DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
             
In the matter of: )
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)     ISCR Case No.16-00515
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Applicant for Security Clearance                  )     
Appearances
For Government: Rhett Petcher, Esq. Department Counsel
For Applicant: Pro se
                                                                            
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Decision
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LYNCH, Noreen, A., Administrative Judge:
The Department of Defense (DOD) issued a Statement of Reasons (SOR) to
Applicant alleging security concerns arising under Guideline F (Financial
Considerations). The SOR was dated June 24, 2016. The action was taken under
Executive Order (EO) 10865, Safeguarding Classified Information within Industry
(February 20, 1960), as amended; DOD 5220.6, Defense Industrial Personnel Security
Clearance Review Program (January 2, 1992), as amended (Directive); and the
Adjudicative Guidelines (AG) implemented in September 2006. Revised Adjudicative
Guidelines were issued on December 10, 2016, and became effective on June 8,
2017.1
Applicant timely answered the SOR and requested a hearing. The case was
assigned to me on February 15, 2017. A notice of hearing was issued on March 27,
In this case, the SOR was issued under Adjudicative Guidelines effective within the Defense Department      1
on September 1, 2006. Revised Adjudicative Guidelines became effective June 8, 2017. My decision and
formal findings under the revised Guidelines B and F would not be different under the 2006 Guidelines.
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2017, scheduling the hearing for June 22, 2017. Government Exhibits (GX) 1-5 were
admitted into evidence without objection. Applicant testified and submitted Applicant
Exhibits (AX) A-B, which were admitted without objection. I kept the record open for
additional submissions and Applicant timely submitted a document, which was marked
as AX C. The transcript was received on July 3, 2017.  Based on a review of the
pleadings, testimony, and exhibits,  eligibility for access to classified information is
denied. 
Findings of Fact
In her answer to the SOR, Applicant admitted all allegations with the exception of 
SOR ¶¶ 1.m and 1.n. She provided explanations for the allegations under Guideline F
(Financial Considerations). 
Applicant is a 41-year-old administrative assistant for a defense contractor. She
graduated from high school and attended college courses for approximately one year.
She is married and has one minor child and two stepchildren. Applicant has worked for
her current employer for seven years. She is being considered for a promotion to a
Facility Security Officer position. (FSO) In 2011, she obtained a security clearance.
Applicant completed her latest security clearance application in January 2015. (GX 1)
Financial Considerations
The SOR alleges 13 delinquent debts including charged-off accounts, past-due
mortgage loan in the amount of $9,617, collection accounts, and medical accounts,
which total about $21,000. It also alleges indebtedness to the Federal Government for
taxes not paid for tax years 2012 and 2013, as well as failure to file the federal AND
state tax returns for those years, in the amount of $6,000. 
Applicant admitted that she had a poor financial history, but she stated that she
was an extremely loyal and trustworthy person. She explained that her husband
encountered many immigration issues. (Tr. 16) He also has child support for which he is
responsible. He was not allowed to seek employment, and Applicant was the sole
support for the family. Despite the fact that those two issues relating to her husband are
almost resolved, Applicant has not been able to gain financial stability. She considered
bankruptcy as an option, but Applicant stated that she does not have the money for an
attorney. (Answer to SOR)
Applicant obtained help from a loan officer recently to help repair her credit. (AX
A). However, she has only spoken to him on the phone. She has not received financial
counseling.  Her husband starts a job soon and she hopes that they will be on a sound
financial ground to pay their delinquent debts. She also noted that there was some poor
money management.
 
As to the SOR allegation in 1.a, Applicant submitted a form 1099-C, dated
October 31, 2016, which showed a cancellation of debt in the amount of $91,385.86
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from the mortgage company. (AX C) This was the primary residence which went to
foreclosure in 2016.
As to the other  SOR allegations 1.b through 1.l, Applicant has not yet made any
payments. She is relying on the credit repair company to guide her through the process
of identifying creditors and repairing her credit. As to the medical debts, Applicant is not
sure, but she believes the amounts are for not meeting her deductibles. She has health
insurance. (Tr. 43) She explained that she has not reached out to any of the SOR
creditors. (Tr. 45)
Applicant stated that she has filed her federal and state 2012 and 2013 tax
returns, but presented no documentation to confirm her assertion.  (SOR 1m.) Applicant
stated that the “back taxes” will be garnished from her husband’s paycheck. (Tr. 20)
She also noted that she will get a refund from the 2016 tax return. She thought that the
federal tax had been resolved, but not the state. Again, Applicant could not produce any
documentation. She believed she had started a payment plan with the state, but she
could not maintain the payments. (Tr. 50)
Applicant earns an annual salary of about $65,000. (Tr. 25) Her husband’s new
job will add about $2,000- $4,000 a month. Applicant’s husband is still paying child
support arrearages in the amount of $5,000. She stated that they live paycheck to pay
check. (Tr. 56) Applicant noted that they sometimes help their grandchildren financially.
  Applicant submitted  performance evaluations from 2011 to 2016. They reflect
the highest rating of a “5". Applicant is described as a team player who always goes out
of her way to assist otherS. Her work is of the highest caliber. (AX B)
Policies
When evaluating an applicant’s suitability for a security clearance, an
administrative judge must consider the adjudicative guidelines (AG). In addition to brief
introductory explanations for each guideline, the adjudicative guidelines list potentially
disqualifying conditions and mitigating conditions. These guidelines are not inflexible
rules of law. Instead, recognizing the complexities of human behavior, they are applied
in conjunction with the factors listed in the adjudicative process. An administrative
judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision.
Under AG ¶ 2(a), this process is a conscientious scrutiny of a number of variables
known as the “whole-person concept.” An administrative judge must consider all
available, reliable information about the person, past and present, favorable and
unfavorable, in making a decision.
The protection of the national security is the paramount consideration. AG ¶ 2(b)
requires that “[a]ny doubt concerning personnel being considered for national security
eligibility will be resolved in favor of national security.” In reaching this decision, I have
drawn only those conclusions that are reasonable, logical, and based on the evidence
contained in the record. Likewise, I have avoided drawing inferences grounded on mere
speculation or conjecture.
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The Government must present evidence to establish controverted facts alleged in
the SOR. An applicant is responsible for presenting “witnesses and other evidence to
rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by
Department Counsel. . . .”  The burden of proof is something less than a preponderance2
of evidence.  The ultimate burden of persuasion is on the applicant.  3 4
A person seeking access to classified information enters into a fiduciary
relationship with the Government based on trust and confidence. This relationship
transcends normal duty hours and endures throughout off-duty hours. The Government
reposes a high degree of trust and confidence in individuals to whom it grants access to
classified information. Decisions include, by necessity, consideration of the possible risk
the applicant may deliberately or inadvertently fail to protect classified information. Such
decisions entail a certain degree of legally permissible extrapolation of potential, rather
than actual, risk of compromise of classified information.
 
Section 7 of Executive Order 10865 provides that decisions shall be “in terms of
the national interest and shall in no sense be a determination as to the loyalty of the
applicant concerned.”  “The clearly consistent standard indicates that security clearance5
determinations should err, if they must, on the side of denials.”  Any reasonable doubt6
about whether an applicant should be allowed access to sensitive information must be
resolved in favor of protecting such information.  The decision to deny an individual a7
security clearance does not necessarily reflect badly on an applicant’s character. It is
merely an indication that the applicant has not met the strict guidelines the President
and the Secretary of Defense established for issuing a clearance.
Analysis
Guideline F, Financial Considerations
AG ¶ 18 expresses the security concern pertaining to financial considerations:
Failure to live within one's means, satisfy debts, and meet financial
obligations may indicate poor self-control, lack of judgment, or
unwillingness to abide by rules and regulations, all of which can raise
 See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995).      2
 Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).      3
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      4
 See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive      5
information), and EO 10865 § 7.
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      6
 Id.      7
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questions about an individual's reliability, trustworthiness and ability to
protect classified or sensitive information. Financial distress can also be
caused or exacerbated by, and thus can be a possible indicator of, other
issues of personnel security concern such as excessive gambling, mental
health conditions, substance misuse, or alcohol abuse or dependence. An
individual who is financially over-extended is at a greater risk of having to
engage in illegal or otherwise questionable acts to generate funds. 
Affluence that cannot be explained by known sources of income is also a
security concern insofar as it may result from criminal activity, including
espionage.
AG ¶ 19 describes conditions that could raise a security concern and may be
disqualifying:
(a) inability to satisfy debts;
(b) unwillingness to satisfy debts regardless of the ability to do so;
(c) a history of not meeting financial obligations;
(d) deceptive or illegal financial practices such as embezzlement,
employee theft, check fraud, expense account fraud, mortgage fraud
income tax evasion, expense account fraud, filing deceptive loan
statements, and other intentional financial breaches of trust;
(e) consistent spending beyond one's means or frivolous or irresponsible
spending, which may be indicated by excessive indebtedness, significant
negative cash flow, a history of late payments or of non-payment, or other
negative financial indicators;
(f) failure to file or fraudulently filing annual  Federal, state, or local income
tax returns or failure to pay annual Federal, state, or local income tax as
required;
(g) unexplained affluence, as shown by a lifestyle or standard of living,
increase in net worth, or money transfers that are inconsistent with known
legal sources of income; 
(h) borrowing money or engaging in significant financial transactions to
fund gambling or pay gambling debts; and
(i) concealing gambling losses, family conflict, or other problems caused by
gambling.
The Government produced credible evidence to establish the delinquent debts
and the failure to file federal and state tax returns for the years 2012 and 2013. There is
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also an indebtedness of about $6,000 . Consequently, the evidence is sufficient to raise
disqualifying conditions ¶¶ 19(a), 19(b), 19(c), and 19(f)
AG ¶ 20 provides conditions that could mitigate the security concerns:
(a) the behavior happened so long ago, was so infrequent, or occurred
under such circumstances that it is unlikely to recur and does not cast
doubt on the individual's current reliability, trustworthiness, or good
judgment;
(b) the conditions that resulted in the financial problem were largely beyond
the person's control (e.g., loss of employment, a business downturn,
unexpected medical emergency, or a death, divorce or separation, clear
victimization by predatory lending practices, or identity theft), and the
individual acted responsibly under the circumstances;
(c) the person has received or is receiving counseling for the problem from
a legitimate and credible source, such as a non-profit credit counseling
service; and there are clear indications that the problem is being resolved
or is under control;
(d) the individual initiated and is adhering to a good-faith effort to repay
overdue creditors or otherwise resolve debts;
(e) the individual has a reasonable basis to dispute the legitimacy of the
past-due debt which is the cause of the problem and provides documented
proof to substantiate the basis of the dispute or provides evidence of
actions to resolve the issue; 
(f) the affluence resulted from a legal source of income; and
(g) the individual has made arrangement with the appropriate tax authority to file
or pay the amount owed and is in compliance with those arrangements.
Applicant’s husband’s immigration issues contributed to her financial problems.
The issues are still not resolved. Applicant recently obtained help from a credit repair
company, but has no payment plan. She has not paid any of the delinquent debts or
provided documentation concerning the federal and state tax returns and tax owed. She
has not received financial counseling. She intends to work on her delinquent debts.
Applicant was the sole provider for the family for many years. She acknowledged that
she has poor financial management skills.  Mitigating conditions AG ¶ 20(b) partially
applies in this case. Based on the evidence in record, the other mitigating conditions do
not apply.
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Whole-Person Concept
Under the whole-person concept, the administrative judge must evaluate an
applicant’s eligibility for a security clearance by considering the totality of an applicant’s
conduct and all the circumstances. The administrative judge should consider the nine
adjudicative process factors listed at AG ¶ 2(d)
(1) the nature, extent, and seriousness of the conduct; (2) the
circumstances surrounding the conduct, to include knowledgeable
participation; (3) the frequency and recency of the conduct; (4) the
individual’s age and maturity at the time of the conduct; (5) the extent to
which participation is voluntary; (6) the presence or absence of
rehabilitation and other permanent behavioral changes; (7) the motivation
for the conduct; (8) the potential for pressure, coercion, exploitation, or
duress; and (9) the likelihood of continuation or recurrence. 
Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a
security clearance must be an overall commonsense judgment based upon careful
consideration of the guidelines and the whole-person concept. As noted above, the
ultimate burden of persuasion is on the applicant seeking a security clearance. 
I considered the potentially disqualifying and mitigating conditions in light of all the
facts and circumstances surrounding this case, as well as the whole-person factors.
 
Applicant is 41 years old. She has been steadily employed. She had financial
difficulties arise due to immigration problems with her husband. He could not work and
she was the sole provider for the family for many years. She has held a security
clearance since 2011. She has excellent performance evaluations. 
However, she only recently reached out to a credit repair company to help her
resolve the financial issues. She did not provide documentation regarding the tax issues.
She has not received financial counseling. She admits that she has poor money
management skills. 
After weighing the disqualifying and mitigating conditions under Guideline F, and
evaluating all the record evidence in the context of the whole person, I conclude
Applicant has not mitigated the security concerns under the guideline. Accordingly, I
conclude that she has not carried her burden of showing that it is clearly consistent with
the national interest to grant her eligibility for access to classified information. Any
doubts must be resolved in favor of the Government.
Formal Findings
Formal findings for or against Applicant on the allegations set forth in the SOR, as
required by section E3.1.25 of Enclosure 3 of the Directive, are:
Paragraph 1, Guideline F: AGAINST APPLICANT
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Subparagraphs 1.a-1.n:  Against Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is  not
clearly consistent with the national interest to grant Applicant a security clearance.
Clearance is denied. 
                                                     
NOREEN A. LYNCH
Administrative Judge
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