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       DEPARTMENT OF DEFENSE 
   DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of: )
)
1 ) ISCR Case No. 18-01240 
) 
Applicant for Security Clearance ) 
Appearances 
For Government: Alison O’Connell, Esq., Department Counsel 
For Applicant: Pro se 
__________ 
Decision 
__________ 
RIVERA, Juan J., Administrative Judge: 
Applicant’s evidence is insufficient to establish that she has been financially 
responsible and that her financial problems are being resolved or are under control. 
Clearance is denied. 
Statement of the Case 
Applicant submitted a security clearance application (SCA) on May 13, 2016. 
She answered interrogatories from the Defense Office of Hearings and Appeals (DOHA) 
in April 2018. After reviewing the information gathered during the background 
investigation, the Department of Defense (DOD) issued a statement of reasons (SOR) 
to her on May 30, 2018, alleging security concerns under Guideline F (financial 
considerations). Applicant answered the SOR on June 20, 2018. She submitted a one-
page document with some explanations, and requested a hearing before an 
administrative judge from DOHA. 
DOHA assigned the case to me on September 12, 2018, and issued a notice of 
hearing on November 13, 2018, setting the hearing for December 14, 2018. At the 
1 In April 2017, Applicant changed her name. (Tr. 12-13, See the state superior court’s Order for Name 
Change at GE 2.) The SOR caption is amended accordingly. 
02/19/2019
 
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hearing, the Government offered seven exhibits (GE 1 through 7). Applicant testified 
and submitted no additional evidence. DOHA received the hearing transcript (Tr.) on 
January 7, 2019. 
 
Findings of Fact 
 
Applicant admitted the factual allegations in SOR ¶ 1.a, that she was $33,395 in 
arrears in her $305,325 mortgage, which was in a foreclosure status. Her admission to 
the SOR allegation, and those at her hearing, are incorporated herein as findings of 
fact. After a thorough review of the record evidence, I make the following additional 
findings of fact:  
 
Applicant is a 41-year-old employee of a federal contractor. She recently 
completed an associate’s degree and is currently pursuing her bachelor’s degree. 
Applicant married in 2004 and divorced in 2013. She has no children. 
 
Applicant worked as a personnel security specialist for a federal law enforcement 
agency between 2005 and 2012. She was unemployed between June 2012 and April 
2014. She worked for a federal contractor between April 2014 and February 2015, and 
was unemployed between February and August 2015. She worked for a federal 
contractor between August 2015 and March 2016. Her current employer, a federal 
contractor, hired Applicant in March 2016 and is currently sponsoring the continuation of 
her clearance. She is a personnel security assistant. (Tr. 23) 
 
Applicant was first granted a clearance when she was a stay-in-school student 
working for the federal agency in 1999. She did not remember the level of her first 
clearance, but stated that the DOD granted her a top-secret clearance in 2002, and 
subsequently other agencies granted her secret clearances related to her duties. (GE 1) 
 
Applicant submitted a SCA in March 2010. (GE 7) She disclosed in her answers 
to Section 26 (Financial Record) that she had financial problems within the last seven 
years, including: filing for bankruptcy in 2003; having a house (purchased in February 
2006) foreclosed in September 2008; and having delinquent debts in collection. 
Applicant explained that “due to the mortgage note being so high ($2,800 a month) my 
spouse and I had to walk. No financial companies would refinance the loan.” She also 
explained her Chapter 7 bankruptcy was discharged in 2003. She noted that she 
currently had some delinquent debts because her spouse has been unemployed since 
October 2009. (GE 7, Section 26) 
 
The SOR concerns a single debt, a delinquent mortgage. (SOR ¶ 1.a) Applicant 
claimed she was delinquent in her mortgage payments because she was lied to during 
the purchase of the house in 2016. She was told the mortgage payment would be 
$1,300, when in fact, the note payment was $1,600. She claimed she did not know 
anything about escrow funds or any additional expenses for insurance and taxes. She 
could not afford the additional mortgage payments. She made two or three mortgage 
payments following the purchase of the house, and she then stopped paying the 
 
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mortgage in August 2016, because she had other living expenses to pay. Additionally, 
Applicant testified that she could not afford the mortgage payments because she 
provided financial support to her mother in an as-needed basis and incurred financial 
expenses related to the death of an unidentified family member. She provided no 
documentary evidence to support these last two claims. 
 
At her hearing, Applicant admitted that she previously purchased a house in 
2006 that was foreclosed for lack of payments in 2008. She claimed that she did not 
learn anything about escrow accounts from owning that property because the note 
payments were automatically drafted from her bank account. Applicant earns close to 
$21 an hour. Her monthly take home pay is about $2,500. She testified that she 
submitted several requests for a mortgage modification to the original creditor and to at 
least two subsequent mortgage account holders. Her last modification request is 
currently pending with the most recent mortgage note holder. 
 
Although she is living in the house, Applicant has made no mortgage payments 
since August 2016. During 2017, she took in a renter for a period of eight months to 
increase her earnings to pay the mortgage. The renter paid her $850 a month, for a total 
of $6,800. Applicant claimed she saved $1,000 from the renter’s income to pay her 
mortgage. She presented no documentary evidence of any mortgage payments made 
since August 2016. She claimed that she used the rent income to pay other debts and 
old payday loans that she and her ex-husband incurred while married. 
 
Applicant testified that she has been talking to telecommunication service 
providers, her home security service company, and other utility companies seeking to 
reduce the services she receives, or to cancel her service contracts, in an effort to 
reduce her expenses and be able to afford her mortgage payments. She presented no 
documentary evidence of these efforts.  
 
Applicant noted that she purchased a 2018 car for about $23,000 in 2017, with a 
monthly payment of about $600. After realizing she was having difficulty making the 
monthly payments, she traded in the 2018 car for a 2007 luxury car that cost her 
$12,000, with a monthly payment of $316. (Tr. 32-36)  
 
Applicant has not participated in financial counseling. She averred she is 
currently following a budget, but provided no documentary evidence to support her 
claim. She promised to take herself out of debt by concentrating on paying her 
mortgage first, and then addressing her remaining debts. She claimed she has been 
looking for a second job to increase her earning since 2016. As of her hearing date, she 
had not found any job opportunities. She promised to repair her credit and to be 
financially responsible in the future.  
 
Policies 
 
The SOR was issued under Executive Order 10865, Safeguarding Classified 
Information Within Industry (February 20, 1960), as amended; DOD Directive 5220.6, 
 
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Defense Industrial Personnel Security Clearance Review Program (Directive) (January 
2, 1992), as amended; and the National Security Adjudicative Guidelines (AG), 
implemented by Security Executive Agent Directive (SEAD) 4, which are effective June 
8, 2017, which are applicable to all adjudicative decisions issued on or after June 8, 
2017.  
 
Eligibility for access to classified information may be granted “only upon a finding 
that it is clearly consistent with the national interest to do so.” Exec. Or. 10865, 
Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended. 
The U.S. Supreme Court has recognized the substantial discretion of the Executive 
Branch in regulating access to information pertaining to national security, emphasizing 
that “no one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 
U.S. 518, 528 (1988). 
 
The AG list disqualifying and mitigating conditions for evaluating a person’s 
suitability for access to classified information. Any one disqualifying or mitigating 
condition is not, by itself, conclusive. However, the AG should be followed where a case 
can be measured against them, as they represent policy guidance governing access to 
classified information. Each decision must reflect a fair, impartial, and commonsense 
consideration of the whole person and the factors listed in SEAD 4, App. A ¶¶ 2(d) and 
2(f). All available, reliable information about the person, past and present, favorable and 
unfavorable, must be considered.  
 
Security clearance decisions resolve whether it is clearly consistent with the 
national interest to grant or continue an applicant’s security clearance. The Government 
must prove, by substantial evidence, controverted facts alleged in the SOR. If it does, 
the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. The 
applicant bears the heavy burden of demonstrating that it is clearly consistent with the 
national interest to grant or continue his or her security clearance.  
 
Persons with access to classified information enter into a fiduciary relationship 
with the Government based on trust and confidence. Thus, the Government has a 
compelling interest in ensuring each applicant possesses the requisite judgment, 
reliability, and trustworthiness of those who must protect national interest as their own. 
The “clearly consistent with the national interest” standard compels resolution of any 
reasonable doubt about an applicant’s suitability for access in favor of the Government. 
“[S]ecurity clearance determinations should err, if they must, on the side of denials.” 
Egan, 484 U.S. at 531; SEAD 4, ¶ E(4); SEAD 4, App. A, ¶¶ 1(d) and 2(b). Clearance 
decisions are not a determination of the loyalty of the applicant concerned. They are 
merely an indication that the applicant has or has not met the strict guidelines the 
Government has established for issuing a clearance. 
 
 
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Analysis 
 
Financial Considerations 
 
AG ¶ 18 articulates the security concern relating to financial problems:  
 
Failure or inability 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 
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 overextended is at greater risk of having to 
engage in illegal or otherwise questionable acts to generate funds . . . .  
 
Applicant’s history of financial problems is documented in the record. In June 
2016, she purchased a home beyond her financial means. She made the first three 
payments on the mortgage and stopped making them because she could not afford to 
make the mortgage payments and to pay her living expenses. Although she has been 
living in the house, since August 2016, she has made no more mortgage payments.  
 
AG ¶ 19 provides three disqualifying conditions that could raise a security 
concern and may be disqualifying in this case: “(a) inability to satisfy debts”; ”(b) 
unwillingness to satisfy debts regardless of the ability to do so”; and “(c) a history of not 
meeting financial obligations.” The record established the above disqualifying 
conditions, requiring additional inquiry about the possible applicability of mitigating 
conditions.  
 
Four mitigating conditions under AG ¶ 20 are potentially applicable: 
 
(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), and the individual acted responsibly under the circumstances; 
  
(c) the person has received or is receiving counseling for the problem 
and/or there are clear indications that the problem is being resolved or is 
under control; and 
 
 
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(d) the individual initiated a good-faith effort to repay overdue creditors or 
otherwise resolve debts;2  
 
The Appeal Board concisely explained Applicant’s responsibility for proving the 
applicability of mitigating conditions as follows:  
 
Once a concern arises regarding an Applicant’s security clearance 
eligibility, there is a strong presumption against the grant or maintenance 
of a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th 
Cir. 1990), cert. denied, 499 U.S. 905 (1991). After the Government 
presents evidence raising security concerns, the burden shifts to the 
applicant to rebut or mitigate those concerns. See Directive ¶ E3.1.15. The 
standard applicable in security clearance decisions is that articulated in 
Egan, supra. “Any doubt concerning personnel being considered for 
access to classified information will be resolved in favor of the national 
security.” Directive, Enclosure 2 ¶ 2(b).  
 
ISCR Case No. 10-04641 at 4 (App. Bd. Sep. 24, 2013).  
 
 None of the financial considerations mitigating conditions are raised by the facts 
in this case. AG ¶ 20(a) is not applicable because Applicant’s financial problems are 
recent and ongoing. AG ¶ 20(b) is not applicable. Applicant claimed her 2013 divorce, 
providing financial assistance to her mother, and the death of a relative are 
circumstances beyond her control that likely contributed to her financial problems. Her 
evidence is insufficient to show that those factors contributed to or aggravated her 
financial situation. She purchased the property on her own three years after the divorce. 
She presented little evidence to articulate the extent of her financial help to her mother, 
or how the death of a relative impacted her financial situation. Moreover, Applicant 
failed to establish that she was financially responsible under the circumstances. 
 
 Applicant has not participated in financial counseling. She claimed she is 
currently following a budget, but failed to provide documentary evidence of a viable 
budget. I find Applicant’s efforts to pay her mortgage lacking. Particularly, when she 
                                            
2 The Appeal Board has previously explained what constitutes a “good-faith” effort to repay 
overdue creditors or otherwise resolve debts:  
 
In order to qualify for application of [the “good-faith” mitigating condition], an applicant 
must present evidence showing either a good-faith effort to repay overdue creditors or 
some other good-faith action aimed at resolving the applicant’s debts. The Directive does 
not define the term “good-faith.” However, the Board has indicated that the concept of 
good-faith “requires a showing that a person acts in a way that shows reasonableness, 
prudence, honesty, and adherence to duty or obligation.” Accordingly, an applicant must 
do more than merely show that he or she relied on a legally available option (such as 
bankruptcy) in order to claim the benefit of [the “good faith” mitigating condition]. 
 
(internal citation and footnote omitted) ISCR Case No. 02-30304 at 3 (App. Bd. Apr. 20, 2004) (quoting 
ISCR Case No. 99-9020 at 5-6 (App. Bd. Jun. 4, 2001)).   
 
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purchased a 2018 car in 2017 above her financial means, and traded it in a couple of 
months for a 2007 luxury car to reduce her monthly payments from $600 to $316. 
Applicant’s financial problem is not being resolved and her finances are not under 
control. AG ¶¶ 20(c) and (d) are not applicable. 
 
 Applicant should have been more diligent assessing her financial situation and 
her ability to pay her mortgage before she purchased the house. She claimed that she 
was the victim of a misrepresentation by the seller. She averred she was told the 
mortgage payment would be $1,300, when in fact it was $1,600 after the addition of 
escrow monies (insurance and taxes). Applicant repeatedly claimed she did not know 
anything about escrow monies and that she miscalculated what she could afford. I find 
her claims of lack of knowledge not credible considering that she purchased another 
house in 2006, which was foreclosed in 2008 for lack of payments. Applicant stated that 
she had to “walk” of that house because she could not afford the payments. 
 
 I note that Applicant has extensive experience working as a personnel security 
specialist for federal agencies and federal contractors. Additionally, she has possessed 
a clearance since 1999. Thus, Applicant is familiar with the security clearance process 
and with the security concerns raised by financial considerations. Her experience 
holding a clearance, submitting clearance applications, and working as a personnel 
security specialist placed Applicant on notice that her financial problems created a 
security concern. Considering the evidence as a whole, Applicant’s evidence is 
insufficient to mitigate the financial considerations concerns. 
 
Whole-Person Concept 
 
 I considered the potentially disqualifying and mitigating conditions in light of all 
the facts and circumstances surrounding this case, and under the whole-person 
concept. SEAD 4, App. A, ¶¶ 2(a) and 2(d). I have incorporated my comments under 
Guideline F in my whole-person analysis. Some of these factors were addressed under 
that guideline, but some warrant additional comment. 
 
Applicant, 41, has been employed with the Government and federal contractors, 
and has held a clearance since 1999. Her evidence is insufficient to demonstrate 
financial responsibility and she failed to mitigate the financial considerations concerns.  
 
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, is:          
 
  Paragraph 1, Guideline F:     AGAINST APPLICANT 
 
  Subparagraph 1.a:     Against Applicant 
 
 
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Conclusion 
 
In light of all the circumstances presented by the record in this case, it is not 
clearly consistent with the national security interests of the United States to grant 
eligibility for a security clearance to Applicant. Clearance is denied. 
 
 
 
____________________________ 
JUAN J. RIVERA 
Administrative Judge