CASE · Clearance Adjudication Search EngineCASE

Loading case…

ISCR Case 17-04110.a1 — CASE

ISCR Case 17-04110.a1unknown

Case Headnote

ISCR Case No. 17-04110.a1

Sep 26, 2019· Hon. Michael Y. Ra'anan· appeal

Summary

This security clearance case, decided under Guideline F (Financial Considerations), involved an applicant representing himself who faced concerns due to approximately $57,500 in significant delinquent debts. The appeal board reversed a previous favorable decision, ultimately resulting in no clearance being granted.

The board identified several disqualifying conditions, primarily F.3, related to the applicant's financial irresponsibility. While the applicant attributed his financial difficulties to personal circumstances, including divorce and increased child support, the board found insufficient evidence of good faith efforts to resolve the debts.

Specifically, the applicant's reliance on involuntary debt resolution methods, such as wage garnishment and tax refund interception, raised concerns about his judgment and reliability. Furthermore, the applicant had not filed for bankruptcy protection by the close of the record, which further undermined his claims of proactive debt resolution. The board emphasized that involuntary resolutions do not demonstrate good faith efforts.

Conditions Referenced

Disqualifying

F.3raisedInability to Satisfy Debts

Mitigating

F.2rejectedThe Conditions That Resulted in the Financial Problems Were Largely Beyond the Person's ControlThe applicant's financial problems were longstanding and not adequately addressed until after receiving notice of security concerns.
F.3rejectedThe Individual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsThe applicant's reliance on involuntary means of debt resolution did not demonstrate good faith efforts.

Key Rule Quoted

“Promises to pay or otherwise resolve delinquent debts in the future are not a substitute for a track record of paying debts in a timely manner or otherwise acting in a financially responsible manner.”

Procedural Posture

SOR issuedAug 13, 2018
Answer filed—
Hearing held—
Decision dateSep 26, 2019

Cite For

Insufficient Evidence of Good Faith Efforts to Resolve Debts Under Guideline F
Reliance on Involuntary Debt Resolution Methods Raises Concerns About Judgment and Reliability
The Importance of a Track Record of Timely Debt Payment in Security Clearance Determinations

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

Appeal at a glance· Full written decision

Reversed

The appeal involved a security clearance decision where the Department of Defense initially granted the applicant a clearance despite significant delinquent debts. The Department Counsel appealed, arguing that the Judge's decision was arbitrary and capricious. The Board agreed, finding that the Judge's analysis did not adequately consider the applicant's financial history and reversed the favorable decision.

Appealed bythe Government (Department Counsel)

Applicant representationPro se (self-represented)

Judge belowDarlene D. Lokey Anderson — granted the clearance

Decided onthe written record

Guidelines belowGuideline F

What the Board reviewed

Decision arbitrary, capricious, or contrary to law — raised by the Government (Department Counsel)Error sustained
The Judge's favorable decision was arbitrary and capricious as it failed to address significant aspects of the record.

Why the Board ruled this way

The Board found that the Judge's analysis was speculative and failed to adequately address the applicant's financial history and the implications for national security. The favorable decision was not supported by substantial evidence and was therefore reversed.

Ignored material evidenceNo rational connection between facts and conclusion

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewProcedural complianceNo de-novo re-decisionNo new evidence on appealBurden of persuasion

Appeal Board panel

Michael Ra’anan — Chair
James E. Moody
James F. Duffy

Descriptive structured reading of this decided, public Appeal Board decision — what the case says, not a prediction or advice.

Full decision

The complete, official text — footnotes and signatures included — is in the original PDF.

Decision text, by section

DEFENSE OFFICE OF HEARINGS AND APPEALS

APPEAL

SYNOPSIS

KEYWORD: Guideline F DIGEST: As of the close of the record, Applicant had not filed for bankruptcy protection. Any discharge of financial obligations resulting from this procedure would come to fruition well into the future. Promises to pay or otherwise resolve delinquent debts in the future are not a substitute for a track record of paying debts in a timely manner or otherwise acting in a financially responsible manner. Nevertheless, the Judge’s analysis appears to contravene this requirement, in that she founded it, in large measure, upon the assumption that Applicant would file for bankruptcy after the close of the record, stating that should he not do so his access to classified information would be in immediate jeopardy. The speculative nature of this analysis underscores the paucity of actual, concrete evidence of debt resolution or of a track record of responsible action. Insofar as Applicant bore the burden of persuasion, this paucity is a reason to conclude that he had failed to meet that burden, and it should have been addressed forthrightly. Favorable decision reversed. CASENO: 17-04110.a1 DATE: 09/26/2019 DATE: September 26, 2019 ) In Re: ) ) -------------- ) ISCR Case No. 17-04110

) ) Applicant for Security Clearance ) )

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT Andrea M. Corrales, Esq., Department Counsel FOR APPLICANT Pro se The Department of Defense (DoD) declined to grant Applicant a security clearance. On August 13, 2018, DoD issued a statement of reasons (SOR) advising Applicant of the basis for that decision–security concerns raised under Guideline F (Financial Considerations) of Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive). Applicant requested a decision on the written record. On June 21, 2019, after considering the record, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Darlene D. Lokey Anderson granted Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. Department Counsel raised the following issue on appeal: whether the Judge’s favorable decision ran contrary to the weight of the record evidence and, accordingly, was arbitrary, capricious, or contrary to law. Consistent with the following, we reverse. The Judge’s Findings of Fact Applicant’s SOR alleges nine delinquent debts, for such things as consumer purchases, child support payments, and Federal tax obligations. The total amount of debt alleged in the SOR is about $57,500. Applicant attributed his financial problems to inability to pay debts incurred during a marriage and to a divorce. His child support payments were increased significantly, which made it difficult for him to pay his debts. Applicant stated that his child support delinquency had been mensurably reduced through court-ordered wage garnishment and that his delinquent Federal tax debt had been resolved through interception of his state tax refund. He intends to file for bankruptcy in order to resolve his remaining financial problems. Applicant’s supervisors characterize him as reliable and trustworthy. They state that he has an excellent work record and that he exercises sound judgment. The Judge’s Analysis The Judge concluded that Applicant has shown a good-faith effort to resolve his delinquent debts. “He is or has filed for Chapter 7 Bankruptcy and the debts listed in the SOR will or have been discharged.” Decision at 6. She stated that Applicant had not incurred new debt, thereby demonstrating that his financial problems are being resolved. “In the event that Applicant does not follow through with his plan to file for Chapter 7 Bankruptcy and to have each of the debts listed in the SOR discharged that have not been paid, his security clearance will be in immediate jeopardy.” Id.

DISCUSSION

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). The applicant is responsible for presenting evidence to rebut, explain, extenuate, or mitigate admitted or proven facts. The applicant has the burden of persuasion as to obtaining a favorable decision. Directive ¶ E3.1.15. The standard applicable in security clearance decisions “is that a clearance may be granted only when ‘clearly consistent with the interests of the national security.’” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). “Any doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.” Directive, Enclosure 2 ¶ 2(b). In deciding whether the Judge's rulings or conclusions are erroneous, we will review the decision to determine whether: it does not examine relevant evidence; it fails to articulate a satisfactory explanation for its conclusions, including a rational connection between the facts found and the choice made; it does not consider relevant factors; it reflects a clear error of judgment; it fails to consider an important aspect of the case; it offers an explanation for the decision that runs contrary to the record evidence; or it is so implausible that it cannot be ascribed to a mere difference of opinion. See ISCR Case No. 14-02563 at 3-4 (App. Bd. Aug. 28, 2015). Department Counsel argues that the Decision fails to address significant aspects of the record. She cites to such things as the timing of Applicant’s efforts at debt resolution, the involuntariness of his child support and Federal tax payments, and the speculative nature of the Judge’s analysis, which, she contends, undercut the Judge’s favorable results. We find Department Counsel’s argument to be persuasive. The concern under Guideline F is not simply that an applicant might be tempted to compromise classified information in order to pay his or her debts. A Judge should also consider the extent to which an applicant’s financial problems cast doubt upon his or her judgment, self- control, and other characteristics essential to protecting national security information. See, e.g., ISCR Case No. 16-04112 at 3-4 (App. Bd. May 28, 2019). This obligation is rooted in the language of the Directive, which states that failure to meet financial obligations may indicate unwillingness to abide by rules and regulations, thereby raising questions about an applicant’s ability to protect classified information. Directive, Encl. 2, App. A ¶ 18; see ISCR Case No. 15-01737 at 3 (App. Bd. Feb. 14, 2017). When an applicant’s record contains evidence that raises security concerns, such as significant, longstanding delinquent debts, the applicant bears the burden of persuasion that he or she should receive a favorable adjudication, under the standard set forth in Egan, supra. In the case before us, Applicant’s debts raise concerns, as the Judge found. However, those aspects of the case to which Department Counsel draws our attention detract from the Judge’s mitigation analysis. For example, the timing of ameliorative action is a factor which should be brought to bear in evaluating an applicant’s case for mitigation. An applicant who begins to resolve security concerns only after having been placed on notice that his or her clearance is in jeopardy may lack the judgment and willingness to follow rules and regulations when his or her personal interests are not threatened. See, e.g., ISCR Case No. 17-01256 at 5 (App. Bd. Aug. 3, 2018). As Department Counsel notes, Applicant’s financial problems go as far back as 2012. However, he did not engage the services of a lawyer for the purpose of filing for bankruptcy protection until three months after receipt of the SOR and after he had received the File of Relevant Material (FORM). As Department Counsel argues, Applicant stated on two occasions–first in his March 2017 security clearance application and again in his September 2018 Answer to the SOR–that he planned to file bankruptcy to discharge [his] debts. However, he did not hire a bankruptcy attorney until November 9, 2018, i.e., after he received the Government’s October 30, 2018 FORM. As such, it is clear that Applicant did not take any active measures towards resolving his delinquencies even after the SOR placed him on notice. Appeal Brief at 8. Accordingly, the timing of Applicant’s hiring of an attorney raises questions about his willingness to follow rules or regulations when his interests are not at stake, a matter that the Judge failed to address in her analysis. This failure impairs her overall conclusions. Moreover, as of the close of the record, Applicant had not filed for bankruptcy protection. Any discharge of financial obligations resulting from this procedure would come to fruition well into the future. Promises to pay or otherwise resolve delinquent debts in the future are not a substitute for a track record of paying debts in a timely manner or otherwise acting in a financially responsible manner. See, e.g., ISCR Case No. 14-04565 at 2 (App. Bd. Sep. 18, 2015). Nevertheless, the Judge’s analysis appears to contravene this requirement, in that she founded it, in large measure, upon the assumption that Applicant would file for bankruptcy after the close of the record, stating that should he not do so his access to classified information would be in immediate jeopardy. The speculative nature of this analysis underscores the paucity of actual, concrete evidence of debt resolution or of a track record of responsible action. Insofar as Applicant bore the burden of persuasion, this paucity is a reason to conclude that he had failed to meet that burden, and it should have been addressed forthrightly. We also find persuasive Department Counsel’s argument that the circumstances by which the two debts that have been, or are being, resolved undercut the mitigating effect that the Judge apparently assigned to them. For example, Applicant’s Federal tax delinquency was resolved not by Applicant’s own considered action but, rather, by interception of a state tax refund. In addition, Applicant’s significant child-support arrearage has been reduced through wage garnishment. Court- ordered or otherwise involuntary means of debt resolution, such as garnishment, are entitled to less weight than means initiated and carried through by the debtor himself. See, e.g., ISCR Case No. 14- 05803 at 3 (App. Bd. Jul. 7, 2016). Indeed, reliance upon garnishment, refund interception, or bankruptcy do not equate to good- faith efforts by Applicant to resolve his financial problems, as the Judge concluded. The Directive does not define the term “good faith.” However, we have stated 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.” See, e.g., ISCR Case No. 99-9020 at 5-6 (App. Bd. Jun. 4, 2001). Accordingly, an applicant must do more than show that he or she relied on a legally available options such as garnishment and bankruptcy in order to receive the full benefit of Mitigating Condition 20(d). (“[T]he individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts[.]”) See, e.g., ISCR Case No.12-01664 at 3 (App. Bd. Jan. 17, 2014). In summary, Applicant has had a significant amount of delinquent debt for a number of years, debts which he only began seriously to address after receipt of the SOR and the FORM. Much of that debt he proposes to resolve through bankruptcy, although as of the close of the record he had not filed, much less received discharge. In addition, those debts that he has resolved were addressed through involuntary means such as wage garnishment. Applicant’s circumstances raise serious concerns about his judgment and reliability, concerns which cannot be successfully mitigated by the relative paucity of favorable evidence contained in the file. The Judge’s analysis fails to address important aspects of the case and runs contrary to the weight of the record evidence. Accordingly, the Judge’s favorable decision is not sustainable.

ORDER

The Decision is REVERSED. Signed: Michael Ra’anan Michael Ra’anan Administrative Judge Chairperson, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board Signed: James F. Duffy James F. Duffy Administrative Judge Member, Appeal Board