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ISCR Case 18-00695.a1 — CASE

ISCR Case 18-00695.a1denied

Case Headnote

ISCR Case No. 18-00695.a1

Sep 20, 2019· Hon. Michael Y. Ra'anan· appeal

Summary

An applicant, represented by counsel, was denied a security clearance under Guideline F (Financial Considerations) due to a history of financial issues. The appeal board affirmed this denial, citing the applicant's failure to file tax returns and significant delinquent debts as security concerns.

The applicant admitted to multiple financial deficiencies, including not filing tax returns and owing substantial delinquent debts. The judge determined that the applicant had a long history of financial problems and had not resolved all alleged debts.

Despite the application of mitigating conditions F.2.a and F.2.c, the disqualifying conditions F.3.a and F.3.c were ultimately not overcome. The applicant failed to demonstrate that future financial problems were unlikely, leading to the denial of the security clearance.

Conditions Referenced

Disqualifying

F.3.araisedInability or Unwillingness to Satisfy Debts
F.3.craisedFailure to File Annual Income Tax Returns as Required

Mitigating

F.2.arejectedThe Behavior Was Not RecentThe applicant's financial issues were ongoing and not resolved.
F.2.crejectedThe Individual Has Received Counseling for the ProblemThe applicant did not provide sufficient evidence of effective financial management.

Key Rule Quoted

“[A]ny doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.”
— Directive, Encl. 2, App. A, ¶ 2(b)

Procedural Posture

SOR issuedSep 4, 2018
Answer filed—
Hearing heldMay 7, 2019
Decision dateSep 20, 2019Appeal decision affirmed.

Cite For

Affirmation of Denial Based on Financial Considerations Under Guideline F
Importance of Demonstrating Resolution of Financial Issues for Security Clearance
Clarification of Standards Applied in Security Clearance Adjudications

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

Affirmed

The appeal involved a denial of a security clearance based on financial considerations under Guideline F. The applicant argued that the Judge did not adequately analyze mitigating conditions and that there was no imminent threat to national interest. The Board affirmed the Judge's decision, finding no harmful error in the analysis of the applicant's financial issues and credibility.

Appealed bythe applicant

Applicant representationAttorney

Judge belowRichard A. Cefola — denied the clearance (split findings)

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
Applicant argued that the Judge did not adequately analyze the potential disqualifying and mitigating conditions.
No specific harmful error alleged — raised by the applicantRejected
Applicant contended that there is no reasonable basis for concluding that allowing access to classified information poses an imminent threat to national interest.

Why the Board ruled this way

The Board found that the Judge's conclusions regarding the applicant's financial history and the potential for future financial problems were supported by substantial evidence. The applicant's arguments did not demonstrate harmful error in the Judge's decision-making process.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewProcedural complianceNo de-novo re-decisionNo new evidence on appealDeference to the judge’s credibility calls

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: Applicant contends that, considering his credibility and integrity, “there is no reasonable basis for concluding that allowing [his] access to classified information poses an imminent threat to the national interest.” Appeal Brief at 6-7, citing Directive ¶ 6.4. Applicant’s reliance on ¶ 6.4, which applies to the temporary suspension of a previously adjudicated security clearance pending a final clearance decision, is misplaced. Regarding this issue, we first note that Applicant’s security clearance was not suspended under ¶ 6.4. Second, the Judge’s decision in this case is an integral part of and, depending on the circumstances, could constitute the final clearance decision. Third, the “imminent threat to the national security” standard is for use by an appropriate DoD official in reviewing a proposed security clearance suspension and not for use by Judges in adjudicating security clearance eligibility. DOHA Judges apply the “clearly consistent with national interest” standard in security clearance adjudications. See Section 2 of Exec. Order No. 10865; the procedures laid out in detail in Enclosures 2 and 3 of the Directive; and Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). See also, ISCR Case No. 14- 05238 at 2 (App. Bd. Jan. 13, 2016) for the proposition that ¶ 6.4 is limited in scope and that as a general matter the Government does not have to prove a “‘clear and present danger’ to national security” before it can deny an applicant a clearance. Moreover, as provided in Directive, Encl. 2, App. A, ¶ 2(b), “[a]ny doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.” Adverse decision affirmed.

CASENO: 18-00695.a1 DATE: 09/20/2019

DATE: September 20, 2019 ) In Re: ) ) ---------- ) ISCR Case No. 18-00695 ) ) Applicant for Security Clearance ) )

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Edward O. Lear, Esq. The Department of Defense (DoD) declined to grant Applicant a security clearance. On September 4, 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 hearing. On May 7, 2019, after the hearing, Administrative Judge Richard A. Cefola denied Applicant’s request for a security clearance. Applicant submitted a Motion for Reconsideration that the Judge granted. On July 2, 2019, after receipt of additional evidence, the Judge again denied Applicant’s request for a clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. The SOR listed 18 allegations of financial deficiencies. These include that Applicant failed to file his state income tax return for 2014 prior to the statutory deadline; that he failed to pay his state incomes taxes for 2011-2014 as required; that he failed to file his Federal income tax returns for 2011-2016 prior to the statutory deadlines; that he owed delinquent income taxes to the Federal Government for 2011-2015 totaling about $39,700; and that he had ten other delinquent debt totaling about $2,570. In responding to the SOR, Applicant admitted each allegation. In the Decision on Reconsideration, the Judge found in favor of Applicant on 15 SOR allegations and against him on three delinquent debts totaling about $1,120. Applicant’s appeal brief contains documents and assertions about the payment of certain debts that were not presented to the Judge for consideration. The Appeal Board is prohibited from considering new evidence on appeal. Directive ¶ E3.1.29. Applicant contends that, considering his credibility and integrity, “there is no reasonable basis for concluding that allowing [his] access to classified information poses an imminent threat to the national interest.” Appeal Brief at 6-7, citing Directive ¶ 6.4. [Emphasis in Appeal Brief.] Applicant’s reliance on ¶ 6.4, which applies to the temporary suspension of a previously adjudicated security clearance pending a final clearance decision, is misplaced. Regarding this issue, we first note that Applicant’s security clearance was not suspended under ¶ 6.4. Second, the Judge’s decision in this case is an integral part of and, depending on the circumstances, could constitute the final clearance decision.1 Third, the “imminent threat to the national security” standard is for use by an appropriate DoD official in reviewing a proposed security clearance suspension and not for use by Judges in adjudicating security clearance eligibility. DOHA Judges apply the “clearly consistent with national interest” standard in security clearance adjudications. See Section 2 of Exec. Order No. 10865; the procedures laid out in detail in Enclosures 2 and 3 of the Directive; and Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). See also, ISCR Case No. 14-05238 at 2 (App. Bd. Jan. 13, 2016) for the proposition that ¶ 6.4 is limited in scope and that as a general matter the Government does not have to prove a “‘clear and present danger’ to national security” before it can deny an applicant a clearance. Moreover, as provided in Directive, Encl. 2, App. A, ¶ 2(b), “[a]ny doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.” Applicant also argues that the Judge did not adequately analyze the potential disqualifying and mitigating conditions. In doing so, he highlights, for example, the actions he has taken to resolve his financial problems. His arguments, however, are not sufficient to show that the Judge weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. See, e.g., ISCR Case No. 17-02488 at 3 (App. Bd. Aug. 30, 2018). We note that the Judge’s key conclusions – that Applicant has a long history of financial problems, that he has not resolved all of the alleged debts, and that he has not demonstrated that future financial problems are unlikely – are sustainable on the record. As we have previously stated, the Judge’s decision must be written in a manner that allows the parties and the Board to discern what findings the Judge is making and what conclusions he or she is reaching. See, e.g., ISCR Case No. 16-02536 at 5 (App. Bd. Aug. 23, 2018). Based on our review, the Judge’s decision in this case creates some ambiguity. As noted above, the Judge found in favor of Applicant on 15 SOR allegations and against him on three debts totaling about $1,120. In general, a Judge’s favorable finding on an SOR allegation tends to indicate that he or she concluded the allegation no longer raises a security concern. In this case, the Judge specifically concluded that Applicant had a history of financial problems and failed to establish that those problems are unlikely to recur. The extent to which the Judge relied on the favorable SOR findings to reach those conclusions is unknown.2 While Applicant notes in his appeal brief that the Judge only found against him on three allegations totaling less than $1,200, he did not specifically claim those unfavorable findings standing alone were insufficient to raise security concerns. As discussed 1 See, Directive ¶ E3.1.36. Because Applicant appealed the Judge’s decision, our decision constitutes the final clearance decision. 2 Even if debts have been paid, removed, rendered uncollectable by operations of law, or are otherwise resolved, a Judge may still consider the underlying circumstances of an applicant’s financial difficulties in evaluating whether he or she has demonstrated good judgment and reliability. See, e.g., ISCR Case No. 17-00192 at 2 (App. Bd. Sep. 21, 2018). above, we concluded the record when viewed as a whole does support the Judge’s adverse conclusions. Given these circumstances, we conclude that no benefit would be gained by remanding the decision to the Judge to clarify the extent to which he may have relied on the favorable findings in rendering his adverse decision. Applicant has failed to demonstrate harmful error below. Accordingly, the Board affirms the Judge’s adverse security clearance decision.

ORDER

The Decision is AFFIRMED. 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