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ISCR Case 19-03640 — CASE

ISCR Case 19-03640denied

Case Headnote

ISCR Case No. 19-03640

Nov 1, 2022· Hon. James E. Moody· appeal

Summary

A military retiree and Department of Defense contractor was denied a security clearance under Guideline F, Financial Considerations, due to six delinquent debts totaling approximately $17,000. The applicant possessed sufficient funds to resolve these debts but chose to retain the money, citing concerns about future financial stability.

The judge determined that the applicant failed to demonstrate responsible action regarding his financial obligations. Specifically, the applicant did not maintain contact with creditors or attempt to settle the outstanding debts.

Consequently, the judge found that Disqualifying Condition F.3 applied, leading to the denial of the security clearance. The appeal affirmed this original decision.

Conditions Referenced

Disqualifying

F.3raisedInability or Unwillingness to Satisfy Debts

Key Rule Quoted

“The general standard 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)

Procedural Posture

SOR issuedAug 19, 2020
Answer filed—
Hearing heldAug 22, 2022
Decision dateNov 1, 2022Appeal affirmed.

Cite For

Financial Responsibility Under Guideline F
Impact of Financial Decisions on Security Clearance Eligibility
Standards for Evaluating Mitigating Circumstances in Financial Cases

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 mis-weighed evidence and failed to consider significant factors. The Board affirmed the decision, finding no harmful error and that the Judge's conclusions were supported by substantial evidence.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowMark Harvey — denied the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
The Judge failed to consider and/or mis-weighed significant record evidence, resulting in a decision that was arbitrary, capricious, or contrary to law.

Error found, but harmless. The Board agreed the judge made a mistake but affirmed anyway, because it did not change the outcome.

Why the Board ruled this way

The Board found that the Judge's decision was based on substantial evidence and articulated a satisfactory explanation for the decision. The Judge's findings were not arbitrary, capricious, or contrary to law, and the applicant did not demonstrate harmful error that would change the outcome.

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

James F. Duffy — Chair
James E. Moody
Jennifer I. Goldstein

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

APPEARANCES

___________________________________

) In the matter of: )

)

-----

)

ISCR Case No. 19-03640

)

) Applicant for Security Clearance ) _______________________________________) Date: November 1, 2022

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B Norman, Esq., Chief Department Counsel FOR APPLICANT Pro se The Department of Defense (DoD) declined to grant Applicant a security clearance. On August 19, 2020, 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 August 22, 2022, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Mark Harvey denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. Applicant raised the following issues on appeal: whether the Judge failed to consider, and/or mis-weighed, significant record evidence, resulting in a decision that was arbitrary, capricious, or contrary to law. Consistent with the following, we affirm.

The Judge’s Findings of Fact and Analysis The Judge made the following findings pertinent to the issues raised on appeal: Applicant has been working for a DoD contractor since 2015 and has held a clearance during that time. A military retiree, he has attended college but does not have a degree. Twice divorced, he has two married children who do not live with him. Applicant’s SOR lists six delinquent debts, i.e., a deficiency judgment following the foreclosure sale of a house, credit card debts, utility bills, and a collection account. The Judge found against Applicant for the three credit card debts of a total amount of about $17,000 and entered favorable findings regarding the others. Applicant attributed his financial problems to various circumstances, such as unemployment, a tenant’s failure to pay rent, support for relatives, a cohabitant’s medical problems, and two divorces, one of which entailed child support obligations. Applicant has approximately $20,000 in bank accounts, enough to pay his credit cards off. However, he explained that if he did so, yet lost his clearance anyway, he would be in worse financial shape than he already is. He stated that this was the basis of his decision “to retain the funds [he] had accumulated to avoid the . . . possibility that [he] would be unable to financially support [himself] after possible termination of [his] employment[.]” Decision at 5; Applicant Exhibit V at 14, but the Judge incorrectly cited as 13. Applicant has received no formal financial counseling, though he has received ad hoc advice over the years. Applicant enjoys an excellent reputation for honesty, trustworthiness, and professionalism. During his military career, he deployed 11 times and received numerous decorations. Applicant cited to his difficulties with anxiety and depression, which he believes resulted from his military experience. The Judge noted the several things beyond Applicant’s control that affected his financial condition. However, he concluded that Applicant had not demonstrated responsible action with regard to his credit card debts. He stated that Applicant failed to show that he had maintained contact with the creditors or that he had offered to pay or settle these debts, despite a stable income and the apparent ability to resolve them. The Judge noted favorable evidence that Applicant provided, such as his military service and his laudatory character references. However, he ultimately concluded that Applicant had failed to present a persuasive explanation for his failure to have resolved the debts found against him.

DISCUSSION

Applicant’s brief includes matters from outside the record, which we cannot consider. Directive ⁋ E3.1.29. He states that, while he believes that the Judge “applied his best understanding” of the mitigating conditions, he failed properly to understand Applicant’s position and arguments. Appeal Brief at 1. He cites to a significant amount of evidence that he believes the Judge did not consider or that he failed properly to weigh, such as (1) the circumstances surrounding his effort to resolve the mortgage debt that was found in his favor; (2) the length of time involved in the processing of his application for a clearance; (3) his reasons for not paying off the credit card debts; (4) the various circumstances underlying his financial problems; and (5) favorable evidence such as his work history and professional attainments.

On the first point, he argues that he delayed paying off his other debts in order to have enough money to satisfy the substantial deficiency judgment alleged in the SOR, although the VA ultimately absolved him of that obligation. See AE S, Letter from Veterans Administration. We find no reason to believe that the Judge failed to consider or that he mis-weighed this evidence, especially insofar as he resolved the mortgage deficiency in Applicant’s favor. That he did not draw from this evidence the implication that Applicant urges in his brief does not undermine the Judge’s decision. Concerning the length of time it has taken to process Applicant’s case, we have no jurisdiction to rule on the manner in which officials conduct clearance investigations. See, e.g., ISCR Case No. 17-04070 at 3 (App. Bd. Mar. 18, 2019). In any event, Applicant has not shown that the time involved in adjudicating his clearance application impaired his ability to present his case for mitigation. Regarding his ultimate reasons for not paying off his credit cards, the Judge made extensive findings drawn from Applicant’s evidence, and he addressed these findings in his analysis. After considering the totality of Applicant’s arguments, we conclude that Applicant has not rebutted the presumption that the Judge considered all of the evidence in the record or that he weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. See, e.g., ISCR Case No. 18-02872 at 3 (App. Bd. Jan. 15, 2020). Applicant presents arguments regarding SOR allegations about utility bills and internet services. The Judge resolved these allegations in Applicant’s favor; accordingly, there is no reason for us to address these arguments. Applicant challenges some of the Judge’s findings of fact. For example, he notes that the Judge found that he had held a clearance for at least 7 years. In reality, Applicant presented evidence that he has held a clearance for around 25 years, which includes his active duty military career. See AE J at 17. The challenged finding is therefore erroneous, although, even if he had found as Applicant argues, the Judge would probably have rendered the same ultimate decision in this case. Therefore, this error is harmless. See, e.g., ISCR Case No. 18-02581 at 3 (App. Bd. Jan. 14, 2020). After reviewing the record, we conclude that the Judge’s material findings are based on substantial evidence, or constitute reasonable characterizations or inferences that could be drawn from the record. Applicant has not identified any harmful error likely to change the outcome of the case. Considering the record evidence as a whole, the Judge’s material findings of security concern are sustainable. Id. Applicant states that other persons similarly situated had “been placed under a monitored state as a stipulation of their clearance being upheld” and requests such a procedure for himself. Appeal Brief at 5. Applicant’s arguments and the record evidence do not support application of any of the possible waivers to policy set forth in Directive, Encl. 2, App. C. See, e.g., ISCR Case No. 19-01084 at 2 (App. Bd. Aug. 26, 2020). The Judge examined the relevant evidence and articulated a satisfactory explanation for the decision. The decision is sustainable on this record. “The general standard 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). See also Directive, Encl. 2, App. A ¶ 2(b): “Any doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.”

ORDER

The Decision is AFFIRMED. Signed: James F. Duffy James F. Duffy Administrative Judge Chairperson, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board Signed: Jennifer I. Goldstein Jennifer I. Goldstein Administrative Judge Member, Appeal Board