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ISCR Case 20-03789 — CASE

ISCR Case 20-03789denied

Case Headnote

ISCR Case No. 20-03789

Aug 10, 2022· Hon. Moira D. Modzelewski· appeal

Summary

A security clearance applicant, representing himself, was denied clearance under Guideline F (Financial Considerations) due to significant financial issues. The applicant had two delinquent vehicle loans totaling over $23,000 and eight delinquent student loans exceeding $120,000. Additionally, the applicant failed to file required Federal and state income tax returns for both 2013 and 2014.

The appeal board identified Disqualifying Condition F.1, which addresses financial difficulties. While Mitigating Condition F.2, concerning financial hardship, was considered, the board found insufficient evidence to alleviate the security concerns.

The applicant's claims of financial hardship did not demonstrate the good judgment and reliability expected in fulfilling financial obligations. Consequently, the board determined that the applicant's financial irresponsibility posed an unacceptable risk to national security, leading to the denial of the security clearance.

Conditions Referenced

Disqualifying

F.1raisedFinancial Considerations

Mitigating

F.2rejectedFinancial ConsiderationsThe applicant's recent debt-resolution efforts do not mitigate the financial considerations security concerns.

Key Rule Quoted

“The general standard is that a clearance may be granted only when ‘clearly consistent with national security.’”
— Department of the Navy v. Egan, 484 U.S. 518, 528 (1988)

Procedural Posture

SOR issuedFeb 20, 2021
Answer filed—
Hearing heldMay 13, 2022
Decision dateAug 10, 2022

Cite For

Denial of Security Clearance Due to Significant Financial Issues Under Guideline F
Insufficient Evidence of Financial Hardship to Mitigate Security Concerns
Importance of Financial Responsibility in Relation to National Security

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 an applicant who was denied a security clearance due to financial issues, including delinquent loans and failure to file tax returns. The applicant argued that these issues did not raise security concerns and claimed errors in the Judge's findings. The Board affirmed the denial, finding no harmful error in the Judge's decision.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowEric H. Borgstrom — denied the clearance (split findings)

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

No specific harmful error alleged — raised by the applicantRejected
Applicant argued that the financial problems do not raise security concerns.
Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
Applicant contended that the Judge's findings regarding his children were erroneous.
Erroneous finding of fact — raised by the applicantRejected
Applicant claimed he provided proof that his tax returns were filed.

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 supported by substantial evidence and that the applicant failed to demonstrate harmful error. The applicant's financial issues were deemed to raise security concerns under Guideline F, and the Judge's findings were not arbitrary or capricious.

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
Moira Modzelewski

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. 20-03789

)

) Applicant for Security Clearance ) _______________________________________) Date: August 10, 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 February 20, 2021, DoD issued a statement of reasons (SOR) advising Applicant of the basis for that decision―security concerns raised under Guideline F (Financial Considerations) of DoD Directive 5220.6 (January 2, 1992, as amended) (Directive). Applicant requested a hearing. On May 13, 2022, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Eric H. Borgstrom denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. For reasons stated below, we affirm the decision. The SOR alleged that Applicant had two delinquent vehicle loans totaling over $23,000, that he had eight delinquent student loans totaling over $120,000, and that he failed to file his Federal and state income tax returns for 2013 and 2014 as required. The Judge found in favor of Applicant on a vehicle loan totaling about $7,700 and against him on the remaining allegations. In summarizing the case, the Judge stated: Applicant’s financial hardships arose from a period of unemployment, significant medical expenses for his wife and special-needs child, and additional

expenses for his child’s care. Notwithstanding these hardships, Applicant failed to demonstrate good judgement and reliability in fulfilling his financial obligations to timely file his tax returns and to address his delinquent debts. Applicant’s recent debt-resolution efforts do not mitigate the financial considerations security concerns. Eligibility for access to classified information is denied. [Decision at 1.] There is no presumption of error below, and the appealing party has the burden of raising and demonstrating the Judge committed harmful factual or legal error. See, e.g., ISCR Case No. 00-0339 at 3 (App. Bd. Mar. 22, 2001). In this case, Applicant has failed to meet that burden. Applicant argues that the “possible indicators” of security concern under Guideline F―excessive gambling, mental health conditions, substance misuse or alcohol abuse or dependence―do not apply to him. Appeal Brief at 1, apparently referencing Directive, Encl. 2, App. A ¶ 18. To the extent that he is arguing his financial problems do not raise security concerns, we do not find that argument persuasive. It is well established that a history of financial problems, an inability to satisfy debts, and a failure to file income tax returns as required may raise security concerns under Guideline F. Id. at ¶¶ 19(a), 19(c), and 19(f). The Guideline F security concerns are broader than the possibility that an applicant might knowingly compromise classified information in order to raise money to satisfy his or her debts. Those concerns also encompass the risk that applicants who are financially irresponsible might also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information. See, e.g., ISCR Case No. 16-04112 at 3-4 (App. Bd. May 28, 2019). In his appeal brief, Applicant states he submitted three character-reference letters, and the Judge referenced only two of them in his decision. In a post-hearing submission, Applicant sent an email to the Judge and Department Counsel that contained eight attachments. Three of those attachments were identified as being possible letters of reference. In the decision, the Judge noted Applicant submitted nine post-hearing documents. The Judge apparently broke those documents down and marked them as ten exhibits (Applicant’s Exhibits (AE) C-L). Decision at 2. Only two of those exhibits are letters of reference (AE F and G). These are letters from Applicant’s current manager and a coworker. In his brief, Applicant does not identify the author of the apparent missing letter, describe its contents, or otherwise explain its significance. More specifically, he has not shown the purported missing letter reflects something different from the two letters in the record and is, therefore, something other than cumulative evidence. While a document may be missing or may have been misidentified in the forwarding email, Applicant has failed to establish that any error that may have occurred was harmful, i.e., an error that, had it not occurred, the case might have been decided differently. Applicant also notes that the Judge erred in some findings regarding his children, but those errors were also harmless. In his decision, the Judge noted that Applicant testified all of his tax returns had been filed, but also indicated that Applicant did not provide documentation to corroborate that his missing tax returns were filed. In his appeal brief, Applicant argues proof was provided that his tax returns were filed, but he does not cite to any specific record evidence supporting that claim. Based on our review of the record, we find no error in the Judge’s finding that Applicant did not provide documentary evidence to corroborate his claim that the delinquent tax returns were filed.

Applicant’s remaining arguments amount to a disagreement with the Judge’s weighing of the evidence. He argues, for example, that he is trustworthy and nothing in his lifestyle or activities would indicate he is a security risk. He further indicates that he has never deliberately or inadvertently failed to safeguard classified information. Although an absence of prior security violations is a matter that a Judge should consider, along with all the other evidence in the record, it does not preclude a Judge from concluding that an applicant’s circumstances present security concerns that remain unmitigated. The Government does not have to wait until an applicant has compromised or mishandled classified information before it can deny the applicant a clearance. Even those with good prior records can encounter circumstances in which their judgment and reliability might be compromised. See, e.g., ISCR Case No. 16-01131 at 2-3 (App. Bd. Apr. 19, 2018). In short, none of his arguments establish that the Judge weighed the evidence or reached conclusions in a manner that is arbitrary, capricious, or contrary to law. Id. at 3. See also Directive ¶ E3.1.32.3. The Judge examined the relevant evidence and articulated a satisfactory explanation for the decision. The decision is sustainable on the record. “The general standard is that a clearance may be granted only when ‘clearly consistent with 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 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: Moira Modzelewski Moira Modzelewski Administrative Judge Member, Appeal Board