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ISCR Case 21-01236 — CASE

ISCR Case 21-01236denied

Case Headnote

ISCR Case No. 21-01236

Oct 31, 2022· Hon. Moira D. Modzelewski· appeal

Summary

A security clearance for an applicant, a man in his forties, was denied under Guideline F (Financial Considerations) due to nine delinquent debts totaling approximately $53,000. The Appeal Board upheld this denial, citing a lack of good-faith effort to resolve the outstanding financial obligations.

The applicant's primary disqualifying condition was F1, stemming from the significant number and total amount of his delinquent debts. His explanation that he was following financial advice to wait for debts to expire from his credit report was not accepted as a genuine attempt to address the issues.

Furthermore, the applicant failed to provide adequate documentation to substantiate his claims of financial hardship, including those related to his divorce and family support obligations. Consequently, the Appeal Board found insufficient evidence to mitigate the financial concerns, leading to the denial of his security clearance.

Conditions Referenced

Disqualifying

F1raisedFinancial Considerations

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 issuedSep 3, 2021
Answer filed—
Hearing heldAug 18, 2022decision on the written record
Decision dateOct 31, 2022

Cite For

Denial of Security Clearance Due to Significant Delinquent Debts Under Guideline F
Insufficient Evidence of Good-faith Efforts to Resolve Financial Issues
Reliance on Financial Advice Not Considered Mitigating Under AG Guidelines

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. The applicant contested the decision, arguing it was arbitrary and capricious. The Board affirmed the decision, finding no harmful error in the Judge's analysis of the applicant's financial situation and efforts to resolve debts.

Appealed bythe applicant

Applicant representationAttorney

Judge belowPaul J. Mason — denied the clearance (split findings)

Decided onthe written record

Guidelines belowGuideline F

What the Board reviewed

Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
Applicant argued that the Judge's adverse decision was arbitrary, capricious, or contrary to law.

Why the Board ruled this way

The Board found no harmful error in the Judge's decision and concluded that the Judge's findings were supported by substantial evidence and 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. 21-01236

)

) Applicant for Security Clearance ) _______________________________________) DEPARTMENT OF DEFENSE DEFENSE LEGAL SERVICES AGENCY DEFENSE OFFICE OF HEARINGS AND APPEALS APPEAL BOARD POST OFFICE BOX 3656 ARLINGTON, VIRGINIA 22203 (703) 696-4759 Date: October 31, 2022

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Alan V. Edmunds, Esq. The Department of Defense (DoD) declined to grant Applicant a security clearance. On September 3, 2021, DoD issued a statement of reasons (SOR) advising Applicant of the basis of that decision—security concerns raised under Guideline F (Financial Considerations) of DoD Directive 5220.6 (January 2, 1992, as amended) (Directive). Applicant requested a decision on the written record. On August 18, 2022, after consideration of the record, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Paul J. Mason denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. The SOR alleged nine delinquent debts. The Judge found favorably for Applicant on one and adversely on the other eight, which total about $53,000. Applicant raises the following issue on appeal—whether the Judge’s adverse decision was arbitrary, capricious, or contrary to law. Consistent with the following, we affirm.

The Judge’s Findings of Fact and Analysis Applicant is in his forties. Divorced in 2016, Applicant has two children. He has been continuously employed from 2007 to the present. Applicant attributes his debts to several factors: his divorce, providing financial assistance to family members, and taking care of his parents after they fell ill. Applicant asserted that financial advisors recommended that he focus on paying current debts and allow his old debts to be charged off. In his June 2020 clearance interview, Applicant explained that he and his ex-spouse agreed during their divorce proceedings to pay off some of their bills. He stated that he paid off some debts but was waiting for the statute of limitations (SOL) to run on others. Applicant also expressed his intent to write creditors and work out repayment plans. He is current on all present bills. At the time of his security clearance interview, Applicant had approximately $4,500 in discretionary income every month after subtracting monthly expenses from net earnings. Applicant did not provide documents to establish how much financial support he provided for his parents or family members. At his interview, he was afforded an opportunity to provide additional documents related to the delinquent debts but declined to do so. Following his 2016 divorce, Applicant accrued about $53,000 in delinquent debt between 2017 and 2020. There is some evidence that events beyond his control—to include his divorce, his parents’ illness, and his assistance to other family members—caused the indebtedness. However, in the absence of documentation of these events, it is impossible to speculate as to their financial impact. The reason why his debts are not being resolved or under control is due to his reliance on advice of financial advisors, persuading him to wait for the pertinent statute of limitations to run out so that the delinquent debts would no longer be enforceable. Under DOHA security clearance law, that decision to rely on the tolling of the statute rather than pay his debts, does not demonstrate a good-faith effort to pay off his debt obligations. [Decision at 7.]

DISCUSSION

In his brief, Applicant states, “He was advised by security personnel that a decision on the written record would provide a faster result.” Appeal Brief at 4. He cites to no evidence in the record that corroborates that statement. To the extent that he is contending the purported statement by unidentified security personnel may have misled him in making a forum choice, he has failed to establish a prima facie case of a due process violation. Applicant has not challenged any of the Judge’s specific findings of fact. To the extent that we understand Applicant’s argument, it is that the Judge failed to consider the actions he has taken to rectify his debts, which included retaining a credit repair firm and following their advice to “[wait] for the debts to fall off his credit report.” Appeal Brief at 6. Applicant notes that the Appeal Board has stated that reliance on a SOL is not a good-faith effort within the meaning of

Adjudicative Guideline (AG) ¶ 20(d),1 but he argues that the Judge erred in that he applied this precedent too broadly and failed to consider whether this same conduct might in fact be mitigating under other subparagraphs.2 For example, “Applicant followed the advice of a financial professional to wait until his debts were charged-off which shows applicability under [AG ¶ 20(c)].”3 Appeal Brief at 7. The Board is not persuaded. Putting aside whether the advice not to pay the debts came from “a legitimate and credible source” within the meaning of the Guidelines, AG ¶ 20(c) requires “clear indications that the problem is being resolved or is under control,” and there are no such indications here. See, e.g., ISCR Case No. 07-09304 at 4 (App. Bd. Oct. 6, 2008). We conclude this assignment of error lacks merit. None of Applicant’s arguments are enough to rebut the presumption that the Judge considered all of the record evidence or to demonstrate the Judge weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. Moreover, the Judge complied with the requirements of the Directive in his whole-person analysis by considering all evidence of record in reaching his decision. See, e.g., ISCR Case No. 19-01400 at 2 (App. Bd. Jun. 3, 2020). Applicant failed to establish that the Judge committed any harmful error or that he should be granted any relief on appeal. 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.” 1 AG) ¶ 20(d): the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts. 2 Applicant cites to an outdated version of the adjudicative guidelines and errs by citing to the wrong subparagraphs of that version. We will interpret his argument under the current guidelines and in the context provided in his brief. 3 AG ¶ 20 (c): the individual has received or is receiving financial counseling for the problem from a legitimate and credible source, such as a non-profit credit counseling service, and there are clear indications that the problem is being resolved or is under control.

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