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ISCR Case 21-01240 — CASE

ISCR Case 21-01240denied

Case Headnote

ISCR Case No. 21-01240

Nov 21, 2022· Hon. Moira D. Modzelewski· appeal

Summary

A security clearance applicant, representing himself, was denied under Guideline F (Financial Considerations) due to unresolved financial issues. The applicant admitted to eight charged-off debts totaling approximately $36,000. The appeal board found that the applicant failed to demonstrate responsible management of these debts since they became delinquent.

Specifically, the disqualifying condition F.3 was raised, indicating a history of not meeting financial obligations. The board determined that none of the mitigating conditions under Guideline F applied to the applicant's situation.

Consequently, the appeal board affirmed the denial of the security clearance, emphasizing the applicant's failure to resolve the significant outstanding debts or demonstrate a clear path toward responsible financial management.

Conditions Referenced

Disqualifying

F.3raisedInability or Unwillingness to Satisfy Debts

Key Rule Quoted

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

Procedural Posture

SOR issuedJun 14, 2021
Answer filed—
Hearing heldSep 19, 2022
Decision dateNov 21, 2022Appeal decision affirmed.

Cite For

Affirmation of Denial Due to Unresolved Financial Issues Under Guideline F
Importance of Demonstrating Responsible Management of Debts
Consideration of Unpaid Debts in Evaluating Trustworthiness and Reliability

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 considerations under Guideline F. The applicant argued that the judge erred in denying the clearance, but the Board affirmed the decision, finding no harmful error in the judge's analysis of the applicant's financial situation and responsibility for debts.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowJohn Bayard Glendon — denied the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

No specific harmful error alleged — raised by the applicantRejected
Applicant argued that the judge erred in denying his security clearance.

Why the Board ruled this way

The Board found that the Administrative Judge's decision was supported by substantial evidence and that the applicant failed to demonstrate any harmful error in the Judge's findings or conclusions.

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. 21-01240

)

) Applicant for Security Clearance ) _______________________________________) Date: November 21, 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 June 14, 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 initially requested a decision on the written record but subsequently elected a hearing. On September 19, 2022, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge John Bayard Glendon 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 eight charged-off debts or debts in collection totaling about $36,000. In his answer to the SOR, Applicant admitted all of the allegations with explanations. The Judge found against Applicant on all allegations.

The Judge’s Findings of Fact and Analysis Applicant’s business failed in 2015 or 2016, causing the eight defaults on credit cards and a loan that are alleged in the SOR. His marriage failed at the same time. Applicant filed for divorce and assumed custody of his two minor children. In his mid-fifties at the time, Applicant experienced a period of unemployment or underemployment before beginning work in July 2018 as a linguist for a U.S. Government contractor. Applicant submitted letters and a certificate of appreciation that attest to his performance as a linguist and his work ethic. The record shows that Applicant has not responsibly managed his substantial debts resulting from his business failure and subsequent unemployment. None of the debts alleged in the SOR have been resolved. His financial problems began with his business failure in 2015 or 2016, and his divorce in 2016. He also had a period of underemployment or unemployment in the following year or two. However, his lack of action to resolve the SOR debts since then does not show responsible conduct on his part. He began earning an income in 2018 as a linguist and has been working overseas for most of the past four years without taking responsibility for his debts. None of the mitigating conditions wholly apply to the facts of this case. . . . I have given significant weight to Applicant’s service to the U.S. Government as a linguist, and the sacrifices and dangers that his work requires. His evidence in mitigation, however, does not outweigh the security-significant failure by Applicant to address and resolve his debts from a number of years ago. He let his debts become unenforceable due to their age without making payment arrangements to resolve them. Overall, the record evidence leaves me with questions and doubts as to Applicant’s present suitability for national security eligibility and a security clearance. [Decision at 7–8.]

DISCUSSION

There is no presumption of error below, and the appealing party has the burden of raising and demonstrating factual or legal error by the Judge. See, e.g., ISCR Case No. 19-01689 at 3 (App. Bd. Jun. 8, 2020). In this case, Applicant has failed to meet that burden. Applicant asserts that his credit cards went into default between 2014 and 2015, that he had no means to pay the debts until he secured employment in 2018, that he then deployed to a combat zone and was unable to contact creditors, and that the statute of limitations had run by the time he returned to the United States in March 2019. The evidence of record, in particular Applicant’s testimony, supports the Judge’s conclusion that Applicant failed to take responsibility for his debts once he secured employment in June 2018. Applicant testified that―once employed―he contacted the creditors, who either wanted payment in full or advised him that the accounts were charged-off and that the statute of limitations would run.

Judge: So, at that point [2018], the debts were not charged off. They were not uncollectable because it had only been a couple of years since they were in default. So, you’re saying you took no action when you became employed? Applicant: That’s correct. Tr. at 51 – 52. The Appeal Board has long recognized that debts remain relevant for security clearance purposes even if they are no longer enforceable due to the running of the statute of limitations. That is, a judge may consider the underlying circumstances of these uncollectable debts in evaluating whether an applicant demonstrated good judgment, trustworthiness, and reliability. We note that all eight debts alleged on the SOR remain unpaid. The record supports the Judge’s conclusion that Applicant did not act responsibly under the circumstances. See, e.g., ISCR Case No. 20-01618 at 3–4 (App. Bd. Sep. 29, 2022). The remainder of Applicant’s brief is largely an argument that the Judge failed to apply the mitigating conditions properly. For example, Applicant highlights that his debts are mitigated by the passage of time: “The financial issues in my past are just that―in my past.” Appeal Brief at 2. However, an applicant’s ongoing, unpaid debts evidence a continuing course of conduct and, therefore, can be viewed as recent for purposes of the Guideline F mitigating conditions. See, e.g., ISCR Case No. 17-03146 at 2 (App. Bd. Jul. 31, 2018). Additionally, Applicant provides new information on appeal, to include details about his employment history since 2018 that are not elsewhere in the record. The Appeal Board does not review cases de novo and is prohibited from considering new evidence on appeal. Directive E3.1.29. Applicant has 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.”

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