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ISCR 21-02369: Guideline F security clearance appeal, denied (2022) · CASE

ISCR Case 21-02369denied

Case headnote

ISCR Case No. 21-02369

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

Summary

The applicant was denied a security clearance under Guideline F (Financial Considerations) due to 22 delinquent debts. These included a significant auto loan and a collection account. The applicant, representing herself, did not provide sufficient evidence of financial counseling or a budget to demonstrate financial responsibility.

While some efforts were made to resolve debts, most of these actions occurred after the Statement of Reasons (SOR) was issued. The appeal board affirmed the denial, concluding that the applicant failed to provide adequate evidence of financial responsibility or hardship.

The denial was based on Disqualifying Condition AG ¶ 19, which addresses a history of not meeting financial obligations.

Conditions referenced

Disqualifying

AG ¶ 19raisedFinancial Considerations

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 issuedDec 1, 2021
Answer filed—Applicant requested a decision on the written record.
Hearing heldOct 14, 2022
Decision dateDec 21, 2022Appeal affirmed.

Cite for

Denial of Security Clearance Due to Unresolved Financial Issues Under Guideline F
Importance of Demonstrating Financial Responsibility in Security Clearance Evaluations
Insufficient Evidence of Financial Hardship Affecting Clearance Eligibility

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 argued that the Judge's decision was arbitrary and that she was denied the opportunity to present evidence. The Board affirmed the decision, finding no harmful error and that the Judge's conclusions were supported by the evidence.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowNoreen A. Lynch 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 decision was arbitrary and capricious.
Erroneous finding of fact, raised by the applicantError found, but harmless
Applicant claimed the Judge erred in finding that payments under a settlement agreement were to begin in January 2023.
Due-process / fairness, raised by the applicantRejected
Applicant asserted that she was denied an opportunity to present evidence in mitigation.

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 no harmful error in the Judge's decision and concluded that the decision was sustainable on the record. The Judge's findings were supported by substantial evidence and did not violate due 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

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

[Extraction unavailable]

APPEAL BOARD DECISION

___________________________________

) In the matter of: )

)

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)

ISCR Case No. 21-02369

)

) Applicant for Security Clearance ) _______________________________________) Date: December 21, 2022

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 December 1, 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 Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive). Applicant requested a decision on the written record. On October 14, 2022, after considering the record, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Noreen A. Lynch denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. Applicant’s SOR lists 22 delinquent debts, for such things as credit cards, medical expenses, education debts, and an automobile loan. The Judge resolved seven allegations in Applicant’s favor and ten allegations adversely to Applicant, including the auto loan in the amount of about $13,000 and a collection account of about $7,000.1 1 Executive Order 10865 § 3(7) provides that an adverse decision shall make findings for or against an applicant on each SOR allegation. See also ISCR Case No. 18-00110 at 4 (App. Bd. Mar. 31, 2020), noting the Directive also

Applicant attributed her financial problems to a year during which she worked without pay and to her husband’s unemployment. The Judge found that Applicant had supplied no information about her income and expenses and no evidence of financial counseling. Applicant did obtain the services of two debt resolution companies but stopped using them. The Judge found that most of Applicant’s efforts at debt resolution occurred after receipt of the SOR. In the Analysis portion of the Decision, the Judge noted circumstances beyond Applicant’s control that affected her financial condition. However, she concluded that Applicant had not shown sufficient responsibility in resolving her debts to meet her burden of persuasion as to mitigation. The Judge also cited to a paucity of record evidence regarding Applicant’s current income, a monthly budget, and financial counseling. Applicant’s brief includes information from outside the record, which we cannot consider (Directive ⁋ E3.1.29), except for the following. Applicant has presented email traffic between her security manager and DOHA officials regarding her Response to the File of Relevant Information (FORM). She states that the DOHA official with whom she dealt did not mention having received her Response and that the Judge did not acknowledge receipt either. Although these assertions constitute new evidence, we will consider them insofar as they pertain to the threshold issue of due process. See, e.g., ISCR Case No. 18-01764 at 1-2 (App. Bd. Jun. 4, 2019). Applicant has attached to her brief email traffic and USPS tracking information. The record contains a document showing that Applicant received the FORM on May 11, 2022, and the USPS tracking information shows that Applicant’s Response thereto was delivered to DOHA on June 13, 2022. In reply to a November 16, 2022, email query by Applicant a DOHA official stated that her FORM response had been received and passed on to the Judge. At the beginning of the Decision the Judge noted that Applicant had responded to the FORM, although she did not explicitly identify the submitted documents. Decision at 1. She did, however, state in her findings that Applicant’s Response included three credit bureau reports, which is consistent with the record. Decision at 3. All in all, Applicant’s appeal brief and attachments do not establish a prima facie case that Applicant submitted evidence that was not included in the record. We conclude that Applicant was not denied an opportunity to present evidence in mitigation. Applicant cites to evidence regarding a settlement agreement she has with the auto loan creditor. The Judge resolved this debt adversely to Applicant, finding that payment under the agreement was not to begin until January 2023. Decision at 3. Actually, that is the date upon which payments are expected to end. Settlement Offer dated June 6, 2022, included in Response to FORM. Accordingly, this finding is in error. However, the agreement was finalized six months after the date of the SOR, which supports the Judge’s finding about the timing of Applicant’s efforts at debt resolution. Therefore, the error in question did not likely affect the overall outcome of the case and is, accordingly, harmless. See, e.g., ISCR Case No. 18-02722 at 4 (App. Bd. Jan. 30, 2020). requires the Judge to make formal findings on each allegation. In this case, the Judge’s error in failing to make formal findings on five allegations, however, is harmless.

Applicant’s arguments on appeal 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. 18-02872 at 3 (App. Bd. Jan. 15, 2020). The Judge examined the relevant evidence and articulated a satisfactory explanation for the decision. Applicant has cited to no harmful error in the Judge’s findings or analysis. 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: Moira Modzelewski Moira Modzelewski Administrative Judge Member, Appeal Board