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ISCR Case 20-02355 — CASE

ISCR Case 20-02355denied

Case Headnote

ISCR Case No. 20-02355

Jun 2, 2023· Hon. Gregg A. Cervi· appeal

Summary

An applicant, represented by counsel, was denied a security clearance under Guideline F (Financial Considerations) due to significant financial issues, including substantial federal and state tax debts. The applicant owed approximately $113,000 in federal taxes and $39,000 in state taxes. A pattern of financial irresponsibility was noted, specifically the failure to file required tax returns for multiple years.

While the applicant made progress in resolving some debts, the Administrative Judge determined that the applicant's financial history and inconsistent payment patterns over the preceding 18 months did not meet the reliability standards required for national security interests. Disqualifying conditions F.3.a and F.3.c were raised, while mitigating conditions F.2.a and F.2.c were applied.

Ultimately, the Administrative Judge's decision to deny the security clearance was affirmed on appeal.

Conditions Referenced

Disqualifying

F.3.araisedInability or Unwillingness to Satisfy Debts
F.3.craisedFailure to File Annual Income Tax Returns as Required

Mitigating

F.2.arejectedThe Behavior Was Not RecentThe judge noted the length of time the debts were delinquent.
F.2.cappliedThe Individual Has Made Good Faith Efforts to Repay Overdue CreditorsThe applicant established a payment plan and made payments towards state tax obligations.

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 issuedJan 31, 2021
Answer filed—
Hearing heldApr 4, 2023
Decision dateJun 2, 2023Decision affirmed on appeal.

Cite For

Denial of Security Clearance Due to Significant Financial Issues Under Guideline F
Consideration of Inconsistent Payment History in Security Clearance Decisions
Importance of Demonstrating Good Faith Efforts to Resolve Debts in Security Clearance 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 was filed by the Applicant after the Administrative Judge denied his request for a security clearance based on financial considerations. The Applicant contended that the Judge erred in failing to consider all evidence and misapplying mitigating conditions. The Board affirmed the decision, finding no harmful error in the Judge's analysis.

Appealed bythe applicant

Applicant representationAttorney

Judge belowMarc E. Curry — denied the clearance (split findings)

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Judge mis-weighed or ignored evidence — raised by the applicantRejected
The Judge failed to consider all of the record evidence.
Mitigation wrongly applied / not applied — raised by the applicantRejected
The Judge misapplied the mitigating conditions and whole-person concept.

Why the Board ruled this way

The Board found that the Judge examined the relevant evidence and articulated a satisfactory explanation for the decision, which was sustainable on the record. The arguments presented by the Applicant's Counsel did not demonstrate any harmful error.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewProcedural complianceNo de-novo re-decisionDeference to the judge’s credibility calls

Appeal Board panel

James F. Duffy — Chair
Moira Modzelewski
Gregg A. Cervi

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. 20-02355

)

) 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: June 2, 2023

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Ryan C. Nerney, Esq. The Department of Defense (DoD) declined to grant Applicant a security clearance. On January 31, 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 the National Security Adjudicative Guidelines (AG) in Appendix A of Security Executive Agent Directive 4 (effective Jun. 8, 2017) and Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive). Applicant requested a hearing. On April 4, 2023, after close of the record, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Marc E. Curry denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. As amended, the SOR alleged that Applicant owed the Federal Government approximately $113,000 in delinquent taxes for seven tax years (2010, 2011, 2014, 2015, 2016, 2017, and 2018); that he owed a state approximately $39,000 in delinquent taxes for three tax years (2010, 2011, and 2012); and that he failed to file, as required, his Federal and state income tax returns for eight years (2011, 2012, 2014, 2015, 2016, 2018, 2019, and 2021). The Judge found in favor of

Applicant on the Federal tax debt allegations and against him on the other allegations. The Judge concluded: Applicant has made significant progress towards satisfying his delinquent federal and state income taxes. However, given the length of time that his taxes were delinquent, and the inconsistency with which he has made payments over the last 18 months, it is not clearly consistent with the national security at this time to grant Applicant a security clearance. [Decision at 1.] On appeal, Applicant’s Counsel contends that the Judge erred by failing to consider all of the record evidence. For example, he argues that Applicant’s “outstanding federal tax debt has been fully resolved, which is significant and something that was overlooked by the Administrative Judge[.]” Appeal Brief at 4. This argument is simply not accurate. The Judge found that, by September 2021, Applicant had satisfied his Federal tax delinquencies by making monthly payments ranging between $1,000 and $22,000. Decision at 3. Additionally, as noted above, the Judge found in favor of Applicant on the Federal tax debt allegations. Applicant’s Counsel further argues the Judge did not take into account that “Applicant had/has a plan in place to resolve his outstanding [state] tax obligations.” Appeal Brief at 9. This argument is also baseless. The Judge found that Applicant had established a payment plan to resolve his remaining state tax deficiency and had made five payments totaling about $10,000 under that plan. Decision at 3. In short, none of the arguments presented are sufficient to rebut the presumption that the Judge considered all of the evidence in the record. See, e.g., ISCR Case No. 19-01400 at 2 (App. Bd. Jun. 3, 2020). Applicant’s Counsel also argues that the Judge erred in his analysis by misapplying the mitigating conditions and whole-person concept. These arguments amount to a disagreement with the Judge’s weighing of the evidence. For example, he contends that Applicant has learned from his past mistakes and highlights that Applicant’s divorce was a circumstance beyond his control that contributed to his financial problems. However, determining the weight to be given to the evidence is a matter within the special province of the Judge as the trier of fact. See, e.g., ISCR Case No. 18-00857 at 4 (App. Bd. May 8, 2019) (citing Inwood Laboratories, Inc. v. Ives Laboratories Inc., 456 U.S. 844, 856 (1982)). Counsel’s arguments for an alternative interpretation of the evidence are not sufficient to demonstrate the Judge weighed the evidence in a manner that is arbitrary, capricious, or contrary to law. See, e.g., ISCR Case No. 19-01400 at 2. In his brief, Applicant’s Counsel relies on hearing-level decisions in unrelated Guideline F cases to argue the Judge erred in his analysis of this case. His reliance on hearing-level decisions is misplaced because each case must be judged on its own merits. AG ¶ 2(b). As the Board has previously stated, how particular facts scenarios were decided at the hearing level in other cases is generally not a relevant consideration in our review of a case. Hearing Office decisions may be useful to highlight a novel legal principle; but only in rare situations⸺such as separate cases involving spouses, cohabitants, or partners in which the debts and the financial circumstances surrounding them are the same⸺would the adjudication outcome in another case have any meaningful relevance in our review of a case. The Hearing Office decisions that Applicant’s Counsel cites have no direct relationship or unique link to Applicant’s case that would make them relevant here. See, e.g., ISCR Case No. 20-00516 at 3 (App. Bd. Mar. 23, 2023).

Applicant’s brief fails to establish that the Judge committed any harmful error. See Directive ¶ E3.1.32. 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 AG ¶ 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 Chair, Appeal Board Signed: Moira Modzelewski Moira Modzelewski Administrative Judge Member, Appeal Board Signed: Gregg A. Cervi Gregg A. Cervi Administrative Judge Member, Appeal Board