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ISCR Case 22-02216 — CASE

ISCR Case 22-02216denied

Case Headnote

ISCR Case No. 22-02216

Oct 27, 2023· Hon. Gregg A. Cervi· appeal

Summary

An applicant, represented by counsel, was denied a security clearance under Guideline F (Financial Considerations) due to six delinquent debts totaling approximately $21,000, which had remained unpaid for years. The judge determined there was insufficient evidence of good-faith efforts to repay creditors or resolve these debts.

The applicant's claims of favorable circumstances were not supported by the record. Consequently, the appeal board affirmed the denial, emphasizing the lack of a meaningful financial track record and the applicant's failure to demonstrate sufficient good-faith efforts toward repayment.

The denial was based on Disqualifying Condition AG ¶ 19, with no mitigating conditions under AG ¶ 20 found applicable.

Conditions Referenced

Disqualifying

AG ¶ 19raisedFinancial Considerations

Mitigating

AG ¶ 20rejectedFinancial ConsiderationsThe applicant failed to show a meaningful financial track record or good-faith efforts to repay debts.

Key Rule Quoted

“Until an applicant has a meaningful financial track record, it cannot be said as a matter of law that he has initiated a good-faith effort to repay overdue creditors or otherwise resolved debts.”
— ISCR Case No. 05-01920 at 5 (App. Bd. Mar. 1, 2007)

Procedural Posture

SOR issuedFeb 13, 2023
Answer filed—
Hearing heldAug 31, 2023
Decision dateOct 27, 2023Appeal decision affirmed.

Cite For

Insufficient Evidence of Good-faith Efforts to Repay Debts Under Guideline F
Importance of a Meaningful Financial Track Record in Security Clearance Evaluations
Unresolved Financial Issues as a Basis for Security Clearance Denial

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 security clearance based on financial considerations. The applicant challenged the Judge's findings and analysis, but the Board affirmed the decision, finding no harmful error in the Judge's assessment of the evidence and the applicant's financial situation.

Appealed bythe applicant

Applicant representationAttorney

Judge belowCarol G. Ricciardello — denied the clearance (split findings)

Decided onthe written record

Guidelines belowGuideline F

What the Board reviewed

Judge mis-weighed or ignored evidence — raised by the applicantRejected
Applicant contended that the Judge failed to properly consider all available evidence.
Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
Applicant claimed that the Judge mischaracterized the evidence and did not consider favorable evidence or extenuating circumstances.

Why the Board ruled this way

The Board found that the Judge thoroughly reviewed the evidence and articulated a satisfactory explanation for the decision, which was supported by substantial evidence. The Judge's conclusions were not arbitrary or capricious, and the decision was sustainable on the record.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewProcedural complianceNo de-novo re-decisionNo new evidence on appeal

Appeal Board panel

James F. Duffy — Chair
Gregg A. Cervi
Allison Marie

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. 22-02216

)

) Applicant for Security Clearance ) _______________________________________) DATE: October 27, 2023

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Christopher Snowden, Esq. The Department of Defense (DoD) declined to grant Applicant a security clearance. On February 13, 2023, 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 June 8, 2017) and DoD Directive 5220.6 (January 2, 1992, as amended) (Directive). Applicant elected to have the Judge decide the case based on the record, including the Government’s file of relevant material (FORM) and Applicant’s response. On August 31, 2023, Defense Office of Hearings and Appeals Administrative Judge Carol G. Ricciardello denied Applicant’s security clearance eligibility. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30, challenging the Judge’s factual findings and her analysis of the evidence. Consistent with the following, we affirm. The SOR alleged six delinquent debts totaling about $21,000, including a charged-off credit-card account. The Judge found in favor of Applicant on the charged-off credit card account, and against him on the remaining five debts. In her analysis, the Judge concluded that Applicant failed to establish that there were clear indications that his financial problems were being resolved or were under control.

On appeal, Applicant’s contention that the Judge failed to properly consider all available evidence is not supported by the record. The record reflects that the Judge thoroughly reviewed information submitted by Applicant in response to the interrogatories, SOR, and FORM, but found them lacking in detail which would convincingly show an adherence to good-faith efforts to repay overdue creditors or otherwise resolve debts. Applicant’s claim that the Judge failed to consider favorable evidence or extenuating circumstances in her decision is misplaced. The Judge noted Applicant’s military service, divorces, health and COVID-related issues, education, business downturn, and his unemployment in her decision. Applicant’s assertions appear to be additional argument challenging the Judge’s interpretation and weight of the evidence. As we have explained before, there is a difference between errors in a judge’s findings of fact and errors in the conclusions drawn therefrom. See ISCR Case No. 22-00822 at 3 (App. Bd. Jul. 5, 2023). Findings of fact must be supported by substantial evidence, while conclusions are reasonable inferences drawn from the evidence. See ISCR Case No. 18-00496 at 3 (App. Bd. Nov. 8, 2019), citing Directive ¶¶ E3.1.32.1 and E3.1.32.3. To the extent that Applicant is contending the Judge mis-weighed or did not consider record evidence, we find no merit in those assertions. None of his 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. See, e.g., ISCR Case No. 21-01169 at 5 (App. Bd. May 13, 2022). The Judge noted that the SOR debts were unpaid for years and correctly cited ISCR Case No. 16-01211 at 4 (App. Bd. May 30, 2018) for the proposition that waiting until a clearance is in jeopardy before resolving debts shows an applicant may be lacking in judgement expected of those with access to classified information. Decision at 9. It is also well established that an applicant’s ongoing, unpaid debts demonstrate a continuing course of conduct and can be viewed as recent for purposes of the Guideline F mitigating conditions. See, e.g., ISCR Case No. 15-06532 at 3 (App. Bd. Feb. 16, 2017). Applicant also contends that the Judge mischaracterized the evidence by concluding that Applicant closed his business to pursue his educational goals and did not consider Applicant’s divorce at the same time. The Judge’s finding is partly based on Applicant’s statement in his SCA where he said he “closed business down and pursued education.” FORM Item 3 at 18. He did not disclose the delinquent business loan in his SCA. The Judge also acknowledged his divorce and other factors that may have impacted his finances but found his failure to show good-faith efforts to repay creditors or otherwise resolve his debts to be a critical factor in denying mitigating credit. Applicant finally agreed to a repayment plan for the business loan in June 2023 despite knowledge of it in September 2022. Applicant Exhibit B; FORM Item 4 at 1. He also failed to provide sufficient evidence of resolution of the remaining debts. Decision at 8. The Board has held that until an applicant has a meaningful financial track record, it cannot be said as a matter of law that he has initiated a good-faith effort to repay overdue creditors or otherwise resolved debts. The phrase “meaningful track record” necessarily includes evidence of actual debt reduction through payment on debts. See, e.g., ISCR Case No. 05-01920 at 5 (App. Bd. Mar. 1, 2007).

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 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: Gregg A. Cervi Gregg A. Cervi Administrative Judge Member, Appeal Board Signed: Allison Marie Allison Marie Administrative Judge Member, Appeal Board