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ISCR Case 22-00762 — CASE

ISCR Case 22-00762denied

Case Headnote

ISCR Case No. 22-00762

Mar 18, 2024· Hon. James B. Norman· appeal

Summary

An applicant, an IT professional in his early forties, was denied a security clearance under Guideline F (Financial Considerations) due to approximately $150,000 in delinquent debts, including a significant mortgage foreclosure. Disqualifying conditions were raised under AG ¶ 20(a) and AG ¶ 20(d), while AG ¶ 20(c) was applied as a mitigating condition.

Despite resolving some debts, the applicant's efforts were deemed insufficient to address the remaining financial obligations. The judge found that the applicant's debt resolution actions were largely reactive, occurring primarily after the security clearance application was submitted. Furthermore, the applicant failed to provide adequate documentation to substantiate claims of good faith efforts to repay debts.

Ultimately, the denial was affirmed on appeal, emphasizing the applicant's lack of good faith in resolving his financial issues. The decision highlighted the applicant's failure to demonstrate a consistent record of payments and responsible financial conduct, leading to the conclusion that the remaining debts posed an unacceptable risk to national security.

Conditions Referenced

Disqualifying

AG ¶ 20(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 20(d)raisedFailure to Meet Financial Obligations

Mitigating

AG ¶ 20(c)rejectedDebt Resolved or Being ResolvedThe judge concluded that the applicant's efforts to resolve debts were insufficient and did not demonstrate good faith.

Key Rule Quoted

“A security clearance adjudication is designed to evaluate an applicant’s judgment, reliability and trustworthiness so that a sound decision is rendered.”
— ISCR Case No. 10-03020, 2011 WL 2937329 at *2 (App. Bd. Jun. 2, 2011)

Procedural Posture

SOR issuedMay 5, 2022
Answer filed—
Hearing heldDec 29, 2023
Decision dateMar 18, 2024Appeal affirmed.

Cite For

Evaluation of Financial Judgment Under Guideline F
Insufficient Debt Resolution Efforts Impacting Security Clearance
Importance of Timely Debt Resolution 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 involved a denial of security clearance based on financial considerations. The Applicant contested the Judge's findings regarding the requirement to be debt-free, credibility determinations, and the weighing of debt resolution timing. The Board affirmed the decision, finding no harmful error in the Judge's analysis.

Appealed bythe applicant

Applicant representationAttorney

Judge belowEric C. Price — 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 erroneously required Applicant to be debt free.
Credibility determination — raised by the applicantRejected
The Judge substituted an unfavorable credibility determination for record evidence.
Judge mis-weighed or ignored evidence — raised by the applicantRejected
The Judge unreasonably weighed the timing of Applicant’s debt resolution efforts.

Why the Board ruled this way

The Board found that the Judge's conclusions regarding the Applicant's financial situation and efforts to resolve debts were supported by substantial evidence and not arbitrary or capricious. The Judge's findings regarding the timing of debt resolution efforts were deemed relevant to the assessment of the Applicant's judgment and reliability.

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

Moira Modzelewski — Chair
Allison Marie
James B. Norman

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. 22-00762

)

) 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: March 18, 2024

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT Julie R. Mendez, Esq., Chief Department Counsel FOR APPLICANT Carl Anthony Marrone, Esq. The Department of Defense (DoD) declined to grant Applicant a security clearance. On May 5, 2022, 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 Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive). Applicant requested a hearing. On December 29, 2023, after the hearing, Administrative Judge Eric C. Price denied Applicant’s security clearance eligibility. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. The SOR alleged that Applicant owed about $150,000 for seven delinquent debts, the largest of which was a mortgage account foreclosed for about $124,000. Applicant denied all allegations. The Judge found in Applicant’s favor on all but one of the allegations – a consumer debt originally charged off for about $17,000. On appeal, Applicant raised the following issues: whether the Judge erroneously required Applicant to be debt free, whether the Judge substituted an unfavorable credibility determination for record evidence, and whether the Judge unreasonably weighed the timing of Applicant’s debt resolution efforts. Appeal Brief at 1. Consistent with the following, we affirm.

The Judge’s Findings of Fact and Analysis Applicant is in his early forties, has some college credits, and holds numerous information technology (IT) certifications. He married his current wife in 2022, and he is previously divorced and has two children with his former spouse. He has been employed by government contractors in various IT positions since 2007, except for periods of unemployment from March 2017 to July 2017 and August 2021 to October 2021. From March 2014 to November 2015, Applicant worked part-time while unsuccessfully attempting to start his own business. He has held a security clearance since 2009 and submitted his most recent security clearance application (SCA) on January 17, 2020. He attributes his delinquencies to his divorce, failed business, and periods of unemployment. Applicant provided the Judge with evidence that the mortgage foreclosure alleged in SOR ¶ 1.a was resolved in 2015. Applicant also provided evidence that the debts alleged in SOR ¶¶ 1.c through 1.gwere settled at various dates in 2021 and 2023. The Judge resolved each of those allegations in favor of Applicant despite concluding that AG ¶¶ 20(a), 20(b), and 20(d) were not fully established and that AG ¶ 20(c) was not established at all. As to the allegation in SOR ¶ 1.b, Applicant maintained that he had entered into a settlement agreement and had made monthly payments. After the hearing, he presented a letter dated February 26, 2022, indicating that the balance had increased to $26,662 and that he had authorized automatic $100 monthly payments beginning in March 2022. He stated that the automatic withdrawals stopped in December 2022 and the debt dropped from his credit report. The Judge found against Applicant as to this account, concluding that Applicant had not made good faith efforts to address the debt.

DISCUSSION

On appeal, Applicant contends that the Judge “demanded complete resolution of all debt” and gave “dispositive weight to the timing” of Applicant’s efforts. Appeal Brief at 3, 5. The Judge addressed each of Applicant’s debts and concluded that, while the efforts to settle them were sufficiently mitigating to resolve most of the specific debts, the majority of those efforts occurred after submitting his security clearance application and after addressing the debts with a government investigator. His favorable conclusion regarding the individual resolved debts did not preclude the Judge from weighing the manner in which Applicant addressed his SOR debts and the independent security significance of his remaining, largely unaddressed outstanding debt. DOHA proceedings are not aimed at collecting an applicant’s debts. Rather, “a security clearance adjudication is designed to evaluate an applicant’s judgment, reliability and trustworthiness so that a sound decision is rendered.” ISCR Case No. 10-03020, 2011 WL 2937329 at *2 (App. Bd. Jun. 2, 2011). Turning first to the debts found in Applicant’s favor, the Judge concluded that, “[a]lthough [Applicant] subsequently resolved five of the six remaining SOR debts, he did so only after submitting a SCA in January 2020 and after discussing his financial issues with a government investigator.” Decision at 8. Even where an applicant has paid his debts,

a judge may still consider the circumstances underlying the debts for what they reveal about the applicant’s security clearance worthiness. See ISCR Case No. 14-02394, 2015 WL 5184614 at *3 (App. Bd. Aug. 17, 2015). As part of his analysis of Applicant’s overall financial history, the Judge correctly considered that the timing of debt payments is relevant in evaluating an applicant’s case for mitigation, in that an applicant who waits until his clearance is in jeopardy before resolving debts might be lacking in the judgment expected of those with access to classified information. See ISCR Case No. 15-01070, 2016 WL 2843113 at *3 (App. Bd. Mar. 9, 2016). The presence of some favorable or mitigating evidence does not require the Judge to make an overall favorable determination in the face of disqualifying conduct such as Applicant’s. See ISCR Case No. 01 07292, 2004 WL 794251 at *3 (App. Bd. Jan. 29, 2004). With respect to SOR ¶ 1(b), the Judge concluded that Applicant ignored the remaining debt for many years as the delinquency grew from about $17,000 to over $26,000, that he made only a limited effort to address it in December 2021 when faced with the loss of his clearance, that he failed to provide documentation supporting any payments made pursuant to the agreement, and that he ceased participating in the payment plan in December 2022 with no further action. Decision at 8. Those findings are supported by the evidence and it was not error for the Judge to find that this did not constitute a good faith effort in addressing the debt to afford mitigation under AG ¶ 20(d). To receive full credit under AG ¶ 20(d), an applicant must initiate and adhere “to a good faith effort to repay overdue creditors or otherwise resolve debts.” In the absence of a meaningful track record of repayments, it cannot reasonably be suggested that an applicant has initiated a good-faith effort to repay creditors or otherwise resolve debts. See ISCR Case No. 07-09304, 2008 WL 4917777 at *3 (App. Bd. Oct. 6, 2008). Nor did the Judge err in finding no mitigation under AG ¶ 20(a), noting that Applicant’s multiple failed opportunities to provide corroborating documentation of his purported repayment efforts impugned his current reliability, trustworthiness, and good judgment. To the extent that Applicant asserts that the Judge substituted an adverse credibility determination for record evidence, there is no factual basis for this assertion. There is no dispute as to the facts surrounding this debt and Applicant simply argues for a different weighing of the evidence. We find that the Judge addressed Applicant’s circumstances and debt resolution efforts in his decision and reasonably concluded that Applicant had not established a sufficient record of payments and responsible financial conduct. Applicant’s “disagreement with the Judge’s weighing of the evidence, or an ability to argue for a different interpretation of the evidence, is not sufficient to demonstrate that the Judge weighed the evidence or reached conclusions in a manner that is arbitrary, capricious, or contrary to law.” ISCR Case No. 06-17409, 2007 WL 4105312 at *2 (App. Bd. Oct. 12, 2007). Moreover, Applicant’s arguments fail to rebut the presumption that the Judge considered all of the record evidence. The Judge’s conclusion that Applicant failed to mitigate the financial security concerns is sustainable. 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). “Any doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.” AG ¶ 2(b).

ORDER

The decision is AFFIRMED. Signed: Moira Modzelewski Moira Modzelewski Administrative Judge Chair, Appeal Board Signed: Allison Marie Allison Marie Administrative Judge Member, Appeal Board Signed: James B. Norman James B. Norman Administrative Judge Member, Appeal Board