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ISCR Case 22-01343 — CASE

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ISCR Case 22-01343

A decided public DOHA case, shown for research — not advice or a prediction.

Case Profile
Decision Date8/19/2024
Statusunknown
LevelAPPEAL
TypeSTANDARD ISCR
Related decisionSee the hearing decision (Case 22-01343) →
Participants
Applicant Representation: Pro Se
Judge: Gregg A. Cervi, James B. Norman, Moira D. Modzelewski
Government Counsel: Andrea M. Corrales
Case Summary
The applicant in this case was a defense contractor in his late 50s, who had previously served in the United States Navy. The Department of Defense (DoD) denied him a security clearance based on allegations under Guideline F (Financial Considerations) related to his financial history, including a Chapter 13 bankruptcy filed in 2017 that was later converted to Chapter 11 and Chapter 7 before being dismissed in 2020. The Statement of Reasons (SOR) indicated that he had 12 delinquent debts totaling approximately $136,000.
During the proceedings, the applicant admitted to the allegations but provided explanations regarding his financial difficulties, attributing them to a failed business venture. The administrative judge found that the applicant had resolved several debts through a repayment plan and demonstrated a good-faith effort to address his financial obligations. However, upon appeal, the Appeal Board determined that the judge's findings were not supported by the evidence. They concluded that only one of the 12 debts had been resolved, indicating a pattern of financial irresponsibility. As a result, the Appeal Board reversed the administrative judge's decision, stating that it failed to adequately consider the relevant evidence and did not provide a rational connection between the findings and the conclusions drawn.
Guidelines Evaluated
- Guideline FFinancial Considerations · Against Applicant
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Case Headnote

ISCR Case No. 22-01343

Aug 19, 2024· Hon. Gregg A. Cervi· appeal

Summary

A defense contractor in his late 50s was denied a security clearance under Guideline F (Financial Considerations) due to a history of bankruptcy and approximately $136,000 in delinquent debts. An initial ruling by an administrative judge favored the applicant, but this decision was subsequently reversed by the appeal board.

The appeal board determined that the judge's favorable findings were not supported by the record evidence. Specifically, the judge's analysis lacked a rational connection between the facts presented and the conclusions reached, failing to provide a satisfactory explanation for the findings.

Contrary to the judge's assertion that nine debts had been resolved, the appeal board found that the applicant had only resolved one of the twelve alleged debts. Consequently, the appeal board found insufficient evidence to support the initial favorable ruling, and no security clearance was granted.

Conditions Referenced

Disqualifying

AG ¶ 19raisedFinancial Considerations

Key Rule Quoted

“A security clearance adjudication is not a proceeding aimed at collecting an applicant’s debts. Rather, it is a proceeding aimed at evaluating an applicant’s judgment, reliability, and trustworthiness.”
— ISCR Case No. 07-08049 at 5 (App. Bd. Jul. 22, 2008)

Procedural Posture

SOR issuedSep 26, 2022
Answer filed—
Hearing heldMay 24, 2024
Decision dateAug 19, 2024Decision reversed on appeal.

Cite For

Insufficient Evidence to Support Favorable Findings Under Guideline F
Evaluation of Financial History in Security Clearance Decisions
Importance of Demonstrating Responsible Financial Conduct for 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

Reversed

The appeal involved a security clearance denial based on financial considerations. The Administrative Judge initially granted the clearance, but the Department Counsel appealed, arguing that the Judge's findings were unsupported by evidence. The Appeal Board reversed the decision, concluding that the Judge's analysis was arbitrary and not based on a reasonable interpretation of the evidence.

Appealed bythe Government (Department Counsel)

Applicant representationPro se (self-represented)

Judge belowRobert Robinson Gales — granted the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Decision arbitrary, capricious, or contrary to law — raised by the Government (Department Counsel)Error sustained
The Judge's findings of fact are not supported by the record evidence, rendering the decision arbitrary, capricious, and contrary to law.

Why the Board ruled this way

The Board found that the Judge's findings of fact were not supported by substantial evidence and that the decision failed to articulate a rational connection between the facts found and the conclusions drawn.

Ignored material evidenceNo rational connection between facts and conclusion

Standard of review applied

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

Appeal Board panel

Moira Modzelewski — Chair
Gregg A. Cervi
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.