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ISCR Case ISCR Case No. 22-02208 — CASE

ISCR Case ISCR Case No. 22-02208denied

Case Headnote

ISCR Case No. ISCR Case No. 22-02208

Apr 18, 2024· Hon. Gregg A. Cervi· appeal

Summary

A U.S. defense contractor, a retired U.S. Navy veteran in his early 50s, was denied a security clearance due to concerns under Guideline F (Financial Considerations) and Guideline E (Personal Conduct). The applicant had five charged-off debts totaling approximately $43,000, which were identified as disqualifying conditions F3 and E2.

The denial was based on the applicant's failure to demonstrate effective financial management, specifically his inability to resolve these debts in a timely manner. Furthermore, despite acknowledging a need for assistance, the applicant did not seek financial counseling.

The appeal of this decision was denied, affirming the initial findings that the applicant's financial mismanagement and related conduct warranted the denial of his security clearance.

Conditions Referenced

Disqualifying

F3raisedInability or Unwillingness to Satisfy Debts
E2raisedPersonal Conduct That Creates a Risk of Adverse Impact on National Security

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 issuedFeb 14, 2023
Answer filednull
Hearing heldnull
Decision dateApr 18, 2024Appeal affirmed the denial.

Cite For

Financial Mismanagement Under Guideline F
Failure to Seek Financial Counseling as a Risk Factor
Affirmation of Denial Based on National Security Interests

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 and personal conduct. The applicant raised two errors regarding the Judge's findings on financial counseling and the purchase of a car. The Board affirmed the decision, finding no harmful error that would change the outcome.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowLeRoy F. Foreman — denied the clearance

Decided ona hearing

Guidelines belowGuideline FGuideline E

What the Board reviewed

Judge mis-weighed or ignored evidence — raised by the applicantRejected
Applicant claimed the Judge erred by stating he had no financial counseling.
Judge mis-weighed or ignored evidence — raised by the applicantError found, but harmless
Applicant contended the Judge erred by stating he bought a car for his daughter.

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 that the Judge's decision was consistent with the evidence presented and articulated a satisfactory explanation for the denial of the security clearance.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewNo de-novo re-decisionNo new evidence on appeal

Appeal Board panel

Moira Modzelewski
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.

Decision text, by section

DEFENSE OFFICE OF HEARINGS AND APPEALS

APPEAL

APPEARANCES

_______________________________________ ) In the matter of: )

)

----- )

ISCR Case No. 22-02208

)

) 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: April 18, 2024

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT Julie R. Mendez, Esq., Chief Department Counsel FOR APPLICANT Pro se The Department of Defense (DoD) declined to grant Applicant a security clearance. On February 14, 2023, DoD issued a Statement of Reasons (SOR) advising Applicant of the basis of that decision – security concerns raised under Guideline F (Financial Considerations) and Guideline E (Personal Conduct) 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 (Jan. 2, 1992, as amended) (Directive). On February 22, 2024, Defense Office of Hearings and Appeals Administrative Judge LeRoy F. Foreman denied Applicant’s security clearance eligibility. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. Under Guideline F, the SOR alleged that Applicant has five charged-off debts totaling about $43,000. Prior to hearing, the Government withdrew a Guideline E allegation that cross- alleged the same debts. The Judge found against Applicant on all of the Guideline F allegations. On appeal, Applicant asserts two errors of fact in the Judge’s decision. He also provides further context and clarification of his testimony and seeks the reversal of the adverse security clearance decision.

Applicant is in his early-50sand has been employed by a defense contractor since 2014. He married in 2007 and has four children. He retired from the U.S. Navy in 2011 and remained unemployed before obtaining his current employment. While separated from his spouse, they both accumulated delinquent debts alleged in the SOR as a result of financial mismanagement and spending beyond their means. The Judge found that Applicant failed to act on two credit-card debts; stopped payments on another credit-card debt that resulted in a default judgment and involuntary garnishment; and settled and paid two additional credit-card debts after they were charged off in 2018. Applicant testified that he has not sought or received financial counseling. When asked why he had not sought counseling, he responded, “I guess I’m a little stubborn and I don’t like to have help.” Tr. at 45. The Judge noted that Applicant paid $22,000 for a car for his 16th daughter’s birthday. In post-hearing submissions, Applicant resolved one debt via an involuntary garnishment, which does not qualify as a good-faith resolution, and he took no significant action to resolve four other debts until he realized that his security clearance was in jeopardy. Applicant claims in his appeal that the Judge erred by stating he had no financial counseling, stating that he had received financial counseling from the Navy before he retired but was never able to implement the strategies suggested. Appeal Brief (AB) at 1. In testimony, Department Counsel asked Applicant, “Have you ever received financial counseling?” to which Applicant answered, “No sir.” Applicant was then asked if he ever looked into financial management or financial counseling though the Department of Veterans Affairs, and Applicant answered, “No sir.” When asked if he ever thought about it, he said he had, but he has not used such a program because “I guess I’m a little stubborn and I don’t like to have help, I guess.” Tr. at 45. We find the Judge’s decision is consistent with Applicant’s testimony. With regard to additional or clarifying evidence presented on appeal, the Appeal Board is prohibited from considering new evidence on appeal and does not review cases de novo. Directive ¶ E3.1.29. Applicant also contends the Judge erred by stating he bought a car for his daughter. Applicant’s statement of error is correct, but harmless. In testimony, Applicant stated that he bought a new car “a few months ago” for “himself,” and he gave his other car to his daughter for her 16th birthday. Tr. at 48. The Judge’s confusion regarding the possession of any particular vehicle is irrelevant to the ultimate findings with regard to Applicant’s failure to resolve delinquent debts in a timely manner. Applicant has not established that the Judge committed harmful error. Our review of the record reflects that the Judge examined the relevant evidence and articulated a satisfactory explanation for the decision, which 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 Member, Appeal Board Signed: Gregg A. Cervi Gregg A. Cervi Administrative Judge Member, Appeal Board Signed: James B. Norman James B. Norman Administrative Judge Member, Appeal Board