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ISCR 24-01532: Guideline E security clearance appeal, denied (2025) · CASE

ISCR Case 24-01532denied

Case headnote

ISCR Case No. 24-01532

Aug 28, 2025· Hon. Moira D. Modzelewski· appeal

Summary

An applicant, representing himself, was denied a security clearance primarily due to significant financial issues and personal conduct concerns under DOHA Guidelines E and F. The appeal board affirmed this denial.

Disqualifying conditions included the applicant filing for bankruptcy five times, with several dismissals due to non-payment. Since his last bankruptcy discharge in 2018, the applicant accumulated four new delinquent debts totaling approximately $20,500. Furthermore, the applicant failed to disclose these financial concerns on his security clearance application, only revealing them when confronted during his background interview.

Despite the favorable resolution of one minor debt, the applicant's extensive history of financial instability and lack of candor regarding these issues were deemed substantial security concerns, leading to the denial of his security clearance.

Conditions referenced

Disqualifying

AG ¶ 20raisedFinancial Considerations
AG ¶ 14raisedPersonal Conduct

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 issuedDec 13, 2024
Answer filed—
Hearing heldJul 8, 2025
Decision dateAug 28, 2025

Cite for

Affirmation of Denial Based on Multiple Bankruptcies Under Guideline F
Significant Financial Issues as a Basis for Security Clearance Denial
Importance of Full Disclosure in Security Clearance Applications

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 issues and personal conduct. The Applicant challenged the Judge's adverse finding regarding a specific debt, claiming he was only an authorized user. The Board found the Judge erred but deemed the error harmless due to the Applicant's significant financial history. The appeal was ultimately affirmed.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowBraden M. Murphy denied the clearance (split findings)

Decided ona hearing

Guidelines belowGuideline EGuideline F

What the Board reviewed

Erroneous finding of fact, raised by the applicantError sustained
The Judge erred in resolving the debt alleged at SOR ¶ 2.h adversely, as Applicant was only an authorized user on the account.
Decision arbitrary, capricious, or contrary to law, raised by the applicantRejected
Applicant argued that the Judge's conclusions were arbitrary and capricious, advocating for a different weighing of circumstances.

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 findings and conclusions were supported by substantial evidence and articulated a satisfactory explanation for the decision. The erroneous finding regarding SOR ¶ 2.h was deemed harmless in light of the overall unfavorable findings against the Applicant.

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)
Jennifer I. Goldstein
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. 24-01532

)

) 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: August 28, 2025

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 December 13, 2024, DoD issued a Statement of Reasons (SOR) advising Applicant of the basis of that decision – security concerns raised under Guideline E (Personal Conduct) and 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 (Jan. 2, 1992, as amended) (Directive). On July 8, 2025, Defense Office of Hearings and Appeals Administrative Judge Braden M. Murphy denied Applicant national security eligibility. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30.

DISCUSSION

Under Guideline F, the SOR alleged that Applicant filed for bankruptcy five times, including under Chapter 7 in 2009, which resulted in discharge, under Chapter 13 in 2012, 2014, and 2015, all of which were dismissed for failure to make plan payments, and finally under Chapter 7 in 2018, which again resulted in discharge. Additionally, Applicant had since accumulated four new delinquent debts totaling approximately $20,500. Applicant did not report any financial

concerns on his 2023 security clearance application (SCA) and did not disclose the bankruptcies or delinquent debts until confronted with the information during his background interview. In response to the SOR, Applicant denied two consumer debts – one as fraudulent (SOR ¶ 2.g) and the other as belonging to his father (SOR ¶ 2.h). He admitted the remaining debts and bankruptcies with explanation. The Judge resolved one allegation favorably – a minor judgment entered against Applicant in 2023 (SOR ¶ 2.i) – and resolved the remaining Guideline F allegations adversely.1 On appeal, Applicant challenges the Judge’s adverse finding regarding the debt alleged at SOR ¶ 2.h, reiterating his denial of liability on the basis that he was merely an authorized user on the account that belonged to his father. The Government acknowledged that Applicant was an authorized user on the account but argued that “[a]san authorized user, Applicant is still responsible for the debt.” File of Relevant Material at 4. The Judge found that Applicant failed to document his father’s liability for the debt sufficiently and declined to find the debt mitigated. Contrary to the Government’s argument and the Judge’s finding, however, Applicant’s credit report confirms that Applicant was only an authorized user on the account2 and, as such, he bears no liability for the debt. The Judge erred in resolving this debt adversely; however, considering the scope of the remaining SOR allegations resolved unfavorably – including Applicant’s lengthy history of bankruptcy and incurring over $18,000 of additional delinquent debt since the last discharge in 2018, the erroneous adverse finding on SOR ¶ 2.h’s $1,200 debt was harmless. See ISCR Case No. 00-0250 at 4 (App. Bd. Jul. 11, 2001). The remainder of Applicant’s appeal fails to allege any error by the Judge. Instead, he reiterates the circumstances leading to his financial problems and advocates for a different weighing of those circumstances under the Whole-Person Concept, which is insufficient to demonstrate that the Judge weighed the evidence or reached conclusions in a manner that is arbitrary, capricious, or contrary to law. See ISCR Case No. 04-08975 at 1 (App. Bd. Aug. 4, 2006) (citation omitted).

CONCLUSION

Applicant has not established that the Judge’s conclusions were arbitrary, capricious, or contrary to law. Rather, the Judge examined and weighed the disqualifying and mitigating evidence and articulated a satisfactory explanation for the decision. The record is sufficient to support that the Judge’s findings and conclusions are sustainable. “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). 1 The Judge resolved the Guideline E falsification concern in Applicant’s favor. Although Applicant on appeal reiterates his explanation for not disclosing reportable financial issues on his SCA, thereby implicitly challenging the Guideline E allegation, the Judge’s favorable finding on this concern renders Applicant’s appeal argument moot. 2 Government Exhibit (GE) 12 at 3.

ORDER

The decision in ISCR Case No. 24-01532 is AFFIRMED. Signed: Moira Modzelewski Moira Modzelewski Administrative Judge Chair, Appeal Board Signed: Jennifer I. Goldstein Jennifer I. Goldstein Administrative Judge Member, Appeal Board Signed: Allison Marie Allison Marie Administrative Judge Member, Appeal Board