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ISCR 06-18535.a1: Guideline E security clearance appeal, granted (2007) · CASE

ISCR Case 06-18535.a1granted

Case headnote

ISCR Case No. 06-18535.a1

Dec 4, 2007· Hon. Jean E. Smallin· appeal

Summary

This security clearance decision involved an applicant, a former U.S. Air Force member and current business owner, who faced concerns under Guidelines E (Personal Conduct), F (Financial Considerations), and J (Criminal Conduct). These issues stemmed from financial difficulties and the misreporting of debts on his application.

However, the applicant demonstrated significant mitigating efforts. He successfully paid off the vast majority of his delinquent debts and hired an accountant to manage his finances, addressing the underlying financial instability. Crucially, the judge found no intent to deceive in the applicant's responses regarding his debts, applying mitigating conditions AG ¶ 20(a), AG ¶ 20(b), and AG ¶ 20(c).

Based on these factors, the judge determined that the security risks were mitigated. The decision to grant the security clearance was subsequently affirmed by the Appeal Board.

Conditions referenced

Mitigating

AG ¶ 20(a)appliedMitigating Condition 1Applicant initiated a good-faith effort to repay overdue creditors.
AG ¶ 20(b)appliedMitigating Condition 2The applicant has demonstrated a responsible attitude toward repaying debts.
AG ¶ 20(c)appliedMitigating Condition 3The applicant's financial difficulties were due to circumstances beyond his control.

Key rule quoted

“The individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.”
Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended)

Procedural posture

SOR issuedAug 22, 2006
Answer filed—
Hearing heldJul 18, 2007
Decision dateDec 4, 2007

Cite for

Good-faith Efforts to Repay Debts Under Guideline F
Intent to Deceive in Security Clearance Applications
Financial Management and Accountability in Personal Conduct 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 security clearance decision where the Administrative Judge granted the Applicant's request for a clearance despite concerns under Guidelines F, E, and J. The Department Counsel appealed, arguing that the Judge's conclusions were arbitrary and capricious. The Board affirmed the Judge's decision, finding no harmful error in the application of mitigating conditions or the conclusions reached.

Appealed bythe Government (Department Counsel)

Applicant representationAttorney

Judge belowMarc E. Curry granted the clearance

Decided ona hearing

Guidelines belowGuideline FGuideline EGuideline J

What the Board reviewed

Decision arbitrary, capricious, or contrary to law, raised by the Government (Department Counsel)Rejected
Department Counsel argued that the Judge's application of mitigating conditions under Guideline F was arbitrary, capricious, and contrary to law.
Decision arbitrary, capricious, or contrary to law, raised by the Government (Department Counsel)Rejected
Department Counsel contended that the Judge's favorable conclusions under Guidelines E and J were arbitrary, capricious, and contrary to law.

Why the Board ruled this way

The Board found no error in the Judge's application of mitigating conditions and concluded that the Judge's findings were supported by substantial evidence and were not arbitrary or capricious.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewProcedural complianceNo de-novo re-decisionDeference to the judge’s credibility calls

Appeal Board panel

William S. Fields
Jean E. Smallin
James E. Moody

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

SYNOPSIS

KEYWORD: Guideline F; Guideline E; Guideline J DIGEST: The Judge noted that Applicant had paid off the vast majority of his delinquent debts. Applicant listed an unpaid judgement on his application. Applicant reasonable explained his confusion regarding his medical bills. The record evidence provides a rational basis for the Judge’s favorable decision. CASENO: 06-18535.a1 DATE: 12/04/2007 DATE: December 4, 2007 In Re: -------- Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 06-18535

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT Ray T. Blank, Jr.,Esq., Department Counsel FOR APPLICANT Gary A. Matthews, Esq., Arnold J. Janicker, Esq. The Defense Office of Hearings and Appeals (DOHA) declined to grant Applicant a security clearance. On August 22, 2006, DOHA issued a statement of reasons advising Applicant of the basis for that decision–security concerns raised under Guideline F (Financial Considerations), Guideline E (Personal Conduct) and Guideline J (Criminal Conduct) of Department of Defense Directive Decision at 3. Directive E2.A6.1.3.6. “The individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.” See, e.g., the accountant’s favorable opinion of the long range prospects for Applicant’s business. Tr. at 242. 5220.6 (Jan. 2, 1992, as amended) (Directive). Applicant requested a hearing. On July 18, 2007, after the hearing, Administrative Judge Marc E. Curry granted Applicant’s request for a security clearance. Department Counsel filed a timely appeal pursuant to Directive ¶¶ E3.1.28 and E3.1.30. Department Counsel raised the following issues on appeal: whether the Judge’s application of Guideline F mitigating conditions is arbitrary, capricious, and contrary to law; and whether the Judge’s favorable conclusions under Guidelines E and J are arbitrary, capricious, and contrary to law. Finding no error, we affirm. The Judge made the following pertinent findings of fact: Applicant served in the U.S. Air Force from 1987 through 1991. After his discharge, he worked for defense contractors and for a hospital staff, performing information systems implementation. In 1998 he started a consulting firm. Although adept at marketing his business and at customer service, Applicant was less so at managing his firm’s finances and fell into debt. Since starting his business, his health coverage has been “sporadic” and he has had difficulty distinguishing those bills that were the responsibility of his insurance provider and those that were to be paid by him. He also has owed a substantial amount of money for state taxes. When asked on his security clearance application (SCA) whether he had delinquent debts of 180 days and 90 days respectively, Applicant answered in the negative. This answer was untrue, in light of several medical debts and a state tax lien. In deciding favorably for Applicant under Guideline F, the Judge noted that Applicant has paid off the vast majority of his delinquent debts. Furthermore, he has hired an accountant to manage his finances, leaving Applicant to operate his business, which has grown considerably. The Judge concluded that Applicant had met his burden of persuasion under FCMC 6. This conclusion is consistent with a reasonable interpretation of the record evidence and is neither arbitrary, capricious, nor contrary to law. Additionally, the Board has considered the Judge’s analysis of whether Applicant intentionally falsified his SCA. The Judge noted that, while Applicant did not list his tax debt under questions 38 and 39, he did list it in response to question 36, which inquired as to the existence of any liens against him. Moreover, Applicant reasonably explained that he was confused as to which medical bills were his responsibility and which were those of his insurance provider, which supports the Judge’s conclusion that his answers to the questions at issue were made in good faith, even if they were erroneous. The Board also notes that Applicant listed an unpaid judgement against him in response to question 37, which further supports the Judge’s conclusion that Applicant was not intending to deceive. Applicant’s answers, viewed as a whole, do not demonstrate an intent to hide his difficulties. The record evidence provides a rational basis for the Judge’s favorable decision. That decision is neither arbitrary, capricious, nor contrary to law.

ORDER

The Judge’s favorable security clearance decision is AFFIRMED. Signed: William S. Fields William S. Fields Administrative Judge Member, Appeal Board Signed: Jean E. Smallin Jean E. Smallin Administrative Judge Member, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board