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ISCR Case 06-24121.a1 — CASE

ISCR Case 06-24121.a1denied

Case Headnote

ISCR Case No. 06-24121.a1

Feb 5, 2008· Hon. Jean E. Smallin· appeal

Summary

The applicant, represented by counsel, was denied a security clearance primarily under Guideline F (Financial Considerations) and Guideline E (Personal Conduct). This denial was affirmed by the appeal board, which highlighted the applicant's poor financial judgment and inability to manage debts responsibly as significant security concerns.

The core issue was over $250,000 in unpaid debt accumulated between 1998 and 2004, which remained unresolved at the time of the hearing. The judge determined that these financial problems originated from poor business decisions and irresponsible spending.

Ultimately, the applicant failed to demonstrate an ability to pay these delinquent obligations, which reflected poorly on their judgment and led to the denial of the security clearance.

Conditions Referenced

Disqualifying

AG ¶ 20raisedFinancial Considerations

Key Rule Quoted

“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 issuedMar 15, 2007
Answer filed—
Hearing heldSep 12, 2007
Decision dateFeb 5, 2008

Cite For

Affirmation of Adverse Decision Based on Significant Unpaid Debt Under Guideline F
Importance of Financial Responsibility in Security Clearance Determinations
Rational Connection Required Between Facts Found and Decisions Made 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 an applicant who was denied a security clearance due to over $250,000 in unpaid debt. The applicant argued that the Judge's decision was arbitrary and capricious. The Board reviewed the case and affirmed the Judge's decision, finding no error in the ruling.

Appealed bythe applicant

Applicant representationAttorney

Judge belowJuan J. Rivera — denied the clearance

Decided ona hearing

Guidelines belowGuideline FGuideline E

What the Board reviewed

Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
Applicant argued that the Judge's adverse security clearance decision is arbitrary, capricious, and contrary to law.

Why the Board ruled this way

The Board found no harmful error in the Judge's decision, affirming that the adverse decision was supported by substantial evidence and was not arbitrary or capricious.

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

Jean E. Smallin
William S. Fields
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 DIGEST: Applicant amassed over $250,000 of unpaid debt between 1998 and 2004. The debt was unpaid as of the hearing. The Judge’s adverse decision is neither arbitrary capricious nor contrary to law. Adverse decision affirmed. CASENO: 06-24121.a1 DATE: 02/05/2008 DATE: February 5, 2008 In Re: -----------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 06-24121

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT James R. Klimaski, Esq. The Defense Office of Hearings and Appeals (DOHA) declined to grant Applicant a security clearance. On March 15, 2007, DOHA issued a statement of reasons (SOR) advising Applicant of the basis for that decision–security concerns raised under Guideline F (Financial Considerations) and The Judge’s favorable decision under Guideline E is not at issue. Applicant testified that this person “had some . . . very severe family legal problems . . . Q: So at the time that you were agreeing to advance him money to help in family situations, he was unemployed; is that correct? A: He was either unemployed or would get a job and lose it. But whatever the situation was, I needed to help him, and I needed to pay for my own living expenses. So that was what the money was used for . . . Q: Now, you have not collected anything from him as of yet; is that correct? A: Not a penny, sir . . . [this person] wrote a letter in November 2002 . . . a very long letter in which he said that, in effect, he didn’t even know who I was.” Tr. 130 - 132. Applicant further testified that he had begun loaning money to this person in 1998 and finally stopped doing so in October 2004, nearly two years after this letter. Tr. at 132 - 133. Guideline E (Personal Conduct) of Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive). Applicant requested a hearing. On September 12, 2007, after the hearing, Administrative Judge Juan J. Rivera denied Applicant’s request for a security clearance. Applicant filed a timely appeal pursuant to Directive ¶¶ E3.1.28 and E3.1.30. Applicant raised the following issue on appeal: whether the Judge’s adverse security clearance decision is arbitrary, capricious, and contrary to law. Finding no error, we affirm. The Judge made the following pertinent findings of fact: Applicant amassed over $250,000 of debt from 1998 to 2004. This debt was unpaid as of the date of the hearing. Applicant’s financial problems were rooted in some bad business decisions. However, in the Conclusions section of his opinion, the Judge stated that these bad decisions reflect poorly upon Applicant’s judgment. For example, Applicant loaned a substantial amount of money to a person suffering from “alcohol, mental, and personal problems” (Decision at 7) and continued to do so even after this person in effect repudiated an intention to repay. The Judge further stated that Applicant had “failed to live within his means, that his irresponsible spending caused his excessive indebtedness, and that he does not have the ability to pay his delinquent obligations.” Decision at 7. In support of his appeal, Applicant points to other decisions, by the Appeal Board and by the Hearing Office, which he argues support his request for a favorable determination. The Board gives them due consideration. However, each case “must be decided upon its own merits.” Directive ¶ E2.2.3. Moreover, Hearing Office decisions are binding neither on other Hearing Office Judges nor on the Board. See ISCR Case No. 06-05903 at 3 (App. Bd. Oct. 15, 2007). We have reviewed the Judge’s conclusions in light of his unchallenged findings of fact. We conclude that the Judge has drawn “a rational connection between the facts found” and his ultimate adverse decision. See ISCR Case No. 03-22861 at 2-3 (App. Bd. Jun. 2, 2006). See also Motor Vehicle Mfrs. Ass’n of the United States v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)(quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)). (A Judge is required to “examine the relevant data and articulate a satisfactory explanation for” the decision, “including a ‘rational connection between the facts found and the choices made’”); “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). Accordingly, we hold that this decision is neither arbitrary, capricious, nor contrary to law. See Directive ¶¶ E3.1.32.3 and E3.1.33.3.

ORDER

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