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ISCR Case 07-04021.a1 — CASE

ISCR Case 07-04021.a1denied

Case Headnote

ISCR Case No. 07-04021.a1

May 16, 2008· Hon. Michael Y. Ra'anan· appeal

Summary

The applicant, representing herself, was denied a U.S. DOHA security clearance under Guideline F, Financial Considerations. The denial stemmed from significant financial issues, including a Chapter 7 bankruptcy discharge in 1997 and substantial unpaid tax debts totaling $86,000.

These financial problems raised disqualifying conditions under Guideline F.1, indicating a history of not meeting financial obligations. The appeal board affirmed the adverse decision, concluding that the applicant did not present sufficient mitigating evidence to resolve the security concerns associated with her financial situation.

Ultimately, the applicant's history of bankruptcy and substantial unaddressed tax debt led to the denial of her security clearance.

Conditions Referenced

Disqualifying

F.1raisedInability or Unwillingness to Satisfy Debts

Key Rule Quoted

“The presence of some mitigating evidence does not compel a favorable overall security clearance decision.”
— ISCR Case No. 05-03452 at 3 (App. Bd. Jul 3, 2007)

Procedural Posture

SOR issuedAug 22, 2007
Answer filed—
Hearing heldFeb 6, 2008
Decision dateMay 16, 2008

Cite For

Financial Considerations Under Guideline F
Impact of Bankruptcy on Security Clearance
Burden of Persuasion 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 a denial of a security clearance based on financial considerations under Guideline F. The Applicant argued that the Judge's findings were not supported by substantial evidence and that the Judge erred in failing to mitigate the security concerns. The Board affirmed the Judge's decision, finding no error in the Judge's conclusions.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowLeRoy F. Foreman — denied the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Judge mis-weighed or ignored evidence — raised by the applicantRejected
Applicant argued that the Judge's findings were not supported by substantial evidence.
Mitigation wrongly applied / not applied — raised by the applicantRejected
Applicant contended that the Judge erred in failing to mitigate the Guideline F security concerns.

Why the Board ruled this way

The Board found that the Judge's findings were supported by substantial evidence and that the Judge properly concluded that the Applicant's case raised security concerns under Guideline F. The Board affirmed the Judge's decision as it reflected a rational connection between the facts and the conclusion reached.

Standard of review applied

Substantial-evidence reviewArbitrary-and-capricious reviewNo de-novo re-decisionNo new evidence on appealDeference to the judge’s credibility calls

Appeal Board panel

Michael Y. Ra’anan — Chair
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 DIGEST: The Judge found Applicant was discharged in bankruptcy in 1997 and unpaid tax debt of $86000 as well as credit card debts. Adverse decision affirmed. CASENO: 07-04021.a1 DATE: 05/16/2008 DATE: May 16, 2008 In Re: ----------- Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 07-04021

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Pro Se The Judge’s favorable decision under SOR ¶¶ 1 (a) and (b) is not at issue in this appeal. The Defense Office of Hearings and Appeals (DOHA) declined to grant Applicant a security clearance. On August 22, 2007, DOHA issued a statement of reasons (SOR) advising Applicant of the basis for that decision–security concerns raised under Guideline F (Financial Considerations) of Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive). Applicant requested a hearing. On February 6, 2008, after the hearing, Administrative Judge LeRoy F. Foreman denied Applicant’s request for a security clearance. Applicant filed a timely appeal pursuant to Directive ¶¶ E3.1.28 and E3.1.30. Applicant has raised the following issues on appeal: whether certain of the Judge’s findings were supported by substantial evidence; and whether the Judge erred in failing to mitigate the Guideline F security concerns in her case. Finding no error, we affirm. The Judge made the following pertinent findings of fact: Applicant was discharged in Chapter 7 bankruptcy in 1997. The next year, due to her husband’s job loss, Applicant filed for Chapter 13 bankruptcy protection. This was subsequently dismissed due to an improvement in Applicant’s financial situation. However, Applicant subsequently lost her job and her husband’s business suffered a downturn. In addition, Applicant’s husband made accounting mistakes in preparing their personal and business income tax returns. Applicant and her husband got behind in their taxes. The IRS filed a lien for $30,219 in March 2005 and a second one for $8,261 in December 2005. Applicant’s total unpaid tax debt from 2003 to 2006 was $86,000. Applicant and her husband hired a tax lawyer to assist them in resolving their debts. They are seeking to refinance their home and use the equity to pay off part of their IRS debt and negotiate payment of the balance. As of the close of the record Applicant has not received a decision on their proposal from the IRS. Applicant has six active credit cards and carries a total balance among them of between $10,000 and $20,000. Applicant has a savings account with a balance of less than $10,000. She and her husband have no other assets other than the family household furnishings. The Board has considered Applicant’s brief, the Judge’s decision, and the record. The Judge’s material findings of security concern are supported by substantial record evidence. See Directive ¶ E3.1.32.1. (Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion in light of all the contrary evidence in the record.”) The Judge properly concluded that Applicant’s case raised security concerns under Guideline F. Furthermore, the Judge drew a “rational connection between the facts found” and his conclusion that neither the Guideline F mitigating conditions nor the whole-person factors support a decision favorable to Applicant. See 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)). The Judge’s decision reflects that he considered the entire record, including the evidence favorable to Applicant. However, the presence of some mitigating evidence does not compel a favorable overall security clearance decision. See, e. g., ISCR Case No. 05-03452 at 3 (App. Bd. Jul 3, 2007). The record supports the Judge’s conclusion that Applicant has failed to meet her burden of persuasion that it is “clearly consistent with the national interest” for her to have a clearance. See Department of the Navy v. Egan, 484 U.S. 518, 528 (1988).

ORDER

The Judge’s adverse security clearance decision is AFFIRMED. Signed: Michael Y. Ra’anan Michael Y. Ra’anan Administrative Judge Chairman, 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