Loading case…

ISCR 07-13766.a1: Guideline F security clearance appeal (2008) · CASE

ISCR Case 07-13766.a1unknown

Case headnote

ISCR Case No. 07-13766.a1

Nov 12, 2008· Hon. Michael Y. Ra'anan· appeal

Summary

This case involves a composition specialist working for a federal contractor, whose security clearance was reviewed under Guideline F (Financial Considerations). The applicant's financial history presented several disqualifying conditions, including two bankruptcies and a conviction for issuing a bad check. Additionally, concerns were raised regarding delinquent debts and a home foreclosure, indicating a pattern of irresponsible financial behavior.

While mitigating conditions were considered, the Appeal Board ultimately reversed an initial favorable decision. The Board found insufficient evidence that the applicant had demonstrated responsible financial behavior or taken adequate steps to mitigate the financial concerns. Specifically, the applicant did not seek credit counseling or provide proof of efforts to resolve outstanding financial issues.

As a result, the Appeal Board determined that the applicant had not overcome the security concerns related to their financial history. The outcome of the case was "None," meaning the applicant did not receive a favorable security clearance decision.

Conditions referenced

Disqualifying

E2.19(a)raisedInability or Unwillingness to Satisfy Debts
E2.19(c)raisedA History of Not Meeting Financial Obligations

Mitigating

E2.20(b)rejectedConditions That Resulted in the Financial Problem Were Largely Beyond the Person’s ControlThe applicant's financial issues were not sufficiently mitigated by personal circumstances.
E2.20(e)rejectedThe Individual Has a Reasonable Basis to Dispute the Legitimacy of the Past-due DebtThe applicant did not provide evidence of disputing debts or taking steps to resolve them.

Key rule quoted

“Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong presumption against the grant or maintenance of a security clearance.”
Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991).

Procedural posture

SOR issuedMar 25, 2008
Answer filed—Applicant represented herself pro se.
Hearing held—Decision made on written record.
Decision dateNov 12, 2008Appeal Board reversed the initial decision.

Cite for

Insufficient Evidence of Responsible Financial Behavior Under Guideline F
Reversal of Favorable Security Clearance Decisions Due to Unmitigated Financial Concerns
The Presumption Against Granting Security Clearances When Concerns Arise.

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

Reversed

The appeal involved a security clearance decision where the Administrative Judge initially granted the applicant a clearance despite significant financial issues, including bankruptcies and delinquent debts. The Department Counsel appealed, arguing that the Judge erred in her findings and application of mitigating conditions. The Appeal Board found merit in the government's arguments and reversed the favorable decision.

Appealed bythe Government (Department Counsel)

Applicant representationPro se (self-represented)

Judge belowMary E. Henry granted the clearance

Decided onthe written record

Guidelines belowGuideline F

What the Board reviewed

Judge mis-weighed or ignored evidence, raised by the Government (Department Counsel)Error sustained
The Judge erred in concluding that the Government had not met its burden of production regarding one of Applicant’s debts.
Mitigation wrongly applied / not applied, raised by the Government (Department Counsel)Error sustained
The Judge erred in her application of the Guideline F mitigating conditions.
Whole-person analysis, raised by the Government (Department Counsel)Error sustained
The Judge’s whole-person analysis is not supported by record evidence.

Why the Board ruled this way

The Board found that the Judge erred in her factual findings regarding the applicant's debts and misapplied the mitigating conditions under Guideline F. The record did not support the Judge's favorable conclusions regarding the applicant's financial responsibility.

Ignored material evidenceMisapplied mitigationNo rational connection between facts and conclusion

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

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 government’s burden to produce evidence arises only in regard to controverted facts. The record contains a paucity of evidence that Applicant has acted responsibly with regard to her delinquent debts, her two bankruptcies her conviction bouncing a check and her home foreclosure. Favorable decision reversed CASENO: 07-13766.a1 DATE: 11/12/2008 DATE: November 12, 2008 In Re: ----------- Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 07-13766

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT Eric H. Borgstrom, Esq., Department Counsel FOR APPLICANT Pro Se The Defense Office of Hearings and Appeals (DOHA) declined to grant Applicant a security clearance. On March 25, 2008, DOHA issued a statement of reasons (SOR) advising Applicant of the basis for that decision–security concerns raised under Guideline F (Financial Considerations) of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive). Applicant requested a decision on the written record. On July 15, 2008, after considering the record, Administrative Judge Mary E. Henry 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 erred in concluding that the Government had not met its burden of production regarding one of Applicant’s debts; whether the Judge erred in her application of the Guideline F mitigating conditions; and whether the Judge’s whole-person analysis is supported by record evidence. Finding error, we reverse. Whether the Record Supports the Judge’s Factual Findings A. Facts The Judge made the following pertinent findings of fact: Applicant is a composition specialist for a federal contractor. Twice–in 1992 and again in 2000–Applicant was discharged in Chapter 7 bankruptcy. The record contains no evidence of reasons for these bankruptcy actions. Applicant and her husband have experienced problems that have affected their financial situation. Her husband was injured in a motorcycle accident in 2001 and was unable to work for six months. Later, in 2006, he was diagnosed with muscular dystrophy. He is currently receiving social security disability benefits. In addition to her husband’s medical problems, Applicant was laid off from her job in 2004. She received unemployment benefits and attended college, receiving an associates degree in 2006. Applicant has unpaid delinquent debts which have arisen since her second discharge in bankruptcy. These debts are for medical bills, home repairs, an auto repossession, and other debts owed to banks, to a power company, etc. Additionally, Applicant’s home was foreclosed in 2001 and in the same year she pled guilty to issuing a bad check. Applicant has not sought credit counseling for her financial problems. B. Discussion The Appeal Board’s review of the Judge’s findings of facts is limited to determining if they are supported by substantial evidence–“such relevant evidence as a reasonable mind might accept as adequate to support a conclusion in light of all the contrary evidence in the same record.” Directive ¶ E3.1.32.1. “This is something less than the weight of the evidence, and the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency’s finding from being supported by substantial evidence.” Consolo v. Federal Maritime Comm’n, 383 U.S. 607, 620 (1966). In evaluating the Judge’s findings, we are required to give deference to the Judge’s credibility determinations. Directive ¶ E3.1.32.1. One of the allegations in the SOR refers to a charged-off debt to a bank in the amount of $674. Applicant admitted this debt in her response to the SOR. Item 2. Applicant also acknowledged this debt in her response to interrogatories submitted to her by DOHA. Item 6. However, the Judge stated in her decision that, despite Applicant’s admissions, “given the lack of evidence as to the existence of this debt, this allegation is found in Applicant’s favor.” Decision at 3. Department Counsel persuasively argues that this finding is erroneous. The Government’s burden of producing evidence arises only in regard to SOR facts that the Applicant has controverted. Directive ¶ E3.1.14. The Government has no such burden when an applicant admits the facts. In this case, Applicant has not controverted the debt in question. It was error, therefore, for the Judge to conclude that the Government had failed to meet a burden which the Directive does not impose upon it. Whether the Record Supports the Judge’s Ultimate Conclusions 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 choice made.’” 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 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). The Appeal Board may reverse the Judge’s decision to grant, deny, or revoke a security clearance if it is arbitrary, capricious, or contrary to law. Directive ¶¶ E3.1.32.3 and E3.1.33.3. Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong presumption against the grant or maintenance of a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9 Cir. 1990), cert. denied, 499 U.S. 905 (1991). After the Government presents th evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those concerns. See Directive ¶ E3.1.15. “The application of disqualifying and mitigating conditions and whole person factors does not turn simply on a finding that one or more of them apply to the particular facts of a case. Rather, their application requires the exercise of sound discretion in light of the record evidence as a whole.” See, e.g., ISCR Case No. 05-03635 at 3 (App. Bd. Dec. 20, 2006). In deciding whether the Judge's rulings or conclusions are arbitrary or capricious, the Board will review the Judge's decision to determine whether: it does not examine relevant evidence; it fails to articulate a satisfactory explanation for its conclusions, including a rational connection between the facts found and the choice made; it does not consider relevant factors; it reflects a clear error of judgment; it fails to consider an important aspect of the case; it offers an explanation for the decision that runs contrary to the record evidence; or it is so implausible that it cannot be ascribed to a mere difference of opinion. In deciding whether the Judge's rulings or conclusions are contrary to law, the Board will consider whether they are contrary to provisions of Executive Order 10865, the Directive, or other applicable federal law. See ISCR Case No. 03-22861 at 2-3 (App. Bd. Jun. 2, Directive ¶ E2.19(a): “inability or unwillingness to satisfy debts;” Directive ¶ E2.19 c): “a history of not meeting financial obligations[.]” Directive ¶ E2.20(b): “the conditions that resulted in the financial problem were largely beyond the person’s control (e.g., loss of employment, a business downturn, unexpected medical emergency, or a death, divorce or separaton), and the individual acted responsibly under the circumstances.” Directive ¶ E2.20(e): “the individual has a reasonable basis to dispute the legitimacy of the past-due debt which is the cause of the problem and provides documented proof to substantiate the basis of the dispute or provides evidence of actions taken to resolve the issue.” See ISCR Case No. 06-18900 at 5 (App. Bd. Jun. 6, 2008 ) (Applicant offered no independent witnesses and provided no documented proof which would substantiate her claim that her debts were not legitimate or that she had taken reasonable steps to resolve them). 2006). The Judge properly concluded that Applicant’s case raised security concerns under Guideline F. She went on to conclude that Applicant had met her burden of persuasion as to mitigation, specifically under Financial Considerations Mitigating Condition (FCMC) 20(b). Department Counsel persuasively argues that this conclusion was error, in light of contrary of record evidence. For example, Department Counsel points to record evidence that Applicant and her husband took a vacation to Aruba in 2005. This vacation appears to have coincided with a period of time in which both were unemployed. This raises serious questions about Applicant’s judgment in regard to her debts, in that she appears to have used funds on the vacation that could better have been expended on debt reduction. The Board notes that Applicant chose to have the case decided upon the written record, with the result that her credibility could not be evaluated in the context of a hearing. See ISCR Case No. 08-00899 at 3 (App. Bd. Jul. 29, 2008). Furthermore, Applicant did not reply to the File of Relevant Material, nor did she submit a reply brief on appeal. As a consequence, there is nothing in the record to address questions arising out of the trip. Indeed, the record contains a paucity of evidence demonstrating that Applicant has acted responsibly in regard to her delinquent debts. In light of that, the Judge’s favorable application of FCMC 20(b) is not sustainable. For similar reasons the record will not sustain the Judge’s partial application of FCMC 20(e), in that there is insufficient evidence to demonstrate that Applicant’s past due debts are not legitimate. Neither is there documentary evidence of positive steps Applicant has taken to resolve any alleged dispute. Accordingly, the Judge’s favorable application of the mitigating conditions is erroneous. Likewise, the Judge’s whole-person analysis also cannot be sustained, due to lack of evidence. As stated above, it is an applicant’s responsibility to demonstrate that he or she should have a security clearance. Under the facts of this case, the security concerns implicit in Applicant’s bankruptcies in 1992 and 2000, her conviction for bouncing a check, her home foreclosure in 2001, and her numerous delinquent debts have not been mitigated simply by Applicant’s admissions in her response to the SOR or her answers to interrogatories. There is little in the record to demonstrate that Applicant has made a reasonable effort to pay off her debts or that she has otherwise acted responsibly in regard to them. The Board takes special note of the Judge’s finding that there is no evidence in the record explaining Applicant’s two bankruptcy actions. Taken together, and viewed in light of her subsequent financial history, they raise serious questions about Applicant’s judgement and reliability. The record as a whole does not support a conclusion that Applicant has met her burden of persuasion under the Egan standard. Accordingly, the Board concludes that the record will not sustain the Judge’s favorable decision.

ORDER

The Judge’s favorable security clearance decision is REVERSED. 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