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ISCR Case 08-05699.a1 — CASE

ISCR Case 08-05699.a1denied

Case Headnote

ISCR Case No. 08-05699.a1

Mar 19, 2010· Hon. Michael Y. Ra'anan· appeal

Summary

A U.S. citizen and former real estate developer was denied a security clearance under Guideline F, Financial Considerations, due to a history of significant financial issues. Disqualifying conditions were raised under Adjudicative Guideline Paragraph 19.

The applicant's financial history included multiple bankruptcies and tax liens, which the judge determined indicated a pattern of financial irresponsibility. The judge found these issues to be recurrent and not solely attributable to external circumstances. Furthermore, the applicant failed to provide corroborating evidence for payments made under various repayment plans.

Despite the applicant's claims of due process violations and efforts to repay debts, the judge concluded that the financial problems were not sufficiently mitigated. Consequently, the security clearance was denied.

Conditions Referenced

Disqualifying

AG ¶ 19raisedFinancial Considerations

Mitigating

AG ¶ 20rejectedFinancial ConsiderationsThe applicant's claims of making payments were not corroborated.

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 issuedMay 26, 2009
Answer filed—
Hearing heldJan 12, 2010
Decision dateMar 19, 2010

Cite For

Denial of Security Clearance Based on Recurrent Financial Issues Under Guideline F
Insufficient Evidence of Due Process Violations in Security Clearance Proceedings
The Standard for Granting Clearance as Consistent with National Security Interests

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 seeking a security clearance who was denied based on financial considerations under Guideline F. The applicant raised issues regarding due process, factual findings, and the arbitrariness of the decision. The Board affirmed the Administrative Judge's decision, finding no harmful error.

Appealed bythe applicant

Applicant representationAttorney

Judge belowMarc E. Curry — denied the clearance

Decided onthe written record

Guidelines belowGuideline F

What the Board reviewed

Due-process / fairness — raised by the applicantRejected
Applicant contended that he was denied due process by not being allowed to present cancelled checks as evidence of payment.
Erroneous finding of fact — raised by the applicantRejected
Applicant argued that the Judge erred in his finding regarding the amount owed to the IRS.
Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
Applicant claimed that the Judge's adverse decision was arbitrary, capricious, or contrary to law.

Why the Board ruled this way

The Board found no harmful error in the Judge's decision, affirming that the findings were based on substantial evidence and that due process was not denied.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewProcedural complianceNo de-novo re-decisionNo new evidence on appeal

Appeal Board panel

Michael Y. Ra’anan — Chair
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 DIGEST: The record as a whole provides no basis to conclude Applicant was denied due process afforded by the Directive. Adverse decision affirmed. CASENO: 08-05699.a1 DATE: 03/19/2010 DATE: March 19, 2010 In Re: -----

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 08-05699

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Eric B. Bryen, Esq. The Defense Office of Hearings and Appeals (DOHA) declined to grant Applicant a security clearance. On May 26, 2009, 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 decision on the written record. On January 12, 2010, after considering the record, Administrative Judge Marc E. Curry denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. Applicant raised the following issues on appeal: whether certain of the Judge’s factual findings are based upon substantial record evidence; whether Applicant was denied due process; and whether the Judge’s adverse decision is arbitrary, capricious, or contrary to law. Finding no error, we affirm. The Judge made the following pertinent findings of fact: Applicant was born and raised in a Middle-Eastern country. He immigrated to the U.S. in the 1970sand became a U.S. citizen in the early 1980s. He has worked as a translator in support of U.S. military operations. In the late 1980s Applicant was a successful real estate developer. He was a partner in a company that owned several shopping centers. In the early 1990sthe real estate market crashed, and Applicant became unable to pay his creditors. His debts were discharged in Chapter 7 bankruptcy in the mid-1990s. After his discharge in bankruptcy, Applicant became a stockbroker. This endeavor faltered during the stock market crash that followed the attacks of September 11, 2001. Some of his clients sued him. Additionally, he experienced family difficulties which added to his money problems. The IRS filed a lien against Applicant’s property for unpaid taxes. In 2006 he filed again for Chapter 7 bankruptcy protection, listing liabilities of $482,000 (including $140,000 in back federal and state taxes). His debts were discharged in bankruptcy later that year. Part of the bankruptcy process included Applicant’s completion of budget and credit counseling. In late 2006, the state obtained a lien against Applicant’s property for unpaid taxes. In early 2007, the IRS obtained a lien due to unpaid federal taxes. He has entered into agreements to repay these debts on a monthly basis. In deciding the case adversely to Applicant, the Judge considered Applicant’s contributions to U.S. security, and he acknowledged that Applicant’s financial problems were affected by circumstances outside his control. However, he also noted the recurrent nature of Applicant’s financial problems, the relatively large amount of debt Applicant had amassed prior to the 2006 bankruptcy, and the amount of delinquent debts remaining. He stated that not all of Applicant’s financial problems corresponded with downturns in the economy. He also concluded that Applicant had not corroborated his claims to have been making payments consistent with the repayment plans. Applicant contends that he was denied due process, in that he did not present cancelled checks to demonstrate payment. He asserts that he was advised that all he needed to present was evidence of a payment plan rather than of actual payment. He attaches to his appeal copies of cancelled checks. This is new evidence, which the Board cannot consider. See Directive ¶ E3.1.29. (“No new evidence shall be received or considered by the Appeal Board”). See also ISCR Case No. 08-06875 at 2 (App. Bd. Oct. 29, 2009); ISCR Case No. 08-06518 at 2 (App. Bd. Mar. 3, 2009). Applicant’s brief states that he acted pro se in preparing the response. However, the cover letter accompanying Applicant’s response to the FORM names an attorney as the one who is to receive the decision in Applicant’s case and to whom questions should be addressed. Therefore, at the very least, Applicant was aware of his right to consult counsel. Applicant does not state who advised him concerning the extent of the evidence that he needed to submit in response to the FORM. In any event, he appears to have had the opportunity to seek assistance of counsel in preparing his response, and the record as a whole provides no reason to believe that Applicant was denied the due process afforded by the Directive. See ISCR Case No. 09- 01074 at 2 (App. Bd. Oct. 16, 2009); ISCR Case No. 08-03110 at 2 (App. Bd. Jan. 27, 2009). Furthermore, the payment plan was new at the close of the record. There is no basis to conclude that Applicant could have documented a substantial number of payments. Applicant contends that the Judge erred in his finding as to the amount Applicant owes to the IRS. We conclude that the Judge’s material findings of security concern are based upon 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 same record.”) The record demonstrates that, as the Judge found, there is substantial evidence in support of the SOR allegations. After reviewing the record, the Board concludes that the Judge examined the relevant data and articulated 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 Judge’s adverse decision is sustainable on this record. “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).

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: Jean E. Smallin Jean E. Smallin Administrative Judge Member, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board