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ISCR Case 08-07602.a1 — CASE

ISCR Case 08-07602.a1denied

Case Headnote

ISCR Case No. 08-07602.a1

Aug 4, 2009· Hon. Michael Y. Ra'anan· appeal

Summary

A network engineer was denied a security clearance under Guideline F (Financial Considerations) due to a prior bankruptcy and ongoing delinquent debts. Disqualifying conditions F2 and F3 were raised, and while mitigating conditions F2 and F3 were considered, they were ultimately not sufficient to overcome the security concerns.

The denial stemmed from several key factors. The applicant's past bankruptcy and current delinquent debts were significant issues. Furthermore, the judge noted a lack of complete documentation regarding the applicant's overall financial situation.

Crucially, the applicant did not demonstrate substantial efforts to resolve his outstanding debts until after the Statement of Reasons (SOR) was issued. Despite some attempts to address his financial issues, the judge found insufficient documentation and a lack of proactive measures to mitigate the financial concerns, leading to the denial of the security clearance.

Conditions Referenced

Disqualifying

F3raisedInability or Unwillingness to Satisfy Debts
F2raisedA History of Not Meeting Financial Obligations

Mitigating

F3rejectedThe Conditions That Resulted in the Financial Difficulties Were Largely Beyond the Person's ControlThe judge found that the applicant's financial problems were not isolated and were exacerbated by his prior bankruptcy.
F2rejectedThe Person Has Made a Good Faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsWhile the applicant showed some effort to resolve debts, it was deemed insufficient and poorly documented.

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 issuedSep 18, 2008
Answer filed—
Hearing heldMay 15, 2009
Decision dateAug 4, 2009

Cite For

Consideration of Prior Bankruptcy in Whole-person Analysis
Importance of Complete Documentation in Financial Matters
Insufficient Efforts to Mitigate Financial Issues Can Lead to Denial Under Guideline F

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 security clearance based on financial considerations under Guideline F. The applicant raised multiple issues regarding the Judge's findings and analysis. The Board affirmed the Judge's decision, finding no harmful error that would change the outcome.

Appealed bythe applicant

Applicant representationAttorney

Judge belowMark W. Harvey — denied the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

No specific harmful error alleged — raised by the applicantRejected
Applicant alleged that the Judge's findings were not based on substantial evidence.
Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
Applicant contended that the Judge's whole-person analysis was erroneous.
Due-process / fairness — raised by the applicantRejected
Applicant claimed he was denied due process regarding the consideration of his prior bankruptcy.
Mitigation wrongly applied / not applied — raised by the applicantRejected
Applicant argued that the Judge erred in his application of the mitigating conditions.
Judge mis-weighed or ignored evidence — raised by the applicantRejected
Applicant asserted that the Judge failed to consider the entirety of the record evidence.

Why the Board ruled this way

The Board found no harmful error likely to change the outcome of the case and concluded that the Judge's findings were based on substantial evidence. The Judge's whole-person analysis was deemed appropriate, and the consideration of the prior bankruptcy was not found to be erroneous.

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
Michael D. Hipple
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: Although Applicant’s prior bankruptcy proceeding was not alleged in the SOR, the Judge properly considered it as part of the whole-person analysis. Adverse decision affirmed. CASE NO: 08-07602.a1 DATE: 08/04/2009 DATE: August 4, 2009 In Re: ---------------- Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 08-07602

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Kenneth W. Prien, Esq. The Defense Office of Hearings and Appeals (DOHA) declined to grant Applicant a security clearance. On September 18, 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 Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive). Applicant requested a hearing. On May 15, 2009, after the hearing, Administrative Judge Mark W. Harvey 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 the Judge’s findings were based upon substantial record evidence; whether the Judge failed to consider the entirety of the record evidence; whether Applicant was denied due process; whether the Judge erred in his application of

FOOTNOTES

1 Applicant identifies one sentence which suggests the Judge was inclined to grant Applicant a security clearance. “The Board does not read individual sentences of a Judge’s decision in isolation.” ISCR Case No. 05-14488 at 4 (App. Bd. Aug. 10, 2007). To the extent error is demonstrated, it is harmless. See ISCR Case No. 01-23362 at 2 (App. Bd. Jun. 5, 2006) for discussion of harmless error doctrine. the mitigating conditions; and whether the Judge’s whole-person analysis was erroneous. Finding no harmful error likely to change the outcome of the case, we affirm. The Judge made the following pertinent findings of fact: Applicant is a network engineer with 13 years of information technology experience. In the mid-1990s, he was discharged in Chapter 7 bankruptcy. He experienced a job loss in 2006 and was divorced from his wife in 2008. Applicant has delinquent debts arising from real estate transactions and from a loan for a truck. The delinquencies arose after Applicant’s discharge in bankruptcy. The Judge noted the effect that divorce, job loss, and a real estate downturn had on Applicant’s financial condition. However, in the Analysis portion of his decision, the Judge stated Applicant’s bankruptcy demonstrates that his financial problems are not isolated. “He received the SOR in October 2008, and did not establish significant efforts to resolve his debts until January 2009. Although he showed excellent effort over the last four or five months to resolve his delinquent debts, he could have acted more aggressively to avoid delinquent debt, to seek debt repayment or resolution, and to better document his remedial efforts over the past two years.” Decision at 15. In evaluating whether Applicant had met his burden of persuasion as to mitigation, the Judge gave considerable attention to the paucity of corroborating information. “Applicant did not provide a personal financial statement. He did not provide proof that he paid his share of the repairs on his truck . . . He said he thought the sale price on one property was sufficient to cover the mortgage when the actual sale price was $224,000 less than the mortgage plus interest . . . I do not intend to imply Applicant is dishonest, but point out these mistakes to emphasize the importance of receiving complete documentation[.]” Id. at 13-14. After reviewing the record, the Board concludes that the Judge’s material findings are based on substantial evidence, or constitute reasonable characterizations or inferences that could be drawn from the record. Applicant has not identified any harmful error likely to change the outcome of the case.1 For example, Applicant claims that the Judge overstated the total amount of money due under a rental agreement for a car. Although the Judge’s finding is consistent with Applicant Exhibit T at 21, even if it were erroneous there is little chance that it affected the ultimate decision. Considering the record evidence as a whole, the Judge’s material findings of security concern are sustainable. See, e.g., ISCR Case No. 06-21025 at 2 (App. Bd. Oct. 9, 2007). Moreover, a Judge is presumed to have considered all the evidence in the record. Applicant’s submissions on appeal are not sufficient to rebut that presumption. See, e.g., ISCR Case No 07-00196 at 3 (App. Bd. Feb. 20, 2009); ISCR Case No. 07-00553 at 2 (App. Bd. May 23, 2008). Much of Applicant’s argument on appeal appears to consist of his taking issue with the Judge’s weighing of evidence. A party’s disagreement with the Judge’s weighing of the evidence, or an ability to argue for a different interpretation of the evidence, is not sufficient to demonstrate the Judge weighed the evidence or reached conclusions in a manner that is arbitrary, capricious, or contrary to law. See, e.g., ISCR Case No. 06-17409 at 3 (App. Bd. Oct. 12, 2007). Applicant contends that it was erroneous for the Judge to rely on the prior bankruptcy proceeding, insofar as it was not alleged in the SOR. He claims that he did not have an opportunity

2 Decision at 10, 15. The Judge stated that the bankruptcy was of low significance, given its remoteness. However, as stated above, the Judge did consider it as an aspect of Applicant’s overall financial history. to present evidence at the hearing concerning this matter. The record demonstrates that this information came out during Applicant’s testimony. Tr. at 169. The Judge specifically stated that he did not consider the bankruptcy under the Guideline F disqualifying conditions, although he took it into account in performing his whole-person analysis.2 The Board concludes that the Judge’s treatment of the bankruptcy was not error and that Applicant was not denied the due process afforded by the Directive. 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 decision that “it is not clearly consistent with the national interest to grant or continue Applicant’s eligibility for a security clearance” is sustainable on this record. Decision at 16. See also Department of the Navy v. Egan, 484 U.S. 518, 528 (1988) (“The general standard is that a clearance may be granted only when ‘clearly consistent with the interests of the national security.’”). 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: Michael D. Hipple Michael D. Hipple Administrative Judge Member, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board