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ISCR Case 09-01175.a1 — CASE

ISCR Case 09-01175.a1denied

Case Headnote

ISCR Case No. 09-01175.a1

May 11, 2010· Hon. Jeffrey D. Billett· appeal

Summary

A computer operator for a Defense contractor was denied a security clearance under Guideline F (Financial Considerations) due to significant delinquent debts. The applicant owed nearly $44,000 in unpaid federal income tax liens and over $59,000 in credit card debts.

While the applicant cited financial hardship and expressed intentions to file for bankruptcy, these claims were deemed insufficient to mitigate the security concerns. The judge found that the applicant did not provide adequate evidence to persuade the court regarding the legitimacy of his debts.

Consequently, the security clearance denial was upheld on appeal, as the applicant failed to meet the burden of persuasion under the disqualifying conditions of AG ¶ 19, and the mitigating conditions of AG ¶ 20 were not sufficiently applied.

Conditions Referenced

Disqualifying

AG ¶ 19raisedFinancial Considerations

Mitigating

AG ¶ 20rejectedFinancial ConsiderationsThe applicant's evidence did not mitigate his failure to pay income taxes or large credit card debt.

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 issuedJun 30, 2009
Answer filed—
Hearing heldFeb 17, 2010
Decision dateMay 11, 2010

Cite For

Denial of Security Clearance Due to Significant Delinquent Debts Under Guideline F
Insufficient Evidence of Financial Hardship to Mitigate Security Concerns
The Standard for Granting Clearance Must Align 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 due to significant delinquent debts. The applicant raised issues regarding the Judge's findings, due process, and the arbitrariness of the decision. The Board affirmed the Judge's decision, finding no harmful error and that the decision was supported by substantial evidence.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowErin C. Hogan — denied the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Judge mis-weighed or ignored evidence — raised by the applicantRejected
Applicant contended that the Judge erred in stating that his debts are unresolved, given that some credit card debts had been charged off.
Due-process / fairness — raised by the applicantRejected
Applicant argued that he was denied due process when his request for a second delay in the hearing was denied.
Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
Applicant claimed that the Judge's adverse security clearance decision was arbitrary, capricious, or contrary to law.

Why the Board ruled this way

The Board found no harmful error in the Judge's findings and concluded that the Judge's decision was based on substantial evidence and articulated a satisfactory explanation for the decision.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewProcedural complianceNo de-novo re-decision

Appeal Board panel

Michael Y. Ra’anan — Chair
Jeffrey D. Billett
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 fact that a person’s debts have been charged off does not mean that the person no longer owes the debts. The Judge did not abuse her discretion in denying Applicant’s request for a second delay in the hearing. Adverse decision affirmed. CASENO: 09-01175.a1 DATE: 05/11/2010 DATE: May 11, 2010 In Re: ----------------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 09-01175

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Pro se The Defense Office of Hearings and Appeals (DOHA) declined to grant Applicant a security clearance. On June 30, 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 hearing. On February 17, 2010, after the hearing, Administrative Judge Erin C. Hogan 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 of fact were based upon substantial record evidence; whether Applicant was denied due process; and whether the The Board notes that the creditor’s choice to charge off a debt for accounting purposes does not affect the debtor’s obligations to the creditor. For additional detail, see a U.S. Department of Treasury-administered website: http://www.helpwithmybank.gov/faqs/loan_general.html. Judge’s adverse security clearance decision was arbitrary, capricious, or contrary to law. Finding no error, we affirm. The Judge found that Applicant, a computer operator employed by a Defense contractor, had significant delinquent debt for unpaid federal income tax liens and for credit card accounts. The three tax liens total nearly $44,000 while the credit card debts total over $59,000. Applicant explained that he got behind in his taxes due to his having to pay what he viewed as unreasonably large amounts of child support. He also attributed his financial condition to health problems which he had suffered. Applicant plans to file for bankruptcy protection. In the Analysis portion of the decision, the Judge concluded that Applicant’s evidence did not mitigate his failure to pay his income taxes or his large credit card debt, noting that he has not had to pay child support for seven years. Although she acknowledged that Applicant intends to file for bankruptcy, she stated that it was premature to conclude that his debts would actually be discharged. The Judge concluded that Applicant had failed to meet his burden of persuasion under the standard set forth in 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’”). Applicant challenges some of the Judge’s findings of fact. For example, he contends that she erred in stating that his debts are unresolved, in light of evidence that some of the credit card debts had been charged off. A delinquent debt is not mitigated because the creditor has charged off the account. However, the record as a whole supports the Judge’s conclusion that Applicant owes the debts which formed the basis of her adverse formal findings. Applicant’s testimony that he is seeking to discharge his debts in bankruptcy and seeking an accord and satisfaction with the IRS implicitly acknowledges the legitimacy of his debts. Applicant challenges a statement in the Decision to the effect that tax debts are not dischargeable in bankruptcy except in rare circumstances. He testified that his attorney had advised him that the tax liens would be discharged, although he provided no corroboration. In any event, he has not undermined the Judge’s conclusion that his tax liens reflect poorly on his judgment and reliability. Applicant also contends that his credit reports contain inaccuracies and that the Judge erred in stating that the IRS had garnished his wages. On this latter point, Applicant himself testified that the IRS initiated a garnishment action against him to collect past due taxes. Tr. at 25; Government Exhibit 2, Interrogatories, at 10. 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. 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). Applicant asserts that prior to the hearing he requested a postponement of the hearing so that he could properly prepare to argue for a grant of his clearance. He notes that his request was denied. Applicant states that the denial greatly altered the outcome of the hearing. Applicant claims that he suffers from a number of physical ailments and that during the hearing he was sick, weak, and exhausted. Applicant’s argument does not establish error on the part of the Judge. Rulings of DOHA administrative judges regarding requests for continuances are reviewed for an abuse of discretion. See, e.g., ISCR Case No. 01-03683 at 4 (App. Bd. Aug. 9, 2002); ISCR Case No. 03-26115 at 2 (App. Bd. Apr. 5, 2007). In this case the record reflects the following: The date of the hearing was originally set in this case for October 22, 2009. On October 20, 2009, Applicant submitted a written request for a postponement to the Judge, stating he needed time to search for a lawyer and requesting that the hearing be held no sooner than November 19, 2009. The Judge granted this request the same day, and a new hearing date of December 2, 2009 was set. On November 20, 2009 Applicant wrote to the Judge and indicated that December 2, 2009 was not a “workable date” in that the attorney he was considering hiring was not available on that date. Applicant indicated he wanted to postpone the hearing until sometime in January 2010. On November 24, 2009, the Judge contacted Applicant and indicated that she was denying his latest request for a delay, noting that additional time had already been granted to him for the purpose of hiring an attorney and he had not done so. The Judge also informed Applicant that if he did obtain an attorney, he should have the attorney contact the Judge if the December 2, 2009 hearing date presented a scheduling conflict. Nothing else transpired before the hearing date. At the hearing the Judge asked the parties if there were any procedural matters to resolve before going forward. Neither party indicated that there were any outstanding procedural matters. The history of the prior requests for continuances was not brought up on the record, and Applicant gave no indication that he was unable to proceed that day. Given these facts, the Board concludes that the Judge acted reasonably and that there was no violation of Applicant’s due process rights. 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 Chairperson, Appeal Board Signed: Jeffrey D. Billett Jeffrey D. Billett Administrative Judge Member, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board