CASEClearance Adjudication Search EngineCASE

Loading case…

ISCR Case 09-07478.a1 — CASE

ISCR Case 09-07478.a1denied

Case Headnote

ISCR Case No. 09-07478.a1

Nov 24, 2010· Hon. Michael Y. Ra'anan· appeal

Summary

A 62-year-old federal contractor employee was denied a security clearance under Guideline F, Financial Considerations, due to significant unmitigated financial issues. The applicant had 19 delinquent debts, totaling approximately $331,116, which raised disqualifying conditions under Adjudicative Guideline (AG) ¶ 19.

Despite the applicant's claims of responsible financial management, these assertions lacked corroboration. Furthermore, the applicant failed to file tax returns for several years, which undermined his credibility regarding financial responsibility.

No mitigating conditions under AG ¶ 20 were applied. The Adjudicator concluded that the applicant did not demonstrate sufficient mitigation of the security concerns raised by his extensive delinquent debts and lack of financial accountability, resulting in the denial of his security clearance.

Conditions Referenced

Disqualifying

AG ¶ 19raisedFinancial Considerations

Mitigating

AG ¶ 20rejectedFinancial ConsiderationsThe applicant's actions to address financial issues were insufficient to mitigate the security concerns.

Key Rule Quoted

“Each case must be decided on its own merits.”

Procedural Posture

SOR issuedMar 8, 2010
Answer filed—
Hearing heldAug 13, 2010Decision on written record.
Decision dateNov 24, 2010

Cite For

Denial of Security Clearance Due to Significant Financial Issues Under Guideline F
Insufficient Corroboration of Financial Management Claims
Failure to File Tax Returns as a Factor in Security Clearance Decisions

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 financial considerations under Guideline F. The applicant argued that the Judge misapplied mitigating conditions. The Board affirmed the Judge's decision, finding no error in the application of the law or the facts considered.

Appealed bythe applicant

Applicant representationAttorney

Judge belowCarol G. Ricciardello — denied the clearance

Decided onthe written record

Guidelines belowGuideline F

What the Board reviewed

Mitigation wrongly applied / not applied — raised by the applicantRejected
Applicant argued that the Judge erred in her application of the pertinent mitigating conditions.

Why the Board ruled this way

The Board affirmed the Judge's decision, finding that the record supported the conclusion that the Judge examined the relevant data and articulated a satisfactory explanation for the decision, with a rational connection between the facts found and the choice made.

Standard of review applied

No new evidence on appealNo de-novo re-decisionSubstantial-evidence reviewArbitrary-and-capricious review

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: Each case must be decided on its own merits. Adverse decision affirmed. CASENO: 09-07478.a1 DATE: 11/24/2010 DATE: November 24, 2010 In Re: ------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 09-07478

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT D. Michael Lyles, Esq., Department Counsel FOR APPLICANT James W. Green, Esq. The Defense Office of Hearings and Appeals (DOHA) declined to grant Applicant a security clearance. On March 8, 2010, 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 August 13, 2010, after considering the record, Administrative Judge Carol G. Ricciardello denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. Applicant raised the following issue on appeal: whether the Judge erred in her application of the pertinent mitigating conditions. Consistent with the following discussion, we affirm the decision of the Judge. The Judge made the following pertinent findings of fact: Applicant is a 62-year-old employee of a Federal contractor. He owes 19 delinquent debts, which include a court judgment, credit card debts, and bank loans. The total amount of Applicant’s delinquent debts is approximately $331,116. Applicant had owned two retail stores, which experienced significant drops in business. He used credit cards to purchase inventory and pay bills. He also took out a bank loan to pay the interest on his credit cards. Applicant had overdue tax debts for personal income tax and for business tax. He filed his 2006, 2007, and 2008 Federal income tax returns in August 2009. He filed state income tax returns for these same tax years later in 2009.1 In an effort to address his financial problems, Applicant liquidated some retirement accounts and took out a second mortgage on his home. He has also attempted to sell a time-share. Applicant did not provide corroboration for his claim that he had made responsible business decisions. He did not explain why he had failed to pay his taxes. Applicant filed for Chapter 7 bankruptcy protection. The bankruptcy action was continuing as of the close of the record. In the Analysis portion of the decision, the Judge noted that Applicant had taken certain actions to live within his means, such as working two jobs. However, she also stated that, insofar as Applicant’s case was decided on the written record, she did not have the opportunity to question him about his business practices in order the evaluate the extent to which his economic problems resulted from causes outside his control or from his own actions. She stated that his failure to have filed tax returns undercut his efforts to demonstrate that his business practices had been sound. She also noted that while bankruptcy is a legal means of resolving debt, it does not necessarily indicate a good-faith effort to pay off debts. Accordingly, she denied Applicant a security clearance. In support of his appeal Applicant submits evidence not contained in the record, including documents showing his discharge in bankruptcy, certificates that he had received financial counseling, and charts showing the monthly sales at his stores. We cannot consider new evidence on appeal. See Directive ¶ E3.1.29. (“No new evidence shall be received or considered by the Appeal Board”). See also ISCR Case No. 08-05379 at 2 (App. Bd. Sep. 15, 2010). Applicant cites to a case by the Hearing Office, which he contends supports his case for reversal of the Judge’s decision. We give due consideration to this case. However, each case must be decided upon its own merits. Directive, Enclosure 2 ¶ 2(b). Moreover, Hearing Office decisions are binding neither on other Hearing Office Judges nor on the Board. See ISCR Case No. 06-24121 at 2 (App. Bd. Feb. 5, 2008). The case cited by Applicant has significant factual differences from his own, notably in terms of the number and amounts of delinquent debts at issue. The case cited by Applicant does not demonstrate that the Judge erred in her application of the mitigating conditions. The record supports a conclusion 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: William S. Fields William S. Fields Administrative Judge Member, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board

FOOTNOTES

1 Applicant’s tax issues were not alleged in the SOR.