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ISCR Case 10-01517.a1 — CASE

ISCR Case 10-01517.a1denied

Case Headnote

ISCR Case No. 10-01517.a1

Jun 4, 2012· Hon. Jean E. Smallin· appeal

Summary

This security clearance application was denied under Guideline F (Financial Considerations) due to persistent financial instability. The applicant, representing herself, had filed for bankruptcy six times between 1996 and 2009, a pattern that raised significant disqualifying concerns.

Despite the application of mitigating conditions, the judge determined that the applicant's current financial situation remained weak. Evidence showed a monthly financial shortfall of $27.00 and two outstanding unpaid debts.

Ultimately, the judge found no sufficient evidence to demonstrate that the applicant's financial condition had improved to a degree that would mitigate thestanding security concerns, resulting in the denial of the security clearance.

Conditions Referenced

Disqualifying

AG ¶ 20raisedFinancial Considerations

Mitigating

AG ¶ 20(a)rejectedConditions Beyond ControlThe judge acknowledged employment difficulties but found they did not mitigate the financial concerns.
AG ¶ 20(b)rejectedActed Responsibly Under CircumstancesThe judge concluded that the applicant failed to demonstrate responsible management of her financial situation.

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 issuedAug 11, 2011
Answer filed—
Hearing heldApr 9, 2012
Decision dateJun 4, 2012

Cite For

Denial of Clearance Due to Unresolved Financial Issues Under Guideline F
Impact of Multiple Bankruptcy Filings on Security Clearance Eligibility
Importance of Demonstrating Improvement in Financial Circumstances for Mitigation

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 who was denied a security clearance due to financial concerns stemming from six bankruptcy filings. The applicant argued that the Judge's decision was arbitrary and capricious. The Board affirmed the Judge's decision, finding it supported by substantial evidence and consistent with national security interests.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowMartin H. Mogul — denied the clearance

Decided onthe written record

Guidelines belowGuideline F

What the Board reviewed

Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
Applicant argued that the Judge's adverse security clearance decision was arbitrary, capricious, or contrary to law.

Why the Board ruled this way

The Board found that the Judge's decision was supported by substantial evidence and articulated a satisfactory explanation for the decision, including a rational connection between the facts found and the choice made.

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

Jean E. Smallin
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: Applicant failed to overcome security concerns arising from her six bankruptcy filings. Adverse decision affirmed. CASE NO: 10-01517.a1 DATE: 06/04/2012 DATE: June 4, 2012 In Re: ----------------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 10-01517

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 August 11, 2011, 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 April 9, 2012, after considering the record, Administrative Judge Martin H. Mogul 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’s adverse security clearance decision was arbitrary, capricious, or contrary to law. Consistent with the following, we affirm the Judge’s decision. The Judge found that Applicant had filed for bankruptcy six times between 1996 and 2009, five under Chapter 13 and one under Chapter 7. The Chapter 7 and one of the Chapter 13 petitions resulted in discharge of Applicant’s debts. Applicant has struggled financially over the years, due to her inability to find jobs that paid enough. She also has experienced unemployment, from July 2005 to January 2006. Her current financial condition is still weak, and, after all expenses are paid, she has a monthly shortfall of $27.00. She owes at least two debts that she has not been paying. In the Analysis, the Judge noted Applicant’s employment difficulties, which he characterized as circumstances outside her control that affected her financial problems.1 He also stated that her bankruptcy discharges had provided some measure of debt resolution. However, he also stated that the record contained no evidence to demonstrate that Applicant’s financial situation as a whole had improved to the point that it mitigated the security concerns arising from her multiple bankruptcy filings. He cited to evidence that Applicant still has to borrow money to pay her expenses and that she has two debts that remain unsatisfied. In the whole-person analysis, the Judge noted that he had not had an opportunity to assess Applicant’s credibility in person.2 He concluded that, based on the record that was before him, Applicant had failed to mitigate the security concerns in her case. 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. See, e.g., ISCR Case No. 02- 21045 at 4 (App. Bd. Dec. 28, 2004) (Record evidence of recurring financial difficulties despite repeated bankruptcy filings supported the Judge’s adverse decision). “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). See also Directive, Enclosure 2 ¶ 2(b): “Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.”

ORDER

The Judge’s adverse security clearance decision is AFFIRMED. Signed: Jean E. Smallin Jean E. Smallin Administrative Judge Member, 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 Directive, Enclosure 2 ¶ 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 separation), and the individual acted responsibly under the circumstances.”

2 Elsewhere in the Decision, the Judge noted that Applicant had not provided a response to the File of Relevant Material, despite being provided with an opportunity to do so. Decision at 1.