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ISCR Case 10-06975.a1 — CASE

ISCR Case 10-06975.a1denied

Case Headnote

ISCR Case No. 10-06975.a1

Apr 19, 2012· Hon. Michael Y. Ra'anan· appeal

Summary

A field engineer with military service was denied a security clearance under Guideline F, Financial Considerations, due to significant delinquent debts and poor financial management. The applicant had approximately $108,000 in outstanding debts, which were largely discharged through bankruptcy.

However, the judge determined that the applicant's overall financial habits demonstrated unreliability and untrustworthiness. Specific concerns included expenditures on non-essential items, which indicated a lack of willingness to adhere to financial rules and regulations.

While a bankruptcy discharge addressed many of the debts, the underlying pattern of financial mismanagement led to the denial. The decision highlighted disqualifying conditions related to financial irresponsibility, despite the application of some mitigating conditions.

Conditions Referenced

Disqualifying

AG ¶ 20(a)raisedFinancial Considerations

Mitigating

AG ¶ 20(c)rejectedFinancial ConsiderationsThe judge found that the applicant's financial management habits evidenced unreliability, despite the discharge of debts through bankruptcy.

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 issuedMay 16, 2011
Answer filed—
Hearing heldFeb 9, 2012
Decision dateApr 19, 2012

Cite For

Financial Management Habits Indicating Unreliability Under Guideline F
Impact of Bankruptcy on Security Clearance Adjudication
The Necessity of a Favorable Track Record for Security Clearance Approval

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 after being denied due to financial considerations under Guideline F. The applicant argued that the Judge's decision was arbitrary and capricious. The Board affirmed the Judge's decision, finding it supported by the record evidence and reasonable in its conclusions.

Appealed bythe applicant

Applicant representationAttorney

Judge belowThomas M. Crean — denied the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
Applicant argued that the Judge's decision was contrary to the weight of the record evidence.

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, maintaining 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

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: Applicant has not rebutted the presumption that the Judge considered all the record evidence. Adverse decision affirmed. CASENO: 10-06975.a1 DATE: 04/19/2012 DATE: April 19, 2012 In Re: -------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 10-06975

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Ronald C. Sykstus, Esq. The Defense Office of Hearings and Appeals (DOHA) declined to grant Applicant a security clearance. On May 16, 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 hearing. On February 9, 2012, after the hearing, Administrative Judge Thomas M. Crean 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 decision is contrary to the weight of the record evidence and, therefore, arbitrary, capricious, or contrary to law. Consistent with the following, we affirm the Judge’s decision. The Judge made the following pertinent findings of fact: Applicant is a field engineer. He served in the Air Force from 1983 until 1992, at which point his military position was converted to a civilian job with a Defense contractor. He and his wife have a combined monthly income of $4,998 and monthly expenses of $4,798. Applicant’s SOR lists numerous delinquent debts–for credit cards, telephone services, utility bills, etc. These debts total about $108,000. Applicant’s problems started when he had a larger than average telephone bill. He paid it, but he became behind on others. He incurred debts due to travel costs associated with family illnesses and deaths. In addition, he purchased numerous gifts and items for his family–computers, automobile tires, TV sets, video game consoles, etc. He paid for these gifts through consumer credit. After receiving the SOR, Applicant filed for bankruptcy protection. All but two of these debts were discharged. His remaining debts are a car payment and a timeshare. Applicant enjoys a good reputation for his work ethic and security worthiness. In the Analysis, the Judge noted that Applicant’s debts were almost all discharged through his bankruptcy proceeding. However, the Judge looked to the circumstances underlying Applicant’s debts, concluding that his financial management habits evidenced unreliability, untrustworthiness, and an unwillingness to follow rules and regulations. The Judge stated that Applicant had the capacity to live within his means, but he had chosen not to do so, expending great sums on non- essential purchases. The Judge reasonably concluded that even though Applicant is now debt-free he has not established a track record upon which to base a favorable security clearance adjudication. Decision at 7. Applicant cites to several pieces of record evidence, such as Applicant’s having held a security clearance for many years, his military service, the discharge of his debts through bankruptcy, and his character references. Applicant argues that this evidence demonstrates his worthiness for a security clearance. The Judge discussed the evidence which Applicant has cited. However, his focus upon the circumstances underlying Applicant’s debts was reasonable and supported his adverse decision. Applicant has not rebutted the presumption that the Judge considered all of the record evidence. See, e.g., ISCR Case No. 10-06943 at 4 (App. Bd. Feb. 17, 2012). Neither has Applicant demonstrated that the Judge mis-weighed the evidence. Applicant requests that, if we do not reverse the decision of the Judge, we award him a clearance with probationary conditions. We do not have authority to grant an interim, conditional, or probationary clearance. See, e.g., ISCR Case No. 10-03646 at 2 (App. Bd. Dec. 28, 2011). 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). 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: Michael Y. Ra’anan Michael Y. Ra’anan Administrative Judge Chairperson, 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