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ISCR Case 11-00421.a1 — CASE

ISCR Case 11-00421.a1denied

Case Headnote

ISCR Case No. 11-00421.a1

Jun 15, 2012· Hon. Jean E. Smallin· appeal

Summary

The applicant, representing himself, was denied a security clearance under Guideline F, Financial Considerations, due to a history of significant financial problems. These issues included defaults on multiple credit card debts and an ongoing Chapter 7 bankruptcy.

The judge determined the applicant's financial situation was precarious, characterized by a negative monthly cash flow and no discernible upward trend in his financial stability. While the applicant presented some mitigating evidence, it was deemed insufficient to alleviate the security concerns raised by his financial history.

Ultimately, the judge found that the disqualifying conditions, specifically those related to financial irresponsibility, outweighed the mitigating factors. The denial of the security clearance was subsequently upheld on appeal.

Conditions Referenced

Disqualifying

AG ¶ 19raisedFinancial Considerations

Mitigating

AG ¶ 20(a)rejectedThe Behavior Was Not RecentThe judge noted the applicant's financial issues were ongoing and serious.
AG ¶ 20(b)rejectedThe Conditions That Resulted in the Behavior Were Beyond the Person's ControlThe judge found the applicant's financial issues were not solely due to external factors.
AG ¶ 20(c)appliedThe Person Has Received Counseling
AG ¶ 20(d)rejectedThe Person Has Taken Significant Steps to Reduce or Eliminate Financial ProblemsThe judge concluded that the applicant's efforts were insufficient given the severity of the financial issues.
AG ¶ 20(e)rejectedThe Person Has a Reasonable Expectation of Future Financial StabilityThe judge found no evidence of a favorable financial trend.

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 issuedOct 27, 2011
Answer filed—
Hearing heldApr 3, 2012
Decision dateJun 15, 2012

Cite For

Denial of Security Clearance Due to Ongoing Financial Instability
Insufficient Mitigating Evidence in Financial Considerations Cases
The Necessity of a Favorable Financial Trend 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 a denial of a security clearance based on financial considerations under Guideline F. The Applicant argued that the Judge's decision was arbitrary and capricious, citing efforts to resolve his debts and a recent bankruptcy discharge. The Board affirmed the Judge's decision, finding no harmful error in the assessment of the evidence.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowMichael H. Leonard — 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 contended that the Judge's adverse decision was arbitrary, capricious, or contrary to law.

Why the Board ruled this way

The Board found that the Judge reasonably explained why the mitigating evidence was insufficient to overcome the government's security concerns, and that the Judge's decision was supported by substantial evidence.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewNo de-novo re-decisionNo new evidence on appealDeference to the judge’s credibility calls

Appeal Board panel

Jean E. Smallin
James E. Moody
William S. Fields

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 Judge found that Applicant had a history of financial problems triggered in part by an adjusting ARM loan, which caused his mortgage payments to spike to the point that credit cards were used to meet living expenses. At the time of the hearing Applicant was still in the process of trying to obtain a discharge of his debts through a Chapter 7 bankruptcy. The Judge concluded that Applicant’s current financial situation is precarious as shown by a negative monthly case flow of several hundred dollars. The Judge reasonably explained why the mitigating evidence was insufficient to overcome the government’s security concerns. Adverse decision affirmed. CASE NO: 11-00421.a1 DATE: 06/15/2012 DATE: June 15, 2012 In Re: ----------------------------- Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 11-00421

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 October 27, 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 April 3, 2012, after the hearing, Administrative Judge Michael H. Leonard denied Applicant’s request for a security clearance. Applicant appealed pursuant to the Directive ¶¶ E3.1.28 and E3.1.30. Applicant raised the following issue on appeal: whether the Judge’s adverse clearance decision is arbitrary, capricious, or contrary to law. Applicant contends that the Judge’s adverse decision should be reversed because his indebtedness did not stem from frivolous spending or criminal conduct, he received counseling, he took reasonable actions to resolve his indebtedness, he is currently debt free, and he has now received a discharge in bankruptcy. Part of Applicant’s argument is based upon new evidence which the Board cannot consider on appeal. Directive ¶ E3.1.29. The balance of his argument does not demonstrate that the Judge erred in reaching his adverse decision.

Once the government presents evidence raising security concerns, the burden shifts to the applicant to establish mitigation. Directive ¶ E3.1.15. The presence of some mitigating evidence does not alone compel the Judge to make a favorable security clearance decision. As the trier of fact, the Judge has to weigh the evidence as a whole and decide whether the favorable evidence outweighs the unfavorable evidence, or vice versa. 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. 10-08508 at 2 (App. Bd. Jan. 4, 2012). In this case, the Judge found that Applicant had a history of financial problems triggered partially by an adjusting ARM loan, which caused his mortgage to spike to the point where credit cards were used to meet living expenses. As a result, Applicant had defaulted on two credit card debts in the amount of $11,000 and $6,032, both of which had been placed for collection. At the time of the hearing Applicant was still in the process of trying to obtain a discharge of those debts and other debts through a Chapter 7 bankruptcy, which he had filed after the issuance of the SOR. Decision at 2-3. The Judge weighed the mitigating evidence offered by Applicant against the length and seriousness of the disqualifying conduct, and considered the possible application of relevant conditions and factors. He noted Applicant’s receipt of counseling and his efforts to put his financial house in order. However, he also noted that: “[Applicant’s] current financial situation is precarious as shown by a negative monthly cash flow of several hundred dollars. At this point, there is no indication of a favorable upward trend upon which to rely, and it is too soon to tell if or when his financial situation will stabilize.” Decision at 7. Accordingly, the Judge reasonably explained why that mitigating evidence was insufficient to overcome the government’s security concerns in light of the totality of the record evidence. The Board does not review a case de novo. 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 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). The Judge’s unfavorable security clearance decision is sustainable.

ORDER

The decision of the Judge denying Applicant a security clearance is AFFIRMED. Signed: Jean E. Smallin Jean E. Smallin Administrative Judge Member, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board Signed: William S. Fields William S. Fields Administrative Judge Member, Appeal Board