CASE · Clearance Adjudication Search EngineCASE

Loading case…

ISCR Case 11-03623.a1 — CASE

ISCR Case 11-03623.a1denied

Case Headnote

ISCR Case No. 11-03623.a1

Jul 25, 2012· Hon. Jeffrey D. Billett· appeal

Summary

A systems engineer was denied a security clearance under Guideline F, Financial Considerations, due to unresolved mortgage defaults and foreclosure. The applicant's history of financial issues raised concerns, specifically disqualifying condition AG ¶ 20.

While mitigating conditions AG ¶ 20(b), AG ¶ 20(c), and AG ¶ 20(d) were considered, they were ultimately insufficient. The denial stemmed from the applicant's failure to demonstrate a consistent track record of resolving delinquent mortgages. Despite having the financial capacity to make payments, the applicant's financial problems were not deemed resolved or under control.

Furthermore, the reasons provided for defaulting on mortgage payments were not attributed to circumstances beyond the applicant's control. Consequently, the applicant failed to provide sufficient evidence of responsible financial behavior, leading to the denial of the security clearance.

Conditions Referenced

Disqualifying

AG ¶ 20raisedFinancial Considerations

Mitigating

AG ¶ 20(b)rejectedConditions Beyond ControlThe applicant did not act responsibly under the circumstances.
AG ¶ 20(c)rejectedFinancial CounselingNo evidence of financial counseling was presented.
AG ¶ 20(d)appliedGood-faith Effort to Repay DebtsOne SOR debt was resolved in the applicant's favor.

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 issuedJan 13, 2012
Answer filed—
Hearing heldMay 31, 2012
Decision dateJul 25, 2012

Cite For

Denial of Security Clearance Due to Unresolved Financial Issues Under Guideline F
Importance of Demonstrating Responsible Financial Behavior for Security Clearance
Impact of Financial Stability on National Security Determinations

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 based on 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 no harmful error in the weighing of evidence or conclusions drawn by the Judge.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowRobert Robinson Gales — 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 did not mis-weigh the evidence and that the decision was supported by substantial evidence. The Judge's conclusions were not arbitrary, capricious, or contrary to law, and the adverse decision was sustainable on the record.

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

Jeffrey D. Billett
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: The record does not support a conclusion that the Judge mis-weighed the evidence. Adverse decision affirmed. CASENO: 11-03623.a1 DATE: 07/25/2012 DATE: July 25, 2012 In Re: --------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 11-03623

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 January 13, 2012, 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 May 31, 2012, after considering the record, Administrative Judge Robert Robinson Gales 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 decision of the Judge. The Judge made the following pertinent findings of fact: Applicant is a systems engineer for a Defense contractor. He served in the U.S. military for 18 months. He attended college, receiving a bachelor’s degree in 1977. Although the record is silent as to his employment status between 1977 and 1998, he has held a security clearance since 1987. Applicant purchased a house, taking out two mortgages and making no down payment. He took out a third mortgage in order to finance the construction of a swimming pool at his house. The total amount of the mortgages was $450,000. His monthly mortgage payment was $3,650. Over time, the value of his house decreased to $220,000, leaving him with no equity. He had the ability to continue making his mortgage payments. However, the negative equity impaired his ability to retire in 3 to 4 years, as he had hoped to do. Applicant consulted with two attorneys, who advised him that he earned too much money for Chapter 7 bankruptcy protection and that his monthly payments under Chapter 13 would be $7,600. Therefore, Applicant decided to default on his mortgage payments, in hopes that he could work with his lenders to reduce both the principal owed and his monthly payments. Merely reducing his monthly payments would not increase his equity in the house. He stopped making mortgage payments in July 2010. He was eventually advised, however, that he did not qualify for loan modification. Applicant permitted the three mortgages to go into foreclosure. At the end of 2010, Applicant earned an annual salary of $117,000, and his wife earned one of $65,000. He submitted no evidence to corroborate his claims that he was paying off all accounts that he had intended to resolve in bankruptcy, including credit cards, car loans, and student loans. There is no evidence in the record of financial counseling. In the Analysis, the Judge concluded that Applicant’s financial problems were neither attenuated by the passage of time nor infrequent.1 He acknowledged that a downturn in the real estate market had occurred during the past few years, which was beyond Applicant’s control. However, the Judge concluded that Applicant had not explained what impact that downturn had actually exerted on his ability to address his financial circumstances. The Judge stated that Applicant had not acted responsibly under the circumstances.2 The Judge also concluded that there was no evidence in the record to demonstrate that Applicant’s financial problems were being resolved or were under control.3 He did resolve an SOR debt in Applicant’s favor,4 but he concluded that Applicant had failed to demonstrate a track record of debt resolution regarding the delinquent mortgages on his house. Applicant cites to a decision by another Hearing Office Judge which, he contends, supports his case for a security clearance. We give this decision due consideration. However, Hearing Office decisions are not binding on other Hearing Office Judges or on the Appeal Board. See, e.g., ISCR Case No. 08-09236 at 4 (App. Bd. Jan. 14, 2010). The case which Applicant cites involves circumstances underlying the debts, which are significantly different from his own. Applicant’s appeal brief includes evidence from outside the record, such as a more recent credit report, a document showing the final bid on a trustee’s sale of his house, documents showing the declining assessed value of Applicant’s home over the past few years, etc. We cannot consider new evidence on appeal. Directive ¶ E3.1.29. Much of Applicant’s appeal brief consists of a disagreement with the Judge’s weighing of the evidence. He cites to his overall history of financial stability, to evidence that he had stopped making mortgage payments in order to apply (unsuccessfully) for a loan remodification, and to other things which he believes that the Judge did not examine in their proper context. However, while the Judge considered the evidence which Applicant has cited, his decision rested in large measure on Applicant’s reasons for defaulting on his mortgage payments (which had little to do with the influence of circumstances outside Applicant’s control), on evidence that Applicant had the financial capacity to make those payments had he chosen to do so, and on a paucity of record evidence demonstrating that Applicant’s financial problems were being resolved. The record does not support a conclusion that the Judge mis-weighed the evidence. 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 that 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. 11-04742 at 2 (App. Bd. Jun. 20, 2012). 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: Jeffrey D. Billett Jeffrey D. Billett Administrative Judge Member, 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

FOOTNOTES

1 Directive, Enclosure 2 ¶ 20(a): “the behavior happened so long ago, was so infrequent, or occurred under such circumstances that it is unlikely to recur and does not cast doubt on the individual’s current reliability, trustworthiness, or good judgment[.]”

2 Directive, Enclosure 2 ¶ 20(b): “The conditions that resulted in the financial problem were largely beyond the person’s control . . . and the individual acted responsibly under the circumstances[.]”

3 Directive, Enclosure 2 ¶ 20(c): “the person has received or is receiving counseling for the problem and /or there are clear indications that the problem is being resolved or is under control[.]”

4 One of the SOR debts was for a mobile home loan account that had been cancelled. The Judge cited to evidence that Applicant had sold the home through a short sale and that the lender had cancelled the balance owed on the loan. In resolving this debt in Applicant’s favor, the Judge relied on Directive, Enclosure 2 ¶ 20(d): “the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts[.]”