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ISCR Case 11-08274 — CASE

ISCR Case 11-08274denied

Case Headnote

ISCR Case No. 11-08274

May 2, 2013· Hon. Jeffrey D. Billett· appeal

Summary

The applicant, representing himself, was denied a security clearance under Guideline F (Financial Considerations) due to $120,000 in delinquent debt. The Appeal Board upheld this denial, citing the applicant's failure to demonstrate financial responsibility and trustworthiness.

Initially, the applicant admitted to the debts but later claimed they were uncollectible due to statutes of limitation. However, he did not provide sufficient evidence to support these claims. The Board determined that relying on statutes of limitation was not a good-faith effort to resolve the debts.

The applicant's decision not to pay his debts raised concerns about his judgment and trustworthiness, aligning with Disqualifying Condition AG ¶ 20(a). Ultimately, the Appeal Board concluded that the applicant had not mitigated the financial concerns, leading to the denial of his security clearance.

Conditions Referenced

Disqualifying

AG ¶ 20(a)raisedFinancial Considerations

Key Rule Quoted

“A Judge is presumed to have considered all of the evidence in the record unless he or she specifically states otherwise.”
— ISCR Case No. 07-00196 at 3 (App. Bd. Feb. 20, 2009)

Procedural Posture

SOR issuedJun 20, 2012
Answer filed—Applicant represented himself.
Hearing heldJan 23, 2013After the close of the record.
Decision dateMay 2, 2013Appeal Board affirmed the decision.

Cite For

Failure to Demonstrate Financial Responsibility Under Guideline F
Impact of Delinquent Debt on Security Clearance Eligibility
Presumption of Evidence Consideration by the Judge

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, but the Board affirmed the denial, finding no harmful error in the Judge's conclusions regarding the applicant's delinquent debts.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowNichole L. Noel — 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 arbitrary, capricious, or contrary to law.

Why the Board ruled this way

The Board found no error in the Judge's decision, affirming that the applicant's debts remain outstanding and unsatisfied, and that the Judge properly weighed the evidence presented.

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
Jeffrey D. Billett
Jean E. Smallin

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: A Judge is presumed to have considered all of the evidence in the record. The Appeal Board has declined to hold that a debtor’s obligations are discharged by actions of the creditor, such as sale of the debt or a charge off of the account. Adverse decision affirmed. CASE NO: 11-08274 DATE: 05/02/2013 DATE: May 2, 2013 In Re: ---------------- Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 11-08274

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Pro se The Department of Defense (DoD) declined to grant Applicant a security clearance. On June 20, 2012, DoD 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 January 23, 2013, after the close of the record, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Nichole L. Noel denied Applicant’s request for a security clearance. Applicant appealed, pursuant to the Directive ¶¶ E3.1.28 and E3.1.30. Applicant raises the following issue on appeal: (1) whether the Judge’s decision is arbitrary, capricious, or contrary to law. For the following reasons, the Board affirms the Judge’s unfavorable security clearance decision. The Judge found: Applicant has $120,000 in delinquent debt alleged in the SOR. This is comprised of four debts in the amount of $16,000, $8,730, $27,000 and $68,000. After he was unable to receive assistance from his creditors or a debt-to-wealth program, Applicant stopped making payments on his debts in 2008. Since 2008, Applicant has focused his efforts on catching up on other financial obligations not listed in the SOR. He has notified the four creditors listed in the SOR that he plans to initiate lawsuits against them for alleged violations of the State’s Deceptive Trade Practices Act. His complaint is that the creditors failed to accurately report information to the credit reporting bureaus. To date, Applicant has not resolved any of the $120,000 in delinquent debt. Although he admits to incurring the debt, he believes that the debts are uncollectible under the statutes of limitation for the two states involved. Applicant currently lives modestly and within his means with the help of a budget. He is current on his recurring financial obligations. The Judge concluded: Applicant admitted each allegation in the SOR, without explanation. However, in a post-hearing submission, he retracted his admissions and denies that he owes the four delinquent debts alleged in the SOR, claiming that these debts are now uncollectible because of the statute of limitations. Under the perception that he had been treated unfairly by his creditors, Applicant decided not to repay his legitimate debts after he lost a home to foreclosure. Instead, he decided to rely on the statute of limitations. The reliance on the statutes of limitation fails on two grounds. First, the assertion is not supported by the record. Applicant did not submit any information regarding the specific terms of the credit agreements, which would have provided a reasoned determination as to which statute of limitation applied. Second, security clearance decisions are not controlled or limited by any statute of limitation, and reliance on the non- collectability of a debt does nor constitute a good-faith effort to resolve that debt within the meaning of the Directive. The federal government is entitled to consider the facts and circumstances surrounding an applicant’s conduct in incurring and failing to satisfy the debt in a timely manner. Applicant’s decision not to pay his debts reflects poorly on his judgment, reliability, trustworthiness, and ability to protect classified information. Applicant’s decision also shows an unwillingness to take responsibility for his actions. Applicant did not meet his ultimate burden of persuasion to obtain a favorable clearance decision. Applicant argues that the Judge failed to consider evidence submitted by him in a post- hearing submission. He referenced the Judge’s mentioning of the operation of the statutes of limitation and asserts that the statute of limitations argument was only a small part of what Applicant raised in the post-hearing submission. Applicant then goes into great detail as to why he does not owe the debts alleged in the SOR. The gravamen of his position as stated in the post-hearing submission is that credit card receivables are typically sold into a secondary market, resulting in a situation where the entities reporting the debts have been paid in full. His position as stated in the post-hearing submission was that he incurred the debts originally, and at one time they were owed, but that they were no longer owed. Applicant engages in very technical arguments as to why, through the vagaries of the secondary market, the debts he owed no longer exist. He states that the Judge failed to consider this evidence. A Judge is presumed to have considered all the evidence in the record unless he or she specifically states otherwise. See, e.g., ISCR Case No. 07-00196 at 3 (App. Bd. Feb. 20, 2009). The Board finds no reason to believe that the Judge did not properly weigh the evidence or that she failed to consider all the evidence in the record. See, e.g., ISCR Case No. 11-06622 at 4 (App. Bd. Jul. 2, 2012). We have considered the totality of Applicant’s arguments on appeal and find no error in the Judge’s ultimate conclusions regarding mitigation. 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. See, e.g., ISCR Case No. 06- 10320 at 2 (App. Bd. Nov. 7, 2007). 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. 06-17409 at 3 (App. Bd. Oct. 12, 2007). Applicant’s appeal brief essentially argues for an alternate interpretation of the record evidence. The Board concludes that the Judge appropriately weighed the mitigating evidence offered by Applicant against the seriousness of the disqualifying conduct and adequately discussed why the disqualifying conduct established under Guideline F was not mitigated. Contrary to Applicant’s assertions, the Judge found that Applicant’s SOR debts remain outstanding and unsatisfied. This finding is supported by the evidence. The Board has previously reviewed and declined to adopt arguments which rely on claims that a debtor’s obligations are discharged as a result of actions by the creditor such as sale of the debt or a charge off of the account. See, ISCR Case No. 06-07554 (App. Bd. Oct. 12, 2007); ISCR Case No. 08-07264 (App. Bd. Oct. 15, 2009); and ISCR Case No. 09-01175 (App. Bd. May 11, 2010). The Board does not review a case de novo. The favorable evidence cited by Applicant is not sufficient to demonstrate the Judge’s decision is arbitrary, capricious, or contrary to law. See, e.g., ISCR Case No. 06-11172 at 3 (App. Bd. Sep. 4, 2007). 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). Therefore, the Judge’s ultimate unfavorable security clearance decision is sustainable.

ORDER

The decision of the Judge is AFFIRMED. Signed: Michael Y. Ra’anan Michael Y. Ra’anan Administrative Judge Chairperson, Appeal Board Signed: Jeffrey D. Billett Jeffrey D. Billett Administrative Judge Member, Appeal Board Signed: Jean E. Smallin Jean E. Smallin Administrative Judge Member, Appeal Board