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ISCR 11-13626.a1: Guideline F security clearance hearing, denied (2013) · CASE

ISCR Case 11-13626.a1denied

Case headnote

ISCR Case No. 11-13626.a1

deniedNov 7, 2013· Hon. Jeffrey D. Billett· hearing

Summary

A federal contractor and military retiree was denied a security clearance under Guideline F, Financial Considerations, due to unresolved financial issues. The applicant had a history of delinquent debts and insufficient repayment efforts, leading to the adverse decision despite a long history of holding security clearances.

Disqualifying conditions under Guideline F, specifically AG ¶ 20(a), were raised. The denial was based on the applicant's longstanding awareness of delinquent debts and dilatory efforts at repayment. Furthermore, the applicant failed to demonstrate a track record of debt resolution despite being fully employed.

Ultimately, the applicant's financial irresponsibility was deemed inconsistent with the judgment expected of someone holding a security clearance, resulting in the denial of the application.

Why the applicant was denied

The applicant had longstanding awareness of delinquent debts and made dilatory efforts at repayment.
The applicant failed to demonstrate a track record of debt resolution despite having full employment.
The applicant's financial irresponsibility was inconsistent with the judgment expected of someone holding a security clearance.

Conditions referenced

Disqualifying

AG ¶ 20(a)raisedFinancial Considerations

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 issuedFeb 27, 2013
Answer filed—
Hearing heldSep 10, 2013
Decision dateNov 7, 2013

Cite for

Failure to Mitigate Financial Concerns Under Guideline F
Importance of Demonstrating a Track Record of Debt Repayment
Consideration of an Applicant's Financial History in Security Clearance Decisions

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

From the decision

Facts this decision states, each with the exact sentence it comes from. Descriptive of the record, not an assessment.

Held a clearance before: Yes: “Applicant has held DoD security clearances since 1979, the year he entered active duty.”
Bankruptcy: Filed for bankruptcy: “During an interview he discussed several consumer credit accounts totaling over”

Standardized Decision Profile

SEAD-4 Guideline F · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The Judge found that the Applicant's financial circumstances raised security concerns under Guideline F due to a history of delinquent debts and a lack of responsible action towards repayment. The Judge concluded that the Applicant failed to mitigate these concerns, resulting in a denial of the security clearance.

The sub-allegation breakdown is part of the Professional plan. See what it includes.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation

Descriptive standardized rendering of a decided public case. The verbatim source decision is shown in full below.

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

HEARING

SYNOPSIS

KEYWORD: Guideline F DIGEST: Given Applicant’s longstanding awareness of his delinquent debts and his dilatory efforts at repayment, the Judge’s weighing of the evidence was not arbitrary, capricious or contrary to law. Adverse decision affirmed. CASENO: 11-13626.a1 DATE: 11/07/2013 DATE: November 7, 2013 In Re: ------------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 11-13626

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 February 27, 2013, 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 September 10, 2013, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Elizabeth M. Matchinski denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. Applicant raised the following issues on appeal: whether the Judge failed to consider all of the evidence in the record and whether the Judge’s adverse decision was arbitrary, capricious, or contrary to law. Consistent with the following, we affirm. The Judge’s Findings of Fact Applicant is an employee of a Federal contractor. He has completed some courses toward a bachelor’s degree. He has served in the U.S. military, retiring as an E-7. Applicant has held DoD security clearances since 1979, the year he entered active duty. There is no evidence that he has ever violated security regulations or procedures. Applicant married his current spouse in 1998. Because of Applicant’s deployments while serving in the military, his spouse handled their finances. In 1999, Applicant and his spouse filed for Chapter 13 bankruptcy protection. In 2001, Applicant completed a security clearance application (SCA), disclosing his bankruptcy. During an interview he discussed several consumer credit accounts totaling over $50,000 that had been included in his bankruptcy action. During this interview Applicant advised that he realized that he and his spouse had to live within his means, avoiding unneeded credit and limiting debt to that which was essential and which could be managed within their budget. Applicant subsequently acquired more delinquent debt, mainly for credit cards. He has experienced several instances of unemployment. In his response to the SOR, he stated that he had been delinquent in paying his debts “out of my own stupidity.” Decision at 7. After the date of the hearing, Applicant met with a debt management company. He agreed to make an initial payment of $263, with subsequent monthly payments of $213, in exchange for which the company would attempt to negotiate with Applicant’s creditors and make payments on his behalf. Applicant presented no evidence showing which of his debts were included within this plan. Applicant’s spouse has a couple of delinquent debts of her own and is negotiating repayment. His ability to make the $213 payments is dependent on his spouses income. Applicant has described himself as “not the most financially savvy person.” Id. at 8. He now understands that he and his spouse undertook more credit card debt than they could afford. Indeed, they used credit cards to make payments on other credit cards. Applicant is active in the Boy Scouts of America, the Veterans of Foreign Wars, and a religiously-affiliated charitable organization. His fellow workers and the vice-president of his employer are aware of his financial problems. He enjoys a good reputation for trustworthiness. The Judge’s Analysis The Judge concluded that Applicant’s financial circumstances raised Guideline F security concerns. The Judge also concluded that Applicant had failed to mitigate those concerns. In doing so, she cited to evidence that Applicant had made no payments on any of his debts as of the close of the record. Although noting that Applicant’s debts were affected by circumstances beyond his control, his periods of unemployment, she concluded that Applicant had not demonstrated responsible action in regard to them. She stated that Applicant’s SOR debts originated after he had gained full employment and that he had stopped paying at least some of them while he held a full- time job and was receiving a military paycheck. She noted that, even after having been hired by his current employer, Applicant had failed to address even relatively small delinquencies that he should have been able to manage. She cited to Applicant’s bankruptcy action, to his 2001 SCA and investigation, and to his 2011 clearance interview, all of which put him on notice that delinquent debts were matters of security concern. However, despite this notice, he did not begin to develop a plan for paying off his debts until after the date of the hearing. She stated that, his recent payment plan notwithstanding, Applicant had failed to demonstrate a track record of debt resolution. In the whole-person analysis, the Judge cited to Applicant’s evidence that he had permitted his wife to handle the finances, resulting in his being unaware of the problems at issue in this case. The Judge stated that the evidence demonstrated a level of inattention to debt obligations that was not consistent with the judgment expected of someone who holds a clearance.

DISCUSSION

Applicant takes issue with the Judge’s treatment of the mitigating conditions, citing in particular to her statement that he had not demonstrated a track record of debt repayment. He argues that when she held the record open for him to submit additional evidence, it was not with the understanding that he had to show that he had been on his debt repayment plan for a specified period of time. We have examined the transcript of the hearing. While the Judge gave Applicant three weeks after the hearing to submit evidence that he had contacted an attorney to set up a payment plan, she did not state or intimate how much weight she would extend to this evidence or that it would be dispositive of Applicant’s security concerns. Given the facts that were before her, particularly Applicant’s longstanding awareness of the significance of his delinquent debts and his dilatory efforts at repayment, her treatment of the repayment plan was reasonable.1 Applicant has not demonstrated that the Judge weighed this evidence, or any of the other evidence, in a manner that was arbitrary, capricious, or contrary to law. See, e.g., ISCR Case No. 09-01970 at 3 (App. Bd. Oct. 29, 2010), to the effect that a party’s disagreement with the Judge’s weighing of the record or an ability to argue for a different interpretation of the evidence is not sufficient to show that the weight that Judge assigned to the evidence was arbitrary, capricious, or contrary to law. Applicant cites to evidence, and the Judge’s finding, that he has held a clearance for many years without incident or concern. While this was evidence the Judge was required to consider, along with all the other evidence in the record, Applicant has not rebutted the presumption that the Judge considered all of the evidence. See, e.g., ISCR Case No. 11-12204 at 4 (App. Bd. Jul. 22, 2013). The Judge made a finding about Applicant’s good security record and discussed this finding in her whole-person analysis. However, her overall adverse decision was consistent with the record that was before her. The Government need not wait until an individual has mishandled classified information to make an unfavorable clearance decision. See, e.g., ISCR Case No. 08-00435 at 3 (App. Bd. Jan. 22, 2009). Security clearance adjudications are predictive in nature, and it is foreseeable that persons with prior good records may nevertheless engage in conduct or undergo circumstances that raise doubts about their future judgment or reliability. See, e.g., ISCR Case No. 03-04927 at 5 (App. Bd. Mar. 5, 2005). The Judge examined the relevant data and articulated a satisfactory explanation for the decision. The 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 Decision is AFFIRMED. Signed: Jeffrey D. Billett Jeffrey D. Billett Administrative Judge Member, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board Separate Opinion of Administrative Judge Michael Y. Ra’anan I agree with the majority analysis of the dispositive issues in this case. Applicant highlights an interesting situation which appears occasionally in DOHA proceedings and is worthy of consideration. He notes that the Judge left the record open for him to produce evidence of his commencing arrangements to pay his debts. He further notes that there was no stipulation at the hearing as to how much debt needed to be repaid or by what date. Applicant has put his finger on a problem which a Judge may sometimes have at the end of the hearing. There is a sound reason to leave the record open so that the Applicant can have every opportunity to develop a favorable record, even if it may not be likely that they can successfully mitigate the security issues at hand. On the other hand, applicants choosing to avail themselves of the additional time may take actions that have serious consequences beyond the context of their current security clearance adjudication. Thus, on occasion the additional time after the hearing was used by an applicant to commence legal proceedings such as bankruptcy or to return a passport to a foreign government. Such cases have been appealed by the applicants when the Judges concluded that the post-hearing actions were insufficient to mitigate the totality of the government’s security concerns. Of course, at the end of the hearing, a Judge has not yet had time to integrate and analyze all the evidence that has been presented. And no Judge can analyze evidence that has not yet been presented. Having noted the issue, I cannot claim to have a ready resolution. Each case is different and to an extent each Judge has discretion in approaching procedural issues. Signed: Michael Y. Ra’anan Michael Y. Ra’anan Administrative Judge Chairperson, Appeal Board

FOOTNOTES

1 “Q: . . . Have you, at this point, made any payments at all on any of these debts? A: No, sir . . . It’s my fault. Q: Now . . . it looks like several of these debts . . . date back to 2007 when you were gainfully employed . . . Can you explain why, at a time where you had been gainfully employed for several years, why you weren’t able to pay any of these debts down? . . . A: I don’t, I’m just–no excuse.” Tr. at 47-48.