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ISCR Case 11-14723.a1 — CASE

ISCR Case 11-14723.a1denied

Case Headnote

ISCR Case No. 11-14723.a1

Oct 3, 2014· Hon. Jeffrey D. Billett· appeal

Summary

A security clearance applicant, representing himself, was denied clearance under Guideline F (Financial Considerations) due to unresolved financial issues. The applicant's financial difficulties stemmed from a divorce and an economic downturn, resulting in numerous delinquent debts exceeding $155,000.

While the applicant had addressed some of these debts, the judge found that he failed to demonstrate responsible action regarding the significant outstanding balance. Specifically, Disqualifying Condition F.3 was raised, indicating a history of not meeting financial obligations. Although Mitigating Condition F.2, suggesting the financial problems were not recent or were due to circumstances beyond the applicant's control, was considered, it was not sufficient to overcome the concerns.

The judge concluded that the applicant did not adequately mitigate the financial concerns, leading to the denial. This decision was subsequently affirmed by the appeal board, which found that the judge's findings were supported by substantial evidence and that the applicant's due process rights were not violated.

Conditions Referenced

Disqualifying

F.3raisedInability or Unwillingness to Satisfy Debts

Mitigating

F.2rejectedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person's ControlThe judge noted circumstances outside the applicant's control but concluded that he did not act responsibly regarding his debts.

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 8, 2014
Answer filed—
Hearing heldJul 17, 2014
Decision dateOct 3, 2014

Cite For

Denial of Security Clearance Based on Unresolved Financial Issues Under Guideline F
Consideration of the Whole-person Concept in Evaluating Financial Responsibility
Affirmation of a Judge's Findings Supported by Substantial Evidence

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 he was denied due process and that the Judge's findings were erroneous and arbitrary. The Board affirmed the Judge's decision, finding no harmful error in the proceedings.

Appealed bythe applicant

Applicant representationAttorney

Judge belowRichard A. Cefola — denied the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Due-process / fairness — raised by the applicantRejected
Applicant argued that he was denied due process during the hearing.
Erroneous finding of fact — raised by the applicantRejected
Applicant challenged the Judge's findings regarding the extent of his resolved debts.
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's findings were supported by substantial evidence and that the Judge properly applied the whole-person concept in reaching the decision.

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 Ra’anan — Chair
Jeffrey D. Billett
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

1 Decision at 1. The SOR is undated. KEYWORD: Guideline F DIGEST: Applicant’s argument consists, on the whole, of a disagreement with the weighing of the evidence. We find no reason to believe that the Judge failed property to apply the whole- person concept, Adverse decision affirmed. CASENO: 11-14723.a1 DATE: 10/03/2014 DATE: October 3, 2014 In Re: ----------------------------- Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 11-14723 APPEAL BOARD DECISION APPEARANCES FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT James Q. McDermott, Esq. The Department of Defense (DoD) declined to grant Applicant a security clearance. On January 8, 2014,1 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 July 17, 2014, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Richard A. Cefola denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30.

2 Directive, Enclosure 2 ¶ 20(b): “the conditions that resulted in the financial problem were largely beyond the person’s control (e.g., loss of employment, a business downturn, unexpected medical emergency, or death, divorce or separation), and the individual acted responsibly under the circumstances[.]” Applicant raised the following issues on appeal: whether Applicant was denied due process; whether the Judge’s findings of fact contained errors; and whether the Judge’s adverse security clearance decision was arbitrary, capricious, or contrary to law. Consistent with the following, we affirm. The Judge’s Findings of Fact Applicant’s SOR alleges numerous delinquent debts that Applicant attributes to the combined effects of the crash of the real estate market and to a divorce. He owned a house (H1) and built another one (H2). However, he was not able to maintain two mortgages and found that he could not sell either house. In 2009, Applicant’s wife filed for a divorce, which remained pending at the close of the record. Both houses went into foreclosure. The Judge found that the deficiency resulting from the foreclosure sale of H1 had been forgiven. However, he found that Applicant remained liable on the deficiency regarding H2. Other debts include a judgment in favor of a contractor who had performed work during the construction of H2, credit cards, cable TV services, medical expenses, etc. The Judge found that Applicant was resolving the judgment and that one of the credit card debts was expected to be forgiven. However, the remaining debts were outstanding. The Judge’s Analysis The Judge stated that Applicant’s unaddressed debts totaled in excess of $155,000 and formed the bulk of the SOR allegations. Although noting evidence of circumstances outside Applicant’s control that affected his financial situation, the Judge concluded that Applicant had not demonstrated responsible action for these remaining debts.2 He noted the favorable character references Applicant had submitted in his own behalf but concluded that the evidence that Applicant had submitted was not sufficient to meet his burden of persuasion regarding mitigation. Discussion Applicant represented himself at the hearing. On appeal he argues that he “was not capable of adequately advocating for his own interest and didn’t understand the significance of certain evidence.” Appeal Brief at 2. We note that, prior to the hearing, Department Counsel provided Applicant with a letter in which he advised him of his right to hire counsel and to submit evidence, among other things. This letter provided insight into the kind of evidence that applicants sometimes submit, such as character statements, receipts, and other documents pertinent to the allegations. Applicant Exhibit (AE) A. DOHA also provided pre-hearing guidance advising Applicant of his various rights, and he received a copy of the Directive as well. At the hearing the Judge questioned Applicant on his qualifications to represent himself and questioned him from time to time in order to clarify Applicant’s testimony. Applicant submitted numerous documents during his case in chief, addressing at least some of the allegations in the SOR. The record demonstrates that Applicant was properly advised of his rights and that he presented his evidence in mitigation with reasonable skill. Pro se applicants are not expected to conduct themselves like lawyers, but they should take reasonable steps to protect their rights. See, e.g., ISCR Case No. 12-02371 at 3 (App. Bd. Jun. 30, 2014). The record shows that Applicant presented his case with a reasonable degree of competence, given his pro se status. He was not denied the due process afforded by the Directive. Applicant challenges the Judge’s findings regarding the extent to which he has resolved his delinquent debts. He argues that he owes no deficiency from the foreclosure sale of H2, due to the state’s anti-deficiency statute. He also argues that he had resolved more of his debts than the Judge found, asserting that his actual remaining debts total a little less than $66,000. We examine a Judge’s findings to see if they are supported by “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion in light of all the contrary evidence in the same record.” Directive ¶ E3.1.32.1. We conclude that the challenged findings are supportable, given the record that was before the Judge. In any event, a Judge should consider not only the extent to which debts have been paid, but also the circumstances underlying those debts that impugn an applicant’s good judgment. See, e.g., ISCR Case No. 10-06975 at (App. Bd. Apr. 19, 2012). Even if the Judge’s findings contained errors, it is not likely that they exerted a significant effect on his overall decision. The Judge’s material findings of security concern are supported by substantial evidence or constitute reasonable conclusions that could be drawn from the evidence. See, e.g., ISCR Case No. 12-03420 at 3 (App. Bd. Jul. 25, 2014). Applicant cites to record evidence that he submitted in his own behalf, including his character statements, his good security history, and the effects of the economic downturn and his divorce on his finances. Applicant also submits evidence from outside the record, that we cannot consider. See, e.g., ISCR Case No. 12-04554 at 4 (App. Bd. Jul. 25, 2014). Applicant’s argument on appeal is not sufficient to rebut the presumption that the Judge considered all of the evidence in the record. See, e.g., ISCR Case No. 11-10255 at 4 (App. Bd. Jul. 28, 2014). He argues that the Judge engaged in a piecemeal analysis of the record, failing to examine Applicant’s circumstances in their totality. Applicant’s argument consists, on the whole, of a disagreement with the Judge’s weighing of the evidence, as Department Counsel argues in his Reply Brief. We find no reason to believe that the Judge failed properly to apply the whole-person concept. See, e.g., ISCR Case No. 12-05232 at 4 (App. Bd. Jun. 30, 2014). Applicant’s brief cites to other Hearing Office cases that, he argues, support his effort to maintain his clearance. We give these cases due consideration as persuasive authority. Hearing Office cases are not binding on other Hearing Office Judges or on the Appeal Board. See, e.g., ISCR Case No. 11-10178 at 3 (App. Bd. Aug. 29, 2013). Each case must be decided on its own merits. The cases Applicant has cited are not sufficient to demonstrate that the Judge improperly weighed the evidence or otherwise reached conclusions that ran contrary to the evidence. The Judge examined the relevant data and articulated a satisfactory explanation for the decision, both as to the mitigating conditions and the whole-person factors. 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: Michael Ra’anan Michael Ra’anan Administrative Judge Chairperson, Appeal Board Signed: Jeffrey D. Billett Jeffrey D. Billett Administrative Judge Member, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board