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ISCR Case 12-07700.a1 — CASE

ISCR Case 12-07700.a1denied

Case Headnote

ISCR Case No. 12-07700.a1

Sep 21, 2016· Hon. Michael Y. Ra'anan· appeal

Summary

A 51-year-old male applicant was denied a security clearance under Guideline F (Financial Considerations) due to significant financial instability. The applicant admitted to 16 delinquent accounts, totaling approximately $26,000, and had recently filed for Chapter 7 bankruptcy. These issues raised disqualifying condition F.3.

While mitigating conditions F.2 and F.3 were considered, the judge ultimately determined that the applicant's financial situation remained unstable. The Appeal Board affirmed the denial, concluding that the applicant's arguments for mitigation were insufficient to overcome the concerns raised by his ongoing financial difficulties.

Conditions Referenced

Disqualifying

F.3raisedInability to Satisfy Debts

Mitigating

F.2appliedConditions Beyond the Person's ControlThe judge considered the impact of the applicant's medical issues on his financial situation.
F.3appliedReceiving Counseling for the ProblemThe applicant entered a debt-management program but could not maintain it.

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 issuedAug 22, 2015
Answer filed—
Hearing heldJun 20, 2016
Decision dateSep 21, 2016

Cite For

Financial Instability as a Basis for Clearance Denial Under Guideline F
Impact of Bankruptcy on Security Clearance Eligibility
Consideration of Mitigating Factors in Financial Cases

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 after being denied due to financial considerations and personal conduct issues. The applicant argued that the Judge's decision was arbitrary and capricious. The Appeal Board affirmed the denial, finding no harmful error in the Judge's decision and noting that the Board does not have the authority to grant conditional clearances.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowMichael H. Leonard — denied the clearance (split findings)

Decided ona hearing

Guidelines belowGuideline FGuideline E

What the Board reviewed

Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
Applicant contended that the Judge's decision was arbitrary, capricious, or contrary to law.

Why the Board ruled this way

The Board found that the Judge's decision was supported by substantial evidence and that the applicant did not demonstrate any harmful error that would change the outcome of the case. The Board affirmed the denial of the security clearance based on the applicant's financial issues and the pending bankruptcy case.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewNo de-novo re-decisionNo new evidence on appeal

Appeal Board panel

Michael Ra’anan — Chair
James E. Moody
James F. Duffy

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: Applicant requests that he be granted a security clearance for one year and, after that year, his credit history be checked to see how he is doing. The Appeal Board, however, does not have authority to grant an interim, conditional, or probationary clearance. Adverse decision affirmed. CASE NO: 12-07700.a1 DATE: 09/21/2016 DATE: September 21, 2016 In Re: ------------ Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 12-07700

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 August 22, 2015, DoD issued a statement of reasons (SOR) advising Applicant of the basis for that decision–security concerns raised under Guideline F (Financial Considerations) and Guideline E (Personal Conduct) of Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive). Applicant requested a hearing. On June 20, 2016, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Michael H. Leonard 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 decision was arbitrary, capricious, or contrary to law. The Judge found in favor of Applicant on the Guideline E allegations and against him on several Guideline F allegations. The favorable findings were not raised as an issue on appeal. Consistent with the following, we affirm the Judge’s unfavorable clearance decision. The Judge’s Findings of Fact Applicant, who is 51 years old, has worked for his current employer since early 2015. Before that, he worked in the same job for a different company for about 16 years. He has never been married, but has a longtime fiancée. They have lived together and shared expenses for many years. Applicant testified about two periods of unemployment stemming from a kidney transplant in 1994. The first period occurred during 2002-2005 and the second during 2011-2013. During those periods, he received about 60% of his income though a combination of short-term and long- term disability payments. The SOR alleged 16 delinquent accounts totaling about $26,000. In his Answer to the SOR, Applicant admitted all of the delinquent accounts. He entered into a debt-management program with a credit counseling service in March-April 2015, but was unable to maintain the $322 monthly payment for long. He concluded that he had no other alternative than to seek bankruptcy relief. He retained the services of a bankruptcy attorney and filed a Chapter 7 bankruptcy petition. The meeting of the creditors was held in May 2016, but no other information about the bankruptcy is reflected in the documentary evidence. The Judge’s Analysis The Judge found the evidence supported a conclusion that Applicant has a history of financial problems as well as an inability to satisfy debts. The Judge discussed the impact of Applicant’s kidney transplant and gave little weight to nine medical collection accounts that totaled about $1,300. Applicant was also given credit under two mitigating conditions.1 In concluding that Applicant had not meet his burden of persuasion, the Judge stated: Moreover, the pending bankruptcy case serves as a clear warning or caution sign that Applicant’s overall financial situation is unstable. It’s true that once he obtains a discharge he will be released from further liability on the dischargeable debts. But even so, it is too soon to tell if Applicant will be financially responsible after the 1 Directive, Enclosure 2, ¶ 20(b), “the conditions that resulted in the financial problems were largely beyond the person’s control (e.g., loss of employment, a business downturn, unexpected medical emergency, or a death, divorce, or separation) and the individual acted responsibly under the circumstances;” and ¶ 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[.]” bankruptcy case is completed.2

DISCUSSION

Applicant contends that the Judge should have found the security concerns mitigated. He argues the Judge should have based the decision on his character, his work history, and his exposure to classified items in the past without any problems. Applicant’s arguments, however, are neither enough to rebut the presumption that the Judge considered all of the evidence in the record nor are they sufficient to show that the Judge weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. See, e.g., ISCR Case No. 14-01284 at 3 (App. Bd. Apr. 6, 2015). Applicant also requests that he be granted a security clearance for one year and, after that year, his credit history be checked to see how he is doing. He stated that, if he had a second chance, he would not put his credit history in jeopardy. The Appeal Board, however, does not have authority to grant an interim, conditional, or probationary clearance. See, e.g., ISCR Case No. 14-04289 at 2 (App. Bd. Sep. 9, 2015). In the appeal brief, Applicant stated that the bankruptcy resulted in a discharge of his delinquent debts in July 2016. He also provided a credit report dated after the decision was issued. His statement about the discharge of his debt and the credit report constitute new evidence that the Appeal Board can neither receive nor consider. Directive ¶ E3.1.29. The Judge examined the relevant evidence and articulated a satisfactory explanation for the decision. Applicant has not identified any harmful error likely to change the outcome of the case. 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.” 2 Decision at 7.

ORDER

The Decision is AFFIRMED. Signed: Michael Ra’anan Michael Ra’anan Administrative Judge Chairperson, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board Signed: James F. Duffy James F. Duffy Administrative Judge Member, Appeal Board