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ISCR Case 14-00234.a1 — CASE

ISCR Case 14-00234.a1denied

Case Headnote

ISCR Case No. 14-00234.a1

Apr 6, 2015· Hon. Jeffrey D. Billett· appeal

Summary

A 44-year-old applicant was denied a U.S. security clearance under Guideline F (Financial Considerations) due to a history of financial irresponsibility, specifically concerning mortgage debts. The denial was based on the applicant's failure to discharge these debts, which was deemed a continuing course of conduct.

The applicant did not provide sufficient evidence to demonstrate that circumstances beyond his control affected his financial obligations. The judge determined that the applicant possessed the financial resources necessary to meet his mortgage responsibilities.

Consequently, the applicant's failure to address these debts and lack of mitigating evidence led to the conclusion that he posed a security risk. The appeal board affirmed the unfavorable decision, upholding the denial of the security clearance.

Conditions Referenced

Disqualifying

Guideline F Disqualifying Condition ¶ 19(c)raisedA History of Not Meeting Financial Obligations.

Key Rule Quoted

“Failure to discharge a debt is a continuing course of conduct.”

Procedural Posture

SOR issuedMar 14, 2014
Answer filed—
Hearing heldJan 16, 2015
Decision dateApr 6, 2015

Cite For

Continuing Course of Conduct Regarding Unpaid Debts Under Guideline F
Insufficient Evidence of Mitigating Circumstances in Financial Irresponsibility Cases
Affirmation of Unfavorable Decisions Based on Poor Financial Judgment

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. The Board affirmed the Judge's decision, finding no harmful error and that the Judge's conclusions were supported by substantial evidence.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowMary E. Henry — 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 that the Judge's decision was supported by substantial evidence and that the Judge did not err in her conclusions regarding the applicant's financial history and its implications for national security.

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

SYNOPSIS

KEYWORD: Guideline F DIGEST: Failure to discharge a debt is a continuing course of conduct. Therefore, it can fairly be described as a “history” of not paying debt. Disagreement with a Judge’s weighing of evidence is not enough to show that the Judge erred. Adverse decision affirmed. CASE NO: 14-00234.a1 DATE: 04/06/2015 DATE: April 6, 2015 In Re: ---------------- Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 14-00234

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 March 14, 2014, 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 16, 2015, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Mary E. Henry 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: 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 made the following findings of fact: Applicant is 44 years old. Applicant currently earns $9,812 a month in gross income plus overtime pay. His net monthly income is approximately $6,100, and his total monthly expenses are approximately $5,000. In 1999, Applicant purchased a house for approximately $265,000. Over the next few years, Applicant refinanced the property a number of times. Some of the money he received through refinancing was invested in a bank which later failed. Applicant eventually owed on a mortgage and a home-equity loan. At one point, Applicant wished to combine these two entities into one monthly payment. He learned that if he wished to modify his mortgage and home-equity loans, he needed to stop paying the loans. He decided to do this as a negotiating tactic in early 2009. At this time, he was experiencing financial problems as a result of heavy job-related travel expenses combined with his employer’s failure to timely reimburse him for those expenses. Applicant moved his family to a rental home. In August 2009, his mortgage lender approached Applicant about a loan modification which would combine his two outstanding loans on the house that he owned. The lender placed him on a three- month trial payment plan for $2,300 per month. Applicant made the first two payments under the trial plan. He decided not to pay the third payment and to allow the house to go into foreclosure. In making this decision, he weighed the cost of moving back into his home against the cost of breaking his lease on the rental property and the impact on his family. The house sold at foreclosure, leaving a balance of approximately $20,000 on the original mortgage. Under his state’s anti-deficiency law, Applicant does not owe any money on this mortgage. The mortgage lender filed a lawsuit against Applicant seeking to recover on the home-equity loan. Applicant did not defend the lawsuit, which resulted in a default judgment against him in the amount of $190,000. This occurred in 2012. Since then, after the lender’s attorney filed for a garnishment on his bank accounts, Applicant has been working through an attorney to settle the judgment. At the hearing, Applicant stated he would make a cash offer between $20,000 and $40,000 plus a monthly payment of $800 to $1,200 per month for two years. Applicant acknowledged that he made poor decisions related to the mortgages. He has not received financial counseling. Outside of the two mortgage debts, Applicant pays his bills in a timely manner and has not defaulted on any other debts. The Judge reached the following conclusions: Applicant experienced problems with his employer reimbursing his travel expenses, which created increased costs for him on his credit cards. Other than this, Applicant has provided no evidence by his testimony or documents which indicates that circumstances beyond his control created a problem with his ability to pay his mortgages when he defaulted on the mortgages in 2009. He had the financial resources to continue the mortgage payments and accept a reasonable modified loan agreement. He failed to defend the civil suit filed on the home-equity loan, and he made no effort to pay or negotiate a settlement of the resulting judgment until the mortgage lender filed a garnishment of his bank accounts. None of the financial considerations mitigating conditions apply. His actions concerning the two mortgages reflect poor judgment and show a lack of responsibility, which raises a security concern about his handling of classified information. Applicant disputes the Judge’s conclusion that Guideline F Disqualifying Condition ¶ 19(c)1 applies to the case. He argues that the debt from the house in 2009 is a single issue and does not constitute a “history.” Applicant’s argument is without merit. The record indicates that the debt arose in 2009 and has yet to be resolved. The Board has long held that a failure to discharge a debt is a continuing course of conduct. See, e.g., ISCR Case No. 07-11814 at 3 (App. Bd. Aug. 29, 2008); ISCR Case No. 01-03695 at 3-4 (App. Bd. Oct. 16, 2002). Thus, the Judge’s characterization of Applicant’s delinquent debt issue as a “history” was not error. Applicant asserts that his financial difficulties were caused by circumstances beyond his control and argues that the Judge should have mitigated the case on that basis. He specifically cites the Judge’s conclusion that “he had the financial resources to continue the [mortgage] payments and accept a reasonable modified loan agreement,” and states that it is incorrect. Applicant has failed to establish error on the part of the Judge. The Judge recognized the financial difficulties that Applicant was experiencing and mentioned them in her decision. These findings, however, do not mandate an overall favorable decision. 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 does not review a case de novo. 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 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

FOOTNOTES

1 “[A] history of not meeting financial obligations.”