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ISCR Case 14-00251.a1 — CASE

ISCR Case 14-00251.a1denied

Case Headnote

ISCR Case No. 14-00251.a1

Oct 10, 2014· Hon. Jeffrey D. Billett· appeal

Summary

A defense contractor consultant was denied a security clearance under Guideline F (Financial Considerations) due to unresolved financial issues. The applicant stopped making mortgage payments a year before losing her job. Subsequently, she and her husband continued to reside in the home without making payments or establishing a clear plan to resolve the debt.

The applicant claimed financial hardship; however, these claims were not adequately supported by the evidence presented. The adjudicator found that disqualifying condition F.1 applied, while mitigating condition F.2 was not met.

Ultimately, the appeal board affirmed the adverse decision, concluding that the applicant failed to meet the burden of persuasion for mitigation. Consequently, the security clearance was denied.

Conditions Referenced

Disqualifying

F.1raisedFinancial Considerations

Mitigating

F.2rejectedMitigating ConditionsThe applicant failed to demonstrate responsible action regarding her financial situation.

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 issuedMar 14, 2014
Answer filed—
Hearing heldJul 30, 2014
Decision dateOct 10, 2014

Cite For

Insufficient Mitigation of Financial Concerns Under Guideline F
Failure to Establish a Clear Debt Resolution Plan
Burden of Persuasion for Mitigation Not Met

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 erred in her findings and application of mitigating conditions. 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 belowNoreen A. Lynch — denied the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Judge mis-weighed or ignored evidence — raised by the applicantRejected
Applicant contended that the Judge erred in finding that the Consent Order expressly tied a loan modification to the reformation of the deed.
Mitigation wrongly applied / not applied — raised by the applicantRejected
Applicant argued that the Judge failed to properly apply the mitigating conditions.

Error found, but harmless. The Board agreed the judge made a mistake but affirmed anyway, because it did not change the outcome.

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 relevant mitigating conditions. The Board concluded that the Applicant did not demonstrate sufficient evidence to mitigate the security concerns raised under Guideline F.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewProcedural complianceNo de-novo re-decisionDeference 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: The Judge’s findings that Applicant and her husband stopped making mortgage payments a year before she lost her job, and that she and her husband continued to live in the house without making payments or establishing a plan for debt resolution support the Judge’s conclusion that there was insufficient mitigation to overcome the Government’s security concerns. Adverse decision affirmed. CASENO: 14-00251.a1 DATE: 10/10/2014 DATE: October 10, 2014 In Re: -----------------------------------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 14-00251

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 July 30, 2014, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Noreen A. Lynch 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’s findings of fact contained errors and whether the Judge failed properly to apply the mitigating conditions. Consistent with the following, we affirm the Judge’s decision. The Judge’s Findings of Fact Applicant is a consultant for a Defense contractor, for whom she has worked since late 2010. She has worked in her career field for 20 years. Married with one child, she has a bachelor’s degree. Applicant’s financial problems began when she and her husband lost their employment. Applicant’s husband lost his job in 2008, and Applicant lost hers in 2009. Applicant gained employment in April 2010, but her husband did not find a job until 2012. They could not make their mortgage payments, so they submitted reduced payments. However, these payments stopped in 2008. At that time, Applicant earned $85,000 annually. The couple stopped making their mortgage payments a year before Applicant lost her job. Applicant and her husband bought their house in the late 1990s. They had a monthly mortgage payment of $1,500. After Applicant lost her job, they sought help from the lender, submitting an application for a loan modification. Nevertheless, the lender foreclosed. The lender claimed that it did not receive the modification application. Applicant and her husband filed for Chapter 13 bankruptcy protection, but they withdrew the petition. They have continued to live in the house. Applicant stated that they continued negotiating through a company to whom the original lender had transferred the loan. This company requested new documentation. Applicant’s house became the subject of a lawsuit to reform an error in the deed and deed of trust. Applicant submitted various motions seeking postponement of the trial, although the Court eventually entered a Consent Order reforming the deed. Applicant contends that the Court tied a loan modification to the signing of the Order, although she submitted no corroboration. The loan has been transferred several times. In April 2013, Applicant and her husband submitted a loan modification package to the current holder of the loan. The following July, Applicant received notice of a $196,064 loan balance, with the next payment being $1,974.13. Applicant requested validation of the amount. In 2014, Applicant sought help from a credit assistance company to look into the loan modification that was purportedly approved in the consent order. There is no evidence in the record to show that an approved loan modification exists. The Judge stated that Applicant had provided a lot of documentation, but that the evidence presents “no clarity” regarding the actual status of the loan modification process. Decision at 3. Applicant states that she and her husband have set aside money to approximate the monthly mortgage payments, though they did not provide corroboration. They also want a clean credit report before they begin making payments. “It has been six years

FOOTNOTES

1 This debt was not alleged in the SOR.

2 Applicant argues that her and her husband’s testimony about this purported agreement demonstrate that she has made a good-faith effort to resolve the mortgage debt. See Directive, Enclosure 2 ¶ 20(d). without a resolution and Applicant stated that perhaps she may sue the mortgage servicing companies for fraudulent handling of claims.” Id. Applicant earns about $115,000 a year. She claims that she has about $40,000 to $50,000 set aside to pay for the past-due mortgage amount. She is current with her bills. Applicant is in the processing of repaying an outstanding tax obligation for $3,000. She believes that she currently owes $1,200 on this tax debt.1 The Judge’s Analysis The Judge concluded that Applicant’s delinquent mortgage account raised concerns under Guideline F. In evaluating Applicant’s case for mitigation, the Judge noted Applicant’s and her husband’s unemployment, which were circumstances outside their control that affected their financial condition. She also noted Applicant’s evidence of having sought loan modifications throughout the years, the last one in April 2013. However, the Judge stated that there is no evidence of a loan modification having been approved. She also stated that Applicant and her husband have lived in the house since 2008 without having made any payments, despite Applicant’s having had steady employment since 2010. In the whole-person analysis, the Judge noted evidence that the couple stopped making mortgage payments a year before Applicant lost her job. Applicant did not corroborate her claim that she had money set aside to pay the loan, and there is no evidence of an actual plan to resolve this matter. She concluded that Applicant had not met her burden of persuasion regarding mitigation. Discussion Applicant contends that the Judge erred in finding that the Consent Order expressly tied a loan modification to the reformation of the deed to her house. She states that she had never claimed that to be the case. Rather, she asserts the loan modification was a “condition precedent” to her agreement to the Consent Order. Appeal Brief at 6. 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 have considered Applicant’s argument in light of the record. We construe her position to be that the lender had entered into an enforceable agreement to approve a loan modification if Applicant and her husband would consent to reform the deed.2 The Judge found that Applicant’s claims were not corroborated by documentary evidence or a Court decree. This finding is consistent with the record that was before her. Even if the Judge’s finding contained an error, it did not affect the outcome of the case. The Judge’s material findings are based on substantial evidence, or

3 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 a death, divorce or separation), and the individual acted responsibly under the circumstances[.]” constitute reasonable characterizations or inferences that could be drawn from the record. See, e.g., ISCR Case No. 12-03420 at 3 (App. Bd. Jul. 25, 2014). Applicant challenges the Judge’s application of the mitigating conditions set forth in the Directive. As stated above, the Judge noted the circumstances that were outside Applicant’s control that had an impact on her financial condition. However, given the record that was before her, the Judge’s conclusion that Applicant had failed to demonstrate responsible action is supportable.3 We note first of all the Judge’s finding that Applicant and her husband had stopped making mortgage payments a year before she lost her job. Moreover, the Judge’s findings that Applicant and her husband have been living in their house since 2008 without making payments and that the evidence does not show a plan for debt resolution also support her adverse conclusion. We have considered Applicant’s arguments in their totality and find no reason to disturb the Judge’s treatment of the mitigating conditions. Applicant’s citation to various pieces of evidence are not enough 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). Applicant’s arguments amount to an alternative interpretation of the record, which is not sufficient to demonstrate that the Judge weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. See, e.g., ISCR Case No. 12-01977 at 2-3 (App. Bd. Dec. 30, 2013). 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: 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