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ISCR Case 14-00474.a1 — CASE

ISCR Case 14-00474.a1denied

Case Headnote

ISCR Case No. 14-00474.a1

Feb 5, 2015· Hon. Jeffrey D. Billett· appeal

Summary

A 40-year-old federal contractor was denied a security clearance under Guideline F (Financial Considerations) due to significant financial concerns. The applicant admitted to 33 delinquent debts, totaling over $182,000. This substantial debt raised doubts about her reliability and judgment.

The denial was based on several disqualifying conditions, primarily the applicant's failure to adequately address her financial issues. She did not provide sufficient evidence of payments made or disputes initiated for her debts. Furthermore, the applicant failed to demonstrate concrete actions taken to resolve her financial problems.

The Appeal Board affirmed the denial, concluding that the applicant had not presented enough mitigating evidence to overcome the concerns raised by her extensive delinquent debts. Consequently, the security clearance was denied.

Conditions Referenced

Disqualifying

F1raisedFinancial 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 issuedMar 21, 2014
Answer filed—Applicant requested decision on written record.
Hearing heldNov 5, 2014
Decision dateFeb 5, 2015

Cite For

Affirmation of Denial Based on Financial Concerns Under Guideline F
Insufficient Evidence to Mitigate Financial Issues
Harmless Error in Procedural Claims

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 who was denied due to financial concerns under Guideline F. The applicant argued that the Judge's decision was arbitrary and capricious. The Board affirmed the denial, finding no harmful error in the Judge's decision and that the applicant's claims did not warrant a different outcome.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowCarol G. Ricciardello — denied the clearance

Decided onthe written record

Guidelines belowGuideline F

What the Board reviewed

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

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 decision was supported by substantial evidence and that any alleged errors were harmless, affirming the unfavorable security clearance 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

SYNOPSIS

KEYWORD: Guideline F DIGEST: Department Counsel’s comments in the File of Relevant Material could not reasonably be construed as having a deleterious effect on Applicant’s procedural rights. Any error in the Judge’s finding is harmless. The Appeal Board cannot consider new evidence on appeal. DOHA has no authority to grant a probationary clearance. Adverse decision affirmed. CASE NO: 14-00474.a1 DATE: 02/05/2015 DATE: February 5, 2015 In Re: ---------------- Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 14-00474

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 21, 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 that the case be decided on the written record. On November 5, 2014, after considering the record, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Carol G. Ricciardello 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: Applicant is 40 years old, and has been employed with a federal contractor since 2009. The SOR alleges 33 delinquent debts totaling more than $182,000. Applicant admits she owes all the debts except for two debts that total about $1,300. She claimed to have made partial payment on some of the debts but did not provide any proof. She claimed that several of the debts were duplicates, but provided no proof establishing those assertions. She disputes the amount owed on another debt but did not provide any proof of what she believes she owes. Applicant claimed that a student loan debt was deferred, but did not provide proof. Applicant attributed her financial problems to her 2008 divorce, her husband’s failure to pay their children’s medical bills, and her failed business. During the life of her business, she failed to pay sufficient federal employee taxes, and as a result she owes $17,000 to the IRS. As part of the business, she obtained a loan that she defaulted on and a company vehicle that was repossessed. In 2011, Applicant signed a lease for a retail space for another business, but the business never materialized. The lessor wanted her to pay the full term of the lease, even though she never moved into the space. The account was placed for collection. Applicant did not provide any explanation, documentation, or evidence for actions she has taken to resolve her financial problems. The Judge reached the following conclusions: Applicant’s debts are recent and unpaid. She failed to provide sufficient evidence regarding any of the delinquent debts she believed she paid, disputed, or believed were duplicates. She did not provide sufficient evidence that she has resolved any of the delinquent debts. Future financial problems are likely to recur, and that fact casts doubt on her reliability, trustworthiness, and good judgment. Without more specific information about her finances during this period, it cannot be concluded that her financial problems were beyond her control. Applicant failed to mitigate the security concerns arising under Guideline F. Applicant cites as error the Judge’s finding that she has been a federal contractor since 2009. She states that the correct date is 2001. The record evidence does not conclusively establish when Applicant commenced work as a federal contractor, although the record includes employment listings with defense contractors prior to 2009. However, even assuming the Judge erred on this point, a review of the record and the Judge’s decision convinces the Board that the error did not affect the outcome of the case. It is therefore harmless. Applicant references the Judge’s finding (on page 2 of the Decision) that she did not provide any proof of what she believes she owes. Applicant states that she did not provide any proof of payments, student loan deferment, and other supporting documentation because of another statement “in [the] findings stating that providing supporting documents, because of the amount of my debt, would still not prove credit worthiness.” The Board construes Applicant’s assertion as a claim that the language in quotations dissuaded her from submitting documentation about her debts. After a review of the Judge’s decision, the Board concludes that no such language appears in the Judge’s findings, nor is any such language implied. There is, however, a comment by Department Counsel in the File of Relevant Material (FORM) which reads, “Applicant has not submitted any documentation in support of these claims, but even if she were to establish all of her claims, she would still have admitted to over $150,000 in delinquent debt.” Assuming this is the language to which Applicant refers, the Board concludes that the statement from Department Counsel was within the bounds of fair advocacy and could not reasonably be construed as having a deleterious effect upon Applicant’s procedural rights. Contained within the record are clear and detailed statements informing Applicant of her right to submit matters of explanation and/or mitigation in response to the FORM. Applicant has not established procedural error. Applicant asserts that her student loans have been confirmed as deferred, that credit report duplication errors have been corrected, and that she has retained counsel to aid her in obtaining credit counseling and completing the bankruptcy process. These statements contain new evidence, which the Board cannot consider. Directive ¶ E3.1.29. Applicant requests “reinstatement” of her clearance based on a probationary period of at least three months, so that she can complete her bankruptcy. Applicant requests relief that is not authorized under the Directive and cannot be granted by the Board. See ISCR Case No. 02-11419 at 4 (App. Bd. Aug. 27, 2003).

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 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