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ISCR Case 14-01284.a1 — CASE

ISCR Case 14-01284.a1denied

Case Headnote

ISCR Case No. 14-01284.a1

Apr 6, 2015· Hon. Michael Y. Ra'anan· appeal

Summary

A retired Air Force E-6 and defense contractor was denied a security clearance under Guideline F, Financial Considerations, due to significant and ongoing financial issues. The applicant failed to file federal tax returns for 2011 and 2012, accumulating approximately $20,000 in tax debt. This failure to file, along with other financial problems, raised disqualifying conditions under AG ¶ 20(a) and AG ¶ 20(c).

While the applicant made some efforts to resolve certain debts, the judge determined that these actions did not demonstrate responsible financial management. The applicant's financial problems were found to be ongoing and not adequately addressed, despite the presence of mitigating conditions AG ¶ 20(d) and AG ¶ 20(e).

Ultimately, the judge concluded that the applicant had not taken sufficient responsible action regarding his financial issues, leading to the denial of the security clearance.

Conditions Referenced

Disqualifying

AG ¶ 20(a)raisedFailure to File Annual Income Tax Returns
AG ¶ 20(c)raisedDelinquent Debts

Mitigating

AG ¶ 20(d)rejectedThe Individual Has Made a Good Faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsThe judge found that the applicant had not demonstrated resolution of all debts and lacked a meaningful track record of debt management.
AG ¶ 20(e)notedThe Individual Has Received or Is Receiving Counseling for the Problem

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 issuedMay 15, 2014
Answer filed—
Hearing heldJan 22, 2015
Decision dateApr 6, 2015

Cite For

Financial Responsibility Under Guideline F
Impact of Unresolved Tax Obligations on Security Clearance
Whole-person Analysis in Financial Considerations 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 was filed by the applicant after the Administrative Judge denied his request for a security clearance based on financial considerations. The applicant raised issues regarding due process and the Judge's decision-making process. The Board affirmed the Judge's decision, finding no harmful error in the proceedings.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowRobert E. Coacher — denied the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Due-process / fairness — raised by the applicantRejected
Applicant argued he was denied due process due to the delay in receiving the hearing transcript.
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 no harmful error in the Judge's decision, affirming that the Judge considered all evidence and that the decision was not arbitrary or capricious.

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 Y. 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 gave Applicant additional time in which to submit documents after the close of the record. Delay in Applicant’s receipt of hearing transcript did not impair his ability to submit documents or to prepare his appeal. Applicant did not rebut the presumption that the Judge considered all of the evidence. Adverse decision affirmed. CASE NO: 14-01284.a1 DATE: 04/06/2015 DATE: April 6, 2015 In Re: ----------------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 14-01284

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 May 15, 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 22, 2015, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Robert E. Coacher 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 he was denied due process and whether the Judge’s adverse decision was arbitrary, capricious, or contrary to law. Consistent with the following, we affirm. The Judge’s Findings of Fact Applicant is employed by a Defense contractor. He has worked for Defense contractors since 2007. He retired from the Air Force in the grade of E-6 and has held a security clearance since 1987. Applicant’s SOR alleges several delinquent debts, plus Applicant’s failure to file his 2012 Federal income taxes in a timely manner.1 The debts are for credit cards and a repossessed vehicle. Applicant’s problems began following his retirement from the Air Force, when he and his wife separated. He stopped paying his debts during this period, and later, when he tried to resolve them, he concluded that he was too far behind to succeed. He did nothing about his debts until late 2013, when he received interrogatories from DOHA. He hired a debt relief company to assist him and has paid off five non-SOR debts totaling about $1,378. The Judge also found that Applicant had resolved, or was resolving, three of the SOR debts. However, he also found that Applicant had not demonstrated resolution of the remaining ones. Applicant has $2,097 each month after expenses. The Judge’s Analysis The Judge cited to evidence of Applicant’s marital separation, which had an effect on his financial problems. He stated, however, that most of these problems occurred between 2007 and 2010, yet Applicant took no meaningful action until 2014, when Applicant’s debts became an issue in his clearance adjudication. The Judge concluded that Applicant had not demonstrated responsible action regarding his debt situation, viewed as a whole. The Judge took note of Applicant’s having hired a debt resolution company and that some of his debts have been resolved. He stated, however, that the “higher-balanced” debts were still ongoing and that Applicant had not addressed his tax obligations. In the whole-person analysis, the Judge made note of Applicant’s military service and the circumstances underlying his indebtedness. He stated, however, that Applicant had done little to resolve his debts and lacked a meaningful track record of debt management.

DISCUSSION

At the end of the hearing, the Judge gave Applicant additional time in which to provide evidence. Applicant states that he did not receive a transcript until mid-February.2 He contends that he should have had access to the transcript before the close of the record, which would have facilitated his effort to provide additional evidence. The Judge stated on the record that he was giving Applicant additional time to provide information about his Federal income tax filings for the preceding two or three years. Tr. at 79-81. Applicant provided tax returns for tax years 2011 and 2012. Applicant Exhibits K and L. He submitted other documents regarding his efforts to resolve his debts. There is no reason to believe that a reasonable person in Applicant’s situation would not have understood what information he was to provide, even without a copy of the transcript. Moreover, the Appeal Board provided Applicant his copy of the transcript in time to prepare his Appeal Brief. Although the delay in Applicant’s receipt of the transcript was clearly undesirable, on this record we find no reason to conclude that the delay impaired Applicant’s ability to exercise his rights to present evidence or to submit an appeal. Applicant’s brief cites to such things as as his military service, family circumstances, etc. His arguments are not 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. 12-03415 at 3-4 (App. Bd. Jul. 25, 2014). The Judge made findings about the evidence Applicant has cited and discussed it in the Analysis section of the Decision. We conclude that the Judge’s whole-person analysis complied with the requirements of the Directive, in that he discussed Applicant’s security-significant circumstances in light of the evidence as a whole. See, e.g., ISCR Case No. 12-01578 at 5 (App. Bd. Sep. 24, 2014). 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: Michal Y. Ra’anan Michael Y. 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 The Judge found that Applicant had not filed his Federal tax returns in 2011 or in 2012 and that he owed about $20,000 in back taxes. However, because the failure to file in 2011 and the tax delinquencies themselves were not alleged, he considered this evidence on the limited question of mitigation and the whole-person analysis. Decision at 4-5, note 14.

2 Applicant’s brief cites to matters outside the record. As a general rule, we do not consider new evidence on appeal. We have done so, however, on threshold issues of jurisdiction or due process. See, e.g., ISCR Case No. 14- 01239 at 2 (App. Bd. Oct. 23, 2014). Therefore, we are considering Applicant’s new evidence to the extent necessary to resolve his due process claim.