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ISCR Case 14-03030 — CASE

ISCR Case 14-03030denied

Case Headnote

ISCR Case No. 14-03030

Sep 2, 2015· Hon. Michael Y. Ra'anan· appeal

Summary

A defense contractor with a long-standing security clearance was denied continued access under Guideline F (Financial Considerations) due to unresolved financial issues. Disqualifying conditions F3 and F1 were raised, pertaining to a federal tax lien and a second mortgage.

While mitigating conditions F2 and F3 were considered, the judge found insufficient evidence to alleviate the financial concerns. The applicant failed to provide adequate documentation to demonstrate resolution of delinquent debts or effective financial management following a prior bankruptcy.

Ultimately, the denial was based on the applicant's ongoing financial issues and the lack of recent evidence to support claims of improved financial stability.

Conditions Referenced

Disqualifying

F3raisedInability or Unwillingness to Satisfy Debts
F1raisedA History of Not Meeting Financial Obligations

Mitigating

F2rejectedThe Conditions That Resulted in the Financial Difficulties Were Largely Beyond the Person's ControlThe judge found that the applicant failed to manage his finances after receiving a fresh start from bankruptcy.
F3rejectedThe Person Has Made a Good Faith Effort to Repay Overdue Creditors or Has Otherwise Resolved DebtsThe applicant did not provide sufficient evidence of recent efforts to resolve debts.

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 issuedSep 15, 2014
Answer filed—Applicant requested a decision on the written record.
Hearing heldJun 17, 2015
Decision dateSep 2, 2015

Cite For

Insufficient Evidence to Mitigate Financial Concerns Under Guideline F
Burden of Proof Lies with the Applicant to Provide Evidence of Mitigation
Consideration of Ongoing Financial Issues Post-bankruptcy in Security Clearance Decisions.

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 under Guideline F. The applicant argued that the Judge's findings were not supported by substantial evidence and that the decision was arbitrary and capricious. The Board affirmed the Judge's decision, finding no harmful error in the ruling.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowMary E. Henry — denied the clearance

Decided onthe written record

Guidelines belowGuideline F

What the Board reviewed

Judge mis-weighed or ignored evidence — raised by the applicantRejected
Applicant argued that the Judge's findings were not based on substantial evidence.
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 findings were based on substantial evidence and that the decision was not arbitrary or capricious. The applicant failed to provide sufficient evidence to mitigate the financial concerns raised against him.

Standard of review applied

Substantial-evidence reviewArbitrary-and-capricious reviewNo de-novo re-decisionNo new evidence on appeal

Appeal Board panel

Michael Y. Ra’anan — Chair
William S. Fields
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: Applicant has the burden of providing evidence of mitigation, explanation, extenuation or rebuttal of the security concerns raised. Adverse decision affirmed. CASENO: 14-03030,a1 DATE: 09/02/2015 DATE: September 2, 2015 In Re: ----------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 14-03030

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 September 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 decision on the written record. On June 17 2015, after considering the record, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Mary E. Henry 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 were based upon substantial record evidence and whether the Judge’s adverse decision as arbitrary, capricious, or contrary to law. Consistent with the following, we affirm. The Judge’s Findings of Fact Applicant works for a Defense contractor. He has held a clearance for 21 years. The record contains no evidence of any security violations or other mishandling of proprietary information. Applicant earned an advanced degree in 2011. He is married, with two sons and a stepson. Applicant was discharged in Chapter 7 bankruptcy in 2000, which removed all of his then existing debts. His SOR alleges several additional delinquent debts, for such things as a second mortgage on a home that went into foreclosure, a Federal tax lien, student loans, a repossessed vehicle, etc. The foreclosure resulted from Applicant and his wife having entered into a mortgage agreement that they did not fully understand, the monthly payments eventually becoming too high. The Judge noted that Applicant did not provide any information about the status of this debt or about the tax lien. She also noted his statement that some of his debts no longer appeared in his credit reports. Although the record contains evidence of a 2013 financial statement submitted as part of Applicant’s student loan rehabilitation, the Judge stated that there is no more recent statement. She noted that Applicant had said that his net monthly income is $9,000, with more than $3,000 left over after expenses. The Judge’s Analysis The Judge resolved some of Applicant’s debts in his favor, including the delinquent student loans and some smaller ones. She resolved the rest against him, including the Federal tax lien and the second mortgage. She cited to a paucity of evidence about the extent of Applicant’s Federal tax debt. She also noted that Applicant has chosen not to pay the remaining amount owed on the vehicle repossession, nor has he taken steps to resolve debts that have fallen off his credit report. In the whole-person analysis, she stated that Applicant’s track record was not sufficient to demonstrate that he had mitigated the concerns in his case. She also observed that, after having been given a fresh start by means of his bankruptcy action, he failed to manage his finances.

DISCUSSION

Applicant discusses some of the Judge’s findings, in an attempt to clarify them or to provide context. Among other things, he states that there is more recent information concerning his present ability to pay his debts, which, he argues, undercut some of the Judge’s findings. He also contends that his response to the SOR was poorly worded in some places, especially regarding the repossessed vehicle. In a DOHA proceeding, it is an applicant’s duty to mitigate, rebut, or extenuate the concerns raised by his or her circumstances, in this case financial delinquencies. Directive ¶ E3.1.15. Moreover, in the File of Relevant Material, Department Counsel placed Applicant on notice of evidentiary gaps that he could address in meeting his burden of persuasion. Nevertheless, we note the Judge’s findings and comments that the record did not contain sufficient information about Applicant’s finances to permit a favorable overall conclusion. These findings and conclusions are sustainable. If Applicant had possessed more recent evidence concerning his finances, it was his duty to have provided it during the pendency of the record. The Judge’s material findings were based upon substantial record evidence or constitute reasonable inferences that could be drawn from the record. See, e.g., ISCR Case No. 12-03420 at 3 (App. Bd. Jul. 25, 2014). Even if the findings contained errors or misinterpretations, correcting them would not likely produce a different result, given evidence that Applicant amassed substantial delinquent debt following a bankruptcy discharge and that the debt is largely ongoing. Applicant’s brief includes matters from outside the record, which we cannot consider. Directive ¶ E3.1.29. Applicant cites to favorable evidence, such as his installment agreement with the IRS. His arguments are not enough to rebut the presumption that the Judge considered all of the evidence in the record. Neither 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. 14-00251 at 4 (App. Bd. Oct. 10, 2014). Applicant argues that it was inconsistent for the Judge to have found that he had an installment agreement with the IRS yet hold against him regarding the tax debt allegation. However, even if a debt is the subject of a settlement agreement, a Judge may still consider the underlying circumstances of the debt, or a paucity of such evidence, in evaluating whether an applicant has met his or her burden of persuasion. See, e.g., ISCR Case No. 11-14723 at 3 (App. Bd. Oct. 3, 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: Michael Y. Ra’anan Michael Y. Ra’anan Administrative Judge Chairperson, Appeal Board Signed: William S. Fields William S. Fields Administrative Judge Member, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board