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ISCR Case 14-03247.a1 — CASE

ISCR Case 14-03247.a1denied

Case Headnote

ISCR Case No. 14-03247.a1

Jul 17, 2015· Hon. Jeffrey D. Billett· appeal

Summary

A long-term employee of a defense company was denied a security clearance under Guideline F, Financial Considerations, due to unresolved financial issues. The applicant had four delinquent debts, including an unpaid mortgage and a judgment.

While the applicant cited several mitigating conditions, the judge determined these were insufficient to overcome theifying conditions. Specifically, the applicant's plan to resolve the debts using an anticipated inheritance was considered too speculative. Furthermore, the applicant failed to provide documentation regarding the unpaid judgment or the status of the foreclosure on the mortgage.

Ultimately, the judge found the applicant's financial management to be inadequate, leading to the denial of the security clearance.

Conditions Referenced

Disqualifying

AG ¶ 20raisedFinancial Considerations

Mitigating

AG ¶ 21(a)rejectedThe Behavior Was Not RecentThe applicant's financial issues were ongoing and unresolved.
AG ¶ 21(b)rejectedThe Conditions That Resulted in the Financial Problems Were Beyond the Person's ControlThe applicant's financial management decisions contributed to the issues.
AG ¶ 21(c)notedThe Person Has Received or Is Receiving Counseling for the Problem
AG ¶ 21(d)rejectedThe Person Has a Reasonable Plan to Resolve the IssuesThe plan to resolve debts through inheritance was considered speculative.
AG ¶ 21(e)rejectedThe Person Has Made a Good Faith Effort to Repay Overdue Creditors or Has Otherwise Resolved DebtsThe applicant had not demonstrated sufficient action to resolve the 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 issuedOct 1, 2014
Answer filed—
Hearing heldMay 7, 2015
Decision dateJul 17, 2015

Cite For

Denial of Security Clearance Due to Unresolved Financial Issues Under Guideline F
Speculative Financial Plans Do Not Mitigate Security Concerns
Importance of National Security in Clearance Determinations

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 argued that the Judge's decision was arbitrary and capricious. The Board affirmed the decision, finding no harmful error in the Judge's analysis.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowMichael H. Leonard — 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 adverse decision was arbitrary, capricious, or contrary to law.

Why the Board ruled this way

The Board found that the Judge did not weigh the evidence in an arbitrary or capricious manner and that the findings were supported by substantial evidence.

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: Applicant cites to favorable evidence but has not demonstrated that the Judge weighed the evidence in a manner that was arbitrary capricious or contrary to law. Adverse decsion affirmed. CASENO: 14-03247.a1 DATE: 07/17/2015 DATE: July 17, 2015 In Re: ----------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 14-03247

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 October 1, 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 May 7, 2015, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Michael H. Leonard denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. Applicant raised the following issue on appeal: 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 has worked for a Defense company for about 20 years. He has a good employment record, and his annual compensation is about $52,000. He has held a security clearance for many years. He and his wife have three adult children, the youngest of whom is attending college. Applicant is assisting with college expenses. Applicant’s wife recently got laid off from her employment, but she received a severance package of six months of pay. Applicant’s SOR alleges four delinquent debts: two charged-off accounts, an unpaid judgment, and a past-due mortgage loan. Applicant stated that he paid off four collection accounts not alleged in the SOR. He has paid off a car loan, and his wages are being garnished by the IRS for repayment of back taxes. The tax debt was not alleged in the SOR either. Applicant paid or settled the two charged-off accounts. At the hearing, Applicant testified that the judgment had been the subject of a garnishment. However, when the IRS began garnishing his wages for his tax debt, the previous garnishment action stopped. Applicant submitted no documentation regarding the unpaid judgment. Applicant’s mortgage debt originated from his having refinanced his house with an interest- only loan, that he later found to be too expensive. He sought to refinance, but the two loan proposals that his bank offered him were not acceptable. An attorney advised Applicant to stop making payments on his mortgage in order to persuade the lender to refinance on more favorable terms. Applicant followed this advice, and the lender foreclosed. The lending institution itself was closed by the Office of Thrift Supervision, and all deposits and loans were transferred to another bank. Applicant has received no documentation about the status of the foreclosure sale, including an IRS Form 1099. Applicant stands to inherit nearly $100,000 from his father’s estate. He has received about $20,000 and expects the balance by the end of 2015. He will use this money to pay off his debts. Applicant provided no documentation concerning the inheritance. The Judge’s Analysis The Judge resolved the two paid debts favorably to Applicant. However, he concluded that Applicant had not mitigated the concerns arising from his mortgage delinquency and the judgment. He concluded that Applicant’s plan to pay these debts from an expected inheritance was too speculative to establish that his debts are under control. He stated that other than garnishment, Applicant has done little to resolve his debts.

DISCUSSION

Applicant cites to evidence concerning the extent to which his debts have been resolved. His argument is not sufficient to rebut the presumption that the Judge considered all of the evidence in the record or that he weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. See, e.g., ISCR Case No. 12-00273 at 3 (App. Bd. Feb. 4, 2014). Applicant’s brief includes matters not contained in the record, which we cannot consider. Directive ¶ E3.1.29. Applicant argues that the evidence is not consistent as to the amount he still owes on the judgment. To the extent that he is challenging the Judge’s findings of fact, we conclude that the findings are based on substantial evidence or constitute reasonable inferences from the evidence. Applicant has cited to no error likely to change the outcome of the case See, e.g., ISCR Case No. 12-03420 at 3 (App. Bd. Jul. 25, 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 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