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ISCR 14-05150.a1: Guideline F security clearance appeal (2016) · CASE

ISCR Case 14-05150.a1unknown

Case headnote

ISCR Case No. 14-05150.a1

Apr 20, 2016· Hon. Jeffrey D. Billett· appeal

Summary

This security clearance case, reviewed under Guideline F (Financial Considerations), involved an applicant represented by counsel. The applicant faced disqualifying conditions under F.1 due to unresolved financial issues, specifically a delinquent mortgage and outstanding tax liens.

The appeal board determined that the judge had failed to adequately consider all relevant evidence, particularly information concerning a scheduled short sale of property. This short sale was deemed significant to the applicant's overall financial situation and potential for mitigation.

Consequently, the appeal board remanded the case for a new decision, instructing the judge to fully discuss the evidence related to the short sale. No final outcome on the security clearance was reached at this stage, as the case was returned for further deliberation. Mitigating conditions under F.2 were considered applicable to the case.

Conditions referenced

Disqualifying

F.1raisedFinancial ConsiderationsThe applicant had unresolved debts, including a delinquent mortgage and tax liens.

Mitigating

F.2rejectedFinancial ConsiderationsThe judge noted circumstances outside the applicant's control but did not find sufficient evidence of resolution.

Procedural posture

SOR issuedApr 22, 2015
Answer filed—
Hearing heldFeb 23, 2016
Decision dateApr 20, 2016remanded for new decision

Cite for

Failure to Consider All Evidence in Financial Cases
Importance of Discussing Relevant Exhibits in Decisions
Remand for New Decision Due to Oversight in Analysis

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

Remanded

The appeal involved a denial of a security clearance based on financial considerations under Guideline F. The applicant argued that the Judge failed to consider all evidence and misapplied mitigating conditions. The Board found merit in these claims and remanded the case for a new decision that addresses the overlooked evidence.

Appealed bythe applicant

Applicant representationAttorney

Judge belowNoreen A. Lynch denied the clearance (split findings)

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Judge mis-weighed or ignored evidence, raised by the applicantError sustained
The Judge failed to consider all of the evidence, specifically Exhibit O pertaining to the scheduled short sale of property.
Decision arbitrary, capricious, or contrary to law, raised by the applicantError sustained
The Judge's application of the mitigating conditions was erroneous.
Decision arbitrary, capricious, or contrary to law, raised by the applicantError sustained
The Judge's whole-person analysis was erroneous.

Why the Board ruled this way

The Board found that the Judge did not adequately consider all evidence, particularly Exhibit O, which is significant to the case. The remand allows for a new decision that includes this evidence.

Ignored material evidence

On remand, the judge must

The Judge must issue a new decision addressing Exhibit O.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewProcedural complianceNo de-novo re-decisionNo new evidence on appeal

Appeal Board panel

Michael Ra’anan (Chair)
Jeffrey D. Billett
James E. Moody
Included a dissent

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 should have discussed Exhibit O pertaining to the schedules short sale of property. Adverse decision remanded. CASENO: 14-05150.a1 DATE: 04/20/2016 DATE: April 20, 2016 In Re: -----

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 14-05150

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Ryan C. Nerney, Esq. The Department of Defense (DoD) declined to grant Applicant a security clearance. On April 22, 2015, 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 February 23, 2016, 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 failed to consider all of the evidence; whether the Judge’s application of the mitigating conditions was erroneous; and whether the Judge’s whole-person analysis was erroneous. Consistent with the following, we remand for a new decision. The Judge’s Findings of Fact Applicant has held a clearance since 2005. In 2007, he bought rental property for about $238,000. However, his employer reduced his income, and his tenant stopped paying rent, as a consequence of which Applicant could not make his monthly mortgage payment. He attempted to sue the tenant for rent and to obtain a loan modification but was not successful. Applicant states that the home went into foreclosure in 2011. It was vandalized in 2014. Applicant has a past-due amount of over $243,000 on the loan for this property. He has not sold it, and the balance is not resolved. However, he has a contract for a would be short-sale if it is approved. Other attempts at short-sales did not meet with success. His realtor believes that there is “a strong chance” that this agreement will be accepted. Decision at 3. Applicant stopped making payments on the mortgage in 2008. In addition, Applicant is indebted to his state for liens in the combined amount of over $3,200. These pertain to his rental property. Applicant submitted a letter from a colleague commending him for his trustworthiness and professionalism. The Judge’s Analysis The Judge resolved an allegation in Applicant’s favor, one that addressed a debt to a bank. However, for the delinquent mortgage and the tax liens she entered adverse findings. She noted that the debts in question are unresolved and that, while Applicant has a contract for a short-sale, other such efforts have been rejected. Though noting circumstances outside Applicant’s control that affected his financial problems, she also noted that Applicant’s mortgage problem is eight years old and resolution is not yet certain.

DISCUSSION

Applicant contends that the Judge did not consider all of the evidence in the record. Specifically, the documents, including a HUD 1, in Exhibit O pertaining to the scheduled short sale of the property were not discussed. While the Board notes that not all the documents are signed, the cumulative significance of the documents contained in the exhibit is sufficient such that the Judge should have discussed the exhibit. The case is remanded for the Judge to issue a new decision in which she addresses Exhibit O.

ORDER

The Decision is REMANDED. Signed: Michael Ra’anan Michael Ra’anan Administrative Judge Chairperson, Appeal Board Signed: Jeffrey D. Billett Jeffrey D. Billett Administrative Judge Member, Appeal Board Dissenting Opinion of Administrative Judge James E. Moody I disagree with my colleagues. Whether or not it would have been preferable for the Judge to have discussed Exhibit O, the exhibit does not, on its face, refute or undermine anything in her Decision. The Judge acknowledged that Applicant had a pending contract for the sale of the property in question but also noted that other attempted short sales had fallen through over the years. The exhibit states that closing had to occur by December 28, 2015, and there is nothing in the record to show that this was done. I would affirm the Judge’s decision. Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board