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ISCR Case 15-02905.a1 — CASE

ISCR Case 15-02905.a1denied

Case Headnote

ISCR Case No. 15-02905.a1

Aug 19, 2016· Hon. Michael Y. Ra'anan· appeal

Summary

A 56-year-old defense contractor with a history of security clearance was denied under Guideline F (Financial Considerations) due to unresolved financial issues. The denial was based on six delinquent debts totaling approximately $21,200, which constituted a disqualifying condition under F.3.

While the applicant had resolved a Federal tax debt, the judges found insufficient evidence of responsible financial management or current financial stability. The applicant also admitted that his financial overextension was self-induced and not due to circumstances beyond his control.

Despite the potential mitigating condition F.20(d), the applicant did not demonstrate sufficient evidence of current financial stability or a pattern of responsible financial management. Consequently, the security clearance was denied.

Conditions Referenced

Disqualifying

F.3raisedInability or Unwillingness to Satisfy Debts

Mitigating

F.20(d)appliedThe Individual Initiated Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtThe applicant resolved a Federal tax debt.

Key Rule Quoted

“Even if an applicant has paid delinquent debts, a Judge may still consider the underlying circumstances in evaluating an applicant’s security eligibility.”
— ISCR Case No. 14-02930 at 3 (App. Bd. Dec. 9, 2015)

Procedural Posture

SOR issuedNov 5, 2015
Answer filed—
Hearing heldJun 7, 2016
Decision dateAug 19, 2016

Cite For

Evaluation of Financial Stability Under Guideline F
Consideration of Underlying Circumstances Despite Debt Resolution
Impact of Self-admitted Financial Overextension on Security Clearance Eligibility

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 who was denied a security clearance due to financial considerations under Guideline F. The Applicant argued that the Judge's decision was arbitrary and that not all evidence was considered. The Board affirmed the Judge's decision, finding it supported by substantial evidence and not arbitrary or capricious.

Appealed bythe applicant

Applicant representationAttorney

Judge belowMatthew E. Malone — 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
The Judge's decision was arbitrary, capricious, or contrary to law.
Judge mis-weighed or ignored evidence — raised by the applicantRejected
The Judge did not weigh and consider all relevant evidence.

Why the Board ruled this way

The Board found that the Judge's decision was supported by substantial evidence and that the Judge properly considered the relevant circumstances surrounding the Applicant's financial situation. The Board concluded that the Judge's findings were not arbitrary or capricious and that the decision was consistent with national security interests.

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
William S. Fields
James F. Duffy

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: Even if an Applicant has paid delinquent debts the Judge may consider the underlying circumstances in evaluating an the person’s security eligibility. Adverse decision affirmed. CASENO: 15-02905.a1 DATE: 08/19/2016 DATE: August 19, 2016 In Re: ----- Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 15-02905

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 November 5, 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 decision on the written record. On June 7, 2016, after considering the record, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Matthew E. Malone 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: (1) whether the Judge decided the case on the full record, and (2) whether the Judge’s decision was arbitrary, capricious, or contrary to law. Consistent with the following, we affirm. The Judge’s Findings of Fact Applicant is a 56-year-old employee of a defense contractor. He served in the military for about 13 years and has held a security clearance since about 1980. He was unemployed for about five months in late 2012 and early 2013. His wife experienced medical problems and his son incurred legal bills, but details about those circumstances were not provided. The SOR alleged that Applicant had six delinquent debts totaling about $21,200. In 2013, he incurred a Federal tax debt because he mistakenly thought his employer was withholding taxes from his pay. He entered into a repayment plan with the IRS and resolved the tax debt. The other debts arose because he became financially overextended. He retained a debt resolution company to negotiate settlements with his creditors. He submitted copies of settlement offers that were sent to him between September 2010 and October 2014. In response to Department Counsel’s File of Relevant Material, he submitted a letter from the debt resolution company stating he completed the debt settlement program. However, he did not provide details about the program, such as the identity of the debts in the program and proof of payments. The Judge’s Analysis The Judge found against Applicant on all of the alleged debts but gave him credit under mitigating condition 20(d)1 for resolving the Federal tax debt. The Judge concluded that Applicant’s other debts were not the result of conditions beyond his control because he admittedly allowed himself to become financially overextended and also stated he did not provide sufficient information to establish he acted responsibly in the face of his financial problems. The Judge noted that Applicant did not show what debts were resolved in the debt repayment program and did not present information about his current finances to support a finding he is unlikely to become overextended again.

DISCUSSION

1 Directive, Enclosure 2, ¶ 20(b): “the individual initiated good-faith effort to repay overdue creditors or otherwise resolve debt[.]” In the Appeal Brief, Applicant contends that the Judge did not weigh and consider all relevant evidence. He cites to such things as his period of unemployment, his wife’s medical problems, his son’s legal bills, his resolution of the Federal tax debt, and his completion of the debt resolution program. However, the Judge made findings about those matters and discussed them in his analysis of the mitigating conditions. Applicant has not challenged any of the specific findings in the decision. His arguments are neither 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. 14-01284 at 3 (App. Bd. Apr. 6, 2015). Applicant also contends that the Judge’s analysis was contradictory because he determined that Applicant resolved the Federal tax debt, yet found against him on that allegation. Even if an applicant has paid delinquent debts or otherwise resolved financial deficiencies, a Judge may still consider the underlying circumstances in evaluating an applicant’s security eligibility. ISCR Case No. 14-02930 at 3 (App. Bd. Dec. 9, 2015). Accordingly, payment of a delinquent debt does not necessarily mandate a favorable ruling on that debt.

The Judge examined the relevant evidence 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 F. Duffy James F. Duffy Administrative Judge Member, Appeal Board