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ISCR Case 15-07941.a1 — CASE

ISCR Case 15-07941.a1denied

Case Headnote

ISCR Case No. 15-07941.a1

Nov 29, 2018· Hon. Michael Y. Ra'anan· appeal

Summary

An applicant representing himself was denied a security clearance due to concerns under Guideline F (Financial Considerations) and Guideline E (Personal Conduct). The applicant admitted to approximately $36,000 in significant unresolved debts, which he attributed to a period of unemployment and a failed business venture.

Despite some repayment efforts and a recent increase in income, the applicant failed to demonstrate responsible financial management. Specifically, he did not present evidence of debt resolution to the judge.

The appeal board affirmed the denial, finding insufficient evidence of responsible financial management to mitigate the concerns raised by the substantial outstanding debts. The security clearance was therefore denied.

Conditions Referenced

Disqualifying

AG ¶ 20raisedFinancial Considerations

Mitigating

AG ¶ 20(d)rejectedFinancial ConsiderationsThe applicant's recent repayment efforts were deemed insufficient to mitigate the financial concerns.

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 13, 2016
Answer filed—
Hearing held2017-11-00
Decision dateNov 29, 2018

Cite For

Insufficient Evidence of Financial Responsibility Under Guideline F
Impact of Charged-off Debts on Financial Obligations
Consideration of Military Service and Prior Clearance History 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 who was denied a security clearance due to financial concerns under Guidelines E and F. The applicant argued that the Judge's decision was arbitrary and capricious. The Board affirmed the Judge's decision, finding no harmful error and that the applicant had not adequately addressed his financial obligations.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowStephanie C. Hess — denied the clearance

Decided ona hearing

Guidelines belowGuideline EGuideline F

What the Board reviewed

Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
Applicant argued that the Judge's 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, which was supported by substantial evidence and followed required procedures. The Judge's conclusions were not arbitrary or capricious, and the applicant failed to mitigate the security concerns raised by his financial issues.

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
James E. Moody
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 E; Guideline F DIGEST: A creditor’s decision to charge off a debt for accounting purposes does not affect a debtor’s obligations to the creditor. A Judge could reasonably conclude charged-off debts remain ongoing financial problems. If Applicant had proof of resolution of alleged debts, he was obligated to present such evidence to the Judge. The doctrine of ineffective assistance of counsel does not apply in DOHA proceedings. Adverse decision affirmed. CASENO: 15-07941.a1 DATE: 11/29/2018 DATE: November 29, 2018 In Re: ------------------------ Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 15-07941

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 13, 2016, DoD issued a statement of reasons (SOR) advising Applicant of the basis for that decision—security concerns raised under Guideline F (Financial Considerations) and Guideline E (Personal Conduct) of Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive). Applicant requested a hearing. On August 31, 2018, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Stephanie C. Hess 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 decision was arbitrary, capricious, or contrary to law. The Judge’s favorable findings under Guideline E have not been raised as an issue on appeal. Consistent with the following, we affirm. The Judge’s Pertinent Findings of Fact and Analysis Applicant works for a defense contractor. He has served honorably in the military, which included multiple deployments to war zones. The SOR alleged that he had 11 debts totaling about $36,000. He admitted ten of those debts. He attributed his financial difficulties to periods of unemployment and underemployment. He also opened a business in 2009 that failed in 2016. In his 2014 security clearance application, Applicant listed a number of his delinquent debts and stated he was currently in the process of filing Chapter 13 bankruptcy. In his 2016 SOR Answer, he again indicated he would resolve the debts through Chapter 13, bankruptcy. At the hearing, he indicated that he decided not to file bankruptcy because he learned taking such action could not protect his marital home from foreclosure and could potentially have an impact on his security clearance eligibility. Applicant’s delinquent debts include a deficiency balance on a repossessed vehicle of over $14,000, three charged-off credit card debts totaling over $11,000, and a charged-off delinquent electronic payment of about $550. Those debts remain unresolved. He paid two of the delinquent debts totaling less than a $1,000 and entered into payment plans or settlement agreements for other debts. In 2017, he received a $20,000 raise and now earns about $90,000 annually. He also receives annual disability compensation benefits of about $12,000. Despite having received the SOR more than a year earlier, Applicant did not contact the creditors until just before the hearing. He did not have a clear understanding of his accounts. He has the prerogative to change his mind about filing bankruptcy, but such a change does not justify a failure to address his delinquent debts. Based on Applicant’s recent repayment agreements, it is too soon to conclude that he has developed a track record of repayments. Although he encountered conditions beyond his control, he has not acted responsibly under the circumstances and his delinquent accounts primarily remain unresolved.

DISCUSSION

Applicant’s brief includes matters that are not contained in the record. For example, he stated that he has paid an attorney to file Chapter 13 bankruptcy and that the delinquency on the repossessed vehicle and another debt will be resolved through that bankruptcy. He also provided documents in his appeal brief showing he paid some of the delinquent debts after the record of the proceeding closed. We cannot consider new evidence on appeal. Directive E3.1.29. Applicant contends that he did not owe credit card debts from specific creditors because the accounts were paid or charged off several years ago and that his attorney did not present accurate information about the accounts even though he provided that information to the attorney. These arguments are not persuasive. First, a creditor’s decision to charge off a debt for accounting purposes does not affect a debtor’s obligations to the creditor. A Judge could reasonably conclude charged-off debts remain ongoing financial problems. See, e.g., ISCR Case No. 17-00683 at 2 (App. Bd. Oct. 19, 2018). Second, if Applicant had proof of resolution of alleged debts, he was obligated to present such evidence to the Judge. Directive ¶ E3.1.15. Third, the doctrine of ineffective assistance of counsel does not apply in DOHA proceedings. See, e.g., ISCR Case No. 17-03852 at 4 (App. Bd. Oct. 31, 2018). Applicant’s arguments do not establish that the Judge committed any harmful error. Applicant argues the adverse decision has resulted in the termination of his job and damaged his career. The Directive does not allow us to consider the impact of an unfavorable decision. See, e.g., ISCR Case No. 17-01492 at 2 (App. Bd. Apr. 30, 2018). He also contends that he was told his decision would be issued in mid-January 2018, but it was issued until much later. “Had the decision reached me sooner, I would have made more economical choices.” Appeal Brief at 2. Applicant’s security clearance hearing was held in November 2017, and he knew a decision on his security clearance eligibility was pending. His economic choices are solely his responsibility and do not warrant any type of relief in this proceeding. Applicant further argues that the Judge did not take into consideration his military service and points out that he has held a security clearance for over 30 years without ever being disciplined or cited for any misbehavior. His arguments are neither sufficient to rebut the presumption that the Judge considered all of the evidence in the record nor enough 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. 17-02488 at 3 (App. Bd. Aug. 30, 2018). Although an absence of prior security violations is a matter that a Judge should consider, along with all the other evidence in the record, it does not preclude a Judge from concluding that an applicant’s circumstances present security concerns that the applicant failed to mitigate. The Government does not have to wait until an applicant has compromised or mishandled classified information before it can deny the applicant a clearance. Even those with good prior records can encounter circumstances in which their judgment and reliability might be compromised. See, e.g., ISCR Case No. 14-04648 at 3 (App. Bd. Sep. 9, 2015). 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, Encl. 2, App. A & 2(b): “Any doubt concerning personnel being considered for national security eligibility 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: James E. Moody James E. Moody Administrative Judge Member, Appeal Board Signed: James F. Duffy James F. Duffy Administrative Judge Member, Appeal Board