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ISCR Case 17-01556.a1 — CASE

ISCR Case 17-01556.a1denied

Case Headnote

ISCR Case No. 17-01556.a1

Aug 2, 2018· Hon. Michael Y. Ra'anan· appeal

Summary

A 56-year-old applicant with a master's degree and a background in federal contracting was denied a security clearance under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The denial stemmed primarily from significant and long-standing financial issues, specifically 18 delinquent student loans totaling approximately $198,000.

The judge determined that these financial problems, ongoing since at least 2014 with no evidence of responsible management before 2016, demonstrated poor self-control and a lack of judgment. Disqualifying conditions under AG ¶ 20(a) and AG ¶ 20(c) were cited.

Despite recent efforts to make payments, these actions were deemed insufficient to demonstrate a good-faith effort to resolve the substantial financial obligations. Consequently, the security clearance was denied.

Conditions Referenced

Disqualifying

AG ¶ 20(a)raisedFinancial Considerations
AG ¶ 20(c)raisedFinancial Considerations

Key Rule Quoted

“A Judge evaluates an applicant’s history of financial problems for what they may reveal about the applicant’s ability to protect classified information.”

Procedural Posture

SOR issuedJun 1, 2017
Answer filed—
Hearing heldMay 1, 2018
Decision dateAug 2, 2018

Cite For

Evaluation of Financial Problems Under Guideline F
Importance of Financial Responsibility in Relation to National Security
Insufficient Evidence of Good-faith Efforts to Resolve Financial Issues

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 issues and personal conduct concerns. The applicant argued that the Judge's decision was arbitrary and capricious. The Board affirmed the Judge's decision, finding no harmful error that would change the outcome.

Appealed bythe applicant

Applicant representationAttorney

Judge belowShari Dam — 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 adverse decision was arbitrary, capricious, or contrary to law.

Why the Board ruled this way

The Board found that the Judge's decision was supported by substantial evidence and articulated a satisfactory explanation for the denial of the security clearance. The applicant did not demonstrate that the Judge's decision was arbitrary, capricious, or contrary to law.

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
Charles C. Hale
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 Judge evaluates an applicant’s history of financial problems for what they may reveal about the applicant’s ability to protect classified information. Financial problems may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations. Adverse decision affirmed. CASENO: 17-01556.a1 DATE: 08/02/2018 DATE: August 2, 2018 In Re: --------------------------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 17-01556

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Andrew P. Bakaj, Esq. The Department of Defense (DoD) declined to grant Applicant a security clearance. On June 1, 2017, 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 May 1, 2018, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Shari Dam 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. 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 Findings of Fact Applicant is 56 years old, married, and has four adult children. He earned an associate’s degree in 1993, bachelor’s degree in 2006, master’s degree in 2009, and technical certificate in 2011. He has worked for Federal contractors since 2003, and his latest employer since late 2015. His current annual salary is about $125,000. He has held a security clearance since 2005. The SOR alleged that Applicant had 18 delinquent student loans totaling about $198,000. Fifteen of those are government loans that became delinquent in 2014 and, as of mid-2017, total about $182,000. The remainder are private loans that totaled over $93,000 in the fall of 2016. Applicant cosigned some of the loans for his son. Applicant attributed his financial issues to a lack of money due to maintaining two households during the years he worked away from home and to short periods of unemployment between contracts. He acknowledged that, from 2005 to late 2016, he did not make payments on the student loans. After being contacted by the private lender, he began making monthly payments of $500 on the three private loans in late 2016. He began making monthly payments of $500 on the government loans in June 2017. At the time of the hearing, the loans were in a current status. Applicant believed his student loans were in a deferred status until 2016. His 2015 and 2016 Federal tax refunds were withheld and applied to his student loans. He did not investigate the reasons for the withholding of those refunds. “Applicant admitted that he ‘put his head in the sand’ for many years, and essentially ignored them because he could not afford to pay them. (Tr. 68)” Decision at 3. Applicant’s supervisor testified that he is an outstanding employee and recommends him for a security clearance. The Judge’s Analysis None of the Guideline F mitigating conditions apply. His financial problems have been ongoing since at least 2014. While some of his financial problems may have resulted from conditions beyond his control, “his decision to continue obtaining student loans for his advanced education and his son’s education, was within his control.” Decision at 6. Insufficient evidence exists to establish he responsibly managed his student loans as they were accumulated or after they became due. “Although he recently established payment plans for the loans during this security clearance investigation, those actions do not constitute a good-faith effort to repay his loans, given his years of indifference and failure to address them prior to 2016.” Decision at 6-7. He has not established a solid track record of responsibly resolving his student loans or managing his finances.

DISCUSSION

Applicant contends that the Judge erred in her mitigation analysis and, more specifically, that she did not consider specific mitigating facts. Citing to his and his wife’s testimony, he argues that he timely addressed the delinquent student loans when he learned they were in arrears. He also disputes the Judge’s conclusion that his decision to obtain student loans for his and his son’s education was within his control, but instead he argues that he acted responsibly in obtaining the student loans to advance his and his son’s career opportunities. He further argues that his efforts to obtain loan deferments should not be held against him. He claims his mitigation and whole-person evidence supports a favorable clearance decision. A Judge evaluates an applicant’s history of financial problems for what they may reveal about the applicant’s ability to protect classified information. See Directive Encl. 2, App. A ¶ 18 for the proposition that financial problems may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations. Accordingly, a Judge can be expected to consider not only the extent to which an applicant’s debts have been paid, settled, or forgiven but also the underlying circumstances, which may, in a given case, shed light upon an applicant’s judgment and reliability. See, e.g., ISCR Case No. 15-02760 at 3 (App. Bd. Dec. 29, 2016). Applicant has neither challenged any of the Judge’s specific findings of fact nor rebutted the presumption that the Judge considered all of the evidence in the record. See, e.g., ISCR Case No. 15-02854 at 2 (App. Bd. Nov. 22, 2016). His arguments are, in essence, a disagreement with the Judge’s weighing of the evidence. We note that the presence of some mitigating evidence does not alone compel the Judge to make a favorable security clearance decision. As the trier of fact, the Judge has to weigh the evidence as a whole and decide whether the favorable evidence outweighs the unfavorable evidence, or vice versa. A party’s disagreement with the Judge’s weighing of the evidence, or an ability to argue for a different interpretation of the evidence, is not sufficient to demonstrate the Judge weighed the evidence or reached conclusions in a manner that is arbitrary, capricious, or contrary to law. See, e.g., ISCR Case No. 15-00650 at 2 (App. Bd. Jun. 27, 2016). Applicant has not identified any harmful error likely to change the outcome of the case. The Judge examined the relevant evidence and articulated a satisfactory explanation for the decision. “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.” The decision is sustainable on this record.

ORDER

The Decision is AFFIRMED. Signed: Michael Y. Ra’anan Michael Y. Ra’anan Administrative Judge Chairperson, Appeal Board

Signed: Charles C. Hale Charles C. Hale Administrative Judge Member, Appeal Board Signed: James F. Duffy James F. Duffy Administrative Judge Member, Appeal Board