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ISCR Case 20-03646 — CASE

ISCR Case 20-03646denied

Case Headnote

ISCR Case No. 20-03646

Nov 29, 2022· Hon. Moira D. Modzelewski· appeal

Summary

A security clearance applicant, representing herself, was denied under Guideline F (Financial Considerations) due to five delinquent debts totaling over $47,000. A significant credit union loan was a primary concern, as the judge determined the applicant had not made a good-faith effort to resolve this recent and ongoing debt. This failure was seen as indicative of poor judgment.

While some medical debts were favorably assessed, the presence of multiple substantial outstanding debts, particularly the credit union loan, led to the denial. The applicant's appeal, which alleged judicial bias and improper decision-making, was rejected.

The appeals board found no harmful error in the judge's original ruling, upholding the decision to deny the security clearance. The applicant's financial irresponsibility, specifically regarding the credit union debt, was the determining factor.

Conditions Referenced

Disqualifying

F.3raisedInability or Unwillingness to Satisfy Debts

Mitigating

F.2rejectedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person's ControlThe judge found that the applicant did not act responsibly regarding her debts.
F.3notedThe Person Has Received or Is Receiving Counseling for the Problem

Key Rule Quoted

“The general standard is that a clearance may be granted only when ‘clearly consistent with national security.’”
— Department of the Navy v. Egan, 484 U.S. 518, 528 (1988)

Procedural Posture

SOR issuedFeb 5, 2021
Answer filed—
Hearing heldSep 19, 2022
Decision dateNov 29, 2022

Cite For

Evaluation of Financial Considerations Under Guideline F
Standards for Establishing Bias in Security Clearance Cases
Weighing of Evidence in Security 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 involved a denial of security clearance based on financial considerations, specifically five delinquent debts totaling over $47,000. The applicant argued bias and that the decision was arbitrary and capricious. The Board affirmed the Judge's decision, finding no harmful error and that the decision was sustainable on the record.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowEdward W. Loughran — denied the clearance (split findings)

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Judge bias or partiality — raised by the applicantRejected
Applicant claimed the Judge was biased due to his membership in the credit union involved in the debt.
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 articulated a satisfactory explanation for the denial of the security clearance.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewProcedural complianceNo de-novo re-decisionDeference to the judge’s credibility calls

Appeal Board panel

James F. Duffy — Chair
James E. Moody
Moira Modzelewski

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

APPEARANCES

_______________________________________________ ) In the matter of: )

)

----- )

ISCR Case No. 20-03646

)

) Applicant for Security Clearance ) _______________________________________) DEPARTMENT OF DEFENSE DEFENSE LEGAL SERVICES AGENCY DEFENSE OFFICE OF HEARINGS AND APPEALS APPEAL BOARD POST OFFICE BOX 3656 ARLINGTON, VIRGINIA 22203 (703) 696-4759 Date: November 29, 2022

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 February 5, 2021, DoD issued a statement of reasons (SOR) advising Applicant of the basis for that decision—security concerns raised under Guideline F (Financial Considerations) of DoD Directive 5220.6 (Jan. 2, 1992, as amended) (Directive). Applicant requested a hearing. On September 19, 2022, after the hearing, Administrative Judge Edward W. Loughran denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. The SOR alleged that Applicant had five delinquent debts totaling over $47,000. These included a charged-off credit union loan for about $43,860 and four medical debts in collection. In responding to the SOR, Applicant admitted with explanations the allegations pertaining to the credit union loan and one of the medical debts. She denied the other three medical debts. The Judge found against Applicant on credit union debt and in favor of her on the medical debts. Regarding the credit union debt, the Judge concluded that Applicant did not make a good-faith

effort to resolve it; that she did not act responsibly under the circumstances; that the debt was recent, ongoing, and continued to cast doubt on her reliability, trustworthiness, and good judgment; and that none of the mitigating conditions applied to that allegation. Applicant raised the following issues on appeal: whether the Judge was biased and whether his decision was arbitrary, capricious, or contrary to law. Consistent with the following, we affirm the Judge’s decision. Bias Applicant’s brief states: [T]he Judge admitted on record to being a member of the . . . Credit Union and having financial ties with the institution. He stated, he was disappointed that the Credit Union did not receive payment for the debt. The Judge even states in his ruling, that the “applicant’s financial stability came at the expense of the credit union.” These ties and the above contradictions show the Judge was unable to separate his personal attachments to the Credit Union from this case. I believe he ruled against me keeping my security clearance based on his bias and not on a fair assessment of a potential risk to national security. [Appeal Brief at 2.] During the hearing, the Judge noted he was a member of that credit union. Tr. at 27. However, we find nothing in the Judge’s decision or in the record to support Applicant’s assertion that the Judge expressed his disappointment that the credit union debt was not paid. To address Applicant’s bias claim, it is helpful to examine 28 U.S.C. § 455, which sets forth the disqualification requirements for Federal judges. Under § 455(b)(4), a Federal judge shall disqualify himself when he “has a financial interest in the subject matter in controversy, or in a party to the proceeding, or any other interest that could be substantially affected by the outcome of the proceeding[.]” The term “financial interest” is defined in the statute. That definition provides, “The proprietary interest of a policyholder in a mutual insurance company, of a depositor in a mutual saving association, or a similar proprietary interest, is a ‘financial interest’ in the organization only if the outcome of the proceeding could substantially affect the value of the interest.” Id. at § 455(d)(4)(iii). Mere membership in a credit union is similar to the proprietary interest of being a depositor in a mutual saving association and is disqualifying only if the outcome of the proceeding could substantially affect the value of the Judge’s financial interest in that institution. It should go without saying that the credit union identified in the SOR allegation is not a party to Applicant’s security clearance proceeding. In this proceeding, moreover, the “subject matter in controversy” is Applicant’s security clearance eligibility. As the Appeal Board has repeatedly stated in the past, a security clearance adjudication is not a debt collection proceeding, but rather is aimed at evaluating an applicant’s judgment, reliability, and trustworthiness.1 See, For debts involving financial institutions (banks, credit unions, savings and loan associations, mortgage lenders, etc.) or commercial entities (consumer debts), alleging the identity of the creditor in an SOR allegation is helpful to place the applicant on notice of the specific debt at issue. However, the identity of the creditor for those types of debts

e.g., ISCR Case No. 07-08049 at 5 (App. Bd. Jul. 22, 2008). The outcome of the Judge’s security clearance determination is likely to have no effect on the value of his financial interest in the credit union. Given these circumstances, a reasonable, well-informed observer with access to all the facts is unlikely to question the Judge’s impartiality in this case. See, e.g., United States v. Stone, 866, F.3d 219, 229-31 (4th Cir. 2017). We conclude that Applicant failed to meet her heavy burden on her to rebut the presumption that a Judge is impartial and unbiased. See, e.g., ISCR Case No. 18-02722 at 5 (App. Bd. Jan. 30, 2020). Weighing Evidence Applicant argues the Judge’s mitigation analysis and whole-person assessment are defective. For example, she points to the Judge’s findings and conclusions that were favorable to her and argues they establish her security clearance worthiness. However, 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. 19-01431 at 4 (App. Bd. Mar. 31, 2020).

CONCLUSION

Applicant failed to establish the Judge committed any harmful error. The Judge examined the relevant evidence and articulated a satisfactory explanation for the decision. The decision is sustainable on the record. “The general standard is that a clearance may be granted only when ‘clearly consistent with 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 national security.” is generally of no significance in the Judge’s analysis in determining whether the applicant acted responsibly in acquiring, handling, or resolving such debts.

ORDER

The decision is AFFIRMED. Signed: James F. Duffy James F. Duffy Administrative Judge Chairperson, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board Signed: Moira Modzelewski Moira Modzelewski Administrative Judge Member, Appeal Board