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ISCR Case 20-01877 — CASE

ISCR Case 20-01877denied

Case Headnote

ISCR Case No. 20-01877

Feb 6, 2023· Hon. Gregg A. Cervi· appeal

Summary

A mid-forties systems engineer was denied a security clearance under Guideline F (Financial Considerations) due to three unresolved delinquent debts totaling approximately $15,688. While the applicant had favorably resolved nine other debts, the remaining three raised security concerns.

The judge applied Disqualifying Condition F.3, noting the applicant's failure to demonstrate a consistent payment history or sufficient progress in resolving the outstanding debts. Although Mitigating Conditions F.2 and F.3 were considered, they were not sufficient to overcome the concerns.

The denial was based on the applicant's inability to provide adequate evidence of consistent payments on the three debts in question, coupled with a perceived lack of urgency in addressing these delinquencies despite having the financial means to do so. Consequently, the security clearance was denied on appeal.

Conditions Referenced

Disqualifying

F.3raisedInability or Unwillingness to Satisfy Debts

Mitigating

F.2rejectedThe Conditions That Resulted in the Financial Difficulties Were Largely Beyond the Person's ControlThe applicant did not establish that he was unable to make more progress sooner in the resolution of these debts.
F.3rejectedThe Person Has Made Good Faith Efforts to Repay Overdue Creditors or Otherwise Resolve DebtsThe applicant only made minimal payments in 2022 and did not demonstrate a track record of consistent payments.

Key Rule Quoted

“An applicant’s ongoing, unpaid debts evidence a continuing course of conduct and, therefore, can be viewed as recent for purposes of the Guideline F mitigating conditions.”
— ISCR Case No. 15-01690 at 3 (App. Bd. Sep. 13, 2016)

Procedural Posture

SOR issuedApr 16, 2021
Answer filed—
Hearing held2022-09-00
Decision dateFeb 6, 2023Appeal affirmed.

Cite For

Denial of Security Clearance Due to Unresolved Delinquent Debts Under Guideline F
Insufficient Evidence of Good Faith Efforts to Resolve Debts
Consideration of Non-alleged Debts in Assessing Credibility and Mitigation Efforts

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 a security clearance based on financial considerations. The Applicant contested the Judge's adverse findings regarding three delinquent debts totaling approximately $23,000. The Board affirmed the Judge's decision, finding no harmful error in the analysis or application of the law.

Appealed bythe applicant

Applicant representationAttorney

Judge belowMark Harvey — denied the clearance (split findings)

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
Applicant contended 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 that the Judge did not err in his analysis or application of the law. The Applicant's arguments did not demonstrate any harmful error that would warrant overturning the decision.

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

James F. Duffy — Chair
Moira Modzelewski
Gregg A. Cervi

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. 20-01877

)

) 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: February 6, 2023

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Brittany D. Forrester, Esq. The Department of Defense (DoD) declined to grant Applicant a security clearance. On April 16, 2021, DoD issued a statement of reasons (SOR) advising Applicant of the basis of that decision—security concerns raised under Guideline F (Financial Considerations) of DoD Directive 5220.6 (January 2, 1992, as amended) (Directive). Applicant requested a hearing. On December 7, 2022, after close of the record, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Mark Harvey denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. The SOR alleged twelve delinquent debts. The Judge found favorably for Applicant on nine and adversely on the other three, which total about $23,000. Applicant raises the following issue on appeal—whether the Judge’s adverse decision was arbitrary, capricious, or contrary to law. Consistent with the following, we affirm.

The Judge’s Findings of Fact and Analysis Applicant is in his mid-forties and married, with no children. He has worked as a systems engineer for 20 years. Beginning in 2010, Applicant experienced intermittent periods of unemployment, but he has been continuously employed since 2016. In his 2019 security clearance application, Applicant disclosed all three debts in issue, asserted that he had communicated with the creditors, and stated his intent to begin payments. In May 2022, Applicant refinanced his home and received about $100,000 in cash, but did not use the proceeds from the refinancing to pay his SOR debts. At his September 2022 hearing, Applicant produced receipts indicating that he had made payments in August 2022 of $100 on two of the accounts and of $170 on the third account. Post-hearing, Applicant provided receipts indicating additional payments in October 2022 on each account. Applicant is not credited with mitigating the [three debts that remain in issue]. He did not provide documentary evidence of payments in 2020 and 2021 despite promises on his SCA to initiate payments in 2020. He only made two payments on each debt in 2022. According to his IRS tax transcripts, he and his spouse received adjusted gross income exceeding $140,000 in [Tax Years] 2018, 2019, and 2021. He obtained at least $100,000 in cash when he refinanced his house in 2022. He did not establish that he was unable to make more progress sooner in the resolution of these three SOR debts, which now total $15,688. He did not establish a track record of consistent payments on these three debts, and there is insufficient assurance that these three debts are being resolved. [Decision at 10– 11.]

DISCUSSION

In his appeal brief, Applicant does not challenge any of the Judge’s specific findings of fact. Rather, he contends the Judge failed to adhere to Executive Order 10865 and the Directive by not considering all of the record evidence and by not properly applying the mitigating conditions and whole-person concept. He argues, for example, that the Judge did not give appropriate weight to “the recency of [Applicant’s] conduct”, which he asserts “began remote in time from 2013 to 2015 when [Applicant] and his wife both experienced bouts of unemployment and underemployment.” Appeal Brief at 7. It is well established, however, that an applicant’s ongoing, unpaid debts evidence a continuing course of conduct and, therefore, can be viewed as recent for purposes of the Guideline F mitigating conditions. See, e.g., ISCR Case No. 15-01690 at 3 (App. Bd. Sep. 13, 2016). Additionally, Applicant argues that he has made progress on other debts and “simply addressed these debts last, but still showed concomitant conduct of arranging a payment plan and making payments toward his plan as agreed.” Appeal Brief at 6. The record, however, supports the Judge’s conclusion that Applicant made only two payments on each of the three debts in 2022 and that he has failed to establish a track record of consistent payments. Decision at 10–11. Applicant argues that the Judge “placed significant weight on Applicant’s 2020 tax year.” Appeal Brief at 11. As we have previously stated, a judge may consider non-alleged debts for the following purposes: (a) in assessing an applicant’s credibility; (b) in evaluating an applicant’s evidence of extenuation, mitigation, or changed circumstances; (c) in considering whether the

applicant has demonstrated successful rehabilitation; and (d) in applying the whole person concept. See, e.g., ISCR Case No. 20-01232 at 6 (App. Bd. Sep. 29, 2022). The Judge’s determination to consider this non-alleged issue for these limited purposes is well-rooted in the precedent to which he cited. None of Applicant’s arguments are sufficient to rebut the presumption that the Judge considered all of the evidence in the record nor are they 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. 19-01400 at 2 (App. Bd. Jun. 3, 2020). Applicant relies on hearing-level decisions in other cases to argue the Judge erred in his analysis of this case, but those cases are neither binding precedent on the Appeal Board nor sufficient to undermine the Judge’s analysis and decision in this case. See, e.g., ISCR Case No. 17-02488 at 4 (App. Bd. Aug. 30, 2018). Applicant has failed to establish any harmful error below. The Judge examined the relevant evidence and articulated a satisfactory explanation for the decision. The decision is sustainable.

ORDER

The decision is AFFIRMED. Signed: James F. Duffy James F. Duffy Administrative Judge Chairperson, Appeal Board Signed: Moira Modzelewski Moira Modzelewski Administrative Judge Member, Appeal Board Signed: Gregg A. Cervi Gregg A. Cervi Administrative Judge Member, Appeal Board