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ISCR 20-02406: Guideline E security clearance appeal, denied (2023) · CASE

ISCR Case 20-02406denied

Case headnote

ISCR Case No. 20-02406

Apr 19, 2023· Hon. Moira D. Modzelewski· appeal

Summary

The applicant, representing himself, was denied a security clearance primarily under Guideline F (Financial Considerations) and Guideline E (Personal Conduct). The denial stemmed from significant financial issues, including 10 delinquent debts totaling approximately $53,200. These debts involved insufficient funds checks and a failure to file tax returns.

Further compounding the financial concerns, the applicant engaged in fraudulent financial practices, specifically kiting checks between accounts. Although the judge acknowledged that some of the applicant's financial problems were due to circumstances beyond his control, these factors did not sufficiently mitigate the overall financial concerns.

The applicant's ongoing Chapter 13 bankruptcy was also a factor and did not provide sufficient mitigation. Ultimately, the appeal was denied, affirming the original decision based on the ongoing bankruptcy and the documented financial misconduct.

Conditions referenced

Disqualifying

AG ¶ 20raisedFinancial Considerations

Mitigating

AG ¶ 21rejectedFinancial ConsiderationsSome financial problems were triggered by circumstances beyond the applicant's control.

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 issuedDec 23, 2021
Answer filed—Applicant requested a decision on the written record.
Hearing heldFeb 27, 2023
Decision dateApr 19, 2023Appeal affirmed.

Cite for

Denial of Security Clearance Due to Financial Misconduct Under Guideline F
Rejection of Mitigating Factors Related to Financial Issues
Affirmation of Decision Based on National Security Standards

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 based on financial considerations and personal conduct. The applicant argued that the Administrative Judge failed to properly weigh evidence and that the decision was arbitrary. The Board affirmed the decision, finding no harmful error in the Judge's ruling.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowPamela C. Benson denied the clearance (split findings)

Decided onthe written record

Guidelines belowGuideline FGuideline E

What the Board reviewed

Judge mis-weighed or ignored evidence, raised by the applicantRejected
Applicant argued that the Judge failed to weigh the evidence properly, including circumstances beyond his control.
Decision arbitrary, capricious, or contrary to law, raised by the applicantRejected
Applicant contended that the Judge's decision was arbitrary, capricious, or contrary to law.
No specific harmful error alleged, raised by the applicantRejected
Applicant failed to establish that the Judge committed any harmful error.

Why the Board ruled this way

The Board found that the Judge examined the relevant evidence and articulated a satisfactory explanation for the decision, which was sustainable on the record. The decision was affirmed as it was consistent with national security considerations.

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
Allison Marie

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. 20-02406

)

) 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: April 19, 2023

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 December 23, 2021, 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 DoD Directive 5220.6 (January 2, 1992, as amended) (Directive). Applicant requested a decision on the written record. On February 27, 2023, after considering the record, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Pamela C. Benson denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. Under Guideline F, the SOR alleged that Applicant had 10 delinquent debts totaling about $53,200, including a check drawn on insufficient funds for about $200; that he failed to file, as required, his Federal and state income tax returns for 2018; that he was indebted to the Federal Government for 2019 delinquent taxes in an unspecified amount; and that he “repeatedly engaged in kiting by transferring over $100,000 between checking accounts held at different banks using checks, ATM withdrawals, and cash deposits” between 2016 and 2018. The SOR also cross- alleged the insufficient-fund check allegation and the kiting allegation in a single Guideline E

allegation. In responding to the SOR, Applicant admitted the Guideline F allegations with explanations and denied the Guideline E allegation. The Judge found against Applicant on the Guideline F allegations and in favor of him on the Guideline E allegation. The Judge summarized the case as follows: Some of Applicant’s financial problems were triggered by circumstances beyond his control, and some of his financial indebtedness can be attributed to poor decisions. He was involved in fraudulent financial practices, and he has not filed his 2018 state and federal income tax returns. He filed for bankruptcy protection shortly after his receipt of the SOR, and it remains pending as of the close of the record. He did not sufficiently mitigate the financial consideration . . . security concerns. Eligibility for access to classified information is denied. [Decision at 1] The Judge also found that bankruptcy records reflect that Applicant’s “gambling losses totaled $23,056 in 2021.” Decision at 3, supported by File of Relevant Material Item 6 (Chapter 13 bankruptcy record) at 40. On appeal, Applicant argues that the Judge failed to weigh the evidence properly, including the circumstances beyond his control, his ongoing Chapter 13 bankruptcy proceeding, and his favorable character evidence and security record. However, none of his arguments are enough to rebut the presumption that the Judge considered all of the record evidence or to demonstrate the Judge weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. See, e.g., ISCR Case No. 21-01169 at 5 (App. Bd. May 13, 2022). Applicant requests that he be able to retain his Secret level clearance at a minimum. The Board has no authority to deny Applicant a higher-level clearance while permitting him to retain a lower-level clearance. See, e.g., ISCR Case No. 03-11627 at 4 (App. Bd. Mar. 18, 2005) Applicant failed to establish that the Judge committed any harmful error or that he warrants any remedial action. 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 the national security.”

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: Allison Marie Allison Marie Administrative Judge Member, Appeal Board