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ISCR Case ISCR Case No. 08-09918 — CASE

ISCR Case ISCR Case No. 08-09918denied

Case Headnote

ISCR Case No. ISCR Case No. 08-09918

Oct 28, 2009· Hon. Michael Y. Ra'anan· appeal

Summary

An applicant, an executive for a federal contractor with a 30-year security clearance history, was denied a security clearance under Guideline F (Financial Considerations). The denial was based on significant financial issues, including numerous delinquent debts and a dismissed bankruptcy petition.

Disqualifying Condition F.3 was raised due to the applicant's history of not meeting financial obligations. While Mitigating Conditions F.2 and F.3 were considered, they were not sufficient to overcome the security concerns.

The judge determined that the applicant had numerous delinquent debts, including medical bills and credit cards. Additionally, the applicant's bankruptcy petition was dismissed because his income exceeded the filing threshold. The judge concluded that the applicant had not taken adequate steps to resolve these financial problems until recently, leading to concerns about his judgment and reliability.

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 judge found that the applicant's financial problems were exacerbated by his divorce but did not sufficiently mitigate the security concerns.
F.3rejectedThe Person Has Made Good Faith Efforts to Repay Overdue Creditors or Otherwise Resolve DebtsThe judge concluded that the applicant had not taken adequate steps to resolve his financial problems.

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 issuedApr 10, 2009
Answer filed—
Hearing heldAug 17, 2009
Decision dateOct 28, 2009

Cite For

Denial of Security Clearance Due to Significant Financial Concerns Under Guideline F
Insufficient Mitigation of Financial Issues Despite a Long History of Holding a Security Clearance
The Standard for Granting a Clearance Must Align with National Security Interests

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 was from a denial of a security clearance based on financial considerations. The applicant raised issues regarding the Judge's findings and application of mitigating conditions. The Board affirmed the decision, finding no harmful error in the Judge's conclusions.

Appealed bythe applicant

Applicant representationPersonal representative

Judge belowErin C. Hogan — denied the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Judge mis-weighed or ignored evidence — raised by the applicantRejected
Applicant contended that the Judge’s factual findings contain errors.
Mitigation wrongly applied / not applied — raised by the applicantRejected
Applicant argued that the Judge’s application of the pertinent mitigating conditions is erroneous.
Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
Applicant claimed that the Judge’s adverse security clearance decision is arbitrary, capricious, or contrary to law.

Why the Board ruled this way

The Board found no harmful error in the Judge's decision and concluded that the findings were supported by substantial evidence. The Judge's application of mitigating conditions was not erroneous, and the decision was not arbitrary or capricious.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewNo de-novo re-decisionNo new evidence on appeal

Appeal Board panel

Michael Y. Ra’anan — Chair
William S. Fields
James E. Moody

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

DATE: October 28, 2009 In Re: --- Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 08-09918

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Carl E. Maas, Personal Representative The Defense Office of Hearings and Appeals (DOHA) declined to grant Applicant a security clearance. On April 10, 2009, DOHA issued a statement of reasons (SOR) advising Applicant of the basis for that decision–security concerns raised under Guideline F (Financial Considerations) of Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive). Applicant requested a hearing. On August 17, 2009, after the hearing, Administrative Judge Erin C. Hogan denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. Applicant raised the following issues on appeal: whether certain of the Judge’s findings of fact are supported by substantial record evidence; whether the Judge’s application of the pertinent mitigating conditions is erroneous; and whether the Judge’s adverse security clearance decision is arbitrary, capricious, or contrary to law. Finding no error, we affirm. The Judge made the following pertinent findings of fact: Applicant is an executive for a federal contractor. He has previously worked for another federal contractor after retiring as an officer in the U.S. Air Force. He has held a security clearance for 30 years. Applicant has numerous delinquent debts for such things as medical bills, credit cards, and a real estate mortgage. His second marriage ended in divorce in 2006. The two were having financial problems during their marriage. The divorce decree required Applicant to pay child and spousal support. These obligations were still in effect at the close of the record. Applicant filed for Chapter 7 bankruptcy protection, but the petition was dismissed because his income exceeded the filing threshold. In the Analysis portion of the decision, the Judge noted the effect which Applicant’s divorce had exerted on his financial condition, his employment history, and his having held a security clearance for 30 years. However, she concluded that Applicant had not taken adequate steps to resolve his financial problems until recently, which impugned his good judgement and reliability. Applicant contended that the Judge’s factual findings contain errors. For example, he challenged the Judge’s statement that Applicant had experienced financial problems at the end of his second marriage. However, after reviewing the record, the Board concludes that the Judge’s material findings are based on substantial evidence, or constitute reasonable characterizations or inferences that could be drawn from the record. In particular, Applicant’s divorce decree, admitted as Applicant Exhibit F, supports the Judge’s statement about Applicant’s financial condition. Applicant has not identified any harmful error likely to change the outcome of the case. Considering the record evidence as a whole, the Judge’s material findings of security concern are sustainable. See, e.g., ISCR Case No. 06-21025 at 2 (App. Bd. Oct. 9, 2007). In support of his appeal, Applicant has provided new evidence not contained in the record, including evidence that he had paid off certain debts. The Board cannot consider this new evidence. See Directive ¶ E3.1.29. (“No new evidence shall be received or considered by the Appeal Board”). See also ISCR Case No. 08-06518 at 2 (App. Bd. Mar. 3, 2009). Applicant’s appeal points to his good security record, which the Judge noted in her decision. This does not demonstrate that the decision is arbitrary, capricious, or contrary to law. The federal government need not wait until an applicant actually mishandles or fails to safeguard classified information before it can deny or revoke access to such information. See Adams v. Laird, 420 F.2d 230, 238-239 (D.C. Cir. 1969). The absence of security violations does not bar or preclude an adverse security clearance decision. See ISCR Case No. 01-03357 at 4 (App. Bd. Dec. 13, 2005). After reviewing the record, the Board concludes that the Judge examined the relevant data and articulated a satisfactory explanation for the decision, “including a ‘rational connection between the facts found and the choice made.’” Motor Vehicle Mfrs. Ass’n of the United States v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)(quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)). The Judge’s decision that “it is not clearly consistent with the national interests to grant Applicant eligibility for a security clearance” is sustainable, in light of the Egan standard. Decision at 11; Department of the Navy v. Egan, 484 U.S. 518, 528 (1988) (“The general standard is that a clearance may be granted only when ‘clearly consistent with the interests of the national security.’”)

ORDER

The Judge’s adverse security clearance decision is AFFIRMED. Signed: Michael Y. Ra’anan Michael Y. Ra’anan Administrative Judge Chairperson, Appeal Board Signed: William S. Fields William S. Fields Administrative Judge Member, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board