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ISCR Case 08-10897.a1 — CASE

ISCR Case 08-10897.a1denied

Case Headnote

ISCR Case No. 08-10897.a1

May 17, 2010· Hon. Michael Y. Ra'anan· appeal

Summary

A defense contractor employee was denied a security clearance under Guideline F (Financial Considerations) due to unresolved financial issues. The applicant had a history of multiple bankruptcies and defaulted debts. The judge determined there was insufficient evidence of financial rehabilitation or solvency, concluding that the applicant remained vulnerable to financial pressure and exploitation.

The denial was based on the applicant's failure to demonstrate financial rehabilitation or solvency, with ongoing financial obligations and living expenses suggesting a high likelihood of recurring financial problems. Additionally, the record lacked sufficient evidence regarding the applicant's character, trustworthiness, or responsibility.

The appeal board affirmed the denial, concurring that the applicant had not provided adequate evidence to support claims of mitigating circumstances. The outcome was a denial of the security clearance.

Conditions Referenced

Disqualifying

AG ¶ 20raisedFinancial Considerations

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 issuedJul 13, 2009
Answer filed—Applicant represented himself pro se.
Hearing held—
Decision dateMay 17, 2010Appeal affirmed by the board.

Cite For

Insufficient Evidence of Financial Rehabilitation Under Guideline F
Affirmation of Adverse Decisions Based on Lack of Solvency
Consideration of Financial Obligations 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 an applicant seeking a security clearance who was denied due to financial considerations under Guideline F. The applicant argued that the Judge failed to consider favorable evidence and misapplied mitigating conditions. The Board affirmed the Judge's decision, finding no error in the evaluation of evidence or application of the law.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowDavid M. White — denied the clearance

Decided onthe written record

Guidelines belowGuideline F

What the Board reviewed

Judge mis-weighed or ignored evidence — raised by the applicantRejected
Applicant contended that the Judge failed to consider evidence favorable to him.
Mitigation wrongly applied / not applied — raised by the applicantRejected
Applicant argued that the Judge erred in the application of the pertinent mitigating conditions.
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, affirming that the Judge properly evaluated the evidence and applied the relevant mitigating conditions.

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
Jean E. Smallin
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

SYNOPSIS

KEYWORD: Guideline F DIGEST: Applicant’s second bankruptcy discharge occurred after the close of the record. It is the Judge who authorizes an extension in a Hearing Office proceeding. Adverse decision affirmed. CASENO: 08-10897.a1 DATE: 05/17/2010 DATE: May 17. 2010 In Re: -----

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 08-10897

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Pro se The Defense Office of Hearings and Appeals (DOHA) declined to grant Applicant a security clearance. On July 13, 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 decision on the written record. On March 11, 2010, after considering the record, Administrative Judge David M. White 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 the Judge did not consider evidence favorable to Applicant; whether the Judge erred in the application of the pertinent mitigating conditions; 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 employee of a Defense contractor. He is married to his fourth wife, with six children living with him and four others living elsewhere. In 2001 Applicant filed for Chapter 7 bankruptcy protection. His debts were discharged later that year. Applicant’s third wife had a substance abuse problem and spent so much money on her addictions that Applicant was reduced to relying on credit cards and loans to fund the ordinary expenses of life. He bought a house in 2005, financing the purchase with a mortgage. He took out a second mortgage on the house two years later. Applicant has defaulted on his multiple credit card debts and his mortgage payments. “By September 2008, the outstanding balance on the second mortgage was $107,658, and the home was in foreclosure.” Decision at 3. Although these debts were in Applicant’s name only, his third wife had access to his funds. In August 2009, Applicant and his current wife filed for Chapter 7 bankruptcy protection. In the Analysis portion of the decision, the Judge explained why he concluded that Applicant had failed to meet his burden of persuasion as to mitigation, He stated in part: Applicant failed to demonstrate financial rehabilitation or evidence of solvency from the present time forward, so recurrence and worsening of his financial concerns were not shown to be unlikely. He continues to bear financial obligations for significant past debt and ongoing living expenses. He accordingly remains subject to pressure, exploitation, or duress. The record contains insufficient other evidence about his character, trustworthiness, or responsibility to mitigate these concerns. Decision at 6. Applicant contends that the Judge failed to consider favorable evidence, submitting in support of this contention documents to the effect that he had been discharged in Chapter 7 bankruptcy in late 2009. However, this evidence was not included in the record and, indeed, the Applicant’s brief includes an attachment dated December 22, 2009, some two months after the close of the record. The Judge had already accepted a submission dated October 27, 2009. On appeal Applicant asserts that the October 27, 2009, submission was timely because he had called Department Counsel to seek an extension and that someone from Department Counsel’s office called him back and granted the extension. The Board has neither the authority nor the resources to confirm this assertion. In any case, it is the Judge, not the opposing party, who authorizes an extension in a Hearing Office proceeding. See Decision at 2: “The record contains insufficient information about the circumstances that led Applicant to seek bankruptcy relief in 2001 to support findings about its causes or reasonableness.” Applicant contends that the Judge ignored information in his security clearance application regarding this bankruptcy. See Item 5, Security Clearance Application, at 19. However, the information in Item 5 is not sufficient to undermine the Judge’s statement. bankruptcy discharge occurred after the close of the record. We cannot consider new evidence on appeal. See Directive ¶ E3.1.29. (“No new evidence shall be received or considered by the Appeal Board”). See also ISCR Case No. 08-06875 at 2 (App. Bd. Oct. 29, 2009); ISCR Case No. 08-06518 at 2 (App. Bd. Mar. 3, 2009). In this case, the Judge properly decided the case on the basis of the record before him. Applicant contends that the Judge did not properly evaluate his mitigating evidence, for example his third wife’s effect on his finances and his prior bankruptcy discharge in 2001, including his subsequent efforts to repair his credit. However, the record demonstrates that the Judge explicitly considered Applicant’s mitigating evidence. The Judge stated that there was little evidence in the record explaining the circumstances underlying his first bankruptcy discharge. He also stated that, despite evidence as to the third wife’s addictions, Applicant had failed to demonstrate that his delinquent debts arose due to circumstances outside his control or that he had acted responsibly in regard to his debts. The record does not support a conclusion that the Judge mis-weighed evidence. See, e.g., ISCR Case No. 06-21819 at 2 (App. Bd. Aug. 13, 2009); ISCR Case No. 06-17409 at 3 (App. Bd. Oct. 12, 2007) (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.) Neither does it support a conclusion that the Judge’s application of the mitigating conditions was erroneous.

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 adverse decision is sustainable on this record. “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).

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: Jean E. Smallin Jean E. Smallin Administrative Judge Member, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board