CASE · Clearance Adjudication Search EngineCASE

Loading case…

ISCR Case 11-13507.a1 — CASE

ISCR Case 11-13507.a1denied

Case Headnote

ISCR Case No. 11-13507.a1

Oct 29, 2013· Hon. Jeffrey D. Billett· appeal

Summary

An independent contractor was denied a security clearance under Guideline F (Financial Considerations) due to persistent financial issues. The applicant had numerous delinquent debts and failed to file tax returns for multiple years, triggering disqualifying conditions F.1 and F.3.

While the applicant made recent efforts to address some of these debts, the judge found these actions insufficient to mitigate the concerns. The judge applied mitigating conditions F.2 and F.3 but ultimately concluded that the applicant's financial problems were likely to recur.

This ongoing instability undermined the applicant's claims of responsible action, leading to the denial of her security clearance.

Conditions Referenced

Disqualifying

F.3raisedFailure to File Annual Income Tax Returns
F.1raisedInability or Unwillingness to Satisfy Debts

Mitigating

F.2rejectedThe Conditions That Resulted in the Financial Problems Were Largely Beyond the Person's ControlThe judge noted circumstances beyond the applicant's control but concluded they did not mitigate the security concerns.
F.3rejectedThe Person Has Made Good Faith Efforts to Repay Overdue Creditors or Has a Legitimate Plan to Repay ThemThe judge found the applicant's efforts to be insufficient and recent, failing to demonstrate a legitimate plan.

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 issuedFeb 27, 2013
Answer filed—
Hearing heldAug 7, 2013
Decision dateOct 29, 2013

Cite For

Denial of Security Clearance Due to Ongoing Financial Issues Under Guideline F
Insufficient Efforts to Resolve Delinquent Debts as a Basis for Denial
Failure to File Tax Returns as a Disqualifying Condition

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 under Guideline F. The applicant argued that the Judge's decision was arbitrary and capricious. The Board affirmed the decision, finding that the Judge's conclusions were supported by substantial evidence and that the applicant's financial issues raised security concerns.

Appealed bythe applicant

Applicant representationAttorney

Judge belowJoan Caton Anthony — denied the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

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 that the Judge's conclusions regarding the applicant's financial situation and efforts to mitigate her debts were reasonably supported by the evidence. The Judge's application of the mitigating conditions was appropriate given the applicant's ongoing financial issues.

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
Jeffrey D. Billett
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: Although the Judge credited Applicant with making some effort with regard to repayment of her delinquent debts, the Judge concluded that these efforts were of recent vintage and that Applicant possessed the financial means to satisfy the debts in a more timely manner. These conclusions are reasonably supported by the record evidence. Adverse decision affirmed. CASENO: 11-13507.a1 DATE: 10/29/2013 DATE: October 29, 2013 In Re: ------------------------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 11-13507

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Christopher Casey, Esq. The Department of Defense (DoD) declined to grant Applicant a security clearance. On February 27, 2013, DoD 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). On March 28, 2013, DoD amended the SOR to add two additional Guideline F allegations. Department Counsel requested a hearing. On August 7, 2013, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Joan Caton Anthony denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. Applicant raised the following issue on appeal: whether the Judge’s decision was arbitrary, capricious, or contrary to law. Consistent with the following, we affirm. The Judge’s Findings of Fact The Judge made the following pertinent findings of fact: Applicant works as an independent contractor for a Government contractor. In the mid-1990s, Applicant and her former husband filed for Chapter 7 bankruptcy protection. In 2009, Applicant worked as a term employee for the Federal Government. She submitted a security clearance application, but the Government did not award her a clearance. During the course of her investigation, it was discovered that she had numerous delinquent debts that she was unable to pay and that she had a delinquent debt to the IRS. Applicant has a state tax lien for $5,582, filed in August 2011. She failed to file her state and Federal tax returns for the years 2007 through 2009. She filed her Federal tax returns in early 2012 and her state returns at the end of that year. She believes that she does not owe the total amount of the lien and that once her refunds are processed she will owe $4,354. She has entered into an installment contract for the payment of her state tax debts, though she stated an intent to pay the debt in full before the end of the installment period. Applicant claims not to live beyond her means and that she would be hired as an employee of the Federal contractor if she gets a clearance. She has a net remainder of $2,405 after she pays her expenses and has no assets. After the hearing, Applicant presented evidence that she had consulted an accountant who advised her of the amount of money she would need to set aside in order to resolve her debts. Applicant enjoys an excellent reputation for integrity. Fellow workers praise her professional skills, character, and trustworthiness. The Judge’s Analysis The Judge concluded that Applicant’s circumstances raised concerns under Guideline F. She resolved in Applicant’s favor one allegation pertaining to a debt to a Government agency. In analyzing Applicant’s case for mitigation regarding Applicant’s tax problems, the Judge stated that Applicant’s efforts to resolve them are relatively recent and that Applicant had not demonstrated that the problems were unlikely to recur. Though noting circumstances beyond Applicant’s control, the Judge stated that Applicant had failed to demonstrate responsible action in regard to her tax debt. Although Applicant consulted an accountant after the hearing, the Judge concluded that this evidence was not sufficient to demonstrate that Applicant’s problems are being resolved. In the whole-person analysis, the Judge stated that Applicant has a history of financial problems and that, while Applicant has addressed some of her debts in the past, she has not been able to prevent new delinquencies. The Judge stated that it is not clear that Applicant will be able to maintain financial stability.

DISCUSSION

Applicant states that failure to file tax returns is not the same as tax evasion. However, failure to file returns is explicitly mentioned in the Directive as a disqualifying condition. See Directive, Enclosure 2 ¶ 19(g). See also ISCR Case No. 11-06622 at 3 (App. Bd. Jul. 2, 2012). In challenging the Judge’s application of the mitigating conditions, Applicant argues, inter alia, that her debts are not recent. However, unpaid delinquent debts constitute a continuing course of conduct, thereby undermining a conclusion that the debts are not recent within the meaning of the Directive. See, e.g., ISCR Case No. 09-01309 at 4 (App. Bd. Apr. 29, 2010). Although the Judge credited Applicant with making some effort with regard to repayment of her delinquent debts, the Judge concluded that these efforts were of recent vintage and that Applicant possessed the financial means to satisfy the debts in a more timely manner. The Judge also concluded that the Guideline F mitigating conditions only partly applied and that this partial application was not enough to overcome the security concerns arising out of her ongoing history of financial indebtedness. These conclusions regarding mitigation are reasonably supported by the record evidence. 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. 06-17409 at 3 (App. Bd. Oct. 12, 2007). Examining the Decision in light of the record as a whole, we conclude that the Judge examined the relevant data and articulated a satisfactory explanation for the decision, both as to the mitigating conditions and the whole-person factors. Given evidence that, after having filed for bankruptcy, Applicant acquired additional delinquent debts, to include a tax lien, and that she failed to file state and federal returns, the decision is sustainable. “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). See also Directive, Enclosure 2 ¶ 2(b): “Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.”

ORDER

The Decision is AFFIRMED. Signed: Michael Y. Ra’anan Michael Y. Ra’anan Administrative Judge Chairperson, Appeal Board Signed: Jeffrey D. Billett Jeffrey D. Billett Administrative Judge Member, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board