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ISCR 11-13965.a1: Guideline B security clearance appeal, granted (2013) · CASE

ISCR Case 11-13965.a1granted

Case headnote

ISCR Case No. 11-13965.a1

Aug 6, 2013· Hon. Jeffrey D. Billett· appeal

Summary

This security clearance application was granted, addressing concerns under Guideline B (Foreign Influence) and Guideline F (Financial Considerations). The applicant, represented by counsel, successfully demonstrated resolution of significant financial issues.

Key factors in the favorable decision included the applicant's resolution of a substantial federal tax debt and subsequent maintenance of financial stability following bankruptcy. Additionally, a statutory lien against the applicant was released by the state, further indicating the resolution of financial obligations.

The judge also considered the applicant's long history of holding a security clearance without incident during military service as a positive element in the whole-person analysis. These mitigating conditions, specifically AG ¶ 20 and AG ¶ 17, supported a finding that the applicant's past conduct was reasonably interpreted, leading to the clearance being granted.

Conditions referenced

Mitigating

AG ¶ 20appliedFinancial ConsiderationsThe applicant demonstrated financial stability and resolved significant debts.
AG ¶ 17appliedForeign InfluenceThe applicant's past conduct was considered in the whole-person analysis.

Key rule quoted

“The Judge’s analysis and conclusions reflect a reasonable interpretation of the record that was before him.”
ISCR Case No. 10-03301 at 2 (App. Bd. Jun. 7, 2012)

Procedural posture

SOR issuedApr 17, 2012
Answer filed—
Hearing heldMay 17, 2013
Decision dateAug 6, 2013

Cite for

Resolution of Significant Financial Obligations Under Guideline F
Whole-person Analysis Considering Military Service Under Guideline B
Evidence of Financial Stability as a Mitigating Factor in Security Clearance Cases.

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 brought by Department Counsel against the Administrative Judge's decision to grant the applicant a security clearance. The Board affirmed the Judge's decision, finding no harmful error in the analysis of the applicant's financial stability and resolution of debts. The Judge's findings were supported by substantial evidence and reflected a reasonable interpretation of the record.

Appealed bythe Government (Department Counsel)

Applicant representationAttorney

Judge belowFrancisco Mendez granted the clearance

Decided ona hearing

Guidelines belowGuideline FGuideline B

What the Board reviewed

Decision arbitrary, capricious, or contrary to law, raised by the Government (Department Counsel)Rejected
Department Counsel 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 analysis and conclusions were a reasonable interpretation of the record evidence, and the favorable findings were sustainable.

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; Guideline B DIGEST: Applicant had resolved a number of his debts to include tax debts. The Judge cited evidence of financial stability. The Judge’s analysis reflects a reasonable interpretation of the record evidence. Favorable decision affirmed. CASENO: 11-13965.a1 DATE: 08/06/2013 DATE: August 6, 2013 In Re: ------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 11-13965

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT David F. Hayes, Esq., Department Counsel FOR APPLICANT David Allen Barnette, Esq. The Department of Defense (DoD) declined to grant Applicant a security clearance. On April 17, 2012, 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 B (Foreign Influence) of Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive). Applicant requested a hearing. On May 17, 2013, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Francisco Mendez granted Applicant’s request for a security clearance. Department Counsel appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. Department Counsel raised the following issue on appeal: whether the Judge’s decision was arbitrary, capricious, or contrary to law. The Judge’s favorable findings under Guideline B are not at issue in this appeal. Consistent with the following, we affirm the Judge’s decision. The Judge’s Findings of Fact This appeal centers around a statutory lien filed by a state against Applicant due to failure to pay workers compensation premiums on behalf of a business that Applicant ran. The Judge found that Applicant had started the company in the mid-1980sand that it was successful until the late 1990s, when it filed for bankruptcy protection. Applicant himself also filed for bankruptcy protection, because he had personally guaranteed the business’s debts. Applicant’s debts were discharged in the year after his filing. After his discharge in bankruptcy, Applicant settled a nearly $800,000 federal tax debt related to the business and a smaller tax debt owed to the state. However, he did not resolve the above-referenced statutory lien, in the amount of nearly $800,000, based on a payroll tax debt that he disputed. The state eventually released the lien, and Applicant provided documentation to that effect.1 His finances have been stable since the failure of his former business. The Judge’s Analysis In the Analysis, the Judge stated that Applicant had not simply relied on bankruptcy to address his financial problems but that he had resolved a number of debts, to include tax debts to the Federal Government and to the state. The Judge noted that Applicant had submitted documentary proof that his remaining debt had been released by the state and cited to evidence that Applicant had maintained financial stability in the years since his security-significant conduct. In the whole-person analysis, the Judge noted that Applicant had held a clearance during his 24-year military career without incident or concern. He stated that Applicant’s performance of official duties had contributed to national security and “helped protect the lives of U.S. personnel” serving in dangerous conditions.

DISCUSSION

Department Counsel argues that Applicant’s refusal to pay the workers compensation tax lien for 13 years evidenced an unwillingness to meet his financial obligations. He asserts that the fact that the lien as been resolved does not negate Applicant’s past conduct showing that Applicant intentionally failed to address his financial obligation, casting doubt on his reliability, trustworthiness, and judgment. The Judge’s analysis and conclusions reflect a reasonable interpretation of the record that was before him. We do not have to agree with a Judge’s decision to find it sustainable. See, e.g., ISCR Case No. 10-03301 at 2 (App. Bd. Jun. 7, 2012).

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

FOOTNOTES

1 We note assertions in Applicant’s reply brief to the effect that statutory liens of the sort at issue in this case do not expire by operation of law, for example through a statute of limitations, as Department Counsel intimated. Applicant argues that the state’s voluntary release of the lien indicates that the lien was improper ab initio, Applicant admitting that he had not paid it because he believed it to be unjust. Applicant contended at the hearing that the state workers’ compensation commission had retroactively, and improperly, imposed workers’ compensation premiums on Applicant’s business that were substantially in excess of the industry standard at the time.