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ISCR 11-13999.a2: Guideline F security clearance appeal (2014) · CASE

ISCR Case 11-13999.a2unknown

Case headnote

ISCR Case No. 11-13999.a2

Jun 23, 2014· Hon. Jeffrey D. Billett· appeal

Summary

This security clearance case, reviewed under Guideline F (Financial Considerations), involved an applicant representing himself who faced significant credit card debt and delinquent taxes. The Appeal Board reversed an earlier favorable decision, ultimately denying the applicant a security clearance.

Disqualifying conditions F1 and F3 were raised, pertaining to an inability or unwillingness to satisfy debts and a history of not meeting financial obligations. While mitigating conditions F2 and F3 were considered, which address good-faith efforts to resolve debts and the financial problems being recent or not likely to recur, they were not sufficient to overcome the concerns.

The Board found that the applicant failed to establish a clear connection between his personal circumstances and his financial difficulties. Evidence indicated his credit card debt was increasing, contradicting his assertion that the issues were under control. Although the applicant attributed the start of his financial problems to a breakup, the timeline did not support this as the primary cause of his substantial debts. Consequently, the applicant did not demonstrate the necessary reliability and trustworthiness for a security clearance.

Conditions referenced

Disqualifying

F1raisedInability or Unwillingness to Satisfy Debts
F3raisedDelinquent Debts

Mitigating

F2rejectedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's ControlThe judge did not adequately explain how the breakup caused the financial issues.
F3rejectedThe Individual Acted Responsibly Under the CircumstancesThe applicant did not initiate debt resolution efforts until after applying for a clearance.

Key rule quoted

“A clearance may be granted only when ‘clearly consistent with the interests of national security.’”
Department of the Navy v. Egan, 484 U.S. 518,528 (1988)

Procedural posture

SOR issuedMar 22, 2013
Answer filed—
Hearing heldAug 28, 2013
Decision dateJun 23, 2014Appeal Board reversed the favorable decision.

Cite for

Reversal of Favorable Decision Due to Unresolved Financial Issues Under Guideline F
Insufficient Nexus Between Personal Circumstances and Financial Problems
Importance of Demonstrating a Clear Connection Between Mitigating Factors and Debts

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

Reversed

The appeal involved a security clearance decision where the Administrative Judge initially granted the Applicant a clearance based on mitigating circumstances related to financial issues. The Department Counsel appealed, arguing that the Judge's decision was arbitrary and lacked a rational connection to the evidence. The Appeal Board found merit in the government's arguments and reversed the favorable decision, concluding that the Applicant did not adequately demonstrate mitigation of the financial concerns.

Appealed bythe Government (Department Counsel)

Applicant representationPro se (self-represented)

Judge belowWilford H. Ross granted the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Decision arbitrary, capricious, or contrary to law, raised by the Government (Department Counsel)Error sustained
The Judge's favorable decision was arbitrary, capricious, or contrary to law.

Why the Board ruled this way

The Judge's conclusions concerning mitigation were found to run contrary to the weight of the record evidence and failed to consider important aspects of the case. The Board determined that the Judge's favorable findings under Guideline F were not sustainable.

No rational connection between facts and conclusionIgnored material evidence

Standard of review applied

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

Appeal Board panel

Michael Y. Ra’anan (Chair)
Jeffrey D. Billett
James E. Moody
Included a dissent

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 failed to demonstrate a nexus between his breakup with his girlfriend and other circumstances beyond his control and his debt problems. Evidence that Applicant has credit card debt that is growing contradicts the Judge’s conclusion that his financial problems are under control. Favorable decision reversed. CASE NO: 11-13999.a2 DATE: 06/23/2014 DATE: June 23, 2014 In Re: ----------------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 11-13999

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 March 22, 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). Applicant requested a hearing. On August 28, 2013, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Wilford H. Ross granted Applicant’s request for a security clearance. Department Counsel appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. On February 3, 2014, the Appeal Board remanded the Decision to the Judge to address certain errors. On March 10, 2014, the Judge issued his remand Decision, again granting Applicant a clearance. Department Counsel again appealed pursuant to the Directive. Department Counsel raised the following issue on appeal: whether the Judge’s favorable decision was arbitrary, capricious, or contrary to law. Consistent with the following, we reverse the Judge’s favorable security clearance decision. The Judge’s Findings of Fact Applicant’s SOR listed 10 delinquent debts, totaling approximately $79,593. These debts included unpaid Federal income taxes. He has a payment plan with the IRS, which originally covered tax years 2007, 2008, and 2009. Taxes for the first of these years have been paid. The plan has been amended, however, to include taxes owed in 2010 and 2011. As of the close of the record, Applicant owed the IRS $10,012.77. He is paying $175 a month on this plan. Applicant’s tax problems originated in errors he committed in preparing his own taxes. He also admitted that he made budgeting errors that contributed to his tax problems. He now utilizes a tax preparation service to ensure that his taxes are correctly filed. Applicant had delinquent taxes owed to his state for tax years 2007, 2008, and 2009. He has satisfied these debts. Applicant also owes delinquent debts on seven credit cards, in amounts ranging from $1,374 to $21,880. Applicant has entered into an agreement with a debt resolution company, and these credit card debts are being resolved. He also owes $82 for a cell phone. He has attempted to resolve this debt, but has not had success. The account appears to be closed. Applicant’s financial problems began when he had a “bad breakup” with his girlfriend. Decision at 4. She lost her job, and he took on all the expenses of the relationship, including her mother’s medical and subsequent funeral expenses. He has also experienced unexpected dental expenses. Applicant attempted to resolve his problems himself, but he was not successful. He lives frugally and has demonstrated that he the financial ability to pay both his current indebtedness, as well as to pay off his delinquent debts. He acknowledged that in the past he has provided financial assistance to family and friends to the extent that was not in his best interest. The Judge’s Analysis The Judge concluded that Mitigating Conditions 20(a)1 and (b)2 apply to Applicant’s circumstances. Regarding (b), he stated that Applicant’s problems resulted for the most part from circumstances outside his control and that he acted responsibly in addressing his debts. Although Applicant has not received financial counseling, the Judge concluded that “there are clear indications that the problem is being resolved or is under control[.]”3 He also concluded that Applicant had “initiated a good-faith effort to repay overdue creditors or otherwise resolve debts[.]”4

DISCUSSION

Department Counsel contends that the Judge’s decision failed to establish a mitigating nexus between events in Applicant’s life and his financial problems. He also maintains that because the evidence does not provide a clear picture as to the cause or causes of Applicant’s delinquent indebtedness, it is not possible to conclude that Applicant’s financial problems, once solved, will not reoccur, Department Counsel also argues that Applicant did not begin to address his overdue debt until recently and this does not constitute evidence that Applicant acted reasonably and exercised good judgment. The Board finds these arguments persuasive. The standard in security clearance decisions “is that a clearance may be granted only when ‘clearly consistent with the interests of national security.’” Department of the Navy v. Egan, 484 U.S. 518,528 (1988). “Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.” Directive, Enclosure 2 ¶ 2(b). In deciding whether the Judge’s rulings or conclusions are erroneous, the Board will review the Judge’s decision to determine whether: it does not examine record evidence; it fails to articulate a satisfactory explanation for its conclusions, including a rational connection between the facts found and the choice made; it does not consider relevant factors; it reflects a clear error of judgement; it fails to consider an important aspect of the case; it offers an explanation for the decision that runs contrary to the record evidence; or it is so implausible that it cannot be ascribed to a mere difference of opinion. See ISCR Case No. 03-22861 at 2-3 (App. Bd. Jun. 2, 2006). Department Counsel asserts that the dates on which Applicant’s financial obligations became delinquent are a significant aspect of the case for purposes of ascertaining the significance and relationship between purportedly mitigating events and the delinquent indebtedness. The Board agrees. Department Counsel notes that Applicant’s federal tax delinquencies covered a period between 2007 and 2011, the commencement of which was two years after the breakup with his girlfriend, an event that the Judge cites as a principal cause of the indebtedness. Department Counsel also notes that Applicant’s state tax delinquencies covered a period from 2007 to 2009 and his consumer credit accounts first became delinquent in 2008 and individual accounts continued to become delinquent until 2011. Given the time frames, with a significant gap between the purported cause of the financial difficulties and the onset of the various debt arrearages, there is no evidence to explain how the breakup with the girlfriend caused the problems. Applicant’s testimony merely cites the breakup as a cause of his monetary problems without going into detail as to how it caused the trouble. Additionally, the Judge cites tax preparation issues as another mitigating source of Applicant’s trouble. Tax preparation was a matter within Applicant’s control. Given this, the Judge’s decision does not adequately explain why Applicant’s tax preparation issues were a matter in mitigation. Similarly, the decision to attend funerals out of state was a matter within Applicant’s control. Bills arising from medical issues may have been matters of necessity, but, as with the other purportedly mitigating events cited by the Judge, there is no explanation as to how they caused Applicant’s sizable debt arrearages. There is insufficient evidence to support the Judge’s application of Mitigating Condition ¶ 20(b). Regarding the other Guideline F mitigating conditions, Department Counsel argues that there was insufficient evidence to support the Judge’s application of the mitigating conditions in light of the contrary evidence in the same record. Department Counsel’s arguments have merit. Department Counsel correctly points out that there is nothing to support the Judge’s conclusion that Applicant’s indebtedness occurred under circumstances unlikely to recur, since the evidence does not establish with any specificity how Applicant’s delinquencies arose. The Judge’s conclusion that Applicant’s efforts at debt resolution were made in good faith is undercut by evidence that he did not initiate attempts at repaying his debts until after he applied for a security clearance and did not hire his debt resolution company until January, 2013. The Judge’s conclusion that Applicant’s debt problem is being resolved or is under control is contradicted by the fact that his credit card debt continues to grow, and the amount of payments made on the debt to date have not substantially lessened Applicant’s debt load. The objective evidence of amounts owed and the amount Applicant is paying per month indicate that he will be engaged in debt reduction longer than the three years he has projected. Once disqualifying conditions are found applicable, Applicant bears the burden of establishing mitigation. The Judge’s conclusions concerning mitigation run contrary to the weight of the record evidence and fail to consider important aspects of the case. Viewed as a whole, the record does not support a conclusion that Applicant has mitigated the Guideline F concerns consistent with the standard set forth in Egan. The Judge’s favorable findings under this Guideline are not sustainable.

ORDER

The Decision is REVERSED. 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 Dissenting Opinion of Administrative Judge James E. Moody I disagree with my colleagues’ resolution of this case. The Judge’s findings, viewed in light of the record as a whole, are sufficient to persuade a reasonable person that Applicant’s security- significant conduct is being resolved. I believe that the record supports a whole-person conclusion that Applicant has developed a reasonable plan for debt repayment and that he has demonstrated a serious intent to effectuate that plan. See, e.g., ISCR Case No. 09-08462 at 3 (App. Bd. May 31, 2011). We need not agree with a Judge’s decision to find it sustainable. See, e.g., ISCR Case No. 07-15696 at 2 (App. Bd. Feb. 20, 2009).

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

FOOTNOTES

1 Directive, Enclosure 2 ¶ 20(a): “the behavior happened so long ago, was so infrequent, or occurred under such circumstances that it is unlikely to recur and does not case doubt on the individual’s current reliability, trustworthiness, or good judgment[.]”

2 Directive, Enclosure 2 ¶ 20(b): “the conditions that resulted in the financial problem were largely beyond the person’s control . . . and the individual acted responsibility under the circumstances[.]”

3 Directive, Enclosure 2 ¶ 20(c).

4 Directive, Enclosure 2 ¶ 20(d).