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ISCR Case 12-02315.a1 — CASE

ISCR Case 12-02315.a1denied

Case Headnote

ISCR Case No. 12-02315.a1

Aug 8, 2014· Hon. Jeffrey D. Billett· appeal

Summary

A 41-year-old applicant was denied a security clearance under Guideline F (Financial Considerations) due to significant and long-standing financial difficulties. The applicant had sixteen delinquent debts, totaling over $30,000, which were identified as a disqualifying condition under Adjudicative Guideline Paragraph 19.

The applicant's financial problems dated back to at least 2006, stemming from a mix of circumstances both within and outside his control. However, the appeal board found that the applicant did not take meaningful action to address these debts until after receiving government interrogatories in 2013.

Ultimately, the applicant's efforts to resolve his debts were not considered good-faith efforts, as they appeared primarily motivated by the security clearance process itself. The board concluded that the financial issues were largely within the applicant's control and had not been adequately addressed prior to the security clearance review, leading to the denial of the clearance.

Conditions Referenced

Disqualifying

AG ¶ 19raisedFinancial Considerations

Key Rule Quoted

“The presence of some mitigating evidence does not alone compel the Judge to make a favorable security clearance decision.”

Procedural Posture

SOR issuedSep 10, 2013
Answer filed—
Hearing heldMay 16, 2014
Decision dateAug 8, 2014

Cite For

Affirmation of Denial Based on Financial Difficulties Under Guideline F
Importance of Addressing Financial Obligations Proactively
Mitigating Evidence Must Outweigh Disqualifying Factors for a Favorable Decision

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's decision was arbitrary and capricious. The Board affirmed the Judge's decision, finding no harmful error and that the Judge's conclusions were supported by the evidence.

Appealed bythe applicant

Applicant representationAttorney

Judge belowJohn Grattan Metz, Jr. — denied the clearance

Decided onthe written record

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 no harmful error in the Judge's decision, affirming that the Judge's conclusions were supported by substantial evidence and articulated a rational connection between the facts and the decision made.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewNo de-novo re-decisionNo new evidence on appealDeference to the judge’s credibility calls

Appeal Board panel

Michael 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: The presence of some mitigating evidence does not alone compel thge Judge to make a favorable security clearance decision. Adverse decision affirmed. CASENO: 12-02315.a1 DATE: 08/08/2014 DATE: August 8, 2014 In Re: -------------- Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 12-02315

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Corey R. Williams, Esq. The Department of Defense (DoD) declined to grant Applicant a security clearance. On September 10, 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 that the case be decided on the written record. On May 16, 2014, after considering the record, Defense Office of Hearings and Appeals (DOHA) Administrative Judge John Grattan Metz, Jr. denied Applicant’s request for a security clearance. Applicant appealed, pursuant to the Directive ¶¶ E3.1.28 and E3.1.30. Applicant raises the following issue on appeal: whether the Judge’s decision is arbitrary, capricious, or contrary to law. For the following reasons, the Board affirms the Judge’s unfavorable security clearance decision. The Judge made the following findings: Applicant is 41 years old. Sixteen delinquent debts totaling over $30,000 are at issue. In his 2011 clearance application, Applicant acknowledged that he had been working to clean up his debts for the last five years. In fact, a number of medical bills were not paid until 2013 and he first made minimal payments on five larger consumer bills in 2013. Applicant attributed his indebtedness to moving from his privately owned home to a rental home in 2008 without selling the home or procuring a renter therefor, as well as medical expenses related to his wife’s chronic illness. Applicant also attributed his troubles to changes in his company’s policies concerning stipends and reimbursements for company travel, as well as his wife taking a salary from a company she started without making quarterly income tax withholding payments. With increasing pressures on the family’s disposable income, Applicant resorted to using credit cards to cover household expenses as well as some of his wife’s company expenses. When his situation drifted out of control, he stopped paying on many of the SOR debts to focus on several larger debts which did not appear in the SOR. Applicant provided no details about these accounts and how they affected his ability to pay on the SOR debts. Applicant was able to settle an $11,000 SOR debt for a lump sum payment of $2,160 in early 2014. He also paid off a $6,500 debt to the IRS at about the same time. He did this by liquidating company stock from his stock plan. Applicant has made payments on some of his debts. However, he has not resolved five medical debts totaling in excess of $2,000. He claimed that he might have paid some of these debts in 2006, but he has not provided any proof of payment. He has not documented any efforts to dispute these debts. Applicant has not received any financial or credit counseling. The Judge reached the following conclusions: The Government established a case for disqualification under Guideline F, and Applicant did not meet the security concerns. Applicant has an extensive history of financial difficulties, which are ongoing, and seem unlikely to be resolved any time soon. Applicant’s financial problems date to at least 2006. Beginning in 2008, they were exacerbated by circumstances both within and without his control. It appears that, despite earlier knowledge of the Government’s concerns, he did not begin to take meaningful action on his debts until after he received the Government’s interrogatories in 2013. Significant factors contributing to his financial problems were within his control. Applicant has not been responsible in addressing his debt. Stopping payments on multiple accounts while addressing others might be a reasonable approach, but only with specifics as to how such an approach was advantageous in terms of lessening overall debt. The record contains no specifics. Also, this approach does not really explain his inability over at least two years to address the ten SOR debts that were under $200 each. Applicant’s efforts have taken place under the impetus of this clearance proceeding. Applicants are expected to address their finances because of their moral and legal obligation to pay their bills, not under threat of losing their clearances. Under the circumstances, Applicant’s efforts cannot be considered a good-faith effort to address his debts. Applicant has apparently disregarded his financial obligations for many years. Further progress on his current debt is required before he can demonstrate that his finances no longer present a security problem. Applicant argues that the Judge failed to consider all the record evidence, and that he erred by not favorably applying the mitigating conditions. Applicant’s assertions fail to establish error. Applicant makes numerous statements on appeal about various efforts to resolve his outstanding overdue debts. A number of these are assertions of fact that fall outside the case record. The Board cannot consider new evidence on appeal. See Directive ¶ E3.1.29. A Judge is presumed to have considered all the evidence in the record unless he or she specifically states otherwise. See, e.g., ISCR Case No. 07-00196 at 3 (App. Bd. Feb. 20, 2009). In this case, the Judge discussed in considerable detail the full circumstances of Applicant’s financial difficulties and also discussed instances in which Applicant did pay, or made an effort to resolve, individual debts. Applicant has failed to establish that the Judge did not consider all the facts. Applicant asserts that he has established a case for mitigation of the government’s security concerns. He states that he has been in contact with his creditors and has either settled or is in the process of resolving his debts. He states that his financial troubles were not the result of irresponsible spending, but resulted from circumstances beyond his control. He takes specific issue with the Judge’s conclusion that his debt resolution efforts have taken place under the impetus of the security clearance proceeding, noting that many of his efforts preceded the issuing of the SOR. The presence of some mitigating evidence does not alone compel the Judge to make a favorable security clearance decision. See, e.g., ISCR Case No. 06-25157 at 2 (App. Bd. Apr. 4, 2008). As the trier of fact, the Judge has to weigh the evidence as a whole and decide whether the favorable evidence outweighs the unfavorable evidence, or vice versa. See, e.g., ISCR Case No. 06-10320 at 2 (App. Bd. Nov. 7, 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. See, e.g., ISCR Case No. 06-17409 at 3 (App. Bd. Oct. 12, 2007). Applicant’s appeal brief essentially argues for an alternate interpretation of the record evidence. After reviewing the Judge’s decision in light of the record as a whole, the Board finds no reason to disturb the Judge’s analysis. Central to that analysis were the Judge’s conclusions that: (1) the causes of Applicant’s financial difficulties were not all beyond Applicant’s control; (2) the record contained no satisfactory explanation for why Applicant waited a number of years before attempting to get his financial house in order; and (3) there are no prospects for Applicant getting his overdue debt problem resolved in the foreseeable future. These conclusions are supported by the record evidence. Applicant takes specific issue with the Judge’s conclusion that he waited until the security clearance process began before he undertook debt resolution, arguing that he took numerous steps to address the problem before the issuance of the SOR. Applicant’s argument overlooks the fact that the security clearance process does not begin with the SOR. Applicant’s security clearance application was completed in 2011. By the time he executed a response to the Government’s interrogatories in mid-year 2013, he had taken no action on nine of the outstanding overdue debts that were later listed in the SOR. The Judge’s conclusion that it took the security clearance process to spur Applicant into action is sustainable. Applicant cites to decisions by the Hearing Office which, he contends, support his case for mitigation. The Board gives these cases due consideration as persuasive authority. However, each case must be decided on its own merits. Nothing in the cases establishes error on the part of the Judge in this case. In any event, Hearing Office cases are binding neither on the Board nor other Hearing Office Judges. See, e.g., ISCR Case No. 11-10178 at 3 (App. Bd. Aug 29, 2013). The Board does not review a case de novo. The favorable evidence cited by Applicant is not sufficient to demonstrate the Judge’s decision is arbitrary, capricious, or contrary to law. See, e.g., ISCR Case No. 06-11172 at 3 (App. Bd. Sep. 4, 2007). 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 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). Therefore, the Judge’s clearance decision is sustainable.

ORDER

The decision of the Judge is AFFIRMED. Signed; Michael Ra’anan Michael 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