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ISCR Case 12-04508.a1 — CASE

ISCR Case 12-04508.a1denied

Case Headnote

ISCR Case No. 12-04508.a1

Aug 21, 2014· Hon. Jeffrey D. Billett· appeal

Summary

A long-time defense contractor employee was denied a security clearance under Guideline F (Financial Considerations) due to unresolved financial issues. The applicant had six delinquent debts totaling nearly $35,000, which were outstanding at the time of the decision.

Despite the applicant's claims of improved financial circumstances and participation in a debt-resolution program, the judge found insufficient evidence that the majority of the debts listed in the Statement of Reasons had been resolved. The judge underscored the critical role of financial responsibility in security clearance determinations.

The appeal board affirmed the denial, rejecting the applicant's claims of due process violations. The denial was based on the applicant's failure to provide adequate proof of debt resolution for the significant outstanding financial obligations.

Conditions Referenced

Disqualifying

AG ¶ 19raisedFinancial Considerations

Mitigating

AG ¶ 20rejectedFinancial ConsiderationsThe applicant's claims of improved financial circumstances and participation in a debt-resolution program were not substantiated with sufficient evidence.

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 21, 2014
Answer filed—
Hearing heldJun 10, 2014
Decision dateAug 21, 2014

Cite For

Importance of Financial Responsibility Under Guideline F
Insufficient Evidence of Debt Resolution as a Basis for Denial
Due Process Considerations 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 involved an applicant seeking a security clearance who was denied due to financial considerations under Guideline F. The applicant argued that she was denied due process and that the Judge's decision was arbitrary and capricious. The Board affirmed the Judge's decision, finding no harmful error and that the applicant was properly notified of her rights.

Appealed bythe applicant

Applicant representationAttorney

Judge belowRita C. O’Brien — denied the clearance

Decided onthe written record

Guidelines belowGuideline F

What the Board reviewed

Due-process / fairness — raised by the applicantRejected
Applicant argued she was denied due process because she was not represented by counsel when responding to the File of Relevant Material.
Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
Applicant contended that the Judge's adverse decision was arbitrary, capricious, or contrary to law.

Why the Board ruled this way

The Board found that the Judge's decision was supported by substantial evidence and that the applicant was afforded due process. The Judge's conclusions regarding the applicant's financial situation and the lack of evidence for debt resolution were deemed reasonable and consistent with the record.

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 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: Applicant was placed on reasonable notice of her right to submit matters in response to the File of Relevant Material. Hearing Office decisions are not binding on other Hearing Office Judges or on the Appeal Board. Adverse decision affirmed. CASE NO: 12-04508.a1 DATE: 08/21/2014 DATE: August 21, 2014 In Re: ----------------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 12-04508

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Ryan C. Nerney, Esq. The Department of Defense (DoD) declined to grant Applicant a security clearance. On February 21, 2014, 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 decision on the written record. On June 10, 2014, after considering the record, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Rita C. O’Brien 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 Applicant was denied due process and whether the Judge’s adverse decision was arbitrary, capricious, or contrary to law. Consistent with the following, we affirm. The Judge’s Findings of Fact Applicant has worked for the same Defense contractor since 1988. She has held a top secret clearance since that time. Applicant’s SOR lists six delinquent debts, one for medical treatment and the others for credit cards. She did not provide evidence as to why she had multiple credit card accounts, saying only “Everyone makes mistakes and hardships do happen.” Decision at 2. Applicant entered into an agreement with a debt-resolution agency. The agency stipulated that her debts must be at least six months delinquent before they would negotiate with creditors. She stated that, before joining this program, her credit cards were being paid on time.” Id. Between 2007 and 2010, the agency settled ten accounts, and Applicant settled three others on her own. She stated that her financial situation has improved and that many of her credit card accounts will drop from her credit reports. The Judge listed each SOR debt, concluding that Applicant had demonstrated that one of them was in the process of being resolved through a payment plan. For the remainder, however, the Judge found that Applicant had failed to substantiate her claims of debt resolution.1 The Judge’s Analysis As noted above, the Judge resolved one debt in Applicant’s favor. For the remainder, she concluded that they were ongoing and unpaid. Though noting Applicant’s debt resolution program, she stated that the debts settled through that program were not the same ones listed in the SOR. Noting Applicant’s belief that a debt that is beyond the statute of limitations has been resolved, the Judge pointed to the long-standing principle that mere non-collectability of a debt does not demonstrate that the debt has been settled.2 In the whole-person analysis, the Judge stated that Applicant has held a clearance for many years, which should have put her on notice that delinquent debts can raise security concerns.

DISCUSSION

Applicant notes that she was not represented by counsel when she responded to the File of Relevant Material (FORM) and, therefore, was not aware that she could have provided character references, performance evaluations, etc. However, the FORM advised Applicant that she could provide a documentary response setting forth matters in rebuttal, extenuation, and/or mitigation. Moreover, DOHA mailed the FORM to Applicant accompanied by a letter advising that she could hire counsel and that she could submit “any material you wish the Administrative Judge to consider . . .” Applicant also received a copy of the Directive, which includes her rights to counsel and to submit matters in response to the FORM. Applicant was placed on reasonable notice of her rights. See, e.g., ISCR Case No. 11-11221 at 3 (App. Bd. Aug. 19, 2013). She was not denied the due process afforded by the Directive. Applicant challenges the Judge’s application of the mitigating conditions and the whole- person factors, focusing particularly on her payment of delinquent debts, including those not alleged in the SOR. The Judge discussed these issues at length in her analysis, and Applicant’s disagreement with the Judge is not sufficient to demonstrate that she erred. See, e.g., ISCR Case No. 12-03074 at 3 (App. Bd. May 16, 2014). Applicant has submitted Hearing Office cases in support of her appeal arguments. We give them due consideration as persuasive authority. However, Hearing Office cases are not binding on other Hearing Office Judge’s or on the Appeal Board. See, e.g., ISCR Case No. 13-00464 at 3 (App. Bd. Feb. 20, 2014). The Judge’s conclusions about the paucity of evidence corroborating Applicant’s claims of debt resolution are consistent with the record that was before her. The Judge examined the relevant data and articulated a satisfactory explanation for the decision. The 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). 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 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

FOOTNOTES

1 The five debts that the Judge resolved against Applicant totaled nearly $35,000.

2 See, e.g., ISCR Case No. 10-03656 at 3 (App. Bd. Jan. 19, 2011).