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ISCR Case 12-10691.a1 — CASE

ISCR Case 12-10691.a1denied

Case Headnote

ISCR Case No. 12-10691.a1

Jul 12, 2013· Hon. Jeffrey D. Billett· appeal

Summary

A 62-year-old male applicant was denied a security clearance under Guideline F (Financial Considerations) due to significant delinquent debts and unfiled state income tax returns. The applicant's total outstanding debt amounted to $565,178, and he had failed to file state income tax returns for multiple years.

While the applicant cited a history of traumatic brain injury and claimed improved management of his condition, the judge found insufficient evidence of responsible financial management. Specifically, the applicant did not present a credible budget or a viable payment plan for his substantial debts.

The decision to deny the clearance was based on the presence of disqualifying conditions related to financial irresponsibility, with insufficient mitigating factors applied to overcome these concerns.

Conditions Referenced

Disqualifying

AG ¶ 20(a)raisedFinancial Considerations
AG ¶ 20(b)appliedFinancial Considerations

Mitigating

AG ¶ 20(b)appliedFinancial ConsiderationsThe applicant's brain injury and circumstances were considered, but insufficient evidence of responsible financial management was provided.

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 issuedSep 28, 2012
Answer filed—
Hearing heldApr 1, 2013
Decision dateJul 12, 2013

Cite For

Denial of Security Clearance Due to Significant Financial Issues Under Guideline F
Insufficient Evidence of Responsible Financial Management Despite Claims of Improvement
Impact of Personal Circumstances on Financial Obligations 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 the Judge's decision was arbitrary and did not adequately consider his circumstances. The Board affirmed the Judge's decision, finding it supported by the evidence and not arbitrary or capricious.

Appealed bythe applicant

Applicant representationPersonal representative

Judge belowJuan J. Rivera — 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 were supported by substantial evidence and that the application of the Directive to the Applicant's case was appropriate. The Judge's findings regarding the Applicant's financial issues and the lack of sufficient evidence to demonstrate responsible action were upheld.

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
William S. Fields

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 Judge’s challenged conclusions are support by the record evidence. It was not a denial of due process to apply the Directive to Applicant’s case. Adverse decision affirmed. CASENO: 12-10691.a1 DATE: 07/12/2013 DATE: July 12, 2013 In Re: -------------- Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 12-10691

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Applicant’s Sister, Personal Representative The Department of Defense (DoD) declined to grant Applicant a security clearance. On September 28, 2012, 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 April 1, 2013, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Juan J. Rivera 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 found: Applicant is 62 years old. In August 2000, Applicant received a traumatic brain injury in an accident. As a result, he has received medical care for the last 10 years. His psychotherapist reported that the injury significantly impacted his executive function. Early on, he had great difficulty managing his administrative and financial affairs. The psychotherapist indicated that in recent years, Applicant has made significant progress. He has obtained and maintained employment commensurate with his expertise and experience. Witnesses testified that Applicant can handle complex thoughts and analysis, and can be trusted to handle classified information. Applicant believes his brain injury does not affect his ability to safeguard classified information.

Applicant has six delinquent debts, totaling $565,178. One is a private judgment, one is a private overdue account, three are state tax liens or debts, and another is a federal tax lien in the amount of $365,000. In January 2013, Applicant received a letter from the state seeking payment of $66,000. The status of this debt is unclear. This may be a new state tax debt, a duplication of one of the previous state tax debts, or a consolidation of the three previous state tax debts. In addition to his debts, Applicant did not timely file state income tax returns for 2002 and 2005 through 2011 as required by law.

The Judge concluded: Applicant attributes his financial problems to his August 2000 brain injury, divorce, IRS errors, and his exploitation by an unscrupulous financial advisor. These were circumstances beyond Applicant’s control. However, he did not establish that he acted responsibly under the circumstances. A witness testified that Applicant has had the mental and executive abilities to safeguard classified information for the last two years. Applicant should have made greater progress getting his state tax returns filed sooner and resolving the four substantial tax debts. Applicant is not given full credit for the financial counseling he received because his progress has been limited, and he did not provide a credible budget showing how he will pay his debts. Applicant is unsure about the extent of his federal and state income tax liability, and he was not able to explain when his tax problems will be resolved. Applicant did not provide enough details to establish the link between the unanticipated circumstances he encountered and his inability to make greater progress paying or resolving his SOR debts over the last two years. He had the means to make more progress resolving his delinquent debts and tax problems. He did not prove that he maintained contact with the IRS and state tax authority, and he did not prove that he made sufficient attempts to timely establish payment plans. He did not establish that there are clear indications that the problem is being resolved or is under control. It is likely that his financial problems will continue. Applicant principally argues that the Judge ignored the continuous and sustaining nature of his physical disability and its effect on his financial situation. Applicant also argues that the Judge erred in concluding he did not act responsibly under the circumstances he was faced with, and erred because he downplayed Applicant’s efforts in attempting to clear up his financial problems. Applicant also asserts that the Judge ignored an upward trend of improvement demonstrated by him in dealing with his financial difficulties. He argues that the Judge based his conclusions only on a small slice of the record. Applicant has failed to establish error on the part of the Judge. Portions of Applicant’s brief state or suggest that the Judge did not consider important evidence in the case. 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). After a review of the Judge’s decision and the record, the Board concludes that Applicant has failed to overcome this presumption. A review of the Judge’s decision indicates that he clearly recognized the factor of Applicant’s injury and subsequent disability. The gravamen of the Judge’s decision is that Applicant’s condition has improved in recent years to the point where he holds demanding employment that requires complex analysis and witnesses testified as to his ability to handle classified information. However, there has been no commensurate improvement in his ability to address his financial problems. While finding that Applicant has made progress in resolving his SOR debts, the Judge concluded that Applicant should have made greater progress, especially in the last two years, in debt resolution, considering his circumstances. This conclusion is supported by the record evidence. Applicant points to evidence indicating that notwithstanding the fact that he has made significant strides in managing his disability, there are still numerous instances where it takes him more effort to perform administrative functions as opposed to other functions. However, a review of the record indicates a paucity of evidence on this particular point, and the evidence is not of significant strength to undermine the Judge’s basic conclusion that if Applicant has been functioning at a complex mental level for the past few years, he should be further along in resolving his financial delinquencies. The Board notes that most of the documentary evidence concerning Applicant’s efforts to resolve his tax difficulties through the state and federal tax authorities is of very recent vintage. The presence of some mitigating evidence does not alone compel the Judge to make a favorable security clearance decision. 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. Applicant argues that the standard used by the Judge upon which the analysis of facts and the decision are based is arbitrary in that it is based on a set of norms associated with the general population, and not the particular circumstances of Applicant. Although the brief is not a model of clarity, this appears to be an argument for applying a different adjudicative standard to Applicant based on his brain injury and the resulting difficulties experienced by him. This argument lacks merit. The Directive provides only one set of standards for applicant’s with the ultimate determination being whether it is clearly consistent with the national interest to allow an applicant access to classified information. The circumstance of his disability was analyzed by the Judge under Mitigating Condition ¶ 20(b),1 and Applicant was given partial credit under that provision. It also figured prominently in the Judge’s whole-person analysis. It was not a denial of due process to apply the provisions of the Directive to Applicant’s case. In this case, the Judge made sustainable findings that, despite some progress, Applicant still had a significant amount of overdue indebtedness, and there is no current indication as to how or when the indebtedness will be resolved. Applicant was still without a credible budget showing how he would repay his sizable debt, and had not established payment plans. He offered insufficient proof that, in keeping with his improved mental functioning, he had been diligent in establishing and maintaining contact with his creditors and taxing authorities. The Judge listed the potentially applicable mitigating conditions and then discussed several components of those factors in his analysis. The Judge found in favor of Applicant as to a number of the Guideline F allegations. However, the Judge offered a narrative explanation as to why the disqualifying conduct under Guideline F was not fully mitigated. The Board concludes that the Judge appropriately weighed the Guideline F mitigating evidence against the seriousness of the disqualifying conduct, and took Applicant’s disability and its effects into full consideration. Applicant asks for alternate forms of relief should the Board not decide to reverse this case outright. These include (1) a reversal where the Hearing Office Judge would presumably be entitled to re-evaluation of the clearance decision after 18 months, upon receipt of Applicant’s tax status with the IRS and the state department of taxation; (2) a request that the decision of the Hearing Office Judge be vacated, the record below be reopened for another six months, and the Judge render a decision after reevaluating the facts; and (3) a request that the Judge’s decision be vacated and the case remanded for further testimonial and documentary evidence, whereupon the Judge would issue a decision based on an expanded record. The Board’s authority is limited to addressing the material issues raised on appeal and then either affirming, remanding, or reversing the decision of the Judge. Directive ¶¶ E3.1.32-E3.1.33.

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 ultimate unfavorable security clearance decision is sustainable.

ORDER

The decision of the Judge is AFFIRMED. Signed: Micahel 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: William S. Fields William S. Fields Administrative Judge Member, Appeal Board

FOOTNOTES

1 “[T]he conditions that resulted in the financial problem were largely beyond the person’s control (e.g., loss of employment, a business downturn, unexpected medical emergency, or a death, divorce or separation), and the individual acted responsibly under the circumstances[.]”