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ISCR Case 14-00860.a1 — CASE

ISCR Case 14-00860.a1denied

Case Headnote

ISCR Case No. 14-00860.a1

deniedMar 12, 2015· Hon. Michael Y. Ra'anan· appeal

Summary

The applicant, representing himself, was denied a public trust position under Guideline F (Financial Considerations) due to ongoing financial issues. The appeal board upheld this denial, citing the applicant's poor financial judgment and insufficient track record in resolving debts.

Disqualifying conditions under AG ¶ 20 were raised, stemming from financial problems that were recent and had persisted for several years. These included significant tax liabilities and poor financial decisions, such as purchasing a house without employment.

While mitigating conditions under AG ¶ 21 were considered, the applicant's promises to pay off debts in the future were deemed insufficient to demonstrate a consistent pattern of debt resolution. Consequently, the denial was upheld.

Why the Applicant Was Denied

The applicant's financial problems were recent and ongoing for several years.
The applicant incurred significant tax liabilities and made poor financial decisions, such as purchasing a house without employment.
Promises to pay off debts in the future were not sufficient to demonstrate a track record of debt resolution.

Conditions Referenced

Disqualifying

AG ¶ 20raisedFinancial Considerations

Mitigating

AG ¶ 21rejectedFinancial ConsiderationsThe applicant's arguments regarding mitigating circumstances were found insufficient to overturn the judge's decision.

Key Rule Quoted

“Promises to pay off delinquent debts in the future are not a substitute for a track record of timely debt repayment.”

Procedural Posture

SOR issuedApr 28, 2014
Answer filed—
Hearing heldDec 31, 2014
Decision dateMar 12, 2015

Cite For

Insufficient Mitigation of Financial Issues Under Guideline F
Poor Financial Judgment as a Disqualifying Factor
The Necessity of a Track Record in Debt Resolution for Trustworthiness Determinations

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

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: A party’s disagreement with a Judge’s weighing of the evidence or an ability to argue for a different interpretation of the evidence is not enough to show that the Judge weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. Promises to pay off debts in the future are not a substitute for a track record of debt resolution. Adverse decision affirmed. CASE NO: 14-00860.a1 DATE: 03/12/2015 DATE: March 12, 2015 In Re: ---------------- Applicant for Public Trust Position ) ) ) ) ) ) ) ) ADP Case No. 14-00860

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 eligibility for a public trust position. On April 28, 2014, DoD issued a statement of reasons (SOR) advising Applicant of the basis for that decision—trustworthiness 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 December 31, 2014, after the hearing, Administrative Judge Matthew E. Malone denied Applicant eligibility for a public trust position. Applicant appealed pursuant to the Directive ¶¶ E3.1.28 and E3.1.30. Applicant raised the following issue on appeal: whether the Judge’s adverse decision is arbitrary, capricious or contrary to law. Applicant contends that the Judge’s adverse decision should be reversed because the Judge did not correctly weigh the evidence. Specifically, he argues that most of his indebtedness was due to a circumstance beyond his control, an extended period of unemployment, and that he planned to payoff his debts after he has secured a job and stabilized that job. In support of his contention, he notes that he had recently negotiated payment plans for his tax indebtedness with the Internal Revenue Service and the state tax authorities. He states that “[a]lthough on paper these may look bad, they were legitimate negotiations” and that he wants to payoff the tax indebtedness before addressing his other debts. Applicant’s Brief at 1. Applicant’s argument does not demonstrate that the Judge’s decision is arbitrary, capricious or contrary to law. The presence of some mitigating evidence does not alone compel the Judge to make a favorable trustworthiness determination. 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., ADP Case No. 14-01564 at 2 (App. Bd. Jan. 28, 2014). 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., ADP Case No. 14-00590 at 3 (App. Bd. Dec. 10, 2014). Moreover, promises to pay off delinquent debts in the future are not a substitute for a track record of timely debt repayment. See, e.g., ADP Case No. 07- 13041 at 4 (App. Bd. Sep. 19, 2008). In this case, the Judge found that Applicant’s financial problems were recent and had been ongoing for a number of years. Applicant had incurred a tax liability in 2011 that he was unable to pay. The tax debt was enforced by a lien, and in 2012 Applicant withdrew $384,000 from his pension fund to pay the lien. He also bought a house that same year for $271,000, even though he did not have a job at the time. As a result of the pension fund withdrawal, Applicant incurred the federal tax liability of $126,000 and the state tax liability of $12,000, that became the subject of the repayment plan that he established at around the time of the hearing. He also still owed about $106,000 for a number of other delinquent or past-due debts, several of which he disputed. Decision at 3-4. In reaching his adverse conclusion the Judge noted in particular that: “Despite having access in late 2011 to more than enough money to pay those debts, he chose instead to buy a house without first having a job. Applicant’s poor judgment in this regard only exacerbated his financial problems and sustained the Government’s concerns about his suitability for access to sensitive information.” Id. at 6. In light of the foregoing, the Judge’s conclusion that Applicant’s financial problems were still ongoing and that he had not met his burden of persuasion as to mitigation is sustainable. The Judge weighed the mitigating evidence offered by Applicant against the length and seriousness of the disqualifying circumstances and considered the possible application of relevant conditions and factors. He reasonably explained why the mitigating evidence was insufficient to overcome the government’s trustworthiness concerns. 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., ADP Case No. 14-00590 supra at 3. 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 standard applicable to trustworthiness cases is that set forth in Department of the Navy v. Egan, 484 U.S. 518, 528 (1988) regarding security clearances: such a determination “may be granted only when ‘clearly consistent with the interest of national security’.” See, e.g., ADP Case No. 14-00590 supra at 3. See also Kaplan v. Conyers, 733 F.3d 1148 (Fed. Cir. 2013), cert. denied.

ORDER

The decision is AFFIRMED. Signed: Michael Y. Ra’anan Michael Y. Ra’anan Administrative Judge Chairperson, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board Signed: William S. Fields William S. Fields Administrative Judge Member, Appeal Board