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ISCR Case 14-03732.a1 — CASE

ISCR Case 14-03732.a1denied

Case Headnote

ISCR Case No. 14-03732.a1

Dec 21, 2015· Hon. Jeffrey D. Billett· appeal

Summary

A security clearance applicant, representing himself, was denied under Guideline F (Financial Considerations) due to unresolved financial issues. The applicant had significant past-due debts and an outstanding judgment.

While the applicant claimed identity theft and disputed some debts, the judge found these claims insufficient to mitigate security concerns. Specifically, the applicant failed to address debts he admitted were legitimate.

Disqualifying conditions under AG ¶ 20 were raised, and mitigating conditions AG ¶ 21(a), (b), (c), (d), and (e) were considered but ultimately not applied. The judge's decision to deny the clearance was affirmed on appeal, concluding that the applicant's financial situation presented an unacceptable security risk.

Conditions Referenced

Disqualifying

AG ¶ 20raisedFinancial Considerations

Mitigating

AG ¶ 21(a)rejectedThe Behavior Was Not RecentThe applicant's financial problems predated the alleged identity theft.
AG ¶ 21(b)rejectedThe Conditions That Resulted in the Financial Problems Were Largely Beyond the Person's ControlThe applicant did not demonstrate that the debts were resolved or that he made good-faith efforts to address them.
AG ¶ 21(c)notedThe Person Has Received or Is Receiving Counseling for the Problem
AG ¶ 21(d)rejectedThe Person Has a Reasonable Plan to Resolve the ProblemThe applicant's proposed settlement was not supported by evidence of further action.
AG ¶ 21(e)rejectedThe Person Has Made a Good-faith Effort to Repay Overdue Creditors or Has Otherwise Resolved DebtsThe applicant had not paid even the amounts he admitted were legitimate.

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 6, 2014
Answer filed—Applicant represented himself.
Hearing heldOct 15, 2015Decision made on the written record.
Decision dateDec 21, 2015Appeal affirmed.

Cite For

Insufficient Mitigation of Financial Issues Under Guideline F
Impact of Unresolved Debts on Security Clearance
The Standard for Granting Clearance Consistent with National Security Interests

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 a denial of a security clearance based on 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 it reasonable and supported by the evidence.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowRichard A. Cefola — 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 adverse decision was arbitrary, capricious, or contrary to law.

Why the Board ruled this way

The Board found that the Judge's conclusion regarding the unresolved delinquent debts was reasonable and supported by substantial evidence. The evidence presented by the Applicant did not sufficiently mitigate the security concerns related to his financial issues.

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 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: Given the record, the Judge’s conclusion that Applicant had not resolved the concerns arising from his delinquent debts was reasonable. Evidence that a creditor is no longer seeking enforcement of a debt and has written it off, does not establish that the debt has been resolved in a way that mitigates security concerns arising from it. Adverse decision affirmed. CASENO: 14-03732.a1 DATE: 12/21/2015 DATE: December 21, 2015 In Re: ------- Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 14-03732

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 September 6, 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 October 15, 2015, after considering the record, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Richard A. Cefola denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. Applicant raised the following issue on appeal: 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 works for a Government contractor. He states that he was a victim of credit card fraud and that he did not make a majority of the charges on the past-due debts. He corroborated his claim of identity theft by providing correspondence from his medical provider that its IT system had been compromised. One of the SOR debts is a judgment in the amount of over $13,000, which is supported by a recent credit report. Applicant attempted to dispute this judgment with the court, but he was not successful. The creditor has written this judgment off as a business loss. The Judge found that it was still outstanding. The three remaining debts are owed to a single creditor. These debts total over $17,500. They too are supported by Applicant’s credit report. The creditor sued Applicant, but the case was dismissed “without prejudice” because the parties had agreed to resolve it between themselves. However, although Applicant offered a settlement, the creditor counter-offered, and the record contains no evidence of further action. The Judge’s Analysis The Judge stated that Applicant has “significant past-due debts and an outstanding judgment, which he has not resolved.” Decision at 3. Though noting Applicant’s disputes as to the amounts owed, the Judge stated that Applicant had not addressed the debts that he admits are his. The Judge concluded that Applicant had failed to mitigate the concerns arising from his financial problems.

DISCUSSION

Applicant cites to evidence that he had disputed the debts. He also notes evidence that his private information may have been hacked and that the creditor owning the judgment has written it off. The Judge made findings about the evidence that Applicant has cited. The Judge’s comment that Applicant had not paid even the amounts that he admits were legitimate is supported by the record. See, e.g., Item 4, Interview Summary, at 5: “In hindsight [Applicant] believes the more correct approach would have been to make payments covering charges he was responsible for while he continued to dispute the balance of the account.” We also note that the compromise of Applicant’s personal information occurred in late 2014, long after Applicant’s financial problems had arisen. Letter from Insurance Company, dated March 5, 2015. Applicant has not rebutted the presumption that the Judge considered all of the evidence. See, e.g., ISCR Case No. 12-08412 at 2 (App. Bd. Sep. 11, 2015). Given the record that was before him, the Judge’s conclusion that Applicant had not resolved the concerns arising from his delinquent debts was reasonable. Evidence that a creditor is no longer seeking enforcement of a debt and has written it off as a business expense does not establish that the debt has been resolved in a way that would necessarily mitigate security concerns arising from it. See, e.g., ISCR Case No. 10-03656 at 3 (App. Bd. Jan. 19, 2011) (Non-collectability of a debt does not constitute a good-faith effort to resolve it). 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