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ISCR Case 14-05908.a1 — CASE

ISCR Case 14-05908.a1denied

Case Headnote

ISCR Case No. 14-05908.a1

Sep 2, 2015· Hon. Michael Y. Ra'anan· appeal

Summary

An applicant, representing himself, was denied a security clearance under Guideline F (Financial Considerations) due to unresolved financial issues, specifically a strategic default on a mortgage and other outstanding debts. The appeal board affirmed the denial, citing the applicant's failure to provide sufficient mitigating evidence.

The board found that the applicant's strategic default, coupled with a lack of demonstrated effort to resolve his financial obligations, raised significant security concerns. Disqualifying conditions under AG ¶ 20(a) were noted.

Ultimately, the applicant did not provide adequate evidence to mitigate the financial concerns, particularly his decision not to honor contractual obligations, leading to the denial of his security clearance.

Conditions Referenced

Disqualifying

AG ¶ 20(a)raisedFinancial Considerations

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 issuedDec 12, 2014
Answer filed—Applicant requested a decision on the written record.
Hearing heldJun 26, 2015
Decision dateSep 2, 2015

Cite For

Insufficient Evidence to Mitigate Financial Concerns Under Guideline F
Strategic Default Raises Significant Security Concerns
Burden of Persuasion Lies with the Applicant in DOHA Proceedings

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 that the applicant did not provide sufficient evidence to mitigate the concerns raised.

Appealed bythe applicant

Applicant representationPersonal representative

Judge belowRobert J. Tuider — 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 decision was supported by substantial evidence and that the applicant failed to provide sufficient evidence to mitigate the security concerns raised by his financial issues.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewProcedural complianceNo de-novo re-decisionNo new evidence on appealBurden of persuasion

Appeal Board panel

Michael Ra’anan — Chair
William S. Fields
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 arguments are not sufficient to demonstrate that the Judge failed. To consider all the evidence. Adverse decision affirmed. CASENO: 14-05908.a1 DATE: 09/02/2015 DATE: September 2, 2015 In Re: --------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 14-05908

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT --------- Personal Representative The Department of Defense (DoD) declined to grant Applicant a security clearance. On December 12, 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 26, 2015, after considering the record, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Robert J. Tuider 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 is seeking a clearance in conjunction with his employment by a Defense contractor. His SOR alleges two debts, both resulting from a foreclosure action on an investment property whose purchase was financed by first and second mortgages. Applicant bought a condo in 2005 but was unable to make his monthly payments by mid 2006, due to increased condo fees, his inability to charge enough rent to cover his mortgage payment, and his lack of success in selling the property. Applicant sought a loan modification and a deed of foreclosure, but the lenders did not agree. In 2008, he engaged in a “strategic default.” A lender purchased the condo for $100 at the foreclosure sale and resold it for $53,000. Applicant believes that he paid taxes on the first mortgage deficiency. He asserts that he does not intend to resolve the second deficiency, upon advice of his lawyer. There is no documentation in the record showing that the deficiencies were forgiven or, if they were, whether Applicant paid the taxes owed on them. In the File of Relevant Material (FORM), Department Counsel noted matters that Applicant needed to address with additional evidence or documentation. Applicant submitted no response to the FORM. There is no record of financial counseling. The Judge’s Analysis The Judge noted Applicant’s statement that, acting on advice from his lawyer, he was not going to pay the deficiency on the second mortgage due to the statute of limitations. The Judge concluded that Applicant’s knowing decision not to honor his contractual obligations raises concerns that are not allayed simply by evidence that the resulting debt has become uncollectible. The Judge also noted a paucity of evidence of financial counseling or of efforts to address his mortgage problems. The Judge concluded that Applicant had not provided enough evidence to mitigate the concerns arising from his mortgage debts.

DISCUSSION

Applicant argues that the Judge’s analysis of the mitigating conditions was faulty. Among other things, he cites to his explanation that he engaged in a “strategic default” on his mortgage and declined to pay the deficiency on the second, because he was acting on advice of counsel. The Judge made a finding about this and referenced it in his Analysis. However, the gravamen of his adverse decision was that, despite sufficient notice, Applicant had not provided enough evidence in response to the FORM to answer the security concerns raised by his financial problems. In a DOHA proceeding, the applicant bears the burden of persuasion, and an applicant’s failure to submit sufficient evidence in mitigation will generally result in an adverse decision. See, e.g., ISCR Case No. 14-00321 at 3 (App. Bd. Jun. 5, 2015) (Judge’s adverse decision based on extent of the applicant’s debts and a paucity of mitigating evidence). Applicant’s arguments are not enough to show that the Judge failed to consider all of the evidence or that the Judge weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. See, e.g., ISCR Case No. 14-00597 at 3 (App. Bd. Jul. 16, 2015).1 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: William S. Fields William S. Fields Administrative Judge Member, Appeal Board Signed; James E. Moody James E. Moody Administrative Judge Member, Appeal Board

FOOTNOTES

1 Applicant argues that his use of the statute of limitations as a defense against collection efforts should be considered mitigating because it was in his best interest. This argument does not address the security concerns raised by Guideline F. See Directive, Enclosure 2 ¶ 18.