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ISCR 15-01094: Guideline F security clearance appeal, denied (2016) · CASE

ISCR Case 15-01094denied

Case headnote

ISCR Case No. 15-01094

Nov 8, 2016· Hon. Michael Y. Ra'anan· appeal

Summary

An applicant, represented by counsel, was denied a security clearance under Guideline F (Financial Considerations) due to significant financial difficulties. These issues stemmed from a failed business, which resulted in substantial debts, including over $72,000 in delinquent payroll taxes. The appeal board affirmed the denial, citing the applicant's failure to adequately address his financial obligations.

Specifically, the applicant did not demonstrate consistent efforts to resolve his debts. Furthermore, inconsistent evidence regarding his monthly budget raised concerns about his financial reliability and undermined his credibility. The judge provided a satisfactory explanation for the adverse findings based on the applicant's financial history.

The denial was based on Disqualifying Conditions F1 and F3, as the applicant's financial conduct indicated an inability or unwillingness to meet financial obligations and a lack of candor regarding his financial situation.

Conditions referenced

Disqualifying

F1raisedInability to Satisfy Debts
F3raisedDelinquent Tax Obligations

Key rule quoted

“A person who fails repeatedly to fulfill his or her legal obligations, such as paying taxes when due, does not demonstrate the high degree of good judgment and reliability required of those granted access to classified information.”
ISCR Case No. 14-01894 at 5 (App. Bd. Aug. 18, 2015)

Procedural posture

SOR issuedSep 23, 2015
Answer filed—
Hearing heldAug 11, 2016
Decision dateNov 8, 2016

Cite for

Financial Reliability Under Guideline F
Impact of Inconsistent Financial Evidence on Security Clearance Decisions
Importance of Timely Debt Resolution in Clearance Evaluations

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 was brought by the applicant after the Administrative Judge denied his request for a security clearance based on financial considerations. The applicant argued that the Judge failed to consider all evidence and misapplied mitigating conditions. The Board affirmed the Judge's decision, finding no harmful error in the proceedings.

Appealed bythe applicant

Applicant representationAttorney

Judge belowRichard A. Cefola denied the clearance (split findings)

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

No specific harmful error alleged, raised by the applicantRejected
Applicant contends that the Judge did not consider all of the evidence.
Decision arbitrary, capricious, or contrary to law, raised by the applicantRejected
Applicant argues that the Judge's application of the mitigating conditions was erroneous.
Decision arbitrary, capricious, or contrary to law, raised by the applicantRejected
Applicant claims that the Judge's whole-person analysis was erroneous.

Why the Board ruled this way

The Board found that the Judge did not err in considering the evidence and that the decision was not arbitrary or capricious. The Judge's findings were supported by substantial evidence and the application of the law was appropriate.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewProcedural complianceNo de-novo re-decisionDeference to the judge’s credibility calls

Appeal Board panel

Michael Y. Ra’anan (Chair)
James E. Moody
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: Applicant contends that the Judge did not consider all of the evidence, including circumstances outside his control that affected his financial condition, his efforts at debt resolution, and his character reference. Applicant has not rebutted the presumption that the Judge considered all of the evidence in the record, nor has he shown that the Judge weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. Adverse decision affirmed. CASE NO: 15-01094 DATE: 11/08/2016 DATE: November 8, 2016 In Re: ------------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 15-01094

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 September 23, 2015, 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 August 11, 2016, after the hearing, 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 issues on appeal: whether the Judge failed to consider all of the evidence; whether the Judge’s application of the mitigating conditions was erroneous; and whether the Judge’s whole-person analysis was erroneous. Consistent with the following, we affirm. The Judge’s Findings of Fact Before starting his current job, Applicant owned a business that failed, leaving him with a substantial amount of delinquent debt. His debts include over $3,600 owed on a credit card account. About two weeks prior to the hearing, Applicant made a first monthly payment of $100 toward satisfying this debt. In addition, he owes over $72,000 to the Federal Government in delinquent payroll taxes. In 2010, he entered into an installment agreement to pay $650 a month toward resolving this debt but did not have the available funds to continue. He has been working with a financial company to address his tax debts but has yet to set up a new payment plan. Applicant also owes nearly $2,000 on another credit card account. He made his first monthly payment about two weeks prior to the hearing. Applicant provided inconsistent evidence as to his monthly budget surplus. He testified that he had about $850 at the end of each month, but his written budget showed a surplus of nearly $3,000. The Judge’s Analysis The Judge resolved two allegations in Applicant’s favor. However, for the debts described above, he entered adverse formal findings. He cited to evidence that Applicant had only recently begun to address his outstanding credit card debts and that, in eight years time, he had not come to an agreement with the Federal Government about his tax delinquencies.

DISCUSSION

Applicant contends that the Judge did not consider all of the evidence, including circumstances outside his control that affected his financial condition, his efforts at debt resolution, and his character reference. Applicant has not rebutted the presumption that the Judge considered all of the evidence in the record, nor has he shown that the Judge weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. See, e.g., ISCR Case No. 14-05795 at 2-3 (App. Bd. Apr. 26, 2016). Applicant draws our attention to a Hearing Office case that he believes supports his efforts to obtain a clearance. We have given this case due consideration as persuasive authority. However, Hearing Office cases are not binding on other Hearing Office Judges or on the Appeal Board. See, e.g., ISCR Case No. 14-03747 at 3 (App. Bd. Nov. 13, 2015). The Judge examined the relevant data and articulated a satisfactory explanation for the decision. A person who fails repeatedly to fulfill his or her legal obligations, such as paying taxes when due, does not demonstrate the high degree of good judgment and reliability required of those granted access to classified information. See, e.g., ISCR Case No. 14-01894 at 5 (App. Bd. Aug. 18, 2015). Timing of debt payments is relevant in evaluating an applicant’s case for mitigation. See, e.g., ISCR Case No. 14-01243 at 3 (App. Bd. Jun. 18, 2015). 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 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