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ISCR Case 15-01690.a1 — CASE

ISCR Case 15-01690.a1denied

Case Headnote

ISCR Case No. 15-01690.a1

Sep 13, 2016· Hon. Michael Y. Ra'anan· appeal

Summary

A defense contractor's security clearance was denied under Guideline F (Financial Considerations) due to a Chapter 7 bankruptcy and other outstanding debts. The appeal board upheld this denial, citing insufficient evidence to mitigate concerns about the applicant's financial stability and responsibility.

Specifically, the board found that the applicant's financial problems were recent and ongoing, which raised doubts about her reliability. The applicant failed to demonstrate current financial stability or responsibility, leading to the application of disqualifying conditions AG ¶ 20(a) and AG ¶ 20(c).

While mitigating conditions AG ¶ 20(d) and AG ¶ 20(e) were considered, the applicant did not provide enough evidence to overcome the financial concerns. Consequently, the security clearance was denied.

Conditions Referenced

Disqualifying

AG ¶ 20(a)raisedFinancial Considerations
AG ¶ 20(c)raisedFinancial Considerations

Mitigating

AG ¶ 20(d)rejectedFinancial ConsiderationsThe applicant did not provide sufficient evidence to demonstrate financial stability.
AG ¶ 20(e)rejectedFinancial ConsiderationsThe applicant's financial issues were ongoing and not resolved.

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 issuedNov 19, 2015
Answer filed—
Hearing heldJun 27, 2016
Decision dateSep 13, 2016

Cite For

Insufficient Evidence to Mitigate Financial Concerns Under Guideline F
Recent and Ongoing Financial Problems Impacting Reliability
Burden of Persuasion on the Applicant Regarding Financial Responsibility

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 her request for a security clearance based on financial considerations. The applicant argued that the Judge made errors in fact-finding and in applying mitigating conditions. The Board affirmed the decision, finding no harmful errors in the Judge's analysis and that the applicant failed to meet her burden of persuasion.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowGregg A. Cervi — denied the clearance

Decided onthe written record

Guidelines belowGuideline F

What the Board reviewed

Judge mis-weighed or ignored evidence — raised by the applicantRejected
Applicant argued that the Judge erred in finding the amount of debt subject to bankruptcy discharge.
Mitigation wrongly applied / not applied — raised by the applicantRejected
Applicant contended that the Judge failed to properly apply the mitigating conditions.
Whole-person analysis — raised by the applicantRejected
Applicant claimed that the Judge's whole-person analysis was erroneous.

Error found, but harmless. The Board agreed the judge made a mistake but affirmed anyway, because it did not change the outcome.

Why the Board ruled this way

The Board found no harmful error in the Judge's findings and concluded that the Judge's whole-person analysis complied with the Directive. The applicant did not present sufficient evidence to mitigate the security concerns raised.

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
James E. Moody
James F. Duffy

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 failed to rebut the presumption that the Judge considered all of the evidence. The Judge’s findings contain no harmful error. The whole-person analysis complies with the Directive in that the Judge considered the totality of the evidence. Adverse decision affirmed. CASE NO: 15-01690.a1 DATE: 09/13/2016 DATE: September 13, 2016 In Re: ----------------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 15-01690

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 November 19, 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 decision on the written record. On June 27, 2016, after considering the record, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Gregg A. Cervi 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’s findings of fact contained errors; whether the Judge failed properly to apply the mitigating conditions; and whether the Judge’s whole-person analysis was erroneous. Consistent with the following, we affirm. The Judge’s Findings of Fact Applicant has worked for a Defense contractor since early 2014. Before accepting this position, she was a homemaker who worked at some part-time jobs. She enjoys a good reputation for honesty, trustworthiness, and job performance. In 2008, Applicant’s husband left his job to start up a business. The business struggled, and the couple fell behind on their credit cards and mortgage payments. Eventually they had to short-sell their home. In mid-2015, Applicant received notice of two garnishment actions against her. She filed for Chapter 7 bankruptcy protection, though her husband was not included in the petition. Later that year, the court ordered that Applicant’s approximately $62,000 in delinquent debt be discharged. Applicant stated that she has not accumulated any new debts in the past several years and is living within her means. Applicant submitted no documentary evidence to show the current state of her finances, her budget, or otherwise to establish financial stability. The Judge’s Analysis Applicant did not submit enough information to meet her burden of persuasion. Applicant’s husband was not included in the bankruptcy filing, and she did not provide information about her current level of financial responsibility. There is insufficient evidence to show that Applicant’s financial condition has improved since her discharge in bankruptcy. Her financial problems are recent and ongoing, and they continue to cast doubt upon her current reliability and good judgment.

DISCUSSION

Applicant challenges the Judge’s findings. In particular, she argues that the Judge erred in finding that the amount of debt subject to the bankruptcy discharge was around $62,000. She notes that her debts included a student loan which, she states, is not subject to discharge. Therefore, the total amount of discharged debt was much lower. Item 4, Bankruptcy Petition, states that debts for most student loans are not discharged, although it also states that there are exceptions to the general rule concerning dischargeable debts. However, even if the Judge erred in making the challenged finding, it was harmless. A finding that substantially less debt was actually resolved would not likely have produced a different result. See, e.g., ISCR Case No. 14-03601 at 3 (App. Bd. Jul. 1, 2015). Applicant has not cited to any harmful error in the Judge’s findings of fact. See, e.g., ISCR Case No. 12-03420 at 3 (App. Bd. Jul. 25, 2014). Applicant challenges the Judge’s application of the mitigating conditions. She reiterates record evidence about the circumstances underlying her financial problems and cites to her character evidence and her interview summary. She also contends that the Judge erred in concluding that her financial problems are recent. On this last point, we note that a delinquent debt is ongoing until it is resolved. Accordingly, a reasonable person could find that debts that were acquired years ago but not resolved until an October 2015 bankruptcy discharge are recent within the meaning of the Directive. See, e.g., ISCR Case No. 12-03984 at 3 (App. Bd. Jun. 10, 2014) for the proposition that an unpaid debt is a continuing course of conduct. Applicant has not rebutted the presumption that the Judge considered all of the evidence in the record, nor has she shown that the Judge mis-weighed the evidence. See, e.g., ISCR Case No. 14-05795 at 2, 3 (App. Bd. Apr. 26, 2016). Applicant’s brief is not sufficient to undermine the Judge’s treatment of the mitigating conditions. We further conclude that the Judge’s whole person analysis complies with the requirements of Directive ¶ 6.3, in that the Judge considered the totality of the record that was before him in reaching his decision. See, e.g., ISCR Case No. 15-00424 at 2-3 (App. Bd. Apr. 20, 2016). He cited to a paucity of mitigating evidence as a reason for denying Applicant a clearance. In a DOHA proceeding, the applicant bears the burden of presenting evidence in mitigation of the concerns raised by the evidence. Directive ¶ E3.1.15. In the case before us, the Judge’s conclusion that Applicant had not presented enough information to meet her burden of persuasion is supportable. 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 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: James F. Duffy James F. Duffy Administrative Judge Member, Appeal Board