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ISCR Case 15-00842.a1 — CASE

ISCR Case 15-00842.a1unknown

Case Headnote

ISCR Case No. 15-00842.a1

Sep 12, 2017· Hon. Michael Y. Ra'anan· appeal

Summary

This security clearance case, decided under Guideline F (Financial Considerations), involved an applicant representing herself. The initial concerns stemmed from delinquent debts and tax liens, specifically citing Disqualifying Condition F.3.

During the review process, the appeal board identified errors in the judge's assessment of the applicant's discretionary income. The judge's calculation failed to adequately account for necessary taxes and other deductions, leading to an inaccurate representation of the applicant's financial capacity.

As a result of these identified errors, the case was remanded for further processing. The outcome of the security clearance decision is currently none, pending the recalculation of discretionary income and subsequent review.

Conditions Referenced

Disqualifying

F.3raisedInability or Unwillingness to Satisfy Debts

Key Rule Quoted

“It was error to conclude that Applicant had $3,000 of monthly discretionary income without accounting for those taxes and deductions.”

Procedural Posture

SOR issuedFeb 12, 2016
Answer filed—
Hearing heldJun 14, 2017
Decision dateSep 12, 2017Remanded due to calculation errors.

Cite For

Remand Due to Errors in Calculating Discretionary Income Under Guideline F
Importance of Accounting for Taxes and Deductions in Financial Assessments
Impact of Financial Miscalculations on Security Clearance Decisions

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

Remanded

The appeal was brought by the Applicant after the Administrative Judge denied her request for a security clearance based on financial considerations. The Board found that the Judge erred in calculating the Applicant's discretionary income by failing to account for taxes and deductions, leading to a remand for correction of this error.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowPaul J. Mason — denied the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Erroneous finding of fact — raised by the applicantError sustained
The Judge erred in calculating the Applicant's discretionary income by not accounting for Federal or state income taxes or other standard payroll deductions.

Why the Board ruled this way

The Board found that the Judge's calculation of the Applicant's discretionary income was erroneous as it did not account for taxes and deductions, which affected the overall analysis of the Applicant's financial situation.

No rational connection between facts and conclusion

On remand, the judge must

The Judge must correct the error in calculating the Applicant's discretionary income and further process the case consistent with the Directive.

Standard of review applied

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

Appeal Board panel

Michael 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: We note that the Judge’s calculation of Applicant’s discretionary income does not account for Federal or state income taxes or other standard payroll deductions. It was error to conclude that Applicant had $3,000 of monthly discretionary income without accounting for those taxes and deductions. Adverse decision remanded. CASENO: 15-00842.a1 DATE: 09/12/2017 DATE: September 12, 2017 In Re: ---------------- Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 15-00842

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 February 12, 2016, 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 June 14, 2017, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Paul J. Mason 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 erred in his findings of fact and whether the Judge’s decision was arbitrary, capricious, or contrary to law. Consistent with the following, we remand the decision. The Judge’s Findings of Fact and Analysis The Judge summarized the case as follows: Applicant began accumulating delinquent debt in 2009. She compounded her financial difficulties when three federal tax liens were filed against her in 2011 for not paying federal taxes. Three civil judgments were filed against her in 2010, 2011, and 2012. She paid a few debts, including her state taxes, and is paying her federal taxes. However, she still owes several debts and has not provided sufficient evidence to prove that she has a plan to resolve the other remaining debts. Her evidence in mitigation does not overcome the disqualifying evidence presented under the financial considerations guideline. . . .1 In the findings of fact, the Judge stated: In her post-hearing documentation, [Applicant] provided her yearly earnings ($79,000) and listed monthly expenses ($3,290). After dividing her yearly earnings by 12 (number of months in a year), her gross monthly earnings are approximately $6,583. After subtracting her listed expenses from her gross monthly income, she has about $3,000 left over in discretionary income, assuming that her monthly medical bills and student loan payment (two expense categories that she did not assign estimates to) amount to about $293 a month.2 In his whole-person analysis, the Judge stated, “Applicant’s uninterrupted earnings since 1991 and her current discretionary monthly remainder of about $3,000 should have allowed her to address her delinquent debts much earlier.”3

DISCUSSION

Applicant contends the Judge erred in finding that she has about $3,000 in monthly discretionary income. We note that the Judge’s calculation of Applicant’s discretionary income does not account for Federal or state income taxes or other standard payroll deductions.4 It was error to conclude that Applicant had $3,000 of monthly discretionary income without accounting for those 1 Decision at 1. 2 Decision at 4. 3 Decision at 7. 4 A review of Applicant’s bank statements (Applicant’s Exhibit E) shows that she had payroll deposits of about $2,150 for two months in 2016. Since Applicant did not provide complete copies of her bank statements for both of those months, it cannot be determined if that figure was her total monthly take-home pay during those months. taxes and deductions and, given the Judge’s reliance on that figure in his analysis, we cannot conclude this error was harmless. Accordingly, we conclude that the best resolution of this case is to remand the case to the Judge for correction of the error and further processing consistent with the Directive.

ORDER

The Decision is REMANDED.

Signed: Michael Ra’anan Michael 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