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ISCR 15-01544.a1: Guideline F security clearance appeal, denied (2017) · CASE

ISCR Case 15-01544.a1denied

Case headnote

ISCR Case No. 15-01544.a1

Jun 20, 2017· Hon. Michael Y. Ra'anan· appeal

Summary

A security clearance was denied to an applicant, a former military member and long-time contractor, primarily under Guideline F (Financial Considerations). The denial stemmed from five delinquent debts, including multiple unresolved credit card debts.

While the applicant resolved two of the outstanding debts, the remaining financial obligations were not addressed. Furthermore, the applicant failed to disclose all debts on the security clearance application, which raised additional concerns.

Despite the applicant's assertions of financial responsibility, these claims were deemed insufficient to mitigate the issues. Consequently, the presence of unresolved debts and the lack of full disclosure led to the denial of the security clearance.

Conditions referenced

Disqualifying

F.3raisedInability or Unwillingness to Satisfy Debts

Mitigating

F.2rejectedThe Conditions That Resulted in the Financial Difficulties Were Largely Beyond the Person's ControlThe judge concluded that the applicant did not show responsible action regarding his credit card debt.
F.3rejectedThe Person Has Made Good Faith Efforts to Repay Overdue Creditors or Otherwise Resolve DebtsThe applicant's decision to not pay debts and instead use funds for other purposes detracted from his case for mitigation.

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 issuedOct 27, 2015
Answer filed—
Hearing heldApr 4, 2017
Decision dateJun 20, 2017

Cite for

Denial of Security Clearance Due to Unresolved Financial Issues Under Guideline F
Importance of Full Disclosure of Debts on Security Clearance Applications
Insufficient Evidence of Financial Reform as a Basis for Mitigation

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 from 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 decision, finding no harmful error in the Judge's findings.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowFrancisco Mendez denied the clearance

Decided ona hearing

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 material findings were sustainable and that the Applicant cited no harmful error in the findings. The adverse decision was affirmed based on the evidence presented.

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)
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: The Judge’s material findings are sustainable. Applicant has cited to no harmful error in the findings. Adverse decision affirmed. CASENO: 15-01544.a1 DATE: 06/20/2017 DATE: June 20, 2017 In Re: ---------------- Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 15-01544

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 October 27, 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 April 4, 2017, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Francisco Mendez 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 served in the military from 1977 to1981. He has worked as a contractor and has held a clearance for over 30 years. His SOR lists five delinquent debts, and he has resolved two of them. The remaining three are for credit cards. He fell behind in his payments in about 2005, which resulted in increased interest rates on his accounts. After receiving the SOR, Applicant consulted a financial counselor, who advised him not to contact the creditors because doing so could revive debts that were past the statute of limitations. Applicant attributed his financial problems to a marital separation in 2000. The subsequent divorce was expensive to Applicant, and he started relying on credit cards. A creditor offered Applicant a settlement, which he could have paid by means of a loan from his 401(k) account. He elected not to do so, however, even though he had previously taken out loans in order to pay debts or make home repairs. Applicant and his wife have combined earnings of about $90,000 a year. Applicant owns a home and has made additional payments on his mortgage loan. He has a favorable credit score. The Judge’s Analysis The Judge cited to matters that were outside Applicant’s control, such as his divorce, that affected his financial situation. He concluded that Applicant did not show responsible action in regard to his credit card debt, insofar as he decided to walk away from it rather than resolve it. He concluded that Applicant used the “windfall” resulting from this decision for such things as improving his retirement savings and paying down his mortgage. The Judge also stated that Applicant’s case for mitigation was impaired by his failure to disclose the credit card debts on his security clearance application, although he did list two debts that he had paid. This omission was not alleged in the SOR, but the Judge stated that he was considering it on the issues on mitigation, credibility, and the whole-person factors.1 He stated that reliance upon the statute of limitations is not sufficient to mitigate concerns arising from the credit card debts, given a lack of significant evidence of financial reform.

DISCUSSION

Applicant’s brief includes matters from outside the record, which we cannot consider. Directive ¶ E3.1.129. He challenges the Judge’s statement that he had received a windfall from his decision not to pay his credit card debt. We read the Judge’s comment to mean that Applicant’s having paid down his mortgage with funds that might have gone to debt resolution detracted from his case for mitigation. We cannot say that this is error. The Judge’s material findings are sustainable. Applicant has cited to no harmful error in the findings. See, e.g., ISCR Case No. 15- 01285 at 3 (App. Bd. Dec. 22, 2016).

FOOTNOTES

1 See ISCR Case No. 14-00151 at 3, n.1 (App. Bd. Sept. 12, 2014) for the extent to which a Judge can consider non-alleged conduct. Applicant cites to favorable evidence, such as his having resolved some of his debts. He argues that his conduct shows financial responsibility. Applicant has not rebutted the presumption that the Judge considered all of the evidence, 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. 13-00502 at 3 (App. Bd. Mar. 7, 2017). The Judge examined the relevant evidence 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: James E. Moody James E. Moody Administrative Judge Member, Appeal Board Signed: William S. Fields William S. Fields Administrative Judge Member, Appeal Board