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ISCR Case 15-03072.a1 — CASE

ISCR Case 15-03072.a1denied

Case Headnote

ISCR Case No. 15-03072.a1

Jun 5, 2017· Hon. James E. Moody· appeal

Summary

The applicant, represented by counsel, was denied a security clearance under Guideline F, Financial Considerations. This denial stemmed from significant delinquent debts exceeding $700,000 and a failure to file tax returns.

The applicant admitted to ten allegations of delinquent debts totaling over $700,000. However, no evidence was presented to demonstrate that these financial difficulties had been resolved or reduced. The applicant's assertion of being a victim of a Ponzi scheme was considered, but the provided evidence was deemed insufficient to mitigate the financial concerns.

Ultimately, the applicant failed to provide adequate evidence of resolution for her financial issues, leading to the denial of her appeal.

Conditions Referenced

Disqualifying

AG ¶ 19raisedFinancial 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 issuedNov 4, 2015
Answer filed—
Hearing heldMar 8, 2017
Decision dateJun 5, 2017

Cite For

Denial of Security Clearance Due to Significant Financial Issues Under Guideline F
Importance of Providing Evidence of Resolution for Financial Difficulties
Impact of National Security Interests on Clearance Determinations

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 who was denied a security clearance due to significant delinquent debts totaling over $700,000. The applicant argued that the Judge's decision was arbitrary and capricious. The Board affirmed the Judge's decision, finding it supported by substantial evidence and compliant with procedural requirements.

Appealed bythe applicant

Applicant representationAttorney

Judge belowMartin H. Mogul — 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 Judge complied with required procedures. The arguments presented by the Applicant did not demonstrate that the Judge's decision was arbitrary, capricious, or contrary to law.

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

William S. Fields
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’s delinquent debts in the SOR total over $700,000. Adverse decision affirmed. CASENO: 15-03072.a1 DATE: 06/05/2017 DATE: June 5, 2017 In Re: ----------------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 15-03072

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 November 4, 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 March 8, 2017, after considering the record, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Martin H. Mogul 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 The SOR lists 11 allegations, including failure to file Federal and state tax returns, Federal tax liens, and other overdue debts. The delinquent debts in the SOR total over $700,000. Applicant admitted ten of the SOR allegations and introduced no evidence to establish that those financial difficulties have been resolved or reduced. For the remaining allegation, a state tax debt of over $500,000, she wrote “deny/partial” in her SOR response, noted the state listed she had no taxes due as of April 2016, but presented no evidence establishing the debt has been resolved or reduced. Applicant was unemployed from about August 2008 to April 2009. In her response to Department Counsel’s File of Relevant Material (FORM), she wrote that her Federal tax debt was the result of a Ponzi scheme and the IRS suspended collection of that debt pending the outcome of a court case involving the alleged perpetrator. She indicated she was a victim and witness in that case. She asserted that she and her accountant are confident that the delinquency will eventually be eliminated. No evidence was introduced to establish this debt has been resolved or reduced.

The Judge’s Analysis Applicant presented some evidence that her tax debt to the IRS may be settled in a lawsuit, but that matter has yet to be resolved. Even if that lawsuit resolved the alleged Federal tax debt, it is unclear whether it would also resolve the Federal tax liens. The record reflects several other debts for which no evidence of resolution or reduction has been presented. While a period of unemployment may have caused Applicant’s financial difficulties, she has not established that she acted responsibly to resolve or reduce her non-Federal delinquent debts. Evidence was not introduced to show Applicant will be able to pay off her past debts or keep up to date on her current debts.

DISCUSSION

Applicant argues that the Judge did not weigh and consider all relevant evidence. She cites to such things as her unemployment and being a victim of a Ponzi scheme. However, the Judge made findings about those matters. Applicant’s arguments are neither sufficient to rebut the presumption that the Judge considered all of the evidence in the record nor enough to show that the Judge weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. See, e.g., ISCR Case No. 14-03747 at 3 (App. Bd. Nov. 13, 2015). We give due consideration to the Hearing Office case that Applicant cited, but it is neither binding precedent on the Appeal Board nor sufficient to undermine the Judge’s decision. Id. Additionally, the Judge complied with the requirements of the Directive in his whole-person analysis by considering the totality of the evidence in reaching his decision. 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: William S. Fields William S. Fields Administrative Judge Member, 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