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ISCR Case 15-03168.a1 — CASE

ISCR Case 15-03168.a1denied

Case Headnote

ISCR Case No. 15-03168.a1

Jul 21, 2017· Hon. Michael Y. Ra'anan· appeal

Summary

A former military member and defense contractor was denied a security clearance under Guideline F (Financial Considerations) due to unresolved financial issues. The applicant failed to demonstrate responsible financial behavior, specifically regarding outstanding debts and delinquent tax filings.

Disqualifying Condition F1 was cited, as the applicant did not provide documentation to prove that these debts, including a significant HOA debt, had been satisfied or released. The appeal board affirmed the denial, noting the applicant's failure to resolve these financial obligations.

The applicant's claims of misunderstanding his due process rights were rejected by the board, which determined he had been adequately informed. Ultimately, the denial was upheld due to the applicant's persistent financial irresponsibility and lack of evidence demonstrating resolution of the identified issues.

Conditions Referenced

Disqualifying

F1raisedFinancial 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 issuedFeb 2, 2016
Answer filed—Applicant requested a decision on the written record.
Hearing held—Decision made based on written record.
Decision dateJul 21, 2017

Cite For

Affirmation of Denial Based on Unresolved Financial Issues Under Guideline F
Importance of Demonstrating Responsible Financial Behavior for Security Clearance
Clarification of Due Process Rights in Security Clearance Proceedings

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 seeking a security clearance who was denied due to financial considerations under Guideline F. The Applicant argued that he was denied due process and that the Judge's decision was arbitrary and capricious. The Board affirmed the Judge's decision, finding no harmful error in the proceedings.

Appealed bythe applicant

Applicant representationAttorney

Judge belowBraden M. Murphy — denied the clearance

Decided onthe written record

Guidelines belowGuideline F

What the Board reviewed

Due-process / fairness — raised by the applicantRejected
Applicant claimed he was denied due process regarding his understanding of the procedures.
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 Applicant was not denied adequate notice of his due process rights and that the Judge's decision was supported by substantial evidence. The Applicant's claims of misunderstanding were not substantiated by the record.

Standard of review applied

No de-novo re-decisionNo new evidence on appealSubstantial-evidence reviewArbitrary-and-capricious reviewProcedural compliance

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: In spite of the plain language to the contrary, Applicant asserts that he believed in June and July 2016 that Department Counsel was “working on my behalf.” If Applicant misunderstood the nature of his rights, the blame cannot fairly be placed on DOHA or other DOD officials. Applicant was not denied adequate notice of his due process rights. Adverse decision affirmed. CASENO: 15-03168.a1 DATE: 07/21/2017 DATE: July 21, 2017 In Re: ----------------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 15-03168

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Shawn C. Graham, Esq. The Department of Defense (DoD) declined to grant Applicant a security clearance. On February 2, 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 decision on the written record. On April 13, 2017, after considering the record, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Braden M. Murphy 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 Applicant was denied due process and 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 until 2004 and upon discharge began working for a Defense contractor. He has held a clearance for over 20 years. Between 2008 and 2010, Applicant engaged in a custody dispute with the mother of his eldest son. The resulting legal fees depleted his savings. At the same time, Applicant had a dispute with his homeowners association (HOA), and he stopped making payments to the HOA in order to pay his legal expenses. Applicant’s SOR lists a judgment in favor of the HOA in the amount of over $14,400. The HOA secured a garnishment action to satisfy this debt. Although Applicant showed that his wages had indeed been garnished from early 2015 until mid-2016, he did not provide any documentation to establish that the judgment had been satisfied or released. Another SOR debt is a charged-off credit card account, which Applicant claims has been satisfied. However, he provided no documentation to corroborate this claim. In addition to the above, Applicant failed timely to file his Federal and state income tax returns. He discovered this during conversations with IRS officials during the course of submitting his 2013 returns. Applicant did not provide evidence that he had filed his 2010 returns. The Judge’s Analysis Though noting circumstances outside Applicant’s control that affected his financial situation, the Judge concluded that Applicant had not demonstrated responsible action in regard to his problems. He cited to evidence that Applicant had stopped paying HOA fees in order to pay his legal expenses during a custody dispute, which the Judge concluded was not a responsible act. He also noted that the HOA was forced to obtain a judgment and garnishment action to satisfy the debt that Applicant owed to it. He stated that garnishment does not equate to a good-faith effort by an applicant to resolve past-due debts. The Judge concluded that Applicant had not demonstrated resolution of the HOA debt, the credit card debt, and the delinquent tax filing.

DISCUSSION

Applicant has raised an issue of due process. In doing so, he makes assertions from outside the record. We are not permitted to consider new evidence on appeal. Directive ¶ E3.1.29. However, we will do so in resolving threshold issues such as jurisdiction or due process. See, e.g., ISCR Case No.14-00812 at 2 (App. Bd. Jul. 8, 2015). Applicant claims that he did not understand the procedures that would apply in his case. He stated that he believed that DoD officials would inform him whether his SOR response was sufficient to mitigate the concerns in his case and, if not, he would be authorized to request a hearing. He cites to a letter from DOHA to the effect that his SOR response was in compliance with the Directive. He argues that this letter failed to advise him that his SOR response was inadequate and that his case had been referred to DOHA for adjudication. He states that he believed that he was entitled to a hearing even after having submitted a documentary response to the File of Relevant Material (FORM). We have considered Applicant’s argument in light of the record. Applicant’s response to the SOR included a DOHA-prepared attachment in which he requested “a decision based on the administrative (written) record, without a hearing before an Administrative Judge. This will include a memo prepared by DoD Department Counsel.” The attachment also notified Applicant of his right to provides documents or other evidence in response to the FORM. Item 1. On May 30, 2016, Department Counsel provided Applicant with a copy of the FORM. Her memo stated clearly that the FORM was being sent because Applicant had requested such a procedure rather than a hearing. Department Counsel also advised Applicant of his right to submit a documentary response to the FORM. The FORM was accompanied by a cover letter from DOHA, dated May 31, 2016. This is the letter that Applicant referenced in his argument. The cover letter advised that his response to the SOR had been received and that it complied with the Directive. It also stated the following: You requested that a determination be made in your case without a hearing. [Department Counsel] has been assigned to present the Government’s case and has prepared a file of what is considered the relevant material which will be submitted to an Administrative Judge to make the determination in your case. Before that file is sent to the Administrative Judge, you have an opportunity to review the attached copy of that complete file and submit any material you wish the Administrative Judge to consider or to make any objections you may have as to the information in the file . . . If you do not file any objections to the attached material or submit any additional information within 30 days of receipt of his letter, your case will be assigned to an Administrative Judge for a determination based solely on the attached [FORM]. As Applicant notes in his Appeal Brief, he submitted documents in response to the FORM that the Judge included in the record. In spite of the plain language to the contrary, Applicant asserts that he believed in June and July 2016 that Department Counsel was “working on my behalf.” The guidance cited above is consistent with the Directive and is couched in the standard language used when applicants request a decision on the written record. The SOR attachment that Applicant signed provided him with a choice between hearing or a FORM, and the notice that Applicant received from various DOHA officials after he chose a FORM clearly and exclusively described a written procedure and made no reference to a hearing purportedly in the future. Moreover, there is nothing in the record to show that, after Applicant chose a FORM, he changed his mind and requested to convert the case to a hearing. If Applicant misunderstood the nature of his rights, the blame cannot fairly be placed on DOHA or other DoD officials. Applicant was not denied adequate notice of his due process rights. See, e.g., ISCR Case No. 15-04472 at 3 (App. Bd. Feb. 9, 2017). Beyond this, we find no reason to disturb the Judge’s weighing of the evidence. 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, Encl. 2 App. A ¶ 2(b): “Any doubt concerning personnel being considered for national security eligibility 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