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ISCR Case 15-03995.a1 — CASE

ISCR Case 15-03995.a1denied

Case Headnote

ISCR Case No. 15-03995.a1

Apr 24, 2017· Hon. Michael Y. Ra'anan· appeal

Summary

A security clearance applicant, a divorced individual with two adult children, was denied under Guideline F (Financial Considerations) due to numerous and recent financial issues. A significant factor in the denial was the applicant's failure to file tax returns for both 2009 and 2010.

While the applicant cited personal hardships as mitigating circumstances, the appeal board found these insufficient. The judge noted that the applicant's financial problems were extensive and recent, and that the applicant had not consistently demonstrated responsible effort in addressing delinquent debts, despite making some payments under pressure.

Ultimately, the board determined that the applicant's financial history presented a potential risk to national security, leading to the denial of the security clearance.

Conditions Referenced

Disqualifying

F3raisedFailure to File or Pay Taxes

Mitigating

F2rejectedThe Conditions That Resulted in the Financial Difficulties Were Largely Beyond the Applicant's ControlThe judge found that the applicant's personal hardships did not mitigate the financial irresponsibility.
F3rejectedThe Applicant Has Made Efforts to Resolve His Financial IssuesThe judge concluded that past financial irresponsibility cannot be mitigated by payment of debts under threat of loss of a clearance.

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 issuedJan 17, 2016
Answer filed—
Hearing heldFeb 1, 2017
Decision dateApr 24, 2017

Cite For

Financial Considerations Under Guideline F
Impact of Personal Hardships on Financial Responsibility
Standard for Granting Security Clearance Related to National Security Interests

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 after being denied due to financial considerations under Guideline F. The applicant raised several issues regarding the Judge's findings and the decision's legality. The Board affirmed the Judge's decision, finding no harmful errors in the findings of fact or analysis.

Appealed bythe applicant

Applicant representationAttorney

Judge belowLeRoy F. Foreman — denied the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Judge mis-weighed or ignored evidence — raised by the applicantRejected
Applicant argued that the Judge failed to consider significant favorable record evidence.
Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
Applicant contended that the Judge's adverse decision was arbitrary, capricious, or contrary to law.
Erroneous finding of fact — raised by the applicantRejected
Applicant challenged the Judge's findings of fact regarding his tax filings.

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 of fact, which were supported by substantial evidence. The Judge's analysis was deemed thorough and consistent with the interests of national security.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewProcedural complianceNo de-novo re-decisionDeference to the judge’s credibility calls

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 find no error in the Judge’s findings of fact regarding Applicant’s taxes. The Judge’s material findings are supported by substantial evidence. Adverse decision affirmed. CASENO: 15-03995.a1 DATE: 4/24/2017 DATE: April 24, 2017 In Re: ----------------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 15-03995

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Crystina M. O’Brien, Esq. The Department of Defense (DoD) declined to grant Applicant a security clearance. On January 17, 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 February 1, 2017, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge LeRoy F. Foreman 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 to consider significant favorable record evidence; 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 has held a clearance since 2004. Divorced, he has two adult children. His wife left him in 2004, leaving him with a number of marital debts. His daughter was diagnosed with a serious autoimmune disorder, his father was killed in an accident, his mother died, and his brother contracted a serious illness, all within a relatively short period of time. Applicant stated that the stress of these events resulted in his delaying to file Federal and state tax returns for tax years 2007 through 2015. The Judge noted that the SOR alleged delinquent filing for 2009 and 2010. He stated that he would consider the non-alleged conduct for such limited purposes as extenuation, mitigation, rehabilitation, and the whole-person analysis. Applicant hired an accountant, who filed the past-due returns in 2016. Applicant did not actually owe taxes for 2007 through 2015, but he forfeited his refunds due to his failure to file in a timely manner. In addition, Applicant took out student loans on behalf of his daughter. He fell behind on one loan in about 2006 and paid it off in 2016, shortly before the hearing. He used some proceeds from his mother’s estate as well as his own saving to pay the debt. Applicant makes about $105,000 a year and has a net monthly remainder of about $1,000. He has about $17,000 in savings. He is current on his expenses and his credit report discloses no adverse entries. Applicant enjoys a good reputation for his professionalism. His character witnesses stated that he has never shown irresponsible behavior and is not a threat to national security. The Judge’s Analysis The Judge resolved one allegation in Applicant’s favor, a relatively small one for cell phone services. However, he characterized Applicant’s financial problems as numerous and recent. He concluded that the underlying circumstances did not suggest that the problems were unlikely to recur. Though noting Applicant’s divorce and the medical problems that his family suffered, the Judge found that Applicant had not demonstrated responsible effort in regard to his delinquent debts. Though noting that Applicant has filed his tax returns and paid the student loan, he stated that past financial irresponsibility cannot be mitigated by payment of debts under threat of loss of a clearance.

DISCUSSION

Applicant challenges some of the Judge’s findings. He argues that he has held a clearance since 1979 rather than 2004, as the Judge found. The Judge’s finding appears to be based upon Applicant’s answer on his security clearance application. Government Exhibit 1 at 24. We note that during his clearance interview, Applicant stated that he had previously been investigated by the DoD in 1979. Government Exhibit 2 at 2. This summary does not elaborate on whether Applicant has held a clearance continuously since then. Even if the challenged finding is erroneous, however, it did not likely affect the outcome of the case. Therefore, it was harmless error. See, e.g., ISCR Case No. 15-00535 at 3 (App. Bd. Mar. 13, 2017). Applicant also states that he did not fail to pay his taxes, only to file his returns, although the Judge entered an adverse finding under the SOR allegation that he had failed to file and pay taxes for 2009 and 2010. We note first of all that Applicant admitted this allegation in his Response to the SOR, without any qualification or explanation. In any event, the Judge’s findings and analysis address only Applicant’s failure to file his returns. The Judge made no reference to any alleged failure to have paid taxes. We find no error in this aspect of the Judge’s findings of fact. Applicant also argues that his personal difficulties extended over a longer period of time than the Judge found. All in all, the Judge’s material findings are supported by substantial evidence. Applicant has cited to no harmful error in the Judge’s findings. See, e.g., ISCR Case No. 15-01285 at 3 (App. Bd. Dec. 22, 2016). Applicant cites to evidence such as his having finally resolved his financial delinquencies, the many difficulties that Applicant experienced affecting his situation, etc. He also cites to comments in the interview summary to the effect that Applicant lives within his means, intends to pay his debts, and that there is nothing in his background that would leave him open to blackmail. These statements are the investigator’s summary of Applicant’s answers during the interview, not the investigator’s own findings of fact, as Applicant contends. In any event, even if an investigator offered such opinions they would not bind the DoD in its evaluation of an applicant’s case. See, e.g., ISCR Case No. 15-00535, supra, at 4. Applicant’s arguments are not enough to rebut the presumption that the Judge considered all of the evidence in the record. 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, both as to the mitigating conditions and the whole-person factors. 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: James F. Duffy James F. Duffy Administrative Judge Member, Appeal Board DATE: 04/24/2017