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ISCR Case 15-04871.a1 — CASE

ISCR Case 15-04871.a1denied

Case Headnote

ISCR Case No. 15-04871.a1

Jun 7, 2017· Hon. Michael Y. Ra'anan· appeal

Summary

An applicant, represented by counsel, was denied a security clearance under Guideline F (Financial Considerations) due to unresolved financial issues. The denial was based on significant mortgage debts and economic setbacks that demonstrated financial irresponsibility and a lack of effective debt resolution.

Specifically, the applicant's mortgage debts and insufficient financial planning were cited as evidence of irresponsibility. Furthermore, the applicant failed to provide evidence of financial counseling or a viable budget that would effectively address the outstanding debts.

At the time of the decision, the applicant's financial problems were not demonstrated to be under control, leading to the denial of the security clearance, which was subsequently affirmed on appeal. The disqualifying conditions raised were AG ¶ 19.

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 issuedDec 30, 2015
Answer filed—
Hearing heldMar 1, 2017
Decision dateJun 7, 2017

Cite For

Financial Irresponsibility Under Guideline F
Timing of Debt Resolution Efforts as a Factor in Clearance Decisions
Presumption That Judges Consider All Evidence in the Record

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 filed by the Applicant after the Administrative Judge denied his request for a security clearance based on financial considerations. The Applicant argued that the Judge did not consider all evidence and that the decision was arbitrary and capricious. The Board affirmed the decision, finding that the Judge's conclusions were supported by substantial evidence and that any error regarding the budget was harmless.

Appealed bythe applicant

Applicant representationAttorney

Judge belowJohn Grattan Metz, Jr. — denied the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Judge mis-weighed or ignored evidence — raised by the applicantError found, but harmless
The Judge did not consider the budget document submitted by the Applicant.
Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
The Judge's adverse decision was arbitrary, capricious, or contrary to law.

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 Judge's findings were supported by substantial evidence, and the decision was not arbitrary or capricious. The error regarding the budget was deemed harmless as it did not affect the outcome of the case.

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
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: A Judge is presumed to have considered all of the evidence in the record. The Judge made findings about Applicant’s debt resolution and discussed it in his analysis. Adverse decision affirmed. CASENO: 15-04871.a1 DATE: 06/07/2017 DATE: June 7, 2017 In Re: ----------------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 15-04871

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 December 30, 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 March 1, 2017, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge John Grattan Metz, Jr., 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 considered all of the 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 In 2003, Applicant bought a home with a VA loan in the amount of about $183,000. He later bought a second home for about $622,000. At about the same time, Applicant obtained a second mortgage on his first house. This loan was for about $248,000. Applicant’s wife and mother were to sell the first home, but they never did so, and was not never rented out. Although Applicant could keep up with mortgage payments through most of 2012, the lender short-sold the first house. This action resolved the first mortgage but not the second. Applicant suffered some economic setbacks in the years leading up to his mortgage problems. A prime contractor did not renew the contract for Applicant’s business and lured away his employees. He was unemployed for several months, eventually taking a job that paid less than he was previously making. He was again unemployed in November 2012, obtaining another job early the next year, though again for a lesser salary than he had made when running his company. Applicant’s wife also experienced some unemployment. Applicant had some non-alleged debts that, though previously delinquent, he had resolved. Applicant did not present evidence of financial counseling or of a budget. (emphasis added) Decision at 3. Neither did he submit character references or evidence of his job performance. The Judge’s Analysis The Judge noted evidence that Applicant and his wife had suffered unemployment, which was beyond their control. However, he concluded that Applicant’s having acquired so much mortgage debt in purchasing a second home without a plan to deal with the first one demonstrated a lack of responsibility. The Judge cited to evidence that Applicant did not begin to resolve his financial problems until after he received the SOR and ultimately concluded that Applicant had not shown that his problems were under control.

DISCUSSION

Applicant argues that the Judge did not consider all of the evidence in the record, for example that he had addressed some of his debts. He also argues that he submitted evidence of a budget, yet the Judge found that he had not done so. A Judge is presumed to have 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 made findings about Applicant’s debt resolution and discussed it in his analysis. Regarding the budget, however, Applicant has rebutted the presumption. Applicant included a budget in a package of documents admitted as Applicant Exhibit B. The Judge’s finding suggests that he did not consider this document in evaluating Applicant’s case, which was an error. However, given (1) that the budget shows a monthly deficit of nearly $300; (2) that the Judge did not rely on the absence of a budget in his analysis of the case; and (3) that the Judge based his decision in large measure on the timing of Applicant’s effort at debt resolution and on aspects of Applicant’s financial problems that impugned his judgment, we find no reason to believe that, had the Judge actually addressed the budget, he would have arrived at a different conclusion. Therefore, this error is harmless. See, e.g., ISCR Case No. 15-00535 at 3 (App. Bd. Mar. 13, 2017). Applicant cites to a Hearing Office case that he asserts is similar to his own and supports his effort to get a clearance. Hearing Office cases are not binding on other Hearing Office Judges or on the Appeal Board. See, e.g., ISCR Case No. 15-01416 at 3 (App. Bd. Nov. Feb. 15, 2017). In any event, the case that Applicant has cited has significant differences from the circumstances underlying his. This case does not provide a reason to reverse the Judge’s 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: 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