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ISCR 17-00893.a1: Guideline E security clearance appeal, denied (2019) · CASE

ISCR Case 17-00893.a1denied

Case headnote

ISCR Case No. 17-00893.a1

May 9, 2019· Hon. Michael Y. Ra'anan· appeal

Summary

A 58-year-old applicant with a prior security clearance was denied a new clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The primary issues stemmed from unresolved financial problems, specifically two state tax liens totaling over $20,000 and an outstanding medical debt.

The appeal board upheld the denial, concluding that the applicant failed to provide sufficient evidence to mitigate these financial concerns. While the applicant claimed to be making payments on her debts, these assertions were not substantiated with clear documentation. The board found that the applicant did not produce enough information to demonstrate that her debts were actively being resolved.

Ultimately, the judge's findings, which supported the denial, were deemed to be based on substantial evidence. The security clearance was therefore denied.

Conditions referenced

Disqualifying

F3raisedInability or Unwillingness to Satisfy Debts
F1raisedFinancial Irresponsibility

Mitigating

F2rejectedThe Conditions That Resulted in the Financial Problems Were Largely Beyond the Person's ControlWhile the applicant experienced conditions beyond her control, she did not act responsibly to address her debts.
F3rejectedThe Person Has Made Good Faith Efforts to Repay Overdue Creditors or Otherwise Resolve DebtsThe applicant did not provide sufficient evidence of good faith efforts to resolve her debts.

Key rule quoted

“It is reasonable for Judge to expect applicants to present documentation showing that debts have been resolved or are being resolved.”
ISCR Case No. 07-10310 at 2 (App. Bd. Jul. 30, 2008)

Procedural posture

SOR issuedMay 16, 2018
Answer filed—
Hearing heldFeb 14, 2019
Decision dateMay 9, 2019Appeal decision affirmed.

Cite for

Insufficient Evidence to Mitigate Financial Concerns Under Guideline F
Expectation of Documentation for Debt Resolution
Impact of Unresolved Debts on Security Clearance Eligibility

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 a denial of a security clearance based on financial considerations and personal conduct. The Applicant argued that the Judge's decision was arbitrary and capricious. The Board affirmed the Judge's decision, finding that the Applicant did not provide sufficient evidence to mitigate the security concerns related to state tax liens.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowNoreen A. Lynch denied the clearance (split findings)

Decided ona hearing

Guidelines belowGuideline EGuideline F

What the Board reviewed

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.

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 that the Judge's conclusion regarding the Applicant's failure to mitigate security concerns was supported by substantial evidence and that the Judge's findings were reasonable and not arbitrary or capricious. The adverse decision was affirmed based on the unresolved state tax liens and the lack of sufficient documentation to demonstrate that debts were being resolved.

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 E; Guideline F DIGEST: The Judge’s conclusion that Applicant did not produce sufficient information to mitigate the security concerns arising from the two state tax liens is sustainable. As the Board has previously stated, it is reasonable for Judge to expect applicants to present documentation showing that debts have been resolved or are being resolved. Adverse decision affirmed. CASENO: 17-00893.a1 DATE: 05/09/2019 DATE: May 9, 2019 ) In Re: ) ) ----------------------------- ) ISCR Case No. 17-00893 ) ) Applicant for Security Clearance ) )

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 May 16, 2018, DoD issued a statement of reasons (SOR) advising Applicant of the basis for that decision—security concerns raised under Guideline F (Financial Considerations) and Guideline E (Personal Conduct) of Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive). Applicant requested a hearing. On February 14, 2019, after the hearing, Administrative Judge Noreen A. Lynch 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. The Judge’s favorable findings under Guideline E were not raised as an issue on appeal and are not discussed further below. Consistent with the following, we affirm. The Judge’s Pertinent Findings of Fact and Analysis Applicant, who is 58 years old, has worked for her current employer since 2015. Before her current employment, she worked as a contractor and has held a security clearance for about 15 years. The Judge found in favor of Applicant on three of six Guideline F allegations. She found against Applicant on two state tax liens totaling over $20,000 and a medical debt of $560. Applicant experienced periods of unemployment, including while working for her current employer. She indicated that she received bad advice from an accountant about the filing of her self- employment tax returns. She also suffered a stroke at work that was not covered by health insurance. Applicant admitted that she was indebted for a state tax lien of about $7,300. While two state tax liens are alleged in the SOR, she claimed she has only one state tax lien in the approximate amount of $13,100. She provided a 2018 state document showing she owes a balance of about $4,700 for tax year 2007 and about $9,000 for tax year 2009. She attributed the past-due taxes to inaccurate tax filings by her accountant. In 2011, she began making $400 payments, but it was not clear from the record to whom she was making those payments. At one point, checks torn in half were returned to her. In 2018, she agreed to a 60-month payment plan with the state. Under that agreement, she was to make a initial payment of $1,374 and then monthly payments of $235. She has not started making the payments because her husband had a massive heart attack, and she is the only one employed. Applicant stated that she was making payments on the delinquent medical account, but provided no proof of those payments. In her post-hearing submission, she provided a receipt for $480; however, it was not clear to whom the payment was made. She also volunteered that she owed about $8,000 in Federal taxes for 2017 and an unspecified amount in state taxes for that same year. She again attributed the 2017 tax delinquencies to her old accountant; however, she has hired a new accountant. While Applicant experienced conditions beyond her control, she has not acted responsibly to address her debts. More specifically, she did not produce sufficient information to show that she has been proactive in her actions. While she settled a Federal tax lien, she has not started payments on others. She has not shown that her financial problems are under control.

DISCUSSION

In her appeal brief, Applicant contends that she made payments towards the state tax liens through a collection agency and that she settled the medical debt through a third-party corporation. The Judge discussed those claimed payments in the decision, indicating for both the state tax liens and the medical debt that it was not clear to whom Applicant made the payments.1 The Judge’s findings regarding state tax liens are generally consistent with the evidence in the record. They are based upon substantial evidence or constitute reasonable inferences therefrom. See, e.g., ISCR Case No. 17-01181 at 4 (App. Bd. Apr. 30, 2018). Additionally, the Judge’s conclusion that Applicant did not produce sufficient information to mitigate the security concerns arising from the two state tax liens is sustainable. As the Board has previously stated, it is reasonable for Judge to expect applicants to present documentation showing that debts have been resolved or are being resolved. See, e.g., ISCR Case No. 07-10310 at 2 (App. Bd. Jul. 30, 2008). The balance of Applicant’s arguments amount to a disagreement with the Judge’s weighing of the evidence, which is not sufficient to establish harmful error. See, e.g., ISCR Case No. 17-02463 at 2 (App. Bd. Sep. 10, 2018). The record supports a conclusion that the Judge examined the relevant data and articulated a satisfactory explanation for the decision, “including a ‘rational connection between the facts found and the choice made.’” Motor Vehicle Mfrs. Ass’n of the United States v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)(quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)). The Judge’s adverse 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 at 528. 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.” 1 Some comments regarding the claimed payments merit noting. a. In her post-hearing submission, Applicant stated that she was providing a receipt from a collection agency for $448 showing the medical debt in SOR ¶ 1.e was paid. The Judge found “Applicant provided a receipt for $480, but it was not clear to whom it was paid.” Decision at 3. In the record, we are unable to find a receipt for either $448 or $480. b. In discussing the $400 state tax lien payments, the Judge stated, “but it was not clear from the record that the payment was going to the IRS.” Decision at 3. At the hearing, Applicant indicated that payments were going to an unspecified collection company. Tr. at 22. In the appeal brief, Applicant states the payments were going to a collection agency, not the IRS. Even though the Judge may have erred in failing to include the receipt for either $488 or $480 in the record and may have erred in referring to the IRS regarding the state tax lien payments, these were harmless errors because they did not likely affect the outcome of the case. See, e.g., ISCR Case No. 11-15184 at 3 (App. Bd. Jul. 25, 2013). As discussed above, the unresolved state tax liens are sufficient to sustain the Judge’s unfavorable clearance decision.

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