DATE: February 5, 2004

---------------

SSN: -----------

Applicant for Security Clearance

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT

Peregrine D. Russell-Hunter, Esq., Chief Department Counsel

FOR APPLICANT

Pro Se

The Defense Office of Hearings and Appeals (DOHA) issued the Applicant a Statement of Reasons (SOR), dated January 30, 2003, which stated the reasons why DOHA proposed to deny or revoke Applicant's access to classified information. The SOR was based upon Guidelines F (Financial Considerations) and E (Personal Conduct). Administrative Judge James A. Young issued an unfavorable security clearance decision, dated October 10, 2003.

Applicant appealed the Administrative Judge's unfavorable decision. The Board has jurisdiction on appeal under Executive Order 10865 and Department of Defense Directive 5220.6 (Directive), dated January 2, 1992, as amended.

Applicant's appeal presents the following issues: (1) whether the Administrative Judge erred by not concluding that the security concerns raised by Applicant's indebtedness had been mitigated; and (2) whether the Administrative Judge erred by not concluding that the security concerns raised by Applicant's falsification of his security clearance application had been mitigated. For the reasons that follow, the Board affirms the Administrative Judge's decision.

On appeal, the Board does not review a case de novo. Rather, the Board addresses the material issues raised by the parties to determine whether there is factual or legal error. There is no presumption of error below, and the appealing party must raise claims of error with specificity and identify how the Administrative Judge committed factual or legal error. Directive, Additional Procedural Guidance, Item E3.1.32. See also ISCR Case No. 00-0050 (July 23, 2001) at pp. 2-3 (discussing reasons why party must raise claims of error with specificity).

When the rulings or conclusions of an Administrative Judge are challenged, the Board must consider whether they are: (1) arbitrary or capricious; or (2) contrary to law. Directive, Additional Procedural Guidance, Item E3.1.32.3. In deciding whether the Judge's rulings or conclusions are arbitrary or capricious, the Board will review the Judge's decision to determine whether: it does not examine relevant evidence; it fails to articulate a satisfactory explanation for its conclusions, including a rational connection between the facts found and the choice made; it does not consider relevant factors; it reflects a clear error of judgment; it fails to consider an important aspect of the case; it offers an explanation for the decision that runs contrary to the record evidence; or it is so implausible that it cannot be ascribed to a mere difference of opinion. See, e.g., ISCR Case No. 97-0435 (July 14, 1998) at p. 3 (citing Supreme Court decision). In deciding whether the Judge's rulings or conclusions are contrary to law, the Board will consider whether they are contrary to provisions of Executive Order 10865, the Directive, or other applicable federal law. Compliance with state or local law is not required because security clearance adjudications are conducted by the Department of Defense pursuant to federal law. See U.S. Constitution, Article VI, clause 2 (Supremacy Clause). See, e.g., ISCR Case No. 00-0423 (June 8, 2001) at p. 3 (citing Supreme Court decisions).

When an Administrative Judge's factual findings are challenged, the Board must determine whether "[t]he Administrative Judge's findings of fact are supported by such relevant evidence as a reasonable mind might accept as adequate to support a conclusion in light of all the contrary evidence in the same record. In making this review, the Appeal Board shall give deference to the credibility determinations of the Administrative Judge." Directive, Additional Procedural Guidance, Item E3.1.32.1. The Board must consider not only whether there is record evidence supporting a Judge's findings, but also whether there is evidence that fairly detracts from the weight of the evidence supporting those findings, and whether the Judge's findings reflect a reasonable interpretation of the record evidence as a whole. Although a Judge's credibility determination is not immune from review, the party challenging a Judge's credibility determination has a heavy burden on appeal.

When an appeal issue raises a question of law, the Board's scope of review is plenary. See DISCR Case No. 87-2107 (September 29, 1992) at pp. 4-5 (citing federal cases).

If an appealing party demonstrates factual or legal error, then the Board must consider the following questions:

Is the error harmful or harmless? See, e.g., ISCR Case No. 00-0250 (July 11, 2001) at p. 6 (discussing harmless error doctrine);

Has the nonappealing party made a persuasive argument for how the Administrative Judge's decision can be affirmed on alternate grounds? See, e.g., ISCR Case No. 99-0454 (October 17, 2000) at p. 6 (citing federal cases); and

If the Administrative Judge's decision cannot be affirmed, should the case be reversed or remanded? (Directive, Additional Procedural Guidance, Items E3.1.33.2 and E3.1.33.3).

1. Whether the Administrative Judge erred by not concluding that the security concerns raised by Applicant's indebtedness had been mitigated. With one exception, Applicant does not dispute the Administrative Judge's findings of fact ⁽²⁾ with respect to the Applicant's overall financial history. Rather, Applicant contends the Judge should have concluded that the security concerns raised by his debts were mitigated because his financial problems were not recent and he had initiated a good-faith effort to repay his creditors. The Board construes these arguments as an assertion that the Judge erred by not concluding that the security concerns raised by Applicant's indebtedness had been mitigated under Financial Considerations Mitigating Conditions 1 ⁽³⁾ and 6. ⁽⁴⁾ For the reasons set forth below, we conclude Applicant has not shown the Judge erred.

The application of Adjudicative Guidelines disqualifying and mitigating conditions does not turn simply on a finding that one or more of them applies to the particular facts of a case. Rather, the application of a disqualifying or mitigating condition requires the exercise of sound discretion in light of the record evidence as a whole. See, e.g., ISCR Case No. 01-14740 (January 15, 2003) at p. 7. Accordingly, the Administrative Judge's finding that much of the Applicant's original financial problems could be traced to conditions that were largely beyond his control--the inability to find a civilian job after retiring from the Army--did not compel the Judge to make a favorable security clearance decision. Even if Applicant's financial difficulties initially arose due to circumstances outside his control, the Judge could consider whether Applicant acted in a reasonable manner when dealing with his financial difficulties. See, e.g., ISCR Case No. 99-0462 (May 25, 2000) at p. 4 ; ISCR Case No. 99-0012 (December 1, 1999) at p. 4 . In this case, it was not arbitrary or capricious for the Judge to it consider Applicant's failure to resolve his multiple consumer and tax ⁽⁵⁾ debts after the conditions which had contributed to them becoming delinquent had passed and his financial situation had improved. Given the record evidence, the Judge could reasonably conclude that Applicant's filing for Chapter 13 bankruptcy--subsequent to the initiation of the security clearance process and the issuance of the SOR--was not a substitute for a sustained record of timely financial payments such that Applicant's financial difficulties could be considered a thing of the past and not likely to recur.

Likewise, the Board has previously discussed what constitutes a "good-faith" effort to repay overdue creditors or otherwise resolve debts:

"In order to qualify for application of Financial Considerations Mitigating Condition 6, an applicant must present evidence showing either a good-faith effort to repay overdue creditors or some other good-faith action aimed at resolving the applicant's debts. The Directive does not define the term 'good-faith.' However, the Board has indicated that the concept of good-faith 'requires a showing that a person acts in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation.' ISCR Case No. 99-0201 (October 12, 1999) at p. 4 (discussing concept of good-faith in connection with another provision of the Adjudicative Guidelines). Accordingly, an applicant must do more than merely show that he or she relied on a legally available option (such as bankruptcy) in order to claim the benefit of Financial Considerations Mitigating Condition 6." ISCR Case No. 99-9020 (June 4, 2001) at pp. 5-6.

Given Applicant's history of financial problems, the sizable nature of the indebtedness, and the fact that the debts at issue had been incurred years earlier, but virtually no effort had been made to resolve them until after the invocation of the security clearance process and the issuance of the SOR, it was not arbitrary or capricious for the Judge to decide that the evidence was insufficient for him to conclude that Applicant's efforts to otherwise resolve his debts warranted application of Financial Considerations Mitigating Condition 6.

Finally, the favorable record evidence cited by Applicant is not sufficient to demonstrate the Administrative Judge's decision is arbitrary, capricious, or contrary to law. As the trier of fact, the Judge had to weigh the evidence as a whole and decide whether the favorable evidence outweighed the unfavorable evidence or vice versa. Applicant's disagreement with the Judge's weighing of the record evidence is not sufficient to demonstrate the Judge weighed the evidence in a manner that is arbitrary, capricious, or contrary to law. There is ample record evidence to support the Judge's adverse conclusions about Applicant's history of financial difficulties.

2. Whether the Administrative Judge erred by not concluding that the security concerns raised by Applicant's falsification of his security clearance application had been mitigated. On appeal, Applicant acknowledges that he provided false information on his security clearance application, but contends that the security concerns raised by his falsifications should have been mitigated because he has now repented and will not repeat his falsifications. The Board construes his argument as an assertion that the Judge erred by not concluding that the security concerns raised by Applicant's falsification had been mitigated under the general factors of Directive, Section 6.3 and Enclosure 2, Item E2.2.1. For the reasons set forth below, we conclude Applicant's argument fails to show the Judge erred.

As discussed earlier in this decision, the Administrative Judge must consider the evidence as a whole and decide whether the favorable evidence outweighs the unfavorable evidence or vice versa. In this case, the Judge considered the record evidence concerning Applicant's falsification of the security clearance application and concluded Applicant had failed to extenuate or mitigate that misconduct. Applicant's appeal argument fails to persuade the Board that the Judge weighed the record evidence in a manner that is arbitrary, capricious, or contrary to law, or that the Judge's adverse conclusions about Applicant's falsifications are arbitrary, capricious, or contrary to law.

Applicant has failed to demonstrate error below. Therefore, the Board affirms the Administrative Judge's adverse security clearance decision.

Signed: Emilio Jaksetic

Emilio Jaksetic

Administrative Judge

Chairman, Appeal Board

Signed: Jeffrey D. Billett

Jeffrey D. Billett

Administrative Judge

Member, Appeal Board

Signed: William S. Fields

William S. Fields

Administrative Judge

Member, Appeal Board

1. The Administrative Judge entered a formal finding in favor of Applicant with respect to SOR paragraph 1.g. That favorable formal finding is not at issue on appeal.

2. On appeal, Applicant contends the delinquent debts covered by SOR paragraphs 1.c and 1.e are the same debt. Considering the record as a whole, the Administrative Judge's findings concerning those two debts are sustainable. Directive, Additional Procedural Guidance, Item E3.1.32.1.

3. "The behavior was not recent" (Directive, Enclosure 2, Item E2.A6.1.3.1).

4. "The individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts" (Directive, Enclosure 2, Item E2.A6.1.3.6).

5. The tax debts were for unpaid federal income taxes for the years 1998, 1999, and 2000.