KEYWORD: Guideline J; Guideline E
DIGEST: A Judge’s acceptance of an applicant’s explanation for his or her conduct must be
based on a reasonable interpretation of the record as a whole.  The record evidence in this case
undercuts both the Judge’s favorable credibility determination and his conclusions regarding the
circumstances of Applicant’s responses.  Favorable decision reversed.
CASENO: 05-02401.a1
DATE: 07/10/2007
DATE: JULY 10, 2007
In Re:
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SSN: -----------
Applicant for Security Clearance
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ISCR Case No. 05-02401
APPEAL BOARD DECISION
APPEARANCES
FOR GOVERNMENT
Julie R. Edmunds, Esq., Department Counsel
FOR APPLICANT
Pro Se
The Defense Office of Hearings and Appeals (DOHA) declined to grant Applicant a security
clearance.  On November 25, 2005, DOHA issued a statement of reasons (SOR) advising Applicant
of the basis for that decision–security concerns raised under Guideline J (Criminal Conduct), and
Guideline E (Personal Conduct) pursuant to Department of Defense Directive 5220.6 (Jan. 2, 1992,
The Judge’s favorable findings with regard to Guideline J were not challenged on appeal.1
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as amended) (Directive).  Applicant requested a hearing.  On November 17, 2006, Administrative
Judge Philip S. Howe granted Applicant’s request for a security clearance.  Department Counsel
timely appealed pursuant to the Directive ¶¶ E3.1.28 and E3.1.30.  
Department Counsel raised the following issues on appeal:  whether the Administrative
Judge’s conclusion that Applicant did not intentionally falsify his answers to two questions on a
security clearance application and did not intentionally provide false information on a written
statement is supported by the record evidence and whether the Judge failed to address Applicant’s
criminal charge of knowingly making false statements under Guideline E.   We reverse the1
Administrative Judge’s decision to grant the clearance. 
Whether the Record Supports the Judge’s Factual Findings
A. Facts 
The Judge made the following factual findings: (a) Applicant was arrested in 1995 for second
degree rape (no force), a felony; (b) the female involved, who was underage, later explained what
happened and that the sex was consensual, and the charges against Applicant were eventually
dismissed; (c) in August 2002, Applicant’s attorney filed a motion to expunge this record;  (d)
Applicant assumed the charges were no longer on his record because they were dismissed and he had
petitioned the local court to expunge his record; (e) Applicant was arrested in 1997 on charges of
second degree robbery, a felony; (f) Applicant was in the vicinity of some of his friends who attacked
a man and robbed him; (g) Applicant got into his car and left the scene when someone yelled the
police were coming; (h) Applicant was questioned by the police that night because he was
recognized by the victim as being in the vicinity; (i) Applicant was arrested two months later and
placed in jail: (j) while in jail, he was recognized by the robbery victim, who was there on other
charges; (k) the victim then told the authorities that Applicant was a witness and not a perpetrator;
(l) Applicant was later released and the charges were dismissed on the motion of the prosecutor; (m)
Applicant filed a motion to expunge this arrest record on an unknown date; (n) In April 2003,
Applicant was served with a warrant charging him with making false statements about his income
on an application to obtain unemployment insurance; (o) Applicant had found an interim part-time
job during a period where he was collecting unemployment benefits but he did not inform the
unemployment insurance office, which would have reduced his unemployment benefits had it
known; (p) in June 2003, Applicant pled guilty to a reduced charge of theft by deception; (q)
Applicant received a suspended jail sentence, was ordered to pay costs and restitution, and was
placed on probation; (r) Applicant thought the charges would be expunged when he completed the
probation in 2005; (s) Applicant received an income tax refund from the IRS in 2002: (t) he spent
the money, only to receive a letter from the IRS six months later asking for its return because he
owed back child support; (u) on January 5, 2004, Applicant gave a written statement to a government
investigator about the IRS check and states he was charged with theft by deception because he could
not repay the money; (v) Applicant’s statement mentions a $300.00 per month repayment agreement
that, in fact, existed for the unemployment restitution, not the IRS repayment; (w) Applicant never
went to court for the IRS claim for repayment; (x) while he was with the government investigator,
Applicant did not mention the unemployment insurance payments he received and did not relate
those payments to the theft by deception charges, claiming he was confused about the two situations;
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(y) Applicant completed a security clearance application on September 5, 2003; (z) on it, he
disclosed his theft by deception arrest in 2003 in answer to Question 26 (any arrest, charges, or
convictions not listed elsewhere on the SCA); (aa) Question 21 of the SCA asked if Applicant had
ever been charged with or convicted of any felony offenses; (bb) Applicant answered “no” because
the 1995 and 1997 charges were dismissed and he was never convicted; (cc) Applicant claims he
does not know the difference between charges and convictions and he thought Question 21 meant
in the conjunctive (“and’) and not the disjunctive (“or”) and referred to convictions of those offenses;
and (dd) Applicant knew that he had not been convicted of the 1995 and 1997 charges.  
  
B. Discussion
The Appeal Board’s review of the Administrative Judge’s findings of fact is limited to
determining if they are supported by substantial record evidence—such relevant evidence as a
reasonable mind might accept as adequate to support such a conclusion in light of all the contrary
evidence in the record.  Directive ¶ E3.1.32.1.  “This is something less than the weight of the
evidence, and the possibility of drawing two inconsistent conclusions from the evidence does not
prevent an administrative agency’s finding from being supported by substantial evidence.”  Consolo
v. Federal Maritime Comm’n, 383 U.S. 607, 620-21 (1966).  In evaluating the Administrative
Judge’s findings, we are required to give deference to the Administrative Judge’s credibility
determinations.  Directive ¶ E3.1.32.1. 
The Administrative Judge’s resolution of the issue of whether Applicant engaged in
deliberate falsification, although it could easily be analyzed as a finding of fact, is couched in terms
of the Judge’s conclusions.  No other findings of fact are challenged on appeal.  Therefore, the
appeal issue in this case can be resolved with reference to the Judge’s conclusions, which are
described in the following paragraph.
  
Whether the Record Supports the Administrative Judge’s Ultimate Conclusions
The Judge reached the following conclusions regarding the alleged falsifications by
Applicant: (i) based on the evidence, including testimony that is credible, there was no knowing and
willful falsification by Applicant of his SCA and the statement to the government investigator; (ii)
it is obvious from Applicant’s testimony at the hearing and from the contents of his written statement
to the investigator that he was confused about the information sought by Question 21 of the SCA,
and was further confused in his statement about his conviction in 2003 and the IRS repayment (i.e.
he was confused about what offense he was convicted of in 2003); (iii) he misread Question 21 so
he thought he would be disclosing and admitting he was convicted of the felonies in 1995 and 1997
when those were not the actual facts; (iv) Applicant’s explanation and even his current display of
confusion on this issue is convincing and credible; (v) with that obvious confusion and lack of
understanding of Question 21's meaning, he could not have knowingly and willfully made a false
statement; and (vi) Applicant’s lack of sophistication is taken into account in deciding he was not
acting or lying about the reasons he gave for failing to make the fullest disclosure.
   An Administrative Judge is required to “examine the relevant data and articulate 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.
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Co., 463 U.S. 29, 43 (1983) (quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156,
168 (1962)).  The Appeal Board may reverse the Administrative Judge’s decision to grant, deny, or
revoke a security clearance if it is arbitrary, capricious, or contrary to law.  Directive ¶ E3.1.32.3.
Our scope of review under this standard is narrow and we may not substitute our judgment for that
of the Administrative Judge.  We may not set aside an Administrative Judge’s decision “that is
rational, based on consideration of the relevant factors, and within the scope of the authority
delegated to the agency. . .”  Motor Vehicle Mfrs. Ass’n, 463 U.S. at 42.  We review matters of law
de novo.
On appeal, Department Counsel asserts that the Administrative Judge’s conclusion that
Applicant did not falsify his September 5, 2003 security clearance application and his conclusion that
Applicant did not falsify his January 5, 2004 statement to a government investigator are arbitrary,
capricious and contrary to law.  Department Counsel’s argument has merit.  
More specifically, Department Counsel contends: (a) the Judge’s conclusion that Applicant
did not engage in deliberate falsification is based, in part, on a favorable credibility determination
that is not sustainable; (b) the Judge’s decision does not articulate a satisfactory explanation for its
conclusions that Applicant did not falsify; and (c) the Judge’s ultimate favorable conclusion is not
sustainable in light of the evidence to the contrary.  These arguments are persuasive.  
It is well established in industrial security clearance cases that the question of whether there
is sufficient evidence to support a Judge’s factual findings is a matter of law, not one of fact. See,
e.g., ISCR Case No. 94-0964 at 3 (App. Bd. July 3, 1996).  The deference afforded a trier of fact is
not absolute. See, e.g., ISCR Case No. 95-0178 at 2-4 (App. Bd. Mar. 29, 1996).  Moreover,
although the Board must give deference to the credibility determinations made by an Administrative
Judge (Directive ¶ E3.1.32.1), that deference does not immunize credibility determinations from
review. See, e.g., ISCR Case No. 99-0710 at 4 (App. Bd. Mar. 19, 2001).  As the Supreme Court
noted in Anderson v. City of Bessemer, 470 U.S. 564, 575 (1985): “[T]he trial judge may [not]
insulate his findings from review by denominating them credibility determinations, for factors other
than demeanor and inflection go into the decision whether or not to believe a witness.  Documents
or objective evidence may contradict the witness’ story; or the story itself may be so internally
inconsistent or implausible on its face that a reasonable fact finder would not credit it.  Where such
factors are present, the courts of appeals may well find clear error even in a finding purportedly
based on a credibility determination.”
Department Counsel persuasively argues that the Judge accepted the Applicant’s hearing
testimony concerning the issue of falsification uncritically.  The Judge’s decision is lacking in any
kind of in-depth analysis of Applicant’s representations concerning his state of mind at the time he
responded to the government’s inquiries, or whether those explanations are plausible in light of the
totality of the record evidence.  The decision contains little more than the rote adoption of
Applicant’s explanations coupled with the Judge’s pronouncement that Applicant is credible.
An Administrative Judge is not required to accept testimony merely because it is unrebutted.
See, e.g., ISCR Case No. 99-0005 at 3 (App. Bd. Apr. 19, 2000).  Indeed, it would be arbitrary and
capricious for a Judge to uncritically accept a witness’s testimony without considering whether it is
plausible and consistent with other record evidence.  See, e.g., ISCR Case No. 00-0620 at 3 (App.
Bd. Oct. 19, 2001).  Accordingly, whether to accept an applicant’s explanation about a matter cannot
simply turn on a Judge’s assessment of the Applicant’s demeanor when the applicant testifies.
Applicant’s answer to the SOR, wherein he is explaining his “no” answer to Question 21 of the security2
clearance application, reads in part: “The answer to that question is yes and no yes I was charged and no I was not
convicted.”
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Furthermore, a Judge’s acceptance of an applicant’s explanation for his or her conduct must be based
on a reasonable interpretation of the record evidence as a whole.  See, e.g., ISCR Case No. 99-0710
at 4 (App. Bd. Mar. 19, 2001); ISCR Case No. 99-0194 at 3 (App. Bd. Feb. 29, 2000).  In
determining whether there is sufficient record evidence to support a Judge’s findings, the Board will
consider not just whether there is record evidence consistent with the Judge’s findings, but will also
consider whether there is evidence that detracts from the Judge’s findings.  See Directive, Additional
Procedural Guidance, Item E3.1.32.1.  See, e.g., ISCR Case No. 99-0205 at 2 (Oct. 19, 2000).
There is record evidence in this case that strongly undercuts both the Judge’s favorable
credibility determination of Applicant and the Judge’s conclusion that Applicant responded to the
government’s inquiries the way he did because of confusion and a lack of sophistication.  These
components of the case will be discussed in turn.
The Judge’s favorable credibility determination is fundamentally flawed inasmuch as it
ignores an important aspect of the case.  It is undisputed that Applicant was convicted in 2003 on
a charge of theft by deception stemming from his making false statements to obtain unemployment
insurance benefits to which he was not entitled.  The Judge made no finding of fact that Applicant
suffered from any lack of understanding when he engaged in this attempt to defraud government
authorities.  The relevance of such a prior conviction to a subsequent determination of Applicant’s
credibility is obvious.  However, the Judge does not include any discussion of this conviction in the
context of determining Applicant’s credibility.  Inasmuch as the 2003 conviction is powerful
evidence that reflects on whether Applicant has a history of honesty and trustworthiness, the Judge’s
failure to address it in the context of assessing Applicant’s credibility was clear error.
Moreover, Applicant’s denials of an intent to falsify do not stand up well to close scrutiny.
The Judge accepted without comment Applicant’s claim that, regarding the 1995 and 1997 incidents,
he did not understand the difference between a charge and a conviction for purposes of answering
Question 21 of his security clearance application.  However, Applicant’s hearing testimony belies
this explanation.  He knew the charges against him once existed and he knew he had never been
convicted of the offenses. Thus, logically, he would have to recognize the difference between the
two.  Additionally, Applicant seemed to understand the distinction between “charges” and
“convictions” in his answer to the SOR.   Thus, there is significant record evidence that detracts from2
the Judge’s conclusion that Applicant did not understand the distinction between the two terms.  
The Judge also accepted without comment Applicant’s explanation that he misread Question
21 and thought it referred to whether he had ever “been charged with and convicted of” any felony
offense, as opposed to the actual language of the question which asked whether he had ever “been
charged with or convicted of” any felony offense.  Question 21 contains plain language and clearly
contemplated the recording of felony charges, regardless of future disposition.  By focusing only on
Applicant’s claim that he had misunderstood what is objectively an unambiguous question, the Judge
failed to provide a rational explanation as to why Applicant had no intent to falsify when he
answered the question incorrectly.  Moreover, Applicant’s claim that he misread Question 21 is
inconsistent with his claim that he does not know the difference between charges and convictions.
A review of the decision below indicates that the Judge accepted both of Applicant’s explanations.
Applicant’s explanations regarding the omissions on his security clearance application were not evaluated by3
the Judge with reference to Applicant’s explanation for the incorrect information in his statement to the government
investigator, and vice versa.  In addition, neither of these matters were evaluated with reference to Applicant’s 2003
conviction for a crime involving dishonesty.  
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No deference is owed to a favorable credibility determination that results in acceptance of an
applicant’s explanations that are inconsistent and incompatible.  See, e.g., ISCR Case No. 00-0713at
3 (App. Bd. Feb. 15, 2002).  The Judge’s conclusion that Applicant did not falsify the security
clearance application is unsustainable because it does not reflect a reasonable interpretation of the
record evidence as a whole, including evidence that runs contrary to the Judge’s finding. See
Directive, Additional Procedural Guidance, Item E3.1.32.1.
Regarding Applicant’s January 5, 2004 sworn statement, in which he erroneously attributed
his 2003 criminal conviction of theft by deception to his failure to make payments on an IRS tax
refund dispute, Department Counsel persuasively argues that Applicant’s claim of confusion between
the IRS matter and his conviction for fraudulently attempting to obtain unemployment compensation
benefits is not reasonably supported by the record evidence.  The undisputed record evidence
indicates that: (a) Applicant received a uniform citation that clearly detailed the charge as knowingly
making false statements for unemployment benefits; (b) the charge initiated in state court; (c)
Applicant was sentenced in state court to two years probation until mid-2005, was ordered not to
move out of state, and was required to pay the state $1,045 in restitution; (d) Applicant was still on
probation for his state conviction at the time he executed his statement; (e) Applicant gave his
signed, sworn statement only six months after he pled guilty to theft by deception: and (f) Applicant
testified at the hearing that, prior to executing his security clearance application and prior to
providing the 2005 statement to the government, he knew that the theft by deception conviction was
for fraudulently receiving unemployment benefits.  This evidence, along with the commonsense
notion that a state court conviction is not something that can be readily confused with a federal tax
matter not in litigation runs contrary to the Judge’s conclusions concerning Applicant’s state of mind
when he executed the statement.                       
 
In summary, the Judge failed to consider or analyze record evidence that detracted from his
conclusions about Applicant’s state of mind, he substituted a favorable credibility determination for
record evidence, and he engaged in a piecemeal analysis of Applicant’s responses to the
government.   The Board concludes that the Judge’s decision is not based on the record evidence as3
a whole or on a reasonable evaluation of Applicant’s explanations regarding his responses to the
government. 
Department Counsel raises a separate appeal issue concerning the Judge’s failure to analyze
Applicant’s 2003 conviction for theft by deception under Guideline E.  While the Judge states why
he concluded that Applicant did not falsify his answers to the government under Guideline E, he
does not explain why the theft by deception conviction was either mitigated or would not raise a
security concern under Guideline E.  Such an omission would ordinarily warrant a remand for
correction of error.  However, inasmuch as the Board has determined in this case that the Judge’s
overall favorable security clearance decision is not sustainable, remand is not necessary.
Department Counsel has demonstrated several errors below, that, taken cumulatively, warrant
reversal.  
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Order
The judgment of the Administrative Judge granting Applicant a clearance is REVERSED.
Signed: Michael Y. Ra’anan    
Michael Y. Ra’anan
Administrative Judge
Chairman, Appeal Board
Signed: Jeffrey D. Billett         
Jeffrey D. Billett
Administrative Judge
Member, Appeal Board
Signed: James E. Moody           
James E. Moody
Administrative Judge
Member, Appeal Board