KEYWORD: Guideline F; Guideline J
DIGEST: Judge’s conclusion that Applicant had failed to mitigate Guideline J concerns despite
passage of eight years from offense to SOR was sustainable.  Also, Applicant’s response to his
debts was dilatory in light of the totality of the record evidence.  Adverse decision affirmed.   
CASENO: 08-00472.a1
DATE: 01/26/2010
DATE: January 26, 2010
In Re:
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Applicant for Security Clearance
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ISCR Case No. 08-00472
APPEAL BOARD DECISION
APPEARANCES
FOR GOVERNMENT
James B. Norman, Esq., Chief Department Counsel
FOR APPLICANT
Samuel Bluck, Esq.
The Defense Office of Hearings and Appeals (DOHA) declined to grant Applicant a security
clearance.  On January 15, 2009, DOHA issued a statement of reasons (SOR) advising Applicant of
the basis for that decision—security concerns raised under Guideline F (Financial Considerations)
and Guideline J (Criminal Conduct) of Defense Directive 5220.6 (Jan. 2, 1992, as amended)
(Directive).  Applicant requested a hearing.  On October 23, 2009, after the hearing, Administrative
Judge Elizabeth M. Matchinski denied Applicant’s request for a security clearance.  Applicant
appealed pursuant to the Directive ¶¶ E3.1.28 and E3.1.30.
Applicant raises the following issue on appeal: whether the Judge’s decision is arbitrary,
capricious, or contrary to law.  For the following reasons, the Board affirms the Judge’s unfavorable
decision. 
Regarding Guideline F, the Judge found that Applicant and two partners started a business
in 1997 and obtained a $100,000 loan pursuant to a promissory note wherein the lender held a
security interest in the business’s assets.  Applicant and other company officers executed documents
guaranteeing the loan.  A second line of credit, also in the amount of $100,000, was also guaranteed
by Applicant and the CEO.  Applicant was not involved in handling the finances of the business.
He invested some of his own assets in the business, and borrowed $27,000 from his brother to put
into the business.  Subsequently, the business failed.  The company offered its inventory as collateral
to the banks when it could no longer make loan payments.  In 2000, both banks filed lawsuits against
the company and the loan guarantors.  In June 2000, one of the banks, Applicant, the CEO and the
company stipulated to a Judgment of $116,418.  In the same month, the other lender obtained a
judgment against Applicant for $112,130.  
Applicant sold his residence and the $32,000 proceeds went to partially satisfy the $116,418
judgment.  As of December 2005, the credit bureaus were reporting that one of the lenders had filed
in court to attach Applicant’s assets to recover a $120,000 debt balance.  In 2006 or 2007, after he
applied for a security clearance, Applicant retained legal counsel to represent him in settling the
judgment debts against him.  Settlement negotiations ensued, but no agreement was reached and, as
of July 2009, Applicant had paid nothing toward the judgment debts.  Applicant believes that one
of the creditors received proceeds from an auction of the inventory of the failed business, but there
is no information available confirming his belief.  As of the summer of 2009, Applicant was making
his credit card account payments and his mortgage payments on time.  In July 2009, Applicant
estimated his annual income at about $180,000.  He had available to him about $20,000 to $30,000
in cash assets to pay the judgments.
Regarding Guideline J, the Judge found that during the course of a lawsuit concerning the
business debts, Applicant was subpoenaed to testify in June 2001.  Applicant provided false
testimony under oath.  Applicant was subsequently indicted on three counts of perjury in October
2001.  In March 2004, Applicant pleaded nolo contendere to two counts of false swearing, a Class
A misdemeanor.  After Applicant signed a form acknowledging that he understood he was admitting
the truth of the charges against him, a finding of guilty was entered for both counts.  Applicant
underwent a voluntary psychological evaluation in April 2009 by a clinical psychologist to determine
whether he exhibited clinical indicators of lying behavior.  The psychologist found no significant
indication of lying behavior at the time of Applicant’s testimony and opined that Applicant was not
deceptive.  Applicant was not willing to acknowledge at his July 2009 hearing that he had knowingly
provided false testimony in the lawsuit.
The Judge concluded that Applicant’s two outstanding judgments raised security concerns
under Guideline F.  The Judge indicated that despite some matters in mitigation, she was unable to
fully apply the Guideline F Mitigating Conditions.  This was because of Applicant’s demonstrated
irresponsibility in not making the restitution of the judgment debts a priority.  While one creditor
may have received some funds from the equity in Applicant’s house in 2000 or 2001, no payments
on the debt have been made since then, and the other creditor has gone uncompensated.  Applicant
made no attempt to address the second judgment until 2006 or 2007, after he applied for his security
clearance.  Despite having $20,000 to $30,000 cash on hand, there is some question as to whether
Applicant has the means to satisfy the approximately $200,000 in outstanding judgments, given the
fact that he has outstanding credit card balances totaling about $29,000.
The Judge concluded that the passage of eight years since the false swearing convictions is
a significant mitigating condition.  She also mentioned Applicant’s character references and good
employment record.  However, this evidence in reform must be weighed against the seriousness of
the offense.  Although a misdemeanor under applicable state criminal statutes, a knowing false
statement made under oath raises very serious concerns about a person’s judgment, reliability, and
trustworthiness.  Concerns persist about Applicant’s reform, given his inability to provide a
consistent, credible account of his conduct in June 2001.  Applicant also told one of the witnesses
testifying on his behalf at the hearing that the judgment debts had been repaid.  Under a whole-
person analysis, the Judge concluded that it would be premature to conclude that the government’s
security concerns are fully mitigated at this time.
Applicant argues that the Judge’s conclusions regarding the unpaid judgments are not a
satisfactory articulation of financial responsibility.  Applicant argues that the Judge focuses too much
on the timeliness aspect of Applicant’s debt resolution and has failed to articulate precisely how
Applicant’s behavior was deficient.  Applicant’s claims do not establish harmful error on the part
of the Judge.  The Board has reviewed the Judge’s conclusions and finds that they are sufficiently
detailed and consistent with her findings of fact to support her adverse decision.  The Judge
appropriately considered the length of time that passed before Applicant took any meaningful action
toward resolution of the outstanding judgments, as well as the fact that, as of the close of the hearing,
most of the debt was still outstanding.  The Judge also considered the amount of the unresolved debt.
Applicant cites the Board’s ruling in ISCR Case No. 08-06567 (App. Bd. Oct. 29, 2009) for
the proposition that the Judge erroneously concluded that he did not act reasonably under the
circumstances of this case, and did not do all he reasonably could to address his indebtedness.  After
review, the Board concludes that the case cited by Applicant is distinguishable from the instant case
on its facts, and does not contain any analysis or statement of law that renders the Judge’s
conclusions unsustainable.  
Applicant argues that the case against him under Guideline J has been mitigated, principally
through the passing of eight years since the offenses.  Applicant’s arguments do not establish error
on the part of the Judge.
 The presence of some mitigating evidence does not alone compel the Judge to make a
favorable security clearance decision.  As the trier of fact, the Judge has to weigh the evidence as a
whole and decide whether the favorable evidence outweighs the unfavorable evidence, or vice versa.
See, e.g., ISCR Case No. 06-10320 at 2 (App. Bd. Nov. 7, 2007).  A party’s disagreement with the
Judge’s weighing of the evidence, or an ability to argue for a different interpretation of the evidence,
is not sufficient to demonstrate the Judge weighed the evidence or reached conclusions in a manner
that is arbitrary, capricious, or contrary to law.  See, e.g., ISCR Case No. 06-17409 at 3 (App. Bd.
Oct. 12, 2007).  
In this case, the Judge weighed the mitigating evidence offered by Applicant against the
seriousness of the disqualifying conduct and considered the possible application of relevant
conditions and factors.  She discussed the applicability of Guideline J Mitigating Conditions and
cogently explained why there was insufficient mitigation to overcome the government’s security
concerns, stressing the fact that the nature of Applicant’s criminal activity (lying under oath) relates
directly to concerns about his judgment, trustworthiness and reliability.
The Board does not review a case de novo.  The favorable evidence cited by Applicant is not
sufficient to demonstrate the Judge’s decision is arbitrary, capricious, or contrary to law.  See, e.g.,
ISCR Case No. 06-11172 at 3 (App. Bd. Sep. 4, 2007).  After reviewing the record, the Board
concludes 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 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).  Therefore, the
Judge’s ultimate unfavorable security clearance decision is sustainable.
Order
The decision of the Judge denying Applicant a security clearance is AFFIRMED.
Signed: Jeffrey D. Billett        
Jeffrey D. Billett
Administrative Judge
Member, Appeal Board
Signed: William S. Fields        
William S. Fields
Administrative Judge
Member, Appeal Board
Signed: James E. Moody         
James E. Moody
Administrative Judge
Member, Appeal Board