KEYWORD: Guideline E
DIGEST: The record contains substantial evidence that Applicant repeatedly over an extended
period of time received payments from his employer to which he was not entitled.  The record
also contains substantial evidence that Applicant deliberately failed to mention a warning letter
received from his employer on his SCA, and in an answer ro a DOHA interrogatory, he
deliberately denied having been removed from a management position, when the evidence
clearly indicated he had.  The Judge’s favorable decision fails to consider relevant factors and
offers an explanation for the decision that runs contrary to the weight of the record evidence.
Favorable decision reversed.
CASENO: 10-03732.a1
DATE: 06/14/2013
DATE: June 14, 2013
In Re:
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Applicant for Security Clearance
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ISCR Case No. 10-03732
APPEAL BOARD DECISION
APPEARANCES
FOR GOVERNMENT
Fahryn Hoffman, Esq., Department Counsel
FOR APPLICANT
Jason Perry, Esq.
The Department of Defense (DoD) declined to grant Applicant a security clearance.  On
October 15, 2012, DoD issued a statement of reasons (SOR) advising Applicant of the basis for that
1The letter was dated October 2, 2008.
decision–security concerns raised under Guideline E (Personal Conduct) of Department of Defense
Directive 5220.6 (Jan. 2, 1992, as amended) (Directive).  Applicant requested a hearing.  On March
5, 2013, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge
Carol G. Ricciardello granted Applicant’s request for a security clearance.  Department Counsel
appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30.
Department Counsel raised the following issues on appeal: whether the Judge erred in
finding that Applicant had not deliberately provided false answers during the processing of his
security clearance application (SCA) and whether the decision was arbitrary, capricious, or contrary
to law.  For the reasons set forth below, we reverse the Judge’s favorable security clearance
decision.
The Judge’s Findings of Fact  
The Judge made the following findings pertinent to the issues addressed on appeal: Applicant
is an employee of a Defense contractor.  From 2001 through 2009, he worked for another contractor,
C.  He holds a master’s degree and was set to defend his Ph.D. dissertation in the month following
the issuance of the decision.
In the late 2000s, Applicant and his colleagues had been advised to enter all hours worked
on their time sheets, even if the amount exceeded 40.  Previously, they had been required to enter
their work time in 40-hour increments.  As a consequence of this change in policy, Applicant began
receiving overtime pay.  Applicant had been promoted to a position that was not authorized
overtime, but he was not aware of this limitation.  He received a warning letter advising that they
were not entitled to overtime.1  Applicant reimbursed his employer for the pay he had improperly
received.  
Applicant testified that he was never removed from a management role or demoted.  He
stated that he was moved from a Supply Chain management role, where he supervised employees
to an individual contributor role, where he was supervising subcontractors.  
Applicant did not mention the warning letter in completing his SCA.  He did not believe that
he had been disciplined or reprimanded during his tenure at C.  When confronted with the letter, he
characterized it as administrative.  He stated that others who had experienced the same issue did not
want to provide letters of support through fear of retribution.  
In early 2009, Applicant decided to look for another job.  Management attempted to persuade
him to remain at C.  However, when he advised that he was tired of traveling, management told him
that he owed $45,000 in unauthorized expenses.  He stated that it was not until after he had told
management that he was leaving that he was confronted with allegations of unauthorized expenses.
Applicant has been at his current job for nearly four years and has had no problems.  He has
been promoted twice since working there.  He enjoys an excellent reputation for the quality of his
work performance, his leadership ability, his honesty, and loyalty.  He is held in high regard for his
integrity and devotion to personal and professional ethics.
The Judge’s Analysis
The Judge cleared Applicant on all allegations in the SOR, most of which addressed conduct
other than that described above.  Concerning the allegations that he improperly received overtime
pay and failed to mention this during the clearance adjudication process, the Judge concluded that
the letter constituted an official warning which he should have disclosed.  However, she also
concluded that his failure to have done so was not deliberate.  She accepted his explanation that he
had misinterpreted the nature of the letter as being administrative rather than corrective in nature.
She also concluded that Applicant had not been removed from a supervisory position and that the
improper receipt of overtime pay was a minor, relatively old offense.
Discussion
Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong
presumption against the grant or maintenance of a security clearance.  See Dorfmont v. Brown, 913
F. 2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991).  After the Government presents
evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those
concerns.  See Directive ¶ E3.1.15.  The standard applicable in security clearance decisions “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).  “Any doubt concerning personnel being
considered for access to classified information will be resolved in favor of the national security.”
Directive, Enclosure 2 ¶ 2(b). 
In deciding whether the Judge's rulings or conclusions are erroneous, 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 ISCR Case No. 03-22861 at 2-3 (App. Bd. Jun. 2, 2006).
Department Counsel argues that the Judge’s favorable conclusions were not consistent with
the weight of the record evidence.  Included in her argument is the contention that the Judge erred
by finding that Applicant had not provided deliberately false answers during the processing of his
SCA. We find this argument persuasive.  
The SOR alleged, inter alia, that Applicant deliberately omitted the warning letter from his
SCA (SOR ¶ 1.g) and that he deliberately failed to admit his removal from a “Supply Chain
Management leadership role” in an answer to a DOHA interrogatory (SOR ¶ 1.i).  The evidence
supporting these allegations includes the following: Government Exhibit (GE) 5 contains several
documents from C relating to Applicant, including the October 2, 2008, letter. This letter’s subject
heading is “Last Chance–Final Written Warning.”  It states that an investigation revealed that
Applicant had, on over 40 different occasions during a two-year period, charged overtime without
having obtained prior management approval.  The letter specifies hours, rates, and amounts
pertaining to the overtime, for a total of nearly $23,000.  It avers that Applicant’s explanations for
his conduct were inconsistent and were not corroborated by other witnesses.  The letter advises
Applicant that he had “exhibited a pattern of disregard for [C] policies and practices and the
leadership requirements of [his position].” It further states: 
You have failed the integrity component of the [C] leadership model.  Your
responses throughout the investigation were inconsistent and lacked credibility.  You
paid yourself overtime out of your own budget without clear approval and/or
authorization.  Your behavior is inconsistent with what is expected from a leader at
your level and will not be tolerated.
The letter continues: 
You will no longer function in a Supply Chain Management leadership role.  Your
new role is an individual contributor with local business development
responsibilities only . . . Consequences for continuing to demonstrate a lack of
integrity will result in your immediate termination.  Nothing in this documentation
should be understood as modifying your status as an at-will employee.  Your
employment can be terminated with or without cause, and with or without notice, at
any time, at [C]’s option. (emphasis added)
Applicant signed the letter on October 6, 2008, acknowledging that he had read, understood, and
received a copy.
GE 1, SCA, dated September 29, 2009, asked the following question: “Have you ever
received a written warning, been officially reprimanded, suspended, or disciplined for misconduct
in the workplace?”  Applicant answered “no.”  GE 4, Interrogatories, asked the following: “Records
indicate you were removed from a supply management role, after submitting overtime hours for
which you were ineligible.  Please explain.”  Applicant provided the following answer:
If records indicate that I was ever removed from a management role, the records are
incorrect.  In fact, many months after I was paid for overtime, I was promoted to a
Project Manager role (a level and monetary increase), where I managed all a major
program for [C].  As to the overtime, the same Finance Manager told me that all
hours worked needed to be recorded.  For a one month period (two pay periods) I did
just that until I realized that my paychecks included overtime pay; I then immediately
ceased the practice.  Shortly after that [C Human Resources] told me that the
overtime needed to be repaid and they were repaid through a reduction in my
paycheck.  This was simply an administrative error that was corrected quickly.
Again, I was never removed form a supply management role for any reason.” 
(emphasis added)
2“[Judge]: So your interpretation is that individual contributor job, on the pecking order, is a higher job than
the supply management job? [Answer]: No, ma’am it’s the same.  You either supervise people, that’s a management in
the title . . .or you’re an individual contributor, which means that you don’t supervise people.”  Tr. at 129-130.
   
The Judge acknowledged that Applicant should have divulged the warning letter in his SCA
response.  She concluded, however, that he had not been removed from a management role.  This
conclusion is not consistent with the evidence cited above.  It also is not consistent with Applicant’s
testimony at the hearing, during which he acknowledged that, as a consequence of the letter, he no
longer performed day-to-day supervisory duties regarding employees of [C] and that supervision is
a distinguishing feature of managerial responsibility.2  Applicant’s contention that he had received
merely a lateral move to an equivalent position contradicts the express language of the letter.  It also
contradicts the letter’s overall tenor, which was to address conduct by Applicant that had impaired
his status as a company leader.  The clear import of the warning letter was that Applicant’s
malfeasance necessitated removing him from a position in which he exerted leadership over
employees of C.  This import is not contradicted, even on its face, by Applicant’s testimony that he
was not demoted or that his duties as an individual contributor entailed supervision of
subcontractors.  The Judge’s conclusion that Applicant’s interrogatory response was factually true
is not sustainable on this record.   
Of course, it is not sufficient to demonstrate that Applicant’s answers were untrue.  To raise
security concerns under Guideline E, the answers must be deliberately so.  In analyzing an
applicant’s intent, a Judge must consider the applicant’s answers in light of the record as a whole.
See, e.g., ISCR Case No. 10-04821 at 4 (App. Bd. May 21, 2012).  We note Applicant’s contention
that he believed the letter to be administrative in nature rather than a warning regarding misconduct.
However, as stated above, the letter was styled “Final Written Warning,” and it addressed
Applicant’s having improperly received overtime pay, admonishing him for a lack of integrity and
threatening him with termination if the conduct persisted.  It is unreasonable on its face to suppose
that a man near to completing a Ph.D. would not understand that such a letter was a warning about
misconduct in the workplace or that he would simply have forgotten about it when he completed his
SCA less than a year later.  The Judge’s conclusion that Applicant did not deliberately omit
reference to the warning letter is not sustainable on this record.
 The reasons cited above also constitute substantial evidence that Applicant’s interrogatory
answer was deliberately false.  Additionally, we note the content of the answer itself, in which
Applicant claimed that he had entered his actual work hours on his time sheet but, two pay periods
later, discovered he was being paid overtime and immediately ceased the practice.  This answer
would convey to a reasonable person that Applicant had corrected a minor administrative error on
his own initiative. 
This is contradicted by the clear language of the warning letter, which charged that Applicant
received  overtime for two-years, rather than merely two pay periods, under circumstances that
impugned his integrity and that subjected him to possible job termination.  Moreover, we note
Applicant’s hearing testimony, in which he stated that he ceased submitting for overtime after
receiving the warning letter, which is not totally consistent with the implication of the interrogatory
3Regarding inconsistencies between Applicant’s explanations and the warning letter issued by his employer,
we note our prior decision, ISCR Case No. 10-03886 at 3 (App. Bd. Apr. 26, 2012), in which we stated that an
employer’s decisions and characterizations of events are entitled to some deference. 
4See Federal Rule of Evidence 404(b): Evidence of other acts or wrongs may be admissible to prove motive,
intent, knowledge, absence of mistake, etc.  See also ISCR Case No. 07-16653 at 3, n. 1 (App. Bd. May 1, 2012).  We
also note the Judge’s finding that C charged Applicant for $45,000 in unauthorized purchases on his company credit card.
This was alleged in the SOR, and the Judge resolved it in Applicant’s favor.  Although we are limiting this appeal
decision to the allegations pertaining to overtime pay, evidence regarding this incident has a bearing on the issue of
intent.  According to a document contained in GE 5, an ethics audit disclosed that Applicant had repeatedly used his
company credit card for personal, rather than business, purposes. 
 The employee improperly expensed personal charges through two methods: (1) obtaining
reimbursement from the company by including personal charges on expense reports as business-
related expenses; and (2) booking travel, expensing such travel to the company, cancelling the travel,
and using the resulting refunds to his credit card account to fund personal purchases using the card.
. . .The employee denied expensing any personal charges to the Company.  Later in the investigation,
he admitted making more extensive personal charges and expensing them to the [C]ompany.  While
the employee specifically identified a number of the improper charges, he was unable or unwilling to
provide a complete accounting of them.  GE 5 at 41.  
5While we defer to a Judge’s credibility determination, that deference is not without limits.  A Judge should
address evidence that raises questions about an applicant’s credibility, such as inconsistent statements, contrary evidence,
etc.  Failure to do so suggests that a Judge has merely substituted a favorable impression of an applicant’s demeanor for
record evidence.  See, e.g., ISCR Case No. 07-10158 at 5 (App. Bd. Aug. 28, 2008). 
6Directive, Enclosure 2 ¶ 17(c): “the offense is so minor, or so much time has passed, or the behavior is so
infrequent, or it happened under such unique circumstances that it is unlikely to recur and does not cast doubt on the
individual’s reliability, trustworthiness, or good judgment[.]”  
answer that he had discovered the improper payments on his own.  His hearing testimony did not
challenge the extent and duration of the overpayments that C charged against him, nor did he address
other significant contradictions between his answer and the warning letter.  Moreover, although he
claimed that the admonitory tone of the letter was an effort by management to cover up their own
complicity in the overpayments, Applicant did not corroborate his claim that his charging of
overtime was in accordance with company policy.3   
Apparent false statements about the circumstances of Applicant’s overpayments were not
alleged in the SOR.  However, evidence of other false statements in the very same interrogatory
answer is relevant to the question of Applicant’s intent, undermining a possible conclusion of
innocent mistake.4  These matters also undermine Applicant’s credibility.  The Judge did not address
this aspect of the case in a reasonable manner.5  The record contains substantial evidence that
Applicant deliberately falsified his SCA by omitting reference to the warning letter and that he
deliberately falsified his answer to the interrogatory question by denying that he had been removed
from a Security Chain Management leadership role.  By erroneously concluding otherwise, and
thereby failing to raise Guideline E security concerns, the Judge failed to address Applicant’s
conduct in light of his burden of persuasion as to mitigation.  See Directive ¶ E3.1.15, supra.    
Concerning the underlying misconduct itself, the Judge concluded that Applicant’s receipt
of overtime was minor and occurred a long time ago.6  The record does not support a conclusion that
willful receipt of nearly $23,000 of unauthorized overtime payments for two-years is minor.
Moreover, evidence of Applicant’s recent meretricious statements undermines a conclusion that his
security-significant conduct is sufficiently attenuated so as to satisfy the Guideline E mitigating
conditions.
To sum up, the record contains substantial evidence that Applicant repeatedly over an
extended period of time received payments from his employer to which he was not entitled.  As a
consequence of this, Applicant received a letter warning him that future similar misconduct would
result in his termination.  The letter also removed him from his position of leadership.  Applicant
deliberately failed to mention the warning letter in his SCA, and, in an answer to a DOHA
interrogatory, he deliberately denied having been removed from his management position.  In
addition, the record contains evidence of inconsistent and/or self-serving statements by Applicant,
which bear directly on the deliberate nature of the omissions and which undermine his credibility.
The Judge’s favorable decision fails to consider relevant factors and offers an explanation for the
decision that runs contrary to the weight of the record evidence.  Given the totality of Applicant’s
security-significant conduct, the record does not support a conclusion that he has mitigated his
security concerns under the Egan standard.  In light of that holding, we do not need to address
Department Counsel’s arguments about the Judge’s other favorable findings.
Order
The Decision is REVERSED.  
Signed: Michael Y. Ra’anan        
Michael Y. Ra’anan
Administrative Judge
Chairperson, 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