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ISCR Case 19-01649.a1 — CASE

ISCR Case 19-01649.a1denied

Case Headnote

ISCR Case No. 19-01649.a1

Jan 6, 2021· Hon. Michael Y. Ra'anan· appeal

Summary

An applicant, represented by counsel, was denied a security clearance under Guideline F (Financial Considerations) due to significant financial issues. The denial was affirmed by the appeal board.

Key disqualifying conditions included the applicant's failure to timely file federal and state tax returns for multiple years, and outstanding tax debts to both the IRS and the state that were not adequately addressed. While mitigating conditions related to the applicant's efforts to resolve the debt and the circumstances surrounding the financial issues were considered, they were ultimately deemed insufficient.

The applicant's claims of marital difficulties and stress were not found to be persuasive enough to mitigate security concerns regarding judgment and reliability. The board emphasized the importance of timely remedial actions, which the applicant did not sufficiently demonstrate. Consequently, the security clearance was denied.

Conditions Referenced

Disqualifying

F.2.araisedInability or Unwillingness to Satisfy Debts
F.3.craisedFailure to File Tax Returns as Required

Mitigating

F.2.arejectedThe Conditions That Led to the Financial Problems Were Beyond the Applicant's ControlThe judge found the applicant's explanations unpersuasive given the duration of the delinquencies.
F.3.bappliedThe Applicant Has Made Efforts to Repay Debts and Has Filed Delinquent Tax ReturnsHowever, the timing of these efforts was considered insufficient to mitigate the concerns.

Key Rule Quoted

“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)

Procedural Posture

SOR issuedNov 15, 2019
Answer filed—
Hearing heldOct 7, 2020
Decision dateJan 6, 2021

Cite For

Timeliness of Remedial Actions in Financial Matters Under Guideline F
Insufficient Mitigation of Financial Issues Due to Personal Circumstances
Importance of Addressing Tax Obligations Promptly for 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 under Guideline F. The Applicant argued that the Judge's findings were erroneous and that the decision was arbitrary and capricious. The Board affirmed the decision, finding that while there was an error regarding inadmissible evidence, it was harmless and did not affect the outcome.

Appealed bythe applicant

Applicant representationAttorney

Judge belowMark Harvey — denied the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Judge mis-weighed or ignored evidence — raised by the applicantRejected
The Judge's findings of fact contained errors and the adverse decision was arbitrary, capricious, or contrary to law.
Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
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 challenged finding was based on inadmissible evidence but determined that it did not influence the Judge's ultimate decision, which was based on the timing of the Applicant's remedial efforts. Therefore, the error was deemed harmless, and the adverse decision was affirmed.

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 Y. 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 F DIGEST: The challenged finding is not sustainable, insofar as it was based upon evidence that was inadmissible under Directive ¶ E3.1.20, which requires authentication of a DoD ROI. However, it does not appear to have exerted an influence on the Judge’s ultimate decision, which relied more on the timing of Applicant’s remedial efforts than on any other factor. Therefore, this error is harmless. Adverse decision affirmed. CASE NO: 19-01649.a1 DATE: 01/06/2021 DATE: January 6, 2021 ) In Re: ) ) ----------------------- ) ISCR Case No. 19-01649

) ) Applicant for Security Clearance ) )

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Joseph D. Jordan, Esq. The Department of Defense (DoD) declined to grant Applicant a security clearance. On November 15, 2019, DoD issued a statement of reasons (SOR) advising Applicant of the basis for that decision–security concerns raised under Guideline F (Financial Considerations) of Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive). Applicant requested a hearing. On October 7, 2020, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Mark Harvey denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. Applicant raised the following issues on appeal: whether the Judge’s findings of fact contained errors and whether the Judge’s adverse decision was arbitrary, capricious, or contrary to law. Consistent with the following, we affirm. The Judge’s Findings of Fact and Analysis Applicant’s SOR alleged that he failed to file his Federal income tax returns in a timely manner for tax years 2010 and 2013 through 2018; that he failed to file his state income tax returns in a timely manner for tax years 2010 through 2018; and that he owed tax debts both to the IRS and to his state. Applicant attributed his tax problems to marital difficulties. His now ex-wife left him in 2010, securing a decree of divorce in 2016. The divorce decree imposed child support obligations of over $2,000 on Applicant, which he was not successful in getting reduced. He claimed that the stress of his marital problems resulted in him forgetting to file his tax returns. He further stated that his delay in filing was due in part to his having to obtain documentation that was in storage and to failure by his tax preparers. Applicant also advised that he provided financial support to his parents, who had medical problems. In his clearance interview, “Applicant said he did not timely file his tax returns because he did not want to pay the government.” In addition, when the interviewer drew his attention to his delinquent returns for 2015 and 2016, Applicant stated that he would file them “this month.” Decision at 3, 5. He did not file the returns until a year later. Applicant has entered into payment plans with the IRS and with his state. Applicant has not been totally consistent in his payments. For example, he did not have an IRS approved payment plan from June 2017 until 2019. Nevertheless, the Judge stated that he “has taken important steps toward showing his financial responsibility . . . and [has] made substantial progress in addressing his tax debt.” Decision at 10. Applicant’s professional colleagues describe him as honest, reliable, trustworthy, and one who has contributed to his employers’ success. In his analysis, the Judge cited to Applicant’s marital problems, his child support obligations, and to his parents’ medical problems. He stated that these things are circumstances beyond Applicant’s control. He also cited to evidence that Applicant has filed his delinquent tax returns and has made a meaningful effort to repay his tax obligations. However, he also cited to evidence that Applicant made only three payments to the federal government in 2019. The Judge noted Applicant’s contention that he forgot about filing his federal and state tax returns due to the stress of his personal circumstances, concluding that this explanation was not persuasive, in light of the extended period of time over which these delinquencies occurred. He cited to Appeal Board cases to the effect that even if an applicant has corrected his tax problems, a Judge may still consider the security significance of longstanding behavior. The Judge stated that the primary problem in Applicant’s case is the timing of his remedial efforts. Applicant was on notice that he should file his returns and resolve his tax debts at least as of the date of his clearance interview. However, Applicant did not file returns for 2015 and 2016 for an entire year following the interview. All in all, the Judge concluded that Applicant’s failure to have begun addressing his problems earlier on impugned his judgment and reliability.

DISCUSSION

Applicant denies that he told his clearance interviewer that he had not filed his returns because he did not want to pay the government. He claims that he challenged the inclusion of this statement in the interview summary, but it made its way into the record anyhow. We find this argument persuasive. In his response to DOHA interrogatories, Applicant stated that the interview summary, part of a DoD report of investigation (ROI), was not accurate in several respects. He supplied corrections to the summary, which included explicit denials of having made the challenged statement about not wanting to pay the government. He certified that the interview summary was accurate only as amended. Government Exhibit (GE) 2, Answers to Interrogatories, at 5-6, 24-25. The challenged statement was not independently authenticated. Accordingly, the finding is not sustainable, insofar as it was based upon evidence that was inadmissible under Directive ¶ E3.1.20, which requires authentication of a DoD ROI.1 However, it does not appear to have exerted an influence on the Judge’s ultimate decision, which relied more on the timing of Applicant’s remedial efforts than on any other factor. Therefore, this error is harmless. See, e.g., ISCR Case No. 18- 02581 at 3 (App. Bd. Jan. 14, 2020). Applicant cites to evidence of circumstances outside his control that affected his tax problems as well as to evidence that he has filed his tax returns and made significant efforts at paying down his debts. This was evidence that the Judge was bound to consider, along with all the other evidence in the record. However, the Judge’s conclusion about the timing of Applicant’s remedial efforts is sustainable. The mere filing of delinquent tax returns or the existence of a payment arrangement with an appropriate tax authority does not compel a Judge to issue a favorable decision under Directive, Encl. 2, App. A ¶ 20(g). See, e.g., ISCR Case No. 17-01213 at 4 (App. Bd. Jun. 29, 2018). To the contrary, a Judge may consider the timing of an applicant’s efforts to resolve his security concerns, on the view that someone who is dilatory in addressing those concerns may be lacking in the judgment and reliability expected of those who hold security clearances. See, e.g., ISCR Case No. 17-01256 at 5 (App. Bd. Aug. 3, 2018). Applicant’s arguments are not enough to rebut the presumption that the Judge considered all of the evidence or to show that the Judge weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. See, e.g., ISCR Case No. 18-02872 at 3 (App. Bd. Jan. 15, 2020). We have given due consideration to the Hearing Office cases that Applicant cites in his appeal brief. However, Hearing Office decisions are not binding on other Hearing Office Judges or on the Appeal Board. Each case must be decided on its own merits. See, e.g., ISCR Case No. 18-02074 at 2 (App. Bd. Aug. 27, 2019). The cited cases do not undermine the Judge’s adverse decision. The Judge examined the relevant evidence and articulated a satisfactory explanation for the decision, both as to the mitigating conditions and the whole-person factors. The 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, 484 U.S. 518, 528 (1988). 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.”

ORDER

The Decision is AFFIRMED. Signed: Michael Y. Ra’anan Michael Y. 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

FOOTNOTES

1 Applicant did not object to the admission of GE 3, which we interpret to mean that he did not object to the document as amended. Tr. at 11. Applicant’s failure to object did not waive this issue.