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ISCR Case 19-02583 — CASE

ISCR Case 19-02583denied

Case Headnote

ISCR Case No. 19-02583

Jun 3, 2022· Hon. Moira D. Modzelewski· appeal

Summary

A security clearance applicant, represented by counsel, was denied eligibility under Guideline F (Financial Considerations) due to a history of significant financial irresponsibility. The applicant failed to file tax returns from 2012 to 2015 and owed approximately $14,000 in unpaid taxes.

The Administrative Judge identified disqualifying conditions under AG ¶ 19, noting the applicant's long-standing financial issues and a lack of proactive effort to resolve these obligations until security eligibility was at risk. While mitigating conditions AG ¶ 20(a), AG ¶ 20(b), AG ¶ 20(c), and AG ¶ 20(d) were considered, they were not found sufficient to overcome the concerns.

Specifically, the applicant did not provide adequate evidence to demonstrate that overseas service impeded tax filing and payment. Consequently, the denial of the security clearance was affirmed on appeal.

Conditions Referenced

Disqualifying

AG ¶ 19raisedFinancial Considerations

Mitigating

AG ¶ 20(a)rejectedThe Behavior Was Not RecentThe applicant's financial issues were ongoing and not resolved until security concerns arose.
AG ¶ 20(b)rejectedThe Conditions That Resulted in the Behavior Were Beyond the Person's ControlThe applicant did not demonstrate that overseas service significantly impeded tax obligations.
AG ¶ 20(c)rejectedThe Person Has Received or Is Receiving Counseling for the ProblemNo evidence of counseling was presented.
AG ¶ 20(d)rejectedThe Person Has Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsPayments made were not sufficient to demonstrate a good-faith effort prior to the security concerns.

Key Rule Quoted

“The general standard is that a clearance may be granted only when ‘clearly consistent with national security.’”
— Department of the Navy v. Egan, 484 U.S. 518, 528 (1988)

Procedural Posture

SOR issuedJan 27, 2020
Answer filed—
Hearing heldMar 23, 2022
Decision dateJun 3, 2022

Cite For

Affirmation of Denial Based on Financial Irresponsibility Under Guideline F
Insufficient Evidence of Mitigating Circumstances Related to Financial Issues
Emphasis on National Security Considerations in Clearance Decisions

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 concerned the denial of a security clearance based on financial considerations, specifically the applicant's failure to timely file tax returns and unpaid taxes. The applicant argued that the Judge's decision was arbitrary and did not consider all evidence. The Board affirmed the decision, finding no harmful error in the Judge's analysis.

Appealed bythe applicant

Applicant representationAttorney

Judge belowGregg A. Cervi — denied the clearance (split findings)

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
Applicant argued that the Judge's decision was arbitrary, capricious, or contrary to law.

Why the Board ruled this way

The Board found no harmful error in the Judge's decision and concluded that the decision was sustainable on the record, affirming the denial of the security clearance.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewProcedural complianceNo de-novo re-decisionDeference to the judge’s credibility calls

Appeal Board panel

James F. Duffy — Chair
James E. Moody
Moira Modzelewski

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

APPEARANCES

_______________________________________________ ) In the matter of: )

)

----- )

ISCR Case No. 19-02583

)

) Applicant for Security Clearance ) _______________________________________) DEPARTMENT OF DEFENSE DEFENSE LEGAL SERVICES AGENCY DEFENSE OFFICE OF HEARINGS AND APPEALS APPEAL BOARD POST OFFICE BOX 3656 ARLINGTON, VIRGINIA 22203 (703) 696-4759 Date: June 3, 2022

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Brittany D. Forrester, Esq. The Department of Defense (DoD) declined to grant Applicant a security clearance. On January 27, 2020, DoD issued a statement of reasons (SOR) advising Applicant of the basis of that decision―security concerns raised under Guideline F (Financial Considerations) of DoD Directive 5220.6 (January 2, 1992, as amended) (Directive). Applicant requested a hearing. On March 23, 2022, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Gregg A. Cervi denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. Applicant raised the following issue on appeal: whether the Judge’s adverse decision was arbitrary, capricious, or contrary to law. Consistent with the following, we affirm. The SOR alleged that Applicant failed to file his Federal income tax returns for 2012-2015 in a timely manner; that he owed the Federal Government about $14,000 in unpaid taxes for 2012; and that he had six other delinquent debts. The Judge found against Applicant on the two tax

allegations and in favor of him on the other allegations. Applicant worked overseas in 2012 and 2013 and provided his wife a power of attorney for her to file their tax returns in his absence, but she felt uncomfortable doing so. He filed his Federal tax returns for 2012-2015 in 2019. He owed unpaid Federal taxes for 2014 and 2015 and made payments towards those taxes in 2020. In late 2020, he received an IRS notice of intent to seize property unless he paid about $2,300 for his 2015 taxes. He made that payment in August 2021. After the DOHA hearing in November 2021, Applicant paid the IRS over $19,000 for his 2012 taxes, over $12,000 for his 2013 taxes, and about $600 for his 2020 taxes. The Judge concluded: Applicant has a long history of financial irresponsibility. He has had debt accumulation and a history of avoidance of tax obligations to include an inability or unwillingness to comply with income tax filing requirements and payment of taxes owed. He has shown little concurrent effort to resolve his financial obligations until his security eligibility was in jeopardy. He has not submitted sufficient or persuasive evidence to show how his service overseas significantly impeded his ability to file federal income tax returns and pay taxes as required. [Decision at 6.] On appeal, Applicant does not challenge any of the Judge’s specific findings of fact but argues, “How the Judge finds there is a potential for pressure, coercion, exploitation, or duress is not stated.” Appeal Brief at 6. The Judge, however, made no finding or conclusion of that nature. Applicant contends the Judge did not consider all of the evidence, misapplied the mitigating conditions, mis-weighed the evidence, and erred in his whole-person assessment. None of Applicant’s arguments, however, are enough to rebut the presumption that the Judge considered all of the record evidence or to demonstrate the Judge weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. See, e.g., ISCR Case No. 17-03363 at 3 (App. Bd. Nov. 29, 2018). The Hearing Office cases that Applicant cites in support of his arguments are neither binding precedent on the Appeal Board nor sufficient to undermine the Judge’s decision. Id. They are easily distinguishable from the present case and do not provide a reason to conclude the Judge erred in his analysis or conclusions. Applicant failed to establish that the Judge committed any harmful error or that he should be granted any relief on appeal. The Judge examined the relevant evidence and articulated a satisfactory explanation for the decision. The decision is sustainable on the record. “The general standard is that a clearance may be granted only when ‘clearly consistent with 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 national security.”

ORDER

The decision is AFFIRMED. Signed: James F. Duffy James F. Duffy Administrative Judge Chairperson, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board Signed: Moira Modzelewski Moira Modzelewski Administrative Judge Member, Appeal Board