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ISCR 19-03098: Guideline F security clearance appeal, denied (2022) · CASE

ISCR Case 19-03098denied

Case headnote

ISCR Case No. 19-03098

Mar 31, 2022· Hon. James E. Moody· appeal

Summary

A security clearance applicant, representing himself, was denied clearance under Guideline F (Financial Considerations) due to significant tax delinquencies. The applicant failed to file federal and and state income tax returns from 2012 to 2016, accumulating a debt of nearly $700,000 to the IRS and approximately $260,000 to his state taxing authority.

The appeal board affirmed the denial, citing the applicant's poor track record regarding tax obligations and the absence of mitigating circumstances. The board noted that the applicant's explanations for his tax issues were inconsistent, and he did not initiate formal efforts to resolve his tax problems until after being served with interrogatories.

The board emphasized that legal obligations, such as tax compliance, can justify security clearance decisions even without prior incidents of mishandling classified information. Consequently, the applicant's security clearance was denied.

Conditions referenced

Disqualifying

AG ¶ 20raisedFinancial Considerations

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 issuedJan 10, 2020
Answer filed—Applicant represented himself.
Hearing held—SOR was amended during the hearing.
Decision dateMar 31, 2022Appeal affirmed the denial.

Cite for

Denial of Security Clearance Due to Significant Tax Delinquencies Under Guideline F
Importance of Legal Obligations in Security Clearance Decisions
Inconsistency in Applicant's Explanations for Financial Issues as a Basis for Denial

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 was filed by the applicant after the Administrative Judge denied his request for a security clearance based on financial considerations. The applicant argued that the decision was arbitrary and capricious. The Board affirmed the decision, finding no harmful error in the Judge's ruling.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowRobert Robinson Gales denied the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Decision arbitrary, capricious, or contrary to law, raised by the applicantRejected
The Judge's adverse decision was arbitrary, capricious, or contrary to law.

Why the Board ruled this way

The Board found that the Judge's decision was supported by substantial evidence and articulated a satisfactory explanation for the denial of the security clearance. The Board noted that the applicant's failure to file tax returns and pay tax obligations raised concerns about his judgment and reliability.

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

James F. Duffy (Chair)
James E. Moody
Jennifer I. Goldstein

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. 19-03098

)

) Applicant for Security Clearance ) _______________________________________) Date: March 31, 2022

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Pro se The Department of Defense (DoD) declined to grant Applicant a security clearance. On January 10, 2020, 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. At the hearing the SOR was amended to expand the time frames and amount alleged and to add an additional Guideline F allegation. On November 18, 2021, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Robert Robinson Gales 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.

As a preliminary matter, we note that the Judge failed to make a formal finding regarding SOR 1.d. This appears to have resulted merely from oversight and has not been raised as an issue on appeal. We simply point out that Judges are required to address all of the allegations in a SOR. Directive ¶ E3.1.25; see also ISCR Case No. 08-07803 at 2 (App. Bd. Sep. 21, 2009). The Judge found that Applicant failed to file his Federal and state income tax returns from 2012 until 2016; that he owed the IRS just under $700,000; and that he owed his state taxing authority about $260,000. The Judge also found Applicant’s explanations for his problems to be inconsistent. Federal and state authorities issued levies against Applicant’s income in satisfaction of his tax delinquencies, but Applicant himself did not engage in formal efforts to resolve his problems until after he had been served with interrogatories. Applicant cited to no circumstances beyond his control that impaired his ability to file returns and pay taxes. The Judge concluded that Applicant’s track record regarding his tax obligations “is extremely poor at best.” Decision at 12. Applicant’s brief includes information from outside the record, which we cannot consider. See Directive ¶ E3.1.29 (“No new evidence shall be received or considered by the Appeal Board.”). Applicant cites to his having held a clearance for many years without incident or concern. The Judge made findings about Applicant’s clearance history, his military service, and the favorable character references attesting to his excellent work record and his trustworthiness. However, the government need not wait until an individual mishandles or fails to safeguard classified information before it can make an unfavorable security clearance decision. Even those with good prior records can encounter circumstances in which their judgment and reliability might be brought into question. See, e.g., ISCR Case No.18-02581 at 4 (App. Bd. Jan. 14, 2020). Indeed, persons who fail to abide by legal obligations, such as filing tax returns and paying tax obligations when due, may be lacking in the qualities expected of those with access to classified information. See, e.g., ISCR Case No. 17-01256 at 3 (App. Bd. Aug. 3, 2018). Applicant has not rebutted the presumption that the Judge considered all of the evidence in the record, nor has he shown 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). The Judge examined the relevant evidence and articulated a satisfactory explanation for the decision. 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: James F. Duffy James F. Duffy Administrative Judge Chairperson, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board Signed: Jennifer I. Goldstein Jennifer I. Goldstein Administrative Judge Member, Appeal Board