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ISCR Case 21-00197 — CASE

ISCR Case 21-00197denied

Case Headnote

ISCR Case No. 21-00197

Nov 2, 2022· Hon. Moira D. Modzelewski· appeal

Summary

A mid-forties married male with a background in military service and defense contracting was denied a security clearance under Guideline F, Financial Considerations. The denial stemmed from his admission of owing delinquent taxes and failing to file returns for multiple years.

During the review, the applicant acknowledged the allegations but attributed his issues to procrastination. However, he did not provide any evidence of a payment plan or other good-faith efforts to resolve his outstanding tax obligations. The adjudicator determined that this pattern of procrastination demonstrated a lack of willingness to adhere to rules and regulations.

Ultimately, the appeal was denied, affirming the original decision. The denial was based on the applicant's failure to present sufficient evidence of mitigation for his financial concerns, specifically regarding his delinquent taxes and unfiled returns.

Conditions Referenced

Disqualifying

F.1raisedFinancial Considerations

Procedural Posture

SOR issuedSep 21, 2021
Answer filed—
Hearing held—Applicant requested a decision on the written record.
Decision dateNov 2, 2022Appeal affirmed.

Cite For

Denial of Security Clearance Due to Financial Considerations Under Guideline F
Insufficient Evidence of Good-faith Efforts to Resolve Tax Issues
Procrastination as a Factor in Assessing Willingness to Comply with Regulations

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. The Applicant argued that the Judge's decision was arbitrary and capricious, but the Board affirmed the decision, finding no harmful error in the Judge's analysis or conclusions.

Appealed bythe applicant

Applicant representationAttorney

Judge belowPamela C. Benson — denied the clearance

Decided onthe written record

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 no harmful error in the Judge's decision, which was based on substantial evidence and adhered to required procedures. The arguments presented by the Applicant's Counsel did not demonstrate that the Judge's decision was arbitrary or capricious.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewNo de-novo re-decisionNo new evidence on appeal

Appeal Board panel

James F. Duffy — Chair
Jennifer I. Goldstein
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. 21-00197

)

) 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: November 2, 2022

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Ryan C. Nerney, Esq. The Department of Defense (DoD) declined to grant Applicant a security clearance. On September 21, 2021, 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 decision on the written record. A copy of the file of relevant material (FORM) was provided to Applicant by letter of January 31, 2022. Applicant was provided a period of 30 days to file objections and submit material for the Judge’s consideration, but he did not respond to the FORM. On September 8, 2022, after consideration of the record, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Pamela C. Benson 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 Judge’s Findings of Fact and Analysis Applicant is in his mid-forties, married, with no children. He served on active duty from 1994 through 2000, has held a security clearance since approximately 2000, and has worked for defense contractors since at least 2010. The SOR alleged that Applicant owes delinquent Federal income taxes for tax year (TY) 2014 in the approximate amount of $11,400 and that he failed to file Federal and state income tax returns for TYs 2016, 2017, 2018, and 2019. In April 2021, Applicant responded to government interrogatories, adopted the summary of his clearance interview, and provided requested tax transcripts. In responding to interrogatories, Applicant provided no proof that he had filed any of the Federal or state income tax returns alleged in the SOR, no proof of an established payment plan with any tax authority, and no proof of payments. In responding to the SOR, Applicant admitted all SOR allegations and attributed the issue to procrastination and a failure to consider the matter a priority. Additionally, he stated that he was in the process of remedying the tax issues. [Applicant] has failed to provide supporting documentation to demonstrate his good-faith efforts to remedy this matter. There is insufficient information to determine the amount of additional Federal or state tax debt he may owe, if any. He failed to take responsible action to resolve his unfiled Federal and State A income tax returns for multiple years and pay his tax delinquency. . . . A person who fails to address concerns, even after having been placed on notice that his or her access or security clearance is in jeopardy, may lack the willingness to follow rules and regulations when his or her personal interests are at stake. Financial considerations security concerns are not mitigated. [Decision at 4–5.]

DISCUSSION

In his appeal brief, Counsel for Applicant does not challenge any of the Judge’s specific findings of fact. Rather, he contends the Judge failed to adhere to Executive Order 10865 and the Directive by not considering all of the record evidence and by not properly applying the mitigating conditions and whole-person concept. Counsel argues repeatedly that the Judge did not give appropriate weight to “evidence that the Appellant had/has a plan in place to resolve his outstanding tax obligation.” Appeal Brief at 8, citing to Applicant’s response to SOR and Interrogatories. Of note, the only plan that Applicant articulated in his answer to the SOR was the phrase “In Process to Remedy.” SOR Answer at 2–3. To the extent that Applicant stated a plan in his response to interrogatories, it was “locating paperwork to file.” Item 4 at 5 and 7. This argument by Counsel is frivolous. Moreover, Counsel argues that Applicant’s outstanding tax debt “has been reduced to approximately $2,000, which is significant and something that was overlooked by the Administrative Judge in her decision.” Appeal Brief at 4. This assertion is baseless and unsupported by the record evidence. Applicant disclosed a Federal tax debt of approximately $11,400 in his response to interrogatories and admitted to the same in his answer to the SOR. Item 4 at 6; SOR Answer at 2. He submitted no evidence that the Federal tax debt was reduced.

If Counsel seeks to introduce it now, cloaked in argument, the Appeal Board reminds Counsel that the Appeal Board is prohibited from considering new evidence on appeal. Directive E3.1.29. None of Counsel’s arguments are sufficient to rebut the presumption that the Judge considered all of the evidence in the record nor are they enough 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. 19-01400 at 2 (App. Bd. Jun. 3, 2020). We give due consideration to the Hearing Office cases that Applicant’s Counsel has cited, but they are neither binding precedent on the Board nor sufficient to undermine the Judge’s decision. See, e.g., ISCR Case No. 17-02488 at 4 (App. Bd. Aug. 30, 2018). Moreover, the cited cases are easily distinguishable on their face. Applicant has failed to establish any error below. The Judge examined the relevant evidence and articulated a satisfactory explanation for the decision. The decision is sustainable.

ORDER

The decision is AFFIRMED. Signed: James F. Duffy James F. Duffy Administrative Judge Chairperson, Appeal Board Signed: Jennifer I. Goldstein Jennifer I. Goldstein Administrative Judge Member, Appeal Board Signed: Moira Modzelewski Moira Modzelewski Administrative Judge Member, Appeal Board