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ISCR Case 11-06622.a1 — CASE

ISCR Case 11-06622.a1denied

Case Headnote

ISCR Case No. 11-06622.a1

Jul 2, 2012· Hon. Jeffrey D. Billett· appeal

Summary

A defense contractor employee was denied a security clearance due to significant concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The applicant failed to file federal and state income tax returns for multiple years, specifically from 2005 to 2010. This failure to meet a fundamental financial obligation raised questions about the applicant's reliability and trustworthiness.

The applicant attributed the non-compliance to a general dislike of paperwork, a reason the judge found insufficient to excuse the repeated failure to file. Furthermore, the applicant did not mitigate these security concerns by filing the delinquent tax returns by the close of the record.

The judge emphasized that fulfilling financial obligations is a key indicator of an individual's suitability for a security clearance. Given the unfiled tax returns and the inadequate explanation, the applicant's security clearance was ultimately denied.

Conditions Referenced

Disqualifying

FCDC 19(g)raisedFailure to File Annual Federal, State, or Local Income Tax Returns as Required
PCDC 16(c)raisedCredible Adverse Information in Several Adjudicative Issue Areas

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 issuedOct 6, 2011
Answer filed—
Hearing heldApr 12, 2012
Decision dateJul 2, 2012

Cite For

Failure to File Tax Returns as a Disqualifying Condition Under Guideline F
Insufficient Reasons for Non-compliance with Financial Obligations
Importance of Financial Responsibility in Assessing Reliability and Trustworthiness

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 an applicant seeking a security clearance who was denied due to failure to file tax returns and other conduct. The applicant argued that the government did not present substantial evidence of security concerns and that the Judge's analysis was flawed. The Board affirmed the Judge's decision, finding no harmful error in the denial of the clearance.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowMatthew E. Malone — denied the clearance

Decided onthe written record

Guidelines belowGuideline FGuideline E

What the Board reviewed

No specific harmful error alleged — raised by the applicantRejected
Applicant contended that the Government did not present substantial evidence of security concerns.
Judge mis-weighed or ignored evidence — raised by the applicantRejected
Applicant argued that the Judge failed to consider all of the record evidence.
Whole-person analysis — raised by the applicantRejected
Applicant claimed that the Judge's whole-person analysis was erroneous.
Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
Applicant contended that 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 conclusions were supported by substantial evidence and that the applicant's arguments did not demonstrate harmful error. The Judge properly applied the relevant guidelines and conducted a thorough analysis of the applicant's conduct.

Standard of review applied

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

Appeal Board panel

Michael Y. Ra’anan — Chair
Jeffrey D. Billett
James E. Moody

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; Guideline E DIGEST: Guideline F concerns include failure to file tax returns. Each such instance is a separate act. Adverse decision affirmed. CASENO: 11-06622.a1 DATE: 07/02/2012 DATE: July 2, 2012 In Re: ------- Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 11-06622

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Pro se The Defense Office of Hearings and Appeals (DOHA) declined to grant Applicant a security clearance. On October 6, 2011, DOHA issued a statement of reasons (SOR) advising Applicant of the basis for that decision–security concerns raised under Guideline F (Financial Considerations) and Guideline E (Personal Conduct) of Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive). Applicant requested a decision on the written record. On April 12, 2012, after considering the record, Administrative Judge Matthew E. Malone 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 Government had presented substantial evidence of security concerns; whether the Judge failed to consider all of the record evidence; whether the Judge’s whole-person analysis was erroneous; and whether the Judge’s adverse decision was arbitrary, capricious, or contrary to law. Consistent with the following, we affirm the decision of the Judge. The Judge made the following pertinent findings of fact: Applicant is an employee of a Defense contractor and requires a clearance for the purposes of his job. He graduated from a U.S. service academy in 1984, leaving active duty in 1988. He received a Master’s degree in computer science. Applicant held a security clearance while in the military. He has held one for most of the past 20 years as a civilian. Applicant did not file federal or state income tax returns for the years 2005 through 2010. His stated reason for not having done so was his dislike of paperwork. He discussed his reason in his security clearance application, in a clearance interview, and in answers to DOHA interrogatories. He also stated that he would hire an accountant and file his returns by September 2011. However, by the close of the record, he had not done so. Intentional failure to file a federal tax return is a misdemeanor, punishable by fines and/or imprisonment. Applicant’s state of residence also requires the filing of income tax returns. In 2004, Applicant was terminated from a job with a Defense contractor for improperly charging his time to a government contract when he was actually using the internet for purposes unrelated to work. Applicant claimed that other employees did the same, but his supervisor was looking for an excuse to fire him because of several instances of narcolepsy-induced tardiness. In the Analysis, the Judge concluded that Applicant’s failure to file income tax returns met the criteria for Financial Considerations Disqualifying Condition (FCDC) 19(g).1 He stated that the filing of tax returns is a basic financial obligation of most income-earning citizens. Noting that Applicant had not submitted any of the delinquent returns by the close of the record, the Judge concluded that he had failed to mitigate the security concerns arising from this conduct. The Judge found in Applicant’s favor regarding a Guideline E allegation concerning his having been fired from a previous job. However, the Judge concluded that Applicant’s failure to file tax returns raised Personal Conduct Disqualifying Condition (PCDC) 16(c).2 He stated that Applicant’s disdain for paperwork, an attitude probably common among taxpayers, was not a sufficient excuse to decline to perform duties imposed by law. In the whole-person analysis, he stated that Applicant’s intentional failure to perform acts required by law impugns his judgment and willingness to follow rules and regulations. This, in turn, raises a reasonable concern that Applicant could fail to observe those rules governing the protection of classified information. Accordingly, the Judge denied Applicant a clearance. Applicant contends that the Judge erred in concluding that his conduct raised security concerns under Guidelines F and E. When, as here, an applicant requests a decision on the written record, the Government must provide to the applicant “a copy of all relevant and material information that could be adduced at a hearing.” Directive ¶ E3.1.17. At a hearing, the Government’s burden is to present substantial evidence regarding any controverted allegation. Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion in light of all the contrary evidence in the same record.” See, e.g., ISCR Case No. 11-03500 at 3 (App. Bd. Feb. 28, 2012). Applicant admitted that he failed to file his tax returns, as alleged. Even though the allegations pertaining to his filing delinquencies were not controverted, the Government presented evidence in the form of Applicant’s answers to questions on the security clearance application, a summary of his interview, and his answers to DOHA interrogatories. Accordingly, the underlying facts are not in doubt; the only issue to be resolved is Applicant’s contention that these facts do not constitute security concerns. Applicant contends that the evidence does not show that he has failed to satisfy debts, as set forth in the security concern under Guideline F. He points to evidence that he had actually been entitled to refunds each year in question. Directive, Enclosure 2 ¶ 18 provides, in part, that [f]ailure or inability to . . . meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual’s reliability, trustworthiness and ability to protect classified information.

That the financial obligations addressed by this concern include the filing of tax returns is evidenced by the plain language of FCDC 19(g), the disqualifying condition that the Judge found applicable in this case. Applicant’s argument that the concern is limited to failure to pay monetary debts is without merit. Applicant also argues that the Judge unreasonably multiplied the significance of his conduct, treating a single act, his failure to file tax returns, as a pattern or series of failures. However, the SOR alleged, Applicant admitted, and the Judge found that the security significant conduct in this case occurred over several successive years. Each instance constitutes a separate act. Although this failure may be viewed as a continuing course of conduct, ongoing as of the close of the record, the evidence demonstrates that this conduct consists of multiple failures. Again, Applicant’s argument is without merit. The Government has presented substantial evidence of Guideline F security concerns.

Applicant contends that the Judge erred in finding security concerns under Guideline E. He argues that his circumstances do not meet the criteria set forth in PCDC 16(c), which references conduct from several adjudicative areas. He also argues that favorable application of this disqualifying condition is inconsistent with the Judge’s conclusions under Guideline F. Security related conduct can be alleged under more than one Guideline and, in an appropriate case, given independent weight under each. See, e.g., ISCR Case No. 04-09251 at 3 (App. Bd. Mar. 27, 2007). In this case, the Judge’s Guideline E analysis focused on Applicant’s disdain for complex paperwork. The Judge concluded that Applicant manifested his disdain through conduct touching on more than one Guideline3 and which evidenced a knowing and willful failure to comply with rules or regulations. These conclusions are supported by the record and are consistent with the Judge’s adverse formal findings under Guideline E. Moreover, these conclusions are sufficiently distinct from those the Judge made under Guideline F, which focus on Applicant failure to discharge financial obligations, so as to support an adverse decision under both Guidelines. Neither a SOR, nor the Guidelines themselves, are to be measured against the requirements of criminal pleadings or statutes. See, e.g., ISCR Case No. 02-15383 at 2-3 (App. Bd. Jul. 20, 2003). The disqualifying conditions listed in the Directive under each Guideline are not exhaustive and exclusive; rather, they are illustrative. Even if an applicant’s circumstances do not meet the specific language of any of the disqualifying conditions presented under a given Guideline, a Judge may still conclude that the conduct falls within the scope of the Guideline’s security concern. See, e.g., ISCR Case No. 07- 02485 at 4 (App. Bd. May 9, 2008). A clearance decision must be a commonsense determination made in the interests of national security. See Directive, Enclosure 2 ¶ 2(c). The Judge’s ultimate conclusions in this case do not unreasonably magnify the security significance of Applicant’s conduct or otherwise present his case so as to make it appear more egregious than his circumstances warrant. Applicant contends that the Judge failed to consider favorable record evidence, such as his having held a clearance for many years without incident or concern. A Judge is presumed to have considered all of the evidence in the record. See, e.g., ISCR Case No. 10-06975 at 2 (App. Bd. Apr. 19, 2012). The Judge made findings concerning Applicant’s history of holding a clearance. However, his findings and analysis support his conclusion that Applicant had failed to mitigate the security concerns arising form his delinquent tax filings. Applicant has not rebutted the presumption that the Judge considered all of the evidence, nor has he demonstrated that the Judge mis-weighed the evidence. Applicant cites to other persons who, he contends, have been permitted to serve the U.S. in various capacities despite tax problems. This is evidence from outside the record, which we cannot consider. Directive ¶ E3.1.29. (“No new evidence shall be received or considered by the Appeal Board”). In any event, each case must be decided on its own merits. See Directive, Enclosure 2 ¶ 2(b). See also ISCR Case No. 09-04216 at 3 (App. Bd. Jan. 31, 2011). Applicant contends that the Judge’s whole-person analysis was not adequate. He states that the service academy he attended evaluated him under such a standard and found him worthy of a commission. He contends the Judge should have found him worthy of a clearance. However, the Judge’s decision took into account the entirety of the record evidence that was before him. Applicant was given an opportunity to respond to the File of Relevant Material but did not do so. Given the record, which includes Applicant’s admitted conduct of security significance, we find no error in the Judge’s whole-person analysis. The record supports a conclusion that the Judge examined the relevant data and articulated a satisfactory explanation for the decision, “including a ‘rational connection between the facts found and the choice made.’” Motor Vehicle Mfrs. Ass’n of the United States v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)(quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)). The Judge’s adverse 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, Enclosure 2 ¶ 2(b): “Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.”

ORDER

The Judge’s adverse security clearance decision is AFFIRMED. 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

FOOTNOTES

1 Directive, Enclosure 2 ¶ 19(g): “failure to file annual Federal, state, or local income tax returns as required or the fraudulent filing of the same[.]”

2 Directive, Enclosure 2 ¶ 16(c): “credible adverse information in several adjudicative issue areas that is not sufficient for an adverse determination under any single guideline, but which, when considered as a whole, supports a whole-person assessment of questionable judgment, untrustworthiness, unreliability lack of candor, unwillingness to comply with rules and regulations, or other characteristics indicating that the person may not properly safeguard protected information[.]”

3 The Judge noted that Applicant’s filing delinquencies could have been alleged under Guideline J, Criminal Conduct. Reading his decision as a whole, we do not conclude that the Judge was raising security concerns not alleged in the SOR. Rather, he was addressing the extent to which Applicant’s conduct applied to more than one adjudicative area, an explicit concern of PCDC 16(c).