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ISCR 11-09365.a1: Guideline F security clearance appeal, denied (2013) · CASE

ISCR Case 11-09365.a1denied

Case headnote

ISCR Case No. 11-09365.a1

May 6, 2013· Hon. Jean E. Smallin· appeal

Summary

An applicant, a defense contractor with prior security clearances, was denied a security clearance under Guideline F (Financial Considerations) due to unresolved tax obligations. The denial was affirmed by the appeal board, which cited serious doubts about the applicant's reliability and judgment.

Disqualifying conditions F.1 and F.2 were raised, indicating a history of not meeting financial obligations and an unwillingness to resolve debts. While mitigating conditions F.3 and F.4 were applied, suggesting some efforts to address the issues, they were insufficient to overcome the security concerns.

The denial was based on the applicant's failure to file tax returns for multiple years and the fact that his tax debts were not fully resolved. The judge also expressed uncertainty regarding the applicant's ability to maintain payment plans, ultimately leading to the conclusion that his financial irresponsibility posed an unacceptable security risk.

Conditions referenced

Disqualifying

F.1raisedInability to Satisfy Debts
F.2raisedDelinquent Accounts

Mitigating

F.3rejectedThe Conditions That Resulted in the Financial Difficulties Were Largely Beyond the Person's ControlThe judge found that the applicant's financial problems were due to a deliberate decision to avoid filing tax returns.
F.4rejectedThe Person Has Received or Is Receiving Counseling for the Financial ProblemThe applicant had not received financial counseling.

Key rule quoted

“Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.”
Directive, Enclosure 2 ¶ 2(b)

Procedural posture

SOR issuedSep 25, 2012
Answer filed—
Hearing heldFeb 19, 2013
Decision dateMay 6, 2013

Cite for

Serious Doubts About Reliability and Judgment Under Guideline F
Impact of Unresolved Tax Obligations on Security Clearance
Affirmation of Adverse Decisions Based on Financial Irresponsibility

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 from an adverse decision denying the applicant a security clearance based on financial considerations under Guideline F. The applicant argued that the Judge failed to consider favorable evidence and that the decision was arbitrary and capricious. The Board affirmed the Judge's decision, finding it supported by substantial evidence and properly reasoned.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowRita C. O’Brien denied the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Judge mis-weighed or ignored evidence, raised by the applicantRejected
Applicant argued that the Judge failed to consider evidence favorable to him.
Decision arbitrary, capricious, or contrary to law, raised by the applicantRejected
Applicant contended that the 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 decision, including a rational connection between the facts found and the choice made. The Judge's adverse decision was sustainable on the record, and the applicant did not rebut the presumption that the Judge considered all evidence.

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)
Jean E. Smallin
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 DIGEST: The Judge had serious doubts about Applicant’s reliability and judgment, due to his having failed to discharge his legitimate tax obligations in two state and to the Federal Government. Adverse decision affirmed. CASE NO: 11-09365.a1 DATE: 05/06/2013 DATE: May 6, 2013 In Re: -------------------------------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 11-09365

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 September 25, 2012, 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 February 19, 2013, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Rita C. O’Brien 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 failed to consider evidence favorable to Applicant and whether the adverse decision was arbitrary, capricious, or contrary to law. Consistent with the following, we affirm. The Judge’s Findings of Fact Applicant has worked for a Defense contractor since 2005. He has worked either as a contractor or as a Federal Government employee for 26 years. He has a bachelor’s degree and is working on an advanced degree. He has held security clearances since the mid-1980s. Applicant has experienced financial problems, which he attributed to his failure to have approached his tax obligations with the appropriate degree of responsibility. He did not file tax returns for two states and for the Federal Government for several years. His Federal back taxes are now paid, but he has not yet paid off all his delinquent state tax obligations. He admitted that these failures reflected poorly upon his judgement. He also had problems meeting his mortgage payments. His lender has approved a short-sale of the house. Applicant’s SOR alleges other debts, including ones for student loans. Applicant’s wife had to retire from her job, resulting in a loss of income for the family. Applicant’s financial statement shows a negative monthly remainder. Applicant has not received financial counseling. The Judge’s Analysis The Judge concluded that Applicant’s financial problems raised security concerns under Guideline F. She also concluded that Applicant had mitigated several of those concerns. However, she concluded that he had not done so with regard to his state and federal taxes. Though acknowledging that his tax debts had either been paid or were covered by a payment plan, she stated that Applicant’s ability to maintain those plans was not clear. Moreover, she noted that he did not enter into payments plans for the tax debts until tax authorities had located him in another state and that he did not begin to pay off a 1995 Federal tax lien until 2002. She stated that she had serious doubts about Applicant’s reliability and good judgment, due to his having failed to discharge his legitimate tax obligations to two different states and to the Federal Government.

DISCUSSION

Applicant asserts that he is resolving his tax problems in accordance with guidance he has received from state and Federal taxing authorities. He states that he does not owe taxes to the states and that the sale of his home will provide him with funds that can be used for debt repayment. A Judge is presumed to have considered all of the evidence in the record. See, e.g., ISCR Case No. 10-11083 at 2 (App. Bd. Dec. 18, 2012). In the case currently under consideration, the Judge made detailed findings about Applicant’s circumstances, including the short-sale of his home. Her adverse decision was based upon Applicant’s tax problems, which, she stated, arose due to a deliberate decision to avoid filing returns. Applicant has not rebutted the presumption that the Judge considered all of the evidence. Neither does his argument provide a reason to believe that the Judge mis-weighed the evidence. 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 Decision is AFFIRMED. Signed: Michal Y. Ra’anan Michael Y. Ra’anan Administrative Judge Chairperson, Appeal Board Signed: Jean E. Smallin Jean E. Smallin Administrative Judge Member, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board