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ISCR Case 12-02058.a1 — CASE

ISCR Case 12-02058.a1denied

Case Headnote

ISCR Case No. 12-02058.a1

Jun 25, 2014· Hon. Michael Y. Ra'anan· appeal

Summary

A government contractor employee, a high school graduate employed since 2008, was denied a security clearance under Guideline F (Financial Considerations). The denial stemmed from significant financial issues, specifically the failure to timely file federal income tax returns for multiple years and an outstanding federal tax debt estimated between $47,000 and $48,000.

Disqualifying conditions F1 (inability or unwillingness to satisfy debts) and F3 (a history of not meeting financial obligations) were raised. While mitigating conditions F2 (the behavior was not recent) and F3 (the conditions were largely beyond the person's control) were considered, they were ultimately not sufficient to overcome the concerns.

The judge determined that the applicant had not consistently adhered to established repayment plans, which subsequently led to their termination. This lack of consistent financial responsibility, particularly concerning a substantial tax debt and failure to file, was deemed incompatible with national security interests, resulting in the denial of the security clearance.

Conditions Referenced

Disqualifying

F1raisedInability or Unwillingness to Satisfy Debts
F3raisedFailure to File Annual Income Tax Returns

Mitigating

F2rejectedThe Conditions That Resulted in the Financial Problems Were Largely Beyond the Person's ControlThe judge noted that the applicant's failures to file returns did not result from circumstances beyond his control.
F3rejectedThe Person Has Made Good Faith Efforts to Repay Overdue Creditors or Has a Legitimate Plan to Repay ThemThe judge found that the applicant had not been faithful in making payments under repayment plans.

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 issuedAug 22, 2013
Answer filed—
Hearing heldMar 25, 2014
Decision dateJun 25, 2014

Cite For

Financial Responsibility Under Guideline F
Impact of Failure to File Tax Returns on Security Clearance
Importance of Adherence to Repayment Plans in Financial Considerations

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 under Guideline F. The Applicant argued that the Judge erred in her findings and that the decision was arbitrary and capricious. The Board affirmed the Judge's decision, finding it supported by substantial evidence and reasonable interpretations of the record.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowJoan Caton Anthony — denied the clearance

Decided onthe written record

Guidelines belowGuideline F

What the Board reviewed

Judge mis-weighed or ignored evidence — raised by the applicantRejected
The Judge erred in finding that the Applicant had not followed his repayment plans.
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 concluded that the Judge’s findings were supported by substantial evidence and that the Judge did not draw adverse inferences from the Applicant's repayment plans. The decision was reasonable and consistent with national security interests.

Standard of review applied

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

Appeal Board panel

Michael Ra’anan — Chair
William S. Fields
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 Board concludes the Judge’s material findings of security concern are supported by substantial record evidence or constitute reasonable characterizations or inferences that could be drawn from the record. There is no basis to conclude that the Judge drew adverse inferences from Applicant’s having repayment plans. Rather, she reasonably considered evidence he had not been faithful in making plan payments. Adverse decision affirmed. CASENO: 12-02058.a1 DATE: 06/25/2014 DATE: June 25, 2014 In Re: ---------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 12-02058

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 August 22, 2013, 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. On March 25, 2014, after considering the record, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Joan Caton Anthony 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’s findings of fact contained errors and 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 A high school graduate, Applicant has worked for a Government contractor since 2008. He has previously been awarded a DoD security clearance and has held access to confidential information from another Government agency. Applicant failed to timely file his Federal income tax returns for a number of years, and he owes a substantial amount of money for unpaid Federal taxes. He has estimated the amount of his IRS tax debt to be between $47,000 and $48,000. He entered into an installment plan for taxes owed in tax years 2000, 2002, and 2005. He made six payments and then stopped. This agreement was subsequently terminated. He established another agreement to repay taxes owed for tax years 2000, 2002, 2005 - 2007, and 2009. He made payments under this agreement from June 2010 until July 2011. In June 2011, he established an installment agreement to pay his 2010 Federal income taxes. The IRS subsequently cancelled this agreement upon discovery that he had not timely filed his 2010 tax return. He entered into a new agreement, whereby he would pay $400 a month. “It appears from documentation in the record that Applicant made payments under the plan between May 2012 and February 2013. He made payments in March, April, and May of 2013. It is not clear form the record that he made any payments thereafter.” Decision at 3. Applicant has a net monthly income of $3,324, with total monthly expenses of $3,016. He has not received financial counseling. The Judge’s Analysis The Judge cited to evidence that Applicant had failed to file his tax returns for at least tax years 2000 through 2008; that he has held stable employment since 2008; and that the record does not show that his failures to file returns resulted from circumstances beyond his control. Additionally, she noted that Applicant had not had financial counseling and that he appears to be living beyond his means. She stated that Applicant had habitually ignored IRS rules and regulations for several years. In the whole-person analysis, the Judge cited to evidence that Applicant had not followed his repayment agreements consistently.

DISCUSSION

Applicant states that his payments “have been made without error.” To the extent that he is arguing that the Judge erred in finding that he had not followed his repayment plans, we conclude that the Judge’s material findings of security concern are supported by substantial record evidence or constitute reasonable characterizations or inferences that could be drawn from the record. See, e.g., ISCR Case No. 11-00970 at 2 (App. Bd. Feb. 28, 2012). Applicant argues that a repayment plan should not automatically cause a denial of a clearance application. However, there is no basis in the Decision to conclude that the Judge drew adverse inferences from Applicant’s having entered into repayment plans. Rather, she considered evidence that he had not been faithful in making payments under those plans, which was a reasonable interpretation of the record that was before her. The Judge examined the relevant data 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, 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: Michael Ra’anan Michael Ra’anan Administrative Judge Chairperson, Appeal Board Signed: William S. Fields William S. Fields Administrative Judge Member, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board