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ISCR Case 14-04597.a1 — CASE

ISCR Case 14-04597.a1denied

Case Headnote

ISCR Case No. 14-04597.a1

Oct 19, 2016· Hon. Michael Y. Ra'anan· appeal

Summary

A retired military member with five children was denied a security clearance under Guideline F, Financial Considerations, due to significant financial issues. The applicant failed to file federal tax returns for multiple years and had delinquent payments, raising disqualifying conditions AG ¶ 20(a) and AG ¶ 20(c).

While mitigating conditions AG ¶ 20(d) and AG ¶ 20(e) were considered, the denial was upheld because the applicant did not provide adequate documentation of financial responsibility. Specifically, claims of ongoing payments to the IRS and other debts were not substantiated.

The appeal board affirmed the denial, emphasizing the applicant's lack of substantiated claims of financial responsibility and the importance of compliance with financial obligations for maintaining a security clearance.

Conditions Referenced

Disqualifying

AG ¶ 20(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 20(c)raisedA History of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(d)rejectedThe Individual Has Made Good Faith Efforts to Repay Overdue Creditors or Has Otherwise Resolved DebtsThe applicant did not provide sufficient evidence of ongoing payments or resolution of tax obligations.
AG ¶ 20(e)rejectedThe Individual Is in a Good Financial Position to Meet Their ObligationsThe applicant's financial situation was not adequately documented to demonstrate a good financial position.

Key Rule Quoted

“Failure to file tax returns suggests that an applicant has a problem with complying with well-established government rules and regulations.”

Procedural Posture

SOR issuedDec 1, 2014
Answer filed—
Hearing heldJul 25, 2016
Decision dateOct 19, 2016

Cite For

Denial of Security Clearance Due to Significant Financial Issues Under Guideline F
Importance of Compliance with Financial Obligations for Security Clearance
Failure to Provide Adequate Documentation of Financial Responsibility 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 brought 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 failed to consider and weigh all evidence properly. The Board affirmed the decision, finding no harmful error in the Judge's analysis and conclusions.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowFrancisco Mendez — denied the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Judge mis-weighed or ignored evidence — raised by the applicantRejected
The Judge failed to consider all of the evidence.
Judge mis-weighed or ignored evidence — raised by the applicantRejected
The Judge failed properly to weigh the evidence.

Why the Board ruled this way

The Board found that the Judge did not err in his findings and that the decision was supported by substantial evidence. The Judge's analysis of the applicant's financial issues was thorough and consistent with the requirements of the law.

Standard of review applied

No new evidence on appealSubstantial-evidence reviewArbitrary-and-capricious review

Appeal Board panel

Michael Y. Ra’anan — Chair
James E. Moody
James F. Duffy

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: Applicant’s brief includes new evidence, including information about persons in the news. We cannot consider new evidence. Also, each case must be decided on it own merits. Adverse decision affirmed. CASENO: 14-04597.a1 DATE: 10/19/2016 DATE: October 19, 2016 In Re: ----------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 14-04597

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 December 1, 2014, 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 July 25, 2016, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Francisco Mendez 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 all of the evidence and whether the Judge failed properly to weigh the evidence. Consistent with the following, we affirm. The Judge’s Findings of Fact Applicant is divorced from his wife of 20 years. He has five children. Applicant retired from the military in 2004, following which he has worked for several different Government contractors. He has worked at his current job since July 2013 and earns about $92,000. He first received a clearance in 1982. He was unemployed for a total of 25 months between mid-2007 and mid-2013. When he found employment, he did not ensure sufficient withholding from his salary to pay his income tax obligations. His reason for this was that he needed the extra income to pay other debts, such as child support and his mortgage. Applicant was unable to pay his Federal tax obligation for 2005 through 2012 and, moreover, did not even file his Federal tax returns, or filed them late. As of the hearing he had yet to file some of his returns. In 2009 he entered into an installment agreement with the IRS but stopped making payments after losing his job. In 2014 he entered into a new agreement and showed that he had made payments of about $3,000 through July 2014. As of that date, he owed about $50,700. However, he provided no documentation to show that he had made further payments since then. In addition, Applicant did not file his 2011 state income tax return. He testified that he had since filed the return and paid the tax but did not provide any corroboration. Applicant also became delinquent in his child support payments and his mortgage. A court increased his child support obligation, which he has paid. He anticipates that this obligation will cease in mid-2016, when his child reaches the age of majority. He has obtained a loan modification, and he is now current on his mortgage. In 2013, Applicant filed for Chapter 13 bankruptcy protection. However, the court dismissed the petition because Applicant failed to attend required financial counseling. He stated that he has since received such counseling but again did not provide corroboration. Applicant’s SOR also lists three consumer debts. Applicant disputes them, and the record shows that he is current on the largest of the three. Applicant pays about $600 a month on credit card debt. He claims that he lives frugally. He disclosed his financial problems on his security clearance application. The Judge’s Analysis The Judge cleared Applicant for SOR allegations about his mortgage account and the three consumer debts referenced above. However, regarding Applicant’s tax problems, he entered adverse findings. The Judge noted Applicant’s unemployment, which was beyond his control, but concluded that Applicant had not shown responsible action, citing to his having failed to ensure adequate withholding. Though commending Applicant for satisfying other debts, including his child-support (which was not alleged), he stated that Applicant had been able to do so only by failing to file and pay his taxes. He noted that Applicant began to address his tax delinquencies only at about the same time that his clearance review was initiated. The Judge cited to a paucity of evidence corroborating ongoing payments on his installment agreement with the IRS. In the whole-person analysis, the Judge acknowledged that Applicant has held a clearance for many years without incident or concern. He cited to evidence of Applicant’s 20 years of military service, sometimes in dangerous conditions. He also acknowledged both Applicant’s candor in disclosing his financial problems during the course of his clearance investigation and the crippling effect that Applicant’s post-divorce obligations exerted on his debts. However, the Judge concluded that these matters did not outweigh a multi-year history of failing to file or pay tax obligations.

DISCUSSION

Much of Applicant’s brief consists of matters from outside the record, including information about persons and events in the news. We cannot consider new evidence on appeal. Directive ¶ E3.1.29. In any event, each case must be decided upon its own merits. Directive, Enclosure 2 ¶ 2(b). Applicant cites to evidence that he has held a clearance for many years and that he served honorably in the military. The Judge addressed these matters in his decision. Applicant has not rebutted the presumption that the Judge considered all of the evidence in the record. See, e.g., ISCR Case No. 14-05795 at 2 (App. Bd. Apr. 26, 2016). Neither 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. 14-06686 at 2 (App. Bd. Apr. 27, 2016). Applicant states that his employment is dependent upon his having a clearance. The Directive does not permit us to consider the impact that an adverse decision might have upon an applicant. See, e.g., ISCR Case No. 14-02619 at 3 (App. Bd. Apr. 7, 2016). The Judge examined the relevant data and articulated a satisfactory explanation for the decision. Failure to file tax returns suggests that an applicant has a problem with complying with well-established government rules and regulations. Voluntary compliance with rules and regulations is essential for protecting classified information. ISCR Case No. 14-04437 at 3 (App. Bd. Apr. 15, 2016). A person who fails repeatedly to fulfill his or her legal obligations, such as filing and paying taxes, does not demonstrate the high degree of good judgment and reliability required of those granted access to classified information. See, e.g., ISCR Case No. 14-01894 at 5 (App. Bd. Aug. 18, 2015). See Cafeteria & Restaurant Workers Union Local 473 v. McElroy, 284 F.2d 173, 183 (D.C. Cir. 1960), aff’d, 367 U.S. 886 (1961). 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 Y. Ra’anan Michael Y. Ra’anan Administrative Judge Chairperson, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board Signed: James F. Duffy James F. Duffy Administrative Judge Member, Appeal Board