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ISCR Case 15-04096.a1 — CASE

ISCR Case 15-04096.a1denied

Case Headnote

ISCR Case No. 15-04096.a1

Nov 22, 2016· Hon. Michael Y. Ra'anan· appeal

Summary

An applicant employed by a Defense contractor was denied a security clearance under Guideline F (Financial Considerations) due to unresolved tax liens exceeding $81,000. The appeal board upheld the denial, citing the applicant's history of tax delinquencies as a significant security concern.

While the applicant claimed to have resolved other debts and filed tax returns on time, these actions did not mitigate the concerns related to the outstanding tax obligations. The board also determined that evidence of providing financial support to family members did not outweigh the security risks posed by the unresolved tax liens.

Ultimately, the denial was based on the applicant's failure to comply with tax obligations, which is a critical factor for security clearance eligibility. The decision emphasized the importance of resolving such financial issues to meet the standards required for access to classified information.

Conditions Referenced

Disqualifying

AG ¶ 19raisedFinancial Considerations

Mitigating

AG ¶ 20rejectedFinancial ConsiderationsThe applicant's claims of resolving other debts and timely filing tax returns were insufficient to mitigate the security concerns.

Key Rule Quoted

“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.”
— ISCR Case No. 14-01894 at 5 (App. Bd. Aug. 18, 2015)

Procedural Posture

SOR issuedDec 22, 2015
Answer filed—
Hearing heldAug 31, 2016
Decision dateNov 22, 2016

Cite For

Security Concerns Related to Unresolved Tax Obligations Under Guideline F
Insufficient Mitigation of Financial Issues Despite Claims of Resolution
Importance of Compliance with Legal Obligations for Security Clearance Eligibility

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, specifically two tax liens. The applicant argued that the Judge's decision was arbitrary and capricious. The Board affirmed the Judge's decision, finding no harmful error in the analysis or conclusions reached.

Appealed bythe applicant

Applicant representationAttorney

Judge belowMark Harvey — denied the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
Applicant argued 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 decision was supported by substantial evidence and articulated a satisfactory explanation for the adverse decision regarding the applicant's financial considerations.

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
James E. Moody
Jean E. Smallin

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 points to evidence that he has resolved most of the SOR debts, including a tax lien. He argues that he “has taken substantial steps to resolve” his remaining tax debts. Applicant’s argument is not enough to rebut the presumption that the Judge failed to consider all of the evidence in the record or to show that he mis-weighed the evidence. Applicant has cited to Hearing Office cases that, he contends, support his effort to obtain a clearance. We give these cases due consideration. However, Hearing Office cases are not binding on other Hearing Office Judges or on the Appeal Board. Adverse decision affirmed. CASENO: 15-04096.a1 DATE: 11/22/2016 DATE: November 22, 2016 In Re: ------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 15-04096

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 December 22, 2015, 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 August 31, 2016, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Mark Harvey 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 The Judge made the following findings pertinent to the issue raised on appeal: Applicant has been employed by a Defense contractor since 2014. He experienced periods of unemployment between 2008 and 2014. Applicant’s SOR includes two tax liens.1 One was filed in May 2011 in the amount over $62,000 covering tax years 2001 through 2006. The other was filed in October 2011 for nearly $19,000 covering tax years 2008 through 2010. Applicant provided financial support to family members rather than pay taxes. He has been making payments on his tax debts since 2011. He has submitted offers in compromise to the IRS and believes that, if they are accepted, he can resolve his tax liabilities in a year or more. He has timely filed his returns since 2010. Applicant has resolved, or successfully disputed, other debts alleged in the SOR, for such things as medical expenses, telecommunications services, child support, etc. The Judge’s Analysis The Judge cleared Applicant of all SOR allegations except the two tax liens described above. Though noting that Applicant had presented some mitigating information, the Judge cited to evidence that Applicant has owed taxes to the Federal Government for many years. He stated that Applicant’s history of failing to pay taxes when due raises unresolved security concerns. Evidence that Applicant had provided some financial support to family members was not enough fully to mitigate the security concerns arising from his tax delinquencies.

DISCUSSION

Applicant points to evidence that he has resolved most of the SOR debts, including a tax lien. See footnote 1, supra. He argues that he “has taken substantial steps to resolve” his remaining tax debts. Applicant’s argument is not enough to rebut the presumption that the Judge failed to consider all of the evidence in the record or to show that he mis-weighed the evidence. See, e.g., ISCR Case No. 14-05795 at 2-3 (App. Bd. Apr. 26, 2016). Applicant has cited to some Hearing Office cases that, he contends, support his effort to obtain a clearance. We give these cases due consideration. However, Hearing Office cases are not binding on other Hearing Office Judges or on the Appeal Board. See, e.g., ISCR Case No. 14-03747 at 3 (App. Bd. Nov. 13, 2015). The Judge examined the relevant data and articulated a satisfactory explanation for the decision. 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). Failure to file tax returns suggest that an applicant has a problem with complying with well-established government rules and regulations. Voluntary compliance with such rules and regulations is essential for protecting classified information. ISCR Case No. 14-06686 at 2 (App. Bd. Apr. 27, 2016). 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: Jean E. Smallin Jean E. Smallin Administrative Judge Member, Appeal Board

FOOTNOTES

1 The SOR alleged another tax lien that the Judge resolved in Applicant’s favor.