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ISCR Case 12-07229.a1 — CASE

ISCR Case 12-07229.a1denied

Case Headnote

ISCR Case No. 12-07229.a1

Jan 13, 2017· Hon. Michael Y. Ra'anan· appeal

Summary

A federal contractor was denied a security clearance under Guideline F (Financial Considerations) due to a history of unresolved debts and a failure to file tax returns. The applicant had not filed federal and state income tax returns for multiple years, specifically from 2009 to 2013. Additionally, the applicant had outstanding debts, including student loans that had been subject to garnishment, which indicated a lack of good-faith effort to resolve these financial obligations.

The judge determined that the applicant's tax issues were longstanding and demonstrated poor judgment. These financial concerns, particularly the non-compliance with tax obligations, were deemed detrimental to national security interests.

The appeal board affirmed the denial, upholding the initial decision based on the applicant's poor judgment and failure to meet financial responsibilities. The denial was specifically linked to Disqualifying Condition AG ¶ 19.

Conditions Referenced

Disqualifying

AG ¶ 19raisedFinancial Considerations

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 27, 2015
Answer filed—
Hearing heldOct 27, 2016Decision on the written record.
Decision dateJan 13, 2017

Cite For

Denial Based on Failure to Comply with Tax Obligations Under Guideline F
Importance of Good-faith Efforts in Resolving Financial Issues
Impact of Unresolved Debts on National Security 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 involved a denial of a security clearance based on financial considerations under Guideline F. The applicant argued that the Administrative Judge's decision was arbitrary and capricious. 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 belowMichael H. Leonard — denied the clearance

Decided onthe written record

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 did not weigh the evidence in an arbitrary or capricious manner and that the decision was supported by substantial evidence. The applicant failed to demonstrate compliance with tax laws, which is critical for security clearance eligibility.

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
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 a substantial information from outside the record, including one document that post-dates the Decision. We cannot consider new evidence on appeal. Applicant cites to efforts at debt resolution, filing of tax returns, etc. Applicant has not rebutted the presumption that the Judge considered all of the record evidence. Neither has Applicant shown that the Judge weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. Failure to comply with Federal and state tax laws suggests that an applicant has a problem with abiding by well-established Government rules and regulations, voluntary compliance with which is essential for protecting classified information. Adverse decision affirmed. CASENO: 12-07229.a1 DATE: 01/13/2017 DATE: January 13, 2017 In Re: ------ Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 12-07229

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 27, 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 decision on the written record. On October 27, 2016, after considering the record, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Michael H. Leonard denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. Applicant raises 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 Applicant has worked as a Federal contractor since at least 1999. Divorced, she has three children. She has a bachelor’s degree. Applicant’s SOR lists several delinquent debts for consumer accounts, student loans, a debt to a Federal agency, and a medical expense. In addition, Applicant failed to file Federal and state income tax returns for 2009 through 2013. Applicant attributed her financial problems to a divorce, a large mortgage loan, and financial assistance to adult children. Applicant failed to provide documentary evidence showing that her delinquent debts had been resolved. Additionally, the delinquent tax filings were “largely unresolved.” Decision at 3. Applicant did, however, submit tax records showing that she had made some progress on her Federal taxes. She submitted nothing regarding her state income tax returns. The Judge’s Analysis The Judge found that one debt, the medical bill, had been resolved. He stated that Applicant had done little if anything, however, to address the remaining allegations. He noted evidence that Federal debts, such as the student loans, were the subject of garnishment orders, “which belies a good-faith effort to pay.” Id. at 6. He found her tax issues to be of particular concern. Although she had filed Federal and state returns for 2010 and 2011, those for 2009, 2012, and 2013 were still outstanding. The Judge stated that Applicant had shown poor judgment over the years, as reflected in her willful neglect of her tax obligations. He concluded that Applicant’s tax problems are too longstanding and too recent to permit a favorable decision.

DISCUSSION

Applicant’s brief includes a substantial amount of information from outside the record, including at least one document that post-dates the Decision. We cannot consider new evidence on appeal. Directive ¶ E3.1.29. Applicant cites to efforts at debt resolution, the garnishment actions against her, her filing of tax returns, etc. Applicant has not rebutted the presumption that the Judge considered all of the evidence in the record. See, e.g., ISCR Case No. 15-02854 at 2 (App. Bd. Nov. 22, 2016). Neither has Applicant 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). The Judge examined the relevant evidence and articulated a satisfactory explanation for the decision. The decision is sustainable on this record. Failure to comply with Federal and state tax laws suggests that an applicant has a problem with abiding by well-established Government rules and regulations, voluntary compliance with which is essential for protecting classified information. See, e.g., ISCR Case No. 14-06686, supra, at 2. “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