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ISCR Case 16-02868.a1 — CASE

ISCR Case 16-02868.a1denied

Case Headnote

ISCR Case No. 16-02868.a1

Jun 8, 2018· Hon. Michael Y. Ra'anan· appeal

Summary

An applicant, represented by counsel, was denied a security clearance under Guideline F (Financial Considerations) due to a pattern of financial irresponsibility. The denial stemmed from the applicant's failure to timely file state and federal tax returns between 2008 and 2014. This consistent non-compliance raised concerns about the applicant's judgment and reliability, which are critical for access to classified information.

While disqualifying condition F.1 was raised, mitigating conditions F.2 and F.3 were applied. However, the judge determined it was too soon to conclude that the applicant's recent compliance with tax authorities indicated a sustained change in character.

Consequently, the appeal board affirmed the denial, emphasizing that the applicant had not yet demonstrated the necessary level of responsibility to mitigate the concerns raised by the prolonged period of unfiled tax returns. The security clearance was therefore DENIED.

Conditions Referenced

Disqualifying

F.1raisedFinancial Considerations

Mitigating

F.2rejectedFinancial ConsiderationsThe applicant's arguments regarding mitigating circumstances were not sufficient to overcome the disqualifying conditions.
F.3rejectedFinancial ConsiderationsThe applicant's compliance with tax authorities was deemed too recent to establish a change in behavior.

Key Rule Quoted

“A person who fails repeatedly to fulfill his or her legal obligations, such as filing tax returns when due, does not demonstrate the high degree of good judgment and reliability required of those granted access to classified information.”
— ISCR Case No. 15-08782 at 3 (App. Bd. Apr. 5, 2017)

Procedural Posture

SOR issuedOct 23, 2016
Answer filed—
Hearing heldMar 16, 2018
Decision dateJun 8, 2018

Cite For

Denial Based on Failure to File Tax Returns Under Guideline F
Importance of Demonstrating Good Judgment and Reliability for Security Clearance
Insufficient Evidence to Rebut the Presumption of the Judge's Consideration of All Evidence

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's decision was arbitrary and capricious. The Board affirmed the decision, finding that the Judge had properly weighed the evidence and articulated a satisfactory explanation for the denial.

Appealed bythe applicant

Applicant representationAttorney

Judge belowMichael H. Leonard — 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 properly considered the evidence and articulated a satisfactory explanation for the decision, affirming that the applicant's arguments were insufficient to demonstrate that the Judge's weighing of the evidence was arbitrary or capricious.

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 Ra’anan — Chair
Charles C. Hale
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 has failed to rebut the presumption that the Judge considered all of the evidence in the record. His arguments, in effect, amount to a disagreement with the Judge’s weighing of the evidence and are not sufficient to establish the Judge weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. Adverse decision affirmed. CASENO: 16-02868.a1 DATE: 06/08/2018 DATE: June 8, 2018 In Re: --------------------------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 16-02868

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 October 23, 2016, 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 March 16, 2018, 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 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. Summary of the Case The Judge summarized the case as follows: [Applicant] failed to timely file state income tax returns for tax years 2008 through 2014. He likewise failed to timely file federal income tax returns for tax years 2012, 2013, and 2014. Taken together, these matters reflect a recent or recurring pattern of irresponsibility, lack of judgment, or unwillingness to abide by rules and regulations. He filed the past-due returns with the IRS in April 2016 and with the state in April 2017, and he is now in compliance with both tax authorities. Nevertheless, it is too soon to tell if his long-standing pattern of behavior is a thing of the past or is a firmly established part of his character. Accordingly, this case is decided against Applicant.1

DISCUSSION

Applicant argues that the Judge did not consider all relevant evidence and failed to apply properly the mitigating conditions, particularly ¶ 20(b)2 and ¶ 20(g).3 In support of his arguments, he cites to, among other matters, his resolution of the alleged tax issues, his wife’s health problems that resulted in him taking over responsibility for tax matters, his health problems, and his submission of a statement of intent pledging never to fail to pay his taxes when due. The Judge, 1 Decision at 1. 2 Directive, Encl. 2, App. A ¶ 20(b) states, “the conditions that resulted in the financial problem were largely beyond the person's control (e.g., loss of employment, a business downturn, unexpected medical emergency, a death, divorce or separation, clear victimization by predatory lending practices, or identity theft), and the individual acted responsibly under the circumstances[.]” 3 Directive, Encl. 2, App. A ¶ 20(g) states, “the individual has made arrangements with the appropriate tax authority to file or pay the amount owed and is in compliance with those arrangements.” however, made findings about those matters. Applicant has failed to rebut the presumption that the Judge considered all of the evidence in the record. See, e.g., ISCR Case No. 15-06494 at 3 (App. Bd. Oct. 5, 2017). His arguments, in effect, amount to a disagreement with the Judge’s weighing of the evidence and are not sufficient to establish the Judge weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. Id. We gave due consideration to the Hearing Office case that Applicant cited, but it is neither binding precedent on the Appeal Board nor sufficient to undermine the Judge’s decision. Id. The Judge examined the relevant evidence and articulated a satisfactory explanation for the decision. A person who fails repeatedly to fulfill his or her legal obligations, such as filing tax returns when due, 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. 15-08782 at 3 (App. Bd. Apr. 5, 2017). 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, Encl. 2, App A ¶ 2(b): “Any doubt concerning personnel being considered for national security eligibility 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: Charles C. Hale Charles C. Hale Administrative Judge Member, Appeal Board Signed: James F. Duffy James F. Duffy Administrative Judge Member, Appeal Board