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ISCR Case 17-03053.a1 — CASE

ISCR Case 17-03053.a1denied

Case Headnote

ISCR Case No. 17-03053.a1

Aug 6, 2018· Hon. Charles C. Hale· appeal

Summary

A security clearance applicant, representing himself, was denied under Guideline F (Financial Considerations) due to unresolved tax liabilities exceeding $350,000. The judge identified disqualifying conditions related to these significant and ongoing financial issues, which raised concerns about the applicant's reliability and judgment.

While the applicant demonstrated some efforts to address his financial problems, and mitigating conditions were considered, these were insufficient to overcome the security concerns. The judge specifically noted that the financial problems were recent and ongoing, undermining the applicant's trustworthiness.

Ultimately, the substantial and unresolved tax debt led to the denial of the security clearance, as the judge concluded that these financial considerations posed an unacceptable security risk.

Conditions Referenced

Disqualifying

AG ¶ 19raisedFinancial Considerations

Mitigating

AG ¶ 20(d)appliedGood-faith Effort to Repay DebtsThe applicant initiated and adhered to a payment plan for his tax debts.
AG ¶ 20(g)appliedArrangements with Tax AuthorityThe applicant made arrangements with the IRS to pay his overdue taxes.

Key Rule Quoted

“The presence of some mitigating evidence does not alone compel the Judge to make a favorable security clearance decision.”

Procedural Posture

SOR issuedSep 28, 2017
Answer filed—
Hearing heldApr 12, 2018
Decision dateAug 6, 2018

Cite For

Impact of Unresolved Tax Liabilities on Security Clearance Eligibility
Weight of Mitigating Evidence in Financial Considerations Cases
Standards for Evaluating the Sufficiency of Evidence in Security Clearance Decisions

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 an applicant seeking a security clearance after being denied due to financial considerations under Guideline F. The applicant argued that the Judge's decision was arbitrary and capricious, citing his efforts to resolve tax debts. The Board affirmed the Judge's decision, finding no harmful error in the analysis or conclusion reached by the Judge.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowEdward W. Loughran — 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 contended 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 denial of the security clearance. The presence of some mitigating evidence did not compel a favorable decision, and the Judge's weighing of the evidence was not 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

James E. Moody
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: The presence of some mitigating evidence does not alone compel the Judge to make a favorable security clearance decision. Adverse decision affirmed. CASENO: 17-03053.a1 DATE: 08/06/2018 DATE: August 6, 2018 In Re: --------------------------- Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 17-03053

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 September 28, 2017, 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 April 12, 2018, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Edward W. Loughran 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 in his 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 owns a small company and did not pay all of his business and personal taxes for 2002, 2003, 2005 through 2012, and 2014. The IRS filed five Federal tax liens against his business between 2012 and 2015 totaling about $142,000 and filed five Federal tax liens against him personally between 2010 and 2013 totaling about $360,000. Applicant attributed his tax deficiencies to “a bad period of time in [his] life going through a divorce, and really didn’t care about a lot of things and two of them were [his] personal and business taxes.” Decision at 3. He realized he needed to get his life in order and set up an installment agreement with the IRS in 2013. He completed paying the business taxes in 2016, and the liens against his company were released. In 2016, Applicant entered into an installment agreement with the IRS to pay his personal taxes. Under that agreement , he was to pay about $3,300 per month on an amount that rose to over $401,000 with interest and penalties. “[He] made most of the payments on a timely basis.” Decision at 3. Under a new agreement, he is to pay $4,220 per month on a balance of about $354,000 at the beginning of 2018. He planned to take out loans to pay his taxes. He submitted a number of letters attesting to his character and dependability.

The Judge’s Analysis Applicant is credited with starting to resolve his tax problems in 2013. He resolved his business tax problems first and has been paying on his personal tax problems since 2016. He has resolved two personal tax liens totaling over $100,000, which are mitigated. Those payments are impressive, but he still owes more than $350,000. Applicant’s tax problems raise security concerns about his willingness to comply with well- established government rules. His financial problems are recent, ongoing, and cast doubt on his current reliability, trustworthiness, and good judgment. Mitigating conditions 20(d)1 and 20(g)2 are partially applicable, but are not sufficient to mitigate the alleged security concerns.

DISCUSSION

In his appeal brief, Applicant contends that the Judge erred in concluding that the alleged security concerns were not mitigated. He cites to his payment plans, his resolution of the business tax debts, and his consistent payments under the current personal tax payment plan. He argues that he has made consistent payments over the past five years and notes the Judge referred to his efforts as impressive. However, the presence of some mitigating evidence does not alone compel the Judge to make a favorable security clearance decision. As the trier of fact, the Judge has to weigh the evidence as a whole and decide whether the favorable evidence outweighs the unfavorable evidence, or vice versa. A party’s disagreement with the Judge’s weighing of the evidence, or an ability to argue for a different interpretation of the evidence, is not sufficient to demonstrate the Judge weighed the evidence or reached conclusions in a manner that is arbitrary, capricious, or contrary to law. See, e.g., ISCR Case No. 15-00650 at 2 (App. Bd. Jun. 27, 2016). Applicant’s appeal brief fails to establish the Judge committed any harmful error. The Judge examined the relevant evidence 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, 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.” 1 Directive, Encl. 2, App. A ¶ 20(d) states, “the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts[.]” 2 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.”

ORDER

The Decision AFFIRMED. Signed: James E. Moody James E. Moody Administrative Judge Member, 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