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ISCR Case 17-03363.a1 — CASE

ISCR Case 17-03363.a1denied

Case Headnote

ISCR Case No. 17-03363.a1

Nov 29, 2018· Hon. Michael Y. Ra'anan· appeal

Summary

A federal contractor, employed since 2003, was denied a security clearance under Guideline F (Financial Considerations) due to significant financial irresponsibility. The applicant failed to file federal and state income tax returns for the years 2000 through 2006. This resulted in unpaid tax debts exceeding $26,000 owed to the IRS, leading to tax liens.

Despite the applicant's claims of mitigating circumstances, the judge found insufficient corroborative evidence to demonstrate financial responsibility. Specifically, the applicant did not provide proof of having filed the tax returns as asserted, nor did they make any payments toward the outstanding tax debts.

The disqualifying conditions cited were AG ¶ 20(a) and AG ¶ 20(c), pertaining to a history of not meeting financial obligations and an inability or unwillingness to satisfy debts. Consequently, the security clearance was denied.

Conditions Referenced

Disqualifying

AG ¶ 20(a)raisedFailure to File or Pay Taxes
AG ¶ 20(c)raisedDelinquent Accounts

Key Rule Quoted

“In a DOHA proceeding, the applicant bears the burden of presenting evidence in mitigation.”

Procedural Posture

SOR issuedOct 26, 2017
Answer filed—
Hearing heldSep 25, 2018
Decision dateNov 29, 2018

Cite For

Burden of Proof in Security Clearance Cases Under Guideline F
Insufficient Evidence of Financial Responsibility Leading to Denial
Impact of Tax Delinquencies on 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 involved an applicant who was denied a security clearance due to financial considerations under Guideline F. The applicant argued that the Judge's decision was arbitrary and capricious. The Board affirmed the Judge's decision, finding that the applicant did not provide sufficient evidence to mitigate the concerns regarding his tax issues.

Appealed bythe applicant

Applicant representationAttorney

Judge belowJuan J. Rivera — 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 rational connection between the facts and the decision made. The applicant failed to meet the burden of presenting sufficient evidence in mitigation of his financial issues.

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
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: In a DOHA proceeding, the applicant bears the burden of presenting evidence in mitigation. A Judge’s finding that an applicant has not presented sufficient evidence in mitigation is not, in and of itself, a finding that the applicant has been deceptive or that he or she lacks credibility. Adverse decision affirmed. CASENO: 17-03363.a1 DATE: 11/29/2018 DATE: November 29, 2018 In Re: -------------------------------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 17-03363

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Iana D. Benjamin, Esq. The Department of Defense (DoD) declined to grant Applicant a security clearance. On October 26, 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 September 25, 2018, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Juan J. Rivera 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 Applicant has worked for his current employer, a Federal contractor, since 2003. He worked for other contractors before taking this job. Applicant has held a clearance since 1996. Divorced, he has two children, ages 36 and 17. Applicant failed to file his Federal and state income tax returns from 2000 through 2006. He stated that during this time he was going through a difficult divorce and that taxes were “the last thing on his mind.” Decision at 3. Applicant stated that he had hired an accountant to file his returns for him, and he claimed that this had in fact been done. He did not provide documentary corroboration of these contentions. Applicant failed to pay his taxes as required, both the IRS and his state securing liens against him. He presented evidence that the IRS had released its liens, although he never attempted to set up payment plans or pay any of his tax debts, either to the Federal Government or to his state. Applicant admitted that he had no answer when queried about his reasons for not having made payments. Applicant hired a company to assist him in resolving his tax problems. With the assistance of this company, the IRS placed Applicant is a “non-collectible” status. Id. Applicant’s take-home pay is about $1,200 every two weeks, and he has about $2,000 in savings and about $50,000 in a retirement account. He pays a little over $420 each month in support of his minor child, and an additional $300 in view of her serious illness. This child has had four operations between 2012 and 2015. The Judge’s Analysis The Judge resolved some of Applicant’s SOR allegations in his favor. However, he entered adverse findings regarding Applicant’s tax problems. Though noting Applicant’s marital difficulties during the time in question, the Judge concluded that Applicant had failed to demonstrate responsible action in regard to his tax obligations. He stated that Applicant had failed to provide convincing evidence that he had filed his returns and that Applicant had made no effort to pay his delinquent tax debts. Despite the release of his Federal liens, the evidence shows that he still owes over $26,000 to the IRS. The Judge stated that Applicant’s repeated failure to file his Federal and state tax returns impugns his judgment and reliability. In the whole-person analysis, the Judge cited to evidence that Applicant has worked for Federal contractors and has held a clearance since the mid-1990s. As a consequence, Applicant was aware that he was required to maintain financial responsibility in order to keep access to classified information. The Judge concluded that Applicant’s tax delinquencies show that he has a problem complying with well-established Government rules and that he has not established a track record of financial responsibility.

DISCUSSION

Applicant contends that the Judge did not take into account evidence that demonstrates his trustworthiness, including his many years of service to the Federal government as a contractor employee, his steps to prevent recurrence of his security-significant conduct, and “other factual circumstances referenced in [his] testimony.” Appeal Brief at 11-12. Examining the Decision in light of the record as a whole, we conclude that the Judge addressed Applicant’s having hired a tax firm to assist him in resolving his problems, his family difficulties, and his testimony about having filed his returns. Applicant’s arguments are not enough to rebut the presumption that the Judge considered all of the evidence in the record, nor are they sufficient to show that the Judge weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. See, e.g., ISCR Case No. 17-02145 at 3 (App. Bd. Sep. 10, 2018). Applicant states that he disclosed his tax problems, that he had not intentionally hidden any information from adjudicative authorities, and that his failure to have submitted sufficient corroborative evidence was not the result of an intent to mask the true state of his finances. He also contends that he “should not be punished for not presenting enough evidence.” Appeal Brief at 11. The SOR did not allege, nor did the Judge find, that Applicant had deliberately failed to admit to his financial delinquencies. The Judge merely concluded that Applicant had not provided enough evidence to mitigate the concerns arising from his tax problems. In a DOHA proceeding, the applicant bears the burden of presenting evidence in mitigation. Directive ¶ E3.1.15. A Judge’s finding that an applicant has not presented sufficient evidence in mitigation is not, in and of itself, a finding that the applicant has been deceptive or that he or she lacks credibility. See, e.g., ISCR Case No. 16-01390 at 3 (App. Bd. Sep. 15, 2017) for the proposition that it is not inconsistent for a Judge to conclude that an applicant is credible but nevertheless has failed to meet his or her burden of persuasion. In the case before us, the Judge found that Applicant’s evidence did not establish that he had paid his tax debts or even corroborate that he had filed his returns as he claimed. This was not a credibility determination but merely a comment on the state of the evidence. We resolve this issue adversely to Applicant. Applicant has cited a Hearing Office case in support of his appeal. We have given this case due consideration as persuasive authority. However, each case must be decided on its own merits. Hearing Office cases are not binding on other Hearing Office Judges or on the Appeal Board. See, e.g., ISCR Case No. 17-02145 at 3. The record supports a conclusion that the Judge examined the relevant data and articulated a satisfactory explanation for the decision, “including a ‘rational connection between the facts found and the choice made.’” Motor Vehicle Mfrs. Ass’n of the United States v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)(quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)). The Judge’s adverse 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: James E. Moody James E. Moody Administrative Judge Member, Appeal Board Signed: James F. Duffy James F. Duffy Administrative Judge Member, Appeal Board