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ISCR Case 19-01056 — CASE

ISCR Case 19-01056granted

Case Headnote

ISCR Case No. 19-01056

grantedJan 25, 2021· Hon. Richard A. Cefola· hearing

Summary

A 42-year-old defense contractor employee was granted a security clearance despite initial concerns under Guideline F, Financial Considerations. The Statement of Reasons cited untimely federal and state income tax filings for tax years 2014 through 2017. The applicant attributed these delinquencies primarily to his wife's job loss due to health reasons.

However, the applicant demonstrated that he was current on his home mortgage, providing documentation from the Federal Home Loan Mortgage Corp. He also established a positive cash flow exceeding $1,500.

The decision to grant the clearance was based on several mitigating factors. The financial difficulties were largely attributed to circumstances beyond the applicant's control, specifically his wife's job loss. Furthermore, the applicant had made demonstrable efforts to rectify his financial situation, including becoming current on his mortgage and maintaining timely tax filings. These actions led the judge to conclude that the financial concerns had been sufficiently mitigated.

Why the Applicant Prevailed

The applicant is current on his mortgage and has a positive cash flow of over $1,500.
The financial difficulties were attributed to his wife's job loss, which was beyond his control.
The applicant has made efforts to rectify his financial situation, including timely tax filings.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
AG ¶ 19(f)raisedFailure to File or Fraudulently Filing Annual Federal, State, or Local Income Tax Returns

Mitigating

AG ¶ 20(a)appliedBehavior Happened so Long Ago, Was Infrequent, or Occurred Under Circumstances Unlikely to Recur
AG ¶ 20(b)appliedConditions Resulting in Financial Problems Were Largely Beyond the Person's Control
AG ¶ 20(d)appliedIndividual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors
AG ¶ 20(g)appliedIndividual Has Made Arrangements with the Appropriate Tax Authority

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedSep 17, 2019
Answer filedOct 19, 2019
Hearing heldNov 3, 2020
Decision dateJan 25, 2021

Cite For

Mitigation of Financial Concerns Under Guideline F
Impact of Personal Circumstances on Financial Obligations
Whole-person Concept in Security Clearance Evaluations

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

Standardized Decision Profile

SEAD-4 Guideline F · descriptive summary of a decided case

Posture: HearingDecided: granted

The judge found that the applicant mitigated financial concerns under Guideline F. The applicant was current with his mortgage and had filed his tax returns, albeit late, attributing his financial difficulties to his wife's job loss and his demanding work schedule.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant has filed his Federal and state income tax returns, albeit in an untimely fashion, for tax years 2014 through 2017.	For Applicant	Tax Filing Failure	Admitted	—	—	—
1.b	Applicant is current with his home mortgage, as evidenced by documentation from the Federal Home Loan Mortgage Corp.	For Applicant	Mortgage or Home Loan Debt	Admitted	—	—	—
1.c	Applicant attributes much of his delinquencies to his wife losing her job due to health reasons.	For Applicant	Unspecified Financial	Admitted	—	—	Claimed Other

Descriptive standardized rendering of a decided public case (Guideline F). The verbatim source decision is shown in full below.

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

HEARING

APPEARANCES

______________ ______________ DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 19-01056 ) ) Applicant for Security Clearance ) Appearances For Government: Aubrey De Angelis, Esq., Department Counsel For Applicant: Pro se January 25, 2021

STATEMENT OF CASE

CEFOLA, Richard A., Administrative Judge: Statement of the Case On September 17, 2019, in accordance with DoD Directive 5220.6, as amended (Directive), the Department of Defense issued Applicant a Statement of Reasons (SOR) alleging facts that raise security concerns under Guideline F. The SOR further informed Applicant that, based on information available to the government, DoD adjudicators could not make the preliminary affirmative finding it is clearly consistent with the national interest to grant or continue Applicant’s security clearance. Applicant answered the SOR on October 19, 2019, and requested a hearing before an administrative judge. (Answer.) The case was assigned to me on April, 2, 2020. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on September 30, 2020, scheduling the hearing for November 3, 2020. The hearing was convened as scheduled. The Government offered Exhibits (GXs) 1 through 8, which were admitted into evidence. Applicant testified on his own behalf. Applicant presented two sets of documents, which I marked Applicant’s Exhibits (AppXs) A and B and admitted into evidence. The record was left open until December 3, 2020, for receipt of

Applicant admitted all three allegations in SOR. After a thorough and careful review of the pleadings, exhibits, and testimony, I make the following findings of fact.

Applicant is a 42-year-old employee of a defense contractor. (GX 1 at page 5, and TR at page 16 lines 10–21.) He has been employed with the defense contractor since 1998, and has held a security clearance for about “20 of those years.” (TR at page 16 lines 16–21.) He is married, and has two children. (TR at page 16 line 22 to page 17 line 15, and at page 20 lines 17–20.) Applicant attributes the alleged financial difficulties to his wife losing her job as a Flight Attendant due to health reasons (TR at page 17 lines 1–18), and his tax delinquencies to an overwhelming work schedule with a new position as Lead Engineer. (TR at page 20 line 16 to page 22 line 5.) He has a monthly, positive cash flow of over $1,500. (AppX C at page 5.)

1.a. and 1.b. Applicant has filed his Federal and state income tax returns, albeit in an untimely fashion, for tax years 2014 through 2017, as evidenced by tax documents. (GX 4 at pages 12–15, AppX A, and AppX C at pages 6–9.) Tax years 2014 through 2016 were filed prior to the issuance of the SOR. Tax year 2017 was filed with an extension, and with his 2019 income tax return, in April of 2020. (Id.)

1.c. Applicant is current with his home mortgage, as evidenced by documentation from the Federal Home Loan Mortgage Corp. (TR at page 29 line 22 to page 30 line 4, and AppX C at pages 6–7.)

additional documentation. On December 3, 2020, Applicant offered AppX C, which was also admitted into evidence. DOHA received the transcript of the hearing (TR) on November 9, 2020.

FINDINGS OF FACT

POLICIES

When evaluating an applicant’s national security eligibility, the administrative judge must consider the adjudicative guidelines (AG). In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are to be used in evaluating an applicant’s national security eligibility. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, administrative judges apply the guidelines in conjunction with the factors listed in AG ¶ 2 describing the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(a), the entire process is a conscientious scrutiny of a number of variables known as the whole-person concept. The administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable, in making a decision.

The protection of the national security is the paramount consideration. AG ¶ 2(b) requires that “[a]ny doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence contained in the record. Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Directive ¶ E3.1.15 states the “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by the applicant or proven by Department Counsel, and has the ultimate burden of persuasion as to obtaining a favorable clearance decision.” A person who applies for access to classified information seeks to enter into a fiduciary relationship with the Government predicated upon trust and confidence. This relationship transcends normal duty hours and endures throughout off-duty hours. The Government reposes a high degree of trust and confidence in individuals to whom it grants access to classified information. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to protect or safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation as to potential, rather than actual, risk of compromise of classified information. Section 7 of Executive Order (EO) 10865 provides that adverse decisions shall be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information).

ANALYSIS

Guideline F - Financial Considerations The security concern relating to the guideline for Financial Considerations is set out in AG ¶ 18: Failure to live within one's means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual's reliability, trustworthiness, and ability to protect classified or sensitive information. Financial distress can also be caused or exacerbated by, and thus can be a possible indicator of, other issues of personnel security concern such as excessive gambling, mental health conditions, substance misuse, or alcohol abuse or dependence. An individual who is financially overextended is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds. Affluence that cannot be explained by known sources of income is also a security concern insofar as it may result from criminal activity, including espionage.

The guideline notes several conditions that could raise security concerns under AG ¶ 19. Three are potentially applicable in this case: (a) inability to satisfy debts; (c) a history of not meeting financial obligations; and (f) failure to file or fraudulently filing annual Federal, state, or local income tax returns or failure to pay annual Federal, state, or local income tax as required. Applicant had some outstanding tax filings and was behind on his mortgage The evidence is sufficient to raise these disqualifying conditions. AG ¶ 20 provides conditions that could mitigate security concerns. I considered all of the mitigating conditions under AG ¶ 20 including: (a) the behavior happened so long ago, was so infrequent, or occurred under such circumstances that it is unlikely to recur and does not cast doubt on the individual's current reliability, trustworthiness, or good judgment; (b) 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; (d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts; and (g) the individual has made arrangements with the appropriate tax authority to file or pay the amount owed and is in compliance with those arrangements. Applicant is current with his mortgage and with his tax filings. He attributes much of his delinquencies to his wife losing her job due to health reasons. Mitigation under AG ¶ 20 has been established. Financial Considerations is found for Applicant.

WHOLE PERSON CONCEPT

Under the whole-person concept, the administrative judge must evaluate an applicant’s eligibility for a security clearance by considering the totality of the applicant’s conduct and all relevant circumstances. The administrative judge should consider the nine adjudicative process factors listed at AG ¶ 2(d):

Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of the Directive, are:

________________________ (1) the nature, extent, and seriousness of the conduct; (2) the circumstances surrounding the conduct, to include knowledgeable participation; (3) the frequency and recency of the conduct; (4) the individual’s age and maturity at the time of the conduct; (5) the extent to which participation is voluntary; (6) the presence or absence of rehabilitation and other permanent behavioral changes; (7) the motivation for the conduct; (8) the potential for pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or recurrence. Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a security clearance must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept. I considered the potentially disqualifying and mitigating conditions in light of all facts and circumstances surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis. Applicant is well respected at his place of employment (AppX B.) He performs well at his job. Overall, the record evidence leaves me without questions or doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant mitigated the Financial Considerations security concerns.

FORMAL FINDINGS

Paragraph 1, Guideline F: FOR APPLICANT Subparagraphs 1.a. through 1.c.: For Applicant

CONCLUSION

In light of all of the circumstances presented by the record in this case, it is clearly consistent with the national interest to grant Applicant national security eligibility for a security clearance. Eligibility for access to classified information is granted. Richard A. Cefola Administrative Judge