ISCR Case No. 20-01143

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS

______________ ______________ In the matter of: ) ) ) ISCR Case No. 20-01143 ) Applicant for Security Clearance ) Appearances For Government: Alison O’Connell, Esquire, Department Counsel For Applicant: Pro se 04/05/2021

GALES, Robert Robinson, Administrative Judge: Applicant failed to mitigate the security concerns regarding financial considerations. Eligibility for a security clearance is denied. Statement of the Case On May 17, 2018, Applicant applied for a security clearance and submitted an Electronic Questionnaires for Investigations Processing (e-QIP) version of a Security Clearance Application (SF 86). On an unspecified date, the Defense Office of Hearings and Appeals (DOHA) issued him a set of interrogatories. On an unspecified date, Applicant responded to those interrogatories. On September 10, 2020, the Defense Counterintelligence and Security Agency (DCSA) Consolidated Adjudications Facility (CAF) issued him a Statement of Reasons (SOR) under Executive Order (Exec. Or.) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended and modified; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended and modified (Directive); and Directive 4 of the Security Executive Agent (SEAD 4), National Security Adjudicative Guidelines (AG) (December 10, 2016), effective June 8, 2017.

The SOR alleged security concerns under Guideline F (Financial Considerations) and detailed reasons why the DCSA adjudicators were unable to find that it is clearly consistent with the national interest to grant or continue a security clearance for Applicant. The SOR recommended referral to an administrative judge to determine whether a clearance should be granted, continued, denied, or revoked. In an unsworn statement, dated November 17, 2020, Applicant responded to the SOR and elected to have his case decided on the written record in lieu of a hearing. A complete copy of the Government’s file of relevant material (FORM) was mailed to Applicant by DOHA on December 30, 2020, and he was afforded an opportunity after receipt of the FORM to file objections and submit material in refutation, extenuation, or mitigation. In addition to the FORM, Applicant was furnished a copy of the Directive as well as the Adjudicative Guidelines applicable to his case. Applicant received the FORM on January 12, 2021. His response was due on February 11, 2021. Applicant chose not to respond to the FORM, for as of March 17, 2021, no response had been received. The case was assigned to me on March 25, 2021.

In his Answer to the SOR, Applicant admitted, with brief comments, all of the factual allegations pertaining to financial considerations (SOR ¶ 1.a.). Applicant’s admissions and comments are incorporated herein as findings of fact. After a complete and thorough review of the evidence in the record, and upon due consideration of same, I make the following additional findings of fact: Applicant is a 34-year-old employee of a defense contractor. He has been serving as a network engineer with his current employer since June 2017. He previously worked for various employers in a variety of positions, including systems engineer; desk-side technician; domain administrator; and network-support technician. A 2004 graduate, he earned some college credits, but no degree. He has never served with the U.S. military. While Applicant claimed in 2018 that he had an active secret clearance, it is unclear when that clearance was granted to him. (Item 5, at 36) Applicant has never been married. He has no children. Financial Considerations Applicant failed to timely file his federal and state income tax returns for the tax years 2012, 2013, 2016, 2017, 2018, and 2019, essentially claiming that he had anxiety and depression and was unable to locate required documentation to timely file those income tax returns. He did not submit medical documentation to reflect the degree of depression and anxiety, or to describe any treatment he may have received to alleviate those conditions. He claimed that he had finally engaged the services of a tax expert, but failed to indicate when that engagement took place. The timeline covering his actions or inactions regarding his filings is as follows: (2012): The federal income tax return was completed on November 3, 2020 – nearly two months after the SOR was issued – and the state income tax return, although

undated, was reportedly either E-filed or mailed by November 6, 2020. (GE 4, at 1-5; GE 6, at 10)

(2013): Both the federal and state income tax returns were completed on November 2, 2020, and were reportedly either E-filed or mailed by November 6, 2020. (GE 4, at 1, 6-10; GE 6, at 4, at 1) (2016): Creating some confusion, Applicant submitted two differently dated copies of his federal income tax return. One is dated November 2, 2020, and the other one is dated March 23, 2020. Nevertheless, he claimed that both the federal and state income tax returns were completed on November 2, 2020, and were reportedly either E-filed or mailed by November 6, 2020. (GE 4, at 1, 11-16; GE 6, at 4, 11-12) (2017): The federal income tax return was completed by his tax preparer on March 23, 2020. He did not submit a copy of his state income tax return. Applicant claimed that both the federal and state income tax returns were reportedly either E-filed or mailed by November 6, 2020. (GE 4, at 1, 17-18; GE 6, at 4, 13-14) (2018): The federal income tax return was completed by his tax preparer on March 23, 2020, and the state income tax return was completed on November 2, 2020. Applicant claimed that both the federal and state income tax returns were reportedly either E-filed or mailed by November 6, 2020. (GE 4, at 1, 22-25; GE 6, at 4, 15) (2019): Both the federal and state income tax returns were completed on November 2, 2020. Applicant claimed that both the federal and state income tax returns were reportedly either E-filed or mailed by November 6, 2020. (GE 4, at 1, 19-21)

The U.S. Supreme Court has recognized the substantial discretion of the Executive Branch in regulating access to information pertaining to national security emphasizing, “no one has a ‘right’ to a security clearance.” (Department of the Navy v. Egan, 484 U.S. 518, 528 (1988)) As Commander in Chief, the President has the authority to control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to have access to such information. The President has authorized the Secretary of Defense or his designee to grant an applicant eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” (Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended and modified.) When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the guidelines in SEAD 4. In addition to brief introductory explanations for each guideline, the guidelines list potentially disqualifying conditions and mitigating conditions, which are used in evaluating an applicant’s eligibility for access to classified information.

An administrative judge need not view the guidelines as inflexible, ironclad rules of law. Instead, acknowledging the complexities of human behavior, these guidelines are applied in conjunction with the factors listed in the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. 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 meaningful decision. In the decision-making process, facts must be established by “substantial evidence.” “Substantial evidence [is] such relevant evidence as a reasonable mind might accept as adequate to support a conclusion in light of all contrary evidence in the record.” (ISCR Case No. 04-11463 at 2 (App. Bd. Aug. 4, 2006) (citing Directive ¶ E3.1.32.1)) “Substantial evidence” is “more than a scintilla but less than a preponderance.” (See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994)) The Government initially has the burden of producing evidence to establish a potentially disqualifying condition under the Directive, and has the burden of establishing controverted facts alleged in the SOR. Once the Government has produced substantial evidence of a disqualifying condition, under Directive ¶ E3.1.15, the applicant has the burden of persuasion to present evidence in refutation, explanation, extenuation or mitigation, sufficient to overcome the doubts raised by the Government’s case. The burden of disproving a mitigating condition never shifts to the Government. (See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005)) A person who seeks access to classified information enters into a fiduciary relationship with the Government predicated upon trust and confidence. This relationship transcends normal duty hours and endures throughout off-duty hours as well. It is because of this special relationship that the Government must be able to repose a high degree of trust and confidence in those 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 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. Furthermore, “security clearance determinations should err, if they must, on the side of denials.” (Egan, 484 U.S. at 531) Clearance decisions must be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” (See Exec. Or. 10865 § 7) Thus, nothing in this decision should be construed to suggest that I have based this decision, in whole or in part, on any express or implied determination as to Applicant’s allegiance, loyalty, or patriotism. It is merely an indication the Applicant has or has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance. In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence contained in the record. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture.

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 a condition that could raise security concerns under AG ¶ 19: (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. The SOR alleged that Applicant failed to file his federal and state income tax returns for the tax years 2012, 2013, 2016, 2017, 2018, and 2019. As of September 10, 2020, the date the SOR was issued, none of those income tax returns had been filed. In fact, Applicant conceded that they were not filed until November 6, 2020. AG ¶ 19(f) has been established. The guideline also includes examples of conditions that could mitigate security concerns arising from financial difficulties under AG ¶ 20: (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; 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. AG ¶ 20(g) minimally applies, but none of the other mitigating conditions apply. The nature, frequency, and recency of Applicant’s continuing failure to voluntarily and timely resolve those delinquent federal and state income tax issues for several years, despite repeated promises to do so, make it rather easy to conclude that they were not infrequent and, considering the length of time it took him to start to resolve those issues, they are likely to remain unchanged in the future. Applicant attributed his financial issues essentially to his depression and anxiety, but he failed to specify in what specific ways those factors were largely beyond his control with respect to timely filing his federal and state income tax returns over a multiyear period. An applicant who begins to resolve his or her financial problems only after being placed on notice that his or her security clearance is in jeopardy may be lacking in the judgment and self-discipline to follow rules and regulations over time or when there is no immediate threat to his or her own interests. (See, e.g., ISCR Case No. 17-01213 at 5 (App. Bd. Jun. 29, 2018); ISCR Case No. 17-00569 at 3-4 (App. Bd. Sept. 18, 2018). Applicant completed his SF 86 in May 2018; underwent his interview with an investigator from the U.S. Office of Personnel Management (OPM) in December 2018; completed his responses to the interrogatories on an unspecified date; the SOR was issued in September 2020; and the FORM was issued in December 2020. Each step of the security clearance review process placed him on notice of the significance of the financial issues confronting him. With respect to his unfiled federal and state income tax returns, there is no evidence that Applicant took any action to resolve any of those issues before the SOR was issued. Instead, he made repeated promises to do so, and none of those promises were fulfilled until November 2020. By failing to do so, he did not demonstrate the high degree of good judgment and reliability required of those granted access to classified information. The DOHA Appeal Board has observed: Failure to file tax returns suggests that an applicant has a problem with complying with well-established governmental rules and systems. Voluntary compliance with such rules and systems is essential for protecting classified information. ISCR Case No. 01-05340 at 3 (App. Bd. Dec. 20, 2002). As we have noted in the past, a clearance adjudication is not directed at collecting debts. See, e.g., ISCR Case No. 07-08049 at 5 (App. Bd. Jul. 22, 2008). By the same token, neither is it directed toward inducing an applicant to file tax returns. Rather, it is a proceeding aimed at evaluating an applicant’s judgment and reliability. Id. A person who fails repeatedly to fulfill his or her legal obligations 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. 14-01894 at 5 (App. Bd. Aug. 18, 2015). See

Cafeteria & Restaurant Workers Union Local 473 v. McElroy, 284 F.2d 173, 183 (D.C. Cir. 1960), aff’d, 367 U.S. 886 (1961). ISCR Case No. 14-04437 at 3 (App. Bd. Apr. 15, 2016). See ISCR Case No. 14-05476 at 5 (App. Bd. Mar. 25, 2016) (citing ISCR Case No. 01-05340 at 3 (App. Bd. Dec. 20, 2002)); ISCR Case No. 14-01894 at 4-5 (App. Bd. Aug. 18, 2015). The Appeal Board clarified that even in instances where an applicant has purportedly corrected his or her federal tax problem, and the fact that the applicant is now motivated to prevent such problems in the future, does not preclude careful consideration of an applicant’s security worthiness in light of his or her longstanding prior behavior evidencing irresponsibility including a failure to timely file federal income tax returns. (See ISCR Case No. 15-01031 at 3 and note 3 (App. Bd. June 15, 2016) (characterizing “no harm, no foul” approach to an Applicant’s course of conduct and employed an “all’s well that ends well” analysis as inadequate to support approval of access to classified information with focus on timing of filing of tax returns after receipt of the SOR). Applicant’s actions, or inaction, under the circumstances cast doubt on his current reliability, trustworthiness, and good judgment. (See ISCR Case No. 09-08533 at 3-4 (App. Bd. Oct. 6, 2010).)

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 the circumstances. The administrative judge should consider the nine adjudicative process factors listed at SEAD 4, App. A, ¶ 2(d): (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 SEAD 4, App. A, ¶ 2(c), the ultimate determination of whether to grant a security clearance must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept. Moreover, I have evaluated the various aspects of this case in light of the totality of the record evidence and have not merely performed a piecemeal analysis. (See U.S. v. Bottone, 365 F.2d 389, 392 (2d Cir. 1966); See also ISCR Case No. 03-22861 at 2-3 (App. Bd. Jun. 2, 2006)) There is some evidence in favor of mitigating Applicant’s financial concerns. Applicant is a 34-year-old employee of a defense contractor. He has been serving as a network engineer with his current employer since June 2017. He previously worked for

________________________ various employers in a variety of positions, including systems engineer; desk-side technician; domain administrator; and network-support technician. A 2004 graduate, he earned some college credits, but no degree. While Applicant claimed in 2018 that he had an active secret clearance, it is unclear when that clearance was granted to him. He candidly acknowledged in his SF 86 that he had continuing federal and state income tax issues. The disqualifying evidence under the whole-person concept is simply more substantial. Applicant failed to timely file federal and state income tax returns over a multi- year period: for the tax years 2012, 2013, 2016, 2017, 2018, and 2019. As of the date the SOR was issued in September 2020, none of those income tax returns had been filed. It was not until nearly two months later, that he filed those income tax returns. He claimed that depression and anxiety afflicted his ability to take timely action, and that confusion after the initial delay took place, kept him from resolving the issues for several years following the first failure. Overall, the evidence leaves me with substantial questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all of these reasons, I conclude Applicant has failed to mitigate the security concerns arising from his financial considerations. See SEAD 4, App. A, ¶¶ 2(d)(1) through AG 2(d)(9).

Formal findings for or against Applicant on the allegations set forth in the SOR, as required by section E3.1.25 of Enclosure 3 of the Directive, are: Paragraph 1, Guideline F: AGAINST APPLICANT Subparagraph 1.a.: Against Applicant

In light of all of the circumstances presented by the record in this case, it is not clearly consistent with the national interest to grant Applicant eligibility for a security clearance. Eligibility for access to classified information is denied. ROBERT ROBINSON GALES Administrative Judge