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ISCR Case 07-00616 — CASE

ISCR Case 07-00616denied

Case Headnote

ISCR Case No. 07-00616

deniedApr 15, 2008· Hon. Martin H. Mogul· hearing

Summary

A 46-year-old defense contractor was denied a security clearance due to significant financial issues and a lack of candor, falling under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The applicant failed to file both Federal and State income tax returns for at least every tax year from 1995 through 2005. This resulted in an outstanding debt to the State for delinquent taxes totaling $8,951.

Additionally, the applicant had multiple overdue debts, including a judgment entered against him in January 2005 for $3,043, another debt of $1,318, and a second overdue debt of $3,007. These debts remained unpaid at the time of the decision.

Furthermore, the applicant provided incorrect material information on his Security Clearance Application regarding both debts over 180 days delinquent and current debts over 90 days delinquent. The Administrative Judge found the applicant's admitted failure to file taxes for over a decade, the multiple unresolved overdue debts, and the provision of false information on the application to be unfavorable, leading to the denial of the security clearance.

Why the Applicant Was Denied

The applicant admitted to failing to file Federal and State tax returns for at least a decade.
The applicant had multiple overdue debts that remained unpaid at the time of the decision.
The applicant provided false information on the Security Clearance Application regarding his debts.

Conditions Referenced

Disqualifying

DC 19(a)appliedInability or Unwillingness to Satisfy Debts
DC 19(c)appliedHistory of Not Meeting Financial Obligations
DC 19(g)appliedFailure to File Annual Federal and State Tax Returns
DC 15(a)appliedFailure to Complete Security Forms or Releases
DC 16(a)appliedDeliberately Providing False and Misleading Information

Key Rule Quoted

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

Procedural Posture

SOR issuedAug 31, 2007
Answer filedNov 28, 2007Applicant's response was unsigned and undated initially.
Hearing held—Applicant requested a decision based on the written record.
Decision dateApr 15, 2008

Cite For

Failure to File Tax Returns as a Disqualifying Factor Under Guideline F
Lack of Candor in Security Clearance Applications Under Guideline E
Significant Financial Issues Impacting 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.

Standardized Decision Profile

SEAD-4 Guideline E (Personal Conduct) · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found that the applicant provided incorrect material information on the Security Clearance Application (SCA) regarding debts over 180 days and 90 days delinquent. The applicant's failure to disclose these debts was deemed intentional, leading to a finding against the applicant under Guideline E.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	Applicant provided incorrect material information on the SCA regarding debts over 180 days delinquent.	Against Applicant	Omission or Failure to DiscloseFOUND DELIBERATE	Financial	Denied	(a) deliberate omission, concealment, or falsification on a security form	—	—
2.b	Applicant provided incorrect material information on the SCA regarding current debts over 90 days delinquent.	Against Applicant	Omission or Failure to DiscloseFOUND DELIBERATE	Financial	Denied	(a) deliberate omission, concealment, or falsification on a security form	—	—

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

Standardized Decision Profile

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

Posture: Decision on RecordDecided: denied

The judge found multiple financial concerns under Guideline F, including failure to file tax returns and several overdue debts. Ultimately, the judge ruled against the applicant on all allegations, concluding that the applicant's financial issues and lack of resolution demonstrated an inability to meet financial obligations, which was inconsistent with national security.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant failed to file Federal Income Tax returns for at least every tax year from 1995 through 2005.	Against Applicant	Tax Filing Failure	Unknown	(g) unexplained affluence	—	—
1.b	Applicant failed to file State Income Tax returns for at least every tax year from 1995 through 2005.	Against Applicant	Tax Filing Failure	Unknown	(g) unexplained affluence	—	—
1.c	Applicant is indebted to the State for delinquent taxes in the amount of $8,951. $8,951	Against Applicant	Tax Unpaid	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	This overdue debt to is cited in the SOR in the amount of $3,043 for a judgement entered against him in January 2005. $3,043	Against Applicant	Judgment Against Applicant	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	This overdue debt is cited in the SOR in the amount of $1,318. $1,318	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	This second overdue debt is cited in the SOR in the amount of $3,007. $3,007	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—

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. 07-00616 SSN: ----------------- ) ) Applicant for Security Clearance ) Appearances For Government: Rita C. O’Brien, Esquire, Department Counsel For Applicant: Pro Se April 15, 2008 ______________ ______________ Decision ______________ MOGUL, Martin H., Administrative Judge: Applicant submitted his Security Clearance Application (SCA), on September 6, 2006. On August 31, 2007, the Defense Office of Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR) detailing the security concerns under Guidelines F and E for Applicant. The action was taken under Executive Order 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the revised adjudicative guidelines (AG) promulgated by the President on December 29, 2005, and effective within the Department of Defense for SORs issued after September 1, 2006.

Applicant responded to the SOR (RSOR) in writing, but unsigned and undated, and then with his signature on November 28, 2007. He requested that his case be decided on the written record in lieu of a hearing. On December 19, 2007, Department Counsel submitted the Department's written case. A complete copy of the file of relevant material (FORM) was provided to Applicant, and he was given the opportunity to file objections and submit material in refutation, extenuation, or mitigation. A response was due on February 6, 2008. Applicant did not submit any additional evidence. The case was assigned to this Administrative Judge on March 27, 2008. In the FORM, Department Counsel offered nine documentary exhibits (Items 1- 9). No documents were offered by Applicant. Based upon a review of the case file, pleadings, and exhibits, eligibility for access to classified information is denied.

FINDINGS OF FACT

Paragraph 1 (Guideline F- Financial Considerations) In his RSOR (Items 3 and 5) Applicant admitted all of the SOR allegations under Guideline F and Guideline E. The admitted allegations are incorporated herein as findings of fact. After a complete and thorough review of the evidence in the record, including the FORM, Applicant's RSOR and the other admitted documents, and upon due consideration of that evidence, I make the additional findings of fact: Applicant is 46 years old. He works for a defense contractor, and he seeks a DoD security clearance in connection with his employment in the defense sector. The SOR lists 6 allegations (1.a. through 1.f.) regarding financial difficulties under Adjudicative Guideline F. As reviewed above, Applicant admitted all of these allegations in his RSOR, and no evidence was introduced to modify or dispute these allegations and admissions. All of the allegations will be discussed in the same order as they were listed in the SOR: 1.a. Applicant failed to file Federal Income Tax returns for at least every tax year from 1995 through 2005. As of the time of Applicant’s RSOR on November 28, 2007, Applicant had still not filed any of these tax returns. In a Personal Subject Interview, which was attached and ratified by Applicant in his response to interrogatories (Item 7), Applicant stated that he may not have filed Federal Income Tax returns for closer to 15 years, nor was he aware if he owed any Federal tax. 1.b. Applicant failed to file State Income Tax returns for at least every tax year from 1995 through 2005. As of Applicant’s RSOR on November 28, 2007, Applicant had still not filed any of these State tax returns. In Item 7, Applicant also stated that he may not have filed State Income Tax returns for closer to 15 years. No information was offered into evidence as to why Applicant failed to file his Federal Tax return for all of these years. In his SCA, Applicant indicated that he has been employed by a defense contractor from May 1984 until the present. Additionally, Applicant refused to sign releases that would have permitted a review of his Federal or State Taxes, or records relating to any other debts (Item 7). 1.c. Applicant is indebted to the State for delinquent taxes in the amount of $8,951. A lien was filed in June 1995. As of at least November 28, 2007, this debt has not been paid. 1.d. This overdue debt to is cited in the SOR in the amount of $3,043 for a judgement entered against him in January 2005. As of at least November 28, 2007, this debt has not been paid. 1.e. This overdue debt is cited in the SOR in the amount of $1,318. As of at least November 28, 2007, this debt has not been paid. 1.f. This second overdue debt is cited in the SOR in the amount of $3,007. As of at least November 28, 2007, this debt has not been paid. Paragraph 2 (Guideline E - Personal Conduct) 2.a. Applicant executed a signed SCA on September 6, 2006 (Exhibit 6). Question 28.a. asks, “In the last 7 years, have you been over 180 days delinquent on any debt(s)?” Applicant answered “No” to this question, and he listed no debts. The Government alleges that Applicant should have included the debts listed in the SOR as 1.d., 1.e., and 1.f. 2.a. Question 28.b. of the SCA asks, “Are you currently over 90 days delinquent on any debt(s)?” Applicant answered “No” to this question, and he listed no debts. The Government alleges that Applicant should have included the debts listed in the SOR as 1.d., 1.e., and 1.f. There is no dispute that these debts were all long overdue and were still owing at the time Applicant completed the SCA, and they should have been included in the responses to 28. a. and b. In the PSI, Applicant claims that his omission of material facts on the SCA was not intentional. However, he could give no explanation for his failure to list any of the debts that he had owed for a significant period of time.

POLICIES

When evaluating an Applicant’s suitability for a security clearance, the Administrative Judge must consider the revised adjudicative guidelines (AG). In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are useful in evaluating an Applicant’s eligibility for access to classified information. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied in conjunction with the factors listed in the adjudicative process. The Administrative Judge’s over-arching adjudicative goal is a fair, impartial and common sense decision. According to AG ¶ 2(c), 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 access to classified information will be resolved in favor of 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. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture. Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, the Applicant is responsible for presenting “witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel. . . .” The Applicant has the ultimate burden of persuasion as to obtaining a favorable security decision. 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. 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 10865 provides that 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 Government has established that Applicant has had a history of financial difficulties and overdue debts. Regarding the Disqualifying Conditions (DC) under Guideline F, I conclude both DC 19. (a) and DC (c) apply, because of Applicant’s inability or unwillingness to satisfy his debts, and his long history of not meeting financial obligations. DC (g) also is applicable for Applicant’s failure to file annual Federal and State tax returns for many years as required by law. I can not find that any Mitigating Condition (MC) applies as Applicant has failed to resolve any of his overdue debts, or even file the long overdue Federal and State tax returns. I, therefore, hold Guideline F against Applicant. Guideline E, Personal Conduct With respect to Guideline E, the evidence establishes that Applicant provided incorrect material information to the Government on the SCA that he executed on March 13, 2006. Applicant identified no debts that were over 180 days overdue in the last seven years prior to his completing the SCA, nor any current debts that were over 90 days overdue, when clearly he should have identified the debts listed on the SOR. Applicant had no explanation for his failure to put the Government on notice that he had financial difficulties. The Government relies heavily on the honesty and integrity of individuals seeking access to our nation’s secrets. When such an individual intentionally falsifies material facts or fails to furnish relevant information to the Government, it is extremely difficult to conclude that he nevertheless possesses the judgment, and honesty necessary for an individual given a clearance. In this case, based on Applicant’s overall history, my inability to see the Applicant and judge his veracity in person, and the lack of any witness to provide testimony regarding Applicant’s character, I can find no reasonable explanation for Applicant’s failure to provide this very significant information to the Government on the SCA, and I must conclude that Applicant knowingly and willingly failed to give complete, honest information to the Government. In reviewing the Disqualifying Conditions (DC) under Guideline E, I conclude that DC15. (a), failure to complete security forms or releases, applies to Applicant. This failure by Applicant results in an unfavorable clearance action. DC16. (a) also applies because Applicant deliberately provided false and misleading information to the Government in a SCA. No Mitigating Condition applies under this Guideline. As a result of the misinformation that Applicant provided to the Government, his conduct exhibits questionable judgement, unreliability, and a lack of candor. I resolve Guideline E against Applicant. On balance, it is concluded that the Applicant has not overcome the Government's evidence opposing his request for a security clearance. Accordingly, the evidence supports a finding against Applicant as to the allegations expressed in Paragraphs 1 and 2 of the Government's SOR.

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 the circumstances. The Administrative Judge should consider the nine adjudicative process factors listed at AG ¶ 2(a): “(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) 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 have considered the potentially disqualifying and mitigating conditions under Guidelines F and E, in light of all the facts and circumstances surrounding this case. Based on all of the reasons cited above, including Applicant’s history of financial difficulties, his failure to resolve the overdue debts, his failure to file Federal and State tax returns for many years, and his willful omissions made to the Government, I find that the record evidence leaves me with significant questions and doubts as to Applicant’s eligibility and suitability for a security clearance under the whole person concept. For all these reasons, I conclude Applicant has not mitigated the security concerns.

FORMAL FINDINGS

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 Subparagraph 1.b: Against Applicant Subparagraph 1.c: Against Applicant Subparagraph 1.d: Against Applicant Subparagraph 1.e.: Against Applicant Subparagraph 1.f.: Against Applicant Paragraph 2, Guideline E: AGAINST APPLICANT Subparagraph 2.a: Against Applicant Subparagraph 2.b: Against Applicant

CONCLUSION

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

Martin H. Mogul Administrative Judge