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ISCR Case 10-07602.a1 — CASE

ISCR Case 10-07602.a1denied

Case Headnote

ISCR Case No. 10-07602.a1

Feb 17, 2012· Hon. Michael Y. Ra'anan· appeal

Summary

A security clearance applicant, representing himself, was denied a clearance primarily due to issues under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The denial stemmed from the applicant's deliberate omission of significant federal income tax liens related to his business from his security clearance application.

The judge found substantial evidence indicating the applicant was aware of these tax debts when he completed the application. The applicant's assertions of confusion regarding his financial obligations were deemed not credible.

Ultimately, the decision emphasized the critical importance of national security, leading to the denial of the security clearance. The specific disqualifying conditions raised were AG ¶ 16 and AG ¶ 15.

Conditions Referenced

Disqualifying

AG ¶ 16raisedFinancial Considerations
AG ¶ 15raisedPersonal Conduct

Key Rule Quoted

“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)

Procedural Posture

SOR issuedJul 20, 2011
Answer filed—
Hearing heldDec 8, 2011
Decision dateFeb 17, 2012

Cite For

Deliberate Omissions Regarding Financial Obligations Under Guideline E
Substantial Evidence Required to Support Findings of Deliberate Falsification
National Security Interests as a Paramount Consideration in 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 a denial of a security clearance based on the applicant's failure to disclose federal income liens on his application. The applicant argued that the Judge erred in finding his omissions were deliberate and that the decision was arbitrary and capricious. The Board affirmed the Judge's decision, finding it sustainable based on the evidence presented.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowJuan J. Rivera — denied the clearance

Decided ona hearing

Guidelines belowGuideline FGuideline E

What the Board reviewed

Judge mis-weighed or ignored evidence — raised by the applicantRejected
Applicant contended that the Judge erred in finding that he had deliberately falsified his security clearance application.
Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
Applicant argued that the Judge's adverse security clearance decision was arbitrary, capricious, or contrary to law.

Why the Board ruled this way

The Board found that the Judge's findings were supported by substantial evidence and that the decision was not arbitrary or capricious. The Judge's conclusion regarding the applicant's deliberate omissions was well-supported by the record.

Standard of review applied

Substantial-evidence reviewArbitrary-and-capricious reviewNo de-novo re-decisionNo new evidence on appealDeference to the judge’s credibility calls

Appeal Board panel

Michael Y. Ra’anan — Chair
William S. Fields
James E. Moody

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; Guideline E DIGEST: The Judge’s finding that Applicant deliberately omitted his federal income liens from his security clearance application is sustainable. Adverse decision affirmed. CASENO: 10-07602.a1 DATE: 02/17/2012 DATE: February 17, 2012 In Re: ----------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 10-07602

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT Tovah A. Minster, Esq., Department Counsel FOR APPLICANT Pro se The Defense Office of Hearings and Appeals (DOHA) declined to grant Applicant a security clearance. On July 20, 2011, DOHA issued a statement of reasons (SOR) advising Applicant of the basis for that decision–security concerns raised under Guideline F (Financial Considerations) and Guideline E (Personal Conduct) of Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive). Applicant requested a hearing. On December 8, 2011, after the hearing, 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 issues on appeal: whether the Judge erred in finding that Applicant had deliberately falsified his security clearance application (SCA) and whether the Judge’s adverse security clearance decision was arbitrary, capricious, or contrary to law. The Judge’s favorable findings under Guideline F are not at issue in this appeal. Consistent with the following, we affirm. The Judge made the following pertinent findings of fact: Applicant started a company that served a number of clients, including the Government. He was successful, and the company had no financial problems. In the mid-2000s, Applicant used some of his profits to purchase a coffee shop. That business did not succeed, because of a lack of business. He closed it in 2007. Later, he closed his company as well, due to the recession. The IRS filed liens against Applicant. The tax debts were related to his business. One lien was for $193,000 and was due to an improper deduction he took when retrofitting the building where his coffee shop was located. Two other liens were the result of his failure to pay his coffee shop’s payroll taxes. He has a plan for paying off these two debts, and he is attempting to work out a payment plan for the large debt as well. When he competed his SCA, he failed to disclose that he had not paid federal taxes. He later stated that he had been acting on the advice of an accountant in taking the deduction that resulted in the $193,000 debt. He also failed to disclose the lien against his property. He stated that, when he filled out his SCA, he had so many debts that he could not keep track of them all. In the Analysis, the Judge stated that Applicant had been aware of the liens when he completed the SCA and of the fact that he owed the IRS a substantial amount of money. The Judge found that Applicant’s omissions were deliberate and that the record did not support a favorable application of any of the Guideline E Mitigating Conditions. Applicant contends that the Judge erred in finding that his omissions were deliberate. In analyzing an applicant’s knowledge or intent, a Judge must consider the omissions in light of the entire record. See, e.g., ISCR Case No. 09-08023 at 3 (App. Bd. Sep. 6, 2011). In this case, the Judge’s challenged finding is supported by substantial record evidence. 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, Enclosure 2 ¶ 2(b): “Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.”

ORDER

The Judge’s adverse security clearance decision is AFFIRMED. Signed: Michael Y. Ra’anan Michael Y. Ra’anan Administrative Judge Chairperson, Appeal Board Signed: William S. Fields William S. Fields Administrative Judge Member, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board