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ISCR Case 14-06808.a1 — CASE

ISCR Case 14-06808.a1denied

Case Headnote

ISCR Case No. 14-06808.a1

Nov 23, 2016· Hon. Michael Y. Ra'anan· appeal

Summary

A security clearance applicant, representing himself, was denied clearance primarily due to significant and long-standing tax delinquencies, falling under Guideline F (Financial Considerations) and Guideline E (Personal Conduct). The applicant failed to file and pay federal and state taxes for several years, with these issues remaining unaddressed until after he received the Statement of Reasons (SOR).

The applicant's financial problems were exacerbated by his personal decision to diminish tax withholding. While the applicant presented some mitigating factors, the judges found them insufficient to overcome the seriousness of the unfulfilled legal obligations.

Specifically, disqualifying conditions related to a history of not meeting financial obligations and an unwillingness to resolve them were raised. Although mitigating conditions concerning the debt being resolved and the applicant demonstrating a good-faith effort to resolve the issues were applied, they did not outweigh the persistent failure to comply with tax laws. Consequently, the security clearance was denied.

Conditions Referenced

Disqualifying

AG ¶ 20(a)raisedFailure to Meet Financial Obligations
AG ¶ 20(c)raisedDelinquent Debts

Mitigating

AG ¶ 20(d)rejectedInability to Satisfy Debts Due to Circumstances Beyond ControlThe judge noted circumstances outside the applicant's control but found them insufficient to mitigate the financial concerns.
AG ¶ 20(e)rejectedThe Applicant Has Made Good Faith Efforts to Repay DebtsThe applicant's efforts to address tax issues were deemed insufficient as they occurred only after the SOR was issued.

Key Rule Quoted

“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.”

Procedural Posture

SOR issuedSep 2, 2015
Answer filed—
Hearing heldAug 29, 2016
Decision dateNov 23, 2016

Cite For

Significance of Tax Compliance Under Guideline F
Timing of Debt Payments as a Factor in Mitigation
Importance of Fulfilling Legal Obligations for 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 was filed by the applicant after the Administrative Judge denied his request for a security clearance based on financial considerations and personal conduct. The applicant argued that the Judge's decision was arbitrary and capricious. The Board affirmed the Judge's decision, finding it supported by substantial evidence and consistent with established precedent regarding tax obligations.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowElizabeth M. Matchinski — denied the clearance

Decided ona hearing

Guidelines belowGuideline FGuideline E

What the Board reviewed

Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
The applicant argued 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 based on substantial evidence and that the applicant's failure to file and pay taxes was significant in evaluating his reliability and judgment.

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; Guideline E DIGEST: The Judge’s decision focused to a large extent on evidence that his taxes remained delinquent for several years and were not addressed until Applicant received the SOR. As we have noted previously, timing of debt payments is relevant in evaluating an applicant’s case for mitigation. It also focused on established precedent about the adverse significance of an applicant’s failure to file and pay his taxes. As we have noted previously, 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. Adverse decision affirmed. CASENO: 14-06808.a1 DATE: 11/23/2016 DATE: November 23, 2016 In Re: -----

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 14-06808

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Pro se The Department of Defense (DoD) declined to grant Applicant a security clearance. On September 2, 2015, DoD 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 August 29, 2016, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Elizabeth M. Matchinski 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. The Judge’s favorable findings under Guideline E are not at issue in this appeal. Consistent with the following, we affirm. The Judge’s Findings of Fact The Judge made the following findings pertinent to the issues raised on appeal: Applicant’s SOR includes numerous delinquent debts. He has experienced unemployment, during the mid-2000s and again in June through October 2012. His financial difficulties were also affected by his domestic partner’s inability to find steady employment. He began experiencing financial problems in 2007 and instructed his employer to stop withholding taxes from his income. Applicant failed to file and/or pay his Federal and state taxes for several years. He completed his Federal return for 2009 in April 2010 and his returns for 2010 through 2012 in late 2015. He filed his 2013 returns electronically in late 2015. Applicant has sought a repayment plan with the IRS to make payments of $80 a month, but the offer has not been accepted as of early 2016. Applicant completed delinquent state tax returns for 2009 through 2012 in early 2016. Applicant acknowledged that it was mere “stupidity” on his part to have failed to file his tax returns. Directive at 7. He promised to comply with tax filing obligations in the future. Applicant enjoys a good reputation for the quality of his work performance as well as for honesty and trustworthiness. The Judge’s Analysis The Judge cleared Applicant of most of the debts alleged in the SOR. She entered adverse findings for three debts, one of which had been reduced to judgment. The gravamen of her analysis was Applicant’s failure to have filed and paid his Federal and state income taxes. She noted circumstances outside his control that harmed his finances, such as unemployment. However, she also noted his diminished tax withholding, which was his own decision. She stated that Applicant has no confirmed installment plan to repay his delinquent taxes. She also stated that Applicant had been on notice of these back taxes at least since his 2013 clearance interview but had only recently undertaken corrective action. She concluded that the timing of Applicant’s tax filing–after receipt of the SOR–diminishes the weight to which this action was entitled.

DISCUSSION

Applicant’s brief contains matters from outside the record, which we cannot consider. Directive ¶ E3.1.29. He cites to his evidence about his proposed installment plans and contends that he has mitigated the concerns arising from his tax delinquencies. The Judge’s decision focused to a large extent on evidence that his taxes remained delinquent for several years and were not addressed until Applicant received the SOR. See, e.g., ISCR Case No. 14-01243 at 3 (App. Bd. Jun. 18, 2015) (Timing of debt payments is relevant in evaluating an applicant’s case for mitigation). It also focused on established precedent about the adverse significance of an applicant’s failure to file and pay his taxes. See, e.g., ISCR Case No. 14-01894 at 5 (App. Bd. Aug. 18, 2015). (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). Applicant has not rebutted the presumption that the Judge considered all of the evidence in the record, nor has he shown that she mis-weighed the evidence. See, e.g., ISCR Case No. 14-05795 at 2 (App. Bd. Apr. 26, 2016). The Judge examined the relevant evidence and articulated a satisfactory explanation for the decision. The 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 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