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ISCR 14-06105: Guideline F security clearance appeal, denied (2017) · CASE

ISCR Case 14-06105denied

Case headnote

ISCR Case No. 14-06105

Mar 7, 2017· Hon. Michael Y. Ra'anan· appeal

Summary

A 56-year-old defense contractor and former military service member was denied a security clearance under Guideline F (Financial Considerations). The denial stemmed from the applicant's failure to file Federal income tax returns for an eight-year period, from 2006 to 2013. This issue raised Disqualifying Condition AG ¶ 20(a).

The applicant attributed his non-compliance to laziness and did not provide evidence of extenuating circumstances beyond his control. While Mitigating Condition AG ¶ 20(c) was considered, the judge determined it did not apply sufficiently to overcome the security concerns.

Ultimately, the judge concluded that the applicant had not demonstrated a consistent track record of financial responsibility and found insufficient reason to believe he would comply with tax laws in the future. Consequently, the security clearance was denied.

Conditions referenced

Disqualifying

AG ¶ 20(a)raisedFailure to File or Pay Taxes

Mitigating

AG ¶ 20(c)rejectedInability to Satisfy Debts Due to Circumstances Beyond the Person's ControlThe applicant did not demonstrate circumstances beyond his control that impaired his ability to file tax returns.

Key rule quoted

“A person who fails repeatedly to fulfill his or her legal obligations, such as filing tax returns when due, does not demonstrate the high degree of good judgment and reliability required of those granted access to classified information.”
ISCR Case 14-06808 at 2 (App. Bd. Nov. 23, 2016)

Procedural posture

SOR issuedDec 2, 2015
Answer filed—
Hearing heldNov 28, 2016
Decision dateMar 7, 2017

Cite for

Failure to File Taxes as a Disqualifying Condition Under Guideline F
Insufficient Evidence of Extenuating Circumstances for Tax Filing Failures
The Importance of Demonstrating Financial Responsibility 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 involved an applicant who was denied a security clearance due to financial considerations under Guideline F. The applicant argued that the Judge's decision was arbitrary and capricious. The Board affirmed the decision, finding that the Judge's findings were supported by substantial evidence and that the applicant did not rebut the presumption that the Judge considered all evidence.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowRobert E. Coacher denied the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Decision arbitrary, capricious, or contrary to law, raised by the applicantRejected
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 material findings were supported by substantial evidence and that the Judge did not act arbitrarily or capriciously in denying the security clearance.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewNo de-novo re-decisionNo new evidence on appeal

Appeal Board panel

Michael Y. 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 DIGEST: We cannot consider new evidence on appeal. Applicant did not rebut the presumption that the Judge considered all of the evidence. The Judge’s material findings are supported by substantial evidence. Adverse decision affirmed. CASE N O: 14-06105 DATE: 03/07/2017 DATE: March 7, 2017 In Re: ----------------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 14–06105

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 December 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) of Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive). Applicant requested a hearing. On November 28, 2016, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Robert E. Coacher 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. Consistent with the following, we affirm. The Judge’s Findings of Fact 56 years old, Applicant works for a Defense contractor, having previously served in the military from 1983 until 1992. He is divorced with three children. Applicant failed to file his Federal income tax returns from 2006 through 2013. He disclosed these failures in his 2008 and 2014 security clearance applications (SCA) and discussed them in his interviews. Applicant attributed his delinquent filings to laziness and because “I do have a problem filing tax returns[.]” Decision at 2, quoting Tr. at 35. He did not worry about this matter, because he was entitled to refunds. Applicant hired a tax professional to prepare his returns, and he filed them in 2016. He did so after the SOR placed him on notice that his clearance was in jeopardy. The IRS filed Applicant’s returns for 2006 through 2008. He overpaid his taxes for all years in question, except 2010, when he owed a little over $300. Applicant stated that he would file his returns in the future. The Judge’s Analysis The Judge stated that Applicant failed to present evidence of circumstances beyond his control that impaired his ability to file his tax returns. To the contrary, he attributed his failure to laziness and his preference for the IRS to file for him. Although Applicant has now filed his delinquent tax returns, the Judge found little reason to conclude that Applicant would comply with the law in the future. He stated that there are no clear indications that Applicant’s problems are behind him. Though noting Applicant’s military service and work for a Federal contractor, the Judge concluded that Applicant had not established a track record of financial responsibility.

DISCUSSION

Applicant’s appeal brief includes matters from outside the record, which we cannot consider. Directive ¶ E3.1.29. He notes that he fully disclosed his filing delinquencies in his 2008 SCA and during the subsequent interview and that authorities granted him a clearance anyway. He argues that he interpreted this favorable result to mean that filing delinquencies were not an impediment to holding a clearance. He also cites to his military service and to his work as for a contractor. He states that he is embarrassed by his security-significant conduct. The Judge made findings about Applicant’s disclosure of his delinquencies, as well as about his military service and civilian career. Applicant’s brief cites to no extenuating evidence in the file that the Judge failed to address. Applicant has not rebutted the presumption that the Judge considered of the evidence in the record. See, e.g., ISCR Case No. 15-02854 at 2 (App. Bd. Nov. 22, 2016). The Judge observed that Applicant’s earlier adjudication should have placed him on notice of the importance of filing his tax returns in a timely manner. This was a reasonable conclusion from the evidence that was before him. Applicant has not shown that the Judge weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. See, e.g., ISCR Case No. 14-06686 at 2 (App. Bd. Apr. 27, 2016). Applicant states that “the government representative inferred that I do not pay my taxes.” Appeal Brief at 1. He is apparently referring to a question by Department Counsel about “any other delinquent debts.” Applicant replied that his Federal taxes themselves were not delinquent, and Department Counsel agreed. Tr. at 35. There is nothing in this colloquy that would have misled the Judge about the true nature of Applicant’s security-significant conduct or that resulted in any erroneous finding of fact. Indeed, the Judge found that Applicant was entitled to refunds for all of the years in question except 2010, when he owed a nominal amount, which was consistent with Applicant’s testimony at the hearing. Tr. at 33. The Judge’s material findings are supported by substantial evidence. See, e.g., ISCR Case No. 15-01285 at 3 (App. Bd. Dec. 22, 2016). The Judge examined the relevant evidence and articulated a satisfactory explanation for the decision. A person who fails repeatedly to fulfill his or her legal obligations, such as filing tax returns when due, does not demonstrate the high degree of good judgment and reliability required of those granted access to classified information. See, e.g., ISCR Case 14-06808 at 2 (App. Bd. Nov. 23, 2016). 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 Decisions is AFFIRMED. Signed: Michael Y. Ra’anan Michael Y. 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