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ISCR Case 16-01750.a1 — CASE

ISCR Case 16-01750.a1denied

Case Headnote

ISCR Case No. 16-01750.a1

Oct 11, 2017· Hon. Michael Y. Ra'anan· appeal

Summary

A defense industry employee with 35 years of experience was denied a security clearance under Guideline F (Financial Considerations) due to significant tax delinquencies. The applicant owed approximately $32,000 to the IRS and $6,500 in state taxes, totaling around $38,500. These debts were identified as disqualifying conditions under F.1.

Although the applicant established a payment plan with the IRS, he had not begun making payments by the close of the record. This failure to address the delinquencies responsibly and initiate payments on the established plan raised concerns about his judgment and reliability.

Ultimately, the applicant's tax delinquencies and the lack of progress on his payment plan suggested he did not possess the necessary judgment for access to classified information, leading to the denial of his security clearance. Mitigating conditions under F.2 were considered but not applied.

Conditions Referenced

Disqualifying

F.1raisedFinancial Considerations

Mitigating

F.2rejectedFinancial ConsiderationsThe applicant's payment plan was not sufficient to demonstrate responsible action as he had not begun payments.

Key Rule Quoted

“A person who fails to fulfill legal obligations, such as paying taxes when due, may be lacking in the judgment and reliability required of those with access to classified information.”
— ISCR Case No. 15-06707 at 3 (App. Bd. Aug. 15, 2017)

Procedural Posture

SOR issuedOct 5, 2016
Answer filed—
Hearing heldJul 5, 2017
Decision dateOct 11, 2017

Cite For

Denial of Security Clearance Due to Significant Tax Delinquencies
Failure to Demonstrate Responsible Financial Behavior
Judgment and Reliability Concerns Related to Financial Obligations

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 under Guideline F. The applicant argued that the Judge's decision was arbitrary and capricious. The Board affirmed the Judge's decision, finding that the evidence supported her conclusions and that her analysis was not flawed.

Appealed bythe applicant

Applicant representationAttorney

Judge belowDarlene D. Lokey Anderson — denied the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
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 findings were supported by substantial evidence and that her decision was not arbitrary or capricious. The Judge properly weighed the evidence and articulated a satisfactory explanation for her decision.

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 DIGEST: An ability to argue for an alternative weighing of the evidence is not sufficient to show that the Judge weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. Adverse decision affirmed. CASENO: 16-01750.a1 DATE: 10/11/2017 DATE: October 11, 2017 In Re: ----------------.

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 16-01750

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Shawn C. Graham, Esq. The Department of Defense (DoD) declined to grant Applicant a security clearance. On October 5, 2016, 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 July 5, 2017, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Darlene D. Lokey Anderson 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 Applicant has worked for his current employer since 2014 and has worked in the Defense industry for nearly 35 years. He has held a clearance since 2000. Applicant’s SOR contains one allegation, that he owes the IRS about $32,000 for tax years 2011 through 2013. He also owes his state about $6,500 in delinquent taxes. Applicant’s difficulties were caused by his not having sufficient withholding from the profits arising from a real estate sale. He experienced some unemployment prior to his current job and exhausted his savings in order to pay his living expenses. He was not able to make his current payments as well as discharge his tax obligations. Applicant has now paid the IRS for tax years 2011 and 2012. However, he currently owes a little over $30,000 for taxes due for 2013 and for 2015. He set up a payment plan with the IRS after he received the SOR. This plan, which the agency has approved, requires him to pay $388 a month, although Applicant had not started making payments by the close of the record. The Judge’s Analysis The Judge noted Applicant’s unemployment, which was beyond his control. She concluded, however, that he had not acted responsibly in regard to his tax problem, in light of evidence that he did not start paying his debts until he received the SOR. She cited to Applicant’s agreement with the IRS. However, since he had not started actually complying with the plan, the Judge concluded that he has not demonstrated that his security-significant conduct is being resolved. In the whole- person analysis, the Judge cited to Applicant’s many years of working in the Defense industry. Despite this, Applicant’s tax delinquencies suggest that he has not shown the level of judgment necessary for one who has access to classified information.

DISCUSSION

Although Applicant styled his first assignment of error as a challenge to the sufficiency of the Judge’s findings of fact, the tenor of his argument appears to be that she did not extend appropriate weight to favorable evidence, such as his IRS payment plan and the efforts he undertook to obtain its approval, along with evidence that he has the financial resources to pay off his tax debts should the plan not be sufficiently mitigating. An ability to argue for an alternative weighing of the evidence is not sufficient to show that the Judge weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. See, e.g., ISCR Case No. 15-08711 at 3 (App. Bd. Aug. 24, 2017). To the extent that Applicant has challenged the sufficiency of the findings, we conclude that the Judge’s material findings “are supported by such relevant evidence as a reasonable mind might accept as adequate to support a conclusion in light of all the contrary evidence in the same record.” Directive ¶ E3.1.32.1. The Judge examined the relevant evidence and articulated a satisfactory explanation for the decision, both as to the mitigating conditions and the whole-person factors. The decision is sustainable on this record. A person who fails to fulfill legal obligations, such as paying taxes when due, may be lacking in the judgment and reliability required of those with access to classified information. See, e.g., ISCR Case No. 15-06707 at 3 (App. Bd. Aug. 15, 2017). “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, Encl. 2, App. A ¶ 2(b): “Any doubt concerning personnel being considered for national security eligibility 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