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ISCR Case 16-01871.a1 — CASE

ISCR Case 16-01871.a1denied

Case Headnote

ISCR Case No. 16-01871.a1

Jul 14, 2017· Hon. Michael Y. Ra'anan· appeal

Summary

A defense contractor employee was denied a security clearance under Guideline F (Financial Considerations) due to a history of unfiled tax returns from 2011 to 2014. The applicant attributed these issues to financial difficulties following his wife's unemployment.

The appeal board affirmed the denial, citing the applicant's failure to file timely tax returns for multiple years as a significant concern regarding his financial responsibility. Disqualifying conditions included a history of not meeting financial obligations and an inability to satisfy debts.

While mitigating conditions such as the financial problems being largely beyond the applicant's control and a good-faith effort to resolve the issues were considered, they were not sufficient. The board found the applicant did not provide evidence of having filed his tax returns or resolved his debts, nor did he demonstrate a good-faith effort to address his financial obligations. The applicant's financial difficulties were not sufficiently linked to his wife's unemployment to mitigate the concerns about his reliability and judgment.

Conditions Referenced

Disqualifying

AG ¶ 20(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 20(c)raisedFailure to File Tax Returns as Required

Mitigating

AG ¶ 20(d)rejectedThe Conditions That Led to the Financial Problems Were Beyond the Applicant's ControlThe judge found no clear nexus between the applicant's wife's unemployment and his failure to file tax returns.
AG ¶ 20(e)rejectedThe Applicant Has Made Efforts to Repay Overdue DebtsThe applicant did not demonstrate a good-faith effort to address his debts.

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 18, 2016
Answer filed—
Hearing heldMay 8, 2017
Decision dateJul 14, 2017

Cite For

Financial Responsibility Under Guideline F
Impact of Failure to File Tax Returns on Security Clearance
Importance of Demonstrating Good-faith Efforts to Resolve Debts

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 seeking a security clearance after being denied due to 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 no harmful error that would affect the outcome.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowCarol G. Ricciardello — 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.

Error found, but harmless. The Board agreed the judge made a mistake but affirmed anyway, because it did not change the outcome.

Why the Board ruled this way

The Board found that the Judge's material findings were consistent with the record and any errors were harmless, affirming the adverse 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
William S. Fields

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 conclude that the Judge’s material findings are consistent with the record that was before her. Even if the Judge erred in some of her findings, any such errors are harmless in that they did not likely affect the outcome of the case. Adverse decision affirmed. CASENO: 16-01871.a1 DATE: 07/14/2017 DATE: July 14, 2017 In Re: ----------------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 16-01871

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 July 18, 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 May 8, 2017, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Carol G. Ricciardello 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 been employed by various Defense contractors since 2004. He failed to file timely state and/or Federal income tax returns for tax years 2011 through 2014. He stated that he was unable to do so because of a dispute with his mortgage company over the amount of property tax he paid on his home. He stated that he stopped paying on the mortgage when the matter was in litigation. In his clearance interview, Applicant stated that he got behind in paying his mortgage when his wife lost her job and he did not have the money to make payments. At the hearing he testified that he was not behind on his mortgage but was being overcharged by the lender. Applicant provided no evidence that would show that his tax returns have been filed. The lender foreclosed on his house and that account is now closed. Concerning another SOR debt, the Judge cited to a document that Applicant submitted pertaining to this debt but noted that the exhibit does not show that the debt has been paid. The Judge’s Analysis The Judge stated that Applicant’s delinquent debts and tax filings cast doubt upon his current reliability, trustworthiness, and good judgment. Although Applicant’s wife became unemployed, which was a circumstance beyond his control, there is no clear nexus between that event and Applicant’s failure to file his tax returns. Applicant has been aware of his delinquent debts since 2015, but he failed to address them until over a year later, after he had received the SOR. The Judge concluded that this did not demonstrate a good-faith effort to pay debts. In the whole-person analysis, the Judge cited to Applicant’s military service and his many years of employment by Federal contractors. However, she noted Applicant’s delinquent debts and his failure to have resolved his tax problems as of the close of the record.

DISCUSSION

Applicant takes issue with some of the Judge’s findings of fact. For example, he states that he has worked for contractors since 1996 rather than 2004, and he denies that his wife’s loss of income was the principal issue underlying his mortgage problems. We conclude that the Judge’s material findings are consistent with the record that was before her. Even if the Judge erred in some of her findings, any such errors are harmless in that they did not likely affect the outcome of the case. See, e.g., ISCR Case No. 15-00535 at 3 (App. Bd. Mar. 13, 2017). Applicant notes a phrase in his interview summary to the effect that there is nothing in his background that could lead to blackmail, etc. This represents Applicant’s answers to the interviewer’s questions, not the interviewer’s opinion as to Applicant’s worthiness for a clearance. In any event, even if an investigator offered such an opinion it would not bind the DoD in its evaluation of Applicant’s case. See, e.g., ISCR Case No. 15-00535, supra, at 4 (App. Bd. Mar. 13, 2017). 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, 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: William S. Fields William S. Fields Administrative Judge Member, Appeal Board