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ISCR 16-03485.a1: Guideline F security clearance appeal, denied (2017) · CASE

ISCR Case 16-03485.a1denied

Case headnote

ISCR Case No. 16-03485.a1

Nov 9, 2017· Hon. Michael Y. Ra'anan· appeal

Summary

The applicant, representing himself, was denied a security clearance under Guideline F (Financial Considerations) due to unresolved tax issues. These issues included a failure to file tax returns from 2006 to 2012 and outstanding tax liens totaling approximately $59,000.

The applicant admitted to the allegations, claiming he was misinformed about the taxability of certain payments. However, the judges found that his explanation did not mitigate the financial concerns. Furthermore, he did not provide corroborating evidence of having filed his tax returns post-hearing.

Ultimately, the judges determined that the applicant did not demonstrate the necessary reliability for access to classified information, leading to the denial of his appeal.

Conditions referenced

Disqualifying

F1raisedFailure to File Annual Income Tax Returns
F3raisedDelinquent Debts

Key rule quoted

“A person who fails repeatedly to fulfill his or her legal obligations, such as filing tax returns and paying taxes when due, does not demonstrate the high degree of good judgment and reliability required of those granted access to classified information.”
ISCR Case No. 15-08782 at 2 (App. Bd. Apr. 5, 2017)

Procedural posture

SOR issuedJan 6, 2017
Answer filed—
Hearing heldAug 14, 2017
Decision dateNov 9, 2017

Cite for

Failure to File Tax Returns as a Disqualifying Condition Under Guideline F
The Necessity of Demonstrating Resolution of Financial Issues for Security Clearance
The Standard of Reliability Required for Access to Classified Information

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 financial considerations under Guideline F. Applicant argued he was denied due process regarding the waiver of the 15-day notice of hearing and that the Judge's decision was arbitrary. The Board affirmed the Judge's decision, finding no harmful error.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowDarlene D. Lokey Anderson denied the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Due-process / fairness, raised by the applicantRejected
Applicant contended that he was denied due process regarding the waiver of the 15-day notice of hearing.
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 Applicant was adequately informed of his right to a 15-day notice of hearing and knowingly waived that right. The Judge's decision was supported by substantial evidence and was not arbitrary or capricious.

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)
William S. Fields
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: Department Counsel advised the Judge that he had explained to Applicant that he had an “absolute right” to receive 15 days notice of the hearing, and Applicant agreed to waive that right. Upon questioning from the Judge, Applicant agreed that he waived that right and acknowledged that he had sufficient time to prepare for the hearing. Due to Applicant’s waiver of the 15-day notice, the Judge also left the record open for a month. Applicant was adequately informed of his 15-day notice of hearing right, and he knowingly and intelligently waived that right. The record contains no basis for Applicant to have assumed that he was entitled to a favorable outcome or that his waiver for the 15-day notice requirement would have resulted in any particular outcome. He was not denied the due process that the Directive affords. Adverse decision affirmed. CASENO: 16-03485.a1 DATE: 11/9/2017 DATE: November 9, 2017 In Re: ----------------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 16-03485

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 January 6, 2017, 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 August 14, 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 issues on appeal: whether Applicant was denied due process and whether the Judge’s adverse decision was arbitrary, capricious, or contrary to law. Consistent with the following, we affirm. The SOR alleged that Applicant failed to file his Federal and state income tax returns from 2006 through 2012 and that he had four Federal tax liens filed against him totaling about $59,000. Applicant admitted each of the SOR allegations. He attributed his tax problems to believing mistakenly that payments he received were non-taxable travel expenses instead of his salary. In 2015, he learned from the Internal Revenue Service (IRS) that those payments were taxable. In November 2016, he began working with an IRS agent to resolve his tax problems. In a letter from April 2017, the IRS agent states that he anticipates Applicant’s case will be resolved once the returns are received. Prior to receipt of the SOR, Applicant worked with a tax preparer on filing his 2010- 2012 income tax returns. After the hearing, Applicant submitted a letter indicating that his 2010- 2013 income tax returns have been finalized and have been faxed to the IRS agent. He is now working on his 2006-2009 income tax returns. For 2014-2016, he filed his income tax returns and paid his income taxes. The Judge concluded that none of the mitigating conditions fully applied because Applicant had not yet filed any of the income tax returns in question nor had he begun resolving the four Federal tax liens. In the appeal brief, Applicant states that he “agreed to waive my right to the 15 days from the date of the notice of appeal.” Appeal Brief at 1. From the context of his brief, it is apparent that Applicant is referring to his waiver of the right to have at least 15 days advanced notice of the time and place of the hearing under Directive ¶ E3.1.8. He contends that he waived the 15-day notice requirement based on his assumption that the “word” of the IRS agent would carry enough weight for the Judge to issue a favorable decision. He further states, “Had I known that the word of the IRS agent would not be sufficient for a favorable decision I would have exercised my right to have the 15 days from the notice . . . and my case would have taken place later in the year and [the Judge] would have seen that I am currently in an installment agreement and my taxes all filed.” Appeal Brief at 1. At the beginning of the hearing, Department Counsel advised the Judge that he had explained to Applicant that he had an “absolute right” to receive 15 days notice of the hearing, and Applicant agreed to waive that right. Tr. at 7. Upon questioning from the Judge, Applicant agreed that he waived that right and acknowledged that he had sufficient time to prepare for the hearing. Tr. at 8. Due to Applicant’s waiver of the 15-day notice, the Judge also left the record open for a month after the hearing to provide him the opportunity to present additional documentation. Tr. at 9 and 79- 84. After reviewing the record, the Board concludes that Applicant was adequately informed of his 15- day notice of hearing right, and he knowingly and intelligently waived that right. See, e.g., ISCR Case No. 06-24213 at 2 (App. Bd. Jun. 10, 2008). The record contains no basis for Applicant to have assumed that he was entitled to a favorable outcome or that his waiver of the 15-day notice requirement would have resulted in any particular outcome. He was not denied the due process that the Directive affords. Applicant contends he presented documentation that he filed his 2010-2013 Federal income tax returns. In her findings of fact, the Judge correctly noted that Applicant presented a post-hearing letter in which he stated he finalized those tax returns and faxed them to the IRS agent. He did not submit copies of those tax returns with that letter. The Board has previously noted that it is reasonable for a Judge to expect applicants to present documentation showing resolution of their financial problems. See, e.g., ISCR Case No. 07-10310 at 2 (App. Bd. Jul. 30, 2008). In the absence of evidence corroborating Applicant’s post-hearing statement, the Judge did not error in concluding that Applicant had not yet filed his tax returns for the years in question. Additionally, even if Applicant had established that he filed those tax returns after the hearing, the Judge could still consider the circumstances underlying his tax filing deficiencies for what they may reveal about his worthiness for a security clearance. See, e.g., ISCR Case No. 14-02394 at 3 (App. Bd. Aug. 17, 2015). In his appeal brief, Applicant provided information that he did not previously submit to the Judge. Such information constitutes new evidence that the Appeal Board cannot consider. Directive ¶ E3.1.29. The balance of Applicant’s arguments amount to a disagreement with the Judge’s weighing of the evidence. For example, he argues that the statements provided by the IRS agent and his tax preparer should be sufficient to resolve the security concerns. The presence of some mitigating evidence does not alone compel the Judge to make a favorable security clearance decision. As the trier of fact, the Judge has to weigh the evidence as a whole and decide whether the favorable evidence outweighs the unfavorable evidence, or vice versa. A party’s disagreement with the Judge’s weighing of the evidence, or an ability to argue for a different interpretation of the evidence, is not sufficient to demonstrate the Judge weighed the evidence or reached conclusions in a manner that is arbitrary, capricious, or contrary to law. See, e.g., ISCR Case No. 15-00650 at 2 (App. Bd. Jun. 27, 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 and paying taxes 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 No. 15- 08782 at 2 (App. Bd. Apr. 5, 2017). 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: William S. Fields William S. Fields Administrative Judge Member, Appeal Board Signed: James F. Duffy James F. Duffy Administrative Judge Member, Appeal Board