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ISCR Case 20-01261 — CASE

ISCR Case 20-01261denied

Case Headnote

ISCR Case No. 20-01261

deniedMay 3, 2022· Hon. Richard A. Cefola· hearing

Summary

A 42-year-old divorced applicant was denied a security clearance under Guideline F (Financial Considerations) due to significant financial issues. The Statement of Reasons detailed several concerns, including the applicant's failure to file federal income tax returns for 2017 and 2018. Additionally, the applicant owed approximately $3,184 in delinquent federal taxes from 2013, which remained unpaid for six years.

Further financial concerns included past-due medical bills from four separate accounts, totaling about $231, and an outstanding debt of approximately $629 owed to Creditor G. These issues collectively raised disqualifying conditions under Adjudicative Guidelines paragraphs 19(a), 19(b), and 19(f).

The administrative judge determined that the applicant did not provide sufficient evidence to mitigate these financial concerns. Specifically, the applicant failed to adequately address the unfiled tax returns, the long-standing delinquent federal taxes, and the admitted past-due medical and other debts. Consequently, granting a security clearance was deemed inconsistent with national interest, and the application was denied.

Why the Applicant Was Denied

The applicant failed to file Federal income tax returns for 2017 and 2018.
The applicant had delinquent taxes owed to the Federal Government, which were not paid until six years later.
The applicant had past-due medical bills and admitted debts that he did not adequately address.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(b)raisedUnwillingness to Satisfy Debts
AG ¶ 19(f)raisedFailure to File Tax Returns

Key Rule Quoted

“Any doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.”

Procedural Posture

SOR issuedOct 15, 2020
Answer filedAug 16, 2021Applicant denied all allegations.
Hearing held—Decided on the written record.
Decision dateMay 3, 2022

Cite For

Failure to File Tax Returns as a Disqualifying Condition Under Guideline F
Inability to Satisfy Debts as a Disqualifying Condition Under Guideline F
Lack of Sufficient Evidence to Mitigate Financial Concerns Under Guideline F

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

Standardized Decision Profile

SEAD-4 Guideline F · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found against the applicant on all financial allegations under Guideline F, including failure to file tax returns and various debts. The applicant denied the allegations but did not provide evidence of addressing his past-due indebtedness, leading to a decision to deny the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant failed to file his Federal income tax returns for tax years 2017 and 2018.	Against Applicant	Tax Filing Failure	Denied	—	—	—
1.b	Applicant was indebted to the Federal Government for delinquent taxes in the amount of about $3,184 for tax year 2013. $3,184	Against Applicant	Tax Unpaid	Denied	—	—	—
1.c	Applicant has past-due medical bills, from four separate accounts, totaling about $231. $231	Against Applicant	Medical Debt	Denied	—	—	—
1.g	Applicant has a past-due debt to Creditor G in the amount of about $629. $629	Against Applicant	Unspecified Financial	Denied	—	—	—

Descriptive standardized rendering of a decided public case (Guideline F). The verbatim source decision is shown in full below.

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

HEARING

APPEARANCES

~ 0 .~;;o-1~'i:""'' t, ~ t ______________ ______________ DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: )

)

) ISCR Case: 20-01261

) Applicant for Security Clearance ) Appearances For Government: Erin P. Thompson, Esquire, Department Counsel For Applicant: Pro se May 3, 2022

STATEMENT OF CASE

CEFOLA, Richard A., Administrative Judge: Statement of Case On March 31, 2019, Applicant submitted a security clearance application (SF 86). On October 15, 2020, the Department of Defense Consolidated Adjudications Facility (DoD CAF) issued Applicant a Statement of Reasons (SOR), detailing security concerns under Guideline F, Financial Considerations. (Item 1.) The action was taken under Executive Order (EO) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; DoD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the National Security Adjudicative Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive Position (AG), effective June 8, 2017. Applicant answered the SOR on August 16, 2021. He denied all of the SOR allegations concerning his delinquent debts, and requested that his case be decided by an administrative judge on the written record without a hearing. (Item 2.) On September 28, 2021, Department Counsel submitted the Government’s written case. A complete

copy of the File of Relevant Material (FORM), containing seven Items, was mailed to Applicant on September 29, 2021, and received by him on October 20, 2021. The FORM notified Applicant that he had an opportunity to file objections and submit material in refutation, extenuation, or mitigation within 30 days of his receipt of the FORM. Applicant did not respond to the FORM. DOHA assigned the case to me on February 1, 2022. Items 1 through 7 are admitted into evidence.

FINDINGS OF FACT

Guideline F – Financial Considerations Applicant is 42 years old. He is divorced, and has no children. (Item 3 at pages 7, 16 and 18.) 1.a. Applicant failed to file his Federal income tax returns for tax years 2017 and 2018. This is evidenced by documentation from the Internal Revenue Service (IRS). (Item 4 at pages 12 and 13.) Applicant has submitted nothing to support his averment that he “filed extensions.” 1.b. Applicant was indebted to the Federal Government for delinquent taxes in the amount of about $3,184 for tax year 2013. This was not paid until six years later with Applicant’s refund for tax year 2019. This is evidenced by documentation from the Internal Revenue Service (IRS). (Item 4 at page 9.) 1.c~1.f. Applicant has past-due medical bills, from four separate accounts, totaling about $231. This is evidenced by a March 2020 credit report. (Item 6 at page 2.) 1.g. Applicant has a past-due debt to Creditor G in the amount of about $629. He admits this debt, but avers it was “settled through my Freedom Debt Relief,” but offers nothing in support of his averment.

POLICIES

When evaluating an applicant’s suitability for national security eligibility, the administrative judge must consider the adjudicative guidelines. In addition to brief introductory explanations for each guideline, the adjudicative guidelines (AG) list potentially disqualifying conditions and mitigating conditions, which are to be used in evaluating an applicant’s national security eligibility. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied in conjunction with the factors listed in AG ¶ 2 describing the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. The entire

process is a conscientious scrutiny of applicable guidelines in the context of a number of variables known as the whole-person concept. The administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable, in making a decision. The protection of the national security is the paramount consideration. AG ¶ 2(b) requires that “[a]ny doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence contained in the record. I have not drawn inferences based on mere speculation or conjecture. Directive ¶ E3.1.14, requires the Government to present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by the applicant or proven by Department Counsel, and has the ultimate burden of persuasion as to obtaining a favorable clearance decision.” A person applying for national security eligibility seeks to enter into a fiduciary relationship with the Government predicated upon trust and confidence. This relationship transcends normal duty hours and endures throughout off-duty hours. The Government reposes a high degree of trust and confidence in individuals to whom it grants national security eligibility. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to protect or safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation as to potential, rather than actual, risk of compromise of classified or sensitive information. Finally, as emphasized in Section 7 of EO 10865, “[a]ny determination under this order adverse to an applicant shall be a determination in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information.)

ANALYSIS

Guideline F - Financial Considerations The security concerns relating to the guideline for financial considerations are set out in AG ¶ 18, which reads in pertinent part: Failure to live within one's means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual's reliability, trustworthiness, and ability to protect classified or sensitive information. Financial distress can also be caused or exacerbated by, and thus can be a possible

indicator of, other issues of personnel security concern such as excessive gambling, mental health conditions, substance misuse, or alcohol abuse or dependence. An individual who is financially overextended is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds. . . . AG ¶ 19 describes four conditions that could raise security concerns and may be disqualifying in this case: (a) inability to satisfy debts; (b) unwillingness to satisfy debts regardless of the ability to do so; (c) a history of not meeting financial obligations; and (f) failure to file or fraudulently filing annual Federal, state, or local income tax returns or failure to pay annual Federal, state, or local income tax as required. Applicant had outstanding taxes, and past-due indebtedness. He also failed to file two years of tax returns. These facts establish prima facie support for the foregoing disqualifying conditions, and shift the burden to Applicant to mitigate those concerns. The guideline includes four conditions in AG ¶ 20 that could mitigate the security concerns arising from Applicant’s alleged financial difficulties: (a) the behavior happened so long ago, was so infrequent, or occurred under such circumstances that it is unlikely to recur and does not cast doubt on the individual's current reliability, trustworthiness, or good judgment; (b) the conditions that resulted in the financial problem were largely beyond the person's control (e.g., loss of employment, a business downturn, unexpected medical emergency, a death, divorce or separation, clear victimization by predatory lending practices, or identity theft), and the individual acted responsibly under the circumstances; (c) the individual has received or is receiving financial counseling for the problem from a legitimate and credible source, such as a non-profit credit counseling service, and there are clear indications that the problem is being resolved or is under control; (d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts;

(e) the individual has a reasonable basis to dispute the legitimacy of the past-due debt which is the cause of the problem and provides documented proof to substantiate the basis of the dispute or provides evidence of actions to resolve the issue; and (g) the individual has made arrangements with the appropriate tax authority to file or pay the amount owed and is in compliance with those arrangements. Applicant has not acted responsibly as to his delinquent taxes, or as to his past- due indebtedness. He waited six years to pay his past-due taxes, and only then by the IRS taking his refund. Applicant has submitted nothing showing he has addressed his past-due indebtedness. The record has not established mitigation of financial security concerns under the provisions of AG ¶ 20.

WHOLE PERSON CONCEPT

Under the whole-person concept, the administrative judge must evaluate an applicant’s eligibility for a security clearance by considering the totality of the applicant’s conduct and all relevant circumstances. The administrative judge should consider the nine adjudicative process factors listed at AG ¶ 2(d): (1) the nature, extent, and seriousness of the conduct; (2) the circumstances surrounding the conduct, to include knowledgeable participation; (3) the frequency and recency of the conduct; (4) the individual’s age and maturity at the time of the conduct; (5) the extent to which participation is voluntary; (6) the presence or absence of rehabilitation and other permanent behavioral changes; (7) the motivation for the conduct; (8) the potential for pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or recurrence. According to AG ¶ 2(c), the ultimate determination of whether to grant national security eligibility must be an overall commonsense judgment based upon careful consideration of the applicable guidelines and the whole-person concept. I considered the potentially disqualifying and mitigating conditions in light of all pertinent facts and circumstances surrounding this case. Overall, the record evidence leaves me with questions and doubts as to Applicant’s judgment, eligibility, and suitability for a security clearance. He has not met his burden to mitigate the security concerns arising under the guideline for financial considerations.

________

FORMAL FINDINGS

Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are: Paragraph 1, Guideline F: AGAINST APPLICANT Subparagraphs 1.a. through1.g: Against Applicant

CONCLUSION

In light of all of the circumstances presented by the record in this case, it is not clearly consistent with the national interest to grant Applicant national security eligibility and a security clearance. National security eligibility is denied. Richard A. Cefola Administrative Judge