ISCR Case No. 23-00899

__________ __________ DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ---------------------------------- ) ISCR Case No. 23-00899 ) Applicant for Security Clearance ) Appearances For Government: Jeff Nagel, Esq., Department Counsel For Applicant: Pro se 02/21/2024

WESLEY, ROGER C. Administrative Judge Based upon a review of the case file, pleadings, exhibits, and testimony, Applicant did not mitigate financial consideration concerns. Eligibility for access to classified information or to hold a sensitive position is denied. Statement of the Case On August 1, 2023, the Defense Counterintelligence and Security Agency (DCSA) Consolidated Adjudications Services (CAS) issued a statement of reasons (SOR) to Applicant detailing reasons why under the financial considerations guidelines the DCSA CAS could not make the preliminary affirmative determination of eligibility for granting a security clearance, and recommended referral to an administrative judge to determine whether a security clearance should be granted, continued, denied, or revoked. The action was taken under Executive Order (Exec. Or.) 10865, Safeguarding Classified Information within Industry (February 20, 1960); Department of Defense (DoD) Directive 5220.6 Defense Industrial Personnel Security Clearance Review Program, (January 2, 1992) (Directive); and Security Executive Agent Directive 4, establishing in Appendix A the National Security Adjudicative Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive Position (AGs), effective June 8, 2017.

Applicant responded to the SOR (undated), and requested a hearing. This case was assigned to me on November 9, 2023. A hearing was scheduled for December 19, 2023, and was heard on the scheduled date. At the hearing, the Government’s case consisted of five exhibits. (GEs 1-5) Applicant relied on one witness (himself) and no exhibits. The transcript (Tr.) was received on January 4, 2024. Summary of Pleadings Under Guideline F, Applicant allegedly (a) failed to file his federal and state income tax returns, for tax years 2009-2011 and 2017-2018, as required and (b) is indebted in the approximate amount of $10,246 for delinquent state income taxes for tax years 2017 and 2018. Allegedly, Applicant’s tax filing for the years in issue remain unfiled, and the alleged delinquent tax debts remain unresolved and outstanding. In Applicant’s response to the SOR, he admitted his failures to file his federal and state income tax returns for the years in issue with explanations. He claimed he was told by his accountant that they would be filing his back tax returns and assumed they were filed. Addressing the allegations of SOR ¶ 1c, Applicant denied any tax indebtedness to State A with explanations. He claimed he paid State A $11,100 in March 2023.

Applicant is a 56-year-old employee of a defense contractor who seeks a security clearance. Allegations covered in the SOR and admitted by Applicant are incorporated and adopted as relevant and material findings. Additional findings follow. Background Applicant never married and has no children. (GE 1) He attended college classes between March 2019 and June 2019 and earned certificates in June 2019. (GE 1) Applicant enlisted in the Air National Guard of his state of residence in July 1995 and served 17 years of active duty before his retirement with an honorable discharge in January 2017. (GE 2) While an active-duty member of his Air National Guard unit, he served in a dual role as an active-duty service member and civilian employee. (GE 4) Since September 2019, Applicant has been employed by his current employer as an information technology specialist. Previously, he was employed by other employers in various jobs. He has never held a security clearance. Applicant’s finances Tax records document that Applicant did not timely file his federal and State A income tax returns for tax years 2009-2011, and for tax years 2017-2018, as required. (GEs 1-4; Tr. 21-22, 27-30) Tax records also document his indebtedness to State A in the approximate amount of $10,246 for tax year 2018. (GEs 1-4) Applicant attributed his 2009-2010 tax-filing lapses to procrastination and his 2017-2018 tax-filing failures to his

mistaken reliance on a prior accountant he engaged to file his returns for those years. (Tr. 27-30) Applicant acknowledged that his 2009-2011 federal tax returns were force- filed by the Internal Revenue Service (IRS) and garnished to satisfy IRS-calculated taxes owed. (GE 4: Tr. 28) Applicant’s mistaken reliance on a prior accountant to file his federal and state tax returns for tax years 2017-2018, was never documented. Without some documentation of his claimed arrangements with a tax accountant to prepare and file his 2017-2018 federal and State tax returns, credit for making good-faith efforts to file his returns cannot be extended. Undocumented and unresolved as well are Applicant’s satisfaction of his state taxes owed for tax years 2017-2018.

By virtue of the jurisprudential principles recognized by the U.S. Supreme Court in Department of the Navy v. Egan, 484 U.S. 518, 528 (1988), “no one has a ‘right’ to a security clearance.” As Commander in Chief, “the President has the authority to control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to have access to such information.” Id. at 527. Eligibility for access to classified information may only be granted “upon a finding that it is clearly consistent with the national interest to do so.” Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended. Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied in conjunction with an evaluation of the whole person. An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable. The AGs list guidelines to be considered by judges in the decision-making process covering DOHA cases. These guidelines take into account factors that could create a potential conflict of interest for the individual applicant, as well as considerations that could affect the individual’s reliability, trustworthiness, and ability to protect classified information. These guidelines include conditions that could raise a security concern and may be disqualifying (disqualifying conditions), if any, and all of the conditions that could mitigate security concerns, if any. These guidelines must be considered before deciding whether or not a security clearance should be granted, continued, or denied. Although, the guidelines do not require judges to place exclusive reliance on the enumerated disqualifying and mitigating conditions in the guidelines in arriving at a decision. In addition to the relevant AGs, judges must take into account the pertinent considerations for assessing extenuation and mitigation set forth in ¶ 2(a) of the AGs, which are intended to assist the judges in reaching a fair and impartial, commonsense

decision based on a careful consideration of the pertinent guidelines within the context of the whole person. The adjudicative process is designed to examine a sufficient period of an applicant’s life to enable predictive judgments to be made about whether the applicant is an acceptable security risk. When evaluating an applicant’s conduct, the relevant guidelines are to be considered together with the following ¶ 2(d) factors: (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 of the conduct; (8) the potential for pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or recurrence. Viewing the issues raised and evidence as a whole, the following individual guidelines are pertinent herein: Financial Considerations The Concern: Failure or inability 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 or 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 acts or otherwise questionable acts to generate funds. . . . AG ¶ 18. Burdens of Proof The Government reposes a high degree of trust and confidence in persons with access to classified information. This relationship transcends normal duty hours and endures throughout off-duty hours. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation about potential, rather than actual, risk of compromise of classified information. Clearance decisions must be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See Exec. Or. 10865 § 7. See also Exec. Or. 12968 (Aug. 2, 1995), § 3.1.

Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant that may disqualify the applicant from being eligible for access to classified information. The Government has the burden of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531. “Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed therein and an applicant’s security suitability. See ISCR Case No. 95-0611 at 2 (App. Bd. May 2, 1996). Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. Directive ¶ E3.1.15. An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his [or her] security clearance.” ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). The burden of disproving a mitigating condition never shifts to the Government. See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b).

Security concerns are raised over Applicant’s failure to (a) timely file his federal, and state income tax returns for tax years 2009-2011 and 2017-2018 and (b) satisfy delinquent state taxes owed in the amount of $10,246 for tax years 2017-2018. Documentation from Applicant addressing these findings was not provided. Financial concerns Applicant’s multiple federal and state tax-filing lapses and owed state taxes warrant the application of one of the disqualifying conditions (DC) of the financial consideration guidelines. DC ¶ 19(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,” applies to Applicant’s situation. Applicant’s documented tax-filing lapses, albeit accompanied by explanations of the circumstances surrounding his failures to timely filed his federal and State A tax returns for the years in issue require no independent proof to substantiate them. See Directive 5220.6 at E3.1.1.14; McCormick on Evidence § 262 (6th ed. 2006). His admitted tax-filing failures are fully documented and create judgment issues as well over the management of his finances. See ISCR Case No. 03-01059 (App. Bd. Sept. 24, 2004). Financial stability in a person cleared to protect classified information is required precisely to inspire trust and confidence in the holder of a security clearance that entitles the person to access classified information. While the principal concern of a security clearance holder’s demonstrated difficulties is vulnerability to coercion and influence, judgment and trust concerns are implicit in cases involving delinquent debts.

Historically, the timing of addressing and resolving tax-filing failures and debt delinquencies (as here) are critical to an assessment of an applicant’s trustworthiness, reliability, and good judgment in following rules and guidelines necessary for those seeking access to classified information or to holding a sensitive position. See ISCR Case No. 14-06808 at 3 (App. Bd. Nov. 23. 2016); ISCR Case No. 14-01894 at 5 (App. Bd. Aug. 18, 2015); ISCR Case No. 14-00221 at 2-5 (App. Bd. June 29, 2016). Without any evidence of (a) IRS and state approved extensions of time for those federal and state tax returns that Applicant failed to timely file, or good cause demonstrated, for his untimely filing of tax returns for tax years 2009-2011 and 2017- 2018 and (b) satisfying state taxes owed for tax years 2017-2018, none of the potentially available mitigating conditions are available to Applicant. In the past, the Appeal Board has consistently imposed evidentiary burdens on applicants to provide documentation corroborating actions taken to resolve financial problems, whether the issues relate to tax-filing lapses, back taxes owed, or other debts and accounts. See ISCR Case No. 19-02593 at 4-5 (App. Bd. Oct. 18, 2021); ISCR Case No. 19-01599 at 3 (App. Bd. Jan. 20, 2020) Applicants for security clearance eligibility are expected to exercise diligence and care in meeting their financial responsibilities. Whole-person assessment Whole-person assessment of Applicant’s clearance eligibility requires consideration of whether his history of multiple tax-filing lapses and debt delinquencies are fully compatible with minimum standards for holding a security clearance. While Applicant is entitled to credit for his military service, his service contributions are not enough at this time to overcome his repeated failures or inability to address his tax-filing and payment responsibilities in a timely way over the course of many years. Overall trustworthiness, reliability, and good judgment have not been established. Based on a consideration of all of the facts and circumstances covered in this case, it is too soon to make safe predictions that Applicant will be able to undertake meritorious, good-faith efforts to mitigate the Government’s financial concerns within the foreseeable future. More time is needed for him to establish the requisite levels of stability with his finances to establish his overall eligibility for holding a security clearance. I have carefully applied the law, as set forth in Department of Navy v. Egan, 484 U.S. 518 (1988), Exec. Or. 10865, the Directive, and the AGs, to the facts and circumstances in the context of the whole person. I conclude financial considerations security concerns are not mitigated. Eligibility for holding a security clearance is denied.

Formal findings For or Against Applicant on the allegations set forth in the SOR, as required by Section E3.1.25 of Enclosure 3 of the Directive, are: Guideline F (FINANCIAL CONSIDERATIONS): AGAINST APPLICANT

__________________________ Subparagraphs 1.a-1.b: Against Applicant

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 eligibility for a security clearance. Eligibility for access to classified information is denied. Roger C. Wesley Administrative Judge