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ISCR Case 16-03439.h1 — CASE

ISCR Case 16-03439.h1denied

Case Headnote

ISCR Case No. 16-03439.h1

deniedSep 7, 2017· Hon. Robert E. Coacher· hearing

Summary

A 66-year-old applicant seeking an IT position was denied a security clearance due to financial considerations under Guideline F. The Statement of Reasons cited several unresolved financial issues. These included four delinquent medical accounts totaling $4,642, and four state tax liens amounting to $16,265, though one state tax lien was set aside in February 2017. Additionally, a federal tax lien of $54,285 was noted. The applicant also admitted to failing to file her 2010 and 2011 federal and state income tax returns when due.

The disqualifying conditions raised were F.1.a (inability or unwillingness to satisfy debts), F.1.c (a history of not meeting financial obligations), and F.1.f (failure to file tax returns or pay taxes).

The denial was based on the applicant's unresolved delinquent medical accounts and tax liens, which totaled $70,550. The judge found insufficient evidence of payment plans or financial counseling for these debts. Furthermore, the applicant's unemployment, cited as a reason for financial hardship, was determined to be a voluntary choice rather than an uncontrollable circumstance.

Why the Applicant Was Denied

Applicant has unresolved delinquent medical accounts totaling $4,642 and tax liens amounting to $70,550.
Applicant failed to provide evidence of payment plans or financial counseling for her debts.
Applicant's unemployment was a voluntary choice, not a condition beyond her control.

Conditions Referenced

Disqualifying

F.1.araisedInability to Satisfy Debts
F.1.craisedA History of Not Meeting Financial Obligations
F.1.fraisedFailure to File or Fraudulently Filing Annual Federal, State, or Local Income Tax Returns

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedDec 9, 2016
Answer filedJan 10, 2017
Hearing heldMar 15, 2017
Decision dateSep 7, 2017

Cite For

Insufficient Evidence of Debt Resolution Under Guideline F
Voluntary Unemployment Not Mitigating Financial Issues
Lack of Financial Counseling as a Factor in Security Clearance Denial

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 multiple financial considerations, including unresolved medical debts and tax liens. Despite some admissions, the applicant failed to demonstrate efforts to mitigate these financial issues, leading to a denial of security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admitted four delinquent medical accounts in a total amount of $4,642. $4,642	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b–1.c	2 sub-charges — specific text not stated in this decision (against the applicant).	Against Applicant			—	—	—
1.d	Applicant’s indebtedness on four state tax liens totaling $16,265. $16,265	Against Applicant	Tax Unpaid	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Applicant provided documentation showing that one state tax lien was set aside in February 2017.	Against Applicant	Tax Unpaid	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	specific text not stated in this decision	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	a federal tax lien in the amount of $54,285. $54,285	Against Applicant	Tax Unpaid	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations (f) failure to file / fraudulent filing of tax returns or unpaid tax	—	—
1.h–1.i	2 sub-charges — specific text not stated in this decision (against the applicant).	Against Applicant			—	—	—
1.j	Applicant admitted she failed to file her 2010 and 2011 federal and state income tax returns when they were due.	For Applicant	Tax Filing Failure	Admitted	(f) failure to file / fraudulent filing of tax returns or unpaid tax	—	—
1.k	specific text not stated in this decision	For Applicant	Unspecified Financial	Unknown	—	—	—

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

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS

In the matter of: ) ) ) ISCR Case No. 16-03439 ) Applicant for Security Clearance )

For Government: Robert J. Kilmartin, Esq., Department Counsel For Applicant: Pro se

09/07/2017 ______________

STATEMENT OF CASE

______________

COACHER, Robert E., Administrative Judge:

Applicant has not mitigated the financial considerations security concerns. Eligibility for access to classified information is denied.

Statement of the Case

On December 9, 2016, the Department of Defense (DOD) issued Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F, financial considerations. DOD acted 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 adjudicative guidelines (AG).1

Applicant answered (Ans.) the SOR on January 10, 2017. The case was assigned to me on February 15, 2017. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on February 28, 2017, and the hearing was convened as scheduled on March 15, 2017. The Government offered exhibits (GE) 1 through 4, which were admitted into evidence without objection. Department Counsel’s exhibit list was marked as hearing exhibit (HE) I. Applicant testified and offered exhibits (AE) A through I, which were admitted without objection. The record was held open six weeks until April 28, 2017, for Applicant to submit additional information. Applicant failed to submit any additional evidence. DOHA received the hearing transcript (Tr.) on March 23, 2017.

FINDINGS OF FACT

Applicant admitted some of the SOR allegations with explanations, and denied others. The admissions are incorporated as findings of fact. After a review of the pleadings and evidence, I make the following additional findings of fact.

Applicant is 66 years old. She is seeking an IT position with a defense contractor. She has been unemployed since 2010. Before that, she worked as an IT technician in the private sector. She has a high school diploma and has earned numerous technical certificates. She is twice divorced and remarried three years ago. She has no children, but raised her niece.2

The SOR alleged and Applicant admitted four delinquent medical accounts in a total amount of $4,642. The SOR also alleged Applicant’s indebtedness on four state tax liens totaling $16,265, a federal tax lien in the amount of $54,285, and her failure to file federal and state income tax returns for 2010 and 2011. The tax liens and medical debts are listed in credit reports from September 2015, and February 2017. She admitted in her security clearance application, her security clearance interview, and her hearing testimony not filing her 2010 and 2011 tax returns.3

Applicant attributed her financial difficulties to her unemployment between 2010 and 2017 when she was caring for her sister and mother. She was supported by her Social Security income of approximately $20,000 and in the last three years her husband’s retirement pension of approximately $110,000.4

Medical debts (SOR ¶¶ 1.a-c, 1.i) Applicant provided no documentation showing payment, or her entering into payment plans to resolve these debts. She presented documentation showing non-SOR medical debts, which showed her handwritten payment notes. She was unable to pay her medical debts because she lacked insurance coverage. She failed to provide evidence of financial counseling. These debts are unresolved.5 Tax Liens (SOR ¶¶ 1.d-1.h). Applicant provided documentation showing that one state tax lien was set aside in February 2017 (SOR ¶ 1.e). She claimed she sent $3,000 to the state taxing authority in March 2017 to pay part of the tax owed in SOR ¶ 1.d. She did not provide supporting documentation. Likewise, she failed to provide documentation showing payment or contacts with officials concerning the remaining tax liens. She specifically disputed the federal tax lien stated in SOR ¶ 1.gclaiming that it was untimely, but she failed to provide documentation supporting her dispute. Except for SOR ¶ 1.e, all the tax liens are unresolved.6

Failure to file federal and state tax returns for 2010 and 2011 (SOR¶¶ 1.j- 1.k). Applicant admitted she failed to file his 2010 and 2011 federal and state income tax returns when they were due. However, it is unclear, based upon her income at the time ($20,000) if she was required to file. Since the Government failed to present evidence establishing that Applicant was required to file federal and state tax returns for those years, I find for Applicant on these allegations.7

Character Evidence.

Applicant presented documentation and a letter showing that she provided valuable assistance as a witness in a lawsuit brought by a former employer. Her integrity and work ethic were noted. She has been recognized for her volunteer work to local schools, community theatre, and charitable organizations.8

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are used in evaluating an applicant’s eligibility for access to classified information.

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 the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(a), the entire process is a conscientious scrutiny 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.

Under Directive ¶ E3.1.14, the Government must 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 applicant or proven by Department Counsel, and has the ultimate burden of persuasion to obtain a favorable security decision.”

A person who seeks access to classified information enters 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 access to classified information. Decisions include, by necessity, consideration of the possible risk that an 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.

Section 7 of EO 10865 provides that decisions shall be “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

AG ¶ 18 expresses the security concern for financial considerations:

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. Affluence that cannot be explained by known sources of income is also a security concern insofar as it may result from criminal activity, including espionage. The guideline notes several conditions that could raise security concerns. I have considered all of them under AG ¶ 19 and the following potentially apply:

(a) inability to satisfy debts;

(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 has delinquent debts and tax liens that remain unpaid. I find all the above disqualifying conditions are raised.

The guideline also includes conditions that could mitigate security concerns arising from financial difficulties. I have considered all of the mitigating conditions under AG ¶ 20 and the following potentially apply:

(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; 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 failed to show efforts toward resolving her debt and tax issues. This pattern shows a lack of reliability, trustworthiness, and good judgment. AG ¶ 20(a) is not applicable.

Applicant’s unemployment since 2010, to care for her mother and sister was a voluntary choice and not a condition beyond her control. AG ¶ 20(b) is not applicable. There is no evidence of Applicant receiving financial counseling. Applicant’s medical debts and federal and state tax liens remain unaddressed. Applicant’s financial problems are not under control. Evidence of good-faith efforts to pay or resolve her debts is lacking. AG ¶¶ 20(c) and 20(d) do not apply. She was given extra time to provide documentation that she was working on resolving her tax liens, but she failed to do so. AG ¶ 20(g) does not apply.

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 the 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.

Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a security clearance must be an overall commonsense judgment based upon careful consideration of the guideline and the whole-person concept.

I considered the potentially disqualifying and mitigating conditions in light of all relevant facts and circumstances surrounding this case. I have incorporated my comments under Guideline F in my whole-person analysis. Some of the factors in AG ¶ 2(d) were addressed under that guideline, but some warrant additional comment.

I considered Applicant’s extended unemployment, her family circumstances, her letter of support, and her community volunteer efforts. However, I also considered that her medical debts and tax liens remain unpaid. She has not established a meaningful track record of debt management.

Overall, the record evidence leaves me with questions and doubts about Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant has not mitigated the financial considerations security concerns.

FORMAL FINDINGS

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:

Paragraph 1, Guideline F: AGAINST APPLICANT

Subparagraphs: 1.a – 1.i: Against Applicant Subparagraphs: 1.j – 1.k: For 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 eligibility for a security clearance. Eligibility for access to classified information is denied.

________________________ Robert E. Coacher Administrative Judge

FOOTNOTES

1 I decided this case using the AG implemented by DOD on June 8, 2017. However, I also considered this case under the previous version of the AG implemented on September 1, 2006, and my conclusions are the same using either set of AG. 2 Tr. at 5, 24-25; GE 1. 3 Tr. at 33; GE 1-4. 4 Tr. at 42-43. 5 Tr. at 46; Ans.; GE 3-4; AE H. 6 Tr. at 29-30; GE 3-4; AE E. 7 Tr. at 33-34, 42. 8 AE A-B, F.