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ISCR Case 14-03342.h1 — CASE

ISCR Case 14-03342.h1denied

Case Headnote

ISCR Case No. 14-03342.h1

deniedJun 15, 2015· Hon. Noreen A. Lynch· hearing

Summary

A 44-year-old single male with a technical degree was denied a security clearance under Guideline F (Financial Considerations) due to significant and unresolved financial issues. The Statement of Reasons cited five delinquent debts totaling approximately $21,150, along with a failure to file federal and state tax returns for 2009, 2010, and 2011, and a state tax return for 2012. These conditions raised disqualifying concerns under Adjudicative Guidelines paragraphs 19(a), 19(c), and 19(g).

The applicant admitted to these financial difficulties, attributing them to financial and health hardships. However, the denial was based on his failure to provide evidence of responsible actions or a concrete plan to address his outstanding debts and unfiled tax returns.

Specifically, the applicant did not demonstrate any payments made towards his debts or any progress in filing the missing tax returns. The recency and unresolved nature of these financial difficulties indicated a lack of responsible action, leading to the conclusion that the applicant had not mitigated the government's security concerns.

Why the Applicant Was Denied

The applicant admitted to having multiple delinquent debts and failing to file tax returns for several years.
The applicant did not provide evidence of any payments made towards his debts or tax filings.
The applicant's financial difficulties were recent and unresolved, indicating a lack of responsible action.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
AG ¶ 19(g)raisedFailure to File Annual Federal, State, or Local Income Tax Returns as Required

Key Rule Quoted

“Any doubt concerning personnel being considered for access to classified information will be resolved in favor of national security.”

Procedural Posture

SOR issuedJul 30, 2014
Answer filed—Timely response requested review based on written record.
Hearing held—No hearing; review based on written record.
Decision dateJun 15, 2015

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Importance of Providing Evidence of Responsible Financial Behavior
Impact of Unresolved Debts on Security Clearance Eligibility

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 that the applicant had multiple delinquent debts totaling approximately $21,150 and failed to file federal and state tax returns for several years. The applicant's financial difficulties were deemed unresolved, leading to a decision against the applicant under Guideline F.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Delinquent debts totaling approximately $21,150. $21,150	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Failed to file Federal and state tax returns for tax years 2009, 2010, and 2011.	Against Applicant	Tax Filing Failure	Admitted	(g) unexplained affluence	—	—
1.c	Failed to file state tax return for tax year 2012.	Against Applicant	Tax Filing Failure	Admitted	(g) unexplained affluence	—	—
1.d–1.i	6 sub-charges — specific text not stated in this decision (against the applicant). (low confidence)	Against Applicant			—	—	—

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. 14-03342 ) ) Applicant for Security Clearance )

For Government: Pamela Benson, Esq., Department Counsel For Applicant: Pro se

06/15/2015 ______________

STATEMENT OF CASE

______________

LYNCH, Noreen A., Administrative Judge:

On July 30, 2014, the Department of Defense (DOD) issued a Statement of Reasons (SOR) listing security concerns arising under Guideline F (Financial Considerations). The action was taken under Executive Order 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; Department of Defense (DoD) Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG), implemented in September 2006.

Applicant timely answered the SOR and requested a review based on the written record in lieu of a hearing. The case was assigned to me on May 28, 2015. Department Counsel submitted a File of Relevant Material (FORM), dated February 19, 2015 . Applicant received the FORM on April 9, 2015. Applicant did not submit any information in response to the FORM. Based on a review of the case file, eligibility for access to classified information is denied.

FINDINGS OF FACT

In his answer to the SOR, Applicant admitted all SOR allegations under Guideline F (financial considerations). (Item 1)

Applicant is 44 years old. He received his GED in 1999. He obtained a technical degree in 1994. Applicant is single and has no children. He has been employed with his current employer since October 2013. (Item 3) This is Applicant’s first request for a security clearance. (Item 3)

The SOR alleges five delinquent debts, including , medical accounts and credit accounts. He also failed to file his Federal and state tax returns for tax years 2009, 2010, and 2011. He failed to file his state tax return for tax year 2012. (Item 5) The delinquent debts total approximately $21,150. He has an estimated Federal tax debt of about $6,000.

Applicant admits that the delinquent debts listed in the SOR and the failure to file Federal and state tax returns for the years mentioned are the result of financial and health hardship. He was unemployed from April 2009 until May 2013. He received help from his parents with whom he has lived since 2008. (Item 2) Applicant also received unemployment compensation. Applicant was diagnosed with a medical condition and took six months leave from work. He did not elaborate or explain these issues with any details.

In his 2013 investigative interview, Applicant stated that he did not file his Federal or state tax returns in 2009, 2010, 2011, and 2012, because he knew he would not have the money to pay the tax bill. He stated that he would start paying his taxes when he had employment. He noted that his current financial situation is not good and for this reason he lives with his parents. He used his money to pay his medical insurance. (Item 2)

Applicant disclosed in his 2013 security clearance application that he would start paying his bills and file taxes when he became employed. He noted that it was a lack of income that prevented him from addressing his financial issues.

Applicant did not provide any information or present any evidence in response to the FORM. It is not possible to know if he has paid any accounts or has established a plan. He promised to pay his delinquent debts, but he did not provide any documentation.

POLICIES

When evaluating an applicant’s suitability for a security clearance, an administrative judge must consider the adjudicative guidelines (AG). In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, they are applied in conjunction with the factors listed in the adjudicative process. An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. Under AG ¶ 2(c), this process is a conscientious scrutiny of a number of variables known as the “whole-person concept.” An 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 access to classified information will be resolved in favor of 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.

The U.S. Government must present evidence to establish controverted facts alleged in the SOR. 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. . . .” The burden of proof is something less than a preponderance of evidence. The ultimate burden of persuasion is on the applicant.

A person seeking access to classified information enters into a fiduciary relationship with the Government based on 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 the applicant may deliberately or inadvertently fail to protect classified information. Such decisions entail a certain degree of legally permissible extrapolation of potential, rather than actual, risk of compromise of classified information.

Section 7 of Executive Order 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.” “The clearly consistent standard indicates that security clearance determinations should err, if they must, on the side of denials.” Any reasonable doubt about whether an applicant should be allowed access to sensitive information must be resolved in favor of protecting such information. The decision to deny an individual a security clearance does not necessarily reflect badly on an applicant’s character. It is merely an indication that the applicant has not met the strict guidelines the President and the Secretary of Defense established for issuing a clearance.

ANALYSIS

Guideline F, Financial Considerations

The security concern for Financial Considerations is set out in AG ¶ 18:

Failure or an 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 and regulations, all of which can raise questions about an individual’s reliability, trustworthiness and ability to protect classified information.” It also states that “an individual who is financially overextended is at risk of having to engage in illegal acts to generate funds.

Applicant admitted that he had delinquent debts and did not file his taxes for a number of years. His 2015 credit report confirms the debts. Consequently, Financial Considerations Disqualifying Conditions (FC DC) AG ¶ 19(a) (inability or unwillingness to satisfy debts), and FC DC AG ¶ 19(c) (a history of not meeting financial obligations) apply. FC DC 19(g) (failure to file annual Federal, state, or local income tax returns as required or the fraudulent filing of the same) is also applicable. With such conditions raised, it is left to Applicant to overcome the case against him and mitigate security concerns.

The nature, frequency, and relative recency of Applicant’s financial difficulties make it difficult to conclude that it occurred “so long ago.” Applicant still has unresolved debts and has not provided proof of filing any tax returns. Consequently, Financial Considerations Mitigating Condition (FC MC) AG ¶ 20(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) does not apply.

Financial Considerations Mitigating Condition (FC MC) AG ¶ 20(b) (the conditions that resulted in the behavior were largely beyond the person’s control (e.g., loss of employment, a business downturn, unexpected medical emergency, or a death, divorce or separation) and the individual acted responsibly under the circumstances) does not apply. Applicant has given reasons for his delinquent debts. His unemployment and medical condition were beyond his control. However, he presented no evidence that he has acted responsibly. He has been working since 2013. He states that he intends to pay his delinquent accounts, but he did not provide any corroborating evidence. He has not acted responsibly.

FC MC AG ¶ 20(d), (the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts) has no application. FC MC AG ¶ 20(c) (the person has received or is receiving counseling for the problem and/or there are clear indications that the problem is being resolved, or is under control) 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 an applicant’s conduct and all the circumstances. The administrative judge should consider the nine adjudicative process factors listed at AG ¶ 2(a):

(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 guidelines and the whole-person concept. As noted above, the ultimate burden of persuasion is on the applicant seeking a security clearance.

I considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case, as well as the whole-person factors. Applicant is a young man who has worked for a number of years. He is single and has no children. The record does not provide any details about his duty performance.

Applicant has not provided information concerning payment of his delinquent debts. He promised to pay when he was gainfully employed. He has not provided evidence of any payments or filing of taxes to supplement the record.

Applicant did not persuade me that he refuted or mitigated the Government’s case concerning the financial considerations security concerns. Any doubts must be resolved in the Government’s favor.

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

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 a security clearance. Clearance is denied.

NOREEN A. LYNCH. Administrative Judge

FOOTNOTES

The Government submitted five items for the record. See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995). Department of the Navy v. Egan, 484 U.S. 518, 531 (1988). ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995). See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information), and EO 10865 § 7. ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995). Id.