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ISCR Case 14-05727.h1 — CASE

ISCR Case 14-05727.h1denied

Case Headnote

ISCR Case No. 14-05727.h1

deniedJul 5, 2017· Hon. Robert J. Kilmartin· hearing

Summary

A 61-year-old electronics technician with military service was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The Statement of Reasons cited a tax lien of approximately $8,000 owed to the IRS, a $3,265 judgment from Capital One Bank, and a collection account of approximately $3,573, also from Capital One Bank. Additionally, the applicant did not report any of these delinquent debts on his 2014 Security Clearance Application.

While the applicant successfully mitigated concerns related to personal conduct, demonstrating no intent to deceive regarding the tax lien, he failed to resolve the outstanding financial obligations. Disqualifying conditions under Guideline F were raised, including a history of not meeting financial obligations and an inability or unwillingness to satisfy debts.

Despite the application of mitigating conditions, the applicant did not provide evidence of resolving his delinquent debts, which were confirmed by his credit report and interview. Consequently, the security clearance was denied.

Why the Applicant Prevailed

The applicant demonstrated no specific intent to deceive regarding the tax lien, as he had already begun making payments to the IRS before completing his Security Clearance Application.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(b)raisedUnwillingness to Satisfy Debts
AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations
AG ¶ 19(f)raisedFailure to File or Pay Taxes

Mitigating

AG ¶ 20(a)rejectedBehavior Occurred Long Ago or InfrequentlyThe applicant's financial issues remain unresolved.
AG ¶ 20(b)rejectedConditions Largely Beyond ControlThe applicant did not demonstrate responsible actions to address his debts.
AG ¶ 20(d)rejectedGood-faith Effort to Repay DebtsThe applicant provided no documentation of efforts to resolve his debts.
AG ¶ 20(g)rejectedArrangements with Tax AuthorityThe applicant did not provide evidence of compliance with tax obligations.

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 issuedDec 5, 2014
Answer filed—Applicant elected to have the case decided on the written record.
Hearing held—No hearing; decided on written record.
Decision dateJul 5, 2017

Cite For

Mitigation of Personal Conduct Concerns Under Guideline E
Failure to Resolve Financial Obligations Under Guideline F
Burden of Proof on Applicant to Demonstrate Financial Responsibility

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 E (Personal Conduct) · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found that the applicant mitigated the personal conduct concerns under Guideline E. Specifically, the applicant was not found to have deliberately falsified information on his security clearance application regarding a tax lien, as he disclosed it to the investigator prior to being confronted with it. Therefore, the judge ruled in favor of the applicant on the personal conduct allegation.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	Applicant reported none of his alleged delinquent debts in section 26 of his 2014 Security Clearance Application (SCA).	For Applicant	Omission or Failure to DiscloseNOT DELIBERATESELF-CORRECTED	Financial	Denied	—	(b) omission/refusal followed advice of counsel; later cooperated fully	Credited Corrected Falsification Promptly

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

Standardized Decision Profile

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

Posture: Decision on RecordDecided: denied

The judge found that the applicant did not mitigate the financial concerns under Guideline F, which included a tax lien and two accounts in collections. As a result, the applicant's eligibility for access to classified information was denied.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant has a tax lien in the amount of approximately $8,000 owed to the IRS. $8,000	Against Applicant	Tax Unpaid	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations (f) failure to file / fraudulent filing of tax returns or unpaid tax	—	—
1.b	Applicant has a judgment against him in the amount of $3,265 from Capital One Bank. $3,265	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.c	Applicant has a collection account in the approximate amount of $3,573 from Capital One Bank. $3,573	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—

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. 14-05727 ) Applicant for Security Clearance )

For Government: Tovah Minster, Esq., Department Counsel For Applicant: Pro se

______________ 07/05/2017

STATEMENT OF CASE

______________

KILMARTIN, Robert J., Administrative Judge:

Applicant did not mitigate the security concerns under Guideline F, financial considerations. He did mitigate the security concerns under Guideline E, personal conduct. Applicant’s eligibility for access to classified information is denied.

Statement of the Case

On December 5, 2014, the Department of Defense (DOD) issued Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F, financial considerations and Guideline E, personal conduct. Applicant timely answered the SOR and elected to have his case decided on the written record.

Department Counsel submitted the Government’s file of relevant material (FORM) on August 21, 2015. Applicant received the FORM on August 31, 2015, and had 30 days to file objections and submit material in refutation, extenuation, or mitigation. Applicant did not object to the Government’s evidence, and he provided no response to the FORM. The Government’s evidence, identified as Items 1 through 5, is admitted into evidence without objection. The case was assigned to me on June 1, 2017. Findings of Fact1

Applicant is 61 years old. Applicant has been employed as an electronics technician by a federal contractor since April 2011. He served honorably in the U.S. Navy from 1974 to 1978, then again from 1984 to 2000. He had a previous security clearance in the Navy. Applicant has been married since 1984 and has three adult children. Applicant reports periods of unemployment from October 2009 to April 2011, and August 2006 to May 2008, while he was a student. Applicant reported none of his alleged delinquent debts in section 26 of his 2014 Security Clearance Application (SCA).2

In his Answer to the SOR, Applicant denied the three delinquent debts alleged in the SOR, including the tax lien at SOR ¶ 1.a and the judgment and collections account by the same creditor bank alleged in SOR ¶¶ 1.band 1.c. He also denied the allegation in SOR ¶ 2.a stating “I would never intentionally mislead or knowingly lie about information on the SF-86.”3 Applicant did disclose the tax lien alleged at SOR ¶ 1.a to the Office of Personnel Management (OPM) investigator who conducted Applicant’s clearance interview on February 24, 2014, prior to being confronted with it.4

In his clearance interview, Applicant explained that he did not list the tax lien in SOR ¶ 1.a in his SCA section 26, because he had already started making payments to the IRS on this tax lien, when he completed the SCA in January 2014. Therefore, he didn’t perceive a need to disclose it. I find Applicant’s explanations to be persuasive and conclude that he had no specific intent to deceive. Thus, he has mitigated the concern in SOR ¶ 2.a.

SOR ¶¶ 1.band 1.cboth concern Capital One Bank. This bank obtained a judgment against Applicant in the amount of $3,265, and a different Capital One account number had been placed for collection in the approximate amount of $3,573. In his answer to the SOR, Applicant claims that he did not open these accounts and he has no record of these accounts. Further, he stated “I am working to get these removed from my credit through Transunion.”5 Yet, he has produced no evidence that he followed through. In his clearance interview of February 2014, Applicant stated that in the past his wife had opened credit card accounts without his knowledge.6 He also stated that he was not sure if the delinquent debts owed to Capital One were his, but if they were, he would make arrangements to pay them off. Applicant also averred that his financial problems were due to his unemployment from October 2009 to April 2011, which was caused by personal-family issues requiring him to take time off. He estimated that he owed approximately $8,000 in back taxes for tax year 2010, and he has been paying $100 per month to the IRS for three years now to resolve this.7 Also, his income tax refunds for tax years 2011 and 2012 were supposedly applied to this $8,000 tax delinquency. Applicant provided no documents or evidence to support these contentions with his answer to the SOR, and he did not respond to the FORM. SOR ¶¶ 1.a to 1.care not resolved.

POLICIES

This 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 adjudicative guidelines promulgated in Security Executive Agent Directive 4 (SEAD 4), effective within the DOD on June 8, 2017.8

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines (AG). In addition to brief introductory explanations, 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 adjudicative process is an examination of a sufficient period and a careful weighing of a number of variables of an individual’s life to make an affirmative determination that the individual is an acceptable security risk. This is 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. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture.

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 as to obtaining 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 as to 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

The security concern relating to financial considerations is set out in AG ¶18:

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 abuse, 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.

This concern is broader than the possibility that an individual might knowingly compromise classified information in order to raise money. It encompasses concerns about an individual’s self-control, judgment, and other qualities essential to protecting classified information. An individual who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information.

AG ¶ 19 provides conditions that could raise security concerns. The following apply here:

(a) inability to satisfy debts;

(b) unwillingness to satisfy debts regardless of the ability to do so;

(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’s delinquent debts alleged in the SOR are confirmed by his credit report, answers to interrogatories, and his clearance interview of February 2014. The Government produced substantial evidence to support the disqualifying conditions in AG ¶¶ 19(a), 19(b), 19(c) and 19(f), thereby shifting the burden to Applicant to produce evidence to rebut, explain, extenuate, or mitigate the facts.9 Applicant has not met that burden. None of the delinquent debts have been resolved.

The guideline also includes conditions that could mitigate security concerns arising from financial difficulties. The following mitigating conditions under AG ¶ 20 are potentially applicable:

(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 …, 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 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 arrangement with the appropriate tax authority to file or pay the amount owed and is in compliance with those arrangements.

Applicant endured periods of unemployment or underemployment. Arguably, these conditions were beyond his control. He has produced no documentation showing efforts to address his delinquencies, either with his Answer to the SOR or in response to the FORM. He has not demonstrated that he acted responsibly under the circumstances. Applicant has the burden to provide sufficient evidence to show that his financial problems are under control, and that his debts were incurred under circumstances making them unlikely to recur. The mitigating conditions enumerated above do not apply.

Guideline E, Personal Conduct

The security concern for personal conduct is set out in AG ¶ 15, as follows:

Conduct involving questionable judgment, lack of candor, dishonesty, or unwillingness to comply with rules and regulations can raise questions about an individual’s reliability, trustworthiness and ability to protect classified or sensitive information. Of special interest is any failure to cooperate or provide truthful and candid answers during national security investigative or adjudicative processes….

AG ¶ 16 describes conditions that could raise a security concern and may be disqualifying. The following disqualifying conditions are potentially applicable:

(a) deliberate omission, concealment or falsification of relevant facts from any personnel security questionnaire, personal history statement or similar form used to conduct investigations, determine employment qualifications, award benefits or status, determine security clearance eligibility or trustworthiness, or award fiduciary responsibilities; and

(b) deliberately providing false or misleading information; or concealing or omitting information, concerning relevant facts to an employer, investigator, security official, competent medical or mental health professional involved in making a recommendation relevant to a national security eligibility determination, or other official government representative.

Since Applicant denied any intent to provide false information as alleged at SOR ¶ 2.a, his intent is an issue. Under ¶ E3.1.14 of DOD Directive 5220.6, the Government is responsible for presenting witnesses and evidence on facts alleged in the SOR that have been controverted. Intent can be inferred or determined from the circumstances. Applicant had been making payments to the IRS already on the tax lien, when he answered section 26 of his SCA, and he fully disclosed it to the OPM investigator prior to being confronted with it. He was not trying to hide the tax lien or deceive the government. I conclude that he did not have the specific intent to deceive when he provided this wrong answer in section 26, and he did not deliberately falsify the SCA. SOR ¶ 2.a has been mitigated.

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 guidelines and the whole-person concept.

I considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. I have incorporated my comments under Guideline E and Guideline F in my whole-person analysis. Some of the factors in AG ¶ 2(d) were addressed under those guidelines.

Applicant’s finances remain a security concern. There is insufficient evidence to conclude that Applicant’s financial problems are under control. He has not met his burden of persuasion. The record evidence leaves me with serious questions and doubts as to Applicant’s suitability for a security clearance. For all these reasons, I conclude Applicant has not mitigated the security concerns arising under Guideline F, financial considerations, but he has mitigated the concerns under Guideline E, personal conduct.

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 to 1.c: Against Applicant

Paragraph 2, Guideline E: FOR APPLICANT

Subparagraph 2.a: For Applicant

CONCLUSION

In light of all of the circumstances presented by the record in this case, it is not clearly consistent with the interests of national security to grant Applicant a security clearance. Eligibility for access to classified information is denied.

________________________ Robert J. Kilmartin Administrative Judge

FOOTNOTES

1 Unless stated otherwise, the source of the information in this section is Applicant’s January 2, 2014 Security Clearance Application (SCA). (Item 3) 2 Item 3. 3 Item 2. 4 Item 4, p.11. 5 Item 2. 6 Item 4, Answers to Interrogatories verifying subject interview of February 24, 2014 at p.3. 7 Item 4. 8 Although I have decided this case under the adjudicative guidelines (AG) effective June 8, 2017, I also considered the case under the former AG effective September 1, 2006, and my decision would be the same under either AG. 9 Directive ¶ E3.1.15. See ISCR Case No. 02-31154 at 5 (App. Bd. Sep 22, 2005) (An applicant has the burden of proving a mitigating condition, and the burden of disproving it never shifts to the Government).