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ISCR Case 10-07411.h1 — CASE

ISCR Case 10-07411.h1denied

Case Headnote

ISCR Case No. 10-07411.h1

deniedOct 25, 2011· Hon. Darlene Lokey Anderson· hearing

Summary

A 62-year-old ordained minister and Chaplain for a defense contractor was denied a security clearance under Guideline F, Financial Considerations. The denial stemmed from significant unpaid tax debts totaling $23,443.45 owed to the Internal Revenue Service, which the applicant admitted.

The Statement of Reasons cited the applicant's indebtedness as a disqualifying condition. While the applicant claimed his financial difficulties were due to external factors, specifically the economic downturn following 9/11, he failed to provide sufficient evidence to substantiate these claims or demonstrate a good faith effort to resolve the debts.

Ultimately, the judge concluded that the applicant's failure to address his financial obligations indicated poor judgment and unreliability, leading to the denial of his security clearance. Mitigating conditions were considered but did not overcome the security concerns.

Why the Applicant Was Denied

The applicant has significant unpaid tax debts totaling $23,443.45.
The applicant failed to demonstrate a good faith effort to resolve his financial obligations.
The applicant's claims of external factors affecting his finances were not substantiated with evidence.

Conditions Referenced

Disqualifying

19.(a)raisedInability or Unwillingness to Satisfy Debts
19.(c)raisedA History of Not Meeting Financial Obligations

Mitigating

20.(b)rejectedConditions Largely Beyond the Person's ControlThe applicant did not act responsibly under the circumstances.

Key Rule Quoted

“The adjudicative process is an examination of a sufficient period of a person’s life to make an affirmative determination that the person is an acceptable security risk.”
— Executive Order 10865

Procedural Posture

SOR issuedMay 2, 2011
Answer filedMay 18, 2011Applicant elected for a written record.
Hearing held—No hearing; case determined on written record.
Decision dateOct 25, 2011

Cite For

Financial Irresponsibility Under Guideline F
Lack of Good Faith Effort to Resolve Debts
Impact of External Economic Factors on Financial Obligations

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 has significant financial issues, specifically an unpaid tax debt of $23,443.45 owed to the Internal Revenue Service. The applicant's claims regarding the impact of external circumstances on his financial situation were not sufficient to mitigate the concerns raised, leading to a denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	The Applicant admits that he is indebted to the Internal Revenue Service for back taxes owed in the amount of $23,443.45. $23,443	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (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. 10-07411 ) ) Applicant for Security Clearance )

For Government: Paul M. Delaney, Department Counsel For Applicant: Pro se

October 25, 2011 ______________

STATEMENT OF CASE

______________

LOKEY ANDERSON, Darlene D., Administrative Judge:

Applicant submitted his Electronic Questionnaires for Investigations Processing (e-QIP) on July 6, 2010. (Government Exhibit 5.) On May 2, 2011, the Defense Office of Hearings and Appeals (DOHA), pursuant to Executive Order 10865 and Department of Defense Directive 5220.6 (Directive), dated January 2, 1992, (as amended), issued a Statement of Reasons (SOR) to the Applicant, which detailed reasons why DOHA could not make the preliminary affirmative finding under the Directive that it is clearly consistent with the national interest to grant or continue a security clearance for the Applicant and recommended referral to an Administrative Judge to determine whether clearance should be denied or revoked.

The Applicant responded to the SOR on May 18, 2011, in which he elected to have the case determined on a written record in lieu of a hearing. Department Counsel submitted the Government’s File of Relevant Material (FORM) to the Applicant on July 26, 2011. The Applicant was instructed to submit information in rebuttal, extenuation or mitigation within 30 days of receipt. Applicant received the FORM on August 5, 2011, and he submitted no reply. The case was assigned to the undersigned for resolution on October 5, 2011. Based upon a review of the case file, pleadings and exhibits, eligibility for access to classified information is denied.

FINDINGS OF FACT

The Applicant is 62 years old and is an ordained minister. He is employed as a Chaplain with a defense contractor and is seeking to obtain a security clearance in connection with his employment.

The Government opposes the Applicant's request for a security clearance, on the basis of allegations set forth in the Statement of Reasons (SOR). The following findings of fact are entered as to each paragraph and guideline in the SOR:

Paragraph 1 (Guideline F - Financial Considerations) The Government alleges that the Applicant is ineligible for clearance because he is financially overextended and at risk of having to engage in illegal acts to generate funds.

The Applicant admits that he is indebted to the Internal Revenue Service for back taxes owed in the amount of $23,443.45. Credit Reports of the Applicant dated October 29, 2010; and July 27, 2010, collectively reflect that the Applicant is indebted to this tax authority. (Government Exhibits 7 and 8.)

The Applicant claims that his home construction business was negatively impacted by the events of September 11, 2001. As a result of the terrorist attacks, the United States economy declined and home sales decreased. The Applicant’s construction business suffered greatly as illegal immigrants were taking jobs at lower wages than those legally employable. As a result, he was unable to pay all of his business debts and he could not find work.

He was unemployed and retired from about May 1998, worked part time as a Molder-Foundry from about April 2006 to May 2008, and then started working in his current position as a Chaplain in about November 2008, where he has worked full time since then. He claims that over the past ten years he has worked and slowly paid off the debt. In August 2003, a federal tax lien in the approximate amount of $23,443 was filed against the Applicant for unpaid taxes owed for tax years 1998, 1999 and 2000. He has not paid this delinquent tax debt. Instead, he argues that the statute of limitations is enforceable, as the debt has passed the ten years statutory enforcement period and he is no longer required by law to pay it. He cities Internal Revenue Service Code Section 6343 and Section 6502 to support his position.

POLICIES

Enclosure 2 of the Directive sets forth adjudication policies divided into "Disqualifying Factors" and "Mitigating Factors." The following Disqualifying Factors and Mitigating Factors are found to be applicable in this case:

Guideline F (Financial Considerations)

18. 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 and regulations, all of which can raise questions about an individual’s reliability, trustworthiness and ability to protect classified information. An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds.

Conditions that could raise a security concern:

19.(a) inability or unwillingness to satisfy debts; and,

19.(c) a history of not meeting financial obligations.

Conditions that could mitigate security concerns:

20.(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, or a death, divorce or separation), and the individual acted responsibly under the circumstances.

In addition, as set forth in Enclosure 2 of the Directive at pages 18-19, in evaluating the relevance of an individual’s conduct, the Administrative Judge should consider the following general factors:

a. The nature, extent, and seriousness of the conduct and surrounding circumstances;

b. The circumstances surrounding the conduct, to include knowledgeable participation;

c. The frequency and recency of the conduct;

d. The individual’s age and maturity at the time of the conduct;

e. The extent to which participation is voluntary;

f. The presence or absence of rehabilitation and other permanent behavior changes; g. The motivation for the conduct;

h. The potential for pressure, coercion, exploitation or duress; and

i. The likelihood of continuation or recurrence.

The eligibility criteria established in the DoD Directive identify personal characteristics and conduct which are reasonably related to the ultimate question, posed in Section 2 of Executive Order 10865, of whether it is “clearly consistent with the national interest” to grant an Applicant’s request for access to classified information.

The DoD Directive states, “The adjudicative process is an examination of a sufficient period of a person’s life to make an affirmative determination that the person is an acceptable security risk. Eligibility for access to classified information is predicated upon the individual meeting these personnel security guidelines. The adjudicative process is the careful weighing of a number of variables known as the whole-person concept. Available, reliable information about the person, past and present, favorable and unfavorable should be considered in reaching a determination.” The Administrative Judge can draw only those inferences or conclusions that have reasonable and logical basis in the evidence of record. The Judge cannot draw inferences or conclusions based on evidence which is speculative or conjectural in nature. Finally, as emphasized by President Eisenhower in Executive Order 10865, “Any determination under this order . . . 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.”

CONCLUSION

In the defense industry, the security of classified industrial secrets is entrusted to civilian workers who must be counted upon to safeguard such sensitive information twenty-four hours per day, seven days per week. The Government is therefore appropriately concerned when available information indicates that an Applicant for clearance may be involved in instances of financial irresponsibility, which demonstrates poor judgment or unreliability.

It is the Government’s responsibility to present substantial evidence to support the finding of a nexus, or rational connection, between the Applicant’s conduct and the holding of a security clearance. If such a case has been established, the burden then shifts to the Applicant to go forward with evidence in rebuttal, explanation or mitigation, which is sufficient to overcome or outweigh the Government’s case. The Applicant bears the ultimate burden of persuasion in proving that it is clearly consistent with the national interest to grant him or her a security clearance.

In this case the Government has met its initial burden of proving that the Applicant has been financially irresponsible (Guideline F). This evidence indicates poor judgment, unreliability and untrustworthiness on the part of the Applicant. Because of the scope and nature of the Applicant's conduct, I conclude there is a nexus or connection with his security clearance eligibility.

The Applicant argues that circumstances largely beyond the Applicant’s control, namely, the consequences of September 11, 2001, and its adverse effects on the economy, negatively effected his construction business. As a result the Applicant incurred tax debt that has remained unpaid and unresolved for many years, including years in which he was employed. He has not shown a good faith effort to resolve the debt with the IRS nor has he addressed it in any fashion. He has not shown that he has acted prudently or responsibly in managing his finances in order to pay the debt and has not shown a firm commitment and/or a financial plan in place to do so. Although he argues that the statute of limitations applies and he is no longer required by law to pay the debt, he provides no supporting documentation to substantiate this. Furthermore, even if Applicant’s contention is legally correct, this does not mitigate the fact that he has a federal debt to the IRS that has remained unpaid for over ten years.

Under the particular circumstances of this case, the Applicant has not made a good faith effort to resolve his past due indebtedness. He obviously does not understand the importance of demonstrating that he is financially responsible. Simply asserting a legal technicality that may relieve him from his legal obligation to pay the debt does not demonstrate that he can properly handle his financial affairs or that he is fiscally responsible. The evidentiary record in this matter is void as to mitigation. Considering all of the evidence, the Applicant has not introduced persuasive evidence in rebuttal, explanation or mitigation that is sufficient to overcome the Government's case.

Under Guideline F (Financial Considerations), Disqualifying Conditions 19.(a) inability or unwillingness to satisfy debts; and 19.(c) a history of not meeting financial obligations apply. Mitigating Condition 20.(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, or a death, divorce or separation), and the individual acted responsibly under the circumstances also applies, but is not controlling in this case. The Applicant remains indebted to the IRS for back taxes that he has not paid. Accordingly, I find against the Applicant under Guideline F (Financial Considerations).

I have also considered the “whole-person concept” in evaluating the Applicant’s eligibility for access to classified information. Under the particular facts of this case, the totality of the conduct set forth above, when viewed under all of the guidelines as a whole, support a whole-person assessment of poor judgement, untrustworthiness, unreliability, a lack of candor, and an unwillingness to comply with rules and regulations, and/or other characteristics indicating that the person may not properly safeguard classified information.

I have considered all of the evidence presented. It does not mitigate the negative effects of his financial indebtedness and the effects that it can have on his ability to safeguard classified information. On balance, it is concluded that the Applicant has failed to overcome the Government's case opposing his request for a security clearance. Accordingly, the evidence supports a finding against the Applicant as to the factual and conclusionary allegations expressed in Paragraph 1 of the SOR.

FORMAL FINDINGS

Formal findings For or Against the Applicant on the allegations in the SOR, as required by Paragraph 25 of Enclosure 3 of the Directive are:

Paragraph 1: Against the Applicant. Subpara. 1.a.: Against the Applicant.

DECISION

In light of all the circumstances presented by the record in this case, it is not clearly consistent with the national interest to grant or continue a security clearance for the Applicant.

Darlene Lokey Anderson Administrative Judge