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ISCR Case 12-08814.h1 — CASE

ISCR Case 12-08814.h1denied

Case Headnote

ISCR Case No. 12-08814.h1

deniedSep 30, 2015· Hon. Robert J. Tuidar· hearing

Summary

A 58-year-old unemployed shipfitter was denied a security clearance under Guideline F (Financial Considerations) due to multiple outstanding tax liens. The Statement of Reasons detailed four specific liens: two state tax liens filed in 2013 for $26,444 and $19,279, respectively, and two federal tax liens for $51,311 (filed in 2011) and $8,542 (filed in 2013).

The applicant admitted to all allegations. While he had resolved some state tax issues, he failed to provide evidence of sufficient efforts to address his federal tax debts. The decision cited Disqualifying Conditions AG ¶ 19(a) and AG ¶ 19(c).

Ultimately, the applicant did not submit enough information or documentation to mitigate the financial security concerns raised by the outstanding tax obligations. Consequently, his security clearance application was denied.

Why the Applicant Was Denied

Applicant admitted to all allegations in the SOR, including multiple tax liens.
He failed to provide evidence of efforts to resolve his federal tax debts.
The applicant did not submit sufficient information or documentation to mitigate the financial security concerns.

Conditions Referenced

Disqualifying

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

Key Rule Quoted

“The concept of a meaningful track record necessarily includes evidence of actual debt reduction through payment of debts.”
— ISCR Case No. 03-02374 at 4 (App. Bd. Jan. 26, 2006)

Procedural Posture

SOR issuedFeb 18, 2015
Answer filedMar 9, 2015Applicant elected to have the case decided on the written record.
Hearing held—No hearing; decided on the written record.
Decision dateSep 30, 2015

Cite For

Failure to Mitigate Financial Obligations Under Guideline F
Importance of Demonstrating a Plan for Debt Resolution
Impact of Financial Issues 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 failed to mitigate security concerns related to financial considerations, specifically regarding delinquent federal tax obligations. While the applicant had resolved some state tax liens, he did not provide sufficient evidence to demonstrate a credible plan for addressing his federal tax debts, leading to a denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	a state tax lien in the amount of $26,444 filed in June 2013 $26,444	For Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	a state tax lien in the amount of $19,279 filed in November 2013 $19,279	For Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	a federal tax lien in the amount of $51,311 filed in October 2011 $51,311	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	a federal tax lien in the amount of $8,542 filed in December 2013 $8,542	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: ) ) XXXXXXXXXX, XXXXX ) ISCR Case No. 12-08814 ) Applicant for Security Clearance )

For Government: Alison O’Connell, Esq., Department Counsel For Applicant: Pro se

09/30/2015 __________

STATEMENT OF CASE

__________

TUIDER, Robert J., Administrative Judge:

Applicant failed to mitigate security concerns regarding Guideline F (financial considerations). Clearance is denied.

Statement of the Case

On February 2, 2012, Applicant submitted a Questionnaire for National Security Positions (SF 86). On February 18, 2015, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued a Statement of Reasons (SOR) to Applicant, pursuant to Executive Order 10865, Safeguarding Classified Information within Industry, dated February 20, 1960, as amended; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive), dated January 2, 1992, as amended; and the adjudicative guidelines (AG), which became effective on September 1, 2006.

The SOR alleged security concerns under Guideline F. The SOR detailed reasons why DOD was unable to find that it is clearly consistent with the national interest to continue a security clearance for Applicant, and referred his case to an administrative judge for a determination whether his clearance should be granted or denied.

Applicant answered the SOR on March 9, 2015, and elected to have his case decided on the written record in lieu of a hearing. A complete copy of the file of relevant material (FORM), dated June 4, 2015, was provided to him by letter dated June 19, 2015. Applicant received the FORM on July 6, 2015. He was afforded a period of 30 days to file objections and submit material in refutation, extenuation, or mitigation. Applicant did not provide additional information within the allotted period of 30 days after receipt of a copy of the FORM. On September 1, 2015, DOHA assigned the case to me.

FINDINGS OF FACT

In his answer to the SOR, Applicant admitted all of the allegations. His admissions are incorporated in my findings of fact.

Background Information

Applicant was a 58-year-old unemployed shipfitter, who was seeking employment with a defense contractor at the time he completed his SF-86. He seeks a security clearance as a condition of employment. (Item 5, Item 8)

Applicant was awarded a GED in June 1974. (Item 5) He attended a community college in “the 70s”, but did not complete any courses. (Item 8) Applicant was previously married from February 1977 to July 1995, and that marriage ended by divorce. He has one adult daughter. Applicant did not serve in the armed forces. (Item 5)

Financial Considerations

Applicant’s SOR contains four separate allegations: (1) a state tax lien in the amount of $26,444 filed in June 2013; (2) a state tax lien in the amount of $19,279 filed in November 2013; (3) a federal tax lien in the amount of $51,311 filed in October 2011; and (4) a federal tax lien in the amount of $8,542 filed in December 2013. (SOR ¶¶ 1.a - 1.d)

There is substantial evidence to support the SOR allegations through Applicant’s admissions and credit reports dated September 23, 2014, and February 22, 2012. (Item 4, Item 6, Item 7) In his SF 86, Applicant disclosed that he had failed to pay his federal and state taxes for year 2005 because he was self-employed and could not afford to pay. (Item 5) In an April 2012 Office of Personnel Management Personal Subject Interview (OPM PSI), Applicant admitted that he had not filed federal or state tax returns for tax years 2005 to 2009. He stated that he was unable to pay his taxes for those years due to lack of funds or poor bookkeeping. (Item 8) His failure to pay his taxes resulted in state and federal tax liens as alleged.

Applicant submitted documentation showing that his $26,440 state tax lien was released in December 2014 and his $19,279 state tax was released February 2015. (Item 4) In his SOR answer, he stated that he is working on his federal tax liens, but did not provide any information detailing any efforts he has made to address these liens. (Item 4)

POLICIES

The U.S. Supreme Court has recognized the substantial discretion of the Executive Branch in regulating access to information pertaining to national security emphasizing, “no one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). 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. The President has authorized the Secretary of Defense or his designee to grant applicant’s eligibility for access to classified information “only 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 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 Executive Order 12968 (Aug. 2, 1995), § 3.1. Thus, nothing in this Decision should be construed to suggest that I have based this decision, in whole or in part, on any express or implied determination about applicant’s allegiance, loyalty, or patriotism. It is merely an indication the applicant has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance.

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 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).

ANALYSIS

Financial Considerations

AG ¶ 18 articulates the security concern relating to financial problems:

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.

AG ¶ 19 provides two disqualifying conditions that could raise a security concern and may be disqualifying in this case: “(a) inability or unwillingness to satisfy debts;” and “(c) a history of not meeting financial obligations.”

The evidence establishes the disqualifying conditions in AG ¶¶ 19(a) and 19(c), requiring additional inquiry about the possible applicability of mitigating conditions.

Five 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 (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; (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;

(d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts; and

(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.

Considering the record evidence as a whole,1 I conclude none of the five financial considerations mitigating conditions above are applicable or partially applicable to explain, extenuate, or mitigate the security concern related to his delinquent federal tax obligation. The available information shows that Applicant has resolved his state tax liability, but failed to document that he has resolved his delinquent federal tax debts.

With that said, a security clearance case is not aimed at collecting debts or enforcing tax laws.2 Rather the purpose is to evaluate an applicant’s judgment, reliability, and trustworthiness consistent with the security guidelines in the Directive. In evaluating Guideline F cases, the Appeal Board has established the following standard:

The Board has previously noted that the concept of a meaningful track record necessarily includes evidence of actual debt reduction through payment of debts. However, an applicant is not required, as a matter of law, to establish that he has paid off each and every debt listed in the SOR. All that is required is that an applicant demonstrate that he has established a plan to resolve his financial problems and taken significant actions to implement that plan. The Judge can reasonably consider the entirety of an applicant’s financial situation and his actions in evaluating the extent to which that applicant’s plan for the reduction of his outstanding indebtedness is credible and realistic. There is no requirement that a plan provide for payments on all outstanding debts simultaneously. Rather, a reasonable plan (and concomitant conduct) may provide for the payments of such debts one at a time. Likewise, there is no requirement that the first debts actually paid in furtherance of a reasonable debt plan be the ones listed in the SOR.3 In requesting an administrative determination, Applicant chose to rely on the written record. In so doing, however, he failed to submit sufficient information or evidence to supplement the record with relevant and material facts regarding his circumstances, articulate his position, and mitigate the financial security concerns. He failed to offer evidence of financial counseling or provide documentation regarding his past efforts to address his delinquent debt. By failing to provide such information, and in relying on a scant paragraph of explanation, financial considerations security concerns remain.

After weighing the relevant disqualifying and mitigating conditions and evaluating the evidence in light of the whole-person concept,4 I conclude Applicant did not present sufficient evidence to explain, extenuate, and mitigate the Guideline F security concern. Accordingly, Applicant has not met his ultimate burden of persuasion to show that it is clearly consistent with the national interest to grant him eligibility for access to classified information.

FORMAL FINDINGS

The formal findings on the SOR are as follows:

Paragraph 1, Guideline F: AGAINST APPLICANT

Subparagraphs 1.a – 1.b: For Applicant Subparagraphs 1.c – 1.d: Against Applicant

CONCLUSION

In light of all of the record as a whole, it is not clearly consistent with the national interest to grant Applicant eligibility for a security clearance. Clearance is denied.

_________________ ROBERT J. TUIDER Administrative Judge

FOOTNOTES

1 See ISCR Case No. 03-02374 at 4 (App. Bd. Jan. 26, 2006) (citing ISCR Case No. 02-22173 at 4 (App. Bd. May 26, 2004)). When making a recency analysis for AG ¶ 20(a), all debts are considered as a whole. 2 ISCR Case No. 09-02160 (App. Bd. Jun. 21, 2010). 3 ISCR Case No. 07-06482 at 3 (App. Bd. May 21, 2008) (citations and quotations omitted). 4 AG ¶ 2(a) (1)-(9).