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ISCR Case 12-10209.h1 — CASE

ISCR Case 12-10209.h1granted

Case Headnote

ISCR Case No. 12-10209.h1

grantedFeb 18, 2016· Hon. Richard A. Cefola· hearing

Summary

A 52-year-old contractor with 28 years of experience was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The Statement of Reasons alleged that the applicant failed to file federal and state tax returns for the tax years 2010 through 2012, raising Disqualifying Condition F.19.g.

The applicant attributed these financial issues to personal losses, which were largely beyond his control. To mitigate these concerns, he took responsible steps by filing all overdue tax returns. This action resulted in the applicant receiving substantial refunds.

The judge applied Mitigating Conditions F.20.b and F.20.d, finding that the applicant's actions and the circumstances surrounding his financial difficulties sufficiently resolved the security concerns. Consequently, the security clearance was granted.

Why the Applicant Prevailed

The applicant's failure to file tax returns was attributed to personal losses, which were largely beyond his control.
The applicant took responsible steps to resolve his financial issues by filing overdue tax returns and receiving significant refunds.

Conditions Referenced

Disqualifying

F.19.graisedFailure to File Annual Federal, State . . . Income Tax Returns as Required

Mitigating

F.20.bappliedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control
F.20.dappliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts

Key Rule Quoted

“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.”

Procedural Posture

SOR issuedApr 24, 2015
Answer filedMay 26, 2015
Hearing held—Applicant represented himself
Decision dateFeb 18, 2016

Cite For

Mitigating Conditions Under Guideline F Related to Personal Circumstances Affecting Financial Issues
The Importance of the Whole-person Concept in Security Clearance Decisions
The Requirement for a Commonsense Judgment in Determining Eligibility for Security Clearance

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: granted

The judge found that the applicant had failed to file his federal and state tax returns for tax years 2009, 2010, and 2011, which raised security concerns under Guideline F. However, the applicant successfully mitigated these concerns by demonstrating that his failure to file was due to personal circumstances beyond his control and that he had since filed the returns and received substantial refunds.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant failed to file his federal and state tax returns for tax years 2010 thru 2012. $11,116	For Applicant	Tax Filing Failure	Denied	—	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Other
1.b	Applicant failed to file his federal and state tax returns for tax years 2010 thru 2012. $1,569	For Applicant	Tax Filing Failure	Denied	—	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Other

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. 12-10209 ) ) Applicant for Security Clearance )

For Government: Tara R. Karoian, Esquire, Department Counsel For Applicant: Pro se

February 18, 2016

______________

STATEMENT OF CASE

______________

CEFOLA, Richard A., Administrative Judge:

Applicant submitted his Electronic Questionnaires for Investigations Processing (e-QIP) on May 22, 2012. On April 24, 2015, the Department of Defense (DOD) issued a Statement of Reasons (SOR) detailing the security concerns under Guideline F for Applicant. The action was taken under Executive Order 10865, Safeguarding Classified Information Within Industry (February 20, 1960), as amended; Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG), effective within the Department of Defense after September 1, 2006.

Applicant answered the SOR in writing, with supporting documentation, on May 26, 2015, and requested an Administrative Determination by an administrative judge. Department Counsel issued a File of Relevant Material (FORM) on August 3, 2015. Applicant submitted nothing further in response to the FORM. The case was assigned to me on November 10, 2015. Based upon a review of the pleadings and exhibits, eligibility for access to classified information is granted.

FINDINGS OF FACT

In his Answer to the SOR, Applicant denied the factual allegations in the two Subparagraphs of the SOR.

Applicant is 52 years old, and has worked as a contractor for about 28 years. (Item 3 at pages 5 and 10.)

Guideline F - Financial Considerations

1.a. and 1.b. Applicant denies that he failed to file his federal and state tax returns “for tax years 2010 thru 2012.” (Item 2 at page 2.) The genesis of the Government’s allegations are Applicant’s May 2012 e-QIP, and his June 2012 OPM interview. (Items 3 and 4.) During his interview, Applicant [Subject] admitted the following to the investigator:

The Subject did not file his returns for those years [tax years 2009, 2010 and 2011] as he was distraught over the loss of his father and 2 close friends. The Subject has taken steps to have an accountant file his returns and the Subject will have all of the returns filed no later than 7/12. The Subject also indicated he has not paid his 2012 taxes . . . [as] the 2012 tax year has not ended [as the interview was conducted in June of 2012]. (Item 4 at page 1.)

In his answer to the SOR, Applicant has submitted documentation from his tax preparer showing that he has filed both his federal and state tax returns for tax years 2009, 2010 and 2011, albeit late, in 2012. (Item 2 at pages 3–5.) His tax refunds from the IRS total about $11,116. His tax refunds from the state taxing authority total about $1,569. (Id.)

POLICIES

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 for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are useful 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 over-arching adjudicative goal is a fair, impartial and commonsense decision. According to AG Paragraph 2(c), 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. Paragraph 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. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture.

Under Directive Paragraph E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive Paragraph E3.1.15, the 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 applicant 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 the Applicant may deliberately or inadvertently fail to protect or 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 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.” 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 the guideline for Financial Considerations is set out in Paragraph 18:

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.

The guideline notes a condition that could raise security concerns. Under Subparagraph 19(g) “failure to file annual Federal, state . . . income tax returns as required” may raise security concerns. Applicant failed to file three years of tax returns in a timely fashion. However, I find two countervailing Mitigating Conditions that are applicable here. Under Subparagraph 20 (b), it may be mitigating where “the conditions that resulted in the financial problem were largely beyond the person’s control (e.g. . . . a death . . .), and the individual acted responsibly under the circumstances.” Applicant’s failure to file tax returns is directly attributed to the loss of his father and two close friends. Under Subparagraph 20 (d), it may also be mitigating where “the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.” Applicant has filed his income tax returns, and has received substantial refunds.

Under the whole-person concept, the administrative judge must evaluate an applicant’s eligibility for a security clearance by considering the totality of Applicant’s conduct and all the circumstances. Under Paragraph 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.

The administrative judge should also consider the nine adjudicative process factors listed at AG Paragraph 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.

I considered all of the evidence, including the potentially disqualifying and mitigating conditions surrounding this case. The record evidence leaves me without questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For this reason, I conclude Applicant has mitigated the security concerns arising from his Financial Considerations, under the whole-person concept.

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: FOR APPLICANT

Subparagraph 1.a. For Applicant

Subparagraph 1.b. For Applicant

CONCLUSION

In light of all of the circumstances presented by the record in this case, it is clearly consistent with the national interest to grant Applicant eligibility for a security clearance. Eligibility for access to classified information is granted.

Richard A. Cefola Administrative Judge