CASE · Clearance Adjudication Search EngineCASE

Loading case…

ISCR Case 12-10507.h1 — CASE

ISCR Case 12-10507.h1granted

Case Headnote

ISCR Case No. 12-10507.h1

grantedMar 30, 2016· Hon. Richard A. Cefola· hearing

Summary

This case concerns a 49-year-old federal contractor employee whose security clearance was initially questioned under Guideline F (Financial Considerations) due to several financial issues. The Statement of Reasons cited his failure to file federal and state income tax returns for the tax years 2006, 2007, 2008, and 2009. Additionally, he was indebted to a creditor for an auto loan of approximately $21,000.

The applicant successfully demonstrated that his financial difficulties were largely attributable to circumstances beyond his control, specifically his wife's health problems. He took proactive steps to resolve these issues, including engaging a CPA to assist with filing his delinquent tax returns.

As a result of these efforts, the applicant is now current with all tax obligations and has resolved his previously delinquent car loan. The judge found that he made good-faith efforts to rectify his financial situation, mitigating the initial concerns. Consequently, the applicant's security clearance was granted.

Why the Applicant Prevailed

Applicant demonstrated a good-faith effort to file delinquent tax returns with the help of a CPA.
Applicant is now current with all tax obligations and debts, including a previously delinquent car loan.
Financial difficulties were largely attributed to circumstances beyond the applicant's control, specifically his wife's health issues.

Conditions Referenced

Disqualifying

F.19.araisedInability or Unwillingness to Satisfy Debts
F.19.craisedHistory of Not Meeting Financial Obligations
F.19.graisedFailure to File Annual Federal, State . . . Income Tax Returns as Required

Mitigating

F.20.bappliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control
F.20.dappliedIndividual 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 issuedMay 30, 2015
Answer filedJun 19, 2015
Hearing held—Applicant represented himself.
Decision dateMar 30, 2016

Cite For

Mitigating Conditions Under Guideline F Related to Financial Difficulties Due to Circumstances Beyond Control
Good-faith Efforts to Resolve Financial Obligations
Whole-person Concept in Security Clearance Determinations

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 financial concerns related to failing to file income tax returns and a disputed auto loan. However, the applicant demonstrated good-faith efforts to resolve these issues, leading to a decision in favor of granting the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	failed to file his Federal and state income tax returns for tax years 2006, 2007, 2008 and 2009	For Applicant	Tax Filing Failure	Admitted	(g) unexplained affluence	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full Documented Financial Counseling
1.b	failed to file his Federal and state income tax returns for tax years 2006, 2007, 2008 and 2009	For Applicant	Tax Filing Failure	Admitted	(g) unexplained affluence	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full Documented Financial Counseling
1.c	indebted to Creditor C for an auto in the amount of about $21,000 $21,000	For Applicant	Auto Loan Debt	Denied	—	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full

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. 12-10507 ) ) Applicant for Security Clearance )

For Government: Eric Borgstrom, Esquire, Department Counsel For Applicant: Pro se

March 30, 2016

______________

STATEMENT OF CASE

______________

CEFOLA, Richard A., Administrative Judge:

Applicant submitted his Electronic Questionnaires for Investigations Processing (e-QIP) on April 19, 2012. On May 30, 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 on June 19, 2015, and requested an Administrative Determination by an administrative judge. Department Counsel issued a File of Relevant Material (FORM) on October 14, 2015. Applicant responded to the FORM (Response) on November 18, 2015. Department Counsel had no objection, and the Response is entered into evidence. The case was assigned to me on December 8, 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 admitted the factual allegations in Paragraphs 1.a., and 1.b. of the SOR, with explanations. He denied the factual allegations in Paragraph 1.c. of the SOR.

Guideline F - Financial Considerations

Applicant is a 49 year-old employee of a federal contractor for whom he has worked for nearly 28 years. (Item 3 at pages 5 and 9). He attributes his financial difficulties to his wife’s “short term disability” early in 2008, and her changing jobs “between 2008 and 2009 . . . to be closer to home and medical appointments.” (Response at page 2.) Applicant now lives within his monthly budget. (Response at “addendum” 7.)

1.a. and 1.b. It is alleged that Applicant failed to file his Federal and state income tax returns for tax years “2006, 2007, 2008 and 2009.” These allegations are based on an uncertified subject interview taken from the Applicant in July of 2012. (Item 6.) This uncertified interview is suspect, at best, as there is no mention of his failing to file a Federal income tax return for tax year 2007. (Item 6 at page 2.) That being said, it is clear that Applicant did have difficulties filing past Federal and state income tax returns in a timely fashion. As a result, in June of 2015, he hired a Certified Public Accountant (CPA) to address his tardy returns. (Item 2 at page 7.) Said CPA has now filed Applicant’s delinquent Federal and state income tax returns, as evidenced by those returns. (Response at “addendum[s]” 2 and 4.) He has also submitted additional Federal and state tax returns demonstrating that he is current with these taxing authorities. (Response at “addendum 1.) I find that Applicant has made a good-faith effort to file his delinquent tax returns.

1.c. Applicant denies that he is indebted to Creditor C for an auto in the amount of about $21,000. He has submitted a letter from Creditor C stating that the “loan was paid in full on 11/12/2013 in the amount of $8,702.34.” (Item 2 at page 6.) However, in the FORM, Department Counsel points to a September 2015 credit report showing a past-due amount of $3,033. (Item 4 at page 2.) In his Response, Applicant has answered this concern by submitting a November 2015 document from Creditor C demonstrating Applicant is current with Creditor C. (Response at “addendum” 6.) I find that Applicant has made a good-faith effort to address this debt.

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 two conditions that could raise security concerns. Under Subparagraphs 19(a) and 19(c) an “inability or unwillingness to satisfy debts,” and “a history of not meeting financial obligations.” may raise security concerns. Applicant had delinquent taxes and a delinquent car loan. Under Subparagraph 19(g) “failure to file annual Federal, state . . . income tax returns as required” may also raise security concerns. Applicant failed to file several 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. loss of employment. . . unexpected medical emergency . . .), and the individual acted responsibly under the circumstances.” Applicant’s failure to file tax returns in a timely fashion and his delinquent car loan can be attributed to his wife’s ill health and her related loss of income. 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 delinquent income tax returns, is current with those taxing authorities, and is current with his car loan. Financial Considerations is found for Applicant.

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

Subparagraph 1.c. 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