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ISCR Case 01-06776.h1 — CASE

ISCR Case 01-06776.h1denied

Case Headnote

ISCR Case No. 01-06776.h1

deniedNov 13, 2002· Hon. Richard A. Cefola· hearing

Summary

This security clearance application was denied due to concerns under Guideline F (Financial Considerations) and Guideline J (Criminal Conduct). The applicant, a 46-year-old defense contractor employee, had an outstanding state tax lien exceeding $18,000. Although the applicant denied this debt, no supporting documentation was provided to refute the claim.

Further financial concerns arose from the applicant's willful failure to file state income tax returns from 1982 to 1987, which constituted misdemeanor offenses. Additionally, under Guideline J, the applicant was arrested for perjury in January 1998, resulting in a $150 fine and deferred prosecution for one year before the case was dismissed in July 2000.

The judge determined that the applicant did not offer sufficient evidence to mitigate the financial concerns, specifically failing to provide documentation for the tax lien and not taking responsibility for financial obligations, including claims regarding tax credits. Consequently, the security clearance was denied.

Why the Applicant Was Denied

The applicant failed to provide documentation addressing an outstanding state tax lien exceeding $18,000.
The applicant's claims regarding tax credits were deemed unacceptable, as he did not take responsibility for his financial obligations.

Conditions Referenced

Disqualifying

F1raisedA History of Not Meeting Financial Obligations
F2raisedInability or Unwillingness to Satisfy Debts

Mitigating

J1appliedThe Criminal Behavior Was Not Recent

Key Rule Quoted

“An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds.”

Procedural Posture

SOR issuedFeb 26, 2002
Answer filedApr 3, 2002
Hearing held—Determined on a written record in lieu of a hearing.
Decision dateNov 13, 2002

Cite For

Denial of Clearance Due to Unresolved Financial Obligations Under Guideline F
Impact of Past Criminal Conduct on Security Clearance Decisions
Responsibility of the Applicant to Address Financial Issues for Mitigation Under Guideline F.

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 Applicant has an outstanding state tax lien exceeding $18,000, which he failed to address adequately. The judge found this financial situation raised significant security concerns, leading to a denial of the security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
2.a	The Applicant is indebted to his former state's franchise tax board in an amount in excess of $18,000 (GX 10 at page 5). The Applicant denies this allegation, but offers no documentation in support of his averment. $18,000	Against Applicant	Tax Unpaid	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—

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

Standardized Decision Profile

SEAD-4 Guideline J (Criminal Conduct) · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found that the Applicant's past criminal conduct, including failures to file state income tax returns and a past arrest for perjury, was not recent enough to be of present security significance, resulting in a ruling for the Applicant on those allegations. However, the Applicant's financial difficulties, specifically an outstanding state tax lien exceeding $18,000, were deemed significant enough to rule against the Applicant under Guideline F, leading to an overall denial of the security clearance.

¶	Allegation	Finding	Offense	Criminal disposition	Response	Disqualifying (¶31)	Mitigating applied (¶32)	Mitigation
1.a	From 1982 to 1987, the Applicant wilfully failed to file his state income tax returns (Government Exhibit (GX) 11). These wilful failures to file are in violation of that states revenue and tax code; and as such, were misdemeanors.	For Applicant	Unspecified Criminal Conduct	Conduct No Charge	Denied	—	—	—
1.b	In January of 1998, the Applicant was arrested for Perjury (GX 6 at page 4). He was fined $150, and prosecution was deferred for one year (GX 8). In July of 2000, the case against him was dismissed (id).	For Applicant	Unspecified Criminal Conduct	Dismissed or Nolle Prossed	Denied	—	—	—
1.a	specific text not stated in this decision	Unknown	Unspecified Criminal Conduct	—	Unknown	—	—	—

Descriptive standardized rendering of a decided public case (Guideline J). 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

DATE: November 13, 2002 In Re: ---------------------- SSN: ----------- Applicant for Security Clearance ISCR Case No. 01-06776 DECISION OF ADMINISTRATIVE JUDGE RICHARD A. CEFOLA

SYNOPSIS Although the Applicant's past criminal conduct is not recent, he has failed to offer any documentation that demonstrates he has addressed his state tax lien, which is in excess of $18,000. Clearance is denied.

STATEMENT OF CASE

On February 26, 2002, 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, 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 a clearance should be denied or revoked. Applicant filed an Answer to the SOR on April 3, 2002. Applicant elected to have this case determined on a written record in lieu of a hearing. Department Counsel submitted the Government's File of Relevant aterial (FORM) on August 18, 2002. Applicant was instructed to submit objections or information in rebuttal, extenuation or mitigation within 30 days of receipt of the FORM. Applicant received his copy on or about August 27, 2002, and Applicant's Reply was received on September 30, 2002. The case was received by the undersigned for resolution on November 5, 2002. The issues raised here are whether the Applicant's past criminal conduct and present financial difficulties militate against the granting of a security clearance.

FINDINGS OF FACT

The following Findings of Fact are based on Applicant's Answer to the SOR, the File of Relevant Material and Applicant's Response. The Applicant is 46 years of age, and is employed by a defense contractor who seeks a security clearance on behalf of the Applicant. Guideline J - Criminal Conduct 1.a. From 1982 to 1987, the Applicant wilfully failed to file his state income tax returns (Government Exhibit (GX) 11). These wilful failures to file are in violation of that states revenue and tax code; and as such, were misdemeanors. 1.b. In January of 1998, the Applicant was arrested for Perjury (GX 6 at page 4). He was fined $150, and prosecution was deferred for one year (GX 8). In July of 2000, the case against him was dismissed (id). Guideline F - Financial Considerations 2.a. The Applicant is indebted to his former state's franchise tax board in an amount in excess of $18,000 (GX 10 at page 5). The Applicant denies this allegation, but offers no documentation in support of his averment. Mitigation The Applicant offers little in the way of mitigation save his bare averments (GX 3 and Reply).

POLICIES

Enclosure 2 and Section E2.2. of the 1992 Directive set forth both policy factors and conditions that could raise or mitigate a security concern, and which must be given binding consideration in making security clearance determinations. The conditions should be followed in every case according to the pertinent criterion, however, the conditions are neither automatically determinative of the decision in any case, nor can they supersede the Administrative Judge's reliance on his own common sense. Because each security clearance case presents its own unique facts and circumstances, it should not be assumed that these conditions exhaust the realm of human experience, or apply equally in every case. Conditions most pertinent to evaluation of this case are: Criminal Conduct Condition that could raise a security concern and may be disqualifying include: 1. Allegations or admissions of criminal conduct, regardless of whether the person was formally charged; Condition that could mitigate security concerns include: 1. The criminal behavior was not recent; Financial Considerations Conditions that could raise a security concern and may be disqualifying include: 1. A history of not meeting financial obligations; 3. Inability or unwillingness to satisfy debts; Conditions that could mitigate security concerns include: None As set forth in the Directive, each clearance decision must be a fair and impartial common sense determination based upon consideration of all the relevant and material information and the pertinent criteria and adjudication policy in enclosure 2, including as appropriate: a. Nature, extent, seriousness of the conduct, and surrounding circumstances. b. Frequency and recency of the conduct. c. Age and maturity of the applicant. d. Motivation of the applicant, and the extent to which the conduct was negligent, willful, voluntary, or undertaken with knowledge of the consequence involved. e. Absence or presence of rehabilitation. f. Probability that circumstances or conduct will continue or recur in the future. The Administrative Judge, however, can only draw those inferences or conclusions that have a 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. The Government must make out a case under Guideline J (Criminal Conduct) and Guideline F (Financial Considerations) which establishes doubt about a person's judgment, reliability and trustworthiness. While a rational connection, or nexus, must be shown between an applicant's adverse conduct and his ability to effectively safeguard classified information, with respect to sufficiency of proof of a rational connection, objective or direct evidence is not required. Then, the Applicant must remove that doubt with substantial evidence in refutation, explanation, mitigation or extenuation, which demonstrates that the past adverse conduct is unlikely to be repeated, and that the Applicant presently qualifies for a security clearance. An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds. The Government must be able to place a high degree of confidence in a security clearance holder to abide by all security rules and regulations at all times and in all places.

CONCLUSION

Considering first the Applicant's past criminal conduct, by not filing his state income tax returns in the mid 1980s, he was subject to possible prosecution for six separate misdemeanor violations. More than four years ago, he was also arrested for Perjury, but prosecution was deferred and the case against him dismissed in July of 2000. I find that the Applicant's past criminal conduct is not recent enough in time so as to be of present security significance. Guideline J is found for the Applicant. The same can not be said as to his financial situation, however. The Applicant has an outstanding state tax lien in excess of $18,000 (GX 10 at page 5), and he has offered no documentation that he has addressed it. In his answer to the SOR, he blames the state for not applying his "entitled W-2 withholding credits" towards his past due indebtedness. This not acceptable, it is the Applicant's responsibility to address his past due indebtedness, not the state of his former residence. This shows extremely poor judgement on Applicant's part; and as such, Guideline F is found against the Applicant. Considering all the evidence, the Applicant has not rebutted the Government's case regarding his financial difficulties. The Applicant has thus not met the mitigating conditions of Guideline F, and of Section E2.2. of the Directive. Accordingly, he has not met his ultimate burden of persuasion under Guideline F.

FORMAL FINDINGS

Formal Findings required by paragraph 25 of Enclosure 3 of the Directive are: Paragraph 1: FOR THE APPLICANT a. For the Applicant. b. For the Applicant. Paragraph 1: AGAINST THE APPLICANT a. Against the Applicant. Factual support and reasons for the foregoing are set forth in FINDINGS OF FACT and CONCLUSIONS, supra.

DECISION

In light of 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. Richard A. Cefola Administrative Judge

FOOTNOTES

01-06776.h1 FOR GOVERNMENT Melvin A. Howry, Esquire, Department Counsel FOR APPLICANT Pro Se file:///usr.osd.mil/...yComputer/Desktop/DOHA%20transfer/DOHA-Kane/dodogc/doha/industrial/Archived%20-%20HTML/01-06776.h1.html[7/2/2021 2:17:16 PM] 01-06776.h1