ISCR Case No. 24-01366

ded (Directive), the DoD issued Applicant a Statement of Reasons (SOR) alleging facts that raise securi

y concerns under Guideline F (Financial Considerations). The SOR further informed Applicant that, based on informatio

available to the government, DoD adjudicators could not make the preliminary affirmative finding it is clearly consistent with the national interest to grant or continue Applicant’s security clearance. Applicant answered the SOR on April 4, 2025, and requested a hearing before an administrative judge. (Answer.) The case was assigned to me on April 20, 2026. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on April 30, 2026, scheduling the hearing for May 19, 2026. The hearing was convened as scheduled. The Government offered Exhibits (GXs) 1 and 2, which were admitted into evidence. Applicant testified on his own behalf. The record was left open until June 18, 2026, for 1

receipt of additional doc

mentation. Applicant submitted a post-hearing closing statement in a timely fashion. DOHA received the transcript of the hearing (TR) on June 9, 2026. Findings of Fact Applicant admitted both allegations of the SOR. After a thorough and careful review of the pleadings, exhibits, and testimony, I make the following findings of fact. Applicant is a 59-year-old employee of a defense contractor. He has been employed with the defense contractor since about October of 2023. Applicant is married and has four adult children. H

was self-employed from June of 1999 until October of 2023, earning about $200,000 a year. During that period, he lived in State A for all but six months. Applicant has received no financial counseling. (TR at page 5 lines 20 to page 6 line 4, at page 12 line 2 to page 18 line 5, at page 19 lines 3~19, and at page 35 lines 15~17.) Guideline F - Financial Considerations 1.a. Applicant admits that he failed to file his Federal income tax returns for tax years 2003~2023, a period of 21 years. When asked “Any reason why,” Ap

licant responded “Just life. Busy.” (TR at page 20 line 4 to page 21 line 14, and at page 25 line 16 to page 26 line 7.) 1.b. Applicant admits that he failed to file his State A income tax returns for tax years 2003~2023, a period of 21 years. When asked “Any reason why,” Applicant responded “Just life. Busy.” (TR at page 20 line 4 to page 21 line 14, and at page 25 line 16 to page 26 line 7.) Policies When evaluating an applicant’s national security eligibility, 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 to be used in evaluating an applicant’s national security eligibility. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, administrative judges apply the guidelines in conjunction with the factors listed in AG ¶ 2 describing the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(a), the entire process is a conscientious scrutiny of a number of variables known as the whole-person concept. The administrative judge must consider all ava

lable, reliable information about the person, past and present, favorable and unfavorable, in making a decision. 2

The protection of the national security is the paramount consideration. AG ¶ 2(b) requires that “[a]ny doubt concerning personnel being considered for national security eligibility will be resolved in favor of the 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. Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Directive ¶ E3.1.15 states the “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by the applicant or proven by Department Counsel, and has the ultimate burden of persuasion as to obtaining a favorable clearance decision.” A person who applies for access to classified information seeks to enter 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 pos

ible 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 (EO) 10865 provides that adverse 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 AG ¶ 18: Failure 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 or sensitive information. Financial distress can also be caused or exacerbated by, and thus can be a possible indicator of, other issues of personnel security concern such as excessive gambling, mental health conditions, substance misuse, or alcohol abuse or dependence. An individual who is financially overextende

is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds. Affluence that cannot be explained by known sources of income is also a 3

security concern insofar as it may result from criminal activity, inclu

ing espionage. The guideline notes several conditions that could raise security concerns under AG ¶ 19. One is clearly applicable in this case: (f) failure to file or fraudulently filing annual Federal, state, or local income tax returns or