KEYWORD: Guideline F, Guideline E
DIGEST: The Board concludes there is merit in Applicant’s claim that the Judge misconstrued a
piece of evidence.  However. The Judge’s adverse decision is supported by sufficient record
evidence.  Adverse decision affirmed.
CASENO: 05-00412.a1
DATE: 04/06/2007
DATE: April 6, 2007
In Re:
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SSN:-----
Applicant for Security Clearance
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ISCR Case No. 05-00412
APPEAL BOARD DECISION
APPEARANCES
FOR GOVERNMENT
James B. Norman, Department Counsel
FOR APPLICANT
Pro Se
The Defense Office of Hearings and Appeals (DOHA) declined to grant Applicant a security
clearance.  On December 5, 2005, DOHA issued a statement of reasons advising Applicant of the
basis for that decision–security concerns raised under Guideline F (Financial Considerations) and
Guideline E (Personal Conduct) of Department of Defense Directive 5220.6 (Jan. 2, 1992, as
amended) (Directive).  Applicant requested a hearing.  On August 25, 2006, after the hearing,
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Administrative Judge Martin H. Mogul denied Applicant’s request for a security clearance.
Applicant timely appealed pursuant to Directive E3.1.28 and E3.1.30.   
Applicant raised the following issue on appeal: whether the Judge’s findings of fact under
Guideline F are based in part on a misunderstanding of one of Applicant’s exhibits.  Finding no
harmful error, we affirm the decision.
Whether the Record Supports the Administrative Judge’s Factual Findings
A.  Facts
The Judge made the following findings that are pertinent to this appeal: Applicant is indebted
to the Internal Revenue Service (IRS) on three tax liens for unpaid federal taxes, interest, and
penalties.  The first allegation is in the amount of $92,733.00; the second $22,445.00; and the third
$80,209.00.
Applicant hired an attorney to represent him in his attempts to resolve his tax liabilities.  A
letter from his attorney (Exhibit L) states that, after February 9, 2007, Applicant will owe only
$25,000.00, the remainder being uncollectible due to the statute of limitations.  Applicant introduced
a check in the amount of $24,932.00, which he stated would be the means whereby he pays off this
reduced amount.  The Judge stated, “At this time, until the IRS responds, I find that Applicant still
owes the full amount alleged” in the SOR.
B.  Discussion
The Appeal Board’s review of the Judge’s findings of fact is limited to determining if they
are supported by substantial evidence–such relevant evidence as a reasonable mind might accept as
adequate to support such a conclusion in light of all the contrary evidence in the record.”  Directive
E3.1.32.1.  “This is something less than the weight of the evidence, and the possibility of drawing
two inconsistent conclusions from the evidence does not prevent an administrative agency’s findings
from being supported by substantial evidence.”  Consolo v. Federal Maritime Comm’n, 383 U.S.
607, 620-21 (1966).  In evaluating the Judge’s findings, we give deference to the Judge’s credibility
determinations.  Directive ¶  E3.1.32.1.  
On appeal, Applicant states that the Judge misunderstood the significance of Exhibit L.  It
“is not a proposal to the IRS, it is a factual statement from my attorney that there is a plan in place
with the IRS that will totally have my debt paid in full in February 2007.”  
We have examined the document in question.  Although it is entitled “Tax Relief Proposal
for [Applicant],” it is not addressed explicitly to the IRS.  It advises the reader that Applicant’s tax
liabilities are expected to be reduced to the extent and for the reasons described above.  Its language
is not that normally associated with offers for settlement drafted by lawyers but appears designed to
advise any interested party that Applicant will be free of legally enforceable tax debt by the specified
date.   
Applicant, in explaining the document, testified as follows: “[My lawyer] has come to a
resolution with the IRS, which is stated in the letter that I presented to you . . .We have a resolution
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to all the tax problems that–February 9  [2007], which is seven months away, I won’t owe the IRSth
anything.  I’ll be totally paid.”  Transcript at 50.
Given the record evidence, we conclude that there is merit in Applicant’s allegation of error.
The Judge appears to have interpreted the document as an offer to the IRS.  However, we read it to
be a statement of the attorney’s professional opinion that, due to operation of the statute of
limitations, Applicant’s enforceable tax debt was, as of the hearing, soon to be reduced by a
substantial amount.  Of course, this error does not impair the Judge’s finding that, as of the date of
the decision, Applicant still owed the full amounts alleged.
Whether the Record Supports the Judge’s Ultimate Conclusions
A Judge is required to “examine the relevant data and articulate a satisfactory explanation
for” the decision, “including a ‘rational connection between the facts found and the choices made.’”
Motor Vehicle Mfrs. Ass’n of the United States v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43
(1983)(quoting Burlington Truck Lines, Inc. V. United States, 371 U.S. 156, 168 (1962)).  The
general standard is that a clearance may be granted only when ‘clearly consistent with the interests
of national security.’”  Department of the Navy v. Egan, 484 U.S. 581, 528 (1988). The Appeal
Board may reverse the Judge’s decision to grant, deny, or revoke a security clearance if it is arbitrary,
capricious, or contrary to law.  Directive  ¶  E3.1.32.3.  We review matters of law de novo.
We must examine whether the erroneous finding identified above is harmful.  In his
Conclusions section, the Judge stated the following: “The evidence shows that Applicant has . . .
made a good faith effort to resolve his debt with the IRS.  Unfortunately at this time he still owes the
IRS approximately $200,000.00.  It is Applicant’s hope that this debt may be satisfied in February
2007.  But at this time there is no way to know if the IRS will accept Applicant’s offer in
compromise.” Decision at 6.  
The Board reads the evidence to show that Applicant is executing a plan to eliminate his
indebtedness which is heavily dependent upon the running of the statute of limitations.  Such
reliance does not normally absolve an applicant of his responsibilities for security clearance
purposes, absent other mitigating circumstances.   See ISCR Case No, 03-04779 at 4 (App. Bd. Jul.
20, 2005).  The Judge’s mischaracterization of Applicant’s plan is harmless error which if anything
benefitted Applicant.  
Moreover, the Judge noted the following in his Conclusion: “An additional point of concern
is that Applicant again exhibited the conduct that got him into trouble previously.  It was his failure
to file his tax returns in 1989 through 1993 that was the cause of the initial debt to the IRS.  The fact
that he again filed his returns late for tax years 2001 through 2003 shows that he may still be subject
to some irresponsible financial behavior.”  Decision at 6. 
In light of the forgoing there is sufficient record evidence to support the Judge’s overall
adverse clearance decision.  We therefore conclude that the factual error identified above is harmless.
See ISCR Case No. 01-23362 (App. Bd. Jun. 5, 2006).
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Order 
The Judge’s decision denying Applicant a security clearance is AFFIRMED.  
Signed: Michael Y. Ra’anan      
Michael Y. Ra’anan
Administrative Judge
Chairman, Appeal Board
William S. Fields                         
William S. Fields
Administrative Judge
Member, Appeal Board
James E. Moody                            
James E. Moody
Administrative Judge
Member, Appeal Board