KEYWORD: Financial; Personal Conduct; Criminal Conduct
DIGEST: Applicant has a history of financial problems due to an unexpected layoff in 2002. He
failed to timely file federal and state income tax returns for tax years 2002, 2003, and 2004.
Applicant was also disciplined by his employer in 2004 for viewing inappropriate material on his
work computer. He is repaying child support arrearage, but security concerns persist because of his
failure to pay his mortgage on time, his concealment from his spouse of the details concerning his
misuse of the work computer, and his failure to rectify his tax situation. Clearance is denied.
CASENO: 06-11989.h1
DATE: 08/06/2007
DATE:  August 6, 2007
In re:
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SSN:  -----------
Applicant for Security Clearance
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ISCR Case No. 06-11989
DECISION OF ADMINISTRATIVE JUDGE
ELIZABETH M. MATCHINSKI
APPEARANCES
FOR GOVERNMENT
James F. Duffy, Esq., Department Counsel
FOR APPLICANT
Pro Se
SYNOPSIS
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Applicant has a history of financial problems due to an unexpected layoff in 2002. He failed
to timely file federal and state income tax returns for tax years 2002, 2003, and 2004. Applicant was
also disciplined by his employer in 2004 for viewing inappropriate material on his work computer.
He is repaying child support arrearage, but security concerns persist because of his failure to pay his
mortgage on time, his concealment from his spouse of the details concerning his misuse of the work
computer, and his failure to rectify his tax situation. Clearance is denied.
STATEMENT OF THE CASE
The Defense Office of Hearings and Appeals (DOHA) declined to grant or continue a
security clearance for Applicant. As required by Department of Defense Directive 5220.6 ¶ E3.1.2
(Jan. 2, 1992), as amended, DOHA issued a Statement of Reasons (SOR) on March 8, 2007,
detailing the basis for its decision–security concerns raised under Guideline F (Financial
Considerations), Guideline E (Personal Conduct), and Guideline H (Criminal Conduct) of the revised
Adjudicative Guidelines (AG) issued on December 29, 2005,  and implemented by the Department
of Defense effective September 1, 2006. The revised guidelines were provided to Applicant when
the SOR was issued. Applicant answered the SOR on March 28, 2007, and elected to have a decision
on the written record without a hearing.
The government submitted a File of Relevant Material (FORM) on April 10, 2007,
consisting of 12 exhibits (Items 1-12). DOHA forwarded a copy of the FORM to Applicant and
instructed him to respond within 30 days of receipt. No response was received by the May 17, 2007
due date, and on June 14, 2007, the case was assigned to me to determine whether it was clearly
consistent with the national interest to grant or continue a security clearance for Applicant.
FINDINGS OF FACT
DOHA alleged under guidelines F (¶ 1.a) and J (¶¶ 3.a and 3.b) that Applicant failed to timely
file and pay his federal and state income tax returns for tax years 2002, 2003, and 2004. It was also
alleged under Guideline F that Applicant owed a $1,247 debt as of January 2007 (¶ 1.b) and child
support arrearage of $9,000 as of March 2005 (¶ 1.c), and was late in his monthly mortgage payment
six times in 2005 and seven times in 2006 (¶ 1.d). Under Guideline E, Applicant was alleged to have
been disciplined by his employer in 2004 for viewing inappropriate (non pornographic) material on
his work computer and to have concealed the facts that led to his suspension from his spouse
knowing it could subject him to blackmail (¶ 2.a).
Applicant admitted he had difficulties satisfying some of his financial obligations because
of a job layoff in 2002, and decreased income when he found work. As for the specific debts, he
expressed his belief that the debt in ¶ 1.b had been paid, and he was repaying his child support
arrearage at $225 per month (¶ 1.c). He acknowledged he got behind in his mortgage due to
unexpected expenses (vehicles breaking down, home repairs, the care of his elderly father-in-law).
He did not anticipate continued problems paying his mortgage on time (¶ 1.d), because he had paid
off his vehicle, freeing up $450 per month, and his father-in-law had returned to his own home.
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Applicant admitted he had used poor judgment in not following his employer’s policy regarding
computer usage, but while he had withheld certain information from his spouse about the
disciplinary action, he denied he was subject to blackmail (¶ 2.a). Applicant indicated that he and
his spouse “desperately want to rectify this situation, file our tax returns, and if any outstanding taxes
are owed, work out a plan to meet our obligations” (¶¶ 3.a and 3.b).
After a thorough review and consideration of the FORM, including Applicant’s response to
the SOR, I make the following findings of fact:
Applicant is a 40-year-old customer training specialist who has worked for his current
employer since June 1997 except for a brief layoff from early 2002 to approximately summer 2003.
Applicant served on active duty in the United States Marines from 1985 to 1997 and was
discharged at the rank of staff sergeant (rate E-6). In July 1998, Applicant and his first wife divorced
after 11 years of marriage. Applicant and his spouse “each had custody of one of the boys.”
Applicant was ordered to pay child support, which was $450 monthly as of March 2007.
Applicant subsequently remarried, although the date of his marriage to his second wife is not
in the record available for review. In early 2002, Applicant was laid off from his job with his
employer. He chose not to relocate because of the advanced age and ill health of his in-laws, and did
not file for unemployment compensation. He found a job where he was paid “much less,” but the
record is silent as to the extent of the income loss. Applicant notified his former spouse that he could
not pay his child support at the same rate and he would ask the court to modify his support
obligation. According to Applicant and not rebutted by the government, his ex-wife told him that
they would work it out, and Applicant paid little, if any, child support to his ex-wife.
In  2002 Applicant’s spouse worked part-time for a company that went out of business at the
end of the year. When she did not receive a W-2 form for tax year 2002 by the deadline for filing
their federal and state income tax returns, Applicant and his spouse filed for an extension of time to
submit their returns. As of March 2007, they had not filed their federal or state income tax returns
for tax years 2002, 2003, or 2004. The record is silent as to whether they had filed for tax year 2005.
In or before summer 2003, Applicant returned to work for the defense contractor. Over the
next year, he viewed various Internet sites “on a near daily basis” from his work computer, usually
during his lunch time but occasionally during working hours. On one website, he viewed non
pornographic images of women in swimsuits. On October 12, 2004, Applicant was placed on
disciplinary leave for five days, and issued a corrective action memo for viewing inappropriate (non
pornographic) material on his work computer in violation of company policy. He told his spouse that
his suspension was for viewing the Internet too frequently at work as he did not want her to know
that he had been viewing images of other women.
After he started back to work with the defense contractor, Applicant’s ex-wife petitioned the
court to collect what Applicant owed in child support. He was ordered to pay an arrearage of about
$9,000 at $225 monthly in addition to his monthly child support payment. Applicant arranged to
make the payments through payroll deduction.
 
The evidence substantiates an outstanding balance of $247 rather than the $1,247 alleged. The high credit of1
the loan was $1,247 according to Applicant’s credit report (Item 7).
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In or about October 2003, Applicant’s loan account with a finance company was charged off
with a past due balance of $247 (¶ 1.b). As of January 2005, Applicant was more than 120 days
delinquent in his $1,143 monthly mortgage obligation.
On March 9, 2005, Applicant was interviewed by a Defense Security Service (DSS) special
agent about his one-week suspension from work and his financial problems. Applicant
acknowledged he had accessed sports information and images of women clad in swimsuits on the
Internet using his work computer, sometimes during work hours, and that he had been suspended for
five days. Applicant indicated he had told his spouse that his suspension was for viewing the Internet
too much and he had not told her about the content accessed. He wanted to keep from her that he had
viewed images of other women on the Internet because of the stress in their relationship (“I am going
to keep this a secret from her and accept that fact that this secret could be used against me for
blackmail purposes.” Item 6). Concerning his finances, Applicant admitted that he was being
threatened with foreclosure for failing to make his mortgage payments for the past three months (¶
1.d) because of other financial demands (vehicle repair and other bills). He added that he had $8,700
available to avoid foreclosure. He also admitted that he had a personal loan on which he had made
no payments for the past year (¶ 1.b). Applicant averred he would pay the $800 balance in a few
months. Applicant also acknowledged he and his spouse had not filed their 2002 or 2003 federal or
state tax returns (“its been difficult to find all the receipts and paperwork that goes along with my
wife’s occupation, and we seem to keep putting it off”), although he believed he did not owe any
taxes. He expressed his belief their delinquent returns would be filed within the next few months.
Under threat of foreclosure, Applicant brought his mortgage current as of April 2005. He had
a spotty record of timely payment thereafter, falling behind more than 30 days several times and
twice more than 60 days. Applicant attributes his late payments, in part, to expenses incurring in
caring for his elderly father-in-law, who had heart valve surgery and a leg amputation. He presented
no evidence of the amounts spent caring for his father-in-law.
As of November 2006, Applicant was more than 60 days late in his mortgage. A check of
Applicant’s credit on January 16, 2007, disclosed Applicant still owed a charged-off balance of $247
on the debt in ¶ 1.b.  He had been late more than 30 days six times in the past two years on his1
automobile loan, but had brought it current as of November 2006. The loan, opened in November
2001 for $23,303 with monthly payments of $461, had a remaining balance of $1,467 as of
December 2006. There is no evidence that Applicant owes any delinquent federal or state income
taxes for those tax years for which he has yet to file his returns (2002, 2003, and 2004).
POLICIES
“[N]o one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S.
518, 528 (1988). As Commander in Chief, the President has “the authority to . . . control access to
information bearing on national security and to determine whether an individual is sufficiently
trustworthy to occupy a position . . . that will give that person access to such information.” Id. at 527.
The President authorized the Secretary of Defense or his designee to grant applicants eligibility for
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access to classified information “only upon a finding that it is clearly consistent with the national
interest to do so.” Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb.
20, 1960). An applicant “has the ultimate burden of demonstrating that it is clearly consistent with
the national interest to grant or continue his security clearance.” ISCR Case No. 01-20700 at 3 (App.
Bd. Dec. 19, 2002).
The revised Adjudicative Guidelines set forth potentially disqualifying conditions (DC) and
mitigating conditions (MC) under each guideline. In evaluating the security worthiness of an
applicant, the administrative judge must also assess the adjudicative process factors listed in ¶ 6.3
of the Directive. The decision to deny an individual a security clearance is not necessarily a
determination as to the loyalty of the applicant. See Exec. Or. 10865 § 7. It is merely an indication
the applicant has not met the strict guidelines the President and the Secretary of Defense have
established for issuing a clearance.
CONCLUSIONS
Guideline F—Financial Considerations
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. (AG ¶ 18). As of March 2007, Applicant had not filed his
federal or state income tax returns for tax years 2002, 2003, and 2004. Failure to file annual federal,
state, or local income tax returns as required can have financial implications (¶ 19(g) failure to file
annual Federal, state, or local income tax returns as required, or the fraudulent filing of the same).
However, there is no evidence that Applicant owes any delinquent federal or state income taxes, or
that his non filing was due to financial difficulties. Applicant told a DSS agent in March 2005 that
he believed he owed no taxes, and there is no evidence to the contrary. However, Guideline F
concerns are established because of his failure to make timely payments on a personal loan (¶ 1.b),
on his child support obligation (¶ 1.c), and on his real estate mortgage (¶ 1.d). Disqualifying
conditions (DC) ¶ 19(a) inability or unwillingness to satisfy debts, and ¶ 19(c) a history of not
meeting financial obligations, apply.
Applicant stopped paying his child support and personal loan after he was laid off from his
job with the defense contractor in early 2002. The Directive provides for mitigation where debts are
incurred due to unforeseen circumstances (See mitigating condition (MC) ¶ 20(b), the condition that
resulted in the financial problem were largely beyond the person’s control (e.g., loss of employment,
a business downturn, unexpected medical emergency, or a death, divorce or separation), and the
individual acted responsibly under the circumstances), but Applicant must have acted reasonably.
Concerning the child support arrearage (¶ 1.c), Applicant arranged for an automatic deduction of
$225 per month from his pay toward the arrearage. While repayment pursuant to a court order does
not merit the same weight in reform as had he initiated a good faith effort on his own after he
returned to work for the defense contractor, that debt is being addressed (¶ 20(c) the person has
received counseling and/or there are clear indications that the problem is being resolved or is under
control).
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However, as for the personal loan debt, Applicant knew as of March 2005 that he had not
paid on the account for over a year. His January 2007 credit report shows a relatively low balance
of $247 (instead of the $1,247 alleged). He has yet to produce documentation showing that the debt
has been satisfied. As for his home mortgage, he has been late several times in the past two years.
He was more than 120 days late in payment of his mortgage in March 2005, notwithstanding his
return to work for the defense contractor sometime in 2003. While he came up with about $8,700
to bring the mortgage current, he had a spotty record of repayment thereafter. Absent documentation
confirming expenditures for car repair or for the care of his father-in-law, I am unable to apply MC
¶ 20(b) to his mortgage delinquency.
 Applicant submits that he is in a better financial situation now, since he had paid off his car
loan and his father-in-law had returned to his own home. A review of his recent credit report shows
a balance on his car loan of $1,467 as of December 2006. He was close to paying the debt off, and
there is no evidence of any recent misuse of consumer credit cards. Yet, it is too soon to conclude
that his financial problems are safely behind him, given his recent mortgage delinquency, and the
absence of any evidence showing his income is adequate to cover his expenses.
Guideline E—Personal Conduct
Conduct involving questionable judgment, lack of candor, dishonesty, or unwillingness to
comply with rules and regulations can raise questions about an individual’s reliability,
trustworthiness and ability to protect classified information. Of special interest is any failure to
provide truthful and candid answers during the security clearance process or any other failure to
cooperate with the security clearance process. (AG ¶ 15). Applicant exhibited extremely poor
judgment from summer 2003 to about September 2004 when he accessed inappropriate material on
the Internet at work, including during work hours on occasion. Applicant’s repeated violation of his
employer’s policy concerning Internet use on his work computer is potentially disqualifying under
DC ¶ 16(d) credible adverse information that is not explicitly covered under any other guideline and
may not be sufficient by itself for an adverse determination, but which, when combined with all
available information supports a whole-person assessment of questionable judgment,
untrustworthiness, unreliability, lack of candor, unwillingness to comply with rules and regulations,
or other characteristics indicating that the person may not properly safeguard protected
information. This includes but is not limited to consideration of: (3) a pattern of dishonesty or rule
violations; (4) evidence of significant misuse of Government or other employer’s time or resources.
Furthermore, since Applicant intentionally concealed from his spouse that he was suspended for
viewing images of women in swimsuits on his work computer, DC ¶ 16(e) personal conduct, or
concealment of information about one’s conduct, that creates a vulnerability to exploitation,
manipulation, or duress, such as (1) engaging in activities which, if known, may affect the person’s
personal, professional, or community standing, applies.
Applicant has acknowledged the inappropriate nature of his conduct and his poor judgment
(“I have absolutely learned from my experience and ensure that I make intelligent decisions based
on proper ethics, policies, procedures, and rules and regulations). Although there is no indication that
Applicant has undergone any counseling (see ¶ 17(d) the individual has acknowledged the behavior
and obtained counseling to change the behavior or taken other positive steps to alleviate the
stressors, circumstances, or factors that caused untrustworthy, unreliable, or other inappropriate
behavior, and such behavior is unlikely to recur), there is no evidence of recurrence, and Applicant
Title 26, Section 7203 of the United States Code provides in relevant part:2
Any person required under this title to pay any estimated tax or tax, or required by this title or by
regulations made under authority thereof to make a return, keep any records, or supply any
information, who willfully fails to pay such estimated tax or tax, make such return, keep such records,
or supply such information, at the time or times required by law or regulation, shall, in addition to
other penalties provided by law, be guilty of a misdemeanor and, upon conviction thereof, shall be
fined not more than $25,000 ($100,000 in the case of a corporation), or imprisoned not more than 1
year, or both, together with the costs of prosecution. (Item 11)
Under Section 143.011 of the Missouri Revised Statutes, a tax is imposed for every taxable year on the3
Missouri taxable income of every resident.  The willful failure to file is punishable as a crime under Section 143.931,
which provides:
Any person required under sections 143.011 to 143.996 to pay any tax, or required by sections
143.011 to 143.996 to make a return (other than a return of estimated tax), keep any records, or supply
any information, who willfully with intent to defraud fails to pay such tax, make such return, keep such
records, keep such records, or supply such information, at the time or times required by law, shall, in
addition to other penalties provided by law, and upon conviction thereof, be fined not more than ten
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is not likely to jeopardize his job by misusing his company computer. However, Applicant has not
mitigated the risk of vulnerability to exploitation, manipulation, or duress where he has not been
forthcoming with his spouse about the nature of his inappropriate Internet use. Although he indicates
that if an incident were to arise he would fully disclose all information to his spouse, there is little
assurance that he will do so given his concealment to date.
Guideline J—Criminal Conduct
Criminal activity creates doubt about a person’s judgment, reliability, and trustworthiness.
By its very nature, it calls into question a person’s ability or willingness to comply with laws, rules
and regulations. (AG ¶ 30). Applicant and his spouse did not file their income tax returns, federal
or state, starting with tax year 2002 when she failed to get her W-2 from an employer. Although they
filed for an extension of time to file that return, they did not file for that year or subsequent tax years
through 2004, if not 2005. Although Applicant was laid off in early 2002, he did not dispute that he
had earned income that year. By summer 2003, he had rejoined the defense contractor. Applicant
now claims to not have known whether he should have filed without the W-2, and to have been
informed in 2003 that he could not file his income tax return without the previous year. Yet, when
asked by the DSS agent in March 2005 about the non filing, Applicant did not claim the loss of a W-
2 or not knowing he had to file. Instead, he responded:
My wife is an independent contractor and thus her taxes are somewhat difficult for
use to file. We have not filed our 2002 or 2003 federal or state tax returns. We do not
believe we owe either the federal or state government money, but its been difficult
to find all the receipts and paperwork that goes along with my wife’s occupation, and
we seem to keep putting it off.
He knew he had an obligation to file and had not complied by March 2007. By willfully not filing
his federal income tax returns for tax years 2002, 2003, and 2004, Applicant committed
misdemeanor criminal conduct.  Under pertinent state law, his failure to file his state income tax2
returns for those years is also punishable as a crime if he had the intent to defraud.  I am not3
thousand dollars, or be imprisoned in the county jail for not more than one year or by not less than two
nor more than five years in the state penitentiary or by both fine and imprisonment together with the
cost of prosecution. (Item 12)
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persuaded of a benign motive where Applicant has yet to make any effort to address his delinquent
filings. The DOHA Appeal Board held in ISCR Case No. 97-0176 (Jan. 22, 1998), "The legal
obligation to file income tax returns is independent and distinct from whether the taxpayer is entitled
to receive a refund or not." DC ¶ 31(a) a single serious crime or multiple lesser offenses, and ¶ 31(c)
allegations or admission of criminal conduct, regardless of whether the person was formally
charged, formally prosecuted, or convicted, apply.
None of the mitigating conditions apply. The record is silent as to whether Applicant filed
his federal and state income tax returns for tax year 2005. Even if he filed his returns for 2005 on
time, MC ¶ 32(d) there is evidence of successful rehabilitation; including but not limited to the
passage of time without recurrence of criminal activity, remorse or restitution, job training or higher
education, good employment record, or constructive community involvement, does not apply. Despite
an expressed desire to address his tax situation (“We desperately want to rectify this situation, file
our tax returns, and if any outstanding taxes are owed, work out a plan to meet our obligations.”),
he had taken no action toward filing his delinquent returns.
Whole Person Analysis
The adjudicative process is an examination of a sufficient period of a person’s life to make
an affirmative determination that the person is eligible for a security clearance. AG ¶ 2(a).
Applicant’s service in the Marines is viewed favorably (¶  2(a) Available, reliable information about
the person, past and present, favorable and unfavorable, should be considered in reaching a
determination). Yet, his behavior since 2003 has not been what one would expect from someone
with 12 years in the military, where he was required to follow orders and to comply with rules and
regulations. Considerable judgment concerns persist because of his ongoing disregard of his
obligation to file income tax returns, his recent financial delinquency, and his violation of his
employer’s policies regarding the use of a company-owned computer.
FORMAL FINDINGS
The following are my conclusions as to each allegation in the SOR:
Paragraph 1. Guideline F: AGAINST APPLICANT
Subparagraph 1.a: For Applicant
Subparagraph 1.b: Against Applicant
Subparagraph 1.c: For Applicant
Subparagraph 1.d: Against Applicant
Paragraph 2. Guideline E: AGAINST APPLICANT
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Subparagraph 2.a: Against Applicant
Paragraph 3. Guideline J: AGAINST APPLICANT
Subparagraph 3.a: Against Applicant
Subparagraph 3.b: Against Applicant
DECISION
In light of all of the circumstances in this case, it is not clearly consistent with the national
interest to grant or continue a security clearance for Applicant. Clearance is denied.
Elizabeth M. Matchinski
Administrative Judge