DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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-------------------- )       ISCR Case No. 05-09208
SSN: ----------- )
)
Applicant for Security Clearance )
Appearances
For Government: Paul M. DeLaney, Department Counsel
For Applicant: Pro Se
February 7, 2008
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Decision
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TESTAN, Joseph, Administrative Judge:
On July 27, 2007, the Defense Office of Hearings and Appeals (DOHA) issued a
Statement of Reasons (SOR) to applicant detailing the security concerns under
Guidelines E and F. 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 revised adjudicative
guidelines (AG) promulgated by the President on December 29, 2005, and effective
within the Department of Defense for SORs issued after September 1, 2006. 
 
Applicant answered the SOR in writing on September 10, 2007, and requested
an Administrative Determination by an Administrative Judge (AJ). Department Counsel
issued a File of Relevant Material (FORM) on November 16, 2007. Applicant did not
respond to the FORM.  Based upon a review of the case file, pleadings, and exhibits,
eligibility for access to classified information is denied.
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Findings of Fact
Applicant is a 59 year old employee of a defense contractor.
Applicant filed a Chapter 7 bankruptcy petition in 1988. His case was “closed” in
1989 (Exhibit 6). In his SOR response, applicant stated he “incurred about a year or so
of unemployment in the ‘80s. Prior to the period of unemployment my bills were paid on
time.”
Applicant admits he was indebted to the IRS for back taxes, penalties, and
interest in the following amounts for the following years:
1987: $2,351.00
1988: $3,248.00
1994: $5,558.00
1995: $15,862.00
1996: $13,030.00
1997: $17,463.00
1998: $6,350.00
1999: $8,714.00
2000: $18,940.00
2001: $6,909.00
2002: $1,025.00
2003: $2,193.00
In 1989, two Federal tax liens were filed against applicant for nonpayment of his
1987 and 1988 income tax. In 1996, another lien was filed for nonpayment of his 1994
income tax. In 1998, two more liens were filed for nonpayment of his 1995 and 1996
income taxes. In 1999, another lien was filed for nonpayment of his 1997 income tax.
Applicant admits he was indebted to the State of Oklahoma (OTC) for back
taxes, penalties and interest (1) in the total amount of $9,950.00 for tax years 1994,
1995, 1996, and 1997; (2) in the amount of $997.00 for tax year 1998; (3) in the amount
of $2,024.00 for tax year 1999; (4) in the total amount of $3,983.00 for tax years 2000
and 2001; and (5) in the amount of $5,492.00 for tax year 2003.
In his SOR response, applicant addressed his tax debts. With respect to the IRS
debts, he stated that his 1987, 1988, 1994, and 1995 tax debts have “been cancelled by
the Internal Revenue Service” and he is “unable to make any payments” for these tax
years. With respect to tax years 1996 through 2001, he stated “arrangements are being
made to settle” these debts. With respect to tax years 2002 and 2003, he stated these
debts were paid in 2007. With respect to his OTC income tax debts, he stated
“arrangements are being made to settle” all of them.
Applicant attached a letter from an Oklahoma accountant who, according to the
accountant, “has in the past and is currently working with [applicant] in regards in [sic]
the process of satisfying various legal tax obligations stated in [the SOR].” In the letter,
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the accountant stated applicant’s IRS tax debts for years 1987, 1988, 1994, and 1995
are “no longer contested by the IRS and [are] considered to have been satisfied within
their system,” and his 2002 and 2003 tax debts have been paid. The accountant further
stated that when they complete and file applicant’s 2004, 2005, and 2006 income tax
returns, applicant will be entitled to approximately $40,000.00 in refunds, which will be
applied to his remaining tax debts. The accountant did not address the Oklahoma tax
debts. No documentation was provided to corroborate any of the accountant’s
statements.
In a signed, sworn statement he gave to an OPM investigator in March 2006,
applicant stated the following:
I am indebted to the IRS and OTC in previous tax years because I
disagreed with the amount owed. Because I didn’t agree with the amount
due for these previous tax years, I withheld payment.
Applicant was indebted to a health care provider in the amount of $1,398.00. The
debt was sent to a collection agency. In his response to the SOR, applicant stated he
thought the debt was taken care of because the medical services provided were for a
work-related injury covered by workers compensation law. He further stated that he
contacted his attorney and asked him to get the bill settled. Unlike his tax debts, this
debt appears to be the result of a mistake. Accordingly, I find it has no current security
significance.
Applicant falsified material facts on a Security Clearance Application (SCA) he
executed in April 2004 when, (1) in response to Question 36, he denied having any tax
liens filed against his property during the previous seven years, (2) in response to
Question 38, he denied he had been over 180 days delinquent on any debt during the
previous seven years, and (3) in response to Question 39, he denied he was then over
90 days delinquent on any debt. In his response to the SOR, applicant stated, in
essence, that his false answers were mistakes.
 
Policies
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.” (Department of
the Navy v. Egan, 484 U.S. 518,527 (1988).) In Executive Order 10865, Safeguarding
Classified Information Within Industry (February 20, 1960), the President set out
guidelines and procedures for safeguarding classified information within the executive
branch. The President authorized the Secretary of Defense or his designee to grant
applicants eligibility for access to classified information “only upon a finding that it is
clearly consistent with the national interest to do so.” (Exec. Ord. 10865, Section 2.)
To be eligible for a security clearance, an applicant must meet the security
guidelines contained in the Directive. Enclosure 2 of the Directive sets forth personnel
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security guidelines, as well as the disqualifying conditions and mitigating conditions
under each guideline.
Initially, the Government must present evidence to establish controverted facts in
the SOR that disqualify or may disqualify the applicant from being eligible for access to
classified information. (Directive, Paragraph E3.1.14.) Thereafter, the applicant is
responsible for presenting evidence to rebut, explain, extenuate, or mitigate the facts.
(Directive, Paragraph E3. 1.15.) 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).) “Any doubt as to
whether access to classified information is clearly consistent with national security will
be resolved in favor of the national security.” (Directive, Paragraph E2.2.2.)
A person granted access to classified information enters into a special
relationship with the government. The government must be able to repose a high
degree of trust and confidence in those individuals to whom it grants access to
classified information. The decision to deny an individual a security clearance is not a
determination as to the loyalty of the applicant. (Exec. Ord. 10865, Section 7.) It is
merely an indication that the applicant has not met the strict guidelines the President
has established for issuing a clearance.
Analysis
Guideline F, Financial Considerations
The security concern relating to Financial Considerations is set forth in
Paragraph 18 of the new AG, and is as follows:
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 AG note several conditions that could raise security concerns. Under
Paragraph a., an “inability or unwillingness to satisfy debts” is potentially disqualifying.
Under Paragraph c., “a history of not meeting financial obligations” may raise security
concerns. The evidence shows applicant has a long history of not paying his State and
Federal income tax obligations. Accordingly, these disqualifying conditions are
applicable.
The guidelines also set out mitigating conditions. Paragraph a. may apply where
“the behavior happened so long ago, was so infrequent, or occurred under such
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circumstances that it is unlikely to recur and does not cast doubt on the individual*s
current reliability, trustworthiness, or good judgment.” Applicant’s failure to pay his
income tax when due was recent, frequent, and intentional. This mitigation condition is
not applicable.
Under Paragraph 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, a business downturn, unexpected medical emergency, or a death, divorce
or separation), and the individual acted responsibly under the circumstances.” Although
the financial problems that caused applicant to file for bankruptcy in the 1980s were,
according to applicant, caused by a lengthy period of unemployment, he failed to
provide credible evidence that his unemployment was beyond his control, or that he
acted responsibly under the circumstances. With respect to his income tax debts, the
evidence establishes that applicant intentionally let them go delinquent and then ignored
them. This mitigating condition does not apply.
Evidence that “the person has received or is receiving counseling for the problem
and/or there are clear indications that the problem is being resolved or is under control”
is potentially mitigating under Paragraph c. Applicant has presented evidence that he
retained an accountant to help him resolve his income tax delinquencies, and that the
accountant has taken some action toward that goal. However, given applicant’s history,
this evidence falls short of establishing the problem is being resolved or is under control.
This mitigation condition does not apply.
Paragraph d. applies where the evidence shows “the individual initiated a good-
faith effort to repay overdue creditors or otherwise resolve debts.” In his SOR response,
applicant stated (1) the IRS cancelled his 1987, 1988, 1994 and 1995 tax debts, and (2)
he paid his delinquent 2002 and 2003 IRS debts. Applicant’s failure to provide any
documentation from the IRS corroborating these statements make them suspect,
particularly in light of his concealment of his tax liens and debts and when he completed
the SCA. However, even if he were given credit for the elimination of these debts, he
has not provided evidence of a good-faith effort to resolve his remaining tax debts. His
vague statement that “arrangements are being made” to settle his remaining IRS debts
(totaling approximately $72,000), and his State income tax debts (totaling approximately
$22,000.00), is hardly sufficient to conclude a good-faith effort is underway. This
mitigating condition does not apply.
It may be mitigating under Paragraph e. if “the individual has a reasonable basis
to dispute the legitimacy of the past-due debt which is the cause of the problem and
provides documented proof to substantiate the basis of the dispute or provides evidence
of actions to resolve the issue.” Since applicant provided no reason for his
disagreement with the IRS and OTC over the amount of taxes owed, there is no way to
conclude his position was reasonable. This mitigating condition does not apply.
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Guideline E, Personal Conduct
The security concern relating to the guideline for Personal Conduct is set forth in
Paragraph 15 of the AG, and is as follows:
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.
Paragraph16 describes conditions that could raise a security concern and may be
disqualifying. Under Paragraph a., the “deliberate omission, concealment, or falsification
of relevant facts from any personnel security questionnaire, personal history statement,
or similar form used to conduct investigations, determine employment qualifications,
award benefits or status, determine security clearance eligibility or trustworthiness, or
award fiduciary responsibilities,” may be disqualifying. This disqualifying condition is
applicable because applicant intentionally provided false, material information in
response to three questions on the SCA he completed in April 2004.
Paragraph 17 sets forth conditions that could mitigate security concerns. I
considered each of them and conclude none apply.
“Whole Person” Analysis 
Under the whole person concept, the AJ must evaluate an applicant’s security
eligibility by considering the totality of the applicant’s conduct and all the circumstances.
An AJ should 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) 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.” Under AG Paragraph 2c, the ultimate
determination of whether to grant a security clearance must be an overall common
sense judgment based upon careful consideration of the guidelines and the whole
person concept.       
I considered the potentially disqualifying and mitigating conditions in light of all
the facts and circumstances surrounding this case. Applicant is a mature man who has
a history of ignoring his income tax obligations. In 2004, he concealed this derogatory
information from the Government when he was asked about it on an SCA. His conduct
was intentional, serious, frequent, and recent. In view of these facts, I conclude
applicant failed to mitigate the security concerns arising from Guidelines E and F.
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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: AGAINST APPLICANT
Subparagraphs 1.a. through 1.r: Against Applicant
Subparagraph 1.s: For Applicant
Paragraph 2, Guideline E: AGAINST APPLICANT
Subparagraph 1.a: Against Applicant
Subparagraph 1.b: Against Applicant
Subparagraph 1.c: Against Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is not
clearly consistent with national security to grant applicant eligibility for a security
clearance.  Eligibility for access to classified information is denied.
                                              
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JOSEPH TESTAN
Administrative Judge