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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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[NAME REDACTED] )       ISCR Case No. 09-07121
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Applicant for Security Clearance )
Appearances
For Government: D. Michael Lyles, Esquire, Department Counsel
For Applicant: Mr. Jake West, Union Representative
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Decision
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MALONE, Matthew E., Administrative Judge:
Applicant accrued nearly $30,000 in delinquent federal and state tax debt by
claiming excessive exemptions from withholdings for which she did not qualify. She also
accrued about $8,000 in delinquent commercial credit debts through poor management
of her personal finances. Finally, she deliberately omitted her past-due debts from a
recent clearance application. Based upon a review of the pleadings, exhibits, and
transcript, Applicant’s request to renew her security clearance is denied.
Statement of the Case
On September 20, 2007, Applicant submitted an Electronic Questionnaire for
Investigations Processing (e-QIP) to renew a security clearance required for her job with
a defense contractor. She also submitted an e-QIP on March 9, 2009. After reviewing
the results of the ensuing background investigation, adjudicators for the Defense Office
1 Authorized by DoD Directive 5220.6 (Directive), Section E3.1.2.2.
2 Required by Executive Order 10865, as amended, and by DoD Directive 5220.6 (Directive), as amended.
3 The adjudicative guidelines were implemented by the Department of Defense on September 1, 2006. These
guidelines were published in the Federal Register and codified through 32 C.F.R. § 154, Appendix H (2006).
Pending official revision of the Directive, they take precedence over the guidelines listed in Enclosure 2 to the
Directive.
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of Hearings and Appeals (DOHA) issued to Applicant interrogatories1 to clarify or
augment information obtained in her background investigation. After reviewing the
results of the background investigation and Applicant’s responses to the interrogatories,
DOHA adjudicators were unable to make a preliminary affirmative finding2 that it is
clearly consistent with the national interest to continue Applicant’s access to classified
information. On September 2, 2010, DOHA issued to Applicant a Statement of Reasons
(SOR) alleging facts which raise security concerns addressed in the adjudicative
guidelines (AG)3 for financial considerations (Guideline F) and personal conduct
(Guideline E).
Applicant timely answered the SOR and requested a hearing. The case was
assigned to me on December 23, 2010. Pursuant to a Notice of Hearing issued on
February 3, 2011, I convened a hearing in this matter on February 22, 2011. The parties
appeared as scheduled. DOHA received a transcript of the hearing on March 3, 2011. 
The Government presented 17 exhibits that were admitted without objection as
Government Exhibits (Gx.) 1 - 17. Applicant testified and submitted four exhibits that
were admitted without objection as Applicant Exhibits (Ax.) A - D. (Tr. 44 - 53) She also
presented two witnesses. Additionally, I left the record open after the hearing so that
Applicant could submit additional relevant information. (Tr. 152 - 153) The record closed
on March 7, 2011, when I received additional information that has been admitted into
the record without objection as Ax. E. 
Findings of Fact
Under Guideline F, the Government alleged that Applicant owed $28,978 to the
Internal Revenue Service (IRS) for tax liens filed in October 2008 and December 2009
for unpaid taxes from each tax year between 2004 and 2008, inclusive (SOR 1.a); that
in November 2009, her wages were involuntarily garnished by the IRS (SOR 1.b); that
she owes $462 for a delinquent medical account referred for collection (SOR 1.c); that
she owes $4,283 for a delinquent credit card account referred for collection (SOR 1.d);
that she owes $2,376 for unpaid taxes on a timeshare account (SOR 1.e); that she
owes $600 for unpaid state taxes from 2006 (SOR 1.f); that she owes $300 for unpaid
state taxes from 2009 (SOR 1.g); and that the tax debt at SOR 1.f is being satisfied
through an involuntary wage garnishment levied by the state in May 2010 (SOR 1.h).
Under Guideline E, the Government alleged that the debt alleged in SOR 1.a
arose when Applicant claimed nine dependent exemptions from withholding each year,
but listed no dependents when she filed her annual tax returns (SOR 2.a); that she
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deliberately made false statements in her September 2007 e-QIP when she answered
“no” to e-QIP question 28.a (debts greater than 180 days past due in the previous seven
years) (SOR 2.b); and that she deliberately made false statements in her September
2007 e-QIP when, in response to question 28.b (debts currently more than 90 days past
due), she answered “yes,” listed a delinquent student loan, but omitted the IRS debts
alleged in SOR 1.a (SOR 2.c).
Under Guideline F, Applicant denied the allegations at SOR 1.c and 1.h, and
admitted the remaining SOR 1 allegations. Under Guideline E, she admitted SOR 2.a,
but denied the remaining SOR 2 allegations. Applicant’s admissions are incorporated in
my findings of fact. Having reviewed Applicant’s response to the SOR, the transcript,
and exhibits, I make the following additional findings of relevant fact.
Applicant is 55 years old and has worked for the same defense contractor since
August 1984 in a position that requires a security clearance. She enlisted in the U.S.
Navy in 1975, but was discharged for medical reasons before she completed boot
camp. She has never been married, but she has one child who is now age 35. (Gx. 1)
Applicant has held a security clearance since at least June 1989. (Gx. 13) In
June 1992, she submitted a National Agency Questionnaire (DD Form 398) to renew
her security clearance. In that form, she disclosed that her pay was being garnished to
satisfy a delinquent debt of $2,899 owed to a commercial credit company. On May 13,
1992, her employer had submitted an Adverse Information Report (AIR) when the order
to garnish her wages was received. (Gx. 13) On May 18, 1992, Applicant filed a Chapter
7 bankruptcy petition seeking to discharge debts and liabilities of approximately
$28,000. Included with her Chapter 7 petition was a Motion to Quash the
aforementioned wage garnishment. She received a Chapter 7 discharge on August 18,
1992. (Gx. 14; Gx. 15)
On March 25, 1996, Applicant’s employer submitted another AIR reflecting that
the IRS had garnished Applicant’s wages to satisfy a $3,647 debt for unpaid taxes in
1991, 1992, and 1993. This was also disclosed on Applicant’s April 28, 1996, security
clearance application. (Gx. 16; Gx. 17) 
On February 23, 2009, Applicant’s employer submitted another AIR indicating
that the IRS had garnished Applicant’s wages to satisfy a $23,406 debt for unpaid taxes
in 2004, 2005, 2006, and 2007. Applicant made monthly payments in varying amounts
on this debt from 2004 until September 2008. Thereafter, the IRS demanded increased
monthly amounts, which the Applicant could not afford. The IRS then resorted to
involuntary garnishment. This debt is still being repaid and accruing interest and
penalties. Applicant estimates she currently owes about $30,000 in unpaid taxes to the
federal government. (Answer to SOR; Gx. 3; Gx. 4; Gx. 5; Gx. 6; Ax. A; Tr. 71 - 75) 
Applicant filed her tax return for 2008 after the April 15, 2009, filing deadline. She
owes $4,439 for 2008 taxes, but she has not yet paid them. She qualified for a tax
refund of about $3,800 from her 2010 taxes, but that refund was claimed by the IRS and
credited toward her tax debt. (Gx. 4; Ax. A; Tr. 74 - 75)
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Applicant’s tax debt for tax years 2004 through 2008 resulted when she claimed
nine exemptions from withholding on her W-4. When she filed her tax returns, she
correctly listed zero dependent credits. However, not enough tax had been withheld
throughout each tax year, and she could not afford to pay the taxes due. Applicant
averred that she did this to help pay medical expenses for her mother, who became sick
in 2005 and eventually died in 2009. When she was asked at the hearing about her tax
debts for 1991, 1992, and 1993, Applicant acknowledged that she claimed too many
exemptions during those years as well, but that she did so simply to have more cash in
her paycheck each week. (Tr. 68 - 69)
Applicant has had difficulty repaying her debts, in part, because of medical
reasons related to cardiac and kidney conditions. Attendance records indicated she was
on sick leave and other extended absences from December 2008 until October 2009.
(Ax. E)
On May 18, 2009, another AIR was issued because the state where Applicant
lives and works garnished Applicant’s wages to satisfy a debt for unpaid taxes in 2006
($600) and in 2009 ($300). This debt has been satisfied through involuntary wage
garnishment. (Answer to SOR; Gx. 6; Gx. 7; Ax. D; Tr. 66 - 68)
Credit reports obtained during Applicant’s most recent background investigation
(Gx. 2; Gx. 9; Gx. 10) attributed to her an unpaid $462 medical bill referred for collection
(SOR 1.c) and an unpaid $4,283 credit card bill referred for collection (SOR 1.d).
Applicant has paid the medical debt (Ax. B) and is making regular monthly payments on
the credit card bill. (Ax. C)
Applicant also owes a $2,376 debt for unpaid taxes on a timeshare she and her
niece co-own. This debt remains unpaid and Applicant expected her niece to pay, but
she did not do so. The debt has been delinquent since 2008, and Applicant has not
made any attempt to resolve it. (Gx. 4; Tr. 65 - 66, 79 - 80)
In January 2009, Applicant enlisted the services of a credit counseling and debt
management company. However, she stopped using their services in May 2009
because she disagreed with the fees they charged. (Gx. 4) She also used a credit
counseling service at some point before 2009, but it was unclear from her testimony
what, if anything, was accomplished through this action. (Tr. 115 - 117)
In Applicant’s September 2007 e-QIP, she responded “no” to question 28.a (In
the last 7 years, have you been over 180 days delinquent on any debt(s)?), In the same
questionnaire, in response to question 28.b (Are you currently 90 days delinquent on
any debt(s)?), she answered “yes,” but listed only a past-due student loan debt that is
now in deferral. In response to DOHA interrogatories, and in her testimony, she averred
that she did not list her IRS debts because she did not understand the questions. (Gx.
2; Gx. 4; Tr. 69 - 70, 97 - 100)
Applicant has been a good and faithful employee of the same company since
1984. Some of her co-workers and supervisors who have known her for most of her
4 See Department of the Navy v. Egan, 484 U.S. 518 (1988).
5 Directive. 6.3.
6 See Egan, 484 U.S. at 528, 531.
7 See Egan; Adjudicative Guidelines, ¶ 2(b).
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tenure there testified that she is honest, dedicated, and of good character in every
respect. (Tr. 122 - 147)
Policies
A security clearance decision is intended to resolve whether it is clearly
consistent with the national interest4 for an applicant to either receive or continue to
have access to classified information. Each decision must be a fair, impartial, and
commonsense determination based on examination of all available relevant and
material information,5 and consideration of the pertinent criteria and adjudication policies
in the adjudicative guidelines. Decisions must also reflect consideration of the factors
listed in ¶ 2(a) of the new guidelines. Commonly referred to as the “whole-person”
concept, those factors are:
(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) the 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. 
The presence or absence of a disqualifying or mitigating condition is not, by itself,
conclusive. However, specific applicable guidelines should be followed whenever a case
can be measured against them as they represent policy guidance governing the grant or
denial of access to classified information.
The Government bears the initial burden of producing admissible information on
which it based the preliminary decision to deny or revoke a security clearance for an
applicant. Additionally, the Government must be able to prove controverted facts
alleged in the SOR. If the Government meets its burden, it then falls to the applicant to
refute, extenuate, or mitigate the Government’s case. Because no one has a “right” to a
security clearance, an applicant bears a heavy burden of persuasion.6 A person who
has access to classified information enters into a fiduciary relationship with the
Government based on trust and confidence. Thus, the Government has a compelling
interest in ensuring each applicant possesses the requisite judgment, reliability, and
trustworthiness of one who will protect the national interests as his or her own. The
“clearly consistent with the national interest” standard compels resolution of any
reasonable doubt about an applicant’s suitability for access in favor of the Government.7
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Analysis
Financial
The security concern about Applicant’s finances, as stated in AG ¶ 18, is that:
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.
Available information supports all of the allegations at SOR 1.a - 1.h. Applicant
accrued over $28,000 in unpaid federal tax debt for tax years 2004 through 2008.
Despite making some payments during 2004 and 2005, she was unable to comply with
the IRS’ required terms of payment, and the debt is now being satisfied through
involuntary wage garnishment. She also had to repay $900 in state taxes for 2006 and
2009. Those debts were paid, albeit through involuntary wage garnishment. Applicant
also had debts in 1992 and 1996 that had to be satisfied through garnishment. All of her
tax debts arose through improper claims of exemptions from withholding for dependents
she never had. Her 35-year-old daughter has not been her dependent since at least
1996. Finally, Applicant’s credit history reflects numerous delinquencies and a
bankruptcy. The facts established require application of the disqualifying conditions
listed at AG ¶ 19(a) (inability or unwillingness to satisfy debts), and AG ¶ 19(c) (a history
of not meeting financial obligations).
In response, Applicant claimed that her recent debts arose from medical
conditions for herself and her mother over which she had no control. This claim requires
consideration of the mitigating condition at AG ¶ 20(b) (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). However,
AG ¶ 20(b) does not apply because Applicant did not establish that her misuse of
exemptions from tax withholding was a consequence of her mother’s health. To the
contrary, it appears this has been a regular practice by the Applicant dating back to
1991. Additionally, taken as a whole, all of the available information about Applicant’s
finances since about 1989 shows she has been largely irresponsible when it comes to
managing her finances. She only pays the larger of her commercial credit debts
begrudgingly, and her tax debts, involuntarily.
Applicant’s delinquent tax debts continue to be resolved through wage
garnishment, her debt for unpaid taxes on a timeshare has not been addressed, and a
large credit card delinquency is being slowly resolved. Further, Applicant has not
followed through on previous debt management and credit counseling opportunities, or
established that she has changed the way she manages her personal finances so they
will not be a problem in the future. Accordingly, none of the other AG ¶ 20 mitigating
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conditions apply here. On balance, Applicant has mitigated the security concerns about
her finances.
Personal Conduct
The Government’s information also supported the SOR allegations in SOR 2. At
the outset, Applicant’s attempts to have more cash on hand through improper
manipulation of her exemptions from withholding, while at the same time accruing debts
she would not or could not pay, reflects significant defects in her judgment with respect
to her finances. Her inability or unwillingness to properly manage her finances is
sufficient to invoke the general security concern expressed at AG ¶ 15 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.
Additionally, despite Applicant’s claim that her omission of her tax and other
debts from her 2007 e-QIP was unintentional, I conclude from all of the information
probative of this issue that it was. Applicant has completed other versions of the same
questionnaire since she was first cleared in 1989. She knew, or should have known,
that she had past-due debts within the meaning of questions 28.a and 28.b. Thus, the
disqualifying condition at AG ¶ 16(a) (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) applies.
By contrast, Applicant did not establish that she made a good-faith effort to
correct her omission, or that she was advised by competent officials to answer her e-
QIP as she did. Finally, deliberately making a false statement to the Government is not
a minor infraction. It is potentially a violation of federal law, and it is inconsistent with
basic tenets of DoD’s personnel security system. Accordingly, this record does not
support application of any of the mitigating conditions listed at AG ¶ 17. Applicant has
failed to mitigate the adverse security concerns raised by the Government’s information
about her personal conduct.
Whole-Person Concept
I have evaluated the facts presented and have applied the appropriate
adjudicative factors under Guidelines E and F. I have also reviewed the record before
me in the context of the whole-person factors listed in AG ¶ 2(a). Applicant is 55 years
old, and she has been employed by the same company for over 26 years. Her
professional stability and good reputation in the workplace are commendable. However,
the positive information in the record is far outweighed by her protracted history of
financial problems and her recent deliberate falsification in her e-QIP. A fair and
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commonsense assessment of all of the available information shows that Applicant has
not resolved any of the doubts about her suitability for access to classified information
raised by this record. Because protection of the national interest is the paramount
consideration here, those doubts must be resolved for the Government.
Formal Findings
Formal findings 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 - 1.h: Against Applicant
Subparagraph 2, Guideline E: AGAINST APPLICANT
Subparagraphs 2.a - 2.e: Against Applicant
Conclusion
In light of all of the foregoing, it is not clearly consistent with the national interest
for Applicant to have access to classified information. Request for continued eligibility
for a security clearance is denied.
                                         
MATTHEW E. MALONE
Administrative Judge