Consisting of the transcript (Tr.) and Government exhibits (GE) 1-5.1
DOHA acted under Executive Order 10865, Safeguarding Classified Information within Industry (February2
20, 1960), as amended; Department of Defense (DoD) Directive 5220.6, Defense Industrial Personnel Security
Clearance Review Program  (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG)
effective within the DoD on 1 September  2006. 
1
                                                             
                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 11-00533
)
Applicant for Security Clearance )
Appearances
For Government: Raashid S. Williams, Esquire, Department Counsel
For Applicant: Pro se
______________
Decision
______________
METZ, John Grattan, Jr., Administrative Judge:
Based on the record in this case,  Applicant’s clearance is denied.1
On 1 September 2011, the Defense Office of Hearings and Appeals (DOHA)
issued a Statement of Reasons (SOR) to Applicant detailing security concerns under
Guideline F, Financial Considerations.  Applicant timely answered the SOR, requesting2
a hearing. DOHA assigned the case to me 21 December 2011, and I convened a
hearing 24 January 2012. DOHA received the transcript (Tr.) 31 January 2012.
2
Findings of Fact
Applicant admitted the SOR financial allegations. He is a 49-year-old network
administrator employed by a defense contractor since October 2003. His annual salary
is $65,000. He draws another $15,600 annually in military retired pay. His wife makes
$90,000 per year. He seeks reinstatement of the clearance he appears to have held
without incident from 1994, when he was in the U.S. military, until May 2010, when his
clearance was suspended for loss of jurisdiction.
Applicant owes nearly $81,000 for tax liens, tax debt, and a delinquent credit
account. He also filed for Chapter 13 bankruptcy protection in October 2007, as well as
receiving non-judicial punishment (NJP) in 2000 for misuse of a government credit card.
He disclosed his delinquent debts and other adverse financial information on his August
2010 clearance application. However, he has not corroborated any of his claimed
payments or contacts with state and federal income tax agencies.
Applicant’s financial problems began in 2000, when he was serving on active
duty in the U.S. military in paygrade E-6. He misused his government credit card,
received NJP, and was awarded a reduction-in-rate (RIR) to paygrade E-5. Although
Applicant claims he was not barred from re-enlistment, he nevertheless decided to retire
at 20-years service when his enlistment ended in September 2002, even though he
might have had his earlier rate restored if he had remained in the military without
incident for another enlistment. He had acquired technical skills that he was anxious to
exploit in the private sector.
 Applicant’s military home of record was a state that treated its military members
as nonresidents if they were not assigned in state or met other defined indicia of
residence. Consequently, Applicant did not have to file state income tax returns during
the time he was in the military. He filed and paid his Federal income tax returns as
required.
When Applicant entered the private sector, he continued to file his Federal
income tax returns. However, he did not adjust his tax withholding to cover his tax
liability and found himself unable to pay. There is no evidence to show how many years
this went on, or what steps, if any, Applicant took to adjust his withholding. In June
2011, the Internal Revenue Service (IRS) filed a $25,000 tax lien against Applicant
(SOR 1.b). Applicant admits a further $15,000 indebtedness to the IRS (SOR 1.e) and
has not provided any documentation to show if this debt is included in, or is in addition
to, the lien. He has not provided any communications from the IRS to clarify his
indebtedness to the IRS. He claims, without corroboration, to have a pending offer in
compromise. He also claims, without corroboration, to have made three $200 payments
to the IRS even though he has not been able to establish a repayment plan.
When Applicant entered the private sector, he began filing state income tax
returns in the state where he lived (not his military home of record). However, when he
moved to a nearby state and lived there from March 2005 to March 2008, he failed to
3
ensure that his employer changed his withholding to his new state of residence.
Consequently, the state filed a $40,000 tax lien against Applicant in April 2010.
Applicant has not provided any communications from the state to clarify his
indebtedness to the state. He claims, without corroboration, that the state lien has been
released. He also claims, without corroboration, that he timely filed state income tax
returns for the state that he was incorrectly withholding income taxes for, but could not
collect those erroneous taxes withheld because of statute of limitations problems.
Applicant married his second wife in October 2004. In April 2005, they bought a
home together, in part so his father-in-law (with whom he did not get along) could
continue to live in the townhouse she owned before their marriage. Applicant has
refinanced both properties to take equity out to pay bills and make needed renovations.
The refinancing increased the monthly mortgage payments, which he and his wife then
had trouble making. He filed for Chapter 13 bankruptcy protection in October 2007, in
part to get the automatic stay of foreclosure action. The plan—which included an IRS
debt of $18,000 (SOR 1.e, 1.b?), a $30,000 mortgage, $1,000 in settlement expenses,
and a $790 credit card (SOR 1.d)—was confirmed in February 2008. He moved to have
the petition dismissed in June 2008, when he realized that the bankruptcy would not
necessarily prevent foreclosure on the properties. At the time the petition was
dismissed, he had paid about $4,100, of which 10% went to trustee expenses and the
balance to minimal payments on each of the four accounts. Both properties have been
foreclosed upon, but their status is unknown.
Beyond the financial counseling required as a condition of filing for bankruptcy
protection, he has not received credit counseling or financial education. The record
contains no work or character references.
Policies
The adjudicative guidelines (AG) list factors to evaluate a person’s suitability for
access to classified information. Administrative judges must assess disqualifying and
mitigating conditions under each issue fairly raised by the facts and situation presented.
Each decision must also show a fair, impartial, and commonsense consideration of the
factors listed in AG ¶ 2(a). The applicability of a disqualifying or mitigating condition is
not, by itself, conclusive. However, specific guidelines should be followed when a case
can be measured against them, as they are policy guidance governing the grant or
denial of a clearance. Considering the SOR allegations and the evidence as a whole,
the relevant adjudicative guideline is Guideline F (Financial Considerations).
Security clearance decisions resolve whether it is clearly consistent with the
national interest to grant or continue an applicant’s security clearance. The Government
must prove, by substantial evidence, disputed facts alleged in the SOR. If it does, the
burden shifts to applicant to refute, extenuate, or mitigate the Government’s case.
Because no one has a right to a security clearance, the applicant bears a heavy burden
of persuasion.
See, Department of the Navy v. Egan, 484 U.S. 518 (1988).3
¶19 (a) inability or unwillingness to satisfy debts;(c) a history of not meeting financial obligations; (g) failure4
to file annual Federal, state, or local income tax returns as required or the fraudulent filing of the same . . .
¶20 (a) the behavior happened so long ago, was so infrequent, or occurred under such circumstances that5
it is  unlikely to recur . . . 
¶20 (b) the conditions that resulted in the financial problem were largely beyond the person’s control . . . and6
the individual acted responsibly under the circumstances;
¶20 (c) the person has received or is receiving counseling for the problem and there are clear indications that7
the problem is being resolved or is under control;
¶20 (d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.8
4
Persons with access to classified information enter into a fiduciary relationship
with the Government based on trust and confidence. Therefore, the Government has a
compelling interest in ensuring each applicant possesses the required judgement,
reliability, and trustworthiness of those who must protect national interests as their own.
The “clearly consistent with the national interest” standard compels deciding any
reasonable doubt about an Applicant’s suitability for access in favor of the Government.3
Analysis
The Government established a case for disqualification under Guideline F, and
Applicant did not mitigate the security concerns. Applicant’s credit reports establish his
indebtedness. Although some minimal payments were made during the pendency of his
Chapter 13 bankruptcy plan, the payments did not continue and none of the alleged
debts have been fully paid or resolved.  Applicant’s difficulties with the IRS, due entirely4
to his failure to adjust his income tax withholding or to make payment arrangements
when he was unable to pay his annual tax liability, seem far from resolution. Similarly,
his state tax issues remain unresolved. Applicant failed to demonstrate how a family
income of over $170,000 per year was inadequate to keep their finances straight.
Applicant meets none of the mitigating factors for financial considerations. His
financial difficulties are both recent and multiple, and occurred under circumstances that
could easily recur.  His tax debts in particular were not due to circumstances beyond his5
control, and he has not acted responsibly in addressing them.  Aside from his brief6
detour into a Chapter 13 repayment plan, there is no evidence that he has sought credit
counseling or otherwise brought the problem under control.  None of the debts have7
been paid, much less paid in a timely, good-faith effort.  Further, given his unwillingness8
to seek or use financial counseling, there is nothing in the record to suggest that
Applicant will put his financial problems behind him. I conclude Guideline F against
Applicant.
5
Formal Findings
Paragraph 1. Guideline F: AGAINST APPLICANT
Subparagraphs a-f: Against Applicant
Conclusion
Under the circumstances presented by the record in this case, it is not clearly
consistent with the national interest to grant or continue a security clearance for
Applicant. Clearance denied.
                                              
                                             
JOHN GRATTAN METZ, JR
Administrative Judge