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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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-------------------------- )       ISCR Case No. 10-03693
)
)
Applicant for Security Clearance )
Appearances
For Government: Jeff A. Nagel, Esquire, Department Counsel
For Applicant: Sarah Kneisel, Esquire
June 26, 2012
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Decision On Remand 
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MOGUL, Martin H., Administrative Judge:
On April 11, 2011, the Defense Office of Hearings and Appeals (DOHA) issued a
Statement of Reasons (SOR) detailing the security concerns under Guidelines F and E
for Applicant. 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 adjudicative guidelines
(AG) effective within the Department of Defense after September 1, 2006. 
 
On May 5, 2011, Applicant replied to the SOR (RSOR) in writing, and he
requested a hearing before an Administrative Judge. I received the case assignment on
June 20, 2011. DOHA issued a notice of hearing on November 22, 2011, and the
hearing was convened as scheduled by Video Teleconference on December 6, 2011.
The Government offered Exhibits 1 through 6, which were received without objection.
Applicant testified on his own behalf and submitted Exhibits A through G at the time of
hearing, which were also received without objection. I granted Applicant’s request to
keep the record open until December 30, 2011, to submit additional documents showing
that Applicant had filed his Federal and state tax returns. No additional documents were
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received. DOHA received the transcript of the hearing (Tr) on December 19, 2011.
Based upon a review of the pleadings, exhibits, and the testimony of Applicant, eligibility
for access to classified information is denied.
Remand Issue
On February 29, 2012, a Decision was issued in this case denying Applicant
eligibility for a security clearance. In my decision, I had written that no Post Hearing
documents were received. Applicant filed a timely appeal, and the Appeal Board (AB)
issued its decision on May 21, 2012, which concluded that the case be Remanded. The
AB held that in Applicant’s appeal brief, he provided credible evidence that he submitted
Post Hearing evidence, which was received by DOHA within the prescribed period of
time. I had never received Applicant’s Post Hearing documents before I issued my
Decision. I will describe each of the Post Hearing documents that I have now received,
and a determination as to their effect on this Remand Decision will be discussed below
in the section titled “Effect of Post Hearing Documents.”
Post Hearing Documents
Exhibit AA is a cover letter to Department Counsel from the Applicant’s attorney’s
office, indicating they were submitting Post Hearing documents. Just to reiterate, I never
received this document or any of the other Post Hearing documents until after the AB
had remanded this case. Exhibit BB is a copy of Applicant’s 1040 Federal tax return for
tax year 2009, signed by Applicant on December 28, 2010, with additional attachments.
Exhibit CC is a copy of Applicant’s 1040 Federal tax return for tax year 2008, signed by
Applicant on December 28, 2010, with an additional attachment. Exhibit DD is a copy of
Applicant’s 1040 Federal tax return for tax year 2007, signed by Applicant on December
28, 2010, with additional attachments. Exhibit EE is a copy of Applicant’s 1040 Federal
tax return for tax year 2006, signed by Applicant on December 28, 2010, with additional
attachments. Exhibit FF is a copy of Applicant’s 1040 Federal tax return for tax year
2005, signed by Applicant on December 28, 2010, with additional attachments. Exhibit
GG is a copy of Applicant’s 1040 Federal tax return for tax year 2004, unsigned by
Applicant, with additional attachments. Exhibit HH is a copy of Applicant’s 1040 Federal
tax return for tax year 2003, unsigned by Applicant, with additional attachments. 
Findings of Fact
After a complete and thorough review of the evidence in the record, including
Applicant's RSOR, the admitted documents, and the testimony of Applicant, and upon
due consideration of that evidence, I make the additional findings of fact: 
Applicant is 46 years old. He is unmarried, and he has three daughters. He
served in the United States Navy from 1986 to 2006, when he received an Honorable
Discharge. Applicant seeks a DoD security clearance in connection with his employment
in the defense sector.
Paragraph 1 Guideline F, Financial Considerations
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The SOR lists nine allegations (1.a. through 1.i.) regarding financial difficulties
under Adjudicative Guideline F. The allegations will be discussed below in the same
order as they were listed on the SOR: 
1.a. The SOR alleges that Applicant failed to file his Federal Income Tax return
for tax year 2004, as required. In his RSOR, Applicant denied this allegation. At the
hearing, Applicant admitted that he had not filed a Federal Income Tax return for tax
year 2004 when it was due, nor did he receive an extension. He testified that he filed
this return in December 2010. (Tr at 29.)
1.b. The SOR alleges that Applicant failed to file his State of Tennessee Income
Tax return for tax year 2004, as required. In his RSOR, Applicant denied this allegation.
At the hearing, based on evidence introduced at the hearing, the SOR allegations in
1.b., 1.d., 1.f., and 1.h., were all amended without objection, from the state of
Tennessee to the state of Kentucky. Therefore, it is alleged in the amended SOR that
Applicant failed to file his State of Kentucky Income Tax return for tax year 2004, as
required. At the hearing, Applicant admitted that he had not filed a State Income Tax
return for tax year 2004 when it was due, nor did he receive an extension. He testified
that he filed this return in December 2010. (Tr at 30.)
1.c. The SOR alleges that Applicant failed to file his Federal Income Tax return
for tax year 2005, as required. In his RSOR, Applicant denied this allegation. At the
hearing, Applicant admitted that he had not filed a Federal Income Tax return for tax
year 2005 when it was due, nor did he receive an extension. He testified that he filed
this return in December 2010. (Tr at 29.)
1.d. The amended SOR alleges that Applicant failed to file his State of Kentucky
Income Tax return for tax year 2005, as required. In his RSOR, Applicant denied this
allegation.  At the hearing, Applicant admitted that he had not filed a State Income Tax
return for tax year 2005 when it was due, nor did he receive an extension. He testified
that he filed this return in December 2010. (Tr at 30.)
1.e. The SOR alleges that Applicant failed to file his Federal Income Tax return
for tax year 2006, as required. In his RSOR, Applicant denied this allegation. At the
hearing, Applicant admitted that he had not filed a Federal Income Tax return for tax
year 2006 when it was due, nor did he receive an extension. He testified that he filed
this return in December 2010. (Tr at 29.)
1.f. The amended SOR alleges that Applicant failed to file his State of Kentucky
Income Tax return for tax year 2006, as required. In his RSOR, Applicant denied this
allegation.  At the hearing, Applicant admitted that he had not filed a State Income Tax
return for tax year 2006 when it was due, nor did he receive an extension. He testified
that he filed this return in December 2010. (Tr at 30.)
1.g. The SOR alleges that Applicant failed to file his Federal Income Tax return
for tax year 2008, as required. In his RSOR, Applicant denied this allegation. At the
hearing, Applicant admitted that he had not filed a Federal Income Tax return for tax
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year 2008 when it was due, nor did he receive an extension. He testified that he filed
this return in December 2010. (Tr at 29.)
1.h. The amended SOR alleges that Applicant failed to file his State of Kentucky
Income Tax return for tax year 2008, as required. In his RSOR, Applicant denied this
allegation. At the hearing, Applicant admitted that he had not filed a State Income Tax
return for tax year 2006 when it was due, nor did he receive an extension. He testified
that he filed this return in December 2010. (Tr at 30.) Exhibit G shows that a state tax
return was prepared for tax year 2006, but no evidence was introduced to establish that
it was filed. 
 
1.i. The SOR alleges that Applicant is indebted to the state of Tennessee in the
amount of approximately $25,000 on a child support account that has been placed in
collection. In his RSOR, Applicant denied this allegation.  However, at the hearing,
Applicant testified that he had been court ordered to pay $1,000 a month in child
support, but since he was only paying $600 a month, he was $400 in arrears each
month. He conceded that he had signed an agreement to pay the $1,000 a month, even
though he did not believe he could afford it, because he just wanted to get the divorce
concluded. (Tr at 82-83.)  This resulted in his owing the amount of approximately
$25,000 for child support. Applicant indicated that he is planning to request that the
amount due each month be lowered, since he has two daughters over the age of 18. At
the time of the hearing, Applicant  has not yet taken any action. (Tr at 40-46.)  
Applicant provided reasons for his financial difficulties. He explained that his
grandfather died in 2000, and his grandmother died in 2003. He was close to both of his
grandparents. Also, in 2002, he separated from his wife. As a result of these incidents,
he failed to take care of his financial obligations, including filing his tax returns. Applicant
testified that in 2003, after he and his wife separated, his wife filed a tax return
separately. Since he had to file his own tax return, he owed more than he would have if
they had filed together. (Tr at 70.) He contacted the IRS to attempt to resolve his
financial situation, but he could not resolve it, as they claimed he owed them $1,100,
and he contended that he had sent them a check for that amount. When the IRS
claimed they had not received the check, Applicant got frustrated and stopped
attempting to resolve the financial situation with the IRS. (Tr at 48-51.)
Applicant conceded that while he was still serving in the Navy he could have had
used the Navy Voluntary Income Tax service to file his taxes, but because of his bitter
feelings about the IRS together with his emotional issues because of the deaths of his
grandparents and his separation from his wife, he simply “didn’t feel like dealing with the
IRS,” and he made a conscious decision not to file Federal tax returns for years 2004
through 2008. Applicant also testified that he failed to file state tax returns for the same
basic reasons that he failed to file Federal tax returns. (Tr at 77.) Applicant contended
that in 2010, he filed his Federal and State tax returns for years 2004 through 2009.  (Tr
at 29-30, 71-74.) As reviewed above, the record remained open until December 30,
2011, to allow Applicant to submit additional documents, showing that he had filed his
Federal and State tax returns. Since no documents were received, I cannot conclude
that Applicant has filed his Federal or state taxes for years 2004 through 2009. 
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Applicant testified that his current financial situation is “pretty good,” but since he
gets paid in American dollars, and a number of his bills are in Japanese yen, he is
losing almost $1,000 every month. (Tr at 51.) 
Paragraph 2 Guideline E, Personal Conduct
2.a.  It is alleged in the SOR that in about September 2003, Applicant was
questioned regarding a rape complaint that was brought against him after he met the
complainant on a chat room and engaged in sexual intercourse with her at her off-base
home. In his RSOR, Applicant denied this allegation. At the hearing, Applicant testified
that he did indeed have sexual intercourse with the woman who is the subject of this
allegation, but he contends that it was consensual as she agreed to have sex with him.
An investigation was launched, but at a later date Applicant was informed by the
investigator of the case that the investigation had been dropped. (Tr at 57.) Since no
evidence was introduced to establish that the investigation resulted in prosecution and
conviction, I do not find that this allegation has been proven adverse to Applicant. 
Applicant executed a Security Clearance Application (SCA) on November 4,
2009. (Exhibit 1.) The SOR alleges that Applicant failed to provide truthful and candid
answers to Question 26, subparagraphs c and j. 
2.b. Question 26 c. of the SCA asks, “For the last 7 years, have you failed to pay
Federal, state, or other taxes, or to file a tax return, when required by law of ordinance?”
Applicant answered, “No” to this question subsection. It is alleged in the SOR that he
failed to disclose that he had failed to file Federal and State income tax returns, as set
forth in subparagraphs 1.a. through 1.h., as reviewed above. In his RSOR, Applicant
denied this allegation.
At the hearing, Applicant testified that when he completed the SCA, it was on a
Government computer, and he only had two hours to complete it. As he got near the
end, he was running out of time. Applicant contended when he got to the question
concerning filing taxes, he felt he was running out of time, and he did not have time to
read the question fully and answer it correctly. Applicant averred that he was not trying
to mislead the Government. (Tr at 57-62.)  
Applicant did admit that he had completed several SCAs before the one in 2009.
(Tr at 84-85.) Since this question is unambiguous and should be understandable to any
person, particularly someone who has completed several previous SCAs, I find that
Applicant knew or should have known that the answer to this question was “Yes,” and
he should have listed the Federal and State taxes that he failed to file for years 2004
through 2008. I find that his failure to answer, “Yes” was an attempt to mislead the
Government. 
2.c. Question 26 j. of the SCA asks, “Have you been delinquent on court-
imposed alimony or child support payments?”  Applicant answered, “No” to this question
subsection. It is alleged in the SOR that Applicant failed to disclose that he was
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delinquent on court imposed child support payments, set forth in subparagraph 1.i,,
above. In his RSOR, Applicant denied this allegation. 
Applicant testified that he knew he was paying $600 a month rather than the
court ordered $1,000, but he did not believe that the excess amount should be
considered as requiring an affirmative answer under this question. (Tr at 62.) I find that
Applicant knew that he was paying $400 less each month than ordered by the court, so
he would have to know that he was delinquent on the total amount owed to his wife for
child support. Therefore, Applicant knew or should have known that he should have
answered, “Yes” to this question and indicated that he was $25,000 in arrears, or at
least that he was behind many thousands of dollars in the amount he owed for child
support. I find that his failure to answer, “Yes” was an attempt to mislead the
Government. 
Mitigation
Applicant submitted several documents in an attempt to mitigate the concerns
addressed in the SOR. These included: his resume showing his previous employment
experience and knowledge (Exhibit A); a personal financial statement showing Applicant
has a monthly income of $3,032 and monthly expenses of $2,605, (Exhibit B),  a
document from the Department of Human Services, showing Applicant has paid
$37,172.23 in child support (Exhibit D); and a DD Form 214, confirming that Applicant
was in the Navy from 1986 to 2006. (Exhibit E.) Documents from the IRS and the State
of Kentucky regarding taxes were also introduced, but these documents do not
establish that Applicant made any payment for Federal or State taxes. (Exhibit F and
G.)   
Policies
When evaluating an applicant’s suitability for a security clearance, the
administrative judge must consider the adjudicative guidelines (AG). In addition to brief
introductory explanations for each guideline, the adjudicative guidelines list potentially
disqualifying conditions and mitigating conditions, which are useful in evaluating an
applicant’s eligibility for access to classified information.
These guidelines are not inflexible rules of law. Instead, recognizing the
complexities of human behavior, these guidelines are applied in conjunction with the
factors listed in the adjudicative process. The administrative judge’s over-arching
adjudicative goal is a fair, impartial and commonsense decision. According to AG ¶ 2(c),
the entire process is a conscientious scrutiny of a number of variables known as the
“whole-person concept.” The administrative judge must consider all available, reliable
information about the person, past and present, favorable and unfavorable, in making a
decision.
The protection of the national security is the paramount consideration. AG ¶ 2(b)
requires that “[Any doubt concerning personnel being considered for access to
classified information will be resolved in favor of national security.” In reaching this
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decision, I have drawn only those conclusions that are reasonable, logical and based on
the evidence contained in the record. Likewise, I have avoided drawing inferences
grounded on mere speculation or conjecture.
Under Directive ¶ E3.1.14, the Government must present evidence to establish
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, the applicant is
responsible for presenting “witnesses and other evidence to rebut, explain, extenuate,
or mitigate facts admitted by applicant or proven by Department Counsel. . . .” The
applicant has the ultimate burden of persuasion as to obtaining a favorable security
decision. 
A person who seeks access to classified information enters into a fiduciary
relationship with the Government predicated upon trust and confidence. This
relationship transcends normal duty hours and endures throughout off-duty hours. The
Government reposes a high degree of trust and confidence in individuals to whom it
grants access to classified information. Decisions include, by necessity, consideration of
the possible risk the applicant may deliberately or inadvertently fail to protect or
safeguard classified information. Such decisions entail a certain degree of legally
permissible extrapolation as to potential, rather than actual, risk of compromise of
classified information.
 
Section 7 of Executive Order 10865 provides that decisions shall be “in terms of
the national interest and shall in no sense be a determination as to the loyalty of the
applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites
for access to classified or sensitive information). 
Analysis
Guideline F, Financial Considerations
The security concern relating to the guideline for Financial Considerations is set
out in AG ¶ 18:  
      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 guideline notes several conditions that could raise security concerns and
could potentially apply in this case.  Under AG ¶ 19 (a), “an inability or unwillingness to
satisfy debts” is potentially disqualifying. Similarly under AG ¶  19 (c), “a history of not
meeting financial obligations” may raise security concerns. I find that both of these
disqualifying conditions apply to Applicant in this case. AG ¶  19 (g) is also applicable
for Applicant’s “failure to file annual Federal, state or local income tax returns as
required.”  Applicant’s failure to file his Federal and State tax returns and the money that
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he still owes to the Federal Government and the State government of Kentucky, as well
as the past due amount he owes for child support, are all of concern to the Government.
     AG ¶ 20 provides conditions that could mitigate security concerns from financial
difficulties: Under AG ¶  20 (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.” As noted
above, Applicant testified that his financial problems resulted in part from the difficult
circumstances of his grandfather and grandmother dying, plus his separation from his
wife. However, I cannot find that Applicant has acted responsibly. He has failed to file
his Federal and state tax returns for many years, and it is still not clear if they have been
filed, plus he has failed to attempt to resolve his overdue child support debt.  Therefore,
I do not find that this potentially mitigating condition is a factor for consideration in this
case. 
I conclude that until Applicant has shown a good faith effort to file his Federal and
state tax returns, and resolve his overdue debt both for his past taxes and his overdue
child support, he has not mitigated the financial concerns of the Government.
Guideline E, Personal Conduct
The Government relies heavily on the honesty and integrity of individuals seeking
access to our nation’s secrets. When such an individual intentionally falsifies material
facts or fails to furnish relevant information to a Government investigator, it is extremely
difficult to conclude that he nevertheless possesses the judgment, and honesty
necessary for an individual given a clearance. 
         With respect to Guideline E, I find that Applicant was aware that he had not filed
tax returns, both Federal and state, for years 2003 through 2008, and his answer to
question 26 c. on the 2009 SCA was a knowing attempt to mislead the Government.  He
also was aware that he was in arrears on his child support payments, and his answer to
question 26 j. on the SCA was a knowing attempt to mislead the Government.
       In reviewing the disqualifying conditions under Guideline E, I conclude that there
was “deliberate omission, concealment, or falsification of relevant facts from any
personnel security questionnaire” by Applicant. Therefore, I find ¶ 16 (a) applies against
Applicant. I do not find that any mitigating condition under ¶ 17 is applicable. Therefore,
I resolve Guideline E against Applicant.
Whole-Person Concept
      Under the whole-person concept, the Administrative Judge must evaluate an
Applicant’s eligibility for a security clearance by considering the totality of the Applicant’s
conduct and all the circumstances. The Administrative Judge should consider the nine
adjudicative process factors listed at AG ¶ 2(a): 
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(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.
       Under AG ¶ 2 (c), the ultimate determination of whether to grant eligibility for a
security clearance must be an overall commonsense 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. Based on all of the reasons cited above
as to why the disqualifying conditions apply and no mitigating conditions apply under
Guidelines F and E, I find that the record evidence leaves me with significant questions
and doubts as to Applicant’s eligibility and suitability for a security clearance under the
whole-person concept. For all these reasons, I conclude Applicant has not mitigated the
security concerns under the whole-person concept.  
Effect of Post Hearing Documents
Under Guideline F, Financial Considerations, Exhibits BB through HH do
establish that Federal tax returns were prepared for Applicant for tax years 2003
through 2009. However, there is no evidence that they were ever filed with the Internal
Revenue Service. Additionally, no evidence was ever submitted to show that Applicant
filed or even prepared Kentucky State tax returns for tax years 2004, 2005, 2006, or
2008, as alleged in the SOR. Applicant’s Post Hearing exhibits also failed to show that
Applicant had in any way resolved his past due child support of approximately $25,000. 
Under Guideline E, Personal Conduct, Applicant’s Post Hearing Exhibits fail to
mitigate my findings that Applicant’s answers to questions 26 c. and j. on the 2009 SCA
were knowing attempts to mislead the Government. 
Therefore, I find that nothing in Applicant’s Post Hearing documents in any way
changes the findings written in the initial Determination. 
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.i.: Against Applicant
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      Paragraph 2, Guideline E: AGAINST APPLICANT
Subparagraph 2.a.: For Applicant
Subparagraphs 2.b. and 2.c.: Against Applicant
Conclusion
         In light of all of the circumstances presented by the record in this case, it is not
clearly consistent with the national interest to grant Applicant eligibility for a security
clearance.  Eligibility for access to classified information is denied.
                                              
Martin H. Mogul
Administrative Judge