Item 5.1
Item 1.2
1
                                                                     
                               DEPARTMENT OF DEFENSE
                DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 12-04731
)
)
Applicant for Security Clearance )
Appearances
For Government: Richard Stevens, Esq., Department Counsel
For Applicant: Pro se
______________
Decision
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WHITE, David M., Administrative Judge:
Applicant accumulated more than $25,700 in delinquent Federal tax and
consumer debts during the past ten years of his current employment. He demonstrated
neither means nor efforts to resolve them. Resulting security concerns were not
mitigated. Based on a review of the pleadings and exhibits, eligibility for access to
classified information is denied.
Statement of the Case 
Applicant submitted a security clearance application (SF 86) on December 17,
2011.  On March 20, 2014, the Department of Defense Consolidated Adjudications1
Facility (DoD CAF) issued a Statement of Reasons (SOR) to Applicant, detailing
security concerns under Guideline F (Financial Considerations).  The action was taken2
Item 4. 3
The Government submitted eight Items in support of the SOR allegations. 4
Item 5; Item 6 at 20.5
Item 4.6
Item 6.7
2
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 that came into effect in the
Department of Defense on September 1, 2006. 
Applicant submitted a written response to the SOR (Answer) on April 23, 2014,
and requested that his case be decided by an administrative judge on the written record
without a hearing.  Department Counsel submitted the Government’s written case on3
May 28, 2014. A complete copy of the File of Relevant Material (FORM)  was provided4
to Applicant, and he was afforded an opportunity to file objections and submit material in
refutation, extenuation, or mitigation within 30 days of his receipt of the FORM. 
Applicant signed the document acknowledging receipt of his copy of the FORM
on June 27, 2014. He submitted additional material in refutation, extenuation, or
mitigation within the 30-day period thereafter, but made no objection to consideration of
any contents of the FORM and did not request additional time to respond. I received the
case assignment on August 25, 2014.
Findings of Fact
Applicant is 52 years old, and has worked as a manager for a defense contractor
since 2004. He has been divorced for nine years. His two daughters, ages 23 and 14,
live with his former spouse. He has no military service, and this is his first application for
a security clearance from DoD. He has held a security clearance in the past, but did not
recall the details.  5
In his response to the SOR, Applicant admitted the allegations in SOR ¶¶ 1.a
through 1.i, and 1.k through 1.m. He denied the allegations in SOR ¶¶ 1.j, and 1.n
through 1.p, with the explanation that he could not verify whether those debts were his
despite their appearance on his credit report.  Applicant’s admissions, including his6
responses to DoD CAF Interrogatories,  are incorporated into the following findings of7
fact.
Applicant made a series of apparently conflicting statements with respect to the
allegation in SOR ¶ 1.a, that he did not timely file his Federal income tax returns for the
years 2007 through 2010. In his December 2011 SF 86, he said, “Have filed all taxes.
Item 5 at 27-28.8
He affirmed that these statements were accurate on November 25, 2013. Item 6 at 16-18.9
Item 6 at 15.10
Item 4 at 1.11
Item 5 at 27-28.12
Item 6 at 18.13
Item 4 at 1.14
3
Have tax balance.” He then reported not having paid required taxes in 2008, 2009, and
2010, due to insufficient funds.  During his February 2012 interview with an investigator8
from the Office of Personnel Management (OPM) Applicant said that he failed to timely
file his Federal income tax returns for the years 2007 through 2010, and had paid his
2007 taxes but still owed about $13,400 for the other three years.  In November 20139
he answered, “Yes,” in response to the DoD CAF Tax Interrogatory question asking
whether he had filed his Federal tax returns for tax years 2008 through 2012, but did not
provide the requested Internal Revenue Service (IRS) account transcripts for those
years.  In his Answer he admitted SOR ¶ 1.a, but added, “. . . it is true that I did not file10
the necessary paperwork on time. All necessary paperwork has been filed and the debt
referred to is being paid by agreed terms to resolve this matter.”  In his FORM11
response letter he said, “To address the date on which the tax returns for the years
2008 and 2009 were submitted to the IRS, this took place on April 14, 2010. For the tax
year of 2010, the return was submitted to the IRS before the deadline date of April 15,
2011.” No copies of any returns were provided to corroborate or clarify any of these
statements.
Applicant consistently admitted that he owed the IRS approximately $13,400 in
unpaid taxes for the years 2008, 2009, and 2010. He said on his SF 86 that he failed to
pay these taxes due to insufficient funds, but had a payment plan in place.  During his12
OPM interview, he said that he had made payment arrangements with the IRS, on a
date he could not recall, under which he was paying $200 per month.  In his Answer he13
said, “the debt referred to is being paid by agreed terms to resolve this matter.”  In his14
response to the FORM, wherein Department Counsel pointed out that he had provided
no documentation concerning an IRS repayment agreement or of payments thereunder,
Applicant forwarded a copy of a June 19, 2014 letter from the IRS confirming
establishment of an installment agreement based on his proposal during a conversation
on June 10, 2014. This agreement covers an unspecified account balance for his 2008
and 2009 delinquent taxes, for which penalties and interest continue to accrue. It calls
for him to pay $100 per month beginning July 18, 2014; with payments increasing to
$125 per month in July 2015 and to $200 per month in July 2016. He provided no
documentation concerning any repayment agreement for his 2010 delinquent taxes,
which he estimated to be $5,200 as of December 2011; and no evidence of actual
payments toward any of his delinquent taxes.
Id.15
Items 4 through 8.16
4
The remaining twelve delinquent debts alleged in the SOR range from $63 to
$6,221 and total $12,367. All are supported by record evidence, and became delinquent
between 2005 and 2012. Applicant’s statement that he “cannot honestly verify if [four of]
these debts are owed without the creditor providing proof that I am responsible for
payment,”  is insufficient to overcome this prima facie evidence of their existence.15
Despite reporting a monthly $450 remainder of income over expenses on his November
2013 Personal Financial Statement, he provided no evidence of having made any
payments toward resolution of these delinquent debts and claimed that insufficient
funds prevented him from doing so.  16
Applicant submitted no evidence of financial counseling or other efforts to
establish financial responsibility. He provided no evidence concerning the quality of his
professional performance, the level of responsibility his duties entail, or his track record
with respect to handling sensitive information and observation of security procedures.
He submitted no character references describing his judgment, trustworthiness,
integrity, or reliability. I was unable to evaluate his credibility, demeanor, or character in
person since he elected to have his case decided without a hearing. 
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 (DCs) and mitigating conditions (MCs), which are to be used 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 AG ¶ 2 describing the adjudicative process. The administrative judge’s
overarching adjudicative goal is a fair, impartial, and commonsense decision. According
to AG ¶¶ 2(a) and 2(c), the entire process is a conscientious scrutiny of applicable
guidelines in the context 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 “[a]ny doubt concerning personnel being considered for access to
classified information will be resolved in favor of the national security.” In reaching this
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. 
5
Under Directive ¶ E3.1.14, the Government must present evidence to establish
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, “[t]he applicant is
responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or
mitigate facts admitted by the applicant or proven by Department Counsel, and has the
ultimate burden of persuasion as to obtaining a favorable clearance decision.” Section 7
of Executive Order 10865 provides: “[a]ny determination under this order adverse to an
applicant shall be a determination in terms of the national interest and shall in no sense
be a determination as to the loyalty of the applicant concerned.”
A person applying for access to classified information seeks to enter 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.
Analysis
Guideline F, Financial Considerations
The security concerns under the guideline for financial considerations are set out
in AG ¶ 18, which reads in pertinent part:      
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. 
Department Counsel asserted, and the record evidence established, security
concerns under two Guideline F DCs, as set forth in AG ¶ 19: 
(a) inability or unwillingness to satisfy debts; and
(c) a history of not meeting financial obligations. 
Applicant failed to pay about $13,400 in Federal income tax debt to the IRS for
the years 2008 through 2010, which continues to accrue penalties and interest. Twelve
other consumer debts alleged in the SOR, totaling $12,367, became delinquent
between 2005 and 2012 and remain unpaid. This evidence raises security concerns
under DCs 19(a) and (c), thereby shifting the burden to Applicant to rebut, extenuate, or
mitigate those concerns. 
6
I also considered whether the record evidence supports security concerns under
AG ¶ 19(g), for “failure to file annual Federal, state, or local income tax returns as
required.” Applicant’s statements concerning his tax filings were inconsistent, and may
reflect confusion between describing submission of the tax returns versus payment of
the resulting tax debts. There is no other evidence from which to determine the dates on
which the returns in question were completed, but all of his statements indicate that they
had been filed with the IRS before he submitted his present security clearance
application. One or more of the returns was admittedly filed late, but I do not find that
conduct to be serious enough in this case to raise independent security concerns under
AG ¶ 19(g). 
The guideline includes five conditions in AG ¶ 20 that could mitigate security
concerns arising from Applicant’s financial difficulties:
(a) the behavior happened so long ago, was so infrequent, or occurred
under such circumstances that it is unlikely to recur and does not cast
doubt on the individual’s current reliability, trustworthiness, or good
judgment; 
(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;
(c) 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; 
(d) the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts; and
(e) 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.
Applicant offered insufficient evidence to support mitigation under any of these
provisions. The weight to be accorded his June 2014 repayment agreement with the
IRS, concerning his delinquent 2008 and 2009 Federal taxes, is significantly reduced by
the absence of any evidence of payments thereunder; and by his having claimed on his
SF 86, during his OPM interview, and in his Answer that he had previously been making
such payments. No other evidence of either intention or means to pursue debt
resolution was provided. 
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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 relevant circumstances. The administrative judge should consider the
nine adjudicative process factors listed at AG ¶ 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) 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
pertinent facts and circumstances surrounding this case. Applicant is an accountable
adult, who is responsible for his voluntary choices and conduct that underlie the security
concerns expressed in the SOR. His financial irresponsibility is ongoing toward more
than $25,000 in delinquent debt, which continues to grow while he fails to address it.
This debt did not arise under circumstances that were shown to be beyond his control,
yet remained unresolved and grew during the past ten years of his current employment.
He offered no evidence of financial counseling, rehabilitation, better judgment, or
responsible conduct in other areas of his life. The potential for pressure, coercion, and
duress remains undiminished. 
In the absence of any demonstrated means or effort to resolve his delinquent
debts, or to otherwise mitigate the resulting security concerns, the record evidence
leaves me with substantial doubt as to Applicant’s present eligibility and suitability for a
security clearance. He did not meet his burden to mitigate the security concerns arising
from his financial considerations.
Formal Findings
Formal findings for or against Applicant on the allegations set forth in the SOR,
as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are:
Paragraph 1, Guideline F: AGAINST APPLICANT
Subparagraph 1.a For Applicant
Subparagraphs 1.b through 1.p: Against Applicant
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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.
                                              
DAVID M. WHITE
Administrative Judge