1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case: 15-08885 ) Applicant for Security Clearance ) Appearances For Government: Douglas Velvel, Esquire, Department Counsel For Applicant: Pro se ______________ Decision ______________ WHITE, David M., Administrative Judge: Applicant has an outstanding state income tax lien for more than $17,000 that he has been unwilling to resolve. He did not demonstrate or substantiate a reasonable basis to dispute this debt. Resulting security concerns were not mitigated. Based upon a review of the pleadings and exhibits, eligibility for access to classified information is denied. Statement of Case On September 8, 2015, Applicant submitted a security clearance application (SF- 86). On March 26, 2016, the Department of Defense Consolidated Adjudications Facility (DoD CAF) issued Applicant a Statement of Reasons (SOR), detailing security concerns under Guideline F, Financial Considerations. The action was taken under Executive Order 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information (AG), effective within the DOD after September 1, 2006. 2 Applicant submitted his Answer to the SOR on April 13, 2016, and requested that his case be decided by an administrative judge on the written record without a hearing. On May 6, 2016, Department Counsel submitted the Government’s written case. A complete copy of the File of Relevant Material (FORM), containing five Items, was mailed to Applicant on May 6, 2016, and received by him on May 12, 2016. The FORM notified Applicant that he could file objections and submit material in refutation, extenuation, or mitigation within 30 days of his receipt of the FORM. On May 17, 2016, Applicant filed his Response to the FORM. He disagreed with Department Counsel’s inferences and conclusions, and forwarded two documentary exhibits (A and B). In commenting on the five evidentiary Items submitted in the FORM, Applicant said, “The documents are factual, but the conclusions drawn are incorrect, and do not reference the timeline of my life.” (Response at 2.) Department Counsel did not object to the admissibility of Applicant’s Response. The five FORM Items and Applicant’s Response are admitted into evidence. DOHA assigned the case to me on January 27, 2017. Findings of Fact In his Answer, Applicant admitted each of the five SOR allegations concerning Federal and state tax liens filed against him in March 2008, April 1996, April 1992, May 1994, and June 1992, with explanations. His admissions are incorporated into these findings of fact. Applicant is 68 years old, and widowed with three adult children. He earned a bachelor’s degree in 1970 and a master’s degree in 1988. He has been employed by a defense contractor, as a subcontracted consultant or direct employee, since April 2008. He is seeking to renew the security clearance that he has held since April 2005 in connection with that employment and earlier work as a subcontracted defense and aerospace consultant. (Item 1; Response.) Applicant had four Federal or state tax liens filed against him between April 1992 and April 1996, as alleged in SOR ¶¶ 1.b through 1.e. These liens resulted from a series of employment-related relocations, and late-filing of required income tax returns around the time of his divorce from his first wife in the early 1990s. All of these liens were resolved between 2005 and 2010. (Answer; Item 2; Item 3; Response.) In March 2008, the state in which Applicant used to reside filed a tax lien against him for unpaid delinquent income taxes in the amount of $17,066. (Answer; Item 2.) Applicant said that he is disputing this debt because he did not live in the state during the time for which they claim the taxes came due. (Answer, Response.) In 2010, Applicant’s certified public accountant and tax advisor suggested that he try to settle this claim, which covered tax years 1998 through 2004, because he admitted that he resided there from 1999 through 2002, and did not have evidence of having established residence in another state during 1998, 2003, or 2004. (Response Exhibit A.) Applicant said that he paid income taxes to that state before and after the years in question, but that he contested liability for those years and, “It has been my choice, to date, to 3 withhold payment.” (Response at 2-3.) Applicant’s addresses dating back to 2001, as reported on his May 2005 full data credit report, were all in the state that filed this tax lien against him. He offered no documentary evidence to support his claim that he lived or, more importantly, established legal residence in any other state between 1998 and 2004. (Item 3; Response.) Applicant provided no evidence, other than uncorroborated assertions, establishing his current financial situation and ability to repay these delinquent state income taxes. All record evidence indicates that he is unwilling to do so in any event. The record lacks sufficient evidence to support determinations concerning the quality of Applicant’s professional performance, the level of responsibility his duties entail, or his track record with respect to handling sensitive information and observation of security procedures. 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. In addition to brief introductory explanations for each guideline, the adjudicative guidelines (AG) list potentially disqualifying conditions and mitigating conditions, 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(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. According to Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an “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.” 4 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 relating to 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. This concern is broader than the possibility that an individual might knowingly compromise classified information in order to raise money. It encompasses concerns about an individual’s self-control, judgment, and other qualities essential to protecting classified information. An individual who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information.1 AG ¶ 19 describes three conditions that could raise security concerns and may be disqualifying in this case: (a) inability or unwillingness to satisfy debts; (c) a history of not meeting financial obligations; and (g) failure to file Federal, state, or local income tax returns as required or the fraudulent filing of the same. 1 See ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012). 5 Applicant has a history of financial irresponsibility dating back at least to his 1992 tax liens, and continuing to date with respect to his outstanding 2008 state income tax lien, which involves tax years 1998 through 2004 and totals $17,066. His financial history and ongoing unwillingness to pay his apparently legitimate state tax debts raise security concerns under the above disqualifying conditions, and shift the burden to Applicant to rebut, extenuate, or mitigate those concerns. The guideline includes five conditions in AG ¶ 20 that could mitigate security concerns arising from Applicant’s ongoing 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 fully resolved the income tax liens filed against him from 1992 to 1996, which arose during a tumultuous period in his life caused by the dissolution of his first marriage. These issues arose more than 20 years ago, and were resolved between 2005 and 2010. These issues no longer cast doubt on Applicant’s current reliability, trustworthiness, or judgment. Accordingly, mitigation under AG ¶ 20(a) was established with respect to the allegations in SOR ¶¶ 1.b through 1.e. Applicant admits the continuing existence of the $17,066 state tax lien, alleged in SOR ¶ 1.a, which he still refuses to pay despite claiming that he could do so. In 2010, his accountant advised him to pay at least the portion of those state taxes that arose during years he admittedly lived in the state; and told him that he would need to provide proof of residence in a different state to negate liability for the other years involved. He provided no documentary evidence supporting the contention that he established 6 residence in any other state during the period from 1998 through 2004, or supporting any other legitimate basis to dispute the validity of this debt. Applicant failed to meet his burden to establish mitigation of resulting security concerns under AG ¶ 20(e). 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. According to 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 a mature adult, who is responsible for his choices and conduct that underlie the security concerns expressed in the SOR. His recent and continuing refusal to pay his apparently legitimate and substantial state income tax debt demonstrates an absence of rehabilitation or behavioral change. The likelihood that similar problems will recur remains a security issue, such that the potential for pressure, coercion, or duress is undiminished. Overall, the record evidence leaves me with doubt as to Applicant’s judgment, eligibility, and suitability for a security clearance. He did not meet his burden to mitigate the security concerns arising under the guideline for 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: Against Applicant Subparagraphs 1.b through 1.e: For Applicant 7 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