1 
 
 
 
               DEPARTMENT OF DEFENSE 
     DEFENSE OFFICE OF HEARINGS AND APPEALS 
 
 
 
 
In the matter of:  ) 
 ) 
  (Redacted)  )   ISCR Case No. 15-00599 
   ) 
Applicant for Security Clearance  ) 
 
 
Appearances 
 
For Government: Carroll J. Connelley, Esq., Department Counsel 
For Applicant: Pro se 
 
 
______________ 
 
Decision 
______________ 
 
 
MATCHINSKI, Elizabeth M., Administrative Judge: 
 
Applicant did not file his federal and state income tax returns for tax year 2010 until 
October 2015. Two judgment debts of $644 from 2008 and $793 from 2009 went unpaid 
until September 2015. He has rectified the financial issues of security concern and is 
managing his current finances responsibly. Clearance is granted. 
 
Statement of the Case 
 
 On August 27, 2015, the Department of Defense Consolidated Adjudications Facility 
(DOD CAF) issued a Statement of Reasons (SOR) to Applicant, detailing the security 
concerns under Guideline F, financial considerations, and explaining why it was unable to 
find it clearly consistent with the national interest to grant or continue security clearance 
eligibility for him. The DOD CAF took the action under Executive Order (EO) 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 on 
September 1, 2006. 
 
 
2 
 
On September 18, 2015, Applicant answered the SOR allegations and requested a 
hearing before an administrative judge from the Defense Office of Hearings and Appeals 
(DOHA). On October 28, 2016, the case was assigned to me to conduct a hearing to 
determine whether it is clearly consistent with the national interest to grant or continue a 
security clearance for Applicant.1 On November 1, 2016, I scheduled a hearing for 
November 29, 2016. 
 
I convened the hearing as scheduled. Three Government exhibits (GEs 1-3) and five 
Applicant exhibits (AE A-E) were admitted into evidence without objection. Applicant 
testified, as reflected in a transcript (Tr.) received on December 5, 2016. 
 
Findings of Fact 
 
 The SOR alleges under Guideline F that, as of August 28, 2015, Applicant had not 
yet filed his federal income tax returns for tax years 2009 and 2010 (SOR ¶ 1.a) or his state 
income tax return for 2010 (SOR ¶ 1.b). Additionally, Applicant is alleged to owe a medical 
judgment of $793 from 2009 (SOR ¶ 1.c) and a credit card judgment of $644 from 2008 
(SOR ¶ 1.d). When Applicant responded to the SOR allegations, he admitted the failure to 
timely file returns for the tax years alleged. He also admitted the judgment debts, but 
indicated that they were paid on September 18, 2015. 
 
 After considering the pleadings, exhibits, and transcript, I make the following 
findings of fact. 
 
Applicant is 30-year-old high school graduate with some community college credits. 
He is married to a woman whom he met at Narcotics Anonymous (NA). They began 
cohabiting in April 2013 (GEs 1, 2) and married in October 2016. (Tr. 45.) Applicant is 
raising her son, who is now age five, as his own child. (Tr. 41.) 
 
Applicant had a serious drug problem from 2005 through 2011, which led to some 
illegal activity and irresponsible behavior on his part. (GEs 1, 2.) He has been sober since 
December 23, 2011 (GEs 1, 2), and his drug abuse and related criminal conduct were not 
raised as security concerns. They are mentioned to the extent that they provide the context 
for the issues in the SOR and are relevant under the whole-person evaluation. 
 
Applicant graduated from high school in July 2005. He was supported by friends and 
his parents while unemployed throughout the fall of 2005. From January 2006 to May 
2006, Applicant worked as a short-order cook in a restaurant. By that time, he was using 
cocaine approximately once a week with some friends. In May 2006, Applicant left the 
restaurant job to attend training to become a card dealer at a local casino. 
 
 In September 2006, Applicant began working as a table games dealer at the casino. 
While still in his probationary period, he was fired in December 2006 for absenteeism. 
During his subsequent unemployment from January 2007 to April 2007, Applicant spent his 
time “being irresponsible, using [illegal] drugs, and sitting around.” (GE 2.)  
                                                 
1 It is unclear what caused the one-year delay in case assignment. 
3 
 
 Applicant worked at a fast-food restaurant from April 2007 until December 2007, 
when he was fired after an altercation with his supervisor. Applicant was introduced to 
opiates in 2007. He stopped using cocaine as he developed an addiction to non-prescribed 
opiates (Oxycontin and Percocet). (GE 2.) While he was unemployed, a credit card 
judgment of $644 (SOR ¶ 1.d) was filed against him in February 2008. (GE 3; Tr. 29.) 
 
 In April 2008, Applicant was re-hired by the casino. His abuse of Oxycontin reached 
its peak during this employment. He used the drug daily for the most part, and at times 
spent approximately $200 a day on the drug. He paid for his drug habit with his income 
from the casino. (GE 2.) An IRS transcript for 2009 shows that his adjusted gross income 
was $27,163. (AE C.) 
 
 In approximately 2009, Applicant was taken to the hospital by ambulance for 
intoxication. He incurred a medical debt that he failed to pay, and in October 2009, a $793 
judgment (SOR ¶ 1.c) was filed against him. (GEs 2, 3; Tr. 24.) 
 
 In October 2009, Applicant was fired by the casino for excessive absenteeism after 
he called in absent about nine times in a year. He reports that he was unemployed until 
February 2012, but also that he collected unemployment. (GE 2.) His federal adjusted 
gross income for 2010 was $16,964. (AE D.) 
 
 Unemployed, Applicant began using crack cocaine in June 2010 with a friend from 
high school with whom he had become reacquainted while working at the casino. He stole 
$3,000 from his sister to support his drug habit and purchased crack cocaine from drug 
dealers, spending $200 at a time. In October 2010, he began taking steps to address his 
drug problem. He took Suboxone under the care of a physician. He underwent two 
detoxification programs in November 2010 and in May 2011 to address his addiction, but 
he returned to illegal drug use after treatment in both instances. In July 2011, he began 
attending NA. In December 2011, he stopped using illegal drugs. (GE 2.) 
 
 Applicant held employment through a temporary staffing agency as an inspector for 
a local business from February 2012 to April 2013. He was then employed full time at $10 
an hour for an auction company until January 2014, when he was laid off. (Tr. 54.) For the 
next few months, he lived off his unemployment compensation and took classes at a local 
community college. (GEs 1, 2.) 
 
 From May 2014 to August 2014, Applicant was a temporary worker placed at $12 an 
hour with a marine supply company. In August 2014, a staffing agency placed him in a 
temporary job at $10 an hour with a manufacturer. (GEs 1, 2; Tr. 55.) 
 
 Applicant applied for employment with a defense contractor, which was contingent 
on him obtaining a DOD security clearance. (GE 2.) On August 20, 2014, Applicant 
completed and certified to the accuracy of a Questionnaire for National Security Positions 
(SF 86). Applicant disclosed a March 2011 larceny charge (theft from his sister) and his 
involvement with marijuana, non-prescribed opiates, and cocaine. He indicated that he was 
“kicked out” of a substance abuse program in June 2011 for using drugs, but that he has 
4 
 
been abstinent since December 23, 2011, with the assistance of NA. Applicant responded 
“Yes” to an inquiry into whether in the last seven years he had failed to file or pay federal, 
state, or other taxes when required by law or ordinance and indicated that he had not filed 
his federal or state income tax returns for tax years 2009 and 2010. In response to inquiries 
concerning any delinquency involving enforcement, he reported the judgment debts in SOR 
¶ 1.c and ¶ 1.d and explained that he had become aware of them only recently when he 
checked a judicial website. Under additional comments, he asserted that he was no longer 
the irresponsible person that he once was. (GE 1.) 
 
 As of August 29, 2014, Applicant had three outstanding delinquencies on his credit 
record. In addition to the previously disclosed financial judgments, a $564 medical debt 
from August 2010 was in collection (not alleged in SOR). Applicant was making timely 
payments on four consumer credit debts with an aggregate balance of $1,807. Three 
student loans totaling $8,250 were in deferment. (GE 3.) 
 
 On September 24, 2014, Applicant was interviewed by an authorized investigator for 
the Office of Personnel Management (OPM). Applicant detailed his drug involvement and 
his efforts at rehabilitation. He asserted that he had been completely abstinent from illegal 
drugs since December 2011 and from alcohol since April 2011. Concerning his tax filings, 
Applicant indicated that he did not file his income tax returns for 2009 or 2010 because he 
was “very irresponsible.” About the outstanding financial judgments, Applicant indicated 
that he became aware of them when he completed his security clearance application 
because he checked his state’s judicial website. He stated that he needed a better paying 
job before he could pay them. Applicant denied any knowledge of a $564 medical debt 
from 2010 that was on his credit record. He attributed his financial issues to his past drug 
abuse. (GE 2.) 
 
 In October 2014, Applicant returned to work for the auction company. He was paid 
$11 an hour as a lot attendant. (Tr. 56.)  In November 2015, Applicant began working as a 
process technician for a private company. (Tr. 25-26, 53.) From 2012 through December 
2014, Applicant’s then fiancée was a college student working part time at a supermarket. 
(Tr. 56.) After she earned her bachelor’s degree, she first worked for an automobile dealer. 
In August 2015, she began working for the defense contractor that offered Applicant a 
position contingent on a favorable clearance adjudication. (Tr. 28, 57.) 
  
 Small claims court records show that Applicant fully satisfied the medical judgment 
(SOR ¶ 1.c) on September 22, 2015 (AE A), and the credit card judgment (SOR ¶ 1.d) on 
October 12, 2015. (AE B.) Applicant gave some thought to satisfying the judgments earlier, 
but his finances were not sufficiently stable. (Tr. 52.) In October 2015, Applicant filed 
federal and state income tax returns for tax years 2009 and 2010. (Tr. 29.) As shown in an 
IRS account transcript for tax year 2009, Applicant learned that he had filed a timely 
income tax return on February 11, 2010, and that he was issued a $302 refund. However, 
the IRS assessed a tax liability of $240 on unreported income, which Applicant believes 
was his unemployment compensation for the last two months of 2009. In February 2013, 
$317 of his refund for tax year 2012 was applied to resolve his tax liability for 2009. (AE C; 
Tr. 32-34.) 
5 
 
An IRS account transcript for tax year 2010 shows that Applicant filed his delinquent 
income tax return for 2010 on October 14, 2015. On February 22, 2016, his income tax 
refund of $130 for tax year 2015 was intercepted and applied to his tax debt for 2010. On 
May 27, 2016, Applicant paid $1,158 to satisfy the balance of his federal taxes for tax year 
2010. (AE D; Tr. 34-36.) 
 
Applicant completed state income tax returns for tax years 2009 and 2010 on 
October 4, 2015.2 On January 12, 2016, he paid $76 to satisfy his state tax liability for 
2010. On February 12, 2016, he paid $647 to satisfy his state tax liability for 2009. (AE E; 
Tr. 37-39.) Applicant has no record of late filings since tax year 2010. (Tr. 39.) 
 
As of November 2016, Applicant’s take-home pay was $460 per week. (Tr. 40.) If 
granted security clearance eligibility, Applicant will earn $15.86 an hour with the defense 
contractor. (Tr. 46.) Applicant’s spouse’s net pay is $1,500 every two weeks. (Tr. 41.) In the 
fall of 2016, Applicant and his spouse purchased their new residence for $210,000. They 
were scheduled to move into the home the day after Applicant’s hearing. Their monthly 
mortgage payment will be $1,484. (Tr. 39-40.) They had been paying $950 per month in 
rent since December 2015. (Tr. 49.) Applicant and his spouse own their cars outright. (Tr. 
42.) 
 
Applicant’s student loans had been in forbearance but were in deferment as of 
November 2016. Applicant planned to resume classes at the community college in the 
spring of 2017. (Tr. 42-43.) Applicant’s spouse is making monthly payments of $50 toward 
her student loan debt. (Tr. 43.) As of late November 2016, Applicant and his spouse had 
$8,000 in savings. (Tr. 44.) Applicant was making timely payments on three credit cards 
with an aggregate balance of approximately $2,400. (Tr. 45.) 
 
Policies 
 
The U.S. Supreme Court has recognized the substantial discretion the Executive 
Branch has in regulating access to information pertaining to national security,  emphasizing 
that “no one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 
U.S. 518, 528 (1988). 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 list potentially 
disqualifying conditions and mitigating conditions, which are required to be considered 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 overall 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. 
                                                 
2 Although Applicant filed his federal income tax return for 2009 on time, he apparently did not file his state 
income tax return for 2009. He explained that “they were backwards or something.” (Tr. 38.) 
6 
 
 
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 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. 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 to obtain 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 
that the applicant may deliberately or inadvertently fail to safeguard classified information. 
Such decisions entail a certain degree of legally permissible extrapolation about potential, 
rather than actual, risk of compromise of classified information. Section 7 of EO 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 concerns about financial considerations are articulated 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 Government met its burden of establishing by substantial evidence a record of 
financial delinquency which raises security concerns under disqualifying conditions AG ¶ 
19(a), “inability or unwillingness to satisfy debts,” and AG ¶ 19(c), “a history of not meeting 
financial obligations.” Available credit reports and Applicant’s admissions indicate that a 
$793 medical judgment was filed against him in 2009, and a $644 credit card judgment 
was filed against him in 2008. 
 
 Applicant indicated on his August 2014 SF 86 and during his September 2014 
subject interview that he had not yet filed his federal or state income tax returns for tax 
years 2009 and 2010. After he filed returns for those tax years in October 2015, he 
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discovered that he had filed his federal income tax return for 2009 on time. When asked at 
his hearing about his state income tax return for tax year 2009, he admitted that he had not 
filed it on time. However, it was not alleged as a security concern in the SOR. The 
evidence of belated filing is undisputed with respect to his federal and state income tax 
returns for tax year 2010, and of late payment of taxes owed the IRS and the state for tax 
years 2009 and 2010. Applicant’s failure to comply with his income tax filing obligation for 
tax year 2010 triggers disqualifying condition AG ¶ 19(g), “failure to file annual Federal, 
state, or local income tax returns as required or the fraudulent filing of the same.” 
 
 Application of the aforesaid disqualifying conditions triggers consideration of four 
potentially mitigating conditions under AG ¶ 20: 
 
(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 resolved or is under control; 
and 
 
(d) the individual initiated a good-faith effort to repay overdue creditors or 
otherwise resolve debts. 
 
 AG ¶ 20(a) applies in that Applicant’s failure to timely file income tax returns was 
infrequent and occurred under circumstances not likely to recur. When his returns for 2010 
were due in 2011, he was battling a serious drug problem. He has timely filed his federal 
and state income tax returns since he stopped using illegal drugs. The judgment debts 
were likewise from some time ago, but it is difficult to fully mitigate them under AG ¶ 20(a) 
because Applicant knew about the judgments in August 2014 and took no steps to address 
them until September 2015. 
 
 Despite Applicant’s lengthy unemployment from October 2009 to February 2012, AG 
¶ 20(b) is not applicable because his unemployment was caused by his own 
irresponsibility. Applicant lost his job at the casino after he called in absent nine times in 
one year for reasons related to drug abuse. His temporary employment opportunities since 
2012 did not provide the financial stability needed for him to pay the judgment debts or his 
tax liabilities. Yet, he did not act responsibly within AG ¶ 20(b) when he took no steps to 
contact his creditors to attempt repayment arrangements. 
 
 After Applicant received the SOR, he satisfied the judgment debts and filed his 
delinquent tax returns. AG ¶ 20(c) is established in that the financial security concerns in 
8 
 
the SOR have been rectified. In considering AG ¶ 20(d), I cannot ignore Appeal Board 
precedent, which requires that “a person acts in a way that shows reasonableness, 
prudence, honesty, and adherence to duty or obligation.”3 Even assuming that Applicant 
was unaware of the financial judgments before September 2014, it is difficult to find that he 
acted fully responsibly without some evidence that he took steps to address them before 
September 2015. Similarly, he thought he had not filed his income tax returns for tax years 
2009 or 2010 and did not file them before 2015. Even where tax problems have been 
corrected and an applicant is motivated to prevent such problems in the future, the 
administrative judge is not precluded from considering an applicant’s trustworthiness in 
light of prior behavior evidencing irresponsibility. See e.g., ISCR Case No. 14-01894 at 5 
(App. Bd. Aug. 2015). The Appeal Board has long held that the failure to file tax returns 
suggests a problem with complying with well-established government rules and systems. 
See e.g., ISCR Case No. 14-04437 (App. Bd. Apr. 15, 2016); ISCR Case No. 01-05340 at 
3 (App. Bd. Dec. 20, 2002).  
 
In that regard, Applicant has demonstrated some financial reform since overcoming 
his drug abuse problem. He testified that he filed his income tax returns on time starting 
with tax year 2011, and he presented corroborating evidence for two of those years. The 
IRS transcript for tax year 2009 shows that he filed a return for 2012 on time. His $317 
refund for 2012 was taken and applied to his tax debt for 2009 in February 2013. The IRS 
transcript for tax year 2010 shows that he filed a return for 2015 on time. His $130 refund 
was applied to his taxes for 2010 in February 2016. Concerning recent delinquencies, in 
addition to the two judgment debts, Applicant had a $564 medical collection debt on his 
credit record as of August 2014. It is unclear whether it is the same debt as the medical 
judgment in SOR ¶ 1.c or, if a separate debt, whether it has been satisfied. Applicant did 
not fully satisfy his IRS debt for 2010 until May 2016. However, Applicant also appears to 
be managing his day-to-day expenses responsibly. He is making timely payments on three 
credit cards with a manageable aggregate debt of $2,400. There is no evidence of recent 
credit card delinquency that would suggest spending beyond his means. The day after his 
hearing, Applicant and his spouse planned to move into a new home that they recently 
purchased. While their mortgage obligation is an increase of $534 per month over their 
previous rent payment, they have no car payments. Applicant’s unrebutted testimony is 
that he and his spouse can afford the mortgage. Should Applicant become employed by 
the defense contractor, his higher income will give them even more of a financial cushion. 
The financial considerations security concerns are adequately mitigated. 
 
                                                 
3 The DOHA Appeal Board stated in ISCR Case No. 07-06482, decided on May 21, 2008, in part: 
 
In evaluating Guideline F cases, the Board has previously noted that the concept of 
“‘meaningful track record’ necessarily includes evidence of actual debt reduction through 
payment of debts.” See, e.g., ISCR Case No. 05-01920 at 5 (App. Bd. Mar. 1, 2007). 
However, an applicant is not required, as a matter of law, to establish that he has paid off 
each and every debt listed in the SOR. See, e.g., ISCR Case No. 02-25499 at 2 (App. Bd. 
Jun. 5, 2006). All that is required is that an applicant demonstrate[s] that he has “. . . 
established a plan to resolve his financial problems and taken significant actions to 
implement that plan.” See, e.g., ISCR Case No. 04-09684 at 2 (App. Bd. Jul. 6, 2006). 
 
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Whole-Person Concept 
 
In assessing the whole person, the administrative judge must consider the totality of 
an applicant’s conduct and all relevant circumstances in light of the nine adjudicative 
process factors in AG ¶ 2(a).4 The analysis under Guideline F is incorporated in my whole-
person analysis. Some of the factors in AG ¶ 2(a) were addressed under that guideline, but 
some warrant additional comment. 
 
 Applicant demonstrated extremely poor judgment during his late teens and early 
twenties. He abused various illegal drugs on a regular basis, stole money from his sister for 
drugs, and spent most of his income on his serious drug habit. It is well settled that once a 
concern arises regarding an applicant’s security clearance eligibility, there is a strong 
presumption against the grant or renewal of a security clearance. See Dorfmont v. Brown, 
913 F. 2d 1399, 1401 (9th Cir. 1990). 
 
 Yet, security clearance decisions are not intended to punish applicants for past 
transgressions. The security clearance adjudication involves an evaluation of an applicant’s 
current judgment, reliability, and trustworthiness in light of the security guidelines in the 
Directive. See ISCR Case No. 09-02160 (App. Bd. Jun. 21, 2010). The Government was 
sufficiently persuaded of Applicant’s reform of his drug problem so as to not allege any 
security concerns in that regard. Applicant was forthright with the DOD from the start about 
his drug-abusing past, his noncompliance with his tax filing obligations, and his outstanding 
delinquencies. More importantly in the current risk assessment, he has accepted 
responsibility for his past behavior, is committed to not repeat it, and has rectified the 
issues of security concern. For the reasons noted above, I find that it is clearly consistent 
with the national interest to grant Applicant security clearance eligibility. 
 
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:  FOR APPLICANT 
 
Subparagraphs 1.a-1.d:  For Applicant 
    
                                                 
4 The factors under AG ¶ 2(a) are as follows: 
 
(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.  
10 
 
Conclusion 
 
In light of all of the circumstances, it is clearly consistent with the national interest to 
continue Applicant’s eligibility for a security clearance. Eligibility for access to classified 
information is granted. 
 
 
_____________________ 
Elizabeth M. Matchinski 
Administrative Judge