DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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  )       ISCR Case No. 15-08558
)
)
Applicant for Security Clearance )
Appearances
For Government: Tara R. Karoian,  Esq., Department Counsel
For Applicant: Pro se
                                                                            
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Decision
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LYNCH, Noreen A., Administrative Judge:
On June 13, 2016, the Department of Defense (DOD) issued Applicant a
Statement of Reasons (SOR) listing security concerns arising under Guideline F
(Financial Considerations) and Guideline E (Personal Conduct). The action was taken
under Executive Order (EO) 10865, Safeguarding Classified Information within Industry
(February 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), implemented in
September 2006.  1
In this case, the SOR was issued under Adjudicative Guidelines effective within the Defense Department      1
on September 1, 2006. Revised Adjudicative Guidelines were issued on December 10, 2016, and became
effective on June 8, 2017. My decision and Formal Findings under the revised Guidelines F and E would not
be different under the 2006 Guidelines.
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Applicant timely answered the SOR  and requested an administrative2
determination. Department Counsel submitted a File of Relevant Material (FORM)
dated August 12, 2016.  Applicant received the FORM on September 9, 2016. He did3
not submit an additional response to the FORM. The case was assigned to me on July
1, 2017. Based on a review of the case file, submissions, and exhibits, eligibility for
access to classified information is denied.
Findings of Fact
In his answer to the SOR, Applicant admitted the allegations in the SOR under
Guideline F, with explanations for each item. He denied the allegation under Guideline
E. (Item 2)
Applicant is 55 years old. He is divorced with two children. He obtained his
undergraduate degree in 1984. Applicant has held a security clearance since 1984.
Since 1984, he has worked as a defense contractor. He completed his security
clearance application (SCA) in 2015. (Item 3)
The original SOR alleged only state tax liens. The amended SOR alleges that
Applicant is indebted to the Federal Government for a 2012 tax lien in the amount of
$19,614; an indebtedness to the Federal Government for a 2010 tax lien in the amount
of $43,308; and a 2012 and a 2010 state tax lien in the same amounts; two collection
accounts; and a 2011 Chapter 7 bankruptcy that was discharged. (Item 1)
The SOR also alleged that Applicant falsified material facts on his 2015 SCA due
to his response to Section 26 - Financial Record, because he did not list the two state
tax liens against his property for failing to pay taxes or other debts in the past seven
years.
Applicant answered the original SOR and admitted the state tax liens for 2012
and 2010. He explained that at the time he was in the final process with his divorce and
that a settlement would satisfy the state tax liens. He submitted a Certificate of Tax
Release of a Federal Tax lien for $43,308, dated June 2016. However, there was no
information concerning the state tax liens, despite the fact that he admitted that when
addressing SOR allegation 1.a and 1.b.
As to SOR allegation 1.c, a collection account in the amount of $641, Applicant
stated that it was not paid, but he would resolve the issue in 60 days. He also stated
that he thought it was resolved in the 2011 bankruptcy. He did not provide any
information in response to the FORM to show that the account has been paid.
 The SOR was amended in the FORM to conform to the evidence that was provided with Applicant’s      2
answer. SOR allegations 1.a and 1.b added the Federal Government in addition to the state government.
The Government submitted five items for the record.      3
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As to SOR allegation 1.d, a collection account in the amount of $86, Applicant
stated that he was in the process of resolving medical debts, and he would resolve the
issue by July 2016. He did not provide any documentation to support his statement.
As to SOR allegation 1.e, Applicant acknowledged his Chapter 7 bankruptcy
filing and discharge of debts in 2011. He stated that the bankruptcy was a result of his
wife’s loss of income as a realtor, two major vehicle accidents, and the loss of his wife’s
job. He was reluctant to file for bankruptcy, but was advised by his lawyer that the
Chapter 7 was the best option at the time. In addition, at that time he and his wife
separated and he liquidated his wife’s 401(k) to pay bills, and as a result incurred a
significant tax bill.
During his April 2015, investigative interview, Applicant  emphasized that he lives
within his means. (Item 5) The 2011 Chapter 7 bankruptcy debts were discharged in the
approximate amount of $500,000. He stressed that since the bankruptcy, his financial
status is good. He acknowledged that he did not list that he owed and failed to pay
some taxes. He elaborated that he did not know how to list the correct information
concerning the taxes owed, but he filed his tax returns. He acknowledged that he was
behind on his taxes for 2012, 2013, and 2014. (Item 5) Concerning the 2012 and 2010
state tax liens, he told the investigator that he was not certain how much he owed. He
also stated that he has not taken any action to resolve the issue.  He stated that he
knew he owed taxes but was not certain that he had a tax lien. Originally, he was going
to work with the IRS and arrange a payment plan, but decided that he would take
money from a 401(k) and pay the IRS. He stated that course of action affected the next
year with regard to taxes owed. He believes he owed $80,000. He did not submit any
information about a payment plan to the IRS. (Item 5)
The 2015 credit report confirmed his 2011 bankruptcy discharge. (Item 4) It also
reflects that Applicant’s current accounts are “pays as agreed.” These accounts are
non-SOR accounts. 
Applicant did not submit any documentation to support his claim that he had a
payment plan with the IRS or the state. He did not submit a response to the FORM.
There is no information in the record to confirm that the SOR debts were tied to his
bankruptcy or any plans to resolve the debts. Applicant did not meet his burden of proof
in this case to mitigate the security concerns under the financial considerations
guideline.
Personal Conduct
The SOR also alleges that Applicant falsified his 2015 SCA because he
answered “No” to Section 26 concerning state tax liens. Applicant denied any
intentional falsification because he was not aware of tax liens, although he knew he
owed taxes. He also provided with his answer to the SOR, the marital settlement
agreement which discusses the federal taxes that are owed. It does not state anything
about tax liens. He put the Government on notice that he owed taxes, but there is no
mention of any liens. Thus, he did not answer “Yes” to Section 26. He did not
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intentionally falsify his 2015 SCA. Omission alone does not establish an intentional
falsification. Applicant’s credit bureau report from 2015 reflects accounts as “pays as
agrees”.  (Item 4) None of the SOR alleged accounts are on those reports.  I do not find
that the Government established a case for falsification. I find for Applicant under the
personal conduct guideline.  
   Policies
When evaluating an applicant’s suitability for a security clearance, an
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. These guidelines are not inflexible
rules of law. Instead, recognizing the complexities of human behavior, they are applied
in conjunction with the factors listed in the adjudicative process. An administrative
judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision.
Under AG ¶ 2(a), this process is a conscientious scrutiny of a number of variables
known as the “whole-person concept.” An 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 national security
eligibility 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. 
The U.S. Government must present evidence to establish controverted facts
alleged in the SOR. An 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 burden of proof is something less than a4
preponderance of evidence.  The ultimate burden of persuasion is on the applicant.  5 6
A person seeking access to classified information enters into a fiduciary
relationship with the Government based on 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 classified information. Such
decisions entail a certain degree of legally permissible extrapolation of potential, rather
than actual, risk of compromise of classified information.
 
 See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995).      4
 Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).      5
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      6
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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.”  “The clearly consistent standard indicates that security clearance7
determinations should err, if they must, on the side of denials.”  Any reasonable doubt8
about whether an applicant should be allowed access to sensitive information must be
resolved in favor of protecting such information.  The decision to deny an individual a9
security clearance does not necessarily reflect badly on an applicant’s character. It is
merely an indication that the applicant has not met the strict guidelines the President
and the Secretary of Defense established for issuing a clearance.
Analysis
Guideline F, Financial Considerations
The security concern for financial considerations is set out in AG ¶ 18:
Failure to live within one’s means, satisfy debts, and meet financial
obligations may indicate poor self-control, lack of judgement, or
unwillingness to abide by rules and regulations, all of which can raise
questions about an individuals’ reliability, trustworthiness, and ability to
protect classified or sensitive information. Financial distress can also be
caused or exacerbated by, and thus be a possible indicator of, other
issues of personnel security concerns such as excessive gambling,
mental health conditions, substance misuse, or alcohol abuse or
dependence. An individual who is financially overextended is at a greater
risk of having to engage in illegal or otherwise questionable acts to
generate funds. Affluence that cannot be explained by known sources of
income is also a security concern insofar as it may result from criminal
activity, including espionage.
The Government provided credible evidence that Applicant has delinquent debt
and has unsatisfied tax liens. He filed for Chapter 7 bankruptcy in 2011. Consequently,
Financial Considerations Disqualifying Conditions (FC DC) AG ¶ 19(a), (c) and (g)
apply. With such conditions raised, it is left to Applicant to overcome the case against
him and mitigate security concerns.  
 Financial Considerations Mitigating Condition (FC MC) 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) partially applies. Applicant provided no information
 See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive      7
information), and EO 10865 § 7.
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      8
 Id.      9
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that would allow any other MCs to fully apply. There is an explanation from Applicant
concerning the delinquent debt that would be paid soon, but he produced no
documentation to confirm his assertion.  None of the other mitigating conditions apply in
this case.
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 an applicant’s
conduct and all the circumstances. The administrative judge should consider the nine
adjudicative process factors listed at AG ¶ 2(d): 
(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. As noted above, the
ultimate burden of persuasion is on the applicant seeking a security clearance. 
I considered the potentially disqualifying and mitigating conditions in light of all
the facts and circumstances surrounding this case, as well as the whole-person factors.
Applicant is 55 years old. He has worked for his current employer since 1984. He has
held a security clearance for many years. He has no history of criminal activity, alcohol
abuse, or drug involvement.  
Applicant filed for bankruptcy in 2011, due to his wife’s loss of income and an
accident. He states that the taxes owed and delinquent debts stem from taking money
from his wife’s 401(k) to pay debts.  Applicant stated that he owed about $80,000 in
federal taxes. He also stated that he would use money from a divorce settlement to pay
any amounts owed, but he did not provide any evidence to support this assertion.  He
has not met his burden of proof in this case under the financial considerations
guideline. I do not find that there is sufficient evidence to prove an intentional
falsification under the personal conduct guideline. He did not mitigate the security
concerns under the financial considerations guideline.
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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-1.e: Against Applicant
Paragraph 2, Guideline E: FOR APPLICANT
Subparagraph 2.a: For 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 a security clearance.
Clearance is denied.
                                                     
NOREEN A. LYNCH
Administrative Judge
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