1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 16-03670 ) Applicant for Security Clearance ) Appearances For Government: Pamela Benson, Esq., Department Counsel For Applicant: Pro se ___________ Decision ___________ HARVEY, Mark, Administrative Judge: Applicant provided insufficient evidence of resolution of his financial issues, including his long-standing federal income tax debt. He did not intentionally provide false information about his finances on his November 4, 2015 Questionnaire for National Security Positions (SF 86) or security clearance application (SCA). Personal conduct security concerns are mitigated; however, financial considerations security concerns are not mitigated. Eligibility for access to classified information is denied. Statement of the Case On November 4, 2015, Applicant completed and signed his SCA. (Government Exhibit (GE) 1) On January 9, 2017, the Department of Defense (DOD) Consolidated Adjudications Facility (CAF) issued a statement of reasons (SOR) to Applicant under Executive Order (Exec. Or.) 10865, Safeguarding Classified Information within Industry, February 20, 1960; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive), January 2, 1992; and the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information, effective on September 1, 2006 (Sept. 1, 2006 AGs). The SOR detailed reasons why the DOD CAF did not find under the Directive that it is clearly consistent with the interests of national security to grant or continue a security clearance for him, and recommended referral to an administrative judge to determine whether a clearance should be granted, continued, denied, or revoked. Specifically, the 2 SOR set forth security concerns arising under the financial considerations and personal conduct guidelines. On February 23, 2017, Applicant responded to the SOR. (HE 3) On May 3, 2017, Department Counsel was ready to proceed. On May 5, 2017, the case was assigned to me. On May 30, 2017, the Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing, setting the hearing for June 6, 2017. (HE 1) Applicant’s hearing was held as scheduled. Applicant waived his right to 15 days of notice of the date, time, and location of the hearing. (Tr. 11-12) The hearing was conducted using teleconference as video teleconference was not feasible. (Tr. 5-6) Applicant waived his right to an in-person or video teleconference hearing and elected to proceed with a teleconference medium. (Tr. 5-6, 12-13) During the hearing, Department Counsel offered six exhibits; Applicant offered five exhibits; there were no objections; and all proffered exhibits were admitted into evidence. (Tr. 19-22; GE 1-6; Applicant Exhibits (AE) A-E) On June 14, 2017, DOHA received a hearing transcript. On July 3, 2017, Applicant provided one additional exhibit, which was admitted without objection. (AE F) While this case was pending a decision, the Director of National Intelligence (DNI) issued Security Executive Agent Directive 4, establishing in Appendix A the National Security Adjudicative Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive Position (AGs), which he made applicable to all covered individuals who require initial or continued eligibility for access to classified information or eligibility to hold a sensitive position. The new AGs supersede the Sept. 1, 2006 AGs and are effective “for all covered individuals” on or after June 8, 2017. Accordingly, I have evaluated Applicant’s security clearance eligibility under the new AGs.1 Findings of Fact2 In Applicant’s SOR response, he admitted the SOR allegations in SOR ¶¶ 1.a through 1.r, and he denied the allegations in SOR ¶¶ 2.a through 2.c. (Tr. 16-17) He also provided extenuating and mitigating information. Applicant’s admissions are accepted as findings of fact. Additional findings of fact follow. Applicant is 55 years old, and he has been employed as a truck driver for a government contractor for the previous two years. (Tr. 7, 24; GE 1) In 1979, he graduated from high school. (Tr. 7) In 1984, he received an associate’s degree in clinical technology. (Tr. 8) He has completed some additional college courses. (Tr. 8) He served in the Army National Guard from 1981 to 1987; his rank upon discharge was second lieutenant; and he received an honorable discharge. (Tr. 8-9) In 1988, Applicant married, and in 2007, he 1 Application of the AGs that were in effect as of the issuance of the SOR would not change my decision in this case. The new AGs are available at http://ogc.osd.mil/doha/5220-6 R20170608.pdf. 2 Some details were excluded to protect Applicant’s right to privacy. Specific information is available in the cited exhibits. 3 divorced. (Tr. 9) In 2014, he married, and his three children are ages 26, 28, and 35. (Tr. 9-10) His SOR response indicates he has four children. Financial Considerations In 1998, Applicant decreased his withholding for taxes, and for two tax years he fell behind on his taxes. (Tr. 26) During the period around 1998, he was having difficulty supporting his family, and he felt overwhelmed. (Tr. 29) Later, he went through a bad period of time where he was upset about his family situation. (Tr. 32) His family situation is much better now. (Tr. 32) Applicant’s salary for several years has ranged from $9,000 to $30,000. (Tr. 25) Applicant and his spouse work together driving a truck. (Tr. 25) His SOR lists the following allegations and their status is as follows: SOR ¶¶ 1.a and 1.d allege the IRS filed federal tax liens against Applicant in 2013 for $3,190 and in 2009 for $31,126. Applicant said the first tax lien was for taxes from about 1998 to 2001. (Tr. 27) He failed to timely file his tax returns for tax years 2002, 2003, 2009, 2010, and 2011. (Tr. 29-30) He has owed the IRS as much as $50,000, and now his federal tax debt is down to about $16,000. (Tr. 28) All federal income tax returns are filed. (Tr. 30) An IRS Installment Agreement Activity statement from July 11, 2016 shows he owes $551 for tax year 2009, $1,941 for tax year 2010, and $857 for tax year 2011. (SOR response) Applicant provided IRS tax transcripts for tax years 2002, 2010, and 2011. On November 13, 2007, Applicant filed his tax return for tax year 2002. (AE A) His tax refund for tax year 2015 of $1,792 was applied to this debt. He made five $150 payments in 2016, and he made three $150 payments in 2017. (AE A) As of June 5, 2017, he owed $11,733 for tax year 2002. (AE A) On August 16, 2013, Applicant filed his tax return for tax year 2009. (AE C) He has not made any payments since August 16, 2013. (AE B) As of June 5, 2017, he owed $570 for tax year 2009. (AE B) On August 23, 2012, Applicant filed his tax return for tax year 2010. (AE C) He made one $100 payment in 2015, and he did not make any payments in 2016 or 2017. (AE C) As of June 5, 2017, he owed $2,007 for tax year 2010. (AE C) On January 10, 2013, Applicant filed his tax return for tax year 2011. (AE D) He made one $100 payment in 2015, and he made seven $100 payments in 2016. (AE D) As of June 5, 2017, he owed $607 for tax year 2011. (AE C) SOR ¶¶ 1.b, 1.c, 1.e, 1.f, and 1.g allege five state tax liens filed against Applicant in 2010 for $4,754, $4,661, $226, $240, and $204. On February 23, 2017, the state tax authority wrote that the taxes owed for tax years 1998, 1999, 2009, 2010, and 2011 totaled $11,343. (Tr. 31; SOR response) Applicant has made some payments over the years. (Tr. 33) On June 5, 2017, the state offered, and Applicant agreed to pay $3,258 to 4 settle the debt. (AE E) He agreed to make 18 payments for $192, and he has already made the first two $192 payments. (Tr. 32-33; AE E) SOR ¶¶ 1.h, 1.i, 1.m, 1.n, 1.q, and 1.r allege six delinquent medical debts for $920, $380, $382, $180, $221, and $470. Applicant said payments were delayed because the creditor did not have his address. (Tr. 38) He and his spouse said all of the medical debts are paid. (Tr. 37-38, 40-41, 48-51) Applicant’s May 22, 2017 credit report shows the medical debts in SOR ¶¶ 1.h, 1.i and 1.m are unpaid, and two medical debts for $570 and $190 are paid. (GE 5) He paid the debt in SOR ¶ 1.i down from $380 to $90. (Tr. 49; GE 5) His May 22, 2017 credit report does not include the debts on SOR ¶¶ 1.n, 1.q, and 1.r, and he is credited with mitigating these three debts. (GE 5) SOR ¶ 1.j, 1.k, and 1.l allege three telecommunications debts placed for collection for $744, $87, and $708. Applicant’s May 22, 2017 credit report shows: the debt on SOR ¶ 1.j is unpaid; the debt in SOR ¶ 1.k is paid; and the debt in SOR ¶ 1.l is not listed. Applicant is credited with mitigating the debts in SOR ¶¶ 1.k and 1.l. SOR ¶ 1.o alleges a judgment filed in 2009 for $876. Applicant said he was unaware of this judgment, and he was unfamiliar with the collection company that obtained the judgment. (Tr. 45) SOR ¶ 1.p alleges a judgment filed in 2009 for $4,982 owed to a college. On January 13, 2016, Applicant satisfied this judgment. (AE F) Personal Conduct Applicant’s November 4, 2015 SCA asked four questions relating to his finances in the last seven years: (1) did he fail to file or pay federal or state taxes when required; (2) has he had a judgment entered against him; (3) has he had any debts turned over to a collection agency; and (4) has he been over 120 days delinquent on any debt. The SCA also asked if he was currently delinquent on any federal debt or currently more than 120 days delinquent on any debt. Applicant completed his SCA on paper, and then his employer typed the information into the computer. (Tr. 36) Applicant had difficulty completing the SCA. He may have misunderstood the questions. (Tr. 46) He was not aware that he had any delinquent non-tax debts. (Tr. 43) He moved and some of the bills may not have been forwarded to him. (Tr. 36-43) He did not check his credit report before he completed his SCA. His SCA contained additional errors, such as failing to list all employment and any of his children. (GE 1; GE 2) On December 15, 2017, Applicant volunteered to the Office of Personnel Management (OPM) investigator that he had tax liens for debts owed to federal and state governments. (Tr. 36) He was open and honest with the investigator about his debts. (Tr. 37) 5 Policies The U.S. Supreme Court has recognized the substantial discretion of the Executive Branch in regulating access to information pertaining to national security emphasizing, “no one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). As Commander in Chief, the President has the authority to control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to have access to such information.” Id. at 527. The President has authorized the Secretary of Defense or his designee to grant applicant’s eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” Exec. Or. 10865. Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied in conjunction with an evaluation of the whole person. An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable. The Government reposes a high degree of trust and confidence in persons with access to classified information. This relationship transcends normal duty hours and endures throughout off-duty hours. Decisions include, by necessity, consideration of the possible risk 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. Clearance decisions must be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See Exec. Or. 10865 § 7. Thus, nothing in this decision should be construed to suggest that it is based, in whole or in part, on any express or implied determination about applicant’s allegiance, loyalty, or patriotism. It is merely an indication the applicant has not met the strict guidelines the President, Secretary of Defense, and DNI have established for issuing a clearance. Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant that may disqualify the applicant from being eligible for access to classified information. The Government has the burden of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531. “Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed therein and an applicant’s security suitability. See ISCR Case No. 95-0611 at 2 (App. Bd. May 2, 1996). Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. Directive ¶ E3.1.15. An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance.” 6 ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). The burden of disproving a mitigating condition never shifts to the Government. See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b). Analysis Financial Considerations AG ¶ 18 articulates the security concern for financial problems: Failure 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 or sensitive information. . . . An individual who is financially overextended is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds. . . . The Appeal Board explained the scope and rationale for the financial considerations security concern in ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012) (citation omitted) as follows: This concern is broader than the possibility that an applicant might knowingly compromise classified information in order to raise money in satisfaction of his or her debts. Rather, it requires a Judge to examine the totality of an applicant’s financial history and circumstances. The Judge must consider pertinent evidence regarding the applicant’s self-control, judgment, and other qualities essential to protecting the national secrets as well as the vulnerabilities inherent in the circumstances. The Directive presumes a nexus between proven conduct under any of the Guidelines and an applicant’s security eligibility. AG ¶ 19 includes four disqualifying conditions that could raise a security concern and may be disqualifying in this case: “(a) inability to satisfy debts;” “(b) unwillingness to satisfy debts regardless of the ability to do so;” “(c) a history of not meeting financial obligations;” and “(f) failure to file or fraudulently filing annual Federal, state, or local income tax returns or failure to pay annual Federal, state, or local income tax as required.” In ISCR Case No. 08-12184 at 7 (App. Bd. Jan. 7, 2010), the Appeal Board explained: It is well-settled that adverse information from a credit report can normally meet the substantial evidence standard and the government’s obligations under [Directive] ¶ E3.1.14 for pertinent allegations. At that point, the burden shifts to applicant to establish either that [he or] she is not responsible for the debt or that matters in mitigation apply. 7 (internal citation omitted). The record establishes the disqualifying conditions in AG ¶¶ 19(a), 19(b), 19(c), and 19(f) requiring, additional inquiry about the possible applicability of mitigating conditions. Six financial considerations mitigating conditions under AG ¶ 20 are potentially applicable in this case: (a) the behavior happened so long ago,3 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, a death, divorce or separation, clear victimization by predatory lending practices, or identity theft), and the individual acted responsibly under the circumstances; (c) the individual has received or is receiving financial counseling for the problem from a legitimate and credible source, such as a non-profit credit counseling service, and there are clear indications that the problem is being resolved or is under control; (d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts;4 (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; and 3 A debt that became delinquent several years ago is still considered recent because “an applicant’s ongoing, unpaid debts evidence a continuing course of conduct and, therefore, can be viewed as recent for purposes of the Guideline F mitigating conditions.” ISCR Case No. 15-06532 at 3 (App. Bd. February 16, 2017) (citing ISCR Case No. 15-01690 at 2 (App. Bd. Sep. 13, 2016)). 4 The Appeal Board has previously explained what constitutes a “good faith” effort to repay overdue creditors or otherwise resolve debts: In order to qualify for application of [the “good faith” mitigating condition], an applicant must present evidence showing either a good-faith effort to repay overdue creditors or some other good-faith action aimed at resolving the applicant’s debts. The Directive does not define the term “good-faith.” However, the Board has indicated that the concept of good- faith “requires a showing that a person acts in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation.” Accordingly, an applicant must do more than merely show that he or she relied on a legally available option (such as bankruptcy) in order to claim the benefit of [the “good faith” mitigating condition]. (internal citation and footnote omitted) ISCR Case No. 02-30304 at 3 (App. Bd. Apr. 20, 2004) (quoting ISCR Case No. 99-9020 at 5-6 (App. Bd. June 4, 2001)). 8 (g) the individual has made arrangements with the appropriate tax authority to file or pay the amount owed and is in compliance with those arrangements. The DOHA Appeal Board concisely explained Applicant’s responsibility for proving the applicability of mitigating conditions as follows: Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong presumption against the grant or maintenance of a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991). After the Government presents evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those concerns. See Directive ¶ E3.1.15. The standard applicable in security clearance decisions is that articulated in Egan, supra. “Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.” Directive, Enclosure 2 ¶ 2(b). ISCR Case No. 10-04641 at 4 (App. Bd. Sept. 24, 2013). None of the mitigating conditions fully apply to all SOR allegations; however, Applicant provided some important mitigating information. He went through a difficult separation and divorce, which is a circumstance beyond his control that adversely affected his finances. He was also underemployed for several years. He did not act responsibly under the circumstances with respect to his taxes and several debts. The absence of delinquent debts from Applicant’s current credit report does not necessarily mitigate security concerns. “[T]hat some debts have dropped off his credit report is not meaningful evidence of debt resolution.” ISCR Case No. 14-05803 at 3 (App. Bd. July 7, 2016) (citing ISCR Case No. 14-03612 at 3 (App. Bd. Aug. 25, 2015)). The Fair Credit Reporting Act requires removal of most negative financial items from a credit report seven years from the first date of delinquency or the debt becoming collection barred because of a state statute of limitations, whichever is longer.5 Debts may be dropped from a credit report upon dispute when creditors believe the debt is not going to be paid, usually because it is collection-barred by the statute of limitations; a creditor fails to timely respond to a credit reporting company’s request for information; or when the debt has been charged off. Applicant indicated he paid certain debts, and they were subsequently not listed on his most recent credit report. Their absence and Applicant’s stated reasons for the disputes are sufficient to credit him with mitigating those debts. I have credited him with mitigating all SOR debts except for the five debts in SOR ¶¶ 1.d, 1.h, 1.j, 1.m, and 1.o. 5Title 15 U.S.C. § 1681c. See Federal Trade Commission website, Summary of Fair Credit Reporting Act Updates at Section 605, https://www.consumer.ftc.gov/articles/pdf-0111-fair-credit-reporting- act.pdf. 9 Applicant is credited with mitigating the state tax liens in SOR ¶¶ 1.b, 1.c, 1.e, 1.f, and 1.g because he established a payment plan in which he will resolve a debt for $11,343 by paying only $3,258. He has made the first two payments. Because of the substantial discount of his state tax debt, I am confident he will continue to make the payments required under his agreement with the state tax authority. Applicant failed to timely file his federal tax returns for tax years 2002, 2003, 2009, 2010, and 2011.6 A willful failure to timely make (means complete and file with the IRS) a federal income tax return is a misdemeanor-level federal criminal offense.7 For purposes of this decision, I am not weighing Applicant’s failure to timely file his federal income tax returns against him as a federal crime. See note 6, supra. In regard to the failure to timely file federal and state income tax returns, the DOHA Appeal Board has commented: Failure to file tax returns suggests that an applicant has a problem with complying with well-established governmental rules and systems. Voluntary compliance with such rules and systems is essential for protecting classified information. ISCR Case No. 01-05340 at 3 (App. Bd. Dec. 20, 2002). As we have noted in the past, a clearance adjudication is not directed at collecting debts. See, e.g., ISCR Case No. 07-08049 at 5 (App. Bd. Jul. 22, 2008). By the same token, neither is it directed toward inducing an applicant to file tax 6 Applicant’s SOR does not include the allegation that Applicant failed to timely file his federal tax returns for tax years 2002, 2003, 2009, 2010, and 2011 and several state tax returns. In ISCR Case No. 03-20327 at 4 (App. Bd. Oct. 26, 2006), the Appeal Board listed five circumstances in which conduct not alleged in an SOR may be considered stating: (a) to assess an applicant’s credibility; (b) to evaluate an applicant’s evidence of extenuation, mitigation, or changed circumstances; (c) to consider whether an applicant has demonstrated successful rehabilitation; (d) to decide whether a particular provision of the Adjudicative Guidelines is applicable; or (e) to provide evidence for whole person analysis under Directive Section 6.3. Id. (citing ISCR Case No. 02-07218 at 3 (App. Bd. Mar. 15, 2004); ISCR Case No. 00-0633 at 3 (App. Bd. Oct. 24, 2003)). See also ISCR Case No. 12-09719 at 3 (App. Bd. April 6, 2016) (citing ISCR Case No. 14- 00151 at 3, n. 1 (App. Bd. Sept. 12, 2014); ISCR Case No. 03-20327 at 4 (App. Bd. Oct. 26, 2006)). These allegations will not be considered except for the five purposes listed above. 7 Title 26 U.S.C, § 7203, willful failure to file return, supply information, or pay tax, reads: Any person . . . required by this title or by regulations made under authority thereof to make a return, keep any records, or supply any information, who willfully fails to . . . make such return, keep such records, or supply such information, at the time or times required by law or regulations, shall, in addition to other penalties provided by law, be guilty of a misdemeanor . . . . A willful failure to make return, keep records, or supply information when required, is a misdemeanor without regard to existence of any tax liability. Spies v. United States, 317 U.S. 492 (1943); United States v. Walker, 479 F.2d 407 (9th Cir. 1973); United States v. McCabe, 416 F.2d 957 (7th Cir. 1969); O’Brien v. United States, 51 F.2d 193 (7th Cir. 1931). 10 returns. Rather, it is a proceeding aimed at evaluating an applicant’s judgment and reliability. Id. A person who fails repeatedly to fulfill his or her legal obligations does not demonstrate the high degree of good judgment and reliability required of those granted access to classified information. See, e.g., ISCR Case No. 14-01894 at 5 (App. Bd. Aug. 18, 2015). See Cafeteria & Restaurant Workers Union Local 473 v. McElroy, 284 F.2d 173, 183 (D.C. Cir. 1960), aff’d, 367 U.S. 886 (1961). ISCR Case No. 14-04437 at 3 (App. Bd. Apr. 15, 2016) (emphasis in original). See ISCR Case No. 14-05476 at 5 (App. Bd. Mar. 25, 2016) (citing ISCR Case No. 01-05340 at 3 (App. Bd. Dec. 20, 2002)); ISCR Case No. 14-01894 at 4-5 (App. Bd. Aug. 18, 2015). The Appeal Board clarified that even in instances where an “[a]pplicant has purportedly corrected [the applicant’s] federal tax problem, and the fact that [applicant] is now motivated to prevent such problems in the future, does not preclude careful consideration of [a]pplicant’s security worthiness in light of [applicant’s] longstanding prior behavior evidencing irresponsibility” including a failure to timely file federal income tax returns. See ISCR Case No. 15-01031 at 3 and note 3 (App. Bd. June 15, 2016) (characterizing “no harm, no foul” approach to an Applicant’s course of conduct and employed an “all’s well that ends well” analysis as inadequate to support approval of access to classified information with focus on timing of filing of tax returns after receipt of the SOR). In ISCR Case No. 15-01031 at 2 (App. Bd. June 15, 2016), the Appeal Board reversed the grant of a security clearance, and noted the following primary relevant disqualifying facts: Applicant filed his 2011 Federal income tax return in December 2013 and received a $2,074 tax refund. He filed his 2012 Federal tax return in September 2014 and his 2013 Federal tax return in October 2015. He received Federal tax refunds of $3,664 for 2012 and $1,013 for 2013. Notwithstanding the lack of any tax debt owed in ISCR Case No. 15-01031 (App. Bd. June 15, 2016), the Appeal Board provided the following principal rationale for reversing the grant of a security clearance: Failure to comply with Federal and/or state tax laws suggests that an applicant has a problem with abiding by well-established Government rules and regulations. Voluntary compliance with rules and regulations is essential for protecting classified information. . . . By failing to file his 2011, 2012, and 2013 Federal income tax returns in a timely manner, Applicant did not demonstrate the high degree of good judgment and reliability required of persons granted access to classified information. ISCR Case No. 15-01031 at 4 (App. Bd. June 15, 2016) (citations omitted). Applicant provided proof that he has an informal payment arrangement with the IRS. In 2016, he made five $150 payments and seven $100 payments, and in 2017, he made three $150 payments. AG ¶ 20(g) applies. However, because of Applicant’s lengthy history of noncompliance with requirements to timely file tax returns and pay taxes going back to 11 1998, and a current federal tax debt of about $14,000, the mitigation in AG ¶ 20(g) is insufficient to fully alleviate financial considerations security concerns. ISCR Case No. 16-00396 at 3 (App. Bd. Aug. 15, 2017) states: It is well established, however, that a security clearance adjudication does not turn simply on a finding that one or more of the mitigating conditions apply to the particular facts of a case. Rather, an adjudication requires the exercise of sound discretion in light of the record evidence as a whole. Thus, the presence of some mitigating evidence does not alone compel the Judge to make a favorable security clearance determination. As the trier of fact, the Judge has to weigh the evidence as a whole and decide whether the favorable evidence outweighs the unfavorable evidence, or vice versa. There is insufficient evidence about why Applicant was unable to make greater progress sooner in the resolution of his tax issues and several other debts. There is insufficient assurance that his financial problems are being resolved, are under control, and will not recur in the future. Under all the circumstances, he failed to establish that financial considerations security concerns are mitigated. Personal Conduct AG ¶ 15 explains why personal conduct is a security concern stating: Conduct involving questionable judgment, lack of candor, dishonesty, or unwillingness to comply with rules and regulations can raise questions about an individual’s reliability, trustworthiness, and ability to protect classified or sensitive information. Of special interest is any failure to cooperate or provide truthful and candid answers during national security investigative or adjudicative processes. AG ¶ 16 describes one condition that could raise a security concern and may be disqualifying in this case, “(a) deliberate omission, concealment, or falsification of relevant facts from any personnel security questionnaire . . . used to conduct investigations, . . . determine security clearance eligibility or trustworthiness. . . .”8 Applicant’s November 4, 2015 SCA asked four questions relating to his finances in the last seven years: (1) did he 8 The Appeal Board has cogently explained the process for analyzing falsification cases, stating: (a) when a falsification allegation is controverted, Department Counsel has the burden of proving falsification; (b) proof of an omission, standing alone, does not establish or prove an applicant’s intent or state of mind when the omission occurred; and (c) a Judge must consider the record evidence as a whole to determine whether there is direct or circumstantial evidence concerning the applicant’s intent or state of mind at the time the omission occurred. [Moreover], it was legally permissible for the Judge to conclude Department Counsel had established a prima facie case under Guideline E and the burden of persuasion had shifted to the applicant to present evidence to explain the omission. ISCR Case No. 03-10380 at 5 (App. Bd. Jan. 6, 2006) (citing ISCR Case No. 02-23133 (App. Bd. June 9, 2004)). 12 fail to file or pay federal or state taxes when required; (2) has he had a judgment entered against him; (3) has he had any debts turned over to a collection agency; and (4) has he been over 120 days delinquent on any debt. The SCA also asked if he was currently delinquent on any federal debt or currently more than 120 days delinquent on any debt. He answered, no, to all six questions, when his answers should have been, yes. Applicant credibly explained why he incorrectly answered the six financial questions. He completed his SCA on paper, and then his employer typed the information into the computer. Applicant had difficulty completing the SCA. He may have misunderstood the questions. He was not aware that he had any delinquent non-tax debts. He did not check his credit report before he completed his SCA. His SCA contained additional errors, such as failing to list all employment and any of his children. On December 15, 2017, Applicant volunteered to the OPM investigator that he had tax liens showing debts owed to the federal and state governments. See also AG ¶ 17(a) (“the individual made prompt, good-faith efforts to correct the omission, concealment, or falsification before being confronted with the facts.”). His tax debts constitute most of his delinquent debts. He was open and honest with the investigator about his debts. Applicant is a truck driver and he is not sophisticated about finances, forms, and computer generated questionnaires. I am convinced that the did not intend to deceive security officials about his delinquent debts. He has refuted the allegation that he intentionally failed to disclose negative financial information on his SCA. Personal conduct security concerns are mitigated. 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(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), “[t]he ultimate determination” of whether to grant a security clearance “must be an overall commonsense judgment based upon careful consideration of the guidelines” and the whole-person concept. My comments under Guidelines F and E are incorporated in my whole-person analysis. Some of the factors in AG ¶ 2(d) were addressed under those guidelines but some warrant additional comment. 13 Applicant is 55 years old, and a government contractor has employed him as a truck driver for the previous two years. In 1984, he received an associate’s degree in clinical technology. He has completed some additional college courses. He served in the Army National Guard from 1981 to 1987; his rank upon discharge was second lieutenant; and he received an honorable discharge. In 1988, Applicant married, and in 2007, he divorced. In 2014, he married, and his three children are ages 26, 28, and 35. His SOR response indicates he has four children. The evidence against mitigation of financial considerations is more substantial. Applicant failed to timely file his federal tax returns for tax years 2002, 2003, 2009, 2010, and 2011. In 2009, the IRS filed a federal tax lien against Applicant for $31,126. In 2016, he paid $1,450 to the IRS, and in 2017, he paid $450. He owes the IRS about $14,000. He has one delinquent judgment, a delinquent telecommunications debt, and two delinquent medical debts. He did not mitigate the debts in SOR ¶¶ 1.d, 1.h, 1.j, 1.m, and 1.o. His failure to act more aggressively to establish his financial responsibility indicates “poor self-control, lack of judgment, or unwillingness to abide by rules and regulations” and this conduct “raise[s] questions about [his] reliability, trustworthiness, and ability to protect classified or sensitive information.” See AG ¶ 18. It is well settled that once a concern arises regarding an Applicant 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). Unmitigated financial considerations concerns lead me to conclude that grant of a security clearance to Applicant is not warranted at this time. This decision should not be construed as a determination that Applicant cannot or will not attain the state of reform necessary for award of a security clearance in the future. With a track record of behavior consistent with his obligations, he may well be able to demonstrate persuasive evidence of his security clearance worthiness. I have carefully applied the law, as set forth in Egan, Exec. Or. 10865, the Directive, and the AGs, to the facts and circumstances in the context of the whole person. Personal conduct security concerns are mitigated; however, financial considerations security concerns are not mitigated. 14 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 and 1.c: For Applicant Subparagraph 1.d: Against Applicant Subparagraphs 1.e, 1.f, and 1.g: For Applicant Subparagraph 1.h: Against Applicant Subparagraph 1.i: For Applicant Subparagraph 1.j: Against Applicant Subparagraph 1.k and 1.l: For Applicant Subparagraph 1.m: Against Applicant Subparagraph 1.n: For Applicant Subparagraph 1.o: Against Applicant Subparagraphs 1.p, 1.q, and 1.r: For Applicant Paragraph 2, Guideline E: FOR APPLICANT Subparagraph 2.a, 2.b, and 2.c: For Applicant Conclusion In light of all of the circumstances in this case, it is not clearly consistent with the interests of national security to grant Applicant’s eligibility for a security clearance. Eligibility for access to classified information is denied. _________________________ Mark Harvey Administrative Judge