1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 16-02485 ) Applicant for Security Clearance ) Appearances For Government: Julie R. Mendez, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ LYNCH, Noreen A., Administrative Judge: Applicant contests the Department of Defense’s (DOD) intent to deny his eligibility for a security clearance to work in the defense industry. He has not mitigated concerns raised by his unresolved delinquent debt and failure to file his Federal and state income tax returns from 2008 through 2014. Clearance is denied. Statement of the Case On September 28, 2016, the DOD issued a Statement of Reasons (SOR) detailing security concerns under the financial considerations guideline.1 DOD adjudicators were unable to find that it is clearly consistent with the national interest to continue Applicant’s security clearance. Applicant timely answered the SOR and requested an administrative determination. On December 7, 2016, Department Counsel sent Applicant the Government’s written case, known as a file of relevant material (FORM), which 1 The DOD CAF acted under Executive Order (EO) 10865, Safeguarding Classified Information within Industry, signed by President Eisenhower on February 20, 1960, as amended; as well as DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program, dated January 2, 1992, as amended (Directive), and the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information, implemented on September 1, 2006. 2 contained four Items. Applicant received the FORM on December 15, 2016. Applicant did not respond to the FORM. Procedural Matters While the case was pending decision, the Director of National Intelligence (DNI) issued Security Executive Agent Directive 4, establishing the National Security Adjudicative Guidelines (AG) applicable to all covered individuals who require initial or continued eligibility for access to classified information or eligibility to hold a sensitive position. The 2017 AG superseded the AG implemented in September 2006, and they are effective for any adjudication made on or after June 8, 2017. Accordingly, I have applied them in this case. Findings of Fact Applicant is 48 years old, earned a General Education Diploma (GED) in 1988, and has been employed by a Federal contractor since April 2006. (Item 3) He was widowed in 2014 and has one adult child. Applicant admittedly has failed to file both Federal and state tax returns from at least 2008 through 2014. He admits and his credit report shows two collection accounts for $376 and $4,197 respectively. (Item 4) Applicant has not provided proof of filing his tax returns and payment of any taxes owed, nor payments toward his collection accounts. He has held a security clearance since 2005. Applicant completed his most recent security clearance application in April 2015, disclosing that he failed to file his tax returns for the years in question. (Item 3) Applicant’s explanation for not filing the tax returns was fear that he would owe money and he did not have the funds to pay. He stated that he is working with a lawyer to help resolve his tax issues. If he owes taxes, he will set up a plan to pay them. As to the collection accounts, Applicant stated that he had not taken any action to date, but he would call the companies and start a payment plan in 2015 to resolve the delinquent debts. (Item 3) Applicant’s current financial status is not known as he provided no information. He referred to a hardship, but provided no details. He did not report any financial counseling. He intends to pay the delinquent debts and file the tax returns, but he did not have a definite plan. He did not respond to the FORM to supplement the record. 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 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, administrative judges apply the guidelines in 3 conjunction with the factors listed in the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(a), 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. 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. 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 the 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 the applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation of potential, rather than actual, risk of compromise of classified information. Section 7 of EO 10865 provides that adverse 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 Financial Considerations Applicant’s finances remain a source of concern. Failure to meet one’s 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.2 Applicant’s admissions and the credit reports establish the Government’s prima facie case that Applicant has a history of not meeting his financial obligations or pay his tax obligations 2 AG ¶ (18). 4 and that he has an inability to do so.3 Applicant presented no evidence to mitigate the concerns about his failure to timely file his 2008 through 2014 Federal and state income tax returns. He plans to resolve the issues by working with a lawyer, but he did not present any evidence to confirm this assertion. A promise to pay in the future is not enough to mitigate the financial concerns. Applicant’s financial problems are ongoing and were not caused by events beyond his control. Although Applicant has expressed a desire to repay his creditors, the alleged delinquent accounts remain unresolved and Applicant did not present a plan for resolving them. After a review of the record and a consideration of the whole-person factors at AG ¶ 2(d), I conclude that Applicant’s financial problems render him unsuitable for continued access to classified information at this time. This decision should not be construed as a determination that Applicant cannot or will not attain the type of financial stability necessary to reapply for national security eligibility in the future. The award of a security clearance is not a once-in-a-lifetime occurrence, but is based on applying the factors, both disqualifying and mitigating, to the evidence presented. While a favorable decision is not warranted at this time, he may present persuasive evidence of financial rehabilitation and reform in the future. 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, Financial Considerations: AGAINST APPLICANT Subparagraph 1.a-1.c: Against Applicant Conclusion In light of all of the circumstances presented, it is not clearly consistent with the national interest to grant Applicant a security clearance. Eligibility for access to classified information is denied. ________________________ Noreen A. Lynch Administrative Judge 3 AG ¶¶ 19(a)(c)and(g).