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         DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of: ) 
)
) ISCR Case No. 17-04113 
) 
)
Applicant for Security Clearance ) 
Appearances 
For Government: Jeff A. Nagel, Esq., Department Counsel 
For Applicant: Pro se 
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Decision 
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COACHER, Robert E., Administrative Judge: 
Applicant has not mitigated the financial considerations security concerns. 
Eligibility for access to classified information is denied.  
Statement of the Case 
On April 3, 2018, the Department of Defense Consolidated Adjudications Facility 
(DOD CAF) issued Applicant a Statement of Reasons (SOR) detailing security concerns 
under Guideline F. The DOD CAF acted under Executive Order (EO) 10865, 
Safeguarding Classified Information within Industry (February 20, 1960), as amended; 
DOD 5220.6, Defense Industrial Personnel Security Clearance Review Program 
(January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG). 
Applicant answered the SOR on April 19, 2018, and elected to have his case 
decided on the written record in lieu of a hearing. Department Counsel submitted the 
Government’s File of Relevant Material (FORM) on July 2, 2018. The evidence included 
in the FORM is identified as Items 2-6 (Item 1 includes pleadings and transmittal 
02/25/2019
 
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information). The FORM was mailed to Applicant, who received it on July 17, 2018. 
Applicant was given an opportunity to file objections and submit material in refutation, 
extenuation, or mitigation. Applicant did not file objections, but he submitted an email 
arguing his position, which I have admitted into the record as Applicant exhibit (AE) A. 
He did not submit any additional evidentiary exhibits. The case was assigned to me on 
January 9, 2019.  
 
Findings of Fact 
 
Applicant admitted all the allegations with some explanation. The admissions are 
adopted as findings of fact. After a careful review of the pleadings and evidence, I make 
the following additional findings of fact. 
 
 Applicant is 44 years old. He has worked for a defense contractor since January 
2017. Between 2012 and 2017, he worked as a non-DOD contractor performing 
carpentry duties. He also experienced multiple periods of unemployment during this 
time frame. He has never married. He has one adult child.1  
  
 The SOR alleged Applicant’s failure to timely file his 2012-2015 federal and state 
tax returns. It alleged he owed the Federal Government for delinquent taxes in the 
amount of approximately $13,000 for tax year 2009, approximately $6,485 for tax year 
2010, and approximately $341 for tax year 2014. It also alleged he owed on four 
collection accounts totaling approximately $671. Applicant admitted in his August 2017 
statement to a defense investigator and in his answer to the SOR that he failed to file 
his 2012-2015 federal and state income tax returns and that he owed the alleged 
amount for delinquent federal taxes for tax years 2009, 2010, and 2014. Credit reports 
from July 2017, March 2018, and June 2018 support the remaining delinquent debts.2 
 
 Applicant was sent a set of interrogatories where, inter alia, he was asked to 
provide his federal and state tax transcripts for the years in question. He provided the 
following transcripts for his federal returns: 2015 (return filed October 2017); 2014 
(return filed September 2017); 2013 (return filed October 2017); and no transcript was 
provided for 2012. Concerning his state tax returns, he did not provide any transcripts 
for the alleged years 2012-2015. He provided no other evidence that the remaining 
federal and state tax returns were filed.3  
 
 Applicant claims he hired an attorney in June 2017, who was working with the 
IRS to resolve his debt through a payment plan. He failed to provide documentary proof 
                                                          
1 Item 2. 
 
2 Items 2, 3-6. 
 
3 Items 1,3; Answer; AE A. 
 
 
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of any agreement reached with the IRS or any written proof of payment for his IRS tax 
debt. Applicant’s tax issues are unresolved.4 
 
 Applicant claimed he paid the four alleged consumer debts, but he failed to 
present documentation evidencing these payments. These debts are unresolved. He did 
not provide any information about his current financial situation or a budget. There is no 
evidence of financial counseling.5 
 
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 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 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, 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, and 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 
                                                          
4 Items 1, 3; AE A. 
 
5 AE A. 
 
 
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the possible risk that an 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 
 
AG & 18 expresses the security concern for financial considerations:  
 
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. Financial distress can also be 
caused or exacerbated by, and thus can be a possible indicator of, other 
issues of personnel security concern such as excessive gambling, mental 
health conditions, substance misuse, or alcohol abuse or dependence. An 
individual who is financially overextended is at 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 guideline notes several conditions that could raise security concerns. I have 
considered all of them under AG & 19 and the following potentially apply: 
 
(a) inability to satisfy debts;  
 
(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. 
 
Applicant has delinquent consumer debts and federal tax debt that remain unpaid 
or unresolved. He also failed to timely file his 2012-2015 federal and state income tax 
returns as required. I find all the disqualifying conditions are raised.  
 
 
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The guideline also includes conditions that could mitigate security concerns 
arising from financial difficulties. I have considered all of the mitigating conditions under 
AG ¶ 20 and the following potentially apply: 
 
(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, 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; and 
 
(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. 
 
 Applicant’s debts are recent and remain unresolved. He did not provide sufficient 
evidence to show that his financial problems are unlikely to recur. AG ¶ 20(a) does not 
apply. The periodic unemployment Applicant experienced throughout his working career 
are circumstances beyond his control. However, he failed to take responsible actions to 
address his debts or timely file his federal and state tax returns. AG ¶ 20(b) does not 
apply. Applicant failed to provide documentation showing any efforts to pay or settle any 
of the debts. There is no evidence of financial counseling. There is no documentary 
evidence showing he made arrangements with the IRS and state tax authorities to 
resolve his tax issues or pay his delinquent consumer debt. AG ¶¶ 20(c), 20(d), and 
20(g) partially applies to the federal returns that were filed late.  
 
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):  
 
 
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(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 guideline and the whole-person concept.        
 
I considered the potentially disqualifying and mitigating conditions in light of all 
the facts and circumstances surrounding this case. I considered his civilian employment 
and his periods of unemployment, but I also considered his lack of progress in resolving 
his debts and filing his tax returns. Applicant has not established a track record of 
financial stability.  
 
Overall, the record evidence leaves me with questions and doubts as to 
Applicant’s eligibility and suitability for a security clearance because of his financial 
status. For all these reasons, I conclude Applicant failed to mitigate the security 
concerns arising under Guideline F, financial considerations.  
 
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.j:    Against 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 eligibility for a security 
clearance. Eligibility for access to classified information is denied. 
 
 
 
                                                     
_____________________________ 
Robert E. Coacher 
Administrative Judge