Summary
A 42-year-old defense contractor was denied a security clearance under Guideline F (Financial Considerations) due to unresolved financial issues. The Statement of Reasons cited a dismissed Chapter 13 bankruptcy from 2018, a delinquent state tax debt of $739 for tax year 2013, and a $3,171 judgment filed in March 2016. Additionally, the applicant had seven charged-off or past-due debts totaling approximately $46,411.
The allegations also included a general failure to resolve debts, an inability to satisfy financial obligations, and a history of not meeting them. Specific concerns were raised regarding a failure to file or fraudulently filing tax returns, and a lack of evidence for financial counseling or a good-faith effort to repay overdue creditors.
While mitigating conditions were considered, the judge ultimately found insufficient evidence that the applicant had made a good-faith effort to manage his financial obligations. This was primarily due to late engagement with a debt relief company and inconsistent payments to creditors, leading to the denial of the security clearance.
Why the Applicant Was Denied
- The applicant had unresolved financial issues, including a dismissed Chapter 13 bankruptcy and delinquent debts totaling approximately $46,411.
- The applicant failed to demonstrate a good-faith effort to manage his financial obligations, as evidenced by his late engagement with a debt relief company and lack of consistent payments to creditors.
Conditions Referenced
- AG ¶ 19(a)raisedInability to Satisfy Debts
- AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
- AG ¶ 19(f)notedFailure 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
- AG ¶ 20(d)appliedThe Individual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsThe applicant resolved his state tax debt and entered into a payment plan for some debts.
- AG ¶ 20(g)appliedThe Individual Has Made Arrangements with the Appropriate Tax Authority to File or Pay the Amount Owed and Is in Compliance with Those ArrangementsThe applicant resolved his state tax debt.
Key Rule Quoted
“The protection of the national security is the paramount consideration.”
Procedural Posture
- SOR issuedApr 9, 2019
- Answer filedMay 20, 2019
- Hearing heldSep 26, 2019
- Decision dateNov 18, 2019
Cite For
- Denial of Security Clearance Due to Unresolved Financial Issues Under Guideline F
- Insufficient Evidence of Good-faith Effort to Manage Financial Obligations
- Consideration of the Whole-person Concept in Financial Security Clearance Cases