ISCR Case 20-03581

Case Headnote

ISCR Case No. 20-03581

deniedApr 6, 2022· Hon. Braden M. Murphy· hearing

Summary

A 33-year-old former U.S. Navy sonar technician was denied a security clearance under Guideline F (Financial Considerations) due to approximately $59,000 in unresolved financial issues. The applicant's Statement of Reasons detailed several charged-off accounts, including a credit card debt of $2,831 from his Navy service, an auto repossession resulting in a $26,044 charged-off account, and a $4,405 charged-off credit account used for personal expenses and a motorcycle loan. Other debts included a $973 charged-off account the applicant did not recognize, a $2,855 charged-off account he attempted to resolve, an $874 electricity bill in collections, and a $262 internet or cable bill in collections.

Disqualifying conditions under Guideline F were raised, specifically concerning a history of not meeting financial obligations and an inability or unwillingness to satisfy debts. While the mitigating condition of the financial problems being largely due to circumstances beyond the applicant's control was considered, it was not sufficient to overcome the concerns.

The denial was based on the applicant's failure to provide sufficient evidence to mitigate the financial security concerns. The judge noted that the financial issues began during his Navy service and continued afterward, indicating a pattern of instability. Crucially, the applicant lacked a track record of steady payments and failed to demonstrate a good-faith effort to resolve his debts, leading to concerns about his reliability and trustworthiness.

Why the Applicant Was Denied

The applicant did not provide sufficient evidence to mitigate financial security concerns arising from delinquent debts.
The applicant's financial issues began while in the Navy and continued after leaving, indicating a pattern of financial instability.
The applicant failed to demonstrate a good-faith effort to resolve his debts, lacking a track record of steady payments.

Conditions Referenced

Disqualifying

AG ¶ 19(a)appliedInability to Satisfy Debts
AG ¶ 19(c)appliedA History of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(d)appliedGood-faith Effort to Repay Overdue CreditorsThe applicant made small payments on student loans and attempted to negotiate settlements.

Key Rule Quoted

“"the clearly consistent standard indicates that security determinations should err, if they must, on the side of denials."”
— Department of the Navy v. Egan, 484 U.S. 518, 531 (1988)

Procedural Posture

SOR issuedJan 19, 2021
Answer filedMar 9, 2021
Hearing heldFeb 8, 2022held virtually
Decision dateApr 6, 2022

Cite For

Insufficient Evidence to Mitigate Financial Concerns Under Guideline F
Pattern of Financial Instability Affecting Security Clearance Eligibility
Importance of Demonstrating Responsible Financial Behavior for Security Clearance

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.i	SOR ¶ 1.i ($2,831) is a credit-card account that has been charged off by a financial institution. The debt remains from Applicant’s time in the Navy. He could not afford to pay it when he left the Navy. It remains unpaid, though Applicant has attempted to pursue settlement. $2,831	Against Applicant	Credit Card Debt	Admitted	—	—	—
1.j	SOR ¶ 1.j ($26,044) is a charged-off account relating to an auto repossession. He bought the auto in 2016, when he was in the Navy, trading in his wife’s car. Applicant said he owed $17,000 when the vehicle was repossessed, and that, after it was sold at auction, he owed $11,000. The Government’s evidence indicates that he owes about $18,200 after the resale. The debt remains unpaid. $26,044	Against Applicant	Auto Loan Debt	Admitted	—	—	—
1.k	SOR ¶ 1.k ($4,405) is a credit account that has been charged off. Applicant and his wife used the account for personal expenses, like holidays and trips. He also used the account for a loan on a motorcycle that he bought in 2017, right before he left the Navy. He sold the motorcycle but GE 5 indicates that for the account at SOR ¶ 1.k, Applicant owed over $7,000, as of June 2021, and the debt remains outstanding. $4,405	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.l	SOR ¶ 1.l ($973) is an account that has been charged off. Applicant did not recognize the debt, though it is listed on his credit reports. $973	Against Applicant	Unspecified Financial	Denied	—	—	—
1.m	SOR ¶ 1.m ($2,855) is an account that has been charged off. This is the same creditor as for the debt in SOR ¶ 1.e, and Applicant believes they are related. Applicant has contacted the creditor to resolve the debt but it remains unpaid. Evidence shows that the account has been charged off at $4,954. $2,855	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.n	SOR ¶ 1.n ($874) is an electricity bill placed for collection. It is from Applicant’s time in the neighboring state. He is unsure of its status. $874	Against Applicant	Utility or Phone Debt	Unknown	—	—	—
1.o	SOR ¶ 1.o ($262) is an account placed for collection by an internet or cable provider. Applicant is unsure of its current status. It is shown on a 2018 credit report, but no others. $262	Against Applicant	Utility or Phone Debt	Unknown	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.i

SOR ¶ 1.i ($2,831) is a credit-card account that has been charged off by a financial institution. The debt remains from Applicant’s time in the Navy. He could not afford to pay it when he left the Navy. It remains unpaid, though Applicant has attempted to pursue settlement.

$2,831

Against Applicant

Credit Card Debt

Admitted

—

1.j

SOR ¶ 1.j ($26,044) is a charged-off account relating to an auto repossession. He bought the auto in 2016, when he was in the Navy, trading in his wife’s car. Applicant said he owed $17,000 when the vehicle was repossessed, and that, after it was sold at auction, he owed $11,000. The Government’s evidence indicates that he owes about $18,200 after the resale. The debt remains unpaid.

$26,044

Against Applicant

Auto Loan Debt

Admitted

—

1.k

SOR ¶ 1.k ($4,405) is a credit account that has been charged off. Applicant and his wife used the account for personal expenses, like holidays and trips. He also used the account for a loan on a motorcycle that he bought in 2017, right before he left the Navy. He sold the motorcycle but GE 5 indicates that for the account at SOR ¶ 1.k, Applicant owed over $7,000, as of June 2021, and the debt remains outstanding.

$4,405

Against Applicant

Unspecified Financial

Admitted

—

1.l

SOR ¶ 1.l ($973) is an account that has been charged off. Applicant did not recognize the debt, though it is listed on his credit reports.

$973

Against Applicant

Unspecified Financial

Denied

—

1.m

SOR ¶ 1.m ($2,855) is an account that has been charged off. This is the same creditor as for the debt in SOR ¶ 1.e, and Applicant believes they are related. Applicant has contacted the creditor to resolve the debt but it remains unpaid. Evidence shows that the account has been charged off at $4,954.

$2,855

Against Applicant

Unspecified Financial

Admitted

—

1.n

SOR ¶ 1.n ($874) is an electricity bill placed for collection. It is from Applicant’s time in the neighboring state. He is unsure of its status.

$874

Against Applicant

Utility or Phone Debt

Unknown

—

1.o

SOR ¶ 1.o ($262) is an account placed for collection by an internet or cable provider. Applicant is unsure of its current status. It is shown on a 2018 credit report, but no others.

$262

Against Applicant

Utility or Phone Debt

Unknown

—

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Case Profile

Summary

Why the Applicant Was Denied

Conditions Referenced

Key Rule Quoted

Procedural Posture

Cite For

Full decision

DEFENSE OFFICE OF HEARINGS AND APPEALS

HEARING

APPEARANCES

STATEMENT OF CASE

FINDINGS OF FACT

POLICIES

ANALYSIS

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION