Summary
A 50-year-old receptionist for a U.S. defense contractor was denied a security clearance under Guideline F (Financial Considerations) due to over $293,000 in unresolved delinquent debts. Key allegations included an undisputed IRS tax lien from 2015 exceeding $235,000, which remains unpaid. Additionally, a $337 credit card account was found to be unresolved, despite the applicant's claims of repayment.
While the applicant did repay a $397 charged-off account in February 2016, other financial issues persisted. A significant concern was the applicant's admission to fraudulently opening a credit card account in 2007 under her former father-in-law’s name, incurring approximately $5,000 in charges.
The denial was based on the applicant's failure to demonstrate responsible action to mitigate the substantial financial concerns, including a lack of evidence regarding efforts to resolve the significant tax and student loan debts. The fraudulent credit card activity further raised questions about her judgment and reliability, ultimately leading to the denial of her security clearance.
Why the Applicant Was Denied
- Applicant incurred over $293,000 in delinquent debt, most of which remains unpaid.
- Applicant failed to provide evidence of efforts to resolve her significant tax and student loan debts.
- The applicant's fraudulent credit card activity raised concerns about her judgment and reliability.
Conditions Referenced
- AG ¶ 19(a)raisedInability to Satisfy Debts
- AG ¶ 19(b)raisedUnwillingness to Satisfy Debts
- AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations
- AG ¶ 19(d)raisedDeceptive or Illegal Financial Practices
- AG ¶ 19(f)raisedFailure to File or Fraudulently Filing Income Tax Returns
- AG ¶ 20(a)rejectedBehavior Occurred Long Ago or Under Unlikely Circumstances to RecurWhile the credit card fraud occurred under unique circumstances, it does not mitigate the overall financial issues.
- AG ¶ 20(b)rejectedConditions Largely Beyond the Person's ControlThe applicant initiated her divorce, which contributed to her financial issues.
- AG ¶ 20(c)rejectedReceived Financial CounselingApplicant provided no evidence of financial counseling.
- AG ¶ 20(d)rejectedGood-faith Effort to Repay DebtsApplicant's only repayment was involuntary through tax refund confiscation.
- AG ¶ 20(e)rejectedReasonable Basis to Dispute DebtsApplicant did not provide evidence to dispute her debts.
- AG ¶ 20(g)rejectedArrangements with Tax AuthorityApplicant failed to demonstrate compliance with any arrangements regarding her tax debt.
Key Rule Quoted
“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.”
Procedural Posture
- SOR issuedSep 12, 2016
- Answer filedDec 29, 2016
- Hearing heldJul 25, 2017Record left open until 08/25/2017 for additional evidence.
- Decision dateJun 18, 2018
Cite For
- Denial of Security Clearance Due to Significant Unresolved Financial Obligations
- Impact of Fraudulent Financial Practices on Security Clearance Eligibility
- Insufficient Evidence of Rehabilitation in Financial Matters