ISCR Case 17-00688.h1

Case Headnote

ISCR Case No. 17-00688.h1

deniedMar 28, 2018· Hon. Darlene Lokey Anderson· hearing

Summary

Darlene D. Lokey Anderson, an Administrative Judge, denied a security clearance application for a 45-year-old defense contractor due to financial considerations under Guideline F. The applicant admitted to approximately $76,236 in significant delinquent debts, including consumer debts and back taxes, and failed to demonstrate responsible financial management despite some efforts to address these obligations.

The applicant had several outstanding consumer debts, including a bank account with a past due amount of $6,301 and a total balance of $450,109 for home repairs, which remained unresolved. Other consumer debts, ranging from $956 to $7,595, were either in collection, charged off, or subject to payment arrangements, with some showing evidence of recent resolution or payment in full. However, significant federal tax debts for 2012 and 2013, totaling $20,036 and $18,894 respectively, remained largely outstanding despite claimed installment agreements.

While several state tax levies from 2012, 2014, 2016, and 2017, ranging from $643.79 to $5,785.14, were shown to be paid in full through garnishment records, the applicant's overall financial history demonstrated excessive indebtedness and poor judgment. Although personal circumstances contributed to the financial issues, the applicant did not adjust spending accordingly, leading to the denial of the security clearance.

Why the Applicant Was Denied

Applicant has a history of excessive indebtedness, demonstrating unreliability and poor judgment.
Despite some debt resolution efforts, the applicant remains significantly indebted to the Federal Government.
The applicant's financial issues were exacerbated by personal circumstances, but he did not adjust his spending accordingly.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 19(b)raisedUnwillingness to Satisfy Debt Regardless of the Ability to Do So
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
AG ¶ 19(g)raisedFailure to File Annual Federal, State, or Local Income Tax Returns as Required

Mitigating

AG ¶ 20(c)rejectedThe Individual Has Received or Is Receiving Financial CounselingWhile the applicant contacted a credit counseling firm, the judge found insufficient evidence of responsible financial management.
AG ¶ 20(d)rejectedThe Individual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue CreditorsThe applicant's late efforts to resolve debts did not demonstrate a pattern of responsibility.

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 issuedApr 26, 2017
Answer filedMay 16, 2017Applicant requested a decision on the written record.
Hearing held—No hearing; decision made on the written record.
Decision dateMar 28, 2018

Cite For

Denial of Security Clearance Due to Significant Financial Obligations Under Guideline F
Insufficient Evidence of Responsible Financial Management Despite Some Debt Resolution Efforts
Impact of Personal Circumstances on Financial Behavior and Judgment

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.a	Applicant is indebted to a bank for an account past due in the approximate amount of $6,301, with an total outstanding balance of $450,109. Applicant explained that this debt was for home repairs after mold was found behind his kitchen counter not covered by his home owners insurance. Applicant states that he appealed the denial of the claim and lost. The debt remains outstanding. $6,301	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant is indebted to a creditor for an account placed for collection in the approximate amount of $7,595. Applicant states that on May 15, 2017, he set up an installment payment plan of $163 monthly and that the correct amount owed is $4,297. The account remains owing. $7,595	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Applicant is indebted to a creditor for an account that was charged off in the approximate amount of $6,879. Applicant rejected a settlement offer of $2,063. Applicant states that on May 15, 2017, he set up a payment arrangement for monthly installments of $200. The account remains owing. $6,879	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	Applicant is indebted to a creditor for an account that was placed for collection in the approximate amount of $1,016. Applicant states that he made payment arrangements and issued two electronic checks in the amount of $381 totaling $762. He contends that the account will be paid in full on June 2, 2017. Applicant’s Exhibit G shows the debt has been paid. $1,016	For Applicant	Unspecified Financial	Admitted	—	—	—
1.e	Applicant is indebted to a creditor for an account that was charged off in the approximate amount of $956. Applicant states that on May 15, 2017, Applicant made payment arrangements, and that balance was $406.70. He states that he issued one electronic check in the amount of $406.70. He contends that the account will be paid in full on May 18, 2017. Applicant’s Exhibit G is correspondence from the creditor, and shows that the debt is being resolved. $956	For Applicant	Unspecified Financial	Admitted	—	—	—
1.f	Applicant is indebted to a creditor for an account that was charged off in the approximate amount of $630. Applicant states that he incurred the debt in May 2014, and that the balance on the account was $384. He states that he paid the debt in full on February 2, 2017. Applicant’s Exhibit G show correspondence from the creditor, and that the debt has been settled. $630	For Applicant	Unspecified Financial	Admitted	—	—	—
1.g	Applicant is indebted to a creditor for an account that was placed for collection in the approximate amount of $315. Applicant states that on May 15, 2017, Applicant contacted the creditor and paid the bill in full on May 16, 2017. Applicant’s Exhibit G shows correspondence from the creditor, and that the balance has been paid. $315	For Applicant	Unspecified Financial	Admitted	—	—	—
1.h	Applicant is indebted to a creditor for an account that was placed for collection in the approximate amount of $544. Applicant states that he made payment arrangements and issued two electronic checks in the amount of $175, totaling $350. He contends that the debt was to be paid in full on June 2, 2017. Applicant’s Exhibit G shows correspondence from the creditor, and that the balance has been paid. $544	For Applicant	Unspecified Financial	Admitted	—	—	—
1.i	Applicant is indebted to the Federal Government for delinquent taxes in the amount of $20,036 for tax year 2012. Applicant states that the balance is $14.097.59, and that he is following an installment agreement paying $350 monthly since approximately September 2012. Applicant’s Exhibit H is an installment agreement summary from the IRS that does not reflect payments. $20,036	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations (g) unexplained affluence	—	—
1.j	Applicant is indebted to the Federal Government for delinquent taxes in the amount of $18,894 for tax year 2013. Applicant states that he is following an installment agreement paying $350 monthly since approximately September 2012. Applicant states that he contacted the IRS on May 15, 2017 and was told that he owes a balance of $19,139.94 for back taxes for tax year 2011. Applicant’s Exhibit H is an installment agreement summary from the IRS that does not reflect payments. $18,894	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations (g) unexplained affluence	—	—
1.k	Applicant is indebted to the state for delinquent taxes in the approximate amount of $4,000 for tax year 2012. Applicant states that since 2012, he was enrolled in automatic deductions (legal garnishment) to have $200 withdrawn from his account every pay period to pay this debt. He contends that the debt was paid in full in 2012. Applicant’s Exhibit I is garnishment record showing payment in full. $4,000	For Applicant	Tax Filing Failure	Admitted	—	—	—
1.l	In about 2014, the state franchise tax board entered a tax levy against the Applicant in the approximate amount of $5,785.14. Applicant states that since 2014, he was enrolled in automatic deductions (legal garnishment) to have $200 withdrawn from his account every pay period to pay this debt. He contends that the debt was paid in full in 2014. There is nothing in the record to address this debt. $5,785	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations (g) unexplained affluence	—	—
1.m	In about 2016, the state taxation authority entered a tax levy against the Applicant in the approximate amount of $2,722.74. Applicant states that since 2016, Applicant was enrolled in automatic deductions (legal garnishment) to have $200 withdrawn from his account every pay period to pay this debt. He contends that the debt was paid in full in 2016. Applicant’s Exhibit I is garnishment record showing payment in full. $2,722	For Applicant	Tax Filing Failure	Admitted	—	—	—
1.n	In about 2017, the state franchise taxation authority entered a tax levy against the Applicant in the approximate amount of $643.79. Applicant states that since 2017, he was enrolled in automatic deductions (legal garnishment) to have $200 withdrawn from his account every pay period to pay this debt. He contends that the debt was paid in full in March 2017. Applicant’s Exhibit I is garnishment record showing payment in full. $643	For Applicant	Tax Filing Failure	Admitted	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant is indebted to a bank for an account past due in the approximate amount of $6,301, with an total outstanding balance of $450,109. Applicant explained that this debt was for home repairs after mold was found behind his kitchen counter not covered by his home owners insurance. Applicant states that he appealed the denial of the claim and lost. The debt remains outstanding.

$6,301

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.b

Applicant is indebted to a creditor for an account placed for collection in the approximate amount of $7,595. Applicant states that on May 15, 2017, he set up an installment payment plan of $163 monthly and that the correct amount owed is $4,297. The account remains owing.

$7,595

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.c

Applicant is indebted to a creditor for an account that was charged off in the approximate amount of $6,879. Applicant rejected a settlement offer of $2,063. Applicant states that on May 15, 2017, he set up a payment arrangement for monthly installments of $200. The account remains owing.

$6,879

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.d

Applicant is indebted to a creditor for an account that was placed for collection in the approximate amount of $1,016. Applicant states that he made payment arrangements and issued two electronic checks in the amount of $381 totaling $762. He contends that the account will be paid in full on June 2, 2017. Applicant’s Exhibit G shows the debt has been paid.

$1,016

For Applicant

Unspecified Financial

Admitted

—

1.e

Applicant is indebted to a creditor for an account that was charged off in the approximate amount of $956. Applicant states that on May 15, 2017, Applicant made payment arrangements, and that balance was $406.70. He states that he issued one electronic check in the amount of $406.70. He contends that the account will be paid in full on May 18, 2017. Applicant’s Exhibit G is correspondence from the creditor, and shows that the debt is being resolved.

$956

For Applicant

Unspecified Financial

Admitted

—

1.f

Applicant is indebted to a creditor for an account that was charged off in the approximate amount of $630. Applicant states that he incurred the debt in May 2014, and that the balance on the account was $384. He states that he paid the debt in full on February 2, 2017. Applicant’s Exhibit G show correspondence from the creditor, and that the debt has been settled.

$630

For Applicant

Unspecified Financial

Admitted

—

1.g

Applicant is indebted to a creditor for an account that was placed for collection in the approximate amount of $315. Applicant states that on May 15, 2017, Applicant contacted the creditor and paid the bill in full on May 16, 2017. Applicant’s Exhibit G shows correspondence from the creditor, and that the balance has been paid.

$315

For Applicant

Unspecified Financial

Admitted

—

1.h

Applicant is indebted to a creditor for an account that was placed for collection in the approximate amount of $544. Applicant states that he made payment arrangements and issued two electronic checks in the amount of $175, totaling $350. He contends that the debt was to be paid in full on June 2, 2017. Applicant’s Exhibit G shows correspondence from the creditor, and that the balance has been paid.

$544

For Applicant

Unspecified Financial

Admitted

—

1.i

Applicant is indebted to the Federal Government for delinquent taxes in the amount of $20,036 for tax year 2012. Applicant states that the balance is $14.097.59, and that he is following an installment agreement paying $350 monthly since approximately September 2012. Applicant’s Exhibit H is an installment agreement summary from the IRS that does not reflect payments.

$20,036

Against Applicant

Tax Unpaid

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(g) unexplained affluence

—

1.j

Applicant is indebted to the Federal Government for delinquent taxes in the amount of $18,894 for tax year 2013. Applicant states that he is following an installment agreement paying $350 monthly since approximately September 2012. Applicant states that he contacted the IRS on May 15, 2017 and was told that he owes a balance of $19,139.94 for back taxes for tax year 2011. Applicant’s Exhibit H is an installment agreement summary from the IRS that does not reflect payments.

$18,894

Against Applicant

Tax Unpaid

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(g) unexplained affluence

—

1.k

Applicant is indebted to the state for delinquent taxes in the approximate amount of $4,000 for tax year 2012. Applicant states that since 2012, he was enrolled in automatic deductions (legal garnishment) to have $200 withdrawn from his account every pay period to pay this debt. He contends that the debt was paid in full in 2012. Applicant’s Exhibit I is garnishment record showing payment in full.

$4,000

For Applicant

Tax Filing Failure

Admitted

—

1.l

In about 2014, the state franchise tax board entered a tax levy against the Applicant in the approximate amount of $5,785.14. Applicant states that since 2014, he was enrolled in automatic deductions (legal garnishment) to have $200 withdrawn from his account every pay period to pay this debt. He contends that the debt was paid in full in 2014. There is nothing in the record to address this debt.

$5,785

Against Applicant

Tax Unpaid

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(g) unexplained affluence

—

1.m

In about 2016, the state taxation authority entered a tax levy against the Applicant in the approximate amount of $2,722.74. Applicant states that since 2016, Applicant was enrolled in automatic deductions (legal garnishment) to have $200 withdrawn from his account every pay period to pay this debt. He contends that the debt was paid in full in 2016. Applicant’s Exhibit I is garnishment record showing payment in full.

$2,722

For Applicant

Tax Filing Failure

Admitted

—

1.n

In about 2017, the state franchise taxation authority entered a tax levy against the Applicant in the approximate amount of $643.79. Applicant states that since 2017, he was enrolled in automatic deductions (legal garnishment) to have $200 withdrawn from his account every pay period to pay this debt. He contends that the debt was paid in full in March 2017. Applicant’s Exhibit I is garnishment record showing payment in full.

$643

For Applicant

Tax Filing Failure

Admitted

—

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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