Summary
The applicant, a 44-year-old employed by a DOD contractor, faced security clearance denial under Guideline E (Personal Conduct) and Guideline F (Financial Considerations) due to ongoing delinquent debts totaling $59,469 and falsification of information on his security clearance application. The judge found insufficient evidence of a plan to resolve financial issues and noted the applicant's lack of honesty during the background investigation, leading to a denial of national security eligibility.
Under Guideline E (Personal Conduct) and Guideline F (Financial Considerations), the Statement of Reasons alleged the following: Applicant completed a security clearance application (SCA) in August 2016. In response to inquiries under section 26, which asked if in the past seven years Applicant had filed a petition under any chapter of the bankruptcy code, he responded “no.” (2.a). In May 2017, Applicant was interviewed by a government investigator as part of his background interview. When asked by the investigator if he had filed bankruptcy, he admitted he had contemplated filing for bankruptcy, but then he decided against it (2.b). SOR ¶ 1.a alleges that Applicant and his wife filed for Chapter 13 bankruptcy in October 2013. The bankruptcy schedules included approximately $51,000 of unsecured creditor claims, about $209,000 of secured creditor claims (without deducting the value of collateral), and about $7,000 owed to the Internal Revenue Service (IRS) for his wife’s unpaid business 941 taxes for years 2004-2007. Applicant recalled providing all of his debt information to his attorney for the bankruptcy petition. The bankruptcy case was dismissed in January 2014 due to the debtors’ failure to make monthly plan payments. Applicant admitted this allegation (1.a). SOR ¶ 1.b alleges that Applicant owes the second mortgage creditor approximately $52,000 after the foreclosure of his home. Applicant admitted this allegation, but testified that his attorney advised him that based on a state’s statute of limitations, the financial obligation is currently unenforceable. Applicant was asked if he ever tried to resolve the second mortgage debt, or settle his outstanding obligation. Applicant never tried to resolve this debt based on the advice of his attorney (1.b). Applicant admitted he owed two outstanding medical accounts that were referred to the same collection agency in the total amount of $710. (SOR ¶¶ 1.d, and 1.e.) Applicant testified that he paid these accounts in full, two days before his hearing by personal check. He did not have any documents to submit to verify his payments, but Applicant stated he would provide this evidence later. This evidence was never received post-hearing (1.d). SOR ¶¶ 1.f, and 1.g allege two unpaid medical accounts in the total amount of $331. Applicant admitted these debts, and testified that he believed these accounts were paid by his wife. He was not certain, but stated he would be able to provide documentation later. This evidence was never received post-hearing (1.e). The final debt in the SOR alleges a judgment was entered against Applicant in 2010 in the approximate amount of $6,439. (SOR ¶ 1.h.) Applicant admitted this debt in his response to the SOR. At the hearing, Applicant stated he had no idea he had a judgment entered against him or that he knew any details about the alleged debt. Applicant verified that his address on GE 6 for legal service of the court’s final summary judgment was correct, but he could not recall if he had received that information. He also confirmed that the debt was included in his Chapter 13 bankruptcy petition, but he still denied knowing anything about the judgment (1.h).
The judge denied the clearance. The government raised disqualifying conditions F.19(a), F.19(c), E.16(a). The judge applied mitigating conditions F.20(c), F.20(d). The decision turned on the following: Applicant's financial issues were ongoing and unresolved, indicating poor self-control and judgment; He failed to demonstrate a workable plan to address his financial problems or progress toward resolution; Applicant falsified information on his security clearance application and during his background interview.
Why the Applicant Was Denied
- Applicant's financial issues were ongoing and unresolved, indicating poor self-control and judgment.
- He failed to demonstrate a workable plan to address his financial problems or progress toward resolution.
- Applicant falsified information on his security clearance application and during his background interview.
Conditions Referenced
- F.19(a)raisedInability to Satisfy Debts
- F.19(c)raisedA History of Not Meeting Financial Obligations
- E.16(a)raisedDeliberate Omission, Concealment, or Falsification of Relevant Facts
- F.20(c)rejectedThe Individual Has Received or Is Receiving Financial CounselingApplicant participated in financial counseling but did not demonstrate serious efforts to resolve debts.
- F.20(d)rejectedThe Individual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue CreditorsApplicant did not show good-faith efforts to resolve his debts.
Key Rule Quoted
“"A person applying for national security eligibility seeks to enter into a fiduciary relationship with the Government predicated upon trust and confidence."”
Procedural Posture
- SOR issuedJan 12, 2018
- Answer filedFeb 26, 2018
- Hearing heldJun 14, 2018Record left open until July 14, 2018 for additional evidence.
- Decision dateOct 12, 2018
Cite For
- Denial of Security Clearance Due to Unresolved Financial Issues Under Guideline F
- Falsification of Information on Security Clearance Application Under Guideline E
- Lack of Demonstrated Good-faith Efforts to Resolve Debts as a Basis for Denial.