Summary
The applicant, a 52-year-old engineer and military veteran, faced security concerns under Guideline F due to unresolved financial issues, including multiple bankruptcies and significant tax debts. Despite claims of future intentions to pay debts following a contentious divorce, the judge found insufficient evidence of responsible financial management, leading to a denial of the security clearance.
Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: Applicant filed a Chapter 13 bankruptcy case in September 2010. The case was dismissed in December 2010 (1.a). Applicant filed another Chapter 13 bankruptcy case in July 2012. Under Schedule D, Creditors Holding Secured Claims, the petition listed mortgage loans of $918,222 and $145,000, and auto loans of $11,484 and $4,526 (1.b). two past-due mortgage accounts (1.c). two past-due mortgage accounts (1.d). $59,000 owed to the IRS (1.e). 28 miscellaneous delinquent debts totaling about $108,000 (1.f). $1,220 (1.j). $213 (1.m). $211 (1.n). $11,561 (1.o). $702 (1.w). $5,589 (1.bb). $65 owed to a pizza restaurant for a returned check (1.cc). $11,886 (1.dd). $15,716 (1.ee). $664 owed to a government entity for a ticket for fishing without a license (1.ff). $59,000 owed to the IRS (1.gg).
The judge denied the clearance. The government raised disqualifying conditions AG ¶ 19(a), AG ¶ 19(c). The judge applied mitigating conditions AG ¶ 20(b), AG ¶ 20(c), AG ¶ 20(a), AG ¶ 20(d), AG ¶ 20(e). The decision turned on the following: The applicant failed to demonstrate a good-faith effort to repay overdue creditors or resolve debts; The applicant's financial issues are ongoing and cast doubt on his reliability and trustworthiness; The applicant's tax debts have increased due to a pattern of not paying taxes when due.
Why the Applicant Was Denied
- The applicant failed to demonstrate a good-faith effort to repay overdue creditors or resolve debts.
- The applicant's financial issues are ongoing and cast doubt on his reliability and trustworthiness.
- The applicant's tax debts have increased due to a pattern of not paying taxes when due.
Conditions Referenced
- AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
- AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
- AG ¶ 20(b)appliedConditions Largely Beyond the Person's ControlThe applicant's contentious divorce and custody case were beyond his control.
- AG ¶ 20(c)appliedReceived Financial CounselingThe applicant received financial counseling as a requirement of his bankruptcy.
- AG ¶ 20(a)rejectedBehavior Occurred Under Circumstances Unlikely to Recur
- AG ¶ 20(d)rejectedGood-faith Effort to Repay DebtsThe applicant has not made a good-faith effort to pay his debts.
- AG ¶ 20(e)rejectedReasonable Basis to Dispute Legitimacy of Debts
Key Rule Quoted
“Failure to comply with Federal and/or state tax laws suggests that an applicant has a problem with abiding by well-established Government rules and systems.”
Procedural Posture
- SOR issuedFeb 27, 2015
- Answer filedApr 14, 2015Applicant initially elected to decide on the written record.
- Hearing heldJun 21, 2016Hearing convened as scheduled.
- Decision dateAug 24, 2016
Cite For
- Denial of Security Clearance Due to Unresolved Financial Obligations
- Impact of Ongoing Tax Issues on Security Clearance Eligibility
- Insufficient Evidence of Financial Responsibility in the Context of a Contentious Divorce