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Summary

The applicant, a 41-year-old program manager operations engineer, faced security clearance denial under Guideline E (Personal Conduct) and Guideline F (Financial Considerations) due to a history of financial difficulties and significant overdue debts, as well as providing materially incorrect information on his security clearance application. The judge found that the applicant's efforts to resolve debts were insufficient and that he knowingly provided false information to the government.

Under Guideline E (Personal Conduct) and Guideline F (Financial Considerations), the Statement of Reasons alleged the following: Applicant completed a signed, sworn Security Clearance Application (SCA) on September 13, 2004. Question #38 asks, "In the last 7 years, have you been over 180 days delinquent on any debt(s)?" Applicant answered, "No" to this question and listed no debts (2.a). Question #39 asks, "Are you currently over 90 days delinquent on any debt(s)?" Applicant answered, "No" to this question and again listed no debts (2.b). Applicant was arrested on January 1, 1997, and charged with (1) Fraud, Use of Credit Card over $100, (2) uttering Forged Instrument, (3) Grand Theft-Attempt 3rd Degree, and (4) Forgery (2.c). Question #21 of the SCA asks, "Have you ever been charged with or convicted of any felony offense?" Applicant answered, "No" to this question and failed to list the 1997 felony charge as set forth in paragraph 2.c (2.d). During a June 15, 2005 interview with an authorized investigator for the Department of Defense Applicant did not fully disclose the events as described in paragraph 2.c (2.e). This overdue debt to Creditor 1 is listed in the SOR in the amount of $112. In his RSOR Applicant admitted that this debt is due and owing. In his post hearing submission, (Exhibit A) Applicant argued that this debt has been disputed and it is due to be removed from his credit reports. The credit reports submitted with Exhibit A acknowledge the dispute, but do not indicate that the debt will be removed from the reports. I can not find that this debt has been resolved (1.a). This overdue debt to Creditor 2 is listed in the SOR in the amount of $306. In his RSOR Applicant denied this allegation. In Exhibit A, Applicant argued that this debt has been disputed and removed from his credit reports. Exhibit 5, a credit report offered by the Government, indicates this debt originally arose in 1997. This debt was not listed on the latest credit report offered by Applicant, dated August 27, 2007. However, since there is no information to indicate that this debt was no longer listed because it has been resolved in some manner, and since debts are often dropped from credit reports after seven year, this debt being older than that, I cannot determine that this debt has been satisfied (1.b). This overdue debt to Creditor 3 is listed in the SOR in the amount of $201. In his RSOR Applicant admitted that this debt is due and owing. In Exhibit A, Applicant argued that this debt has been disputed and removed from his credit reports. The August 27, 2007 credit report offered by Applicant, indicates that this debt was deleted from the credit report. Therefore, I find that this debt has been resolved (1.c). This overdue debt to Creditor 4 is listed in the SOR in the amount of $121. In his RSOR Applicant denied this allegation. In Exhibit A, Applicant argued that this debt has is not listed by any of the credit reporting services. The August 27, 2007 credit report offered by Applicant, indicates that this disputed debt was deleted from the credit report. Therefore, I find that this debt has been resolved (1.d). This overdue debt to Creditor 5 is listed in the SOR in the amount of $201. In his RSOR Applicant admitted that this debt is due and owing. I find that this debt, which is listed on the SOR, as the same creditor and the same amount as the debt listed as 1.c., above, is a duplication of that debt. Therefore, I find that this debt has been resolved (1.e). This overdue debt to Creditor 6 is listed in the SOR in the amount of $2,817. In his RSOR Applicant denied this allegation because of a dispute. In Exhibit A, Applicant argued that this debt, “Should not be includeed (sic) in assessement (sic) beyond threahold (sic).” Since I can not determine what this means, I cannot find that this debt has been satisfied (1.f). This overdue debt to Creditor 7 is listed in the SOR in the amount of $4,047. In his RSOR Applicant denied this allegation because of a dispute. In Exhibit A, Applicant argued that this debt is in “formal dispute process” and it will be resolved when the original creditor retrieves the record of the debt. Since there is no evidence that the debt will be resolved, I cannot find that this debt has been satisfied (1.g). This overdue debt to Creditor 8 is listed in the SOR in the amount of $1,048. In his RSOR Applicant denied this allegation. In Exhibit A, Applicant argued that this debt is resolved and has been deleted from the August 27, 2007 credit report. The credit report acknowledges that a different debt to this creditor is in dispute, but gives no indication that this debt is in dispute and will be removed from the report. I can not find that this debt has been resolved (1.h). This overdue debt to Creditor 9 is listed in the SOR in the amount of $367. In his RSOR Applicant denied this allegation. In Exhibit A, Applicant argued that this debt is “Resolving for settlement.” I cannot find that at this time this debt has been resolved (1.i). This overdue debt to Creditor 10 is listed in the SOR in the amount of $487. In his RSOR Applicant denied this allegation. In Exhibit A, Applicant argued that this debt has been verified by Equifax reporting agency as not belonging to Applicant. I find this to be correct. Therefore, I find that this debt has been resolved (1.j). This overdue debt to Creditor 11 is listed in the SOR in the amount of $920. In his RSOR Applicant denied this allegation. In Exhibit A, Applicant argued that this debt is resolved and has been deleted from the August 27, 2007 credit report. The TransUnion credit reporting agency identified that this disputed debt would be deleted. Therefore, I find that this debt has been resolved (1.k). This overdue debt to Creditor 12 is listed in the SOR in the amount of $3,392. In his RSOR Applicant denied this allegation. In Exhibit A, Applicant argued that this debt has been deleted from the August 27, 2007 credit report. The TransUnion credit reporting agency identified that this disputed debt would be deleted. Therefore, I find that this debt has been resolved (1.l). This overdue debt to Creditor 13 is listed in the SOR in the amount of $26,163 for a judgement entered against Applicant on January 2001. At the hearing, Applicant testified that the creditor was going to make some kind of deal to resolve this debt by placing a lien on another piece of property that Applicant planned to sell. In Exhibit A, Applicant argued that he is in negotiations with the corporate attorney for this creditor, and that there is a lien on property, which is pending a sale and resolution. However, no evidence has been offered to establish that, at this time, this debt has been resolved (1.m). This overdue debt to Creditor 14 is listed in the SOR in the amount of $920. In his RSOR Applicant denied this allegation. In Exhibit A, Applicant argued that this debt has been verified as not his debt and deleted from the August 27, 2007 credit report. While this debt was not listed on the August 27, 2007 credit report, no information was included in the report to indicate that this debt was no longer listed because it has been resolved in some manner. Since this debt arose in November 2000, it could have been dropped from credit report without any resolution. Therefore, I cannot determine that this debt has been satisfied (1.n). This overdue debt to Creditor 15 is listed in the SOR in the amount of $201. In his RSOR Applicant admitted that this debt is due and owing. In Exhibit A, Applicant argued that this debt has been deleted from the August 27, 2007 credit report. The TransUnion credit reporting agency identified that this disputed debt would be deleted. Therefore, I find that this debt has been resolved (1.o). This overdue debt to Creditor 16 is listed in the SOR in the amount of $1,771. In his RSOR Applicant denied this allegation. In Exhibit A, Applicant argued that this debt has been resolved and deleted from the October 12, 2007 credit report (Exhibit 8). While this debt was not listed on Exhibit 8, no information was included in the report to indicate that this debt was no longer listed because it has been resolved in some manner. Since this debt arose in August 2000, it could have been dropped from credit report without any resolution. Therefore, I cannot determine that this debt has been satisfied (1.p). This overdue debt to Creditor 17 is listed in the SOR in the amount of $54. In his RSOR Applicant denied this allegation. In Exhibit A, Applicant argued that this debt has been resolved and deleted from the October 12, 2007 credit report (Exhibit 8). While this debt was not listed on Exhibit 8, no information was included in the report to indicate that this debt was no longer listed because it has been resolved in some manner. Since this debt arose in April 2000, it could have been dropped from credit report without any resolution. Therefore, I cannot determine that this debt has been satisfied (1.q). This overdue debt to Creditor 18 is listed in the SOR in the amount of $23,036. In his RSOR Applicant denied this allegation because of a dispute. In Exhibit A, Applicant argued that this debt is the same as that listed on 1.m., above. While both of these debts are greater than $20,000, I can not see evidence that they are the same debt, although they may be. Additional evidence would be required to establish that this is the same debt as 1.m (1.r). This overdue debt to Creditor 19 is listed in the SOR in the amount of $365. In his RSOR Applicant admitted that this debt is due and owing. In Exhibit A, Applicant argued that this debt is “Resolving for settlement.” I cannot find that at this time this debt has been resolved (1.s). This overdue debt to Creditor 20 is listed in the SOR in the amount of $289. In his RSOR Applicant denied this allegation. In Exhibit A, Applicant argued that this debt was identified in the August 27, 2007 credit report as “paying as agreed” as of May 2004. I cannot find that at this time this debt is overdue (1.t). This overdue debt to Creditor 21 is listed in the SOR in the amount of $159. In his RSOR Applicant denied this allegation. In Exhibit A, Applicant argued that this debt has been resolved and deleted from the October 12, 2007 credit report (Exhibit 8). While this debt was not listed on Exhibit 8, no information was included in the report to indicate that this debt was no longer listed because it has been resolved in some manner. Since this debt arose in August 1999, it could have been dropped from credit report without any resolution. Therefore, I cannot determine that this debt has been satisfied (1.u). Applicant prepared a Personal Financial Statement on December 18, 2007, (Exhibit 6) which indicates he has a monthly net remainder of $2,800, after expenses. The Government alleges that he should have been able to resolve more of his debts. In his RSOR Applicant admitted this allegation, but he added that he needed to seek legal assistance for some of these debts (1.v).

The judge denied the clearance. The government raised disqualifying conditions F.19(a), F.19(c), E.16(a), E.16(b). The judge applied mitigating conditions F.20(d). The decision turned on the following: The applicant has a history of financial difficulties and significant overdue debts; The applicant provided materially incorrect and incomplete information on his security clearance application; Mitigation of financial issues was not demonstrated due to the high level of unresolved debts.

Why the Applicant Was Denied

• The applicant has a history of financial difficulties and significant overdue debts.
• The applicant provided materially incorrect and incomplete information on his security clearance application.
• Mitigation of financial issues was not demonstrated due to the high level of unresolved debts.

Conditions Referenced

Key Rule Quoted

“"A person who seeks access to classified information enters into a fiduciary relationship with the U.S. Government that is predicated upon trust and confidence."”

Procedural Posture

• SOR issuedMar 28, 2007
• Answer filedMay 1, 2007Applicant requested a hearing.
• Hearing heldOct 17, 2007Conducted in San Jose, California.
• Decision dateNov 28, 2007

Cite For

• Denial Based on Significant Unresolved Financial Issues Under Guideline F
• Material Misrepresentation on Security Clearance Application Under Guideline E
• Insufficient Mitigation Efforts in the Context of Financial Difficulties