ISCR Case 09-06011.h1

Case Headnote

ISCR Case No. 09-06011.h1

deniedApr 22, 2011· Hon. John Grattan Metz, Jr.· hearing

Summary

A 51-year-old security officer was denied a security clearance under Guideline F (Financial Considerations) due to significant and unresolved financial difficulties, including over $400,000 in delinquent debts. The Statement of Reasons detailed multiple outstanding debts, some dating back to 2009, and included substantial amounts related to two houses purchased in 2006.

While the applicant made some payments and settlement attempts on various smaller debts, these efforts were often inconsistent or incomplete. For example, a $772 rent dispute debt, in collection since October 2009, was settled for $1,000, but the applicant failed to make all scheduled payments. Similarly, a $1,617 debt, despite a claimed repayment plan, was charged off in April 2010. Other debts, such as an electric bill and a $1,792 debt, saw partial payments or missed settlement terms.

Ultimately, the judge found the applicant's financial situation insufficiently mitigated. Despite some payments and attempts to resolve specific debts, a history of over $400,000 in delinquent obligations remained largely unaddressed, leading to the conclusion that granting a clearance was not consistent with national interest.

Why the Applicant Was Denied

The applicant has a history of financial difficulties totaling over $400,000 in delinquent debts.
The applicant's efforts to address her debts were insufficient and inconsistent, with many debts remaining unresolved.
The applicant did not demonstrate financial responsibility or obtain financial counseling.

Conditions Referenced

Disqualifying

F.2.araisedInability or Unwillingness to Satisfy Debts
F.2.craisedA History of Not Meeting Financial Obligations

Mitigating

F.3.brejectedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person’s ControlWhile unemployment contributed to her financial issues, the judge questioned her financial decisions.
F.3.drejectedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsThe applicant's efforts were deemed insufficient and inconsistent.

Key Rule Quoted

“The Government must prove, by substantial evidence, controverted facts alleged in the SOR.”
— Department of the Navy v. Egan, 484 U.S. 518 (1988)

Procedural Posture

SOR issuedMay 4, 2010
Answer filed—Applicant answered timely.
Hearing heldAug 25, 2010
Decision dateApr 22, 2011

Cite For

Denial of Clearance Due to Unresolved Financial Issues Under Guideline F
Insufficient Mitigation of Financial Difficulties Despite Some Payments Made
Importance of Financial Responsibility in Security Clearance Evaluations

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	The delinquent debt at SOR 1.a ($772) has been in collection since October 2009 and involves a rent dispute over a security deposit. Applicant paid $25 on the debt in February 2010. By May 2010, the account balance had grown to nearly $1,400, when she settled the account for $1,000. She paid $600 down, and was to make two monthly payments of $200 in May and June 2010 (Answer). However, she was unable to make the scheduled payments, although she paid $100 in July 2010 (AE D). She claimed (Tr. 103) that she would be able to pay the remaining $300 by the end of August 2010, but provided no proof of payment in her post-hearing submission (AE F). $772	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	The delinquent debt at SOR 1.b ($11) was the balance on a medical debt after insurance paid its portion of the bill. Applicant paid the debt in February 2010 (GE 2). $11	For Applicant	Medical Debt	Admitted	—	—	—
1.c	Applicant settled the cable bill at SOR 1.c ($189) for an undisclosed amount in May 2010 (Answer). $189	For Applicant	Unspecified Financial	Unknown	—	—	—
1.d	In May 2010, Applicant made a $69 payment on the delinquent electric bill at SOR 1.d ($545)(Answer). She appears to have made a pre-authorized payment of $119 in July 2010. Applicant claims without corroboration (Tr. 44) that the account is current, and that she made a $200 payment in July 2010, reducing the balance to $189. $545	Against Applicant	Utility or Phone Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Applicant paid the debt at SOR 1.e ($136) in full in February 2010 (Answer). $136	For Applicant	Unspecified Financial	Admitted	—	—	—
1.f	Applicant claimed (Tr. 48-49) that she had begun a repayment plan on SOR debt 1.f ($1,617) in 2008, had stopped payments temporarily because of more pressing needs, and had resumed paying $50 per month in January 2009. Her June 2009 credit report (GE 3) tends to support that claim. The creditor reported that the account was now current, but had been 60-days past due four or more times, with a balance of $1,542. Applicant suggested that she had continued to make regular payments directly to the original creditor and had reduced the balance to $1,200, but the evidence belies that claim. In her April 2010 credit report (GE 4), the account had been charged off in April 2010 with a balance of $1,617. The reported date of last activity was May 2009, the same date reported in the June 2009 credit report. Applicant documented a $50 payment in late July 2010 on a balance of $1,517 and a $50 payment in late August 2010 on a balance of $1,367. $1,617	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	In June 2009, the creditor at SOR 1.g ($1,239) offered to settle the account for $716 (GE 2) conditioned on payments in July 2009 ($127), August 2009 ($206), early September 2009 ($204), and late September 2009 ($179). However, Applicant did not have the funds to take advantage of the settlement offer. She made a $150 payment in July 2010 (AE B), leaving a balance of $550. $1,239	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	Applicant paid $414 on SOR debt 1.h ($1,792) in February 2010 (GE 2). In May 2010, the creditor agreed to settle the remaining balance (now grown to $2,200) for additional monthly payments of $331 paid in May 2010, June 2010, July 2010, August 2010, and September 2010. However, she could not meet the established schedule. She started a month late, made the first payment in late June 2010, the second in early July 2010, and the third in late July 2010 (AE F), as scheduled. Nevertheless, the record does not reflect when or if the last payments were made. $1,792	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	The remaining three debts [1.i ($46,495), 1.j ($334,442), and 1.k ($15,982 past due on a $209,600 mortgage)] concern two houses Applicant bought in 2006. $46,495	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	The remaining three debts [1.i ($46,495), 1.j ($334,442), and 1.k ($15,982 past due on a $209,600 mortgage)] concern two houses Applicant bought in 2006. $334,442	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.k	The remaining three debts [1.i ($46,495), 1.j ($334,442), and 1.k ($15,982 past due on a $209,600 mortgage)] concern two houses Applicant bought in 2006. $15,982	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.l	Applicant settled SOR debt 1.l ($160) by paying $135 in May 2010 (Answer). $160	For Applicant	Unspecified Financial	Admitted	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

The delinquent debt at SOR 1.a ($772) has been in collection since October 2009 and involves a rent dispute over a security deposit. Applicant paid $25 on the debt in February 2010. By May 2010, the account balance had grown to nearly $1,400, when she settled the account for $1,000. She paid $600 down, and was to make two monthly payments of $200 in May and June 2010 (Answer). However, she was unable to make the scheduled payments, although she paid $100 in July 2010 (AE D). She claimed (Tr. 103) that she would be able to pay the remaining $300 by the end of August 2010, but provided no proof of payment in her post-hearing submission (AE F).

$772

Against Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.b

The delinquent debt at SOR 1.b ($11) was the balance on a medical debt after insurance paid its portion of the bill. Applicant paid the debt in February 2010 (GE 2).

$11

For Applicant

Medical Debt

Admitted

—

1.c

Applicant settled the cable bill at SOR 1.c ($189) for an undisclosed amount in May 2010 (Answer).

$189

For Applicant

Unspecified Financial

Unknown

—

1.d

In May 2010, Applicant made a $69 payment on the delinquent electric bill at SOR 1.d ($545)(Answer). She appears to have made a pre-authorized payment of $119 in July 2010. Applicant claims without corroboration (Tr. 44) that the account is current, and that she made a $200 payment in July 2010, reducing the balance to $189.

$545

Against Applicant

Utility or Phone Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.e

Applicant paid the debt at SOR 1.e ($136) in full in February 2010 (Answer).

$136

For Applicant

Unspecified Financial

Admitted

—

1.f

Applicant claimed (Tr. 48-49) that she had begun a repayment plan on SOR debt 1.f ($1,617) in 2008, had stopped payments temporarily because of more pressing needs, and had resumed paying $50 per month in January 2009. Her June 2009 credit report (GE 3) tends to support that claim. The creditor reported that the account was now current, but had been 60-days past due four or more times, with a balance of $1,542. Applicant suggested that she had continued to make regular payments directly to the original creditor and had reduced the balance to $1,200, but the evidence belies that claim. In her April 2010 credit report (GE 4), the account had been charged off in April 2010 with a balance of $1,617. The reported date of last activity was May 2009, the same date reported in the June 2009 credit report. Applicant documented a $50 payment in late July 2010 on a balance of $1,517 and a $50 payment in late August 2010 on a balance of $1,367.

$1,617

Against Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.g

In June 2009, the creditor at SOR 1.g ($1,239) offered to settle the account for $716 (GE 2) conditioned on payments in July 2009 ($127), August 2009 ($206), early September 2009 ($204), and late September 2009 ($179). However, Applicant did not have the funds to take advantage of the settlement offer. She made a $150 payment in July 2010 (AE B), leaving a balance of $550.

$1,239

Against Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.h

Applicant paid $414 on SOR debt 1.h ($1,792) in February 2010 (GE 2). In May 2010, the creditor agreed to settle the remaining balance (now grown to $2,200) for additional monthly payments of $331 paid in May 2010, June 2010, July 2010, August 2010, and September 2010. However, she could not meet the established schedule. She started a month late, made the first payment in late June 2010, the second in early July 2010, and the third in late July 2010 (AE F), as scheduled. Nevertheless, the record does not reflect when or if the last payments were made.

$1,792

Against Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.i

The remaining three debts [1.i ($46,495), 1.j ($334,442), and 1.k ($15,982 past due on a $209,600 mortgage)] concern two houses Applicant bought in 2006.

$46,495

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.j

The remaining three debts [1.i ($46,495), 1.j ($334,442), and 1.k ($15,982 past due on a $209,600 mortgage)] concern two houses Applicant bought in 2006.

$334,442

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.k

The remaining three debts [1.i ($46,495), 1.j ($334,442), and 1.k ($15,982 past due on a $209,600 mortgage)] concern two houses Applicant bought in 2006.

$15,982

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.l

Applicant settled SOR debt 1.l ($160) by paying $135 in May 2010 (Answer).

$160

For Applicant

Unspecified Financial

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

FORMAL FINDINGS

CONCLUSION

FOOTNOTES