Summary
The applicant, a 63-year-old male with over 25 years of employment and a history of holding a security clearance since 1992, faced allegations of delinquency on 13 debts totaling approximately $713,000 under Guideline F (Financial Considerations). Despite some debts being forgiven, the applicant failed to demonstrate effective financial management or that his financial issues were under control, leading to the denial of his security clearance.
Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: Applicant was indebted on two time share accounts in the amount of $24,010 (1.b). Applicant was indebted on a time share account in the amount of $24,010 (1.c). Applicant was indebted on a time share account in the amount of $15,040 (1.d). Applicant was indebted to a bank for a home equity debt in the amount of $39,615 (1.e). Applicant was indebted on a credit card in the amount of $13,994 (1.f). Applicant is indebted on a credit card in the amount of $7,572 (1.g). Applicant was indebted on a credit card in the amount of $6,424 (1.h). Applicant is indebted on a delinquent account in the amount of $4,913 (1.i). Applicant is indebted on a credit card in the amount of $13,994 (1.j). Applicant was indebted on a delinquent debt in the amount of $16,314 (1.k). Applicant was indebted on a delinquent debt in the amount of $15,900 (1.l). Applicant was indebted on a delinquent debt in the amount of $528,000 (1.m). Applicant was indebted on a delinquent debt in the amount of $1,962 (1.n).
The judge denied the clearance. The government raised disqualifying conditions AG ¶ 19(a), AG ¶ 19(c). The judge applied mitigating conditions AG ¶ 20(a), AG ¶ 20(b), AG ¶ 20(c), AG ¶ 20(d), AG ¶ 20(e). The decision turned on the following: The applicant has a history of financial indebtedness documented by credit reports and a Chapter 13 bankruptcy petition; The applicant failed to demonstrate that his poor financial judgment has been corrected or that future financial problems are unlikely; The applicant did not provide evidence of effective financial counseling or a plan to resolve unresolved debts.
Why the Applicant Was Denied
- The applicant has a history of financial indebtedness documented by credit reports and a Chapter 13 bankruptcy petition.
- The applicant failed to demonstrate that his poor financial judgment has been corrected or that future financial problems are unlikely.
- The applicant did not provide evidence of effective financial counseling or a plan to resolve unresolved debts.
Conditions Referenced
- AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
- AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
- AG ¶ 20(a)rejectedBehavior Happened so Long Ago, Was Infrequent, or Occurred Under Circumstances Unlikely to RecurThe applicant's financial problems are ongoing.
- AG ¶ 20(b)rejectedConditions That Resulted in Financial Problems Were Largely Beyond the Person's ControlThe applicant acknowledged overspending on credit cards.
- AG ¶ 20(c)rejectedReceived or Is Receiving Counseling for the ProblemThe applicant provided no evidence of effective financial counseling.
- AG ¶ 20(d)rejectedGood-faith Effort to Repay Overdue Creditors or Resolve DebtsWhile some debts were resolved, the applicant failed to demonstrate a plan for unresolved debts.
- AG ¶ 20(e)rejectedReasonable Basis to Dispute the Legitimacy of the Past-due DebtThe applicant did not provide evidence of any formal dispute.
Key Rule Quoted
“The protection of the national security is the paramount consideration.”
Procedural Posture
- SOR issuedMar 2, 2016
- Answer filedMay 22, 2016
- Hearing heldJul 22, 2016convened as scheduled
- Decision dateOct 20, 2016
Cite For
- Failure to Demonstrate Effective Financial Management Under Guideline F
- Ongoing Financial Problems as a Basis for Denial
- Insufficient Evidence of Mitigating Conditions for Financial Considerations