ISCR Case 15-04266.h1

Case Headnote

ISCR Case No. 15-04266.h1

deniedMar 7, 2017· Hon. Carol G. Ricciardello· hearing

Summary

A 49-year-old federal contractor was denied a security clearance under Guideline F (Financial Considerations) due to unresolved financial issues. The applicant filed for Chapter 7 bankruptcy in November 2011, with debts totaling $183,000 discharged in April 2012.

Specific allegations included a federal tax lien filed in June 2011 for $35,055, which the applicant addressed through an August 2012 agreement with the IRS for monthly payments and the application of future tax refunds. Additionally, a state tax lien was filed in August 2012, leading to an installment agreement with monthly payments. The applicant provided documentation showing compliance with the state agreement, with one payment remaining in July 2015.

Despite some efforts to resolve debts, the clearance was denied. The decision cited the large amount of debt discharged in bankruptcy as an indicator of an inability to manage financial obligations. Furthermore, insufficient evidence was provided to demonstrate responsible financial behavior or current financial stability, and the applicant did not offer specific information regarding business finances or other debts included in the bankruptcy.

Why the Applicant Was Denied

Applicant had a large amount of debts discharged in bankruptcy, indicating an inability to manage financial obligations.
Insufficient evidence was provided to demonstrate responsible financial behavior or current financial stability.
The applicant did not provide specific information regarding his business finances or debts included in the bankruptcy.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(c)appliedThe Person Has Received or Is Receiving Counseling for the ProblemApplicant resolved federal and state tax liens.
AG ¶ 20(b)rejectedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's ControlInsufficient evidence to conclude that including debts not delinquent in bankruptcy was responsible.

Key Rule Quoted

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

Procedural Posture

SOR issuedJan 4, 2016
Answer filedJan 21, 2016Applicant elected to have the case decided on the written record.
Hearing held—No hearing; decided on written record.
Decision dateMar 7, 2017

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations Under Guideline F
Insufficient Evidence of Financial Responsibility Post-bankruptcy
Impact of Financial History on Security Clearance Eligibility

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	Applicant filed Chapter 7 bankruptcy in November 2011, and his debts were discharged in April 2012. On his security clearance application (SCA), in response to the inquiry “provide the amount (in U.S. dollars) involved in the bankruptcy,” he disclosed $183,000.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	A federal tax lien was filed against Applicant in approximately June 2011 for $35,055. Applicant entered into an agreement with the Internal Revenue Service (IRS) in August 2012, agreeing to make monthly payments of $370 toward the delinquent tax and applying any future tax refunds toward the debt. $6,415	For Applicant	Tax Unpaid	Admitted	—	(c) received/receiving counseling; problem being resolved	Documented Debt Paid in Full
1.c	A state tax lien was filed against Applicant in approximately August 2012. Applicant entered an installment agreement with the state agreeing to make monthly payments of $326. He provided documents to show he complied with the agreement and had one remaining payment in July 2015.	For Applicant	Tax Unpaid	Admitted	—	(c) received/receiving counseling; problem being resolved	Documented Debt Paid in Full

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant filed Chapter 7 bankruptcy in November 2011, and his debts were discharged in April 2012. On his security clearance application (SCA), in response to the inquiry “provide the amount (in U.S. dollars) involved in the bankruptcy,” he disclosed $183,000.

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.b

A federal tax lien was filed against Applicant in approximately June 2011 for $35,055. Applicant entered into an agreement with the Internal Revenue Service (IRS) in August 2012, agreeing to make monthly payments of $370 toward the delinquent tax and applying any future tax refunds toward the debt.

$6,415

For Applicant

Tax Unpaid

Admitted

—

(c) received/receiving counseling; problem being resolved

Documented

Debt Paid in Full

1.c

A state tax lien was filed against Applicant in approximately August 2012. Applicant entered an installment agreement with the state agreeing to make monthly payments of $326. He provided documents to show he complied with the agreement and had one remaining payment in July 2015.

For Applicant

Tax Unpaid

Admitted

—

(c) received/receiving counseling; problem being resolved

Documented

Debt Paid in Full

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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

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION

FOOTNOTES