Summary
A 50-year-old defense contractor employee was denied a security clearance under Guideline F, Financial Considerations, due to a history of financial instability. The Statement of Reasons cited eight bankruptcy petitions filed between 1992 and 2015, with debts discharged through Chapter 7 bankruptcy on four occasions: 1992, 1999, 2006, and 2015. Additionally, the applicant failed to file federal and state income tax returns for the years 2013 through 2015.
Disqualifying conditions F.1.a, F.1.c, and F.1.f were raised, while mitigating conditions F.2.b, F.2.c, F.2.d, and F.2.g were considered. However, the judge determined that the applicant's long history of financial instability, including the multiple bankruptcies and the failure to file tax returns for 2013-2015, demonstrated a lack of responsible financial management.
The applicant admitted potential tax liabilities of at least $13,000 for the unfiled returns but did not provide evidence of good-faith efforts to resolve these financial issues or file the missing tax documents. Consequently, the judge found that the applicant had not mitigated the security concerns, leading to the denial of the security clearance.
Why the Applicant Was Denied
- The applicant has a long history of financial instability, including eight bankruptcy filings since 1992.
- He failed to file federal and state tax returns for 2013 to 2015, admitting potential tax liabilities of at least $13,000.
- The applicant did not provide evidence of good-faith efforts to resolve his financial issues or file the missing tax returns.
Conditions Referenced
- F.1.araisedInability to Satisfy Debts
- F.1.craisedA History of Not Meeting Financial Obligations
- F.1.fraisedFailure to File or Fraudulently Filing Annual Federal, State, or Local Income Tax Returns
- F.2.bappliedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person's Control
- F.2.crejectedThe Individual Has Received or Is Receiving Financial Counseling for the ProblemThe applicant's financial problems are not under control.
- F.2.drejectedThe Individual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsEvidence of good-faith efforts to pay or resolve debts is lacking.
- F.2.grejectedThe Individual Has Made Arrangements with the Appropriate Tax Authority to File or Pay the Amount OwedThe applicant failed to provide proof of filing tax returns.
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 issuedApr 5, 2016
- Answer filedApr 27, 2016
- Hearing heldMar 14, 2017
- Decision dateAug 24, 2017
Cite For
- Financial Instability as a Disqualifying Factor Under Guideline F
- Failure to File Tax Returns as a Significant Concern
- The Impact of Personal Circumstances on Financial Management Evaluations