ISCR Case 06-22473.h1

Case Headnote

ISCR Case No. 06-22473.h1

grantedAug 27, 2007· Hon. Philip S. Howe· hearing

Summary

A 39-year-old defense contractor was granted a security clearance despite initial concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The Statement of Reasons (SOR) alleged that the applicant failed to disclose certain information on her 2003 PTPA and 2005 SCA. Financial concerns included a history of unfiled and unpaid city income taxes from 1993, 1996-1998, and 2000-2005, totaling $5,239.39, which she is now repaying through a $250 monthly installment agreement.

Additional financial issues included a $2,075 judgment for apartment rental debt, which she is settling for $700, and several smaller debts for returned checks, utility bills, and medical expenses, most of which have been paid or are being regularly repaid. The applicant disputed the validity of several other debts, including a $201 mail-order business charge, a cell phone service bill, a $130 tanning salon membership, and a $795.92 judgment from 2004.

The judge ultimately granted the clearance, finding that the applicant had mitigated the concerns. She successfully completed a Chapter 13 bankruptcy and demonstrated a commitment to repaying her debts, with only $1,043 remaining unpaid across all outstanding items. Her explanations for past financial issues were deemed credible and reasonable.

Why the Applicant Prevailed

Applicant successfully completed a Chapter 13 bankruptcy, demonstrating a commitment to repaying her debts.
She has made significant progress in repaying her current debts, with only $1,043 remaining unpaid.
The judge found her explanations for past financial issues credible and reasonable.

Conditions Referenced

Disqualifying

FDC 19.araisedInability or Unwillingness to Satisfy Debts
FDC 19.craisedA History of Not Meeting Financial Obligations
FDC 19.graisedFailure to File Annual Local Income Tax Returns
PC 16.araisedDeliberate Omission, Concealment, or Falsification of Relevant Facts

Mitigating

FMC 20.bappliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control
FMC 20.dappliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts
FMC 20.eappliedThe Individual Has a Reasonable Basis to Dispute the Past-due Debt
PMC 17.aappliedThe Individual Has Not Engaged in Any Criminal Activity Since the Last Incident

Key Rule Quoted

“An applicant has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance.”
— ISCR Case No. 01-20700 at 3.

Procedural Posture

SOR issuedJan 10, 2007
Answer filedJan 31, 2007
Hearing heldJun 6, 2007
Decision dateAug 27, 2007

Cite For

Mitigation of Financial Difficulties Under Guideline F
Credibility of Applicant's Explanations for Past Conduct Under Guideline E
Successful Completion of Chapter 13 Bankruptcy as a Mitigating Factor

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	Applicant did not disclose certain information as alleged in the SOR on her 2003 PTPA. She did not disclose the same information on her 2005 SCA, as alleged in the SOR.	For Applicant	Omission or Failure to DiscloseNOT DELIBERATE	Financial	Denied	—	(b) omission/refusal followed advice of counsel; later cooperated fully (d) acknowledged the behavior; counseling/positive steps taken (e) positive steps to reduce vulnerability to exploitation	Claimed Explanation of Omission Credible

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

2.a

Applicant did not disclose certain information as alleged in the SOR on her 2003 PTPA. She did not disclose the same information on her 2005 SCA, as alleged in the SOR.

For Applicant

Omission or Failure to DiscloseNOT DELIBERATE

Financial

Denied

—

(b) omission/refusal followed advice of counsel; later cooperated fully

(d) acknowledged the behavior; counseling/positive steps taken

(e) positive steps to reduce vulnerability to exploitation

Claimed

Explanation of Omission Credible

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant failed to file and pay her city income taxes in 1993, 1996 to 1998, 2000 to 2005. She assumed her employer withheld the income tax from her pay checks. She did not verify that assumption. She did not file her city tax returns for some years, in particular 2003. She claimed the filing requirement “slipped her mind.” Since April 3, 2007, she has an installment payment agreement with her residence city to pay $250 monthly to retire the $5,239.39 tax debt. $5,239	For Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations (g) unexplained affluence	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts (e) reasonable, documented basis to dispute the debt	Claimed Other
1.b–1.i	8 sub-charges — specific text not stated in this decision (for the applicant). (low confidence)	For Applicant			—	—	—
1.j	Subparagraphs 1.j ($2,075 judgment) and 1.o ($1,179 judgment) are for the same apartment rental debt. The difference in amounts is not explained in any exhibit. Both debts resulted from judgments on the same day of June 2003. This debt is being paid at $100 monthly. Applicant is saving her money to settle the debt for $700. She has saved nearly that entire amount to be able to pay the settlement. $2,075	For Applicant	Judgment Against Applicant	Unknown	—	—	—
1.k	Subparagraphs 1.k ($25 for a returned check) and 1.l ($108 for a returned check) were paid in October and November 2006, respectively. $133	For Applicant	Unspecified Financial	Unknown	—	—	—
1.l	specific text not stated in this decision	For Applicant	Unspecified Financial	Unknown	—	—	—
1.m	Subparagraph 1.m ($1,674 for utility bills) is being paid regularly, and now has an amount due of $208. $1,674	For Applicant	Utility or Phone Debt	Unknown	—	—	—
1.n	Subparagraph 1.n ($201 for a mail order business) is a debt Applicant denies as valid. She claims her former boyfriend ordered something from this company, but she did not. The name used to order the item consisted of her nickname and the boyfriend’s last name. It remains unpaid. $201	For Applicant	Unspecified Financial	Denied	—	—	—
1.o–1.q	3 sub-charges — specific text not stated in this decision (for the applicant). (low confidence)	For Applicant			—	—	—
1.r	Subparagraph 1.r (satellite television service bill for $391) is a debt not yet repaid. $391	For Applicant	Utility or Phone Debt	Unknown	—	—	—
1.s	Subparagraph 1.s is for a cell phone service provider. Applicant denies she owes his bill because she never had service with that company. She uses a pre-paid cell phone. This debt remains unpaid, and Applicant disputes its validity.	For Applicant	Unspecified Financial	Denied	—	—	—
1.t	Subparagraph 1.t is a medical debt for $62. She is paying the collection agency $50 monthly to repay this bill and several others that agency is collecting. The total debt is about $300. $62	For Applicant	Medical Debt	Unknown	—	—	—
1.u	Subparagraph 1.u is for $130 owed on a tanning salon membership. This debt is unpaid. $130	For Applicant	Unspecified Financial	Unknown	—	—	—
1.v	Subparagraph 1.v is for a judgment from 2004 in the amount of $795.92. Applicant denies the validity of this debt. It is not listed on the credit reports submitted as exhibits. Applicant has not paid this debt and disputes its validity. $795	For Applicant	Judgment Against Applicant	Denied	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant failed to file and pay her city income taxes in 1993, 1996 to 1998, 2000 to 2005. She assumed her employer withheld the income tax from her pay checks. She did not verify that assumption. She did not file her city tax returns for some years, in particular 2003. She claimed the filing requirement “slipped her mind.” Since April 3, 2007, she has an installment payment agreement with her residence city to pay $250 monthly to retire the $5,239.39 tax debt.

$5,239

For Applicant

Tax Unpaid

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(g) unexplained affluence

(b) conditions largely beyond the person’s control; acted responsibly

(d) good-faith effort to repay or otherwise resolve debts

(e) reasonable, documented basis to dispute the debt

Claimed

Other

1.b–1.i

8 sub-charges — specific text not stated in this decision (for the applicant). (low confidence)

For Applicant

—

1.j

Subparagraphs 1.j ($2,075 judgment) and 1.o ($1,179 judgment) are for the same apartment rental debt. The difference in amounts is not explained in any exhibit. Both debts resulted from judgments on the same day of June 2003. This debt is being paid at $100 monthly. Applicant is saving her money to settle the debt for $700. She has saved nearly that entire amount to be able to pay the settlement.

$2,075

For Applicant

Judgment Against Applicant

Unknown

—

1.k

Subparagraphs 1.k ($25 for a returned check) and 1.l ($108 for a returned check) were paid in October and November 2006, respectively.

$133

For Applicant

Unspecified Financial

Unknown

—

1.l

specific text not stated in this decision

For Applicant

Unspecified Financial

Unknown

—

1.m

Subparagraph 1.m ($1,674 for utility bills) is being paid regularly, and now has an amount due of $208.

$1,674

For Applicant

Utility or Phone Debt

Unknown

—

1.n

Subparagraph 1.n ($201 for a mail order business) is a debt Applicant denies as valid. She claims her former boyfriend ordered something from this company, but she did not. The name used to order the item consisted of her nickname and the boyfriend’s last name. It remains unpaid.

$201

For Applicant

Unspecified Financial

Denied

—

1.o–1.q

3 sub-charges — specific text not stated in this decision (for the applicant). (low confidence)

For Applicant

—

1.r

Subparagraph 1.r (satellite television service bill for $391) is a debt not yet repaid.

$391

For Applicant

Utility or Phone Debt

Unknown

—

1.s

Subparagraph 1.s is for a cell phone service provider. Applicant denies she owes his bill because she never had service with that company. She uses a pre-paid cell phone. This debt remains unpaid, and Applicant disputes its validity.

For Applicant

Unspecified Financial

Denied

—

1.t

Subparagraph 1.t is a medical debt for $62. She is paying the collection agency $50 monthly to repay this bill and several others that agency is collecting. The total debt is about $300.

$62

For Applicant

Medical Debt

Unknown

—

1.u

Subparagraph 1.u is for $130 owed on a tanning salon membership. This debt is unpaid.

$130

For Applicant

Unspecified Financial

Unknown

—

1.v

Subparagraph 1.v is for a judgment from 2004 in the amount of $795.92. Applicant denies the validity of this debt. It is not listed on the credit reports submitted as exhibits. Applicant has not paid this debt and disputes its validity.

$795

For Applicant

Judgment Against Applicant

Denied

—

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Case Profile

Summary

Why the Applicant Prevailed

Conditions Referenced

Key Rule Quoted

Procedural Posture

Cite For

Full decision

DEFENSE OFFICE OF HEARINGS AND APPEALS

HEARING

SYNOPSIS

STATEMENT OF CASE

FINDINGS OF FACT

POLICIES

CONCLUSION

WHOLE PERSON ANALYSIS

FORMAL FINDINGS

DECISION

FOOTNOTES

APPEARANCES