Summary
A 53-year-old senior designer for a defense contractor was denied a security clearance under Guideline F (Financial Considerations). The denial stemmed from a history of financial issues, including a Chapter 7 bankruptcy discharge in December 1999.
Further concerns were raised by the applicant's failure to file federal income tax returns for 2001, 2002, and 2003. He was notified in 2004 that he owed over $5,000 for his 2001 taxes, and did not file the 2002 and 2003 returns until October 2007. Additionally, a landlord obtained a judgment against him for $2,781 in November 2200 for unpaid rent, and he had a delinquent cell phone service account.
Despite positive supervisor evaluations and long tenure, the applicant's financial track record since 1999 led to doubts about his current reliability and trustworthiness. The denial was based on his failure to file tax returns and a lack of demonstrated good-faith effort to resolve his debts, specifically the unresolved judgment for unpaid rent.
Why the Applicant Was Denied
- The applicant failed to file federal income tax returns for 2001, 2002, and 2003, raising concerns under AG ¶ 19(g).
- The applicant's financial track record since 1999 raised doubts about his current reliability and trustworthiness.
- The applicant did not demonstrate a good-faith effort to resolve his debts, particularly the unresolved judgment for unpaid rent.
Conditions Referenced
- 19(a)raisedInability or Unwillingness to Satisfy Debts
- 19(c)raisedHistory of Not Meeting Financial Obligations
- 19(g)raisedFailure to File Annual Federal, State, or Local Income Tax Returns
- 20(a)rejectedBehavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to RecurThe applicant's failure to file tax returns for 2002 and 2003 was not established as infrequent or unlikely to recur.
- 20(b)appliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's ControlThe bankruptcy was due to an unexpected downturn in property values.
- 20(c)appliedReceived or Is Receiving Counseling for the Problem And/or There Are Clear Indications That the Problem Is Being Resolved or Is Under ControlThe applicant's tax issues are under control, but the judgment for unpaid rent remains unresolved.
- 20(d)appliedInitiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsThe bankruptcy was a reasonable response to financial crisis, but other debts were not resolved in good faith.
Key Rule Quoted
“Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the revised adjudicative guidelines (AG).”
Procedural Posture
- SOR issuedNov 26, 2007
- Answer filedJan 2, 2008
- Hearing heldFeb 29, 2008
- Decision dateApr 30, 2008
Cite For
- Denial of Security Clearance Based on Financial Considerations Under Guideline F
- Impact of Unresolved Debts on Security Clearance Eligibility
- Importance of Demonstrating Good-faith Efforts to Resolve Financial Issues