ISCR Case 08-01392.h1

Case Headnote

ISCR Case No. 08-01392.h1

deniedDec 7, 2010· Hon. Jennifer I. Goldstein· hearing

Summary

A 42-year-old defense contractor employee was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The denial stemmed from approximately $26,136 in outstanding debts and the intentional omission of these debts from his 2009 security clearance application (EQIP). The judge determined that the applicant failed to demonstrate responsible financial behavior and lacked candor in his disclosures, failing to meet trustworthiness standards for classified information access.

Specific financial allegations included a $348 judgment for unemployment overpayment, which was paid through wage garnishment. A $3,137 store credit card debt, initially attributed to his ex-wife but later acknowledged as his own, was resolved through a settlement agreement for a reduced amount of $1,411.74. An approximate $799 federal overpayment from his Army discharge was satisfied in February 2010 via an income tax return.

Other debts included a $19,767 collection for a repossessed vehicle, which the applicant disputes and is addressing through a class action lawsuit and credit counseling. An $885 phone company debt was claimed paid but lacked documentation, and a $280 bank debt was claimed satisfied for $183, but documentation did not match the original debt. Finally, a $920 phone company debt was disputed as a duplicate, but credit reports showed two distinct accounts. The intentional omissions on his EQIP, due to embarrassment, were a key factor in the denial.

Why the Applicant Was Denied

The applicant failed to show he acted responsibly with respect to his outstanding debts.
He intentionally omitted relevant financial information from his security clearance application, indicating a lack of candor.

Conditions Referenced

Disqualifying

F.19(a)raisedInability or Unwillingness to Satisfy Debts
F.19(c)raisedA History of Not Meeting Financial Obligations
E.16(a)raisedDeliberate Omission, Concealment, or Falsification of Relevant Facts
E.16(c)raisedCredible Adverse Information in Several Adjudicative Issue Areas

Mitigating

F.20(b)rejectedConditions That Resulted in the Financial Problem Were Largely Beyond the Person’s ControlWhile the applicant's financial issues were partly due to his ex-wife's mismanagement, he failed to demonstrate responsible behavior toward his debts.
F.20(c)rejectedThe Person Has Received or Is Receiving Counseling for the ProblemThe applicant's financial problems are not fully resolved or under control despite attending a financial management class.
F.20(d)rejectedThe Individual Initiated a Good-faith Effort to Repay Overdue CreditorsThe applicant's efforts to resolve debts were insufficient and not timely.
E.17(a)rejectedThe Individual Made Prompt, Good-faith Efforts to Correct the OmissionThe applicant did not make prompt or good-faith efforts to correct his omissions.

Key Rule Quoted

“Any doubt concerning personnel being considered for access to classified information will be resolved in favor of national security.”

Procedural Posture

SOR issuedApr 8, 2010
Answer filedApr 21, 2010
Hearing heldSep 28, 2010Rescheduled due to applicant's hospitalization.
Decision dateDec 7, 2010

Cite For

Failure to Disclose Financial Obligations Under Guideline F
Lack of Candor in Security Clearance Applications Under Guideline E
Insufficient Evidence of Responsible Financial Behavior Mitigating Security Concerns

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 failed to list his delinquent debts on his 2009 EQIP in Sections 26(b) and 26(m). He clearly knew he had debts that had not been resolved since his last security interview and were over 180 days delinquent in the past 7 years and that he was currently over 90 days past due on some debts. Additionally, he knew he had a vehicle repossessed. Yet, he chose not to include the debts on the EQIP because he was embarrassed of them. This behavior indicates questionable judgment and untrustworthiness.	Against Applicant	Omission or Failure to DiscloseFOUND DELIBERATE	Financial	Denied	(a) deliberate omission, concealment, or falsification on a security form	—	—
2.b	specific text not stated in this decision	Against Applicant	Unspecified Personal Conduct	—	Denied	—	—	—

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

2.a

Applicant failed to list his delinquent debts on his 2009 EQIP in Sections 26(b) and 26(m). He clearly knew he had debts that had not been resolved since his last security interview and were over 180 days delinquent in the past 7 years and that he was currently over 90 days past due on some debts. Additionally, he knew he had a vehicle repossessed. Yet, he chose not to include the debts on the EQIP because he was embarrassed of them. This behavior indicates questionable judgment and untrustworthiness.

Against Applicant

Omission or Failure to DiscloseFOUND DELIBERATE

Financial

Denied

(a) deliberate omission, concealment, or falsification on a security form

—

2.b

specific text not stated in this decision

Against Applicant

Unspecified Personal Conduct

—

Denied

—

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant is indebted on a judgment against him in the approximate amount of $348, as alleged in allegation 1.a. Applicant incurred this debt when he received an overpayment on his unemployment benefits. His wages were garnished to satisfy this debt and it is now paid. $348	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant is indebted on a store credit card in the approximate amount of $3,137, as alleged in allegation 1.b. Applicant testified that his ex-wife incurred this debt when they were married and it was assigned to Applicant in their divorce. However, in his adopted subject interview, he indicated that this debt was solely his debt, and he used the card to purchase his children’s school clothing. Applicant has reached a settlement agreement with this creditor. He agreed to make payments of $117.65 per month until he has satisfied a reduced amount of $1,411.74. $3,137	For Applicant	Credit Card Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Credited Payment Plan with Creditor
1.c	Applicant was indebted to the Federal government for an overpayment he received when he was discharged from the Army in the approximate amount of $799, as stated in allegation 1.c. This debt was satisfied in February 2010 when Applicant’s income tax return was applied to this debt. Applicant presented a notification from the U.S. Department of Treasury that shows this debt was satisfied. $799	For Applicant	Tax Unpaid	Admitted	—	—	—
1.d	Applicant is indebted to a collection agent in the approximate amount of $19,767, as alleged in 1.d. This debt was incurred when Applicant surrendered a vehicle for repossession. He purchased the vehicle in 2005 for approximately $26,000. He owned it for two and one-half years. He made payments on the vehicle for the first two years, but was unable to continue to afford the vehicle. He called the lender and surrendered it. He believes the vehicle was resold by the creditor for more than he owed on the vehicle at the time of surrender. He has joined a class action law suit against the creditor. He also provided documentation that he has hired a credit counseling company to negotiate with this creditor on his behalf. To date, there is no agreement with this creditor. Applicant disputes the full debt and has requested an accounting from the company, through the credit counseling service. $19,767	Against Applicant	Auto Loan Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(e) reasonable, documented basis to dispute the debt	Claimed Debt Disputed with Creditor
1.e	Applicant is indebted to a collection agent for a phone company in the approximate amount of $885, as alleged in 1.e. This debt was incurred when Applicant acquired cell phone service for his oldest child. At hearing, Applicant claimed this debt had been paid. However, he was unable to provide documentation to establish payment. He indicated, in his post-hearing exhibits, that he has now listed this debt with his consumer credit counseling service, but he provided no documentation to support this claim. $885	Against Applicant	Utility or Phone Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Applicant is indebted to a collection agent for a bank in the approximate amount of $280, as alleged in 1.g. Applicant claims he satisfied this debt for a negotiated amount of $183. He provided a copy a bank statement showing $183 had been deducted from his bank account on April 28, 2010. However, neither the name of the creditor paid, nor the amount paid match the original debt as stated in Applicant’s credit reports. $280	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	Applicant is indebted to a collection agent for a phone company in the approximate amount of $920, as alleged in 1.h. Applicant disputes this debt and claims it is a duplicate of the debt in SOR allegation 1.e. However, he offered no documentation to establish his claim. Applicant’s credit reports show Applicant had two different account numbers with this creditor, opened at different times. $920	Against Applicant	Utility or Phone Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant is indebted on a judgment against him in the approximate amount of $348, as alleged in allegation 1.a. Applicant incurred this debt when he received an overpayment on his unemployment benefits. His wages were garnished to satisfy this debt and it is now paid.

$348

Against Applicant

Judgment Against Applicant

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.b

Applicant is indebted on a store credit card in the approximate amount of $3,137, as alleged in allegation 1.b. Applicant testified that his ex-wife incurred this debt when they were married and it was assigned to Applicant in their divorce. However, in his adopted subject interview, he indicated that this debt was solely his debt, and he used the card to purchase his children’s school clothing. Applicant has reached a settlement agreement with this creditor. He agreed to make payments of $117.65 per month until he has satisfied a reduced amount of $1,411.74.

$3,137

For Applicant

Credit Card Debt

Admitted

—

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

Credited

Payment Plan with Creditor

1.c

Applicant was indebted to the Federal government for an overpayment he received when he was discharged from the Army in the approximate amount of $799, as stated in allegation 1.c. This debt was satisfied in February 2010 when Applicant’s income tax return was applied to this debt. Applicant presented a notification from the U.S. Department of Treasury that shows this debt was satisfied.

$799

For Applicant

Tax Unpaid

Admitted

—

1.d

Applicant is indebted to a collection agent in the approximate amount of $19,767, as alleged in 1.d. This debt was incurred when Applicant surrendered a vehicle for repossession. He purchased the vehicle in 2005 for approximately $26,000. He owned it for two and one-half years. He made payments on the vehicle for the first two years, but was unable to continue to afford the vehicle. He called the lender and surrendered it. He believes the vehicle was resold by the creditor for more than he owed on the vehicle at the time of surrender. He has joined a class action law suit against the creditor. He also provided documentation that he has hired a credit counseling company to negotiate with this creditor on his behalf. To date, there is no agreement with this creditor. Applicant disputes the full debt and has requested an accounting from the company, through the credit counseling service.

$19,767

Against Applicant

Auto Loan Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(e) reasonable, documented basis to dispute the debt

Claimed

Debt Disputed with Creditor

1.e

Applicant is indebted to a collection agent for a phone company in the approximate amount of $885, as alleged in 1.e. This debt was incurred when Applicant acquired cell phone service for his oldest child. At hearing, Applicant claimed this debt had been paid. However, he was unable to provide documentation to establish payment. He indicated, in his post-hearing exhibits, that he has now listed this debt with his consumer credit counseling service, but he provided no documentation to support this claim.

$885

Against Applicant

Utility or Phone Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.g

Applicant is indebted to a collection agent for a bank in the approximate amount of $280, as alleged in 1.g. Applicant claims he satisfied this debt for a negotiated amount of $183. He provided a copy a bank statement showing $183 had been deducted from his bank account on April 28, 2010. However, neither the name of the creditor paid, nor the amount paid match the original debt as stated in Applicant’s credit reports.

$280

Against Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.h

Applicant is indebted to a collection agent for a phone company in the approximate amount of $920, as alleged in 1.h. Applicant disputes this debt and claims it is a duplicate of the debt in SOR allegation 1.e. However, he offered no documentation to establish his claim. Applicant’s credit reports show Applicant had two different account numbers with this creditor, opened at different times.

$920

Against Applicant

Utility or Phone Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

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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