ISCR Case 08-08106.h1

Case Headnote

ISCR Case No. 08-08106.h1

deniedSep 24, 2009· Hon. Henry Lazzaro· hearing

Summary

A 40-year-old security officer was denied a security clearance due to financial considerations under Guideline F, stemming from a long history of financial irresponsibility. The applicant had filed for Chapter 13 bankruptcy in August 1999, which was dismissed in April 2001 for non-compliance with the repayment plan. Additionally, he owed $3,746.70 in delinquent federal income taxes for tax years 2002, 2003, and 2006 as of August 5, 2009.

Further financial issues included a judgment from his 1999 bankruptcy, originally $7,071, which had increased to approximately $11,500 with interest. The Statement of Reasons also listed 11 delinquent accounts, totaling $7,957, submitted for collection, with dates of last activity ranging from December 2001 to January 2008. The applicant had made no payments on these debts and had not contacted creditors to arrange repayment. His only action toward resolution was obtaining documents for a future Chapter 7 bankruptcy filing.

The applicant attributed his financial problems to unemployment and low wages, but the record showed issues, including a 1997 judgment for a repossessed auto, predated his unemployment. The judge found that the applicant failed to take sufficient action to resolve his debts and did not demonstrate a likelihood of future compliance, leading to the denial of his security clearance.

Why the Applicant Was Denied

Applicant failed to mitigate the security concern created by his long history of financial irresponsibility.
He admitted to all allegations in the Statement of Reasons and did not take action to resolve most debts listed.
The applicant's testimony provided little reason to anticipate he would resolve his debts in the foreseeable future.

Conditions Referenced

Disqualifying

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

Mitigating

MC 20(a)rejectedThe Behavior Occurred Under Such Circumstances That It Is Unlikely to Recur
MC 20(b)rejectedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's Control
MC 20(c)rejectedClear Indications That the Problem Is Being Resolved or Is Under Control
MC 20(d)rejectedInitiated a Good-faith Effort to Repay Overdue Creditors

Key Rule Quoted

“The objective of the security-clearance process is the fair-minded, commonsense assessment of a person’s trustworthiness and fitness for access to classified information.”

Procedural Posture

SOR issuedMar 11, 2009
Answer filedMar 24, 2009
Hearing heldAug 17, 2009
Decision dateSep 24, 2009

Cite For

Failure to Mitigate Financial Irresponsibility Under Guideline F
Impact of Unresolved Debts on Security Clearance Eligibility
Rejection of Mitigating Conditions Related to Financial Issues

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 for Chapter 13 bankruptcy protection in August 1999. The bankruptcy was dismissed in April 2001, because Applicant failed to comply with the plan that had been established to repay his creditors.	Against Applicant	Bankruptcy Filing	Admitted	(a) inability to satisfy debts	—	—
1.b	Applicant owes delinquent federal income taxes for tax years 2002, 2003, and 2006. As of August 5, 2009, the total amount he owed was $3,746.70. $3,746	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts	—	—
1.c	The judgment listed in Applicant’s 1999 bankruptcy as owing in the amount of $7,071, and in the SOR as owing in the amount of $7,061, has now risen to approximately $11,500 through the accumulation of interest. $11,500	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts	—	—
1.d	The SOR lists 11 delinquent accounts, totaling $7,957, that have been submitted for collection. The dates of last activity on those accounts range from December 2001 to January 2008. $7,957	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts	—	—
1.e	Applicant has not made any payment on any of these debts. He also has not contacted any of these creditors in an effort to make repayment arrangements.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts	—	—
1.f	The only action he has taken to resolve his delinquent debts is to obtain a packet of bankruptcy documents from a document preparation service and fill them out in contemplation of filing for Chapter 7 bankruptcy protection sometime in the near future.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts	—	—
1.g	Applicant attributes his financial problems to his reported periods of unemployment, his current low wages, and to his wife leaving her employment with the same company for which he now works.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts	—	—
1.h	The record establishes that a judgment was entered against Applicant based on a repossessed auto in 1997, long before he ever became unemployed.	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts	—	—
1.i	He has 11 delinquent collection accounts, totaling $7,957, that have been delinquent for years. $7,957	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts	—	—
1.j	Most of the dates of last activity occurred between September 2005 and September 2007. Applicant has not made any payment on any of these debts.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts	—	—
1.k	Applicant has not contacted any of these creditors in an effort to make repayment arrangements.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts	—	—
1.l	The only action he has taken to resolve his delinquent debts is to obtain a packet of bankruptcy documents from a document preparation service and fill them out in contemplation of filing for Chapter 7 bankruptcy protection sometime in the near future.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts	—	—
1.m	Applicant attributes his financial problems to his reported periods of unemployment, his current low wages, and to his wife leaving her employment with the same company for which he now works.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts	—	—
1.n	The financial problems began before either period of unemployment, continued through his lengthy period of employment as a corrections officer, and have not begun to be resolved.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant filed for Chapter 13 bankruptcy protection in August 1999. The bankruptcy was dismissed in April 2001, because Applicant failed to comply with the plan that had been established to repay his creditors.

Against Applicant

Bankruptcy Filing

Admitted

(a) inability to satisfy debts

—

1.b

Applicant owes delinquent federal income taxes for tax years 2002, 2003, and 2006. As of August 5, 2009, the total amount he owed was $3,746.70.

$3,746

Against Applicant

Tax Unpaid

Admitted

(a) inability to satisfy debts

—

1.c

The judgment listed in Applicant’s 1999 bankruptcy as owing in the amount of $7,071, and in the SOR as owing in the amount of $7,061, has now risen to approximately $11,500 through the accumulation of interest.

$11,500

Against Applicant

Judgment Against Applicant

Admitted

(a) inability to satisfy debts

—

1.d

The SOR lists 11 delinquent accounts, totaling $7,957, that have been submitted for collection. The dates of last activity on those accounts range from December 2001 to January 2008.

$7,957

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

—

1.e

Applicant has not made any payment on any of these debts. He also has not contacted any of these creditors in an effort to make repayment arrangements.

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

—

1.f

The only action he has taken to resolve his delinquent debts is to obtain a packet of bankruptcy documents from a document preparation service and fill them out in contemplation of filing for Chapter 7 bankruptcy protection sometime in the near future.

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

—

1.g

Applicant attributes his financial problems to his reported periods of unemployment, his current low wages, and to his wife leaving her employment with the same company for which he now works.

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

—

1.h

The record establishes that a judgment was entered against Applicant based on a repossessed auto in 1997, long before he ever became unemployed.

Against Applicant

Judgment Against Applicant

Admitted

(a) inability to satisfy debts

—

1.i

He has 11 delinquent collection accounts, totaling $7,957, that have been delinquent for years.

$7,957

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

—

1.j

Most of the dates of last activity occurred between September 2005 and September 2007. Applicant has not made any payment on any of these debts.

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

—

1.k

Applicant has not contacted any of these creditors in an effort to make repayment arrangements.

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

—

1.l

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

—

1.m

Applicant attributes his financial problems to his reported periods of unemployment, his current low wages, and to his wife leaving her employment with the same company for which he now works.

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

—

1.n

The financial problems began before either period of unemployment, continued through his lengthy period of employment as a corrections officer, and have not begun to be resolved.

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

—

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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

FORMAL FINDINGS

CONCLUSION

FOOTNOTES