ISCR Case 08-11741.h1

Case Headnote

ISCR Case No. 08-11741.h1

grantedSep 21, 2010· Hon. Martin H. Mogul· hearing

Summary

A 40-year-old defense contractor and former Navy service member was granted a security clearance despite financial considerations under Guideline F. The Statement of Reasons (SOR) detailed several overdue debts and failures to file tax returns. Specifically, the applicant had two student loans, totaling $4,654 and $5,510, which had been in default but were rehabilitated through consistent payments of $150 per month for approximately one year, totaling $2,000. A third listed student loan for $4,642 was determined to be a duplicate of one of the rehabilitated loans.

Additionally, the applicant owed $4,200 in child support arrears, stemming from a court order he was unaware of for several years, with payments now being made via wage garnishment. An overdue debt of $294 was cited, but the applicant was unaware of its origin and unable to locate the creditor despite having a money order prepared for payment. The SOR also noted a failure to file federal and state income tax returns for 2008 and a failure to report full income to the federal government between August 2001 and August 2006.

The judge found that the applicant made significant efforts to rehabilitate his financial situation. He filed all overdue tax returns for 2001 through 2008, which showed no tax liability, and demonstrated a good-faith effort by making payments on his student loans and child support. The financial difficulties were attributed partly to circumstances beyond his control, including unemployment and increased family responsibilities after his sister's death. Based on these mitigating factors, the security clearance was granted.

Why the Applicant Prevailed

The applicant demonstrated a good-faith effort to rehabilitate his financial situation by making payments on his student loans and child support obligations.
The applicant's financial difficulties were largely due to circumstances beyond his control, including unemployment and taking on additional family responsibilities after his sister's death.
The applicant filed overdue tax returns for the years 2001 through 2008, showing no tax liability.

Conditions Referenced

Disqualifying

AG ¶ 19(a)appliedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)appliedHistory of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(b)appliedConditions Largely Beyond the Person's Control
AG ¶ 20(c)appliedGood Faith Effort to Repay Debts
AG ¶ 20(d)appliedRehabilitation of Financial Obligations

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedJul 30, 2009
Answer filedAug 28, 2009
Hearing heldApr 12, 2010Second day of hearing after initial hearing on December 17, 2009.
Decision dateSep 21, 2010

Cite For

Mitigation of Financial Difficulties Under Guideline F
Good Faith Efforts to Rehabilitate Financial Obligations
Consideration of Personal Circumstances Affecting Financial Stability

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	This overdue debt is cited in the SOR in the amount of $4,654. At the hearing, Applicant testified that this debt was for a student loan, as was 1.b. He stated that both of these loans had been in default, but he had been making payments of $150 month for approximately one year with a total amount of $2,000, and the loan had been removed from the default category. Exhibit F, which is a letter from the Settlement Unit for the college funds owed by Applicant, dated October 28, 2009, indicated that Applicant’s two education loans were rehabilitated and are no longer in default. Applicant now pays $70 a month on these two loans per the agreement, since he has now rehabilitated the loans. $4,654	For Applicant	Student Loan Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly	Documented Debt Paid in Full
1.b	This overdue debt is cited in the SOR in the amount of $5,510. Applicant testified that this debt, also for a student loan, has also been removed from the default category, as reviewed in 1.a., above. Exhibit F confirms that this debt has been rehabilitated. $5,510	For Applicant	Student Loan Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly	Documented Debt Paid in Full
1.c	This overdue debt is cited in the SOR in the amount of $4,200. Applicant testified that this loan is for child support, which he has been paying in various amounts. He averred that he was ordered to make payments for a child of whom he had not been aware, and he is still not certain of the paternity. He indicated that he was in arrears because the court had ordered him to make child support payments, but he had not received notice of the order for several years. When he went to renew his license in another state in 2007, that was when he learned of this debt. His wages are now being garnished to make payments on this debt. $4,200	For Applicant	Child Support Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly	Documented Payment Plan with Creditor
1.d	This overdue debt is cited in the SOR in the amount of $4,642. Applicant testified that this debt is the same as 1.a., above. He pointed to Exhibit F, the letter from the Settlement Unit for the college funds, which refers to two student loans, not the three, as are listed on the SOR. He also testified that he had only taken out two education loans. $4,642	For Applicant	Student Loan Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly	Documented Debt Paid in Full
1.e	This overdue debt is cited in the SOR in the amount of $294. Applicant testified that he is unaware of the origin of this debt, and since it is not listed on his credit report, he is unable to contact a creditor to inquire as to its origin. He is willing and able to pay this debt, and has actually purchased a money order in the amount of $294 to pay this debt but he cannot locate the creditor, so he is unable to do so. $294	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Other
1.f	You failed to file your Federal and State income tax returns for tax year 2008.	For Applicant	Tax Filing Failure	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Documented Tax Returns Filed Late
1.g	During the approximate period of August 2001 to August 2006, you failed to report your full income to the Federal Government.	For Applicant	Tax Filing Failure	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Documented Tax Returns Filed Late

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

This overdue debt is cited in the SOR in the amount of $4,654. At the hearing, Applicant testified that this debt was for a student loan, as was 1.b. He stated that both of these loans had been in default, but he had been making payments of $150 month for approximately one year with a total amount of $2,000, and the loan had been removed from the default category. Exhibit F, which is a letter from the Settlement Unit for the college funds owed by Applicant, dated October 28, 2009, indicated that Applicant’s two education loans were rehabilitated and are no longer in default. Applicant now pays $70 a month on these two loans per the agreement, since he has now rehabilitated the loans.

$4,654

For Applicant

Student Loan Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

Documented

Debt Paid in Full

1.b

This overdue debt is cited in the SOR in the amount of $5,510. Applicant testified that this debt, also for a student loan, has also been removed from the default category, as reviewed in 1.a., above. Exhibit F confirms that this debt has been rehabilitated.

$5,510

For Applicant

Student Loan Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

Documented

Debt Paid in Full

1.c

This overdue debt is cited in the SOR in the amount of $4,200. Applicant testified that this loan is for child support, which he has been paying in various amounts. He averred that he was ordered to make payments for a child of whom he had not been aware, and he is still not certain of the paternity. He indicated that he was in arrears because the court had ordered him to make child support payments, but he had not received notice of the order for several years. When he went to renew his license in another state in 2007, that was when he learned of this debt. His wages are now being garnished to make payments on this debt.

$4,200

For Applicant

Child Support Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

Documented

Payment Plan with Creditor

1.d

This overdue debt is cited in the SOR in the amount of $4,642. Applicant testified that this debt is the same as 1.a., above. He pointed to Exhibit F, the letter from the Settlement Unit for the college funds, which refers to two student loans, not the three, as are listed on the SOR. He also testified that he had only taken out two education loans.

$4,642

For Applicant

Student Loan Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

Documented

Debt Paid in Full

1.e

This overdue debt is cited in the SOR in the amount of $294. Applicant testified that he is unaware of the origin of this debt, and since it is not listed on his credit report, he is unable to contact a creditor to inquire as to its origin. He is willing and able to pay this debt, and has actually purchased a money order in the amount of $294 to pay this debt but he cannot locate the creditor, so he is unable to do so.

$294

For Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

Claimed

Other

1.f

You failed to file your Federal and State income tax returns for tax year 2008.

For Applicant

Tax Filing Failure

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

Documented

Tax Returns Filed Late

1.g

During the approximate period of August 2001 to August 2006, you failed to report your full income to the Federal Government.

For Applicant

Tax Filing Failure

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

Documented

Tax Returns Filed Late

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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

APPEARANCES

STATEMENT OF CASE

FINDINGS OF FACT

POLICIES

ANALYSIS

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION