ISCR Case 08-11950.h1

Case Headnote

ISCR Case No. 08-11950.h1

deniedFeb 28, 2011· Hon. Noreen A. Lynch· hearing

Summary

A 27-year-old defense contractor employee was denied a security clearance under Guideline F, Financial Considerations, due to significant unresolved delinquent debts totaling approximately $20,000. The applicant acknowledged a history of poor financial judgment, including a $5,000-$6,000 debt from a tax refund error in 2004, which he spent on apartment furnishings and could not repay. In 2005, he incurred a $13,550 debt for a truck he returned after 30 days without making payments.

Further financial concerns included a $1,000 loan taken for a vacation instead of debt repayment, and a long-standing bank overdraft of $281, which he recently paid. While the applicant had no new delinquent debt and recently began payment plans for four accounts, his debts had languished for years. Despite having a monthly net remainder of $900 after expenses, he failed to provide structured repayment plans for all his debts.

The judge found that the applicant's recent efforts to address his financial issues were insufficient to mitigate the security concerns. His history of poor financial management and lack of prioritization in repaying debts led to the denial of his security clearance.

Why the Applicant Was Denied

The applicant admitted to having significant delinquent debts totaling approximately $20,000.
He failed to provide structured repayment plans for his debts despite having a net remainder of $900 after expenses.
The applicant's financial issues had persisted for several years without adequate resolution.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(a)rejectedBehavior Happened Long Ago or InfrequentlyThe applicant's financial issues have persisted for several years.
AG ¶ 20(b)rejectedConditions Largely Beyond the Person's ControlThe applicant was employed during the time debts were incurred.
AG ¶ 20(d)rejectedGood-faith Effort to Repay Overdue CreditorsThe applicant only recently began repayment plans and did not prioritize his debts.
AG ¶ 20(c)rejectedReceived Counseling for the ProblemThe applicant did not provide evidence of financial counseling.

Key Rule Quoted

“The ultimate burden of persuasion is on the applicant seeking a security clearance.”

Procedural Posture

SOR issuedOct 20, 2010
Answer filed—Timely answered the SOR.
Hearing heldFeb 8, 2011Hearing conducted with applicant testifying.
Decision dateFeb 28, 2011

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations Under Guideline F
Importance of Demonstrating a Consistent and Proactive Approach to Debt Repayment
Consideration of the Whole-person Concept in Security Clearance Determinations

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 acknowledged that he used poor judgment with regard to his finances when he was younger. However, he did not begin addressing the debts alleged on the SOR until recently. He recently began a payment plan for three debts alleged in the SOR. $385	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.b	In January 2004, Applicant had his tax returns prepared by a Rapid Refund group who worked out of a liquor store. He paid them a fee of $200 and they prepared his tax returns. He was given a sum of approximately $5,000 or $6,000 based on an expected tax refund. However, he learned a few months later that an error was made and that he owed the money to the tax group. He had spent the money buying furnishings for his apartment. Thus, he did not have the money to return to the tax group. $2,811	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	In 2005, Applicant purchased another vehicle for $10,000. However, he returned the car a few days later because a 'cigarette tray' was missing. He had not made a down payment. The dealership gave him a different truck that he thought was a loaner until he would get his original car back. He kept the truck for 30 days and he learned he was then responsible for the truck. He did not want this particular type of truck so he returned the truck to the dealership. Applicant did not make any payments on the vehicle. He now owes $13,550. $13,550	Against Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	Applicant acknowledged that instead of paying some of his delinquent debt, he took out a loan for a vacation in the amount of $1,000. $1,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Applicant has unresolved debt for several accounts. He agrees that his debts have languished over time. He has no new delinquent debt. However, he just started making the payments last month for the four accounts that are in repayment. He has a $500 a month car note. He is planning a wedding with a budget of $5,000. $20,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	The debt alleged in SOR 1.f is due to a bank overdraft. Applicant acknowledged that this account has been delinquent for several years. He provided receipts for payment of the overdraft of $281. $281	For Applicant	Unspecified Financial	Admitted	—	—	Documented Debt Paid in Full

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant acknowledged that he used poor judgment with regard to his finances when he was younger. However, he did not begin addressing the debts alleged on the SOR until recently. He recently began a payment plan for three debts alleged in the SOR.

$385

For Applicant

Medical Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

Documented

Debt Paid in Full

1.b

In January 2004, Applicant had his tax returns prepared by a Rapid Refund group who worked out of a liquor store. He paid them a fee of $200 and they prepared his tax returns. He was given a sum of approximately $5,000 or $6,000 based on an expected tax refund. However, he learned a few months later that an error was made and that he owed the money to the tax group. He had spent the money buying furnishings for his apartment. Thus, he did not have the money to return to the tax group.

$2,811

Against Applicant

Tax Unpaid

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.c

In 2005, Applicant purchased another vehicle for $10,000. However, he returned the car a few days later because a 'cigarette tray' was missing. He had not made a down payment. The dealership gave him a different truck that he thought was a loaner until he would get his original car back. He kept the truck for 30 days and he learned he was then responsible for the truck. He did not want this particular type of truck so he returned the truck to the dealership. Applicant did not make any payments on the vehicle. He now owes $13,550.

$13,550

Against Applicant

Auto Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.d

Applicant acknowledged that instead of paying some of his delinquent debt, he took out a loan for a vacation in the amount of $1,000.

$1,000

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.e

Applicant has unresolved debt for several accounts. He agrees that his debts have languished over time. He has no new delinquent debt. However, he just started making the payments last month for the four accounts that are in repayment. He has a $500 a month car note. He is planning a wedding with a budget of $5,000.

$20,000

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.f

The debt alleged in SOR 1.f is due to a bank overdraft. Applicant acknowledged that this account has been delinquent for several years. He provided receipts for payment of the overdraft of $281.

$281

For Applicant

Unspecified Financial

Admitted

—

Documented

Debt Paid in Full

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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