ISCR Case 09-03622.h1

Case Headnote

ISCR Case No. 09-03622.h1

grantedJul 14, 2010· Hon. Marc E. Curry· hearing

Summary

A 51-year-old intelligence analyst and translator was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The applicant faced allegations of financial difficulties, including a delinquent credit card debt, mortgage issues, and a significant tax delinquency.

Specifically, the applicant had a $5,548 credit card debt that became delinquent after his separation, which he settled for $2,000 and paid in full by January 2010. He also experienced mortgage payment difficulties, attempting to sell his home in May 2008 and later pursuing a deed-in-lieu of foreclosure and a short sale, both of which were declined by the bank. The bank filed for foreclosure in October 2009, but the applicant sold the home the following month and satisfied the mortgage with the proceeds.

Furthermore, an IRS audit in 2007 revealed a $16,000 tax miscalculation for tax years 2004-2006, which accrued to $46,500 by June 2009. The applicant negotiated a monthly payment agreement of $2,733 and had paid approximately $22,900 by January 2010, continuing to adhere to the agreement. The clearance was granted because the applicant demonstrated a good-faith effort to repay creditors, his financial issues were largely due to circumstances beyond his control, and he made significant progress in reducing his tax delinquency while maintaining a stable income and savings.

Why the Applicant Prevailed

The applicant demonstrated a good-faith effort to repay overdue creditors and resolve debts.
The applicant's financial issues were largely due to circumstances beyond his control, including divorce and medical emergencies.
The applicant has made significant progress in reducing his tax delinquency and has a stable income and savings.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts

Mitigating

AG ¶ 20(b)appliedConditions Largely Beyond the Person's Control
AG ¶ 20(c)appliedReceived Counseling or Indications That the Problem Is Being Resolved
AG ¶ 20(d)appliedGood-faith Effort to Repay Overdue Creditors

Key Rule Quoted

“"failure or inability to live within one’s means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual’s reliability, trustworthiness, and ability to protect classified information"”
— AG ¶ 18

Procedural Posture

SOR issuedJan 8, 2010
Answer filedJan 22, 2010
Hearing heldApr 21, 2010
Decision dateJul 14, 2010

Cite For

Mitigation of Financial Concerns Under Guideline F
Impact of Personal Circumstances on Financial Obligations
Proactive Measures in Resolving Debts

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	The SOR lists another debt that became delinquent after Applicant and his wife separated. It is a credit card with a balance of $5,548. Applicant’s monthly payment was allegedly more than 120 days late as of the date of the SOR’s issuance. In January 2010, Applicant negotiated a settlement for $2,000 and paid it in full. $5,548	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.b	Applicant struggled to pay his mortgage, as alleged in SOR subparagraph 1.b. Applicant attempted to sell the house in May 2008 after his estranged wife moved; however, his efforts were initially unsuccessful. By November 2008, Applicant had begun to fall behind on his mortgage payments. In February 2009, Applicant contacted the bank and requested a deed-in-lieu of foreclosure arrangement. The bank declined his request. Applicant then attempted to structure a short-sale package with a potential buyer. The deal failed when the bank rejected it. In October 2009, the bank filed for foreclosure. The following month, while the foreclosure process was pending, Applicant sold the home. Using the proceeds from the sale, Applicant satisfied the home mortgage.	For Applicant	Mortgage or Home Loan Debt	Denied	(a) inability to satisfy debts	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.c	In 2007, the IRS audited Applicant’s tax returns for tax years 2004 through 2006. The audit revealed that Applicant and his then-wife, with whom he had filed jointly, miscalculated these tax returns, and owed approximately $16,000. By June 2009, Applicant’s tax delinquency had accrued to $46,500. That month, Applicant negotiated a payment agreement under which he was to pay the IRS $2,733 monthly. Since then, he has adhered to the agreement. By January 2010, Applicant had satisfied approximately $22,900 of the delinquency. He continues to make the monthly payments, and anticipates satisfying the delinquency in the next five months. $46,500	For Applicant	Tax Unpaid	Denied	(a) inability to satisfy debts	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

The SOR lists another debt that became delinquent after Applicant and his wife separated. It is a credit card with a balance of $5,548. Applicant’s monthly payment was allegedly more than 120 days late as of the date of the SOR’s issuance. In January 2010, Applicant negotiated a settlement for $2,000 and paid it in full.

$5,548

For Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

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

(c) received/receiving counseling; problem being resolved

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

Documented

Debt Paid in Full

1.b

Applicant struggled to pay his mortgage, as alleged in SOR subparagraph 1.b. Applicant attempted to sell the house in May 2008 after his estranged wife moved; however, his efforts were initially unsuccessful. By November 2008, Applicant had begun to fall behind on his mortgage payments. In February 2009, Applicant contacted the bank and requested a deed-in-lieu of foreclosure arrangement. The bank declined his request. Applicant then attempted to structure a short-sale package with a potential buyer. The deal failed when the bank rejected it. In October 2009, the bank filed for foreclosure. The following month, while the foreclosure process was pending, Applicant sold the home. Using the proceeds from the sale, Applicant satisfied the home mortgage.

For Applicant

Mortgage or Home Loan Debt

Denied

(a) inability to satisfy debts

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

(c) received/receiving counseling; problem being resolved

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

Documented

Debt Paid in Full

1.c

In 2007, the IRS audited Applicant’s tax returns for tax years 2004 through 2006. The audit revealed that Applicant and his then-wife, with whom he had filed jointly, miscalculated these tax returns, and owed approximately $16,000. By June 2009, Applicant’s tax delinquency had accrued to $46,500. That month, Applicant negotiated a payment agreement under which he was to pay the IRS $2,733 monthly. Since then, he has adhered to the agreement. By January 2010, Applicant had satisfied approximately $22,900 of the delinquency. He continues to make the monthly payments, and anticipates satisfying the delinquency in the next five months.

$46,500

For Applicant

Tax Unpaid

Denied

(a) inability to satisfy debts

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

(c) received/receiving counseling; problem being resolved

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

Documented

Debt Paid in Full

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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

FOOTNOTES