ISCR Case 09-03621.h1

Case Headnote

ISCR Case No. 09-03621.h1

deniedJul 1, 2009· Hon. Paul J. Mason· hearing

Summary

A 46-year-old veteran with over 20 years of military service was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The denial stemmed from unresolved financial issues, including 24 delinquent debts totaling $106,859, and a dismissed Chapter 13 bankruptcy.

Specific allegations included the applicant's deliberate omission of material facts on a Security Clearance Application (SCA) signed on February 25, 2009. He falsely answered "no" regarding a bankruptcy petition filed within the last seven years, debts turned over to a collection agency, and being over 90 days delinquent on any debt. While some debts were resolved, such as a $2,287 car finance account and an $88 telephone bill, significant financial concerns remained. For instance, two separate $21,000 delinquent accounts lacked verification of current status, with over $19,000 still owed on each. Additionally, a $180 debt still had a $60 balance, and a $495 bank debt remained unpaid.

Despite the applicant's efforts to address some debts, the judge found the evidence insufficient to mitigate the overall financial concerns. The Chapter 13 bankruptcy was dismissed due to the applicant's inability to maintain the payment schedule, further contributing to the denial of eligibility for access to classified information.

Why the Applicant Was Denied

The applicant had 24 delinquent debts totaling $106,859, which he admitted to incurring.
The applicant's Chapter 13 bankruptcy was dismissed due to his inability to maintain the payment schedule.
The applicant's evidence of mitigating his debts was insufficient to overcome the adverse financial evidence.

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(b)appliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's ControlThe applicant acted responsibly by filing for bankruptcy after his business failed.

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.”

Procedural Posture

SOR issuedNov 19, 2009
Answer filedDec 9, 2009
Hearing heldFeb 23, 2010
Decision dateMar 16, 2010

Cite For

Insufficient Evidence to Mitigate Financial Issues Under Guideline F
Dismissal of Chapter 13 Bankruptcy as a Factor in Security Clearance Denial
Impact of Unresolved Debts on Reliability and Trustworthiness Under Guideline E

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 deliberately omitted material facts in an SCA he signed on February 25, 2009, by answering “no” to Section 26 a (whether a bankruptcy petition was filed in last 7 years).	For Applicant	Omission or Failure to DiscloseNOT DELIBERATE	Other	Admitted	—	—	—
2.b	Applicant deliberately omitted material facts in the same SCA by answering “no” to Section 26.g (debts turned over to a collection agency in last 7 years) and Section 26.n (currently over 90 days delinquent on any debt(s)).	For Applicant	Omission or Failure to DiscloseNOT DELIBERATE	Other	Admitted	—	—	—

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

2.a

Applicant deliberately omitted material facts in an SCA he signed on February 25, 2009, by answering “no” to Section 26 a (whether a bankruptcy petition was filed in last 7 years).

For Applicant

Omission or Failure to DiscloseNOT DELIBERATE

Other

Admitted

—

2.b

Applicant deliberately omitted material facts in the same SCA by answering “no” to Section 26.g (debts turned over to a collection agency in last 7 years) and Section 26.n (currently over 90 days delinquent on any debt(s)).

For Applicant

Omission or Failure to DiscloseNOT DELIBERATE

Other

Admitted

—

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	$21,000, unknown type of delinquent account. Applicant indicated he paid the account to a current status. Applicant’s payment ledger shows he made five monthly payments to the creditor from September 2009 through January 2010 (AE DD), and a payment of $239 in February 2010. His documentation indicates he made four payments totaling $1,837 on the account between September 2009 and February 2010. He provided no verification that the debt is current as he claimed in his answer to the SOR. A balance of more than $19,000 is still his responsibility. $21,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	$2,287, car finance company. While referring to his credit report (AE EE) and his payment ledger, Applicant indicated a payment of $226.50 was made, bringing the account to a current status. (Tr. 25) Applicant’s documentation does not show the amount of the payment made, but does indicate that on February 18, 2010, the balance on the account was $301.25 after a payment. (AE E) The exhibit also indicates the account was still designated delinquent, as verified by the words in the rectangular box requesting an offer for settlement. (Id.) This account is found in Applicant’s favor. $2,287	For Applicant	Auto Loan Debt	Admitted	—	—	—
1.f	$21,000, unknown type of delinquent account. Applicant indicated he paid the account to a current status. Applicant’s payment ledger shows he made five monthly payments to the creditor from September 2009 through January 2010 (AE DD), and a payment of $239 in February 2010. His documentation indicates he made four payments totaling $1,837 on the account between September 2009 and February 2010. He provided no verification that the debt is current as he claimed in his answer to the SOR. A balance of more than $19,000 is still his responsibility. $21,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.v	$180, Applicant made three payments to the creditor in November, December 2009, and January 2010, but still owes $60. (AE L) $180	For Applicant	Utility or Phone Debt	Admitted	—	—	—
1.w	$495, bank. Applicant testified he was awaiting contact information and the debt was still unpaid. (Tr. 31-32) He still owes the delinquent debt. $495	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.y	$88, telephone. The last activity on the account before it became delinquent was in December 2008. Applicant paid the creditor $96.68 in September 2009 to satisfy the account. (AE M) This debt is resolved in Applicant’s favor. $88	For Applicant	Utility or Phone Debt	Admitted	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

$21,000, unknown type of delinquent account. Applicant indicated he paid the account to a current status. Applicant’s payment ledger shows he made five monthly payments to the creditor from September 2009 through January 2010 (AE DD), and a payment of $239 in February 2010. His documentation indicates he made four payments totaling $1,837 on the account between September 2009 and February 2010. He provided no verification that the debt is current as he claimed in his answer to the SOR. A balance of more than $19,000 is still his responsibility.

$21,000

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.b

$2,287, car finance company. While referring to his credit report (AE EE) and his payment ledger, Applicant indicated a payment of $226.50 was made, bringing the account to a current status. (Tr. 25) Applicant’s documentation does not show the amount of the payment made, but does indicate that on February 18, 2010, the balance on the account was $301.25 after a payment. (AE E) The exhibit also indicates the account was still designated delinquent, as verified by the words in the rectangular box requesting an offer for settlement. (Id.) This account is found in Applicant’s favor.

$2,287

For Applicant

Auto Loan Debt

Admitted

—

1.f

$21,000

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.v

$180, Applicant made three payments to the creditor in November, December 2009, and January 2010, but still owes $60. (AE L)

$180

For Applicant

Utility or Phone Debt

Admitted

—

1.w

$495, bank. Applicant testified he was awaiting contact information and the debt was still unpaid. (Tr. 31-32) He still owes the delinquent debt.

$495

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.y

$88, telephone. The last activity on the account before it became delinquent was in December 2008. Applicant paid the creditor $96.68 in September 2009 to satisfy the account. (AE M) This debt is resolved in Applicant’s favor.

$88

For Applicant

Utility or Phone Debt

Admitted

—

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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