ISCR Case 09-06831.h1

Case Headnote

ISCR Case No. 09-06831.h1

grantedOct 5, 2010· Hon. Noreen A. Lynch· hearing

Summary

A 56-year-old defense contractor with prior military service, including holding a top secret clearance, was granted a security clearance despite concerns under Guideline B (Foreign Influence) and Guideline F (Financial Considerations). The applicant's financial history included four bankruptcy filings: Chapter 7 in 1986, discharging approximately $58,347; Chapter 7 in 1994, discharging unsecured non-property debts; Chapter 7 in 2004, discharging approximately $570,264 in liabilities; and Chapter 13 in 2010, which included four alleged debts that were either paid in full or incorporated into the filing.

The bankruptcies were attributed to his first wife's illnesses and medical expenses, and later, significant legal and credit card debts incurred during a difficult divorce from his second wife. The applicant also experienced periods of unemployment in 2006-2007 and 2008, leading to additional delinquent debts and mortgage arrears. Currently, the applicant earns approximately $83,000 annually, supplemented by a $45,000 military pension and $1,000 monthly VA disability. He has maintained $1,000 monthly payments since his 2010 bankruptcy, developed a budget, and received financial counseling. He consistently disclosed his bankruptcies on previous security clearance applications.

The judge found that the applicant's strong ties to the U.S. and credible testimony mitigated the concerns. His foreign family ties were determined not to create a conflict of interest, and his commitment to national interests was demonstrated. Consequently, the security clearance was granted.

Why the Applicant Prevailed

The applicant demonstrated strong ties to the U.S. and a commitment to national interests.
He provided credible testimony regarding his foreign contacts and financial history.
The applicant's family ties to foreign nationals did not create a conflict of interest.

Conditions Referenced

Disqualifying

AG ¶ 7(a)raisedContact with Foreign Family Members
AG ¶ 7(b)raisedConnections to Foreign Persons
AG ¶ 7(d)raisedSharing Living Quarters with Foreign Nationals

Mitigating

AG ¶ 8(a)appliedNature of Relationships with Foreign Persons
AG ¶ 8(b)appliedMinimal Conflict of Interest

Key Rule Quoted

“The United States has a compelling interest in protecting and safeguarding classified information from any person, organization, or country that is not authorized to have access to it, regardless of whether that person, organization, or country has interests inimical to those of the United States.”
— ISCR Case No. 02-11570 at 5 (App. Bd. May 19, 2004)

Procedural Posture

SOR issuedMar 15, 2010
Answer filed—
Hearing heldOct 5, 2010
Decision date—

Cite For

Mitigation of Foreign Influence Concerns Under Guideline B
Financial Considerations Related to Multiple Bankruptcies
Evaluation of Personal Circumstances 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	Relationship	Country	Response	Disqualifying (¶7)	Mitigating applied (¶8)	Mitigation
1.a–1.f	6 sub-charges — specific text not stated in this decision (for the applicant).	For Applicant	Unspecified Foreign Relationship Immediate Family	— HEIGHTENED RISK		—	—	—

Allegation

Finding

Relationship

Country

Response

Disqualifying (¶7)

Mitigating applied (¶8)

Mitigation

1.a–1.f

6 sub-charges — specific text not stated in this decision (for the applicant).

For Applicant

Unspecified Foreign Relationship

Immediate Family

—

HEIGHTENED RISK

—

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
2.a	In 1986, Applicant filed for Chapter 7 bankruptcy. Approximately $58,347 was discharged in January 1987. The majority of the debt was incurred when Applicant’s first wife lost her income due to her illness and they were reduced to one income. Medical bills, and extra child care costs, along with hospital bills contributed to the debts. When Applicant’s wife could no longer work due to her illness, Applicant became delinquent with his accounts. $58,347	For Applicant	Bankruptcy Filing	Admitted	—	—	—
2.b	In October 1994, the year that Applicant’s first wife died, he filed for Chapter 7 bankruptcy. His unsecured non-property debts were discharged in January 1995. Applicant explained that the debts were caused by his then first wife’s continuing illness during the years, medical expenses that were not covered by his medical insurance, he being the sole provider, and other debts incurred early in the marriage. $0	For Applicant	Bankruptcy Filing	Admitted	—	—	—
2.c	In May 2004, Applicant again filed for Chapter 7 bankruptcy. Total liabilities discharged in 2004 were approximately $570,264. Applicant explained that due to the difficult divorce to his second wife, he incurred legal expenses in excess of $100,000. He paid his own legal fees and that of his wife. His second wife had incurred very large credit card debts about which he had no knowledge. $570,264	For Applicant	Bankruptcy Filing	Admitted	—	—	—
2.d	On May 1, 2010, Applicant filed for Chapter 13 bankruptcy protection. Four debts alleged in the SOR have been paid in full or are included in the Chapter 13 bankruptcy filing. $0	For Applicant	Bankruptcy Filing	Admitted	—	—	—
2.e	Applicant was unemployed from October 2006 until June 2007 due to contracts that were not renewed. Before his unemployment, he earned about $68,000 a year in income. He was unemployed from May 2008 until November 2008. He incurred other delinquent debts in the amount of approximately $16,000. He fell behind in his mortgage for approximately $12,000. $16,000	For Applicant	Unspecified Financial	Admitted	—	—	—
2.f	Applicant earns approximately $83,000 a year. He has a military pension of approximately $45,000 a year and receives $1,000 a month for a VA disability. He has developed a budget and received the financial counseling that is required for filing bankruptcy. $0	For Applicant	Unspecified Financial	Admitted	—	—	—
2.g	Applicant has made monthly payments of $1,000 from the time of his 2010 bankruptcy petition until the present time. $0	For Applicant	Unspecified Financial	Admitted	—	—	—
2.h	Applicant disclosed his bankruptcies on his security clearance applications when he was in the military. He held a clearance, including a clearance at the top secret level, during his military career with no security-related incidents. $0	For Applicant	Unspecified Financial	Admitted	—	—	—
2.i–2.k	3 sub-charges — specific text not stated in this decision (for the applicant). (low confidence)	For Applicant			—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

2.a

In 1986, Applicant filed for Chapter 7 bankruptcy. Approximately $58,347 was discharged in January 1987. The majority of the debt was incurred when Applicant’s first wife lost her income due to her illness and they were reduced to one income. Medical bills, and extra child care costs, along with hospital bills contributed to the debts. When Applicant’s wife could no longer work due to her illness, Applicant became delinquent with his accounts.

$58,347

For Applicant

Bankruptcy Filing

Admitted

—

2.b

In October 1994, the year that Applicant’s first wife died, he filed for Chapter 7 bankruptcy. His unsecured non-property debts were discharged in January 1995. Applicant explained that the debts were caused by his then first wife’s continuing illness during the years, medical expenses that were not covered by his medical insurance, he being the sole provider, and other debts incurred early in the marriage.

For Applicant

Bankruptcy Filing

Admitted

—

2.c

In May 2004, Applicant again filed for Chapter 7 bankruptcy. Total liabilities discharged in 2004 were approximately $570,264. Applicant explained that due to the difficult divorce to his second wife, he incurred legal expenses in excess of $100,000. He paid his own legal fees and that of his wife. His second wife had incurred very large credit card debts about which he had no knowledge.

$570,264

For Applicant

Bankruptcy Filing

Admitted

—

2.d

On May 1, 2010, Applicant filed for Chapter 13 bankruptcy protection. Four debts alleged in the SOR have been paid in full or are included in the Chapter 13 bankruptcy filing.

For Applicant

Bankruptcy Filing

Admitted

—

2.e

Applicant was unemployed from October 2006 until June 2007 due to contracts that were not renewed. Before his unemployment, he earned about $68,000 a year in income. He was unemployed from May 2008 until November 2008. He incurred other delinquent debts in the amount of approximately $16,000. He fell behind in his mortgage for approximately $12,000.

$16,000

For Applicant

Unspecified Financial

Admitted

—

2.f

Applicant earns approximately $83,000 a year. He has a military pension of approximately $45,000 a year and receives $1,000 a month for a VA disability. He has developed a budget and received the financial counseling that is required for filing bankruptcy.

For Applicant

Unspecified Financial

Admitted

—

2.g

Applicant has made monthly payments of $1,000 from the time of his 2010 bankruptcy petition until the present time.

For Applicant

Unspecified Financial

Admitted

—

2.h

Applicant disclosed his bankruptcies on his security clearance applications when he was in the military. He held a clearance, including a clearance at the top secret level, during his military career with no security-related incidents.

For Applicant

Unspecified Financial

Admitted

—

2.i–2.k

3 sub-charges — specific text not stated in this decision (for the applicant). (low confidence)

For Applicant

—

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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