Summary
The applicant, a 56-year-old defense contractor and former Navy master chief petty officer, faced security concerns under Guideline F due to significant financial indebtedness totaling approximately $81,858. Despite filing for Chapter 13 bankruptcy and making some efforts to manage his debts, the judge found that the applicant failed to demonstrate responsible financial behavior and did not mitigate the security concerns, resulting in a denial of his security clearance.
Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: Applicant is indebted to a collection agent for a utility bill in the amount of $184 (1.a). Applicant is indebted to a collection agent for an educational loan that he had co-signed with his son in the amount of $1,036 (1.b). Applicant is indebted to a bank for a second student loan that he co-signed for his son in the amount of $3,633 (1.c). Applicant is indebted on his mortgage for his primary residence in the amount of $22,113 (1.d). Applicant is indebted to a collection agent for vehicle insurance in the amount of $145 (1.e). Applicant is indebted on a mortgage for unimproved property he purchased in the amount of $14,000 (1.f). Applicant is indebted in the amount of $13,805 for a repossessed vehicle (1.g). Applicant is indebted to a collection agent for a credit card in the amount of $14,632 (1.h).
The judge denied the clearance. The government raised disqualifying conditions AG ¶ 19(a), AG ¶ 19(c). The judge applied mitigating conditions AG ¶ 20(a), AG ¶ 20(b), AG ¶ 20(c), AG ¶ 20(d). The decision turned on the following: The applicant has nine delinquent accounts and has not established a good-faith effort to resolve these debts; The applicant's financial problems have been ongoing since 2008, and he only recently filed for bankruptcy; The applicant's unexplained gambling losses of $11,500 in 2010 raised concerns about his financial responsibility.
Why the Applicant Was Denied
- The applicant has nine delinquent accounts and has not established a good-faith effort to resolve these debts.
- The applicant's financial problems have been ongoing since 2008, and he only recently filed for bankruptcy.
- The applicant's unexplained gambling losses of $11,500 in 2010 raised concerns about his financial responsibility.
Conditions Referenced
- AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
- AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
- AG ¶ 20(a)rejectedBehavior Happened so Long Ago, Was Infrequent, or Occurred Under Circumstances Unlikely to RecurThe applicant's financial delinquencies are recent and ongoing.
- AG ¶ 20(b)rejectedConditions That Resulted in Financial Problems Were Largely Beyond the Person's ControlThe applicant failed to show he acted responsibly under the circumstances.
- AG ¶ 20(c)rejectedReceived or Is Receiving Counseling for the ProblemThe applicant's financial problems are not under control.
- AG ¶ 20(d)rejectedInitiated a Good-faith Effort to Repay Overdue CreditorsThe applicant filed for bankruptcy only two months prior to the hearing.
Key Rule Quoted
“The protection of the national security is the paramount consideration.”
Procedural Posture
- SOR issuedDec 14, 2010
- Answer filedFeb 4, 2011
- Hearing heldApr 14, 2011Applicant requested a continuance.
- Decision dateJul 1, 2011
Cite For
- Failure to Mitigate Financial Considerations Under Guideline F
- Impact of Gambling Losses on Financial Responsibility
- Recent Bankruptcy Filings and Their Implications for Security Clearance Eligibility