ISCR Case 10-04380.h1

Case Headnote

ISCR Case No. 10-04380.h1

deniedJul 1, 2010· Hon. Carol G. Ricciardello· hearing

Summary

A 50-year-old federal contractor with military service was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The applicant had numerous delinquent debts totaling over $60,000, which he failed to disclose on his security clearance application. During an interview with an OPM investigator, he was not candid about these debts and claimed unawareness of their specifics.

Specific debts included a $10,531 credit card debt, a $113 phone service collection account, a $15,070 consumer loan, and a $1,548 satellite television debt he disputed. Other significant debts included multiple credit card accounts ranging from $777 to $12,625, some of which were part of a consolidated payment plan but remained unresolved. While some debts had settlement offers or partial payments, many lacked documented proof of resolution or were still being negotiated.

The judge found the applicant's testimony not credible, concluding he deliberately omitted relevant financial information. The denial was based on his failure to disclose numerous delinquent debts, his financial difficulties being largely within his control due to maintaining two households, and his lack of good judgment regarding financial awareness.

Why the Applicant Was Denied

The applicant failed to disclose numerous delinquent debts on his security clearance application, raising concerns about his honesty and reliability.
The applicant's financial difficulties were largely within his control, as he chose to maintain two households and incurred significant debt without adequate planning.
The applicant's testimony regarding his financial awareness was deemed not credible, indicating a lack of good judgment.

Conditions Referenced

Disqualifying

F.1.araisedInability or Unwillingness to Satisfy Debts
F.1.craisedA History of Not Meeting Financial Obligations
E.2.araisedDeliberate Omission, Concealment, or Falsification of Relevant Facts

Mitigating

F.2.cappliedThe Person Has Received or Is Receiving Counseling for the ProblemThe applicant attended financial counseling twice.
F.2.dappliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsThe applicant made some efforts to settle some of his debts.
E.2.arejectedThe Individual Made Prompt, Good-faith Efforts to Correct the OmissionThe applicant did not make prompt efforts to correct the omissions before being confronted.

Key Rule Quoted

“Any doubt concerning personnel being considered for access to classified information will be resolved in favor of national security.”

Procedural Posture

SOR issuedMar 9, 2011
Answer filedMay 12, 2011
Hearing heldSep 1, 2011Hearing rescheduled from August 30, 2011.
Decision dateSep 12, 2011

Cite For

Deliberate Omission of Financial Obligations Under Guideline E
Failure to Mitigate Financial Considerations Under Guideline F
Credibility Issues in Applicant's Testimony Regarding Financial Awareness

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 failed to disclose all of his delinquent debts on his security clearance application (SCA).	Against Applicant	Omission or Failure to DiscloseFOUND DELIBERATE	Financial	Admitted	—	—	—
2.b	During his interview with an OPM investigator, Applicant was not candid about his delinquent debts and indicated he was not aware of the specifics of his debts.	Against Applicant	Lack of Candor in InterviewFOUND DELIBERATE	Financial	Admitted	—	—	—

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

2.a

Applicant failed to disclose all of his delinquent debts on his security clearance application (SCA).

Against Applicant

Omission or Failure to DiscloseFOUND DELIBERATE

Financial

Admitted

—

2.b

During his interview with an OPM investigator, Applicant was not candid about his delinquent debts and indicated he was not aware of the specifics of his debts.

Against Applicant

Lack of Candor in InterviewFOUND DELIBERATE

Financial

Admitted

—

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	The debt in SOR ¶ 1.a is a credit card debt ($10,531). It became delinquent sometime in late 2006 or early 2007. He did not make a payment on the debt once it was in a delinquent status. He has no current settlement offer for the debt. It is not paid or resolved. $10,531	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	The debt in SOR ¶ 1.b ($113) is a collection account for phone service. Applicant contracted for the phone service for his son in 2005 or 2006. His son changed providers and did not tell Applicant. He learned of the delinquent account in May 2011 when he obtained his credit report. Applicant stated he paid the debt when he learned of it. He did not provide documented proof that he paid the debt. $113	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	The debt in SOR ¶ 1.c ($15,070) is a consumer loan Applicant obtained in August or September 2007. He used the money to pay other debts. The debt became delinquent in about September or October 2008. He is attempting to negotiate a settlement with the creditor. This debt is included in his credit consolidation plan but no payments have been made to resolve it. $15,070	Against Applicant	Personal Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	The debt in SOR ¶ 1.d ($1,548) is for satellite television. Applicant disputes the debt stating he has never contracted with this carrier. He contacted the creditor and filed a fraudulent dispute claim. He provided a copy of the dispute letter. $1,548	For Applicant	Unspecified Financial	Denied	—	—	—
1.e	The debt in SOR ¶ 1.e ($1,036) is a credit card debt. Applicant stated he settled the debt for $520 in April 2011. The debt was charged off in December 2004. He provided a copy of the letter noting he had provided a post-dated check to the creditor. $1,036	For Applicant	Credit Card Debt	Admitted	—	—	—
1.f	The debts in SOR ¶ 1.f ($2,959), ¶ 1.g ($4,381), and ¶ 1.n ($4,730) are credit card debts. This creditor does not want to negotiate with third party debt consolidators and will only address the debt with the consumer. The debts in SOR ¶ 1.f and ¶ 1.g are included in the consolidated payment plan. However; no settlement has been negotiated because of the creditor’s policy. Applicant disputed the debt in SOR ¶ 1.n stating he paid it. Applicant’s credit report shows a fourth account with this creditor was previously paid, but this one remains delinquent. Applicant provided a document dated May 13, 2011, that shows he was to make a scheduled payment of $1,480 on the debt in SOR ¶ 1.f by May 27, 2011. He did not provide proof that he made the payment. The debts remain unresolved. $2,959	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	The debts in SOR ¶ 1.f ($2,959), ¶ 1.g ($4,381), and ¶ 1.n ($4,730) are credit card debts. This creditor does not want to negotiate with third party debt consolidators and will only address the debt with the consumer. The debts in SOR ¶ 1.f and ¶ 1.g are included in the consolidated payment plan. However; no settlement has been negotiated because of the creditor’s policy. Applicant disputed the debt in SOR ¶ 1.n stating he paid it. Applicant’s credit report shows a fourth account with this creditor was previously paid, but this one remains delinquent. Applicant provided a document dated May 13, 2011, that shows he was to make a scheduled payment of $1,480 on the debt in SOR ¶ 1.f by May 27, 2011. He did not provide proof that he made the payment. The debts remain unresolved. $4,381	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	The debt in SOR ¶ 1.h ($777) is a credit card debt. In Applicant’s statement to the OPM investigator he indicated he had contacted the creditor and would pay the debt by February 2009. He did not make the payment. This debt is included in his payment plan, but has not been paid. The debt is about four years old. $777	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	The debt in SOR ¶ 1.i ($5,839) is a credit card debt. It was charged off in 2006. Applicant indicated he received a settlement offer in February 2011 for $2,630. He made seven payments of $328 through his consolidated payment plan. He provided proof of the payments beginning in February 2011. $5,839	For Applicant	Credit Card Debt	Admitted	—	—	—
1.j	The debt in SOR ¶ 1.j ($837) is a store credit card. It is approximately seven years old. The consolidated credit company contacted the creditor but they did not offer a settlement agreement. Applicant indicated he will pay the debt when he receives a settlement offer. $837	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.k	The debt in SOR ¶ 1.k ($2,068) is a credit card debt. The current balance is $3,568. Applicant indicated that his consolidated credit company negotiated a settlement in May 2010 for ten monthly payments of $173. He did not provide documented proof of his payments or that the debt is resolved. $2,068	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.l	The debt in SOR ¶ 1.l ($4,202) is a credit card debt. It was forwarded to a collection account in November 2006. The creditor agreed to settle the debt for $1,922. Applicant was to make an initial payment of $400 and monthly payments of $152. He provided documentation to show he made three payments in June, July, and August 2011. $4,202	For Applicant	Credit Card Debt	Admitted	—	—	—
1.m	The debt in SOR ¶ 1.m ($12,625) is a credit card debt. It has been delinquent since approximately 2006. Applicant stated he was notified in 2007 that he was behind in his payments. He stated the payment amounts increased at that time and he was unable to make them. He stated he has contacted the creditor about a year ago and is negotiating a settlement. This debt is not included in the consolidated payment plan. $12,625	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.n	The debts in SOR ¶ 1.f ($2,959), ¶ 1.g ($4,381), and ¶ 1.n ($4,730) are credit card debts. This creditor does not want to negotiate with third party debt consolidators and will only address the debt with the consumer. The debts in SOR ¶ 1.f and ¶ 1.g are included in the consolidated payment plan. However; no settlement has been negotiated because of the creditor’s policy. Applicant disputed the debt in SOR ¶ 1.n stating he paid it. Applicant’s credit report shows a fourth account with this creditor was previously paid, but this one remains delinquent. Applicant provided a document dated May 13, 2011, that shows he was to make a scheduled payment of $1,480 on the debt in SOR ¶ 1.f by May 27, 2011. He did not provide proof that he made the payment. The debts remain unresolved. $4,730	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

The debt in SOR ¶ 1.a is a credit card debt ($10,531). It became delinquent sometime in late 2006 or early 2007. He did not make a payment on the debt once it was in a delinquent status. He has no current settlement offer for the debt. It is not paid or resolved.

$10,531

Against Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.b

The debt in SOR ¶ 1.b ($113) is a collection account for phone service. Applicant contracted for the phone service for his son in 2005 or 2006. His son changed providers and did not tell Applicant. He learned of the delinquent account in May 2011 when he obtained his credit report. Applicant stated he paid the debt when he learned of it. He did not provide documented proof that he paid the debt.

$113

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.c

The debt in SOR ¶ 1.c ($15,070) is a consumer loan Applicant obtained in August or September 2007. He used the money to pay other debts. The debt became delinquent in about September or October 2008. He is attempting to negotiate a settlement with the creditor. This debt is included in his credit consolidation plan but no payments have been made to resolve it.

$15,070

Against Applicant

Personal Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.d

The debt in SOR ¶ 1.d ($1,548) is for satellite television. Applicant disputes the debt stating he has never contracted with this carrier. He contacted the creditor and filed a fraudulent dispute claim. He provided a copy of the dispute letter.

$1,548

For Applicant

Unspecified Financial

Denied

—

1.e

The debt in SOR ¶ 1.e ($1,036) is a credit card debt. Applicant stated he settled the debt for $520 in April 2011. The debt was charged off in December 2004. He provided a copy of the letter noting he had provided a post-dated check to the creditor.

$1,036

For Applicant

Credit Card Debt

Admitted

—

1.f

The debts in SOR ¶ 1.f ($2,959), ¶ 1.g ($4,381), and ¶ 1.n ($4,730) are credit card debts. This creditor does not want to negotiate with third party debt consolidators and will only address the debt with the consumer. The debts in SOR ¶ 1.f and ¶ 1.g are included in the consolidated payment plan. However; no settlement has been negotiated because of the creditor’s policy. Applicant disputed the debt in SOR ¶ 1.n stating he paid it. Applicant’s credit report shows a fourth account with this creditor was previously paid, but this one remains delinquent. Applicant provided a document dated May 13, 2011, that shows he was to make a scheduled payment of $1,480 on the debt in SOR ¶ 1.f by May 27, 2011. He did not provide proof that he made the payment. The debts remain unresolved.

$2,959

Against Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.g

$4,381

Against Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.h

The debt in SOR ¶ 1.h ($777) is a credit card debt. In Applicant’s statement to the OPM investigator he indicated he had contacted the creditor and would pay the debt by February 2009. He did not make the payment. This debt is included in his payment plan, but has not been paid. The debt is about four years old.

$777

Against Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.i

The debt in SOR ¶ 1.i ($5,839) is a credit card debt. It was charged off in 2006. Applicant indicated he received a settlement offer in February 2011 for $2,630. He made seven payments of $328 through his consolidated payment plan. He provided proof of the payments beginning in February 2011.

$5,839

For Applicant

Credit Card Debt

Admitted

—

1.j

The debt in SOR ¶ 1.j ($837) is a store credit card. It is approximately seven years old. The consolidated credit company contacted the creditor but they did not offer a settlement agreement. Applicant indicated he will pay the debt when he receives a settlement offer.

$837

Against Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.k

The debt in SOR ¶ 1.k ($2,068) is a credit card debt. The current balance is $3,568. Applicant indicated that his consolidated credit company negotiated a settlement in May 2010 for ten monthly payments of $173. He did not provide documented proof of his payments or that the debt is resolved.

$2,068

Against Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.l

The debt in SOR ¶ 1.l ($4,202) is a credit card debt. It was forwarded to a collection account in November 2006. The creditor agreed to settle the debt for $1,922. Applicant was to make an initial payment of $400 and monthly payments of $152. He provided documentation to show he made three payments in June, July, and August 2011.

$4,202

For Applicant

Credit Card Debt

Admitted

—

1.m

The debt in SOR ¶ 1.m ($12,625) is a credit card debt. It has been delinquent since approximately 2006. Applicant stated he was notified in 2007 that he was behind in his payments. He stated the payment amounts increased at that time and he was unable to make them. He stated he has contacted the creditor about a year ago and is negotiating a settlement. This debt is not included in the consolidated payment plan.

$12,625

Against Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.n

$4,730

Against Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

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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