Summary
A 49-year-old defense contractor and former Navy Lieutenant Commander was denied a security clearance under Guideline F, Financial Considerations, due to extensive and ongoing financial difficulties. The applicant faced a pending Chapter 11 bankruptcy with over $6.5 million in liabilities.
Specific allegations included multiple collection accounts for amounts such as $2,177 from a boat store, $102 from a telecommunications company, and $686 from another collection agency. Utility debts included $220 for a water bill, $126 for a gas bill, and $186 for a cable company. Additionally, there were charged-off accounts totaling approximately $9,323, $61,446, and $460,943 for a home equity line of credit. The applicant also had several delinquent real estate loans, ranging from $100,000 to $825,000, and a delinquent second mortgage of approximately $168,985.
The denial was based on the applicant's failure to mitigate these financial concerns. The judge cited poor judgment in accumulating excessive debt and ongoing delinquencies, noting that the pending Chapter 11 bankruptcy did not demonstrate sufficient control over the financial problems.
Why the Applicant Was Denied
- Applicant has extensive and ongoing financial difficulties, including millions in delinquent debts.
- The applicant's financial issues were exacerbated by poor judgment in acquiring excessive debt and extravagant purchases.
- The pending Chapter 11 bankruptcy does not demonstrate sufficient control over financial problems.
Conditions Referenced
- AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
- AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
- AG ¶ 19(d)raisedConsistent Spending Beyond One’s Means
- AG ¶ 20(a)rejectedBehavior Happened Long Ago or InfrequentlyNot enough time has passed to predict whether Applicant will be able to live within his means.
- AG ¶ 20(b)rejectedConditions Largely Beyond the Person's ControlApplicant's financial difficulties were partially caused by the economic downturn, but he did not act responsibly.
- AG ¶ 20(c)rejectedReceiving Counseling for the ProblemApplicant has failed to show that his financial problems are under control.
- AG ¶ 20(d)rejectedGood-faith Effort to Repay CreditorsPending bankruptcy does not demonstrate significant attempts to address debts.
- AG ¶ 20(e)notedReasonable Basis to Dispute Legitimacy of Debt
Key Rule Quoted
“A person who seeks access to classified information enters into a fiduciary relationship with the Government predicated upon trust and confidence.”
Procedural Posture
- SOR issuedJul 14, 2011
- Answer filedSep 16, 2011
- Hearing heldDec 20, 2011
- Decision dateMar 9, 2012
Cite For
- Denial of Security Clearance Due to Extensive Financial Liabilities Under Guideline F
- Impact of Poor Financial Judgment on Security Clearance Eligibility
- Consideration of Pending Bankruptcy in Security Clearance Decisions