ISCR Case 10-10631.h1

Case Headnote

ISCR Case No. 10-10631.h1

grantedSep 30, 2011· Hon. Rita C. O'Brien· hearing

Summary

A 49-year-old heavy equipment mechanic was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The applicant admitted to approximately $19,206 in debts, many stemming from co-signing loans for family members.

Specific allegations included a cell phone account co-signed for his girlfriend’s daughter, a voluntarily returned 1998 Ford, and an apartment lease co-signed for his girlfriend and her daughter, which resulted in a lawsuit. Other debts involved an unrecognized credit card account that was settled, a credit card given to a biological daughter, and a hospital bill that was settled. The applicant also co-signed an auto loan for his girlfriend’s daughter, later assuming payments before voluntarily returning the vehicle.

The judge found that the applicant had resolved over 75% of the listed debts, demonstrating a good faith effort. His credible testimony indicated he had learned from past financial mistakes, and his current employment and income supported his ability to manage remaining obligations. These mitigating factors led to the security clearance being granted.

Why the Applicant Prevailed

The applicant resolved over 75% of the debts listed in the SOR, demonstrating a good faith effort to address his financial issues.
He provided credible testimony indicating he learned from past financial mistakes and would not repeat them.
The applicant's current employment and income allowed for a positive monthly net remainder, supporting his ability to manage remaining debts.

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 (a)appliedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to Recur
AG ¶ 20 (c)appliedThe Person Has Received or Is Receiving Counseling for the Problem And/or There Are Clear Indications That the Problem Is Being Resolved or Is Under Control
AG ¶ 20 (d)appliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts

Key Rule Quoted

“A security clearance decision is intended only to resolve the questions of whether it is clearly consistent with the national interest for an applicant to either receive or continue to have access to classified information.”
— Department of the Navy v. Egan, 484 U.S. 518 (1988)

Procedural Posture

SOR issuedApr 13, 2011
Answer filedJun 8, 2011
Hearing heldAug 16, 2011
Decision dateSep 30, 2011

Cite For

Mitigation of Financial Concerns Under Guideline F
Good Faith Efforts in Resolving Debts
Whole-person Analysis 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	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant agreed to co-sign on his girlfriend’s daughter’s cell phone account. She did not pay the amount owed, and the debt now appears on Applicant's credit report. $1,013	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(a) behavior happened long ago / infrequent / unlikely to recur	—
1.b	Applicant purchased a 1998 Ford in 2006 for $15,000. He voluntarily returned it when he could no longer make the payments. He was informed he would not owe any further balance, and he was not contacted by the creditor after returning the vehicle. $10,217	For Applicant	Auto Loan Debt	Admitted	—	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—
1.c	Applicant co-signed on an apartment lease for his girlfriend and her daughter. When he left, Applicant believed his $1,700 balance was covered by the $1,900 security deposit that the company retained. The apartment company filed suit for $1,774. $1,774	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(a) behavior happened long ago / infrequent / unlikely to recur	—
1.d	Applicant did not recognize this credit card debt, and disputed it with the credit reporting agencies. After Equifax verified the account as Applicant's, he negotiated a settlement of $387.24, to be paid in monthly payments of $129.08. Applicant provided proof that he has paid the debt in full. $1,225	For Applicant	Credit Card Debt	Admitted	—	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—
1.e	Applicant gave this credit card, in his name, to one of his biological daughters as a gift. He testified that he thought he had one account, with two credit cards on it--this card and the one at allegation 1.d. He also believed that they were listed on his credit report as two separate accounts in error. $1,005	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(a) behavior happened long ago / infrequent / unlikely to recur	—
1.f	Applicant believed his health insurance would pay this debt related to a hospital visit. He received a settlement offer of $204 from the collection agency. He provided evidence that he paid the settlement amount on August 18, 2011. $299	For Applicant	Medical Debt	Admitted	—	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—
1.g	Applicant co-signed on an auto loan for his girlfriend’s daughter. After a year, she returned the car to Applicant because it was having mechanical problems. Applicant assumed the payments, but subsequently voluntarily returned it to the dealer. $3,673	For Applicant	Auto Loan Debt	Admitted	—	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant agreed to co-sign on his girlfriend’s daughter’s cell phone account. She did not pay the amount owed, and the debt now appears on Applicant's credit report.

$1,013

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(a) behavior happened long ago / infrequent / unlikely to recur

—

1.b

Applicant purchased a 1998 Ford in 2006 for $15,000. He voluntarily returned it when he could no longer make the payments. He was informed he would not owe any further balance, and he was not contacted by the creditor after returning the vehicle.

$10,217

For Applicant

Auto Loan Debt

Admitted

—

(c) received/receiving counseling; problem being resolved

(d) good-faith effort to repay or otherwise resolve debts

—

1.c

Applicant co-signed on an apartment lease for his girlfriend and her daughter. When he left, Applicant believed his $1,700 balance was covered by the $1,900 security deposit that the company retained. The apartment company filed suit for $1,774.

$1,774

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(a) behavior happened long ago / infrequent / unlikely to recur

—

1.d

Applicant did not recognize this credit card debt, and disputed it with the credit reporting agencies. After Equifax verified the account as Applicant's, he negotiated a settlement of $387.24, to be paid in monthly payments of $129.08. Applicant provided proof that he has paid the debt in full.

$1,225

For Applicant

Credit Card Debt

Admitted

—

(c) received/receiving counseling; problem being resolved

(d) good-faith effort to repay or otherwise resolve debts

—

1.e

Applicant gave this credit card, in his name, to one of his biological daughters as a gift. He testified that he thought he had one account, with two credit cards on it--this card and the one at allegation 1.d. He also believed that they were listed on his credit report as two separate accounts in error.

$1,005

For Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(a) behavior happened long ago / infrequent / unlikely to recur

—

1.f

Applicant believed his health insurance would pay this debt related to a hospital visit. He received a settlement offer of $204 from the collection agency. He provided evidence that he paid the settlement amount on August 18, 2011.

$299

For Applicant

Medical Debt

Admitted

—

(c) received/receiving counseling; problem being resolved

(d) good-faith effort to repay or otherwise resolve debts

—

1.g

Applicant co-signed on an auto loan for his girlfriend’s daughter. After a year, she returned the car to Applicant because it was having mechanical problems. Applicant assumed the payments, but subsequently voluntarily returned it to the dealer.

$3,673

For Applicant

Auto Loan Debt

Admitted

—

(c) received/receiving counseling; problem being resolved

(d) good-faith effort to repay or otherwise resolve debts

—

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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

PROCEDURAL MATTERS

FINDINGS OF FACT

POLICIES

ANALYSIS

WHOLE PERSON ANALYSIS

FORMAL FINDINGS

CONCLUSION

FOOTNOTES