ISCR Case 10-10612.h1

Case Headnote

ISCR Case No. 10-10612.h1

deniedJul 1, 2010· Hon. Edward W. Loughran· hearing

Summary

A 47-year-old defense contractor was denied a security clearance due to financial considerations under Guideline F. The Statement of Reasons detailed a history of financial difficulties, including two Chapter 7 bankruptcies filed in 2000 and February 2011. The 2011 bankruptcy petition listed unsecured nonpriority claims totaling $58,342.

Further allegations included a $747 delinquent debt to a collection company for telephone services, which the applicant settled on June 24, 2011. Additionally, a $585 delinquent debt for unemployment compensation overpayment was resolved with a $1,013 payment on the same date. Disqualifying conditions under Adjudicative Guidelines Paragraphs 19(a) and 19(c) were raised.

Despite some evidence of financial counseling and stable employment, and the application of mitigating conditions under Adjudicative Guidelines Paragraphs 20(b) and 20(c), the judge found the applicant's financial situation to be unclear and indicative of ongoing instability. The applicant was behind on a car loan and a credit card, and had significant child support arrears, leading to the denial of the security clearance.

Why the Applicant Was Denied

The applicant had a history of financial problems, including two bankruptcies and significant child support arrears.
The applicant's financial situation was muddled and did not demonstrate sufficient control over his finances.
The applicant was behind on payments for a car loan and a credit card, indicating ongoing financial instability.

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(b)appliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control
AG ¶ 20(c)appliedThe Person Has Received or Is Receiving Counseling for the Problem

Key Rule Quoted

“Failure or inability to live within one’s means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual’s reliability, trustworthiness and ability to protect classified information.”

Procedural Posture

SOR issuedJun 9, 2011
Answer filedJul 7, 2011Applicant initially elected to decide on the written record.
Hearing heldApr 26, 2012
Decision dateNot specified

Cite For

Denial of Security Clearance Due to Unresolved Financial Issues Under Guideline F
Impact of Ongoing Child Support Obligations on Financial Stability
Consideration of the Whole-person Concept in Financial Evaluations for Security Clearance

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 filed Chapter 7 bankruptcy in 2000, and his debts were discharged in 2001. Applicant continued to have financial difficulties after his bankruptcy.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant filed Chapter 7 bankruptcy in February 2011. The bankruptcy petition did not list any debts under Schedule D – Creditors Holding Secured Claims, or Schedule E – Creditors Holding Unsecured Priority Claims. Under Schedule F – Creditors Holding Unsecured Nonpriority Claims, the petition listed claims totaling $58,342. $58,342	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Applicant owed a $747 delinquent debt to a collection company on behalf of a telephone services company, as alleged in SOR ¶ 1.c. Applicant settled this debt on June 24, 2011. $747	For Applicant	Unspecified Financial	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Credited Debt Paid in Full
1.d	SOR ¶ 1.d alleges a $585 delinquent debt for an overpayment of Applicant’s unemployment compensation. Applicant paid the debt with a $1,013 payment on June 24, 2011. $585	For Applicant	Unspecified Financial	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Credited Debt Paid in Full

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant filed Chapter 7 bankruptcy in 2000, and his debts were discharged in 2001. Applicant continued to have financial difficulties after his bankruptcy.

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.b

Applicant filed Chapter 7 bankruptcy in February 2011. The bankruptcy petition did not list any debts under Schedule D – Creditors Holding Secured Claims, or Schedule E – Creditors Holding Unsecured Priority Claims. Under Schedule F – Creditors Holding Unsecured Nonpriority Claims, the petition listed claims totaling $58,342.

$58,342

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.c

Applicant owed a $747 delinquent debt to a collection company on behalf of a telephone services company, as alleged in SOR ¶ 1.c. Applicant settled this debt on June 24, 2011.

$747

For Applicant

Unspecified Financial

Admitted

—

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

Credited

Debt Paid in Full

1.d

SOR ¶ 1.d alleges a $585 delinquent debt for an overpayment of Applicant’s unemployment compensation. Applicant paid the debt with a $1,013 payment on June 24, 2011.

$585

For Applicant

Unspecified Financial

Admitted

—

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

Credited

Debt Paid in Full

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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