ISCR Case 11-08807.h1

Case Headnote

ISCR Case No. 11-08807.h1

deniedJan 30, 2013· Hon. Rita C. O'Brien· hearing

Summary

A 45-year-old office administration specialist for a defense contractor was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The applicant had three credit card accounts with significant balances ($10,563, $11,098, and $3,613) that became delinquent around 2009-2010, largely due to expenses incurred during her divorce. These accounts were subsequently charged off and in collection status by May 2011.

Despite these financial issues, the applicant answered "No" to questions on her April 2011 security clearance application regarding charged-off debts, accounts 180 days delinquent, or currently 90 days past due. While she made efforts to address her debts, including arranging payment plans and making sporadic payments, the judge found that her failure to disclose the charged-off debts constituted deliberate falsification.

Although the judge acknowledged the applicant's efforts to resolve her financial issues, the security clearance was ultimately denied. The primary reason for denial was the deliberate falsification of her security clearance application by failing to disclose her charged-off debts, which reflected negatively on her reliability and judgment.

Why the Applicant Was Denied

The applicant failed to disclose charged-off debts on her security clearance application, which constituted deliberate falsification.
The applicant's failure to be forthright with the Government during the security clearance investigation reflects poorly on her reliability and judgment.

Conditions Referenced

Disqualifying

AG ¶ 16(a)appliedDeliberate Omission, Concealment, or Falsification of Relevant Facts

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
AG ¶ 20(d)appliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors

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 issuedSep 28, 2012
Answer filedJan 30, 2013
Hearing heldDec 13, 2012
Decision dateJan 30, 2013

Cite For

Deliberate Falsification of Security Clearance Application Under Guideline E
Mitigating Conditions for Financial Considerations Under Guideline F
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	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	Applicant failed to report any financial issues on her April 2011 security clearance application. Even though three of her credit card accounts had been delinquent – at least for some periods during the previous two years -- she answered “No” to the questions that asked if she had any accounts charged off, 180 days delinquent in the previous seven years, or currently 90 days past due. Applicant was aware that she had been having financial problems since her separation and divorce. She also knew that they were not resolved at the time she completed the application. Applicant may have reasonably thought she did not have any debts that had been six months past due, or that were 90 past due in May 2011, because she had been paying on them sporadically as she had funds available. However, Applicant answered “No” to question 26h, denying any charged-off debts, even though she was aware that her accounts had been charged off. Her knowing failure to disclose this fact constitutes deliberate falsification.	Against Applicant	Falsification Security FormFOUND DELIBERATE	Financial	Denied	(a) deliberate omission, concealment, or falsification on a security form	—	—

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

2.a

Applicant failed to report any financial issues on her April 2011 security clearance application. Even though three of her credit card accounts had been delinquent – at least for some periods during the previous two years -- she answered “No” to the questions that asked if she had any accounts charged off, 180 days delinquent in the previous seven years, or currently 90 days past due. Applicant was aware that she had been having financial problems since her separation and divorce. She also knew that they were not resolved at the time she completed the application. Applicant may have reasonably thought she did not have any debts that had been six months past due, or that were 90 past due in May 2011, because she had been paying on them sporadically as she had funds available. However, Applicant answered “No” to question 26h, denying any charged-off debts, even though she was aware that her accounts had been charged off. Her knowing failure to disclose this fact constitutes deliberate falsification.

Against Applicant

Falsification Security FormFOUND DELIBERATE

Financial

Denied

(a) deliberate omission, concealment, or falsification on a security form

—

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	credit card ($10,563) – Applicant opened this credit card in 2000, and used it to pay family living expenses during her divorce. She was able to keep it current for a time, but it became delinquent in 2009. It was closed, charged off and in collection status on her May 2011 credit report. In April 2011, she arranged a payment plan with the creditor of $139 monthly. At the hearing, she testified that she contacted the creditor again in about March 2012. She could not afford the lump-sum settlement that the creditor offered. Her brother and her boyfriend offered to lend her the funds, but she wanted to pay the debt herself because it was her debt. She began payments of $100. Recently, she reduced the payment to $50 per month. She testified that it was not a payment plan, because she paid the company when she could afford it. Applicant has made multiple requests for receipts to show her payments, but has been unsuccessful. She was able to provide one statement showing her $50 payment made on December 11, 2012. $10,563	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full
1.b	credit card ($11,098) – Applicant used this credit card to pay for living expenses during her divorce. It became delinquent in about 2009. During her May 2011 security interview, she said she spoke with the creditor, but she could not afford to make payments. In 2012, she contacted the creditor. She was offered a settlement but could not afford it. Her brother and her boyfriend offered to lend her the funds, but she wanted to pay the debts herself because it was her debt. She arranged a payment plan. As of July 2012, she had been paying regularly on the account. She testified that she started payments in about May or June 2012, and provided documentation showing monthly payments of $105.95 between July and December 2012. The payments are automatically deducted from her bank account. In June 2013, the account will be evaluated and she may be offered a reduction of the balance. $11,098	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full
1.c	credit card ($3,613) – Applicant used this credit card to pay family living expenses during her divorce. It was charged off in August 2010. Her 2011 credit report shows it in collection status. At her May 2011 security interview, Applicant stated that after it became delinquent, she began payments of $300 to $400 per month. At a second interview in June 2011, Applicant stated that she had been making payments, but at times she was unable to afford it, or to make even the minimum payment, and it became delinquent. She re-started with payments of $100 per month in June 2011. The debt was sold several times. In about March 2012, Applicant attempted to reach the current creditor, but the company did not return her calls. $3,613	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

credit card ($10,563) – Applicant opened this credit card in 2000, and used it to pay family living expenses during her divorce. She was able to keep it current for a time, but it became delinquent in 2009. It was closed, charged off and in collection status on her May 2011 credit report. In April 2011, she arranged a payment plan with the creditor of $139 monthly. At the hearing, she testified that she contacted the creditor again in about March 2012. She could not afford the lump-sum settlement that the creditor offered. Her brother and her boyfriend offered to lend her the funds, but she wanted to pay the debt herself because it was her debt. She began payments of $100. Recently, she reduced the payment to $50 per month. She testified that it was not a payment plan, because she paid the company when she could afford it. Applicant has made multiple requests for receipts to show her payments, but has been unsuccessful. She was able to provide one statement showing her $50 payment made on December 11, 2012.

$10,563

For Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(b) conditions largely beyond the person’s control; acted responsibly

(c) received/receiving counseling; problem being resolved

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

Claimed

Debt Paid in Full

1.b

credit card ($11,098) – Applicant used this credit card to pay for living expenses during her divorce. It became delinquent in about 2009. During her May 2011 security interview, she said she spoke with the creditor, but she could not afford to make payments. In 2012, she contacted the creditor. She was offered a settlement but could not afford it. Her brother and her boyfriend offered to lend her the funds, but she wanted to pay the debts herself because it was her debt. She arranged a payment plan. As of July 2012, she had been paying regularly on the account. She testified that she started payments in about May or June 2012, and provided documentation showing monthly payments of $105.95 between July and December 2012. The payments are automatically deducted from her bank account. In June 2013, the account will be evaluated and she may be offered a reduction of the balance.

$11,098

For Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(b) conditions largely beyond the person’s control; acted responsibly

(c) received/receiving counseling; problem being resolved

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

Claimed

Debt Paid in Full

1.c

credit card ($3,613) – Applicant used this credit card to pay family living expenses during her divorce. It was charged off in August 2010. Her 2011 credit report shows it in collection status. At her May 2011 security interview, Applicant stated that after it became delinquent, she began payments of $300 to $400 per month. At a second interview in June 2011, Applicant stated that she had been making payments, but at times she was unable to afford it, or to make even the minimum payment, and it became delinquent. She re-started with payments of $100 per month in June 2011. The debt was sold several times. In about March 2012, Applicant attempted to reach the current creditor, but the company did not return her calls.

$3,613

For Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(b) conditions largely beyond the person’s control; acted responsibly

(c) received/receiving counseling; problem being resolved

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

Claimed

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

PROCEDURAL MATTERS

FINDINGS OF FACT

POLICIES

ANALYSIS

WHOLE PERSON ANALYSIS

FORMAL FINDINGS

CONCLUSION

FOOTNOTES