Summary
A 68-year-old CEO of a defense contractor was granted a security clearance despite concerns under Guideline C (Foreign Preference) and Guideline F (Financial Considerations). The applicant held dual citizenship with the United Kingdom and the United States and had not renounced his foreign citizenship.
Financial concerns stemmed from significant difficulties, including two federal tax liens from February and April 2011 for unpaid payroll taxes from 2009, totaling $124,090.68 and $119,214.78 respectively. Other issues included a charged-off $150,000 line of credit, multiple past-due mortgages on rental properties ranging from $163,800 to $357,000, and a first mortgage with a $389,918 past-due balance that initiated foreclosure. Additionally, a second mortgage/home improvement loan was $65,000 past due, and $2,417.29 in state withholding tax was unpaid from 2008 and 2010. These financial problems were attributed to embezzlement by a former employee and subsequent poor financial decisions.
The judge found that the applicant had taken substantial steps to mitigate these concerns. He demonstrated a commitment to resolving his financial issues by engaging with creditors, seeking professional assistance, and providing evidence of efforts to mitigate past financial mismanagement, including resolving several delinquent accounts. His moral obligation to pay his debts, despite being legally absolved, was also considered a mitigating factor, leading to the clearance being GRANTED.
Why the applicant prevailed
- The applicant demonstrated a commitment to resolving his financial issues, including engaging with creditors and seeking professional assistance.
- He provided evidence of efforts to mitigate the impact of past financial mismanagement, including resolving several delinquent accounts.
- The applicant's moral obligation to pay his debts, despite being legally absolved, was considered a mitigating factor.
Conditions referenced
- F.3raisedInability or Unwillingness to Satisfy Debts
- C.1raisedForeign Preference
- F.2appliedThe Conditions That Resulted in the Financial Difficulties Were Largely Beyond the Applicant's Control
- F.3appliedThe Applicant Has Made Efforts to Resolve His Financial Issues
- C.2appliedThe Applicant Has Taken Steps to Mitigate Foreign Preference Concerns
Key rule quoted
“Eligibility for a security clearance and access to classified information is granted when the applicant demonstrates that the security concerns have been mitigated.”
Procedural posture
- SOR issuedMay 30, 2012
- Answer filedJun 27, 2012Applicant requested a hearing.
- Hearing heldSep 26, 2012Joint hearing with applicant's wife.
- Decision dateNov 19, 2012
Cite for
- Mitigation of Financial Issues Under Guideline F
- Foreign Preference Concerns Under Guideline C
- Demonstrating Efforts to Resolve Debts as a Mitigating Factor