ISCR Case 12-07103.h1

Case Headnote

ISCR Case No. 12-07103.h1

grantedFeb 2, 2015· Hon. Matthew E. Malone· hearing

Summary

A 60-year-old defense contractor, holding a security clearance since 1985, faced a DOHA security clearance review under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The allegations primarily concerned delinquent debts totaling approximately $50,980 and a false statement on his EQIP form regarding an omitted debt.

Specifically, one debt involved a cable television box, which, due to a payment method error, grew to $1,247 before being reduced to $247.32 and paid in July 2014. A second, larger debt of nearly $50,000 stemmed from past-due mortgage payments on a commercial real estate business started in August 2008, for which the applicant hired an attorney and was advised to file Chapter 7 bankruptcy. The false statement allegation related to the omission of this mortgage debt from his EQIP.

Despite these concerns, the security clearance was GRANTED. The judge found that the applicant's financial issues originated from circumstances beyond his control, including a tornado and an economic downturn. The applicant demonstrated proactive efforts to resolve his debts, and his current financial situation was deemed sound. Witness testimony also supported his reputation for reliability and trustworthiness.

Why the Applicant Prevailed

The applicant was proactive in addressing his financial issues and demonstrated sound current finances.
The debts arose from circumstances beyond the applicant's control, including a natural disaster and economic downturn.
The applicant's reputation for reliability and trustworthiness was supported by witness testimony.

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)appliedBehavior Happened so Long Ago, Was Infrequent, or Occurred Under Circumstances Unlikely to Recur
AG ¶ 20(b)appliedConditions That Resulted in Financial Problems Were Largely Beyond the Person's Control
AG ¶ 20(c)appliedReceived or Is Receiving Counseling for the Problem And/or Indications That the Problem Is Being Resolved

Key Rule Quoted

“A security clearance decision is intended only to resolve 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 issuedJun 5, 2014
Answer filed—Timely response to SOR.
Hearing heldDec 18, 2014Hearing was rescheduled after a continuance.
Decision dateFeb 2, 2015

Cite For

Mitigation of Financial Concerns Under Guideline F Due to Circumstances Beyond Control
Resolution of Personal Conduct Allegations When Intent to Conceal Is Not Established
Consideration of the Whole-person Factors in Security Clearance Decisions

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 deliberately made a false statement to the Government by omitting from his EQIP the debt alleged at SOR 1.b (SOR 2.a).	For Applicant	Omission or Failure to DiscloseNOT DELIBERATE	Financial	Denied	—	(b) omission/refusal followed advice of counsel; later cooperated fully	—

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

2.a

Applicant deliberately made a false statement to the Government by omitting from his EQIP the debt alleged at SOR 1.b (SOR 2.a).

For Applicant

Omission or Failure to DiscloseNOT DELIBERATE

Financial

Denied

—

(b) omission/refusal followed advice of counsel; later cooperated fully

—

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant incurred a delinquent debt for the cost of a cable television box. It was not accounted for as returned because of a mistake over the method of payment when Applicant cancelled his service at a previous residence. When Applicant became aware of the unpaid account, it had grown to $1,247 from interest and penalties. Applicant contacted the creditor and the debt was reduced to $247.32, which he paid in July 2014. $247	For Applicant	Utility or Phone 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	Documented Debt Paid in Full
1.b	The debt alleged at SOR 1.b is for a mortgage on a commercial real estate business Applicant and his current wife started in August 2008. Applicant has accrued almost $50,000 in past-due payments. In 2012, Applicant hired an attorney to represent him in negotiations with the new mortgage lender. Applicant’s attorney recommended Applicant and his wife file Chapter 7 bankruptcy to resolve his financial obligation regarding the apartment building. $50,000	For Applicant	Mortgage or Home Loan 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	Claimed Chapter 7 Bankruptcy

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant incurred a delinquent debt for the cost of a cable television box. It was not accounted for as returned because of a mistake over the method of payment when Applicant cancelled his service at a previous residence. When Applicant became aware of the unpaid account, it had grown to $1,247 from interest and penalties. Applicant contacted the creditor and the debt was reduced to $247.32, which he paid in July 2014.

$247

For Applicant

Utility or Phone 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

Documented

Debt Paid in Full

1.b

The debt alleged at SOR 1.b is for a mortgage on a commercial real estate business Applicant and his current wife started in August 2008. Applicant has accrued almost $50,000 in past-due payments. In 2012, Applicant hired an attorney to represent him in negotiations with the new mortgage lender. Applicant’s attorney recommended Applicant and his wife file Chapter 7 bankruptcy to resolve his financial obligation regarding the apartment building.

$50,000

For Applicant

Mortgage or Home Loan 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

Claimed

Chapter 7 Bankruptcy

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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

FINDINGS OF FACT

POLICIES

ANALYSIS

FORMAL FINDINGS

CONCLUSION

FOOTNOTES