Summary
The applicant, a 54-year-old federal contractor with a bachelor's degree, faced security clearance denial under Guideline F due to unresolved financial issues stemming from significant debts and bankruptcies. Despite some debts being discharged or charged off, the applicant's financial management raised concerns about his reliability and judgment, leading to the denial of his security clearance.
Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: The consumer debt in SOR ¶ 1.b ($22,467) is an individual credit card account that was charged off (1.a). The consumer debt in SOR ¶ 1.d ($31,468) is an individual credit card account that was charged off (1.b). Applicant indicated he paid the debt in SOR ¶ 1.c (past due $13,278) listed as a home equity loan (1.c). The loan in SOR ¶ 1.e (past due $2,275, balance $107,000) appears to have been paid and the account closed in 2012 (1.d). Applicant has been disputing the mortgage loan on his primary residence in SOR ¶ 1.f ($324,000 past due on a $681,079 balance) since at least 2011 (1.e). Applicant has not resolved the mortgage loan (SOR ¶ 1.f). He disputes the debt claiming it was discharged in bankruptcy (1.f). Sufficient documentation was provided to show the debt in SOR ¶ 1.g (past due $1,625 on $11,152 balance) is paid (1.g).
The judge denied the clearance. The government raised disqualifying conditions AG ¶ 19(a), AG ¶ 19(c). The judge applied mitigating conditions AG ¶ 20(b), AG ¶ 20(e). The decision turned on the following: Applicant failed to demonstrate a good-faith effort to resolve overdue debts; Applicant's financial issues were recent and frequent, casting doubt on his reliability and judgment; The applicant's reliance on bankruptcy and the statute of limitations did not constitute responsible financial behavior.
Why the Applicant Was Denied
- Applicant failed to demonstrate a good-faith effort to resolve overdue debts.
- Applicant's financial issues were recent and frequent, casting doubt on his reliability and judgment.
- The applicant's reliance on bankruptcy and the statute of limitations did not constitute responsible financial behavior.
Conditions Referenced
- AG ¶ 19(a)appliedInability or Unwillingness to Satisfy Debts
- AG ¶ 19(c)appliedA History of Not Meeting Financial Obligations
- AG ¶ 20(b)appliedConditions Largely Beyond the Person's ControlApplicant attributed financial problems to a downturn in the real estate market.
- AG ¶ 20(e)appliedReasonable Basis to Dispute Legitimacy of Past Due DebtSome debts were discharged in bankruptcy or barred by statute of limitations.
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 6, 2015
- Answer filedJul 14, 2015Applicant elected to proceed without a hearing.
- Hearing held—Decided on the written record.
- Decision dateApr 27, 2016
Cite For
- Denial of Security Clearance Due to Unresolved Financial Issues Under Guideline F
- Impact of Bankruptcy on Security Clearance Eligibility
- Consideration of Financial Management in Assessing Reliability and Trustworthiness