ISCR Case 12-12401.h1

Case Headnote

ISCR Case No. 12-12401.h1

deniedApr 25, 2014· Hon. LeRoy F. Foreman· hearing

Summary

A 33-year-old defense contractor and former U.S. Navy member was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The denial stemmed from a history of unresolved financial issues, including multiple delinquent debts, and personal conduct concerns such as past drug abuse and a failure to disclose certain financial obligations.

Specifically, the applicant had several outstanding debts, including a $1,274 credit card debt, a $676 credit card debt, a $6,858 loan, and student loans totaling approximately $9,117, which were not resolved. Additionally, an unsatisfied judgment for $770 for unpaid rent remained unresolved. While some debts, such as a $1,374 cell phone debt, a $2,749 auto repossession deficiency, and an $828 credit card debt, were found to be resolved, the applicant failed to provide sufficient documentation or evidence of resolution for several other significant financial obligations.

The judge concluded that the applicant's financial irresponsibility, coupled with his past misconduct and failure to demonstrate control over his financial problems, raised serious questions about his reliability and trustworthiness. Despite some mitigating factors, the persistent unresolved debts and personal conduct issues ultimately led to the denial of his security clearance.

Why the Applicant Was Denied

The applicant had numerous unresolved debts, including a history of not meeting financial obligations.
The applicant failed to demonstrate that his financial problems were under control or being resolved.
The applicant's past misconduct, including drug abuse and failure to disclose debts, raised significant concerns about his reliability.

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)rejectedBehavior Happened so Long Ago, Was Infrequent, or Unlikely to RecurThe applicant's debts are numerous and unresolved, indicating they are likely to recur.
AG ¶ 20(b)rejectedConditions Beyond the Person's ControlWhile some circumstances were beyond his control, the applicant's unemployment was due to his own misconduct.
AG ¶ 20(c)rejectedReceived Counseling or Indications That the Problem Is Being ResolvedThe applicant did not provide clear evidence that his financial problems are under control.
AG ¶ 20(d)rejectedGood-faith Effort to Repay Overdue CreditorsThe applicant did not demonstrate a reasonable plan to resolve his financial issues.

Key Rule Quoted

“Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the AG.”
— Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended.

Procedural Posture

SOR issuedSep 27, 2013
Answer filedOct 21, 2013
Hearing heldMar 18, 2014via video teleconference
Decision dateApr 25, 2014

Cite For

Denial Based on Unresolved Financial Obligations Under Guideline F
Impact of Personal Conduct on Security Clearance Eligibility Under Guideline E
Importance of Demonstrating Financial Responsibility in Security Clearance Cases

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–2.l	12 sub-charges — specific text not stated in this decision (4 against, 8 for the applicant).	Mixed		—		—	—	—

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

2.a–2.l

12 sub-charges — specific text not stated in this decision (4 against, 8 for the applicant).

Mixed

—

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	SOR ¶ 1.a (cell phone, $1,374). This debt was for a cell phone used by Applicant’s estranged wife. It was referred for collection in November 2012. In his PSI, Applicant told the investigator that he had forgotten about this debt, and he promised to resolve it. At the hearing, he testified that the debt was resolved. It is not reflected on his March 2014 CBR. I conclude that it is resolved. $1,374	For Applicant	Utility or Phone Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	SOR ¶ 1.b (credit card, $1,274). This debt is for a joint credit card account used by Applicant’s estranged wife, which she “maxed out” when she left him. It was referred for collection in December 2012. In his PSI, Applicant admitted this debt and promised to resolve it. At the hearing, he admitted that the debt was not resolved. $1,274	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	SOR ¶ 1.c (student loans for $114, $96, $74, and $9,117). Applicant denied these debts and testified that he believed all his student loans had been resolved. The delinquent loan in SOR ¶ 1.c was referred for collection in December 2007. It is one of three student loans reflected on Applicant’s January 2013 CBR with the same creditor and the same guarantor. The other two student loans from this creditor and with this guarantor are reflected as paid collections and are not alleged in the SOR. The evidence submitted by Applicant after the hearing reflects that he defaulted on four student loans from the creditor alleged in SOR ¶ 1.c. The guarantor for those loans paid claims totaling about $9,020 in December 2007, which is approximately equal to the $9,117 debt alleged in SOR ¶ 1.i. The account number for the loan alleged in SOR ¶ 1.c is the same as the account number for the loan alleged in SOR ¶ 1.i, indicating that SOR ¶ 1.c is included in SOR ¶ 1.i. The creditor alleged in SOR ¶ 1.i is servicing the loans paid by the guarantor, on which Applicant remains liable. The delinquent student loan in SOR ¶ 1.i is reflected on the January 2013 CBR as more than 120 days delinquent, closed, and assigned to the government in November 2006. I conclude that the delinquent student loan account alleged in SOR ¶ 1.i, which includes the delinquent student loan account alleged in SOR ¶ 1.c, is not resolved. $9,117	For Applicant	Student Loan Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	SOR ¶ 1.d (deficiency on auto repossession, $2,749). Applicant denied this debt. In his PSI and at the hearing, he stated that the debt was resolved. His January 2013 CBR reflects that the judgment obtained by this creditor in February 2009 was satisfied in August 2012. $2,749	For Applicant	Auto Loan Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	SOR ¶ 1.e (credit card, $676). Applicant’s January 2013 CBR reflects that this account was charged off and sold to another lender, but it does not identify the new lender. In his PSI, Applicant told the investigator that he had been unable to find the new lender. At the hearing, Applicant admitted this debt, and he testified that he was making payments on it, but he produced no documentation to support his testimony. It is not resolved. $676	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	SOR ¶ 1.f (loan for $6,858). This debt was referred for collection in November 2006. In his PSI, Applicant told the investigator that this debt was a joint debt to purchase a computer for his wife. Applicant admitted this debt and testified he is making payments on it, but he produced no documentation. His March 2014 CBR reflects that he is making payments on another loan from the same lender, for a different amount. The debt alleged in the SOR is not resolved. $6,858	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	SOR ¶ 1.g (deficiency on auto repossession, $5,617). This debt was charged off in July 2007. In his PSI, Applicant told the investigator that this debt was incurred when his wife purchased an automobile and he cosigned the loan. He testified that he and his wife are making payments on this debt. It is not reflected on his March 2014 CBR, indicating that it is resolved. $5,617	For Applicant	Auto Loan Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	SOR ¶ 1.h (credit card for $828). Applicant’s January 2013 CBR reflects that this account has a zero balance and was closed at Applicant’s request in January 2007. It is resolved. $828	For Applicant	Credit Card Debt	Denied	—	—	—
1.i	SOR ¶ 1.i (student loans for $9,117). The delinquent student loan in SOR ¶ 1.i is reflected on the January 2013 CBR as more than 120 days delinquent, closed, and assigned to the government in November 2006. I conclude that the delinquent student loan account alleged in SOR ¶ 1.i is not resolved. $9,117	Against Applicant	Student Loan Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	SOR ¶ 1.j (deficiency on auto repossession, $5,617). This debt was charged off in July 2007. In his PSI, Applicant told the investigator that this debt was incurred when his wife purchased an automobile and he cosigned the loan. He testified that he and his wife are making payments on this debt. It is not reflected on his March 2014 CBR, indicating that it is resolved. $5,617	For Applicant	Auto Loan Debt	Denied	—	—	—
1.k	SOR ¶ 1.k (credit card for $828). Applicant’s January 2013 CBR reflects that this account has a zero balance and was closed at Applicant’s request in January 2007. It is resolved. $828	For Applicant	Credit Card Debt	Denied	—	—	—
1.l	SOR ¶ 1.l (unsatisfied judgment for $770). This judgment was entered in December 2006. It was for unpaid rent for the apartment that Applicant and his wife last occupied. In his PSI, he told the investigator that he had paid his share of the debt. He submitted a personal financial statement (PFS) in July 2013, indicating that he was making monthly $192 payments on this debt. At the hearing, he testified that the judgment was satisfied, but he provided no documentary support for his testimony. I conclude that it is not resolved. $770	Against Applicant	Judgment Against Applicant	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

SOR ¶ 1.a (cell phone, $1,374). This debt was for a cell phone used by Applicant’s estranged wife. It was referred for collection in November 2012. In his PSI, Applicant told the investigator that he had forgotten about this debt, and he promised to resolve it. At the hearing, he testified that the debt was resolved. It is not reflected on his March 2014 CBR. I conclude that it is resolved.

$1,374

For Applicant

Utility or Phone Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.b

SOR ¶ 1.b (credit card, $1,274). This debt is for a joint credit card account used by Applicant’s estranged wife, which she “maxed out” when she left him. It was referred for collection in December 2012. In his PSI, Applicant admitted this debt and promised to resolve it. At the hearing, he admitted that the debt was not resolved.

$1,274

Against Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.c

SOR ¶ 1.c (student loans for $114, $96, $74, and $9,117). Applicant denied these debts and testified that he believed all his student loans had been resolved. The delinquent loan in SOR ¶ 1.c was referred for collection in December 2007. It is one of three student loans reflected on Applicant’s January 2013 CBR with the same creditor and the same guarantor. The other two student loans from this creditor and with this guarantor are reflected as paid collections and are not alleged in the SOR. The evidence submitted by Applicant after the hearing reflects that he defaulted on four student loans from the creditor alleged in SOR ¶ 1.c. The guarantor for those loans paid claims totaling about $9,020 in December 2007, which is approximately equal to the $9,117 debt alleged in SOR ¶ 1.i. The account number for the loan alleged in SOR ¶ 1.c is the same as the account number for the loan alleged in SOR ¶ 1.i, indicating that SOR ¶ 1.c is included in SOR ¶ 1.i. The creditor alleged in SOR ¶ 1.i is servicing the loans paid by the guarantor, on which Applicant remains liable. The delinquent student loan in SOR ¶ 1.i is reflected on the January 2013 CBR as more than 120 days delinquent, closed, and assigned to the government in November 2006. I conclude that the delinquent student loan account alleged in SOR ¶ 1.i, which includes the delinquent student loan account alleged in SOR ¶ 1.c, is not resolved.

$9,117

For Applicant

Student Loan Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.d

SOR ¶ 1.d (deficiency on auto repossession, $2,749). Applicant denied this debt. In his PSI and at the hearing, he stated that the debt was resolved. His January 2013 CBR reflects that the judgment obtained by this creditor in February 2009 was satisfied in August 2012.

$2,749

For Applicant

Auto Loan Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.e

SOR ¶ 1.e (credit card, $676). Applicant’s January 2013 CBR reflects that this account was charged off and sold to another lender, but it does not identify the new lender. In his PSI, Applicant told the investigator that he had been unable to find the new lender. At the hearing, Applicant admitted this debt, and he testified that he was making payments on it, but he produced no documentation to support his testimony. It is not resolved.

$676

Against Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.f

SOR ¶ 1.f (loan for $6,858). This debt was referred for collection in November 2006. In his PSI, Applicant told the investigator that this debt was a joint debt to purchase a computer for his wife. Applicant admitted this debt and testified he is making payments on it, but he produced no documentation. His March 2014 CBR reflects that he is making payments on another loan from the same lender, for a different amount. The debt alleged in the SOR is not resolved.

$6,858

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.g

SOR ¶ 1.g (deficiency on auto repossession, $5,617). This debt was charged off in July 2007. In his PSI, Applicant told the investigator that this debt was incurred when his wife purchased an automobile and he cosigned the loan. He testified that he and his wife are making payments on this debt. It is not reflected on his March 2014 CBR, indicating that it is resolved.

$5,617

For Applicant

Auto Loan Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.h

SOR ¶ 1.h (credit card for $828). Applicant’s January 2013 CBR reflects that this account has a zero balance and was closed at Applicant’s request in January 2007. It is resolved.

$828

For Applicant

Credit Card Debt

Denied

—

1.i

SOR ¶ 1.i (student loans for $9,117). The delinquent student loan in SOR ¶ 1.i is reflected on the January 2013 CBR as more than 120 days delinquent, closed, and assigned to the government in November 2006. I conclude that the delinquent student loan account alleged in SOR ¶ 1.i is not resolved.

$9,117

Against Applicant

Student Loan Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.j

SOR ¶ 1.j (deficiency on auto repossession, $5,617). This debt was charged off in July 2007. In his PSI, Applicant told the investigator that this debt was incurred when his wife purchased an automobile and he cosigned the loan. He testified that he and his wife are making payments on this debt. It is not reflected on his March 2014 CBR, indicating that it is resolved.

$5,617

For Applicant

Auto Loan Debt

Denied

—

1.k

SOR ¶ 1.k (credit card for $828). Applicant’s January 2013 CBR reflects that this account has a zero balance and was closed at Applicant’s request in January 2007. It is resolved.

$828

For Applicant

Credit Card Debt

Denied

—

1.l

SOR ¶ 1.l (unsatisfied judgment for $770). This judgment was entered in December 2006. It was for unpaid rent for the apartment that Applicant and his wife last occupied. In his PSI, he told the investigator that he had paid his share of the debt. He submitted a personal financial statement (PFS) in July 2013, indicating that he was making monthly $192 payments on this debt. At the hearing, he testified that the judgment was satisfied, but he provided no documentary support for his testimony. I conclude that it is not resolved.

$770

Against Applicant

Judgment Against Applicant

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

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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