ISCR Case 14-01191.h1

Case Headnote

ISCR Case No. 14-01191.h1

grantedOct 24, 2014· Hon. Rita C. O'Brien· hearing

Summary

A 40-year-old senior electrical engineer was granted a security clearance despite concerns under Guideline F (Financial Considerations). The issues stemmed from his wife's health problems and his subsequent unemployment, which led to several outstanding debts.

Specifically, the applicant addressed a $66 debt he was unaware of, which was subsequently removed from his credit report as the creditor had no record of it. A $337 debt, also unknown to him and related to his wife, was found to have already been paid. Two allegations totaling $2,000 and $2,268 were identified as duplicate entries for the same online retailer account, which the applicant fully paid in early 2014 using funds from unused vacation time after being laid off. A $10,425 debt for a van, co-signed by the applicant for his wife's former business, was resolved through a $300 monthly payment plan initiated in September 2014. Additionally, the applicant had filed for Chapter 7 bankruptcy in 2000 due to college expenses, which was discharged in January 2001.

The judge determined that the applicant had mitigated the financial concerns. This decision was based on his history of timely payments, the successful resolution of three of the four alleged debts, and the fact that his financial difficulties were largely due to circumstances beyond his control.

Why the Applicant Prevailed

The applicant demonstrated a history of timely payments on most accounts, indicating reliability and good judgment.
He successfully resolved three of the four debts listed in the SOR, showing a commitment to addressing financial obligations.
The applicant's financial difficulties were largely due to circumstances beyond his control, including his wife's illness and his unemployment.

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 Counseling for the Problem And/or Indications That the Problem Is Being Resolved
AG ¶ 20(d)appliedInitiated a Good-faith Effort to Repay Overdue Creditors or Resolve Debts

Key Rule Quoted

“A security clearance decision is issued only to resolve the question 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 issuedMay 5, 2014
Answer filedMay 13, 2014
Hearing heldOct 7, 2014Applicant waived right to 15 days' notice.
Decision dateOct 24, 2014

Cite For

Mitigation of Financial Concerns Under Guideline F
Impact of Personal Circumstances on Financial Obligations
Good-faith Efforts to Resolve Debts as a Mitigating Factor

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	$66 – RESOLVED. At his December 2013 security interview, Applicant stated he was unaware of this account. He testified that he believes this debt reflects a returned check his wife issued to a mail delivery service. Applicant contacted that creditor that appears in allegation 1.a, to pay the debt. However, the debt did not appear in its records, and the company could not provide relevant documentation. In his Answer, Applicant said the creditor’s representative stated he would instruct the credit reporting agency to delete it from Applicant's credit report. $66	For Applicant	Unspecified Financial	Admitted	—	—	—
1.b	$337 – PAID. Applicant was unaware of this debt for a returned check, issued by his wife. He contacted the law office handling the account, to pay it, but was informed that it had already been paid. He requested documentation, and provided the resulting letter. $337	For Applicant	Unspecified Financial	Admitted	—	—	—
1.c	$2,268 – PAID. The two debts (1.c, $2,000; 1.d, $2,268) reference a charge account with an online retailer. Applicant testified that the debts are duplicates of the same debt, sold to successive creditors. He provided a letter from the current creditor, a collection agency. It states that on December 20, 2012, the debt was sold and transferred from the original creditor, the retailer listed in SOR allegation 1.c, to the collection agency shown in SOR allegation 1.d. Applicant's documentation also shows, through the account numbers, that they are the same debt. When Applicant was laid off in early 2014, he used funds received for unused vacation time and made two payments to the current creditor, paying the outstanding balance in full. $2,268	For Applicant	Unspecified Financial	Admitted	—	—	—
1.d	$2,268 – PAID. The two debts (1.c, $2,000; 1.d, $2,268) reference a charge account with an online retailer. Applicant testified that the debts are duplicates of the same debt, sold to successive creditors. He provided a letter from the current creditor, a collection agency. It states that on December 20, 2012, the debt was sold and transferred from the original creditor, the retailer listed in SOR allegation 1.c, to the collection agency shown in SOR allegation 1.d. Applicant's documentation also shows, through the account numbers, that they are the same debt. When Applicant was laid off in early 2014, he used funds received for unused vacation time and made two payments to the current creditor, paying the outstanding balance in full. $2,268	For Applicant	Unspecified Financial	Admitted	—	—	—
1.e	$10,425 – PAYMENT PLAN. In 2010, Applicant’s wife purchased a van for $10,000 to use as part of a day care business that she operated from their home. Applicant co-signed on the loan. The monthly payments were $500. When she became ill in 2012 and could no longer run the business, she ceased operations, and voluntarily returned the van. Applicant's wife contacted the creditor monthly, but with no response. However, in September 2014, the company contacted her, agreeing to a payment plan. Applicant provided documentation showing a plan for $300 monthly payments. His wife will make the payments, until he is employed. $10,425	For Applicant	Auto Loan Debt	Denied with Explanation	—	—	—
1.f	In 2000, when Applicant was in his 20’s, he filed a Chapter 7 bankruptcy petition. He testified it was primarily because of his college expenses. It was successfully discharged in January 2001.	For Applicant	Bankruptcy Filing	Admitted	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

$66 – RESOLVED. At his December 2013 security interview, Applicant stated he was unaware of this account. He testified that he believes this debt reflects a returned check his wife issued to a mail delivery service. Applicant contacted that creditor that appears in allegation 1.a, to pay the debt. However, the debt did not appear in its records, and the company could not provide relevant documentation. In his Answer, Applicant said the creditor’s representative stated he would instruct the credit reporting agency to delete it from Applicant's credit report.

$66

For Applicant

Unspecified Financial

Admitted

—

1.b

$337 – PAID. Applicant was unaware of this debt for a returned check, issued by his wife. He contacted the law office handling the account, to pay it, but was informed that it had already been paid. He requested documentation, and provided the resulting letter.

$337

For Applicant

Unspecified Financial

Admitted

—

1.c

$2,268 – PAID. The two debts (1.c, $2,000; 1.d, $2,268) reference a charge account with an online retailer. Applicant testified that the debts are duplicates of the same debt, sold to successive creditors. He provided a letter from the current creditor, a collection agency. It states that on December 20, 2012, the debt was sold and transferred from the original creditor, the retailer listed in SOR allegation 1.c, to the collection agency shown in SOR allegation 1.d. Applicant's documentation also shows, through the account numbers, that they are the same debt. When Applicant was laid off in early 2014, he used funds received for unused vacation time and made two payments to the current creditor, paying the outstanding balance in full.

$2,268

For Applicant

Unspecified Financial

Admitted

—

1.d

$2,268

For Applicant

Unspecified Financial

Admitted

—

1.e

$10,425 – PAYMENT PLAN. In 2010, Applicant’s wife purchased a van for $10,000 to use as part of a day care business that she operated from their home. Applicant co-signed on the loan. The monthly payments were $500. When she became ill in 2012 and could no longer run the business, she ceased operations, and voluntarily returned the van. Applicant's wife contacted the creditor monthly, but with no response. However, in September 2014, the company contacted her, agreeing to a payment plan. Applicant provided documentation showing a plan for $300 monthly payments. His wife will make the payments, until he is employed.

$10,425

For Applicant

Auto Loan Debt

Denied with Explanation

—

1.f

In 2000, when Applicant was in his 20’s, he filed a Chapter 7 bankruptcy petition. He testified it was primarily because of his college expenses. It was successfully discharged in January 2001.

For Applicant

Bankruptcy Filing

Admitted

—

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Summary

Why the Applicant Prevailed

Conditions Referenced

Key Rule Quoted

Procedural Posture

Cite For

Full decision