ISCR Case 14-02913.h1

Case Headnote

ISCR Case No. 14-02913.h1

grantedJan 15, 2015· Hon. Robert Robinson Gales· hearing

Summary

A 51-year-old defense contractor and retired Air Force master sergeant was granted a security clearance despite concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). These issues stemmed from financial difficulties following a contentious divorce and a major stroke.

Specific allegations included a late 2011 federal income tax filing, which the applicant attributed to his ex-wife's failure to file, a fact unknown to him when he completed his e-QIP. Additionally, he provided inaccurate responses on his e-QIP regarding delinquent and collection accounts, explaining that divorce court had not yet finalized his financial responsibilities. Several debts, including a bank line of credit for $9,792 and multiple credit cards with balances ranging from $1,794 to $10,079, were past due or in collection. These accounts were included in his bankruptcy petition, with initial disbursements made on November 25, 2014, and most are in the process of being resolved. One credit card debt of $12,854 was discharged due to the creditor's failure to submit a timely claim.

The judge found that the applicant mitigated these concerns. He demonstrated proactive financial management by filing for Chapter 13 bankruptcy and making regular payments. He also provided evidence of financial counseling and a manageable budget. Character references from supervisors and colleagues further attested to his integrity and work ethic, leading to the granting of his security clearance.

Why the Applicant Prevailed

The applicant demonstrated proactive financial management by filing for Chapter 13 bankruptcy and making regular payments to the bankruptcy trustee.
The applicant provided evidence of financial counseling and a personal financial profile showing a manageable budget post-bankruptcy.
Character references from supervisors and colleagues attested to the applicant's integrity and work ethic.

Conditions Referenced

Disqualifying

F.3raisedInability to Satisfy Debts
E.2raisedFalsification of Information

Mitigating

F.2appliedConditions That Resulted in Financial Difficulties Were Largely Beyond the Applicant's Control
E.2appliedThe Applicant's False Statements Were Not Made with Intent to Deceive
F.3appliedThe Applicant Has Taken Significant Steps to Address Financial Issues

Key Rule Quoted

“Eligibility for a security clearance and access to classified information is granted only upon a finding that it is clearly consistent with the national interest to do so.”
— Department of the Navy v. Egan, 484 U.S. 518

Procedural Posture

SOR issuedJul 24, 2014
Answer filedAug 15, 2014Applicant elected to proceed without a hearing.
Hearing heldDec 18, 2014
Decision dateJan 15, 2015

Cite For

Mitigation of Financial Difficulties Under Guideline F
False Statements Regarding Financial Status Under Guideline E
Consideration of Character References 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	On February 1, 2013, when Applicant completed his e-QIP, he responded to questions pertaining to his financial record. One question in Section 26 – Financial Record – Taxes asked if, in the past seven years, he had failed to file or pay federal, state, or other taxes when required by law or ordinance. Applicant answered “no” to the question. He certified that the response was “true, complete, and correct” to the best of his knowledge and belief, but the response to that question was, in fact, false for Applicant’s 2011 federal income tax return was not filed until 2013. He subsequently explained that he only learned of his ex-wife’s failure to timely file the tax return when the tax preparation service submitted documentation for his signature for both tax years 2011 and 2012, and that information was not known to him when he completed the e-QIP. In complying with the divorce court mandate, Applicant had provided his ex-wife all the documentation, such as W2s and 1099s, so she could have the forms completed and filed by a specific tax preparation service. He essentially complied with his obligations, but she had failed to complete her own obligations. While the late filing was technically his responsibility as well, his response to the inquiry in the absence of knowledge of her failure, did not constitute a knowing falsification by him.	For Applicant	Lack of Candor in InterviewNOT DELIBERATE	—	Admitted	—	—	Claimed Other
2.b	Another question in Section 26 – Financial Record (Delinquency Involving Routine Accounts) asked if, in the last seven years, he had bills or debts turned over to a collection agency; been over 120 days delinquent on any debt not previously entered, and if he was currently over 120 days delinquent on any debt. Applicant answered “no” to those questions. He certified that the response was “true, complete, and correct” to the best of his knowledge and belief, but the response to those questions was, in fact, false for at that time Applicant had several accounts that were either placed for collection or were over 120 days delinquent. He subsequently explained that when he completed the e-QIP a final determination had not yet been made by the divorce court as to which accounts he would be responsible. He denied intending to falsify his response, but conceded that upon reflection, he probably should have furnished a more thorough explanation.	For Applicant	Lack of Candor in InterviewNOT DELIBERATE	—	Admitted	—	—	Claimed Other

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

2.a

On February 1, 2013, when Applicant completed his e-QIP, he responded to questions pertaining to his financial record. One question in Section 26 – Financial Record – Taxes asked if, in the past seven years, he had failed to file or pay federal, state, or other taxes when required by law or ordinance. Applicant answered “no” to the question. He certified that the response was “true, complete, and correct” to the best of his knowledge and belief, but the response to that question was, in fact, false for Applicant’s 2011 federal income tax return was not filed until 2013. He subsequently explained that he only learned of his ex-wife’s failure to timely file the tax return when the tax preparation service submitted documentation for his signature for both tax years 2011 and 2012, and that information was not known to him when he completed the e-QIP. In complying with the divorce court mandate, Applicant had provided his ex-wife all the documentation, such as W2s and 1099s, so she could have the forms completed and filed by a specific tax preparation service. He essentially complied with his obligations, but she had failed to complete her own obligations. While the late filing was technically his responsibility as well, his response to the inquiry in the absence of knowledge of her failure, did not constitute a knowing falsification by him.

For Applicant

Lack of Candor in InterviewNOT DELIBERATE

—

Admitted

—

Claimed

Other

2.b

Another question in Section 26 – Financial Record (Delinquency Involving Routine Accounts) asked if, in the last seven years, he had bills or debts turned over to a collection agency; been over 120 days delinquent on any debt not previously entered, and if he was currently over 120 days delinquent on any debt. Applicant answered “no” to those questions. He certified that the response was “true, complete, and correct” to the best of his knowledge and belief, but the response to those questions was, in fact, false for at that time Applicant had several accounts that were either placed for collection or were over 120 days delinquent. He subsequently explained that when he completed the e-QIP a final determination had not yet been made by the divorce court as to which accounts he would be responsible. He denied intending to falsify his response, but conceded that upon reflection, he probably should have furnished a more thorough explanation.

For Applicant

Lack of Candor in InterviewNOT DELIBERATE

—

Admitted

—

Claimed

Other

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	There is a bank line of credit with a credit limit of $10,300 and a remaining balance of $9,792 that was 180 days or more past due. The account was included in his bankruptcy petition as an unscheduled nonpriority claim, and the first disbursement in the amount of $1,757.23 was made on November 25, 2014. The account is in the process of being resolved. $9,792	For Applicant	Credit Card Debt	Admitted	—	—	—
1.b	There is a credit card that Applicant had with his 21-year-old son (as an authorized user) with a credit limit of $12,000 and a remaining balance of $1,794 that was placed for collection and eventually charged off. The account was included in his bankruptcy petition as an unscheduled nonpriority claim, and the first disbursement in the amount of $2,021.38 was made on November 25, 2014. The account is in the process of being resolved. $1,794	For Applicant	Credit Card Debt	Admitted	—	—	—
1.c	There is a credit card with a credit limit of $8,700 and a remaining balance of $7,375 that was $583 past due for over 60 days when it was placed for collection. The account was included in his bankruptcy petition as an unscheduled nonpriority claim, and the first disbursement in the amount of $835.50 was made on November 25, 2014. The account is in the process of being resolved. $7,375	For Applicant	Credit Card Debt	Admitted	—	—	—
1.d	There is a credit card with a credit limit of $9,500 and a remaining balance of $10,079 that was $772 past due for over 60 days when it was placed for collection. The account was included in his bankruptcy petition as an unscheduled nonpriority claim, and the first disbursement in the amount of $1,819.82 was made on November 25, 2014. The account is in the process of being resolved. $10,079	For Applicant	Credit Card Debt	Admitted	—	—	—
1.e	There is a credit card with a credit limit of $12,854 that was $1,566 past due for over 150 days when it was placed for collection and eventually charged off. The account was included in his bankruptcy petition as an unscheduled nonpriority claim, but because the creditor failed to timely submit a required Proof of Claim, the delinquency was discharged. The account has been resolved. $12,854	For Applicant	Credit Card Debt	Admitted	—	—	—
1.f	Applicant’s 2011 federal income tax return was not filed until 2013. There is no evidence of any continuing penalty because of the late 2011 filing, and the matter appears to have been resolved.	For Applicant	Tax Filing Failure	Admitted	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

There is a bank line of credit with a credit limit of $10,300 and a remaining balance of $9,792 that was 180 days or more past due. The account was included in his bankruptcy petition as an unscheduled nonpriority claim, and the first disbursement in the amount of $1,757.23 was made on November 25, 2014. The account is in the process of being resolved.

$9,792

For Applicant

Credit Card Debt

Admitted

—

1.b

There is a credit card that Applicant had with his 21-year-old son (as an authorized user) with a credit limit of $12,000 and a remaining balance of $1,794 that was placed for collection and eventually charged off. The account was included in his bankruptcy petition as an unscheduled nonpriority claim, and the first disbursement in the amount of $2,021.38 was made on November 25, 2014. The account is in the process of being resolved.

$1,794

For Applicant

Credit Card Debt

Admitted

—

1.c

There is a credit card with a credit limit of $8,700 and a remaining balance of $7,375 that was $583 past due for over 60 days when it was placed for collection. The account was included in his bankruptcy petition as an unscheduled nonpriority claim, and the first disbursement in the amount of $835.50 was made on November 25, 2014. The account is in the process of being resolved.

$7,375

For Applicant

Credit Card Debt

Admitted

—

1.d

There is a credit card with a credit limit of $9,500 and a remaining balance of $10,079 that was $772 past due for over 60 days when it was placed for collection. The account was included in his bankruptcy petition as an unscheduled nonpriority claim, and the first disbursement in the amount of $1,819.82 was made on November 25, 2014. The account is in the process of being resolved.

$10,079

For Applicant

Credit Card Debt

Admitted

—

1.e

There is a credit card with a credit limit of $12,854 that was $1,566 past due for over 150 days when it was placed for collection and eventually charged off. The account was included in his bankruptcy petition as an unscheduled nonpriority claim, but because the creditor failed to timely submit a required Proof of Claim, the delinquency was discharged. The account has been resolved.

$12,854

For Applicant

Credit Card Debt

Admitted

—

1.f

Applicant’s 2011 federal income tax return was not filed until 2013. There is no evidence of any continuing penalty because of the late 2011 filing, and the matter appears to have been resolved.

For Applicant

Tax Filing Failure

Admitted

—

Loading case…

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

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION

FOOTNOTES