ISCR Case 14-04302.h1

Case Headnote

ISCR Case No. 14-04302.h1

grantedMar 17, 2016· Hon. Jennifer I. Goldstein· hearing

Summary

A 39-year-old owner of a defense contracting company was evaluated for security clearance, facing concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The Statement of Reasons cited two financial issues: a $36,542 past-due mortgage loan, with an outstanding balance of $309,546, which resulted in a February 2011 foreclosure, and a charged-off credit card debt of $18,909. Additionally, the applicant failed to disclose both the foreclosure and the delinquent credit card debt on his e-QIP.

The judge found that the applicant's financial difficulties stemmed primarily from a back injury that caused unemployment. All debts were subsequently resolved; the mortgage lender indicated the applicant was not personally liable for the remaining debt, and the credit card debt was settled with a final payment of $14,182.02 in September 2009. The applicant also completed financial counseling.

Crucially, the omissions on the e-QIP were determined to be unintentional, not indicative of a lack of candor or intent to deceive. Given that the debts were resolved, the financial issues were largely beyond his control, and the omissions were unintentional, the security clearance was GRANTED.

Why the Applicant Prevailed

The applicant's financial difficulties were largely due to circumstances beyond his control, specifically a back injury that led to unemployment.
All debts were resolved, and the applicant completed financial counseling.
The omissions on the e-QIP were unintentional and did not indicate a lack of candor or intent to deceive.

Conditions Referenced

Disqualifying

F.1.araisedInability or Unwillingness to Satisfy Debts
F.1.craisedA History of Not Meeting Financial Obligations
E.2.araisedDeliberate Omission, Concealment, or Falsification of Relevant Facts

Mitigating

F.2.aappliedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to Recur
F.2.bappliedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control
F.2.cappliedThe Person Has Received or Is Receiving Counseling for the Problem
F.2.dappliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts
E.2.aappliedThe Conduct Was Not Intentional and Did Not Indicate a Lack of Candor

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedOct 15, 2015
Answer filedNov 12, 2015
Hearing heldMar 2, 2016
Decision dateMar 17, 2016

Cite For

Mitigation of Financial Difficulties Under Guideline F Due to Circumstances Beyond Control
Unintentional Omissions on E-qip Not Indicative of Lack of Candor Under Guideline E
Successful Rehabilitation and Financial Counseling as Mitigating Factors

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 failed to disclose his foreclosure on his electronic Security Clearance Application (e-QIP).	For Applicant	Omission or Failure to DiscloseNOT DELIBERATE	Financial	Denied	—	(b) omission/refusal followed advice of counsel; later cooperated fully (c) offense is minor, long ago, infrequent, or unique circumstances	Claimed Explanation of Omission Credible
2.b	Applicant failed to disclose his credit card debt over 120 days delinquent on his electronic Security Clearance Application (e-QIP).	For Applicant	Omission or Failure to DiscloseNOT DELIBERATE	Financial	Denied	—	(b) omission/refusal followed advice of counsel; later cooperated fully (c) offense is minor, long ago, infrequent, or unique circumstances	Claimed Explanation of Omission Credible

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

2.a

Applicant failed to disclose his foreclosure on his electronic Security Clearance Application (e-QIP).

For Applicant

Omission or Failure to DiscloseNOT DELIBERATE

Financial

Denied

—

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

(c) offense is minor, long ago, infrequent, or unique circumstances

Claimed

Explanation of Omission Credible

2.b

Applicant failed to disclose his credit card debt over 120 days delinquent on his electronic Security Clearance Application (e-QIP).

For Applicant

Omission or Failure to DiscloseNOT DELIBERATE

Financial

Denied

—

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

(c) offense is minor, long ago, infrequent, or unique circumstances

Claimed

Explanation of Omission Credible

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant was $36,542 past due on a mortgage loan with an outstanding balance of $309,546. This mortgage was for the condominium Applicant resided in at the time of his injury. It was foreclosed upon by the lender in February 2011, after Applicant defaulted on his payments. Applicant received an IRS Form 1099-A for this transaction, which indicated the fair market value of the property was $283,100. It also indicated that Applicant was not personally liable for the repayment of his remaining mortgage debt. This debt is resolved. $36,542	For Applicant	Mortgage or Home Loan Debt	Denied	—	(a) behavior happened long ago / infrequent / unlikely to recur (b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full Documented Financial Counseling Documented Other
1.b	Applicant was indebted on a charged-off credit card in the amount of $18,909. Applicant testified that this was the credit card he used to survive while recovering from his injury. He set up a payment agreement with this creditor prior to receiving the SOR. His final payment on this debt, in the amount of $14,182.02, was made in September 2009. He received a letter from this creditor showing he had completed the terms of the settlement agreement on this debt. It is resolved. $18,909	For Applicant	Credit Card Debt	Denied	—	(a) behavior happened long ago / infrequent / unlikely to recur (b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full Documented Financial Counseling Documented Other

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant was $36,542 past due on a mortgage loan with an outstanding balance of $309,546. This mortgage was for the condominium Applicant resided in at the time of his injury. It was foreclosed upon by the lender in February 2011, after Applicant defaulted on his payments. Applicant received an IRS Form 1099-A for this transaction, which indicated the fair market value of the property was $283,100. It also indicated that Applicant was not personally liable for the repayment of his remaining mortgage debt. This debt is resolved.

$36,542

For Applicant

Mortgage or Home Loan Debt

Denied

—

(a) behavior happened long ago / infrequent / unlikely to recur

(b) conditions largely beyond the person’s control; acted responsibly

(c) received/receiving counseling; problem being resolved

(d) good-faith effort to repay or otherwise resolve debts

Documented

Debt Paid in Full

Documented

Financial Counseling

Documented

Other

1.b

Applicant was indebted on a charged-off credit card in the amount of $18,909. Applicant testified that this was the credit card he used to survive while recovering from his injury. He set up a payment agreement with this creditor prior to receiving the SOR. His final payment on this debt, in the amount of $14,182.02, was made in September 2009. He received a letter from this creditor showing he had completed the terms of the settlement agreement on this debt. It is resolved.

$18,909

For Applicant

Credit Card Debt

Denied

—

(a) behavior happened long ago / infrequent / unlikely to recur

(b) conditions largely beyond the person’s control; acted responsibly

(c) received/receiving counseling; problem being resolved

(d) good-faith effort to repay or otherwise resolve debts

Documented

Debt Paid in Full

Documented

Financial Counseling

Documented

Other

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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

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION

FOOTNOTES