ISCR Case 14-06560.h1

Case Headnote

ISCR Case No. 14-06560.h1

grantedDec 30, 2015· Hon. Robert Robinson Gales· hearing

Summary

A 43-year-old former defense contractor and retired Master Sergeant was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The Statement of Reasons (SOR) primarily focused on financial difficulties stemming from the repossession of a mobile home.

Specifically, the applicant faced allegations regarding a mobile home mortgage loan with a balance of $21,066. He proposed a $3,000 lump-sum settlement, noting the expired statute of limitations, and withdrew $10,375.96 from his Thrift Savings Plan to facilitate resolution, though no response from the creditor had been received at the time of the decision. Other allegations included an automobile loan, which the applicant contended was paid off in 2005, and two cellular telephone accounts, which were confirmed to have been paid in full in 2007 and 2012, respectively, well before the SOR was issued.

The clearance was granted because the applicant's financial issues were largely attributed to circumstances beyond his control, such as the loss of mobile home tenants. He demonstrated responsible financial behavior by seeking counseling, developing a budget, and making good-faith efforts to resolve his remaining debts.

Why the Applicant Prevailed

The applicant's financial difficulties were largely due to circumstances beyond his control, specifically the loss of tenants for his mobile home.
He actively sought financial counseling and developed a budget to manage his finances.
The applicant made good-faith efforts to resolve overdue debts, including proposing a settlement for a delinquent account.

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 Long Ago or Infrequently
AG ¶ 20(b)appliedConditions Largely Beyond the Person's Control
AG ¶ 20(c)appliedReceived Counseling and Evidence of Resolution
AG ¶ 20(d)appliedGood-faith Effort to Repay Creditors

Key Rule Quoted

“A person who seeks access to classified information enters into a fiduciary relationship with the Government predicated upon trust and confidence.”
— Department of the Navy v. Egan, 484 U.S. 518, 528 (1988)

Procedural Posture

SOR issuedFeb 11, 2015
Answer filedFeb 27, 2015Applicant initially elected to decide on the written record but later requested a hearing.
Hearing heldAug 24, 2015
Decision dateDec 30, 2015

Cite For

Mitigating Conditions Under Guideline F for Financial Considerations
Impact of Circumstances Beyond Control on Financial Obligations
Good-faith Efforts to Resolve Debts 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	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	This is the mortgage loan for the mobile home discussed above. Upon learning of the SOR focus on this and other accounts, Applicant again contacted the creditor in an effort to establish a repayment plan. Although the current balance on the account was listed as $21,066, the creditor offered to settle it for one payment of $5,000, an amount that Applicant could not accumulate because of his unemployment status. Also required by the creditor was a “financial hardship letter” explaining Applicant’s current financial status. In September 2015, Applicant proposed a lump-sum settlement for $3,000, and noted that the statute of limitations had already expired. In anticipation of some sort of agreed settlement, Applicant withdrew $10,375.96 from his Thrift Savings Plan (TSP) to enable him to resolve this one remaining delinquent account. No response from the creditor has yet been received. Nevertheless, the account is in the process of being resolved. $21,066	For Applicant	Mortgage or Home Loan Debt	Unknown	—	—	—
1.b	This is an automobile loan with a high credit of $14,548 and remaining balance of $397 that was placed for collection, charged off, and sold to a debt purchaser. Applicant denied the allegation and contacted the creditor in an effort to resolve it. Applicant contends that he paid off the car loan in 2005 and received the title. He traded the vehicle to a used car dealer in 2007. The account does not appear in his August 2014 credit report or in his February 2015 credit report. Applicant called the creditor when he learned of the alleged delinquent status of the account, but the creditor had no recollection of any remaining unpaid balance. It appears that the account was resolved in 2005, ten years before the issuance of the SOR. $397	For Applicant	Auto Loan Debt	Denied	—	—	—
1.c	This is a cellular telephone account with a high credit and a remaining past-due balance of $265 that was placed for collection and charged off in January 2007. Applicant contended that the account was paid in full as of February 2, 2007. The account does not appear in his August 2014 credit report or in his February 2015 credit report. The creditor acknowledged that the account had been previously paid in full. It appears that the account was resolved in 2007, eight years before the issuance of the SOR. $265	For Applicant	Utility or Phone Debt	Admitted	—	—	—
1.d	This is a cellular telephone account with a high credit and a remaining past-due balance of $115 that was placed for collection and charged off in May 2011. The account was sold to a debt purchaser in August 2011. Applicant contended that the account was paid in full August 17, 2012, and Applicant’s August 2014 credit report confirms that the account was paid before October 2012. The debt purchaser and its attorney have confirmed that the debt has been paid. The account does not appear in his February 2015 credit report. It appears that the account was resolved in 2012, three years before the issuance of the SOR. $115	For Applicant	Utility or Phone Debt	Admitted	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

This is the mortgage loan for the mobile home discussed above. Upon learning of the SOR focus on this and other accounts, Applicant again contacted the creditor in an effort to establish a repayment plan. Although the current balance on the account was listed as $21,066, the creditor offered to settle it for one payment of $5,000, an amount that Applicant could not accumulate because of his unemployment status. Also required by the creditor was a “financial hardship letter” explaining Applicant’s current financial status. In September 2015, Applicant proposed a lump-sum settlement for $3,000, and noted that the statute of limitations had already expired. In anticipation of some sort of agreed settlement, Applicant withdrew $10,375.96 from his Thrift Savings Plan (TSP) to enable him to resolve this one remaining delinquent account. No response from the creditor has yet been received. Nevertheless, the account is in the process of being resolved.

$21,066

For Applicant

Mortgage or Home Loan Debt

Unknown

—

1.b

This is an automobile loan with a high credit of $14,548 and remaining balance of $397 that was placed for collection, charged off, and sold to a debt purchaser. Applicant denied the allegation and contacted the creditor in an effort to resolve it. Applicant contends that he paid off the car loan in 2005 and received the title. He traded the vehicle to a used car dealer in 2007. The account does not appear in his August 2014 credit report or in his February 2015 credit report. Applicant called the creditor when he learned of the alleged delinquent status of the account, but the creditor had no recollection of any remaining unpaid balance. It appears that the account was resolved in 2005, ten years before the issuance of the SOR.

$397

For Applicant

Auto Loan Debt

Denied

—

1.c

This is a cellular telephone account with a high credit and a remaining past-due balance of $265 that was placed for collection and charged off in January 2007. Applicant contended that the account was paid in full as of February 2, 2007. The account does not appear in his August 2014 credit report or in his February 2015 credit report. The creditor acknowledged that the account had been previously paid in full. It appears that the account was resolved in 2007, eight years before the issuance of the SOR.

$265

For Applicant

Utility or Phone Debt

Admitted

—

1.d

This is a cellular telephone account with a high credit and a remaining past-due balance of $115 that was placed for collection and charged off in May 2011. The account was sold to a debt purchaser in August 2011. Applicant contended that the account was paid in full August 17, 2012, and Applicant’s August 2014 credit report confirms that the account was paid before October 2012. The debt purchaser and its attorney have confirmed that the debt has been paid. The account does not appear in his February 2015 credit report. It appears that the account was resolved in 2012, three years before the issuance of the SOR.

$115

For Applicant

Utility or Phone Debt

Admitted

—

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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