ISCR Case 01-05107.h1

Case Headnote

ISCR Case No. 01-05107.h1

deniedMay 14, 2002· Hon. Kathryn Moen Braeman· hearing

Summary

A 61-year-old defense contractor employee was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The applicant faced multiple unresolved financial issues, including an approximately $8,000 debt for a totaled vehicle, a disputed $3,000 debt to Creditor #2, and a $9,000 corporate debt to Creditor #3, which he claimed was part of his personal bankruptcy. Other disputed debts included approximately $20,000 for a business cellular phone, $2,200 to Creditor #5, and a $26,900 state tax lien. He also acknowledged debts of approximately $13,000 from a civil judgment and $1,000 to an individual, plus $5,400 for legal work.

The judge found that the applicant failed to demonstrate sufficient efforts to resolve his financial issues, including the significant state tax liability. He did not seek financial counseling until after his wages were garnished, indicating a lack of proactive financial management. While an earthquake in 1994 was cited as a contributing factor to his financial problems, he did not take timely action to address his debts.

Furthermore, the applicant provided incomplete information on his security questionnaire, failing to disclose all relevant debts. This lack of candor, combined with his financial irresponsibility, led to the denial of his security clearance.

Why the Applicant Was Denied

The applicant failed to demonstrate sufficient efforts to resolve his financial issues, including a significant state tax liability of over $26,000.
He did not seek financial counseling until after his wages were garnished, indicating a lack of proactive financial management.
The applicant provided incomplete information on his security questionnaire, failing to disclose all relevant debts.

Conditions Referenced

Disqualifying

F.1raisedHistory of Not Meeting Financial Obligations
F.3raisedInability or Unwillingness to Satisfy Debts
E.2raisedDeliberate Omission, Concealment, or Falsification of Relevant and Material Facts
E.3raisedDeliberately Providing False or Misleading Information

Mitigating

F.3rejectedConditions Largely Beyond the Person's ControlThe applicant failed to document how the 1994 earthquake led to his financial problems.
E.7rejectedOmission of Material Facts Caused by Inadequate AdviceThe applicant did not argue that his omissions were due to inadequate advice.

Key Rule Quoted

“The responsibility for producing evidence initially falls on the Government to demonstrate that it is not clearly consistent with the national interest to grant or continue Applicant's access to classified information.”

Procedural Posture

SOR issuedNov 21, 2001
Answer filedJan 30, 2002Notarized response to SOR.
Hearing heldApr 8, 2002Hearing rescheduled from April 16, 2002.
Decision dateMay 14, 2002

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations Under Guideline F
Failure to Disclose Relevant Financial Information Under Guideline E
Lack of Proactive Measures to Address Financial Issues as a Security Concern

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	The deliberate omission, concealment, or falsification of relevant and material facts from any personnel security questionnaire, personal history statement, or similar form used to conduct investigations, determine employment qualifications, award benefits or status, determine security clearance eligibility or trustworthiness, or award fiduciary responsibilities;	Against Applicant	Omission or Failure to DiscloseFOUND DELIBERATE	Financial	Denied	—	—	—
2.b	Deliberately providing false or misleading information concerning relevant and material matters to an investigator, security official, competent medical authority, or other official representative in connection with a personnel security or trustworthiness determination;	Against Applicant	Lack of Candor in InterviewFOUND DELIBERATE	Financial	Denied	—	—	—
2.c	specific text not stated in this decision	Against Applicant	Unspecified Personal Conduct	—	Unknown	—	—	—

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

2.a

The deliberate omission, concealment, or falsification of relevant and material facts from any personnel security questionnaire, personal history statement, or similar form used to conduct investigations, determine employment qualifications, award benefits or status, determine security clearance eligibility or trustworthiness, or award fiduciary responsibilities;

Against Applicant

Omission or Failure to DiscloseFOUND DELIBERATE

Financial

Denied

—

2.b

Deliberately providing false or misleading information concerning relevant and material matters to an investigator, security official, competent medical authority, or other official representative in connection with a personnel security or trustworthiness determination;

Against Applicant

Lack of Candor in InterviewFOUND DELIBERATE

Financial

Denied

—

2.c

specific text not stated in this decision

Against Applicant

Unspecified Personal Conduct

—

Unknown

—

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	A debt of approximately $8,000 is due to Creditor #1 for the balance owing on a totaled vehicle after the insurance paid approximately $21,000. $8,000	Against Applicant	Auto Loan Debt	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.b	Applicant disputes a debt of approximately $3,000 to Creditor #2, a bad debt charged off in October 1992, as he never had a credit card from Creditor #2; it was removed from his credit report. $3,000	For Applicant	Unspecified Financial	Denied	—	—	—
1.c	Applicant claims the debt of approximately $9,000 to Creditor #3 for a bad debt charged off in 1987 was a corporate debt that is now included in his personal bankruptcy. $9,000	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts	—	—
1.d	Applicant disputes this debt of approximately $20,000 to Creditor #4 for a cellular phone for his business, Company #2, which was charged off in 1994. $20,000	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts	—	—
1.e	Applicant has no knowledge of a $2,200 debt to Creditor #5 for an account which he disputes. $2,200	For Applicant	Unspecified Financial	Denied	—	—	—
1.f	Applicant claimed to have no knowledge of this $26,900 debt to Creditor #6, for a personal state tax lien filed in State #2 in July 1999. $26,900	Against Applicant	Tax Unpaid	Denied	(a) inability to satisfy debts	—	—
1.g	Applicant acknowledged a debt of approximately $13,000 to Creditor #7, an individual, who filed a civil judgment against him in December 1997. $13,000	For Applicant	Judgment Against Applicant	Denied	(a) inability to satisfy debts	—	—
1.h	Applicant acknowledged a debt of approximately $1,000 to Creditor #8, an individual, who had lent him the money to help him make payroll one week. $1,000	Against Applicant	Judgment Against Applicant	Denied	(a) inability to satisfy debts	—	—
1.i	Applicant has a debt of approximately $5,400 owed to Creditor #9 for legal work done for Company #2. $5,400	Against Applicant	Judgment Against Applicant	Denied	(a) inability to satisfy debts	—	—
1.j	specific text not stated in this decision	Unknown	Unspecified Financial	Unknown	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

A debt of approximately $8,000 is due to Creditor #1 for the balance owing on a totaled vehicle after the insurance paid approximately $21,000.

$8,000

Against Applicant

Auto Loan Debt

Denied

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.b

Applicant disputes a debt of approximately $3,000 to Creditor #2, a bad debt charged off in October 1992, as he never had a credit card from Creditor #2; it was removed from his credit report.

$3,000

For Applicant

Unspecified Financial

Denied

—

1.c

Applicant claims the debt of approximately $9,000 to Creditor #3 for a bad debt charged off in 1987 was a corporate debt that is now included in his personal bankruptcy.

$9,000

Against Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

—

1.d

Applicant disputes this debt of approximately $20,000 to Creditor #4 for a cellular phone for his business, Company #2, which was charged off in 1994.

$20,000

Against Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

—

1.e

Applicant has no knowledge of a $2,200 debt to Creditor #5 for an account which he disputes.

$2,200

For Applicant

Unspecified Financial

Denied

—

1.f

Applicant claimed to have no knowledge of this $26,900 debt to Creditor #6, for a personal state tax lien filed in State #2 in July 1999.

$26,900

Against Applicant

Tax Unpaid

Denied

(a) inability to satisfy debts

—

1.g

Applicant acknowledged a debt of approximately $13,000 to Creditor #7, an individual, who filed a civil judgment against him in December 1997.

$13,000

For Applicant

Judgment Against Applicant

Denied

(a) inability to satisfy debts

—

1.h

Applicant acknowledged a debt of approximately $1,000 to Creditor #8, an individual, who had lent him the money to help him make payroll one week.

$1,000

Against Applicant

Judgment Against Applicant

Denied

(a) inability to satisfy debts

—

1.i

Applicant has a debt of approximately $5,400 owed to Creditor #9 for legal work done for Company #2.

$5,400

Against Applicant

Judgment Against Applicant

Denied

(a) inability to satisfy debts

—

1.j

specific text not stated in this decision

Unknown

Unspecified Financial

Unknown

—

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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

CONCLUSION

FORMAL FINDINGS

DECISION

FOOTNOTES