ISCR Case 01-09423.h1

Case Headnote

ISCR Case No. 01-09423.h1

deniedApr 24, 2002· Hon. Claude R. Heiny II· hearing

Summary

A 54-year-old federal contractor was denied a security clearance due to concerns under Guideline F (Financial Considerations) and Guideline J (Criminal Conduct). The denial stemmed from a history of welfare fraud and approximately $9,500 in outstanding debts.

Specific financial allegations included an outstanding vehicle loan of about $4,744, a renegotiated consolidation loan with approximately $2,000 still owed, and a $103 shoe store debt sold to collections. The applicant also had a department store debt that resulted in an $1,854 judgment in April 1999, which was subsequently paid in full. Other unpaid debts included a $349 telephone bill, a $107 doctor's bill disputed by the applicant, and approximately $2,198 in back rent from July 1999, which remains in default.

Despite some evidence of rehabilitation, the judge determined that the applicant's financial irresponsibility and criminal history, specifically the welfare fraud conviction, raised sufficient doubts about her judgment and trustworthiness. The applicant's failure to make a good faith effort to repay her substantial debts further contributed to the denial of her security clearance.

Why the Applicant Was Denied

The applicant was convicted of welfare fraud, which raised significant concerns about her judgment and trustworthiness.
The applicant has a substantial amount of unpaid debts and has not made a good faith effort to repay them.

Conditions Referenced

Disqualifying

J1.araisedAllegations or Admission of Criminal Conduct, Regardless of Whether the Person Was Formally Charged.
J1.braisedA Single Serious Crime or Multiple Lesser Offenses.
J1.craisedConviction in a Federal or State Court, Including a Court-martial of a Crime and Sentenced to Imprisonment for a Term Exceeding One Year.
F1raisedA History of Not Meeting Financial Obligations.
F3raisedInability or Unwillingness to Satisfy Debts.

Mitigating

J2.aappliedThe Criminal Behavior Was Not Recent.
F6rejectedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts.The applicant has not made a good faith effort to repay her debts.

Key Rule Quoted

“"the clearly consistent standard indicates that security clearance determinations should err, if they must, on the side of denials."”
— Department of Navy v. Egan, 484 U.S. 518, 531 (1988)

Procedural Posture

SOR issuedOct 22, 2001
Answer filedDec 1, 2001
Hearing heldMar 18, 2002
Decision dateApr 24, 2002

Cite For

Denial of Clearance Due to Criminal Conduct Under Guideline J
Financial Irresponsibility as a Basis for Clearance Denial Under Guideline F
Impact of Unpaid Debts on Security Clearance Eligibility

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
2.a	In December 1993, the Applicant signed a contract so her son could purchase a vehicle. Approximately $4,744.00 is yet owing on the loan. $4,744	Against Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
2.b	The Applicant had a consolidation loan, which was renegotiated a number of times. Approximately $2,000.00 is owed on this loan. $2,000	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
2.c	In 1996, the Applicant incurred a $103.00 shoe store debt. The debt was sold to a collection agency. $103	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
2.d	The Applicant incurred a department store debt, which resulted in a $1,854.00 judgment against the Applicant in April 1999. In July 1999, the Applicant paid $1,234.81 on this judgement by cashier's check. The Applicant has paid the judgment in full. $1,854	For Applicant	Judgment Against Applicant	Admitted	—	(g) arrangements made with the tax authority; in compliance	Documented Debt Paid in Full
2.e	The Applicant incurred a telephone bill of $349.00, on which she last made payment in July 1999. $349	Against Applicant	Utility or Phone Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
2.f	The Applicant owes a doctor approximately $107.00. The Applicant believes this should have been covered by insurance. The debt has not been paid. $107	Against Applicant	Medical Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
2.g	When she moved from an apartment, she owed approximately $2,198.00 for two months back rent. This debt has been owing since July 1999 and is in default. $2,198	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

2.a

In December 1993, the Applicant signed a contract so her son could purchase a vehicle. Approximately $4,744.00 is yet owing on the loan.

$4,744

Against Applicant

Auto Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

2.b

The Applicant had a consolidation loan, which was renegotiated a number of times. Approximately $2,000.00 is owed on this loan.

$2,000

Against Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

2.c

In 1996, the Applicant incurred a $103.00 shoe store debt. The debt was sold to a collection agency.

$103

Against Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

2.d

The Applicant incurred a department store debt, which resulted in a $1,854.00 judgment against the Applicant in April 1999. In July 1999, the Applicant paid $1,234.81 on this judgement by cashier's check. The Applicant has paid the judgment in full.

$1,854

For Applicant

Judgment Against Applicant

Admitted

—

(g) arrangements made with the tax authority; in compliance

Documented

Debt Paid in Full

2.e

The Applicant incurred a telephone bill of $349.00, on which she last made payment in July 1999.

$349

Against Applicant

Utility or Phone Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

2.f

The Applicant owes a doctor approximately $107.00. The Applicant believes this should have been covered by insurance. The debt has not been paid.

$107

Against Applicant

Medical Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

2.g

When she moved from an apartment, she owed approximately $2,198.00 for two months back rent. This debt has been owing since July 1999 and is in default.

$2,198

Against Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

¶	Allegation	Finding	Offense	Criminal disposition	Response	Disqualifying (¶31)	Mitigating applied (¶32)	Mitigation
1.a	For the Applicant	For Applicant	Fraud or Deception Criminal	Convicted	Admitted	(a) pattern of minor offenses casting doubt on judgment/reliability (b) evidence of criminal conduct, regardless of charge or conviction (c) currently on parole or probation	(a) so much time has passed, or unusual circumstances, that it is unlikely to recur	Credited Passage of Time
1.b	Against the Applicant	Against Applicant	Fraud or Deception Criminal	Convicted	Admitted	(a) pattern of minor offenses casting doubt on judgment/reliability (b) evidence of criminal conduct, regardless of charge or conviction (c) currently on parole or probation	—	—

Allegation

Finding

Offense

Criminal disposition

Response

Disqualifying (¶31)

Mitigating applied (¶32)

Mitigation

1.a

For the Applicant

For Applicant

Fraud or Deception Criminal

Convicted

Admitted

(a) pattern of minor offenses casting doubt on judgment/reliability

(b) evidence of criminal conduct, regardless of charge or conviction

(c) currently on parole or probation

(a) so much time has passed, or unusual circumstances, that it is unlikely to recur

Credited

Passage of Time

1.b

Against the Applicant

Against Applicant

Fraud or Deception Criminal

Convicted

Admitted

(a) pattern of minor offenses casting doubt on judgment/reliability

(b) evidence of criminal conduct, regardless of charge or conviction

(c) currently on parole or probation

—

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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