Summary
A 54-year-old defense contractor employee was granted a security clearance despite allegations under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The Statement of Reasons alleged that the applicant engaged in deceptive financial practices by misrepresenting the condition and cost of a coordinate measuring machine purchased for a former employer. Specifically, it was claimed the applicant stated the machine cost $24,000 and was in good working condition, when it actually cost $10,000 and was non-functional. The applicant was subsequently terminated and did not repay the $14,000 difference.
However, the judge determined that the applicant's business transaction was an arms-length transaction, not a deceptive practice. This finding was supported by the fact that two grand juries found no probable cause to indict the applicant for theft or deception.
Ultimately, the judge concluded that the applicant's actions were consistent with ethical business practices and did not violate any known codes of conduct. Based on these findings, the security clearance was granted.
Why the Applicant Prevailed
- The applicant's business transaction was deemed an arms-length transaction, not a deceptive practice.
- Two grand juries found no probable cause to indict the applicant for theft or deception.
- The applicant's actions were consistent with ethical business practices and did not violate any known codes of conduct.
Conditions Referenced
- E2.A5.1.2.1rejectedReliable, Unfavorable Information Provided by Associates, Employers, Coworkers, Neighbors, and Other Acquaintances
- E2.A5.1.2.3rejectedA Pattern of Dishonesty or Rule Violations
- E2.A6.1.2.2rejectedDeceptive or Illegal Financial Practices Such as Embezzlement, Employee Theft, Check Fraud, Income Tax Evasion, Expense Account Fraud, Filing Deceptive Loan Statements, and Other Intentional Breaches of Trust
- E2.A5.1.3.1appliedThe Information Was Unsubstantiated or Not Pertinent to a Determination of Judgment, Trustworthiness, or Reliability
- E2.A6.1.3.1appliedThe Behavior Was Not Recent
- E2.A6.1.3.2appliedIt Was an Isolated Incident
Key Rule Quoted
“"A person who seeks access to classified information enters into a fiduciary relationship with the government predicated upon trust and confidence."”
Procedural Posture
- SOR issuedAug 16, 2002
- Answer filedSep 9, 2002
- Hearing heldFeb 7, 2003
- Decision dateApr 7, 2003
Cite For
- Arms-length Business Transactions Under Guideline E
- Mitigating Conditions for Financial Considerations Under Guideline F
- Credibility of Applicant's Testimony in Financial Disputes