ISCR Case 02-15662.h1

Case Headnote

ISCR Case No. 02-15662.h1

deniedMar 31, 2005· Hon. Roger E. Willmeth· hearing

Summary

A 38-year-old production planning specialist employed by a defense contractor was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The denial stemmed from unresolved delinquent debts totaling $2,511.00 and the applicant's failure to disclose a significant debt on his security clearance application.

Specifically, the applicant had several outstanding debts, including a $236.00 healthcare bill from 1999, a $1,782.00 credit card balance from 1997, a $213.00 credit account balance from 2001, a $302.00 credit account balance from 2002, and a $214.00 credit account balance from 2002, all of which were transferred to debt collectors and remained unresolved in the record. While a $96.00 county court obligation was satisfied and a $1,681.00 credit card debt was settled for $986.62, the judge found that the applicant failed to mitigate four of the seven delinquent debts.

Furthermore, the applicant answered "no" to question 38 on his security clearance application and did not disclose the delinquent debts, including the largest outstanding debt of $1,782.00. A personal financial statement provided by the applicant showed a monthly balance of $24.00 after expenses, with no allowance to pay any of the delinquent debts listed in the Statement of Reasons. The judge concluded that the applicant did not provide sufficient evidence to mitigate the financial concerns, leading to the denial of his clearance.

Why the Applicant Was Denied

Applicant failed to mitigate four of the seven delinquent debts addressed by the SOR.
The applicant's personal financial statement showed no allowance to pay any of the delinquent debts.
The applicant did not disclose the largest debt of $1,782.00 on his security clearance application.

Conditions Referenced

Disqualifying

E2.A5.1.2.2appliedDeliberate Omission, Concealment, or Falsification of Relevant and Material Facts
E2.A6.1.2.1appliedHistory of Not Meeting Financial Obligations
E2.A6.1.2.3appliedInability or Unwillingness to Satisfy Debts

Mitigating

E2.A6.1.3.3rejectedConditions That Resulted in the Behavior Were Largely Beyond the Person's ControlThe applicant's brief period of unemployment was insufficient to explain the extent of unresolved debts.
E2.A6.1.3.6appliedIndividual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsThe applicant settled one debt but failed to address others.

Key Rule Quoted

“"No one has a 'right' to a security clearance."”
— Department of the Navy v. Egan, 484 U.S. 518, 528 (1988)

Procedural Posture

SOR issuedAug 25, 2003
Answer filedOct 24, 2003
Hearing heldApr 30, 2004
Decision dateMar 31, 2005

Cite For

Failure to Disclose Significant Debts on Security Clearance Applications Under Guideline E
Financial Irresponsibility as a Disqualifying Condition Under Guideline F
Insufficient Mitigation of Delinquent Debts Affecting 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	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	In response to question 38, he answered, "no" (SOR ¶ 2.a).	For Applicant	Omission or Failure to DiscloseNOT DELIBERATE	—	Denied	—	—	—
2.b	He failed to disclose his delinquent debts addressed by SOR ¶ 1.a and 1.d (SOR ¶ 2.b).	Against Applicant	Omission or Failure to DiscloseFOUND DELIBERATE	—	Denied	(b) deliberately providing false information to an investigator or official	—	—

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

2.a

In response to question 38, he answered, "no" (SOR ¶ 2.a).

For Applicant

Omission or Failure to DiscloseNOT DELIBERATE

—

Denied

—

2.b

He failed to disclose his delinquent debts addressed by SOR ¶ 1.a and 1.d (SOR ¶ 2.b).

Against Applicant

Omission or Failure to DiscloseFOUND DELIBERATE

—

Denied

(b) deliberately providing false information to an investigator or official

—

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	In September 1999, Applicant incurred a $236.00 bill from a healthcare provider that he did not pay. In April 2000, the healthcare provider transferred it to a debt collector. $236	For Applicant	Medical Debt	Unknown	—	—	—
1.b	In November 2001, Applicant incurred a $96.00 obligation to a county court that he did not pay. In January 2002, the county court transferred it to a debt collector. There is evidence of record to indicate the obligation was satisfied. $96	For Applicant	Unspecified Financial	Unknown	—	—	—
1.c	In September 2000, Applicant opened a credit card account with a bank. By August 2001 he had incurred a $1,681.00 balance that he did not pay and that the bank charged off as a bad debt and transferred to a debt collector. On April 23, 2003, Applicant paid $986.62 to settle the debt. $1,681	For Applicant	Credit Card Debt	Unknown	—	—	—
1.d	In February 1997, Applicant opened a credit card account with a bank. By January 1999 he had incurred a $1,782.00 balance that he did not pay and that the bank charged off as a bad debt and transferred to a debt collector. There is nothing in the record to establish that the debt was paid or otherwise settled or explain the reason it has been deleted from Applicant's credit report. $1,782	Against Applicant	Credit Card Debt	Unknown	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.e	In August 2001, Applicant opened a credit account. He had incurred a $213.00 balance that he did not pay and that the creditor transferred to a debt collector. There is nothing in the record to establish that the debt was paid or otherwise settled or explain the reason it has been deleted from Applicant's credit report. $213	Against Applicant	Unspecified Financial	Unknown	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.f	In October 2002, Applicant opened a credit account and incurred a $302.00 balance. He did not pay the obligation and the creditor transferred to a debt collector. There is no evidence of record that the delinquent debt has been paid or otherwise settled. $302	Against Applicant	Unspecified Financial	Unknown	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.g	In December 2002, Applicant opened a credit account and incurred a $214.00 balance. He did not pay the obligation and the creditor transferred it to a debt collector. There is no evidence of record that the delinquent debt has been paid or otherwise settled. $214	Against Applicant	Unspecified Financial	Unknown	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.h	On May 13, 2004, Applicant provided a personal financial statement that reflects a monthly balance of $24.00 after deducting expenses of $1,875.00 and debts of $1,745.00 from his net salary of $3,644.00. None of the debts are those addressed by the SOR.	Against Applicant	Unspecified Financial	Unknown	(b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

In September 1999, Applicant incurred a $236.00 bill from a healthcare provider that he did not pay. In April 2000, the healthcare provider transferred it to a debt collector.

$236

For Applicant

Medical Debt

Unknown

—

1.b

In November 2001, Applicant incurred a $96.00 obligation to a county court that he did not pay. In January 2002, the county court transferred it to a debt collector. There is evidence of record to indicate the obligation was satisfied.

$96

For Applicant

Unspecified Financial

Unknown

—

1.c

In September 2000, Applicant opened a credit card account with a bank. By August 2001 he had incurred a $1,681.00 balance that he did not pay and that the bank charged off as a bad debt and transferred to a debt collector. On April 23, 2003, Applicant paid $986.62 to settle the debt.

$1,681

For Applicant

Credit Card Debt

Unknown

—

1.d

In February 1997, Applicant opened a credit card account with a bank. By January 1999 he had incurred a $1,782.00 balance that he did not pay and that the bank charged off as a bad debt and transferred to a debt collector. There is nothing in the record to establish that the debt was paid or otherwise settled or explain the reason it has been deleted from Applicant's credit report.

$1,782

Against Applicant

Credit Card Debt

Unknown

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

1.e

In August 2001, Applicant opened a credit account. He had incurred a $213.00 balance that he did not pay and that the creditor transferred to a debt collector. There is nothing in the record to establish that the debt was paid or otherwise settled or explain the reason it has been deleted from Applicant's credit report.

$213

Against Applicant

Unspecified Financial

Unknown

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

1.f

In October 2002, Applicant opened a credit account and incurred a $302.00 balance. He did not pay the obligation and the creditor transferred to a debt collector. There is no evidence of record that the delinquent debt has been paid or otherwise settled.

$302

Against Applicant

Unspecified Financial

Unknown

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

1.g

In December 2002, Applicant opened a credit account and incurred a $214.00 balance. He did not pay the obligation and the creditor transferred it to a debt collector. There is no evidence of record that the delinquent debt has been paid or otherwise settled.

$214

Against Applicant

Unspecified Financial

Unknown

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

1.h

On May 13, 2004, Applicant provided a personal financial statement that reflects a monthly balance of $24.00 after deducting expenses of $1,875.00 and debts of $1,745.00 from his net salary of $3,644.00. None of the debts are those addressed by the SOR.

Against Applicant

Unspecified Financial

Unknown

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

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Summary

Why the Applicant Was Denied

Conditions Referenced

Key Rule Quoted

Procedural Posture

Cite For

Full decision