ISCR Case 03-02850.h1

Case Headnote

ISCR Case No. 03-02850.h1

deniedMay 12, 2005· Hon. Thomas M. Crean· hearing

Summary

A 45-year-old logistics specialist for 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 a history of delinquent debts and the applicant's failure to disclose a car repossession on her security clearance application.

The applicant's financial history included numerous debts dating back to 1994, with many being medical bills or related to returned checks for insufficient funds. Several debts were placed in collection, and while many were paid in full by August 2004, some remained unresolved. Notably, a car repossessed in May 1996 still had an outstanding balance, which the applicant intended to let lapse. Another car repossession from May 1999 resulted in a judgment against the applicant and her husband in December 2002, with no current agreement to pay the remaining debt. The applicant also disputed two insurance company debts from 1997 and a medical bill from 2002 that was ultimately paid by her health insurance.

The judge determined that the applicant exhibited a pattern of financial irresponsibility and did not make a good-faith effort to resolve her financial obligations until confronted with the security clearance process. Furthermore, the deliberate omission of a car repossession on her application demonstrated a lack of candor, leading to the denial of her security clearance.

Why the Applicant Was Denied

The applicant had a long history of delinquent debts dating back to 1994, indicating a pattern of financial irresponsibility.
The applicant failed to disclose a car repossession on her security clearance application, demonstrating a lack of candor.
The applicant did not initiate a good-faith effort to pay past due creditors until confronted with the security clearance process.

Conditions Referenced

Disqualifying

E2.A6.1.2.2raisedA History of Not Meeting Financial Obligations
E2.A6.1.2.3raisedInability or Unwillingness to Satisfy Debts
E2.A5.1.2.2raisedThe Deliberate Omission, Concealment, or Falsification of Relevant and Material Facts

Key Rule Quoted

“"The adjudicative process is an examination of a sufficient period of a person's life to make an affirmative determination that the person is eligible for a security clearance."”
— Department of the Navy v. Egan, 484 U.S. 518 (1988)

Procedural Posture

SOR issuedAug 19, 2004
Answer filedSep 13, 2004
Hearing heldApr 25, 2005
Decision dateMay 12, 2005

Cite For

Lack of Good-faith Effort to Resolve Financial Obligations Under Guideline F
Deliberate Omission of Relevant Facts Under Guideline E
Long-term Financial Irresponsibility as a Disqualifying Factor

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	Applicant deliberately did not include a car repossession on her security clearance application.	Against Applicant	Omission or Failure to DiscloseFOUND DELIBERATE	Other	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

Applicant deliberately did not include a car repossession on her security clearance application.

Against Applicant

Omission or Failure to DiscloseFOUND DELIBERATE

Other

Denied

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

—

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Debt 1.a. in the SOR is a debt placed in collection in August 1994 paid in full in June 1995.	For Applicant	Unspecified Financial	Admitted	—	—	—
1.b	Debt 1.b. in the SOR is a medical bill placed in collection in 1994 paid in full in August 2004.	Against Applicant	Medical Debt	Admitted	—	—	—
1.c	Debt 1.c. in the SOR is a medical bill incurred in 1995 Applicant was unaware of until August 2004 when she received the SOR. Applicant paid the debt in full in August 2004.	Against Applicant	Medical Debt	Admitted	—	—	—
1.d	Debts 1.d. and 1.f. in the SOR are duplicates for a check returned in 1995 for insufficient funds.	Against Applicant	Unspecified Financial	Unknown	—	—	—
1.e	Debt 1.e. in the SOR is a telephone bill from 1996 Applicant paid in full in August 2004.	Against Applicant	Utility or Phone Debt	Admitted	—	—	—
1.f	Debt 1.f. in the SOR is a duplicate for a check returned in 1995 for insufficient funds.	For Applicant	Unspecified Financial	Unknown	—	—	—
1.g	Debt 1.g. is for another check returned in 1996 for insufficient funds. Applicant paid the checks and a fine for fraudulent check after being charged by local authorities.	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.h	Debt 1.h. in the SOR is a medical bill incurred in May 1996. Applicant contacted the creditor but they could not provide information to pay the debt.	For Applicant	Medical Debt	Unknown	—	—	—
1.i	Debt 1.i. in the SOR is a medical bill incurred in 1996 paid in full in August 2004.	Against Applicant	Medical Debt	Admitted	—	—	—
1.j	Debt 1.j. in the SOR is the remaining debt for a car repossessed in May 1996. Applicant discussed the debt in August 2004 with the creditor who wanted a lump sum payment to settle the debt. Applicant did not talk to the creditor prior to August 2004. Since Applicant could not make the lump sum payment, she has not paid the debt and will let it lapse so it will be removed from her credit report.	Against Applicant	Auto Loan Debt	Unknown	—	—	—
1.k	Debt 1.k. in the SOR is an account placed in collection in 1997 paid in full in August 2004.	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.l	Debt 1.l. is a medical bill incurred in 1997 paid in full in August 2004.	Against Applicant	Medical Debt	Admitted	—	—	—
1.m	Debts 1.m. and 1.n. in the SOR are from an insurance company placed in collection in 1997. Applicant never had insurance with the company and disputes the debts. Applicant did not know the debts existed until receiving the SOR in August 2004. She last spoke to the collection agency in August 2004 to obtain further information on the debt.	For Applicant	Unspecified Financial	Unknown	—	—	—
1.n	Debt 1.n. in the SOR is the other debt from the insurance company placed in collection in 1997. Applicant disputes the debts.	For Applicant	Unspecified Financial	Unknown	—	—	—
1.o	Debt 1.o. in the SOR is a medical bill incurred in January 1998 paid in full in August 2004.	Against Applicant	Medical Debt	Admitted	—	—	—
1.p	Debt 1.p. in the SOR is a medical bill incurred in October 1998 paid in full in April 2003.	Against Applicant	Medical Debt	Admitted	—	—	—
1.q	Debt 1.q. in the SOR is a medical bill incurred in March 1999 paid in full in August 2004.	Against Applicant	Medical Debt	Admitted	—	—	—
1.r	Debt 1.r. in the SOR is the remainder of a debt from a car repossession in May 1999 that has not been satisfied. Applicant and her husband cosigned on the car loan and the creditor obtained a judgment against them in December 2002. Applicant stated she did not know the debt belonged to her since it was for a vehicle only her husband drove. Applicant and her husband contacted the creditor in August 2004 to determine a process for paying off the debt. There is no agreement with the creditor to pay off the debt.	Against Applicant	Auto Loan Debt	Unknown	—	—	—
1.s	Debt 1.s. is a medical bill incurred in January 2000 paid in full in August 2002.	Against Applicant	Medical Debt	Admitted	—	—	—
1.t	Debt 1.t. in the SOR is a medical bill incurred in January 2000 paid in full in August 2004.	Against Applicant	Medical Debt	Admitted	—	—	—
1.u	Debt 1.u. in the SOR is a medical bill placed in collection in January 2000 paid in full in April 2003.	Against Applicant	Medical Debt	Admitted	—	—	—
1.v	Debt 1.v. in the SOR is a medical bill placed in collection in March 2000 paid in full in August 2004.	Against Applicant	Medical Debt	Admitted	—	—	—
1.w	Debt 1.w. in the SOR is a medical bill incurred in August 2000, the creditor agreed to settle for a lesser amount, paid in full in September 2004.	Against Applicant	Medical Debt	Admitted	—	—	—
1.x	Debt 1.x. in the SOR is a medical bill incurred in July 2001 paid in full in August 2004.	Against Applicant	Medical Debt	Admitted	—	—	—
1.y	Debt 1.y. in the SOR is a medical bill incurred in May 2002 paid in full in August 2004.	Against Applicant	Medical Debt	Admitted	—	—	—
1.z	Debt 1.z. in the SOR is a medical bill incurred in May 2002 paid in full in August 2004.	Against Applicant	Medical Debt	Admitted	—	—	—
1.aa	Debt 1.aa. in the SOR is a medical bill placed in collection in October 2002. The health care provider submitted the bill to the wrong insurance company. When it was not paid, the health care provider submitted the bill for collection. The bill was resubmitted to the correct insurance company and subsequently paid. Applicant disputes this debt since it was paid by the health insurance company.	For Applicant	Unspecified Financial	Unknown	—	—	—
1.bb	Debt 1.bb. in the SOR is a utility bill placed in collection in October 2003 paid in full in August 2004.	Against Applicant	Utility or Phone Debt	Admitted	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Debt 1.a. in the SOR is a debt placed in collection in August 1994 paid in full in June 1995.

For Applicant

Unspecified Financial

Admitted

—

1.b

Debt 1.b. in the SOR is a medical bill placed in collection in 1994 paid in full in August 2004.

Against Applicant

Medical Debt

Admitted

—

1.c

Debt 1.c. in the SOR is a medical bill incurred in 1995 Applicant was unaware of until August 2004 when she received the SOR. Applicant paid the debt in full in August 2004.

Against Applicant

Medical Debt

Admitted

—

1.d

Debts 1.d. and 1.f. in the SOR are duplicates for a check returned in 1995 for insufficient funds.

Against Applicant

Unspecified Financial

Unknown

—

1.e

Debt 1.e. in the SOR is a telephone bill from 1996 Applicant paid in full in August 2004.

Against Applicant

Utility or Phone Debt

Admitted

—

1.f

Debt 1.f. in the SOR is a duplicate for a check returned in 1995 for insufficient funds.

For Applicant

Unspecified Financial

Unknown

—

1.g

Debt 1.g. is for another check returned in 1996 for insufficient funds. Applicant paid the checks and a fine for fraudulent check after being charged by local authorities.

Against Applicant

Unspecified Financial

Admitted

—

1.h

Debt 1.h. in the SOR is a medical bill incurred in May 1996. Applicant contacted the creditor but they could not provide information to pay the debt.

For Applicant

Medical Debt

Unknown

—

1.i

Debt 1.i. in the SOR is a medical bill incurred in 1996 paid in full in August 2004.

Against Applicant

Medical Debt

Admitted

—

1.j

Debt 1.j. in the SOR is the remaining debt for a car repossessed in May 1996. Applicant discussed the debt in August 2004 with the creditor who wanted a lump sum payment to settle the debt. Applicant did not talk to the creditor prior to August 2004. Since Applicant could not make the lump sum payment, she has not paid the debt and will let it lapse so it will be removed from her credit report.

Against Applicant

Auto Loan Debt

Unknown

—

1.k

Debt 1.k. in the SOR is an account placed in collection in 1997 paid in full in August 2004.

Against Applicant

Unspecified Financial

Admitted

—

1.l

Debt 1.l. is a medical bill incurred in 1997 paid in full in August 2004.

Against Applicant

Medical Debt

Admitted

—

1.m

Debts 1.m. and 1.n. in the SOR are from an insurance company placed in collection in 1997. Applicant never had insurance with the company and disputes the debts. Applicant did not know the debts existed until receiving the SOR in August 2004. She last spoke to the collection agency in August 2004 to obtain further information on the debt.

For Applicant

Unspecified Financial

Unknown

—

1.n

Debt 1.n. in the SOR is the other debt from the insurance company placed in collection in 1997. Applicant disputes the debts.

For Applicant

Unspecified Financial

Unknown

—

1.o

Debt 1.o. in the SOR is a medical bill incurred in January 1998 paid in full in August 2004.

Against Applicant

Medical Debt

Admitted

—

1.p

Debt 1.p. in the SOR is a medical bill incurred in October 1998 paid in full in April 2003.

Against Applicant

Medical Debt

Admitted

—

1.q

Debt 1.q. in the SOR is a medical bill incurred in March 1999 paid in full in August 2004.

Against Applicant

Medical Debt

Admitted

—

1.r

Debt 1.r. in the SOR is the remainder of a debt from a car repossession in May 1999 that has not been satisfied. Applicant and her husband cosigned on the car loan and the creditor obtained a judgment against them in December 2002. Applicant stated she did not know the debt belonged to her since it was for a vehicle only her husband drove. Applicant and her husband contacted the creditor in August 2004 to determine a process for paying off the debt. There is no agreement with the creditor to pay off the debt.

Against Applicant

Auto Loan Debt

Unknown

—

1.s

Debt 1.s. is a medical bill incurred in January 2000 paid in full in August 2002.

Against Applicant

Medical Debt

Admitted

—

1.t

Debt 1.t. in the SOR is a medical bill incurred in January 2000 paid in full in August 2004.

Against Applicant

Medical Debt

Admitted

—

1.u

Debt 1.u. in the SOR is a medical bill placed in collection in January 2000 paid in full in April 2003.

Against Applicant

Medical Debt

Admitted

—

1.v

Debt 1.v. in the SOR is a medical bill placed in collection in March 2000 paid in full in August 2004.

Against Applicant

Medical Debt

Admitted

—

1.w

Debt 1.w. in the SOR is a medical bill incurred in August 2000, the creditor agreed to settle for a lesser amount, paid in full in September 2004.

Against Applicant

Medical Debt

Admitted

—

1.x

Debt 1.x. in the SOR is a medical bill incurred in July 2001 paid in full in August 2004.

Against Applicant

Medical Debt

Admitted

—

1.y

Debt 1.y. in the SOR is a medical bill incurred in May 2002 paid in full in August 2004.

Against Applicant

Medical Debt

Admitted

—

1.z

Debt 1.z. in the SOR is a medical bill incurred in May 2002 paid in full in August 2004.

Against Applicant

Medical Debt

Admitted

—

1.aa

Debt 1.aa. in the SOR is a medical bill placed in collection in October 2002. The health care provider submitted the bill to the wrong insurance company. When it was not paid, the health care provider submitted the bill for collection. The bill was resubmitted to the correct insurance company and subsequently paid. Applicant disputes this debt since it was paid by the health insurance company.

For Applicant

Unspecified Financial

Unknown

—

1.bb

Debt 1.bb. in the SOR is a utility bill placed in collection in October 2003 paid in full in August 2004.

Against Applicant

Utility or Phone Debt

Admitted

—

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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

CONCLUSION

FORMAL FINDINGS

DECISION

FOOTNOTES

POLICIES