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Summary

The applicant, a 45-year-old retired Marine Corps veteran, sought a security clearance but was denied due to significant financial difficulties and providing inaccurate information on his Security Clearance Application (SCA). Despite efforts to repay debts, the applicant still owed over $90,000, and the judge found that he knowingly omitted material facts regarding his financial situation, undermining his trustworthiness.

Under Guideline E (Personal Conduct) and Guideline F (Financial Considerations), the Statement of Reasons alleged the following: In the last 7 years, have you have you had a lien place against your property for failing to pay taxes or other debts? Applicant responded "No." Applicant should have responded by including the tax lien placed against him in August 1999 in the amount of $6,500 in taxes, penalties, and interest for non payment of a state tax debt (2.a). In the last 7 years, have you have you had any judgements against you that you have not paid? Applicant answered "No" to this question. Applicant should have answered "Yes" to this question and included the judgement listed as 1.d. in the SOR (2.b). In the last 7 years, have you been over 180 days delinquent on any debt(s)? Applicant answered, "No" to this question and listed no debts. Clearly, at the time he completed the SCA, Applicant was or had been over 180 days delinquent on all the debts listed on the SOR, and he should have included all of these debts (2.c). This debt to Creditor 1 is listed in the SOR in the amount of $1,736. Applicant testified that he has paid $200 a month on this debt since July 2005. He did not have a current amount that he still owes on this debt. A post hearing letter from a creditor, which Applicant identifies as Creditor 1, dated August 7, 2006, shows that the current balance on this debt is $0. However, a term payment schedule, prepared and provided by Applicant post hearing, shows that at the time of the hearing, he owed $1,969, and his debt will not be paid in full until June 2007 (Exhibit Z) (1.a). This debt to Creditor 2 is in the amount of $4,283.76. Applicant began making payments of $50 a month, starting on May, 2004, and then he increased it to $200 a month. He has now made six $300 payments for a total of $1,800. Applicant's term payment schedule shows that as of August 15, 2006, he owes $1,754.39, and his debt will not be paid in full until May 2007 (Exhibit Z) (1.b). This debt to Creditor 3 is in the amount of $200. Applicant testified that he can not locate this creditor, and he has made no payments on this debt (1.c). This debt to Creditor 4 is listed in the SOR in the amount of $5,944 for a judgement entered against him in August 2000. Applicant's term payment schedule shows that as of August 15, 2006, he owes $15,870.32. He is now making payments of $300 a month, and he will not pay this debt in full until March 15, 2010 (Exhibit Z) (1.d). This debt to Creditor 5 is listed in the SOR in the amount of $1,506. This debt is part of student loans for Applicant's education that he is now paying off. He graduated in 1987. His term payment schedule shows that he owes $3,972 as of August 15, 2006, and he will not pay off this debt until May 15, 2008 (Exhibit Z) (1.e). This debt to Creditor 6 is listed in the SOR is in the amount of $3,012. Applicant testified that this is also part of the same debt as 1.e., above. This will also be resolved in May 2008 (1.f). This debt to Creditor 7 is listed in the SOR in the amount of $5,541. According to Applicant's testimony and his term payment schedule, he has made no payments on this debt. He is scheduled to start paying $200 a month on this debt, and he will not pay it off until November 2008 (1.g). This debt to Creditor 8 is listed in the SOR in the amount of $309. Applicant testified that this debt has been paid. He stated that he would submit a letter from the creditor post hearing establishing that this debt has been paid. No letter was submitted from this creditor (1.h). This debt to Creditor 9 is listed in the SOR in the amount of $1,555. Applicant testified that he disputes this debt. He averred that when he spoke to the collection agency for this creditor that he was informed the debt would be removed from his credit report (1.i). This debt to Creditor 10 is listed in the SOR in the amount of $333. Applicant testified that this debt has been paid on June 2004. Applicant offered that he would submit evidence to prove that this debt had been paid, but no documentation was offered (1.j). This debt to Creditor 11 is listed in the SOR in the amount of $332. Based on Applicant's testimony at the hearing, this allegation was amended to the following: "Based upon your estimate, the amount due on this debt is now approximately $80,000." At the hearing, Applicant admitted that this debt, for two car purchases and student loans, is still due and owing. Applicant's term payment schedule shows that as of August 15, 2006, he owed $71,095, and this debt will not be paid in full until December 2010 (1.k). This debt to Creditor 12 is listed in the SOR in the amount of $1,609. Applicant testified that this debt has not been paid (1.l).

The judge denied the clearance. The government raised disqualifying conditions E2.A6.1.2.1, E2.A6.1.2.3, E2.A5.1.2.2. The judge applied mitigating conditions E2.A6.1.3.6. The decision turned on the following: Applicant has a history of financial difficulties, owing over $90,000 in debts; Applicant provided materially incorrect and incomplete information on his SCA regarding financial obligations.

Why the Applicant Was Denied

• Applicant has a history of financial difficulties, owing over $90,000 in debts.
• Applicant provided materially incorrect and incomplete information on his SCA regarding financial obligations.

Conditions Referenced

Key Rule Quoted

“When such an individual intentionally falsifies material facts on a security clearance application, it is extremely difficult to conclude that he nevertheless possesses the judgment, reliability and trustworthiness required of clearance holders.”

Procedural Posture

• SOR issuedSep 16, 2004
• Answer filedNov 2, 2004
• Hearing heldJul 6, 2006
• Decision dateAug 28, 2006

Cite For

• Financial Difficulties Impacting Security Clearance Eligibility
• Inaccurate Information on SCA as a Disqualifying Factor
• Good-faith Efforts to Repay Debts May Not Mitigate Significant Financial Issues