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ISCR Case 03-12321.h1 — CASE

ISCR Case 03-12321.h1denied

Case Headnote

ISCR Case No. 03-12321.h1

deniedJun 29, 2004· Hon. Joseph Testan· hearing

Summary

A 42-year-old defense contractor employee was denied a security clearance under Guideline E (Personal Conduct) due to long-standing financial difficulties. The denial was based on disqualifying conditions E2.A6.1.2.1 and E2.A6.1.2.3.

The applicant had a history of not meeting financial obligations, including significant debt and a past bankruptcy. A key factor was that her monthly expenses exceeded her income, demonstrating ongoing financial instability.

Crucially, no evidence was presented to suggest that the applicant's financial condition would improve in the near future. The judge concluded that the applicant's financial situation was unlikely to resolve, leading to the denial of the security clearance.

Why the Applicant Was Denied

Applicant has a history of not meeting financial obligations due to significant debt and bankruptcy.
Applicant's monthly expenses exceed her income, indicating ongoing financial instability.
No evidence was presented to suggest that the applicant's financial condition would improve in the near future.

Conditions Referenced

Disqualifying

E2.A6.1.2.1raisedHistory of Not Meeting Financial Obligations
E2.A6.1.2.3raisedInability or Unwillingness to Satisfy Debts

Key Rule Quoted

“It is not now clearly consistent with the national interest to grant her access to classified information.”

Procedural Posture

SOR issuedMar 8, 2004
Answer filedMar 15, 2004Applicant elected to have the case determined on a written record.
Government's FORM submittedApr 9, 2004
Decision dateJun 29, 2004

Cite For

Financial Instability as a Basis for Denial Under Guideline E
Impact of Bankruptcy on Security Clearance Eligibility
Lack of Mitigating Conditions in Financial Cases

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

Standardized Decision Profile

SEAD-4 Guideline E (Personal Conduct) · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found all allegations under Guideline E against the applicant, indicating that her personal conduct did not mitigate the concerns regarding her financial difficulties. The decision concluded that granting a security clearance was not consistent with the national interest.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
1.a–1.k	11 sub-charges — specific text not stated in this decision (against the applicant).	Against Applicant		—		—	—	—

Descriptive standardized rendering of a decided public case (Guideline E). The verbatim source decision is shown in full below.

Full decision

The complete, official text — footnotes and signatures included — is in the original PDF.

Decision text, by section

DEFENSE OFFICE OF HEARINGS AND APPEALS

HEARING

APPEARANCES

DATE: June 29, 2004 In Re: ------------------- SSN: ----------- Applicant for Security Clearance ISCR Case No. 03-12321 DECISION OF ADMINISTRATIVE JUDGE JOSEPH TESTAN

SYNOPSIS Applicant's long-standing indebtedness precludes a finding that it is now clearly consistent with the national interest to grant her access to classified information. Clearance is denied.

STATEMENT OF CASE

On March 8, 2004, the Defense Office of Hearings and Appeals (DOHA), pursuant to Executive Order 10865 and Department of Defense Directive 5220.6 (Directive), dated January 2, 1992, issued a Statement of Reasons (SOR) to applicant which detailed reasons why DOHA could not make the preliminary affirmative finding under the Directive that it is clearly consistent with the national interest to grant or continue a security clearance for applicant and recommended referral to an Administrative Judge to determine whether clearance should be denied or revoked. Applicant responded to the SOR in writing on March 15, 2004, and elected to have her case determined on a written record in lieu of a hearing. Department Counsel submitted the Government's written case (FORM) on or about April 9, 2004. Applicant did not file a response to the FORM. The case was assigned to me on June 3, 2004.

FINDINGS OF FACT

Applicant is a 42 year old employee of a defense contractor. Applicant admits all of the factual allegations in the SOR. Accordingly, SOR Allegations 1a through 1kare incorporated by reference as Findings of Fact. In a January 5, 2004 letter to DOHA, applicant stated, "I will be filing chapter 7 bankruptcy this year because I'm the only working person in my household. yhusband only gets one check a month. [The husband] was medical retired in June 1991. I've had one heart attack over stress and I'm not going to have another."

CONCLUSION

The evidence establishes that (1) applicant filed a Chapter 7 bankruptcy action in 1997, and that in January 1998, over $64,000.00 of unsecured debt was discharged by the bankruptcy court, (2) since that discharge, applicant has had at least six debts placed in collection and at least three debts "charged off" by various creditors, (3) as of January 2004, applicant's monthly expenses exceeded her monthly income by approximately $368.00. These facts require application of Disqualifying Conditions E2.A6.1.2.1 (a history of not meeting financial obligations) and E2.A6.1.2.3 (inability or unwillingness to satisfy debts). No mitigating conditions are applicable. (1) In view of applicant's history of financial difficulties, and the lack of any evidence that would suggest her financial condition is likely to significantly improve anytime soon, it is not now clearly consistent with the national interest to grant her access to classified information. Based on the foregoing, Guideline F is found against applicant.

FORMAL FINDINGS

PARAGRAPH 1: AGAINST THE APPLICANT All subparagraphs found against applicant.

DECISION

In light of all the circumstances presented by the record in this case, it is not clearly consistent with the national interest to grant or continue a security clearance for applicant. ____________________________ Joseph Testan Administrative Judge 1. There is some evidence in the record indicating that health problems experienced by applicant and her husband contributed to her financial difficulties. However, the extent to which these health problems contributed to applicant's financial difficulties cannot be determined from the record. Accordingly, itigating Condition E2.A6.1.3.3 (the conditions that resulted in the behavior were largely beyond the person's control) is not applicable.

FOOTNOTES

FOR GOVERNMENT Stephanie C. Hess, Department Counsel FOR APPLICANT Pro Se