ISCR Case 03-15214.h1

Case Headnote

ISCR Case No. 03-15214.h1

deniedJul 28, 2005· Hon. Carol G. Ricciardello· hearing

Summary

A 48-year-old programmer analyst, employed by a federal contractor since 2000, was denied a security clearance under Guideline F (Financial Considerations) due to approximately $17,000 in delinquent debts. The applicant acknowledged several debts but stated he did not intend to repay some of them because they were no longer listed on his credit report.

Specifically, the applicant admitted to owing a debt to Company A but later clarified he did not understand this admission to mean he agreed to repayment, noting it had been charged off. He disputed a second debt, believing it was the same as the first, and provided no documentation to verify this. A third debt was acknowledged, with the applicant claiming he was attempting to resolve it, but it remained unpaid. A debt to a military store was initially denied but later acknowledged and satisfied through a federal tax return reduction. Finally, a $1,888 debt was admitted, but the applicant again stated he did not intend to repay it as it was charged off and no longer on his credit report.

The judge found that the applicant failed to mitigate the financial concerns, citing his approximately $17,520 in delinquent debt, his stated intent not to repay charged-off debts, and his lack of good faith effort to resolve these obligations despite having sufficient income.

Why the Applicant Was Denied

The applicant has approximately $17,520 in delinquent debt that he has failed to pay or resolve.
The applicant admitted to owing debts but stated he does not intend to pursue repayment since they are charged off.
The applicant has not made a good faith effort to resolve his debts, despite having sufficient income.

Conditions Referenced

Disqualifying

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

Mitigating

E2.A6.1.3.1rejectedThe Behavior Was Not RecentThe applicant has been employed since 2000, and the financial issues date back to 1996.
E2.A6.1.3.3rejectedThe Conditions That Resulted in the Behavior Were Largely Beyond the Person's ControlThe applicant's financial difficulties were not recent and he has had ample time to address them.
E2.A6.1.3.4rejectedThe Person Has Received or Is Receiving Counseling for the ProblemNo information was provided about the applicant receiving financial counseling.
E2.A6.1.3.6rejectedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsThe applicant stated he does not intend to repay the debts.

Key Rule Quoted

“The sole purpose of a security clearance determination is to decide if it is clearly consistent with the national interest to grant or continue a security clearance for an applicant.”

Procedural Posture

SOR issuedApr 5, 2004
Answer filedMay 12, 2004Applicant responded to SOR allegations.
Hearing held—Case decided on written record.
Decision dateJul 28, 2005

Cite For

Denial of Clearance Due to Significant Delinquent Debts Under Guideline F
Failure to Demonstrate Good Faith Efforts to Resolve Financial Obligations
Impact of Financial Irresponsibility on 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	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admitted in his sworn answer of May 12, 2004, that he owed the debt in Subparagraph 1.a., and he was trying to reach a repayment agreement with the creditor. However, in Applicant's statement of March 22, 2005 he states, "In agreeing that the debt to [Company A], was valid I did not understand that it meant that I was agreeing to make a repayment of the debt. The debt has since been charged off and I am not pursuing repayment. This debt no longer shows on my credit report." $9,087	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.b	Applicant does not dispute that he had an account with the creditor of Subparagraph 1.b., but believed it was the same as the debt in Subparagraph 1.a. Although this debt was sold to a different creditor, Applicant has not provided any supporting documents to verify this is the same debt as in 1.a. Despite this dispute, Applicant minimally acknowledges he owes on one debt, yet he still has not paid, nor resolved either of the debts. $5,530	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.c	Applicant admitted the debt in Subparagraph 1.c., but claims he did not know it existed and claimed in his statement of April 3, 2003, that he was going to check into the matter and make sure the case is closed and the judgment removed from his credit report. Applicant acknowledged the debt again in his May 12, 2004 statement and claimed he had requested the originator of the action to release the small claims action and re-file so that he would have an opportunity to be represented in court. In his latest statement of March 22, 2005, Applicant claimed he was still attempting to resolve the debt. This debt has not been resolved. $1,015	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.d	Applicant's debt in Subparagraph 1.d. was to a military store. He denied the debt and claimed he had no knowledge of the debt being charged off. Applicant later acknowledged the debt and proves it had been satisfied through a Federal Tax Return reduction.	For Applicant	Unspecified Financial	Denied	—	—	—
1.e	Applicant admitted the debt in Subparagraph 1.e. in his statement of May 12, 2004. In his statement of March 22, 2005, Applicant states with regard to this debt for $1,888, "I did not understand that saying this was a valid debt constituted agreement for repayment of the debt. This debt has since been charged off and I am not attempting repayment. This debt no longer appears on my credit report. Applicant has not paid this debt. $1,888	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant admitted in his sworn answer of May 12, 2004, that he owed the debt in Subparagraph 1.a., and he was trying to reach a repayment agreement with the creditor. However, in Applicant's statement of March 22, 2005 he states, "In agreeing that the debt to [Company A], was valid I did not understand that it meant that I was agreeing to make a repayment of the debt. The debt has since been charged off and I am not pursuing repayment. This debt no longer shows on my credit report."

$9,087

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.b

Applicant does not dispute that he had an account with the creditor of Subparagraph 1.b., but believed it was the same as the debt in Subparagraph 1.a. Although this debt was sold to a different creditor, Applicant has not provided any supporting documents to verify this is the same debt as in 1.a. Despite this dispute, Applicant minimally acknowledges he owes on one debt, yet he still has not paid, nor resolved either of the debts.

$5,530

Against Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.c

Applicant admitted the debt in Subparagraph 1.c., but claims he did not know it existed and claimed in his statement of April 3, 2003, that he was going to check into the matter and make sure the case is closed and the judgment removed from his credit report. Applicant acknowledged the debt again in his May 12, 2004 statement and claimed he had requested the originator of the action to release the small claims action and re-file so that he would have an opportunity to be represented in court. In his latest statement of March 22, 2005, Applicant claimed he was still attempting to resolve the debt. This debt has not been resolved.

$1,015

Against Applicant

Judgment Against Applicant

Admitted

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.d

Applicant's debt in Subparagraph 1.d. was to a military store. He denied the debt and claimed he had no knowledge of the debt being charged off. Applicant later acknowledged the debt and proves it had been satisfied through a Federal Tax Return reduction.

For Applicant

Unspecified Financial

Denied

—

1.e

Applicant admitted the debt in Subparagraph 1.e. in his statement of May 12, 2004. In his statement of March 22, 2005, Applicant states with regard to this debt for $1,888, "I did not understand that saying this was a valid debt constituted agreement for repayment of the debt. This debt has since been charged off and I am not attempting repayment. This debt no longer appears on my credit report. Applicant has not paid this debt.

$1,888

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

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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

SYNOPSIS

APPEARANCES

FINDINGS OF FACT

POLICIES

CONCLUSION

FORMAL FINDINGS

DECISION

FOOTNOTES