Summary
A 37-year-old defense contractor employee was granted a security clearance for an Information Systems Position, despite initial concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The applicant's financial difficulties stemmed from an investment in a mismanaged landscaping business, which led to substantial debts. These debts included multiple credit cards and a secured loan for equipment, all of which were either charged off or placed for collection.
A key allegation under Guideline E was that the applicant falsely stated on his SF 85P that he was not over 180 days delinquent on any financial obligation, despite the existence of these outstanding debts. However, the judge found that the applicant's financial issues were largely beyond his control, citing business mismanagement and a period of unemployment.
Ultimately, the applicant's eligibility was affirmed because he took proactive steps to resolve his financial situation. This included selling and returning equipment, working out payment plans with creditors, and ultimately discharging his debts through Chapter 7 bankruptcy. These actions, coupled with securing permanent employment, demonstrated a resolution of his financial issues, leading to the granting of his security clearance.
Why the Applicant Prevailed
- The applicant's debts were discharged under Chapter 7 bankruptcy, demonstrating a resolution of financial issues.
- The applicant took proactive steps to manage and resolve his debts, including selling and returning equipment and working out payment plans with creditors.
- The applicant's financial difficulties were largely due to circumstances beyond his control, such as business mismanagement and loss of employment.
Conditions Referenced
- E2.A6.1.2.1raisedHistory of Not Meeting Financial Obligations
- E2.A6.1.2.3raisedInability or Unwillingness to Satisfy Debts
- E2.A6.1.3.3appliedConditions That Resulted in the Behavior Were Largely Beyond the Person's Control
- E2.A6.1.3.4appliedThe Person Has Received or Is Receiving Counseling for the Problem and There Are Clear Indications That the Problem Is Being Resolved or Is Under Control
- E2.A6.1.3.6appliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts
- E2.A5.1.3.4appliedOmission of Material Facts Was Caused or Significantly Contributed to by Improper or Inadequate Advice of Authorized Personnel
- E2.A5.1.3.5appliedThe Individual Has Taken Positive Steps to Significantly Reduce or Eliminate Vulnerability to Coercion, Exploitation, or Duress
Key Rule Quoted
“The issuance of the clearance is "clearly consistent with the interests of national security," or "clearly consistent with the national interest."”
Procedural Posture
- SOR issuedJun 3, 2004
- Answer filedJul 1, 2004
- Hearing heldNov 17, 2004
- Decision dateMay 25, 2005
Cite For
- Mitigation of Financial Difficulties Due to Circumstances Beyond Control
- Good-faith Efforts to Resolve Debts
- Reliance on Questionable Financial Advice Leading to Unintentional Misrepresentation