ISCR Case 04-05188.h1

Case Headnote

ISCR Case No. 04-05188.h1

grantedSep 22, 2005· Hon. Martin H. Mogul· hearing

Summary

A 48-year-old defense contractor employee was granted a security clearance despite concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The Statement of Reasons cited multiple overdue debts and incomplete disclosures on her Security Clearance Application (SCA) submitted on January 24, 2003. Specifically, she answered "Yes" to questions regarding delinquencies over 180 days and 90 days but failed to list all outstanding debts.

The applicant admitted to most of the debts and, subsequent to the hearing, provided evidence of payments made on July 21, 2005, resolving numerous obligations, including those to Creditors 1, 2, 3, 4, 6, 7, 16, and 17. She also demonstrated that debts to Creditors 8 and 10 were disputed or not her responsibility, and a debt to Creditor 11 was resolved through a class action lawsuit. Payments were being made on a debt to Creditor 12 via wage garnishment. Several other listed debts were identified as duplicates of those already resolved. Additionally, the applicant provided updated income information, showing her husband's employment, which addressed the allegation that her expenses exceeded her income.

The judge determined that the applicant's incomplete disclosures stemmed from an honest misunderstanding rather than an intent to deceive. Her proactive efforts to resolve the majority of her debts through payments and credit counseling, along with her demonstrated good faith, led to the clearance being granted.

Why the Applicant Prevailed

The applicant resolved the majority of her overdue debts through payments and credit counseling.
The judge found that the applicant's incomplete disclosure was due to an honest misunderstanding, not intent to deceive.
The applicant demonstrated a good faith effort to address her financial issues.

Conditions Referenced

Disqualifying

E2.A6.1.2.1raisedHistory of Not Meeting Financial Obligations
E2.A6.1.2.3rejectedInability or Unwillingness to Satisfy DebtsThe applicant has satisfied almost all debts and is paying the last remaining debt through garnishment.

Mitigating

E2.A6.1.3.3appliedDebts That Result From Circumstances Beyond the Person's Control
E2.A6.1.3.4appliedGood Faith Effort to Repay Debts

Key Rule Quoted

“"The clearly consistent standard indicates that security-clearance determinations should err, if they must, on the side of denials."”
— Department of the Navy v. Egan, 484 U.S. 518, 531 (1988)

Procedural Posture

SOR issuedFeb 14, 2005
Answer filedMar 5, 2005Applicant requested a hearing.
Hearing heldJul 19, 2005
Decision dateSep 22, 2005

Cite For

Mitigation of Financial Difficulties Under Guideline F
Good Faith Belief in the Accuracy of Disclosures Under Guideline E
Resolution of Debts Through Credit Counseling Efforts

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 completed a signed, sworn Security Clearance Application (SCA) on January 24, 2003: Question #38 asks, "In the last 7 years, have you been over 180 days delinquent on any debt(s)?" Applicant answered "Yes" to this question, and she listed one debt. At the time she completed the SCA, Applicant was delinquent on all of the debts discussed above, and she should have included the debts listed in the SOR which were overdue, as discussed above.	For Applicant	Omission or Failure to DiscloseNOT DELIBERATE	Financial	Admitted	—	(a) prompt, good-faith correction before being confronted	—
2.b	Question #39 asks, "Are you currently over 90 days delinquent on any debt(S)?" Applicant answered "Yes" to this question, and she listed one additional debt. At the time she completed the SCA, Applicant was delinquent on all of the debts discussed above, and she should have included the debts listed in the SOR which were overdue, as discussed above.	For Applicant	Omission or Failure to DiscloseNOT DELIBERATE	Financial	Admitted	—	(a) prompt, good-faith correction before being confronted	—

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

2.a

Applicant completed a signed, sworn Security Clearance Application (SCA) on January 24, 2003: Question #38 asks, "In the last 7 years, have you been over 180 days delinquent on any debt(s)?" Applicant answered "Yes" to this question, and she listed one debt. At the time she completed the SCA, Applicant was delinquent on all of the debts discussed above, and she should have included the debts listed in the SOR which were overdue, as discussed above.

For Applicant

Omission or Failure to DiscloseNOT DELIBERATE

Financial

Admitted

—

(a) prompt, good-faith correction before being confronted

—

2.b

Question #39 asks, "Are you currently over 90 days delinquent on any debt(S)?" Applicant answered "Yes" to this question, and she listed one additional debt. At the time she completed the SCA, Applicant was delinquent on all of the debts discussed above, and she should have included the debts listed in the SOR which were overdue, as discussed above.

For Applicant

Omission or Failure to DiscloseNOT DELIBERATE

Financial

Admitted

—

(a) prompt, good-faith correction before being confronted

—

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	This overdue debt to Creditor 1 is cited in the SOR in the amount of $130. Applicant admitted that this debt was due and owing. Subsequent to the hearing she submitted a copy of a personal money order which established that on July 21, 2005, she made a payment to this creditor in the amount of $130. While this payment was not made until after the hearing, I find that she currently does not owe anything on this debt. $130	For Applicant	Personal Loan Debt	Admitted	—	—	Documented Debt Paid in Full
1.b	This overdue debt to Creditor 2 is cited in the SOR in the amount of $67. Applicant admitted that this debt was due and owing. Subsequent to the hearing she submitted a copy of a personal money order which established that on July 21, 2005, she made a payment to this creditor in the amount of $68. While this payment was not made until after the hearing, I find that she currently does not owe anything on this debt. $67	For Applicant	Personal Loan Debt	Admitted	—	—	Documented Debt Paid in Full
1.c	This overdue debt to Creditor 3 is cited in the SOR in the amount of $481. Applicant admitted that this debt was due and owing. Subsequent to the hearing she submitted a copy of a letter from the creditor showing that they were willing to accept $361 to settle this debt. Applicant also submitted a copy of a personal money order which established that on July 21, 2005, she made a payment to this creditor in the amount of $361. While this payment was not made until after the hearing, I find that she currently does not owe anything on this debt. $481	For Applicant	Personal Loan Debt	Admitted	—	—	Documented Debt Paid in Full
1.d	This overdue debt to Creditor 4 is cited in the SOR in the amount of $4,973. Applicant admitted that this debt was due and owing. Subsequent to the hearing she contended that the correct amount owed was $360 and she submitted a copy of a letter from the creditor showing the amount owed was $360. While the amount owed is significantly less than was alleged, it appears to be the same debt for which only $360 is owed. Applicant also submitted a copy of a personal money order which established that on July 21, 2005, she made a payment to this creditor in the amount of $360. While this payment was not made until after the hearing, I find that she currently does not owe anything on this debt. $4,973	For Applicant	Personal Loan Debt	Admitted	—	—	Documented Debt Paid in Full
1.e	This overdue debt to Creditor 5 is listed in the SOR in the amount of $4,973. In her RSOR, Applicant contended that the amount owed was not correct. In her post hearing submission, Applicant contends that this is the same debt as 1.d., above. Since the amount listed for this debt is the same as listed in 1.d., I find this is the same debt, and she has now resolved this debt. $4,973	For Applicant	Personal Loan Debt	Unknown	—	—	Documented Debt Paid in Full
1.f	This overdue debt to Creditor 6 is cited in the SOR in the amount of $2,883. Applicant admitted that this debt was due and owing. Subsequent to the hearing she submitted a copy of a letter from the creditor showing that they were willing to accept $925 to settle this debt. Applicant also submitted a copy of a personal money order which established that on July 21, 2005, she made a payment to this creditor in the amount of $925. While this payment was not made until after the hearing, I find that she currently does not owe anything on this debt. $2,883	For Applicant	Personal Loan Debt	Admitted	—	—	Documented Debt Paid in Full
1.g	This overdue debt to Creditor 7 is cited in the SOR in the amount of $587. Applicant admitted that this debt was due and owing. Subsequent to the hearing she submitted a copy of a letter from the creditor showing that they were willing to accept $293 to settle this debt. Applicant also submitted a copy of a personal money order which established that on July 21, 2005, she made a payment to this creditor in the amount of $293. While this payment was not made until after the hearing, I find that she currently does not owe anything on this debt. $587	For Applicant	Personal Loan Debt	Admitted	—	—	Documented Debt Paid in Full
1.h	This overdue debt to Creditor 8 is cited in the SOR in the amount of $6,248. Applicant admitted that this debt was due and owing. However, subsequent to the hearing Applicant contended that this is not a debt incurred by either her or her husband and that she had disputed this bill with the credit reporting services in 2004. She also submitted a letter from the credit reporting service, dated March 13, 2004, showing that she had disputed this bill, and the credit service indicated that the bill would be deleted from its report. I find that Applicant does not owe anything on this debt. $6,248	For Applicant	Unspecified Financial	Denied	—	—	—
1.i	This overdue debt to Creditor 9 is listed in the SOR in the amount of $587. In her RSOR, Applicant contended that this bill was a duplicate bill. In her post hearing submission, Applicant contends that this is the same debt as 1.g., above. Since the amount listed for this debt is the same as listed in 1.g., I find this is the same debt, and she has now resolved this debt. $587	For Applicant	Personal Loan Debt	Unknown	—	—	Documented Debt Paid in Full
1.j	These two overdue debts to the same creditor, Creditor 10 are listed in the SOR in the same amount of $529. I find that there is only one debt. Subsequent to the hearing Applicant contended that these are not debts incurred by either her or her husband and that she had disputed this bill with the credit reporting services in 2004. She submitted a letter from the credit reporting service, dated March 13, 2004, showing that she had disputed this bill. The credit service did not indicate that the result of its investigation, but continues to list this debt, showing that is disputed. While Applicant contends that she is still disputing this bill, and she testified at the hearing as to the reason for her dispute, I find that Applicant does owe $529 for one debt. $529	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts	—	—
1.k	This overdue debt to Creditor 11 is listed in the SOR in the amount of $4,046. At the hearing, Applicant submitted a letter from a management services company, dated June 2, 2004, which showed that the previous balance on this debt was $4,733, but the current balance was $0. Applicant testified that she believed this debt was resolved because she had been part of a class action lawsuit against this creditor, and this was the settlement. I find that Applicant has now resolved this debt. $4,046	For Applicant	Personal Loan Debt	Unknown	—	—	Documented Debt Paid in Full
1.l	This overdue debt to Creditor 12 is listed in the SOR in the amount of $6,200. Applicant admitted that this debt was due and owing. Subsequent to the hearing Applicant submitted a copy of her wage and earning statement showing that her wages were being garnished in the amount of $69 a week to pay this debt and that a total of $1,990 had been garnished. I find that Applicant is making payments on this debt. $6,200	For Applicant	Personal Loan Debt	Admitted	—	—	—
1.m	This overdue debt to Creditor 13 is listed in the SOR in the amount of $130. In her RSOR, Applicant contended that this bill was a duplicate bill. At the hearing, Applicant testified that this is the same debt as 1.a., above. Since the amount listed for this debt is the same as listed in 1.a., I find that she has now resolved this debt. $130	For Applicant	Personal Loan Debt	Unknown	—	—	Documented Debt Paid in Full
1.n	This overdue debt to Creditor 14 is listed in the SOR in the amount of $587. In her RSOR, Applicant contended that this bill was a duplicate bill. At the hearing, Applicant testified that this is the same debt as 1.g., above. Since the amount listed for this debt is the same as listed in 1.g., I find that she has now resolved this debt. $587	For Applicant	Personal Loan Debt	Unknown	—	—	Documented Debt Paid in Full
1.o	This overdue debt to Creditor 15 is listed in the SOR in the amount of $380. In her RSOR, Applicant admitted that this debt is due and owing. In her post hearing submission, Applicant contends that this is the same debt as 1.c., above, and she contends that she has verified this with the creditor. Since the name of the creditors listed on both debts is basically the same, I find this is the same debt, and she has now resolved this debt. $380	For Applicant	Personal Loan Debt	Admitted	—	—	Documented Debt Paid in Full
1.p	This overdue debt to Creditor 16 is cited in the SOR in the amount of $263. Applicant admitted that this debt was due and owing. Subsequent to the hearing she submitted a copy of a personal money order which established that on July 21, 2005, she made a payment to this creditor in the amount of $263. While this payment was not made until after the hearing, I find that she currently does not owe anything on this debt. $263	For Applicant	Personal Loan Debt	Admitted	—	—	Documented Debt Paid in Full
1.q	This overdue debt to Creditor 17 is listed in the SOR in the amount of $297. Applicant admitted that this debt was due and owing. Subsequent to the hearing she submitted a copy of a personal money order which established that on July 21, 2005, she made a payment to this creditor in the amount of $297. While this payment was not made until after the hearing, I find that she currently does not owe anything on this debt. $297	For Applicant	Personal Loan Debt	Admitted	—	—	Documented Debt Paid in Full
1.r	The Government alleges that Applicant's monthly expenses exceed her monthly income. At the hearing Applicant denied this allegation. Subsequent to the hearing she submitted a copy of her husband's wage and earning statement showing that as of April 30, 2005, his year to date earnings were $5,238. He was unemployed when Applicant's had previously determined the family income on Applicant's financial statement.	For Applicant	Unspecified Financial	Denied	—	—	—
1.s	specific text not stated in this decision	For Applicant	Unspecified Financial	Unknown	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

This overdue debt to Creditor 1 is cited in the SOR in the amount of $130. Applicant admitted that this debt was due and owing. Subsequent to the hearing she submitted a copy of a personal money order which established that on July 21, 2005, she made a payment to this creditor in the amount of $130. While this payment was not made until after the hearing, I find that she currently does not owe anything on this debt.

$130

For Applicant

Personal Loan Debt

Admitted

—

Documented

Debt Paid in Full

1.b

This overdue debt to Creditor 2 is cited in the SOR in the amount of $67. Applicant admitted that this debt was due and owing. Subsequent to the hearing she submitted a copy of a personal money order which established that on July 21, 2005, she made a payment to this creditor in the amount of $68. While this payment was not made until after the hearing, I find that she currently does not owe anything on this debt.

$67

For Applicant

Personal Loan Debt

Admitted

—

Documented

Debt Paid in Full

1.c

This overdue debt to Creditor 3 is cited in the SOR in the amount of $481. Applicant admitted that this debt was due and owing. Subsequent to the hearing she submitted a copy of a letter from the creditor showing that they were willing to accept $361 to settle this debt. Applicant also submitted a copy of a personal money order which established that on July 21, 2005, she made a payment to this creditor in the amount of $361. While this payment was not made until after the hearing, I find that she currently does not owe anything on this debt.

$481

For Applicant

Personal Loan Debt

Admitted

—

Documented

Debt Paid in Full

1.d

This overdue debt to Creditor 4 is cited in the SOR in the amount of $4,973. Applicant admitted that this debt was due and owing. Subsequent to the hearing she contended that the correct amount owed was $360 and she submitted a copy of a letter from the creditor showing the amount owed was $360. While the amount owed is significantly less than was alleged, it appears to be the same debt for which only $360 is owed. Applicant also submitted a copy of a personal money order which established that on July 21, 2005, she made a payment to this creditor in the amount of $360. While this payment was not made until after the hearing, I find that she currently does not owe anything on this debt.

$4,973

For Applicant

Personal Loan Debt

Admitted

—

Documented

Debt Paid in Full

1.e

This overdue debt to Creditor 5 is listed in the SOR in the amount of $4,973. In her RSOR, Applicant contended that the amount owed was not correct. In her post hearing submission, Applicant contends that this is the same debt as 1.d., above. Since the amount listed for this debt is the same as listed in 1.d., I find this is the same debt, and she has now resolved this debt.

$4,973

For Applicant

Personal Loan Debt

Unknown

—

Documented

Debt Paid in Full

1.f

This overdue debt to Creditor 6 is cited in the SOR in the amount of $2,883. Applicant admitted that this debt was due and owing. Subsequent to the hearing she submitted a copy of a letter from the creditor showing that they were willing to accept $925 to settle this debt. Applicant also submitted a copy of a personal money order which established that on July 21, 2005, she made a payment to this creditor in the amount of $925. While this payment was not made until after the hearing, I find that she currently does not owe anything on this debt.

$2,883

For Applicant

Personal Loan Debt

Admitted

—

Documented

Debt Paid in Full

1.g

This overdue debt to Creditor 7 is cited in the SOR in the amount of $587. Applicant admitted that this debt was due and owing. Subsequent to the hearing she submitted a copy of a letter from the creditor showing that they were willing to accept $293 to settle this debt. Applicant also submitted a copy of a personal money order which established that on July 21, 2005, she made a payment to this creditor in the amount of $293. While this payment was not made until after the hearing, I find that she currently does not owe anything on this debt.

$587

For Applicant

Personal Loan Debt

Admitted

—

Documented

Debt Paid in Full

1.h

This overdue debt to Creditor 8 is cited in the SOR in the amount of $6,248. Applicant admitted that this debt was due and owing. However, subsequent to the hearing Applicant contended that this is not a debt incurred by either her or her husband and that she had disputed this bill with the credit reporting services in 2004. She also submitted a letter from the credit reporting service, dated March 13, 2004, showing that she had disputed this bill, and the credit service indicated that the bill would be deleted from its report. I find that Applicant does not owe anything on this debt.

$6,248

For Applicant

Unspecified Financial

Denied

—

1.i

This overdue debt to Creditor 9 is listed in the SOR in the amount of $587. In her RSOR, Applicant contended that this bill was a duplicate bill. In her post hearing submission, Applicant contends that this is the same debt as 1.g., above. Since the amount listed for this debt is the same as listed in 1.g., I find this is the same debt, and she has now resolved this debt.

$587

For Applicant

Personal Loan Debt

Unknown

—

Documented

Debt Paid in Full

1.j

These two overdue debts to the same creditor, Creditor 10 are listed in the SOR in the same amount of $529. I find that there is only one debt. Subsequent to the hearing Applicant contended that these are not debts incurred by either her or her husband and that she had disputed this bill with the credit reporting services in 2004. She submitted a letter from the credit reporting service, dated March 13, 2004, showing that she had disputed this bill. The credit service did not indicate that the result of its investigation, but continues to list this debt, showing that is disputed. While Applicant contends that she is still disputing this bill, and she testified at the hearing as to the reason for her dispute, I find that Applicant does owe $529 for one debt.

$529

Against Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

—

1.k

This overdue debt to Creditor 11 is listed in the SOR in the amount of $4,046. At the hearing, Applicant submitted a letter from a management services company, dated June 2, 2004, which showed that the previous balance on this debt was $4,733, but the current balance was $0. Applicant testified that she believed this debt was resolved because she had been part of a class action lawsuit against this creditor, and this was the settlement. I find that Applicant has now resolved this debt.

$4,046

For Applicant

Personal Loan Debt

Unknown

—

Documented

Debt Paid in Full

1.l

This overdue debt to Creditor 12 is listed in the SOR in the amount of $6,200. Applicant admitted that this debt was due and owing. Subsequent to the hearing Applicant submitted a copy of her wage and earning statement showing that her wages were being garnished in the amount of $69 a week to pay this debt and that a total of $1,990 had been garnished. I find that Applicant is making payments on this debt.

$6,200

For Applicant

Personal Loan Debt

Admitted

—

1.m

This overdue debt to Creditor 13 is listed in the SOR in the amount of $130. In her RSOR, Applicant contended that this bill was a duplicate bill. At the hearing, Applicant testified that this is the same debt as 1.a., above. Since the amount listed for this debt is the same as listed in 1.a., I find that she has now resolved this debt.

$130

For Applicant

Personal Loan Debt

Unknown

—

Documented

Debt Paid in Full

1.n

This overdue debt to Creditor 14 is listed in the SOR in the amount of $587. In her RSOR, Applicant contended that this bill was a duplicate bill. At the hearing, Applicant testified that this is the same debt as 1.g., above. Since the amount listed for this debt is the same as listed in 1.g., I find that she has now resolved this debt.

$587

For Applicant

Personal Loan Debt

Unknown

—

Documented

Debt Paid in Full

1.o

This overdue debt to Creditor 15 is listed in the SOR in the amount of $380. In her RSOR, Applicant admitted that this debt is due and owing. In her post hearing submission, Applicant contends that this is the same debt as 1.c., above, and she contends that she has verified this with the creditor. Since the name of the creditors listed on both debts is basically the same, I find this is the same debt, and she has now resolved this debt.

$380

For Applicant

Personal Loan Debt

Admitted

—

Documented

Debt Paid in Full

1.p

This overdue debt to Creditor 16 is cited in the SOR in the amount of $263. Applicant admitted that this debt was due and owing. Subsequent to the hearing she submitted a copy of a personal money order which established that on July 21, 2005, she made a payment to this creditor in the amount of $263. While this payment was not made until after the hearing, I find that she currently does not owe anything on this debt.

$263

For Applicant

Personal Loan Debt

Admitted

—

Documented

Debt Paid in Full

1.q

This overdue debt to Creditor 17 is listed in the SOR in the amount of $297. Applicant admitted that this debt was due and owing. Subsequent to the hearing she submitted a copy of a personal money order which established that on July 21, 2005, she made a payment to this creditor in the amount of $297. While this payment was not made until after the hearing, I find that she currently does not owe anything on this debt.

$297

For Applicant

Personal Loan Debt

Admitted

—

Documented

Debt Paid in Full

1.r

The Government alleges that Applicant's monthly expenses exceed her monthly income. At the hearing Applicant denied this allegation. Subsequent to the hearing she submitted a copy of her husband's wage and earning statement showing that as of April 30, 2005, his year to date earnings were $5,238. He was unemployed when Applicant's had previously determined the family income on Applicant's financial statement.

For Applicant

Unspecified Financial

Denied

—

1.s

specific text not stated in this decision

For Applicant

Unspecified Financial

Unknown

—

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Case Profile

Summary

Why the Applicant Prevailed

Conditions Referenced

Key Rule Quoted

Procedural Posture

Cite For

Full decision

DEFENSE OFFICE OF HEARINGS AND APPEALS

HEARING

SYNOPSIS

APPEARANCES

STATEMENT OF CASE

FINDINGS OF FACT

POLICIES

CONCLUSION

FORMAL FINDINGS

DECISION

FOOTNOTES