ISCR Case 04-05399.h1

Case Headnote

ISCR Case No. 04-05399.h1

deniedNov 8, 2005· Hon. Matthew E. Malone· hearing

Summary

A 33-year-old defense contractor employee was denied a security clearance under Guideline F (Financial Considerations) due to over $28,000 in delinquent debts accumulated in 1996 and 1997, compounded by her husband's unemployment. Disqualifying conditions included a history of not meeting financial obligations and a pattern of financial irresponsibility. While some debts were resolved, approximately $23,000 remained outstanding, and the applicant lacked a concrete repayment plan.

Specific allegations included a Chapter 13 bankruptcy filing in December 1997, which involved monthly payments to a wage earners' plan, but was later dismissed for non-payment. Other debts included a $10,000 deficiency after a re-sale, an involuntarily repossessed car with an outstanding deficiency of about $3,880, and another debt of approximately $3,800 with no payments made since the bankruptcy action ended. The applicant also denied owing $700 to the IRS.

Mitigating conditions noted included the payment of a previously unknown utility bill, the payoff of a delinquent furniture debt, and the satisfaction of two county property tax bills through wage garnishment. A medical bill was also paid. However, the applicant's history of unpaid debts spanning up to 10 years, coupled with her financial means and lack of a repayment plan, ultimately led to the denial of her security clearance.

Why the Applicant Was Denied

The applicant has a history of not meeting financial obligations, with debts remaining unpaid for up to 10 years.
Despite having the financial means, the applicant has no plan to pay or resolve her debts.
The applicant's previous bankruptcy petition was dismissed for non-payment, indicating poor financial management.

Conditions Referenced

Disqualifying

DC 1appliedA History of Not Meeting Financial Obligations
DC 3appliedInability or Unwillingness to Satisfy Debts

Mitigating

MC 3rejectedThe Conditions That Resulted in the Behavior Were Largely Beyond the Person's ControlThe applicant's financial overextension was a result of poor financial management, not solely due to her husband's unemployment.

Key Rule Quoted

“A person who has access to classified information enters into a fiduciary relationship with the government based on trust and confidence.”
— Department of the Navy v. Egan, 484 U.S. 518 (1988)

Procedural Posture

SOR issuedSep 8, 2004
Answer filed—Applicant admitted with explanation seven of the 15 allegations.
Hearing heldAug 4, 2005Applicant testified and presented a witness.
Decision dateNov 8, 2005

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations
Impact of Poor Financial Management on Security Clearance Eligibility
Consideration of Mitigating Conditions in Financial Cases Under Guideline F

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	the couple filed for Chapter 13 bankruptcy protection in December 1997 and began to pay $700 each month to a wage earners' plan that would resolve their debts in 42 months.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts	—	—
1.b	Applicant still owes a $10,000 deficiency after re-sale. $10,000	Against Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts	—	—
1.c	the car was involuntarily repossessed and Applicant still owes an unpaid deficiency after re-sale of about $3,880. $3,880	For Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts	—	—
1.d	Applicant paid a utility bill she was previously unaware of.	For Applicant	Utility or Phone Debt	Admitted	—	—	—
1.e	specific text not stated in this decision	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts	—	—
1.f	Applicant finished paying off a delinquent debt for the furniture she purchased when she and her husband were first married.	For Applicant	Unspecified Financial	Admitted	—	—	—
1.g	Applicant still owes about $3,800 on this debt, but has made no payments since ending her bankruptcy action. (low confidence) $3,800	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts	—	—
1.h	specific text not stated in this decision	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts	—	—
1.i	Applicant paid a medical bill.	For Applicant	Medical Debt	Admitted	—	—	—
1.j	Two county property tax bills were satisfied through garnishment of Applicant's wages as a county employee.	For Applicant	Tax Filing Failure	Admitted	—	—	—
1.k–1.l	2 sub-charges — specific text not stated in this decision (for the applicant). (low confidence)	For Applicant			—	—	—
1.m	Applicant denies she owes the Internal Revenue Service (IRS) $700. $700	For Applicant	Tax Unpaid	Denied	—	—	—
1.n	specific text not stated in this decision	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts	—	—
1.o	Applicant has more than $626 left over each month after paying expenses, a figure that does not reflect any repayment of her delinquent debts. $626	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

the couple filed for Chapter 13 bankruptcy protection in December 1997 and began to pay $700 each month to a wage earners' plan that would resolve their debts in 42 months.

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

—

1.b

Applicant still owes a $10,000 deficiency after re-sale.

$10,000

Against Applicant

Auto Loan Debt

Admitted

(a) inability to satisfy debts

—

1.c

the car was involuntarily repossessed and Applicant still owes an unpaid deficiency after re-sale of about $3,880.

$3,880

For Applicant

Auto Loan Debt

Admitted

(a) inability to satisfy debts

—

1.d

Applicant paid a utility bill she was previously unaware of.

For Applicant

Utility or Phone Debt

Admitted

—

1.e

specific text not stated in this decision

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

—

1.f

Applicant finished paying off a delinquent debt for the furniture she purchased when she and her husband were first married.

For Applicant

Unspecified Financial

Admitted

—

1.g

Applicant still owes about $3,800 on this debt, but has made no payments since ending her bankruptcy action. (low confidence)

$3,800

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

—

1.h

specific text not stated in this decision

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

—

1.i

Applicant paid a medical bill.

For Applicant

Medical Debt

Admitted

—

1.j

Two county property tax bills were satisfied through garnishment of Applicant's wages as a county employee.

For Applicant

Tax Filing Failure

Admitted

—

1.k–1.l

2 sub-charges — specific text not stated in this decision (for the applicant). (low confidence)

For Applicant

—

1.m

Applicant denies she owes the Internal Revenue Service (IRS) $700.

$700

For Applicant

Tax Unpaid

Denied

—

1.n

specific text not stated in this decision

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

—

1.o

Applicant has more than $626 left over each month after paying expenses, a figure that does not reflect any repayment of her delinquent debts.

$626

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

—

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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

STATEMENT OF CASE

FINDINGS OF FACT

CONCLUSION

FORMAL FINDINGS

DECISION

FOOTNOTES