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ISCR Case 04-06499.h1 — CASE

ISCR Case 04-06499.h1denied

Case Headnote

ISCR Case No. 04-06499.h1

deniedMay 18, 2006· Hon. Joseph Testan· hearing

Summary

A 36-year-old defense contractor employee was denied a security clearance under Guideline E (Personal Conduct) due to significant financial indebtedness and a pattern of financial irresponsibility. The applicant faced allegations concerning approximately $30,000 in past-due debts, many of which had been outstanding for several years.

Specific issues included two dismissed Chapter 13 bankruptcy petitions filed in July 1998 and June 1999. The applicant also had a $2,286 judgment against her from 1996, despite her denial of knowledge of this creditor. Other debts included two accounts totaling $21,099 with last activity in 1998, a $429 charged-off debt, a $161 past-due and charged-off debt, a $596 debt past-due since 2002, a $7,159 charged-off auto loan, and a $151 debt outstanding since 2003. Two allegations were found in favor of the applicant due to insufficient evidence or a valid dispute regarding a vehicle.

The judge concluded that the applicant's financial irresponsibility adversely affected her judgment and trustworthiness. The denial was based on the numerous past-due debts, their long-standing nature, and the lack of evidence indicating an imminent improvement in her financial situation.

Why the Applicant Was Denied

Applicant has numerous past-due debts totaling approximately $30,000.
Most debts have been outstanding for many years, indicating a lack of financial responsibility.
There is no evidence suggesting the applicant's financial situation will improve in the near future.

Conditions Referenced

Disqualifying

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

Key Rule Quoted

“The evidence establishes that applicant is indebted to numerous creditors in the total amount of approximately $30,000.00.”

Procedural Posture

SOR issuedMay 24, 2005
Answer filedJun 13, 2005Applicant elected to have the case determined on a written record.
Hearing held—No hearing; case determined on written record.
Decision dateMay 18, 2006

Cite For

Financial Irresponsibility as a Disqualifying Factor Under Guideline E
Impact of Past-due Debts on Security Clearance Eligibility
Lack of Evidence for Financial Improvement Affecting Judgment and Trustworthiness

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 against the applicant on personal conduct concerns related to financial issues. The applicant's significant indebtedness and failure to meet financial obligations were deemed to adversely affect her judgment and reliability, leading to the denial of her security clearance.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
1.a	Applicant filed a Chapter 13 bankruptcy petition in July 1998. Her petition was dismissed.	Against Applicant	Omission or Failure to Disclose	Financial	Denied	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
1.b	Applicant filed a Chapter 13 bankruptcy petition in June 1999. Her petition was dismissed.	Against Applicant	Omission or Failure to Disclose	Financial	Denied	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
1.c	Applicant has consistently denied any knowledge of this creditor. However, Exhibit 7 indicates this creditor obtained a $2,286.00 judgment against her in 1996.	Against Applicant	Omission or Failure to Disclose	Financial	Denied	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
1.d	Applicant admits being indebted to this creditor. Exhibit 7 establishes that applicant is indebted to this creditor on two accounts totaling $21,099.00, and that the last activity on both accounts occurred in 1998.	Against Applicant	Omission or Failure to Disclose	Financial	Denied	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
1.e	Applicant is indebted to this creditor in the amount of $429.00. This is a bad debt that was charged off.	Against Applicant	Omission or Failure to Disclose	Financial	Denied	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
1.f	Applicant is indebted to this creditor in the amount of $161.00. The debt is past-due and was charged off.	Against Applicant	Omission or Failure to Disclose	Financial	Denied	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
1.g	Applicant is indebted to this creditor in the amount of $596.00. This debt has been past-due since 2002.	Against Applicant	Omission or Failure to Disclose	Financial	Denied	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
1.h	Applicant is indebted to this creditor in the amount of $7,159.00 for an auto loan account that was charged off as a bad debt.	Against Applicant	Omission or Failure to Disclose	Financial	Denied	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
1.i	Applicant has been indebted to this creditor in the amount of $151.00 since 2003.	Against Applicant	Omission or Failure to Disclose	Financial	Denied	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
1.j	Applicant denies this debt. She claims that she was sold a "lemon" by the car dealer, that the dealer refused to honor the warranty, and that the creditor took possession of the vehicle straight from the dealer's lot. This allegation is found for applicant.	For Applicant	Omission or Failure to Disclose	Financial	Denied	—	—	—
1.k	The Government's evidence is insufficient to establish that applicant is indebted as alleged. Accordingly, this allegation is found for applicant.	For Applicant	Omission or Failure to Disclose	Financial	Denied	—	—	—

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: May 18, 2006 n Re: ------------------- SSN: ----------- Applicant for Security Clearance CR Case No. 04-06499 DECISION OF ADMINISTRATIVE JUDGE JOSEPH TESTAN

SYNOPSIS Applicant is indebted to numerous creditors in the approximate amount of $30,000.00. Most, if not all, of these debts are past-due, some for many years. These facts, together with the lack of any evidence suggesting applicant's financial condition is likely to significantly improve anytime soon, precludes a decision favorable to applicant. Clearance is denied.

STATEMENT OF CASE

On May 24, 2005, 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 on June 13, 2005, 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 July 26, 2005. Applicant did not file a response to the FORM. The case was assigned to me on September 20, 2005.

FINDINGS OF FACT

Applicant is a 36 year old employee of a defense contractor. SOR Allegation 1a: Applicant filed a Chapter 13 bankruptcy petition in July 1998. Her petition was dismissed. SOR Allegation 1b: Applicant filed a Chapter 13 bankruptcy petition in June 1999. Her petition was dismissed. SOR Allegation 1c: Applicant has consistently denied any knowledge of this creditor. However, Exhibit 7 indicates this creditor obtained a $2,286.00 judgment against her in 1996. SOR Allegations 1dand 1e: Applicant admits being indebted to this creditor. Exhibit 7 establishes that applicant is indebted to this creditor on two accounts totaling $21,099.00, and that the last activity on both accounts occurred in 1998. SOR Allegation 1f: Applicant is indebted to this creditor in the amount of $429.00. This is a bad debt that was charged off (Exhibits 7 and 8). SOR Allegation 1g: Applicant is indebted to this creditor in the amount of $161.00. The debt is past-due and was charged off (Exhibit 8). SOR Allegation 1h: Applicant is indebted to this creditor in the amount of $596.00. This debt has been past-due since 2002. SOR Allegation 1i: Applicant is indebted to this creditor in the amount of $7,159.00 for an auto loan account that was charged off as a bad debt. SOR Allegation 1j: Applicant has been indebted to this creditor in the amount of $151.00 since 2003. SOR Allegation 1k: Applicant denies this debt. She claims that she was sold a "lemon" by the car dealer, that the dealer refused to honor the warranty, and that the creditor took possession of the vehicle straight from the dealer's lot. This allegation is found for applicant. SOR Allegation 1l: The Government's evidence is insufficient to establish that applicant is indebted as alleged. Accordingly, this allegation is found for applicant. Applicant's financial problems are due in part to marital difficulties she and her now former husband experienced.

CONCLUSION

The evidence establishes that applicant is indebted to numerous creditors in the total amount of approximately $30,000.00. Most, if not all, of these debts are past-due. Some of them have been past-due for years. Applicant's failure to honor her financial obligations reflects adversely on her judgment, reliability and trustworthiness, and suggests she cannot be relied upon to safeguard classified information. 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) are applicable. In view of applicant's numerous past-due debts, her inability or unwillingness to address them in any significant way, and the lack of any credible evidence that her financial condition is likely to significantly improve anytime soon, Guideline F is found against applicant. No Mitigating Conditions are applicable.

FORMAL FINDINGS

PARAGRAPH 1: AGAINST THE 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

FOOTNOTES

FOR GOVERNMENT Robert Coacher, Department Counsel FOR APPLICANT Pro Se