Summary
The applicant, a 57-year-old quality and safety inspector with a long history of holding a security clearance, faced allegations under Guideline F due to delinquent debts exceeding $150,000 from a failed real estate venture. Despite these debts, the applicant demonstrated significant financial assets and income, leading the judge to conclude that he was not at risk of engaging in illegal acts to resolve his financial issues, resulting in the granting of his security clearance.
Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: Collection companies are seeking from Applicant a total of about $2,400 in unpaid utility bills (1.a). Collection companies are seeking from Applicant a total of about $2,400 in unpaid utility bills (1.b). Collection companies are seeking from Applicant a total of about $2,400 in unpaid utility bills (1.c). Collection companies are seeking from Applicant a total of about $2,400 in unpaid utility bills (1.d). He owes about $143,000 in debts remaining from mortgage foreclosures and home equity loans acquired during the business (1.h). a civil judgment, still unpaid, for $6,750 was entered against Applicant in February 2002 (1.l). Applicant returned a truck he had bought for use by his sons in managing the properties. He and the lender agreed to a settlement of the remaining debt whereby Applicant paid about half what was owed (1.p).
The judge granted the clearance. The government raised disqualifying conditions DC 1, DC 3. The judge applied mitigating conditions MC 3. The decision turned on the following: The applicant has significant financial assets and income, making it unlikely he would resort to illegal acts to resolve his debts; The debts stemmed from a business downturn that was largely beyond the applicant's control; The applicant has a long history of responsible financial management and has held a security clearance without incident for over 20 years.
Why the Applicant Prevailed
- The applicant has significant financial assets and income, making it unlikely he would resort to illegal acts to resolve his debts.
- The debts stemmed from a business downturn that was largely beyond the applicant's control.
- The applicant has a long history of responsible financial management and has held a security clearance without incident for over 20 years.
Conditions Referenced
- DC 1raisedA History of Not Meeting Financial Obligations
- DC 3rejectedInability or Unwillingness to Satisfy DebtsThe applicant has acted to pay or resolve a large portion of his real estate obligations.
- MC 3appliedThe Conditions That Resulted in the Behavior Were Largely Beyond the Person's ControlThe debts stemmed directly from a business downturn he could not have foreseen.
Key Rule Quoted
“The presence of unpaid debts, regardless of the amount, does not, without more, create such a risk.”
Procedural Posture
- SOR issuedFeb 28, 2006
- Answer filed—Applicant admitted all but five allegations.
- Hearing heldAug 2, 2006Applicant testified pro se.
- Decision dateDec 27, 2006
Cite For
- Application of Mitigating Conditions Under Guideline F
- Consideration of Financial Stability Despite Delinquent Debts
- Assessment of Risk Based on Overall Financial Management and History