ISCR Case 97-0303.h1

Case Headnote

ISCR Case No. 97-0303.h1

deniedSep 9, 1997· Hon. Elizabeth M. Matchinski· hearing

Summary

A 53-year-old lithotech operator was denied a Secret security clearance under Guideline F (Financial Considerations) due to significant and recent financial issues. The applicant had multiple delinquent credit card accounts and a recent bankruptcy discharge. The judge determined that the applicant's financial irresponsibility and failure to demonstrate future financial stability precluded a favorable security clearance decision.

The Statement of Reasons detailed seven specific delinquent credit card accounts. These included an individual account with creditor #1, opened in February 1994, which became delinquent in September 1994 with a $2,239.00 balance, and a joint account with creditor #2, opened in November 1993, which became delinquent with $2,025.00 owing. Other accounts included a joint account with creditor #3, delinquent with a $3,782.00 balance, and an account with creditor #4, delinquent with a $5,808.00 obligation.

Further delinquencies involved an account with creditor #5, where the applicant stopped making payments on a $963.00 high credit account, and a joint account with creditor #6, where $3,303.00 was charged off. Finally, a VISA account with creditor #7, with a $1,400.00 credit limit, became delinquent and approximately $1,330.00 was charged off. The judge found that the applicant's history of not meeting financial obligations, totaling approximately $33,662.00, indicated a pattern of irresponsible financial behavior and a lack of rehabilitation.

Why the Applicant Was Denied

The applicant had a history of not meeting financial obligations, as evidenced by multiple delinquent credit card accounts totaling approximately $33,662.00.
The applicant's financial problems were recent and extensive, indicating a pattern of irresponsible financial behavior.
The applicant failed to demonstrate sufficient rehabilitation or a clear plan for managing future financial responsibilities.

Conditions Referenced

Disqualifying

F.1raisedHistory of Not Meeting Financial Obligations
F.2raisedInability or Unwillingness to Satisfy Debts

Key Rule Quoted

“Security clearance decisions are not designed to punish applicants for past wrongs but instead involve an assessment of future risk, i.e., whether one can be counted on to adhere to his security responsibilities.”
— Department of Navy v. Egan, 484 U.S. 518, 531 (1988)

Procedural Posture

SOR issuedApr 24, 1997
Answer filedMay 20, 1997
Hearing heldAug 14, 1997
Decision dateSep 9, 1997

Cite For

Financial Irresponsibility as a Disqualifying Factor Under Guideline F
The Impact of a Recent Bankruptcy Discharge on Security Clearance Decisions
The Necessity of Demonstrating Future Financial Stability for Security Clearance Approval

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	Applicant's individual revolving credit card account with creditor #1, opened in February 1994, became delinquent in September 1994 with an outstanding balance of $2,239.00. Applicant's last payment on the account was sometime between January and March 1995, and the account was canceled by the creditor in about October 1995. As of May 1997, he owed $2,055.00 to the creditor. $2,055	Against Applicant	Credit Card Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.b	In November 1993, Applicant opened a joint revolving credit card account with creditor #2. High credit on the account was $2,000.00. The account became delinquent with $2,025.00 owing as of September 1994 and it was charged off to profit and loss. As of May 1997, Applicant owed $1,824.00 to the creditor. $1,824	Against Applicant	Credit Card Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.c	Applicant opened a revolving joint credit card account with creditor #3 in January 1994. The account was termed delinquent in July 1995 with a $3,782.00 balance owed. That balance remained due as of May 1997. $3,782	Against Applicant	Credit Card Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.d	Another revolving credit card account, which was opened in January 1991 with creditor #4, also became delinquent in July 1995. A $5,808.00 outstanding obligation was written off to profit and loss. As of May 1997, Applicant owed $5,448.00 on the account. $5,448	Against Applicant	Credit Card Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.e	Applicant opened a credit card account with creditor #5 in October 1988. High credit on the account was $963.00. Applicant stopped making payments on this card. As of May 1997, he owed creditor #5 $805.00. $805	Against Applicant	Credit Card Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.f	Applicant was co-maker on a revolving credit card account opened with creditor #6 in June 1993. High credit on the account was $3,000.00. Applicant could no longer manage the minimum monthly payments and $3,303.00 was charged off to profit and loss in January 1996. As of May 1997, Applicant owed an estimated $3,125.00 on the account. $3,125	Against Applicant	Credit Card Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.g	In September 1993, Applicant opened a VISA card account with creditor #7. Credit limit on the account was $1,400.00. The account subsequently became delinquent and approximately $1,330.00 was charged off in March 1996. As of May 1997, Applicant owed at least $1,225.00 to the creditor. $1,225	Against Applicant	Credit Card Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant's individual revolving credit card account with creditor #1, opened in February 1994, became delinquent in September 1994 with an outstanding balance of $2,239.00. Applicant's last payment on the account was sometime between January and March 1995, and the account was canceled by the creditor in about October 1995. As of May 1997, he owed $2,055.00 to the creditor.

$2,055

Against Applicant

Credit Card Debt

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.b

In November 1993, Applicant opened a joint revolving credit card account with creditor #2. High credit on the account was $2,000.00. The account became delinquent with $2,025.00 owing as of September 1994 and it was charged off to profit and loss. As of May 1997, Applicant owed $1,824.00 to the creditor.

$1,824

Against Applicant

Credit Card Debt

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.c

Applicant opened a revolving joint credit card account with creditor #3 in January 1994. The account was termed delinquent in July 1995 with a $3,782.00 balance owed. That balance remained due as of May 1997.

$3,782

Against Applicant

Credit Card Debt

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.d

Another revolving credit card account, which was opened in January 1991 with creditor #4, also became delinquent in July 1995. A $5,808.00 outstanding obligation was written off to profit and loss. As of May 1997, Applicant owed $5,448.00 on the account.

$5,448

Against Applicant

Credit Card Debt

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.e

Applicant opened a credit card account with creditor #5 in October 1988. High credit on the account was $963.00. Applicant stopped making payments on this card. As of May 1997, he owed creditor #5 $805.00.

$805

Against Applicant

Credit Card Debt

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.f

Applicant was co-maker on a revolving credit card account opened with creditor #6 in June 1993. High credit on the account was $3,000.00. Applicant could no longer manage the minimum monthly payments and $3,303.00 was charged off to profit and loss in January 1996. As of May 1997, Applicant owed an estimated $3,125.00 on the account.

$3,125

Against Applicant

Credit Card Debt

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.g

In September 1993, Applicant opened a VISA card account with creditor #7. Credit limit on the account was $1,400.00. The account subsequently became delinquent and approximately $1,330.00 was charged off in March 1996. As of May 1997, Applicant owed at least $1,225.00 to the creditor.

$1,225

Against Applicant

Credit Card Debt

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

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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

APPEARANCES

STATEMENT OF CASE

FINDINGS OF FACT

POLICIES

CONCLUSION

FORMAL FINDINGS

DECISION

FOOTNOTES