Summary
The applicant, a 52-year-old senior electrical engineer, sought a security clearance under Guideline F due to significant financial difficulties, including a recent Chapter 7 bankruptcy filing. The judge found that the applicant's financial irresponsibility and failure to address debts, despite having a stable income, raised security concerns, leading to a denial of the clearance.
Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: Applicant had two separate credit card accounts with a sales financing company (creditor #1). The first, opened in November 1989, was charged off in August 1994 with an outstanding balance of $1,320.00 (1.a). The second account was charged off in October 1994 with a delinquent balance of $1,190.32 (1.b). Applicant's Mastercard account, opened with a credit union (creditor #2) in July 1984, was charged off in October 1994 with $3,000.00 owed (1.c). In December 1993 Applicant opened an individual revolving charge account with a nationwide department store (creditor #3). A delinquent balance of $331.00 was written off in December 1994 (1.d). Applicant's revolving charge account with a large banking institution (creditor #5), opened in September 1988, was charged off in February 1995 with $4,745.70 owed (1.e). Applicant's individual revolving charge card with a nationwide credit company (creditor #6) was charged off with a $7,249.00 outstanding balance (1.f). Two unpaid medical bills incurred during his emergency hospital visit in January 1995 in the amounts of $289.00 owed to creditor #7 and $50.00 owed to creditor #8 were turned over for collection in July 1995 and November 1995, respectively (1.g). Applicant's revolving charge with a home furnishings retailer (creditor #9), opened in November 1993, was charged off in July 1995 with a $2,111.00 delinquent balance (1.h). In November 1995, the account was charged off with $3,133.00 owed to a nationwide retailer (creditor #10) (1.i). Also turned over for collection in November 1995 were two accounts with creditor #11 for unpaid credit card purchases totaling $385.40 (1.j). In April 1996 his car was repossessed. He remains liable to creditor #12 for the $7,111.92 deficiency balance (1.k.(1)). Applicant failed to remain current on his utility bills. As of June 1996, he owed $166.00 to the power and light company (creditor #14) and $406.00 to the city (creditor #15). These delinquent accounts were placed for collection in November 1996 (1.k.(2)). Applicant is indebted in the aggregate of $44,375.37 to twenty creditors (1.l.). Applicant filed a voluntary petition as an individual debtor under Chapter 7 of the United States Bankruptcy Code, listing $44,375.37 in unsecured nonpriority claims owed to twenty different creditors (1.m.).
The judge denied the clearance. The government raised disqualifying conditions DC 1, DC 3. The judge applied mitigating conditions MC 3, MC 4. The decision turned on the following: The applicant failed to make any payments toward his substantial delinquencies, some dating back to 1994; The applicant's financial problems were ongoing and not isolated, with significant debts remaining unpaid despite stable employment; The applicant's bankruptcy filing did not demonstrate a good faith effort to repay creditors or resolve financial issues.
Why the Applicant Was Denied
- The applicant failed to make any payments toward his substantial delinquencies, some dating back to 1994.
- The applicant's financial problems were ongoing and not isolated, with significant debts remaining unpaid despite stable employment.
- The applicant's bankruptcy filing did not demonstrate a good faith effort to repay creditors or resolve financial issues.
Conditions Referenced
- DC 1appliedHistory of Not Meeting Financial Obligations
- DC 3appliedInability or Unwillingness to Satisfy Debts
- MC 3raisedConditions Beyond the Person's ControlThe applicant cited unforeseen circumstances such as job relocation and medical issues as contributing to his financial difficulties.
- MC 4rejectedGood Faith Effort to Repay DebtsThe applicant's bankruptcy filing was not considered a good faith effort to repay debts.
Key Rule Quoted
“A person who seeks access to classified information enters into a fiduciary relationship with the Government predicated upon trust and confidence.”
Procedural Posture
- SOR issuedJul 11, 1997
- Answer filedSep 4, 1997Requested determination on the written record.
- Hearing held—
- Decision dateFeb 9, 1998
Cite For
- Denial Based on Ongoing Financial Irresponsibility Under Guideline F
- Impact of Bankruptcy on Security Clearance Eligibility
- Failure to Demonstrate Good Faith Efforts to Resolve Financial Issues