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Summary

The applicant, a 44-year-old married defense contractor, sought a Secret-level security clearance but was denied due to financial irresponsibility and personal conduct issues. The judge found a pattern of delinquent debts and a serious misappropriation of life insurance proceeds intended for his nephews, demonstrating poor judgment and unreliability.

Under Guideline E (Personal Conduct) and Guideline F (Financial Considerations), the Statement of Reasons alleged the following: The Applicant completed a Questionnaire for National Security Positions which required him to indicate whether in the last seven years, he has ever been over 180 days delinquent on any debts, and whether he was currently 90 days overdue on any debts. The Applicant responded "no", to both questions (2.a). The Applicant contends that his wife has been in control of paying the family bills, and that he had no knowledge of the extent of his past due indebtedness (2.b). The Applicant was indebted to a to a creditor in the amount of $68.00 for an account referred to collection in May 1991. The Applicant states that in June 1998, he satisfied the debt, and that it is no longer outstanding (1.a). The Applicant was indebted to a credit bureau in the amount of $480.00 for a debt referred to collection in May 1991. In June 1998, the Applicant satisfied the debt, and it is no longer outstanding (1.b). In 1994, the Applicant wrongfully received proceeds of a life insurance policy that was intended to benefit his two minor nephews under a constructive trust. Instead, the Applicant spent the proceeds for the benefit of himself and his wife. No part of the funds or interest earned by the funds were used or given to his nephews as their intended inheritance. In June 1994, a judgment was entered against the Applicant in the amount of approximately $30,584.89. In August, 1994, a judgment was entered against him in the amount of approximately $5,085.27 for plaintiff's costs and attorney fees (1.c). The Applicant was indebted to the State taxing authorities in the amount of $600.00 for a tax lien that was filed against him in July 1995. The Applicant states that he paid the taxes owed, and that the tax lien was released in June 1997 (1.d). The Applicant was indebted to a department store in the amount of $21.00 for a delinquent account. In June 1998, the Applicant satisfied the debt, and it is no longer outstanding (1.e). The Applicant was indebted to a department store in the amount of $56.00 for a delinquent account. The Applicant states that in June 1998, he satisfied the debt, and that it is no longer outstanding (1.f).

The judge denied the clearance. The government raised disqualifying conditions F.1, F.3, E.2. The judge applied mitigating conditions F.6. The decision turned on the following: The applicant has a history of financial irresponsibility, including significant unpaid judgments; The applicant misappropriated life insurance proceeds intended for his nephews, indicating poor judgment; The applicant failed to respond to the Government's File of Relevant Material, leaving questions about rehabilitation unanswered.

Why the applicant was denied

• The applicant has a history of financial irresponsibility, including significant unpaid judgments.
• The applicant misappropriated life insurance proceeds intended for his nephews, indicating poor judgment.
• The applicant failed to respond to the Government's File of Relevant Material, leaving questions about rehabilitation unanswered.

Conditions referenced

Key rule quoted

“Eligibility for access to classified information is predicted upon the individual meeting these personnel security guidelines.”

Procedural posture

• SOR issuedMay 29, 1998
• Answer filedJun 22, 1998Applicant elected for a written record.
• Hearing held—No hearing; case determined on written record.
• Decision dateSep 25, 1998

Cite for

• Financial Irresponsibility as a Basis for Clearance Denial
• Misappropriation of Funds as Indicative of Poor Judgment
• Failure to Respond to Government Inquiries as Detrimental to the Applicant's Case