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Summary

The applicant, a 36-year-old defense contractor, faced issues under Guideline F (Financial Considerations) due to a history of financial irresponsibility, including multiple delinquent debts and a prior bankruptcy. The judge found that the applicant failed to provide sufficient evidence of rehabilitation or a plan to address his debts, leading to a denial of his security clearance.

Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: In 1991, the Applicant filed for Chapter 13 Bankruptcy and later changed it to Chapter 7 at the advise of his attorney. The Applicant discharged approximately $23,450 in past due indebtedness (1.a). The Applicant was indebted to a State's child support enforcement division in the amount of $10,614.85. As of October 1998, this account remained outstanding. The Applicant states that the amount of the debt listed is wrong, and that he has now paid off the debt (1.b). The Applicant was indebted to a utility service in the amount of $301.26 for a debt on an account that was closed in September 1992. As of October 1998, this account remained outstanding. The Applicant states that his soon to be ex-wife continued to use the account after their separation. He intends to pay the amount owed (1.c). The Applicant was indebted to a telephone company in the amount of $565.92 for a balance owed on an account that was closed in September 1992, and turned over to collection in 1993. As of October 1998, this account remained outstanding. The Applicant states that his soon to be ex-wife continued to use the account after their separation. He intends to pay the amount owed (1.d). The Applicant was indebted to a creditor in the amount of $16,639.21 for a balance owed on a student loan account that was opened in 1991 and turned over to collection in June 1996. As of October 1998, this account remained outstanding. The Applicant states that he owes approximately $3,000.00 less than stated, and that he has consistently made payments on the account. He intends to pay the amount owed (1.e). The Applicant was indebted to a creditor in the amount of $147.00 for a judgment entered against him in October 1996. As of October 1998, this account remained outstanding. The Applicant states that he was not aware of the debt until his security clearance investigation. He intends to pay the amount owed (1.f). The Applicant was indebted to a creditor in the amount of $785.00 for a balance owed on an account that was turned over for collection in October 1996. As of January 1999, this account remained outstanding. The Applicant states that he was not aware of the debt until his security clearance investigation. He intends to pay the amount owed (1.g). The Applicant was indebted to a creditor in the amount of $524.00 for a balance owed on an account that was turned over for collection in October 1996. As of January 1999, this account remained outstanding. The Applicant states that he was not aware of the debt until his security clearance investigation. He intends to pay the amount owed (1.h). The Applicant was indebted to a creditor in the amount of $55.20 for a balance owed on two accounts which were turned over to collection in October 1996. As of January 1999, these accounts remained outstanding. The Applicant states that the debt was incurred by his soon to be ex-wife without his knowledge and consent. He intends to pay the amount owed (1.i). The Applicant was indebted to a creditor in the amount of $132.00 for a judgment entered against him in December 1996. As of October 1998, this account remained outstanding. The Applicant states that the debt was incurred by his soon to be ex-wife without his knowledge and consent. He intends to pay the amount owed (1.j). The Applicant was indebted to a telephone service in the amount of $1,265.39 for the balance owed on a long distance service account which was turned over for collection in September 1997. As of October 1998, this account remained outstanding. The Applicant states that the debt was incurred by his soon to be ex-wife without his knowledge and consent. He intends to pay the amount owed (1.k). The Applicant was indebted to a creditor in the amount of $4,160.60 for a balance owed on an account which was turned over for collection in September 1997. As of January 1999, this account remained outstanding. The Applicant states that he was not aware of the debt until his security clearance investigation. He intends to pay the amount owed (1.l). The Applicant was indebted to a medical clinic in the amount of $45.50 for a balance owed on a patient service account which was opened in December 1997, and subsequently turned over to collection. As of January 1999, this account remained outstanding. The Applicant states that he was not aware of the debt until his security clearance investigation. He intends to pay the amount owed (1.m). The Applicant's personal financial statement of September 30, 1998, indicates that his monthly expenses exceed his monthly income which does not include repayment of the delinquent debts set forth in subparagraphs 1(a) through 1(n), except 1(b). The Applicant states that he recently received a promotion with his company, and his income now comfortably exceeds his expenses which will allow him to pay off his outstanding debts (1.o).

The judge denied the clearance. The government raised disqualifying conditions F.1, F.3. The decision turned on the following: The applicant has a history of financial irresponsibility, including multiple delinquent debts and a bankruptcy discharge; The applicant failed to respond to the Government's File of Relevant Material, leaving the record silent on rehabilitation efforts; The applicant's financial issues are recent, ongoing, and indicative of a pattern of irresponsibility.

Why the applicant was denied

• The applicant has a history of financial irresponsibility, including multiple delinquent debts and a bankruptcy discharge.
• The applicant failed to respond to the Government's File of Relevant Material, leaving the record silent on rehabilitation efforts.
• The applicant's financial issues are recent, ongoing, and indicative of a pattern of irresponsibility.

Conditions referenced

Key rule quoted

“The adjudicative process is an examination of a sufficient period of a person's life to make an affirmative determination that the person is an acceptable security risk.”

Procedural posture

• SOR issuedJul 30, 1999
• Answer filedAug 11, 1999Applicant elected to have the case determined on a written record.
• Hearing held—No hearing; case determined on written record.
• Decision dateNov 22, 1999

Cite for

• Financial Irresponsibility as a Basis for Security Clearance Denial
• Failure to Respond to the Government's Evidence Can Impact the Outcome
• The Importance of Demonstrating Rehabilitation in Financial Matters