Many security clearance denials and revocations will make you cringe. And not because people are weird (but people are weird), but often because as you read through the case you can see the path the applicant could have taken to lead toward a favorable eligibility determination—and yet they clearly took a different path.
Summary:
A 65-year-old defense contractor, employed since 2018 and with a personnel vetting history dating back to 2009, was denied continued access to classified information. The decisive factor? A pattern of unresolved financial issues—chronic tax delinquencies, large outstanding debts, and insufficient remedial action. His financial instability raised serious concerns under Adjudicative Guideline F.
The Charges
- Failure to file Federal and state taxes spanning six years (2017–2022).
- Nine delinquent accounts totaling over $114,000.
Amid hearings from November 2023 to October 2024—and a reopening to allow submission of additional documents—the adjudicator found:
- Some debts were resolved (e.g., small car payment and judgments), while several large debts (notably a $35,000 credit card balance and $47,700 HELOC) remained largely unaddressed.
- Partial mitigation: a $9,300 judgment, medical and autopay debts, and the mortgage were either resolved or brought current.
- However, the tax filing failures and unresolved large balances remained unmitigated.
What the Judge Noted
- Tax Filing Failures: No Mitigation
The applicant submitted Returns for 2020–22, but no evidence for 2017–19 filings or state returns. Lack of proof of filing with the IRS or state eroded possible mitigation under Adjudicative Guideline 20(g). - Debt Status: Mixed Results
- Unresolved: A $47,707 HELOC (only partial repayment, no supporting documents) and a $35,242 credit card debt stemming from financial turmoil involving a spouse’s gambling and medical issues.
- Resolved: Smaller debts including a $9,310 charged-off account (eventually paid off via garnishment), an $853 auto charge-off, mortgage arrears (refinanced and current), and minor judgments.
- Mitigation Factors Considered
The judge applied standard mitigating factors:- Personal circumstances (medical emergencies, unemployment) helped explain, but not excuse, the failures.
- While the applicant expressed strong intent to repay remaining debts, the lack of a concrete record of repayment or tax filings left doubts.
- Whole-Person Analysis
Guided by a nine-factor “whole-person” analysis, the adjudicator assessed seriousness, recency, voluntary nature, documentation, and likelihood of recurrence. Despite the applicant’s candor and half-efforts, unresolved liabilities and lack of concrete actions tipped the balance against him. The applicant also failed to provide documentation, including related to advice from his attorney or payment plans. That was especially significant for the multiple years of unpaid taxes – including for the years with the Statement of Reasons was first submitted.
The Verdict
- Formal findings: Tax and large debt delinquencies—AGAINST applicant. Minor debts—FOR the applicant.
- Conclusion: “Eligibility for access to classified information is denied.” The record contained too many unanswered financial issues to be “clearly consistent with the national interest.”
Takeaway Lessons
- Documentation is Everything: Simply stating intent or citing personal hardship is insufficient—document recoveries, payments, and tax filings. No, the government doesn’t trust you. You need to verify and document the what and why behind any issues.
- Timeliness Matters: Swift resolution—even on older debts—can help trigger mitigation under AG 20(a), 20(b), and 20(d).
- Stay Ahead of Tax Obligations: IRS or state non-compliance, especially over multiple years, goes straight to AG 20(g)—and failing to file or enroll in repayment programs is a serious red flag.
- Be Proactive: Blanket statements like “I’ll pay it off later” fall short. Judges need clear evidence—like payment plans, scheduled filings, or ongoing compliance.
This case underscores the high bar for financial remediation in clearance adjudication. Even when faced with legitimate, sympathetic circumstances—like illness, unemployment, spousal medical bills, or a spouse’s gambling—action speaks louder than words. Persistent financial instability, unfiled taxes, and unresolved debts signal to adjudicators that an applicant may be untrustworthy, unreliable, or vulnerable to undue influence.
Fixing your finances isn’t just about paying what you owe—it’s about demonstrating responsibility, accountability, and resolving past mistakes before they threaten your clearance.
