Security Clearance Denial

Caribbean Vacations and Luxury Vehicle Leases Result in Clearance Denial

Living within one’s means is one of many ways to keep yourself out of a financial mess. When money gets tight you shouldn’t charge mortgage and car lease payments to credit cards, and you definitely shouldn’t take vacations to the Caribbean when you have $39,000 in delinquent debt. A defense contractor found this out the hard way. Here is a quick summary of the case:

This security clearance applicant and his wife had two houses and in anticipation of his wife getting laid off, sold the one house and requested a loan modification for their primary residence. Still, they were short on total income versus bills and decided to use credit cards to pay the mortgage for several months. They also charged leases for two luxury vehicles and four trips to the Caribbean to these credit cards. Eventually, realizing he has to do something to get out of this jam, the applicant signed up with a debt consolidation company of ill repute to try and address his delinquencies, but the company folded when the Federal Trade Commission shut them down and sued for fraudulent practices.

The applicant’s wife eventually received a $41,000 lump sum disability payment and a monthly stipend of $1,600, however, they failed to put any of that towards their delinquent debt. Rightly so, the judge in the initial appeal opined the applicant had not acted responsibly in addressing his debt even though it appears they had the means to do so. The result was the same in the subsequent appeal to DOHA.

Under financial considerations in the adjudicative guidelines, failure to live within one’s means and act responsibly in addressing delinquent debts are serious concerns and are a direct correlation to evaluating trustworthiness, reliability, and being an overall good security risk. As noted in the previous year’s statistics, financial issues is by far the number one reason for a clearance denial. 


  1. Using credit cards to pay the mortgage is a really bad idea, but by comparison with the other dumb moves it was the smartest thing they did.