Financial Concerns For Security Clearance Holders

By John V. Berry, Esq.,

One of the most often raised issues in security clearance cases involves the issue of financial concerns for a federal employee or government contractor.  The majority of security clearance cases, by far, involve this issue.  This type of security clearance case falls under Guideline F, Financial Considerations of the new June 2017 Adjudicative Guidelines contained in Security Executive Agent Directive 4.   Guideline F is the section of the Adjudicative Guidelines which involve financial considerations and provides the basis to evaluate their impact on an individual’s ability to maintain a security clearance.

Guideline F issues usually come into play when a federal employee or contractor has built up significant debts or is overextended in their ability to make monthly payments towards debts.  The source of these concerns generally comes from the credit report obtained by security clearance investigators.  The basis for this concern is that an individual may be more vulnerable to foreign or other types of influence if they are in significant financial debt or cannot meet their bills.

This type of case is best illustrated by a ruling of the Defense Office of Hearings and Appeals (DOHA), in ISCR Case No. 10-040008 (DOHA Jan. 31, 2011). In this case, DOHA Administrative Judge Carol Ricciardello reviewed a security clearance denial that involved a federal contractor who had run into difficulties under Guideline F, Financial Considerations.

Sample Case Background

In particular, the case (ISCR Case No. 10-040008) at issue involved a federal contractor that had gotten into security clearance difficulties when a close family friend had sought the contractor’s help in co-signing for a mortgage in order to help them qualify for the home purchase.  The contractor ultimately agreed to help out the family friend, on a temporary basis, in order to help them secure the mortgage.

Unfortunately, the family friend experienced financial difficulties after a number of months and was unable to make payments on the home, causing the federal contractor to become liable for making these payments.  Eventually, the contractor had to assume full responsibility for the close family friend’s financial obligations.  This, ultimately, led to having to sell the home through a short sale, and ultimately a dispute between the contractor and the mortgage company about the amount that she owed.

The federal contractor eventually received a Statement of Reasons (SOR), relating to the disputed debt owed to the mortgage company as she attempted to negotiate a settlement with the creditor.  The case eventually was assigned to the DOHA and an administrative judge was assigned to hear it.  The federal contractor had sought the restoration of her clearance.

Why the Judge Granted the Security Clearance 

The Administrative Judge, in granting the federal contractor’s security clearance, made several key observations about her actions in the case, which are important to note by others facing issues under Guideline F, Financial Considerations.   The positive factors in the case that mitigated the concerns regarding the federal contractor’s security clearance included:

* That the contractor had a record of paying her bills on time;

* That the contractor had a record of keeping a savings account;

* That the contractor had kept up the funding her retirement accounts;

* That despite the fact that she was attempting to help a family friend, and that the mortgage was not for her own home, that she assumed the debt and took full responsibility for the matter;

* That the contractor was financially solvent and lived within her means;

* That the contractor had a provided evidence to show her good character and honesty;

* That despite the difficult situation that the contractor faced, that the contractor attempted to confront the issues head on and acted with responsibility.

Lessons for Financial Consideration Cases

In security clearance cases involving Guideline F, Financial Considerations, it is very important to understand just how critical it is to demonstrate that the federal employee or government contractor involved has been responsible regarding their finances or has made specific changes in their conduct to eliminate future security concerns.  In the case, above, the contractor was able to demonstrate this in the hearing process before the Administrative Judge and thereby obtain her security clearance. These cases can involve many differing types of variables and a number of mitigating factors specific to each case so retaining counsel to represent and advise the person involved is critical because each case is different.


In sum, when facing financial consideration security clearance cases, it is very important to have counsel. If you need assistance with a security clearance case, please call us at (703) 668-0070 or contact us at or through this page.