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Why Would a Security Clearance Be Denied?

Schrameck Law, P.L.L.C. Nov. 25, 2024

Security clearance is essential for federal employees, contractors, and others handling sensitive information, but the process can be challenging, and denials aren’t uncommon. For federal employees in Michigan and beyond, understanding the process and common denial reasons is crucial for managing government employment law.

When you need help understanding employment law in the United States, turn to me at Schrameck Law, P.L.L.C. I can help you understand the common reasons for security clearance denial, the appeals process, and will offer thorough guidance on what applicants can do to maximize their chances of approval.

Security Clearance: What It Is and Why It Matters

Before discussing denial reasons, it’s important to understand security clearance. This federal process determines an individual's eligibility to access classified information through a thorough background investigation that assesses trustworthiness, reliability, and allegiance to the United States. Clearance levels vary based on the sensitivity of the information.

  • Confidential: Access to information that could cause damage to national security if disclosed.

  • Secret: Access to information that could cause serious damage to national security.

  • Top secret: Access to information that could cause exceptionally grave damage to national security.

Due to the high stakes associated with security clearance, applicants undergo a detailed examination of their personal and professional lives. Despite their qualifications or intent, several factors can lead to a denial of security clearance.

Common Reasons for Security Clearance Denial

Each security clearance investigation covers a range of factors, often referred to as "adjudicative guidelines." Here’s an overview of some of the most common reasons for a clearance denial:

Financial Issues

  • Debt and bankruptcy: Excessive debt or recent bankruptcies can be red flags. High levels of debt may indicate financial irresponsibility or vulnerability to bribery or coercion.

  • Unpaid taxes: Failure to pay taxes on time or inaccuracies in tax reporting can suggest a lack of responsibility and may lead to denial.

  • Unexplained wealth: Unusual increases in income or wealth without clear sources can trigger concerns about corruption or other criminal activity.

Criminal Conduct

  • Past criminal behavior: A record of criminal activity, even if it occurred in the distant past, can affect clearance eligibility. Violent offenses or repeated offenses, especially those related to theft or dishonesty, are particularly problematic.

  • Pending charges: Even if charges haven’t led to a conviction, ongoing criminal investigations or pending charges can delay or prevent clearance approval.

Drug or Alcohol Abuse

  • Substance abuse: Current or past substance abuse can be grounds for denial. The use of illegal drugs, even if not habitual, can be problematic, as can alcohol abuse that has led to criminal charges or job-related issues.

  • Failure to report: Dishonesty about past drug use or substance abuse rehabilitation can also be problematic, as the process highly values transparency.

Mental Health Concerns

  • Mental health disorders: While most mental health conditions don’t automatically disqualify applicants, conditions that affect judgment or impulse control can raise concerns. This includes untreated or unmanaged issues that could lead to impaired decision-making.

  • Failure to seek treatment: Refusal to seek treatment or comply with recommended therapy can signal a lack of responsibility and self-awareness, potentially impacting security clearance decisions.

Foreign Influence and Preference

  • Foreign contacts or interests: Close associations with foreign nationals, especially those from countries that aren’t allied with the U.S., can raise questions about allegiance.

  • Foreign financial interests: Financial holdings in foreign banks or investments in foreign-owned entities can be problematic if they suggest potential conflicts of interest.

  • Foreign travel: Frequent travel to countries with strained U.S. relations can raise security concerns.

Personal Conduct and Character

  • Lack of honesty or integrity: Integrity is critical. Lying on the SF-86 form, which is the questionnaire for national security positions, is an instant red flag.

  • Misuse of technology or classified information: Misuse of information systems or unauthorized disclosure of sensitive information can severely harm a clearance application.

  • Poor judgment: Patterns of poor judgment in personal or professional life, such as legal or ethical violations, can be considered as reasons for denial.

The Appeals Process: What to Do if Your Clearance i=Is Denied

When an applicant receives a denial, it doesn’t necessarily mean the end of the road. There’s a structured appeals process that provides an opportunity to challenge the decision. Here’s an outline of what this process looks like:

Understanding the Statement of Reasons (SOR)

The agency denying the clearance will issue a Statement of Reasons (SOR) detailing why the clearance was denied. This document outlines the specific issues uncovered in the background check, often using the adjudicative guidelines.

Responding to the SOR

After receiving the SOR, an applicant typically has 20 to 30 days to respond in writing. This response should address each concern raised and, if possible, provide evidence to counter the claims. An experienced employment law attorney can assist in building a robust response that includes documents, character references, or proof of rehabilitation efforts.

Hearing Before an Administrative Judge

If the response to the SOR isn’t sufficient, the applicant may request a hearing before an administrative judge. During this hearing, the applicant can present additional evidence, call witnesses, and argue their case. A strong legal representation can make a significant difference during this stage.

Decision and Appeal

After the hearing, the judge will issue a decision. If the applicant is denied again, they may be able to appeal to higher-level boards within the specific agency. This process can be lengthy but may be worth pursuing, especially if new evidence can be presented to strengthen the applicant’s case.

How to Improve Your Chances of Approval

Securing a favorable outcome in the security clearance process involves being proactive. Here are a few strategies to improve your odds:

Complete All Paperwork Honestly and Accurately

Be thorough when filling out forms, particularly the SF-86. Omitting information, even if it seems minor, can appear dishonest and result in denial.

Address Financial Issues Early

Before applying, review your credit report and address outstanding debts, unpaid taxes, or other financial concerns. Demonstrating financial responsibility through a solid track record can be essential.

Seek Treatment for Substance Abuse or Mental Health Conditions

If you have a history of substance abuse or mental health issues, seek and document treatment. Adjudicators want to see that you’re taking steps to address these matters responsibly.

Be Transparent About Foreign Contacts

Explain any foreign ties, whether family or friends. Documenting these relationships, why they’re benign, and demonstrating loyalty to the U.S. can be helpful.

Consult an Employment Law Attorney if Necessary

If there are potential issues in your background, consulting an employment law lawyer experienced in federal employment and security clearances can be beneficial. They can advise on how to present your application most favorably and guide you through the appeals process if needed.

Frequently Asked Questions

Here are some commonly asked questions about the security clearance process:

Will a Single Financial Mistake Automatically Disqualify Me?

Not necessarily. Minor financial issues can be explained, especially if they occurred in the distant past or have been addressed responsibly.

Can a Denied Clearance Affect Future Employment Prospects?

A clearance denial doesn’t always prevent future employment, but it can complicate opportunities that require clearance. It’s critical to address any issues thoroughly to avoid repeated denials.

Are There Ways to Improve My Chances if I’ve Been Denied Before?

Yes. Seek legal assistance from an employment law attorney to analyze your past denials, address issues, and reapply if your situation has changed. If you’ve corrected the problems cited in your previous denial, you may have better luck on subsequent applications.

Can I Appeal if My Clearance Is Suspended Instead of Denied?

Yes. If your clearance is suspended, you can go through a similar appeals process to restore it. Suspensions often involve temporary issues that, once addressed, can lead to reinstatement.

Reach Out Today

Financial troubles, past criminal conduct, substance abuse, and foreign influence are among the common reasons for denial, but addressing these issues proactively and consulting with a federal employment attorney from Schrameck Law, P.L.L.C., applicants in the United States can better understand the security clearance process and avoid pitfalls. Call me today.