COVID-Related Financial Considerations and Your Security Clearance

Financial difficulties brought about by the COVID-19 coronavirus could threaten your security clearance.

COVID-19 has caused an unexpected reduction in salary and wages for hundreds of thousands of Americans in recent months. Have your wages been reduced? Have you or your spouse been laid off? Are you struggling to keep up with your mortgage or consumer debt? How about your student loans? 

Some positions require a security clearance. The loss of your clearance could mean the loss of your job. If you hope to keep your security clearance, the time to act is now. 

Guideline F of the Adjudicative Guidelines gives a detailed explanation of the “concern”, but the ultimate question is whether you acted responsibly given the circumstances. You will have an opportunity to mitigate the Government’s concerns if you receive a Statement of Reasons (“SOR”) alleging Financial Considerations issues. It may be too late to start working toward mitigation after you receive the SOR.

What can you do to create a record of responsible conduct if you have suffered a reduction in income? The key is to create a record that you have acted responsibly given the circumstances.

First, you need to ensure that you develop a written budget and stick to it. If you are unable to cover your costs, then you need to work with your creditors to see what options are available to you to reduce payment amounts. You might need to rank your debts in order of most influential.

For example, failing to pay your taxes or your student loan payments might carry more weight than a failure to make a full payment on a credit card. You might be in a position where you will need to focus your efforts (and money) on debts that will be more difficult to resolve when your income bounces back.

Another issue to consider is whether you are living outside of your means. Your budget should be adjusted accordingly.

Finally, there are some last ditch efforts that might help you to maintain your clearance. There is a common misperception that filing for bankruptcy protection will result in the revocation of your security clearance. Filing for bankruptcy protection is not an automatic bar to holding a clearance. It might actually be the responsible thing to do given your circumstances at the time. You should be careful not to only speak with a bankruptcy attorney about this issue if you hold a clearance. You should speak with an experienced security clearance attorney before taking a drastic approach, such as filing for bankruptcy. You might consider contacting a firm that has a security clearance team and a bankruptcy team to ensure that your team works together to protect your interests.

If you receive notification that your security clearance might be revoked, you should take it very seriously. Far too many people respond on their own with a brief and unsupported response, which often results in the loss of the security clearance. This approach actually creates a record that could be used against you for the remainder of the adjudication process.

If you take the right steps now, you will be prepared to provide proof that you acted responsibly given the circumstances. In your response, you should: (1) respond to the Financial Consideration (Guideline F) allegations and (2) submit evidence to support the “Whole Person” concept. An experienced security clearance attorney can assist you with developing a plan now to show that you acted responsibly given the circumstance and can assist with submitting a well-prepared response to any future allegations. Be proactive, not reactive. 

Anthony J. Kuhn, Esq. is a Partner with Tully Rinckey PLLC. He is the Managing Partner of the firm’s Buffalo, NY office, and is the Chair of Tully Rinckey’s nationwide Military and National Security practice groups. His practice focuses on the representation of military personnel, federal agents and employees, as well as private employers and non-profit corporations.