Financial Irresponsibility: Background Information for Security Personnel

Abstract : Financial irresponsibility is one of the criteria that may justify denial or revocation of security clearance. A recent study analyzed the issues that arose in a sample of 7,232 special background investigation cases. In those cases when a single issue was identified by the investigation, it was a financial issue 16.6% of the time. Of all the single issue cases, finances were the basis for 30% of the denials. In cases where three or more issues were identified, finances were one of the issues 48.2% of the time and were one of the reasons for almost 59% of the denials. The present study provides background information on financial issues. Most of the data fall into four general categories. These are: (1) Statistics on the prevalence of bankruptcy and delinquency on various types of debt; (2) Potential indicators of financial problems; (3) The relationship between financial problems and other problems behaviors, particularly the relationship with white collar crime and various compulsive behaviors; and (4) Potential mitigating factors. This report is based on a review of relevant literature and contact with organizations that track consumer financial behavior.