Home Foreclosures and Security Clearances

The crisis affecting the U.S. economy has made a discernible mark on security clearance disputes, according to a new study of clearance revocation cases.

“Since the collapse of the housing market in 2008, debt resulting from job losses and home foreclosures has had a devastating effect on people holding national security clearances. That, more than any other factor today, is causing the revocation or denial of security clearances, resulting in the loss of good paying jobs, and putting skilled workers further and further behind in their effort to dig out of debt.”

The new study (pdf), by attorney Sheldon I. Cohen, examined cases before the Department of Defense Office of Hearings and Appeals (DOHA), which is the only one of the eleven clearance adjudicating bodies to publish its decisions. [Correction: The Department of Energy also publishes its clearance adjudication decisions.] The author found a growing trend, though the actual number of cases involved remains fairly small.

“From 2000 to 2002, there was one reported case at DOHA dealing with foreclosure. Between 2003 and 2006, there averaged three cases per year. In 2007 and 2008, the number of cases dealing with foreclosures jumped to nine each year. In 2009, there were twenty-four such cases, and in the first five months of 2010, which looks like a record year, there have been nine foreclosure cases thus far.  While DOHA is the only adjudicative body for clearances that publishes its decisions [note correction above], there is no reason to believe that any of the other ten federal Adjudication Authorities come to different results.”

See “Debt and Home Foreclosures: Their Effect on National Security Clearances” by Sheldon I. Cohen, September 2010.

No Responses to “Home Foreclosures and Security Clearances”

  1. George Smith September 21, 2010 at 1:48 PM #

    It is a ridiculously low number, especially considering the quantity of foreclosures nationwide.

    One could contrast it with the number of foreclosures in the civilian non-defense population. And how the resulting damaged credit ratings, on top of a lost job, make it even more dire finding work in the slumped economy.

    One could make the opposite case that the small number of security revocations due to foreclosure, as compared to the loss of job viability everywhere else, shows a measure of the durability of work in the national security complex.

    It’s the one industry that has not been much impacted by the economic slump plaguing the rest of the middle class. Paradoxically, it seems to return the least to society. It being difficult to determine what material or social value holding a security clearance adds to the general welfare.

  2. T.J. Mac September 23, 2010 at 7:01 AM #

    “…..the small number of security revocations due to foreclosure, as compared to the loss of job viability everywhere else, shows a measure of the durability of work in the national security complex.”

    Really? I am missing your logic there. You have a timeline comparison of the same industry with a marked increase in foreclosures. How does that figure relate to durability of the ‘national security complex’?

    “……seems to return the least to society. It being difficult to determine what material or social value holding a security clearance adds to the general welfare.”

    I realize that in some utopian version of life, “National Security” is a vile and offensive phrase. I actually wished I lived there myself. Unfortunately, I live in this world. The world of real threats and need for real reactions to those threats. I for one like to think that what I (and millions like me) have done for the last 30 years plus has added to the general welfare. In fact I take pride that work in the “national security complex” allows you to have a myopic view of society and freely express that.

    BTW: for the record, DOHA does not hear cases on military members and they have been hit very hard by the loss of security clearances due to debt issues. They have no real avenue of appeal so simply lose their clearance

  3. George Smith September 23, 2010 at 12:58 PM #

    Employment in the national security industry has been durable compared to the majority experience through the Great Recession. That’s just a fact, and a fairly glaring one.

    I for one like to think that what I (and millions like me) have done for the last 30 years plus has added to the general welfare. In fact I take pride that work in the “national security complex” allows you to have a myopic view of society and freely express that.

    You spin the thread of your argument too finely when roping in the overused, patronizing and vain bromide about your line of work “allowing” me to have the freedom of my opinions.

  4. SecurityRep September 23, 2010 at 1:05 PM #

    It is not true that military personnel have no avenue to appeal revocations and yes, DOHA does hear military cases. From their website, http://www.dod.mil/dodgc/doha:

    “The Defense Office of Hearings and Appeals (DOHA)….conducts personal appearances and issues decisions in security clearance cases for DoD civilian employees and military personnel.” Military members can also go before the Personnel Security Appeals Board.

    As long as you have documentation that you are doing what you can to pay back your debts the clearance facilities will work with you. The clearance facility has went as far as to recommend bankruptcy if it seemed there is no way the individual could repay their debt and their financial situation can be mitigated (i.e. events that occured through no fault of the individual). It’s a last resort, but sometimes necessary to save your security clearance and ultimately your job.

  5. T.J. Mac September 23, 2010 at 4:21 PM #

    SecurityRep. You are absolutely correct that military members can avail themselves of the DOHA appeal process. While I have never run across a member who has done so….it certainly can be done. I apologize for mispeaking on this matter.

    George Smith: The author used the statistics to illustrate the impact of the damaged economy on those with security clearances. A 24-fold increase in occurrences in a sub-set of any group is significant and it is moot as to whether the industry the sub-set works for is more or less affected by events in the economy. I agree that to date the defense industry has been spared a lot of the pain the rest of the US industrial base has experienced. Of course, given the timeline of implementation of the US defense budget it may be premature to crow too much about this apparent sparing of pain. Your specious attempt to use the numbers to minimize this impact while at the same time delivering an offensive snide aside as to the value to society of the “national security complex” is as well worn and recognizable as you claim my assertion of that same group of people aiding in your inherent right to voice your opinion. It may gall you to think so but it is the truth nonetheless, regardless of how “overused, patronizing and vain” it may seem to you.

  6. Steve Ellis September 28, 2010 at 2:51 PM #

    I work for DOE and need a security clearance for my job. In June of 2015 my house payment will go up, by more than $1000 a month. I have called all four of the banks to try and work something out. Because my house has gone from $650,000 down to around $275,000 in value, I can’t get any one of them to change the loan, to something I can pay. I have seen four bankruptcy attorneys, who all told me the same thing. We’ll file bankruptcy and let them foreclose. Can’t see any other way out. Need real help, not some bank or government run around program that helps very few!