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Clock Ticks for Cash-Strapped Feds With Security Clearances

Federal Employment Law

By Mathew B. Tully

It’s hard to believe that it was four years ago this December that the nation entered what was to become the longest recession since the Great Depression. Although the National Bureau of Economic Research says that this recession ended in June 2009, many financial hardships have outlived it.

Some federal employees who managed to retain their security clearances since the recession began in December 2007—despite experiencing severe financial woes—may think it has been a matter of luck that their clearance status has not changed. However, as many will find out in 2012, their luck could be winding down as their clearances come up for reinvestigation.

Federal employees who received top secret clearances around the start of the recession in 2007—or whose clearance at that level was last reinvestigated during that year—will likely see their clearance subjected to a mandatory five-year review in 2012. Secret clearances, meanwhile, are reinvestigated every 10 years, and confidential clearances every 15 years.

This reexamination period means that Office of Personnel Management investigators likely will see the full range of the financial tumult the recession unleashed on these federal employees. Records of a foreclosure, bankruptcy, large sums of credit card debt or unpaid taxes could prompt a letter of intent (LOI)/statement of reasons (SOR) to revoke a federal employee’s security clearance.

However, federal employees should not let financial troubles wrought by the recession jeopardize their federal careers. It is the job of security clearance investigators to find matters of concern, and it is up to federal employees and their attorneys to prove that there is nothing to worry about.

This can be done by responding to the SOR and requesting a hearing before a Defense Office of Hearings and Appeals (DOHA) administrative judge. With the assistance of a security clearance law attorney, federal employees could:

  • Provide information proving that certain debts or taxes actually were paid
  • Show that a payment plan, such as a Chapter 13 wage earner plan, is in place to pay off debts
  • Explain that unforeseen circumstances, such as an illness, divorce, death or job loss caused the financial problems
  • Avoid foreclosure deficiencies by using deeds in lieu of foreclosure or short sales
  • Note any incorrect information analyzed by an adjudicator and provide the correct information.

The federal government views financial problems as indications of poor self-control and poor judgment. It worries that overextended federal employees will take bribes or trade secret information to enemies or allies in return for money that could go toward paying off debts. It is imperative for a federal employee facing security clearance revocation to contact a security clearance attorney, who can help allay the government’s concerns.

Mathew B. Tully is the founding partner of Tully Rinckey PLLC. He concentrates his practice on representing military personnel and federal government sector employees and can be reached at The information in this column is not intended as legal advice.


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