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Denis Poroy / AP file
A sign offers military financing at a used car lot in Oceanside, Calif. on Oct. 12, 2006. The lot is one of many businesses in downtown Oceanside that offer credit to Marines from nearby Camp Pendleton.
Nearly 36,000 active-military members who hold security clearances have recently sought urgent financial advice or aid because heavy debts and delinquent bills threatened to void their classified status, according to a nonprofit that helps troops and veterans solve money problems.
“You can lose that security clearance if you have credit or debt issues,” said John E. Pickens III, executive director of VeteransPlus. “If you lose that clearance, you can become un-promotable or you can be taken from your assignment. And, ultimately, you can even receive a bad-conduct discharge.
“If you’re going to be entrusted with national security,” he added, “the military figures you’ve got to at least be able to pay your bills on time.”
Pickens’ nonprofit has offered financial counseling to more than 150,000 current and former service members. Among that crowd of clients, more than half are active duty, National Guard members or reservists. And out of that portion, he said, 46 percent have expressed worries about their security clearances.
Approximately half of America's 2.4 million active duty, National Guard and reserve troops hold some level of security clearance, said Pentagon spokesman Lt. Col. James Gregory. Most of those 1.19 million service members possess the second-highest security rating - "secret" - while the next largest portion hold a higher status: TS/SCI, (Top Secret/Sensitive Compartmented Information), he added. The sensitive nature of certain military jobs typically dictate the security classifications.
“All military members know they are required by the Uniform Code of Military Justice to pay their debts,” Pickens said. “But right now, the Department of Defense says excessive and delinquent indebtedness is the No. 1 cause for denying or revoking security clearances.”
Asked to confirm that massive debt and late payments are, indeed, the leading factors in security-clearance terminations, Gregory said: “One reason (for concern) is that a person with big debts is more likely to accept money in exchange for revealing secrets. So that's why financial things are one of the biggest reasons that a clearance would not be granted or be revoked.
“That said,” Gregory added, “the military takes a ‘whole person’ approach. Finance is only one factor to be considered among many others when it comes to security clearances. The U.S. military pays close attention to debt and other financial issues when it comes to screening applicants for security clearance to handle sensitive information.”
Based on the financial counseling sessions provided by VeteransPlus, statistics show that service members and veterans who approach the nonprofit have an average debt-to-income ratio of 46.5 percent, Pickens said. According to “The Ultimate Credit Handbook,” by Gerri Detweiler, a debt load of 36 percent or less is healthy for most people to carry, but a ratio of 43 percent to 49 percent means that dire financial difficulties are probably imminent unless immediate action is taken.
The nonprofit’s counselors also see an average unsecured debt (such as credit cards) of $9,700 and an average secured debt (such as a home) of $16,500.
How much is too much?
“I wish I knew that number,” Pickens said. “But if you’re not paying your bills and your debt-to-income ratio is what the military would consider to be excessive, they look at you as a risk.
“Military folks are susceptible to the same kinds of pressures and economic things as everybody else,” Pickens adds. “Their spouses get laid off. They have foreclosures. The fact that they have to move around frequently means they’re often upside down on their houses when they have to sell.”
In April 1990, Derek Staden, then 19, learned he was about to be deployed from his Air Force base in Wichita, Kan., to the Middle East as the U.S. military launched Operation Desert Storm. Then a senior airman whose duties included refueling aircraft, Staden’s mailbox suddenly was flooded with offers for credit cards and high-interest loans.
“Just out of nowhere – all from creditors locally,” Staden said. “I guess they knew our base was deploying. All we had to do was endorse the checks and they would cash them for us. I was a young man and I’d never seen anything like that before. I didn’t know how the interest payments worked so I took them and took advantage of them. I bought some things I needed and things I didn’t need.”
When Staden returned to his base later in 1990, those same creditors demanded that he repay the loans or balances or they would report him to his commanding officer. He knew his security clearance would be at risk if his superiors learned of his unpaid bills. He had earned that classified status during basic training. He needed the clearance because he was involved in secret, Cold War practice drills during which he refueled aircraft.
“I had to keep those payments up to speed because the military frowns on having debt issues like that,” Staden said. “It wasn’t an option to call my parents and ask for help because they taught me growing up how to be responsible for your obligations. I didn’t want to call them to tell them I’d been duped by creditors.
“I just had to scale back, spend all my weekends in the dorms (on base). Those were some lean times for me. I was so embarrassed.”
Staden, who left the service in 1995 and now lives in New Orleans and is trying to get into the music-production business, estimates that his debt ultimately reached in the low $20,000 range.
"I felt like I didn’t have anywhere to go for help – outside of my parents. I figured if I went to the adjutant on base I would get myself in trouble,” he said. “It made me second-guess a lot of things. I thought I was more prepared for living on my own. That was probably part of the reason I didn’t re-enlist. It was very stressful.”
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Leave a Comment:
Stop having secrets and then it won't be a problem.
Not possible in this day and age and for the forseeable future. Get real.
In today society, I can see this credit problem. In my days in the military. You couldn't get a credit card because of low wages. The only place was HFC, where you might get $500.00 max. at a 14.5% interest. Which was considered highway robbery during that time. Today, you can get a credit card by just having a job. Many of these eighteen year old soldiers today, have never paid a payment in the past. Their parents made these payments while the kid was a kid living with his parents with room and board free with car,with cell phone,with IPad. Today that new recruit can immediately finance a new car and get a bundle of credit cards.
This is no news. My husband was in the USAF with a very Top Security clearance due to his job description and in gaining this clearance we BOTH got checked out.
We had to provide every address we had lived , along with obviously our debt. We were newlyweds, that rented,only a car loan and a couple of student loans. It was in the 70's and was long enough ago that credit cards did not exist quite yet
Once your paperwork was signed, these goons(OSI) also were going door to door in our neighborhood to see if we 'partied" alot, did we go to church, BS like that. Our medical records on base were stamped "Human Reliability Program" because of what he did. Meaning, if I came in for a check up and said I was severely depressed, someone beside the doctor I was using would know. I do not know if the HIPA laws are voided on a military base where you are seeing a flight surgeon or other physician., but I know that the HIPA law did not exist then. If someone was having marital problems, someone felt the need to tell a commander. However, if the commander was hitting on a wife of someone in his command, no problem.
If someone's wife was having an affair, somehow everyone knew, from the top on down. Not so much for the guys and there was a "sunday come to meet Jesus meeting, to straighten out the wife or you were being re-assigned.
As far as the government goes, it is not so black and white anymore, however reading about what happening at Lackland AFB to the trainees, not surprising. It is still a man's world.
Lots of hypocrites in every line of business, and particularly the military. There have always been two sets of "rules" Let us not forget RANK HAS IT'S PRIVLEDGES"!
Grammar and spelling lesson: Rank has its privileges.
thought, the OSI are "goons"? There are rules about who to give clearances and how to research their backgrounds. If you do not want people prying into your private lives, do not get a clearance, it is that simple. Almost all of this research is to find anything and everything that the clearance holder can be blackmailed about. This is clearly laid out for the clearance applicant. I know all this because I was in the USAF in the 70s and went through the same process. Quit whining.
Many lower-ranking enlisted (E-1 through E-4) service members go into debt because they try to support a family on a salary that was intended to support a single person. This was a common problem when I served during the Vietnam era because of the draft. Today, it's a problem because many married service members enlisted due to the lack of civilian job opportunities.
Now that we have an all-volunteer military, all service members, including recruits, should be paid a living wage that compensates them more fairly for their skills and the risks they take. Since most recruits have no experience living on their own, personal financial management should be an integral part of all service members' basic training. They should be counseled about the financial burdens they will encounter if they marry before they have attained higher rank and pay. Furthermore, laws need to be enacted and enforced that prevent usurious lenders from preying on our service members.
Exactly Invisible,
We ordered pizza the other night, our delivery person was one of my husband's soldiers from his company before he retired, this kid is still active duty. I was in shock that an E-4 would have to work a second job.
This is a good thing. If enough of our soldiers don't get clearance then maybe the silver spoon fed politicians will have to suit up and get into the sand for once.
They could not pass the age test or the physical, so, no, that is not happening.
America is screwed when running up a couple of credit cards raises red flags and makes a soldier lose a security clearance, but associating with known al qaeda members like the Foot Hood shooter did does not.
Military medical doctors normally don't need a security clearance.
Woody -
Army psychiatrist probably didn't have much of a security clearance.
Really Invisible Hand? You mean they now trust individuals without a security clearance to confidential medical records, etc? It sure wasn't that way when I was in the Army.
All officers, including military medical doctors, are cleared to "secret." Certain sensitive assignments may require "top secret" or higher levels of clearance.
Well the Pentagon will have to tighten it's belt, with the billions or more they can't account for, they can find enough to pay for security and more, the Pentagon needs a lease and some one strong enough to tighten it. The tax payers are tired of paying $200.00 for toilet seats no mater who's a$$ sit's on it.
Perhaps all our soldiers should just quit...all at the same time and say a big "F*#K YOU!" to our greed - driven, bank - owned government. I know I wouldn't put my life on the line for the sake of keeping GM or GE or Bank of America's bottom line intact. The truth is, the REAL crime is our government and their corporate pals sending all the jobs overseas to make sure they keep raking in more money by depriving their own countrymen of a living wage job....just pay Wun Hung Lo a pittance and he can't complain or the commie government will crack down on him. It's sickening that our entire nation's economic woes are directly parallel to the decimation of industry here, done intentionally to allow those corporations and banks to grow ever richer. It's not good enough any more to make "steady" money....the mindset is that somehow the money has to just keep ballooning forever, or else it isn't worth doing.
Our government is a lost cause. I love America for what we were told it stood for, not for what it has become.
I don't believe in the handout society Obama wants to usher us into permanently, but when there are no jobs "BY DESIGN", even those who might wish to work for their bread haven't got a chance.
People need to quit buying all things which are not necessary, and stop buying anything made anywhere other than the USA. But good luck, because there is NOTHING made here anymore, thanks to the politician bastards and their corporate pals. That goes for both Dems and Republicans...they all enjoy their money regardless of the b.s. they preach for the sake of winning votes. Pelosi and Reid, Obama and the Clintons, George Soros, and the cast of liberals are ALL rich. No less well - off than the Republicans they demonize on a daily basis for the weak - minded who fall for their lies. Being rich isn't a bad thing, mind you. But destroying the nation intentionally in order to maximize profit is and should be an act of treason!
We have the power. But we are all too lazy and preoccupied to band together and demand our rights and freedoms back, including the right to be able to make a decent living and be paid a fair wage for a day's work.
That is not what they are doing and you should know it. They are one part of keeping this country intact so that GE or BoA or the local malt show can exist, period.
Such a right has never existed, the right to attempt that exists, but there is no guarantee of success. The right to make a decent living is a myth promulgated by the Left. Failure is always an option, just not a very nice one.
The White House gives info for free
The White House isn't allowed to charge for providing information.
The White House also decides what is and isn't classified.
Invisible, the White House is not the only "agency" to determine the classification of material. There are at least 5 others.
We pay billions to private security companies and then they rob Americans of millions more.
I remember a few years ago when about half the people in congress were writing rubber checks.Are they better then the service people??I guess it all depends on who you are or what your job title is whether you need to be responsible with money..
I guess that is why no November tasking high back project level clearance authorization was in place during the Bin Losing raid in Pakistan, Nobody had the proper credit levels. PLCA's are for violating the sovereignty of countries armed with strategic deterrents.
Absurd, the federal government is the grand daddy of them all just look at the national debt 16T and climbing. Where do you think they learned that buying on credit is the way to get ahead... Like the pot calling the kettle black. Its laughable to think that only ones in debt would think of taking money for secrets. Warped thinking.
in the day, i earned a total of $1567. per month including housing and rations. had a 3 bedroom/ 2 bath home, two cars, wife and two babies in the house. this as a w2 in the army. have reviewed current pay scales for army and am dumbfounded that these people cannot manage their money? i realize today every private has his wife/ kids/ stereo system/ big screen tv and new car(s). combine this with absolutely no idea on how to manage money and they are doomed. the military has been mercenaries since 1973 and in my last years would put on documents when asked for my work; would put down mercenary. i understand a person has to live; but until the army (all services) get people who can manage a $20 dollar bill they are going to be financially up the creek.
Half of you are full of crap and you know nothing about the military. I was in the Air Force for 20 years raising a family and we had to live pay check to pay check the first 8 years, but you survive and you do without. You also have annual training that involves financial planning as well as leadership schools through out your career. If your young and not taught at home, then another branch of our military teaches you...my son is active Army in his 5th year and they always have financial planning classes, in fact going into debt can get you a counseling statement , an Article 15 and possibly a dishonorable discharge.
Being in debt and staying in debt does affect your security clearance, but so does deployment after deployment after deployment!!!
But, yet people with bankruptcies get to stay in!! Where people that are making an effort are hosed! I am currently in this predicament...I have to submit financials every 6 months...
But is OK with members of congress or government to not pay their income taxes on time, to be involved with all sorts of smarmy activities, i.e., Abromhoff, Holder, Geithner, and the list goes on and on. But our military personell, who are busy saving our countries ass, must figure out a way to make enough money to pay thteir bills on time while serving in remote regions of the world. What in god's name is wrong with this country?
It's not just banksters preying on US troops. Repugnicans have been actively cutting down on military benefits and veteran programs. Once out of combat or service, military personnel are of no use to Repugnicans.
Ocean water is also salty.
No bank or pay-day loan is preying on any soldier.
Just like civilians who don't know better, ignorance is not an excuse. If some people in the military can't control their debt, then obviously, revoke their clearance.
I mean do we really need Jason Bourne robbing banks now?
Maybe the service members should learn how to better control their spending! Maybe if they weren't so lazy they would have a job that pays them better!! Damn entitlement bums!!!!
All above posted with tongue firmly in cheek poking fun at allllllllllllllllll the people on these forums who think Corporate America is the greatest America ever.
The system in America, whatever you want to call it, is terrible. The only bright light? It is far better than any other system ever tried on this planet by humans. Even Obama has not done enough damage to change that!
We need to immediately recruit another 36k people for the military who can be taught to be financially responsible.
Hey Steelermama: "You also have annual training that involves financial planning as well as leadership schools through out your career." There's no ANNUAL Training in the ACTIVE DUTY MILITARY. By the use of the term "annual training" I'm assuming you were a Reservist for 20 years. Which doesn't count. "living pay check to pay check..." really....you might want to look at your outside job and see how much your getting paid. Not the military.
Ross: Sarcasm aside...you are actually right when you were trying to be ironic. "Maybe the service members should learn how to better control their spending!" True....same goes with civilians.
... and the government
As a former military wife, we were quite poor and only took on debt for a new used car when the other one bit the dust. We rented (no base housing for us). We didn't have kids which was a plus because I couldn't see how you could support them on military wages. I worked but didn't make much in the South due to low wages and uncertainty of being transferred.
The military needs to monitor this stuff. See what happened when they didn't: i.e. "Johnny" Walker and his family of spies.
“If you’re going to be entrusted with national security,” he added, “the military figures you’ve got to at least be able to pay your bills on time.”
I find this to be a load of BS. Debt does not mean your going to take money or give out classified info to the enemy.
Just look at Pvt Manning he released thousands of documents that were classified for FREE. Those are the people you need to watch out for the ones who think they are above the rules.