Many years ago, before becoming a security clearance defense attorney, I was an investigator for the Defense Counterintelligence and Security Agency (then-U.S. Office of Personnel Management). The job was frequently tedious, repetitive, and thankless, but it did also have its entertaining moments. One of those was watching peoples’ incredulous reactions when confronted with the details of a questionable financial transaction they made in their personal life, sometimes years prior.
If you’ve never been subjected to this line of questioning during a security clearance background investigation, you may be surprised to learn that, yes, the government does review your finances as part of the process, albeit not in the way you may think.
Absent serious counter-intelligence or criminal indicators that result in the case being referred for a different type of investigation, the government doesn’t peek into your bank accounts or review your credit card transactions in the normal course of a background investigation. Security officials won’t know if you’ve been running up charges at strip clubs or buying copious amounts of alcohol. And they won’t see if you’ve been Venmo-ing a domestic employee you’ve been paying off the books (although that’s independently reportable on the SF-86 as a failure to pay taxes when required).
What the government will see is any monetary transaction flagged by a financial institution as potentially suspect under the federal Bank Secrecy Act (BSA), along with cash purchases of negotiable instruments and reports of cash transactions exceeding $10,000 in a single day.
The latter two categories are relatively straightforward, although clearance holders should be aware that structuring cash transactions to avoid the $10,000 reporting threshold is a federal offense. The former, however, is exceedingly broad and sometimes results in soccer moms, recreational gamblers, small business owners, and folks with overseas connections all getting swept up into a vast database run by a secretive federal agency called the Financial Crimes Enforcement Network, or “FinCEN.”
Under the BSA, financial institutions are required to file a “Suspicious Activity Report” with FinCEN within 30 days after the questionable transaction. Purportedly “suspicious” transactions can include anything from sending money overseas to a country where the individual has no obvious connections; to minimal casino gaming with large transactions; to transactions that are out of pattern for the particular customer – and an exceedingly wide swath of other activity that is open to interpretation. In other words, if you do anything in life that is interesting, unusual, or just unusual for you, there is a non-negligible possibility that a record of that event has been reported to the government by your financial institution as potentially suspicious.
Fortunately, as long as you have a legal, credible, and truthful explanation for the transaction, it’s not likely to have any impact on the ultimate adjudication of your security clearance case. But there are exceptions to this, including cases where someone is demonstrating a gambling addiction, paying off a blackmailer, or supporting activities in a foreign country that may be inimical to U.S. national security interests or foreign policy. When in doubt, remember that money always leaves a trail, and it isn’t a hard one for the government to follow.
This article is intended as general information only and should not be construed as legal advice. Although the information is believed to be accurate as of the publication date, no guarantee or warranty is offered or implied. Laws and government policies are subject to change, and the information provided herein may not provide a complete or current analysis of the topic or other pertinent considerations. Consult an attorney regarding your specific situation.
FAQs
The former, however, is exceedingly broad and sometimes results in soccer moms, recreational gamblers, small business owners, and folks with overseas connections all getting swept up into a vast database run by a secretive federal agency called the Financial Crimes Enforcement Network, or “FinCEN.”
Does a secret clearance check your bank account? ›
A Top Secret security clearance doesn't require one to turn over this level of documentation - they just pull credit reports, which show active and closed lines of credits, balances, etc. Depends on where you are working with that clearance. Some agencies require an annual report of all bank and credit card statements.
What financial disqualifies you from Top Secret clearance? ›
A history of not meeting financial obligations. Deceptive or illegal financial practices such as embezzlement, employee theft, check fraud, income-tax evasion, expense-account fraud, filing deceptive loan statements, and other intentional financial breaches of trust. Inability or unwillingness to satisfy debts.
What is the Top Secret investigation? ›
For a Top Secret security clearance, the background investigation includes additional record checks which can verify citizenship for the applicant and family members, verification of birth, education, employment history, and military history.
How serious is a public trust clearance? ›
National Security clearances range from confidential, which is the easiest to attain, to Secret, Top Secret, and SCI, which is the most challenging. Public Trust clearances are either low, moderate, or high risk, and Non-sensitive are the least extensive, requiring only criminal background and credit checks.
Can private investigators see your bank account? ›
Finding Assets
Private investigators can find bank accounts California by accessing databases. They may also look through public records such as property filings, tax returns, and other papers.
Can the Feds see your bank account? ›
Without your consent, a Federal agency that wants to see your financial records may do so ordinarily only by means of a lawful subpoena, summons, formal written request,or search warrant for that purpose.
How much debt can you have with a Top Secret clearance? ›
No branch of the military has a set amount of debt that is the breaking point for security clearance. You could owe $5,000 or $50,000 and be granted or denied clearance. It's all a matter of how you deal with the debt. Responsible behavior in tackling your debt problems is considered a positive.
What will deny you a secret clearance? ›
More specific conditions that may endanger your security clearance include: A history of deceptive or illegal financial acts like embezzlement, tax evasion, and fraud; Failure to satisfy your debts; and. Financial problems caused by gambling, drug abuse, or alcohol abuse.
How far back does secret clearance go? ›
Security Clearance Adjudicative Process
The clearance process for Secret level access uses an investigation called the National Agency Check with Law and Credit that goes back five years, while the clearance process for Top Secret uses a Single Scope Background Investigation that goes back ten years.
Investigators examine all the information on the form. An applicant's employers, landlords, and previous neighbors will be interviewed; sometimes, relatives will also be contacted for an interview. The idea is to gain information, insight, opinion, and perspective about the applicant.
What is the Yankee White clearance? ›
Yankee White is an administrative nickname for a background check undertaken in the United States of America for Department of Defense personnel and contractor employees working with the president and vice president.
What is Tier 5 Top Secret investigation? ›
Tier 5 (Former SSBI or Level 3) – critical sensitive national security position. This investigation makes the staff member eligible for a top-secret clearance. Tier 5+ (Formerly level 4) – a select designation for staff needing TS/SCI security clearances. Only a very select few positions are within this scope.
What is a Tier 4 investigation? ›
Tier 1 investigations are required for determining eligibility for basic federal employment suitability/fitness and Homeland Security Presidential Directive 12 credentialing. Tier 2 and Tier 4 investigations are required for Moderate Risk and High Risk Public Trust positions.
What do they check in public trust clearance? ›
The investigation includes:
- A detailed examination of the individual's employment.
- Education.
- Residence.
- Any other personal information.
The most common security clearance disqualifiers include:
- Not a U.S. Citizen.
- Not loyal to the U.S. / foreign influence.
- Illegal drug use/involvement.
- Mental incompetency or psychological conditions.
- Dishonorable discharge from the military or revoked security clearance.
- A history of financial problems.
- Criminal activity.
Security clearance information
The background investigation will: Review your previous and current employment history, including contact with your current employer. Verify your education, residential history and financial background. Interview your friends, neighbors, supervisors and coworkers.
What does the government check for secret clearance? ›
What information do you evaluate in the security clearance investigation? During the background and security clearance investigation, investigators will review delinquency in paying debts, tax obligations, certain criminal offenses and the illegal use or possession of drugs.
How much debt can you have for secret clearance? ›
Is There a Debt Limit to Obtain a Security Clearance? No branch of the military has a set amount of debt that is the breaking point for security clearance. You could owe $5,000 or $50,000 and be granted or denied clearance. It's all a matter of how you deal with the debt.
