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Troops' debt a growing security concern

By THOMAS WATKINS, Associated Press WriterThu Oct 19, 2:23 PM ET

Thousands of U.S. troops are being barred from overseas duty because
they are so deep in debt they are considered security risks, according
to an Associated Press review of military records.

The number of troops held back has climbed dramatically in the past few
years. And while they appear to represent a very small percentage of all
U.S. military personnel, the increase is occurring at a time when the
armed forces are stretched thin by the wars in Iraq and Afghanistan.

"We are seeing an alarming trend in degrading financial health," said
Navy Capt. Mark D. Patton, commanding officer at San Diego's Naval Base
Point Loma.

The Pentagon contends financial problems can distract personnel from
their duties or make them vulnerable to bribery and treason. As a
result, those who fall heavily into debt can be stripped of the security
clearances they need to go overseas.

While the number of revoked clearances has surged since the beginning of
the Iraq war, military officials say there is no evidence that service
members are deliberately running up debts to stay out of harm's way.

Officials also say the increase has not undermined the military's
fighting ability, though some say it has complicated the job of
assembling some of the units needed in Iraq or Afghanistan.

The problem is attributed to a lack of financial smarts among recruits;
reckless spending among those exhilarated to make it home alive from a
tour of duty; and the profusion of "payday lenders" — businesses that
allow military personnel to borrow against their next paycheck at
extremely high interest rates.

The debt problems persist despite crackdowns on payday lenders and the
financial counseling the Pentagon routinely offers to the troops.

Data supplied to the AP by the Navy, Marines and Air Force show that the
number of clearances revoked for financial reasons rose every year
between 2002 and 2005, climbing ninefold from 284 at the start of the
period to 2,654 last year. Partial numbers from this year suggest the
trend continues.

More than 6,300 troops in the three branches lost their clearances
during that four-year period. Roughly 900,000 people are serving in the
three branches, though not all need clearances.

The figures gathered by the AP represent just a piece of problem,
because the Army — which employs an additional 500,000 people and
accounts for the vast majority of the 160,000 U.S. troops in Iraq and
Afghanistan — rejected repeated requests over the past month to supply
its data, saying such information is confidential.

At Point Loma, Patton said clearance revocations in key areas such as
military police forces have gotten so common that he often looks for two
sailors to fill a single posting.

Still, Patton said he had never heard of anyone racking up bills to get
out of combat. "There are folks who find ways of avoiding being
deployed, as there always will be, but I've never seen any do it through
finances," he said.

Security clearances are revoked when service members' debt payments
amount to 30 percent to 40 percent of their salary. The exact amount
depends on the military branch.

There are three levels of clearance — confidential, secret and top
secret. Not all troops need clearance. Marine infantrymen don't, but
some Marine specialists, such as those in intelligence, do. So do many
jobs in the Navy and Air Force.

Financial problems are the overwhelming reason security clearances are
revoked. Other reasons include criminal activity, questionable
allegiance and ill health.

A key reason the military revokes clearances on financial grounds is the
fear that soldiers in debt might be tempted to sell secrets or equipment
to the enemy.

Also, "when they are over there fighting, we like them to have their
heads in the game," said Maj. Gen. Michael Lehnert, commander of Marine
Corps bases in the western United States. "We like to have them ... not
worrying about whether or not they are going to be able to make the
mortgage payment or car payment."

Members of the brass also blame runaway interest rates at payday lending
businesses, many of which are clustered outside bases around the
country. Several states have cracked down on payday lending practices,
and on Tuesday, President Bush signed legislation limiting how much
these businesses can charge military personnel.

Some personnel fall into debt upon returning from combat.

"It can be hard to cut that sense of elation and desire to live for the
moment," Lehnert said. "Some tend to get themselves overextended
financially."

Also, when they go to war, they get combat pay, and none of their income
is taxed. That can lead them to overspend when they come home.

Patton said that like other services, the Navy offers zero-interest
emergency loans. Also, military personnel commonly take money-management
classes as part of basic training.

"Every time we go in and do an indoctrination brief, there is
instruction or training in place to give them some of the pitfalls of
debt," said Terry Harris, a personal finance educator at the Pensacola
Naval Air Station in Florida. "We do inform them about the pitfalls of
security clearances being lost to that."

The increase in finance-related revocations could actually be a good
sign — it could reflect greater awareness among the troops, according to
Chief Master Sgt. Rodney J. McKinley, the Air Force's highest-ranking
noncommissioned officer.

"We have a few more people coming forward and saying, `Hey, I'm having
some financial difficulty and need help,' versus going down the other
path where they keep so quiet," McKinley said.

___

Associated Press Writers Pauline Jelinek in Washington, Melissa Nelson
in Pensacola, Fla., and Estes Thompson in Raleigh, N.C., contributed to
this report.

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