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                            DEPARTMENT OF DEFENSE
             DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
----------, ---------- -------- )       ISCR Case No. 09-01585
SSN: ------ ---- -------- )
)
Applicant for Security Clearance )
Appearances
For Government: Jeff A. Nagel, Esquire, Department Counsel
For Applicant: Pro Se
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Decision
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WHITE, David M., Administrative Judge:
Applicant owes about $55,000 in total delinquent Federal income taxes that he
failed to pay each year from 2003 to 2008. He recently resolved two other delinquent
accounts. He recently resumed participation in Gamblers Anonymous to address his
gambling addiction, but has not yet established a track record of financial responsibility
or solvency. Based upon a thorough review of the case file, pleadings, exhibits, and
testimony, eligibility for access to classified information is denied. 
Applicant submitted his security clearance application on October 30, 2007. On
July 24, 2009, the Defense Office of Hearings and Appeals (DOHA) issued a Statement
of Reasons (SOR) to Applicant detailing security concerns under Guideline F (Financial
Considerations). The action was taken under Executive Order 10865, Safeguarding
Classified Information within Industry (February 20, 1960), as amended; Department of
Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review
Program (January 2, 1992), as amended (Directive); and the revised adjudicative
guidelines (AG) promulgated by the President on December 29, 2005, and effective
within the Department of Defense (DoD) for SORs issued after September 1, 2006.
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Applicant acknowledged receipt of the SOR on August 3, 2009. He answered the SOR
in writing (AR) on August 10, 2009, and requested a hearing before an administrative
judge. Department Counsel was prepared to proceed on September 17, 2009, and
DOHA assigned the case to me on September 24, 2009.
DOHA issued a Notice of Hearing on October 1, 2009, and I convened the
hearing as scheduled on October 28, 2009. Department Counsel offered Government
Exhibits (GE) 1 through 10, which were admitted without objection. Applicant testified on
his own behalf, and offered Applicant Exhibit (AE) A, which was also admitted without
objection. I granted Applicant’s request to leave the record open until November 15,
2009, for submission of additional evidence. Applicant timely submitted documentation
that he resolved two debts (AE B), an Internal Revenue Service (IRS) Installment
Agreement (AE C), and his annual performance evaluations for the last five years (AE
D), which were also admitted without objection. DOHA received the transcript of the
hearing (Tr.) on November 5, 2009.
Findings of Fact
Applicant is a 53-year-old subcontract manager, who has been employed by a
defense contractor for about 35 years. He served a three-year enlistment in the Marine
Corps, and was honorably discharged in 1978. He has held a security clearance since
1984. He has been divorced since 1995, and has three adult children. (AR at 3; GE 4 at
6, 11-14, 17-18, 21, 27-28; Tr. at 8-9, 36-40.) In his answer to the SOR, Applicant
admitted the truth of all factual allegations set forth in ¶¶ 1.a through 1.g, with
explanations. (AR at 1-5.) Those admissions are incorporated into the following findings
of fact.
Applicant began gambling in 1996 after his divorce and a break-up with a
subsequent girlfriend. The first year he lost around $16,000. He was unable to pay all of
his bills, and tried unsuccessfully to sell his house. In March 1997 he filed for Chapter 7
bankruptcy relief, listing four unsecured creditor accounts totaling $42,650. Two of these
debts, totaling $28,000 were exempted from discharge, and Applicant made regular
monthly payments to those creditors after his July 1997 discharge until they were
satisfied. (GE 1; GE 3; Tr. at 42-44, 79-80.)
 Applicant attended about eight months of professional counseling for his
depression and gambling problem in 1997. He also attended Gamblers Anonymous
(GA) for the first time that year. In February 1998, he told a Defense Investigative
Service agent:
I don’t think I have any problems with gambling now. I may go to a casino
once or twice a month to play blackjack, but I set a limit now. I know it
probably isn’t the right thing to do, but since I set a limit of $50 & stick with
it, I don’t think it will cause me any problems.
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(GE 3 at 3.) Applicant’s gambling problems continued, however. He attended GA
meetings for about ten months during 2001-2002, for about six months in 2003, for
about ten months in 2004 (along with another six months of mental health counseling as
alleged in SOR ¶ 1.g), for about four months in 2007, and for about two months in 2008.
According to Applicant:
There were times after I exited the program during those years I would
abstain from gambling. But, that didn’t last very long. So, the times that I
was not gambling is when I was in the program.
(Tr. at 44-45.) He was interviewed in January 2008 by an investigator from the Office of
Personnel Management (OPM), and estimated that he spent from $400 to $500 per
gambling outing, totaling about $25,000 annually. He also told the investigator that he
realized he had a gambling problem when not attending GA meetings, and that he was
again attending them. (GE 7 at 6.)
Applicant last gambled in January 2009. Late in that month, he began a series of
hospitalizations for surgeries, heart attacks, and other medical complications. He was in
the hospital from late January to March, in June, and again in September 2009. In April
2009, he resumed attendance and participation in several different GA meeting groups.
People with whom he has attended GA since 2001 or 2002 testified that his recent
participation is far more committed, enthusiastic, and sincere than it had been during
earlier periods of attendance. His stated intention is to continue abstinence from
gambling and active participation in GA to help him prevent another relapse. (AE A at 5;
Tr. at 29-33, 57-74.) His mother, with whom he now resides, also testified to his
transformation since January 2009, his rededication to family relationships without
interference from gambling, and his lifelong patriotism. (Tr. at 74-79.)
Applicant failed to pay a substantial portion of his Federal income taxes each
year from 2001 through 2008. He has not yet filed or calculated his 2009 income tax
obligation, but hopes that his recently renewed contributions into his 401(k) savings
account will reduce the amount he owes by enough to be covered by his withholdings,
unlike the previous years. His Federal income tax delinquencies total approximately
$55,000 for tax years 2003 through 2008.Two tax liens were filed against him for
portions of this total as alleged in SOR ¶¶ 1.b and 1.e. He has negotiated several
different agreements with the IRS to pay his delinquent taxes, and has satisfied the
delinquencies for 2001 and 2002. In November 2007, his agreement called for $1,500
monthly payments. By April of 2009, that amount had changed to $1,024 per month. In
October 2009, Applicant began paying $1,100 per month under another revised
installment agreement, with the intent to have all back taxes paid within five years. (AR
at 4, 5; GE 7 at 6, 14; AE C; Tr. at 50-54, 80-83, 86.)
Applicant’s annual income is about $101,000. Since he now lives with his
parents, he has reduced his living expenses to the point that he has more than $2,000
per month in surplus income after paying his IRS installment agreement and remaining
non-delinquent debt payments. Since January 2009, he has used that surplus to reduce
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his outstanding debt from 25 creditors to 8, including the IRS. He satisfied the two non-
IRS delinquent debts alleged in SOR ¶¶ 1.c and 1.d, by making final payments toward
both in early October 2009. His total debt to the seven non-IRS creditors was $21,220
as of October 16, 2009, and he was current on the scheduled monthly payments for
each of them. He was also able to increase the value of his 401(k) savings account from
$31,574 to $46,662 between April and October 2009. (GE 8; GE 10; AE A; AE B; Tr. at
47-49, 54-57, 83-86.)   
Applicant’s performance evaluations for 2004 through 2008 reflect that he
generally exceeded expectations and performed his responsible duties in an efficient
and effective manner. (AE D.) His testimony and demeanor during the hearing reflected
candor and sincerity in his desire and intent to avoid future financial problems, and
especially not to resume gambling. 
Policies
When evaluating an applicant’s suitability for a security clearance, the
administrative judge must consider and apply the revised adjudicative guidelines (AG).
In addition to brief introductory explanations for each guideline, the adjudicative
guidelines list potentially disqualifying conditions and mitigating conditions, which are to
be used in evaluating an applicant’s eligibility for access to classified information.
These guidelines are not inflexible rules of law. Instead, recognizing the
complexities of human behavior, these guidelines are applied in conjunction with the
factors listed in AG ¶ 2, describing the adjudicative process. The administrative judge’s
overarching adjudicative goal is a fair, impartial, and commonsense decision. According
to AG ¶¶ 2(a) and (c), the entire process is a conscientious scrutiny of applicable
guidelines in the context of a number of variables known as the whole-person concept.
The administrative judge must consider all available, reliable information about the
person, past and present, favorable and unfavorable, in making a decision.
The protection of the national security is the paramount consideration. AG ¶ 2(b)
requires that “[a]ny doubt concerning personnel being considered for access to
classified information will be resolved in favor of the national security.” In reaching this
decision, I have drawn only those conclusions that are reasonable, logical and based on
the evidence contained in the record. Likewise, I have avoided drawing inferences
grounded in mere speculation or conjecture.
Under Directive ¶ E3.1.14, the Government must present evidence to establish
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, “[t]he applicant is
responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or
mitigate facts admitted by the applicant or proven by Department Counsel, and has the
ultimate burden of persuasion as to obtaining a favorable clearance decision.” Section 7
of Executive Order 10865 provides, “[a]ny determination under this order adverse to an
applicant shall be a determination in terms of the national interest and shall in no sense
be a determination as to the loyalty of the applicant concerned.” 
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A person applying for access to classified information seeks to enter into a
fiduciary relationship with the Government predicated upon trust and confidence. This
relationship transcends normal duty hours and endures throughout off-duty hours. The
Government reposes a high degree of trust and confidence in individuals to whom it
grants access to classified information. Decisions include, by necessity, consideration of
the possible risk that the applicant may deliberately or inadvertently fail to protect or
safeguard classified information. Such decisions entail a certain degree of legally
permissible extrapolation as to potential, rather than actual, risk of compromise of
classified information.
Analysis
Guideline F, Financial Considerations
AG ¶ 18 expresses the security concern pertaining to financial considerations:
Failure or inability to live within one's means, satisfy debts, and meet
financial obligations may indicate poor self-control, lack of judgment, or
unwillingness to abide by rules and regulations, all of which can raise
questions about an individual's reliability, trustworthiness and ability to
protect classified information. An individual who is financially over-
extended is at risk of having to engage in illegal acts to generate funds.
Compulsive gambling is a concern as it may lead to financial crimes
including espionage. Affluence that cannot be explained by known sources
of income is also a security concern. It may indicate proceeds from
financially profitable criminal acts.
AG ¶ 19 describes conditions that could raise a security concern and may be
disqualifying. Department Counsel requested analysis of the applicability of four of
these potentially disqualifying conditions: 
(a) inability or unwillingness to satisfy debts;
(b) indebtedness caused by frivolous or irresponsible spending and the
absence of any evidence of willingness or intent to pay the debt or
establish a realistic plan to pay the debt;
(c) a history of not meeting financial obligations; and 
(f) financial problems that are linked to drug abuse, alcoholism, gambling
problems, or other issues of security concern. 
(Tr. at 18.) Applicant began gambling to an extent that he could not meet his other
financial obligations in 1996. Even with six different periods of abstinence during GA
participation between 1997 and 2008, this problem continued into January 2009. During
those years, he was regularly unable or unwilling to satisfy numerous debts, specifically
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including his Federal income tax liabilities starting in 2001. Since undergoing a series of
serious medical problems in 2009, he stopped gambling and has resolved a number of
delinquent debts. However, about $55,000 in Federal tax delinquencies remain, which
will take five years to repay under current arrangements. Applicant’s present financial
inability to pay these substantial remaining delinquencies supports ongoing security
concerns under AG ¶ 19(a). He is under continuing financial duress, so he remains at
risk of having to engage in illegal acts to generate funds. The evidence further
established a lengthy and ongoing history of not meeting significant financial obligations
as a result of his addictive gambling problems, raising security concerns under AG ¶¶
19(c) and (f). This history raises concerns about poor self-control, lack of judgment, and
unwillingness to abide by rules and regulations, thereby raising questions about his
reliability, trustworthiness, and ability to protect classified information. AG ¶ 19(b) was
not established in this case. Although Applicant admits irresponsible spending over the
period from 1996 to 2008 that resulted in multiple delinquent debts, his resolution of
many of these debts between April and October 2009, and his recent arrangement
regarding the remaining IRS debt, provide some evidence of willingness and intent to
pay his debts. 
AG ¶ 20 provides conditions that could mitigate security concerns arising from
the foregoing financial considerations. Potentially applicable mitigating conditions are:
(a) the behavior happened so long ago, was so infrequent, or occurred
under such circumstances that it is unlikely to recur and does not cast
doubt on the individual's current reliability, trustworthiness, or good
judgment;
(b) the conditions that resulted in the financial problem were largely
beyond the person's control (e.g., loss of employment, a business
downturn, unexpected medical emergency, or a death, divorce or
separation), and the individual acted responsibly under the circumstances;
(c) the person has received or is receiving counseling for the problem
and/or there are clear indications that the problem is being resolved or is
under control;
(d) the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts; and
(e) the individual has a reasonable basis to dispute the legitimacy of the
past-due debt which is the cause of the problem and provides
documented proof to substantiate the basis of the dispute or provides
evidence of actions to resolve the issue.
AG ¶ 20(a) was not established because Applicant’s delinquencies arose over
the last fourteen years, and the substantial Federal tax debts continue at present. His
multiple relapses into gambling after previous attempts at abstinence with the
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assistance of mental health counselors and the GA program also preclude application of
this mitigating condition without a longer period of successful reform. Applicant’s 1995
divorce partially contributed to the debt problems underlying his 1997 bankruptcy, but
his gambling was the primary cause. He lost $16,000 gambling during the year
preceding the court’s discharge of about $14,000 in unsecured debt. He also had
significant medical problems in 2009, but those issues had no causal relationship to any
SOR-alleged financial concerns. Accordingly, mitigation under AG ¶ 20(b) was not
established. Applicant resumed participation in the GA program during the six months
preceding his hearing, and several fellow GA members observed that he seems more
dedicated and sincere now than he was during his six previous unsuccessful attempts.
This is a very good start, but given his history of relapse, it is too soon to reach a finding
that there are clear indications that the problem is under control. Applicant repaid two
smaller delinquencies alleged in SOR ¶¶ 1.c and 1.d immediately before his hearing.
However, he pays only $1,100 per month toward his large Federal tax debt, despite a
monthly surplus income of more than $2,000. Thus, meaningful mitigation is not yet
established under AG ¶¶ 20(c) or (d). Applicant did not dispute any of his delinquencies
under AG ¶ 20(e), and in fact admitted that they were valid debts. 
Whole-Person Concept
Under the whole-person concept, the administrative judge must evaluate an
applicant’s eligibility for a security clearance by considering the totality of the applicant’s
conduct and all relevant circumstances. The administrative judge should consider the
nine adjudicative process factors listed at AG ¶ 2(a): 
(1) the nature, extent, and seriousness of the conduct; (2) the
circumstances surrounding the conduct, to include knowledgeable
participation; (3) the frequency and recency of the conduct; (4) the
individual’s age and maturity at the time of the conduct; (5) the extent to
which participation is voluntary; (6) the presence or absence of
rehabilitation and other permanent behavioral changes; (7) the motivation
for the conduct; (8) the potential for pressure, coercion, exploitation, or
duress; and (9) the likelihood of continuation or recurrence. 
Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a security
clearance must be an overall commonsense judgment based upon careful consideration
of the applicable guidelines and the whole-person concept.  
I considered the potentially disqualifying and mitigating conditions in light of all
the pertinent facts and circumstances surrounding this case. Applicant’s conduct of
security concern was fourteen years of failure to meet financial obligations, including
significant Federal tax debt resulting from years of excessive gambling. He resolved a
number of debts during 2009, while again participating in GA and abstaining from
gambling. Unfortunately, each of six previous attempts to control his gambling addiction
through GA participation ended in relapses and further financial irresponsibility. Two
courses of counseling by mental health providers similarly failed. His pattern of not
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paying his Federal tax obligations for many successive years, together with the absence
of any meaningful effort to avoid recurrence of the problem for 2009, raise particular
concerns about his commitment to fulfilling his Federal duties and obligations. His
actions during 2009 demonstrate a good start toward controlling gambling and paying
creditors, but are not yet of sufficient duration to eliminate these security concerns.
Applicant has not yet established a good-faith track record of financial responsibility or
permanent behavioral changes. The record demonstrates his unwillingness to more
promptly address his delinquent Federal debt despite substantial surplus income.
Applicant’s ongoing indebtedness generates continuing potential for pressure, coercion,
or duress. His 1997 bankruptcy was so far in the past that, in itself, it would not support
security concerns. However, it represents the beginning of a long and continuing pattern
of financial irresponsibility relating to problem gambling and supports continuing
concerns about Applicant’s trustworthiness and reliability. Insufficient time has passed
to demonstrate that his gambling-related financial problems are unlikely to recur or
worsen. 
Applicant did not mitigate security concerns arising from his history of failing to
meet financial obligations, and his inability to pay his gambling-related delinquent debts.
The record generates significant doubt as to his present eligibility and suitability for a
security clearance. 
Formal Findings
Formal findings for or against Applicant on the allegations set forth in the SOR,
as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are:
Paragraph 1, Guideline F: AGAINST APPLICANT
Subparagraph 1.a: Against Applicant
Subparagraph 1.b: Against Applicant
Subparagraph 1.c: For Applicant
Subparagraph 1.d: For Applicant
Subparagraph 1.e: Against Applicant
Subparagraph 1.f: Against Applicant
Subparagraph 1.g: Against Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is not
clearly consistent with the interests of national security to grant Applicant eligibility for a
security clearance. Eligibility for access to classified information is denied.
                                  
DAVID M. WHITE
Administrative Judge