KEYWORD: Guideline F
DIGEST: There was no unfair surprise in the Judge’s reference to, and consideration of,
gambling debts referenced in Applicant’s own evidence.  Conduct not alleged in a SOR may be
considered for certain purposes, such as the sufficiency of an applicant’s case for mitigation, a
whole person analysis, etc.  Adverse decision affirmed.  
CASE NO: 10-03430.ind
DATE: 09/19/2011
DATE: September 19, 2011
In Re:
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Applicant for Security Clearance
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ISCR Case No. 10-03430
APPEAL BOARD DECISION
APPEARANCES
FOR GOVERNMENT
James B. Norman, Esq., Chief Department Counsel
FOR APPLICANT
Steven A. Marczeski, Esq.
The Defense Office of Hearings and Appeals (DOHA) declined to grant Applicant a security
clearance.  On December 14, 2010, DOHA issued a statement of reasons (SOR) advising Applicant
of the basis for that decision–security concerns raised under Guideline F (Financial Considerations)
of Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive).  Applicant
requested a hearing.  On July 1, 2011, after the hearing, Administrative Judge Jennifer I. Goldstein
denied Applicant’s request for a security clearance.  Applicant appealed pursuant to Directive ¶¶
E3.1.28 and E3.1.30.
Applicant raised the following issues on appeal: whether certain of the Judge’s findings of
fact were based upon substantial record evidence; whether the Judge improperly relied on conduct
1“[Q]: Okay.  The . . . debt placed by [creditor] for $1,036, what was that debt for? [A]: Was it the one that I
denied? [Q]: Correct. [A]: It was actually a debt incurred by my son and I believe it got into my record because we have
the same name . . .  and it has something to do with his education. [Q]: Did you ever formally dispute that account? [A]:
No, I did not ‘cause . . . my son reminded me I cosigned it, so it fell upon me as well.”  Tr. at 51.    
not alleged in the SOR; and whether the Judge’s adverse security clearance decision was arbitrary,
capricious, or contrary to law.  Consistent with the following, we affirm the Judge’s decision.
The Judge made the following pertinent findings of fact: Applicant is employed by a Defense
contractor.  He served in the Navy for 25 years, retiring as a Master Chief Petty Officer.  Since
retiring, he has worked for several Government contractors.    He held a top secret clearance while
in the Navy and has held a clearance throughout his civilian career as well.  He has never had a
security violation.
Applicant has numerous delinquent debts, for such things as a utility bill, student loans he
co-signed with his son, vehicle insurance, mortgage payments, a repossessed vehicle, and a credit
card.  Applicant’s wife contributed to the family income “until three to four years ago,” at which
time her childcare business experienced a loss of customers due to a downturn in the economy.
Decision at 2.  Concerning the student loans, he originally thought they were in his son’s name
only.1  Decision at 3.  Applicant filed for Chapter 13 bankruptcy protection in early 2011.  The plan
was accepted, and Applicant has agreed to pay $1,863.18 per month for five years.  He has made
two payments under the plan.  He has received financial counseling pursuant to his bankruptcy
filing, and he has striven to reduce his ordinary expenses.  His bankruptcy filing shows that
Applicant had a gambling loss of $11,500 in 2010. 
In her analysis, the Judge stated that Applicant’s financial problems have been ongoing since
2008.  She concluded that his two payments under the bankruptcy plan were not sufficient to
demonstrate a good-faith effort to pay his debts or to demonstrate that his financial problems were
under control.  In the whole-person analysis, she concluded:
[Applicant] has failed to act responsibly with respect to his finances.  He only
recently began to address his financial problems by filing bankruptcy proceedings
that will resolve his debts five years from now if he follows plan requirements.
Further, his unexplained large gambling losses in 2010, while substantial delinquent
financial obligations were largely ignored, are of concern.  Decision at 7.
Accordingly, the Judge concluded that Applicant had not mitigated the security concerns arising
from the allegations in the SOR.
Applicant contends that the Judge erred in her findings of fact.  Specifically, he challenges
the statement in the Analysis portion of the Decision that Applicant’s financial problems began in
2008.  He also challenges the Judge’s statement that Applicant had known about his financial
problems since that year.  Contending that the evidence actually shows that his problems began in
2009, he states that efforts to address them in 2010 should be considered responsible and, therefore,
mitigating.
2We note that Applicant’s counsel informed the Judge at the hearing, “I have served on Counsel today a copy
of the United States Bankruptcy Court petition . . .”  Tr. at 22.
3In this earlier case, the Judge made a finding concerning a prior clearance application by the applicant.  In
appealing the denial of her current application, the applicant contended that she was denied due process.  “She states that,
until she read the Judge’s sentence . . . she was not aware that her 2007 SCA had been disapproved.  She contends that,
had she known about the prior disapproval, she would have presented her case differently at the hearing . . . [However,
A Judge’s findings must be based upon substantial record evidence; that is, “such relevant
evidence as a reasonable mind might accept as adequate to support a conclusion in light of all the
contrary evidence in the same record.”  Directive ¶ E3.1.32.1; ISCR Case No. 09-08083 at 3 (App.
Bd. Jul. 15, 2011).  
We note the following testimony, during Department Counsel’s cross examination of
Applicant:
Q: [Y]ou lost the ability to pay these debts when your wife’s business took a
downturn; is that true?
A: That’s correct.
Q: What time frame are we talking about, sir?
A: . . .  I would say three or four years ago.
We also note Applicant Exhibit (AE) A, Bankruptcy Petition, at page 19, which lists the IRS as
holder of an unsecured claim for unpaid taxes owed in the year 2008.  Applicant’s own testimony
and evidence support a finding that his problems originated three to four years prior to the hearing,
which was held in early 2011.  Moreover, the evidence supports a conclusion that Applicant was
aware of his problems at the time.  The Judge’s material findings of security concern are sustainable.
Applicant contends that the Judge erred in her consideration of evidence of the gambling
losses.  He states that, although the Judge described this matter as “unexplained,” no one brought
it to his attention until the Decision was issued.  Had anyone done so, Applicant contends that it
could have been easily explained.  In support of his argument he presents new evidence, which we
cannot consider.  See Directive ¶ E3.1.29.  
The Judge’s finding and analysis on this matter derived from Applicant’s own evidence, AE
A at 35.  This is a part of the bankruptcy petition in which Applicant and his wife, as joint debtor,
were required to list any losses during the previous year arising from fire, theft, other casualties, or
gambling.  Applicant contends that he “was never informed that gambling was a consideration for
the denial of his security clearance.  Gambling was not mentioned in the SOR, nor by the
Government Counsel at the hearing, even though Counsel had such knowledge.”  Applicant Brief
at 8.2  However, under the facts of this case, there can be no issue of unfair surprise to Applicant
arising from the Judge’s consideration a document that Applicant himself submitted.  See, e.g., ISCR
Case No. 09-05176 at 2 (App. Bd. Dec. 14, 2010).3  See also ISCR Case No. 02-24512 (App. Bd.
the] Judge’s statement appears to refer to [the applicant’s] own testimony concerning the circumstances of her SCA[.]”
Accordingly, the Board concluded that the applicant had not been denied adequate notice of the evidence which the
Government had  used in presenting its case at the hearing.  
4“His bankruptcy filing shows unexplained gambling losses of $11,500 in the past year.  While there was neither
an allegation of compulsive or addictive gambling in the SOR, nor sufficient evidence in the record to establish potential
disqualification under AG ¶ 19(g), Applicant’s recent unexplained gambling losses indicate that, as late as 2010, he has
not acted responsibly under the circumstances.”  Decision at 6.
5“Applicant’s debt is being managed through his Chapter 13 bankruptcy plan.  He filed bankruptcy only two
months prior to the hearing, and two months after the SOR was issued, despite being aware of his financial problems
since 2008.”  Decision at 6.  
Jul. 27, 2005). 
Moreover, conduct not alleged in a SOR may be considered for a number of reasons,
including evaluating an applicant’s case for mitigation; evaluating the extent to which he has
demonstrated successful rehabilitation; and as evidence relevant to a whole-person analysis.  See,
e.g., ISCR Case No.03-20327 at 4 (App. Bd. Oct. 26, 2006).  In the case under consideration here,
the Judge explicitly considered evidence of gambling losses as it pertained to mitigation and the
whole-person analysis.4  Accordingly, she evaluated this evidence in its proper context.  
Applicant contends that the record is silent regarding significant aspects of this loss and that
a complete understanding would lead to a favorable result.  However, it was Applicant who bore the
burden of persuasion as to mitigation and who had an opportunity at the hearing to clear up what he
now contends are ambiguities in his own evidence.  In any event, the Judge’s decision appears to
rest principally on the extent of Applicant’s delinquent debt and on the relative recency of his efforts
to address it.5  Although the Judge discussed the gambling losses, this evidence does not appear to
have been determinative to the ultimate result. 
Applicant contends that the Judge failed to consider significant record evidence, for example
that portion of AE A in which Applicant lists certain payments he had made in anticipation of his
bankruptcy filing.  He argues that this evidence demonstrates that he had begun to address his
financial problems earlier than the Judge supposed.  A Judge is presumed to have considered all of
the record evidence.  See, e.g., ISCR Case No. 09-06691 at 3-4 (App. Bd. May 16, 2011).  Applicant
has not rebutted this presumption.  In any event, the cited evidence does not undermine the Judge’s
overall conclusion that Applicant was dilatory in addressing his financial problems.  
The record supports a conclusion that the Judge examined the relevant data and articulated
a satisfactory explanation for the decision, “including a ‘rational connection between the facts found
and the choice made.’”  Motor Vehicle Mfrs. Ass’n of the United States v. State Farm Mut. Auto. Ins.
Co., 463 U.S. 29, 43 (1983)(quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168
(1962)).  The Judge’s adverse decision is sustainable on this record.  “The general standard is that
a clearance may be granted only when ‘clearly consistent with the interests of the national security.’”
Department of the Navy v. Egan, 484 U.S. 518, 528 (1988).  See also Directive, Enclosure 2 ¶ 2(b):
“Any doubt concerning personnel being considered for access to classified information will be
resolved in favor of the national security.”
Order
The Judge’s adverse security clearance decision is AFFIRMED.
Signed: Michael Y. Ra’anan            
Michael Y. Ra’anan
Administrative Judge
Chairperson, Appeal Board
Signed: Jeffrey D. Billett                
Jeffrey D. Billett
Administrative Judge
Member, Appeal Board
Signed: James E. Moody                
James E. Moody
Administrative Judge
Member, Appeal Board