DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
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-----------------------------------                  )       ISCR Case No. 15-00949
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Applicant for Security Clearance )
Appearances
For Government: Andre M. Gregorian, Esq., Department Counsel
For Applicant: Pro se
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 Decision
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WESLEY, Roger C., Administrative Judge:
Based upon a review of the pleadings and exhibits, I conclude that Applicant did
not mitigate security concerns regarding his finances. Eligibility for access to classified
information is denied. 
 
History of the Case
On August 28, 2015, the Department of Defense (DOD) Consolidated
Adjudication Facility (CAF) issued a Statement of Reasons (SOR) detailing reasons
why DOD adjudicators could not make the the preliminary affirmative determination of
eligibility for granting a security clearance, and recommended referral to an
administrative judge to determine whether a security clearance should be granted,
continued, denied, or revoked. The action was taken under Executive Order 10865,
Safeguarding Classified Information within Industry (February 20, 1960), as amended;
DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review
Program (January 2, 1992), as amended (Directive); and the Adjudicative Guidelines
(AGs) implemented by the DOD on September 1, 2006.
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Applicant responded to the SOR on September 29, 2015, and elected to have
his case decided on the basis of the written record. Applicant received the
Government’s File of Relevant Material (FORM) on January 11, 2016, and did not
respond to the FORM. The case was assigned to me on March 29, 2016.
Summary of Pleadings
 
Under Guideline F, Applicant allegedly accumulated the following delinquent
debts: an Internal Revenue Service (IRS) debt for $19,000; three judgments exceeding
$31,000; and 13 debts exceeding $28,000, Allegedly, each of the listed delinquent
debts remains outstanding. 
In his response to the SOR, Applicant admitted most of the allegations in the
SOR, with explanations. He denied the alleged debts to creditor 1.b (claiming he
established monthly plans of $300 a month, which the IRS canceled and resumed);
creditors 1.c and 1.d (claiming he satisfied the judgment debts through wage
garnishment); creditor 1.e (claiming he established a monthly payment plan in 2011 for
$300 a month that was canceled by the judgment creditor when he missed a payment),
creditors 1.g-1.h, and 1.j) (claiming he established automatic payment plans with the
creditors); creditor 1.i (claiming the creditor confirmed the debt was charged off); and
creditor 1.k (claiming he made a $1,726 payment to the creditor, believing at the time
the debt was charged off).
Findings of Fact
 Applicant is a 51-year-old software engineer for a defense contractor who seeks
a security clearance. The allegations covered in the SOR and admitted by Applicant are
adopted as relevant and material findings. Additional findings follow.
Background
                                  
Applicant married in January 1988, divorced his spouse in June 1990, and has
no children from his marriage. (Item 3) Applicant enlisted in the U.S. Air Force in July
1983. He served 21 years of active duty and received an honorable discharge in
October 2004. (Item 2) He earned two associate’s degrees: one in avionics systems
and one in computer systems. (Item 3) He attended classes at a local community
college between April 2003 and April 2004 and from an online university between
August 2004 and August 2005. He did not earn a degree from either institution.
Applicant has been employed by his current employer since August 2004 as a software
engineer. (Items 2) 
Finances
Applicant accumulated a number of delinquent debts between 2005 and June
2014. His debts included $19,000 owed to the IRS for past due income taxes (creditor
1.a). Records revealed that he accrued three judgments: one in 2012 from creditor 1.c
in the amount of $3,462; another in 2011 from creditor 1.d in the amount of $23,089;
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and another in 2010 from creditor 1.e in the amount of $5,227. (Items 3-7) Applicant
also accrued 13 delinquent consumer debts exceeding $22,000. (Items 3-7)
Addressing his three judgments, Applicant admitted all three judgments entered
by creditors 1.c-1-e). He claimed the judgment entered by creditor 1.c was discharged
in full (i.e., $4,088) by wage garnishment. (Items 2-3) And he claimed the creditor 1.d
judgment (i.e., $19,631) was satisfied in part by wage garnishment. He provided no
documentation, however, to verify his claims. Concerning his judgment creditor 1.e
$5,227 judgment, he claimed the judgment was satisfied in part by voluntary $300
monthly payments, commencing in 2011, before it was cancelled by the creditor after
he missed a payment. (Items 2-3) He claimed, too, that he contacted the law firm
representing the judgment creditor to explore payment options, but was told the firm no
longer represents creditor 1.e. Applicant provided no documented proof of his
payments or explanations as to why he did not pursue the creditor with a reinstatement
proposal.
Applicant attributed many of his financial problems to legal gambling between
2005 and 2014. Introduced to gambling in 2005, he gradually increased the frequency
of his gambling to the point in 2009 when he started using all of his disposable income
on gambling. (Item 3) The majority of his gambling entailed “pull tabs,” but he did make
two trips to Las Vegas, where blackjack and slot machines combined to form his games
of choice. (Item 3) He estimated the frequency of his gambling to be four days a week
before curtailing his gambling in 2014. (Items 2-3) Applicant incurred an estimated
$75,000 in gambling losses, lost his home due to gambling, and unsuccessfully
attended gamblers anonymous. Still, he continues to gamble on occasion. (Items 2-3) 
In the past, Applicant has made payment plans with some of his creditors, but
defaulted for unexplained reasons. While he has done little himself to satisfy his three
judgment debts (creditors 1.c-1.e), he claimed to have satisfied all or most of the
creditor 1.c and 1.d judgment debts through wage garnishment. He provided no
documentation, though, to verify his claims, or clarify what amounts are still owing on
the three judgments.
Besides his three judgment debts, records document that Applicant is indebted
to creditor 1.b for delinquent federal taxes in the amount of $19,000. (Items 2-7)
Applicant initiated automatic monthly installment plans with the IRS of $300 a month
back in 2009, which the IRS cancelled (date not provided). Applicant claimed he is on a
current monthly payment plan of $500 a month that he initiated in November 2014. 
Except for two months in August and September 2015, he continues to have his
payments deducted from his checking account by the IRS. And he claimed to have
made one time payments to the IRS in April and June 2015. (Item 2) Applicant
estimated his current balance on his owed federal taxes is $12,230. (Item 3) He
provided no documentary proof, though, to corroborate his claims. Without documented
proof, Applicant’s claims cannot be verified and accepted.
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Records show that Applicant also accumulated 13 delinquent consumer debts
totaling $22,000. (Items 2-7) These listed 13 delinquent debts exceed $22,000 in
aggregate indebtedness. ((Items 2-7) Applicant provided no evidence to verify any of
his claimed payments to these listed creditors (I.e., creditors 1.g, and 1.j-1.k).   
Endorsements
Applicant provided no character references on his behalf, either with his answer
or with his response to the FORM.  Nor did he furnish any performance evaluations or
evidence of community and civic contributions. 
Policies
The AGs list guidelines to be used by administrative judges in the decision-making
process covering DOHA cases. These guidelines take into account factors that could
create a potential conflict of interest for the individual applicant, as well as considerations
that could affect the individual’s reliability, trustworthiness, and ability to protect classified
information. These guidelines include "[c]onditions that could raise a security concern
and may be disqualifying” (disqualifying conditions), if any, and many of the "[c]onditions
that could mitigate security concerns.” 
The AGs must be considered before deciding whether or not a security clearance
should be granted, continued, denied, or revoked. The guidelines do not require
administrative judges to place exclusive reliance on the enumerated disqualifying and
mitigating conditions in the guidelines in arriving at a decision. Each of the guidelines is to
be evaluated in the context of the whole person in accordance with AG ¶ 2(c). 
In addition to the relevant AGs, administrative judges must take into account the
pertinent considerations for assessing extenuation and mitigation set forth in AG ¶ 2(a) of
the AGs, which are intended to assist the judges in reaching a fair and impartial
commonsense decision based upon a careful consideration of the pertinent guidelines
within the context of the whole person. The adjudicative process is designed to examine
a sufficient period of an applicant’s life to enable predictive judgments to be made about
whether the applicant is an acceptable security risk. 
When evaluating an applicant’s conduct, the relevant guidelines are to be
considered together with the following AG ¶ 2(a) factors: (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 chances; (7) the motivation for the conduct; (8) the potential for
pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or
recurrence.
Viewing the issues raised and evidence as a whole, the following individual
guideline is pertinent in this case:
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Financial Considerations
The Concern: 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
overextended 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 ¶ 18.
Burden of Proof
By virtue of the principles and policies framed by the AGs, a decision to grant
or continue an applicant's security clearance may be made only upon a threshold
finding that to do so is clearly consistent with the national interest.  Because the
Directive requires administrative judges to make a commonsense appraisal of the
evidence accumulated in the record, the ultimate determination of an applicant's
eligibility for a security clearance depends, in large part, on the relevance and
materiality of that evidence. See United States, v. Gaudin, 515 U.S. 506, 509-511
(1995).  As with all adversarial proceedings, the judge may draw only those inferences
which have a reasonable and logical basis from the evidence of record. 
The Government's initial burden is twofold: (1) it must prove by substantial
evidence any controverted facts alleged in the SOR, and (2) it must demonstrate that
the facts proven have a material bearing to the applicant's eligibility to obtain or
maintain a security clearance. The required materiality showing, however, does not
require the Government to affirmatively demonstrate that the applicant has actually
mishandled or abused classified information before it can deny or revoke a security
clearance. Rather, the judge must consider and weigh the cognizable risks that an
applicant may deliberately or inadvertently fail to safeguard classified information.
Once the Government meets its initial burden of proof of establishing admitted
or controverted facts, the evidentiary burden shifts to the applicant for the purpose of
establishing his or her security worthiness through evidence of refutation, extenuation,
or mitigation.  Based on the requirement of  Exec. Or. 10865 that all security
clearances be clearly consistent with the national interest, the applicant has the
ultimate burden of demonstrating his or her clearance eligibility. “[S]ecurity-clearance
determinations should err, if they must, on the side of denials.” See Department of the
Navy v. Egan, 484 U.S. 518, 531 (1988). 
Analysis  
Applicant is a fully employed software engineer manager for a defense
contractor, and he has accumulated delinquent debts exceeding $50,000. His listed
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debts are comprised of a an IRS debt for past due federal taxes ($19,000), three
adverse judgments  (exceeding $31,000 in the aggregate), and 13 consumer debts
exceeding $22,000. While Applicant claims to have addressed some of his listed
debts, he provided no documentation to verify his claims. As matters stand, Applicant
has made no verifiable payments on any of the listed debts in the SOR that can be
validated and approved.
Applicant’s collective accumulation of delinquent debts warrant the application
of four of the disqualifying conditions (DC) of the Guidelines. DC ¶ 19(a), “inability or
unwillingness to satisfy debts,” DC ¶19(c), “a history of not meeting financial
obligation,” and DC ¶19(f), “financial problems that are linked to drug abuse,
alcoholism, gambling problems, or other issues of security concern,” and DC ¶19(i),
“compulsive or addictive gambling as indicated by an unsuccessful attempt to stop
gambling, “chasing losses” (i.e., increasing the bets or returning another day in an
effort to get even), concealment of gambling losses, borrowing money to fund
gambling or pay gambling debts, family conflict, or problems caused by gambling.”
apply to Applicant’s situation.
Applicant’s pleading admissions with respect to his accumulation of
unaddressed delinquent debts covered in the SOR negate the need for any
independent proof (see McCormick on Evidence, § 262 (6th ed. 2006)). Each of
Applicant’s listed filing lapses and debts are fully documented in his credit reports.
Some judgment problems persist over Applicant’s insufficiently explained accrual of
mortgage debts with his principal lender and other consumer creditors. To date, he
has taken insufficient corrective steps to resolve his delinquencies and demonstrate
he acted responsibly in addressing his listed debts. See ISCR Case 03-01059 at 3
(App. Bd. Sep. 24, 2004). 
                                         
Holding a security clearance involves a fiduciary relationship between the
Government and the clearance holder. Quite apart from any agreement the clearance
holder may have signed with the Government, the nature of the clearance holder’s
duties and access to classified information necessarily imposes important duties of
trust and candor on the clearance holder that are considerably higher than those
typically imposed on Government employees and contractors involved in other lines of
Government business.  See Snepp v. United States, 444 U.S. 507, 511 n.6 (1980). 
Inferentially, Applicant’s delinquent debts are attributable for the most part to
gambling losses. Without more information from Applicant about his debt
delinquencies and the status of any delinquencies on his past-due tax debts,
outstanding judgments, consumer debts, more detailed assessments cannot be
made. Based on the documented materials in the FORM, no extenuating
circumstances can be credited to Applicant. While likely contributory to his financial
difficulties, gambling losses cannot be considering extenuating when evaluating an
applicant’s clearance worthiness. MC ¶ 20(b), “the conditions that resulted in the
behavior were largely beyond the person’s control (e.g., loss of employment, a
business downturn, unexpected medical emergency, or a death, divorce, or
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separation, and the individual acted responsibly,” has no applicability to Applicant’s
situation.
Whole-person assessment does not enable Applicant to surmount the
judgment questions raised by his accumulation of past due federal taxes, three
outstanding judgments, and delinquent consumer accounts. Resolution of his listed
delinquent accounts is a critical prerequisite to his regaining control of his finances.
Based on the limited information provided by Applicant, the evidence of record does
not permit Applicant to establish judgment and trust levels sufficient to overcome
security concerns associated with his accumulation of past due federal taxes, adverse
judgments, and delinquent consumer debts.
Taking into account all of the documented facts and circumstances surrounding
Applicant’s accrual of delinquent federal taxes and consumer accounts (inclusive of
three judgments) and lack of documented resolution of them, it is still too soon to
make safe predictions of Applicant’s ability to satisfactorily resolve his debts. More
time is needed to facilitate’s Applicant’s making the necessary progress with his
creditors to facilitate conclusions that his finances are sufficiently stabilized to permit
him access to classified information. Allegations covered by subparagraphs 1.a
through 1.r of Guideline F are resolved unfavorably to Applicant. 
Formal Findings
In reviewing the allegations of the SOR and ensuing conclusions reached in the
context of the findings of fact, conclusions, conditions, and the factors listed above, I
make the following formal findings:
GUIDELINE F (FINANCIAL CONSIDERATIONS): AGAINST APPLICANT
   
Subparagraphs. 1.a through 1.r:      Against Applicant
Conclusions
In light of all the circumstances presented by the record in this case, it is not
clearly consistent with the national interest to grant or continue Applicant’s security
clearance.  Clearance is denied.
                                          
Roger C. Wesley
Administrative Judge 
                                        
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