Case No. VSO-0287 (H.O. Palmer February 7, 2000)

For full history of this case, and links to other cases, click here.

* The original of this document contains information which is subject to withholding from disclosure under 5 U.S.C. 552. Such material has been deleted from this copy and replaced with XXXXXXX’s.

February 7, 2000

DEPARTMENT OF ENERGY

OFFICE OF HEARINGS AND APPEALS

Hearing Officer’s Opinion

Case Name: Personnel Security Hearing

Date of Filing: July 15, 1999

Case Number: VSO-0287

This Opinion concerns the eligibility of XXXXXXXXXXXXXXXXXXXXX (hereinafter referred to as "the individual") to retain an access authorization under the regulations set forth at 10 C.F.R. Part 710, entitled "Criteria and Procedures for Determining Eligibility for Access to Classified Matter or Special Nuclear Material."(1)

I. Background

For a number of years, the individual has been employed by a Department of Energy (DOE) contractor in a job that required that he maintain a security clearance. As required by the DOE, on June 16, 1998, the individual reported to personnel security officials that he had filed for bankruptcy under Chapter 13 of the federal bankruptcy laws. Because this information raised security concerns, a DOE Personnel Security Specialist interviewed the individual. Based on information given by the individual during this Personnel Security Interview (PSI), the local Security Office referred the individual to a psychiatrist (hereinafter referred to as “the DOE psychiatrist”), for an agency-sponsored psychiatric evaluation. The DOE psychiatrist interviewed the individual and provided a written evaluation to the Security Office.

After reviewing the results of this investigation, the local Director of Security determined that derogatory information existed which cast into doubt the individual’s

suitability for continued access authorization. The Director informed the individual of this determination in a letter which set forth in detail the DOE’s security concerns and the reasons for those concerns. I will hereinafter refer to this letter as the Notification Letter. The Notification Letter also informed the individual that he was entitled to a hearing before a Hearing Officer in order to resolve the substantial doubt regarding his continued eligibility for access authorization.

The individual requested a hearing on this matter. The Director forwarded the individual’s request to the Office of Hearings and Appeals and I was appointed the Hearing Officer. A prehearing telephone conference was held, and the hearing was convened near the individual’s job site. Four witnesses testified at the hearing. A Personnel Security Specialist and the DOE psychiatrist testified for the DOE. Testifying for the individual were a psychologist and the individual himself.

II. Statement of Derogatory Information

As indicated above, the Notification Letter included a statement of derogatory information in possession of the DOE that created a substantial doubt as to the individual’s eligibility to hold a clearance. This information pertains to paragraphs (h) and (l) of the criteria for eligibility for access to classified matter or special nuclear material set forth at 10 C.F.R. § § 710 et seq. Paragraph (h) defines as derogatory any information indicating that the individual has “[a]n illness or mental condition of a nature which, in the opinion of a board-certified psychiatrist, other licensed physician or a licensed clinical psychologist, causes, or may cause, a significant defect in judgment or reliability.” Paragraph (l) refers to information that the individual has “engaged in any unusual conduct or is subject to any circumstances which tend to show that the individual is not honest, reliable or trustworthy; or which furnishes reason to believe that the individual may be subject to pressure, coercion, exploitation, or duress which may cause the individual to act contrary to the best interests of the national security. Such conduct or circumstances include . . . a pattern of financial irresponsibility. . . .”

The Notification Letter states that the individual was evaluated by the DOE psychiatrist, and that the psychiatrist diagnosed the individual as follows:

Axis l: Clinical Syndromes - Impulse Control Disorder, identified at this time, as determined from available admitted data

(1) Pathological Gambling Disorder (312.31) likely, but marked denial of signs and symptoms inhibits absolute diagnosis; therefore, Impulse Control Disorder NOS, gambling compulsion.

(2) Suspect Mood Disorder, either Cyclothymia (301.13) or Bipolar Disorder NOS (296.70).

(3) Suspect Anxiety Neurosis Disorder/Obsessive Compulsive Disorder (300.30) versus or co-morbid with Obsessive Compulsive Personality.

Axis ll: Personality Disorders

Suspect Cluster C Personality Disorder NOS, mixed (301.90)

Obsessive Compulsive features (301.40), or co-morbid with OCD

Neurosis, Also perhaps Avoidant Personality Traits? (301.82)

Axis lll: General Medical Conditions, none known.

Axis lV: Psychosocial and Environmental Problems: Considered serious to severe

Economic: gambling debts, overspending beyond means, writing bad (NSF) checks, bankruptcy, limited fluid finances.

Life Style: changes and adjustments in spending, housing, etc.

Work: concerns about job security and thus ability to finance living readjustments and plans to rectify current financial problems.

Spousal Discord: denied, but suspected; concern about accurate reporting.

Underlying emotional conflicts or disorders related to gambling compulsion are suspected.

Axis V: Global Assessment of Functioning

Currently portrayed: 70 to 80

Actual GAF suspected: 60 to 70

These estimates are based upon available information and take into account subject’s marked denial of problems, a chronic self-defeating defense system.

The DOE psychiatrist opined that these conditions cause or may cause a significant defect in the individual’s judgment and reliability within the meaning of paragraph (h).

The DOE’s contentions with regard to paragraph (l) concern the individual’s history of severe financial difficulties. The Notification Letter cites the individual’s statements in his PSI as support for allegations that he:

(1) filed for bankruptcy in 1998 and admitted that this was necessary due to irresponsible spending on his part;

(2) spent excessive amounts of money on gambling, especially in the year before his bankruptcy filing, which contributed to the bankruptcy, and continued gambling after the bankruptcy;

(3) purchased trucks in 1996 and 1997 that he could not afford;

(4) purchased a TV/VCR combination for over $400 on credit after he knew that he would be filing for bankruptcy;

(5) was unable to meet his financial obligations even after filing for bankruptcy;

(6) does not have a budget and has not sought financial counseling despite his financial problems; and

(7) desires to maintain a lifestyle that he cannot afford, despite negative consequences, indicating that he would be susceptible to exploitation or duress which may cause him to act contrary to the best interests of national security.

The DOE alleges in the Notification Letter that this behavior is unusual, is indicative of a pattern of financial irresponsibility, and calls into question the individual’s judgment, reliability and honesty.

III. Findings of Fact and Analysis

The criteria for determining eligibility for security clearances set forth at 10 C.F.R. Part 710 dictate that in these proceedings, a Hearing Officer must undertake a careful review of all of the relevant facts and circumstances, and make a “common- sense judgment . . . after consideration of all the relevant information.” 10 C.F.R. § 710.7(a). I must therefore consider all information, favorable or unfavorable, that has a bearing on the question of whether restoring the individual’s security clearance would compromise national security concerns. Specifically, the regulations compel me to consider the nature, extent, and seriousness of the individual’s conduct; the circumstances surrounding his conduct; the frequency and recency of the conduct; the age and maturity of the individual at the time of the conduct; the absence or presence of rehabilitation or reformation and other pertinent behavioral changes; the likelihood of continuation or recurrence of the conduct; and any other relevant and material factors. 10 C.F.R. § 710.7(c).

A DOE administrative proceeding under 10 C.F.R. Part 710 is not a criminal proceeding in which the burden is on the government to prove the individual guilty beyond a reasonable doubt. See Personnel Security Hearing, Case No. VSO-0078, 25 DOE ¶ 82,202 (1996), aff’d, Case No. VSA-0078, 25 DOE ¶ 83,016 (1996) (affirmed by OSA, 1996). A hearing is “for the purpose of affording the individual an opportunity of supporting his eligibility for access authorization.” 10 C.F.R.

§ 710.21(b)(6). Once the DOE has made a showing of derogatory information raising security concerns, the burden is on the individual to produce evidence sufficient to convince the DOE that restoring his access authorization “would not endanger the common defense and security and would be clearly consistent with the national interest.” 10 C.F.R. § 710.27(d). See Personnel Security Hearing, Case No. VSO-0013, 24 DOE ¶ 82,752 at 85,511 (1995) (affirmed by OSA, 1996), and cases cited therein. After careful consideration of the factors mentioned above and of all the evidence in the record in this proceeding, I find that the individual has failed to make this showing, and that his clearance should therefore not be restored.

As an initial matter, I find that the record in this proceeding amply supports the DOE’s conclusions that security concerns exist with respect to paragraphs (h) and (l) of the criteria for eligibility for access to classified matter or special nuclear material. The DOE psychiatrist diagnosed the individual as suffering from Impulse Control Disorder, gambling compulsion, and concluded that this condition impairs the individual’s judgment, especially with reference to matters of personal finance. Moreover, the individual does not deny having behaved in a financially irresponsible manner prior to his filing for bankruptcy under Chapter 13 (and later, under Chapter 7) of the federal bankruptcy laws.

Instead, the individual contends that sufficient mitigating factors exist to indicate that restoring his clearance would not endanger national security. Specifically, he states that he has stopped gambling and has sought professional counseling, and that he now has his financial affairs in order.

In response to the DOE’s security concerns under paragraph (h), at the hearing the individual presented the testimony of a clinical psychologist. The psychologist testified that the DOE psychiatrist “grossly overinterpreted the data that he had available to him.” Hearing Transcript (Tr.) at 93. He added that the results of the Minnesota Multiphasic Personality Inventory (MMPI) and Millon Clinical Multiaxial Inventory (MCMI) tests that were administered to the individual by the DOE psychiatrist were “within normal limits” and do not indicate the existence of any “psychopathology.” Tr. at 94, 95.

When asked about the extent of his evaluation of the individual, the psychologist stated that he met with the individual for about an hour, and that he reviewed the Notification Letter and the DOE psychiatrist’s report and accompanying notes. He stated that he does believe that the individual has “a gambling problem,” although he does not believe that it meets the parameters of pathological gambling within the meaning of the DSM-IV. Tr. at 104. The psychologist also indicated the existence of an impulse control problem, Tr. at 102, 105, and he referred the individual to a licensed therapist for counseling in these areas. He added, however, that he does not believe that the individual’s gambling problem is so severe that it would cause him to make bad judgments. Tr. at 105.

When asked about the extent and nature of the individual’s sessions with the licensed therapist, he said that the individual had seen him five or six times, on a weekly basis, for about 50 minutes per session, and that these sessions focused on a cognitive behavioral treatment of gambling and the issues that contribute to it. Tr. at 106. The psychologist stated that his recommendation was for a total of twelve to 16 sessions, and that the individual would be ready for discharge from treatment when he could “articulate the issues that are underlying” his condition and demonstrate the capacity to refrain from the pattern of dysfunctional gambling that he had previously engaged in. Tr. at 108. When asked to assess the individual’s current condition, he said that he did not know if the individual was still gambling, but added that the individual “has been able to address the gambling and the style approach that he’s had to utilizing gambling in his life and where it fits but he’s not by any means at the point of being discharged. He’s not by any means at the point of having this thing under control and demonstrating awareness of all the issues.” Tr. at 110.

The individual also testified at the hearing. He attributed a significant portion of his financial problems to his 1996 marriage and his new family, stating that it is not unusual for new families to spend irresponsibly and that, before the wedding, he had not had any financial problems. Tr. at 127 As for the DOE’s allegations that he purchased a Dodge truck in 1996 and a Ford truck in 1997 that he could not afford, he pointed out that he made all the payments due on the Dodge truck for the few months that he owned it, before it was sold to pay his bills. He added that he purchased the Ford truck on the advice of his attorney, who told him that he needed a reliable vehicle that would last at least five years, because it would be difficult to purchase another after his bankruptcy. Tr. at 130. He also denied knowing that he was going to file for bankruptcy when he purchased a TV/VCR combination on credit in December 1997, stating that “the concept of bankruptcy hadn’t entered my mind until we talked to a bankruptcy attorney in mid-January [1998] about our options. . . .“ Tr. at 131. As for not being able to meet his financial obligations even after his Chapter 13 bankruptcy, the individual testified that the schedule of payments drawn up by his attorney was unrealistic and did not leave sufficient funds for food, utilities or other basics of life. Tr. at 133. After consulting with another attorney, the individual filed for a Chapter 7 bankruptcy, which he said, “straightened out our lives.” Id.

The individual also testified that he has not sought professional financial advice because he has learned what not to do from experience, and that the fact that he has no formal budget does not make him “irresponsible, nor is it unusual conduct.” Tr. at 135. He indicated that he and his wife handle the finances jointly, and that they are currently up to date in their paying of bills. Tr. at 169, 173. He stated that they have a checking account, which is used solely to pay bills, and a debit card, adding that they pay their “important” bills in cash every pay day, thereby ensuring that their checks do not bounce. Tr. at 135. In response to the DOE’s allegation that he made irresponsible purchases to impress his friends and because he wanted nice things and did not want to wait for them, the individual said that he no longer strives to maintain a lifestyle that he cannot afford, and that he is no longer subject to coercion or pressure because of finances, if this in fact ever was the case. Tr. at 137.

As to the DOE’s allegations concerning his gambling, the individual said that the description of these activities in the Notification Letter as “excessive” is too strong a term, since his gambling losses were less than 5% of his total debt. Tr. at 129. He added that gambling helped him to pay the bills at times, but wasn’t the best solution. At the time, he said, gambling seemed a viable option since he didn’t know what his other options were in terms of getting help. Id. In response to the allegation that he continued to wager despite having major financial problems due to gambling, he denied that gambling was a significant contributor to those problems, adding that he has “gambled on an extremely limited basis since the bankruptcy,” and has sought professional help to eliminate it altogether. Tr. at 134. He stated that he last gambled approximately six months prior to the hearing, at a bingo parlor. Tr. at 163. The individual concluded that although he did not disagree with the suspension of his clearance, he now believes that it should be reinstated. Tr. at 138.

I do not agree. After reviewing the Hearing Transcript and all of the exhibits submitted by the parties, I conclude that the individual has not successfully mitigated the DOE’s security concerns under paragraphs (h) and (l).

Although I believe that the individual has made significant progress toward addressing his problems regarding gambling and impulse control, the record in this matter clearly indicates that the individual’s recovery is not yet complete. During the hearing, the DOE psychiatrist testified that, in order to restore the psychiatrist’s confidence in the individual’s judgment and reliability, the individual would have to admit that he has a gambling problem, completely abstain from gambling, and participate in a treatment program, such as Gamblers Anonymous, for one to two years. He also indicated that he would have to readminister the two psychiatric tests to the individual before he could determine whether the individual had sufficiently recovered from his gambling and impulse control problems. Tr. at 55-58, 61. Having completed only “five or six” weekly counseling sessions, the individual has not satisfied even the less stringent therapy requirements recommended by his own psychologist. Tr. at 106, 108. Accordingly, the psychologist testified that the individual is “not by any means at the point of having [his gambling problem] under control and demonstrating awareness of all the issues.” Tr. at 110. Indeed, even the individual himself admitted that “there’s still more to do” in terms of his counseling. Tr. at 164.

That the individual’s recovery is still a work in progress is attested to by his repeated contention that his gambling losses were not “excessive” because they constituted only 5 percent of his total indebtedness. Tr. at 82, 129, 134. However, the record indicates that the individual lost thousands of dollars gambling in the period of time leading up to his Chapter 13 bankruptcy, and even after that bankruptcy, when, by his own admission, the individual was having trouble providing the necessities of life for his family, such as food, utilities and transportation. Tr. at 82, 132-133, 155-156, 161- 162. This conduct is excessive under any reasonable definition of that term. Although the individual has admitted that he has a gambling problem and has sought professional help for that problem, I find that a valid security concern still exists under paragraph (h).

The individual’s failure to seek professional financial counseling, and his failure to establish a budget, lead me to conclude that valid concerns also remain under paragraph (l). I find these failures to be especially damaging in view of the individual’s history of self-delusion concerning financial matters. His purchases on credit of the Dodge truck in 1996 and the TV/VCR combination in 1997 when he knew, or should have known, that he could not afford them, are examples of this tendency.

In his PSI, the individual indicated that he purchased the truck in February 1996 for $23,000 even though he knew that he was headed for financial trouble. PSI at 10. He had to take out a second mortgage on his house to satisfy this and other debts, and had to sell the truck several months later to pay off still more debts. When asked why he purchased the truck even though he was experiencing financial difficulties, he said that he had “had it on order for quite some time and it was one of those things I just really wanted and . . . it was a nice truck but I ended up having to sell it later.” PSI at 10-11.

During the PSI, when asked why he purchased the TV/VCR, he replied that “its Christmas time and you’re thinking ?jeez, the kids need something nice - - it’s the only thing the kid wanted’ and you sit around thinking ?well how are we going to get him this,’ you know, ?there’s no way that we can afford it.’ And then, you come up with the idea that . . . ?I can get it through Sears.’” PSI at 49. In discussing this purchase at the hearing, the individual observed that “it may have been delusional to think I could have paid it off but . . . I felt that we are going to make payments on it and pay it off. . . . but then a month later . . . [I felt that we were] not going to be able to make the payments.” Tr. at 152-153.

In view of these incidents and others like them, I believe that professional financial guidance and the discipline imposed by a well-defined budget can play a key role in helping the individual to maintain control of his finances. Although the individual contends that he has achieved this goal by eschewing the use of credit and paying his bills in cash every payday, Tr. at 135, the record suggests that the individual has only a vague understanding of how his money is being spent. When asked to account for his expenditures during the 12 months prior to the hearing, the individual estimated that he saved “two or three thousand” to “get into a new house.” Tr. at 158- 159.

Q. And you said that you take home around twenty-two hundred a month?

A. Uh-huh.

Q. So where did all the money go?

A. I can’t speak for that because I -- you know, I don’t know.

Q. I guess I’m seeing around thirty thousand dollars that you would have taken home --

A. Uh-huh.

Q. -- over the course of a year. . . . Can you explain where the money went?

A. At this time I cannot. That’s something I can address at a later time. . . .

Q. Did you buy another house?

A. No, we did not. . . . As far as where [the money] all went, I don’t keep financial records as to where everything goes. . . . We did pay power bills, we did pay payments on the house or to the vehicle and up until we filed the chapter seven, then we resumed after the seven. There were other things that we were paying on just to have a normal life.

Tr. at 159-160. In the absence of professional guidance, a formal budget, or even a complete awareness of how his money is being spent, I am not at all confident that the individual will be able to maintain a pattern of financial responsibility and avoid the problems that led to his bankruptcy. A recurrence of these difficulties could make the individual vulnerable to financial pressures or coercion. (2)

IV. Conclusion

As explained in this Opinion, I find that the DOE properly invoked 10 C.F.R. §§710.8(h) and 710.8(l) in suspending the individual's access authorization. I further find that the arguments advanced by the individual in his defense do not adequately mitigate the DOE’s security concerns. Based on the record in this proceeding, I am unable to conclude that granting the individual access authorization would not endanger the common defense and security and would be clearly consistent with the national interest. Accordingly, I find that the individual’s access authorization should not be restored.

The regulations set forth at 10 C.F.R. § 710.28(a) provide that the Office of Security Affairs or the individual may file a request for review of the Hearing Officer’s Opinion within 30 calendar days of receipt of the Opinion. Any such request must be filed with the Director, Office of Hearings and Appeals, 1000 Independence Ave., S.W., Washington, D.C. 20585, and served on the other party. If either party elects to seek review of the Opinion, that party must file a statement identifying the issues on which it wishes the OHA Director to focus. This statement must be filed within 15 calendar days after the party files its request for review. The party seeking review must serve a copy of its statement on the other party, who may file a response within 20 days of receipt of the statement. 10 C.F.R. § 710.28(b).

Robert B. Palmer

Hearing Officer

Office of Hearings and Appeals

Date: February 7, 2000

(1)An access authorization is an administrative determination that an individual is eligible for access to classified matter or special nuclear material. 10 C.F.R. § 710.5. Such authorization will be referred to in this Opinion as access authorization or a security clearance.

(2)Finally, I am also troubled by an apparent inconsistency between the individual’s PSI and his testimony at the hearing. During the PSI, the individual indicated that he and his wife started thinking about bankruptcy in November or December of 1997, PSI at 32, prior to their purchase of the TV/VCR combination. PSI at 48. However, at the hearing, he responded to the DOE’s allegation that he made this purchase on credit knowing that he would soon file for bankruptcy by stating that “we really hadn’t discussed bankruptcy until . . . mid-January so the thought of paying it off was still there. . . . [T]he entertainment of thoughts for a bankruptcy” didn’t occur until a month after the purchase of the TV/VCR. Tr. at 152. Although I am inclined to attribute this inconsistency to an unclear memory and nervousness under pressure, I cannot totally discount the possibility of an intentional misrepresentation.