Case No. VSO-0414, 28 DOE ¶ 82,794 (H.O. Mancke March 12, 2001)

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* 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.

March 12, 2001

DEPARTMENT OF ENERGY

OFFICE OF HEARINGS AND APPEALS

Hearing Officer’s Opinion

Case Name: Personnel Security Hearing

Date of Filing:November 6, 2000

Case Number: VSO-0414

This opinion concerns the eligibility of XXXXXXX (the Individual) for restoration of her access authorization (hereinafter, “access authorization” or “security clearance”) under the Department of Energy (DOE) regulations set forth at 10 C.F.R. Part 710, “Criteria for Access to Classified Matter or Special Nuclear Material.” As discussed below, after consideration of the record before me and relevant regulations, I recommend against restoration of the Individual’s access authorization.

I. Background

The Individual’s position with a DOE contractor requires that she maintain a security clearance. This administrative proceeding began when a DOE Operations Office suspended the Individual’s access authorization and issued a Notification Letter to her stating that reliable information in possession of the DOE created a substantial doubt as to her continued eligibility for access authorization. Specifically, the Notification Letter alleges that after having most of her debts discharged through bankruptcy, the Individual continued to submit late mortgage payments, failed to pay on several accounts that she had reaffirmed(1) during the bankruptcy proceedings, and admitted during a personnel security interview that she spent between $800 and $1400 per month on lottery tickets. The Notification Letter further states that a July 2000 credit report revealed that several of the Individual’s reaffirmed accounts had been charged off and the mortgage on her house had been placed in foreclosure. The Notification Letter concludes that the Individual’s pattern of financial irresponsibility shows that she has engaged in unusual conduct or is subject to circumstances which tend to show that she is not honest, reliable, or trustworthy; or which furnishes reason to believe that she may be subject to pressure, coercion, exploitation, or duress which may cause her to act contrary to the best interests of national security, which raises a security concern under 10 C.F.R. § 710.8(l) (Criterion L).

Pursuant to 10 C.F.R. § 710.21, the Individual requested a hearing in order to respond to the information set forth in the Notification Letter. At the hearing, the DOE called one witness, a personnel security specialist, and the Individual offer her own testimony and that of three witnesses: two of her supervisors and her husband. The DOE submitted seven exhibits into the record (Exh. 1- 7) and the Individual submitted three (Exh. A-C).

II. Findings of Fact

The essential facts underlying this case are not in dispute. Prior to this proceeding, the Individual had remained gainfully employed for 22 years as an administrative assistant for a DOE contractor. Hearing Tr. (Tr.) at 8. Her husband, however, lost his full-time position in the early 1980s, and held a series of part-time jobs for at least a decade, before again obtaining other full-time, but low-paying employment. Tr. at 73; Exh. 2 at 3.

Meanwhile, besides having a home mortgage, the couple amassed a considerable amount of credit card debt. Although a portion of the debt is attributable to nonessential purchases, much of it is due to unexpected expenses, including several costly automobile and major appliance repair bills. Tr. at 91. In addition, the Individual, who had handled the couple’s finances, repeatedly took cash advances from one credit card in order to make a payment on another. Tr. at 128-29. Although using this practice the Individual generally managed to submit timely minimum payments on all credit cards, she also increased the couple’s total indebtedness. By late 1997 or early 1998, she had exhausted all lines of credit. In mid-1998, the couple decided to file a joint application for bankruptcy under Chapter 7 and officially executed the filing in November of that year. Tr. at 16; Exh. 2 at 4-5.

Besides a used truck, the couple made no large purchases subsequent to arriving at the decision to file for bankruptcy but before actually doing so. Id. They decided to purchase the truck prior to filing for bankruptcy, in order to avoid post-bankruptcy financing problems and high interest rates. Tr. at 130. The couple sought and obtained financing for the truck in or around May 1998, reaffirmed the automobile loan in their bankruptcy, and have remained current on their payments. Id.

Pursuant to DOE security procedure, the Individual reported her bankruptcy filing to the local DOE facility. A DOE security specialist (the PSS) held two interviews with the Individual in January 1999 (the first PSI) and July 2000 (the second PSI), respectively. In the first PSI, the Individual completed a Personal Financial Statement (PFS), which indicated that after monthly payments on her and her husband’s reaffirmed debts (which included various credit card balances, her mortgage, and the automobile loan) and outlays for living expenses, approximately $400 in net monthly income remained. Exh. 3. After reviewing her budget with her, the PSS informed the Individual that the DOE would continue to monitor her progress and advised her that failure to stay current on her bills may jeopardize her security clearance. Exh. 2 at 33. The Individual acknowledged his warning and stated her intention to ensure satisfaction of her reaffirmed debts. Id. at 30-34.

A July 2000 credit report for the Individual revealed, however, that several of the accounts the Individual had reaffirmed in the bankruptcy proceeding were either delinquent or charged off. The credit report also showed that the Individual’s home mortgage had been placed in foreclosure and the lending bank had obtained a civil judgment against her. Exh. 4. The PSS therefore conducted the second PSI with the Individual. During that interview, the Individual admitted that rather than making timely payments on her mortgage and credit card bills, she had been spending between $800 and $1000 per month, for several months, on lottery tickets. Exh. 6 at 13; Tr. at 113. No other major circumstance had caused her to stray from the PFS she had formulated during the first PSI.

The Individual had been a regular purchaser of lottery tickets for approximately ten years. Tr. at 115. However, purchasing lottery tickets did not become a self-described “problem” for the Individual until mid-1999, when her monthly spending on lottery tickets increased to hundreds per week. Tr. at 99. Purchasing lottery tickets is the only form of gambling in which the Individual has been engaged. Tr. at 86. As of the hearing date, the Individual had not been formally diagnosed as suffering from a gambling addiction. Tr. at 133.

III. Standard of Review

“The decision as to access authorization is a comprehensive, common-sense judgment, made after consideration of all the relevant information, favorable or unfavorable, as to whether the granting of access authorization would not endanger the common defense and security and would be clearly consistent with the national interest.” 10 C.F.R. § 710.7(a). The standard implies that there is a strong presumption against the granting or restoring of a security clearance. See Dep’t of Navy v. Egan, 484 U.S. 518, 531 (1988)(the “clearly consistent with the interests of national security” test indicates that “security-clearance determinations should err, if they must, on the side of denials”); Dorfmont v. Brown, 913 F.2d 1399, 1403 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991) (strong presumption against the issuance of a security clearance).

Moreover, the presumption against granting or restoring a security clearance makes it “necessary and appropriate” to place the burden on the individual, not the government, to show that granting his security clearance would not endanger the common defense and security and would be clearly consistent with the national interest. See Personnel Security Hearing, 24 DOE ¶ 82,752 (1995). Once the DOE has made a showing of derogatory information raising security concerns, the individual must rebut, refute, explain, extenuate or mitigate the allegations. Id.

IV. Analysis

A. Whether the DOE Has Shown a Security Concern

Pursuant to Criterion L, the initial question in this case is whether there exists information that the Individual engaged in unusual conduct or is subject to circumstances which tend to show that she is not honest, reliable, or trustworthy; or which furnishes reason to believe that she may be subject to pressure, coercion, exploitation, or duress which may cause her to act contrary to the best interests of national security. For the reasons set forth below, I find that there is ample record evidence showing that a Criterion L concern exists.

When an individual files for bankruptcy, a security concern may stem not from the bankruptcy per se, but rather from the circumstances surrounding the individual’s bankruptcy and financial problems. See Personnel Security Hearing (Case No. VSO-0041), 25 DOE ¶ 82,775 (1995), aff’d (Case No. VSA-0041), 25 DOE ¶ 83,005 (1996). The relevant determination is whether an individual’s financial problems resulted from either legitimate financial hardship or a pattern of financial irresponsibility.

In this case, although legitimate financial hardship may have caused the Individual to file for bankruptcy, her conduct following the discharge of her debts shows a pattern of financial irresponsibility that raises a concern regarding her judgment and reliability. First, as the Individual admits, by using her mortgage money to purchase lottery tickets, she demonstrated a pattern of financial irresponsibility for the year and a half subsequent to having most of her debts discharged in bankruptcy. Exh. 6 at 11; Tr. at 132. Second, the Individual’s failure to make timely payments on her reaffirmed debts even after having received notice during the first PSI that such failure may jeopardize her security clearance calls into question her sound judgment. Third, the Individual’s failure or inability to better her financial situation after having articulated a firm and apparently sincere intention to do so raises doubts with regard to her reliability and trustworthiness. Based upon the foregoing, I find that the Individual’s post-bankruptcy conduct raises a Criterion L concern.

B. Whether the Criterion L Concern is Resolved

Having found ample information to support the existence of a Criterion L concern, I now turn to the issue of whether the Individual has met her burden of mitigating that concern. For the reasons set forth below, I find that she has not.

Toward mitigating a security concern, an individual may present, and hearing officers must consider, evidence regarding the nature, extent, and seriousness of the conduct, knowledgeable participation; the frequency and recency of the conduct; the voluntariness of participation; 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 motivation for the conduct; the potential for pressure, coercion, exploitation, or duress; and the likelihood of continuation or recurrence. 10 C.F.R. § 710.7(c).

In this case, the Individual contends that her demonstrated pattern of financial irresponsibility is not likely to continue. Tr. at 134, 140-42. She blames her poor financial choices, at least in part, on a gambling “compulsion,” and testified that she “just couldn’t seem to stop” purchasing lottery tickets. Tr. at 133. She further testified that her self-described addiction was the primary reason she failed to pay her mortgage and reaffirmed debts and that treating the underlying gambling problem will therefore put an end to her poor financial practices and resolve the attendant security concern. Tr. at 103, 140-42. To that end, the Individual testified that she plans on attending Gamblers Anonymous (GA) meetings, beginning with her first one the night of the hearing. Tr. at 101.

As an initial matter, as the PSS testified, a finding that a gambling compulsion or addiction exists would not mitigate the Criterion L concern raised by irresponsible financial practices. Tr. at 46. Rather, the formal diagnosis of a gambling addiction may constitute a separate security concern itself. Tr. at 47. See also 10 C.F.R. § 710.8(h). In any case, the Individual’s own realization that she perhaps has an addiction may be the first step toward addressing the problem, but does not demonstrate adequate evidence of rehabilitation from it. Although the Individual testified that she became aware of her gambling “problem” in mid-1999, it was not until a year and a half later in December 2000-- approximately one month before the hearing-- that she researched local GA meetings, and as of the hearing date, she had not attended a single GA meeting. Tr. at 101. Until then, she had pursued counseling only through the DOE Employee Assistance Program (EAP); as of the hearing date, she had met with an EAP counselor a total of four times since having her clearance suspended. Tr. at 100.(2) Furthermore, the Individual admitted at the hearing to having purchased lottery tickets as recently as one week prior to the hearing. Tr. at 113-14. Based upon the foregoing, I find that the Individual has not adequately demonstrated the ability to control her gambling habit and prevent its continued interference with satisfaction of her debts.

In addition, there is no evidence that the Individual has taken any other affirmative steps to better her financial situation. As of the hearing date, she had not sought credit counseling, managed to stay on a planned budget for more than a week, or attempted to supplement her income. Tr. at 105, 131, 135. In fact, when asked why she had not sought temporary employment when her security clearance was suspended, in order to ensure timely payment of her bills, the Individual responded that she enjoyed having the time off from having to work. Tr. at 135. Moreover, as of the hearing date, the last time she had made a mortgage payment was in mid-1999. Tr. at 116.

V. Conclusion

Based upon the foregoing, I find that the Individual has failed to mitigate the Criterion L concern raised by her pattern of financial irresponsibility and related gambling habit. I therefore do not recommend that her security clearance 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 this Hearing Officer’s Opinion within 30 calender 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. 20585-0107, 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.

Helen E. Mancke

Hearing Officer

Office of Hearings and Appeals

Date: March 12, 2001

(1)Reaffirmed debts are those that the Individual chose not to have discharged through the bankruptcy.

(2)Approximately one month after the hearing, I received a handwritten note from the Individual stating that she has “not gambled for 40 days (since January 17, 2001)” and has maintained her payment schedule and continued to see the EAP counselor. Attached to her note was a GA attendance sheet, evidencing her attendance at five GA meetings since the hearing date. Because the record is devoid of any evidence or expert testimony in support of the argument that the foregoing efforts would demonstrate rehabilitation, given the nature of the Individual’s gambling habit (which had not been professionally diagnosed as of the hearing date), the document does not alter my opinion that the Individual has failed to mitigate the Criterion L concerns raised by her gambling in concert with her demonstrated pattern of financial irresponsibility.