US govt security clearance and "gambling"

[eastbay]

I hold a high level US govt security clearance. In reviewing my poker tracker stats, I realize that to keep my nose clean, I am going to have to report a "gambling loss" on my income tax that is comparable to my annual salary.

I of course will also post gambling wins of that gambling loss plus about 35% - my long term poker ROI. However, I am suddenly nervous about the prospect of some clearance investigator seeing these numbers and flying out of his chair at this obvious "problem gambler" who is "gambling his entire salary" and getting stripped of my clearance and my entire career which I spent decades building and value immensely, both financially and emotionally.

I was just looking for anecdotes from anyone who has held a clearance and has also been a moonlighting poker player. I am really hoping that common sense will prevail here, but in matters of govt beaurocracy that may be optimistic.

I am also considering a "pre-emptive strike" by going to the clearance investigation center to discuss this matter with them before they discover it in my upcoming re-investigation a year from now. I figure if I am the one to make the first volley here, it may be possible to head this off before it becomes a serious problem. They do seem to value you voluntarily putting any potential issues out there, rather than them having to come to you to find things that may be, in their mind, red flags.

So, has anyone been in this spot before? Any experiences of things to do or not to do? What are my chances of having a rational discussion about advantage gambling with these folks? I am, frankly, increasingly concerned about this at the moment. I can see lots of nodding and winking as I try to explain the statistics of my results, while the investigators write things in their notebook like "rationalizes extreme gambling addiction with mathematical double-talk." Sigh.

If you look at the stated criteria for holding clearances as documented, gambling only comes up as a potential factor in financial irresponsibility and financial difficulties. Clearly a person in financial dire straits is a security risk, as they may be tempted to sell secrets. I understand this - it is a rational concern. But what I am concerned about is the appearance of financial irresponsibility associated with apparently very large gambling transactions.

Now I know, you know, we all know that a winning player is basically "recycling" his money with a very low risk. It's like taking the coins out of a +EV slot machine and firing them back in, over and over and over again. But when you look at the numbers, I admit they are terrifying looking, and a non-gambler will likely not really understand any of this.

So, once again, anyone been through this?

eastbay

[Ray Zee]

start by trying to get them all into poker games. once you can get respected as a good player they will be forced to accept it. tell them about how it is easy to make money on the net and such. start using probabilities around the office for different things. get to be known as a gambling wiz. problem solved with respect.

[eastbay]

[ QUOTE ]
start by trying to get them all into poker games. once you can get respected as a good player they will be forced to accept it. tell them about how it is easy to make money on the net and such. start using probabilities around the office for different things. get to be known as a gambling wiz. problem solved with respect.

[/ QUOTE ]

Unfortunately the guys in charge of clearances work in a totally separate place than I do, and there are hundreds of them, and they subcontract most of the investigative work to private detective agencies.

So the chance of me befriending any of the guys involved or making an impression on the respect factor is basically nil.

eastbay

[eastbay]

http://www.dss.mil/nf/adr/gambling/gamT.htm

Process of Becoming a Compulsive Gambler
...
Henry Lesieur, a prominent scholar in the field, has traced the process by which many people make the transition from social gambler to compulsive gambler, and often to criminal. This process is believed to apply to most male compulsive gamblers, especially those who play games of skill, and to about half of female compulsive gamblers. Ref 20 The following is a mixture of quotation and paraphrase from Lesieur's account, together with several points added from other sources.

During the early phase of gambling, there are usually no serious losses. Those who will eventually have a problem fall in love with the excitement and "action" and, at first, may be quite successful. They have fantasies of further success, and of gambling becoming their personal path to wealth and power. Such fantasies are often fed by a big win early in the gambler's career.

"Gamblers who are headed for problems think they are smarter than the average bettor and are bound to win in the long run. "They know that gambling is going to work for them because they, unlike less clever people, really understand how to beat the system. Ref 21 As they become more involved in gambling, they derive an increasing portion of their self-esteem from seeing themselves as smart or lucky. Because of this, two things happen when they do incur the inevitable losses: first, they suffer monetary loss; second, and often more important, they suffer a deflated ego."

Emphasis mine.

This is the kind of stuff people will have been "briefed" on and been told to look out for. Us people who "believe we're smarter" and "must win in the long run", which is what happens before - of course - the inevitable losses.

Groan...

eastbay

[eastbay]

Regarding investigating gamblers...

"If investigation reveals extensive gambling but the credit check shows no financial problems, there are at least six possible explanations:

* Debts may be in a form that does not show up on a credit check, i.e., borrowing on life insurance, stockbroker loans, unpaid hospital bills, or credit provided by casinos, bookies or loan sharks;
* The individual may be financing his or her gambling through embezzlement or other illegal activity;
* The gambler may for a while be luckier than most, as some people actually do hit jackpots.
* If the gambler is playing games of skill, he or she may be more skillful than most or have access to inside information;
* The gambler's financial condition may be so strong that losses are affordable and considered as "entertainment" costs;
* The individual may be too young to have a meaningful credit history.

Investigation should seek to determine which of these explanations applies.

One specialist in this field advises that consistent winning should not necessarily be interpreted as meaning there is no security risk. He recommends being "at least as concerned about those who are winning." This is because doctors who work with compulsive gamblers undergoing treatment find that many of the embezzlers come from the ranks of those who had been big winners. A severely compulsive gambler must periodically increase the amount bet or the riskiness of the bet in order to continue achieving the same level of excitement and psychic satisfaction. When the bad break inevitably does come, those who had been consistent winners fall farther and harder and may be more prone to desperate actions. Ref 23 For a description of how some social gamblers become compulsive gamblers and then turn into criminals, see the process of becoming a compulsive gambler."

Emphasis mine.

Great, so the fact that I am a consistent winner makes me an even bigger risk? wtf...

eastbay

[Punker]

I seem to recall a post from someone here a while back that said they had basically be flatly rejected from their application as a police office because of their gambling. I looked but couldn't find the post...any forum whizzes?

[Sponger15SB]

dude this website is crazy pants, how is this one...

[ QUOTE ]
Have you ever claimed to be winning money gambling when you really weren't?
Did you ever gamble more than you intended to?
Have people criticized your gambling?
Have you ever felt guilty about the way you gamble or what happens when you gamble?
Have you ever hidden betting slips, lottery tickets, gambling money, or other signs of gambling from your spouse, children, or other important people in your life?
Have you ever borrowed from someone and not paid them back as a result of your gambling?
Have you ever lost time from work (or school) due to gambling?
If you borrowed money to gamble or to pay gambling debts, who or where did you borrow from?

[/ QUOTE ]

i said yes to every one except the "not paid them back as a result of your gambling"

am i in denial or does this test just seemed incredibly rigged because it focuses on the stigma that everyone else gives complusive gambling,

its like if your mom told you she hated you watching porno so you hid the porn in your sock drawer you are addicted to watching porn.

[TwoGun]

I think poker's surging popularity will certainly help you out. Granted, I have never been nearly in the situation you are in, but most people I've met (especially men) understand that poker is a game of skill and that many are 'professionals.' Heck, there's a good chance that the people reviewing your security clearance play internet poker!

While this may seem incredibly sexist, it may be worthwhile knowing the type of person that will be reviewing you. If it's a woman, you are perhaps more in trouble because they may not differentiate poker from other gambling (because not as many play poker).

[adios]

I've had a high level clearance which ended about 9 years ago but I didn't have the problem you encounter. The investigators will be interested. Honesty is the best policy in this situation. I'm not certain a pre-emptive move is the best.

[Gator]

Reminds me of one of my favorite poker/gambling quotes: "Gambler's anonymous must be really hard up for members. I just took their 20 question quiz to see if you are a compulsive gambler and they make it way to easy to qualify."

[Toro]

If this really materializes as a conflict with the Government job, you have no alternative but to quit. The job, of course, not poker.

[Kurn, son of Mogh]

Work in the private sector.

[midas]

EastBay:

I have a suggestion that may work but it may go again how to report gambling income and losses to the IRS.

Declare your Net Poker Gain as Other Income thus paying the correct amount of taxes to the IRS and not declaring your poker "hobby" to your other employer. Keep great records of your actual poker profit and loss statements in a very secure place like a safe deposit box just in case your get audited so you can prove your true gain.

[britspin]

Reading this, you have to wonder how Harry Truman and Richard Nixon passed the V-P selection process, never mind held the top job.

[eastbay]

[ QUOTE ]
I think poker's surging popularity will certainly help you out.

[/ QUOTE ]

I had the same thought. I hope you are right.

eastbay

[eastbay]

[ QUOTE ]
If this really materializes as a conflict with the Government job, you have no alternative but to quit. The job, of course, not poker.

[/ QUOTE ]

Uhh... right. No, actually, given the choice I'd quit poker, hands down.

eastbay

[eastbay]

[ QUOTE ]
Work in the private sector.

[/ QUOTE ]

Actually, most jobs in the private sector that I am qualified for that pay anywhere near what I make now, also require an equivalent level of clearance.

eastbay

[eastbay]

[ QUOTE ]
EastBay:

I have a suggestion that may work but it may go again how to report gambling income and losses to the IRS.

Declare your Net Poker Gain as Other Income thus paying the correct amount of taxes to the IRS and not declaring your poker "hobby" to your other employer. Keep great records of your actual poker profit and loss statements in a very secure place like a safe deposit box just in case your get audited so you can prove your true gain.

[/ QUOTE ]

I considered something along these lines for about two seconds, but the fact of the matter is that these guys are very good at what they do and they will find out. Attempting to keep it a secret from them would be a big mistake. For my initial investigation, they were somehow able to discover various shenanigans that I was involved in in high school, almost 20 years ago.

No, they will find out. My soon to be wife, my family, and my friends all know about the extent of my poker playing.

eastbay

[eastbay]

[ QUOTE ]
Reading this, you have to wonder how Harry Truman and Richard Nixon passed the V-P selection process, never mind held the top job.

[/ QUOTE ]

Good point.

Not to mention I got put through the wringer for pot smoking and beer drinking from my high school and college days the first time around.

I never touched cocaine in my life, and GW is President.

eastbay

[Kurn, son of Mogh]

Declare your Net Poker Gain as Other Income

IRS pub. 529 specifically forbids this.

[adios]

[ QUOTE ]
Uhh... right. No, actually, given the choice I'd quit poker, hands down.

[/ QUOTE ]

You may very well have to make such a choice, no joke.

[Sponger15SB]

[ QUOTE ]


Uhh... right. No, actually, given the choice I'd quit poker, hands down.

eastbay

[/ QUOTE ]

sweet! now the $20 PP SNGs are a lot easier!

good riddance...

[midas]

EastBay:

Here's another suggestion - do the right disclosure thing with the IRS and then stop playing online.

Don't disclose anything to your employer and wait it out. If it comes up later, you can tell them it was a passing thing and you've stopped once you realized that it was a threat to your Security Clearance.

In the meantime -play live games that are less traceable.

[slamdunkpro]

To a certian degree it depends on which agency is doing the investigation. PM me for more info on that.

[ QUOTE ]
So, has anyone been in this spot before? Any experiences of things to do or not to do? What are my chances of having a rational discussion about advantage gambling with these folks? I am, frankly, increasingly concerned about this at the moment. I can see lots of nodding and winking as I try to explain the statistics of my results, while the investigators write things in their notebook like "rationalizes extreme gambling addiction with mathematical double-talk." Sigh.

[/ QUOTE ]

Not much hope here. I spent a great deal of time with my life under a microscope because of a similar issue. What I learned was:

1. Once they hear the word gambling or poker you are suspect.

2. ANY explination will be disbelived

3. They will crawl up your finances with a very uncomfortable microscope - because they just know that you can't win; you've got to be getting extra money from somewhere

4. If you are playing online they will dig harder due to the fact that you are gambling with a "Foreign national"

[ QUOTE ]
If you look at the stated criteria for holding clearances as documented, gambling only comes up as a potential factor in financial irresponsibility and financial difficulties.

[/ QUOTE ]

Correct - but they also look at it from a exploitation factor. Remember the trader in Japan who gambled away something like 1 billion dollars because he liked being treated like a high roller?

Depending on how hight your clearance is you're in a -ev spot. Sorry to be the bearer of bad news

[eastbay]

[ QUOTE ]
[ QUOTE ]


Uhh... right. No, actually, given the choice I'd quit poker, hands down.

eastbay

[/ QUOTE ]

sweet! now the $20 PP SNGs are a lot easier!

good riddance...

[/ QUOTE ]

You seem offended by that statement. Weird.

eastbay

[Wheezl]

Sounds like you have a gambling problem for sure then.

[Wheezl]

[ QUOTE ]
3. They will crawl up your finances with a very uncomfortable microscope - because they just know that you can't win; you've got to be getting extra money from somewhere

[/ QUOTE ]
A simple examination of PP's records involving deposits vs. withdrawals will answer this question with certainty. You are either winning or losing. To be getting the money from somewhere implies that you are not winning and must fund your gambling via illegal activity or whatever.

Would a person have any legal ground to stand on vs. the GOVT. in a situation like this?

[eastbay]

[ QUOTE ]
[ QUOTE ]
3. They will crawl up your finances with a very uncomfortable microscope - because they just know that you can't win; you've got to be getting extra money from somewhere

[/ QUOTE ]
A simple examination of PP's records involving deposits vs. withdrawals will answer this question with certainty. You are either winning or losing. To be getting the money from somewhere implies that you are not winning and must fund your gambling via illegal activity or whatever.

Would a person have any legal ground to stand on vs. the GOVT. in a situation like this?

[/ QUOTE ]

No. Discrimination against gamblers probably wouldn't find much sympathy in a US court of law. Of course, if I was a minority, or a woman, I might have a shot...

Basically, this is a process where you are presumed guilty until proven innocent.

eastbay

[ACPlayer]

Consult an attorney on how to handle it.

[ZeeJustin]

If you do end up "explaining yourself" to someone, the most important thing is to explain bankroll management. You never put yourself in a position to lose a significant amount of money, and if you were at great risk of losing your annual salary, you would have quit long ago.

Also, I am just now discovering that people intuitively think playing in ring games is a degenerate activity, while playing in tournaments is a competition. People can relate to the whole competing against a large field for 1st place idea, while the grinder aspect is seen as compulsive gambling. You don't even have to explain that you have an edge (even though this is important, people don't often understand it). Just explain that you are drawn to poker because of the great deal of strategy involved, and the nature of competing for 1st place (people love that stuff.)

[lefty rosen]

Explain to the bean counter that it's no different than stock market investing(infact it's probably safer if you play idiots). This will get them to give you slack, or at least should....... /images/graemlins/confused.gif

[Cosimo]

Seems that the only way around this are (1) quit poker, or (2) pre-emptively approach them about it.

In terms of explaining it, you will need to find a mathematical expert, not a psych major. Whomever you talk to, they need to understand statistics to the point that they see what the likelihood of being a winning player over 100,000+ hands.

[Bill Murphy]

Fill out your taxes correctly, say nothing, and hope the big boys are WPT fans.

I think drawing attention to it is a mistake. Might look you're trying to spin. Why throw up the red flag yourself? If "gambling" is going to affect your career; if your clearance officer is an Ashcroft type, I don't think anything you do will help.

Never hurts to keep your mouth shut. I've been in similar situations(although not nearly this important), and it always worked out better to let the bad news if there was any find me.

The time to come forward is when you HAVE done something wrong. Coverup, not the crime. Here, you're just a working stiff, innocently filling out his taxes. I think you'll prolly be OK, unless you draw an Ashcroft, but won't they be more concerned about the gambling being online?

Good Luck.

[12AX7]

Welcome to the world of psycho-bable subjective diagnosises. You'll find that DSM-IV is full of "disorders" and "illnesses" for which a pathology is not known...and that all the Dr. types accept the mere symptoms as evidence of a pathology....and absolutely no thought is given to the question of detecting false positives in terms of the diagnosis. If you fit the description, the will label you...and none of them will try to determine if you viewpoint is valid. I promise this to you from the bottom of my heart. The only way you'll ever convince them you don't have an "illness" is to quit. Then they'll just say your chronic condition is in remission. I'd advise you to give up poker immeadiately if the reviewers can't be reasoned with. Talk to them now. If they seem resolute in tagging you with a label...which is likely the case...they have to justify thier paychecks...AND you reaaly do value the job...quit the game or drop way down in limits. DO NOT GIVE THEM THE AMMUNITION THEY NEED TO SCREW UP YOU LIFE. Meant in all sincerity.

[Patrick del Poker Grande]

[ QUOTE ]
Explain to the bean counter that it's no different than stock market investing(infact it's probably safer if you play idiots). This will get them to give you slack, or at least should....... /images/graemlins/confused.gif

[/ QUOTE ]
Getting and keeping DOE or DOD clearance is not nearly the same as some beancounter auditing your taxes. I'd liken the level of scrutiny and depth of inquisition to taking the bar exam versus a 2nd grade spelling test - probably worse. It can be a truly intense process and takes months or even years to pass, depending on your history and level of clearance.

This thread does bring some concern to me, as I am in a field where I may come to need DOD and/or DOE clearance, depending on my company's need and my growing experience (I'm only 1.5 years into an aerospace career). Please keep us updated, eastbay. I would be especially interested in your experience.


Patrick

[jcx]

I hold a security clearance position and have had no problems. Do you provide the investigators with your tax return every year? Because if not, they don't have any way to get it. The IRS won't give your tax info to other governmental agencies. If they ask if you gamble, tell them you play poker and leave it at that. They probably play too.

[Roy Hobbs]

Hi Eastbay,

As you undoubtedly know, the responses which suggest hiding your poker income/loss by misreporting it on your taxes or "playing dumb" with respect to your clearance investigation are idiotic. I think that the worst possible situation for you would be to do anything to hide the activity. When discovered, any attempt to cover your tracks will only raise eyebrows.

The question is whether to proactively approach, or to simply be entirely forthright when asked about it. I think there are arguments to be made for both. On the one hand, approaching the clearance office may smell of cover up. On the other hand, it can defuse any initial "gotcha" effect when they read your tax return.

Have you thought about what you would do if they asked to see your books (ie pokertracker stats)?

I think that the best advice may be to speak with an attorney, though I think that involving a lawyer in this process in any official capacity would be a serious mistake (i.e. communicating on your behalf with the clearance office).

One last question -- are there guidelines issued to you about when you should proactively report information about yourself to the clearance office? Maybe that could give you some guidance.

MHR

[fnurt]

[ QUOTE ]
Also, I am just now discovering that people intuitively think playing in ring games is a degenerate activity, while playing in tournaments is a competition. People can relate to the whole competing against a large field for 1st place idea, while the grinder aspect is seen as compulsive gambling. You don't even have to explain that you have an edge (even though this is important, people don't often understand it). Just explain that you are drawn to poker because of the great deal of strategy involved, and the nature of competing for 1st place (people love that stuff.)

[/ QUOTE ]

As a lawyer, this argument jumped out at me as the one likely to hold the most intuitive appeal. Most of the other suggestions on this thread are arguments that make sense to the 2+2 crowd, but to a layman they sound like just another rationalization.

Explaining that you play in tournaments "like the ones on TV" is likely to come across differently, however. It doesn't give the appearance that you're playing in some high-stakes game where you might be forced to put the deed to the ranch into the pot to call someone's bet. A tournament is a fixed buy-in, this year you happened to have a bad run where you didn't win any tournaments, oh well.

And I feel very strongly that you don't want to be proactive about bringing this to anyone's attention. That doesn't gain you anything except a guarantee that someone is going to notice the issue and take it seriously.

[Lucky]

Now dude liked to gamble; the former morality czar, Republican Party bigwig gambled all his life, claiming to win more than he lost while playing high at games like slots
(I need to get sklansky's, SFAP). No one knew anything about one of the most famous men in the politcal world until the newsweek story busted it wide open.

The bottom line is that someone in his position:
1. Extremely high profile (i would recognize him at the mirage
2. Who preached "virtue"
3. won and lost millions playing -ev games in vegas

was only found out by a reporter with a vendetta/who wanted the big journalistic score.

Based on this, I put your chances of:

1. The background check folks discovering it
2. the background check folks bringing it up
3. Your explanation of being a winning player at a skill game, who can document it not being enough
4. Not being given a chance to end your "evil gambling" (stopping tracable online play)
5. Your career being "destroyed" by your degenerate compulsiveness

..... at 20-1.

That being said, I realize the "one" part is pretty big; So you lose your gubment job. Then you get to move to canada, hang with david ross and learn curling!

[eastbay]

[ QUOTE ]
I hold a security clearance position and have had no problems. Do you provide the investigators with your tax return every year?


[/ QUOTE ]

No, but I am reinvestigated every 5 years, at which time they collect certain information. I was under the impression that they could look at my tax return, and I would be quite surprised if they can't or don't. I know that they check to see if you filed. I suppose it is possible that if you filed, that's as far as they can look without a court order.

[ QUOTE ]

Because if not, they don't have any way to get it. The IRS won't give your tax info to other governmental agencies.


[/ QUOTE ]

Are you sure about that? Can you back that up?

If you're right, a HUGE weight is lifted off my shoulders.

eastbay

[Sully]

I am in the mortgae business, and we use a form called a "Form 4506", which lenders often require. If the lender decides to audit the file, the signed 4506 is sent to the IRS, and they will release a copy of the full tax returns to the inquiring party.

If you have signed something like this, they can pull your returns in a matter of hours.

[eastbay]

[ QUOTE ]
I am in the mortgae business, and we use a form called a "Form 4506", which lenders often require. If the lender decides to audit the file, the signed 4506 is sent to the IRS, and they will release a copy of the full tax returns to the inquiring party.

If you have signed something like this, they can pull your returns in a matter of hours.

[/ QUOTE ]

Man, I signed so many things I couldn't possibly remember them all. Basically there was one big form which read "YOU HAVE NO RIGHTS. WE OWN YOU FOREVER. MUAHAHAHAHA!"

eastbay

[Poker blog]

Your entire post is extraordinarily asinine.

[Poker blog]

I'm not an expert on the subject -- and I hope to not write a post as stupid as the one I recently ridiculed -- but I would be very, very surprised if the government didn't look at your tax returns.

From what I know of the field of national security, you sign away your right to privacy as a condition of employment.