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ISCR Case 15-06263.h1 — CASE

ISCR Case 15-06263.h1denied

Case Headnote

ISCR Case No. 15-06263.h1

deniedDec 14, 2016· Hon. Richard A. Cefola· hearing

Summary

A 46-year-old naturalized U.S. citizen, who is also the president of a U.S. corporation, was denied a security clearance under Guideline B (Foreign Influence). The denial stemmed from concerns related to his significant ties to South Korea, including family and property interests.

The Statement of Reasons detailed several allegations: his spouse is a South Korean citizen residing in the U.S., and both of his parents are South Korean citizens and residents. The applicant also admitted to maintaining a South Korean bank account containing approximately $4,000 and owning a home in South Korea valued at about $1,100,000. These facts raised disqualifying conditions under Adjudicative Guidelines Paragraphs 7(a) and 7(e).

While mitigating conditions under Adjudicative Guidelines Paragraph 8(a) were considered, the clearance was ultimately denied. The decision highlighted that the applicant failed to adequately address the government's concerns regarding his substantial property interests in South Korea. This, combined with his foreign family ties, was deemed to create an unmitigated risk of foreign exploitation, manipulation, or coercion.

Why the Applicant Was Denied

The applicant has substantial property interests in South Korea, valued at over $1,100,000, which he has not addressed despite the government's concerns.
The applicant's foreign family ties create a heightened risk of foreign exploitation, manipulation, or coercion, as outlined in the guidelines.

Conditions Referenced

Disqualifying

AG ¶ 7(a)raisedContact with Foreign Family Members
AG ¶ 7(e)raisedSubstantial Property Interest in a Foreign Country

Mitigating

AG ¶ 8(a)rejectedNature of Relationships with Foreign PersonsThe applicant's financial interests in South Korea were deemed a significant concern that outweighed the nature of his relationships.

Key Rule Quoted

“Any doubt concerning personnel being considered for access to classified information will be resolved in favor of national security.”

Procedural Posture

SOR issuedApr 15, 2016
Answer filedMay 9, 2016
Hearing held—Case assigned on December 1, 2016.
Decision dateDec 14, 2016

Cite For

Foreign Influence Concerns Under Guideline B
Impact of Substantial Foreign Property Interests on Security Clearance Eligibility
Rejection of Mitigating Conditions Related to Foreign Family Ties

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

Standardized Decision Profile

SEAD-4 Guideline B (Foreign Influence) · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found against the applicant on allegations of foreign influence due to his ties to South Korea, including family connections and a substantial property interest. While some familial ties were mitigated, the applicant's ownership of a home in South Korea raised significant security concerns, leading to a denial of his security clearance.

Country conditions:the decision took administrative notice of official facts about the foreign country (the Government’s country submission).

U.S. ties the decision noted: Naturalized U.S. Citizen

¶	Allegation	Finding	Relationship	Country	Response	Disqualifying (¶7)	Mitigating applied (¶8)	Mitigation
1.a	Applicant’s spouse is a citizen of South Korea, residing in the United States.	For Applicant	Spouse Dual or Foreign Citizen Immediate Family	South Korea HEIGHTENED RISK	Admitted	(a) contact with a foreign family member/associate/friend creating a heightened risk of exploitation	—	—
1.b	Applicant’s parents are citizens and residents of South Korea.	For Applicant	Parent in Foreign Country Immediate Family	South Korea HEIGHTENED RISK	Admitted	(a) contact with a foreign family member/associate/friend creating a heightened risk of exploitation	—	—
1.c	Applicant admits he has a South Korean bank account with about $4,000 in it.	Against Applicant	Foreign Bank Account or Investment Financial or Property Interest	South Korea HEIGHTENED RISK	Admitted	(a) contact with a foreign family member/associate/friend creating a heightened risk of exploitation (e) shared living quarters creating a heightened risk	—	Claimed Foreign Assets Divested
1.d	Applicant admits he owns a home in South Korea valued at about $1,100,000.	Against Applicant	Foreign Real Estate Financial or Property Interest	South Korea HEIGHTENED RISK	Admitted	(e) shared living quarters creating a heightened risk	—	Claimed Foreign Assets Divested

Descriptive standardized rendering of a decided public case (Guideline B). The verbatim source decision is shown in full below.

Full decision

The complete, official text — footnotes and signatures included — is in the original PDF.

Decision text, by section

DEFENSE OFFICE OF HEARINGS AND APPEALS

HEARING

APPEARANCES

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS

In the matter of: ) ) ) ISCR Case No. 15-06263 ) ) Applicant for Security Clearance )

For Government: Andrew H. Henderson, Esquire, Department Counsel For Applicant: Sean M. Bigley, Esquire

December 14, 2016

______________

STATEMENT OF CASE

______________

CEFOLA, Richard A., Administrative Judge:

Applicant submitted his Electronic Questionnaires for Investigations Processing (e-QIP) on January 20, 2015. On April 15, 2016, the Department of Defense (DOD) issued a Statement of Reasons (SOR) detailing the security concerns under Guideline B for Applicant. The action was taken under Executive Order 10865, Safeguarding Classified Information Within Industry (February 20, 1960), as amended; Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG), effective within the Department of Defense after September 1, 2006.

Applicant answered the SOR in writing on May 9, 2016, and requested an Administrative Determination by an administrative judge. Department Counsel issued a File of Relevant Material (FORM) on June 9, 2016. Applicant responded to the FORM (Response) on July 12, 2016. Department Counsel had no objection, and the documents are entered into evidence. The case was assigned to me on December 1, 2016. Based upon a review of the pleadings and exhibits, eligibility for access to classified information is denied.

FINDINGS OF FACT

In his Answer to the SOR, Applicant admitted all the factual allegations of the SOR, with explanations.

Applicant is a 46 year-old “President of [a] “US Corporation.” (Item 2 at pages 5 and 15.) He became a naturalized U.S. citizen in August of 2006. (Item 2 at page 7.)

Guideline B - Foreign Influence

1.a. Applicant’s spouse is a citizen of South Korea, residing in the United States. (Response at Exhibit I.) She “is a housewife and stay at home mother.” (Item 3 at page 5.)

1.b. Applicant’s parents are citizens and residents of South Korea. (Item 3 at pages 21–24.) They are both retired; but before his retirement, his father was a “Constitutional Court” Judge. (Item 2 at page 22.) Applicant avers that his father retired in “2005.” (Response at page 5.) He further avers that his mother was a homemaker. (Id.)

Applicant’s two sisters are citizens and residents of South Korea. (Item 2 at pages 27–29.) He avers that they are “homemakers.” (Response at page 5.)

Applicant’s brother is a citizen and resident of South Korea. (Item 2 at pages 29–31.) He avers that his “brother works in consulting at a private bank.” (Response at page 5.)

Applicant speaks to his parents and siblings “about four (4) times per year.” (Id.)

1.c. Applicant admits he has a South Korean bank account with about $4,000 in it. He is in the process closing this account, as evidenced by a letter to the bank. (Response at Exhibit J.)

1.d. Applicant admits he owns a home in South Korea valued at about $1,100,000. He avers that he plans “to sell the property as soon as reasonably feasible and purchase a home in the United States.” (Response at page 5.) Despite the Government’s concern noted in the SOR issued more than six months ago; and reiterated in the Government’s FORM, Applicant has yet to address this serious concern of the Government.

Both Department Counsel and Applicant Counsel ask me to take administrative notice of the facts regarding South Korea. South Korea is one of the United States’ most important strategic and economic partners in Asia. In 2012, both countries entered into a free trade agreement, which is expected to add between $10~$12 billion dollars to our Gross Domestic Product. The United States and South Korea have had a Mutual Defense Treaty since 1953, and we have a strong military presence there. That being said, South Korea has a history of collecting protected U.S. information.

POLICIES

When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines (AG). In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are useful in evaluating an applicant’s eligibility for access to classified information.

These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied in conjunction with the factors listed in the adjudicative process. The administrative judge’s over-arching adjudicative goal is a fair, impartial and commonsense decision. According to AG ¶ 2(c), the entire process is a conscientious scrutiny of a number of variables known as the “whole-person concept.” The administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable, in making a decision.

The protection of the national security is the paramount consideration. AG ¶ 2(b) requires that “[a]ny doubt concerning personnel being considered for access to classified information will be resolved in favor of national security.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical and based on the evidence contained in the record. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture.

Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, the applicant is responsible for presenting “witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by the applicant or proven by Department Counsel. . . .” The applicant has the ultimate burden of persuasion as to obtaining a favorable clearance decision.

A person who seeks access to classified information enters into a fiduciary relationship with the Government predicated upon trust and confidence. This relationship transcends normal duty hours and endures throughout off-duty hours. The Government reposes a high degree of trust and confidence in individuals to whom it grants access to classified information. Decisions include, by necessity, consideration of the possible risk the Applicant may deliberately or inadvertently fail to protect or safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation as to potential, rather than actual, risk of compromise of classified information.

Section 7 of Executive Order 10865 provides that adverse decisions shall be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information).

ANALYSIS

Guideline B - Foreign Influence

Paragraph 6 of the adjudicative guidelines sets out the security concern relating to Foreign Influence:

Foreign contacts and interests may be a security concern if the individual has divided loyalties or foreign interests, may be manipulated or induced to help a foreign person, group, organization, or government in a way that is not in U.S. interests, or is vulnerable to pressure or coercion by a foreign interest.

Here, Paragraphs 7(a) and 7(e) are applicable: 7(a) “contacts with a foreign family member . . . who is a citizen of or resident in a foreign country if that contact creates a heightened risk of foreign exploitation, inducement, manipulation, pressure, or coercion”; and 7(e) “substantial . . . property interest in a foreign country . . . .” The Applicant’s parents and siblings are citizens and residents of South Korea. Paragraph 7(a) is countered by the first mitigating condition, as 8(a) “the nature of the relationships with foreign persons, . . . are such that it is unlikely the individual will be placed in a position of having to choose between the interests of a foreign individual . . . and the interests of the U.S.” His parents and brother now have no connection with the Korean government; his father has been retired for a decade, and he would not jeopardize national security vis-a-vis these relatives.

That, however, can not be said vis-a-vis his financial interest in South Korea, over a million dollars. He has had more than six months to deal with this obvious concern of the Government, but has chosen not to do so. If and when Applicant eliminates this concern, he may well be eligible for a security clearance, but not now.

WHOLE PERSON CONCEPT

Under the whole-person concept, the administrative judge must evaluate an applicant’s eligibility for a security clearance by considering the totality of the applicant’s conduct and all the circumstances. Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a security clearance must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept.

The administrative judge should also consider the nine adjudicative process factors listed at AG ¶ 2(a):

(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 changes; (7) the motivation for the conduct; (8) the potential for pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or recurrence.

I have considered all of the evidence, including the potentially disqualifying and mitigating conditions surrounding this case. Applicant is highly regarded by those who know him. (Response at Exhibit E.) Overall, the record evidence leaves me with questions or doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant has not mitigated the security concerns arising from his Foreign Influence.

FORMAL FINDINGS

Formal findings for or against Applicant on the allegations set forth in the SOR, as required by section E3.1.25 of Enclosure 3 of the Directive, are:

Paragraph 1, Guideline B: AGAINSTAPPLICANT

Subparagraphs 1.a.~1.c. For Applicant

Subparagraph 1.d. Against Applicant

CONCLUSION

In light of all of the circumstances presented by the record in this case, it is not clearly consistent with the national interest to grant Applicant eligibility for a security clearance. Eligibility for access to classified information is denied.

Richard A. Cefola Administrative Judge