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Summary

The applicant, a 63-year-old naturalized U.S. citizen originally from Taiwan, faced security concerns under Guideline B (foreign influence) and Guideline F (financial considerations) due to past financial difficulties and family ties in Taiwan and the PRC. The applicant successfully mitigated these concerns by demonstrating financial recovery and a strong commitment to U.S. interests, leading to a favorable decision for security clearance.

Under Guideline B (Foreign Influence) and Guideline F (Financial Considerations), the Statement of Reasons alleged the following: Applicant has two brothers who are U.S. citizens. One brother has been living in Hong Kong since the 1990s. He is a real estate developer. He has a detailed knowledge of the PRC business market, and is helping Applicant with business development for his health information systems venture (2.a). Applicant’s other brother moved from the U.S. after he retired, and splits his time between PRC and Taiwan. Applicant communicates with him about four times per year. They do not discuss the details of Applicant’s work (2.b). Applicant has established a holding company in Hong Kong. He is its director and chairman. Applicant’s holding company owns a PRC business, a wholly foreign-owned subsidiary (WFOE) specializing in health information technology market research and development (2.c). Applicant’s business in PRC has neither generated any contracts, nor any revenue. However, the effort that Applicant has spent developing this business and structuring it so that it can compete with other multinational U.S. companies seeking to penetrate the PRC information technology market render it a substantial interest regardless of whether it has generated revenue (2.d). Applicant’s wife, adult child, and three of his siblings live in the United States. He has lived in the United States for more than 40 years and has been a naturalized citizen for nearly 35 years (2.e). Applicant’s company has a federal income tax debt of $1.5 million and a state income tax debt of $107,000 that it was unable to pay (1.a). Applicant’s company defaulted on a $13 million line of credit, personally guaranteed by Applicant (1.b). Applicant gradually began paying this delinquency through installments, beginning in April 2011 (1.c).

The judge granted the clearance. The government raised disqualifying conditions AG ¶ 19(a), AG ¶ 19(c), AG ¶ 8(a), AG ¶ 7(e). The judge applied mitigating conditions AG ¶ 19(b), AG ¶ 19(c), AG ¶ 8(b). The decision turned on the following: The applicant demonstrated a history of responsible financial management by repaying tax delinquencies and fulfilling obligations under a forbearance agreement; The applicant's ties to the U.S. and philanthropic efforts were emphasized, showcasing his integration into American society; The applicant's foreign business interests were deemed not to pose a significant risk due to the lack of revenue generation and the nature of his family contacts.

Why the Applicant Prevailed

• The applicant demonstrated a history of responsible financial management by repaying tax delinquencies and fulfilling obligations under a forbearance agreement.
• The applicant's ties to the U.S. and philanthropic efforts were emphasized, showcasing his integration into American society.
• The applicant's foreign business interests were deemed not to pose a significant risk due to the lack of revenue generation and the nature of his family contacts.

Conditions Referenced

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

• SOR issuedFeb 27, 2015
• Answer filedApr 24, 2015
• Hearing heldSep 28, 2015
• Decision dateJan 21, 2016

Cite For

• Mitigation of Financial Considerations Under Guideline F Due to Business Downturn
• Foreign Influence Concerns Mitigated by Strong U.S. Ties and Philanthropic Activities
• Whole-person Concept Applied in Evaluating Applicant's Circumstances