1 
 
                                                              
                           DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 10-02268 
  )   
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Melvin A. Howry, Esq., Department Counsel 
For Applicant: Pro se 
 
 
February 9, 2012 
______________ 
 
Decision 
______________ 
 
 
GOLDSTEIN, Jennifer I., Administrative Judge: 
 
Applicant is a 45-year-old employee of a defense contractor. He has a wife, two 
brothers, two sisters, a brother-in-law, a mother-in-law, and three friends who are 
citizens and residents of South Korea. His foreign family members and friends raised a 
security concern under Foreign Influence. He failed to mitigate the Foreign Influence 
security concerns. He is also alleged to have a history of indebtedness, including four 
debts in the approximate amount of $80,777, raising security concerns under Financial 
Considerations. Applicant mitigated the Financial Considerations security concerns by 
showing that the debts were due to identity theft and that he has been disputing the 
accounts. Eligibility for access to classified information is denied.  
 
Statement of the Case 
 
On March 19, 2009, Applicant submitted an Electronic Questionnaires for 
Investigations Processing (e-QIP). On March 7, 2011, the Defense Office of Hearings 
and Appeals (DOHA) issued a Statement of Reasons (SOR) to Applicant detailing 
security concerns under Guidelines F, Financial Considerations, and B, Foreign 
Influence. The action was taken under Executive Order (EO) 10865, Safeguarding 
 
2 
 
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 September 1, 2006.  
 
Applicant answered the SOR (Answer) on April 19, 2011, and requested a 
decision based on the record. Department Counsel exercised his right to request a 
hearing before an administrative judge. The case was assigned to me on August 30, 
2011. DOHA issued a notice of hearing on November 17, 2011, scheduling the hearing 
by video-teleconference for December 6, 2011 (Pacific Standard Time). The hearing 
was convened as scheduled. The Government offered Exhibits (GE) 1 through 8, which 
were admitted without objection. The Government requested administrative notice be 
taken of certain facts relating to South Korea as contained in Hearing Exhibit (HE) I. 
Applicant had no objection and I took administrative notice of the documents. The 
Applicant offered Exhibits (AE) A through K, which were admitted without objection. 
Applicant testified on his own behalf and called one witness. The record was left open 
for receipt of additional documentation. On January 4, 2012 Applicant submitted AE L 
through Q, which were admitted without objection. DOHA received the transcript of the 
hearing (Tr.) on December 15, 2011.  
 
Procedural Matters 
 
Pursuant to Additional Procedural Guidance ¶¶ E3.1.2, E3.1.3, E3.1.7, and 
E3.1.13 of the Directive, Department Counsel moved to amend the SOR issued to 
Applicant as follows: 
 
 1. Add SOR subparagraphs 2.d and 2.e to read as follows: 
 
d. Your wife is a citizen and resident of South Korea. 
 
e. Your mother-in-law is a citizen and resident of South Korea.  
 
Applicant had no objection to the amendments and I granted the motion. (Tr. 
101-102.) 
 
Findings of Fact 
 
 Applicant is a 45-year-old employee of a defense contractor. He was born in 
South Korea and was naturalized as a U.S. citizen in 1992. As a teenager, Applicant 
was adopted by his aunt and uncle, who were American citizens. He has two step-
siblings that live in the United States and are American citizens. (GE 1; AE A; Tr. 94.) 
 
Applicant has worked for his current employer since 2008. He is employed on an 
overseas military base. He served in the U.S. Army from 1989 to July 1994, when he 
was honorably discharged. He achieved the rank of Specialist (E-4). During his service, 
he was awarded the Army Service Ribbon; the National Defense Service Medal; an 
 
3 
 
Army Good Conduct Medal; an Army Commendation Medal; and an Overseas Service 
Ribbon. (GE 1; AE A; AE D; Tr. 47-53.) 
 
Applicant has been married two times. His first marriage was from 1992 until 
approximately 2008, when he got divorced. He had two children with his first wife. His 
first wife and children are citizens of and reside in the United States. His second 
marriage occurred in 2010. He has an adult step-son from his second marriage. (GE 1; 
Tr. 95-98.) 
 
DOHA alleged under Guideline F, Financial Considerations, that Applicant is 
indebted to four creditors in the total amount of $80,777. Applicant denied these 
allegations in his Answer. He contends that each of these debts was incurred through 
identity theft while he was overseas. Applicant testified that in approximately December 
2005, Applicant traveled from South Korea to the United States for two weeks to visit his 
family.1 While there, he lost his driver’s license. He presented a Certificate of Entry and 
Exit from the Ministry of Justice of the Republic of Korea and a copy of his U.S. 
passport to show he was overseas when the debts were incurred. However, the 
Certificate of Entry and Exit lists Applicant’s most recent entry into South Korea as 
January 2004. Applicant’s passport bears multiple re-entry permits stamped into 
Applicant’s passport bearing dates from 2004 through 2011. It is unclear from the 
documents when he traveled. (SOR; Answer; GE 2; GE 3; AE B; AE C; Tr. 73-85.) 
 
In a letter to the Court, Applicant indicated: “I have had an outstanding credit 
score with U.S.A. Federal and no one alerted me to any moneys owed to any other 
financial institution. I was able to conduct standard banking practices with them and had 
a great credit score until the Security Check was conducted.” However, in a personal 
subject interview conducted on September 30, 2009, Applicant indicated that “at 
approximately 05/2007 or 06/2007, subject attempted to purchase a car in Korea and 
was told that the interest rate on the car loan would be higher than expected because 
his credit report revealed two loans of $20,000 each were still outstanding.” (AE A; GE 
2.) 
 
The first debt is on an account that has been charged off in the approximate 
amount of $21,759. It was for a “noteloan” opened in January 2006. Applicant testified 
he disputed this debt with both the creditor and the credit reporting agencies but none of 
the dispute letters he entered into evidence appear to pertain to this account. 
Applicant’s August 2011 report of credit reflects the status of this debt as “dispute 
reslvd-cust disagrees.” This account is reflected on his December 2011 credit report as 
“customer disputes after resolution.” (GE 2; GE 3; GE 6; GE 8; AE L through AE P.) 
 
The second debt is on an account that has been charged off in the approximate 
amount of $25,225. It was for an unsecured loan opened in January 2006. Applicant 
testified he has disputed this debt with both the credit reporting agency and the creditor. 
He provided copies of the letters he sent regarding his dispute on this account from 
                                                          
1 In some of the documents Applicant indicated he last left South Korea December 23, 2003, through 
January 13, 2004, consistent with the Certificate of Entry and Exit. (GE 2; AE B.) 
 
4 
 
March through June 2011. On Applicant’s December 2011 credit report, it is reflected as 
a “charged off account.” (GE 2; GE 3; GE 6; AE G; AE L through AE P.) 
 
The third debt is on an account that has been charged off in the approximate 
amount of $17,293. It was for a loan opened in February 2008. Applicant testified he 
has disputed this debt with both the credit reporting agency and the creditor. He 
provided copies of the letters he sent regarding his dispute on this account in March 
through June 2011. There was no evidence that this debt has been resolved. (GE 2; GE 
3; AE L through AE P.) 
 
The fourth debt is on an account that has been charged off in the approximate 
amount of $16,500. It was for a “noteloan” opened in January 2006. Applicant testified 
he has disputed this debt with both the credit reporting agency and the creditor. He 
provided copies of the letters he sent regarding his dispute on this account in March 
through June 2011. Applicant’s August 2011 report of credit reflects the status of this 
debt as “payment after charge off/collection,” and lists “dispute reslvd-cust disagrees” in 
the remarks. (AE G; AE L through AE P.) 
 
Applicant’s most recent credit report reflects that he is in good standing on all 
other accounts. He provided copies of his U.S. Individual Tax Returns for 2006 through 
2009 and bank account summaries that show that he has sufficient funds to meet his 
monthly expenses. Applicant’s personal financial statement indicates he has $1,793.90 
left over each month after his bills are paid. He also presented evidence that he 
successfully made all of his car loan payments. (AEs E through AE K.) 
 
Applicant’s friend and co-worker testified on Applicant’s behalf. He indicated that 
he had known Applicant since 2005 and found him to be a “very trustworthy individual.” 
The witness has been actively helping Applicant to contact his creditors and contest the 
delinquent accounts. He indicated Applicant began addressing the delinquent accounts 
in 2009 after the security clearance investigation was initiated. (Tr. 47-64.) 
 
DOHA alleged under Guideline B, Foreign Influence, that Applicant’s wife, two 
brothers, two sisters, brother-in-law, and mother-in-law are all citizens and residents of 
South Korea. Applicant also has contact with four friends who are citizens and residents 
of South Korea. Applicant admits these allegations. (SOR; Answer; Tr. 101-102.) 
 
Applicant’s resides with his wife, who is a citizen and resident of South Korea. 
Applicant’s wife is employed, but he failed to state in what industry. Applicant’s wife is 
emotionally tied to her mother and visits her mother twice a year in a city about a two-
hour drive away. Applicant’s wife calls her mother approximately once every six months. 
Her mother is supported through an inheritance from her husband, money sent by her 
two sons, and a pension. Applicant also testified she received money from the “Korean 
government, if you [are] more than 60, they give you [a] job, like go outside where it’s 
cold or do something.” Applicant’s two brothers-in-law also are citizens and residents of 
Korea. They live approximately a five-hour drive from Applicant. One brother-in-law 
owns a business and the other works in construction. (Tr. 90-92, 99-100.) 
 
 
5 
 
Applicant’s two brothers work together in a delivery service business. The 
business is in no way affiliated with the South Korean government. He failed to indicate 
how his sisters are supported. In his Answer, he wrote, “I keep a close and continuing 
contact with my two brothers and two sisters who are Korean citizens and residents 
of/in Korea.” (Answer; GE 5.) 
 
Applicant identified four friends who are South Korean residents and citizens. Of 
those four friends identified, one is his current wife and one is a childhood friend. The 
other two are friends from Applicant’s work on a United States military base. (GE 4; TR. 
87-90.) 
 
Applicant presented documents entitled “Criminal History & Investigation Career” 
in Korean along with an English translation. They show that Applicant’s brother-in-law, 
two brothers, mother-in-law, son, two sisters, and wife do not have criminal records in 
South Korea.  (AE Q.) 
 
 I have taken administrative notice that South Korea is a stable, democratic 
republic. The South Korean government generally respects the human rights of its 
citizens. However, South Korea has some reported human right problems including: 
hazing of military personnel, imprisonment of conscientious objectors, the government’s 
interpretation of laws regulating the internet and telecommunications, and sexual and 
domestic violence. South Korean National Security Law allows arrest and detention for 
conduct the Government views as “endangering the security of the State.” (HE I.) 
 
I also have taken administrative notice that South Korea and North Korea have a 
strained relationship. In 2010, relations between the two nations experienced significant 
setbacks when a South Korean warship was struck by a North Korean torpedo and 
sunk. Tensions further increased when North Korea fired upon a South Korean island 
with artillery. (HE I.) 
 
Finally, I have taken administrative notice that South Korea has a history of 
collecting protected U.S. information. On several occasions, South Korea has been the 
unauthorized recipient of sensitive technology, in violation of U.S. export control laws. 
South Korea has been identified as one of the seven most active nations engaging in 
foreign economic collection and industrial espionage. (HE I.) 
 
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 to be used 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, administrative judges apply the guidelines in 
conjunction with the factors listed in the adjudicative process. The administrative judge’s 
 
6 
 
overarching 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.  
 
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 to obtain a favorable security 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 EO 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 F, Financial Considerations 
 
The security concern for Financial Considerations is set out in AG ¶ 18, as 
follows:       
 
Failure or inability to live within one’s means, satisfy debts, and meet 
financial obligations may indicate poor self-control, lack of judgment, or 
unwillingness to abide by rules and regulations, all of which can raise 
questions about an individual’s reliability, trustworthiness and ability to 
protect classified information. An individual who is financially 
overextended is at risk of having to engage in illegal acts to generate 
funds.  
 
7 
 
The guideline notes several conditions that could raise security concern under 
AG ¶ 19. Two are potentially applicable in this case:   
 
(a) inability or unwillingness to satisfy debts;  
 
(b) a history of not meeting financial obligations. 
 
 Applicant has four debts in the approximate amount of $80,777. Three of the 
debts have been delinquent since 2006. Applicant was made aware of potential credit 
issues in 2007, when he attempted to purchase a vehicle in Korea. He is unwilling to 
satisfy these debts, because he believes they are not his debts. The Government 
established a case for disqualification under Guideline F. 
 
 Three Financial Considerations Mitigating Conditions under AG ¶ 20 are 
potentially applicable:  
 
(a) the behavior happened so long ago, was so infrequent, or occurred 
under such circumstances that it is unlikely to recur and does not cast 
doubt on the individual’s current reliability, trustworthiness, or good 
judgment; 
 
(b) the conditions that resulted in the financial problem were largely 
beyond the person’s control (e.g., loss of employment, a business 
downturn, unexpected medical emergency, or a death, divorce or 
separation), and the individual acted responsibly under the circumstances;  
 
(d) the individual initiated a good-faith effort to repay overdue creditors or 
otherwise resolve debts; and 
 
(e) the individual has a reasonable basis to dispute the legitimacy of the 
past-due debt which is the cause of the problem and provides 
documented proof to substantiate the basis of the dispute or provides 
evidence of actions to resolve the issue. 
 
 Applicant meets significant mitigating factors for financial considerations. The 
circumstances under which Applicant’s financial problems occurred are unlikely to recur. 
His identity was stolen in 2006 and 2008, but it does not appear than any accounts in 
his name have been opened since then and he has alerted the credit reporting agencies 
to the theft. He could not control the identity theft and he acted responsibly by 
contacting the credit reporting agencies and creditors to dispute the accounts. His 
actions evidence a good faith effort to resolve the debts. He provided documented proof 
of his efforts to address the creditors. It does not appear that Applicant was living 
beyond his means in any regard. He can be trusted to monitor his finances closely and 
resolve his debts in the future. Applicant’s financial problems are under control. Aside 
from the debts which do not belong to him, he is current on all of his accounts. AG ¶¶ 
20(a), 20(b), 20(d), and 20(e) apply. 
 
 
8 
 
Guideline B, Foreign Influence 
 
 The security concern for the Foreign Influence guideline is set out in AG ¶ 6: 
 
Foreign contacts and interests may be a security concern if the individual 
has divided loyalties or foreign financial 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 
any foreign interest. Adjudication under this Guideline can and should 
consider the identity of the foreign country in which the foreign contact or 
financial interest is located, including, but not limited to, such 
considerations as whether the foreign country is known to target United 
States citizens to obtain protected information and/or is associated with a 
risk of terrorism. 
 
 The guideline notes nine conditions that could raise security concerns under AG 
¶ 7. One is potentially applicable in this case: 
 
(a) contact with a foreign family member, business or professional 
associate, friend, or other person 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. 
 
The Government raised concerns over possible foreign influence because of 
Applicant's ties of affection to his wife, two brothers, two sisters, a brother-in-law, a 
mother-in-law, and three friends who are citizens and residents of South Korea. Not 
only does disqualifying condition AG ¶ 7(a) require the presence of foreign contacts, it 
also requires that a heightened risk be present. Government Counsel introduced 
sufficient evidence on South Korea’s history of collecting protected U.S. information to 
establish a heightened risk relating to Applicant’s family members and friends in South 
Korea. These contacts raise security concerns under AG ¶ 7(a).  
 
 AG ¶ 8 provides conditions that could mitigate security concerns. I considered all 
of the mitigating conditions under AG ¶ 8 including: 
 
(a) the nature of the relationships with foreign persons, the country in 
which these persons are located, or the positions or activities of those 
persons in that country 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, group, organization, or government and the interests of the 
U.S.; 
 
(b) there is no conflict of interest, either because the individual's sense of 
loyalty or obligation to the foreign person, group, government, or country is 
so minimal, or the individual has such deep and longstanding relationships 
and loyalties in the U.S., that the individual can be expected to resolve any 
conflict of interest in favor of the U.S. interest; 
 
9 
 
 Applicant is admittedly close to all of his South Korean relatives. Further, South 
Korea is known to collect protected U.S. information. Applicant had the burden to 
present evidence to mitigate the Government’s case against him and he failed to 
present sufficient evidence of mitigation. For instance, Applicant’s wife is employed in 
South Korea, but he failed to state in what industry. It is also unknown how Applicant’s 
sisters are supported. Applicant further testified that his mother-in-law receives some of 
her support from the South Korean government. Due to the close contacts between 
Applicant and his family, the nature of the South Korean collection efforts, and the lack 
of evidence regarding the positions or activities of all of Applicant’s family members and 
friends in South Korea, it is impossible to determine that it is unlikely the individual will 
be placed in a position of having to choose between the interests of a foreign individual, 
group, organization, or government and the interests of the U.S. AG ¶ 8(a) does not 
apply. 
 
 Applicant served the United States honorably from 1989 to July 1994, and 
received a number of honors for his service. He also has an ex-wife, two children, and 
his adopted family residing in the United States. These certainly represent longstanding 
relationships and loyalties in the U.S. However, these facts alone are not enough to 
mitigate his strong family ties in South Korea. Applicant failed to present sufficient 
information to establish it is unlikely he could be placed in a position of having to choose 
between the interests of his South Korean family or friends and the interests of the U.S. 
Further, he did not show that the nature of the relationships with his foreign family and 
friends are so minimal that he would resolve any conflict of interest in favor of the U.S. 
AG ¶ 8(b) does not apply. 
 
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 relevant circumstances. The administrative judge should 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. 
 
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.  
 
I considered the potentially disqualifying and mitigating conditions in light of all 
the facts and circumstances surrounding this case. I have incorporated my comments 
 
10 
 
under Guidelines B and F in my whole-person analysis. Some of the factors in AG ¶ 
2(a) were addressed under those guidelines, but some warrant additional comment. 
Applicant is well respected by his friend, who testified on his behalf. He has worked 
diligently to contest debts that were a result of identity theft. He served in the U.S. Army 
from 1989 to July 1994. His dedication and service, family in the United States, and 
contacts with the United States are significant, but do not overshadow his close ties of 
affection in South Korea.  
 
Overall, the record evidence leaves me with questions and doubts as to 
Applicant’s eligibility and suitability for a security clearance. For all these reasons, I 
conclude Applicant has mitigated the Financial Considerations security concerns, but 
has not mitigated the Foreign Influence security concerns.  
 
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 F:   FOR APPLICANT 
 
  Subparagraph 1.a:    For Applicant 
Subparagraph 1.b:    For Applicant 
Subparagraph 1.c:    For Applicant 
Subparagraph 1.d:    For Applicant 
 
 
Paragraph 2, Guideline B:   AGAINST APPLICANT 
 
  Subparagraph 2.a:    Against Applicant 
Subparagraph 2.b:    Against Applicant 
Subparagraph 2.c:    Against Applicant 
Subparagraph 2.d:    Against Applicant 
Subparagraph 2.e:    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. 
 
 
 
 
 
________________________ 
Jennifer I. Goldstein 
Administrative Judge