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                           DEPARTMENT OF DEFENSE 
         DEFENSE OFFICE OF HEARINGS AND APPEALS 
           
             
 
In the matter of: ) 
 ) 
[Name Redacted]  )  ISCR Case No. 14-05913 
  ) 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Eric Borgstrom, Esquire, Department Counsel 
For Applicant: Pro se 
 
 
______________ 
 
Decision 
______________ 
 
 
HOGAN, Erin C., Administrative Judge: 
 
Applicant submitted an application for a security clearance (e-QIP) on March 5, 
2014. On April 30, 2015, the Department of Defense Consolidated Adjudications Facility 
(DOD CAF) issued a Statement of Reasons (SOR) to Applicant detailing the security 
concerns under Guideline H, Drug Involvement, and Guideline B, Foreign Influence. 
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) 
implemented within the Department of Defense on September 1, 2006.  
  
 On June 9, 2015, Applicant answered the SOR and requested a hearing before 
an administrative judge. Department Counsel was ready to proceed on July 1, 2015. I 
was assigned the case on July 28, 2015. On September 11, 2015, a Notice of Hearing 
was issued, scheduling the hearing for October 8, 2015. The hearing was held as 
scheduled. During the hearing, the Government offered two exhibits which were 
admitted without objection as Government (Gov) Exhibits 1 and 2. Government Exhibit 
2 is the summary of Applicant’s interview conducted by an investigator conducting his 
background investigation. Applicant clarified some facts in the summary. These 
clarifications were written on Gov 2. After the changes were made, Applicant stated it 
was an accurate accounting of what transpired during the interview and Gov 2 was 
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admitted. Applicant offered seven exhibits which were admitted as Applicant Exhibits 
(AE) A – G, without objection. The Government also requested administrative notice be 
taken of certain facts regarding the People’s Republic of China (PRC or China). The 
administrative notice document was marked as HE I. Applicant did not object to the 
administrative notice document.  The transcript was received on October 16, 2015. 
Based upon a review of the case file, pleadings, and exhibits, eligibility for access to 
classified information is granted. 
 
Findings of Fact 
 
 In his answer to the SOR, Applicant admits to all of the allegations in the SOR. 
(Item 3)  
 
Applicant is a 42-year-old partner of a private equity investment firm. One of the 
firm’s investments includes a federal contractor that works on classified projects. 
Applicant is on the board of the federal contractor and requires a security clearance. 
This is his first time applying for a security clearance. He received his bachelor’s degree 
in May 1995. He is single, but is in a committed relationship. He and his partner are 
expecting their first child in December 2015. (Tr. 12-13, 24; Gov 1) (Note: The facts in 
this decision do not specifically describe employment, names of witnesses, or locations 
in order to protect Applicant and his family’s privacy. The cited sources contain more 
specific information.)  
 
Guideline H – Drug Involvement 
 
Applicant admits to using marijuana from June 1991 to January 2014 with 
varying frequency, but no more than once or twice a year. There were some years when 
he did not use marijuana at all. His marijuana use consisted of using it when it was 
passed around at parties. He never purchased marijuana. He disclosed his marijuana 
use on his security clearance application, dated March 5, 2014, and discussed it during 
his background investigation interview.  He listed his illegal drug abuse in response to 
section 23 on his security clearance application, which he certified on June 5, 2013. (Tr. 
23-24, 37-38; Gov 1, section 23)   
 
Applicant’s last use of marijuana occurred while on vacation in Jamaica in 
January 2014. He is not dependent on marijuana and does not intend to use marijuana 
in the future. For the past year and a half, he has not been in a social setting where 
marijuana was passed around. He recently moved in with his girlfriend and they are 
starting a family. His girlfriend does not use marijuana. Applicant’s focus is on his career 
and supporting his family. (Tr. 24, 38-40) 
 
 Applicant provided the report of a drug screen test he took on June 3, 2015. The 
result was negative. (AE B) 
 
Guideline B – Foreign Influence 
 
The sole allegation under the Foreign Influence concern is that Applicant owned 
an apartment in China valued at $600,000. Before discussing this allegation, some 
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background information is relevant. Applicant has one sibling. He and his brother were 
born and raised in the United States. Aside from a three-year period when his 
grandmother cared for him as an infant in Taiwan, Applicant has lived in the United 
States his entire life. Applicant was educated in the United States.(Tr. 12) 
 
 Applicant’s parents were born in mainland China in the mid to late 1930s. His 
parents’ families moved to Taiwan when the Communist party rose to power on 
mainland China.  His parents immigrated to the United States in the 1960s. His parents 
are U.S. citizens. They built successful careers in accounting and nursing. Applicant 
testified that he owes all of his success to his family and the opportunities provided in 
the United States. All of his close friends and family are located in the United States. He 
has one paternal uncle who is a citizen and resident of Taiwan. He does not keep in 
close contact with him. He also has a second cousin, who is a U.S. citizen who lives in 
Taiwan and owns an apartment in Shanghai. He does not keep in regular contact with 
his second cousin. The last time he spoke with him was in 2007, which was the last time 
Applicant travelled to Shanghai, PRC. (Tr. 11-12; 25, 29) 
 
In 2004, Applicant’s brother worked for a U.S. accounting firm at their office 
located in Shanghai, PRC. Applicant’s brother could not afford to purchase an 
apartment on his own, so Applicant and his brother purchased the apartment together. 
The cost of the apartment was $344,000. The borrowed 70% of the purchase price and 
each invested $51,500 towards the purchase. (Tr. 26; AE C) 
 
In October 2005, Applicant’s brother moved back to the United States. Applicant 
and his brother decided to keep the apartment in Shanghai as a rental investment 
property. Applicant’s brother assumed responsibility for managing the property and uses 
local agents. Applicant has minimal involvement in managing the property. The 
apartment in Shanghai has appreciated in value. It is worth approximately $1,032,000. 
There is $160,000 remaining on the mortgage. Applicant’s share in the property is 
$436,000. (Tr. 26-27; AE C)  
   
Applicant’s investment portfolio is over $5.2 million. He testified the current 
market value is $6.2 million. His investments are diversified. His brother mentioned that 
he helped Applicant invest approximately $768,064 in five residential properties and one 
commercial property in the United States. The loss of his investment in the Shanghai 
property would not have an overall significant impact on his overall financial well-being 
and he could not be subject to undue influence in order to protect his investment in the 
Shanghai property. He is willing to divest his interest in the Shanghai property. (Tr. 28-
29, 44; AE C – AE G)  
 
The co-managing partner of the private equity investment firm where Applicant 
works wrote a statement on Applicant’s behalf. He has known and worked with 
Applicant since July 1995. Applicant has a long and distinguished career with the firm. 
The firm only retains and promotes the best performing and most promising team 
members. Applicant was promoted to partner in 2011. He has the utmost faith in 
Applicant and believes he would be a worthy recipient of a security clearance. Applicant 
has been an outstanding member of the firm for over 20 years. He has acted with 
integrity throughout his career. Applicant works with confidential information from public 
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and private companies on a daily basis. He treats confidential information with care and 
would handle classified information in the same manner. (AE A)  
 
Administrative Notice – People’s Republic of China 
 
  China has an authoritarian government, dominated by the Chinese Communist 
Party whose members hold almost all top government, police, and military positions. 
China has a poor human rights record, suppresses political dissent, and practices 
arbitrary arrest and detention, forced confessions, torture, and other prisoner 
mistreatment. China also monitors communications devices, such as telephones, 
telefaxes, and internet servers. (HE I) 
 
  China is the most aggressive country conducting espionage against the United 
States, focusing on obtaining information and technologies beneficial to China’s military 
modernization and economic development. The Chinese government encourages and 
rewards the action of private individuals who obtain technology on its behalf. China’s 
intelligence services as well as private companies and other entities frequently seek to 
exploit Chinese citizens or persons with family ties to China who can use their insider 
access to corporate networks to steal secrets. They also have offered financial 
inducements to U.S. government officials to encourage them to compromise classified 
information. Chinese attempts to collect U.S. technological and economic information 
represent a growing and persistent threat to U.S. economic security. (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 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.  
 
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 
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responsible for presenting “witnesses and other evidence to rebut, explain, extenuate, 
or mitigate facts admitted by applicant or proven by Department Counsel. . . .” The 
applicant has the ultimate burden of persuasion as to obtaining 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 
that 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 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).   
 
Guideline H, Drug Involvement 
 
The security concern relating to the guideline for Drug Involvement is set out in 
AG & 24:       
  
Use of an illegal drug or misuse of a prescription drug can raise questions 
about an individual’s reliability and trustworthiness, both because it may 
impair judgment and because it raises questions about a person’s ability 
or willingness to comply with laws, rules and regulations.  
 
Drugs are defined as mood and behavior altering substances, and include: 
(1) Drugs, materials, and other chemical compounds identified and listed 
in the Controlled Substances Act of 1970, as amended, (E.g., marijuana or 
cannabis, depressants, narcotics, stimulants, and hallucinogens), and (2) 
inhalants and other similar substances; 
 
Drug abuse is the illegal use of a drug or use of a legal drug in a manner 
that deviates from approved medical direction. 
 
The guideline notes several disqualifying conditions that could raise security 
concerns. I find the following drug involvement disqualifying conditions apply to 
Applicant’s case.  
 
AG & 25(a) any drug abuse; and 
 
AG & 25(c) illegal drug possession, including cultivation, processing, 
manufacture, purchase, sale, or distribution; or possession of drug 
paraphernalia. 
 
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Applicant used marijuana with varying frequency from 1991 to January 2014. His 
use occurred in social settings, no more than once or twice per year. There were years 
when he did not use marijuana. He was not a habitual user of marijuana. However, AG 
& 25(a) applies because he did use marijuana which falls under the Directive’s definition 
of drug abuse. AG & 25(c) also applies because Applicant possessed marijuana when 
he used it.   
  
The Government’s substantial evidence and Applicant’s own admissions raise 
security concerns under Guideline H, Drug Involvement. The burden shifted to Applicant 
to produce evidence to rebut, explain, extenuate, or mitigate the security concerns. 
(Directive ¶ E3.1.15) An applicant has the burden of proving a mitigating condition, and 
the burden of disproving it never shifts to the Government. (See ISCR Case No. 02-
31154 at 5 (App. Bd. September 22, 2005))  
  
Guideline H also includes examples of conditions that could mitigate security 
concerns arising from drug involvement. The following mitigating conditions potentially 
apply to the Applicant’s case:  
 
AG ¶ 26(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; and  
  
AG & 26(b) a demonstrated intent not to abuse any drugs in the future, 
such as: (1) disassociation from drug-using associates and contacts; (2) 
changing or avoiding the environment where drugs were used; (3) an 
appropriate period of abstinence; and (4) a signed statement of intent with 
automatic revocation of clearance for any violation.  
   
 AG ¶ 26(a) applies because more than 22 months have passed since Applicant’s 
last illegal use of marijuana. He indicated that he stopped using marijuana in January 
2014 because he wanted to focus on his future.  Most of Applicant’s illegal drug use 
occurred in social settings at parties where marijuana was being passed around. This 
occurred only once or twice a year. His use of marijuana occurred before he applied for 
a security clearance. He was forthcoming when disclosing his illegal drug use on his 
security clearance application and apologizes for his behavior. Applicant understands 
the security concern involving illegal drug use. It is unlikely that he will jeopardize his 
future by returning to illegal drug use.   
 
 AG ¶ 26(b) applies because Applicant has not used illegal drugs for close to two 
years. His use of marijuana did not occur on a habitual basis. His life circumstances 
have changed now that he and his girlfriend are starting a family. While he did not 
provide a signed statement of intent with automatic revocation of clearance for any 
violation, he did express his intent to never use marijuana again in response to 
questions in Section 23 of his security clearance application, in his response to the SOR 
and during the hearing. Applicant met his burden to mitigate the security concerns 
raised under Guideline H, Drug Involvement.  
   
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Guideline B, Foreign Influence 
 
  AG ¶ 6 explains the security concern about “foreign contacts and interests” 
stating: 
 
[I]f the individual has divided loyalties or foreign financial interests, [he or 
she] 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 indicates one condition that could raise a security concern and 
may be disqualifying under AG ¶ 7 in this case: 
 
(e) a substantial business, financial, or property interest in a foreign 
country, or in any foreign-owned or foreign-operated business, which 
could subject the individual to heightened risk of foreign influence or 
exploitation. 
 
  Applicant owns a fifty percent interest in an apartment in Shanghai, PRC.  There 
is a potential for heightened risk because of the amount of the investment and the 
nature of the PRC government. Applicant’s ownership interest creates a risk of foreign 
pressure or attempted exploitation because there is always the possibility that Chinese 
agents or individuals operating in China may exploit the opportunity to obtain sensitive 
or classified information about the United States.  
 
  The Government produced substantial evidence raising a potentially disqualifying 
condition, and the burden shifted to Applicant to produce evidence and prove a 
mitigating condition. The burden of disproving a mitigating condition never shifts to the 
Government. AG ¶¶ 7(e) applies and further inquiry is necessary about potential 
application of any mitigating conditions.  
 
AG ¶ 8 lists six conditions that could mitigate foreign influence security concerns. 
Of these conditions, two apply to Applicant’s case: 
 
(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; and  
 
(f) the value or routine nature of the foreign business, financial, or property 
interests is such that they are unlikely to result in a conflict and could not 
be used effectively to influence, manipulate, or pressure the individual. 
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Applicant was born, raised, and educated in the United States. Aside from three 
years living in Taiwan while an infant, Applicant has always lived in the United States. 
Applicant has a strong affection and sense of obligation to the United States. He is 
grateful for the opportunities the United States has provided him. All of his close family 
members are citizens of and reside in the United States.  
 
Notwithstanding, the risk of coercion, persuasion, or duress are significantly 
greater because China has an authoritarian form of government and Applicant has a 
significant property interest in the Shanghai apartment. Although not insignificant, 
Applicant’s investment in the Shanghai property is not his only major investment. His 
U.S. investment portfolio is worth several times more than the value of his ownership 
interest in the apartment located in the PRC. Applicant testified that the loss of this 
investment would not have a large impact on his overall financial wealth and has 
provided proof of his substantial U.S. holdings. His property interest in the Shanghai 
apartment is unlikely to result in a conflict and could not be used to influence, 
manipulate, or pressure him.  
 
Security concerns raised under Foreign Influence are mitigated.  
 
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. In addition to Applicant’s illegal drug 
use, I considered he fully disclosed his illegal drug use on his security clearance 
application. Close to two years have passed since his last use of marijuana.  Applicant’s 
marijuana use occurred before he applied for a security clearance. The level of 
marijuana use was not habitual, only one to two times per year.  Applicant has no intent 
to use marijuana in the future and understands the consequences that additional illegal 
drug use may have on his ability to hold a security clearance. Applicant met his burden 
to overcome the security concerns raised under Drug Involvement.  
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Applicant’s investment in an apartment located in Shanghai, PRC, raised a 
security concern under Foreign Influence. However, those concerns are mitigated 
because Applicant’s investments in the United States are far greater than his interest in 
the Shanghai apartment. He initially purchased his interest in the apartment to help out 
his brother. When his brother moved back to the United States, they held onto to the 
property as an investment rental property. While the property has appreciated, Applicant 
states that he could not be unduly influenced in order to keep the property. I find his 
explanations credible.      
 
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 H:    FOR APPLICANT 
 
  Subparagraph 1.a:    For Applicant 
   
 Paragraph 2, Guideline B:    FOR APPLICANT 
 
  Subparagraph 2.a:    For Applicant 
     
Conclusion 
 
In light of all of the circumstances presented by the record in this case, it is  
clearly consistent with the national interest to grant Applicant eligibility for a security 
clearance.  Eligibility for access to classified information is granted. 
 
                                                
_________________ 
ERIN C. HOGAN 
Administrative Judge