The Government submitted two items for the record.      1
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                        DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 15-00299
)
)
Applicant for Security Clearance )
Appearances
For Government: Robert J. Kilmartin, Esq., Department Counsel
For Applicant: Pro se
                                                                            
______________
Decision
______________
LYNCH, Noreen A., Administrative Judge:
On July 27, 2015, the Department of Defense  (DOD) issued a Statement of
Reasons (SOR) listing security concerns arising under Guideline C (Foreign
Preference) and Guideline B (Foreign Influence). The action was taken under Executive
Order 10865, Safeguarding Classified Information within Industry (February 20, 1960),
as amended; DoD Directive 5220.6, Defense Industrial Personnel Security Clearance
Review Program (January 2, 1992), as amended (Directive); and the adjudicative
guidelines (AG), implemented in September 2006. 
Applicant timely answered the SOR and requested a review based on the written
record in lieu of a hearing. Department Counsel submitted a File of Relevant Material
(FORM), dated November 24, 2015.  Applicant received the FORM on December 2,1
2015. On December 18, 2015, responded to the FORM. Applicant submitted
documents in response to the FORM, which were admitted without objection. The case
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was assigned to me on March 3, 2016.  Based on a review of the pleadings and
exhibits, eligibility for access to classified information is granted.
Procedural Issue
Department Counsel and Applicant did not present materials for administrative
notice regarding South Africa. I have taken administrative notice of certain facts
regarding South Africa from U.S. Department of State documents, which is Exhibit I and
entered into the record.
Findings of Fact
In his answer to the SOR, Applicant denied the SOR allegation under Guideline
C, but admitted two of the three  allegations under Guideline B with explanations. 
Applicant is 56 years old. He was born in South Africa. He was conscripted and
served in the South African Army from 1985 until 1990. In 1998, he came to the United
States. He became a naturalized U.S. citizen in 2008. He received his undergraduate
and graduate degrees in South Africa. He is single. He completed a security clearance
application in 2014. He has been employed with his current employer since 2008 and
has held a security clearance since 2009. He is a senior engineer for the company. He
has worked as a contractor since 2005. (Item 2)
FOREIGN PREFERENCE
The SOR alleges under Guideline C that Applicant maintained his South African
citizenship due to his foreign financial assets. Applicant denies this allegation.
According to South African regulations, South African citizenship is automatically lost
upon becoming a U.S. citizen, unless prior permission to become a dual citizen has
been granted. Applicant provided documentation to support this claim. In fact, he has
taken another step by completing an Application for Renunciation of South African
citizenship and forwarding it to the Home Affairs Office in South Africa. The certified
response from the Home Affairs Office confirmed that Applicant automatically ceased to
be a citizen, when he acquired U.S. citizenship. (AX A)
Although not mentioned in the SOR, Applicant surrendered his South African
passport to his Facility Security Officer (FSO) in August 2009. His FSO retained control
of the passport until it was forwarded to the South African Embassy in December 2015,
along with his official renunciation letter to the Office of Personnel Management. He
provided a copy of the letter. (AX C)
FOREIGN INFLUENCE
The SOR alleges under paragraph 1.a that Applicant’s sister is a citizen and
resident of South Africa, under paragraph 1.b that Applicant owns South African bank
accounts, stocks, and mutual funds worth an estimated $90,000, and under paragraph
1.c that Applicant receives a pension from South Africa worth an estimated $82,000. 
3
Applicant’s sister lives in South Africa and is married. He maintains contact with
her by email and telephone. If he visits South Africa, he sees her. He last saw her in
2014. She has no connection to the South African Government. Applicant’s parents are
deceased. His father died in late 2013. He has other sisters who live in Canada. (GX 2) 
As to allegation 1.b, Applicant admits that he owns South African Bank accounts,
stocks and mutual funds worth an estimated total of $90,000.  In his Answer to the SOR
(Item 1), he noted and provided documentation that South Africa imposes stringent
capital controls. Retirement Annuities cannot normally be transferred out of South Africa.
The process for performing the transfer of assets (excluding inheritances) is detailed in
his attachment.  There is a form to actually transfer money once permission is granted.
(AX C) The South African Bank uses the term “formal emigration” for the process of
winding up one’s financial affairs and then making it possible to transfer assets out of
South Africa. This is not related to citizenship and applies to any former resident.
Applicant completed the required form and submitted it on September 15, 2015.
He has now received the “tax clearance” certificate. (AX B) The liquidation of available
assets is a taxable event, which increases the complexity and time to complete the step.
He noted the mutual funds were liquidated in March, April, and May 2015 and put in his
South African bank account. One fund that matured in 2014 was liquidated and put into
his South African bank account.
As to allegation 1.c., Applicant denies receiving a pension from South Africa. He
states the only income generated by his South African assets are dividends and interest.
That income is retained in South Africa and is approximately $60 a month. He stated
that he did have a pension preservation fund that contained a pension from his first
employer, but that fund did not provide income and the complete balance has been
cashed out into his South African bank account. Finally, he admitted that he has four
retirement annuities, but none have been annuitized, and they do not provide any
income. One retirement annuity matured in April 2015 and is in a holding account. It
does not provide income. (AX B) He provided documentation that states South Africa
imposes stringent exchange controls, both limiting the amount that can be transferred
out of the country and requiring Reserve Bank authorization for each transaction. Due to
the restrictions, he has had limited ability to repatriate all his assets to the United States.
(AX C)
In Applicant’s response to FORM, he provided a tax clearance certificate from the
South African Revenue Services (SARS). The tax certificate is then sent to a local bank
representative to request authorization to export the assets. The local bank then exports
the non-inheritance portion of the bank account. However, the estate has not been
completed.  He can then request that his retirement accounts be liquidated into his bank
account. Each transfer to the United States requires permission, with associated costs
and delay. He needs about six transfers to move all his assets. Applicant noted that the
South African assets are not particularly substantial, being less than 15% of his net
worth. He sold his home in South Africa when he left the country and purchased a home
in the United States. (Item 2) He has paid state and local taxes in the United States. He
U.S. Department of State - U.S. Relations with South Africa, Fact Sheet, dated October 7, 2015.      2
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provided a partial list of his investment portfolio in the United States. (Attachment 14)
The amount of funds represented is about $1,300,000.
ADMINISTRATIVE NOTICE
The United States established diplomatic relations with South Africa in 1929
following the United Kingdom’s recognition of South Africa’s domestic and external
autonomy within the British Empire. Until the 1990's, the South African Government
followed a policy of white domination over the majority black population, and racial
separation (apartheid). From the 1970's through the early 1990's, U.S.-South African
relations were severely affected by South Africa’s racial policies.
Since the end of apartheid and with the advent of democracy in 1994, the two
countries have enjoyed a bilateral relationship. South Africa is a strategic partner of the
United States, particularly in the areas of health, security, and trade. The two countries
share development objectives throughout Africa, and South Africa plays a key economic
and political role on the African continent. The United States seeks opportunities for
increased U.S.-South African cooperation on regional and international issues. In 2010,
the United States and South Africa launched a strategic dialogue aimed at deepening
cooperation on a range of issues of mutual interest and concern.
South Africa has made remarkable strides toward building a prosperous and
peaceful democracy since 1994, but faces many challenges, including high
unemployment, HIV/AIDS, crime, and corruption. U.S. assistance focuses on improving
healthcare, increasing education standards and teacher training, building capacity in
agriculture to address regional food security, and developing clean energy to adapt to
global climate changes. Improving the capacity of South Africa’s security force will
enable it to take a lead role in regional stability and security efforts.
U.S.-South African economic and trade relations are strong. South Africa is
eligible for preferential trade benefits under the African Growth and Opportunity Act. The
United States and South Africa have a bilateral tax treaty eliminating double taxation. A
bilateral Trade and Investment Framework Agreement is in place.2
Policies
When evaluating an applicant’s suitability for a security clearance, an
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. These guidelines are not inflexible
rules of law. Instead, recognizing the complexities of human behavior, they are applied
in conjunction with the factors listed in the adjudicative process. An administrative
judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision.
Under AG ¶ 2(c), this process is a conscientious scrutiny of a number of variables known
 See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995).      3
 Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).      4
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      5
 See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive      6
information), and EO 10865 § 7.
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      7
 Id.      8
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as the “whole-person concept.” An 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. 
The U.S. Government must present evidence to establish controverted facts
alleged in the SOR. An applicant is responsible for presenting “witnesses and other
evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven
by Department Counsel. . . .”  The burden of proof is something less than a3
preponderance of evidence.  The ultimate burden of persuasion is on the applicant.  4 5
A person seeking access to classified information enters into a fiduciary
relationship with the Government based on 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 classified information. Such
decisions entail a certain degree of legally permissible extrapolation of 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.”  “The clearly consistent standard indicates that security clearance6
determinations should err, if they must, on the side of denials.”  Any reasonable doubt7
about whether an applicant should be allowed access to sensitive information must be
resolved in favor of protecting such information.  The decision to deny an individual a8
security clearance does not necessarily reflect badly on an applicant’s character. It is
merely an indication that the applicant has not met the strict guidelines the President
and the Secretary of Defense established for issuing a clearance.
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Analysis
Guideline C, Foreign Preference
Under AG ¶ 9 the security concern involving foreign preference arises, “[W]hen
an individual acts in such a way as to indicate a preference for a foreign country over the
United States, then he or she may be prone to provide information or make decisions
that are harmful to the interests of the United States.”
AG ¶ 10 describes conditions that could raise a security concern and may be
disqualifying:
(a) exercise of any right, privilege or obligation of foreign citizenship after
becoming a U.S. citizen or through the foreign citizenship of a family
member.  This includes but is not limited to:
(1) possession of a current foreign passport;
(2) military service or a willingness to bear arms for a foreign
country;
(3) accepting educational, medical, retirement, social welfare,
or other such benefits from a foreign country;
(4) residence in a foreign country to meet citizenship requirements;
(5) using foreign citizenship to protect financial. or business
interests in another country;
(6) seeking or holding political office in a foreign country; and
(7) voting in a foreign election;
(b) action to acquire or obtain recognition of a foreign citizenship by an
American citizen;
(c) performing or attempting to perform duties, or otherwise acting, so as to
serve the interests of a foreign person, group, organization, or government
in conflict with the national security interest; and,
(d) any statement or action that shows allegiance to a country other than
the United States: for example, declaration of intent to renounce United
States citizenship; renunciation of United States citizenship.
SOR ¶ 2.a alleges Applicant was using his South African citizenship to protect his
financial interests. Applicant has substantial South African financial interests. AG ¶
10(a)(5) applies.
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AG ¶ 11 provides conditions that could mitigate security concerns:
(a) dual citizenship is based solely on parents' citizenship or birth in a
foreign country;
(b) the individual has expressed a willingness to renounce dual citizenship;
(c) exercise of the rights, privileges, or obligations of foreign citizenship
occurred before the individual became a U.S. citizen or when the individual
was a minor;
(d) use of a foreign passport is approved by the cognizant security
authority;
(e) the passport has been destroyed, surrendered to the cognizant security
authority, or otherwise invalidated; and
(f) the vote in a foreign election was encouraged by the United States
Government.
Applicant became a naturalized U.S. citizen in 2008. He surrendered his South
African passport to his FSO in 2009. He ceased to be a citizen of South Africa when he
became a U.S. citizen. His former country does not recognize dual citizenship. He
officially renounced his South African citizenship. AG ¶ 11(b) applies. Applicant has
mitigated the security concerns under the foreign preference guideline.
Guideline B, Foreign Influence
The security concern under Guideline B is set out in AG ¶ 6 as follows: 
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.
A disqualifying condition may be raised by “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.” AG ¶ 7(a). A disqualifying condition
also may be raised by “connections to a foreign person, group, government, or country
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that create a potential conflict of interest between the individual’s obligation to protect
sensitive information or technology and the individual’s desire to help a foreign person,
group, or country by providing that information.” AG ¶ 7(b). In addition, another
disqualifying condition may exist when “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.” AG ¶
7(e).
Applicant’s sister is a citizen and resident of South Africa. Applicant  maintains
some contact with her by phone, and he visits her when he is in South Africa. She has
no connection to a foreign government. Based on this evidence, AG ¶ 7(a) and 7(b) are
raised. Applicant has substantial property interests in South Africa.  AG ¶ 7(e) is also
raised.
Since the Government produced evidence to raise  disqualifying conditions in AG
¶¶ 7(a), (b), and (e) the burden shifted to Applicant to produce evidence to rebut,
explain, extenuate, or mitigate the facts. 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. Sep. 22, 2005). 
 
Guideline B is not limited to countries hostile to the United States.  “The United
States has a compelling interest in protecting and safeguarding classified information
from any person, organization, or country that is not authorized to have access to it,
regardless of whether that person, organization, or country has interests inimical to
those of the United States.”  ISCR Case No. 02-11570 at 5 (App. Bd. May 19, 2004). 
Furthermore, friendly nations can have profound disagreements with the United
States over matters they view as important to their vital interests or national security.
Finally, we know friendly nations have engaged in espionage against the United States,
especially in the economic, scientific, and technical fields.  See ISCR Case No. 00-0317,
2002 DOHA LEXIS 83 at **15-16 (App. Bd. Mar. 29, 2002).  Nevertheless, the nature of
a nation’s government, its relationship with the United States, and its human rights
record are relevant in assessing the likelihood that an applicant’s family members are
vulnerable to government coercion. The risk of coercion, persuasion, or duress is
significantly greater if the foreign country has an authoritarian government, a family
member is associated with or dependent upon the government, or the country is known
to conduct intelligence operations against the United States, or the foreign country is
associated with a risk of terrorism. 
While there is no evidence that intelligence operatives  from South Africa seek or
have sought classified or economic information from or through Applicant, or his sister
living in South Africa, nevertheless, it is not possible to rule out such a possibility in the
future. International terrorist groups are known to conduct intelligence activities as
effectively as capable state intelligence services. Applicant’s relationship with his sister
creates a potential conflict of interest because these relationships are sufficiently close
to raise a security concern. 
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Security concerns under this guideline can be mitigated by showing that “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.”  AG ¶ 8(a). The totality of an applicant’s family ties to a foreign country as well
as each individual family tie must be considered.  ISCR Case No. 01-22693 at 7 (App.
Bd. Sep. 22, 2003). Similarly, AG ¶ 8(b) can mitigate concerns when “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.” AG ¶ 8(c) can
mitigate if “contact or communication with foreign citizens is so casual and infrequent
that there is little likelihood that it could create a risk for foreign influence or exploitation.”
AG ¶ 8(f) can mitigate “if the value or routine nature of the foreign business, financial,
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.” 
AG ¶ 8(b) applies. A key factor in the AG ¶ 8(b) analysis is Applicant’s “deep and
longstanding relationships and loyalties in the U.S.” Applicant has been in the United
States since 1998. He has been employed since 2005 with the same company. He has
held a security clearance. He is praised by his employer. He is a naturalized U.S. citizen.
He has chosen a life in the United States.  His financial, professional, and personal ties
are in the United States. Applicant took an oath and swore allegiance to the United
States when he became a naturalized U.S. citizen. He manifested his patriotism, loyalty,
and fidelity to the United States over all other countries. 
As to the financial interests, Applicant has sold his home in South Africa and
purchased a home in the United States. He has a professional position as a senior
engineer. He started the process of liquidating the retirement funds and other accounts.
He produced information to show that this is not a short process. He has renounced his
South African citizenship and he has started the entire process of having his money
transferred out of South Africa. However, South Africa imposes strict capital controls. He
is now in possession of a tax clearance certificate which will permit the next step in the
procedure to take place. He is doing all that he can in good-faith to complete the
process, which could take three to six months. He admits due to inheritance issues,
there have been some delays. 
Applicant’s relationship with the United States must be weighed against the
potential conflict of interest created by his relationship with his sister in the South Africa.
Moreover, there is no evidence, however, that terrorists, criminals, the South African
government or those conducting espionage have approached or threatened Applicant,
or his sister. As such, there is a reduced possibility that either Applicant or his sister
living  in South Africa would be specifically selected as targets for improper coercion or
exploitation. 
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Applicant’s property interests in the United States exceed $1million and his
property interests in South Africa are about $100,000. His employment in the United
States also has significant economic value. His financial interests are more than ten
times greater than his South African interests. AG ¶ 7(f) applies.
In sum, Applicant has renounced his South African citizenship officially. He is not
a dual citizen once he became a naturalized U.S. citizen. He surrendered his passport to
his FSO. He is a senior engineer working with the same company since 2005. He has
mitigated the foreign influence concerns. Applicant’s connections to the United States
are strong. He is committed to his professional life in the United States.  There is
substantial mitigation in this case. He has worked with the investigative process and
secured all documents to begin to transfer his assets from South Africa to the United
States. It is not a quick process. He is recommended by his employer. He can be
expected to resolve any conflict of interest in favor of the United States. Foreign
influence security concerns are mitigated under Guideline B.  Even if security concerns
are not mitigated under Guideline B, they are mitigated under the whole-person concept,
infra.
  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 an applicant’s
conduct and all the 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. As noted above, the
ultimate burden of persuasion is on the applicant seeking a security clearance. 
I considered the potentially disqualifying and mitigating conditions in light of all the
facts and circumstances surrounding this case, as well as the whole-person factors.
Applicant is 56 years old.  He came to the United States in 1998 after his professional
education to work in the United States. He has one sister in South Africa. He has
relinquished his South African passport and renounced his South African citizenship
officially. He has provided sufficient documentation that he has put in process the plan
for transferring his assets to the United States. He has significant monetary investments
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in the United States. For all the foregoing reasons, I find that Applicant mitigated the
foreign preference and foreign influence 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 B : FOR APPLICANT
Subparagraphs 1.a-1c: For Applicant
Paragraph 2, Guideline C : 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 a security clearance.
Clearance is granted.
                                                     
NOREEN A. LYNCH.
Administrative Judge