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DEPARTMENT OF DEFENSE 
DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of: ) 
)
[Redacted] ) ISCR Case No. 18-00791 
)
Applicant for Security Clearance ) 
Appearances 
For Government: David F. Hayes, Esq., Department Counsel 
For Applicant: Pro se 
______________ 
Decision 
______________ 
FOREMAN, LeRoy F., Administrative Judge: 
This case involves security concerns raised under Guidelines L (Outside 
Activities), B (Foreign Influence), and C (Foreign Preference). Eligibility for access to 
classified information is granted. 
Statement of the Case 
Applicant submitted a security clearance application (SCA) on February 10, 
2017. On August 15, 2018, the Department of Defense Consolidated Adjudications 
Facility (DOD CAF) sent him a Statement of Reasons (SOR) alleging security concerns 
under Guidelines L, B, and C. The DOD CAF acted under Executive Order (Exec. Or.) 
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) promulgated in Security Executive Agent Directive 4, National Security 
Adjudicative Guidelines (December 10, 2016). 
Applicant answered the SOR on September 18, 2018, and requested a decision 
on the written record without a hearing. Department Counsel submitted the 
04/05/2019
 
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Government’s written case on January 31, 2019. A complete copy of the file of relevant 
material (FORM) was sent to Applicant, who was given an opportunity to file objections 
and submit material to refute, extenuate, or mitigate the Government’s evidence. He 
received the FORM on February 6, 2019, and submitted a response, which is marked 
as Applicant’s Exhibit (AX ) A. The case was assigned to me on March 12, 2019.  
 
Department Counsel requested that I take administrative notice of relevant facts 
about the United Arab Emirates (UAE). The request and supporting documents were 
not admitted in evidence but are attached to the record as FORM Item 6. I took 
administrative notice as requested by Department Counsel. In addition, I have taken 
administrative notice, with no objection from either party, of the facts published by the 
U.S. Department of State, Bureau of Near Eastern Affairs, in U.S. Relations with United 
Arab Emirates (September 13, 2018), available at www.state.gov and included in the 
record as FORM Item 7. The facts administratively noticed are set out below in my 
findings of fact. 
 
Findings of Fact1 
 
 In Applicant’s answer to the SOR, he admitted the allegations in SOR ¶¶ 1.a and 
2.b. He admitted ¶ 3.a in part. His admissions are incorporated in my findings of fact.  
 
 Applicant served on active duty in the U.S. Air Force from January 1988 to 
February 2008, retired as a technical sergeant, and received an honorable discharge. 
He held a security clearance while on active duty and retained it as a defense 
contractor.  
 
 Applicant married in September 1988, divorced in October 1997, and married his 
current spouse in August 2011. His current and former spouses are citizens and 
residents of the United States. He has an adult daughter from his first marriage, who is 
a citizen and resident of the United States. 
 
 Applicant is a 50-year-old owner, president, and chief executive officer of a 
defense contractor. He is a citizen and resident of the United States. His company does 
business in the Middle East and is a partner in a joint venture in the United Arab 
Emirates (UAE). The joint venture provides training, support, operations consulting, and 
professional services to governmental and military entities in the UAE. His business 
partner in the joint venture is a citizen and resident of the UAE, and they have quarterly 
telephonic contact. Their last face-to-face contact was in June 2016. The current 
memorandum of agreement creating the joint venture expires in May 2019. 
 
The joint venture had a one-year contract in 2015-2016 that provided human 
resource services for a project in the UAE. The gross value of the contract was about 
$3,000,000. The services provided were professional services for edged-impact-
                                                          
1 Applicant’s personal information is extracted from his security clearance application (FORM Item 2) 
unless otherwise indicated by a parenthetical citation to the record. 
 
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weaponry-training services, the design of bladed weapons, and the development of 
sporting-tournament programs. The involvement with UAE did not include classified 
information, special nuclear material, U.S. export-controlled commodities, technical 
know-how, or technical data. (Certificate Pertaining to Foreign Interests, attached to 
Item 2.) 
 
Applicant has been unable to compete for or perform defense contracts in the 
United States until his company’s facility clearance is reactivated, and it cannot be 
reactivated until his security clearance is adjudicated. In January 2017, the Defense 
Security Service (DSS) reviewed the joint venture’s facility clearance and determined 
that joint venture is not under foreign ownership, control, or influence that requires 
mitigation. (DSS Letter of Jan. 4, 2017, attached to Item 2.) Applicant’s foreign business 
activities have not been limited to the UAE. The record reflects that he also has done 
business in Italy and Australia. (Item 2 at 36; Certificate Pertaining to Foreign Interests, 
attached to Item 3.) His contacts with these countries are not alleged in the SOR. 
 
 In order to facilitate the operation of his joint venture in the UAE, Applicant has a 
bank account in the UAE. When he was interviewed by a security investigator in May 
2017, there was no money in the account. (Personal Subject Interview (PSI), attached 
to SOR Answer.) When he responded to interrogatories in April 2018, the account had 
the minimum balance required to remain open. He holds an active UAE driver’s license, 
which he needs in order to drive in the UAE if he remains in the UAE for more than 30 
days. He held a UAE identity card, which expired in July 2018, and he does not intend 
to renew it. He held a UAE gate-entry card that expired in July 2017. 
 
 The UAE is a federation of monarchies consisting of seven emirates. The rules of 
the emirates constitute the Federal Supreme Council, the country’s highest legislative 
and executive body. The emirates are under patriarchal rule with political allegiance 
defined by loyalty to tribal leaders, leaders of individual emirates, and leaders of the 
federation. The United States has had friendly relations with the UAE since its formation 
in 1971. The UAE has an influential role in the Middle East and is a key partner for the 
United States. The two countries enjoy strong bilateral cooperation on many issues, 
including defense. UAE ports host more U.S. Navy ships than anywhere else outside 
the United States. 
 
 The UAE is a regional and global financial and transportation hub, and terrorist 
organizations exploit it send and receive financial support. It is a drug-transshipment 
point for illegal traffickers and its position as a major financial center makes it vulnerable 
to money laundering. There have been numerous instances in which U.S. dual-use and 
military components have been shipped to Iran, Iraq, and Afghanistan through the UAE, 
using methods making it appear that UAE was the final destination. 
 
 The U.S. Department of State regards two emirates, Abu Dhabi and Dubai, as 
medium-threat locations for terrorist activity directed at or affecting U.S. Government 
interests. The UAE’s participation in the anti-ISIS coalition and the Yemen civil war has 
increased the likelihood of terrorist attacks against Western interests. 
 
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 The UAE maintains effective control over its security forces. The most significant 
human-rights issues have involved allegations of torture in detention, arbitrary arrest 
and detention, government interference with privacy rights, restrictions on assembly and 
association, and the inability of citizens to choose their government in free and fair 
elections. 
 
Policies 
 
 “[N]o one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 
484 U.S. 518, 528 (1988). As Commander in Chief, the President has the authority to 
“control access to information bearing on national security and to determine whether an 
individual is sufficiently trustworthy to have access to such information.” Id. at 527. The 
President has authorized the Secretary of Defense or his designee to grant applicants 
eligibility for access to classified information “only upon a finding that it is clearly 
consistent with the national interest to do so.” Exec. Or. 10865 § 2.  
 
Eligibility for a security clearance is predicated upon the applicant meeting the 
criteria contained in the adjudicative guidelines. These guidelines are not inflexible rules 
of law. Instead, recognizing the complexities of human behavior, an administrative judge 
applies these guidelines in conjunction with an evaluation of the whole person. An 
administrative judge’s overarching adjudicative goal is a fair, impartial, and 
commonsense decision. An administrative judge must consider all available and reliable 
information about the person, past and present, favorable and unfavorable. 
 
 The Government reposes a high degree of trust and confidence in persons with 
access to classified information. This relationship transcends normal duty hours and 
endures throughout off-duty hours. Decisions include, by necessity, consideration of the 
possible risk that the applicant may deliberately or inadvertently fail to safeguard 
classified information. Such decisions entail a certain degree of legally permissible 
extrapolation about potential, rather than actual, risk of compromise of classified 
information. 
 
Clearance decisions must be made “in terms of the national interest and shall in 
no sense be a determination as to the loyalty of the applicant concerned.” Exec. Or. 
10865 § 7. Thus, a decision to deny a security clearance is merely an indication the 
applicant has not met the strict guidelines the President and the Secretary of Defense 
have established for issuing a clearance. 
 
 Initially, the Government must establish, by substantial evidence, conditions in 
the personal or professional history of the applicant that may disqualify the applicant 
from being eligible for access to classified information. The Government has the burden 
of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531. 
“Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. 
Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines 
presume a nexus or rational connection between proven conduct under any of the 
 
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criteria listed therein and an applicant’s security suitability. See ISCR Case No. 15-
01253 at 3 (App. Bd. Apr.20, 2016).  
  
 Once the Government establishes a disqualifying condition by substantial 
evidence, the burden shifts to the applicant 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).  
 
An applicant “has the ultimate burden of demonstrating that it is clearly consistent 
with the national interest to grant or continue his security clearance.” ISCR Case No. 
01-20700 at 3 (App. Bd. Dec. 19, 2002). “[S]ecurity clearance determinations should err, 
if they must, on the side of denials.” Egan, 484 U.S. at 531.  
 
Analysis 
 
Guideline L, Outside Activities 
The SOR alleges that Applicant is a business partner in a joint venture that is 
incorporated and doing business in the UAE. AG ¶ 36 expresses the security concern 
pertaining to outside activities: “Involvement in certain types of outside employment or 
activities is of security concern if it poses a conflict of interest with an individual's 
security responsibilities and could create an increased risk of unauthorized disclosure of 
classified information.” 
AG ¶ 37 describes conditions that could raise a security concern and may be 
disqualifying: 
(a) any employment or service, whether compensated or volunteer, with:  
(1) the government of a foreign country;  
(2) any foreign national, organization, or other entity;  
(3) a representative of any foreign interest; and, 
(4) any foreign, domestic, or international organization or person 
engaged in analysis, discussion, or publication of material on intelligence, 
defense, foreign affairs, or protected technology; 
(b) failure to report or fully disclose an outside activity when this is 
required.  
 
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 Applicant’s joint venture in the UAE is sufficient to establish AG ¶ 37(a)(2). AG ¶ 
37(b) is not established, because there is no evidence that Applicant has failed to 
report or fully disclose his activity as required. 
AG ¶ 38 provides conditions that could mitigate security concerns: 
(a) evaluation of the outside employment or activity by the appropriate 
security or counterintelligence office indicates that it does not pose a 
conflict with an individual's security responsibilities or with the national 
security interests of the United States; and, 
(b) the individual terminated the employment or discontinued the activity 
upon being notified that it was in conflict with his or her security 
responsibilities. 
 AG ¶ 38(a) is established. Applicant’s involvement with the UAE does not involve 
classified information, nuclear materials, or export-controlled commodities, or protected 
technical knowledge or data. His company was cleared by DSS. 
 
 AG ¶ 38(b) is not yet established, but it will be applicable when the current 
memorandum of agreement expires in May 2019. 
 
Guideline B, Foreign Influence 
 
 The SOR alleges that Applicant’s business partner is a citizen and resident of the 
UAE (SOR ¶ 2.a) and that Applicant has a bank account in the UAE (SOR ¶ 2.b). The 
security concern under this guideline is set out in AG ¶ 6:  
 
Foreign contacts and interests, including, but not limited to, business, 
financial, and property interests, are a national security concern if they 
result in divided allegiance. They may also be a national security concern 
if they create circumstances in which the individual maybe manipulated or 
induced to help a foreign person, group, organization, or government in a 
way inconsistent with U.S. interests or otherwise made vulnerable to 
pressure or coercion by any foreign interest. Assessment of foreign 
contacts and interests should consider the country in which the foreign 
contact or interest is located, including, but not limited to, considerations 
such as whether it is known to target U.S. citizens to obtain classified or 
sensitive information or is associated with a risk of terrorism. 
 
 The following disqualifying conditions under this guideline are relevant: 
 
AG ¶ 7(a): contact, regardless of method, 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; 
 
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AG ¶ 7(b): connections to a foreign person, group, government, or country 
that create a potential conflict of interest between the individual's 
obligation to protect classified or sensitive information or technology and 
the individual's desire to help a foreign person, group, or country by 
providing that information or technology; and 
 
AG ¶ 7(f): substantial business, financial, or property interests in a foreign 
country, or in any foreign owned or foreign-operated business that could 
subject the individual to a heightened risk of foreign influence or 
exploitation or personal conflict of interest. 
 
 AG ¶¶ 7(a) and 7(f) require substantial evidence of a “heightened risk.” The 
“heightened risk” required to raise one of these disqualifying conditions is a relatively 
low standard. “Heightened risk” denotes a risk greater than the normal risk inherent in 
living or having business associates or business interests subject to a foreign 
government. 
 
 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, “even friendly nations can have profound disagreements with the 
United States over matters they view as important to their vital interests or national 
security.” ISCR Case No. 00-0317 (App. Bd. Mar. 29, 2002). Finally, we know friendly 
nations have engaged in espionage against the United States, especially in the 
economic, scientific, and technical fields. 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. In considering the nature of the government, an 
administrative judge must also consider any terrorist activity in the country at issue. See 
generally ISCR Case No. 02-26130 at 3 (App. Bd. Dec. 7, 2006) (reversing decision to 
grant clearance where administrative judge did not consider terrorist activity in area 
where family members resided). 
 
 AG ¶¶ 7(a), 7(b), and 7(f) are established. Applicant’s relationship with his 
business partner appears to be an arms-length impersonal relationship. The record 
contains no evidence regarding the reliability or trustworthiness of Applicant’s partner. 
The joint venture has not involved sensitive or classified information or materials. 
However, the risk of terrorism, the activities of drug traffickers, and the exploitation of 
the UAE as an illegal transshipment point for dual-use and protected military equipment 
 
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are sufficient to establish the “heightened risk” in AG ¶¶ 7(a) and 7(f) and the potential 
conflict of interest in AG ¶ 7(b).  
 
 The following mitigating conditions are potentially relevant: 
 
AG ¶ 8(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 
United States; 
 
AG ¶ 8(b): there is no conflict of interest, either because the individual’s 
sense of loyalty or obligation to the foreign person, or allegiance to the 
group, government, or country is so minimal, or the individual has such 
deep and longstanding relationships and loyalties in the United States, 
that the individual can be expected to resolve any conflict of interest in 
favor of the U.S. interest; 
 
AG ¶ 8(c): 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; and 
 
AG ¶ 8(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. 
 
 AG ¶ 8(a) is not established. The record contains insufficient information to 
evaluate the nature of Applicant’s relationship with his business partner. The UAE’s 
vulnerability to terrorism, exploitation by illegal drug traffickers, money laundering, and 
illegal transshipment of dual-use and military equipment preclude a finding that a future 
conflict of interest is unlikely. 
 
 AG ¶ 8(b) is established. Applicant’s ties to the UAE are strictly commercial. His 
only business associate in the UAE is his partner. There is no evidence that he has any 
close friends in the UAE. He and his immediate family are life-long citizens and 
residents of the United States. He served honorably in the U.S. Air Force for 20 years. 
He has held a security clearance for many years without incident. 
 
 AG ¶ 8(c) is not established. Applicant’s quarterly contacts with his partner in the 
UAE are arguably infrequent, but they are business-related and not casual. 
 
 AG ¶ 8(f) is established. Applicant’s last contract with the UAE was substantial, 
but he has no current contracts. His UAE bank account has a minimal balance. His 
memorandum of agreement with the UAE expires in May 2019.  
 
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Guideline C, Foreign Preference 
 
 The SOR alleges that Applicant holds an active UAE identity card, UAE driver’s 
license, and a UAE gate card (SOR ¶ 3.a). Applicant has refuted the allegations that he 
has an active UAE identity card and gate card. He admits that he has an active UAE 
driver’s license. 
 
The concern under this guideline is set out in AG ¶ 9:  
 
When 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 provide 
information or make decisions that are harmful to the interests of the 
United States. Foreign involvement raises concerns about an individual's 
judgment, reliability, and trustworthiness when it is in conflict with U.S. 
national interests or when the individual acts to conceal it. By itself; the 
fact that a U.S. citizen is also a citizen of another country is not 
disqualifying without an objective showing of such conflict or attempt at 
concealment. The same is true for a U.S. citizen's exercise of any right or 
privilege of foreign citizenship and any action to acquire or obtain 
recognition of a foreign citizenship. 
 
 The relevant potentially disqualifying conditions are: 
 
AG ¶ 10(b): failure to report, or fully disclose when required, to an 
appropriate security official, the possession of a passport or identity card 
issued by any country other than the United States; 
 
AG ¶ 10(d) participation in foreign activities, including but not limited to: 
 
(1) assuming or attempting to assume any type of 
employment, position, or political office in a foreign 
government or military organization; and 
 
(2) otherwise acting to serve the interests of a foreign 
person, group, organization, or government in any way that 
conflicts with U.S. national security interests; 
 
 Neither disqualifying condition is established. There is no allegation or evidence 
that Applicant failed to disclose his possession of a UAE identity card when required. 
There is no evidence that he assumed or attempted to assume any position in the UAE 
government or military and no evidence that he acted to serve the interests of any entity 
in a way that conflicted with U.S. national security interests. 
 
 
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Whole-Person Concept 
 
 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. In applying the whole-
person concept, an 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 and applying the adjudicative factors in AG ¶ 2(d).2  
 
 I have incorporated my comments under Guidelines L, B, and C in my whole-
person analysis and applied the adjudicative factors in AG ¶ 2(d). After weighing the 
disqualifying and mitigating conditions under Guidelines L, B, and C, and evaluating all 
the evidence in the context of the whole person, I conclude Applicant has mitigated the 
security concerns raised by his participation in a joint venture in the UAE. 
 
Formal Findings 
 
 I make the following formal findings on the allegations in the SOR: 
 
 Paragraph 1, Guideline L, Outside Activities:  FOR APPLICANT 
 
  Subparagraph 1.a:     For Applicant 
 
 Paragraph 2, Guideline B (Foreign Influence):  FOR APPLICANT 
 
  Subparagraphs 2.a and 2.b:   For Applicant 
 
 Paragraph 3, Guideline C (Foreign Preference): FOR APPLICANT 
 
  Subparagraph 3.a:     For Applicant 
 
                                                          
2 The factors are: (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.  
 
 
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Conclusion 
 
 I conclude that it is clearly consistent with the national security interests of the 
United States to continue Applicant’s eligibility for access to classified information. 
Clearance is granted. 
 
 
 
 
LeRoy F. Foreman 
Administrative Judge