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When Chan Moon first landed a contract to run technology support for the Office of the Secretary of Defense nearly a decade ago, the South Korean-born businessman thought his small shop was finally ready to take off. With work for the U.S. Army, the Coast Guard, and the Patent & Trademark Office already lined up, the day when more contracts — and cash — started flowing in didn’t seem far off. After all, there were many fans among Moon’s customers. “Everybody gives me repeat business,” the dapper 56-year-old founder of Comint Systems Corp. likes to say. But cracking the federal government market hasn’t been quite as easy as he initially hoped. The challenge: getting a security clearance, something the federal government requires of contractors. Moon has no criminal record and has been a U.S. citizen since 1988. But when Defense Department officials offered to sponsor him for a clearance in 2003, he began a three-year tug of war with the government. The government’s principal concern was that Moon’s two brothers, who live in Seoul, could be in a position someday to persuade Moon to divulge classified information. Since the terrorist attacks of Sept. 11, 2001, the United States has stiffened its requirements for security clearances, creating monumental problems for contractors at a time when their services are increasingly needed. Although most Americans wouldn’t object to a thorough investigation of someone seeking access to classified information, many attorneys who practice in this area say decisions on foreign association often contradict one another even when applicants have similar circumstances and countries of origin. Attorneys say the decisions are particularly tough at the Defense Office of Hearings and Appeals (DOHA), the body that oversees all clearances for Defense Department employees and most federal contractors and the single largest office overseeing security clearances in the government. “If you have any sort of foreign contact, especially relatives, you have an uphill battle, and it’s a sad situation,” says Jon Roberts, an attorney representing clients who appear before DOHA. Foreign influence and preference have always been grounds to deny someone a clearance. But things have gotten so tough that government officials and contractors who’ve had clearances for years are being denied renewals because of concerns about family members abroad. Those seeking clearance are charged with proving that they won’t disclose classified information to family members who live overseas, a burden of proof that can be nearly impossible for those originally from countries in East Asia and the Middle East. The more rigorous process has created something of a paradox for government employers and contractors whose foreign-born employees, with sought-after technology and language skills, are being denied or held up for years in the clearance process. The problem is so pervasive that a number of companies have retained attorneys such as Elizabeth Newman to counsel their employees ahead of time on their prospects for getting a clearance. “They don’t want to lose good employees. At the same time, they don’t want to put them in a position where they won’t pass,” says Newman, who wrote a book on security-clearance procedure. The situation is exacerbated by a huge governmentwide backlog of security-clearance cases. A spokesperson for the Office of Personnel Management, which investigates all background checks, put its current backlog at 161,235. A process that once took a few months now takes an average of a year. And differing standards among agencies can often lead to individuals being cleared by one department but denied by another. Defense Department officials would not provide statistics about DOHA’s caseload. (Only redacted appeals decisions are publicly available, and attorneys say that record is not complete.) But according to a forthcoming study by Sheldon Cohen, a solo attorney who regularly practices before DOHA, appeals alone have increased more than 400 percent since 2000. Those based on foreign association have been key among that jump, increasing to 66 last year from just 8 in 2000. And according to an article by Robert Gales, DOHA’s chief administrative judge, published by the D.C. Bar in December, more than half of all applicants lose at the administrative hearing level. Among those who don’t hire an attorney, the chance of a favorable ruling drops to just 12 percent. In December the government issued new guidelines stating that foreign contacts are only grounds for denying a clearance when they create a “heightened risk,” but the Defense Department has yet to enforce the new standard, attorneys say. And with the increased scrutiny Congress is giving to foreign influence in businesses involving national security (think Dubai Ports), the more stringent attitude seems unlikely to loosen anytime soon. “In some ways it sort of cuts against the American dream where we are a country of immigrants, a melting pot,” says Leslie McAdoo, a former security-clearance investigator for the government and now a private practice attorney before DOHA. “But it’s based on the rational perspective that people who have a connection to a foreign country are more susceptible of being approached by agents of those countries and may be vulnerable to coercion because of the connection.” CHASING THE DREAM It was the American dream that first brought Moon to the United States, in 1981. His father was a schoolteacher, and his mother a homemaker. Though his family had the wherewithal to send Moon, the first of four boys, to college, he says he often went hungry as a child in Korea. After receiving a degree in electrical engineering from Hang Yang University in Seoul, Moon landed his first job as a computer technician at the now-defunct Prime Computers Inc. in Seoul. A few years later, Moon’s father died. As is the custom in many Asian countries, after his father’s death, Moon, the oldest male, assumed the role of breadwinner and helped put his younger brothers through college. Soon his company sent him to work in Saudi Arabia, where Moon saved enough money to buy tickets to the United States for himself and his wife. Though he never expected to be a millionaire, he thought America would be a place where he could seek out a better living. They chose Northern Virginia, where his wife had family. Moon landed a job, once again, with Prime Computers. The next year, the company asked him to return to Saudi Arabia to help sell mainframe hardware. His wife didn’t want to go, but the money was too good to pass up, with a package that included free housing, transportation, and commissions on sales. Moon went on his own, but in December 1982 he returned to the United States for the birth of his first daughter. “As soon as I saw the brand-new baby, I didn’t want to go back,” Moon says. It was then that he decided to go out on his own, building a company that offered tech support for mainframe systems — then the backbone of the emerging computer industry. But as players such as Bill Gates’ Microsoft entered the computer market, the older mainframe business began to decline. To bolster revenue, Moon began selling used computer parts to his old contacts in the Middle East and Asia, where the new technology had yet to catch up. Realizing he needed a new business model, he focused on government contracting and was successful in landing work for the Defense Department, including installing the computer network for DOHA’s Arlington courtrooms (a fact not lost on the DOHA judge that would later review his case). But there was a catch: The pool of work he could bid on was limited. In order to compete for the bigger and more lucrative jobs, he’d need a security clearance. Over the years, Moon had built up trust within the department. So in 2003 a small group of Defense Department officials (whom Moon declines to name) agreed to sponsor him for a clearance. With his two daughters hitting college age, the timing couldn’t have been better. AND THE WINNER IS . . . But it soon became apparent that the process would not go quickly — or smoothly. About a year after the review began, Moon received a letter stating that government investigators had concerns about giving him a security clearance. First, they were troubled that sections of his company’s Web site were in Japanese and Korean and advertised a defunct export business. Second, they were worried about Moon’s relationship with his two brothers still living in South Korea (another brother and Moon’s mother had immigrated here during the 1990s.) Moon wasn’t surprised that his roots raised security concerns. National security had risen to the top of the political agenda in the post-9/11 world. But Moon knew he had nothing to hide, so he vowed to fight. It couldn’t take that long, he thought. The world of security clearances, however, was in the midst of upheaval. Delays were frequent, and recent rule changes had stiffened requirements for naturalized citizens. At DOHA, the tightened standards dated back to March 2000, when an appeals panel had upheld the security clearance of a person holding dual citizenship. The next day the director of DOHA put an indefinite hold on all cases involving dual citizens, leaving many applicants in limbo, according to a study by Cohen, the solo attorney. Then, in 2002, Arthur Money, assistant secretary of defense, barred virtually anyone with a foreign passport from getting a clearance. This decision generated a wave of rejections, especially among those whose clearances were coming up for regular review. Some attorneys objected to the directive. Part of the problem, says attorney Philip Cave, is that “everyone is worried about making a mistake. They don’t want to let someone in with secret clearance and then the person turns out to be al-Qaeda.” Many applicants found an easy out by renouncing their home citizenship and giving up their foreign passport. But that decision can have its own consequences, notes attorney Anthony Vergnetti. For instance, if Iranians surrender their passport, it effectively means they forfeit ever being able to travel to Iran to visit family. That’s because Iranian-born U.S. citizens face difficulties entering the country with a U.S. passport. “Our own State Department tells our Iranian-born U.S. citizens to travel on their Iranian passport,” Vergnetti says. Against this backdrop, in May 2005, Moon’s attorney, Mark Zaid, lined up a stellar list of witnesses for the administrative hearing on Moon’s clearance, including three Defense Department officials, one of whom was from the department’s Office of General Counsel. Zaid showed that Moon no longer did any foreign business and had gotten rid of any references to it on his Web site. He also showed that Moon had little contact with his brothers back in South Korea beyond telephone conversations a couple of times a year. As for Moon himself, he hasn’t visited South Korea since January 1993. The hearing was only three and a half hours long, but that was enough time to persuade Administrative Law Judge Christopher Graham to rule in Moon’s favor. The government, however, wasn’t convinced and appealed Moon’s case. It was an ominous development. According to Cohen’s statistics, of the 41 security-clearance grants the government has appealed since 2000, it has won a reversal in every single case. Moon, however, got a break. In April a three-judge panel remanded his case, saying the administrative law judge needed to look more closely at Moon’s family ties. In May, Graham came back with another affirmative decision. Within days, government lawyers told Moon they would seek another appeal. Aggravated and exhausted, Moon couldn’t help but take the decision personally. He opened up nearly ever facet of his past. What more did his adopted country want? Then, just after 9 p.m. on June 14, Moon’s phone rang. It was his lawyer, Zaid, and his voice couldn’t hide his excitement. The government had just informed him it was dropping its appeal. Moon was cleared. Make it 41-1.
Emma Schwartz can be contacted at [email protected].

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