System.UnauthorizedAccessException Attempted to perform an unauthorized operation. From webservice accessing remote directory

I have a webservice that runs under an app pool assigned to a specific active directory account.
This service controls a share that exists on the network. Its intention is to create directories and add/remove directory permissions.   The share to this directory structure exists on a seperate server.  The active directory group has been granted full control access and local administrative rights on the system that maintains the share.
The webservice adds and removes directory with no problem. However when it attempts to add or remove security permissions to those directories I get the following error.
 
System.Web.Services.Protocols.SoapException: System.Web.Services.Protocols.SoapException: Server was unable to process request. ---> System.UnauthorizedAccessException: Attempted to perform an unauthorized operation.
  at System.Security.AccessControl.Win32.GetSecurityInfo(ResourceType resourceType, String name, ...