[House Hearing, 105 Congress]
[From the U.S. Government Publishing Office]



 
                 DEPARTMENTS OF COMMERCE, JUSTICE, AND
                   STATE, THE JUDICIARY, AND RELATED
                    AGENCIES APPROPRIATIONS FOR 1998

========================================================================

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED FIFTH CONGRESS

                              FIRST SESSION
                                ________

  SUBCOMMITTEE ON THE DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE 
                    JUDICIARY, AND RELATED AGENCIES

                    HAROLD ROGERS, Kentucky, Chairman

JIM KOLBE, Arizona                 ALAN B. MOLLOHAN, West Virginia
CHARLES H. TAYLOR, North Carolina  DAVID E. SKAGGS, Colorado
RALPH REGULA, Ohio                 JULIAN C. DIXON, California
MICHAEL P. FORBES, New York        
TOM LATHAM, Iowa                   

NOTE: Under Committee Rules, Mr. Livingston, as Chairman of the Full 
Committee, and Mr. Obey, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.

  Jim Kulikowski, Therese McAuliffe, and Jennifer Miller, Subcommittee 
                                 Staff
                                ________

                                 PART 7
                                                                   Page
Secretary of State...............................................    1
State/ACDA Inspector General.....................................  193
International Organizations and Peacekeeping.....................  321
Administration of Foreign Affairs................................  375
United States Information Agency and Broadcasting Board of 
 Governors.......................................................  419
Arms Control and Disarmament Agency..............................  607
Asia Foundation..................................................  661
                                ________

         Printed for the use of the Committee on Appropriations
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                     U.S. GOVERNMENT PRINTING OFFICE

41-735 O                    WASHINGTON : 1997

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                       COMMITTEE ON APPROPRIATIONS                      

                   BOB LIVINGSTON, Louisiana, Chairman                  

JOSEPH M. McDADE, Pennsylvania         DAVID R. OBEY, Wisconsin            
C. W. BILL YOUNG, Florida              SIDNEY R. YATES, Illinois           
RALPH REGULA, Ohio                     LOUIS STOKES, Ohio                  
JERRY LEWIS, California                JOHN P. MURTHA, Pennsylvania        
JOHN EDWARD PORTER, Illinois           NORMAN D. DICKS, Washington         
HAROLD ROGERS, Kentucky                MARTIN OLAV SABO, Minnesota         
JOE SKEEN, New Mexico                  JULIAN C. DIXON, California         
FRANK R. WOLF, Virginia                VIC FAZIO, California               
TOM DeLAY, Texas                       W. G. (BILL) HEFNER, North Carolina 
JIM KOLBE, Arizona                     STENY H. HOYER, Maryland            
RON PACKARD, California                ALAN B. MOLLOHAN, West Virginia     
SONNY CALLAHAN, Alabama                MARCY KAPTUR, Ohio                  
JAMES T. WALSH, New York               DAVID E. SKAGGS, Colorado           
CHARLES H. TAYLOR, North Carolina      NANCY PELOSI, California            
DAVID L. HOBSON, Ohio                  PETER J. VISCLOSKY, Indiana         
ERNEST J. ISTOOK, Jr., Oklahoma        THOMAS M. FOGLIETTA, Pennsylvania   
HENRY BONILLA, Texas                   ESTEBAN EDWARD TORRES, California   
JOE KNOLLENBERG, Michigan              NITA M. LOWEY, New York             
DAN MILLER, Florida                    JOSE E. SERRANO, New York           
JAY DICKEY, Arkansas                   ROSA L. DeLAURO, Connecticut        
JACK KINGSTON, Georgia                 JAMES P. MORAN, Virginia            
MIKE PARKER, Mississippi               JOHN W. OLVER, Massachusetts        
RODNEY P. FRELINGHUYSEN, New Jersey    ED PASTOR, Arizona                  
ROGER F. WICKER, Mississippi           CARRIE P. MEEK, Florida             
MICHAEL P. FORBES, New York            DAVID E. PRICE, North Carolina      
GEORGE R. NETHERCUTT, Jr., Washington  CHET EDWARDS, Texas                 
MARK W. NEUMANN, Wisconsin             
RANDY ``DUKE'' CUNNINGHAM, California  
TODD TIAHRT, Kansas                    
ZACH WAMP, Tennessee                   
TOM LATHAM, Iowa                       
ANNE M. NORTHUP, Kentucky              
ROBERT B. ADERHOLT, Alabama            

                 James W. Dyer, Clerk and Staff Director









DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED 
                    AGENCIES APPROPRIATIONS FOR 1998

                              ----------                              

                                          Wednesday, March 5, 1997.

                    UNITED STATES SECRETARY OF STATE

                                WITNESS

HON. MADELEINE K. ALBRIGHT, UNITED STATES SECRETARY OF STATE

                           General Statement

    Mr. Rogers. It's a pleasure to welcome Madeleine Albright 
in her first appearance before our Subcommittee as Secretary of 
State. You've appeared on several occasions, of course, in your 
former position of U.N. Ambassador. It's a special pleasure to 
welcome you back after your most recent promotion.
    You've just returned from a whirlwind trip, a very 
successful trip, I think, around the world. You covered ten 
countries in nine days with glowing reviews both here and 
there.
    Of course, being in charge of the Ship of State means 
multiple responsibilities. You're now responsible for a 
Department that has some 23,000 employees and 250 embassies and 
consulates overseas.
    Operating a Department of that size involves management as 
well as diplomacy. And it is those day-to-day management 
operations as well as assessments for international 
organizations over which the Subcommittee has jurisdiction.
    So, we're very proud to have you with us today. We're proud 
of you as Secretary of State. We think you did a wonderful job 
on your trip overseas.
    We look forward to working with you as we have in the past. 
Your statement will be made a part of the record. And if you 
would like to verbally summarize informally, we'd be pleased to 
hear from you.

                  Secretary Albright's Opening Remarks

    Secretary Albright. Thank you very much, Mr. Chairman and 
Members of the Subcommittee. I really am delighted to be here 
for the first time in my new capacity. Over the past four 
years, we've developed what I believe--and what I hope you 
believe--was a constructive and candid dialogue about U.N.-
related issues. I look forward now to broadening that dialogue 
to include a full array of the challenges facing our nation and 
the world.
    Our ability to work together successfully matters because 
this Subcommittee provides many of the resources by which 
American interests are protected and American leadership is 
maintained. This matters because in our era we are all deeply 
affected by events overseas.
    Our workers and business people compete in a global 
marketplace. Our citizens travel. Our students are measured 
against those from around the world. Our borders are vulnerable 
to illegal immigrants, drugs, pollution and disease. And our 
children will do better and be safer in a world where nations 
are working together to set high standards, contain conflict 
and enforce the rule of law.

                           expansion of nato

    Mr. Chairman, it was with these considerations in mind that 
I left Washington last month for that overseas trip. In Europe, 
I discussed a variety of issues with our key allies, including 
NATO's plan to invite a number of Europe's new democracies to 
begin talks about joining the alliance.
    Today, four months prior to the summit in Madrid, our 
alliance is united. NATO will continue its process of internal 
adaptation. We will accept new members, and keep open the door 
to future membership. We will coordinate with all of Europe's 
democracies. We will develop an enhanced relationship with 
Ukraine. And we will strive to forge a long-term strategic 
partnership with Russia.
    In this way, we will ensure NATO's continued role as a 
mighty instrument for peace, stability and freedom throughout 
the continent.
    In Moscow, I emphasized to Russian leaders that, just as 
they have created a new Russia, we have created a new NATO. The 
new NATO is not arrayed against any country; it is a force for 
democracy and for integration. Russia's own security will be 
enhanced in a Europe without walls, with a transformed NATO as 
its partner.
    During my talks with President Yeltsin and Russian Foreign 
Minister Primakov, I was able to outline the concrete 
possibilities of such a partnership. I very much welcome 
President Yeltsin's subsequent statement that he will seek to 
make progress during the summit with President Clinton in 
Helsinki later this month.

                          relations with asia

    In Europe, the central question we face is whether we have 
learned the right lessons from history. The same is true in 
Asia, where much depends on whether choices are based on past 
suspicion or current hope.
    The message I conveyed during my trip is that America wants 
to help build a secure and peaceful future for Asia and the 
Pacific. I reaffirmed our strong security relationships with 
our key allies--Japan and the Republic of Korea.
    I emphasized the importance of proceeding with the Agreed 
Framework that has frozen--and will ultimately dismantle--North 
Korea's nuclear weapons program. I announced the scheduling of 
a joint briefing on the proposal for Four Party peace talks 
concerning the future of the Korean Peninsula. And I discussed 
our decision to contribute emergency food relief to the 
starving people of North Korea.
    During my meetings with the Chinese leaders, we reviewed a 
broad range of issues including nonproliferation, human rights, 
trade, Taiwan and the future of Hong Kong. My visit, and 
China's willingness to receive me despite the death of Deng 
Xiaoping, reflects a mutual determination to maintain our 
strategic dialogue.
    This dialogue is designed to identify and build on areas of 
cooperation, while seeking through candid discussion to narrow 
differences. By doing so, we hope to develop more extensive 
areas of common ground, thereby serving the interests of both 
our countries and the world.

                      humanitarian crisis in zaire

    Although our interests demand that we direct our attention 
frequently to Europe and Asia, we cannot--and are not-- 
neglecting our responsibilities elsewhere. for example, we are 
participating actively with South Africa's President Mandela, 
regional leaders and the U.N. to find a political solution and 
to ease the ongoing humanitarian crisis in Zaire.

                         relations with mexico

    In the wake of the President's decision to certify Mexico's 
cooperation in the drug war, I am working with the Attorney 
General and Director McCaffrey to encourage further progress in 
that war, both short-term and long-term. I recognize that there 
are those who disagree with the President's decision, but it 
was the right one.
    President Zedillo is fighting back against the corruption 
that has undermined the anti-narcotics efforts in his country. 
Our focus now must be not on unproductive efforts to allocate 
blame, but on strategies to overcome problems. In this effort, 
we will be pleased to consult with Congress, and we welcome 
Congressional support.

                       arab-israeli peace process

    Finally, with regard to the Arab-Israeli peace process, we 
are working closely with the Government of Israel, the 
Palestinians and others in the region to sustain the progress 
generated by the Hebron Agreement.
    The recent visits of Prime Minister Netanyahu and Chairman 
Arafat, and the upcoming visits of President Mubarak and King 
Hussein reflect the vital role that America plays in this 
effort. In that role, we will continue to back thosewho believe 
in peace, and continue to oppose vigorously those who seek to disrupt 
peace through violence or terror.
    Mr. Chairman and Members of the Subcommittee, the United 
States has important economic, security, political and 
humanitarian interests on every continent. But if we are to 
have the resources required to protect those interests, we will 
need your help in maintaining our diplomatic readiness.

            adequate funding for state department operations

    Accordingly, I urge your strong support for the President's 
requests for funding for fiscal year 1998, beginning with State 
Department Operations, where we are requesting roughly a 4 
percent increase from this year's level.
    As Members of this Subcommittee know, although our workload 
in priority areas has increased, and overseas inflation has 
eroded our buying power, funding for our embassies and 
consulates has been flat.
    We have done our best to manage this squeeze by 
streamlining operations, cutting jobs, postponing repairs and 
closing overseas posts. We have also recognized that, if we are 
going to work smaller, we have got to work smarter. To this 
end, we have reduced dramatically the time required for an 
American to obtain a passport.
    We have developed an improved model for overseas staffing. 
We are re-designing our worldwide logistics operations to 
provide materials and services faster, better and cheaper. We 
are proposing a plan for the State Department to retain the 
fees we generate.
    And in part thanks to your efforts, Mr. Chairman, we have 
put in place a system to promote equitable sharing among 
federal agencies of overseas costs. But sound management 
requires investment and modernization, as well as efficiency.
    The small increase requested by the President this year 
will help us keep pace with inflation, modernize our 
technology, integrate environmental concerns and make a small 
down payment on repairs to our dilapidated facilities in China 
which I saw in person. Even so, we will not have the resources 
we need to improve many other substandard facilities.
    Mr. Chairman, as I have told State Department employees, 
helping to design and implement American foreign policy is not 
just another career choice. It is a service to America as 
important and often as risky as service within our armed 
forces. It requires a commitment to American interests and 
ideals. And it needs to be done with excellence and spine.
    I think it's important not to forget what it is we are 
asking our diplomats to do. We depend on our diplomats to 
negotiate and verify the agreements that keep us safe from the 
spread of nuclear weapons. We rely on them to maintain day-to-
day support for the peacemakers over the bomb throwers in 
strategic areas of the world.
    We turn to them to build relationships with other nations 
that will enable us to protect our citizens from the scourge of 
drugs, the plague of crime and the threat of terror. We ask 
them to open new markets and ensure fair treatment for American 
goods and services in a fiercely competitive global market 
place. Thereby creating new jobs for our people here at home. 
We expect them to look behind the claims of dictators and desk 
bugs and to report the truth about abuses of civil liberties 
and violations of human rights.
    We count on them to help Americans who are hurt or fall 
seriously, or who are otherwise in need of a friendly voice in 
a far away land. And we require them to provide support for 
other federal agencies from defense to agriculture, to 
commerce, to the FBI that are also involved in promoting 
American interests around the world.
    So, there are not more important part of my message to you 
today than that the people who do America's work abroad need 
and deserve the support of Congress, the representatives of our 
people here at home.

                 reform in international organizations

    I also asked your support for the President's request for 
participation in international organizations. In my previous 
capacity, Mr. Chairman, we had a number of opportunities to 
discuss the CIO account, which I think you agree serves a wide 
range of American interests that I will not take the time to 
enumerate now.
    The real policy question we face is not whether the U.N. 
and its agencies work for us--they do--but whether we can make 
them work better. That is why we have repeatedly stressed the 
need for reform. Mr. Chairman, on this subject, we have come a 
long way. We are far from satisfied, but it is fair to say that 
because of our mutual efforts there has been more U.N. reform 
during the past four years than in the previous 40.
    During this period, the U.N.'s new Inspector General has 
shown growing independence in exposing inefficiency and waste, 
and with a little more time, Mr. Chairman, and a few more 
resources I expect we'll have your junkyard dog.
    The U.N. has lived within a no-growth budget, and we 
believe it will continue to do so. U.N. staffing has declined. 
New peacekeeping operations are far less frequent and more 
successful. An informal moratorium on U.N. global conferences 
is being observed. And our reform mantra of consolidation, 
accountability, prioritization and fiscal discipline is having 
an impact on the U.N. system.
    This progress did not come easy. Our support for reform 
does not go down well with those whose priorities differ from 
our own. Moreover, our policy of paying assessments late, 
coupled with our arrears, has alienated both supporters and 
opponents of reform.

                         payment of arrearages

    Last year, we proposed a five-year plan for paying arrears, 
with the understanding that the payments would be tied to 
specific reforms. I think in retrospect that proposal was 
flawed. It didn't provide much leverage with U.N. members. And 
despite the efforts of this Subcommittee, we didn't come out a 
winner with Congress.
    The $50 million we received in arrears last year for U.N. 
peacekeeping was more than offset by an $85.6 million shortfall 
in appropriations for CIO. Our goal is to get out of the hole, 
not dig it deeper still.
    That is why the President has proposed a plan this year 
that would fully clear our payable arrears, while maximizing 
prospects for achieving other U.N. priorities. If this request 
is approved, we would have far greater leverage in negotiating 
the budgets of the international organizations to which we 
belong. And we would have a far better chance of negotiating 
reductions in our share of these budgets and making further 
progress on reform.
    This is a ``win-win-win'' proposition. By paying our 
arrears, we would get America out of debt. By reducing future 
assessments, we would keep America out of debt. By providing 
incentives for reform, we would enable these organizations to 
do more with less. We would also demonstrate America's 
seriousness about meeting its obligations.
    Mr. Chairman, one of the reasons your state's 
mostillustrious son is so admired is that he demonstrated early in life 
his commitment to make good on any debt--even if that debt was only the 
damage of a borrowed book left out in the rain. Abraham Lincoln set a 
high standard, but it is a standard that I believe Americans continue 
to respect.
    In the days ahead, I would like to work with this 
Subcommittee and others in Congress to implement the 
President's plan. Our continued leadership at the U.N. and 
within other international organizations depend upon it. Our 
principles require it. Our interests demand it. And our budget 
allows it.
    Mr. Chairman and Members of the Subcommittee, our request 
this year also includes funds to meet our current assessments 
to international organizations and our anticipated requirements 
for U.N. peacekeeping. As we have discussed before, I 
appreciate your desire to be consulted about prospective 
peacekeeping operations.

                       peacekeeping requirements

    We need your understanding and support so that operations 
will be effective and so that we can pay our assessments. In 
that spirit, let me mention one possibility. Although progress 
has been made in Bosnia, we are faced now with the challenge of 
implementing the recent decision of putting the City of Brcko 
under international supervision for one year.
    Police monitoring will be a key element, and we will be 
talking with you further about a likely expansion of the U.N. 
civilian police mission in Bosnia to handle that task. Mr. 
Chairman, in the coming months and years, the President and I 
will be working closely with you and the Members of this 
Subcommittee.

                       bipartisan foreign policy

    Fortunately, the foundations of a bipartisan foreign policy 
are already strong. I think it is fair to say that, despite 
differences on timing and tactics on some issues, there is 
widespread agreement on our central goals. We agree on the need 
to build a Europe whole and free, and an Asia-Pacific community 
based on shared interests and a common commitment to peace.
    We agree on the need to create an ever-expanding global 
economy, in which American genius and productivity receive 
their due. We agree on the need to fight back hard against 
threats to our security, and to seize opportunities for peace. 
And we agree on the need for America to remain true to its 
principles--defending freedom, promoting human dignity and 
keeping commitments.
    Mr. Chairman, Members of the Subcommittee, as we near the 
end of this century, we share a great responsibility; to 
maintain America's influence, power and prestige around the 
world. And by so doing, to lay the foundation for the next 
American century.
    Towards that end, I pledge my own best efforts, and solicit 
your wise counsel and support. Thank you, Mr. Chairman.
    [The statement of Secretary Albright follows:]

[Pages 7 - 136--The official Committee record contains additional material here.]


    Mr. Rogers.  Thank you, Madam Secretary. I think it would 
be good for us to try to abide by the ten-minute rule this 
morning so that everyone will have a good chance to visit with 
the Secretary.

             United States Policy on Human Rights in China

    Madam Secretary, a week after you rode into Beijing wearing 
your black stetson, China has come out shooting, calling the 
United States a ``money bag democracy.'' And calling it a 
``democracy for the rich.'' Do you think that indicates that 
they've rejected the possibility of signing human rights 
conventions relating to the protection of civil liberties?
    Secretary Albright.  Mr. Chairman, first of all, maybe they 
didn't mean that as such an evil thing. Maybe they want to have 
a democracy themselves. Let me say that we have some hopes that 
the Chinese will in fact take some more positive steps. We 
think that--we obviously encourage them to do so. And that 
demonstrates the importance of having a multi-faceted 
relationship with them.
    We, however, are continuing to press on this issue with 
them and will be working further on a human rights resolution 
in Geneva, although we have not made a final decision on all of 
that yet.
    Mr. Rogers.  If China signs the conventions, will we forgo 
sponsorship of a resolution to censure China on human rights at 
the U.N. Commission on Human Rights, even thoughthe Department 
of Human Rights report indicates that all dissent in China has been 
silenced?
    Secretary Albright.  Well, we have asked them to do a 
number of things in terms of their human rights record. And we 
will be assessing how much they have done. We still have time 
to make that decision. And we are now consulting with our EU 
friends and other members of the Human Rights Commission on 
what a resolution might look like. So, we are still waiting to 
make a final decision on that while proceeding with 
consultations.

               bombing of u.s. facility in saudia arabia

    Mr. Rogers.  Now, there has been a great deal of concern 
that Saudi Arabia has not been forthcoming with respect to the 
bombing of the U.S. facility there where 19 American airmen 
were killed last June. Are they being forthcoming?
    Secretary Albright.  Mr. Chairman, we have been cooperating 
with them. We expect them to continue cooperating. And we make 
that point at various occasions; that we expect cooperation on 
this very important issue because, as you have pointed out, 
Americans have been killed and we need to get to the bottom of 
it.
    Mr. Rogers.  So, do you think they're cooperating and being 
forthcoming?
    Secretary Albright.  Well, they have been cooperating. And 
we expect them to continue cooperating on the additional 
material that has been asked of them. The subjects were raised 
with them when they were here and we expect them to continue 
cooperating.

        certification of mexico as cooperating in fighting drugs

    Mr. Rogers.  Now, the first major issue that you faced was 
to make recommendations on whether drug producing countries are 
fully cooperating with the U.S. in fighting drugs. You 
recommended that Mexico be certified as fully cooperating, and 
that is, to say the least, a controversial recommendation.
    Mexico's drug czar who was arrested February 6th and 
charged with being on the payroll of Mexico's drug lords and 
had been briefed by the United States on joint U.S.-Mexico drug 
efforts. As a result, drug dealers in Mexico have potentially 
gained access to the programmatic road map of joint U.S.-
Mexican programs, and indeed possibly the identities of elite, 
vetted anti-drug units trained in the U.S.
    Hasn't that development severely set back our efforts to 
work with Mexico to fight drugs?
    Secretary Albright.  Mr. Chairman, clearly the issue of the 
Mexico certification was a very difficult decision. It asked 
for an up and down decision, a snapshot issue at a snapshot 
time on what is an ongoing and very difficult problem. I think 
it is important for us to understand two things.
    One is the great efforts that the Mexican Government has in 
fact taken to try to deal with what is basically a longstanding 
system of corruption that permeates large parts of the system. 
What they have tried to do is to pass legislation that 
criminalizes money laundering and chemical diversion and a 
tough new organized crime bill.
    They have had a lot of discussion there about the 
corruption. And the issue here, from our estimation, is that 
President Zedillo and the highest levels of the government are 
working on the issue diligently. We are not denying the fact 
that problems continue.
    And the problem such as you've described is clearly a very 
serious one. I do not believe that it has compromised our 
efforts, but clearly it is a serious problem. We had to make 
the determination frankly, Mr. Chairman, as to whether we were 
going to be better off, we, the United States, with Mexico 
cooperating with us on what they recognize to be as serious a 
problem as we do, or putting them in a position where 
cooperating with us because we have de-certified them would 
raise such an uproar for President Zedillo that he would not be 
in a position to actively cooperate.
    The President has asked the Attorney General and Director 
McCaffrey and me to monitor very closely what the Mexicans are 
now going to do. We are going to be watching their arrest of 
some of the kingpins. There are requests for extradition; how 
they are proceeding in dealing with money launderers and the 
criminal elements.
    These are guidelines that we're going to be looking at. And 
we made the determination that we were more likely to get 
cooperation from Mexico if we certified them. But they are 
clearly under a very close microscope on this.
    Mr. Rogers.  Well, on the day you announced the decision to 
certify Mexico, one of their top drug kingpins and money 
launderers was allowed to walk out of jail. And Mexico's 
Attorney General didn't announce that his own officials allowed 
it to happen until seven hours after the certification was 
made. Is that a sign that Mexico is cooperating with us or 
thumbing their nose at us?
    Secretary Albright.  Well, I think, you know, I'm not going 
to make excuses for them about this, but there was a lot of 
discussion about the fact that their drug Czar had in fact been 
arrested. That was viewed as a sign of how awful everything 
was. There is no question that when the drug Czar is implicated 
in this way it is not good sign.
    But a good sign is that they arrested him and that they are 
in fact trying to deal with what they see as a system of 
corruption. It would be I think naive of us to assume that we 
could deal with this problem quickly. I am not going to make 
excuses for Mexico. I think that what is important here is for 
us to try to develop a policy where we can get the maximum 
cooperation from Mexico.
    And I think that you heard from the Attorney General 
yesterday, her assessment that we can get better cooperation on 
extradition and a variety of legal issues if we certified. So, 
as I said initially this was not an easy discussion. We spent a 
lot of time debating the pros and cons and decided that we were 
more likely to get better cooperation if we certified and kept 
them under very close scrutiny.

developing criteria for certifying countries as cooperating in fighting 
                                 drugs

    Mr. Rogers.  Now, the Inspector General for the State 
Department has issued a report which we discussed at her 
hearing stating that there are no objective criteria for what 
``fully cooperating'' means under the statute, with the result 
that some final certification discussions appear arbitrary and 
subjective, which hampers the Department's ability to portray 
the certification process as an objective measurement of a 
country's counter-narcotics efforts.
    Her report quotes a number of senior officials in the field 
who said that certification was a political rather than an 
objective process; that horse trading took place and that the 
results were pre-cooked. Can we or should we try to more fully 
define what the term ``fully cooperating'' means when we talk 
about certifying a country as fully cooperating in the war 
against drugs?
    Secretary Albright.  Let me say that this piece of 
legislation I think, to a great extent, becomes a blunt 
instrument. I think you know that. We have talked about that. 
It is viewed basically as a blame placing. We have to be 
verycareful in terms of how we deal with other sovereign nations.
    I think that we did examine the situation and did what the 
law required and made our judgments accordingly. But I think 
listing very specific criteria frankly, Mr. Chairman, is 
probably not helpful. What we have to do is assess the 
situation within each country, obey the law and make our 
assessments as carefully as we can.
    Each country has a slightly different situation. Let me 
just, for instance, say we did de-certify Columbia because we 
believed that the government there was not cooperating with us. 
Whereas, we assessed that while problems continued in Mexico, 
that Zedillo was in fact doing his level best to make the 
situation better and was dealing with what had been years of a 
fundamentally corrupt system.
    Mr. Rogers. Mr. Mollohan.
    Mr. Mollohan.  I yield to the gentleman.
    Mr. Rogers.  Mr. Obey.
    Mr. Obey.  I thank the gentleman and I thank the Chair.
    Madam Secretary, I just want to really say three things and 
then ask you a couple of questions. First of all, I'm very 
happy that you are where you are. I think the President made an 
excellent choice. Keep that Stetson moving around the world, 
and this country will be a whole lot better off.
    Secondly, I'd just like to make a comment on the 
President's discussion and yours with respect to the 
certification for Mexico. I think the certification is dubious 
because I think the whole process is dubious. I'm very troubled 
by the fact that Congress has consistently, for decades, tried 
to deny the President the ability to do something in terms of 
policy.
    And then what they do is to establish either a 
certification process or a waiver process so that the President 
has to take the heat for the fact that the world isn't perfect. 
I don't know what the right discussion would be on your part 
with respect to Mexico because I think the whole process is 
ridiculous to begin with.
    And I don't think the President ought to have to take the 
heat for that because he didn't invent the process. I also 
guess I am dubious about the assertion that somehow without 
certification, we would be better off in the fight against 
drugs than we are with the Administration having made that 
certification.
    It seems to me that as long as there is profit in producing 
or trafficking in drugs, especially in third world countries, 
they are going to be immensely susceptible to corruption and to 
bribery. I think, therefore, that the right question for 
Congress to ask, if it wants to have both a constructive 
relationship with Mexico and, in effect, a policy on drugs, is 
what we can really do in this country to shut off the demand 
for drugs?
    Secondly, what action by the President is most conducive to 
our having a rational and effective future relationship with 
the country in question? And I think that's the standard by 
which the President's discussion ought to be judged; not 
whether or not we're happy with Mexico because I, for one, am 
very unhappy with Mexico. And I'm very unhappy with our NAFTA-
oriented policy toward Mexico. But that's a different question.
    So, I just think that Congress needs to reconsider the 
entire certification process, not just for this issue, but a 
whole range of issues, because I think it puts the Executive 
Branch in a ridiculous position no matter what it does, while 
allowing the Congress to pose for political holy pictures as an 
institution.

                           expansion of nato

    Secondly, I would like to strongly dissent from the 
Administration's position with respect to NATO. I have worked 
with this Administration and the previous Administrations in 
the area of foreign affairs for a long time, as you know, on 
budgets, on Russia, on Central Europe, on peacekeeping, on 
development issues; you name it.
    But I have profound misgivings about the Administration's 
intentions with respect to the expansion of NATO. I think 
you're going to get a deal with Mr. Yeltsin, but I'm concerned 
about what that means in the future. Because based on my 
understanding of the way Russia works, and I've followed it for 
more than 30 years, I think that we run a grave risk that 
future Russian nationalists, under worse economic and political 
conditions than we have in Russia today, will be able to 
exploit any Russian Government decision to accept a movement 
east of the military borders of NATO.
    And I think that could have profoundly negative 
consequences long term. Secondly, I don't think the American 
people have heard anything about this issue. If we do proceed, 
I think they're going to wake up one morning and discover that 
we have provided a guarantee to defend Central Europe; three or 
four more new countries.
    They didn't know about it. And I doubt they're going to be 
very thrilled about it. I don't think the American public has 
been sufficiently talked to about this issue so that they can 
make an intelligent choice about how they feel about it.
    Thirdly, I'm concerned it will in fact create a more tense 
no-man's land between the newly defined NATO and Russia; 
putting under more pressure than you have right now, countries 
like the Baltic and Ukraine; countries who don't get in, in the 
first tranche.

           arms control ratification by russians in the duma

    Lastly, I find it very difficult to believe that we are not 
going to have more difficulty getting the Russians to ratify in 
the Duma the Arms Control Treaties which are now before them or 
Arms Control Treaties that might be before them in the future.
    So, I guess I would simply ask, do you really have evidence 
that shows that the arms control ratification by the Duma will 
not be made more difficult? Can you really tell us that the 
intelligence agencies conclude that this would result in a 
stronger U.S.-Russian relationship? Are we really going to be 
committed to defend Central Europe either with conventional 
forces or with our nuclear weapons if Russia attacks Central 
Europe in the distant future? And if not, what does that do to 
the confidence that other parties have had in our commitment to 
NATO countries over the years that we will in fact do so.

                  dealing with demand problem of drugs

    Secretary Albright.  Mr. Obey, thank you very much for your 
kind words. Let me just say quickly on the Mexican issue, you 
have pointed to something that I said in my statement when I 
announced the decision. The demand problem is one of the major 
issues that we have to deal with.
    And when other countries are critical of us for certifying 
them or de-certifying them, they point to your demand problem. 
Who is certifying you on the demand issue? So, I think that, 
that is very important part of this. Obviously the President's 
drug strategy internally is a very important part of the whole 
process.

                           expansion of nato

    On the NATO question, and let me say I know that you 
havebeen looking at this subject for 30 years, I think we have been 
looking at it together when I testified before you as a professor at 
various stages on the subject. I know of your knowledge and interest. 
And I respect it very highly.
    Let me say that we're obviously going to have a lot more 
time to talk about this, but in a very quick way, let me go to 
some basic points. First of all, I do think that it is very 
important for all of us, Americans and Russians and Western 
Europeans and Central Europeans, to understand that we are 
dealing with an entirely new world situation.
    We have all grown up, all of us, with a Cold War prism on 
how we do foreign policy. We have divided the world between 
Communists and ourselves. We have established alliances and a 
foreign policy that responded to that, one of the great 
challenges that we all face.
    And I must say I am very pleased to be in this position to 
be able to face it with all of you, is to begin to think about 
an entirely new way of organizing ourselves and thinking about 
foreign policy. So, when I met with President Yeltsin he said 
to me, you have to think about a new Russia. And I said to him, 
you have to think about a new NATO. And I think we all need to 
think about that.
    The NATO that we are about to create through an internal 
adaptation within NATO itself and the enlargement is one that 
is not an alliance against anybody or a defensive alliance 
against a single threat. It is an alliance that is going to 
provide a security system against internal instability and 
create a web that will bring those countries in Central and 
Eastern Europe, that were artificially divided from Western 
Europe by the Cold War, back into the system, and do for them 
what was done by the Marshall Plan at the end of the Second 
World War.
    Now, the question is what do the Russians get out of this? 
And we understand what you were saying is that the Russians 
might in fact feel that no matter what we say, that they will 
feel unprotected. Therefore, we are working on a parallel 
document which would be a NATO Russia Charter that would enable 
them to have a sense of partnership with the new NATO.
    And what I found interesting in my discussions in Moscow 
was an understanding of the fact that they have been threatened 
by an unstable Central and Eastern Europe, even more than we 
have. They have been the victims of two World Wars and lost 
more people than anybody. That an attempt to create some kind 
of stability in Central and Eastern Europe is also important 
for them.
    I do think we have to talk about this with you and with 
them much more, and also with the American people. And we are 
beginning to have that discussion. I think we need a national 
discussion. The invitations to an enlarged NATO will be made 
this summer at the Madrid conference. And then a two-year 
process of ratification by all of you and by parliaments in the 
NATO countries will take place. And there will be a major 
discussion about it.
    On the issue of arms control, I think we have to understand 
that arms control agreements are good for us and for the 
Russians. And therefore as they proceed the ratification of 
START II and a desire to already move on to START II, where 
there would be lower numbers, I think that the Duma is being 
persuaded and will come to understand that this is good for the 
Russians.
    But I don't disagree with you, Congressman Obey. There is a 
lot of work to be done. But most of it has to start with all of 
us getting rid of our old thinking from the Cold War and begin 
to think more in entirely new terms about what a European 
continent, whole and free, would look like, and what a 
relationship of a democratic Russia with such a continent would 
also be. I'm sorry to take so long. But let us pursue this and 
we will.
    Mr. Obey.  Well, my time has expired. So, I won't ask you 
any other follow-up question. I would simply observe, I think 
that's an innovative response. I'm still concerned that the 
Administration's determination to move ahead is going to put 
the Congress in a position where we're going to be told as much 
as we were told by previous Presidents on other issues, gee, we 
can't turn back now. We've already made the decision. We're too 
far down the road. I don't think there will be any real 
opportunity for us to really consider it in a thoughtful way.
    Secretary Albright.  If I can get ``innovative'' out of 
you, that's not bad.
    Mr. Obey.  I would also just say that I really find it a 
strange use of language to suggest that NATO, in fact, have the 
expectation that NATO would not create a new division in 
Europe. It will. I mean it will simply move the line eastward. 
In my judgment we run the risk, and the West runs the risk of 
making an historically arrogant decision which we will come to 
regret.
    Mr. Rogers.  Mr. Latham.
    Mr. Latham.  Thank you, Mr. Chairman. It is indeed an honor 
and a pleasure to have you here as the newest Member of this 
Committee. I want to add that I personally prefer the baseball 
cap; but anyway.
    Mr. Rogers.  Would the gentleman suspend? We have a bit of 
Subcommittee business to address.
    Mr. Mollohan.  Mr. Chairman, pursuant to the provision of 
clause 2(g)2 of Rule XI of the Rules of the House, I move that 
those portions of the hearing on March 5th and March 12, 1997 
which involve classified material, or would compromise 
sensitive law enforcement information, be held in executive 
session.
    Mr. Rogers.  If the gentleman would yield.
    This deals with the FBI's appearance this afternoon and the 
FBI and Department of State's appearance on counter-terrorism 
issues on March 12th. This motion requires a vote of the 
Subcommittee by a roll call, a quorum being present.
    Mr. Obey.  Mr. Chairman, can I ask a question?
    Mr. Rogers.  Yes.
    Mr. Obey.  Will that just automatically close the entire 
hearing today?
    Mr. Rogers.  No.
    Mr. Obey.  Or would portions of that----
    Mr. Rogers.  We would remain open until we hit a sensitive 
subject in which case we would have the authority to go in to 
closed session. We may not ever, but we want to have the 
authority. It requires a roll call. The Clerk will call the 
roll.
    Mr. Kulikowski.  Mr. Kolbe.
    [No response.]
    Mr. Kulikowski. Mr. Taylor.
    [No response.]
    Mr. Kulikowski. Mr. Regula.
    [No response.]
    Mr. Kulikowski. Mr. Forbes.
    [No response.]
    Mr. Kulikowski. Mr. Latham.
    Mr. Latham.  Aye.
    Mr. Kulikowski.  Mr. Livingston.
    [No response.]
    Mr. Kulikowski.  Mr. Mollohan.
    Mr. Mollohan.  Aye.
    Mr. Kulikowski.  Mr. Skaggs.
    Mr. Skaggs.  Aye.
    Mr. Kulikowski.  Mr. Dixon.
    Mr. Dixon.  Aye.
    Mr. Kulikowski.  Mr. Obey.
    Mr. Obey.  Aye.
    Mr. Kulikowski.  Mr. Rogers.
    Mr. Rogers.  Aye.
    Six to zero, and the motion is carried. I thank the 
Gentleman and the Secretary for yielding.

                       arrearage payments to u.n.

    Mr. Latham.  Thank you, Mr. Chairman. Something probably a 
little closer to home in your past experience, but obviously we 
have a real concern with the U.N. as far as our dues are 
concerned. Apparently they're estimating about a billion 
dollars that we owe as far as our share. That number is not 
exactly agreed to.
    You're asking, I believe, in your request for $100 million 
in the 1998 budget. And then in 1999, $921 million to pay the 
arrears. My understanding is that the United Nations contends 
that the United States owes more for dues than the Committee. 
If a payment is made by the Congress to the U.N., are we going 
to be assured that the United Nations agrees that the United 
States is paid up?
    Secretary Albright.  Congressman Latham, let me just say 
first of all, I like the cap too. And it was given to me by the 
armed forces on the DMZ. So, I feel particularly strongly about 
it.
    Let me say that the issue is one where we are assessed at a 
particular rate which was determined by the United Nations. 
That is the American obligation by treaty there. At the same 
time, there was legislation passed here that required us to 
spend on peacekeeping at 25 percent rather than the 30.1 
percent which we are assessed. That is the reason for the 
discrepancy. The Administration is obeying American law. And we 
are paying out at 25 percent.
    Another part of the problem is the question as to whether 
your legislation was retroactive or not. That is another 
portion of the discrepancy. My own sense here is that if in 
fact there is the appropriation which we have asked for to fund 
arrears, that will be a step forward as far as the U.S. and our 
reform agenda and the U.N. is concerned.
    While I cannot guarantee that they would accept that as a 
final payment, it certainly would make an entire difference. It 
would make it much easier for us to argue that that is 
sufficient to fulfill our legal obligations.
    Mr. Latham.  Do you think that maybe having the difference 
gives us additional leverage as far as the reforms that I think 
everyone agrees are necessary?
    Secretary Albright.  I think that the leverage comes 
basically from our working out a plan whereby it is evident 
that this money is there in order to pay back what we owe, and 
at the same time move to try to get reforms from them.
    I have to tell you, from my previous experience, that it 
was very hard to get reforms when every time I walked into a 
room, whatever the room was, somebody would say where is your 
money; including our best friends the British who finally got 
off a sound byte they'd waited 200 years to say, which was 
``representation without taxation.'' So, I do think that 
knowing that that money is in, so to speak, the back pocket of 
now Ambassador Richardson.
    It will provide the leverage to get the individual reforms 
that we agree on, I think, which is streamlining the 
Secretariat and avoiding eliminating duplication. And frankly, 
Congressman Latham, also trying to get down the assessment rate 
which is one reason that we're asking for this money up-front 
so that we have real leverage in the negotiation to bring the 
assessment rate down and thereby eliminate new problems in 
terms of what we might owe.

      international cooperative administrative support     services--
                                 icass

    Mr. Latham.  I guess I just have one other question right 
now. The ICASS system that I guess in 1996 was a pilot project. 
Could you give us any kind of an update? Is it working and will 
it be fully operational in 1998?
    Secretary Albright.  First of all, let me say that I think 
it is a tremendously important innovation. And it is thanks to 
the Chairman that we're really moving forward on that. I think 
that it is something that has made a big difference in terms of 
the possibilities of our being able to act appropriately 
overseas and trying to make sure that the embassies themselves 
provide a platform for other agencies to work with us.
    We now have a pilot and it's working well. It will be fully 
operational in 1998. We see it as a big step forward and as a 
way for the State Department to recoup some of the expenses 
that are created by other agencies. And we are very grateful 
for the help of this Subcommittee on that.
    Mr. Latham.  Some of the other agencies probably wouldn't 
agree with the success.
    Secretary Albright.  Well; they should also not either see 
it as a zero sum issue.
    Mr. Latham.  Right.
    Secretary Albright.  I think that it is basically a 
cooperative effort as it is stated. And I think it is correct 
in a way of assessing costs.
    Mr. Latham.  I just want to tell you that I look forward to 
working with you and helping in any way possible.
    Secretary Albright.  And with you, sir. Thank you.
    Mr. Rogers.  Mr. Mollohan.
    Mr. Mollohan.  Thank you, Mr. Chairman. Madam Secretary, 
I'd like to welcome you to the Subcommittee in your new 
capacity as we review the whole State Department's request for 
1998. You're no stranger to the Committee. I'd like to share 
the sentiments of the Chairman; that we certainly appreciate 
your dedicated efforts in the United Nations and look forward 
to your service in this new capacity.
    You've pushed reforms in the United Nations at the same 
time you had to fight the battle of being a debtor. That's 
pretty impressive, your successes in that regard.
    Secretary Albright.  Thank you.

       fy 98 omb budget request vs. congressional budget request

    Mr. Mollohan.  Your budget for 1998 in the aggregate I note 
is 4 percent more than your budget for 1997. And that's to 
cover inflation. You also note in your testimony that the 
increase is to address some restoration and facilities 
challenges that the State Department has.
    That really sounds like a bare bones budget request to me. 
And I'd like you to, if you would, speak to needs that maybe 
are not reflected in your request. First, I'd like to start by 
asking you how does the request that we have beforeus differ 
from your request to OMB?
    Secretary Albright.  Well, first of all, again, thank you 
very much for your kind words. And let me give you a little bit 
of context as to why we have come up with this kind of a 
budget. First of all, I think that the real problem that we 
have had is that for the last five years, there's been a flat 
budget for the State Department.
    And with the changes in inflation rates and other problems 
that basically has had us lose 17 percent of our purchasing 
power. And so having an increase of 4 percent makes a big 
difference to the reversal of this which I think is very, very 
important to us. And we have been very careful in the way that 
we have presented this.
    We also do believe fully with the President and with all of 
you in terms of the importance of a balanced budget. And 
clearly there does have to be some trade-offs and one can't 
have everything that one wants. But one of the reasons really 
why, even though this is not a large increase, we consider that 
it will be a big step forward for the State Department is that 
we have managed a number of improvements.
    One improvement is the overseas staffing model which, again 
with your help, we have been able to be much more rational in 
the way we send people overseas and decide what missions need 
what. The ICASS system as I've just been talking to Congressman 
Latham about has also I think been a great step forward and 
will in fact allow us to save about $100 million. And that will 
help us.
    Mr. Mollohan.  Well, that won't help you for awhile.
    Secretary Albright.  Well; but the process I think is 
beginning to work. We also have been able to work some in our 
technology upgrades. We also have finally been working on a way 
of managing our assets better. And that is being able to sell 
properties to buy other properties.
    So, I think in that way we have improved ourselves. We are 
going to also be trying to get some money additionally through 
fees. I think that will help us in resources. Let me just say 
that is the reason we have not requested money for new 
facilities, and we will have to rely on these assets to finance 
the purchase of the facilities that we want to improve.
    I think that I will have to get others to give you more 
details on what it is we asked for from OMB because I was not 
in this job.
    Mr. Mollohan.  Would you submit that for the record?
    Secretary Albright.  Yes. We can.
    Mr. Mollohan.  Submit your OMB request to us individually.
    Secretary Albright.  I will have to check on that, sir.
    Mr. Mollohan.  You mean you will have to check on what? 
What are you going to check on?
    Secretary Albright.  I don't know frankly whether it's 
appropriate to submit what our request was.
    [The information follows:]

      FY 98 OMB Budget Request Versus Congressional Budget Request

    The Department's operating appropriations have been flat 
for the past five years. As a result, we have had to cut 
staffing, close embassies and consulates, and defer essential 
modernization of infrastructure and communications. Our FY 1998 
budget request reverses these recent funding trends as well as 
introduces a number of management reforms. The budget includes 
about a 4 percent increase for worldwide State operations, 
enough to cover inflation and help upgrade our obsolete 
information technology.
    The Department's request to the Office of Management and 
Budget was reduced by approximately $170 million or roughly 7 
percent in our State Programs appropriations (see attachment). 
However, it is important to note that the 1998 Executive Branch 
budget process was a dialogue between the Agencies and OMB. The 
process served to set the President's budget priorities among 
many competing requests within the context of the President's 
plan to balance the budget by 2002. Accordingly, in this 
funding climate, not all high priority programs could be 
funded.
    It is equally important to note that the Administration's 
user fee proposal was developed as a means to ensure continued 
funding for the Department's operations. The proposal to allow 
the Department to retain, subject to annual appropriation, the 
fees generated by Department activities is an essential 
component of the FY 1998 request. As requested, the fee 
retention proposal would provide a mechanism to meet increasing 
workload demands.
    The Department's request to OMB highlighted the areas the 
Department could apply additional resources to provide adequate 
training, facilities, information technology, and logistical 
support to effectively carry out the Department's important 
national security functions. The Department would apply any 
additional funds appropriated above the President's request to 
further advance the initiatives contained in the President's 
budget including accelerating investment in information 
technology modernization, replacing obsolete and deteriorating 
overseas equipment and motor vehicles, ensuring the 
Department's staffing meets mission requirements, fully funding 
overseas rates of inflation, funding the implementation of the 
Department's reengineered logistics organization, and funding 
other infrastructure needs including the cost of relocating the 
American Embassy from Bonn to Berlin.

  DEPARTMENT OF STATE FY 1998 REQUEST TO OMB VERSUS FY 1998 PRESIDENT'S 
                             BUDGET REQUEST                             
                        [In thousands of dollars]                       
------------------------------------------------------------------------
                                       Fiscal year 1998                 
                                  --------------------------            
                                    Request to  President's   Difference
                                       OMB         budget               
------------------------------------------------------------------------
Diplomatic and consular..........    1,861,059  ...........          N/A
Programs:                                                               
    Appropriation--definite......  ...........    1,291,977          N/A
    Appropriation--indefinite....  ...........      455,000          N/A
Total, D&CP......................    1,861,059    1,746,977     -114,082
Salaries and expenses............      379,742      363,513      -16,229
Capital investment fund..........      105,135       64,600      -40,535
                                  --------------------------------------
      Total appropriations.......    2,345,936    2,175,090     -170,846
------------------------------------------------------------------------

                   total resources needed for fy 1998

    Secretary Albright. Let me just say that obviously we would 
like more. But I think that we understand the fact that we are 
operating within the need to have a balanced budget. We are 
learning to manage our funds in a better way. We are going to 
work very hard to make sure that we can have the best 
diplomatic service with the money that we have.
    Mr. Mollohan. Right. In your prepared statement, you talk 
about a small increase requested by the President this year 
which will help us keep pace with inflation, modernization, 
information technology, and integration of environmental 
concerns. Then you go on and make a small down payment on 
repairs to diplomatic facilities in China. Even so the 
Department will not have the resources needed to improve sub-
standard facilities.
    That's the issue I want to get at. What additional 
resources would you need in order to do the job in fiscal year 
1998 that you would like to do?
    Secretary Albright. Well, I'll have to get the dollar 
number for you.
    [The information follows:]

    The imperative of balancing the federal budget is a top 
priority for the State Department as it is for all other 
agencies of the United States Government. Were it not for this 
national priority, there would be a number of international 
activities and areas where the State Department believes 
additional funding in FY 1998 would be in the national 
interest. Some of these areas fall within the jurisdiction of 
your subcommittee and others would be funded by the Foreign 
Operations Subcommittee.
    Specific to the accounts covered by your subcommittee, I 
appreciate your continued support of sufficient funding for 
State Department operations. Maintaining America's strength 
requires world-class diplomacy. Given broad, bipartisan support 
for reducing the Federal deficit, this request increases 
funding for Department of State operations by a modest four 
percent. This increase would cover inflation and provide the 
funding the Department must make to modernize information 
technology and reverse the deterioration of infrastructure 
overseas.
    The Department's operating appropriations have been flat 
for the past five years. As a result, we have had to cut 
staffing, close embassies and consulates, and defer essential 
modernization of infrastructure and communications. The 
Department's request to OMB (see enclosure) highlights the 
areas where we could apply additional operating resources to 
provide adequate training, facilities, information technology, 
and logistical support to effectively carry out the 
Department's important national security functions. Any cuts 
from the President's request will make it even harder to meet 
these needs. We especially need your help so that we can 
continue to invest in information technology modernization, 
replace obsolete and deteriorating overseas equipment and motor 
vehicles, ensure the Department's staffing meets mission 
requirements, cope with overseas rates of inflations, fund the 
implementation of the Department's reengineered logistics 
organizations, and meet other infrastructure needs including 
the costs of moving our people from the American Embassy in 
Bonn to Berlin and sustaining adequate operations in China.
    To help us meet these needs, it is equally important to 
note that the Administration's user fee proposal was developed 
as a means to ensure continued funding for the Department's 
operations. The proposal to allow the Department to retain, 
subject to annual appropriation, the fees generated by 
Department activities is an essential component of the FY 1998 
request. As requested, the fee retention proposal would provide 
a mechanism to meet increasing workload demands.
    I appreciate your concern about State Department resources 
and want to continue to work with you to ensure that Department 
of State operations are adequately funded.

    Secretary Albright.  But I think the issue here is it would 
be good if we had it. There is no question. But I do think that 
it's nice to be asked a question like this. But let me say that 
I think we understand that it's important to live under certain 
constraints. The facilities that we are going to be working on 
are the ones that are really in terrible shape. And the Chinese 
facility is one that I saw myself----
    Mr. Mollohan.  I'm a little surprised at the 4 percent 
increase because we've been hearing in different ways and 
different directions that the State Department is under-funded. 
It's in competition with a lot of accounts that seem to be 
treated more favorably right at this particular point in time 
in our history.
    So, I was surprised that we only got a request for a 4 
percent increase. I am interested in knowing to what extent 
that did not really truly reflect the desires of the State 
Department? That's why I'd like to get to the OMB numbers.
    Mr. Chairman, do I have any more time in this round?
    Mr. Rogers.  You have a few more minutes.
    Mr. Mollohan.  A few more minutes, okay.

               request for arrears payments--u.n. reform

    I think the OMB numbers will probably get at some of that. 
I'd like for you to talk about U.N. arrears just a little bit. 
I know the Chairman will follow-up in greater detail on that. 
If you would detail the arrears and then speak a little bit to 
the proposal that we advance appropriate money for that 
purpose. And just indicate if you have a fall-back strategy if 
you don't get an advanced appropriation from this Committee.
    Secretary Albright.  In terms of the arrears, they are 
primarily in the peacekeeping area. And came out of period of 
time when it was deemed by the previous Administration as well 
as ours that peacekeeping was actually a very good way for the 
United States to share the burden and do business.
    Mr. Mollohan.  Right. What's the peacekeeping total number 
for doing that?
    Secretary Albright.  The arrears--on the----
    Mr. Mollohan.  By the way, I note that in the chart I have 
here that while we owe, according to this chart, $1.596 
billion, the British owe $56 million. So, I don't know that 
they have any right to ask you questions since they have 
arrears. It indicates here that they have arrears also.
    Secretary Albright.  Well, they do have arrears. You know, 
we are in a very strange position in that we are one at the 
same time the largest contributor and the largest debtor. I 
think it makes it very hard for us. But there is no question 
that others also have arrears. Believe me, I pointed that out 
whenever I could.
    Mr. Mollohan.  Well, rather than go through the numbers, 
which we have, let me ask you this. I know you and the Chairman 
have been working together for some time and also with others 
in the Congress on this formula payment plan, that we would 
make a payment based upon some progress in the reforms. That 
was discussed in the last meeting we had with Leader Lott on 
the Senate side.
    How is that process working and do you think that we can 
get to the point where we can structure an arrangement around 
that concept?
    Secretary Albright.  The concept is the following. It is 
that basically we do owe a very large portion of money which 
comprises a lot of the whole debt of the U.N. and is creating, 
to a great extent, an artificial financial crisis there. On the 
other hand, we are also asking them to undertake a series of 
reforms which are regarded as important by some and unpopular 
with others because in many ways the U.N. is a political 
operation and people have constituencies.
    But what we are trying to do is to figure out a way that 
our bona fides on this would be evident because there would be 
a forward appropriation. And it would be evident that the U.S. 
would pay after a series of reforms were in fact undertaken. 
The group that we are talking about that you mentioned that the 
Majority Leader set-up is a way for us to begin to work on what 
the list of reforms would be.
    I think that, that is where we as a government, that is the 
Executive and Legislative Branches, need to come together to 
decide what doable reforms would be, and set those out in some 
kind of a plan, and then work them in New York to get them to 
also accept them. That is where we are at the moment. For the 
Administration last year, I proposed in New York, a whole set 
of reforms which included things not only within the 
Secretariat, but a way to rationalize the economic and social 
side of the United Nations; eliminate duplication; try to get 
the budgets of the affiliated and specialized agencies down; a 
whole series of things.
    And I think that what is going to be happening is that the 
group in which we will take part along with you will begin to 
look at that paper and pick out a set of reforms that can be 
done. The question then will be is how long they have to carry 
out the forms? But having the money, I think, forward 
appropriated will give Ambassador Richardson frankly the 
leverage up there to negotiate these reforms.
    I think it's a good way to go about it. It shows our bona 
fides. And it really puts our money where out mouth is on this 
and then gives the strength in order to negotiate the reforms 
we need.
    Mr. Mollohan.  Okay. Thank you, Madam Secretary.

                 easing travel restrictions with russia

    Mr. Rogers.  Mr. Taylor.
    Mr. Taylor.  Madam Secretary, I'm also delighted to have 
you here with us today. At a time when some think we should be 
downsizing State, I would like to express my support as I have 
in the past for the State Department, I think it's a time when 
there is great change in the world. There is great risk in the 
world. But there is also great opportunity in the world. It's 
not a time that we should be drawing back in any manner with 
the resources of State and the related resources that would 
help us both understand what may be happening as well as 
project America's image, how we understand and how we can work 
with peoples around the world, especially in Russia.
    I worked with Ambassador Pickering in the last Congress to 
put in a request for increasing State's access in Russia, a 
country with 11 time zones. There is a need to increase travel, 
both business and educational, as well as tourism for those 
people that might like to visit the United States.
    I would ask, is there an effort to negotiate with the 
Russians to keep some pressure on lowering visa fees, and other 
activities, that are necessary for a visa? We are led a lot by 
their actions, and of course, we respond.
    So, many times the burden is on them to come down before we 
do, but is there some effort for us to make that visitation for 
both countries easier and also open offices of State across the 
country in ways that will facilitate both economic and social 
travel from thiscountry to Russia as well as vice versa.
    Secretary Albright.  Mr. Taylor, I know very much of your 
interest in this subject and I very much appreciate it. I think 
that the kinds of issues that you are raising are exactly the 
important ones I mentioned responding to Congressman Obey about 
the importance of thinking about a new Russia, and a new NATO. 
And a new Russia is a part of what we are having to deal with 
and we need to do everything we can to support it.
    As a part of another request, the Administration is trying 
to get additional assistance for the NIS and Russia in terms of 
trying to get into the next steps where we are working to have 
much more economy trying to get them to have a rational 
investment and tax code; creating a climate in Russia that 
makes it better for Americans to travel and invest.
    On the subject of the visa fees, I will have to check on 
that. I think that they are probably set in another way. But 
let me check on that issue because I think it's an interesting 
point.
    I think we should do everything we can to encourage travel 
back and forth; and visitors programs and seminars and 
everything that can be done. I think we ought to do more with 
college kids and high schools and exchanges in both countries 
frankly so that young people know more about what's going on 
there because that is the wave of the future.
    I'll look into the visa question.
    [The information follows:]

                          Russia--Visa Issues

    Question. Has the State Department explored the possibility 
of visa reform with Russia with regard to lowering costs and 
simplifying the process by which Russian and American citizens 
can travel between the two countries?
    Answer. Whenever practical, the Department attempts to put 
into place the most liberal visa reciprocity schedule possible 
with up to ten years, multiple entry, no fees visas. In 
addition to our regular contacts with the Russian Ministry of 
Foreign Affairs, the Department has a formal channel to discuss 
these issues periodically with Russia and we continue to 
negotiate for a more liberalized visa reciprocity schedule and 
simplified application procedures. We have proposed repeatedly 
to drop all visa fees on a reciprocal basis, with the exception 
of the MRV fee, but have had only limited success. While we 
have been able to keep some fees low (especially single entry 
visa to facilitate family and student travel) and eliminate 
others, overall, they remain high because Russia prefers to 
maintain high fees.

                           expansion of nato

    Mr. Taylor.  The country is, at the moment, in the 
financial situation which means that the incomes of the 
individuals are relatively small. And $120 which can be the 
cost of the visa going in and I assume reciprocated across, can 
be a real burden if you have three or four members of a family 
trying to travel. That can add a great deal.
    So, in many cases I see, we have to negotiate with them so 
that we can reciprocate in long lines. I don't want to get into 
the question of NATO deeply because that's an initiative. But 
as you know Representative Curt Weldon and I were in Russia 
just before your visit. And we were there a little bit while 
you were in Russia.
    We met with the Defense Chairman and the Duma. They, of 
course, are greatly concerned about NATO. Their expression is 
they feel they have opened themselves toward friendly steps. 
They have a history that makes them very nervous about what's 
happening on their borders.
    They feel the NATO movement leaves the moderates, so to 
speak, out on a limb and gives their opposition a lot of strong 
arguing points, especially if there were another election to 
occur in the near future for whatever reason. So, they are 
somewhat questioning our attitude.
    Of course, it gives me some pause because I see no waythat 
we will step in and fund the Republics and bring the armies up to any 
level. We will be placing American troops in the Ukraine. Are we making 
headway for a better understanding with the Russians on this subject? 
Is it something that perhaps we can continue a dialogue sometime before 
we take a lot of action?
    Secretary Albright.  Congressman Taylor, you've raised a 
number of issues. But let me just make the following points. 
First of all there are clearly those within Russia opposed to 
NATO enlargement. We also know that the vast number of people 
in Russia are not opposed, I think, in terms of opinion polls 
that have been taken.
    And there is a sense that the average Russian has no clue 
into this negative approach towards it. On the issue of 
dialogue, we are working very hard on having the best of all 
possible relations with Russia. What I found in my discussions 
whether it was with President Yeltsin or with Foreign Minister 
Primakov, was that having a good U.S.-Russian relationship was 
very important to them.
    They saw that as key to ask how are we going to move 
forward into the 21st Century? That is why we are working so 
hard now on making sure that this NATO Russian Charter is one 
that deals with how they can be a part of consultative 
mechanisms on decisions, on discussions on things that we do in 
Europe, and generally develop a partnership approach with them.
    And obviously that is the major point of all U.S.-Russian 
relations at the moment. What I find interesting is that, for 
instance, former Foreign Minister Kozerew wrote a very 
interesting article about why he thinks NATO's enlargement is 
fine. And that a lot of these arguments are ones that are being 
raised by some people and they're basically red herrings.
    So, I think we clearly all have a lot of work to do. There 
is no question about that. And that is what the Administration 
is going to be doing for the next months and years because the 
U.S.-Russian relationship is key. And so we will do what you're 
talking about.
    Mr. Taylor.  I think--and it's a treacherous sort of thing. 
Of course, I know you will approach it; but I wanted to give 
you just from my own personal perspective. I think responsible 
people in the Russian leadership are not concerned about it 
because they don't understand what is happening. I don't know 
that the public is tuned in at all.
    You had mentioned they're not against it. I don't think 
they are tuned in to what is happening. I think it is a 
potential demagogic issue. In a future election, that could be 
a powerful tool to bring a less than friendly force into office 
there. If I were politically involved in your country, that's 
when the delicacy of moving ahead with it and trying to include 
them as much as possible and to educate along the way as much 
as possible is in our interest.

                   duplication of activities in u.n.

    May I ask one other question about the United Nations? I 
know it started in the '40s. I think it was sort of politically 
put to jaw-jaw rather than to war-war. And that's the assembled 
portion of it. And I think that's been very much a success.
    As it has moved into many other areas and the bureaucracy 
has grown, we've gotten into areas where there have been 
accusations of inefficiency and perhaps even fraud. Is there 
any effort on the part of the U.S. to go back and review and 
say, let's see if we can keep the basic framework of the United 
Nations and more greatly scrutinize the rest?
    Let's take a look at the various branches of the United 
Nations and see can this be done better perhaps working through 
non-United Nations organizations and their plethora of 
organizations that cross-tie with what the U.N. does; some of 
them in modest ways and some are more the Samaritan's Purse, 
the Red Cross.
    All of these things to some extent overlap and privatize, I 
suppose, with the United Nations' support but a reduction in 
bureaucracy and costs perhaps in the delivery. Have we thought 
about pushing that in some small way?
    Secretary Albright.  Congressman, that is kind of what 
we're trying to do; is basically look at what the core goals of 
the U.N. are. And they are not just in security and 
peacekeeping, but the charter of the U.N. does talk about the 
importance of economic and social development, looking at 
diseases and various parts that are necessary to keep a healthy 
international system functioning. What we are looking at is 
exactly though what you have talked about, which is that over 
the years, whenever there was a problem, there was a creation 
of some new organization with its own stationery and 
bureaucrats.
    And basically what happened was that this bureaucracy grew 
to elephant size proportions and now we're asking it to do 
gymnastics. So, what we have been trying to do is to get them 
to focus on overlapping agencies; and to get them to coordinate 
with a lot of the non-governmental organization that you've 
described.
    But the pressure is that there is always somebody, some 
other country, that does in fact believe that x-agency 
represents them better than y-agency. And then they always say 
well, why are you telling us what to do or anything if you 
haven't paid your dues.
    This is why the whole package goes together. We need to 
have the clout of knowing that we will pay--they think that 
we're doing what we're doing in order to get out of paying 
more. And we are telling them they need to look at this 
proliferation of agencies. So, we are in fact telling them to 
stop duplicating which is what you're talking about.
    Mr. Taylor.  We appreciate your attendance here today. 
Thank you, Mr. Chairman.
    Mr. Rogers.  Mr. Skaggs.
    Mr. Skaggs.  Thank you, Mr. Chairman. Let me add welcome 
and congratulations. I note for the Committee that the 
Secretary is a daughter of Colorado, a fact in which we take 
great pride.
    Secretary Albright.  Which is why I wear a Stetson.
    Mr. Skaggs.  I might offer some gratuitous counsel which is 
the use of elephantine metaphors given the control of the 
Congress is dicey. I want to make a couple of comments and then 
ask a couple of questions. We've had several observations made 
about the NATO situation.
    I expect I'm likely to come down on the merits differently 
than Mr. Obey, but on the process, I think he makes a very 
compelling point about the need for greater Congressional 
involvement and education of the American public about this.
    Several of us had the opportunity to visit with our 
counterparts in Europe at a conference over our most recent 
break. It is enormously compelling to hear Eastern Europeans 
talk about what this means to them. And we are way behind the 
curve in bringing the American public along to appreciatethe 
practical, emotional, political, economic, and human rights dimensions 
of all of this.
    In that regard, I would urge that you consider some way of 
bringing some of the elected officials of Hungary, Poland, or 
Czechoslovakia to this country or facilitate their coming to 
this country because of the way that they make their case for 
this. I think there is also a lot of misinformation about the 
likely cost still floating around that we need to shed some 
light on. Another brief comment and then a question. I hope you 
will also find a creative way to avoid the necessity of 
asserting a national security exemption concerning Helms-Burton 
before the World Trade Organization.
    I think, as you know, the underlying premises of our Cuba 
policy are highly irrational. This would only be a further 
demonstration to the world that we've put ourselves into a box 
on this. That it's not in our long-term national interest.
    On your budget, while I hope we will succeed in 
accommodating the request for additional monies for fiscal year 
1998, as I see the out-year projections, they're going to go 
south again. Obviously, if we're going to attempt, as I agree 
with you that we should, to have a more robust presence abroad, 
I would assume we need to have some kind of budget track that 
will permit you to plan ahead and sustain that kind of 
presence.

                       retention of fees proposal

    Secretary Albright.  Well, I think we clearly are concerned 
about keeping a functional State Department with its 
appropriate people working in the right places. And we 
obviously are looking at the out years. We hope in many ways 
that the fee proposal that we have raised will help in the out 
years.
    That is one of the reasons why we think that, that is a 
good way of evening out what our needs are. We see that 
Americans are going to be traveling more and being abroad more 
generally. And that will increase the amount of the fees 
collected and I think that will help us meet the work load if 
we can keep them at that. But obviously we are concerned about 
making sure that the State Department is properly funded. If I 
might go back on your point about NATO.

                central and eastern europe joining nato

    Congressman Taylor was talking about demagoguery potential 
in Russia. The same is true in Central and Eastern Europe in 
these very fragile democracies that are working on dealing with 
their border issues and their ethnic problems. We think that by 
bringing those countries into NATO, what it will do is provide 
a web of stability.
    Frankly, if we don't take them in we're punishing those 
countries twice. They wanted to be a part of the West at the 
end of the Second World War. And they were artificially 
divided. And by not letting them in now, we are in effect 
saying again you can't get in.
    And we are working with Russia to have a relationship that 
will make them comfortable. We're working with Ukraine to have 
an enhanced relationship. We are working on getting the Baltic 
as part of the EU. So, we know there is no complete and easy 
answer. But I do think we need to assess, as you have pointed 
out, what the difficulties would be for Central and Eastern 
Europe if they remain in kind of a gray zone.

      value of an agency's presence overseas in relation to icass

    Mr. Skaggs.  Let me give you some support further than you 
may be ready to go on the ICASS set of issues. It seems to me 
that some of your sister agencies would attach a greater value 
than merely their fair share of the cost of maintaining a 
particular outpost abroad in having it continue in good 
functioning condition.
    I think whether it's Commerce or perhaps some of the 
National Security agencies, there is room to get a premium 
above rent, if you will, because of the greater importance and 
value to some of your tenants than perhaps just to some of your 
traditional State Department mission. We need to push that 
envelope further and not just be satisfied with the ICASS 
formulation, as much progress as that itself represents.

              consolidation of acda with state department

    Finally, we had the IG testify before the Subcommittee a 
couple of days ago. She expressed a view that, upon review, 
there may be some merit in consolidation of some support 
functions, but that the importance of maintaining an 
independent voice on arms control and disarmament matters; that 
is, not fully consolidating ACDA into the State Department, 
should that be proposed, is an arrangement that she still 
supports on the merits.
    I wonder whether you would express your view about whether 
ACDA should remain independent?
    Secretary Albright.  Well, let me say that on the whole 
issue as it has come to be known on consolidation, I have 
stated that I have an open mind on that. We are looking at 
various options. I think that there is no question that the 
State Department itself with some of these agencies, there is 
some duplication involved there.
    I think that what we need to think about is to what extent 
arms control is now basically a central part of some of the 
work that is being done within the State Department itself. So, 
I reserve on this issue. It is very much on my mind.
    We are in fact looking at a variety of ways that would make 
the State Department and the affiliated agencies more efficient 
in carrying out the foreign policy of the United States. I 
would prefer not yet to have an opinion because I am gathering 
information on it.
    Mr. Skaggs.  Thank you.
    Mr. Rogers.  Mr. Regula.

                           expansion of nato

    Mr. Regula.  Thank you, Mr. Chairman. I would like to 
address the expansion of NATO. What is the rationale for 
pursuing this expansion now?
    Secretary Albright.  Well, the objective of it is basically 
in order to include these new democracies as part of a security 
system. What we have said is that we would not have nuclear 
weapons there. The NATO Alliance itself had spoken about the 
fact that we saw no reason, there was no plan, no intention at 
this time to have nuclear weapons there.
    We have gone through a way of rethinking the CFE Treaty, 
the one on Conventional Forces, and are working on equipment 
entitlement there, changing what were block limits to 
territorial and national limits. And that is a long discussion 
we can have. But the reason for bringing them in is, one, they 
will in fact militarily provide their own components to NATO.
    One of the tests really as to whether a country can be a 
part of enlarged NATO is built on the Partnership for Peace 
which is getting the new Central and Eastern European 
democracies kind of up to speed in terms of their military 
modernization and readiness and ability to train and exercise 
with NATO countries.
    So, the reason for bringing them all in is to provide a net 
of security and stability to a region which in fact has created 
two world wars. And already it has had a salutary effect in 
that Romania and Hungary have made a borderagreement. The 
Czechs and Germans have come to an agreement. It is basically in order 
to give them a sense of security and not being in a gray area.
    Mr. Regula. Will the new efforts into NATO have the Article 
Five protections now afforded existing NATO members?
    Secretary Albright. Well, we have said that they would be 
protected, but they would themselves not, according to our 
unilateral declaration by NATO themselves, need to have nuclear 
weapons on their territory.
    Mr. Regula. But Article Five, I believe requires that the 
U.S. and other NATO members take on security responsibility for 
these new members.
    Secretary Albright. We would, yes.

                    expansion of the european union

    Mr. Regula. It seems to me that the first step ought to be 
the expansion of the European Union, to ensure economic 
development in these nations first?
    Secretary Albright. Frankly, we're doing both. I mean they 
are trying also to get them into the EU. And we believe that 
both are important. Both institutions are really needed in 
order to deal with what are these new countries that as I said 
earlier, basically were excluded from the West as a result of 
the Second World War and now wish to be a part of it.
    And we think that by providing the NATO umbrella that it 
helps create a sense of stability and security for Western 
Europe, for ourselves, as well as frankly for Russia that had 
been invaded from that part of the world.
    Mr. Regula. It seems to me that ensuring economic stability 
first, is key before those nations enter a military alliance. 
Can you comment?
    Secretary Albright. Well, I think that obviously we are a 
part of NATO. We are not a part of the EU. We believe as a 
result of our own policy determinations that it is good for 
U.S. interest, because ultimately we have been drawn into 
problems in Central and Eastern Europe twice in this century. 
That it is on its own hook important for NATO enlargement to 
take place on schedule while at the same time urging that the 
EU does in fact look positively on requests by those countries 
to become members of it.
    Mr. Regula. I think EU membership could be made a 
precondition for NATO membership. If trouble developed in this 
region, these nations would be better able to take 
responsibility, better able to meet their NATO obligations, if 
their economics are fully developed.
    Secretary Albright. I personally would not make it a 
precondition because I think that the decision to expand NATO 
was made by the United States and the others for its own sake 
in terms of creating a sense of political and military 
security. That does not mean that we don't think it's a good 
idea for EU expansion also.
    But I think we have to remember why we're doing this. And 
we're doing it because we think that there has been a gray zone 
created in Central and Eastern Europe and this is a good way to 
proceed. I think that it's important to move forward with both, 
but not make one a precondition to the other.
    Mr. Regula. I believe that if the issues of economic 
stability are addressed first, then we can address security 
issues at a later time. I don't know if you want to comment 
further.
    Secretary Albright. Well, I don't see it as one excluding 
the other. I mean I think that what happened was that NATO in 
effect created a framework in Western Europe that allowed 
Western Europe to thrive economically. I think the two go 
together. And I'm hopeful--and that is we need to have both 
move forward.
    I agree with you that the Western Europeans do in fact need 
to open themselves up to these new democracies. I have watched 
enough how the Central and Eastern European economies are 
evolving. And it's very important for the markets of Western 
Europe to be opened up to Eastern Europe, Central and Eastern 
European products. And they need to be more open about that. No 
question about it. The only point that I would make to you, 
sir, is that I would not make it a precondition.
    Mr. Regula. I understand that. But I think making it a 
precondition in all likelihood would greatly accelerate the 
process of the EU accepting new members.

                         cost of nato expansion

    One last question. Do you have any idea what the cost would 
be to us in terms of satisfying Russia's concerns about NATO 
expansion? They're going to make demands. Do you have any idea 
what these demands will be and who pays for them? What will be 
the cost to the United States?
    Secretary Albright. Well, in the initial discussions that 
we have been having this is not an issue of dollars and cost, 
but more a matter of their desire to be treated with respect, 
to be a part of a consulted mechanism in Europe, not to feel 
excluded, and basically to have support for what is going on.
    But outside of that, we still do believe that it is 
important for us to try to support democracy and the market 
system in Russia and the New Independent States. So, whether we 
are involved with expanding NATO or not we, on our own, do 
believe in support of Russia. And we do support it in a variety 
of ways as you know.
    But that has not been a--the way that you've framed the 
question is not the way that it has come up. The way it comes 
up is as a desire of theirs which I frankly think is legitimate 
to be treated with respect and to be a part of institutions in 
which they can have a voice.
    Mr. Regula. I understand the Administration is preparing a 
report regarding the costs of NATO expansion.
    Secretary Albright. That is correct. Yes.
    Mr. Rogers. Mr. Dixon.

                    transition of hong kong to china

    Mr. Dixon. Thank you very much, Mr. Chairman. Madam 
Secretary, I too would like to welcome you before the 
Subcommittee. Madam Secretary, you said in your opening 
statement that you made it clear that we expect China to ensure 
a smooth transition and I'm wondering what that really means 
and what their response was to it. And I would point out that I 
believe Hong Kong is a member of the World TradeOrganization 
and China is not. So, what was their response to your saying that you 
looked forward to this transition and the high degree of autonomy?
    Secretary Albright.  Well, they know that we and the 
British and the other members of the international community 
are watching very carefully the way that the transition takes 
place. And I spoke about the importance of preserving the way 
of life of Hong Kong and political and human rights.
    I have to tell you frankly they use exactly the same 
vocabulary, but the question is whether they mean the same 
thing. They do know that the world is watching. And that their 
own economy to a great extent can benefit from a Hong Kong that 
preserves its capitalist market system.
    We spoke about the necessity of keeping it open and having 
the possibility of our ships visiting and various relationships 
continuing. I think they got the message. But I am not saying 
that the issue is over. I mean we have to watch this very 
carefully, make very clear along with our friends and allies 
that we expect the way of life of Hong Kong, our definition of 
it, to be preserved.
    Mr. Dixon.  So, in essence, you received no assurances?
    Secretary Albright.  Their assurances were that life would 
go on there. The question is whether their definition of it is 
exactly the same as ours. But I did speak about the importance 
of having this legislature, this council that they've created 
being temporary and preserving the various political rights.
    But I wouldn't be honest with you if I didn't say that we 
need to watch this constantly. The bottom line though is from 
their own perspective, they need to keep Hong Kong in a way 
that it adds to their life. And to a certain extent it would be 
counter-productive to curtail it markedly. But we do have to 
watch it.
    And I think words are not important. We have to watch their 
actions. So, whatever words they used with me are neither here 
nor there. But we are really going to be looking at their 
actions. But I do not underestimate, you know, that we have to 
watch it.
    Mr. Dixon.  Thank you. Thank you, Mr. Chairman.

                 increases in fy 1998 budget submission

    Mr. Rogers.  Madam Secretary, much has been said about cuts 
in the international affairs budget, and the impact on 
diplomatic readiness. But when you look at the Administration's 
proposal for international affairs, of a $1.2 billion increase, 
almost all of it is for foreign aid. Of the proposals before 
this Subcommittee, the biggest increase, $131 million, is for 
payments to international organizations, like the U.N., the 
Food and Agriculture Organization, and so on. The biggest 
increase for the State Department operations that is in the 
budget, is $40 million for computer modernization. That doesn't 
put you on a very high list at the White House as far as 
increases go; does it?
    Secretary Albright.  Well, I think that we have looked at 
what the size of the pie is and have tried to divide it 
equitably, and are making our priorities according to where we 
think they can do the most good. We, obviously, as I, you know, 
in the best of all possible worlds, we would have more money as 
I have said to Congressman Mollohan.
    I think that we are trying to make an assessment where 
first we have reversed the decline in the State Department 
budget itself. We consider that an important step forward and 
the 4 percent increase is going to help us. We are trying to 
stay within guidelines for a balanced budget. And I think that 
we are trying to divide our priorities where we meet our 
international obligations.
    And, if I might say, on the role of international 
organizations, I think that we have to understand that our 
contributions there in effect leverage our strength. They are 
of course maximized because they allow us to do things 
internationally where others also help pay the bills.

                       retention of fees proposal

    Mr. Rogers.  Now, you and I have talked somewhat about your 
fee proposal. We talked yesterday evening about it. And as I 
indicated to you, I think it will be very difficult to get the 
legislation passed that would authorize that fee system. But 
beyond that, the fees that you're proposing are risky for the 
State Department. The budget proposes to fund $595 million, 
which is 25 percent of the Department's basic operating budget, 
from passport and visa fees that previously went to the General 
Treasury. You're asking now that thet go back to the State 
Department to fund your operations.
    But for these fees to materialize, there has to be some 
legislative changes made that would enable you, andauthorize 
you, to collect the fees and keep them. If those changes are not passed 
in the Congress, then you're going to be short $595 million or 25 
percent of your operating budget. And that would be a major catastrophe 
it seems to me.
    So, I think if your budget submission is based on us, the 
Congress, enacting a very dubious proposal, then we're really 
rolling the dice in a big time way. And I hope that we can talk 
about this some more. Do you have any quick thoughts about 
that?
    Secretary Albright.  Well, let me say, as we discussed last 
night, I mean clearly this is a difficult issue. I would not 
use the word ``dubious.'' I would just say difficult. It's a 
new way of thinking. We see it basically as kind of a good 
government proposal in that there is much more of a link 
between resources and those who carry them out.
    The important point here, Mr. Chairman, is that this is not 
just an issue for State Department fees. This is an across the 
board government attempt that OMB Director Raines is behind, 
agrees with, and believes that it cannot afford to fail. So, 
I'm hoping very much that we can work together to make this 
happen; not in any way realizing the difficulties of the 
legislative process here.
    But I'm hoping that we can solve the problem together 
because it's basically a very good way to do business and to 
link what is happening on the ground with the people who are 
doing it. There are frankly more people in the State Department 
that are needed to do visas and counsular work. Because of the 
increase in requests it creates a link between the job and 
those who do it.
    Mr. Rogers.  Well, I'm not disputing that. It may or may 
not be a great idea. I'm just saying mechanically it's going to 
be tough to get the authorizing committees of the House and the 
Senate to pass legislation authorizing it and to have the 
Budget Committee grant the Budget Act waivers and so forth. 
It's going to be very, very difficult to do in a timely way 
because we've got to pass appropriations bills probably long 
before they would have a chance to change the law on fees.
    If we give you a budget that's $595 million short. hoping 
that the fee increase will pass later on to make that up, and 
it doesn't pass, you're left at the end of the year or at the 
beginning of the next fiscal year with almost a $600 million 
shortfall. And that would hit the Department hard. So, I think 
we need to do some fancy footwork here.
    Secretary Albright.  Well, I appreciate your concern about 
this. The truth is that, you know, when we tried ICASS, it was 
also difficult. And I just hope that we can see this again as a 
new way of doing business. But I appreciate your concern.
    And let me also say, Mr. Chairman, I have a very good 
feeling in appearing before this Subcommittee because I sense 
that we are all on the same wavelength; that this is a matter 
of trying to figure out how best to do the diplomatic business 
of the United States. So, I appreciate your sentiment on this 
and we will all be working together on what is a high priority.

               reforms associated with arrearage payments

    Mr. Rogers.  Well, I agree. We must work constructively and 
work together. And I think that we do have a good rapport with 
you. We're all trying to do the best thing for the American 
interest overseas. Let's talk about that some.
    Now, on the U.N. and other reforms. You're proposing to pay 
off the arrears to the U.N. and other organizations in return 
for reforms. And yet the budget you submit proposes no 
conditions, no strings, that require achievement of reforms 
prior to payment of over $1 billion.
    Why does the budget propose to eliminate even the existing 
conditions that we have on payment of funds for these 
organizations and peacekeeping; particularly the requirement of 
a 15-day advanced notice to Congress before voting for a new 
peacekeeping mission? I thought we had worked out that kind of 
consultation procedure.
    Secretary Albright.  Well, first of all, I see no problem 
in having that consultative procedure. That is something that, 
as I stated, we have a desire to consult with you more on the 
peacekeeping operations. So, you should have no concern about 
that. But I think that what we have been trying to do and I'm 
hoping that this group can negotiate what those reforms are 
going to be before you all actually get to the appropriating 
part of this.
    I think that we need to put that discussion on a fast track 
and try to sort it out. I think we are in better shape on that 
than we have been since we started talking about this. And it 
is important to get a concept of what reforms are going to be 
simultaneously as we move forward with the appropriations 
process.
    Mr. Rogers.  Well, I know we have the working task force 
that you referred to earlier that the Majority Leader in the 
Senate, Senator Lott, was instrumental in helping set-up with 
the State Department and the House and Senate's relevant 
committees to try to work out some way to address the U.N. 
arrears problem that we have discussed, both the arrears and 
the rate of our assessment and other things.
    So we are addressing that in negotiations and conversations 
I think in a very constructive way. Do you have any thoughts 
you would like to quickly add here on what broad reforms you 
think we need to undertake at the U.N.?
    Secretary Albright.  Well, I think broadly speaking we need 
to keep focusing on streamlining the Secretariat. There, I know 
that you have met with the new Secretary General Kofi Annan and 
he is really quite sanguine about having more reforms and will 
be talking to us even more about potential reforms.
    But it is basically a way to try to streamline to make sure 
that the hiring practices are difficult; that the U.N.'s 
Inspector General is working well; those kinds of concepts. 
Then we have some broad ideas in terms of how to cut down the 
duplication of the regional councils that are affiliated, the 
Economic and Social Council.
    And generally looking at that side of the House. We have 
this large reform paper, as I mentioned. And I think what we 
need to do is look at that with you. We have been working on 
this broad set of reforms.
    But I think in the course of doing it, Mr. Chairman, we 
need to be reasonable; not ask the U.N. to totally cut itself 
down to a point where it can't do anything. And that is where 
we need to work together as well as with the United Nations.
    The other part also is that Kofi Annan, he, himself, has 
said does not have total control over this. He has control over 
the Secretariat, but not over the relations that are created as 
a result of governments working together.
    Mr. Rogers.  Well, so that there can be no misunderstanding 
at the U.N. or anywhere else, thisSubcommittee and this Member 
believe strongly in a strong U.N. It's to the whole world's interest 
that we have that body. It's to the United States interest that we have 
that body. If there were not a United Nations, we would be out trying 
to create one.
    So, it is important for the world and for us that we belong 
to a United Nations and that we pull our weight there; that we 
support the United Nations with our fair share. Having said 
that, the interest that I have and the Subcommittee has 
coincides with the interest that you have had, and that is to 
make the U.N. more efficient. We need to cut out some waste and 
abuse that takes place in any large organization, including the 
United Nations and including the U.S. Government for that 
matter.
    So, our idea is to work with you to try to create a more 
efficient and better United Nations. That's what this is all 
about. In the past, just historically, we have tried reform at 
the U.N. ever since I've been on the Subcommittee and even 
before I was here, to little avail. And out of frustration we 
decided to try to just withhold some support, financial support 
for the United Nations, out of protest more or less.
    What we have done in the past is not in any way intended to 
hurt the United Nations. It's intended to help the U.N. And so 
we want to constructively work with you. And by the way, I want 
to congratulate you on your job at the United Nations when you 
were there. But we want to work with you on paying our arrears 
in a systematic way, tied to constructive proposals that we 
hope the United Nations would look at seriously as we go 
through the process here.
    So, I think we are talking about the same kind of notion. 
We look forward to that task force giving us a proposal that 
everyone can rally around. Now, you proposed, or your budget 
proposes, $50 million for an African Peacekeeping Crisis Fund, 
compared to $20 million for contingencies in 1998. What's the 
plan for that money?
    Secretary Albright. First, let me just go back on something 
that you said. Not only are you a friend of the State 
Department, but having worked with you now on this for four 
years, I know what you think about the importance of the United 
Nations. And I think that your role in all of that has been 
just key.
    And I look forward to working with you more on it. I think 
we have accomplished something though. I mean we have a cap on 
the budget that had never happened before. The Inspector 
General is bigger and tougher. So, there have been certain 
advances here.
    Mr. Rogers.  Right.
    Secretary Albright.  So, I think you should feel good about 
that. And I think that there has been a very interesting 
relationship between the pressure that you all put on and what 
can be accomplished in New York. Where I felt that we were 
getting in trouble in the last year was that the amount of 
money that we were owing was so large that it made us lose 
creditability. That was the problem.
    And therefore now by creating a good package, you can 
maintain the pressure, but it doesn't put us kind of into the 
dog house in terms of not being able to come forward with what 
we're going to do. That's why I think a forward appropriation 
will help us to get the kinds of things that you're talking 
about. So, I'm hoping very much that this committee will in 
fact be able to work it all together.
    Mr. Rogers.  We would call it a different name. I don't 
think we can do what you would call a forward appropriation. 
What we can talk about possibly is a five-year or a multi-year 
program that we would appropriate one year at a time on. I 
don't think we could appropriate the five-year sum in advance. 
We'll have to work on it a year at a time. We can do that with 
an overlay of suggestions on changes at the U.N. one year at a 
time as well. But we can talk about that.
    Secretary Albright.  Well, I think that we do need to kind 
of have this discussion. And I think that this can be kind of 
the best sign of cooperation that we really are able to do.

                          african crises fund

    On your African question, I think that what we are looking 
at is I think you know the instability in Central Africa now 
around the Great Lakes Region and in Zaire has created a 
massive outflow of refugees. We're dealing with that on a daily 
basis. And what we are looking at is a way to respond to the 
potential crisis out of that area.
    There is no question in my mind that as we look at what's 
happening in Zaire that in some way this is a contingency to 
deal with what might be happening in that region. We are now 
working on trying to get a cease-fire there. We're trying to 
work with the U.N. to establish humanitarian quarters for the 
refugees.
    But the request here is basically as a way to try to deal 
with the outflow of refugees; try to make sure that there is 
not the same kind of genocidal killing that we had before. And 
so while there are others who participate in this, I think this 
allows us by having this kind of a fund to serve as a magnet to 
get the others to also help on it.
    Also, Mr. Chairman, it's the kind of thing that you and I 
have talked about, the necessity of doing some forward thinking 
on contingencies that might come up. As you and I said, it's 
very hard to really seek a budget in advance for genocidal, 
horrible killings, but it is possible for us to think ahead 
with you in terms of where we see major instability where we 
know that we're going to be doing something.
    Mr. Rogers.  I have other questions that I can submit for 
the record.

                   forward funding and fee proposals

    Mr. Mollohan, would you like to follow up?
    Mr. Mollohan.  Madam Secretary, I would like to follow up 
on your discussion with the Chairman about this forward funding 
and fee request. That's not a proposal that is immediately 
attractive to appropriators or to the Congress in general.
    I don't know how well thought through this idea was by the 
Administration because they have this idea of forward funding 
sprinkled throughout the budget. I haven't heard many favorable 
comments about the idea with regard to any of the proposals.
    I think there is a difference between forward funding and 
forward thinking as the Chairman talked about, some kind of 
formulation that takes into account the amount of money that 
you're talking about forward funding, but doesn't appropriate 
it until the regular appropriations cycle.
    The thing that just occurs to me that might be dangerous 
about this proposal is not whether you get it or don't get it 
in the Congress, but how the idea is marketed.
    Secretary Albright.  In dealing with the U.N. primarily is 
that because we have been delinquent for so long, they simply 
do not believe that we're going to do it. And I can just in the 
plainest language, as it has been explained to me, they say 
always, you know, we reform, you raise the bar and you never 
pay anyway. And I think if we could say to them, this money is 
and has been in effect put aside it will not be given to you 
until you do XYZ upon which we will mutually agree; that it 
shows our bona fides.
    And the reason frankly that we talked about it front-
loading it in this way is because we're about to go into 
negotiations on changing the assessment rate. And the 
assessment rate changes are a zero sum issue. It means that 
whatever we don't pay somebody else has to pick up. And what we 
need is the benefit of saying, okay we will pay our arrears, 
here it is, and you have to lower our assessment rate.
    We would not disburse funds out of this forward 
appropriation until they have achieved the needed reforms. But 
I think you understand from a negotiating perspective that it 
is hard to negotiate if you don't have anything in your back 
pocket.
    Mr. Mollohan.  I understand. Perhaps they would accept an 
agreement such as might come out of the Lott initiative. And 
maybe that's an idea that's more realistic for you to work 
around, having that sort of leadership and the Chairman's good 
efforts behind it. My guess is, that's what you're going to 
get.
    Secretary Albright.  I honestly think that we have created 
a vehicle that is going to be very helpful to all of it. And 
it's going to be the best example of Executive and Legislative 
cooperation and bipartisanship. And I'm very hopeful about it. 
So, I think our main issue here is now to move it fast enough 
so that in fact we can get the reform package together before 
you actually do the appropriation and set out a road map. 
That's what we need.

                            radio free asia

    Mr. Mollohan.  That's what's really important, is to get 
the whole Congress agreeing, all the players to agree. And I 
think forward funding might not be something that's a key piece 
to it. And I don't think you're going to have it.
    As a final question, Madam Secretary, I was interested in 
your considered thoughts about Radio Free Asia and its mission. 
As you know, it is newly created and it's just getting off the 
ground. What do you think of Radio Free Asia versus the 
services being performed by the Voice of America?
    But don't answer that question unless you've thought about 
that in the context of your new role as Secretary. In my 
judgment, we'll be spending a lot of money to support Radio 
Free Asia soon. It is already costing a lot of money.
    My guesstimate is that it is going to, in some way, 
encroach upon the resources that Voice of America has. And I 
question the necessity of that. I just wanted your thoughts 
about it, but I don't want your thoughts unless you're really 
prepared.
    Secretary Albright.  I would prefer to wait on that.
    Mr. Mollohan.  Okay.
    Secretary Albright.  I've had private thoughts from my past 
experiences, but I'd like to give you a more considered answer 
on that.
    [The information follows:]

                            Radio Free Asia

    With respect to Radio Free Asia (RFA), Mr. Mollohan, it was 
authorized, as you know, by the U.S. International Broadcasting 
Act of 1994 ``to provide accurate and timely news, information, 
and commentary about events within those Asian nations whose 
people do not fully enjoy the freedom of expression.'' In 
responding to the Radio Free Asia section of the Broadcasting 
Act, the Broadcasting Board of Governors determined that the 
establishment of this news service not injure in any way the 
critically important Voice of America (VOA) broadcasts to Asia. 
They were envisioned by both the Congress and the 
Administration as complementary, not competitive, services.
    RFA's inaugural broadcast to China took place on September 
29 of last year. Since then, broadcasts have also begun in 
Tibetan, Burmese, Korean, and Vietnamese. In May, RFA will add 
its remaining two language services, Khmer and Lao. In each 
case, broadcasts schedules have been carefully coordinated with 
those of the counterpart VOA language services to avoid 
overlap.
    RFA programming continues to concentrate on the type of in-
depth reporting and analysis of in-country news contemplated by 
the International Broadcasting Act. Recent programming 
highlights have included the Mandarin Service's exclusive 
serialization of imprisoned dissident Wang Dan's memoirs; 
exclusive reports by the Burmese Service of combat on the Thai 
border as the Burmese military seeks to crush resistance of the 
Karen people; and a two-part series by the Korean service on 
the different human rights perspectives in North and South 
Korea.
    Radio Free Asia is operating within its approved Fiscal 
Year 1997 financial plan, and is making every effort to 
restrain costs while fulfilling its assigned mission.

    Mr. Mollohan.  Thank you. Thank you, Mr. Chairman.
    Mr. Rogers. Madam Secretary, we appreciate your appearance 
today, and wish you the best.
    Secretary Albright.  I thank you, Mr. Chairman. And I 
gather that there is a Floor debate going on, on the resolution 
honoring Warren Christopher which I heartily approve of.
    Mr. Rogers. We will be following up on a number of the 
issues raised here, and we will keep in touch.
    Secretary Albright.  Please. And thank you very much. And 
as I said earlier, I really do feel that I am among friends; 
that we're trying to do the best for America together. And I 
look forward to working with all of you. Thank you.
    Mr. Rogers. Thank you. The hearing stands adjourned.

[Pages 166 - 192--The official Committee record contains additional material here.]


                                        Tuesday, February 25, 1997.

  OFFICE OF INSPECTOR GENERAL FOR U.S. DEPARTMENT OF STATE, U.S. ARMS 
 CONTROL AND DISARMAMENT AGENCY, UNITED STATES INFORMATION AGENCY, AND 
                    BROADCASTING BOARD OF GOVERNORS

                                WITNESS

JACQUELYN L. WILLIAMS-BRIDGERS, INSPECTOR GENERAL

    Mr. Rogers. The Committee will come to order.
    Today we begin hearings on the Administration's budget 
request for fiscal year 1998 within the jurisdiction of the 
subcommittee. I am pleased to welcome back all of our Members 
from the last Congress. We also have a new Member, Tom Latham, 
from the Fifth District of Iowa.
    This year we will continue to face the requirement for 
fiscal restraint as we bipartisanly seek to balance the Federal 
budget. That is not an easy task, but it is a worthwhile one, 
and we will do our best to find ways to find restraint 
responsibly.
    We start the year by inviting the Inspectors General from 
the Departments of State, Justice and Commerce to give us their 
guidance on efficiencies that can be achieved and 
vulnerabilities that need to be addressed.
    Our first witness is Jacquelyn Williams-Bridgers, Inspector 
General of the Department of State, the United States 
Information Agency, and the Arms Control and Disarmament 
Agency.
    Ms. Williams, your written statement will be made a part of 
the record, and you may summarize it if you would like. We 
would appreciate if you could keep your remarks to 5 minutes or 
so. Welcome.
    Ms. Williams-Bridgers. Thank you very much.
    It is good to be here again with you, Mr. Chairman, Mr. 
Skaggs. Thank you for the opportunity to present OIG's fiscal 
year 1998 budget request and discuss with you our 
recommendations for budget savings and operational 
improvements. With your permission, Mr. Chairman, I will 
provide a brief summary, and then submit the complete statement 
for the record as you requested.
    I would like to present testimony on my office's oversight 
responsibilities in terms of OIG's three newly defined 
strategic objectives for its work. These objectives pose three 
broad questions which will guide our oversight of the foreign 
affairs agencies for which we are responsible.
    These questions quite simply are, how well is foreign 
policy being implemented? Are resources clearly linked to 
foreign policy objectives? And, lastly, how well are the 
operating platforms and infrastructures working?
    My testimony focuses on work we have conducted in response 
to these objectives, including the management challenges of the 
Department, USIA and ACDA, opportunities for achieving program 
efficiency and cost avoidance, and the impact of OIG's 
recommendations in these areas.
    I would like to first comment on OIG's fiscal year 1998 
budget request for a consolidated OIG for the Department of 
State, USIA and ACDA. Our new fiscal year 1998 request is for 
$28.3 million. For all the support provided by this Committee 
to my office, I regret to say that our operating platform is 
still inadequate. Our fiscal year 1998 request falls $750,000 
short of what is needed to cover staff and contract or resource 
needs for auditing the Department's financial statements as 
required by CFO and GMRA. I am appealing directly to this 
subcommittee for these additional funds.
    As a result of the efforts of this Subcommittee, language 
was included in last year's appropriations conference report 
stating that OIG's fiscal year 1998 budget submission should 
include all funds for oversight of ACDA.
    We received $143,000 for fiscal year 1997 to cover partial 
funding for our oversight of ACDA. We estimate that a total of 
$250,000 is necessary to fulfill our ACDA oversight 
responsibilities.
    I appreciate this Subcommittee's efforts to bring more 
comprehensive and efficient oversight within the foreign 
affairs community. The merger with USIA OIG, for example, 
allowed us to reassess our priorities and to handle our new 
oversight responsibilities for public diplomacy and 
international broadcasting. Subsequent to the merger, we 
established in our Office of Audits a division to focus on 
international broadcasting issues as well as contracts and 
grants. Of course, the work by these divisions will be 
supplemented by resources from all other components of OIG.
    The merger legislation also provided relief from the 5-year 
inspection rule. The change allows us to reorder our workload 
rationally through improved criteria for selecting overseas 
posts for inspection and to better link our resources to the 
priorities of the Department and the Congress. New inspection 
criteria takes into account resources managed by the post, 
importance of the post to advancing U.S. interests, management 
vulnerabilities, as well as length of time since last 
inspection.
    Before I discuss specific OIG work that address the three 
strategic objectives, I would like to discuss OIG's efforts on 
a key Department initiative, ICASS.
    My office endorses the ICASS initiative being undertaken by 
the Department. We have been actively engaged in reviewing 
ICASS development since its inception by monitoring the 
proposed use of the Working Capital Fund, testing software 
programs, and reviewing ICASS materials as they are drafted. In 
an earlier review of ICASS software, we identified the need for 
adequate controls to ensure that key tables could not be 
manipulated and changed by users. Those cost tables have been 
secured, and proper access controls have been established.
    While OIG has found the Working Capital Fund unauditable in 
the past, the Department has developed a plan to make the ICASS 
part of the WCF auditable this year. However, OIGstill has 
concerns since past reports have indicated flaws in financial policy 
and system weaknesses, which do not allow for accurate and reliable 
data collection. As diligently as the Department might work to 
implement ICASS, the success of this program will depend on 
appropriators in Congress to realign the agencies' budgets in 
accordance with the ICASS system. There is also a need to ensure that 
the agencies will then use the funds to pay for ICASS services rather 
than divert them to other program purposes.
    OIG has been very much involved in monitoring efforts by 
the Department to establish the overseas staffing model. When 
perfected, the staffing model will provide both the executive 
branch and the Congress with a useful tool to evaluate requests 
for additional personnel resources. Our inspection teams now in 
the field are starting to examine actual implementation of the 
overseas staffing model. While the Department's progress in 
developing this model is impressive, until similar 
consideration is given to the total U.S. Government presence 
overseas, there will be no comprehensive structure to monitor 
our overseas staffing.
    OIG has cited numerous opportunities this past year whereby 
program efficiencies can be achieved and funds put to better 
use. If implemented, for example, our recommended action in the 
property management area will result in an estimated $6.8 
million the Department could use for higher priority 
activities. Such actions include merging immigrant visa 
operations at two consulates general, disposing of 
underutilized properties and consolidating other operations. In 
addition, if the Department reprograms or replaces direct-hire 
American positions with eligible family members, abolishes some 
Foreign Service national positions in a number of posts, 
unnecessary costs could be avoided.
    An issue we raised in last year's testimony was the 
reorganization and reprogramming of 26 positions in the Bureau 
of Inter-American Affairs. I am pleased to report this has been 
largely achieved, avoiding $1.5 million in costs.
    The merger of State and USIA OIGs provided us an 
opportunity to exercise a broadened perspective on how well 
foreign policy is being implemented. Adjusting to today's 
budget priorities and realities, USIA adopted a policy of no 
residuals, which states that all regular USIA-funded and -
managed programs must cease with the closure of a USIS post, 
and no USIA resources can be left behind. As a result of our 
recommendation, USIA has agreed to address this issue through 
the NSDD-38 process in those instances where a complete 
transfer of USIA resources is being proposed.
    Law enforcement improvements have also been noted as a 
foreign policy objective. Narcotics trafficking and other 
international crime activities are a principal threat to 
national security. My office has continued to review the 
activities of the Department and we will be expanding our 
coverage of law enforcement activities in post inspections. My 
office will soon begin a worldwide audit to examine the 
coordination of overseas law enforcement activities.
    As I look to answer the second of our strategic 
objectives--are resources linked to policy objectives--we have 
found some critical problems in the area of human resource 
management. Department operations suffer from serious staffing 
gaps throughout the world, especially at hardship posts such as 
those in Africa and the South Pacific, in part due to the 
Department's unwillingness to make direct assignments. Critical 
staffing shortages continue to exist in the areas of 
administration and consular affairs. Both are identified as 
weaknesses for the Department.
    We also have serious concerns about the diminishing number 
of security officers over the next 5 years as intake for 
officers for diplomatic security fails to keep pace with 
attrition. We have also identified specific training 
deficiencies for officers working in procurement and 
contracting. Gaps at posts where American staffing is minimal 
can cause significant management deficiencies. Filling jobs 
with willing but inexperienced officers creates its own risk, 
especially at posts where there is no one to mentor them in 
specialized areas such as administration and consular 
operations.
    We have made numerous recommendations to realign resources 
with areas of greatest vulnerability, and we are working with 
the Department and FSI, the Foreign Service Institute, to help 
address these staffing and training needs.
    Our third and last strategic objective focuses our 
attention on how well the infrastructure and platforms are 
working in our agencies. I have already mentioned our work in 
reviewing the financial underpinnings of ICASS, so let me speak 
to financial management controls.
    As I stated in last year's testimony, the Department's 
financial management systems do not provide adequate data on 
which to base funding decisions, to effectively control 
resources or to prepare required financial statements. The 
soundness of major support elements in the Department 
ultimately depends on the adequacy of these systems. Although a 
material weakness since 1983, the Department has reported 
significant improvements in 1996.
    Another area of concern involves the numerous 
vulnerabilities regarding the management of and controls over 
the American Institute in Taiwan's fiscal affairs, identified 
by OIG, the Department and private sector auditors. Despite the 
various reports and numerous recommendations that have 
resulted, many of the problems and vulnerabilities continue to 
exist.
    As a result of one of our recommendations, AIT is now 
including funds received from visa processing fees in its 
budget presentation to Congress to ensure there is 
congressional visibility over these funds.
    One of my highest priorities is the oversight of Department 
security programs to protect lives and information. In today's 
fiscal environment, we must balance the need to adhere to the 
community security standards with the operational realities in 
the field, where strict adherence is not always possible. With 
risk management we can identify funds to be put to better use 
in certain posts in low and medium threat environments, where 
security measures in place may provide adequate security by 
meeting the spirit, if not the letter, of the standard.
    In response to a congressional inquiry, my office completed 
a review this year of whether budgetary rollbacks in security 
resources have endangered U.S. personnel, facilities and 
information. This review found largely that through the 
application of risk management, prioritization of threats, and 
program efficiencies, the current security funding level 
appears to afford a sufficient level of security to minimally 
protect people, data and facilities.
    We are concerned, however, that further reductions will 
undermine the Department's ability to provide adequate 
security, particularly in security staffing, informationsystem 
security, and the operation and maintenance of equipment.
    The second challenge is to provide adequate personnel 
security programs to protect national security information 
entrusted to the 750 information management communications 
specialists. The Department needs a program to regularly screen 
these specialists for counterintelligence suitability concerns, 
and an arbitration process to resolve the differences between 
the security concerns raised by the Bureau of Diplomatic 
Security with the ``needs of the service'' issues raised by the 
Bureau of Personnel.
    Department programs to combat illegal immigration, 
including alien smuggling, fraud and border control 
initiatives, are a priority concern of my office as well. Since 
I last appeared before you, the State Department has made 
significant efforts to counter visa fraud and improve border 
controls through such initiatives as extending the MRV program, 
supporting antifraud units at high-fraud posts, transmitting 
worldwide advisories on detecting fraudulent documents, and 
analyzing fraud trends.
    OIG will continue to examine how well the Department, in 
coordination with other agencies, is implementing these border 
control initiatives and antifraud efforts. We will continue to 
give special attention to whether or not these programs, such 
as immigrant and nonimmigrant visa processing and the related 
data sharing system and personnel issues, are given 
sufficiently high priority and the concomitant funding.
    OIG investigations are also an important ingredient to good 
management insofar as they promote accountability and affect 
Department programs and operations in a number of ways. 
Detecting fraud often results in deterring similar criminal 
activity. This is the result of a tough stance that we have 
taken in presenting these cases to the Department of Justice 
for prosecution. We have also continued efforts to work 
cooperatively with diplomatic security to best utilize our 
joint resources on passport and visa fraud.
    In conclusion, Mr. Chairman, Members of the Subcommittee, 
my office has mapped out a very ambitious strategic plan that 
encompasses the key areas of U.S. foreign policy implementation 
as well as management at the Department of State, USIA and 
ACDA. As we tackle the important elements of our plan, we have 
tried not only to identify the deficiencies, but also the 
impediments that undermine progress. We make every effort to 
offer viable solutions.
    This concludes my brief statement. I will be happy to take 
any questions you may have.
    [The information follows:]

[Pages 198 - 227--The official Committee record contains additional material here.]


    Mr. Rogers. We appreciate your statement and the work that 
you are doing.

            additional efficiencies in state, usia, and acda

    Now, the administration is saying in a general way on the 
international budget that they have submitted that in effect 
reductions have gone far enough and that it is time to increase 
the international budget by $1.2 billion over the 1997 level.
    Are you telling us that you are satisfied that every bit of 
efficiency has been squeezed out of State, USIA and ACDA, and 
that there are no more savings to be had anywhere?
    Ms. Williams-Bridgers. No, I would not present that 
argument to you. I do believe that in many areas, the 
Department does need additional funding. However, whether or 
not that additional funding, for areas such as information 
systems, financial management systems, and security, should 
come from incremental increases to the 150 account is left to 
others to determine. There are, obviously, opportunities that 
the Department has yet to exercise to reallocate money within 
its existing budget.
    Mr. Rogers. I am particularly interested in your specific 
ideas about where we can economize, make things more efficient, 
save money, and economize. I would like to have your listing of 
that in due course of time.
    Ms. Williams-Bridgers. Very good. I would be glad to 
provide that to you.
    Mr. Rogers. I would like to have that so we can look at it 
in detail.
    [The information follows:]

[Pages 229 - 230--The official Committee record contains additional material here.]


              top three financial and management problems

    Mr. Rogers. Now tell us what you think are the top three 
financial and management problems that are facing these 
agencies, and how you have used the broader scope and 
flexibility we gave you to address them?
    Ms. Williams-Bridgers. Certainly. I would begin with the 
financial management systems that are in place. Financial 
management, the ability to collect data and to make good, sound 
funding decisions based on that information, and sound 
information about your budgets and the allocation of resources, 
is imperative. Currently neither State nor USIA has a very good 
basis on which to make those sound financial management 
decisions.
    In the Department of State, the collection instruments, the 
financial management system itself, is deficient. We are 
working very hard with the Department, as it is meeting the 
intended mandates of the CFO Act, to address what the 
shortcomings are in its financial management systems, to 
identify opportunities to collect additional information, and 
to get a good financial management system in place.
    I would also say that the ability of the Department to 
reallocate its resources to its highest priorities is an 
outstanding issue and of great concern. This is being addressed 
through the overseas staffing model. It can alsobe addressed 
through ICASS, where costs would be better attributed to the various 
agencies that have a presence overseas, and then--hopefully, 
eventually--those costs can be better distributed within the State 
Department.
    I would also say that USIA is going through a similar 
exercise with the no residuals policy, and working with much 
higher budget constraints. They are looking at where they can 
close their USIS operations and reallocate their resources, and 
similarly, we will provide due attention to their reallocation 
of resources.

                                 icass

    Mr. Rogers. Now, this Subcommittee has been working with 
the Department for several years on the International 
Cooperative Administrative Support Services (ICASS) system, in 
fact, pushing and shoving the Department to get it implemented, 
and yet in the budget that was submitted it was not referred 
to.
    Am I correct in assuming that there will be a budget 
amendment submitted by the Administration that will in effect 
implement ICASS?
    Ms. Williams-Bridgers. I know the Department is fully 
intending to implement ICASS. It is undertaking a staged 
implementation process. It was my understanding that the 
Department would look to the Congress to assist it in 
reallocating or making the appropriate base transfers, for all 
the agencies that have a presence overseas and will be 
participating in ICASS in the upcoming year.
    We have been working very closely with the Department, as I 
mentioned in my testimony. We have a very extensive audit 
effort ongoing looking at the Working Capital Fund. We are 
looking at the software being used by posts to collect the data 
and have been working very closely in addressing any of the 
concerns or bringing back to Washington any of the concerns 
that other agencies have raised about other anticipated cost 
increases.
    Mr. Rogers. The question was, is the Administration going 
to submit a new ICASS budget amendment?
    Ms. Williams-Bridgers. I fully anticipate the 
Administration will submit it.
    Mr. Rogers. We can't move until they do.

   incorporating commerce program inspections with state inspections

    Let me ask you, the Commerce Department IG is requesting an 
increase in travel funding to increase inspections of Commerce 
Department activities overseas. Would you be willing to discuss 
the possibility of incorporating the inspections of Commerce 
programs overseas with your inspections of overseas posts, with 
this Subcommittee and Dr. DeGeorge?
    Ms. Williams-Bridgers. I would welcome that discussion.
    Mr. Rogers. Good.

                      american institute in taiwan

    Now, there has been a long history of IG reports and 
concerns over the American Institute in Taiwan, including 
oversight of the contract, and assessment and allocation of 
visa fees.
    Last year, the Subcommittee indicated that we felt we were 
not getting the whole picture of resources being used by AIT. 
Now we are apparently in the midst of a mess with accusations 
flying on all sides.
    Haven't the warnings of problems at AIT been clear enough 
to warrant appropriate action?
    Ms. Williams-Bridgers. Yes, I think that the message has 
been communicated loudly and clearly and repeatedly to the 
Department, not only by OIG, but by a series of private sector 
auditors. The Department, in fairness, has taken some action in 
response to the various recommendations that have been made. 
Over the past 4 years, OIG has made a number of 
recommendations, specifically recommending that the Department 
put in place an off-the-shelf accounting system. They have done 
that. It has been newly installed, just within the past 2 
weeks. AIT Taiwan is in the process of hiring an accountant and 
persons to administer that accounting system.
    We have recommended that the Department look at the 
contractual relationship between AIT Taiwan and Washington and 
the Department, and institute some more aggressive oversight 
mechanisms. The Department has responded. They have recently 
established a task group which is looking not only at the 
contractual roles, but the financial management and oversight 
systems that need to be put in place.
    The Grant Thornton auditors that have had an ongoing 
presence at AIT Taiwan have also identified some of the very 
serious internal control problems and financial management 
problems, at post. They have identified the problems of visa 
fees not being accurately accounted for and controlled. This is 
also a problem that OIG identified a couple of years ago.
    The problems, the root causes of these problems, are very 
difficult to address, but I think the Department is now trying 
to get a handle on the issue of the contract that currently 
exists between AIT Taiwan and AIT Washington and the 
Department, and is trying to make improvements in the 
provisions of that contract to allow the Department and AIT 
Washington to exercise more careful and tough oversight over 
some of those areas that deficiencies have occurred in.

               american institute in taiwan investigation

    Mr. Rogers. In June of 1996, you referred a complaint to 
the Justice Department about James Wood, originally from 
Arkansas, who was the head of the American Institute.
    Ms. Williams-Bridgers. Yes.
    Mr. Rogers. About allegations that he was soliciting 
campaign contributions from Taiwan. On January 22 of this year, 
the day that former Secretary Christopher left office, 
apparently Wood was forced to resign. On February 10th, there 
was an article in one of our national newspapers to the effect 
that the investigation had been expanded to allegations that he 
used this diplomatic position for private business pursuits. He 
has denied those charges, and made a series of charges of his 
own against AIT. And on February 24th, the State Department 
denied his charges.
    Where are we on all of this?
    Ms. Williams-Bridgers. You are quite right, Mr. Chairman, 
in your recollection of the facts of our having referred an 
allegation about Mr. Wood to the Department of Justice.
    Since the time that we referred those allegations in June 
of 1994, we have not been a part of that investigation. So I 
cannot provide you any substantive comment on the status of 
that ongoing investigation.
    Mr. Rogers. Well, would you get back with us?
    Ms. Williams-Bridgers. Certainly. I will inquire with the 
Department of Justice and ask them to provide additional 
information, if possible, at this time.
    Mr. Rogers. Have they kept you posted on it?
    Ms. Williams-Bridgers. They have not. We have repeatedly 
inquired about it, but they have not engaged us about that 
investigation.
    Mr. Rogers. What do they say?
    Ms. Williams-Bridgers. That they will notify us at the 
appropriate time.
    [The information follows:]

                 Status of the Woods/AIT Investigation

    Because our office has referred this matter to the Federal 
Bureau of Investigation and is not involved in the inquiry, we 
are not able to respond to this question. The Subcommittee may 
wish to contact the FBI or the Justice Department's Public 
Integrity Section directly on the status of this ongoing 
criminal investigation.

    Mr. Rogers. Is there a special section of the Department of 
Justice that is dealing with this, or do you know?
    Ms. Williams-Bridgers. Dealing with the Department of 
Justice investigation? Not that I am aware of.
    Mr. Rogers. No, in the Department of Justice is there a 
special unit that is dealing with your request for an 
investigation?
    Ms. Williams-Bridgers. Oh, of the Department of Justice? 
Yes, it is the Criminal Division.
    Mr. Rogers. Well, can you be a trifle more specific?
    Ms. Williams-Bridgers. As I understand it, my last 
conversation was with Bill Esposito, Assistant Director, 
Criminal Investigation Division of the FBI, a little more than 
a month ago, I believe, and as I understood it, that 
investigation was broken off separate and apart from the larger 
investigation of DNC contributions. So I am not aware, Mr. 
Chairman, of who specifically is handling that investigation.

     unaccounted for visa fees at the american institute in taiwan

    Mr. Rogers. Well, the former head in a press conference 
Sunday charged, among other things, that $5.3 million in visa 
fees under a previous director were unaccounted for. The State 
Department yesterday denied the money is missing, yet the most 
recent audit of September 1996 conducted by an outside firm and 
provided to the Subcommittee by your office states clearly that 
$5.3 million is unaccounted for.
    Ms. Williams-Bridgers. Yes.
    Mr. Rogers. Can you help us out with that?
    Ms. Williams-Bridgers. Yes. Let me explain what I 
understand Grant Thornton's findings to be with regards to the 
visa fee collections. They are saying of the visa fees 
collected between 1992 and 1995, I believe, which totalled a 
little over $9 million, $5.3 million is unaccounted for in 
terms of what that money has been spent for. They are not 
suggesting that that money was embezzled, they are not 
suggesting that there was fraud involved there, simply that the 
monies, because of the very poor accounting and control systems 
that they had in place, because of the way that they deposited 
that money and commingled it with the general fund for the AIT, 
that Grant Thornton, as of this time, has not been able to 
track those expenditures. But it is not a matter of these 
monies being missing, as I understand it.
    Mr. Rogers. Well, what are you doing about it?
    Ms. Williams-Bridgers. We have initiated an audit team, an 
interdisciplinary team, of auditors, inspectors and our 
counsel. We are working quite closely with the Department. We 
are awaiting the final financial audit report of Grant 
Thornton. We have already met with AIT Taiwan director. I 
personally have met with him, Daryl Johnson. I also have met 
personally with the administrative officer of AIT Taiwan, and 
we are prepared to pursue the outstanding issues of the visa 
fee collections, the internal controls, and the contractual 
relationships.
    Mr. Rogers. Well, we want a report on it forthwith.
    Ms. Williams-Bridgers. We will provide that to you.
    Mr. Rogers. These are very serious allegations.
    Ms. Williams-Bridgers. Mr. Chairman, if I might add, we see 
at this time no connection between the allegations that we 
received about Mr. Wood, the Chairman and managing director, 
and the specific issues regarding financial controls and 
management of AIT Taiwan. There is no nexus there.
    But perhaps not being party to the investigation of Mr. 
Wood, I don't know exactly what the Department of Justice has 
been finding right now. But there was no apparent nexus in the 
allegations we received and referred and the work we have done 
over the past several years regarding financial management 
controls. These problems preexisted Mr. Wood's tenure with AIT.

           rules and regulations applicable to ait employees

    Mr. Rogers. Are employees of the AIT subject to the same 
rules and regulations as State Department employees?
    Ms. Williams-Bridgers. They are coming in line. There have 
been recent changes with regard to personnel. There are some 
outstanding concerns about pension plan and payroll and the 
like which will all be part of the review we are about to 
initiate.
    Mr. Rogers. Well, the question is, are those AIT employees 
subject to the Hatch Act?
    Ms. Williams-Bridgers. I am not in a position to answer 
that right now, Mr. Chairman. I can research that question and 
get back to you.
    Mr. Rogers. Will you give us an answer on it?
    [The information follows:]

                    AIT Employees and the Hatch Act

    AIT employees are subject to the Hatch Act through the AIT 
contract. Section H. 14 of the most recent Department of State/
AIT contract, entitled ``Ethical Conduct,'' provides that AIT 
``shall require in all of its contracts of employment that all 
its trustees, employees, consultants and other advisors conduct 
themselves . . . in a manner consistent with . . .'' certain 
laws, including 5 U.S.C. 7324, which is the Hatch Act.
    AIT officers are covered under the category of AIT 
employees. The Hatch Act does exempt certain Presidential 
appointees from Hatch Act coverage; exempt employees include 
those ``appointed by the President, by and with the advice and 
consent of the Senate, whose position is located within the 
United States, who determine policies to be pursued by the 
United States in relations with foreign powers or in the 
nationwide administration of Federal laws.'' None of the 
officers or trustees of AIT require the advice and consent of 
the Senate. Consequently, the Hatch Act would apply to AIT 
employees through the contract.

    Mr. Rogers. Mr. Skaggs.

              acda consolidation with the state department

    Mr. Skaggs. Thank you, Mr. Chairman. Good afternoon. Mr. 
Chairman, I don't know what you may have announced, since I 
wasn't present from the very beginning. Are you planning to go 
more than one round with this witness. I just don't know how to 
discipline my questioning.
    Mr. Rogers. We will have two separate hearings. We will 
have this witness and then the Commerce Department.
    Mr. Skaggs. I wanted to get your views, if you have any, on 
a question that seems to pop up annually almost, and that is 
whether ACDA should be consolidated as a bureau within the 
Department. Have you done work that can help enlighten us on 
that, and would ACDA's mission be compromised significantly if 
that were to happen? What are your thoughts?
    Ms. Williams-Bridgers. Yes. We have done considerable work 
in that area. In late 1995, we issued two reports, one an 
inspection of the entire Arms Control and Disarmament Agency, 
where we looked at all aspects of the operation, its mission, 
its functions, its deployment of resources. We also, within a 
month of the issuance of the ACDA inspection, looked at the 
Political Military Affairs Bureau.
    We concluded that ACDA and PM had provided independently 
very significant contributions to arms control and disarmament 
to date. However, we suggested that there need not necessarily 
be the attendant infrastructure in ACDA in order for it to 
continue to provide the types of expertise and advice that it 
has historically provided over time.
    We suggested that there was much duplication and overlap in 
the roles and the missions between ACDA and PM. However, we 
suggested that whatever the infrastructure ultimately resulting 
from the debate, that there needs to be maintained some 
independent senior advisory role, such as that which the ACDA 
director currently performs, because ACDA has time and time 
again provided the sole voice on debates, on issues, that no 
one else in the community has provided.
    Since that time we also specifically recommended that ACDA 
and PM work with the National Security Council to address 
recommendations that both NSC and our office had made about the 
duplication and overlap of several positions. I believe the NSC 
study pointed to about 30 or so positions that it felt needed 
to be reexamined.
    These positions principally were in the area of----
    Mr. Skaggs. Thirty total in the two agencies?
    Ms. Williams-Bridgers. In the two agencies. I don't recall 
right now, but I think, as I recall, the recommendations spoke 
to about 16 in each place that were subject to closer 
examination. Since that time, PM has taken very assertive 
action and has reduced about nine positions that were 
considered those to be overlapping or duplicative of the ACDA 
functions.
    ACDA has also eliminated about 10 positions, but none of 
the 10 positions that they eliminated were those that we or NSC 
cited as being duplicative or overlapping with PM.
    Mr. Skaggs. So they get credit for that, just the wrong 
kind of credit.
    Ms. Williams-Bridgers. They don't get credit from us for 
that. In fact, we are going to initiate a review within the 
coming months to reexamine the efforts that ACDA has taken to 
reduce those types of roles.
    Mr. Skaggs. What do you say on the fundamental policy issue 
of whether there ought to be an entity with direct access to 
the President of the United States on arms control and 
nonproliferation issues?
    Ms. Williams-Bridgers. We say yes, but it need not 
necessarily be in the structure that is in place now.
    Mr. Skaggs. The use of the word ``infrastructure'' makes me 
wonder whether you are suggesting that some of the 
administrative support functions that are now internally done 
within ACDA could be provided by State, or is it more subtle 
than that?
    Ms. Williams-Bridgers. In fact, I think by ACDA's own 
admission and actions they have taken, they have concluded that 
as well. The positions eliminated are primarily support, and 
overseas ACDA has made good response to recommendations where 
we cited the need to consolidate with the Department's missions 
overseas.

                         classification reform

    Mr. Skaggs. You mentioned in your testimony you are looking 
at information security issues. I have taken an interest in my 
work on the Intelligence Committee in the whole matter of 
classification reform. If you have looked into this, I would be 
interested in just your general assessment; if you haven't, 
whether you plan to; the range of issues involving the 
overclassification of national security information, the 
inappropriate classification of national security information, 
and/or the rate at which old classified information is being 
reviewed for declassification.
    I was astounded to learn when we first did this survey that 
the United States Government, not including the CIA, spends 
about $13 billion a year on various things having to do with 
keeping secrets. So there is a lot of money here.
    I am just wondering whether, in your jurisdiction, you have 
found that that is being spent appropriately and whether there 
is room for additional discipline.
    Ms. Williams-Bridgers. We have not, Mr. Skaggs, looked at, 
at least in recent years, the three areas that you are 
suggesting. We have looked at the information security systems 
and have identified vulnerabilities in the classified 
information systems, not the rate of retiring or inappropriate 
classifications.
    Mr. Skaggs. Have you looked at, I forget the official name 
of the panel, but there was a Presidential commission that 
reported out, I guess a year and a half or so ago, about 
classification reform.
    Ms. Williams-Bridgers. No, I am sorry.
    Mr. Skaggs. Let me commend that to you because, as I 
recall, it makes, among other points, the point that looking at 
mechanical systems--or electronic systems anyway--a review of 
the hardware, and the fencing may not be the most significant 
areas of vulnerability in protecting information that needs to 
be protected, and looks at it with a different twist on the 
whole issue. I would be interested in your reactions to the 
report.
    Ms. Williams-Bridgers. I will follow up on that.
    [The information follows:]

       Report on Protecting and Reducing Government Secrecy--1997

    OIG has obtained a copy, and is in the process of reviewing the 
document titled ``Report of the Commission on Protecting and Reducing 
Government Secrecy--1997.'' This report was transmitted to the 
President and Congressional leaders on March 3, 1997 pursuant to Title 
IX of Public Law 236.

    Mr. Skaggs. I would be very interested if it turns out 
making its way to your cutoff line, given the resources you 
have, just a random sampling of recent classification decisions 
to see whether they are being done for legitimate national 
security reasons, or perhaps because of the potential for 
either personal or official embarrassment that sometimes works 
its way into these things.
    Ms. Williams-Bridgers. We will follow up on that.
    Mr. Skaggs. Just one more question for this round, if I 
may, Mr. Chairman.

                            oversight of oig

    I noticed your career had a long stay at GAO, and it is a 
question both for your present position and your GAO 
experience, sort of who polices the police? This is not to 
suggest there is a problem in your organization.
    Ms. Williams-Bridgers. Thank you.
    Mr. Skaggs. But abstractly, if an OIG employee has a 
problem with the way the IG's operation is being conducted, 
what is the remedy there? Likewise if somebody at GAO is 
unhappy with GAO, it is a parallel problem, and hopefully it is 
not a very big one, but we ought to have a clear way of dealing 
with it.
    Ms. Williams-Bridgers. Sure. There are a number of 
different avenues that an employee can undertake, depending on 
the nature of the problem, of course.
    If an employee is concerned about retaliation outside of 
the IG community, there is the Office of Special Counsel, where 
a person can seek proper redress of any concerns that they 
might have about fraud, abuse, mismanagement, within their own 
agencies, for which they feel that they have been 
inappropriately harmed by having voiced concerns about abuse.
    The larger IG community is just now, in fact, working on a 
set of standards with the Integrity Committee to put in place--
--
    Mr. Skaggs. Excuse me. What is the Integrity Committee?
    Ms. Williams-Bridgers. I am sorry--the President's Council 
on Integrity and Efficiency has formed a Subcommittee headed by 
personnel from the Federal Bureau of Investigation to address 
how to handle problems within the IG community, principally 
problems that stem from performance or alleged misconduct by 
more senior officials in the IG community.
    Heretofore, those kinds of problems went directly to the 
FBI; there was no step in between. The Integrity Committee of 
the PCIE will set in motion for the first time a community 
working group that will work with the Integrity Committee to 
vet those problems. It will allow an avenue where other IGs can 
investigate problems that have surfaced in an IG's shop.
    But we are just now in the process of actually responding 
to an executive order with a set of policies and procedures.
    Mr. Skaggs. But at least that contemplates a category of 
problems that don't rise to the level of criminal prosecution 
but are still serious enough to need some process?
    Ms. Williams-Bridgers. That is right, administrative. But 
also that working group can vet, because it includes Department 
of Justice employees--allegations of criminal activity as well 
and make the adequate referral.
    Mr. Skaggs. Thank you, Mr. Chairman. I will have questions 
on my favorite topic, if I may.
    Mr. Rogers. Mr. Forbes.

                            monitoring icass

    Mr. Forbes. Thank you, Mr. Chairman.
    Thank you for being here today. I have a special fondness 
for people who went to Syracuse University.
    Mr. Rogers. Do they play basketball up there?
    Ms. Williams-Bridgers. Yes, they do.
    Mr. Forbes. You wanted to answer them?
    Ms. Williams-Bridgers. I don't know how they have been 
doing lately, quite honestly, but when I was there, they were 
the top of the list.
    Mr. Forbes. The ICASS system--you made reference in your 
statement to the complex nature of not just getting the ICASS 
up and running fully, but the complexity that is necessary for 
this system to operate effectively. You made a reference in 
your statement to the auditability of ICASS.
    First, prior to this system getting up and running--your 
office is doing an audit of first and second quarters of 
implementation. It is my understanding that it won't be fully 
implemented until August, the beginning of the new fiscal year.
    Is the Department working closely with you as far as making 
sure that in the future OIG will have the capability of 
monitoring this system effectively as they create this system? 
Specifically, as they create this huge system is your office 
going to have the ability to more effectively monitor these 
costs?
    Ms. Williams-Bridgers. Yes. The Department and my office 
have been working very closely in that regard, and in fact 
early on when OMB had expressed some reservations about moving 
forward with ICASS because of the problems that we had reported 
in the past on the working capital fund. They asked us to come 
over to give them our latest thinking on whether or not the 
financial control mechanisms in the working capital fund were 
sufficient to make them feel good about the ICASS system being 
a viable system in the future.
    We had many discussions with OMB and continue to have 
discussions with OMB. Quite frankly, I credit our office for 
providing the assurances, as best we possibly could, and trying 
not to use our crystal ball to predict what might happen in the 
future, but to give OMB a sense of what the problems were with 
the working capital fund, to give them our best sense of how 
well the Department was addressing the past problems we had 
noted, and also to make sure that OMB was quite aware of any 
ongoing concerns that we had about cost collection and control 
mechanisms.

                     costs of icass implementation

    Mr. Forbes. I don't know if this question is premature but 
do you think that getting the system up and running is going to 
stay within the financial parameters laid out for it so far?
    Ms. Williams-Bridgers. I don't think anyone can tell that 
at this point in time. Costs for administrative services will 
certainly escalate, but a lot of that will depend on who is at 
the posts. A lot of it will depend on whether or not we have 
more cost-efficient providers available at the post, if they 
are private market providers, whether or not everyone, 
including State Department, will seek out that private 
provider. There are too many uncertainties at this point.
    The ICASS councils at posts have not yet moved, at this 
point in time, to where they are looking at all the various 
options that they eventually will have to look at in terms of 
selecting a best service provider.
    Mr. Forbes. I appreciate that.

  oig time spent monitoring implementation of international narcotics 
                                programs

    Just to shift gears for a moment here, could you give the 
Committee an idea of how much time the inspector general's 
office spends monitoring the implementation of international 
narcotic problems?
    Ms. Williams-Bridgers. In fact, in the past year we spent 
considerable time looking at the certification process. We have 
revisited certification at timely intervention points 
immediately prior to certification decisions having been made.
    We have also in the course of our inspections looked at the 
LEGATT function. Although at most of the posts we visited over 
of the past year, there wasn't a LEGATT presence, I don't 
believe. In the upcoming year we intend to expend much more 
effort in that regard. We will be undertaking a very broad-
based audit to try to survey the land of the various sets of 
issues and try to develop a strategy for how we should best 
identify the sets of issues regarding law enforcement 
coordination at posts.
    There is an audit component certainly looking at 
coordination issues, there is an intelligence component, we 
have a newly created intelligence division, and there are 
equities there for us as well. And then we will continue in-
post inspections, and in the upcoming round there will be 
considerable LEGATT presence at some of the upcoming 
inspections.
    So I cannot give you a very good answer, but I will 
certainly try and calculate a staff day or dollar cost for 
planned effort as well as past efforts. I can provide that for 
the record.
    Mr. Forbes. I would appreciate that. Thank you very much.
    [The information follows:]

   OIG Time Spent on Monitoring the Implementation of International 
                     Narcotics Programs in FY 1997

    During FY 1996-1997, OIG reviewed the Department of State's 
overall management and implementation of the counternarcotics 
certification process and the impact of the process on U.S. 
overseas counternarcotics efforts. Among the issues we examined 
were the Department's coordination of the process with other 
government agencies, the criteria and methodologies used for 
assessing counternarcotics performance, and the effect 
certification decisions have had on counternarcotics 
performance by other countries. The certification review was 
published in December 1996. Estimated time and costs for the 
assignment were 333 staff days, at a cost of $88,866 in 
salaries and $10,528 in travel.
    In the last quarter of FY 1996, OIG began a review of the 
Bureau for International Narcotics and Law Enforcement Affairs' 
(INL) management of its field program activities. We examined 
the bureau's management systems, staffing issues overseas, and 
potentially vulnerable narcotics program components, such as 
fuel, food and additional program support costs, such as travel 
and provision of incentive salary payments to host country 
personnel. These program components are more difficult to 
monitor and control than are durable program commodities such 
as aircraft, vehicles, boats, and other high value items. OIG 
has spent about 312 staff days in FY 1997 on this review, with 
estimated costs of $68,741 for salaries and $25,000 for travel.
    During the third quarter of FY 1997, we will implement a 
review of INL's law enforcement coordination efforts overseas. 
The review will examine the Department's role, authorities, and 
performance in coordinating overall U.S. Government law 
enforcement activities overseas, and assess the efficiency and 
effectiveness with which INL is implementing the new crime 
control programs that it has been charged with administering. 
At the request of INL's Assistant Secretary, the first part of 
this review will be an audit of procurement and financial 
practices at the International Law Enforcement Academy in 
Budapest, Hungary. We estimate we will spend 350 staff days in 
FY 1997, with estimated costs of $72,300 for salaries and 
$20,000 for travel.

                     icass implementation at posts

    Mr. Rogers. We are pleased to welcome the newest member of 
our Subcommittee, Mr. Tom Latham from the State that last 
furnished us a chairman of the Subcommittee, Neal Smith, and we 
are happy to have Iowa back in the fold as of January.
    Mr. Latham, you are recognized. Welcome.
    Mr. Latham. I am going to set a precedent which I hope I 
will continue, not having any questions at this time. A 
question on ICASS was what I was going to ask about.
    Thank you, Mr. Chairman.
    Ms. Williams-Bridgers. If I might, Mr. Chairman, just in 
response, my colleague handed me a note here on ICASS 
implementation.
    In addition to the audit we have ongoing of ICASS, ICASS is 
one of the four areas of emphasis in our post inspections. So 
we are asking questions of the people at post that are 
responsible, the people that have been empowered to make some 
of these critical decisions about costs and providers and the 
like: How is it working? How is the software that the 
Department has provided to you for the purposes of collecting 
the data, how user-friendly is that? What are the problems you 
are anticipating?
    As the USIA IG now, we are getting a very good sense of an 
agency that is financially constrained, has a very small 
American officer presence at posts, and is realizing huge, or 
at least at this point has anxieties about huge increases in 
costs at post.
    So we are getting a very good sense of a newcomer to the 
ICASS system, if you will, someone who previously has not paid 
a considerable portion of their administrative expenses at 
post, as well as the traditional provider from a State 
perspective.
    Mr. Latham. The Chairman brought up that it was not 
included in the budget. Is there any reason why that would not 
have been included in the budget to begin with?
    Ms. Williams-Bridgers. I quite honestly did not realize 
that. It was my understanding and my full expectation that the 
cost of any incremental costs for ICASS would be included in 
the budget, if not a supplemental request later this year.
    Mr. Rogers. If I may, staff indicates to me that there have 
been conversations with the White House, and our understanding 
is that a budget amendment is on the way.
    Ms. Williams-Bridgers. Okay.
    Mr. Rogers. Now, Mr. Latham, not to have asked a question, 
you got an answer without asking a question. You are good.
    Mr. Latham. It is scary, isn't it?
    Ms. Williams-Bridgers. Especially for an IG. We usually 
don't do that; it is out of character.

                 counternarcotics certification process

    Mr. Rogers. Now, Ms. Williams, let me bring up the 
counternarcotics certification process. This week the Secretary 
of State is supposed to be forwarding her recommendations to 
the President for him to certify by March 1 which of the major 
drug producing or drug transit countries are fully cooperating 
with the U.S. or taking sufficient actions on their own in 
international efforts to control drug exports.
    The major issue, of course, is again likely to be Mexico, 
where just a few days ago the army general serving as their 
drug czar was arrested on bribery charges, after 10 weeks on 
the job. He had received hours of confidential briefings by the 
U.S. experts, and the concern is that he may have passed 
information to one of Mexico's drug kingpins or more.
    You published a review of that certification process in 
December, and some major findings that you found were, ``The 
certification criteria and measurements of performance remain 
unclear, with the result that some final certification 
decisions appear arbitrary and subjective, hampering the 
Department's ability to portray the certification process as an 
objective measurement of the country's counternarcotics 
efforts.''
    You quote a number of senior officials at post who said 
that certification was a political rather than objective 
process, that horse trading took place, and the results were 
precooked.
    Is there a clear, consistent standard for what the words 
``cooperating fully'' mean in the certification that the 
President makes?
    Ms. Williams-Bridgers. The short answer is no, there is 
not. That was the finding in our report, that it is not clear 
at all what constitutes full compliance, so you have variances 
in the types of decisions or the apparent basis for decisions.
    Mr. Rogers. Is there a way to tighten up that definition, 
to make it more of an objective measurement as opposed to being 
subjective, the way it is now?
    Ms. Williams-Bridgers. Yes, we believe there is. We believe 
that the Department needs to work closely with all agencies 
involved in establishing clear criteria for determinations of 
full compliance.
    Mr. Rogers. How could we go about tightening up that 
language? What would it require?
    Ms. Williams-Bridgers. It requires more objective criteria 
to use to base decisions about which countries have been fully 
cooperating with U.S. efforts to exercise counternarcotics 
strategies.
    Mr. Rogers. Does that need to be language the Department 
writes, or is that required to be written into law?
    Ms. Williams-Bridgers. I am not certain if it requires a 
legislative change on that, Mr. Chairman.
    Mr. Rogers. Well, even if it is statutory, the Department 
would be within the law, I would think, to write more of an 
accurate definition of that term administratively.
    Ms. Williams-Bridgers. That is absolutely correct. I think 
there is much the Department can do to clarify countries that 
are considered in compliance and not, but I am not certain if 
it would require any additional legislation.
    Mr. Rogers. It seems to me that this is of major importance 
to us, whether or not Mexico or any other country is making the 
maximum effort and cooperating fully in trying to stem drugs, 
and yet when we have a blatant violation of that, as we have 
now, with the drug czar being arrested for bribery and dealing 
the information that he got from us confidentially to the drug 
kingpin, I mean, how much more of a blatant violation could you 
have? And yet it is likely to be smoothed over because we can't 
afford political trouble with Mexico.
    All of that could be cured, it seems to me, if they knew 
precisely what we meant and we knew what we meant, so we could 
measure their conduct by a yardstick that there is no guesswork 
in it, and it would be plain to the world, that this was a 
violation, irrespective of our friendship on general terms.
    Is that an accurate portrayal?
    Ms. Williams-Bridgers. I would agree with you.
    Mr. Rogers. How can we get that done? Can you do it, or can 
I do it?
    Ms. Williams-Bridgers. Your help would certainly be 
appreciated.
    Mr. Rogers. Whom could we talk to about it?
    Ms. Williams-Bridgers. The Assistant Secretary for INL is 
the lead responsible bureau for certification decision making.
    Mr. Rogers. Well, the Secretary would really be the one.
    Ms. Williams-Bridgers. Absolutely.
    Mr. Rogers. Maybe we could talk to the Secretary about it. 
I would bet she would have an interest in this.
    Ms. Williams-Bridgers. We would be glad to help you out in 
any way we can to support that.
    Mr. Rogers. She will come before us one of these days. 
Maybe we will have a chance to discuss it. Maybe before that, 
she will have a chance to do some thinking about some specific 
yardstick we can lay down so that Mexico, and others, will know 
what we mean when we say ``cooperating fully on interdicting 
narcotics.''
    Ms. Williams-Bridgers. Yes.
    Mr. Rogers. Do you think that is right?
    Ms. Williams-Bridgers. I think that is absolutely right. We 
have an outstanding recommendation to the INL Bureau, to make 
clarifications in the certification criteria, so we are on the 
same wavelength, Mr. Chairman.
    Mr. Rogers. The New York Times article today indicated that 
now the Administration apparently is considering a 
certification that Mexico is not fully cooperating, but 
granting a waiver from the sanctions based on the ``vital 
national interests of the United States.''
    Ms. Williams-Bridgers. Yes.
    Mr. Rogers. Is there any objective standard for granting a 
waiver of sanctions for noncooperation because of vital 
national interests that you are aware of?
    Ms. Williams-Bridgers. That, too, needs much improvement. 
What we suggested in our report is that another category 
perhaps be created, that of limited certification, one that 
recognizes the tremendous impact of decertification and the 
attendant sanctions that must be then imposed on a country, but 
at the same time sends a very clear message to the country that 
it is not viewed as being fully cooperative with the U.S. 
Government's efforts in countering the narcotics area.

                     nonimmigrant visa datasharing

    Mr. Rogers. Now, your written statement indicates continued 
data sharing problems between the State consular offices and 
INS and law enforcement agencies in relation to nonimmigrant 
visas. This is something that we have been preaching on this 
Subcommittee for all the years I have been here, which is 12. 
State will say yes, we are marching right ahead with this 
information and they are cooperating. INS says, when they are 
here, yes, we are cooperating fully; but nothing ever happens. 
I think we are seeing protection of turf here. What do you 
think?
    Ms. Williams-Bridgers. I think, in fairness to the 
Department and INS, there has been considerable progress in 
immigrant visa and nonimmigrant visa processing. There has been 
considerably more data sharing than there was in the past. The 
technologies have advanced, and there are no longer some of the 
incompatibilities in the various systems that would prevent 
data sharing.
    There is a new data share project that is being advanced, a 
pilot project with INS, on immigrant visas. The continued 
shortcomings, however, are in the nonimmigrant visa area, where 
there are needs for improvements. There are continued needs for 
improvements on visa issue answers and sharing of that sort of 
information.
    Lastly, in the area that you also mentioned of law 
enforcement data, it is not just INS, it is also the FBI, the 
larger law enforcement community, that has continued to be 
reluctant to share information with our consular officers.
    Now, understandably, there are some concerns out there that 
need to be addressed before that information can be readily 
shared. Given the demands on our visa lines now, given the 
demands on our consular functions at position, our consular 
officers rely to a great extent on foreign service nationals to 
help process the visas.
    Certainly we would not advocate that law enforcement 
information be put in the hands of foreign service nationals. 
There have to be controls placed over access to very sensitive 
information. But we have been able to do that with other data 
systems out there, systems that INR runs, for example, and I 
think that INS and the Department and the larger law 
enforcement community need to work aggressively to address 
whatever controls need to be put in place so that that 
information can be shared. It is irresponsible for the law 
enforcement community not to share vital information with 
consular officers so they can make more informed decisions 
about whom to grant visas to.
    Mr. Rogers. Well, you raise a valid point about the law 
enforcement agencies being a little bit touchy about sharing 
their data. We have asked the FBI to explain what they are 
doing and why. We haven't got the report back. I expect it 
soon.
    But nevertheless, irrespective of that, I still don't think 
INS and State are on the same wavelength on sharing information 
between them that would reduce the risk of fraud, 
counterfeiting, not to mention allowing into the country 
criminals, drug dealers, and other dangerous people. One of 
these days, it is going to hit the fan, because there is going 
to be one of these people that causes a major problem in the 
country, and people will look to State or INS and say, why 
didn't you do so and so? Why didn't you cooperate? And we have 
already had some of that.
    Don't you agree that this is an explosive problem?
    Ms. Williams-Bridgers. Oh, I absolutely agree.

                   resource needs for visa processing

    Mr. Chairman, if I might add too, there are a couple of 
other areas that I think need attendant attention and resource 
commitments, and in the visa processing area certainly data 
sharing is a large component of the cure for making informed 
decisions, but also it is a matter of having enough people on 
the line to man the visa lines and having adequately trained 
consular officers on the line.
    Right now in some positions, high fraud positions, for 
example, I returned recently from Lagos, Nigeria; I saw junior 
officers, first tour officers, interviewing 300 people a day. 
The growing consular demands are astronomical, and without more 
resources--you asked earlier about areas that need more 
resources--without more resources being directed into the 
consular function to make sure we have sufficient numbers of 
people and adequately trained people in our visa lines, then 
fraud will continue to exist.
    Mr. Rogers. Okay.
    Mr. Skaggs.
    Mr. Skaggs. I am just reeling from the idea of 300 
interviews a day. You can't do 300 interviews a day.
    Ms. Williams-Bridgers. You can't do it and be expected to 
exercise good judgment about making a determination of whether 
or not the documents they provide are good or the individuals 
are providing credible stories.
    Mr. Rogers. That is one every 2 minutes.

                         EVALUATION OF TV MARTI

    Mr. Skaggs. Well, I was intrigued by the framework that you 
mentioned in your opening comments by which you evaluate 
programs on how well they implement our foreign policy 
objectives, whether the resources are appropriately applied, 
and how well the platform is performing, if I am summarizing 
roughly correctly.
    Ms. Williams-Bridgers. Yes.
    Mr. Skaggs. How would you apply those standards to TV 
Marti?
    Ms. Williams-Bridgers. Unfortunately, I don't have a good 
basis for drawing any conclusions and making a judgment about 
that. We have not recently done any work on TV Marti. Most of 
our efforts recently have been expended on Radio Marti.
    Mr. Skaggs. If you would take a look at that and let me 
know, I would appreciate it.
    Ms. Williams-Bridgers. Certainly.

         SCOPE OF OIG OFFICE OF CUBA BROADCASTING INVESTIGATION

    Mr. Skaggs. A great segue then to Radio Marti. You and I 
have talked, and I appreciated having that conversation with 
you after your recent report was issued. I continue to be 
concerned about how narrow it was compared to the investigation 
originally undertaken by your colleague who then ran the USIA 
IG shop. I am just wondering if you would explain how that 
happened?
    Ms. Williams-Bridgers. Yes. As I recall, there were three 
basic allegations that she was looking at, the former USIA IG. 
One dealt with allegations of misuse of government funds.
    As I understand it, although I must admit to you I have not 
read any reports or any of the work papers supporting that 
work, but as I understand it, at the conclusion of the 
investigation of allegations of misuse of funds by the 
President's Advisory Board, they found no basis to substantiate 
those specific allegations.
    There was another set of allegations with regard to 
improper personnel practices. The former USIA IG had an audit 
ongoing and concluded in their final audit report there were a 
number of personnel mismanagement practices there and made some 
recommendations in that regard.
    The issue that came to the table when we merged with the 
USIA OIG, related to specific allegations made by the research 
analysts, about reprisal actions taken by OCB in reaction to 
concerns that they had expressed about management practices.
    Mr. Skaggs. Again, my question was, why the narrow focus; 
and if I am interpreting your response correctly the reason is 
because you thought the others had already been covered in some 
fashion?
    Ms. Williams-Bridgers. That is right.
    Mr. Skaggs. Interestingly, the product that covered those 
other things, which I guess took its most concrete form in a 
draft prepared by John Sinclair, then the assistant IG at USIA, 
has never been made available, I assume that got sent to you 
when you were merged?
    Ms. Williams-Bridgers. I have never seen such a report. Are 
you talking about a report on the allegations of misuse of 
funds by the President's Advisory Board?
    Mr. Skaggs. The whole scope of investigation undertaken 
originally by the USIA IG.
    Ms. Williams-Bridgers. We mentioned there was no report. 
What I did read, however, was a collection of depositions of 
employees of Radio Marti. I did read those.
    Mr. Skaggs. There was both a draft report that had been 
prepared by the then OIG at USIA. Now, gosh, Mr. Chairman, it 
has been almost 2 years ago, I think, but then I have it on 
pretty reliable authority that John Sinclair had prepared a 
final draft that was awaiting review at the time of the merger, 
and that--you are not familiar with that?
    Ms. Williams-Bridgers. No one ever submitted a draft report 
to me, no.
    Mr. Skaggs. Can we find that? Mr. Sinclair now works at 
Interior, as I understand it, and----
    Ms. Williams-Bridgers. Mr. Skaggs, let me also point out to 
you that regardless of what kind of summary document or report 
that the former USIA IG prepared, when my office examined the 
work that had been done by the former USIA OIG, we found there 
was much more work that needed to be done. We found there were 
people that should have been interviewed by our standards that 
were not interviewed. In the course of the months, we 
identified documents that had not been previously reviewed.
    We re-interviewed a number of people that had been 
previously interviewed simply because of the passage of time in 
response to requests from some of those individuals that they 
wanted to share with us what they thought was relevant 
information.
    So whatever document was prepared, it would not reflect in 
any way----
    Mr. Skaggs. You are acknowledging you haven't seen the 
document that evidently represented the most complete effort by 
your predecessor agency. We ought to find that and see what it 
said. Presumably it might have helped you get along with what 
you are undertaking, better knowledge of the raw materials that 
I gather you inherited.
    Ms. Williams-Bridgers. We had the raw materials, as well as 
some of the people that were party to that initial 
investigation.
    Mr. Skaggs. Okay. Could you track that down? If you have 
any problems, let me know, because I think we can find Mr. 
Sinclair and he might know what file cabinet it is in.
    Ms. Williams-Bridgers. Okay.
    Mr. Skaggs. Was there any communication to you from senior 
administration officials outside the OIG community with regard 
to the conduct of that investigation?
    Ms. Williams-Bridgers. The course it should take? No, 
absolutely none. Of course, we interviewed Dr. Duffy because he 
was a principal involved in the reinvention plan, but 
absolutely no other communications or contacts with anyone else 
that expressed an opinion about how that investigation should 
proceed.
    Mr. Skaggs. If I may, Mr. Chairman, I think rather than 
take up more time this afternoon, may I submit some questions 
for the record on this? I know that you continue to be 
fascinated by it, but I don't want to abuse your patience.
    Mr. Rogers. It is one of the things I live for. Thank you, 
Mr. Skaggs.
    [The information follows:]

     Draft USIA/OIG Information on the Office of Cuba Broadcasting

    OIG has this information from Mr. Sinclair, consisting of a four-
page summary of a number of affidavits from the ongoing investigation, 
copies of the affidavits, and a transmittal letter. However, as the 
previous IG for USIA stated in her July 18, 1995 transmittal letter to 
Congressman Skaggs, ``. . . the OIG investigation is not yet complete. 
We need to conduct several more interviews, and we need to further 
evaluate the information we have gathered. As a result, we have not 
completed our Report of Investigation.'' Additionally, we have a copy 
of a more extensive summary and compilation of interviews which was 
prepared as of November 1995. These documents were interim in nature 
and based on limited data available at the time they were authored. OIG 
had reviewed these documents during the course of its investigation, 
and their contents were considered in the development of the final 
investigative report.

       OIG OPINION OF ADEQUACY OF RESOURCES FOR SECURITY OVERSEAS

    Mr. Rogers. Now, on security, what is your opinion on the 
adequacy of resources for security overseas and risks and 
vulnerabilities, in a brief statement?
    Ms. Williams-Bridgers. Starting from the larger picture of 
the Bureau of Diplomatic Security, we are quite concerned about 
what the future holds for diplomatic security. In our review of 
the budget, its current mission, its ability to execute its 
mission given the resource levels that are now committed to it, 
we found that Diplomatic Security was able to execute its most 
basic mission of protecting people, data, and facilities.
    However, we continue to be concerned about the adequacy of 
training of security officers--particularly junior officers, 
that are deployed to posts, about the use of regional resource 
spaces to provide security for posts. We continue to be 
concerned about the facilities themselves, in some locations, 
that we do not believe provide adequate protection for our 
people at posts.
    So the future holds much anxiety and doubt about whether or 
not diplomatic security will be able to perform its mission, 
given the mission as stated today. However, we believe that 
there are opportunities for better deployment of resources.
    With regard to a 24-hour presence and protection of our 
information and assets overseas, we think the Department needs 
to better rationalize its deployment of resources. There is no 
global policy at this point that allows for coherent decision-
making about where 24-hour guards need to be deployed.
    The Department of Defense has come to the table and said it 
will fund Marine security guards for its presence overseas. 
That is an excellent start to making some course correction, 
but much more needs to be done in that regard.

                  SELLING SURPLUS PROPERTIES OVERSEAS

    Mr. Rogers. Now, on surplus property overseas, what steps 
has the Department taken, if any, and what progress have they 
achieved in selling assets in a timely and cost-effective way?
    Ms. Williams-Bridgers. Within the past year, the Department 
has taken a number of steps. We have seen recently lists of 
properties that have been sold, in both fiscal year 1995 and 
fiscal year 1996. That is a good step in the right direction. 
Previously you couldn't get such lists out of the Department.
    The Department needs to have a methodology to better assess 
the value of properties overseas. We have been working with 
them in that regard. It stems from work we have been doing on 
our financial statement audits of real property.
    The Department just recently, I understand, is reaching 
agreement on a charter for this advisory panel that GAO 
recommended be established for the disposition and sale of 
properties. The panel would, if it meets the requirements that 
we discussed last year, identify the inventory of properties 
that needed to be sold, would solicit from posts an 
identification of properties that needed to be sold, and would 
develop some strategy for disposing of those properties.
    There is an outstanding problem though, and that is, the 
posts don't have an incentive to readily identify those 
properties that need to be sold. The posts continue to be 
concerned that once those properties are identified and 
disposed of, they will never see the return on that investment 
or the return from the proceeds of the sale. So that incentive 
structure needs to be addressed as well.
    Mr. Rogers. Well, as you say, we set up that advisory panel 
in last year's conference report at your recommendation, and 
this is an area we are going to be following very closely, 
because we have assets overseas that need to be sold.
    Ms. Williams-Bridgers. Yes.
    Mr. Rogers. And I expect to see a list of properties 
recommended for sale.
    Ms. Williams-Bridgers. Yes.
    Mr. Rogers. It is time we did that. One of the first big 
tests of whether or not you are going to have any influence on 
selling surplus property is in Germany, where we are doing a 
massive relocation from Bonn to Berlin----
    Ms. Williams-Bridgers. Right.

           size and timing of relocation from bonn to berlin

    Mr. Rogers. I understand that this effort is being financed 
through the sale of property in Bonn. What is the size and 
timing of that effort, and how well is the Department handling 
it?
    Ms. Williams-Bridgers. Mr. Chairman, if I may, can I 
provide that answer to you for the record? I don't have readily 
available the time frames for that move and the disposition of 
those properties.
    Mr. Rogers. Sure. Can you give us a general answer?
    Ms. Williams-Bridgers. We know that the Department has 
disposed of a number of properties in Bonn, and, as you 
mentioned, that they are going to make the appropriate swaps 
for Berlin.
    An inspection that we did in Germany last year indicated, 
however, some grave concerns about the renovation of several of 
the housing units in Berlin. It ultimately led to our 
recommendation, to which the Department responded positively, 
for stopping the renovation of that particular property. It was 
a sizeable sum. The building plans were vague and inaccurate, 
the contractor was not up to par, there were a number of 
problems there, but, as I understand it, they have let a new 
contract or are about to let a new contract. But any more 
details, Mr. Chairman, I would have to provide to you for the 
record.
    Mr. Rogers. I would appreciate your doing that. We would 
like to have a report on that whole situation over there, 
because it is a massive one, and we have a lot of property 
there.
    [The information follows:]

   Status of the Relocation of U.S. Diplomatic Presence From Bonn to 
                                 Berlin

    Embassy Bonn, in cooperation with the Department of State 
and other Executive Branch agencies, has developed a 
comprehensive plan for restructuring and relocating our 
diplomatic presence in Germany. This integrated effort involves 
moving the bilateral components of the Embassy from Bonn to 
Berlin, concentrating regional support activities at a Regional 
Service Center (RSC) in Frankfurt, and reinventing the 
representation of vital US interests in Germany in an 
environment of increasingly limited funding for the 
international affairs agencies. Some 360 American and Foreign 
Service national positions (State, USIA, and other agency 
personnel) are being transferred from Bonn to Berlin in phased 
increments during the 1996-2000 time frame. The bulk of these 
positions will move in 1998-1999, with the formal relocation of 
the Ambassador planned for 1999. The residual Embassy presence 
in Bonn is projected to end during FY 2000. An estimated 130 
American and Foreign Service national positions are moving to 
Frankfurt during the same time frame. At the completion of this 
relocation and restructuring process, overall staffing at the 
Embassy and constituent posts will total about 900 positions, 
as compared with over 2,100 in 1992.
    The real property dimensions of this relocation are complex 
and in a state of continual evolution. In Berlin, the 
Department's Office of Foreign Buildings Operations has 
selected a design for a new Chancery building to accommodate 
our smaller bilateral presence. The Embassy has developed an 
interim occupancy plan using the former East Berlin chancery 
and annex buildings, the Clay Kaserne Consular Section in West 
Berlin and other leased properties as office space until the 
new Chancery and the renovated Goertzallee general services 
compound are ready for occupancy. In 1994, Embassy Bonn and the 
German Government agreed to exchange 156 residential units in 
Bonn for 157 residential units in Berlin. Thus, the basic 
building blocks of the Department's post-2000 presence in 
Berlin are in place or on the drawing boards. Meanwhile, other 
properties in Berlin that are excess to U.S. needs have been 
included in a country-wide asset management plan that is 
expected to generate a significant portion of the funding 
required for the relocation.
    In Bonn, the chancery building will revert to the German 
government once the relocation is complete. USG-owned office 
buildings, warehouses, community facilities and housing units 
at the Plittersdorf compound and at several other locations in 
Bonn will be exchanged or sold as they are vacated. Properties 
made available by the closing of the Consulate General in 
Stuttgart and the restructuring of operations at other 
constituent posts will be similarly treated under the asset 
management plan. The follow-up inspection team that I am 
sending to Germany this spring will assess the current status 
of the plan, including its important real property dimension. 
In our review of Embassy Bonn, Germany, OIG recommended 
suspending modifications in the Leipzig consulate general 
building at a cost of $400,000 and exploring cost saving 
alternatives. The report also recommended terminating a flawed 
contract for renovation of Berlin housing for several million 
dollars, revising the scope of work required, and letting a new 
contract that more accurately reflects the needs of the 
mission. The Department has terminated the flawed contract and 
revised the scope of work required. My staff will work closely 
with Embassy Bonn and the Department of State in evaluating the 
formulation and implementation of the asset management plan.

              u.s. information service presence in germany

    Mr. Rogers. Now, finally, let's stay on Germany a few 
minutes. Your inspection of Germany found that the USIA 
presence in Germany is very, very generous, with a budget of 
some $17 million and more than 120 American and German staffers 
spread over Embassy Bonn and Embassy offices in Berlin, and six 
branch posts, one of the largest USIA establishments in the 
world.
    Do we need such a large USIA presence, given available 
resources and the availability of mass media that provide 
continuous exposure to American culture, information and 
analysis? Do we need that kind of presence in Germany compared 
to the rest of the world?
    Ms. Williams-Bridgers. Excellent question, and I certainly 
could not provide that answer to you. I am not certain if USIA 
could. USIA has a regional allocation system that we have not 
looked at recently, so I am not sufficiently familiar with the 
criteria that USIA uses to establish its presence overseas.
    Mr. Rogers. In your Inspection Report, you say, ``U.S. 
Information Service, focusing intensively on current issues,'' 
in Berlin, ``lends expert and generous support to mission 
objectives. As well administered as the program is, however, 
its generous presence''--talking about Germany--``in a stable 
allied country raises larger questions.'' But then you never 
say what those larger questions are. What are the larger 
questions raised by our generous presence in Germany?
    Ms. Williams-Bridgers. I really can't provide a response to 
you right now. I would be glad to see if we have additional 
information to provide for the record.
    Mr. Rogers. Well, it just seems like you were starting out 
saying we have too many people and money being spent in a 
country that is peaceful, an ally in every way, and I would 
like to know if you really feel that way.
    Ms. Williams-Bridgers. I am sure we feel that way if we 
said it, but I will provide you with additional information to 
clarify that question.
    [The information follows:]

                        USIS Presence in Germany

    The U.S. mission presence in Germany totals about 2,100 
staff. We looked at USIA resources in Germany in the context of 
Mission staffing levels adjusted to the post Cold War conduct 
of foreign relations in Central Europe and the real decline in 
budgets that have limited agency operations worldwide. My 
inspection team found that USIS programs in Germany supported 
the Ambassador's multifaceted public diplomacy in pursuit of an 
ambitious American agenda. Consistent with the movement toward 
a leaner, more nimble U.S. presence as laid out in the Mission 
2000 strategic plan, USIS absorbed a 19 percent reduction in 
its FY96 budget by closing regional centers in Stuttgart and 
Hanover, and shedding 7 American and 21 FSN positions. We also 
echoed the questions of independent observers who have asked 
whether a USIS presence ranking as one of agency's largest 
overseas operations was necessary in a highly developed 
industrial democracy that is one of our closest allies. They 
noted that USIS' $17 million public affairs budget, which 
ranked second worldwide behind USIS Japan, is large in terms of 
the USIA budget but relatively insignificant when compared to 
the total information/media effort directed by public and 
private sources alike at influencing the Germans. It has been 
suggested that USIA's public affairs resources would be better 
spent if directed to other audiences. Many observers contrast 
the comparative richness of the USIS program in Germany with 
what is happening in many of our embassies in Africa, the South 
Pacific, and other locations, where USIS operations are being 
closed down or substantially reduced.
    My office will continue to work closely with the Department 
of State and USIA in supporting and evaluating the Mission's 
program to reinvent the representation of U.S. interests in 
Germany while shifting the locus of that representation from 
Bonn to Berlin. An important element of that continuing effort 
will be to assess the Chief of Mission's determinations about 
appropriate staffing levels for USIS and other agencies under 
NSDD-38 authority. I plan to send a follow-up inspection team 
to Germany this spring that will address the issue you are 
raising. However, the larger question that remains to be 
addressed is what role USIA should play in Western European 
countries and other democratic nations when the needs for 
democracy building are so great in other parts of the world.

    Mr. Rogers. Okay. Well, thank you very much for your 
testimony here today. Please stay in touch.
    Ms. Williams-Bridgers. Thank you very much.

[Pages 252 - 319--The official Committee record contains additional material here.]


                                         Wednesday, March 19, 1997.

    DEPARTMENT OF STATE INTERNATIONAL ORGANIZATIONS AND PEACEKEEPING

                               WITNESSES

BILL RICHARDSON, AMBASSADOR
PRINCETON N. LYMAN, AMBASSADOR

    Mr. Rogers.  The committee will come to order.
    Today, we are very pleased to welcome Ambassador Bill 
Richardson and Ambassador Princeton Lyman to the Subcommittee. 
Special congratulations go to Ambassador Lyman, who was just 
sworn in this morning as Assistant Secretary for International 
Organization Affairs. And congratulations, of course, to our 
own Ambassador Richards, our colleague with whom we served here 
in the House of Representatives for so many years, on becoming 
our representative to the United Nations. We are especially 
proud of him for his achievements. We're pleased to welcome 
both of you. Bill, I hope that you will always feel that this 
House is your home.
    This hearing is about the funding this Subcommittee 
recommends to the House of Representatives to pay assessments 
for international organizations and peacekeeping activities, 
including the United Nations. While this Subcommittee has 
consistently recognized the important functions that the United 
Nations serves, it's also been insistent on addressing widely 
recognized problems of a bureaucracy with overlapping functions 
and agencies unwilling or unable to change themselves.
    We've worked on a number of reforms to promote a more 
efficient and effective U.N.; the creation of an Inspector 
General, a no-growth budget for the first time in its history, 
reductions in the size of the staff, reining in peacekeeping 
missions to those the U.N. is most capable of effectively 
conducting, and encouraging this Administration to take a 
strong position on the need for reform and for a Secretary 
General dedicated to reform. Reform is now at the top of the 
agenda, with respect to the U.N. And that's an enormously 
promising development.
    It's an opportunity that must not be squandered. And 
Ambassador Richardson and Ambassador Lyman, we look forward to 
continuing to work with you to realize real reform. Your 
written statements will be made a part of the record. We'd like 
you to summarize them if you'd like. We'd be pleased to hear 
from you. Ambassador Richardson, you're on deck.

               Opening Statement of Ambassador Richardson

    Ambassador Richardson. Thank you, Mr. Chairman and Members 
of the Subcommittee. Thank you very much for inviting me here 
today. This is my first opportunity to appear in front of you 
since assuming my new duties. And it's both a little strange 
and nostalgic to be sitting on the other side of the dias to 
discuss the matters before this Committee.
    Thank you for welcoming me home.

                             united nations

    Mr. Chairman, after a month in New York, I've confirmed for 
myself that the U.N. remains an institution that is enormously 
useful for the United States and it's important that we remain 
engaged.
    In recent weeks, we've been able to maintain full sanctions 
by the international community on Iraq and Libya.
    We're ensuring that the important U.N. sponsored Peace 
Agreement with Guatemala is able to go into effect so that 
American taxpayers don't have to spend money averting problems 
that are close to home. And in El Salvador, because of a U.N. 
brokered and guaranteed peace accord, a military that a few 
short years ago was fighting a civil war, may soon be 
contributing to international peacekeeping around the world.
    Even prior to my current position, I already saw first-hand 
how the United Nations helps further our interests. In North 
Korea, inspectors from the IAEA have helped verify that the 
North Koreans are living up to their commitments not to produce 
nuclear weapons.
    In remote parts of Sudan to which Americans have little or 
no access, I have seen how U.N. affiliated bodies help protect 
and feed the victims of terrible humanitarian disaster. In 
Burma, I've seen how the nations of the world through the 
General Assembly have brought hope to embattled democrats by 
justly condemning a brutal and repressive regime.
    Mr. Chairman, with all of those considerations in mind, 
today I come to discuss with you the Administration's funding 
request for international organizations and conferences for 
fiscal year 1998. I don't intend to review the details of our 
proposal. That information will be presented to you shortly by 
Assistant Secretary Lyman.

                              u.n. reform

    I do want to apprise you of the status of financial and 
reform issues in New York where I think we've begun to make 
some important new progress. As you know, Mr. Chairman, we're 
committed to accomplishing three ambitious and demanding tasks 
over the next few years. First, the substantial reform and 
reinvigoration of the U.N. system so that it is prepared and 
able to meet the challenges of the 21st Century. These include 
vital security, health, crime and drug control activities; all 
of great importance to the American people.
    Second, reaffirming and sustaining vigorous American 
leadership within the United Nations. Whether defending our 
trade interests, maintaining sanctions against aggressive 
states or controlling the proliferation of weapons of mass 
destruction, American leadership is indispensable to protecting 
our interests.
    Third, bringing U.S. financial support of international 
organizations to a level that is sustainable and supported by 
the Congress. Mr. Chairman, as you know under the leadership of 
then-Ambassador Albright, major progress was made towards 
reforming every aspect of the way the U.N. conducts its 
business.
    I can report to you today that last Monday, U.N. Secretary 
General Kofi Annan took a significant and unprecedented step 
towards the kind of structural reform that will help the U.N. 
do more and for less.
    He has already made a public commitment to carry out those 
reforms that are within his authority; a commitment he made to 
Congressional leaders in January. Now, in a detailed and 
thorough blueprint, he specified a series of ten reform 
benchmarks. He will begin to implement these key benchmarks 
very soon extending over the next several years.
    The presentation of a negative nominal growth budget 
proposal for the 1998-1999 biennium and the elimination of 
1,000 posts. A 13 percent reduction in administrative costs, 
from 38 percent to 25 percent by the year 2001, with the annual 
savings directed to substantive programming.
    A significant 25 percent reduction in U.N. documents and 
paperwork by December, 1998. The establishment of a Code of 
Conduct. The merging of three separate development departments 
into one. The merging of Conference Services Division and 
General Assembly Affairs Division.
    The restructuring of the Department of Public Information. 
The country-level coordination of U.N. programs. The 
establishment of a centralized management and issues capability 
to handle matters that cross departmental lines.
    This is a plan that indicates the Secretary General has 
heard loud and clear the message from member states and is now 
taking bold and effective action. It's a plan that encompasses 
many of the most important reforms our countryand, you, Mr. 
Chairman, have advocated and worked for over the last three years.
    Thus, he has answered the call for leadership on reform and 
is prepared to exercise the powers of his office in an 
affirmative and in an appropriate manner.
    We recognize that implementing some of these proposals are 
going to meet some resistance. It is my commitment to you today 
that we will spare no effort to ensure that the U.N. delivers 
on these reforms.
    We're also very pleased that since his appointment, Mr. 
Annan has wielded his authority as Chief Administrative Officer 
to root out incompetence and inefficiency. He has already cut 
several senior positions from his Executive Office. We're also 
impressed by the swift removal of inept officials at the Rwanda 
War Crimes Tribunal.
    We are pleased at his establishment of a policy 
coordination group, an idea we have strongly supported, to 
bring cohesion and authority to the decision-making process. 
Mr. Chairman, this is a good start, and sets the kind of 
example he expects of the entire institution.
    But many of the broader structural and organizational 
reforms are beyond the authority of the Secretary General. They 
must be negotiated with other member states, as well as the 
governing councils of affiliated organizations.
    We're already working to eliminate outdated functions, 
consolidate duplicative and overlapping programs, and ensure 
that goals and priorities that are clear and achievable are set 
across the organization.
    This is why a fully functioning, strong and effective 
Office of Internal Oversight Services remains so vital. We have 
repeatedly indicated to the U.N. the importance of Inspector 
General Karl Paschke's work.
    We're very pleased that even within the budget cap, OIOS 
Office, which is basically an Inspector General function, is 
being provided the resources necessary for full staffing and 
for its investigative, monitoring, and audit activities.

                              u.n. arrears

    We will maintain our strong efforts to ensure that the 
Office continues to be provided with a level of resources 
sufficient to allow the OIOS to fulfill its mandate 
effectively. However, Mr. Chairman, based on my first four 
weeks in New York, I must tell you that the pace and scope of 
this kind of real progress towards reform will not continue 
without progress of our own towards paying our arrears.
    Our failure to pay is also impeding our efforts to achieve 
a more equitable and fair scale of assessment, a key part of 
our proposal to bring contributions from the CIO account down 
to $900 million for fiscal year 1999, with no arrears at that 
level. It's also increasingly affecting every other interest we 
have at the U.N. and harming vital relationships that we've 
worked to build over many years with U.N. delegations, 
entities, and related groups.
    Mr. Chairman, I recently briefed U.N. delegates in New York 
on the Administration's proposal to schedule our arrears, 
reduce budgets, and achieve further U.N. reforms. The first 
reactions I got were blunt, and can be summarized this way.
    ``Even if we give the United States all that it is seeking, 
why should we believe that it will honor its commitments, when 
it has not done so in the past?''
    This question is a fair one. Our ability to achieve our 
goals at the U.N. is impaired because member states are not 
convinced that in the end, even with reform, we'll pay our 
share.
    I've explained to delegates that this is one reason why the 
President's budget calls for advanced appropriations, so that 
member states will have some assurance that we will really make 
substantial payments towards our arrears as reforms are 
implemented.
    They also understand how our government works and they are 
well aware that it is Congress and not the Administration who 
will provide the necessary appropriations. And they understand 
that reforms are essential.
    The problems are particularly apparent as we work to adjust 
the scales under which countries are assessed for U.N. costs, 
including a reduction of the U.S. assessment rates for regular 
budget activities in peacekeeping.
    The Administration believes that the U.N. assessment system 
should reflect recent changes in the global economy and that 
the U.N. would function better with a broader base of 
shareholders who have a more significant financial stake in the 
international system.
    To achieve this, we need the approval of 184 other member 
states, many of whom would have to pay more if we pay less. 
Without the leverage of a credible U.S. commitment to pay our 
arrears, we will have little chance of convincing them.
    Other delegations have indicated to me that they 
understand, even if they do not yet accept our requirements, 
and they are willing to work with us. But they are firm in 
insisting that first, there be a credible commitment that the 
United States will honor its treaty obligations to both pay 
arrears and meet our commitments in the future.
    I hope that I can bring back to New York a message that 
while reforms are being debated, while questions and concerns 
remain to be addressed, there is bipartisan support for the 
United States making a financial commitment in which U.N. 
members can place their confidence.
    I can assure you, Mr. Chairman, that the willingness and 
commitment of the Chairman, yourself, and other Members of the 
Subcommittee to become engaged in the reform and financial 
process at the U.N., has already played an important and 
positive role.
    The meetings that have already occurred between Members of 
the House and Senate, Secretary General Annan, and hopefully 
soon with you, Mr. Chairman, are useful and productive. I hope 
that this dialogue that you've started will continue.
    Mr. Chairman, let me close by saying that President Clinton 
has made repaying our debt to international organizations a 
foreign policy priority because, as you know so well, the 
multi-lateral system, more than ever, makes an important 
difference on the vital issues that we care about.
    As you well know, our total contributions to international 
organizations amount to about one-tenth of one percent of the 
federal budget.
    That is why we are committed to revitalizing the U.N. by 
reforming every aspect of its operation, paying what we owe, 
avoiding future debt, and guaranteeing a sustainable level for 
our contributions. I look forward to working with you, Mr. 
Chairman, in the days ahead.
    [The statement of Ambassador Richardson follows:]

[Pages 326 - 336--The official Committee record contains additional material here.]


    Mr. Rogers.  We'll be in recess for a minute or two.
    [Recess.]
    Mr. Rogers.  The hearing will resume. Ambassador Lyman.

                 Opening Statement of Ambassador Lyman

    Ambassador Lyman. Congressman, yes. I've submitted a 
written statement. I'll just summarize very quickly here just 
some of the numbers in the request. There were two points.

                             budget request

    Ambassador Richardson has presented the overall rationale 
and political importance of our presentation. In specific 
terms, the request for our contribution to international 
organizations this year is $969,491,000. That will fully fund 
our assessed contributions for calendar year 1997. These are 
contributions that are assessed based on an existing biennium 
budget in these organizations.
    For peacekeeping, we are requesting $240 million. I'm 
pleased to say this is a $66 million reduction from our request 
last year. And it reflects not only the importance of 
supporting properly deployed and administered peacekeeping 
operations, but it also represents the application of the kinds 
of criteria the Chairman talked about, much closer and a much 
more careful review of the mission, the appropriateness, the 
terms of reference, and the basis on which peacekeeping 
operations are deployed.
    For international meetings and conferences, we are 
requesting $4.9 million. In addition, as you know, 
theAdministration is requesting payment of arrears totaling $1.021 
billion; $100 million of this we are requesting in the fiscal year 1998 
appropriation. Of that amount $54 million will be to cover our regular 
U.N. arrears, and the balance would go toward our peacekeeping arrears.
    In an advanced appropriation, we would request for fiscal 
year 1999 a total of $921 million for the balance of the 
arrears. There are many reasons, of course, that we press for 
action along these lines. Congressman Richardson has emphasized 
those.

                            budget strategy

    I would add only one more. In many of these forums, we are 
negotiating or involved with decisions that have major impact 
on the United States economic situation. For example, the FAO 
sets phytosanitary standards for agricultural products. We are 
one of the world's largest agricultural exporters.
    We export $60 billion a year. Right now, FAO is looking at 
the issue of biotechnology which some would like to see as a 
limit on our agricultural exports. We have to be well 
represented at the meetings that look at those decisions. And 
there are many more in the U.N. system that decide standards 
and the basis on which our trades take place.
    On the budgetary front, Ambassador Richardson has mentioned 
our intention to renegotiate this year the scale of assessment 
by which the United States is assessed in these organizations. 
We have an exceptional opportunity, but a very tight time line 
in which to negotiate those changes.
    In the next six to nine months, all the next biennium 
budgets for the United Nations specialized agencies will be 
negotiated, as well as the scale of assessment by which they 
will be financed. It's in this time period, between now and the 
end of the year, that we have the opportunity to not only bring 
down these budgets, but to change the scale of assessment with 
two objectives in mind for the United States.
    One, to get the United Nations to recognize and formalize 
the 25 percent cap on our peacekeeping contribution which 
Congress legislated in fiscal year 1996. Second, to reduce our 
regular assessment down as close as possible to 20 percent.
    The net effect of those changes would be as Congressman 
Richardson said, that we could come back to you in fiscal year 
1999 with a request for this account at $900 million, close to 
the amount that Congress has appropriated in the last two 
years, but no arrears would be involved at that level as has 
happened in the past.
    So, these are the elements of our proposal, Congressmen. 
They represent a maintenance of our position, an underpinning 
of our efforts of re form, the protection of very important 
American interests whether security, health, or trade, and an 
opportunity to change the basis in a major way by which the 
United Nations is financed, maintaining our influence, but 
putting our obligations at a level that we hope will have 
bipartisan support. Thank you.
    [The statement of Ambassador Lyman follows:]

[Pages 339 - 346--The official Committee record contains additional material here.]


                              u.n. arrears

    Mr. Mollohan. I know from talking to you and hearing your 
testimony that it is difficult to maintain our leadership at 
the U.N. with these big debts.
    Can you give us some more tangible examples of where being 
in arrears has actually hurt you in negotiations with regard to 
reforms or otherwise at the United Nations.
    Ambassador Richardson. Well, let me be specific, Mr. 
Chairman. Every morning I sit in the Security Council on 
matters of international peace and security.
    And as I advance a proposal, I see the 14 other member 
states of the Security Council basically almost whispering 
under their breaths, ``So, you want us to do this. Why don't 
you pay your bills?'' That is a reduction in influence.
    Secondly, we want to get, for instance Mr. Chairman, a 
reduction in our assessment. We think it's a good reform and it 
further complies with Congressional policy. For instance, we 
have a proposal on peacekeeping to lower payments from 30.8 to 
25 percent, and U.N. dues down to 20 percent. That's a 
significant reform proposal.
    We lost a critical seat on the budget committee. It's 
called the ACABQ that makes financial decisions within the U.N. 
Our candidate actually lost. We are threatened by U.S. 
positions within the U.N. system being gobbled up by other 
countries, specifically in the United Nations Development 
Program and the United World Food Program.
    There have been many other instances, where you can 
actually feel a reduction of our leverage. Just last week the 
United States lost a vote; 138 to 2 on a question relating to 
the Israeli housing issue.
    Mr. Mollohan.  Surely, that's not related to being in 
arrears.
    Ambassador Richardson. No. But, we have lost votes. And as 
somebody, as you recall, who is a former Whip, I can visibly 
see the loss of influence by not having these arrears paid.
    I think if you look at the future, whether we're talking 
about maintaining sanctions on Iraq, Libya, and North Korea; 
future peacekeeping operations; looking at growing multi-
lateral, multi-national threats, international terrorism.
    Mr. Mollohan.  You're suggesting here that our not paying 
arrears is affecting substantive decisions by the United 
Nations.
    Ambassador Richardson. Yes. We are losing our influence and 
our leverage.
    Mr. Mollohan.  Do you think a part of that is because we 
are behind in our payments to the United Nations international 
organizations.
    Ambassador Richardson. Absolutely. And I believe that if we 
pay our arrears we can achieve some strong reforms that are 
good for everybody. We can regroup our influence, and we can 
once again use the United Nations as one of the tools in our 
foreign policy; a tool that is important as we approach 
problems multilaterally.

                              u.n. reforms

    Mr. Mollohan.  Well, let me ask you, Mr. Ambassador. I'm 
going to leave specific questions with regard to reforms that 
you're negotiating to the Chairman, because he has a particular 
interest in that and I know he wants to speak to you.
    Where are you in regard to the process in this reform? 
You're up here asking for an agreement from the Congress to do 
a certain funding scheme. Is you're being successful with that 
specific funding scheme necessary in order for you to strike a 
deal with the powers that be at the United Nations for reform?
    Ambassador Richardson. Yes, Mr. Chairman. Let me just 
explain, or Mr. Ranking Member.
    Mr. Mollohan.  Yes.
    Ambassador Richardson. Let me tell you the three reasons 
why we need an advance appropriation. First, as I said, 
keyallies have told us that they oppose reducing U.S. assessment rates 
without a concrete assurance that we will pay our arrears. That's one. 
Number two, U.N. agencies, and there are many affiliated agencies, will 
be better able to cut their budgets if they also have a concrete 
assurance that we will pay our arrears and meet our annual commitments. 
Third, previous multi-year plans in previous Administrations, Reagan, 
Bush, didn't achieve their goals.
    What I'm simply saying is if we show substance and good 
faith in some advanced funding that we're on the road to paying 
our arrears, as the President has asked for this advanced 
appropriation triggered in fiscal year 1999, we will get those 
reforms and we will recover the influence that we need.
    Mr. Mollohan.  All right. So, you're saying that the 
specific proposal for advance appropriations isn't the 
necessary element here. It's some sort of a dependable funding, 
not a guarantee, but assurance that it is important as you 
negotiate these reforms.
    Ambassador Richardson. We feel, Mr. Chairman, we need the 
advance----
    Mr. Mollohan.  I'm the Ranking Minority Member, Mr. 
Ambassador. I appreciate it though.
    Ambassador Richardson. I was thinking of the good old days. 
And I have the highest regard for the Chairman. Let me say that 
the Administration is requesting an advance appropriation. We 
know that, as you know, there is a lot of leadership----
    Mr. Mollohan.  Okay. Okay.
    Ambassador Richardson. We're going to deal with these 
issues, but our objective is to get an advance appropriation.
    Mr. Mollohan.  Mr. Chairman, we haven't gotten into any of 
the reform issues.
    Mr. Rogers. Well, thank you very much. Now, let me say 
first off, Mr. Ambassador, that I want a strong United Nations. 
It is important to the U.S. and it is important to the world. 
If we didn't have one we'd be about the business of trying to 
invent one. So, I'm with you.
    I think both of us want an effective U.N. I know that's 
certainly my interest, and to be sure we clean away the 
barnacles that have collected on that organization since 1945. 
It needs some refreshing. I think the Secretary of State 
certainly agrees with that, and I know you do, too.
    The questions is how do we go about doing that? What needs 
to be done? In addition to reducing the general assessment rate 
paid by the U.S. to 20 percent, which is your goal, the 
Administration's goal, and our goal, and the peacekeeping rate 
paid by the U.S. to 25 percent, what other reforms do you 
believe need to be achieved at the U.N.?
    Ambassador Richardson. Well, first, Mr. Chairman, I think 
we have to continue having the U.N. live under a budget cap. 
And for the next biennium, it's going to do that. It's observed 
that budget cap--which is very much the foundation of some of 
your reforms and the Appropriations Committee reforms.
    Second, Mr. Chairman, as I testified earlier, the Office of 
Internal Oversight Services, OIOS, gives it teeth and gives it 
power. It was recently responsible for looking at the Rwanda 
War Tribunal, spotting inefficiency. Individuals were let go. 
This is what we need at the U.N.
    Thirdly, Mr. Chairman, what I think is very, very important 
is peacekeeping. You've raised this many times before. We are 
reducing our peacekeeping level to 25,000 total peacekeeping 
troops from the high in the mid-1990s of 75,000. Our assessed 
rate is $280 million, down from $1 billion in the mid-1990s.
    We are asking the tough questions on peacekeeping. How much 
is it going to cost? When do we get out? What is command and 
control? Have we properly consulted the Congress? You will see 
leaner, meaner peacekeeping efforts throughout the U.N. system. 
Consolidation of agencies. This is something that Secretary 
General Annan has done in this first wave of reforms.
    And I might add that these are reforms that Annan has done 
on his own as Secretary General. The next wave of reforms that 
he has promised before July will be submitted to the membership 
of the entire U.N. for approval.
    In conclusion, Mr. Chairman, we're pushing very hard for 
reforms like: eliminating duplicative functions and other 
restructuring; code of conduct issues; making sure employees 
have financial disclosure; that there be certain restrictions 
relating to outside activities; first class travel; and other 
things that we don't think should be a necessary part of this 
U.N. system.
    Assistant Secretary Lyman has worked on this issue as 
Acting Assistant Secretary. He was confirmed last week. Mr. 
Chairman, if I could turn to him for elaboration on some of the 
reforms that I mentioned.
    Mr. Rogers.  Ambassador.
    Ambassador Lyman. Thank you. The Ambassador has touched on 
many of them. But for example, what we will start pressing for 
in the latter part of this year, and this requires the approval 
of all the members, is to take the Economic and Social 
Commission with its many, many different commissions and reduce 
those commissions and get some sense of consistency in its 
recommendations for economic and social affairs.
    We want a better link between what is said there and what 
is carried out in the development programs. Kofi Annan's 
proposals to consolidate some of his Departments of Economic 
and Social Affairs is a good first step. We want to see that 
link made more effective.
    In all the operations of the U.N., for example, the 
Economic Commissions in each of the regions, we have been 
pressing for prioritization of programs and reductions in 
budgets.
    We've made great progress just now through the Economic 
Commission for Europe. Russia was the last country to come on 
board. We've now got a reform package there. We've got reforms 
underway. We still have a lot of way to go on some of the other 
Economic Commissions.
    The specialized agencies. There, we need better budget 
transparencies, particularly in WHO, but also in some of the 
others so we can see where the money is going in terms of 
program output and then be able to prioritize and, where we 
can, cut the budgets.
    We have a big agenda, but I think we are moving in the 
right direction. But getting the other governments to go along 
with us, that's key, because in the end they all have to 
support us in the votes.

                            u.n. staff cuts

    Mr. Rogers.  Well, that's a nice healthy start. But we want 
to see, of course, results. The Secretary General, Kofi Annan, 
as we know the other day, on Monday, announced the reduction of 
1,000 posts.
    Those 1,000 positions have already been reduced over the 
past year as a part of the existing plan to first reduce 1,000 
people and then officially abolish the positions in thenew 
biennial budget, and then it reduces another 500 positions in 1998 and 
1999. There is nothing new about that, is there?
    Ambassador Richardson. Might I, Mr. Chairman?
    Mr. Rogers.  Please.
    Ambassador Richardson. It is new and it is significant. 
Here is why. Mr. Annan is not only going to keep those 1,000 
posts vacant, but he's going to recommend that the U.N. General 
Assembly, in other words, suppress them. Write them off their 
books so there is no more potential for filling them.
    They have about 9,000 jobs filled, which is a 10.2 decline 
from the high that the U.N. had of 10,021. And it's a 25 
percent decline from what the U.N. has had at its highest level 
which I believe is approximately 12,000. He is also talking 
about additional vacancies that are a possibility.
    Over this last three-year period, there have been buy outs. 
There have been people leaving. And most significantly, he is 
going to go to the General Assembly and say, we don't want to 
have them any more. They can't come back.
    Mr. Rogers.  What I'm saying is, those are vacant positions 
that have been vacated over the last year or so. The U.N. is 
not laying anybody new off. It is just permanently, I guess, 
doing away with the slots that are there. There is nobody 
occupying the slots as it is right now. Is that true?
    Ambassador Lyman. That's true, Mr. Chairman, but I think 
it's significant that we've got the Secretary General, on 
record now, recommending that those be eliminated. There is a 
great deal of resistance to eliminating those posts. Many 
countries wanted them filled again. To get them totally off the 
books means they can't be filled.
    Mr. Rogers.  Do you know if he intends to seek the further 
reduction of 500 personnel that was a part of the budget 
outline for 1998-1999 since last August?
    Ambassador Richardson. This would be in his July proposal.
    Ambassador Lyman. Right. He has indicated that he would 
look for ways to do that. He didn't put a number on it. He 
didn't put the 500 number on it.
    Mr. Rogers.  Look for ways to do what?
    Ambassador Lyman. To find further vacancies in the next 
biennium.
    Mr. Chairman, let me point out that every time the 
Secretary General reduces a position, mainly from the group of 
77 developing countries, they object very strongly. I've been 
there in the room when the reforms were pushed, and so the 
Secretary General has a constituency of his own that he has to 
deal with.
    What he is doing is basically taking on a constituency, a 
U.N. system, that in the past has not been used this way. So, I 
have to tell you that I do think he is way out front as a 
reformer. My hope is that we can back him up.
    Ambassador Richardson. We are going to be unveiling our 
reform proposals sometime in the next days, that go a little 
bit beyond what the Secretary General has proposed. But let me 
just say that he has a second try of reform initiatives that he 
will be submitting before the end of July, probably sooner than 
the end of July, that he has publicly stated he will do.
    Mr. Rogers.  Well, as you've indicated, we have a process 
going on between the Administration and Congress to try to come 
up with a reform plan and payment of arrears plan that the 
Administration and the Congress both sign onto. We're meeting 
again this afternoon with the Secretary and you, Mr. 
Ambassador, both of you, in representing both the Senate and 
the House. We're plugged into that process.
    I want it to succeed. I want us to have a plan that we can 
all sign onto in the U.S. that we can go to the U.N. with a 
united front on reform and payment of arrears, which we want to 
do, but we want to see these reforms. We're in our, what, 
fourth or fifth year now of trying to force reform of the U.N.
    We're both parties to that. We're on the verge, I think, of 
making some real progress here. I want to say that the 
Secretary General has come forward in a very positive way with 
an attitude of reform that I like. I mean, it looks good. But I 
want to be sure that it's real.

            $123 million reduction in 1998-1999 u.n. budget

    We've been led down the primrose path before on promises of 
reform in the past. And that's no longer going to be tolerated 
at least from my point of view. I don't know quite yet how much 
this proposal he has really amounts to. Because in my judgment, 
most of it has already been proposed. For example, in 
announcing that the 1998-1999 budget will be cut back $123 
million, the Secretary General is indicating that he will 
follow the General Assembly's lead and submit a budget at the 
level the General Assembly voted for in January, if I'm not 
mistaken.
    Ambassador Richardson. Might I, Mr. Chairman?
    Mr. Rogers.  Please.
    Ambassador Richardson. Yes. First, let me say that it is a 
$123 million reduction. Let me explain that. This is budget-ese 
that I've had difficulty comprehending because we're dealing 
with biennial budgets. The 1996-1997 biennium budget has an 
approved appropriation level of $2.603 billion.
    In December of 1996 the U.N. General Assembly approved a 
budget outline that authorized a planning estimate for 1998-
1999 biennium totaling $2.48 billion. And assuming cost levels 
remain the same, the difference is $123 million.
    What I'm also looking at, Mr. Chairman, entirely separate 
from this question of the budget level, the Secretary General 
has estimated that approximately 38 percent of the U.N.'s 
regular budget is spent on administrative costs. He set a 
target to reduce this percentage by 25 percent by the year 
2001.

                              u.n. arrears

    So, we are talking about additional cost savings. Let me 
just make one final point, Mr. Chairman, on your very positive 
attitude toward achieving an arrears package. I think what is 
important here is timing. Timing, as you know, is critical. 
Budgets are set this year for the next two years. The scale of 
assessments at the U.N. are going to be set for the next three 
years.
    We need that leverage to achieve change. If we don't, we're 
going to have to live with the old system of budgets until the 
year 2000. My point here is that these reforms are going to be 
difficult to achieve. They're not going to be easy. Without 
this leverage, we're not going to be able to convince anyone to 
pay more so that we can pay less.
    That's what we're doing. The European Community and other 
international partners have signaled to us that unless there is 
a real commitment on our part to pay our arrears, we are not 
only going to lose our leverage, but our proposal for the scale 
of assessment is not going to work.
    So, Mr. Chairman, once again, your active engagement in 
this process, as you've mentioned, as a friend of reform of the 
U.N. through your task force and your relationship withMr. 
Thornburg, the former Under Secretary for Management, is critical here.
    I would hope that we can achieve this agreement shortly on 
a bipartisan basis at the highest levels. And that we move on 
so our influence will be restored at the U.N.

                              u.n. budget

    Mr. Rogers.  Well, I certainly am a part of that process. I 
want to see the resolution of it. I want to see us achieve 
reforms and pay our arrears in full, once we agree upon the 
amount.
    Does the U.S. intend to insist that the U.N. not exceed the 
$2.480 billion in spending over the next two years, as you did 
with respect to the $2.608 billion budget in the 1996-1997 
budget?
    Ambassador Richardson. I'll ask the Assistant Secretary to 
amplify on what I'm going to say. All I know is that the U.N. 
actually, in the last biennium saved $5 million in its actual 
projections, sticking to that budget cap. My understanding is 
we're going to be very strong on this $2.48 billion. It is 
going to be possibly altered a little bit by re-costing.
    Ambassador Lyman. I think we will want to see the recosting 
that's done for the actual approval of the budget, Mr. 
Chairman, before we come down on a specific figure. But once 
we've agreed, and will want to consult with you as well, on 
what we think makes sense for a cap. Then we will push for that 
to be a real ceiling as we did the last two years.
    Mr. Rogers.  Mr. Mollohan.
    Mr. Mollohan.  Thank you, Mr. Chairman. Mr. Ambassador, Mr. 
Assistant Secretary, it's a little hard to know where this is 
picking up.
    Ambassador Richardson. I know.

                              u.n. reform

    Mr. Mollohan.  But what I think has not been explored and 
what I think is very important is the process by which these 
reforms were brought forward. Everybody wants U.N. arrears 
paid. I think most everybody wants them paid. The question is 
how to do that in light of the Congress' interest in 
implementing these reforms.
    I'd like to explore that with you a little bit to see how 
much flexibility you think the United Nations might have with 
regard to this and give some indication as to what I think you 
might expect by way of flexibility or the lack of flexibility 
with regard to the Congress.
    In what detail have you talked with the Secretary General, 
or whomever you've discussed this issue with about the reform, 
the scheme of the reform?
    Ambassador Richardson. Let me say, ``extensively.'' Almost 
every day I make a speech at some U.N. entity, and I probably 
see the Secretary General once a day, either at Security 
Council meetings or somewhere else.
    There is an extensive process. We have a very good staff at 
the U.S.-U.N. Mission headed by Ambassador Marrero, who handles 
the reform issue. There is an Under Secretary General for 
Management that has been named; Joseph Connor, a former Price 
Waterhouse CEO, who is deeply engaged in reform issues, 
exclusively in financial and budget matters, along with Maurice 
Strong, a Canadian high powered Under Secretary who deals with 
these issues.
    There are many, many working groups dealing with reform 
issues almost everywhere. In the European Community there are 
vigorous reform initiatives. Mr. Chairman, I think the process 
that we have is a good one. We have a Secretary General that is 
out front on reform.
    He wants to name, for instance, an Under Secretary, a 
number two person, that deals exclusively with basically 
running the organization. I have said to you that I believe the 
peacekeeping missions have been run a lot better. There are 
fewer but tougher questions that are being asked.
    There is a process that involves the U.S. Congress and the 
Secretary General working closely. Staff level meetings have 
taken place. I think that members of this staff have been a 
part of those. That hasn't happened before. There is a 
Secretary of State, who is a former U.N. Ambassador who knows 
this issue. She has given it high priority.
    The President is engaged. I think we have a very strong 
reform process. What we need is leverage to achieve those 
reforms. That leverage, Mr. Chairman, is the arrears and the 
advance appropriation which I keep harping on and which you 
keep telling me to be careful about expecting what we receive.

                  other countries pushing u.n. reform

    Mr. Mollohan. What other countries are pushing reforms 
besides the United States?
    Ambassador Richardson. There are many.
    Mr. Mollohan. The Secretary General seems to be stepping 
forward on this.
    Ambassador Richardson. Yes. There are many. I'll have 
Princeton--the European Community is very active on reform. 
There are a lot of working groups. Princeton, do you want to 
comment on this?
    Ambassador Lyman. The European Union submitted a packet of 
reforms last year which followed on some of the many things 
that we had been discussing. But they went into great detail. 
The Northern countries have been very active on reform for 
about ten years.
    They've just produced a new report. Their report focuses 
much more on the Development Agencies. And one of these steps 
that the Secretary General announced Monday is closer 
coordination in the field of the U.N.; which flows almost 
directly out of the audit, and these most recent 
recommendations.
    So, there are a lot of countries who have been working on 
the reform agenda. Where we run into resistance, quite frankly, 
is in budget reductions and changes in the scale of assessment 
because these countries say, yes, they're sympathetic. But then 
we run into the arrears question.
    On the subject of improving the effectiveness of the U.N., 
there is quite a body now of material recommendations coming 
out of a number of countries and from the developing countries. 
The UNCTAD reform that took place at their last meeting in 
South Africa was very much supported by key developing 
countries, including South Africa, which took over the 
Chairmanship, to streamline that organization, focus it much 
more, and avoid duplication with these new World Trade 
Organizations. So, there is support from a number of quarters.

                            u.n. staff cuts

    Mr. Mollohan. Of the ten reforms that the Secretary 
announced, is there pretty broad based support in the United 
Nations for those reforms?
    Ambassador Richardson. Well, as I said, Congressman 
Mollohan, there is going to be some resistance to these. I 
think the 1,000 staff cuts have engendered quite a bit of 
controversy. I suspect they all will generate controversy. 
These are initiatives that the Secretary General, within his 
purview as Secretary General, can take on his own.
    Mr. Mollohan. Has he specified where those positions would 
come from?
    Ambassador Richardson. Yes. From his Secretariat. Now, 
these are the positions in New York, in Geneva, Vienna, and in 
Nairobi, Kenya where the U.N. Secretariat Offices are located. 
There will be more reforms, Congressman Mollohan, that he will 
initiate before the end of July. Those other reforms will be 
tougher to get because they involve votes and support by the 
entire 185 membership of the U.N.
    Mr. Mollohan. Do these ten reforms not involve similar 
support?
    Ambassador Richardson. Those are initiatives that he can do 
on his own.
    Ambassador Lyman. He will have to get approval when 
approving the next biennium budget. The General Assembly will 
have to endorse that elimination of the 1,000 positions because 
it would be part of studying the personnel seated for the next 
two years. So, he is going to have to sell that.
    Mr. Mollohan. Is he detailing those positions in advance?
    Ambassador Lyman. I do not think so. I think he's working 
from the vacancies. What I think they will have to do then is 
once they've eliminated the post, he's announced that he is 
going to reorganize several different departments of the 
Secretariat. I think in the process he will reallocate 
positions within the new ceiling.
    Mr. Mollohan. Could he achieve a 1,000 position reduction 
just based on vacancies?
    Ambassador Lyman. Yes. He can now because they have over 
1,000 vacancies.
    Ambassador Richardson. In other words, what he will try to 
do is suppress them and not get them to fill them again.
    Ambassador Lyman. Right.

                    effect of arrears on u.n. reform

    Mr. Mollohan. I'm just wondering to what extent is our 
paying arrears really playing? What role are they really 
playing in this overall reform, including his ten proposals and 
whatever might come after that? There seems to be a little bit 
of a broad-based consensus here.
    Ambassador Richardson. Paying our arrears. Everyone at the 
U.N., the 184 countries--in all my courtesy calls--they say, 
``pay your arrears''.
    Mr. Mollohan. Of course, that's being a piper. I mean, 
that's an issue. One of the directions that I come at this from 
is we're just not meeting our responsibilities.
    Ambassador Richardson. Right.
    Mr. Mollohan. But in terms of providing impetus and 
momentum to this reform movement, just how important is the 
withholding, using the payment of arrears as leverage, how 
important is that in this reform process?
    Ambassador Richardson. I think extremely important. The 
Secretary General would be undercut if we don't deliver after 
he has made so many initiatives towards the Congress. We would 
not get the scale of assessments that we want. We're saying to 
the U.N. we think the peacekeeping mission should be 25 percent 
which is consistent with Congress. Others are saying 30.8%.
    Mr. Mollohan. I can see the arrears being a bigger issue 
with our percentage payment in these two areas than it would 
actually be with reforms. Is that the case?
    Ambassador Lyman. There are two aspects of it because, 
again, not only do we want a scale change, but we want to hold 
budget caps and reduce budgets. There, if we are promising to 
pay our arrears over the next two years, it offsets in a way 
some of the budget pressures because they will be able to pay 
back either borrowed funds or things that they've had to do 
because of our arrears.
    There is also a special problem in peacekeeping because 
about two-thirds of our arrears are peacekeeping arrears and 
they're owed to countries rather than the U.N. in the end. 
Countries who have contributed troops to peacekeeping 
operations are complaining quite bitterly about contributing 
and not getting reimbursed. So, it has an impact to some extent 
on when we continue to try and improve, and get approved, 
important peacekeeping operations.
    Ambassador Richardson. It all goes to the fundamental 
question that you asked, your very first question. Basically, 
why is the U.N. important? My answer to you was that the U.N. 
is important to American foreign policy interests because it 
advances our interests.
    We get multi-lateral, international support for our foreign 
policy goals which saves us money. Let me give two examples. 
The Gulf War is always the best one. Our security objectives 
were achieved. And we got international support for it. Our 
interests were protected.
    In North Korea, which I know this committee has dealt with, 
the threat of sanctions prevented the North Koreans from moving 
ahead with nuclear weapons. Small pox, there is an announcement 
recently that possibly the World Health Organization is going 
to deal with polio. They eliminated small pox. That saved the 
American taxpayer $300 million in immunization costs.
    One more example, and I promise I won't keep going, is the 
International Civil Aviation Agency that deals with airline 
safety. Forty percent of all travelers are Americans. That 
affects our American travelers along with other agencies that 
deal with worker safety and freer trade.
    I guess I should be careful with you on that.
    Mr. Mollohan. I'm for free trade. What are you talking 
about?
    Ambassador Richardson. I know. I know you are.

                           u.n. arrears costs

    Mr. Mollohan. All right. I'd like to get into the issue of 
how much we owe. Can you outline for us what the U.N. is 
claiming we owe and what the State Department feels we owe in 
each category?
    Ambassador Richardson. The U.N. is claiming for all arrears 
that we owe them $2.487 billion. And we're claiming that we owe 
them $1.02 billion.
    Mr. Mollohan. That's a big difference.
    Ambassador Richardson. Yes. It's about half.
    Mr. Mollohan. Can you explain it?
    Ambassador Richardson. Yes. I will go through each item. In 
the U.N. regular budget, the organization claims we owe them 
$561 million and we claim it's $54 million.
    Mr. Mollohan. Could you explain the difference there? Why 
is there a discrepancy?
    Ambassador Richardson. I will now turn to Assistant 
Secretary Lyman for those discrepancies.
    Mr. Mollohan. All right.
    Ambassador Richardson. The biggest one, and let me just 
briefly summarize.
    Mr. Mollohan. Sure.
    Ambassador Richardson. Is over peacekeeping. And I think 
what I will do is, the Chairman, by the way----
    Mr. Mollohan. Did he go?
    Ambassador Richardson. Yes. The Chairman gave us whathe 
considers to be our arrears. We have a detailed paper.
    Mr. Mollohan. Well, that's the next issue. I just want to 
understand.
    Ambassador Lyman. Let me just go through it, Congressman. A 
part of it is that we intend to pay on our fiscal year for the 
back calendar year. So, they're counting money we are 
requesting this year which was due to be in January.
    Mr. Mollohan. To be advanced payments.
    Ambassador Lyman. Right. So, let me just take, for example, 
the U.N. regular budget. As the Ambassador said, they say we 
owe $561 million. We say $54 million. Okay. The biggest 
difference, one big difference is $161 million which are items 
that Congress has said we cannot contribute to. Some of these 
were Middle East related. Some of these were buildings that we 
didn't think ought to be built, et cetera, et cetera. Some of 
these go back many years.
    Mr. Mollohan. So, that's our proportional share of paying 
for those buildings that we don't think should have been built.
    Ambassador Lyman. Sure. That's right.
    Mr. Mollohan. Do you agree with that?
    Ambassador Lyman. We are proposing not to pay those.
    Mr. Mollohan. Okay.
    Ambassador Lyman. Then they list appropriated funds that 
have already been appropriated in fiscal year 1997 that we 
haven't disbursed yet. And that's $69 million. And some of 
those are being disbursed very shortly.
    Mr. Mollohan. Is that $69 million in your $507 million?
    Ambassador Lyman. No. That isn't in our arrears because----
    Mr. Mollohan. No, no. That's not arrears.
    Ambassador Lyman. I'm sorry. Which $507 million are you 
talking about?
    Mr. Mollohan. You're in the regular budget.
    Ambassador Lyman. Yes.
    Mr. Mollohan. You're saying the U.N. says that we owe $561 
million.
    Ambassador Lyman. Right.
    Mr. Mollohan. I thought I understood you, the point you're 
making is that they are saying that we owe today what you say 
we won't owe until sometime in the future, and that was $69 
million.
    Ambassador Lyman. Well, $69 million from this fiscal year 
and $277 million from the request we've just put before the 
Congress.
    Mr. Mollohan. Okay.
    Ambassador Lyman. That's simply because the bills start to 
come due in January of the year. As you know, we pay for the 
fiscal year towards the end.
    Mr. Mollohan. Okay.
    Ambassador Lyman. If you subtract those items, you get down 
to the $54 million that we say are really arrears. When we get 
to peacekeeping, it gets a little more controversial, if you 
will. Their records show $1.33 billion. Now, we subtract from 
that the difference between what they've assessed us, somewhat 
over 30 percent, and the 25 percent cap enacted by Congress.
    We subtract the amount as of the beginning of the fiscal 
year in which that cap was enacted; that is October 1, 1995. 
And that's a $229 million difference. And we're saying to the 
U.N., we're contesting those because Congress said we could not 
pay them. Then, there is $146 million not yet paid. That, 
again, is current fiscal year money that has not been released.
    So, that gets down to our figure of $658 million in 
arrears.
    Mr. Mollohan. So, the $229 million is obligations that they 
say we've incurred since the passage of the law that put them 
on notice that we would not pay in excess of 25 percent.
    Ambassador Lyman. Right; exactly. But the difference 
between us and perhaps the Congress; I know there was quite an 
exchange between the Chairman and Secretary Albright last year. 
We don't believe that we should apply that 25 percent 
retroactively.
    Mr. Mollohan. Retroactive from the date of passage of the 
legislation.
    Ambassador Lyman. From the day that the fiscal year in 
which the legislation went into effect.
    Mr. Mollohan. Did we put them on notice pursuant to that 
legislation that you did not intend to pay more than 25 
percent?
    Ambassador Lyman. The interpretation of the law that has 
been made is that it does apply retroactively. We are 
proposing, Congressman, that that be changed because we feel 
that we will not yet accept this even on a contested basis that 
we should apply that retroactively. That's something we should 
discuss.
    Mr. Mollohan. I'm not sure I understood that.
    Ambassador Lyman. I'm sorry. The law was a fiscal year 1996 
law. But since we had arrears at that point, the position, as I 
understand it from the Chairman, and some interpretations of 
the legislation is, that we couldn't even pay arrears that 
accrued before that time period at the 30.4 percent.
    Mr. Mollohan. Do we not have a memorandum from the State 
Department that agrees with that interpretation?
    Ambassador Lyman. You do, indeed. But from a policy point 
of view, we're asking that it be reconsidered.
    Mr. Mollohan. I see. It's a legal interpretation. You just 
have to agree that the law supports it.
    Ambassador Lyman. We would like the law amended.
    Mr. Mollohan. Are you asking to have it amended?
    Ambassador Lyman. Yes, because we have put in our request 
for the arrears that difference. It's $132 million.
    Mr. Mollohan. Are you making that request to the 
authorizing committee?
    Ambassador Lyman. Yes. It's in the request for the arrears 
going to both committees.
    Mr. Mollohan. To the authorizing committee?
    Ambassador Lyman. Yes.
    Mr. Mollohan. And you've testified before the authorizing 
committee on this issue?
    Ambassador Lyman. I testified last week. This particular 
issue did not come up.
    Ambassador Richardson. But I'm sure it will.
    Mr. Mollohan. Well, it would be something that would have 
to come through the authorizing committee I would imagine.
    Ambassador Lyman. Yes. Yes. I would think so. But it would 
require, I think, a change in the legislation.
    Mr. Mollohan. But you are not assuming that interpretation 
in these numbers.
    Ambassador Lyman. In our number----
    Mr. Mollohan.  You do not apply retroactively----
    Ambassador Lyman. We in our request and in our computation, 
we do not apply it.
    Mr. Mollohan.  Although you have a legal interpretation 
from the State Department that that's an appropriate 
application for a law, as a matter of policy, this is your 
request.
    Ambassador Lyman. Exactly. Exactly.
    Mr. Mollohan.  Well, you need to work with the authorizers 
on that issue.
    Ambassador Lyman. We will meet.
    Mr. Mollohan. Particularly if you have a legal opinion from 
your own organization that that's a proper interpretation of 
the law.
    Ambassador Lyman.  If Congress were to agree with us to pay 
this full amount, then Congress would be asked to adjust the 
law.
    Mr. Mollohan.  You are assuming the adjustment would take 
place in the appropriations bill?
    Ambassador Lyman. In whatever form Congress agrees to 
address it.
    Mr. Mollohan.  Well, I'm just saying that you need to take 
a leadership position on that issue.
    Ambassador Lyman.  All right.
    Mr. Mollohan.  Would you continue your analysis?
    Ambassador Lyman. Yes. Then we get to the U.N. affiliated 
agencies. Those are some of the specialized agencies like FAO, 
et cetera. The differences there are almost entirely funds that 
we are requesting this year that would be applied.
    They show $610 million. We show $254 million. Of the 
difference, $351 million is in our fiscal year 1998 normal 
request. It says $351 million, I'm sorry. And $5 million is 
another legislative withholding on tax funds.
    Finally, Mr. Congressman, other organizations; these are 
not U.N. organizations. These are a variety of regional and 
other organizations in which we are also in arrears. $283 
million is the figure from those organizations. We show only 
$55 million. Again, most of that is in funds that haven't been 
released or haven't been appropriated; $5 million is in real 
difference, legislative withholding. But $140 million is in 
funds we have from this fiscal year that we haven't released. 
And $83 million is in the request level. So, those are the 
differences between the U.N. and these organizations' figures 
and ours.
    Mr. Mollohan.  What is going to be the difference after you 
get your 1998 appropriation?
    Ambassador Lyman.  After we get our appropriation----
    Mr. Mollohan.  I guess the real contested numbers.
    Ambassador Lyman.  We would bring down the numbers that we 
recognized by $100 million, if Congress approves the request we 
made just for fiscal year 1998. We've requested the bulk of our 
arrears be paid out in fiscal year 1999.
    Mr. Mollohan.  Okay. But my question is----
    Ambassador Lyman.  Oh, I'm sorry. If we get the 
appropriations?
    Mr. Mollohan.  Yes. I'm saying what's the real difference 
here? At the end of the day when you get your 1998 
appropriation, what's the number between what they----
    Ambassador Lyman.  The real difference between them and us 
boils down to $362 million. That's where they have figures that 
we don't accept.
    Mr. Mollohan.  Okay. Just summarize that $362 million. How 
does that break down?
    Ambassador Lyman.  The----
    Mr. Mollohan.  I'm sorry. Just let me finish my question.
    Ambassador Lyman.  Sure.
    Mr. Mollohan.  Of that $362 million, what are the reasons 
for the difference; if you could break that down?
    Ambassador Lyman. The biggest item is the difference 
between 25 percent and the 30.4 percent in peacekeeping. That 
accounts for $229 million of that $362 million.
    Mr. Mollohan.  Okay.
    Ambassador Lyman.  The next largest item is the Tax 
Equalization Fund; a very complicated issue by which they would 
take part of our assessments for reimbursing Americans for 
having to pay income tax, since the rest of U.N. employees do 
not pay income tax.
    We have a proposal that we have to work out with IRS to try 
to eliminate that fund all together. But in the meanwhile, we 
do not recognize that particular item. And the rest are those 
items I mentioned, legislative withholdings on buildings and 
Middle East activities, et cetera.
    Mr. Mollohan.  So, that's about $133 million minus these 
buildings issues.
    Ambassador Lyman. Right.
    Mr. Mollohan.  That doesn't sound right. Are you sure 
that's correct, Mr. Ambassador?
    Ambassador Lyman. I'm sorry?
    Mr. Mollohan.  Without getting into details on numbers, 
this just didn't sound like that was the right break out.
    Ambassador Lyman. It should be.
    Mr. Mollohan.  What is the number on the tax issue?
    Ambassador Lyman.  Let's see. The tax is $100.4 million.
    Ambassador Richardson.  Mr. Chairman, may I just correct 
the record on something I said?
    Mr. Mollohan.  Yes.
    Ambassador Richardson.  You asked me about the total U.N. 
debt; the differences. I am told that the U.N. says we owe them 
$1.594 billion. The $2.487 billion that I gave you is what all 
the international organizations funded out of the CIO account 
say we owe them. That includes the OAS and other entities.
    Mr. Mollohan.  I see that.
    Ambassador Richardson. So, I apologize for that. Let me 
also mention that, that $132 million that you mentioned, the 
change in the appropriations bill. We are asking for the $132 
million legislation change in both the appropriations and the 
authorization bills. In other words, we want the change in both 
places.
    The last point, Mr. Chairman, you asked me. There are five 
working groups working on reform. The biggest issue as to why 
these five working groups don't achieve a reform consensus is 
the U.S. arrears. This causes these working groups not to move 
concrete steps on reform because of the U.S. arrears.
    Mr. Mollohan.  When you said it causes them not to move in 
concrete steps, are they moving toward developing a list of 
reforms that they'd be willing to achieve if they were to get 
their arrears?
    Ambassador Richardson.  My impression, Mr. Chairman, is 
that without the arrears, they will not be significant changes.
    Mr. Mollohan.  I know, but will they say what changes they 
would make if they were to get the arrears? We're going to have 
a meeting later on this afternoon. One of the purposes is to 
get down to these specifics. You're seeking an agreement with 
the Congress on what reforms, what list of reforms, will be 
acceptable to the Congress. On the one hand, that's what we're 
asking for. And on the other hand, the U.N. is asking for 
money.
    Ambassador Richardson. Right.
    Mr. Mollohan.  It seems to me that we know what the money 
is.
    Ambassador Richardson. Right.

                  u.n. reform (third world countries)

    Mr. Mollohan.  What are the reforms that they'd be willing 
to achieve if they got the money. Then you can work out the 
scheme.
    Ambassador Richardson. What we are saying is if you give us 
the money, if you give us the arrears, those reforms that we 
want, the Clinton Administration, you, and the Congress.
    Mr. Mollohan.  I get it. Do you have a list of those 
reforms?
    Ambassador Richardson. Yes. We'll present them this 
afternoon.
    Mr. Mollohan.  Well, that will be great.
    Ambassador Richardson. The Secretary General has made a 
very good start.
    Mr. Mollohan.  Oh, yes; agreed. How are you dealing with 
the third world countries on this issue of reform? What is 
their attitude?
    Ambassador Richardson.  I don't want to group them all.
    Mr. Mollohan.  What about these job issues?
    Ambassador Richardson. There is some resistance.
    Mr. Mollohan.  It's hard to give us, but we've done it. 
We've lived with it.
    Ambassador Richardson. Twelve out of 14 years for me. Third 
world countries know that reforms will help. They know that. 
And I'm not saying they're all resisting it. But when it comes 
to some staff positions, they've been resistent. Let me just 
say that the failure of the U.N. to run an efficient ship has 
been most evident in Africa where if we just had good 
infrastructure, good management systems, good delivery of 
resources, in the Great Lakes Region, Zaire, Rwanda, Burundi, 
the War Crimes Tribunal--we would have done a better job. And I 
think the third world nations and regions realize these things; 
more efficient peacekeeping operations, leaner budgets, and 
more effective delivery systems in health and many other 
components would make their regions more active to get good 
U.N. delivery.
    So, third world countries aren't pro-reform. It's just a 
varying degree of what member countries are willing to accept. 
The big push for major reform at the U.N. will come though, if 
the United States pays its arrears.

                             u.n. borrowing

    Mr. Mollohan.  I was reviewing some materials a week or so 
ago that involved other countries who are in arrears too. How 
is the United Nations operating? Are they borrowing the money?
    Ambassador Lyman They do it in several ways. Different 
parts of the U.N. operate differently, obviously. The regular 
U.N. budget, up until recently when their financial situation 
got a little better, borrowed from the peacekeeping 
contributions because their cash flow was running ahead in the 
peacekeeping account, even though their arrears were very big 
there.
    It was not popular. The peacekeeping contributor countries 
complained bitterly, et cetera. Some of the specialized 
agencies borrow internally. For example, WHO borrows from its 
pension funds and hopes to make it up through future year 
payments.
    Some reduce their program expenses that just simply don't 
meet their targets. So, different parts of the U.N. have done 
it in different ways.

                          organization review

    Mr. Mollohan.  Part of your reform proposal, would it be a 
reorganization proposal? Would you be able to look through 
those organizations, for example, and recommend some of them 
that don't merit continued funding?
    Ambassador Richardson.  Let me just say on that, Mr. 
Ranking Member, we have three criteria for whether we continue 
in a specific U.N. organization. Does it contribute to peace 
and security? Does it assist U.S. sector industries? Does it 
assist the health and safety of the American people?
    We have found, for instance, we have withdrawn from some 
organizations at the U.N. in the international system. UNIDO, 
the United Nations Industrial Development Organization. We got 
out of there. The World Tourism Organization, and the Pan 
American Railway Congress Association. We're constantly looking 
at entities within this international system that are not doing 
their job; that are not reforming themselves.
    There are some in the environmental area and the Economic 
and Social Council area that we're trying to save. We want them 
to run more efficiently. Why do you need so many duplications? 
Kofi Annan did this by merging three Economic and Social 
Council departments just this week into one.
    Mr. Mollohan.  Yes. Good for him. That's to his credit. 
What about you all? Could you come to this committee and say 
this organization or that organization doesn't merit our 
continued funding?
    Ambassador Richardson.  Well, if we would, sure.
    Ambassador Lyman As you know, we withdrew from three last 
year. We believed they were too small. We are constantly 
looking at that list of organizations to see if there are 
others.

                         tax equalization fund

    Mr. Rogers.  I swear to you, we're not going in relays. We 
are actually voting on the Floor, and trying to keep the 
hearing going in the midst of all these votes. I know Mr. 
Mollohan has talked about the amount of arrearages to the U.N. 
You said it was $54 million. The U.N. did just provide a $27 
million credit due to recalculation of old bills. Does that 
mean that the actual arrears now is $27 million?
    Ambassador Lyman. Mr. Chairman, what we did was we had $27 
million. We used it to reduce our fiscal year 1998 request. We 
could have done it either way. We could have credited it to 
arrears, but then we would have had to raise our fiscal year 
1998 request by $27 million.
    In other words, we took the amount that we would normally 
be assessed in fiscal year 1998 and we subtracted the $27 
million of that.
    Mr. Rogers.  Why would we want to say our arrears were 
higher than they are? You ought to lock that in.
    Ambassador. Lyman. Then we'd have to ask you to appropriate 
$27 million more in fiscal year 1998.
    Mr. Rogers.  Well, you can ask.
    Ambassador Lyman. Okay.

                            ARREARS HISTORY

    Mr. Rogers.  Well, isn't it correct that the arrears for 
the regular budget arose in 1989? That was the year, wasn't it, 
that we fell out on some matters? And since that time, we've 
paid our regular assessment to the U.N. every year; have we 
not?
    Ambassador Lyman. We've been virtually current. I think in 
the last two years, Mr. Chairman, with the consensus that we 
agreed to pay the full share with certifications that you had 
asked of us in reducing the money. That's exactly true.
    Mr. Rogers.  And of the peacekeeping arrears, most if not 
all of those arrears arose in 1995, did they not, when the 
Administration proposed a supplemental appropriation to pay 
rapidly escalating peacekeeping costs at that time, but did not 
propose any offsetting spending reductions to where we would 
find those monies to assure that the debts would not be 
increased. Is that not true?
    Ambassador Lyman. I'll take your word for it, Mr. Chairman. 
I wasn't in this position then, but if you say so. I know that 
the arrears do derive from that very period.
    Mr. Rogers.  If we had a spending offset back in the spring 
of 1995, we would have passed that supplemental and we wouldn't 
have this problem today. And if I'm not mistaken, correct me, 
most if not all of the peacekeeping arrears would not be used 
to support U.N. operating costs, but to reimburse countries for 
their peacekeeping troops and equipment, such as France and 
Britain.
    Ambassador Lyman. That's correct.
    Ambassador Richardson. I might point out, too, Mr. 
Chairman, that we have had situations where we would want to be 
reimbursed, too, like we did for Macedonia and others. This is 
a part of the peacekeeping cycle and custom that you get 
reimbursed for many of these costs. I throw that argument and 
they throw it back at me. We have been reimbursed for our 
recent activities.
    Mr. Rogers.  Well, aren't we still owed $102 million?
    Ambassador Lyman. In unpaid reimbursements; right.
    Mr. Rogers.  Is that a part of the peacekeeping arrears?
    Ambassador Lyman. Well, I guess indirectly I suppose it is.
    Mr. Rogers.  So, if the U.S. wanted to say, okay, we cancel 
the $102 million----
    Ambassador Lyman. I don't think the Pentagon would be very 
happy with that. But I'd have to ask them.
    Ambassador Richardson. It's $12 million, Mr. Chairman, that 
we owe.
    Mr. Rogers.  I think $12 million is owed the State 
Department; $102 million is owed to the U.S.; $12 million of 
that is owed to the State Department, I think.
    Ambassador Lyman. You're right on the total figures, Mr. 
Chairman. It is $12 million for the troops and the rest is for 
our services, et cetera.
    Mr. Rogers.  My understanding is that $12 million is owed 
the State Department and $90 million is owed to the Defense 
Department for a total of $102 million.
    Ambassador Lyman. Exactly.
    Mr. Rogers.  Still U.S. money.
    Ambassador Lyman. Yes.
    Ambassador Richardson. Mr. Chairman, another figure that I 
wanted to make you aware of is on the arrears. The CIO arrears, 
this is the arrears entity, the whole thing, grows about $100 
million annually. And the reason, in a political sense, is why 
I call this to your attention.
    If this is unchecked, we might lose voting rights with some 
of the affiliated agencies within the next few years if that 
continues to be unchecked. In other words, if we don't deal 
with the arrears.
    This is in the total $1.021 billion that we consider as 
arrears. This is why in our advance appropriations, Mr. 
Chairman, we're saying we want to pay this off, but not get in 
the hole again.

                              U.N. ARREARS

    Mr. Rogers.  Mr. Ambassador, the quicker we get off this 
advance appropriation topic we can save time. That's just not 
going to happen. So, I know you've got to stick with the story, 
but you're wasting your time there.
    Now, the U.N. says that the U.S. owes significantly more 
than even you say we owe. Now, suppose we paid what you say we 
owe, they're still going to say we owe them a half a billion 
dollars. What's to keep the U.N. from coming back and back and 
back saying you still owe us, even if we pay every dollar you 
want?
    Ambassador Lyman. One of our proposals, Mr. Chairman, if we 
didn't come to an agreement on the payment is to go to the U.N. 
and to take those items that we have not proposed to pay and 
ask them to move them off the arrears account into something 
called a contested account.
    They would still argue with us over them, but we would ask, 
and we would have to negotiate this, that they wouldn't count 
against us for arrears, particularly as Ambassador Richardson 
said, against voting rights. We would have to negotiate that.
    But it would be one of the things that we would seek to 
negotiate once we had an understanding with Congress on the 
payment of what we have requested.
    Mr. Rogers.  Now, your budget request pays arrears of 
$1.021 billion, of which $712 million is for the U.N. You did 
not propose that any reforms be achieved in your proposal in 
order to pay these arrears. There are no conditions in your 
budget proposal.
    Ambassador Richardson. We're going to put this on the table 
today, Mr. Chairman, at the meeting this afternoon. The 
Secretary General gives us a good impetus to do this. We 
consider his proposal significant.
    We will put ours on. I assume the Congress will work 
together on how we can merge yours with ours and then the 
Secretary General will have another say in April. But our hope 
is that we can achieve both an arrears, as well as a reform 
package.
    Mr. Rogers.  You're not saying we should pay without 
extracting----
    Ambassador Richardson. We think reforms are important.

                            NON-U.N. ARREARS

    Mr. Rogers.  Yes. Now, in addition to the $54 million for 
the U.N. regular budget arrears which is in your budget 
request, and $658 million for U.N. peacekeeping arrears, your 
budget request also includes $309 million for payment of 
arrears to 45 other organizations, from $105 million for the 
Food and Agricultural Organization to $2,000 for the Columbo 
Plan Council for Technical Cooperation, and so forth.
    Despite the fact that most of the attention is focused on 
our U.N. arrears, is payment of arrears to all these 45 
organizations of the same priority in your view, Mr. 
Ambassador, as payment of arrears to the U.N.?
    Ambassador Richardson. I'll let the Assistant Secretary for 
International Organization Affairs, including all international 
organizations, answer that.
    Ambassador Lyman. Some of these organizations, Mr. 
Chairman, are quite small. When we don't pay our assessment, it 
impacts them very greatly. We have had very strong appeals, for 
example, recently from the Coast Guard about the International 
Maritime Organization and the shortfall created by our arrears.
    They impact on them perhaps more than the amount of the 
dollar sounds like. But what we did last year is we took all of 
these organizations and put them into categories of 
prioritization. When we were short about $85 million after the 
FY97 appropriation, we took the largest arrears, if you will, 
with those organizations that were down near the bottom of our 
list.
    Nevertheless, they are organizations to which we belong. 
They serve a purpose. We would like to pay these arrears.
    Mr. Rogers.  Many of those organizations like the Food and 
Agriculture Organization, the International Labor Organization, 
they are in as much need of reform, if not more, than the U.N. 
Would you not agree with that?
    Ambassador Lyman. Mr. Chairman, they do. Indeed there has 
been progress in some of these. Both the FAO and ILO have been 
making progress in this direction. To be very candid, we will 
probably not get the kinds of reforms that we want in the World 
Health Organization until we have a new Director General. And 
that is one of our high priorities for the coming year.
    Mr. Rogers.  Shouldn't we take the same approach with them 
as we've taken with the U.N. as far as paying arrears over time 
as we see reforms take place?
    Ambassador Lyman. You will see in the paper that Ambassador 
Richardson spoke of. We will deal somewhat with this.

                          BOSNIA PEACEKEEPING

    Mr. Rogers.  Ambassador Richardson, the Department has 
recently notified us of its intention to expand the 
peacekeeping mission in Bosnia by 200 for supervision of the 
city of Brcko, a city over which control is disputed, I am 
told.
    In the letter, which requires a statement of the exit 
strategy, it is stated, ``The exit strategy for the IPTF as a 
whole is for the local police to reach the point where they can 
maintain public security and freedom of movement in a manner 
consistent with international principles of democratic policing 
of human rights.''
    How can that be called an exit strategy? That's a strategy 
to assure there is a peacekeeping mission in Bosnia for a long 
time to come, is it not?
    Ambassador Richardson. Mr. Chairman, let me say that this 
implementation agreement was reached recently. It's in Northern 
Bosnia. It's a part of the Dayton Accords. What we are doing 
really is civilian implementation. These are police. There have 
been some problems with those police monitors. These are 
individuals that have come in to basically keep the peace, 
prevent looting, et cetera. It is not necessarily peacekeeping 
entities. We feel that with those police and human rights 
monitors we can reach what is called this civilian 
implementation a lot better.
    This Brcko Agreement was agreed to by many of our allies. 
We think it's eventually going to work well. It's not perfect. 
I think the closer we stick to the Dayton Accords, the better 
off we will be in this effort for an exit strategy.
    Mr. Rogers.  Well, as you know, one of the things that we 
wanted the Administration to assure the Congress, whenever they 
voted for more involvement of a peacekeeping nature, that one 
of the things we wanted to know up-front was, what is the exit 
strategy? How long are we going to be there and how are we 
going to get out of there? What are the conditions that would 
contribute to us coming out? Is there an end in sight?
    And the exit strategy that we called for and which was 
stated is to me a statement that we're going to be there almost 
forever.
    Ambassador Richardson. Mr. Chairman, let me say that 
sitting in the Security Council, we have some very strict 
standards. I think the Somalia experience taught us that we 
have to ask those tough questions that you mentioned. President 
Clinton came out with what is called PDD25, Presidential 
Determination 25, which addresses those questions of American 
Command and Control, congressional consultation, and exit 
strategy. How much is it going to cost? Under what 
circumstances do we get in? Is this supported by the American 
people? Those standards are in place.
    Now, this Brcko implementation force is simply an effort to 
keep some stability there with these police monitors. This is 
not anything more than that, at the moment.
    Mr. Rogers.  At the moment. Now, Defense Secretary Cohen 
has announced a firm exit date for U.S. troops in Bosnia of 
June 1998. When do you anticipate the police task force will 
wrap-up; particularly if there are no troops to protect them?
    Ambassador Richardson. Mr. Chairman, I'd like to get back 
to you on that. Let me just say that we also have, as you know, 
through congressional legislation, what I consider to be very 
sound policy. You are notified 15 days before there is an 
expansion of a peacekeeping entity. And I think from what the 
staff tells me, it has worked well and that your staff 
vigorously participates.
    Mr. Rogers.  That's correct. And that's something as you 
recollect when you were in the House, we passed in the 
appropriations bill a couple of years ago--a 15-day 
notification. And it has been working well.
    We've had fewer, and fewer peacekeeping missions, thank 
goodness, than we've had couple of years ago. But what I'm 
saying to you is, if Secretary Cohen withdraws U.S. troops in 
June of 1998, are we going to leave this 200-person police 
force in Brcko unprotected by troops?
    Ambassador Richardson. What we're talking about, I believe 
is 200 police monitors and some human rights observers. I'm 
cognizant of what Secretary Cohen said. I don't think there is 
any effort by anybody in the Administration to do this.
    We want to make sure that there are several issues 
addressed in that whole area, Mr. Chairman. We have to make 
sure that the War Crimes Tribunal Panel works and that we have 
a strong policy there. We have other U.N. missions in the area 
that deal with Croatia. It's a very complex area that involves 
an exit strategy, but under the Dayton Accords.
    You're right. It's a difficult situation to manage. But 
we're doing the best we can so that we do have those police 
monitors there for the achieved purpose of those activities.

                       PEACEKEEPING RESERVE FUND

    Mr. Rogers.  There is a peacekeeping reserve fund at the 
United Nations that we pay one-third of. That totals $94 
million. It's a pot sitting up there right now; a peacekeeping 
reserve fund. It's not been used sinceSeptember of 1995. Why 
can't those funds be freed up and used as a source to satisfy some of 
the outstanding peacekeeping bills?
    Ambassador Lyman. Mr. Chairman, we would need the General 
Assembly to change the rules of that fund to do that. We 
wouldn't object to that fund being eliminated, but we have to 
get General Assembly approval to do so.
    Mr. Rogers. Would you propose that?
    Ambassador Lyman.We can raise that, but I'm not sure how 
we'll do on it. But we will certainly follow-up on that, Mr. 
Chairman.
    Mr. Rogers. Well, the money is laying there supposedly. I 
assume the money is still there; is it not?
    Ambassador Richardson. Mr. Chairman, let me just answer 
something you asked on Brcko. Obviously, we wouldn't leave the 
police monitors, the IPD, out there if there was a major 
security threat. We want to work that out with the U.N. and 
with the Congress.
    This comes up on the Security Council that I attend on a 
daily basis. But I think the decisions we're making right now 
on this police force are sound and based on a security 
situation and are what is needed to achieve this implementation 
of the Dayton Peace Accord.
    Mr. Rogers. Mr. Skaggs.

                            u.n. staff cuts

    Mr. Skaggs. Thank you, Mr. Chairman. Mr. Ambassador, it's 
nice to see you. I can't resist letting you know that I had to 
stay over at the Intelligence Committee for awhile, or I would 
have been here on time. They wanted me to let you know about 
the Richardson arrears at the Intel Committee. So, we need to 
have you clear your account.
    I want to get your review. The Secretary General recently 
announced reform proposals; I want to know particularly whether 
you are worried, as some people have expressed worry around 
here, that these reforms aren't going to result in real staff 
reductions, but merely not filling existing vacancies. How do 
you see the Secretary General's proposal as far as real reform?
    Ambassador Richardson. Well, I'm enthusiastic about it. I 
believe he's a real reformer who is way out front on reform 
issues at the United Nations. I think this is a significant 10-
point plan. Before you arrived, we talked about the 1,000 cuts. 
These are positions that he wants to eliminate all together. 
So, they are significant.
    The savings of $132 million, I do think they are actual 
savings. I believe that the other steps he's taking like 
consolidating the Economic Departments, setting up cabinet 
heads of departments, a code of conduct for all U.N. employees 
involving disclosure, strong components of an oversight agency, 
and living within a U.N. budget cap, are critically important.
    Mr. Chairman, there are 12 of these that I can discuss with 
you, if you would like. My point is reducing documentation by 
25 percent by the year 1998; streamlining and consolidating 
administrative functions.
    Mr. Skaggs. The real point I wanted to get to is whether 
this is a shell game with vacant full-time equivalent position 
(FTEs).
    Ambassador Richardson. No. This is a serious effort. This 
is a first crack. This is the track that he can do on his own 
as Secretary General. There is a second track that he has to 
get support from member states that he is going to push before 
the end of July.
    So, we're talking about two tracks of reforms that he is 
initiating. Our view is that for all of these reforms to take 
place, in addition to some reforms that the United States would 
like to see such as the budget cap, and continued strengthening 
of the oversight entity, peacekeeping reductions for scale 
assessment reductions for the United States, consolidation of 
departments, et cetera, that we need the leverage of funding.
    By paying our arrears, and making a good faith effort there 
with the recognition that it gives us leverage to achieve these 
reforms that are good for all of us. So, I think this is 
significant reform. There are five working groups working on 
reform at the U.N.
    Mr. Annan, I believe, is out front. We're supportive of 
these efforts. We think the Congress is a key player here, 
obviously. The Congress would be initiating and letting us know 
of some of their reform initiatives.
    We want to resolve this problem, Congressman, because it is 
hurting America's leverage at the U.N. and it's affecting our 
interest at the U.N. which is a tool for our foreign policy. We 
can use the U.N. to advance our foreign policy interests a lot 
better by dealing with this issue once and for all in one 
package.
    Mr. Skaggs. By the way, I had the privilege of meeting 
briefly with the Secretary General at the reception that was 
right after his selection. There weren't very many Members in 
town. If you have occasion and you think it's appropriate to 
suggest to him a return visit to D.C., especially to meet with 
interested Members of Congress, again, in an informal setting 
of some kind, I think that could be very helpful.
    Ambassador Richardson. I will do that. I also extended an 
invitation to the Chairman for him to visit the U.N. and to you 
too, for a half a day to see first-hand some of these reform 
efforts and to talk to the Secretary General and his reform 
team.
    He has an American, Joseph Connor, as Under Secretary. He 
deals with reform issues and many others. He has a team that 
works every day on reform, and every day I make some kind of 
speech on reform. So, it is a big priority for all of us.

                         offset against arrears

    Mr. Skaggs. One other question. I understand you already 
hashed over the arrears issue pretty thoroughly. It is often 
suggested by my colleagues here and others that we insist on 
some kind of offset against arrears for those independent, 
unilateral expenditures the United States has made on logistics 
and other support for peacekeeping. If you've already talked 
about that, I don't want you to repeat yourself. If you 
haven't, could you just give us a sense of whether you could 
sell that proposition to the other member states on any basis 
connected with other arrears reductions or any other theory 
that might be able to be put forward.
    Ambassador Lyman. Congressman, I think not only would we 
have difficulty, I'm not sure we want to in every case. These 
are operations that we have undertaken under our own control, 
run by the Pentagon in our interests often with U.N. 
authorization in support of other activities.
    For example, we enforce the No Fly Zone over Iraq. It's the 
peacekeeping operations for which there is assessment that are 
the ones that come under the U.N. organization. They determine 
to work out the command and control, et cetera. It is Blue Hat, 
et cetera.
    These operations are not. They are run by the United States 
military. We do them often because we want to dothem, not just 
because the U.N. wants them. The second problem is that other countries 
do the same. They don't bill the U.N. for such operations.
    For example, the NATO countries support us in the No Fly 
Zone, or in enforcing the sanctions against shipping into Iraq, 
et cetera. So, if we did that, other countries would add in all 
of theirs as well. I'm not sure we'd come out ahead even in 
terms of the amount. It would change the whole nature of what 
the U.N. assesses and what it does not. Usually it assesses for 
things which the Security Council not only authorizes, but the 
DPKL organizes and runs. And I think it would not be a good or 
an easy proposition.
    Mr. Skaggs. So, there is not any significant amount of 
money in terms of independent, U.S. logistical support for Blue 
Hat operations.
    Ambassador Lyman. There is some for Blue Hat operations 
that we've undertaken if we felt it was important to get those 
operations off quickly. And we've done that. And we did not ask 
for reimbursement. Again, other countries have done that as 
well.
    Mr. Skaggs. Thank you, Mr. Chairman.

                    new international organizations

    Mr. Rogers. Thank you. Ambassador Lyman, funding is 
requested for the U.S. assessment for two new international 
organizations, the International Sea Bed Authority and the 
International Tribunal of the Sea. But joining those 
organizations has to be ratified by the Senate before funding 
is required. Is that not correct?
    Ambassador Lyman. Yes. This is assuming that the Senate 
ratifies that we join.

                  withdrawal from other organizations

    Mr. Rogers. Now, you've had some time to look at the 
alphabet soup of international organizations that are funded 
partly by us, from the Copper Study Group to the International 
Office of Vine and Wine. Two years ago, the U.S. withdrew from 
three organizations. We belong to many hundreds, I suspect. Can 
you recommend what additional organizations that are not high 
priority that we can withdraw from and save some money?
    Let me start with the International Office of Epizootics.
    Ambassador Lyman. The International Office of Epizootics 
actually is an important organization in terms of preventing 
the spread of disease. There is no organization that is focused 
on that problem. It's a highly scientific organization, and it 
is very valuable to the United States.
    These organizations sound so esoteric. I mean, I was 
looking at one the other day, the PanAmerican Institute of 
Geography and History. And I thought right away, there is one 
we ought to review. But it turns out that they provide mapping 
information that our Defense Department, NASA, NOAA, and FAA 
all use for safety in maritime information throughout the 
Americas.
    Each of these has a specialized function. They don't serve 
a broad section of the American people, but they do serve very 
particular either scientific or trade interests. Now, we do 
continue to examine these organizations for priority. And if we 
come to the conclusion that they don't merit our continued 
participation in them, we will make that recommendation to you, 
Mr. Chairman.
    Ambassador Richardson. Mr. Chairman, let me point out to 
you that it's not always that easy to get out of these 
organizations. We did try to get out of one, the International 
Cotton Advisory Committee. There was an overwhelmingly negative 
reaction from the Congress. So, we decided not to get out of 
that. I just want to point that out. We did consider getting 
out, but there is also a lot of domestic constituencies that I 
know you can appreciate.

                       international conferences

    Mr. Rogers. Now, Ambassador Lyman, you're asking for $5 
million for the cost of international conferences in 1998, an 
account for which we gave you no money in 1997, although we 
provided the ability to transfer some money for this function 
if it became necessary. How many conferences do we plan to 
participate in, in 1997? How many in 1998?
    Ambassador Lyman. Well, we anticipate in 1998 participating 
in around 650. I think we just sent up perhaps a list of those 
in some detail. I have just been saying to my staff, I'm sorry 
we called these international conferences, because the 
overwhelming number of these are meetings of five or fewer from 
the United States.
    They represent very important meetings either affecting 
trade or other policies important to the U.S. There are a lot 
of them; over 600 of them. But each one of them represents a 
negotiation or a process that affects an important area of 
American interest.
    Mr. Rogers. Well, now, if the State Department has a policy 
now of no more than ten delegates per conference in 1997, what 
are the plans for 1998?
    Ambassador Lyman. We are holding to that in terms of 
accrediting delegates. What we don't have the authority to 
control, Mr. Chairman, to be perfectly candid, is other people 
from other departments that go unaccredited.
    And one of the reasons, quite frankly, it helps us to have 
this budget is that people prefer to be accredited. We use that 
budget to accredit delegates and control the number of 
accredited delegates.
    When we have no budget or we have a very limited budget, we 
accredit very few, but then other departments send other people 
as unaccredited.
    Mr. Rogers. Do you have any mechanism now to try to control 
the number of government-wide delegates that are sent by their 
agencies, willy-nilly many times, to these conferences?
    Ambassador Lyman. Mr. Chairman, in response to your and 
other Members of the Congress request to us last year, we have 
proposed from the Department to OMB a system for that purpose. 
And we are trying to work out the details of that right now.

                       rwanda war crimes tribunal

    Mr. Rogers. Ambassador Richardson, in February, the U.N. 
Inspector General issued a scathing report on the operation of 
the Rwanda War Crimes Tribunal. It seems like a tragedy that 
such a serious process would be mired with problems. We've made 
available significant amounts of money, about $13 million with 
another $15 million expected to be assessed in 1998. What's 
being done to correct that problem?
    Ambassador Richardson. Well, as you may know, Mr. Chairman, 
this has been a serious problem. That was the OIOS Office that 
I've been bragging about that made these recommendations. 
Corrective action was taken. Administrative changes were made.
    The top two people there I believe were let go. The 
Secretary General did it decisively, and immediately. We're 
still anxious for more progress there, believe me. This is an 
important priority. We want to see more indictments and 
detention and for the process to go forward. But, again, a 
problem was detected and it was acted upon.
    Mr. Rogers. Do we know how much money didn't reach it's 
intended purpose?
    Ambassador Richardson. I'll get back to you on that, Mr. 
Chairman. I don't have those figures.
    Mr. Rogers.  If you'll provide that for the record. We'd 
appreciate it.
    [The information follows:]

                 Assessed Funds for the Rwanda Tribunal

    We are not aware of any particular information about how 
assessed funds for Rwanda Tribunal were used beyond that 
information reported by the UN Office of Internal Oversight 
Services (OIOS). The administrative weaknesses identified by 
the OIOS report, indicate that the funds the Tribunal had at 
its disposal were not used as quickly or efficiently as they 
should have been. For example, the Tribunal has been slow to 
staff up, and even today 22 percent of its positions remain 
vacant. We are working hard to make sure the UN has a good 
selection of well-qualified applicants so that the Tribunal can 
operate at full strength. The leadership of the Tribunal, 
namely Chief Prosecutor Louise Arbour, the new Deputy 
Prosecutor Bernard Muna, and the new Registrar Agwu Okali are 
focusing on implementing the OIOS recommendations fully, and we 
are following this issue closely. In addition, the UN Inspector 
General's office plans a follow-up visit to the Rwanda Tribunal 
offices in Kigali and Arusha in September to assess results of 
the Tribunal's reform regimen.
    The U.S. also supports the Rwanda Tribunal through 
voluntary contributions. Last October, Secretary Christopher 
announced a $650,000 voluntary contribution. Rather than pay 
this sum directly into Tribunal accounts, we closely administer 
its expenditure for specific purposes. For example, we used 
$50,000 of that amount to fund a Tribunal training workshop, 
where investigators and prosecutors, including experienced ones 
from the Yugoslav Tribunal, focused on developing indictments 
for war crimes related to incidents of rape. We are also using 
part of our voluntary contribution to contract for the 
videotaping of the Tribunals' trials--a project of great 
importance for public affairs, training and the historical 
record.

                         u.n. inspector general

    Mr. Rogers.  The size of the U.N. Inspector General's 
budget, do you think that's sufficient?
    Ambassador Richardson. We want to see it expanded, Mr. 
Chairman. We want the Inspector General to have enforcement 
power. We worked very hard to get him the staff positions that 
the Inspector General wanted. I believe that there were some 7 
to 13 staff positions under contention.
    I believe that has been resolved. I've talked to Mr. 
Pashke, the Inspector General, recently. I think he is 
relatively pleased. But we think a vigorous Inspector General's 
Office is important.
    Mr. Rogers.  Well, obviously, and that's one of the 
conditions in the past that Congress insisted that the U.N. 
have.
    Ambassador Richardson. And here is a case where we are 
asking for more resources because we think eventually it saves 
money.
    Mr. Rogers.  I agree. That's why we need to know what you 
think about the size of that operation and make a 
recommendation on that.
    Ambassador Lyman. The GAO, at the request of the Congress 
is undertaking an assessment of the OIOS Office. We look 
forward to that because I think it will give us come clues as 
to how that office should go and for what period of time. So, 
we welcome that study.
    Mr. Rogers.  When can we expect it?
    Ambassador Lyman. I think their time table is to finish it 
toward the end of the summer; around September.
    Mr. Rogers.  Have we examined the recently published 
guidelines of the Inspector General on the protection of 
whistleblowers? Have we determined that those protections are 
adequate?
    Ambassador Lyman. They appear to be. There is a manual for 
external purposes. It doesn't detail the internal operations of 
the OIOS. But it looks like to us that it is warning everyone 
quite clearly that there will be action taken if there are any 
reprisals taken against whistleblowers. Now, what we have to do 
now is watch and see if that's effective and implemented.

                              u.n. reform

    Mr. Rogers.  Now, in conclusion here, let me say this. We 
have a Secretary of State who I'm satisfied is determined, as 
anybody can be, to help with the process of making the U.N. 
more efficient and effective, as we all are, through some 
reforms.
    We have an Ambassador to the United Nations now, Bill 
Richardson, whom I'm convinced is as determined as the rest of 
us. And of course, Ambassador Lyman is determined to root out 
waste and abuse in the rest of the international organizations. 
Certainly, you've got a Congress, at least onthis Subcommittee, 
and I think the Congress as a whole, that is determined to do the same. 
There are some shrill voices here on the Hill on both sides or either 
side of that question. I think there are a number of us that realize 
the practicalities of achieving reform.
    We want to work with you on that respect. It will not be an 
easy proposition, either in this body or in the U.N. But I 
think it's a worthwhile, a very worthwhile effort. When the 
United Nations was being born in the mid-1940s there was the 
question that existed at that time in the view of the old 
League of Nations, will this thing ever work? Can we work 
together? Can we talk?
    And I think we've learned with the United Nations that, 
yes, it can and will work. But like any other organization, it 
has grown barnacles over the years and needs the hull cleaned. 
That's what I'm proposing. I want to make that hull sleeker and 
more effective and sail smoother through the troubled waters 
that we surely shall face.
    I do not think the United Nations at this moment is sleek 
enough to get to the trouble spots fast enough to solve the 
problems. So, I just want to reassure you, Mr. Ambassador, that 
I'm with you. We want to help you reform the United Nations 
because we want a better United Nations; not because we don't 
want a United Nations. We want a better one. At least I speak 
for myself in that respect.
    So, we'll be working with you on the Hill to achieve the 
goals that you have, both of you. We thank you for being here. 
We are adjourned.
                                          Thursday, March 20, 1997.

           STATE DEPARTMENT ADMINISTRATION OF FOREIGN AFFAIRS

                                WITNESS

PATRICK F. KENNEDY, ACTING UNDER SECRETARY OF STATE FOR MANAGEMENT
    Mr. Rogers.  The Committee will come to order.
    We're pleased to welcome Patrick Kennedy, the Acting Under 
Secretary of State for Management. With 23,000 employees and 
252 posts around the world, including 12,000 properties, there 
is a lot to manage.
    The Department's plate is full with initiatives that are 
either underway or about to begin, from the International 
Cooperative Administrative Support System, ICASS, the subject 
of a budget amendment that was transmitted earlier this week, 
to the overseas staffing model, to a five-year information 
resource modernization plan, to name three.
    This Subcommittee has been particularly interested in 
making sure that resources overseas are being spent where 
they're needed. Two years ago it was apparent that there was no 
system to match spending with overseas priorities. This 
Subcommittee has supported the Department in making those 
changes. We look forward to signs of progress in those areas 
especially.
    Secretary Kennedy, your statement will be made a part of 
the record. If you would like to briefly summarize it, we'd be 
happy to hear from you. And if you'd like, you may identify 
those with you.

                  Opening Statement of Patrick Kennedy

    Mr. Kennedy.  Mr. Chairman, accompanying me is Richard 
Greene who is the Chief Financial Officer for the Department.
    Mr. Chairman, this Committee has a long history in 
assisting the Department in its efforts to advance the foreign 
policy interests of the American people. I am particularly 
grateful to you, Mr. Chairman and to the Members of the 
Subcommittee, for your help and in understanding in the past.
    Your efforts have been invaluable. And I am seeking your 
help again as I testify in support of the Department's fiscal 
year 1998 budget request for those accounts which fund 
Department operations.
    I will not read my entire statement, but it will be much 
easier if it could be entered into the record.
    Mr. Rogers.  It shall be.
    Mr. Kennedy.  Three weeks ago, Secretary Albright spoke 
openly before this Committee about the substantive foreign 
policy requirements that underpin this budget request. She 
outlined the principal foreign policy challenges before us 
today and pointed out those that lay ahead in what remains of 
this century and beyond.
    In order to meet these challenges, there is a real need for 
diplomatic readiness, maintaining or, in many cases, restoring 
the human and material infrastructure that allows the Secretary 
and others, whether they work for the State Department or other 
agencies of the United States Government, to advance the 
national policy agenda overseas.
    As you know, this is not an easy burden. To support and 
advance American interests around the world, the Department 
maintains some 250 diplomatic counselor posts in 164 countries. 
These platforms are the home bases not only for the Department 
of State, but also for more than 200 other U.S. Government 
entities who help support and advance American interests.
    All of our posts operate in a complex environment where 
resources are tight and payments are not easy among a complex 
mix of tasks. The American people want their diplomats to 
foster American exports, oppose drug trafficking and terrorism, 
prevent further damage to the environment, deter the spread of 
weapons of mass destruction, foster the peaceful settlement of 
disputes, look after the welfare of American travelers abroad, 
promote and sustain democracy, and control immigration.
    Pursuit of this rich agenda requires a certain level of 
representation abroad. Effective and flexible management is 
needed to continuously find ways to use scarce resources more 
wisely. The operations of these platforms clearly support the 
Department's request for the amounts specified in the 
President's budget.
    In order to help improve our ability to manage such a 
worldwide operation and ensure that every tax dollar is wisely 
utilized, the Department has made significant progresson a 
number of important management initiatives. I will speak about that 
later in my presentation.
    Finally, we are making increasingly greater use of 
strategic planning in compliance with the Government 
Performance and Results Act to ensure that we allocate our 
scarce resources to the highest priorities.
    If I might, let me highlight the major elements of our 
budget request. We need to fund mandatory pay raises and 
overseas as well as domestic inflation.
    We must continue to improve our information technology 
infrastructure. Our budget request seeks $40 million in 
additional funding in this area.
    We must continue an aggressive border security program by 
upgrading consular systems, employing new technologies, and 
adequately funding worldwide consular operations.
    We must maintain an inventory of overseas facilities to 
promote operational efficiency, employee health and safety, and 
an extended useful life for our buildings.
    We need additional funding for other initiatives as well; 
hosting important international conferences, upgrading our 
entire infrastructure in China, and complying with legislative 
arms control export mandates.
    In her confirmation hearing, Secretary Albright noted that 
American leadership in the world derives from having a full 
range of foreign policy tools, including military force and 
vigorous diplomacy.
    We need to approach diplomacy with the same commitment that 
has made our Armed Forces, which Secretary Albright referred 
to, as the best led, best trained, best equipped, and most 
respected in the world. Diplomatic readiness is the basic 
foundation of a vigorous constant, creative, and effective 
diplomacy.
    There are three principal components of this diplomatic 
readiness.
    Human Resources. We need a work force that reflects the 
vigor and diversity of the nation it represents. We also need 
the right number of skilled employees with foreign language, 
functional, and technical expertise who are well-prepared to 
represent the varied interests of the United States overseas, 
build effective relationships with their international 
counterparts, exercise foreign policy leadership, protect 
American citizens, and provide operational support for the 
conduct of foreign affairs.
    Information. We need highly qualified personnel and the 
information technology capability to gather, analyze, and 
communicate information efficiently.
    Infrastructure and Operations. We need well-maintained 
office and overseas residential facilities, supported by 
efficient financial, administrative, logistical, and security 
systems which enable employees to conduct business properly at 
home and abroad.
    Diplomatic readiness helps achieve real foreign policy 
goals. For example, how can we maintain constructive relations 
with great powers without the right people, with the right 
skills, at our most important diplomatic missions? How can we 
advance the nation's economic and commercial interests abroad 
without properly trained and equipped people in the right 
places to help break down trade barriers, support U.S. business 
and negotiate mutually beneficial investment and tax 
agreements?
    How can we effectively provide consular services to 
American citizens traveling or living abroad, when in order to 
successfully reduce budgets we must close more overseas posts, 
or reduce staffing at the posts that we are able to keep open.
    There has been a cumulative negative impact on our 
diplomatic readiness produced in recent years by the flat 
budgets that have been appropriated since 1993. Information 
systems have fallen behind in technology, inter-connectivity, 
and reliability.
    Buildings require substantial renovation. For well over a 
decade we have not been able to maintain realistic replacement 
cycles for critical equipment that supports overseas operations 
like computers, telephone systems, vehicles, and office 
equipment.
    Staffing gaps at even key embassies are now the rule and 
not the exception. In the critical areas of language training, 
the Foreign Service Institute's ability to develop new 
materials, apply new technologies and support language ability 
has been limited by these budget reductions. Maintenance has 
been seriously constrained by resource reductions. And without 
adequate security resources, the risk to our personnel, 
facilities, and information will soon exceed what is prudent.
    The Department has undertaken a number of significant 
management initiatives designed to help us make optimal use of 
the human and material resources that you provide us. As you 
mentioned, the International Cooperative Administrative 
Services System is a new way to manage and fund administrative 
support for all United States Government agencies operating in 
our diplomatic missions abroad. ICASS will provide senior 
managers, for the first time, with information on the full cost 
of overseas support, with the objective of obtaining quality 
services at the lowest possible cost. At the mission level, 
these costs will be distributed equitably and transparently 
under the guidance of a local ICASS Council composed of 
representatives of all U.S. Government agencies.
    Logistics Reengineering. The Department's Logistics 
Reengineering Project is redesigning worldwide logistics 
support operations. Work can be organized around the total 
logistics concept to provide material and services, better, 
faster, and cheaper.
    We hope to achieve greater efficiency in operations. We 
will have worked from complex and expensive channels to simpler 
and more economic ones, and reduced inventory carrying costs, 
as well as transportation and internal processing costs.
    The Overseas Staffing Model. This model calculates staffing 
requirements for overseas posts based directly on workload, 
counsel, and administrative staffing as a function of the 
post's global, regional, and bilateral foreign policy 
priorities, primarily political and economic staffing.
    Based on the relational assessment of requirements 
worldwide, the model provides department management with 
analytical tools for allocating personnel resources consistent 
with foreign policy objectives and priorities, adjusting 
staffing proportionately to deal with any funding level, and 
determining staffing levels for new posts. We plan to 
revalidate the overseas staffing model on a regular basis.
    Border Security. The Department has had an ambitious Border 
Security Program, which includes deploying advanced technology 
to all consulor posts within three years. State and other 
agencies are actively sharing data to enhance the United States 
Government's ability to screen out terrorists, narco-
traffickers, and other criminals.
    Every visa issuing post now has a sophisticated, automated, 
name checking system to help prevent visa issuance to people 
who should not receive them. Every post now also utilizes the 
machine readable visa system, which offers numerous security 
features to help strengthen U.S. border security.
    Information Technology. In recent years, the infrastructure 
deficit has had a dramatic impact on many elements of the 
Department's information handling systems. For example, over 40 
percent of the Department's overseas telephone switch gear is 
obsolete. Eighty-two percent of all radio equipment overseas is 
obsolete, and 55 percent of overseas computer systems are 
obsolete.
    Like all organizations in the public and private sector, 
the Department must also accelerate planning for and implement 
measures to solve the problems posed by the year 2000 dilemma. 
That fact alone means that most current software and some 
hardware recognize only two digits in a date. This alone is 
expected to cost $135 million to correct.
    Fee Retention. A key budget strategy that we will actively 
pursue beginning in fiscal year 1998 is the retention of 
revenues generated by all fees. In the past, we have retained 
only fees for machine readable visas and for expedited passport 
processing.
    In 1998, we expect to retain fees sufficient to support the 
delivery of standardized high quality consulor services that 
American citizens expect from their government, implement an 
effective U.S. immigration policy, improve the nation's border 
security and contribute to the delivery of other critical 
services.
    Mr. Chairman, I understand the concerns you have expressed 
to the Secretary when she appeared before this Committee. We 
want to work seriously and energetically with you and others in 
the Congress to make this part of our budget strategy succeed.
    Asset Management. The Department is responsible for the 
acquisition, operation, and maintenance of over 12,000 office, 
residential, and other properties abroad. The real estate asset 
management program disposes of unneeded properties and uses 
those proceeds to meet higher priority, real property needs.
    This program generated $59 million in the past two years. 
And with these funds and other appropriation balances, new 
facilities were purchased, which are now saving over $12 
million every year in avoided lease costs.
    Diplomatic Security. The most important currency security 
issue is the need to combat the threat of terrorism worldwide, 
especially in the Middle East. To meet this threat, thanks to 
the actions of this Committee and others, the Counter-Terrorism 
Budget Amendment provide an additional $38 million in no-year 
funding for the Department, of which $23.7 million will be used 
for improvements emphasizing security upgrades.
    While producing an immediate response on a terrorist 
threat, the Bureau of Diplomatic Security must also develop a 
longer term strategy for a more stable budget level to address 
security requirements worldwide.
    The Diplomatic Security Office rigorously applies a risk 
management strategy to the implementation of its security 
stands at all overseas posts, through refining the established 
generic security standards and counter measures to meet 
specific threats, at specific posts, at specific times. This 
technique avoids the waste inherent in using a one size fits 
all approach and allows the Department to husband scarce 
security resources.
    Diplomatic security has also expanded its outreach to the 
U.S. business community through the Overseas Security Advisory 
Council, which helps protect life and facilities through 
information sharing activities involving over 1,500 American 
businesses having overseas operations.
    Strategic Planning. The Department is actively making 
progress in strategic management, including meeting the 
requirements of the Government Performance and Results Act.
    Under the leadership of an Advisory Council of nine 
Assistant Secretaries, a strategic planning team is developing 
an over-arching, international strategic plan covering all U.S. 
Government activities abroad; and based on that plan, a 
Department of State strategic plan.
    Once reviewed by senior leadership, we will consult with 
all our stakeholders and customers, including other agencies, 
OMB, and the Congress.
    Finally, the Department already requires overseas missions 
and bureaus in Washington to prepare annual performance plans 
which will now be derivative of the Department's own strategic 
plan.
    In conclusion, Mr. Chairman, Secretary Albright has stated, 
there will be many occasions in many places where we will rely 
on diplomacy to protect our interests, and we will expect our 
diplomats to defend those interests with skill, knowledge, and 
spine.
    But she has also noted that we cannot have world class 
diplomacy on the cheap. We must invest the resources required 
for American leadership.
    Mr. Chairman, that last sentence is the essence of my 
message today; to carry out a reasonable, forward looking, U.S. 
foreign policy, one which advances the national interest 
everywhere in the world requires a level of diplomatic 
readiness for the President's fiscal year 1998 budget request 
supports.
    Give us the tools we need and we will do the job. And we 
will do it well. Thank you very much.
    [The statement of Mr. Kennedy follows:]

[Pages 381 - 394--The official Committee record contains additional material here.]


                         fee retention proposal

    Mr. Rogers.  Well, thank you, Mr. Secretary.
    As we said earlier, you've got a big ranch to farm, spread 
all around the world in every country that exists.
    As you referred to it and as we took this up with the 
Secretary the other day, I'm greatly concerned about the budget 
proposal that the State Department has put forward, which is a 
part of a government-wide effort by the Administration to 
partly fund agencies out of the fees they generate, rather than 
have the fees go to the Treasury and come back in appropriated 
funds.
    To briefly summarize, in so far as State is concerned, you 
would no longer be funded from a straight appropriation, but 
rather from a partial appropriation. The user fees from such 
things as the machine readable visa machine would make up the 
balance of your funding.
    And you would use the monies that you generate partly for 
your own operations. Irrespective of the merits of that, and I 
admit, it has great merit, I'm concerned about where we are and 
what's going to happen to us this year. To get that kind of a 
proposal enacted into law would take I don't know how many 
committees of the Congress and the Senate agreeing to it, 
having it signed into law, signed by the President, all before 
we mark-up a bill to fund the State Department this year, which 
is going to happen in a matter oftwo or three months. I just 
don't know how that's going to work.
    In the meantime, if at the time we mark-up our bill, those 
fees have not been approved by the authorizing committees, 
we're faced with marking up your budget, anticipating those 
fees would come in to place later on. In the meantime, we are 
only giving you a portion of what it would take to operate the 
State Department if those fees don't pass.
    And you would be faced with a budget cut of 25 percent, 
assuming those fees don't pass later on in the year. I don't 
know whether you can live with that or not. What do you think?
    Mr. Kennedy.  If this proposal does not work, Mr. Chairman, 
we're in serious trouble. This is an Administration proposal. 
We have been consulting directly with the Director of OMB. 
Secretary Albright has personally spoken to him. And we've been 
assured orally and in writing that this is an Administration 
proposal. It carries the full weight and the full interest of 
the Executive Branch.
    And that we believe that because of the merits of it as a 
good government proposal, that it will meet the concerns of the 
Legislative Branch and it will be enacted.
    Mr. Rogers.  Well, it's a quarter of your budget. And 
unless I'm completely blind, I'm doubting it's going to happen. 
I'd worry about what's going to happen to the Department in the 
meantime. Do you have a fall-back plan?
    Mr. Kennedy.  We have been assured by OMB, Mr. Chairman, 
that they believe this proposal will carry. And that they will 
take whatever steps are necessary to ensure that it will work.
    Mr. Rogers.  Well, this is government shutdown two; partial 
shutdown which is probably worse than a complete shutdown. I 
mean, this is really walking to the edge of the bluff here and 
looking at the ground and seeing a dangerous situation out 
there.
    Secondly, your proposal takes the $140 million from the 
machine readable visa fee that has previously been off-budget 
and puts it on-budget, which requires us to appropriate $140 
million more than we have in the past, simply to keep the 
operating budget at the same level as in the past.
    What happens if we don't have an increase in our allocation 
from the Committee to handle that?
    Mr. Kennedy.  Mr. Chairman, I can't answer that. This is an 
Administration proposal. The merits are having the State 
Department able to deal with a constantly increasing workload, 
of which you are well aware. Passport issuance is up almost 60 
percent over the last five years. We've had a 12-percent 
increase in the issuance of visas overseas.
    This kind of workload which is in measurable services, 
either to the American public, to foreign publics, our issuance 
of Defense Trade Control Licenses, and other activities which 
are fee related, continue to rise. Faced with declining budgets 
or straight line budgets, these services that we must perform 
that we wish to perform are driving out other activities of the 
Department which we believe are equally important, but are more 
flexible in the sense that we don't have to have long lines of 
Americans citizens or others, of American businesses queuing up 
for much needed licenses.
    The ability to generate additional revenues to meet our 
requirements, the fees are the tools that are necessary to get 
us to the program levels that we need to operate. And that is 
why this fee proposal is important because the fees lead us to 
the tools that then enable us to do our jobs.
    Mr. Rogers.  I admit that. I think it's a terrific idea. I 
may be alone in that. I'm just saying to you that mechanically, 
practically, this year, if that scheme does not come off, 
you're in deep trouble. Can I put that more plainly than that?
    Mr. Kennedy.  Mr. Chairman, I totally accept that premise, 
if this does not pass.

                           alternative budget

    Mr. Rogers.  Send us an alternative budget. Send us two 
budgets. Let the Congress choose between the fee scheme and the 
old regular way. Give us an out, because I don't know how we're 
going to deal with your budget the way you've presented it to 
us now. I know it's not your doing. It's at a higher pay grade. 
But it's the same for me.
    Mr. Kennedy.  Mr. Chairman, Secretary Albright will be back 
from Helsinki on Friday night. I promise I will take this up 
with her as soon as she returns.
    Mr. Rogers.  I've already taken it up with her. Mr. Obey.

                     state department organization

    Mr. Obey.  Thank you, Mr. Chairman. Mr. Kennedy, I've got 
nine questions I need to ask you in five minutes. I'm going to 
ask you to be very brief in your responses. Let me start with, 
this is a simple blow-up of the Government Organization Manual. 
I'm sure you're familiar with it. It describes the organization 
of the State Department.
    Mr. Kennedy.  Yes, sir.
    Mr. Obey.  What's wrong with that picture?
    Mr. Kennedy.  I don't see anything particularly wrong with 
it, sir.
    Mr. Obey.  Well, let me tell you what Larry Egleberger says 
is wrong with it; the guy who used to run the agency at one 
time before he was Secretary of State. He wrote this.
    ``The State Department currently has 19 Assistant 
Secretaries divided by regions such as the Near East and 
functions such as human rights, each with the supporting 
bureau. There are too many Assistant Secretaries and their 
views are too divergent for the Secretary of State to meet with 
them as a group, except on rare occasions.
    ``They report to five Under Secretaries. Policy 
coordination does not normally take place at the Under 
Secretary level either. When Assistant Secretaries appeal to 
their immediate superiors, disputes are often perpetuated 
rather than settled. Over the Under Secretaries are the 
Secretary and the Deputy Secretary who would bring some order 
to the process by focusing on these internal conflicts.
    ``But like most of their predecessors, Secretary 
Christopher and Deputy Secretary Talbot have right been too 
preoccupied with the outside world to keep peace in Foggy 
Bottom.''

                    number of assistant secretaries

    Do you really have 19 Assistant Secretaries?
    Mr. Kennedy.  Yes, sir.
    Mr. Obey.  My staff looked at the work page last night and 
said you have 20. Did you add one overnight or something?
    Mr. Kennedy.  No, sir. There are 19 Assistant Secretaries 
of State. We have an authorizing legislation that permits 20, 
but there are only 19 established or confirmed Assistant 
Secretaries.
    Mr. Obey.  Aren't there about ten others such as Inspector 
General, Director General, Director of Policy Planning who 
would appear to virtually have the standing of Assistant 
Secretaries?
    Mr. Kennedy.  There are other positions----
    Mr. Obey.  Who are in bureaus?
    Mr. Kennedy.  Yes, sir. They're either established by law 
at Executive Level 4 or equivalent.
    Mr. Obey.  So, roughly, you've got about 30 people.
    Mr. Kennedy.  About 30 people. That is correct.
    Mr. Obey.  I sit on the Labor-HHS Education Subcommittee. 
The three Departments under the jurisdiction of that 
Subcommittee manage budgets that at a minimum are ten times as 
large as the State Department, but all together they don't have 
five Under Secretaries and no two of them combined have 30 
Assistant Secretaries.
    Our Committee has an investigation staff--Surveys and 
Investigations. They took a look at the Department a couple of 
years ago, and they reported this.
    ``The State Department bureaus view themselves as 
independent, stand alone, operations. Numerous officials 
describe State as independent chiefdoms, whose separate 
narrowly focused information technology requirements are 
paramount. One of these individuals expressed a view that 
historically bureau managers have not talked to one another.''
    Does that describe the way the Department functions today?
    Mr. Kennedy.  I don't believe so, sir.

                       chief information officer

    Mr. Obey.  I'd like to think not. Their investigation 
contends that this fundamental lack of central management has 
created a situation where there is no consistent policy on 
information system or even cost accounting.
    I want to make it clear. I'm not criticizing you. I think 
the problem with the way things are organized is that people 
like you don't have enough power to get things done. But the 
staff indicated that ``Each bureau has its own data system 
procurement section. That individual is charged with 
Department-wide responsibility and has no line authority over 
those who actually select the systems in the bureau.''
    Is that still true?
    Mr. Kennedy.  No, sir. That is not correct.
    Mr. Obey.  When did it change?
    Mr. Kennedy.  About 18 months ago. The Department has 
established a Chief Information Officer who sets the policies 
and the parameters for information technology Department-wide. 
We also have a procurement executive.
    Mr. Obey.  What kind of power do they have to actually 
integrate it?
    Mr. Kennedy.  All of the proposals for any new system, any 
changes to systems, any expenditures of anything other than 
routine operational funds are handled by a joint planning 
committee which the Chief Information Officer functions in 
effect as the Executive Secretary and ensures that there is 
compliance with standards.

                     state department organization

    Mr. Obey.  Okay. We'll ask our staff to review your 
situation again and evaluate how much they think it's changed. 
Let me just say this. The GAO said last summer that 
Departmental management's attention to downsizing had been 
distracted by ``internal bureaucratic pressures.''
    And Mr. Eagleberger called this strategic management 
initiative, ``Narrowly conceived and cosmetic in effect.'' Just 
an offhand observation. I've been in this town 28 years, and 
I've not been thrilled with the organization of the Department 
in any of those years.
    It seems to me that you have a Department where 
responsibilities are carved up very narrowly so that everybody 
gets to wear a big hat. Many of those people end up with very 
little real work to accomplish. So, they spend a lot of their 
time fighting for turf.
    And those who do have real work to do sometimes don't have 
the time nor the patience to take them up. And so the system 
goes on and on. I think there are a number of things this 
Committee might consider doing instead of simply withholding 
salaries for some of these slots.
    I don't know how far I'm willing to go on that yet, but I'm 
willing to go pretty far. I would simply say that any agency 
with this kind of structure in comparison to the others I deal 
with who want to supposedly save money by taking another 
troubled agency under its jurisdiction and throwing it into 
this morass, I think anybody who thinks that this is going to 
solve any problems, they are smoking something that probably 
was not grown in North Carolina.
    I would hope the agency will take a good hard look at that 
before they cause themselves more problems, and cause other 
agencies more problems.
    Mr. Kennedy.  I'm not going to assert that the Department 
is a perfect organization. I would be foolish to do so. And I 
wouldn't insult your intelligence by asserting that.
    However, I believe that the State Department has engaged 
over the last several years in some of the major management 
initiatives that I have outlined such as information technology 
reform, the overseas staffing model, logistics reengineering, 
et cetera, which are having a positive affect on streamlining 
Departmental operations.
    On the policy side, the number of issues the Department is 
dealing with since the end of the Cold War, the number of 
embassies that we have to maintain overseas, the breadth of the 
issues that we face continue to expand. So, the structure of 
the State Department by no means internally is perfect.
    I think the over-arching structure of Assistant Secretaries 
who are responsible for either regional matters or major 
functional areas is one that has a large number of positive 
attributes.
    Mr. Obey.  I guess I would just say that when I looked at 
that organizational chart, I have minimum high regard for what 
it tells me. Thank you, Mr. Chairman.
    Mr. Rogers.  Thank you, Mr. Obey. Mr. Mollohan.

                      information systems upgrade

    Mr. Mollohan.  Thank you, Mr. Chairman. You referred to the 
fee proposal as a good government proposal. I don't agree with 
that. I understand there are a number of fee proposals that are 
sprinkled throughout the President's budget.
    I think the Chairman asked some very good practical 
questions with regard to how to do it. I would suggest that you 
address that issue because you may end up in a jam--certainly 
in this appropriation cycle.
    You asked for a $40 million increase for information 
systems upgrades. Talk to us a little bit about that. Bring us 
up-to-date on your systems upgrade program. How far have you 
come with that? Then talk to us about this new strategicplan; 
how it fits in and what you plan to do with this $40 million and what 
requests do you anticipate for the out years pursuant to your strategic 
plan--submitted here in February.
    Mr. Kennedy.  That is correct, sir.
    Our overall State Department technology bill, which 
includes not only equipment, but the long haul 
telecommunications circuitry to connect our posts abroad; the 
operating cost of our communications, including the personnel 
costs.
    We estimate that over the course of five years, that's a 
total of $2.7 billion, of which about $2.1 billion is base 
operating cost, which is the communications circuitry, normal 
equipment replacement, and personnel salaries. We're talking 
about a modernization initiative that incorporates about $600 
million spread out over five years.

             information resource management program board

    In order to do this in a logical and coherent fashion, and 
to make sure that we do not do anything that crosses another 
system, or that is inappropriate, or is ineffective or would 
lead to a result that we do not wish. We have established 
within the Department an Information Resource Management 
Program Board, which is chaired by the Under Secretary for 
Management.
    Mr. Mollohan.  When did you establish that?
    Mr. Kennedy.  Two years ago, sir.
    The Information Resource Management Program Board, chaired 
by the Under Secretary includes the major players in any such 
activity, the Chief Information Officer, the Chief Financial 
Officer, Assistant Secretary for Administration, diplomatic 
security, Consulor Affairs, personnel.
    It also includes representatives from our regional bureau 
to make sure that we're responding to that; the Bureau of 
Intelligence and Research to make sure we're meeting those. And 
also there is a seat at the table for the Inspector General's 
Office as well.
    This body is the validating body. We then set working 
groups composed of all of these entities together to write a 
strategic plan and an information tactical plan which 
implements the strategic plan. These have been validated by 
this Information Resource Management Board.

           status of strategic planning and tactical planning

    Mr. Mollohan.  How far along are you in that strategic 
planning and tactical planning process? That report that you 
submitted in February is the final product?
    Mr. Kennedy.  It is the final product, but obviously it is 
a rolling product as well. That is the program, the strategic 
plan, for looking out five years; the tactical plan looking out 
two years. We intend to re-do that plan every year to take into 
account new and emerging technologies, changes in pricing, 
changes in what the private sector is offering to us.
    I see no reason given the size of the State Department for 
us ever to be on the leading edge of technology. I want to be 
in that safe middle, by----
    Mr. Mollohan.  You've been successful.
    Mr. Kennedy.  Since, we haven't spent any money on 
information technology for the last five years, I know exactly 
where I am.

                              wang problem

    Mr. Mollohan.  You've been provided money in the last five 
years. I mean I heard about this WANG problem--that it is 
proprietary and can't communicate, and you can't buy parts for 
it. How many years have we heard that?
    Mr. Rogers.  I think they use carrier pigeons.
    Mr. Mollohan.  How long have you been testifying about this 
WANG problem?
    Mr. Kennedy.  For a number of years.
    Mr. Mollohan.  And you've requested and gotten money.
    Mr. Kennedy.  We have gotten some sums of money 
appropriated which have launched us down the path. As I pointed 
out before, 55 percent of our computer technology is obsolete. 
If we went back to Dick Moose's presentations before this 
Committee last year and the year before that, we would be 
talking about 70 percent, 80 percent, 90 percent regressing 
back into time.

                   resources for new computer systems

    Mr. Mollohan.  Did you ask for adequate resources to fix 
that problem within a shorter period of time than it's 
obviously being fixed? First of all, did you ask this Committee 
for resources for this in past years?
    Mr. Kennedy.  We have presented budget requests to the 
Congress which are consummate with the President's desire to 
balance the budget. We have had significant other priorities.
    Mr. Mollohan.  That doesn't matter. Just answer my 
question. Did you ask for enough money to put in new computer 
systems?
    Mr. Kennedy.  No, sir.

                             strategic plan

    Mr. Mollohan.  Okay. This strategic plan, does it address 
all of these concerns in a five-year period?
    Mr. Kennedy.  Yes, sir.
    Mr. Mollohan.  It does. So, you would have a modern--
    Mr. Kennedy.  We would have, through----
    Mr. Mollohan [continuing]--system in five years?
    Mr. Kennedy.  Through coordinated planning and standards. 
We addressed the year 2000 dilemma. We resolve the 
infrastructure problems we have now. We reach to the desktop of 
every State Department employee who needs computing power on 
their desktop. We upgrade applications in software to do 
resource management, financial management.
    Mr. Mollohan.  And this $40 million is a down payment on 
that?
    Mr. Kennedy.  The $40 million is a part of the funds that 
we need to reach the five-year plan. Yes, sir.
    Mr. Mollohan.  And the five-year plan is $2.7 billion?
    Mr. Kennedy.  It's $2.7 billion which includes if you 
project out current spending. It includes $2.1 billion on base 
and operating.
    Mr. Mollohan.  On base and operating.
    Mr. Kennedy.  On base and operating. That's correct, sir.
    Mr. Mollohan.  How much is new equipment?
    Mr. Kennedy.  New equipment this year--well, the $600 
million is a combination of new equipment, new software 
development. We are going to be spending this year probably the 
entire $40 million should it be appropriated on hardware. That 
is to replace the antiquated equipment we now have in 
Washington and in posts around the world with new equipment.
    It rigorously adheres to the standards which we call ALMA, 
A Logical Modernization Approach, that is a part of our 
strategic plan.
    Mr. Mollohan.  Is this laid out in detail completely in 
your proposal?
    Mr. Kennedy.  In the strategic plan. Yes, sir.

                           year 2000 problem

    Mr. Mollohan.  This year 2000 issue, just to wrap up here, 
the year 2000 problem, you've estimated that it cost you $135.2 
million to fix that.
    Mr. Kennedy.  Yes, sir.
    Mr. Mollohan.  How did you arrive at that number?
    Mr. Kennedy.  What we did is we looked at two things. We 
looked at hardware platforms and software applications that we 
now have that cannot deal with four digits in a date. And we 
estimate about $88 million worth of equipment replacement and 
$47 million worth of hardware and software repairs or 
enhancements are needed in order to be compliant with the fact 
of dealing with the year 2000.
    Mr. Mollohan.  Let me ask you this. In this upgrade, would 
you not be replacing a lot of hardware and an awful lot of 
software that in and of itself would take care of this year 
2000 problem?
    Mr. Kennedy.  That is correct. Yes, sir.
    Mr. Mollohan.  So, what part of the $135.2 million fixes 
old equipment and old software? How much of it is investment in 
new software and new equipment?
    Mr. Kennedy.  $88 million is in replacing equipment.
    Mr. Mollohan.  New equipment?
    Mr. Kennedy.  New equipment that replaces old equipment, 
which is both antiquated and currently not year 2000 compliant.
    Mr. Mollohan.  So, a part of this $135 million is really a 
part of your upgrade costs.
    Mr. Kennedy.  That is correct.
    Mr. Mollohan.  In reality.
    Mr. Kennedy.  Yes.

                   resources for new software systems

    Mr. Mollohan.  How much of it is for software, new software 
systems?
    Mr. Kennedy.  $47 million will take and either replace 
software systems that are more cheaply replaced by simply 
buying new commercial, off-the-shelf products, or taking very, 
very complex systems like our personnel system or our payroll 
system, or our financial system and replacing or converting 
them.
    Mr. Mollohan.  So, you're fixing your financial systems; 
your software programs that run your financial programs. You 
are fixing those.
    Mr. Greene.  We're doing a combination. We're upgrading 
off-the-shelf software that will make it year 2000 compliant. 
We're replacing some of the older systems.
    Mr. Mollohan.  I was just trying to get at the number out 
of this $135.2 million that actually represents somebody going 
in and reprogramming old software because you can't replace it 
like you replace the hardware. What is that number?
    Mr. Greene.  We have 141 applications that are not year 
2000 compliant that we'd have to replace. Of those, 85 are 
considered mission critical. Those are the ones we are putting 
the highest priority on.
    Mr. Mollohan.  How many of those involve reprogramming, 
going in and fixing the two-digit problem instead of replacing 
it with new hardware and new software?
    Mr. Greene.  Of those, there are about 20 of the big, major 
corporate systems that, again, we're doing a combination of 
replacing and upgrading. As Under Secretary Kennedy was saying, 
we want to do as little as possible, investing quick fixes into 
older systems. We want to accelerate it and that's the total 
fix.
    Mr. Kennedy.  About 20 will be totally replaced. I think 40 
are going to be rewritten totally. And about 57 have small 
fixes where it is most economical to fix them, because the 
program itself is a relatively modern, robust program and it's 
easy to correct.
    Mr. Mollohan.  So, this $40 million figure has to be 
adjusted. Thank you, Mr. Chairman.

                          g7 meeting in denver

    Mr. Rogers.  Mr. Skaggs.
    Mr. Skaggs.  Thank you, Mr. Chairman. Good afternoon.
    I wanted to digress for a moment to a parochial problem for 
us in the Denver, Colorado area having to do with the upcoming 
G7 meeting. I am advised by Denver authorities that they 
anticipate a real crunch in being able to meet all of the 
security expenses associated with the arrangements having to do 
with the G7 meeting.
    I don't know whether there is a way to find some resources 
that are under your authority to help out on that and don't 
expect you to have an answer for me off the cuff this 
afternoon.
    But obviously we have a national interest in making sure 
that meeting goes off smoothly and that the local folks don't 
eat security costs beyond those that are typically associated 
with something like this. Can we agree to work through whatever 
Deputy you may wish to send my way to work on this?
    Mr. Kennedy.  Certainly. And we will be working with the 
U.S. Secret Service as well who have a part of the 
responsibility and the State Department's Diplomatic Security 
Service who have the rest. We'll be glad to work with anyone.
    Mr. Skaggs.  Thank you. I understand you now have the ICASS 
proposal up here.
    Mr. Kennedy.  Yes, sir.

       international cooperative administrative support services

    Mr. Skaggs.  I'm always excited when I realize I've been 
completely wrong about something. I thought this was going to 
be a way for the State Department to get additional funds from 
others, rather than to give them to others. Can you walk us 
through the logic of starting out in the other direction?
    Mr. Kennedy.  Certainly. Right now, the State Department, 
as you are well-aware, has about 30 percent of the personnel 
overseas and we're paying 70 percent of the cost. Every time a 
new agency, for good and sufficient reasons to advance the U.S. 
interest, goes overseas, they in effect go overseas with a 70 
percent off coupon.
    And they go into the embassy and hand that 70 percent off 
coupon in to the administrative section and we're providing 
them support and we're paying 70 percent of the cost and 
they're paying 30 percent.
    Every year overseas inflation takes place, as it does, and 
it runs ahead of U.S. inflation. We're estimating about 3.8 
percent average overseas inflation. The State Department is 
paying 70 percent of the increased cost of supporting all of 
these other agencies abroad.
    Under ICASS, all new positions that go overseas by any 
agency will be funded fully by that agency. All the existing 
cost the State Department is now spending, i.e., being 30 
percent of the people and paying 70 percent of the cost, that 
cost for those other agencies' operations shift to those 
agencies. So, for every fiscal year starting with fiscal year 
1998, the State Department is only going to be bearing its own 
cost. And therefore the additional and incremental burdens that 
we've been carrying for other agencies which continue to rise 
every year are going to be shifted, if you would, to those 
agencies because those are the users and consumers of the 
services.
    So, the State Department's budget will in effect be 
alleviated of the burden of carrying these additional agency 
responsibilities, both the increase and the going rate. So, 
this is a significant net positive effect from the State 
Department, as well as being a good government matter 
ofdistributing costs to the user.
    Mr. Skaggs. This is a one-time adjustment?
    Mr. Kennedy. One-time adjustment. The $113 million with the 
Congress' agreement, which is shifted to the other agencies, 
goes one time. And any future year, there is no other shift 
unless at some point in the future we would decide to shift 
other costs around. But there would be no repeat of the 
services that underpin the $113 million transfer.
    Mr. Skaggs. I understand this was all negotiated out. But 
in your Department's judgment, is this $113 million a fair and 
sufficient accounting for that 70 percent?
    Mr. Kennedy. Yes, sir, it is.

             funding of information technology in outyears

    Mr. Skaggs. Good. Back to information technology; at least 
as I understand it, both in this area and for that matter in 
general State Department funding overall, your longer term 
budget submission anticipates a fall-off of dollars in the 
outyears. We've got less for your information technology 
upgrades in outyears, and less for the State Department overall 
in the budget projection through 2002. Am I wrong again?
    Mr. Kennedy. It is our anticipation that as we work with 
the Office of Management and Budget and with the Congress that 
we will be able, through a combination of appropriated funds 
and appropriated authorization for fee retention to be able to 
correct that outyear slide.
    That the State Department will have sufficient funds to 
maintain and enhance the diplomatic readiness which we believe 
is important.

                omb out-year projections for department

    Mr. Skaggs. That decline in appropriated funds is, again, 
based on the same assumption that the Chairman invited you to 
back off of, that the difference is going to be made up with 
retention of fee monies.
    Mr. Kennedy. It is that and more, sir. There were outyear 
projections by OMB about where the State Department's budget 
will be in fiscal years 1999, 2000, 2001, 2002 which were never 
accepted by Secretary Christopher, and they have not been 
accepted by Secretary Albright.
    She intends to keep carrying the message back to OMB and to 
the President that the State Department needs more funding than 
is initially foreseen and forecast in the OMB outyear accounts.

                funding needs of department in outyears

    Mr. Skaggs. Are you prepared to share the Department's 
preferred glide path with us and how it differs with the OMB 
projections?
    Mr. Kennedy. We see it rather as not a glide path, but an 
increase; and not glide path downward. That we need the current 
level of funding, plus the ability to deal with inflation, and 
with whatever programmatic increases that should arise over the 
next few years, because of either new post openings occasioned 
by new diplomatic initiatives, or other events in the worldwide 
arena that would cause the State Department to have to be more 
engaged either in that region or on that subject.
    Mr. Skaggs. Let me just ask you for the record to give us 
what the Secretary's best estimates are of what the needs of 
the Department will be in the outyears.
    Mr. Kennedy. I'll be glad to do that, sir.
    [The information follows:]
    The current budget authority projection for the State 
Department through the year 2002 is $2.7 billion--essentially a 
straight-line projection from our FY 1998 budget request. This 
projection is consistent with the President's plan to balance 
the budget.
    The Department plans to sustain Department operations 
within these budget authority levels by implementing the key 
management initiatives we are championing in our FY 1998 budget 
request including ICASS cost sharing arrangements with other 
agencies, the user fee retention proposal, logistics 
reengineering, and asset management.
    As part of each annual budget process, the Department will 
refine these outyear budget projections and work within the 
Administration's overall budget framework to ensure that high 
priority Department initiatives are identified and included for 
funding in future budget submissions.

                   lender and minority representation

    Mr. Skaggs. The Department has indicated goals on diversity 
in the foreign service and in the rest of the State Department 
workforce. Particularly regarding the foreign service, how are 
you doing on achieving your goals on both gender and minority 
representation and what can we expect in the future on that?
    Mr. Kennedy. We've been engaged in the last several years 
in a more extensive recruiting effort than we've ever had. That 
was delayed somewhat because of the fact that we were not, for 
budgetary reasons, able to offer the foreign service exam 18 
months ago.
    We did recently offer the foreign service exam. You take 
that exam and the three most recent ones, minority exam 
registrants were up about 22 percent. Minorities who took the 
written exam, their pass rate is up about 25 percent. And the 
minority exam passers were up about 114 percent. So, we're 
seeing an increase.
    Is it enough to make me happy? No. We have to engage in 
more rigorous outreach. We have to go out and find the 
communities, the colleges and others to make the foreign 
service better known. We've always been able to reach out to 
Georgetown University and others.
    We need to go out and find other locations which teach 
international relations, which teach business subjects, which 
teach international economics or whatever. We are doing 
thatnow. Minority junior officer hiring has been running about 10 to 12 
percent over the last few years and we'd like to see that rise.
    Mr. Skaggs. Okay. Thank you.

             utilization of modern communication technology

    Mr. Rogers. Briefly, on information resource management, 
we've been giving the Department over the years money to 
upgrade the computer system. I talked with the Secretary the 
other day, informally, about communication worldwide.
    It just seems a shame that the Secretary cannot utilize the 
modern convenience of communications that now exist; two-way 
telecommunications, computer mail, and all of that linking 
these posts around the world. To me, it's an embarrassment that 
our own agency that deals with foreign affairs is communicating 
in an 18th Century fashion.
    Mr. Kennedy. We have made progress in that regard, Mr. 
Chairman. One example, five years ago if you looked at the 
number of telegrams, you know, formal written record messages 
the State Department was sending, you get to the last day of 
the year and you see that the last message going out from the 
Secretary of State I think was number 350,127 or some number 
over 350,000 messages.
    At the end, on December 31st of this year, I believe the 
last message that went out was serial numbered something around 
280,000. So, we reduced those formal message trapping by over 
20 percent.
    Mr. Skaggs. The fact that you have one is embarrassing to 
me.
    Mr. Kennedy. We believe, Mr. Chairman, that there is a 
certain number of messages that need to go out in a formal 
fashion, that formally authorize somebody to issue a visa when 
there has been a question, that formally authorize the 
expenditure of funds, that give a formal instruction to an 
Ambassador to deliver it.
    What we are doing is we're moving tens of thousands of E-
mail messages a month. And we have pulled all of those, just as 
you rightly suggest, out of the formal system and moved to the 
informal system, but we believe that there will always be some 
need for a formal instruction so that there is a record of 
where it came from and that it was formally transmitted. So, 
the recipient knows that he or she has in effect given that 
written marching order.
    Mr. Rogers. You can do that electronically as well?
    Mr. Kennedy. We are working very, very closely with the 
Department of Defense.
    Mr. Rogers. I mean, you know, we'd still be using waxed 
seals if we took that to it's----
    Mr. Kennedy. We hear you, Mr. Chairman.
    Mr. Rogers. I mean there are just new ways to communicate. 
The State Department is going to have to catch up with the 20th 
Century.
    Mr. Kennedy. There is a new program called the Defense 
Message System, which we are following very closely which DOD 
is testing now. It shifts everything over to an e-mail base and 
we will be using theirs.
    Mr. Rogers. We have your modernization plan. We will be 
going over it with you and rolling up our sleeves and analyzing 
it for you. Of course, we've learned with the Internal Revenue 
Service that big computer systems can go awry, overrun and not 
work. Do you solemnly swear that you will modernize the system?
    Mr. Kennedy. Mr. Chairman, the State Department lives on 
words and information.
    Mr. Rogers. Believe me, I know that.
    Mr. Kennedy. There is nothing that is more burdensome on 
the Department than not being able to move information, to 
analyze information with the speed of light. We must do this. 
We must make these changes. Thanks to this committee's help 
over the last few years, when Dick Moose, I think, testified 
before you several years ago, he talked about 90 percent of our 
overseas computer systems being obsolete.
    I can stand before you today and tell you it's 55 percent. 
We have taken the funding that you have provided us and we have 
brought down that infrastructure deficit overhang to the point 
where, I think, with your continued help that we will fix this 
problem just as our strategic plan outlines.

                      agencies agreement to icass

    Mr. Rogers. Now, on the ICASS, are all the affected 
agencies on board?
    Mr. Kennedy. Yes, sir. We have a regular steering group 
meeting that they're invited to. All of the agencies have 
signed on. That is what took so long to get the budget 
amendment to you.
    Mr. Rogers. Has anybody talked about opting out of it? They 
can if they want, I believe.
    Mr. Kennedy. There are a couple of agencies who have 
suggested that they will do some certain services on their own. 
We believe though that over the course of time, as they see the 
efficiencies that are inherent in doing it through the ICASS 
process and looking at their own direct cost of doing business, 
they will either come back to ICASS or stay.
    Mr. Rogers. Now, we're running short of time. So, I'm going 
to run through some things hurriedly with you.
    Mr. Kennedy. Please, sir.

                implementing the overseas staffing model

    Mr. Rogers. I'll try to be brief as well. The overseas 
staffing model--how far along are you in terms of implementing 
that system overseas?
    Mr. Kennedy. We have done all of the background work. We 
now have levels for every single post. We have levels for every 
single category at every single post. We are actively using 
those. I looked at every request for increases, decreases, new 
post openings, funding requests against a matrix that is the 
overseas staffing model.
    Mr. Rogers. When would you implement that system?
    Mr. Kennedy. It is implemented now, sir.
    Mr. Rogers. Altogether?
    Mr. Kennedy. We have set the standards. And then every 
change has dealt with that. And as we develop the strategic 
plan for fiscal year 1999, we are going to measure the overseas 
staffing model part of the strategic planning process so that 
posts have to validate their resources against the overseas 
staffing model.
    Mr. Rogers. So, does every post now fit into the system?
    Mr. Kennedy. Some posts are under their staffing levels; 
some posts are over.
    Mr. Rogers. But every post is now subjected to this 
standard.
    Mr. Kennedy. Yes, sir.
    Mr. Rogers. Some are over now and some are under.
    Mr. Kennedy. Correct.
    Mr. Rogers. As the normal rotations take place, you will 
adjust each post according to this scheme?
    Mr. Kennedy. We will adjust each post and we will discuss 
it with the post to find out if there are--no model can be 100 
percent perfect on every occasion. There will obviously be some 
exceptions to the model which are necessary.
    Mr. Rogers. Now, this only applies so far to your core 
program?
    Mr. Kennedy. No, sir.
    Mr. Rogers. Does it apply to diplomatic security as well?
    Mr. Kennedy. There are six components to the overseas 
staffing model; core program, administrative, diplomatic 
security, information, management, consulor, and other/regional 
specialists who happen to be home-based in a given post. So, 
there are six components to the overseas staffing model for 
every post.
    Mr. Rogers. When it finally matures and perfects each post, 
what will be the savings do you think?
    Mr. Greene. Unfortunately, our work to date indicates that 
we are probably short some 200 positions.
    Mr. Rogers. By reforming this, it's going to cost us more 
money. You're going to get more personnel out of this reform.
    Mr. Greene. One of the advantages of the model, Mr. 
Chairman, is that we can adjust and distribute our resources to 
whatever level we have. We are seeing a great increase,as you 
can imagine, in our requirements for both the security personnel 
overseas and for consular officers in order to implement our border 
security activities.

                      security in the middle east

    Mr. Rogers.  Today's Washington Post has an article about a 
National Security Council aide raising concerns about security 
in the Persian Gulf. Are there particular risks in diplomatic 
security in the region that you're aware of that need to be 
addressed? If there are, I'm sure you won't want to tell us in 
open session.
    Mr. Kennedy.  We monitor everything that's going on in the 
Middle East literally on a daily basis. We've dealt with 30,000 
reports of security interests last year. There are problems in 
the Middle East. We are addressing them. We think that we have 
our hands around them. However, it is a dangerous region.

               proceeds from the sale of surplus property

    Mr. Rogers.  You're selling off a lot of foreign properties 
or properties overseas.
    Mr. Kennedy.  Yes, sir.
    Mr. Rogers.  What was the level of proceeds from the sale 
of surplus property in 1996 and what do you figure it will be 
in 1997 and in 1998?
    Mr. Kennedy.  Last year we sold $13.9 million worth of 
properties. So far this year, less than six months into the 
year, we have already sold $15 million which is more in this 
six months than in all of last year.
    We also had a $13 million additional property swap where we 
traded a property valued at $13 million for another property 
valued at $13 million. So, it could be said that we sold $28 
million worth of properties this year, half way through the 
year.

                construction and rehabilitation projects

    Mr. Rogers.  What construction projects do you figure on 
starting next year or this year?
    Mr. Kennedy.  We have no new embassy construction projects 
underway. We have a number of rehabilitation projects. We have 
no new capital programs under way.
    Mr. Rogers.  File those for the record if you don't mind 
describing what you plan to do this year.
    Mr. Kennedy.  Yes, sir.
    [The information follows:]

            Rehabilitation Projects for FY 1997 and FY 1998

    Congressman Rogers. Since we have no new capital projects underway, 
with the exception of the new Ottawa office building, what 
rehabilitation projects are planned for FY 1997 and FY 1998?
    Mr. Kennedy. Design or construction for major rehabilitation 
projects are planned for the following posts in FY 1997 and FY 1998:
                             fy 1997 ($45m)
Accra Staff Housing--Design.
Ankara Chancery & Consular Bldg.--Construction.
Beijing Chancery--Design.
Belgrade Consular--Construction.
Berlin Ambassador's Residence (EMR)/Interim Offices--Construction & 
Housing--Design.
Bratislava Annex--Construction.
Brussels Chancery--Design.
Budapest Chancery--Construction.
Buenos Aires EMR--Construction.
Dhahran Compound Infrastructure--Design.
Dushanbe Chancery--Design.
Frankfurt Regional Center--Design & Housing--Construction.
Geneva HVAC Project--Design.
Havana U.S. Interest Section--Construction.
Hong Kong Consular--Construction.
Jakarta Compound--Design.
Ljubljana Chancery--Construction.
London EMR--Design/Construction.
Minsk Chancery--Construction.
Nairobi Chancery--Construction.
New Delhi Chancery--Construction.
Paris Housing Phase I--Construction.
Phnom Penh Chancery--Construction.
Port au Prince Chancery--Construction.
Prague EMR--Design.
Rome Chancery Compound--Construction.
Santo Domingo Consular--Design.
Sarajevo Chancery--Construction.
Seoul Chancery--Construction.
Shanghai Consular--Construction.
Skopje Chancery--Construction.
Tashkent Chancery--Design.
Tirana Chancery--Construction.
Vienna Chancery/Office Bld.--Design.
Zagreb Chancery--Construction.
                            fy 1998 ($48.3m)
Accra Chancery--Design.
Accra Staff Housing--Construction.
Ankara Consular--Construction.
Berlin Interim Office & Housing--Construction.
Bratislava Chancery--Construction.
Brussels Chancery--Design.
Budapest Chancery--Construction.
Copenhagen Chancery--Design.
Dhahran Compound Infrastructure--Construction.
Dublin Chancery--Design.
Frankfurt Regional Ctr. & Housing--Design.
Geneva Heating, Ventilation & Air Conditioning (HVAC)--Construction.
Jakarta Compound--Design.
Kuala Lumpur Chancery--Construction.
Ljubljana Chancery--Construction.
London EMR--Construction & Chancery--Design.
Manila Compound--Construction.
Nairobi Chancery--Construction.
New Delhi Consular & Housing--Construction.
Paris Chancery & Housing Phase II--Desgn.
Port au Prince Chancery--Construction.
Rangoon Chancery--Construction.
Rome Chancery Compound--Construction.
Santo Domingo Consular--Construction.
Suva Chancery--Construction.
Tirana Chancery--Construction.
Tokyo Chancery--Design.
Vienna Chancery & Office Bldg.--Construction.
Vientaine Chancery--Construction.
Warsaw Chancery--Construction.

                             china facility

    Mr. Skaggs.  You are planning a major program facility in 
China.
    Mr. Kennedy.  Yes, sir.
    Mr. Rogers.  What is that?
    Mr. Kennedy.  Our facility in China is one that we acquired 
in the early 1980s. It is totally out-moded and out-grown by 
the increase in the demand for resources to deal with the 
multiple----
    Mr. Rogers.  Briefly.
    Mr. Kennedy.  We need a new classified annex on the back of 
the existing chancery. We need an unclassified annex and we 
need housing.
    Mr. Rogers.  How much money?
    Mr. Kennedy.  We are estimating that the overall cost of 
all of these is probably in excess of $50 million which we 
intend to pay for out of our proceeds at sale.

                            lease purchases

    Mr. Rogers.  Now, we've expressed an interest in the past 
in lease purchases as a way to lower the cost of new 
facilities. A report on a pilot project was supposed to be done 
in November, but we've not seen anything. Can you light a fire 
somewhere and see if we can get that report?
    [The information to follows:]

                    Kingston Lease Purchase Facility

    In July 1996, an A/FBO planning team visited Embassy 
Kingston. Meetings were held with the Ambassador and mission 
department heads to discuss post's requirements. The team also 
met with local real estate representatives and developers to 
obtain information on the local market.
    Subsequent to the trip, the planning team and ARA/EX have 
been meeting regularly to work through the issues. The 
Department has also been in frequent consultation with the post 
and our Ambassador in Kingston. Post originally proposed that a 
new embassy might be funded under some type of lease-purchase 
arrangement instead of via conventional means of construction 
funding.
    Post now reports that, after further research, the lease-
purchase option may not be the most feasible alternative and is 
presently considering long term lease (LTL) options in newly 
leased premises as an alternative to a new office building 
(NOB). The Department's preliminary analysis concurs with this 
opinion.
    A report on the feasibility of a NOB in Kingston using a 
lease-purchase, LTL alternative, or other options to provide 
post with more suitable office facilities will be completed 
within four months.

    Mr. Rogers. Does that ring any bell with you?
    Mr. Kennedy. Yes, sir. Since that time the Ambassador has 
decided that the conditions in the country, permitting the 
generation of funding for a lease purchase or not are not 
advantageous. Also, because we have never been able to extract 
true lease purchase authority, we still have to front the money 
in order to engage in lease purchasing.
    Mr. Rogers. There may be some questions that will be 
submitted for the record.
    Mr. Kennedy. Thank you, sir. We'll be glad to respond.
    Mr. Rogers.  Mr. Secretary, we appreciate your appearance. 
Thank you for your time. The hearing is adjourned.
    [The following questions were submitted to be answered for 
the record:]

[Pages 412 - 418--The official Committee record contains additional material here.]


                                         Wednesday, March 12, 1997.

    UNITED STATES INFORMATION AGENCY BROADCASTING BOARD OF GOVERNORS

                               WITNESSES

JOSEPH DUFFEY, DIRECTOR
STANLEY M. SILVERMAN, AGENCY BUDGET OFFICER
DAVID BURKE, CHAIRMAN, BROADCASTING BOARD OF GOVERNORS
TOM C. KOROLOGOS, MEMBER, BROADCASTING BOARD OF GOVERNORS

    Mr. Rogers. Today we will be hearing about the programs and 
activities of the United States Information Agency, the agency 
responsible for our international public diplomacy efforts. 
With us today are Dr. Joseph Duffey, Director of USIA; David 
Burke, the Chairman of the Broadcasting Board of Governors.
    The fiscal year 1998 budget request for USIA totals $1.078 
billion, an increase of $18 million over the fiscal year 1997 
enacted level. As you know, fiscal year 1998 will bring another 
year of fiscal constraints. We want to know what efforts you 
are taking to streamline, consolidate and become more 
efficient.
    We are pleased to have both of you with us today. We are 
running a pretty tight schedule, so we will need to conclude as 
close to noon or before as possible in order to allow the 
hearing room to be prepared for this afternoon's hearing.
    Dr. Duffey, we will begin with you and then hear from Mr. 
Burke. If both of you would like to proceed with your opening 
statement, we will be sure that your written statements are 
made a part of the record and you can summarize them verbally, 
if you please. In addition, we will insert for the statements 
from the East-West Center and the North-South Center.
    Mr. Duffey. Thank you, Mr. Chairman. Let me make a very 
brief summary of the statement that I ask be entered into the 
record.
    I appreciate the opportunity to appear before the Committee 
and to express my views on the mission and work of the United 
States Information Agency and to respond to your questions.
    It is no secret that I began 4 years ago to lead this 
agency in the process of change. The path I chose involved 
thoughtful examination of the world and how it has changed, the 
new conditions with respect to our relations to other nations, 
our mission and objectives in the world and our current 
understanding of the national interest.
    Having examined the mission of USIA, and continually 
thought about how it relates to the national interest, we have 
made a significant number of changes in our programs and 
organization over the last 4 years.
    We are no longer the multimedia organization that we once 
were. The times have changed. The demands now are different. 
Our resources are far more restrained and we see nothing in the 
future but a continuation of that restraint. Our mission is far 
more subtle than the days when President Truman called upon 
USIA to wage a campaign of truth around the world, and the days 
when we were oriented to battling a multimillion dollar 
disinformation campaign waged by the former Soviet Union.
    But for that, our mission is no less important or less 
critical in terms of practical U.S. national interests that are 
not being directly served by any other agency of the 
government, or any organization in the private sector.
    I believe that today the great threat to U.S. interests is 
not that we not be loved and admired in some far corner of the 
world, but that we be misunderstood; that misjudgments might be 
made by other nations about our interests and our willingness 
to defend those interests when they are threatened.
    We must realize that America is a puzzling nation to many 
who seek to understand how our system works, given the 
contradictions and ironies that go into our ways of making 
policy and defining our national aspirations. And we cannot 
take for granted that even those who seek in sympathy to 
understand our behavior can do so without our becoming more 
forthcoming.
    There are two forces of historical significance that shape 
the world we live in today: the information and communications 
revolution and the shift of power away from central government 
authority to individuals and publics. These forces require all 
of us to reexamine the way in which we engage the world. If 
American leadership is to be successful, traditional diplomacy, 
which is becoming less and less important and central to the 
pursuit of our interests, must be complemented by an open and 
creative public diplomacy which focuses on the values, beliefs, 
attitudes, and opinions of foreign publics. These new 
challenges highlight as well the need to engage, to a much 
greater extent, the talents and resources of our own citizens.
    These, as I see it, are new goals in the world. They are 
quite practical objectives. They do not have with them some of 
the heroism of crusades in the past, but they are nonetheless 
critical to our national interest: greater deregulation of 
trade and investment; protection of intellectual property 
rights; enactment of laws and agreements regarding 
transnational investment; and all of these in the context of 
the spread of an understanding of fundamental freedoms and 
human rights.
    It is in this context that we have begun to reexamine what 
we do, our organization, and our culture. We submitted a few 
years ago to President Clinton an updated definition of our 
mission and it has been affirmed. It is this: to promote the 
national interest and the national security of the United 
States of America through understanding, informing and 
influencing foreign publics, and broadening dialogue between 
American citizens and institutions and their counterparts 
abroad.
    This clear statement has been the first step in the 
Agency's implementation of the Government Performance and 
Results Act. You will find that our ``Budget in Brief'' this 
year is organized around our goals. This is in preparation for 
the requirement that we display goals and outcomes when we 
present the budget next year.
    We seek to build international support for American 
policies, even when they are unpopular. We base our public 
diplomacy on the principles of American democracy, even when 
the target audiences are hostile to them. We respond to crises 
that cannot be foreseen by any planning process.
    We have tried to become far more flexible as an agency. 
Rather than coming back to the Congress or to the 
Administration when there is a critical need deriving from a 
change in policy, we have tried to find flexibility within our 
resources and redirect them to address problems that are 
central to this Nation's foreign policy. We also operate 
programs that are long-term investments in stability, political 
security and open markets, though they may show few immediate 
results.
    The statement you have provides a number of illustrations, 
also contained in the ``Budget in Brief'', which indicate the 
way we plan to move forward with the requirements of the 
Government Performance and Results Act.
    Let me close by referring to a statement that appeared 2 
weeks ago in the Wall Street Journal by two prominent Members 
of the Congressional Majority leadership. Representative Gerald 
Solomon of the House Rules Committee and Representative 
Christopher Cox, Chairman of the House Republican Policy 
Committee, wrote about the elements necessary for U.S. global 
leadership.
    Their discussion is controversial. They are highlighting 
some of the debates that will take place in this budget 
session. But at one point, the two Congressmen wrote the 
following: American leadership derives from our powerful ideals 
and values, our global military presence and the economic 
benefits of the free enterprise system.
    Whatever differences may emerge in this session of the 
Congress and whatever debates may occur between the 
Administration and Congress and others as we seek to find our 
way in the world, I believe those words do express a consensus. 
One-third of the three elements the Congressmen cite--our 
powerful ideals and values--represent the central focus of 
every program that USIA is engaged in. Compared to the costs of 
other activities overseas, this one-third of the agenda 
represents a quite modest investment, but a powerful one, an 
investment directly related to the future of U.S. leadership in 
the world.
    I will be happy, Mr. Chairman, when the time comes, to 
address any questions you and your colleagues might have.
    [The information follows:]

[Pages 422 - 497--The official Committee record contains additional material here.]


    Mr. Rogers. Mr. Burke.
    Mr. Burke. Mr. Chairman, I have submitted my full statement 
for the record, and I would just like to say a few words now, 
if I may.
    First, let me introduce Mr. Tom Korologos, who is the 
senior Republican member of our Board of Governors. It is rare 
that I go anyplace without Tom. He is my mentor, and we have 
developed a very close personal and professional friendship.
    The Board of Governors, as you will recall, is made up of 
eight private citizens. None of us are full-time people. We 
live other lives. However, this committee should know that 
these eight citizens spend a great deal of time and a great 
deal of effort, personal time and even personal finances, to 
participate in this activity, and they do it with great 
dedication.
    There are other people I would like to introduce to the 
committee because I think we are about a year and a half old 
now, and we have spent an awful lot of time on personnel 
matters and being sure the house was in order, since we are a 
brand new organization created by the Congress in 1994.
    Behind me today is Mr. Kevin Klose, who is the President of 
Radio Free Europe and Radio Liberty. He will be leaving that 
position to become the Director of the International 
Broadcasting Bureau, and our Board of Governors is very happy 
about that. Kevin is a professional journalist, was the Moscow 
bureau chief for The Washington Post. He was with the Post for 
about 25 years, and he is the man who moved Radio Free Europe/
Radio Liberty from Munich to Prague without anyone who listens 
to those essential broadcasts even knowing. There was no 
interruption at all.
    Kevin is also the one who has overseen a reduction by two-
thirds in RFE/RL's budget. Radio Free Europe and Radio Liberty 
is now $68 million a year from over two hundred million in 
1994, not so many years ago.
    Kevin has done that, and he has done it with, I think, 
great majesty. If you ever go to Prague and visit those people 
over there, you will see a level of morale and spirit and 
enthusiasm for their work. They are truly committed people.
    Evelyn Lieberman is behind me as well. She is also the--
    Ms. Lieberman. Good morning.
    Mr. Burke [continuing]--new leader of the Voice of America. 
Evelyn--we first heard of Evelyn when she was a communications 
director for the Children's Defense Fund, which we all know 
about because of Evelyn. She was also on the First Lady's 
staff. She was the Deputy Chief of Staff to the President under 
Leon Panetta, and we are delighted to have her--more than 
delighted. She is a very intelligent,straight, no-nonsense 
person. We have every confidence in the world in Evelyn.
    Dick Richter is the head of the Radio Free Asia. RFA is one 
year old yesterday and Dick has done an extraordinary job. 
There are people who feel very strongly, I know, about Radio 
Free Asia, but the Congress created it, told us to set it up, 
and within 6 months it was set up--it was in about 6 months, I 
believe--and now we are about 3 or 4 weeks away from Laotian 
and Cambodian languages, and then we are under the mandate of 
Congress for having seven countries handled by Radio Free Asia.
    Not with me this morning is the newest member of our team, 
Mr. Herminio San Roman is the new head of the Office of Cuba 
Broadcasting. He is a lawyer from Miami. It would be an 
understatement for me to say I am delighted, and I look forward 
to the opportunity for you or your staff to meet him at any 
time when he is finally ensconced in office. We are very 
pleased about that.
    And, of course, we will some day have a new director of 
Radio Free Europe, Radio Liberty. That is where we are.
    And we are pleased, as a Board, and I think Tom would agree 
with that, all of us are pleased with where we are and the 
people we have in place. As far as this Board of Governors is 
concerned, and as far as International Broadcasting is 
concerned, we are ready for some differences in the years 
ahead.
    I was thinking, coming up this morning, Mr. Chairman, 
about--I don't want to play numbers games with you folks. I 
want to be very sharp and quick on where we are, but I was 
thinking in my own terms, that of the entire budget of the 
United States, International Affairs is about 1.2 percent. 
International Broadcasting is 2 percent of that 1.2 percent.
    Now, if you put a decimal point there, there are just too 
many zeroes for you to take down. In my business we talk in 
terms of basis points because it is just too complicated to get 
that small. So that is who we are in International 
Broadcasting. We are that small.
    But I will tell you who we are not small to. We are not 
small to Mr. Milosevic when he shuts down B-92 in Belgrade, and 
we stay on the air and we increase our time on the air, and we 
bring in the people from B-92 and force him within 20 hours to 
open it up again.
    We are not small when it comes to Albania. The first 
thing--authoritarian people never change. The first thing they 
try to do is kill communications. The one thing you want to do, 
if you want to deprive anyone of democracy or freedom, is stop 
the news because clearly human beings can't be trusted with the 
news. The Albanian Government did the same thing. We repeated 
the same process, and we are now back on the air in Albania.
    We started a television program in Iran. The first thing 
the Iranian Government did was go around rooftop to rooftop and 
take down the dishes, because this was coming from a satellite, 
a television signal from a satellite. So we view in sort of a 
sick way our Nielsen numbers on how many dishes were taken 
down. We must be pretty successful.
    Dick Richter cannot get or has a difficult time getting the 
signal into Vietnam. Vietnam is jamming constantly, so we must 
be doing something right.
    For so little money, we create so much consternation in the 
minds of those who deprive their citizens of freedom and 
democracy. When the wall went down, and when everyone wondered 
what will be the role of international broadcasting in this 
less than bipolar world, the answer over time is becoming clear 
to us. It is being relied upon more and more by people around 
the world when their governments, regardless of ideology, adopt 
authoritarian poses and stances. That is our strength, and that 
is what we are going to continue to do. We are going to try to 
think of new ways to do that.
    Now, on the numbers, we come before you with a current 
services funding request for 1998 for our operations budget. 
But the fact that it is flat does not tell you the kinds of 
sacrifices that are being made internally.
    For example, we had an opportunity to purchase a dedicated 
place on ASIASAT which is a television satellite, for around $3 
million a year. The importance of ASIASAT is its footprint 
which has the ability to reach over 60 percent of the Earth's 
population, and we know that use of satellites and satellite 
dishes in all parts of the world is increasing all the time, 
and that this is much harder to jam. So, therefore, ASIASAT was 
very important to us.
    We are going to spend an additional million dollars on 
research to make sure that we are broadcasting to the right 
people in the right place, and that is the only enhancement 
requested in our budget.
    We are also spending more money to create a studio for what 
we call multimedia use. Multimedia use is a simple concept. We 
broadcast over the radio all the time, shortwave, medium wave, 
FM. If you put a television camera in the room, you have a 
different situation. Again, as I say, you have a signal that is 
much more difficult to jam. And it has an immediate attraction 
to the people around the world, significantly different than 
just a radio voice does.
    We need studios to do that in, and these are makeshift 
studios. I am not talking about--don't think American 
television firms. We are not talking about highlighting and all 
sorts of kinds of things I used to spend stockholders' money 
on. We are talking about crude, raw television, which is 
extraordinarily effective. We are going to have another studio, 
but that is not going to increase our budget either.
    So we are here before you with a modest request. But we 
have the people in place, and we have the energy level in 
place, I believe, Mr. Chairman, and I believe the members of 
this Board do, to go forward and do some extraordinarily 
different things and try to do what we believe the Congress 
mandated us to do in 1994, which was to create new definitions 
for international broadcasting as we approach the millennium.
    Thank you, sir.
    [The information follows:]

[Pages 501 - 512--The official Committee record contains additional material here.]


    Mr. Rogers. Thank you. Well, I think you realize this 
Subcommittee has been very supportive of international 
broadcasting and international efforts of USIA over the years. 
We are small in number, like you are, and to borrow from your 
analogy of a tiny percentage of the Federal budget that you 
have, we want to be helpful, but I want to point out to you, I 
am only \1/435\th of one-half of one-third of the government.
    Mr. Burke. Just one decimal point.
    Mr. Rogers. A lot of zeroes there, too.
    Mr. Korologos, would you care to be heard?
    Mr. Korologos. Mr. Chairman, I just want to echo what 
Chairman Burke said. We have come a long way in our year and a 
half. A year ago when we were here, we were new kids on the 
block. We now feel as though we are incumbents with a record, 
and the record is there for everyone to see. We are on the air 
in a lot of new places, as mandated by Congress. We have done a 
lot of new things that have been useful both to the listener 
and to the U.S. Government.
    My view on telecommunications in the new age that is coming 
is this business that we are in is the highest yield low-cost 
commodity that policymakers in this government have. And we are 
using the taxpayers' funds judiciously, and I for one am proud 
of what the Board has accomplished and just want to say thank 
you so far for what you have done and for what you are about to 
do.
    Mr. Rogers. Mr. Silverman.
    Mr. Silverman. I yield my time, Mr. Chairman.
    [The following statements were submitted for the record:]

[Pages 514 - 524--The official Committee record contains additional material here.]


    Mr. Rogers. We will try to abide this morning within limits 
under a 5-minute rule so we can try to get you out of here in a 
timely manner.
    Well, there is no doubt about it. The bang for the buck 
that we get from broadcasting, I think, is dynamic, and we 
congratulate you for maintaining those efforts during the 
dramatic downsizing over the last few months as a matter of 
fact; not years, but months. Overall staffing in fiscal year 
1993 of USIA was 9,000, and you are proposing 6,800 for 1998, 
which would be a 25 percent reduction. Why, that rivals what 
the White House has done in that span of time.

                 effect of downsizing on foreign policy

    Now, Dr. Duffey, with all this downsizing, have we had a 
discernible reduction in the effect of our foreign policy, as 
you see it?
    Mr. Duffey. No, I don't think so, Mr. Chairman. We have 
different objectives now. We are not engaged in a great bipolar 
struggle out of fear and dread of nuclear war. We are pursuing 
more practical immediate interests that affect every community 
in America, in our own economy. I do not think that there have 
been great damaging effects. I do not think our policy is less 
effective. It is far more difficult now, far more subtle, and 
the threats are multiplied, but I don't think the policies are 
less effective.

                        proposed budget increase

    Mr. Rogers. You are proposing a modest increase of $18 
million for all of USIA, which is essentially a flat budget. 
What kind of problems would that cause you?
    Mr. Duffey. We will have, under that budget, a number of 
reductions. I would be glad to submit those reductions for the 
record. They include further reductions in our operating budget 
of about $5 million; reductions in our exchange programs of 
about $4 million; and reductions for some of the organizations 
that receive support from USIA. The budget as originally 
submitted has a reduction for the East-West Center, though I 
think that may be subject to further discussion.
    [The information follows:]
            Details of 1998 Program Reductions, -$13,897,000
     international information programs appropriation, -$5,239,000
    The 1998 IIP request, which funds USIA's overseas information and 
cultural programs and core domestic direction and support operations, 
reflects 1998 program reductions of $5,239,000. As a result of these 
reductions, the Agency will eliminate 118 positions; close America 
Houses in Munich and Hamburg as part of the continuing restructuring of 
USIS Germany; close the branch post in Kaduna, Nigeria and the 
principal post in Port Moresby, Papua New Guinea; downsize programs in 
India, Brazil, and Spain, including closing of the Washington Irving 
Center in Madrid; streamline and consolidate warehouse operations in 
the U.S.; and reduce other domestic support activities.
        educational and cultural exchange programs, -$4,623,000
    In FY 1998, further program reductions of $4,623,000 are projected, 
consisting of $1,940,000 in Academic Programs and $2,683,000 in 
Professional/Cultural Exchanges. The reductions in Academic Programs 
include $1,176,000 in the Fulbright Program; $300,000 in student 
advising and student services; $264,000 in English teaching training 
for Africa; $100,000 each in study of the U.S. and English language 
programs. The cuts in Professional and Cultural Exchanges include 
$614,000 in the International Visitor Program; $269,000 in Citizen 
Exchanges; $1,000,000 for the Irish Management Center; and $800,000 for 
the Mike Mansfield Fellowship Program.
                      other accounts, -$4,035,000
    Program reductions in other accounts total $4,035,000. This 
includes $3,255,000 for the East-West Center to continue a phaseout of 
this non-competitive grant program. Finally, the National Endowment for 
Democracy will be cut $780,000 to offset 1998 inflationary increases.

    While we speak of foreign affairs comprising 1 percent of 
the budget, I am well aware, Mr. Chairman, that, in fact, a 
great part of the U.S. budget is off limits because it involves 
entitlements, which are going to increase. So we are talking 
about, in terms of foreign affairs, the amount of discretionary 
money you have to deal with, something closer to 4 or 5 
percent. There are difficult decisions to be made because those 
entitlements, until we come to grips with them, will continue 
to grow. So recognizing that we have to allocate within limited 
resources, we will continue the downsizing and reorganization 
of our agency.

                           country priorities

    Mr. Rogers. Now, let me ask you--we are under a tight time 
constraint here. Let's try to keep our questions and answers as 
brief as we can so we can squeeze more in. Let's talk about our 
priorities countrywise, geographic. Your top five under your 
1998 request, one is Japan at $14.5 million; Germany, second; 
Brazil; Italy; and India. Is that the right priority?
    Mr. Duffey. As we now rate them. The budgets are for our 
facilities and personnel on the ground. They do not include our 
exchange and broadcasting allocations.
    Mr. Rogers. Well, is that the right priority, do you think?
    Mr. Duffey. Those are the countries which the U.S. must 
engage on a wide range of issues. Even though we have made 
substantial cuts in each of those countries, they remain 
extremely important to us.
    Mr. Rogers. Well, all of those countries are terribly 
important in the world and to us. I could argue with you on 
whether or not that is the right priority of in-country 
spending that USIA ought to be doing. Is there anything that 
skews the ranking that is not apparent at first glance?
    Mr. Duffey. Japan is far more expensive to operate in at 
the moment than any other country in the world.
    Mr. Rogers. Just the cost of living?
    Mr. Duffey. The cost of living and the cost of facilities.
    Mr. Rogers. Now, Germany has fallen to number 2 now that 
you are closing the two American houses there.
    Mr. Duffey. Germany has very high standards of social 
insurance. They have a social safety net that we once aspired 
to, and that makes operating extraordinarily expensive as well.
    [The information follows:]
            Top Five Countries Reflecting All USIA Resources
    The preceding discussion of country priorities reflects the top 
five countries based on USIA resources spent for staff and programs on 
the ground. While this is one measure of priority, the amounts are 
skewed on the one hand by high costs of salaries, rents and operations 
and, on the other, by difficulties of access. Thus, we believe it is 
more meaningful to include the broadcasting and exchange of persons 
program costs attributed to each country as well as field operations. 
This approach reflects the complementary nature of USIA's programs and 
is a better indication of priority. The top five for FY 1998 on a total 
USIA resource bases are:
    Russia, Cuba (in large part Radio and TV Marti), Germany, China, 
and Japan.

    international cooperative administrative support systems (icass)

    Mr. Rogers. Now, let me ask you about ICASS, International 
Cooperative Administrative Support Systems, a State Department 
initiative that this Subcommittee has supported. We believe 
that the fiscal year 1998 budget amendment to finance the ICASS 
system will be sent up to the Hill this week. It proposes 
transferring funds from State to USIA and any other agency that 
occupies embassies overseas to cover the costs of their 
occupancy of State Department premises.
    Do you think that proposal is an improvement over the 
current system?
    Mr. Duffey. Well, I think it may well be. We have to see 
how it works out. The understanding behind that principle is 
there will be more and greater incentive for the State 
Department to relate to the other agencies ascustomers, and 
that the other agencies will have the options of going outside the 
State Department for purchase of certain services and supplies if they 
can find a better price. It builds a good incentive into the system, so 
I think it has some promise for creating more efficiency all the way 
around.
    Mr. Rogers. So you can sign on to it?
    Mr. Duffey. We have some apprehensions about it, but we 
will--no more than I would have about continuing the present 
system.
    Mr. Rogers. Well, there can be a number of advantages to 
the system, I think. Mainly, I hope it encourages many 
basically domestic agencies such as Agriculture to discipline 
themselves on the number of personnel they send around the 
world to our embassies, expecting the State Department to 
provide for their upkeep.
    So we think in the broader picture, it will have a 
disciplining impact on budgets of all other agencies.
    Mr. Duffey. I think a year ago I brought in a chart to 
illustrate that in the U.S. representation around the world, 
State, USIA and AID are less than half the official presence 
overseas. So I think we need to pursue this based on what you 
just described.
    Mr. Rogers. Mr. Mollohan.
    Mr. Mollohan. Thank you, Mr. Chairman.
    Mr. Duffey, gentlemen, welcome to the hearing.

                            radio free asia

    I would probably address this to Mr. Burke. I would just 
like to ask you one question about Radio Free Asia. How are you 
getting along?
    Mr. Burke. How is Radio Free Asia getting along?
    Mr. Mollohan. Yes.
    Mr. Burke. I think it is getting along very well. I think 
it would be useful, too, sir, if maybe you and some members of 
your staff visited them down there to see if you want to have a 
look at the future.
    Mr. Mollohan. We will. Thank you. I appreciate that.
    Mr. Burke. It is very, very good. I think we get along very 
well.
    Mr. Mollohan. Okay.
    Mr. Burke. I will go on, if you like.
    Mr. Mollohan. No, no, that's fine. Can you tell me where 
are you now on broadcasting?
    Mr. Burke. Yes.
    Mr. Mollohan. Where are you on-line, and where do you 
project to be on-line, if you could do that?
    Mr. Burke. I will break that down, yes. We are currently on 
in the Mandarin service.
    Mr. Mollohan. On air, I guess, it would be, not on-line.
    Mr. Burke. On air, yes. The Mandarin service began in 
September. Tibetan broadcast started December 1st; Burmese on 
February 3rd. The Vietnam service started February 5th, and 
they are jamming it to death. The Korean service to North Korea 
started March 4th. Cambodia and Laos are the two services yet 
to come to meet the law, and the difficulty, I think, is that 
in those languages it is sometimes very hard to find people who 
can participate in that effort. That is where we are 
broadcasting to at the moment.
    Mr. Mollohan. Okay. Just starting with the Mandarin 
broadcast.
    Mr. Burke. Yes.
    Mr. Mollohan. Are you up to your projected level, ultimate 
projected level of broadcast?
    Mr. Burke. Are we at the level, Dick?
    Mr. Richter. No. As of March 31 we will be at 3 hours of 
live broadcasting, over 4 hours of----
    Mr. Rogers. You will need to identify yourself.
    Mr. Burke. Dick Richter, who is the President of Radio Free 
Asia.
    Mr. Mollohan. Okay. Is that broadcast being jammed at all?
    Mr. Richter. No.
    Mr. Mollohan. What hours of the day are you broadcasting?
    Mr. Richter. 8:00 p.m. in the evening----
    Mr. Rogers. You will need to stand up so the reporter can 
hear you.
    Mr. Richter. 11 p.m. to 1 a.m., and 7 a.m. to 8 a.m., and 
we are about to start broadcasting from 5 a.m. to 6 a.m.
    Mr. Burke. So that we are on during Nightline.

                     rfa vs. voa broadcast schedule

    Mr. Mollohan. To what extent, if at all, have you backed 
out Voice of America broadcasting in order to get your 
broadcasting on air?
    Mr. Richter. I think virtually not at all.
    Mr. Mollohan. So you are telling me there has been no 
substitution of Radio Free Asia time slots into Voice of 
America time slots?
    Mr. Richter. I think we have had one or two----
    Mr. Mollohan. Excuse me. It is important that I ask the 
whole question because she can't take down two.
    Mr. Richter. Sure.
    Mr. Mollohan. Go ahead.
    Mr. Richter. I think that one of the hours, and I am not 
sure which it was, one of the evening hours, was formerly Voice 
of America, and I believe that one of the morning hours is--
well, the 5 a.m. broadcast that we are about to start is 
currently Voice of America.
    Mr. Burke. Mr. Congressman, may I comment?
    Mr. Mollohan. Please.
    Mr. Burke. On behalf of Tom, myself and the other members 
of the Board, we are parents and we have many children here. 
The Voice of America is vitally important to all of us.
    Mr. Mollohan. No. I want to get at that.
    Mr. Burke. And Radio Free Asia is vitally important, too, 
but we are not letting one compete with the other in that way.
    Mr. Mollohan. Well, that is the issue I want to get to.
    Mr. Burke. Yes.
    Mr. Mollohan. I have to get a couple of facts on the record 
to do that, to make that judgment.
    Mr. Burke. I am sorry.
    Mr. Mollohan. No. I appreciate your comment. I have got a 
5-minute period here. The gavel is going to go down here in a 
second.
    Okay. So you are saying there is 2 hours of Mandarin that 
you backed out Voice of America?
    Mr. Richter. Well, they haven't reduced the number of 
hours.
    Mr. Mollohan. No, that's not my question, Dick.
    Mr. Richter. Yes, the answer to your question is yes.
    Mr. Mollohan. So the answer to the question is yes. You 
have backed out 2 hours.
    Mr. Richter. Yes.
    Mr. Mollohan. Are the hours you backed out prime time 
hours, one in the morning and one in the evening; is that your 
testimony?
    Mr. Richter. Well, 5:00 a.m. is not considered prime time.
    Mr. Mollohan. They are not real early risers, is that it?
    Okay. In Tibet, the same questions, the Tibet broadcast.
    Mr. Richter. We have not backed them out of anything.
    Mr. Mollohan. Not backed Voice of America out. How many 
hours are you broadcasting?
    Mr. Richter. Two.
    Mr. Mollohan. What hours are those?
    Mr. Richter. It is 9 p.m. and 7 a.m.
    Mr. Mollohan. 7 a.m. was not a Voice of America slot?
    Mr. Richter. No.
    Mr. Mollohan. How about Burmese?
    Mr. Richter. The Burmese is.
    Mr. Mollohan. I am sorry, Tibet, are they jamming you?
    Mr. Richter. No. As a matter of fact, our Tibetan signal is 
phenomenally strong. It is surprisingly strong. It is stronger 
than the Voice of America signal.
    Mr. Mollohan. Is the total broadcasting between Voice of 
America and Radio Free Asia now more or the same as it was 
prior to your coming on air?
    Mr. Richter. More.
    Mr. Mollohan. Burmese, same question?
    Mr. Richter. Two hours, 9:30 p.m. and 7 a.m.
    Mr. Mollohan. Have you backed out Voice of America?
    Mr. Richter. No.
    Mr. Mollohan. What is the total broadcast; is it increased 
by 2 hours?
    Mr. Richter. Yes.
    Mr. Mollohan. Between the two broadcasts?
    Mr. Richter. Yes.
    Mr. Mollohan. So you are broadcasting more, added 2 hours?
    Mr. Richter. Yes.
    Mr. Mollohan. And you have not invaded any of Voice of 
America's previous time slots?
    Mr. Richter. No.
    Mr. Mollohan. Burmese?
    Are they jamming Burmese?
    Mr. Richter. No.
    Mr. Mollohan. They are not?
    Mr. Richter. No.
    Mr. Mollohan. Okay. Is that just with regard to these?
    Mr. Richter. It is very difficult to say. It is very costly 
to jam, and, frankly, I was surprised that they are not jamming 
the Chinese broadcast.
    Mr. Mollohan. Yes. Because you expected that, actually?
    Mr. Richter. Yes, I did, and I told you that.
    Mr. Mollohan. Yes.
    Mr. Richter. What they have done is brought pressure on two 
different countries to stop transmitting our signals. One is 
Kazakhstan.
    Mr. Mollohan. So you are negotiating that issue?
    Mr. Richter. Yes.
    Mr. Mollohan. Vietnamese, the same question.
    Mr. Richter. Vietnamese we are currently broadcasting at 
7:30 a.m. and at 9:30 p.m., and we have not backed Voice of 
America out of any hours.
    Mr. Mollohan. How about jamming?
    Mr. Richter. Jamming has been rather constant from the very 
first day we were on the air. However, we are being heard in 
Vietnam to a fair degree because we are coming in right now 
with eight transmitters from seven different locations.
    Mr. Mollohan. North Korea, same question.
    Mr. Richter. We are on the air at 7 a.m. and 12:30 p.m., 
and we have not backed Voice of America out of anything.
    Mr. Mollohan. And Cambodia and Laos you haven't brought 
them on-line yet?
    Mr. Richter. We haven't, and we will not conflict in any 
way or back out Voice of America out of any of those hours.
    Mr. Mollohan. Okay. How about with regard to your 
transmission issues, if you could summarize that for the 
committee?
    Mr. Richter. The transmission situation is going very well. 
I just returned, as a matter of fact, from a trip to Armenia, 
Georgia and Russia, and for the first time it looks bright as 
far as the possibility of transmitting from Russia, which we 
have not done up to this point. We have a scheme worked out 
with the Russians and with the Embassy and the State Department 
that we think will be successful in the next few months to 
achieve that. And we are about to start testing from Georgia, 
and we are increasing our transmissions from Armenia.
    Mr. Mollohan. Okay. I have some budget questions, Mr. 
Chairman. If we have a second round, I will ask them. If we 
don't, I will submit them for the record.
    Mr. Rogers. All right.
    Mr. Mollohan. Thank you very much, Mr. Richter.
    Mr. Richter. Thank you.
    Mr. Rogers. Mr. Skaggs.
    Mr. Skaggs. Thank you very much, Mr. Chairman.
    Just picking up on Radio Free Asia, this is more just a 
suggestion, which you probably are already acting on anyway. 
Our former colleague Pete Peterson is on his way to Hanoi. It 
would seem to me opportune to urge him to raise this issue when 
he presents his credentials over there.
    Mr. Richter. I have, sir.
    Mr. Skaggs. Okay. Good.

  usia budget compared to public information spending of other nations

    I would be interested, just for the record, Dr. Duffey, in 
what the other major advanced nations around the world spend on 
comparable public information activities that could be compared 
with USIA. I just would be curious if you have those numbers or 
if they could be developed without a lot of trouble?
    Mr. Duffey. I am sure we can submit something for the 
record.
    Mr. Skaggs. Could you compare these activities----
    Mr. Duffey. We will submit something for the record, Mr. 
Chairman.
    Mr. Skaggs [continuing]. Whether it is ratio to GDP or 
budget or whatever.
    [The information follows:]
              Public Diplomacy Programs of Other Countries
    There is no readily available comprehensive information on the 
public diplomacy programs of other countries. We do have a comparison 
of the international broadcasting efforts of a number of other 
countries. The data follow:

[Pages 532 - 533--The official Committee record contains additional material here.]


                            declassification

    Just a few comments. How are you all doing on 
classification reform and declassification of documents that 
are primarily in your custody and control?
    Mr. Duffey. We have several senior people working in a 
warehouse now. As you know, President Clinton----
    Mr. Skaggs. Sounds like prime duty.
    Mr. Duffey. Well, President Clinton's directive is that by 
the year 2000 every document over 25 years old should be 
declassified. If we stick to that, we----
    Mr. Skaggs. You will be at the warehouse soon 
declassifying, right?
    Mr. Duffey. Well, I may have to spend some of my time 
there.
    Let me say I am very concerned about this, Mr. Chairman. 
The first decision I made was that we would immediately take 
the items from USIA, which I think are the only ones we have at 
the moment, declassify them and immediately release them. I 
made that decision when Senator Moynihan reminded us all of the 
importance of the problem.
    I have just received the custody of the documents from 
Radio Free Europe/Radio Liberty, going back prior to 1972. I 
think they should, frankly, be in the public record now, but I 
am required until the year 2000 to have them screened. I will 
release them, however, as they are screened rather than holding 
the whole group. Like I said, I have the authority to do that.
    Mr. Skaggs. If you could put in the record something that 
puts us on notice as to the budget implications that all this 
has for you for the next several years, I think it is important 
for us to grasp that.
    Mr. Duffey. Sure. Be glad to do that.
    [The information follows:]
                        Declassification Efforts
    The Agency's major effort to carry out the declassification 
requirements of E.O. 12958 is in its second year. On an annual basis, 
the current effort costs $1.2 million. The size of the collection of 
documents to be processed has been reassessed, and is now estimated at 
21 million pages, instead of 13 million. Total resources approximating 
$1.7 million per year would be required to complete the 
declassification project within the stipulated time frame, by 2000. 
Recently a new requirement, embracing all of BIB's (the former Board 
for International Broadcasting) and RFE/RL's classified materials, has 
been added to the Declassification Unit's workload. The size of this 
collection, stored in various locations around D.C. and abroad, is now 
being ascertained. Again, more resources would be needed to address 
this workload on a timely basis.

                            tv marti signal

    Mr. Skaggs. Mr. Burke, any information that the TV Marti 
signals are being received in Cuba by a significant number of 
people?
    Mr. Burke. There is no indication that anyone sees TV Marti 
in Cuba.
    Mr. Skaggs. I am curious. I am looking at USIA's ``Program 
and Budget in Brief'' on page 47 toward the bottom of the page. 
The statement, ``it has proven effective''--this is referring 
to Cuban broadcasting, but includes radio and TV--``proven 
effective in communicating the objectives of U.S. Government 
policies toward Cuba and the international community to the 
Cuban audience.''
    Is that a true statement with regard to TV Marti?
    Mr. Burke. Not with regards to TV Marti.
    Mr. Skaggs. And the next sentence, the Martis are valued as 
a source of news and information not otherwise available to 
Cuban audiences, is that a true statement in regard to TV 
Marti?
    Mr. Burke. That is true about Radio Marti. I think Radio 
Marti is effective.
    Mr. Skaggs. I would stipulate that. But is that a true 
statement as to TV Marti?
    Mr. Burke. No, it is not; no, not in my opinion.
    Mr. Skaggs. Okay. And do you believe that the switch to UHF 
broadcasting will improve that situation?
    Mr. Burke. I do not, Congressman.
    Mr. Skaggs. Would you care to comment, Dr. Duffey?
    Mr. Duffey. Well, the experiment with the UHF is taking 
place because of a commission that I asked to look at this 
problem the first year I came to the Agency. And the equipment 
is ready now. We should watch the experiment this fall. I think 
that it is unlikely that we can avoid jamming, though there are 
some advantages.
    I have asked Mr. San Roman, during the first month of his 
work, to begin a study of a question that keeps being raised 
about TV Marti, and that is whether in the case of a collapse 
on the island or dramatic change, what facilities would we have 
available from which to broadcast, which will be important in 
case there are indications of mass immigration toward Florida, 
as well as reaching the people of Cuba.
    He and I have agreed that the study, which will be 
conducted looking at military and other resources, will look at 
a suggestion I made that we have a skeleton television 
capability standing by in case of major change.
    Mr. Skaggs. We might be able to do business on that basis.
    Mr. Duffey. Well, I think it will be one of the first tasks 
Mr. San Roman will begin.

      investigation of alleged leak of draft report on radio marti

    Mr. Skaggs. Finally, as I understand it, the investigation 
conducted by the President's Council on Integrity and 
Efficiency on your former, now closed, IG operation regarding 
the alleged leaking of the draft report on Radio Marti problems 
has been in your possession.
    I am not sure what restrictions apply to its being shared 
with Members of Congress. I suspect it is not the sort of thing 
we put in the record, but I would appreciate it assuming that 
my information is correct--if you have that report, if you 
could make it available in some appropriate way for us to 
review and in whatever redacted form for it to be publicized.
    Mr. Duffey. There are so many reports and allegations, but 
the one you are referring to, I think the recently finished 
one, I believe has been made public. There is a version that 
includes the names of certain individuals which I am quite sure 
you would understand should be kept confidential, but I will 
see that that report, if it is not here, is here immediately.
    Mr. Skaggs. I am not referring to the one recently 
completed by State IG, but the investigation of the former USIA 
IG that I believe you requested the Office of Integrity to 
conduct.
    Mr. Duffey. Yes.
    Mr. Skaggs. And I don't----
    Mr. Duffey. Let me see what we have from that, Mr. Skaggs. 
I don't believe we received anything yet, but we will make it 
available when it is received.
    [The information follows:]

 Investigation of Alleged Leaks of Draft Report on Radio Marti Problems

    The Director of USIA asked the President's Council on 
Integrity and Efficiency (PCIE) to review events involving an 
investigation of the Office of Cuba Broadcasting by the USIA's 
former OIG to determine whether these events disclose any 
violations of applicable law, practices or procedures. The 
Integrity Committee of the PCIE agreed to include this issue in 
their comprehensive analysis of issues related to the conduct 
of the former USIA OIG. That report has now been completed by 
the PCIE's Integrity Committee. We have requested a copy of the 
report from the PCIE.

    Mr. Skaggs. Thank you, Mr. Chairman.
    Mr. Rogers. Thank you.

         two-way high-speed digital telecommunications network

    Dr. Duffey, you are talking about creating a high-speed 
two-way satellite telecommunications system. What do you have 
in mind here, and what would be the ultimate cost of such a 
system?
    Mr. Duffey. What we are proposing are some experiments, not 
making a major investment at this time. I think Mr. Bruns is 
here, Chief Information Officer of the Agency. Let me ask him 
to say a word about this.
    Mr. Bruns. Mr. Chairman, I am Joseph Bruns, CIO, Chief 
Information Officer, USIA.
    What we are proposing is an experiment to test a two-way 
high-speed data link with up to four posts, using appropriated 
funds from 1996 and proposed funds for 1997, to follow on to 
the experiment we did using the Diplomatic Telecommunications 
Service Program Office, the DTS-PO, two-way high-speed link.
    Obviously, I think it goes without stating that USIA is in 
the information business. Modern organizations that are in the 
information business are more and more dependent on the use of 
two-way high-speed telecommunications.
    The experiment that we conducted with DTS-PO, which 
established a high-speed link in five posts, had mixed results. 
As you know, DTS-PO really is the Government monopoly right now 
for providing telecommunications.
    What we would like to do, because of the unique needs of 
USIA, moving large amounts of information back and forth for 
programmatic reasons as opposed to just for communications, is 
to look at alternative methods for high-speed 
telecommunications. We are going out into the market to see if 
we can get better and more economical communications. What we 
are proposing to do right now is an experiment with up to four 
posts.
    Mr. Rogers. Well, Dr. Duffey, before you undertake such a 
plan, what steps do you believe you need to take in terms of 
funding and consultation with us about that?
    Mr. Duffey. We will update the status of our plan for the 
approach, costs and the posts we have chosen. In this proposed 
system, USIA does not have a concern about classification of 
information. We do have a concern about the most efficient way 
to move information, images, and high-speed data which are not 
now in the DTS-PO configuration. So we will submit the details 
of this plan. I don't know how much we have provided you so 
far.
    I guess we have a report. Let me just single it out. It has 
already been provided. If it is not adequate, we would be glad 
to send someone up.
    Mr. Rogers. That is just a report.
    Mr. Duffey. You would like the proposal?
    Mr. Rogers. Yes.
    Mr. Duffey. I think we have that in detail.
    Mr. Silverman. It is being worked on right now, Mr. 
Chairman.
    Mr. Duffey. Could we get that by next week?
    Mr. Bruns. Yes. We just completed the DTS-PO trial in late 
fall, and we did a very detailed evaluation of it, which we did 
send up. Before we go forward with the other experiment using 
very low Earth-oriented satellites, we must first clear it with 
OMB, and then we will be in contact with staff here before we 
go forward with it.
    [The information follows:]

           Two-Way High Speed Digital Network Status of Tests

    As indicated in USIA's FY 1997 budget presentation, the 
Agency is engaged in pilot testing of a two-way high speed 
digital network.
    In 1996 and early 1997, USIA conducted a test using DTSPO 
64 kbs two-way digital links between Washington headquarters 
and five overseas posts. On March 10, 1997, the Agency supplied 
to the Committee an analysis of that test and indicted that 
another test was under development.
    To explore other options for meeting our program 
requirement for high speed data circuits, the Agency has almost 
completed a plan for a test of alternative technology using 128 
kbs Very Small Aperture Satellite circuits (VSAT). We 
anticipate completing these plans in the near future. Once the 
plans are completed and approved by OMB, we will forward them 
to the Committee as part of our Technology appropriation 
reprogramming proposal.

    Mr. Rogers. Well, that would be good. Because it would 
require reprogramming.
    I have to tell you, we have been very protective of the 
notion of having a single overseas communications system. It 
may not be workable, but with the kinds of technology that 
exist today, the State Department and everybody else that 
serves the embassy needs a good communications system.
    I don't know whether your needs could not be possibly 
served by a single system or not.
    Mr. Bruns. Yes, sir, I think they actually could be.
    The problem is that we are a minority customer of DTS-PO, a 
monopoly that was designed primarily to provide classified 
communications. Our needs are specialized needs. They are 
somewhat different than much of the other foreign affairs 
communities.
    I think, in fact, DTS-PO probably could provide the kinds 
of service that we want. They need to look at more modern 
technology as well, and they need to develop some better 
customer service standards.
    We do not need or want to necessarily establish our own 
telecommunications network. We want service. That is all we 
want. Who we actually procure from is not particularly 
important to us, but we want it to be economical and reliable.
    Mr. Rogers. What are you looking to use this for?
    Mr. Duffey. Well, this will involve video conferencing. It 
will involve high-speed Internet transmission of data and----
    Mr. Bruns. Regular, direct access to the Internet. We need 
a broader band than what DTS-PO currently is designing for 
service overseas. We need more bandwidth because we are so 
information dependent. We are not looking for just point-to-
point communication. We are actually looking for the 
transmission, in real time as quickly as possible, of large 
amounts of data both from government sources and also from 
private proprietary sources.
    Mr. Rogers. Would this be interagency communication?
    Mr. Duffey. No, it is public.
    Mr. Bruns. Right. The Internet now serves as both an 
intranet for USIA and for its posts overseas, as well. 
Eventually, we hope to have access to important audiences 
overseas as the Internet goes overseas.

                              vsat system

    Mr. Rogers. You are talking about the VSAT system.
    Mr. Bruns. Yes, sir.
    Mr. Duffey. My preference, Mr. Chairman, is that USIA 
should not be in the business of investing permanently in 
technology. I think that also should be the case with 
broadcasting. We should be in the leasing business. Because the 
technology keeps changing, and we have learned from the past 
that heavy investments in current technology are simply not a 
wise way for the government to operate.
    So, in a sense, what I see for the future is that this test 
will not lead us to ask for large amounts to invest in 
technology, instead it will demonstrate that flexible leasing 
in the private sector is far more effective.

                      worldnet versus vsat system

    Mr. Rogers. How would this differ from Worldnet?
    Mr. Duffey. Worldnet uses satellite television technology.
    Mr. Rogers. Would this replace Worldnet?
    Mr. Duffey. I think it would replace Worldnet eventually 
for many of the applications that we use. We are already 
replacing Worldnet's satellite network, in many cases, with 
telephone lines. The Internet is now capable at high speeds of 
having two-way video-media transmission. NASA has demonstrated 
how effective that can be.
    Mr. Rogers. Now, if you have the VSAT system in place, 
would that be more expensive or less than Worldnet?
    Mr. Duffey. I think it would be significantly less 
expensive than what we now have, certainly.
    Mr. Rogers. And it would replace it in terms of what 
Worldnet is desiring to achieve?
    Mr. Bruns. Mr. Chairman, it would not replace it 
immediately. Right now, particularly where we have high-level 
government officials, where we hope that the interactive will 
have placement on local television, it requires a better 
quality of broadcasting than is currently available desktop to 
desktop through the Internet. Thus, we need Worldnet's video 
capability. Now, eventually, of course----
    Mr. Rogers. All I am looking for is this. If we do VSAT, 
can we do away with Worldnet and save the $20 million?
    Mr. Bruns. Not immediately.
    Mr. Duffey. But I think we can achieve savings and reduce 
Worldnet in certain parts of the world. This has a lot to do 
with the philosophy of Worldnet. And Mr. Burke and I are 
working now on a clearer understanding and division of the 
mission of Worldnet.

                         technology initiatives

    Mr. Rogers. Well, let's talk more about it.
    Now, you have a number of initiatives under the technology 
fund, including creating an exchange alumni resources network 
so that Fulbright scholars can keep in touch with their 
colleagues, and exploring the possibilities of distance 
education. Are those high-priority items that deserve funding?
    Mr. Duffey. They are not the highest priority, but I 
believe they are extraordinarily important and effective.
    A few years ago, after the collapse of the Soviet Union, 
Mr. Soros looked around, I think rather shrewdly, for the most 
important investments to make, understanding that science in 
the Soviet Union, which had been really quite advanced, was 
going to suffer significantly if scientists either left or 
became terribly demoralized. His early investments in Internet, 
making this connection possible, I think have been demonstrated 
to be very important for the growth of that community.
    We think the same thing should be done. The alumni of these 
programs are a very important asset for our local embassies. We 
want to make more use of them.

                           video-conferencing

    Mr. Rogers. Now, you also propose increased video 
conferencing at post. Are you working with other agencies at 
these posts to determine if they have the capacity or, if they 
do not, to create a system that we all can use?
    Mr. Duffey. Yes. First of all, we serve all those other 
agencies; and it is not our interest to duplicate facilities on 
post.
    Mr. Rogers. Now, Mr. Burke, Broadcasting is also investing 
in video conferencing, are you not?
    Mr. Burke. In video conferencing, no. We are doing more 
programming through satellite, call-in programs, but it is not 
video conferencing.
    In fact, as Dr. Duffey was referring to, we are working 
together to separate out conferencing and video conferencing 
post-to-post from broadcasting, so that will be his 
responsibility.
    Mr. Duffey. One is more mission-directed and policy-
directed. The other is journalistic and broadcasting.
    Mr. Rogers. Mr. Mollohan, would you like to ask any 
questions?
    Mr. Mollohan. Just a couple.

                             budget request

    Mr. Duffey, I want to ask you a couple questions about your 
budget request.
    First of all, you are asking for a couple small 
enhancements, $1.9 million for technology funds and around 
$600,000 for an exchanges clearinghouse function. Your salaries 
and expenses and exchange accounts are not maintaining current 
services, are they?
    Mr. Duffey. No, there will be reductions.
    Mr. Mollohan. The Chairman asked you some questions about 
that. He asked you about what impact that would have on your 
programs. Would you talk about that a little more? First of 
all, what was your request to OMB?
    Mr. Duffey. We will check that out in just a moment.
    $1.126 billion, and our request here is $1.078 billion. So 
the difference between $1.126 and $1.078 billion is fairly 
small. The $1.078 billion will mean we will be reducing the 
international information programs account by $5 million. That 
is, a reduction of $5.2 million.
    Mr. Silverman. Yes, from current services.
    Mr. Duffey. From the current service of this year. The 
education and cultural exchanges account will be reduced $4.6 
million from this year's service, and other accounts will be 
reduced just over $4 million.
    Mr. Mollohan. What impact is this going to have on your 
exchange program?
    Mr. Duffey. Well, we described where the cuts would take 
place. The academic programs would be cut by $1.9 million, 
nearly $2 million; the professional and cultural exchange 
programs by $2.6 million. Of the academic programs reductions, 
$1.1 million would be cut in the Fulbright program. Student 
advising services overseas would be cut by $300,000, English 
teaching programs by $100,000. English teaching programs in 
Africa would be cut $264,000. Other cuts would be made in 
professional exchanges.
    Mr. Mollohan. In your request to OMB, did you assume those 
cuts?
    Mr. Duffey. We assumed some of them but not all of them. We 
sought stability, a level line.
    Mr. Mollohan. You requested a current services budget from 
OMB, is the way we would say that; is that correct?
    Mr. Silverman. Yes, sir.
    Mr. Mollohan. Across the board?
    Mr. Duffey. Pretty much across the board this year. Last 
year, we moved some money out of administration and into 
technology and other areas, but this year we are trying to 
maintain current services.

                     expiration of funding for rfa

    Mr. Mollohan. Just a couple questions on Radio Free Asia if 
you will. Doesn't the act provide that your funding for this 
function, Radio Free Asia, is supposed to expire in 1998?
    Mr. Burke. Yes.
    Mr. Mollohan. How are you looking at that date? As you plan 
for it, are you assuming the President requests funding in 1999 
and/or do you have a contingency if, in fact, he does not? If 
he does not request it, do you plan to continue the service and 
are you seeking other funding sources?
    Mr. Burke. My anticipation is that the President will 
request a continuation at the appropriate time, whenever 
legislation calls for it, since he supports it very strongly, 
and he has publicly stated that he supports it very strongly. 
Therefore, I am relying upon that.
    Mr. Mollohan. Do you have a contingency plan?
    Mr. Burke. We do not. You and I had this conversation 
before, and I just think it is always good to put it into some 
context. The Broadcasting Board of Governors did not meet and 
decide to have a Radio Free Asia.
    Mr. Mollohan. Believe me, I appreciate that. I just want to 
ask what your thoughts are. I mean, I might even end up here 
thinking that you are doing a great job.
    Mr. Burke.
    So there are no contingency plans to kill it, no. And if 
the President was lukewarm on it, I would attempt to speak to 
someone who may speak to him and tell him he shouldn't be. 
Because I think they are doing a great job, and I think it is 
an important thing.
    But there is one more thing that I would like to say, if 
you would give me a moment.
    Mr. Mollohan. Absolutely.
    Mr. Burke. I come from this business and I know how 
competitive news people are. It doesn't bother me that people 
of the Mandarin Service in the Voice of America talk to other 
people outside about Radio Free Asia--I mean, they are supposed 
to be competitive that way.
    But I also come from a world where I know the relationship 
between a network and a local station. And I know how 
supportive they can be of each other and they perform different 
functions.
    Mr. Mollohan. I am missing your point here.
    Mr. Burke. My point is, I have heard the concerns of the 
people in the Voice of America about the existence of Radio 
Free Asia.
    Mr. Mollohan. Do you know that I have not even talked to 
VOA----
    Mr. Burke. I am not suggesting that you have.
    Mr. Mollohan [continuing]. For two years. So I anticipate 
these problems while I still have them on my mind.
    Mr. Burke. So my basic point is that these rivalries exist, 
and I welcome them because that is what brings--
    Mr. Mollohan. The best out in all of us.
    Mr. Burke. Exactly right, sir.
    Mr. Mollohan. In terms of your funding, do you assume that 
broadcasting funds for Radio Free Asia are coming from some 
place other than the Radio Free Asia requests, is that correct, 
transmission costs?
    Mr. Burke. The transmission costs for Radio Free Asia will 
be in the general budget of the International Broadcasting 
Bureau, and this is consistent with Radio Free Europe/Radio 
Liberty transmission costs.
    Mr. Mollohan. Sure. Does the statute speak to that? Educate 
me on that, please.
    Mr. Burke. The statute does not to my knowledge speak to 
that, as to how you approach that. I think that----
    Mr. Mollohan. So we should actually add $4 million, is it, 
to your budget request?
    Mr. Burke. If I could just finish my sentence. I think, 
sir, that the statute does speak to the authorities of the 
Board of Governors to allocate resources.
    Mr. Mollohan. Hey, I am not questioning your authority. I 
am just trying to find out where it is coming from. So $4 
million--you assume $4 million in transmission costs from that 
source?
    Mr. Burke. Yes.
    Mr. Silverman. It is part of the 1998 request.
    Mr. Burke. It is part of the 1998 request. It is within 
that 1998 request, which is a current services request.
    Mr. Mollohan. Thank you.
    Mr. Burke. You are welcome.
    Mr. Mollohan. Thank you, Mr. Chairman.

          video-conferencing in the radio construction account

    Mr. Rogers. Before yielding to Mr. Latham, let me go 
briefly back to Mr. Burke on the subject of video-conferencing.
    I see in the radio construction account, although nothing 
in 1998, you have $792,000 video-conferencing planned for 
through fiscal year 2002. So you did have video-conferencing.
    Mr. Duffey. This is the arrangement Mr. Burke and I had 
been working on last summer to separate these items out. I 
believe that was probably under the Worldnet request last year.
    Mr. Rogers. It is this year's radio construction account. 
Page 31 of your submission.
    Mr. Silverman. Thank you, Mr. Chairman.
    Mr. Duffey. Yes. The engineering facilities under 
broadcasting are used to serve the whole agency. We don't have 
a neat and clean separation between broadcasting and USIA. USIA 
depends upon broadcasting, engineering and construction for 
many of our policy-driven programs; and I think that is why the 
item is here. We are trying to build more post capability for 
video-conferencing.
    Mr. Rogers. I am not saying it is wrong. I am just saying 
that, contrary to what we were told, you do have two-way video 
conferencing in broadcasting.
    Mr. Duffey. You do notice, in the request, it does say that 
management, USIA and other Government agencies, Congress and 
the White House, have been using IBB's video-conferencing 
facilities. This is essentially a service item.
    Mr. Silverman. Mr. Chairman, if I may, it is my 
understanding that there is no money being spent on that 
particular project in 1997 or 1998. It was a project funded 
earlier.
    But the video-conferencing capabilities within the 
Broadcasting Bureau are generally of broadcast quality, and the 
ones that are being set up within our proposed two-way high-
speed communication would be a serviceable signal, but it would 
not really be of broadcast quality.
    Mr. Rogers. But it is used, as I understand it, for 
conferences between posts, right?
    Mr. Silverman. Yes. The project that was in our technology 
fund is between posts, yes, sir. But that doesn't require 
broadcast quality on the European or Asian end of it.
    If we have the Secretary of State or the Chairman of the 
Subcommittee on Commerce, Justice, State on two-way hookup, we 
would hope that it would be broadcast quality on the other end 
so they could place it on a channel abroad. But that has been 
the service of Worldnet; and, as the Director and Mr. Burke 
have indicated, all of that is under review.
    Mr. Rogers. Well, there is a half million dollars, as I 
understand, in that account, through fiscal year 2002. So there 
is money laying there.
    Mr. Silverman. Well, the project was originally thought of 
as going to 2002; and there was $792,000 budgeted for the total 
project. No money is being obligated this year or proposed for 
next year; so it is sort of in suspended animation I believe.
    Mr. Rogers. Mr. Latham.

                  agency's presence in western europe

    Mr. Latham. Thank you, Mr. Chairman.
    I am new to the Committee here, so maybe you can give me a 
little background. Can you explain the rationale for the 
presence we have and still continue to have in Western Europe? 
Most of the parts of Europe I have visited have CNN. They have 
access to a lot of information. I just wondered if we still 
need presence there.
    Mr. Duffey. Well, the presence has been reduced. I will 
give you the figures in just a moment over the last few years, 
and I suspect further reductions are certainly in order.
    Before I go into that, let me say that these are the 
nations that are our allies when we are involved in actions 
pursuing our interests.
    You remember in the last year Mr. Dole asked a question one 
day after one of our Iraq problems--where are the allies? There 
are new generations coming along in these countries. I have 
never found that Ted Turner, as much as I respect him, or CNN, 
have the sympathetic portrayal of U.S. interests and policy as 
their main objective. In fact, sometimes, just given the nature 
of commercial news media, they get a bit distorted.
    We do not work with mass audiences in these countries. We 
try to work with opinion makers, the people that write, the 
people who teach, the people who influence public opinion. We 
also work with a very wide range of our institutions. We have 
NATO. We have OSCE and other institutions to which we have 
commitments.
    We have made substantial cuts. We are moving away from the 
grand days of large libraries and embassies. But, in many 
cases, I think we have probably cut a little too fast. The 
difficulty of growing up in France or Germany these days and 
having an accurate perception of U.S. policy or even U.S. 
values on the basis of the movies that come from Hollywood or 
worldwide global communications, I think, is very significant.
    Mr. Latham. Maybe I am confused. In one part of your 
response you said you are targeting the people of influence and 
then, on the other hand, you said that you are trying to help 
the kids in France learn more about America.
    Mr. Duffey. I am talking about people who are emerging as 
leaders in the business schools and in the schools of foreign 
policy and others. We are not engaged in mass public 
communication. We are trying to seek those who will influence 
the future of their countries. We have cut $20 million since 
1944 in Western Europe--I am sorry--1994 in Western Europe.
    Mr. Latham. We could have bought it for $20 million in 
1944.
    Mr. Duffey. This means that our overseas American presence 
in Western Europe has been cut by 34 positions, our foreign 
national presence by 151. This means we have closed posts in 
Hanover and Stuttgart, Germany, Florence, Italy, and access 
libraries in Milan, Lisbon and Vienna.
    We will continue to cut when we have to make decisions 
about other priorities. But I think a presence that is flexible 
and true and targeted is very important to the United States 
and Europe.

                broadcasting to iran and the middle east

    Mr. Latham. I understand you are broadcasting in Iran in 
the Farsi language. Do you have any other plans to go to any 
other countries in that region?
    Mr. Burke. Well, we do broadcast to all the countries in 
that region, sir. And Iran is a special effort involving more 
than one media, not just radio but television as well; and it 
has caused great consternation in Iran, which is a good thing.
    Mr. Latham. Are they jamming or anything?
    Mr. Burke. They are not jamming. It is a television signal, 
and it is very hard to jam a television signal. So what they do 
is climb on a roof and take down a dish, or try to. And people 
are very ingenious as to how to hide their dishes, which will 
be an easier task in the future as dishes progressively get 
smaller and smaller and smaller.
    Mr. Duffey. I think one of the most interesting things that 
the Voice of America has done, which has been controversial in 
our agency, is to work cooperatively with the Mideast 
broadcasting, essentially an emerging Arabic service, something 
like a CNN. Once a week we do a joint program on topics that 
reflect U.S. interests and goals and that reaches a massive 
audience and represents a new way of approaching broadcasting, 
a cooperative venture.

            sharing of resources between voa, rfe/rl and rfa

    Mr. Latham. In the same vein as far as cooperation, how 
much do you share resources with the Voice of America and Radio 
Free Europe and Asia as far as your resources, technology, and 
your facilities? How much coordination is there?
    Mr. Burke. I think, as a result of the consolidation that 
has taken place over the years, I think it has been rather 
successful and was demanded in the 1994 Act. In fact, the 
broadcasting arms that once upon a time were separate and 
distinct and competing over the air with each other no longer 
do that.
    All engineering functions for all of the entities--Radio 
Free Asia, Radio Free Europe/Radio Liberty and Voice of America 
have been consolidated in the International Broadcasting 
Bureau. And as far as the news activity is concerned, I believe 
that there can be more and there will be more on the team that 
we have assembled. I believe there will be far more interaction 
and cooperation between them. But as far as the saving of 
dollars by getting rid of redundancy to the extent possible, so 
far I think we have been rather successful in that.
    Mr. Latham. I think that is all, Mr. Chairman. Thank you.
    Mr. Rogers. Thank you.

   consolidation of exchanges support costs in the exchanges account

    Dr. Duffey, you are proposing to consolidate all salaries 
and support costs for exchanges in the exchanges account 
instead of in the international information programs account, 
previously known as salaries and expenses. Why is that so?
    Mr. Duffey. Well, there is a long history of that. Let me 
let Mr. Silverman describe that.
    Mr. Rogers. Keep it brief.
    Mr. Silverman. I will make the history very brief, Mr. 
Chairman.
    Over the last several years, the cost of supporting the 
exchanges program has been shared between salaries and expenses 
and the exchanges account. Each year, the Office of Management 
and Budget has sought to redirect all the support costs back 
into the salaries and expenses account and Congress has split 
it.
    OMB now feels they will give up their previous approach and 
put everything into the exchanges account. I think some of the 
staff discussions we have had make it clear that it is better 
for it all to be in one place. I think it will be clearer in 
the future, Mr. Chairman.
    Mr. Duffey. I would have to seize the opportunity again to 
say that salaries and expenses for the name of this account is 
a little misleading. It is an operations account, and there are 
many programmatic activities that do not fall under the 
exchange designation, though they are very similar, that we 
have to operate under this account. So it is significantly more 
than salaries.

                  competition of the fulbright program

    Mr. Rogers. Now, you are proposing to compete the Fulbright 
program. Is that a good thing? And, if so, why on a worldwide 
basis rather than a regional basis?
    Mr. Duffey. Well, we are preparing now, at the request of a 
number of interests, including Members of the Congress, to 
begin planning for the competition of those grants. We will 
stay on that track. I have some concerns, and I think Congress 
might share them.
    I want to look very carefully at whether regionalizing 
significantly increases the cost of administration and takes 
money away from the grant. I would like to avoid these programs 
simply being bid on by organizations that are solely in the 
bidding business. I believe that institutions which have a 
broader constituency and can, in fact, raise funding, may hold 
more hope for the future of the program.

                   foreign government matching funds

    I also believe, Mr. Chairman, that in the future we should 
be very reluctant to begin an exchange program without the 
participation of another government. Even if their 
participation is in kind and quite modest, I believe that that 
must be a new principle. We should not make the exchange 
programs a kind of benevolent giveaway. We should seek the 
participation of other countries.
    I am glad that when Mr. Frei came here last week from 
Chile, he announced a million dollars that the Chilean 
government would put into that Fulbright program. It comes out 
of conversations we have had for several years. Venezuela has 
just decided to do the same. There are many countries in 
Western Europe whose match is larger than ours. I want to 
pursue that principle. Once we solicit the administration of 
the program, I hope it will be bid upon by institutions that 
understand that this is our goal.

                            civic education

    Mr. Rogers. Now, there is an initiative in your request to 
start a civic education exchange program. Where does that come 
from, and what is that all about?
    Mr. Duffey. I think we have created a lot of confusion by 
talking rather narrowly about democracy and our interest in 
democracy. In the early stages, we were interested in 
assistance with the writing of constitutionsand elections. But 
we also knew that those alone would not make democracies, that 
underneath there is, what I guess I might call, a culture of civility, 
private institutions beyond government and business, the nonprofit 
sector, and leadership at the local level.
    In our country, we have a significant movement to teach 
civic education and civil society. So we began a couple of 
years ago to experiment, using that theme, to create 
partnerships with Western European countries in which our 
citizens could work together with their counterparts from those 
countries to promote civic education in other countries.
    We have received a lot of interest, particularly from 
Western Europe. We had conferences in Prague and Argentina to 
engage countries in those regions and are planning others. We 
believe there is a theme, a very promising theme. I frankly 
think, with respect to Eastern Europe, it is the equivalent of 
the Marshall Plan in our time. It involves citizens and 
institutions across the country. We want to pursue that theme, 
to provide a much clearer indication of what we mean by 
democratic society than simply an emphasis on law and 
elections, as important as that may be.

                               bbg budget

    Mr. Rogers. Now, Mr. Burke, your budget request for the 
Board of Governors in 1997 was $1.12 million, which we agreed 
with, which was a decrease from $1.5 million in 1996. You have 
asked us to reprogram monies to raise that figure to $1.4 
million, a $300,000 increase; and you are spending at the rate 
of $1.4 million. Now if the reprogramming does not work out, 
you have a problem.
    Mr. Burke. We will have a problem, sir. We will have to 
accommodate that problem.
    Mr. Rogers. So what happens?
    Mr. Burke. We have a consultancy line there, which has some 
flexibility in it. I think it would hinder us. I would like to 
address it in a more general way, the question of the staff of 
the Board of Governors, which is the main part of that budget, 
since the Board of Governors themselves are a very small part 
in terms of expenses.
    When we first arrived in town, Mr. Chairman, we were told 
you really don't need a staff because we don't need people 
looking over our shoulders. That is not the kind of attitude 
that went down very well with the members of the Board of 
Governors.
    We looked at the law. We looked at what our 
responsibilities are. And we take it very seriously. In fact, 
we think what we are doing here is on the level.
    When we looked at what happened in the past, there was a 
board that preceded us that had 12 employees to oversee only 
Radio Free Europe/Radio Liberty. Congress passed this bill to 
have total responsibility--budgetary, oversight, every kind of 
responsibility for Radio Free Europe/Radio Liberty, to create a 
Radio Free Asia, for the Voice of America, for the 
International Broadcasting Bureau, and for television.
    The people who make up our staff, besides being excellent 
people, are career employees of the United States Government.
    I submit to you, sir, that the question, like bubble gum on 
your shoe, that keeps coming up about the staff of the Board of 
Governors has less to do about budget than it does about power. 
Some people are still upset that the Board of Governors even 
exists, and they are going to drag it up again and again and 
again.
    Mr. Korologos.
    Mr. Korologos. One of our goals, Mr. Chairman, we started--
well, the first thing we did was read the law in the Congress; 
and I can't tell you how many times it said independent, 
independent, independent, you will, you will, you will. You 
will analyze budget. You will analyze engineering. You will do 
this and this and that.
    To that end, my view--and I agree with Chairman Burke--was 
I wanted an independent viewpoint. I wanted our people on our 
staff beholden to us to give us the real skinny. To say it in a 
crass way, I wanted a BS protector.
    Mr. Rogers. A what?
    Mr. Korologos. Never mind. I wanted somebody to give me the 
full nine yards of what this all meant, not coming from the 
person running the program. I wanted an independent viewpoint 
on the budget on engineering. We wanted our own budget officer 
to tell us if the numbers were scrubbed correctly and 
accurately, and we wanted our own congressional relations 
person to keep you all informed and to respond to the many 
questions that you have put to us. So to that end we set up 
what we have here, a lean and mean staff that has functioned 
quite well in our view.
    Mr. Rogers. Well, how much did you request for 1997 of OMB?
    Mr. Burke. A million, six.
    Mr. Rogers. For the current fiscal year. And you only were 
allowed by OMB to ask for $1.112; right?
    Mr. Burke. I don't have a clear memory.
    Mr. Rogers. I mean that is what was requested. So OMB cut 
you back; right?
    Mr. Burke. Yes.
    Mr. Rogers. And so----
    Mr. Burke. But then the passback for 1998 from OMB was $1.4 
million.
    Mr. Rogers. For 1998.
    Mr. Silverman. And, Mr. Chairman, OMB has also approved the 
reprogramming letter that you have before you to go from $1.1 
million to $1.4 million in 1997.
    Mr. Rogers. I wish they would make up their mind then. I 
mean, none of us have time to fool with all this batting around 
with insignificant numbers, to be frank with you. But it is 
important to you, I understand.
    Mr. Burke. It is very important, and it is important to all 
of the members of the Board of Governors. I mean, given the 
responsibilities that we have, I believe these people, none of 
whom were brought into the Government from the private sector, 
in fact, it should be remembered, the Act that created us in 
1994 had a clause in it protecting the people that worked for 
the Board preceding us. However, as I said, and I will say no 
more about it, it comes up again and again and again, and it is 
rather small.

               funding for voa serbian language programs

    Mr. Rogers. Well, there is another $300,000 figure. This is 
a small amount, but it is critical. There is a recent story 
that indicates the success of the Serbian language programs at 
VOA in responding to government's crackdown on Serbia's free 
media has left VOA strapped for funds and wondering how to pay 
for it, and another $300,000 might be required to solve that 
problem.
    Do you think you could ask OMB for some more money?
    Mr. Burke. I think we can. But if not, we will find it in 
VOA.
    But I want to tell you something. When those demonstrations 
were going on in the streets of Belgrade and we had the 
opportunity to bring for the first time to the citizens of 
Belgrade pictures of what was going on in their downtown that 
they were not allowed to see in their own country. It is at a 
moment like that when the freedom and the kind of life that 
these people are going to have is at stake. I will be very 
frank with you, I am not going to sit there and juggle about 
$300,000 because the freedom of those people is worth more than 
that. And that government gave in.

           proposed increase in broadcasting research budget

    Mr. Rogers. Now, you propose to double your research budget 
to $2 million.
    Mr. Burke. Yes, sir.
    Mr. Rogers. Why is that?
    Mr. Burke. We know the Congress has an enormous amount of 
interest in research, as do we. When you live in this world of 
finite resources, and we believe those resources are going to 
be finite for a long time, and we accept that, we have to use 
whatever assets we have as effectively as possible.
    It is very hard in the world to which we broadcast, which 
is not oftentimes a very sophisticated part of the globe, to 
find out how effective we are being. But yet one has to find 
out how effective one is to continue putting assets into the 
effort. And, as you know, under the Act, the Congress has made 
these demands upon us.
    The responsibility upon us is to allocate resources in an 
effective way and always make judgments about the languages 
that we are broadcasting in to make sure we are not just doing 
something because we always did it. Therefore it is vital for 
us to get a broader picture of where we are effective in order 
to spend the dollars effectively. And we have already started, 
and I will have to leave with you the language profile service 
showing, country by country, where we broadcast and how 
effective we are to the extent we can measure it now. And we 
are going to try to measure it even more effectively next year. 
And that is the reason for that increase.

                      radio free asia (rfa) budget

    Mr. Rogers. Let me ask you briefly about Radio Free Asia. 
We gave you $9.3 million in 1997, with at least another $5 
million available in carryover from the previous year. Your 
financial plan indicates that you expect to spend about $8.8 
million for operations and $3.2 million for transmission costs. 
To me, that indicates you will be carrying over about $2.3 
million in 1998. Is that generally in the ball park?
    Mr. Burke. That is in the ball park.
    Mr. Rogers. We just need to have some kind of figures here. 
Can you refine that any further, the $2.3 million number?
    Mr. Ringler. The current estimate is $1.5 million.
    Mr. Rogers. State your name for the record.

                         asia transmission plan

    Mr. Ringler. Mike Ringler, budget officer, BBG.
    Mr. Rogers. All right. Now Tinian is coming on line in 
1998, and you will be leasing many other transmission 
facilities and using satellite and leasing space in Asia. Can 
you tell me what the costs are and whether there is a 
coordinated and firm plan to make use of the transmission 
capability that is available?
    Mr. Burke. For Radio Free Asia?
    Mr. Rogers. Yes. Well, for all of Asia broadcasting.
    Mr. Burke. For all of Asia broadcasting, Tinian in the 
first place is rather important to us. It is important to us 
because it is a territory of this country and it is secure and 
we can always rely upon it as we have always with some of our 
allies in the area at the moment.
    Now, Radio Free Asia at the moment is doing the best it 
can, and rather successfully, I must say, to transmit from 
wherever it can by leasing, by forming all sorts of 
relationships. However, these relationships are always unstable 
because you make a relationship with a country and then you may 
lose it. So Tinian is vital to us in a secure place.
    The Philippines, I am sorry to say, is not as secure as we 
look to the future, which is unfortunate.
    The Thais will not allow Radio Free Asia to be broadcast 
from Thailand. So many countries in Asia react to pressures 
from especially China, and those pressures are not military 
anymore, they are economic, which puts us out of the 
marketplace.
    So I don't know if I have answered your question, I am 
rambling, but if you would like me to get closer to it, I will.
    Mr. Rogers. Well, maybe we can do that for the record.
    Mr. Burke. Fine.
    [The information follows:]
 What Are Your Plans for Philippines, Marianas, Thailand and Sri Lanka 
                             Relay Stations
    Voice of America will be broadcast from all four stations. Radio 
Liberty will be broadcast from the Philippines, Thailand and from 
Tinian. Radio Free Asia will only be broadcast from Tinian. These 
limits are dictated by host governments and could change in the future. 
Leasing of direct broadcasts, currently used for RFA, will be reduced 
when Tinian becomes operational although some lease operations will be 
continuing to ensure appropriate coverage. Leased satellite facilities 
will continue to be used to deliver program material to Bureau relay 
stations and affiliated broadcasters in the region.
    The broadcast needs of the region are constantly changing--network 
utilization must continue to be dynamic and flexible. We know the 
Subcommittee is interested in East Asia transmissions, and we will keep 
you informed of our progress as we develop more concrete plans for the 
use of these facilities.

                          Funding for Security

    Mr. Rogers. And finally, Dr. Duffey, the Congress 
appropriated $2.5 million for USIA for security purposes this 
current year. How much of those costs will continue into 1998?
    Mr. Duffey. Well, what would we do without Stan Silverman?
    Mr. Silverman. Mr. Chairman, we need $845,000 of that sum 
in 1998 for the domestic security portion. The overseas portion 
went to the foreign building operations of the State 
Department, and that was a one-time cost. A great deal of the 
domestic costs for us are one time as well. But we do need 
$845,000 to continue guard service and some equipment 
maintenance in 1998.
    Mr. Rogers. Are you satisfied with the security of your 
operations overseas?
    Mr. Duffey. We have not had any serious incidents in the 
course of the last year or two. I think the changing conditions 
would make me think that they are adequate. There are places 
where I think we probably have overinvested in security in the 
past and that the challenge is to try to adjust those 
expenditures to a realistic assessment of the current 
situation. But I believe they are adequate, yes.

                   USIA's Mission in a Post-Cold War

    Mr. Rogers. Now, finally, maybe this is a hackneyed 
question, but we geared up for the Cold War immediately after a 
World War, immediately after an enormous worldwide economic 
cataclysm. We have been managing crisis since we matured as a 
country, after World War II, and we evolved into this worldwide 
fight for the mind of man with the former Soviet Union in the 
last several decades. All of a sudden the Soviet Union 
collapsed, and here we are in a brand new world that none of us 
have ever experienced. We are into a new era.
    So what does this agency, that was born out of a fight for 
survival, do now that the threat has been so greatly 
diminished? How do you change your message? And what is your 
message? And do we need that message in this new era?
    Mr. Duffey. I tried to address that a bit in my opening 
statement, Mr. Chairman, and I did not have time to go through 
that whole statement. I think I may be the oldest person in the 
room.
    Mr. Burke. Yes. Thank you.
    Mr. Rogers. No argument.
    Mr. Duffey. I am not prepared to talk completely about all 
my involvement in the Cold War, but I think I know and 
understand that war in significant measure, and it did shape 
our mindset. It shaped the whole way in which we interpreted 
the world, and the collapse has been traumatic.
    I just read last night a new book of the history of the 
Cold War by John Gaddis of Ohio State which is entitled, ``Now 
We Know.'' And on the basis of information--we have new 
information since 1990--we are reassessing our behavior, what 
we face, the nature of the crisis, and the way it shaped our 
thinking. I believe that for the next generation--at least for 
the next 15 to 20 years--we have to be prepared for surprises 
as we get more information about what that Cold War did to us 
and how it shaped our thinking.
    Now I am prepared to ask those difficult questions. At USIA 
we have as well. We are no longer in the hearts and minds game. 
That is what I meant when I said it is not most important to us 
that we be loved and admired in all parts of the world. It is 
critically important to us that we be understood. It is very 
important to us that our motives--that the way our policies are 
made be understood.
    When the Hong Kong transition takes place in July, it is 
not important that the Chinese love us--we always like to be 
loved--but it is very important that they understand the 
concern across this country for human rights, the way in which 
the Congress will need to respond to it, the way in which an 
incident of overreaction on their part could create an incident 
that could last for many years.
    We must pursue the transition of our economy to a global 
economy, the protection of intellectual property rights, the 
openness of trade, and the rule of law. Those are quite new and 
important issues on our agenda.
    At USIA we have accepted the fact that this is the period. 
That is what I meant when I said this is not a heroic period. 
We are economically less dominant than we were even 10 years 
ago. We are now living with rising economies. We are doing very 
well, we have our act together, our economy is enormously 
stable at the moment. Though we still have a number of internal 
problems with which to deal, in my judgment, this is just as 
important as anything to our world leadership.
    I quite frankly think that dealing with managing the 
deficit is perhaps more important than anything now to our 
capacity to lead the world because we will affect other 
economies. So it is a new world. We are trying to confront 
that, and you make a very elegant description of what it means 
to see one era end and try to understand the new one.
    Mr. Rogers. Perhaps we should go back and study what 
happened immediately after the Crusades.
    Mr. Duffey. There are many people that think that is a very 
good analogy.
    Mr. Burke. If I could say, Mr. Chairman, just for a moment, 
it is rather interesting that when the wall went down, there 
was, I believe, a false sigh of relief. The fact is, the 
percent of people on this earth who live in governments that 
could be considered free--or democratic as defined by Freedom 
House--is falling all the time. It is now down to 20 percent, 
given the demographics that existed especially in Asia. Twenty 
percent of the people who live on this earth do live in 
governmental systems that are free and democratic.
    We know for our children and for our grandchildren the 
importance of Asia. We know the importance of the Pacific. We 
know that there is no such thing as a free society without free 
press. There never has been such a thing. Therefore, in 
international broadcasting, our effort remains the same.
    Ideologies come and ideologies go. But if you look around 
the world, if you look upon China, and we say that is a 
Communist nation, which is a nice thing to say because it 
easily fits in the box and we were born and raised with it. 
Burma is not a Communist nation, but there is absolutely no 
freedom. It could be a danger state. There could be new kinds 
of danger states, economic powerhouses that are purely 
fascistic. They could be threatening to us and to the security 
of our children down the road.
    Also, without being preachy about it, I believe given the 
gifts that we have in this country and being gladly ensconced 
within that 20 percent that live under freedom, we have a moral 
obligation, to the extent we can, to bring the benefits of 
freedom and lessons about the institutions that support such 
freedoms to as many people as we can. That is what 
international broadcasting is about.
    Mr. Latham. I just want to make one comment. I had dinner 
last night with the Prime Minister from Montenegro, and you 
mentioned something earlier about Belgrade with the riots. 
There were four Members of Congress in Belgrade at that time, 
and, surprisingly enough, they all took credit for themselves, 
and said nothing about Voice of America. The Members said they 
settled the problem. The solution is either Voice of America or 
send four Members of Congress. By the way, it was a bipartisan 
group.
    Mr. Burke. You can tell those four Members of Congress I 
would be glad to hire them, if I wouldn't be criticized on my 
budget.
    Mr. Rogers. Were you one of those?
    Mr. Latham. No, I wasn't.
    Mr. Rogers. Well, thank you all for your testimony.
    Mr. Korologos, would you like to comment?
    Mr. Korologos. No, sir. I just agree with what the Chairman 
said.
    Mr. Rogers. Well, even though we have changed eras, there 
is still a mission for this agency, as you both very clearly 
and eloquently said. In fact, I have said this before, so you 
probably won't be surprised by it. I think you ought to have on 
your front door down here a bronze plaque, that has the 
quotation of Archibald MacLeish that I happened to see one time 
at Disney World, of all places, in the Hall of Presidents and 
wrote down because it struck me that this ought to be your 
motto and ought to be on your wall. He said, ``There are those 
who would say that the liberation of man and mind is only a 
dream.'' He said, ``They were right. It is the American 
dream.''
    So you are in the business of liberation, and there are 
still a lot of enslaved people around the world, as you said, 
and that is your mission.
    Thank you very much.

[Pages 554 - 606--The official Committee record contains additional material here.]


                                         Wednesday, April 16, 1997.

                U.S. ARMS CONTROL AND DISARMAMENT AGENCY

                                WITNESS

JOHN D. HOLUM, DIRECTOR

    Mr. Rogers.  The Committee will come to order.
    We're pleased to welcome John Holum, the Director of the 
Arms Control and Disarmament Agency in the first of two 
hearings we will hold this afternoon. I think this makes the 
32nd or 33rd hearing we've had this year, and we're not yet 
finished. ACDA is an agency that has had its share of 
controversy and, indeed, questions as to whether it should be a 
separate agency. One of the issues we will be looking at today 
is the issue of meeting unbudgeted costs for treaties and 
conventions that appear to be seriously out-stripping anyone's 
plans to pay for them.
    ACDA's budget requests an 11 percent increase at a time 
when money is likely to be as scarce or scarcer than last year. 
Before we hear from Director Holum, I'm going to recognize the 
Chairman of the Full Committee, Chairman Livingston, for any 
comments that he would care to make, knowing that he has a full 
schedule. If you have questions, Mr. Chairman, we can include 
them in the record if you have to leave.
    Mr. Livingston.  Thank you, Mr. Chairman.
    Mr. Rogers.  I'm glad to have you with us.
    Mr. Livingston.  Well, thank you very much. I'm glad to be 
with you. I apologize to all of the Members for jumping ahead. 
There is an Agriculture mark-up at 2:30 p.m. In order to 
transport my body to more than one place at once, I have to 
kind of jump around. I apologize.
    Mr. Rogers.  We're going to get you a rocket booster.
    Mr. Livingston.  I really need one. I need one of those 
back-packs to strap on.
    Mr. Holum, welcome. We're glad to have you with us, as 
Chairman Rogers has pointed out. I'll just make some 
preliminary comments, ask a couple of questions, and then ask 
that all of my remarks be incorporated into the record after 
your initial statement. If you will address them in your 
statement and then provide some response to my questions I'd 
appreciate it.

                              streamlining

    We've had a chance to take a look at your written 
statement, your testimony, and as I understand it, it is very 
carefully written and leaves the impression that ACDA has 
become a streamlined, lean, and mean agency. But frankly, we're 
concerned that in the last two years there has not been a lot 
of progress.
    Perhaps in your statement you can discuss that proposition. 
But in looking at your statement from pages 8 to 11, we can 
only find one or two new streamlining accomplishments that were 
not told to this Subcommittee two years ago.
    In the report submitted by the State Department, to this 
Subcommittee in May, 1995 on steps to reduce unnecessary 
duplication between the State Department and ACDA, Barbara 
Larkin pointed out in May, 1995, almost every one of the 
streamlining accomplishments that are described in your 
statement today, except the consolidation of ACDA's export 
control functions into a single division, and implementation of 
the new license and referral system, were being referred to 
then.
    You have a two-page listing of streamlining accomplishments 
attached to the back of your testimony, but a majority of those 
were referred to and apparently accomplished two years ago. You 
still have the authority to fill 245 slots. In current dollars, 
your budget is effectively what it was in 1992, although in 
constant dollars it's gone down from $44 million to $37 
million.

                             reorganization

    In March 1995, former NSC Director and General Brent 
Scowcroft testified before the Senate Foreign Relations 
Committee that ACDA should be disbanded in the interest of 
improving policy, integration, and coherence.
    In the 104th Congress, the Republican Congress passed a 
Foreign Policy Authorization Bill, H.R. 1561, that among other 
reforms, mandated that at least one of four international 
affairs agencies be eliminated. And one of those four was 
indeed ACDA. The President vetoed that bill.
    We know from the Defense Authorization and various other 
appropriations bills, that every year we authorize or 
appropriate millions of dollars for arms control and 
disarmament: for example, the State Department's Political and 
Military Affairs Office which has people dedicated to arms 
control issues and in the Department of Energy, over $160 
million is appropriated annually for arms control. Over $190 
million is appropriated for non-proliferation and verification, 
research, and development. Over $46 million is appropriated for 
nuclear safeguards and security. Over $95 million is 
appropriated for program direction, non-proliferation and 
national security. And over $90 billion for fissile materials 
disposition. In fiscal year 1997, the Air Force got $26 million 
for arms control implementation.
    Various other programs, agencies, and departments deal with 
millions more appropriated to provide for other defense agency 
arms control efforts, including the Defense Nuclear Agency. So, 
all of that leads up to a single question which I'm sure you 
will address in your statement and that is, ``why do we need 
ACDA anymore?'' Inherent in that question is another one, 
``can't the State Department do your job?''
    Mr. Rogers.  Thank you, Mr. Chairman. Mr. Obey, would you 
care to make a statement at this time.
    Mr. Obey.  I don't want to answer Bob's question.
    Mr. Rogers.  Before we hear the witness, would you care to 
make a statement?
    Mr. Obey.  Bob and I both have to go to another mark-up, 
but I guess I would just make one observation. Number one,I'm 
sure that arms control costs money. I doubt that it cost as much as an 
arms race. Secondly, I would simply observe that I'm sure the State 
Department would like to do everybody's job.
    The State Department, for as long as I have known it under 
whatever Administration I have known it, has always felt that 
it has better judgment than the Defense Department, the 
Intelligence Organization of the Government, the United States 
Congress, and any other agency of government.
    I would simply say that when it comes to the question of 
evaluation of compliance with prior arms control agreements, I 
would very much hate to be in a position where I had to rely on 
the State Department for an evaluation of some other country's 
compliance because the State Department always has a reason to 
find someone else in compliance because that means that their 
problem in building a relationship of that country is less 
complicated than if they come down with a negative finding.
    It also seems to me that the State Department's job is to 
pursue matters of diplomacy and policy and not matters that 
often involve inspection and technical judgment. So, I guess 
I'll have to state that I have a great deal of respect and 
affection for the present Secretary of State and most past 
Secretaries that I've dealt with.
    I would not want to rely on that Department for either 
independent judgment that the Congress is supposed to get or 
rely on them to do a whole lot of jobs that I suspect they are 
not qualified to do, and I have relatives working in the State 
Department. So, enough said.
    Mr. Rogers.  Well, do I hear you saying that you would not 
want to know whether or not a nation is complying with a 
nuclear arms treaty dependent on whether or not they purchase 
U.S. wheat, or grain, or something? Is that what you're driving 
at?
    Mr. Obey.  No. I'm saying that I think the State Department 
always has a reason to find some other country in compliance 
because they want good relations with that country. And they 
have to deal with them on a day-to-day basis, just like I think 
the State Department would like to have total control over 
AID's Foreign Aid Budget because every ambassador in the world 
would like to have walking around money that they can peddle in 
every country in the world rather than having money independent 
of their local operations devoted to long-term development.
    I would simply like to have an independent source looking 
over the shoulder to see whether or not the country is in 
compliance with something as important as an arms control 
treaty. That's why, for instance, I personally do not believe 
in having the CIA Director as a Member of the President's 
Cabinet. I think the President needs independent advice from 
the CIA which is not sitting at the table that designs policy 
that the CIA is supposed to analyze.
    So, I guess I'd like to get information from a lot of 
people on my own staff in competition with each other so it 
doesn't get funneled to me. I feel a whole lot more comfortable 
when I can go to AID or ACDA or other agencies to get an 
independent view of State Department policy for any 
Administration.
    Mr. Rogers.  Mr. Chairman.
    Mr. Livingston.  I will defer to Mr. Holum. Thank you.
    Mr. Rogers.  Well, Mr. Ambassador, we're glad to have you 
with us. In talking about your budget, I guess I'm reminded of 
Bok's law, who said if you think education is expensive, try 
ignorance.
    Now, that you've heard the jury before you've testified is 
your sense of American justice renewed?
    Mr. Holum.  I don't suppose I have the option of just 
resting at this point.
    Mr. Rogers.  Do you want to rest your case? We will enter 
your written statement in the record. We'd like you to 
summarize it briefly if you will. The floor is yours.

                            opening remarks

    Mr. Holum.  Thank you, Mr. Chairman and Chairman 
Livingston, Mr. Dixon, Mr. Skaggs, and Mr. Obey. Thank you very 
much for being here.
    I'm pleased to be with you to discuss the President's 
ambitious agenda for arms control and non-proliferation and our 
efforts to advance that. I ask you to consider the President's 
fiscal year 1998 budget request of $46.2 million for ACDA in 
this light, which is in some respects directed to Chairman 
Livingston's point. We are a compact agency under instruction 
to do more while becoming even smaller. I think we are 
succeeding on both counts.
    I'll summarize very briefly our mission and spend a bit 
more time on the reform and streamlining. As President Clinton 
has stressed, we are pursuing the most ambitious agenda to 
dismantle and fight the spread of weapons of mass destruction 
since the atom was split.
    We've had some major successes, including the indefinite 
extension of the Nuclear Non-Proliferation Treaty. More vital 
work lies ahead, for the Cold War's end has left behind a 
massive overhang of arms and the growing danger that weapons of 
mass destruction will fall into the wrong hands.

                      reductions in strategic arms

    To address those issues, our leading priorities now as 
defined by President Clinton include continuing reductions in 
strategic arms, including the follow-up to the Helsinki Summit 
where Presidents Clinton and Yeltsen reached an understanding 
on further reductions.

                      nuclear and chemical weapons

    We're working in Geneva to negotiate a cut-off of 
production of fissile material for weapons, and other 
priorities to strengthen the Nuclear Non-Proliferation Treaty 
regime, including its safeguards. We're nearing completion, Mr. 
Chairman, in Vienna, on a package of steps, including new 
technologies and access, to sharply increase the chances of 
uncovering secret nuclear weapons.
    Also, to ratify and implement the Comprehensive Nuclear 
Test Ban Treaty or CTBT, would complete an effort begun by 
President Eisenhower and finally agreed to last year.
    Our most urgent priority is ratification of the Chemical 
Weapons Convention and adoption of the implementing legislation 
so we will have better tools to deal with some 20 countries, 
many hostile to the United States, that have or are seeking 
chemical weapons.
    To be an original party, we have to deposit our instruments 
of ratification by April 29th or lose our place in key 
decision-making bodies. And we need early action on domestic 
implementing legislation as well.
    We are also working hard to enhance compliance with the 
Biological Weapons Convention which has broad prohibitions, but 
unlike the CWC lacks teeth for monitoring and enforcement.

                  ban on anti-personnel and land mines

    Finally, another leading priority in the Conference on 
Disarmament is to negotiate a ban on anti-personnel and land 
mines which routinely are wiping out whole cities, a few people 
at a time. We're determined to meet President Clinton's charge 
to the U.N. last September that our children deserve to walk the earth 
in safety.
    But, as we pursue these and other arms control advances we 
have to attend to something perhaps less glamorous, but 
certainly no less important, arms control implementation, the 
steady work of translating the gains agreed to on paper into 
real results on the ground. Functionally, implementation, not 
negotiation is where most of the action takes place in arms 
control, in monitoring behavior, evaluating intelligence and 
inspection reports, challenging misconduct, resolving issues of 
interpretation, and reporting non-compliance to the Congress 
and the American people.
    As we succeed in negotiations there are, it is true, more 
arms control implementation and verification requirements. A 
number of recent agreements are joining older ones to create an 
architecture of international arms control law, and realizing 
its full potential is becoming a momentous mission.
    With my South Dakota farm roots, I think of this as the 
arms control harvest where we actually reap the benefits of the 
work that's gone before. It is work specifically assigned by 
law to ACDA. It occupies more and more of our time. While it is 
a national security bargain, it is neither effortless nor free.
    Notwithstanding this expanding mission, ACDA is a 
streamlined agency. We're committed to efficient and effective 
arms control. We are able to do more with less in part because 
we've set priorities through a strategic planning process that 
is now in its third year.
    The Government Performance and Results Act, GPRA, of 1993 
starts this year. ACDA welcomes the opportunity to consult with 
the Subcommittee on the strategic plan that we've already been 
implementing. We intend to continue working with you to improve 
our efficient and effective operation. To date, while doing 
more, we have reduced our annual operating budget by $2 million 
in current dollars.
    We have reorganized internally to eliminate unnecessary 
management layers and streamline for a more efficient and 
effective operation. ACDA has also worked with the Department 
of State to eliminate unnecessary duplication by reorganizing 
and coordinating all arms control and non- proliferation work.
    This effort has resulted in saving hundreds of thousands of 
dollars by sharing scarce resources and avoiding unnecessary 
expenses. For example, our Geneva operations have moved our 
Conference on Disarmament delegation from commercial space 
elsewhere into the U.S. Mission. ACDA has eliminated 
administrative duplication with State in the areas of 
documentation, treaty retrieval, and dissemination of 
diplomatic and other communications. ACDA has closed its 
library by transferring it to the State Department's library 
and has eliminated its photographic services by out-sourcing 
with State as needed.
    We've also continuously restructured ourselves to meet new 
objectives as earlier ones are achieved. For example, once the 
NPI and test ban agreements were achieved, the divisions 
assigned those were realigned to work on other challenges.
    For fiscal year 1998, the Administration is requesting 
$46.2 million for ACDA's responsibilities. This provides $42 
million, roughly, for ACDA's ongoing activities and $4.2 
million for new activities related to the test ban, CWC, and 
the NPI; $2.8 million will partially fund the CTBT Preparatory 
Commission's work to establish that treaty's verification 
regime, including networks of sensors.
    Eight hundred and ninety-two thousand dollars is for the 
Office of National Authority for the Chemical Weapons 
Convention needed under the treaty to compile declarations and 
reports, interact with the Organization for the Prohibition of 
Chemical Weapons, and provide administrative support for U.S. 
implementation activities.
    And $250,000 will support preparation for the Nuclear Non- 
Proliferation Treaty Review Conference. The first Preparatory 
Committee meeting for that conference is underway now in New 
York. It finishes this week.
    Finally, $200,000 is to address special requirements of 
ACDA's data repository. We need to upgrade our technical 
capabilities in order to keep pace with the treaties now 
entering implementation.
    Leaving aside these special requirements, our fiscal year 
1998 operating budget request for $42 million is $2 million 
less than our appropriation four years ago. Our 1998 request 
also represents a reduction of another ten positions from the 
FTE personnel ceiling established for the fiscal year 1997 
budget. These reductions in both funds and personnel are a part 
of the Administration's systematic right sizing initiatives 
across the Federal Government. We continue to look for ways to 
enhance productivity.

                efficiency and productivity improvements

    For example, we consolidated most of ACDA's export control 
functions into a single division and implemented a new 
licensing referral system resulting in faster processing time. 
We dual-hatted personnel among the CTB, Fissile Cut-Off, and 
Land Mines initiatives without adding new personnel, but doing 
more work.
    We've implemented a system for computerized storage and 
retrieval of policy documents and decisions. Now, within 
minutes we can retrieve information which once took days. Over 
the past four years and continuing, we've completely modernized 
our computer system and without increasing our annual budget 
request for that purpose.
    That prompted the computer industry to rank ACDA as the 
first among all Federal agencies, in terms of a working 
environment for computer professionals. I also want to point 
out that ACDA has been working very hard to reduce its 
administrative support infrastructure.
    Over the past three years our downsizing and streamlining 
efforts have eliminated a total of 28 authorized administrative 
positions in our domestic and overseas offices. Domestically, 
we've reduced administrative support by 23 percent or 19 
support positions. Overseas we've reduced administrative 
support by 45 percent, another 9 positions.
    This reflects both internal economizing and the results of 
Vice President Gore's National Performance Reviews, which 
reaffirmed ACDA's importance for effective arms control, but 
also set specific requirements for consolidating administrative 
functions across foreign affairs agencies. We've taken that 
mandate seriously.
    We're continuing to search for ways to operate more 
efficiently. For example, our legislation, submitted on 
February 14th proposes a number of changes which should result 
in additional efficiencies and savings. They would eliminate a 
redundant report, streamline our publication efforts, and 
achieve economies in our security clearance process.
    Mr. Chairman, I've read your response to Acting Under 
Secretary Patrick Kennedy's letter regarding the Department's 
intention to transfer $10 million from the Contributions to 
international Organizations appropriation to the International 
Conferences and Contingencies appropriation, pursuant to stipulations 
in the CJS Appropriations Act of last year.
    I am obviously disappointed in that response, but also 
hopeful that we can still move this reprogramming forward so 
that the entire amount requested for arms control purposes, 
$6.5 million, can be released so that the existing bill to the 
U.S. Government can be paid. The Committee's report on last 
year's appropriation bill removed certain arms control items 
from the Committee's recommendation for ACDA's budget, 
referring to a $4 million amount for implementation of the CTB 
and $525,000 for the BWC Review Conference.
    The report stated that authority has been provided under 
the State Department Contributions to the International 
Conferences and Contingencies Account to allow funding for 
these sorts of activities.
    The current bill to the U.S. Government for these sorts of 
activities, arms control activities, is $5,030,188 for the 
Provisional Technical Secretariat for the Organization for the 
Prohibition of Chemical Weapons, and $307,000 for the 
Biological Weapons Review Conference.
    These bills are past due and I'm sure we share a view that 
the United States should pay the bills to which we're 
obligated, and we should pay them on time. ACDA has set aside 
funds to cover the BWC bill. In addition, bills will still be 
forthcoming for arms control implementation activities in 
support of two treaties, the CTBT and the Biological Weapons 
Convention.
    As you correctly pointed out in your letter to Mr. Kennedy, 
the total requirements for these types of activities in 1997 
will exceed the amount requested in the reprogramming. In 
selecting arms control activities to be covered, the State 
Department consulted with ACDA and decided to request 
reprogramming for those arms control activities wherever there 
were outstanding or soon to be outstanding bills which needed 
to be paid.
    I know that the Financial Management Office at the 
Department of State is now focusing on additional amounts for 
arms control activities which will come due in fiscal year 
1997. They will be discussing the various options with the 
Administration and certainly with your Committee.
    Therefore, Mr. Chairman, I respectfully request that the 
additional $4 million in the reprogramming request be released 
for the types of activities mentioned in your Committee report 
of last year. At this point, the $4 million would be used for 
additional amounts past due to the CWC Provisional Technical 
Secretariat, and amounts soon to be expended for the 
Comprehensive Test Ban.
    Mr. Chairman and Members of the Subcommittee, the world 
today still bristles with Cold War over-armament and faces new 
dangers of proliferation, terrorism, convulsive nationalism, 
environmental pressures, drug trafficking, and many others that 
directly affect us. These challenges require ever more 
effective diplomacy--the most important component of the 
nation's international power.
    And they demand that we work together, even when our 
government is divided in fashioning the kind of unified foreign 
policy that befits a great power in a perilous world. It is in 
that spirit that ACDA presents to you the Administration's 
request for $46.2 million to fund its arms control and non- 
proliferation work in fiscal year 1998.
    Thank you, Mr. Chairman.
    [The statement of Mr. Holum follows:]

[Pages 616 - 631--The official Committee record contains additional material here.]


    Mr. Rogers.  Thank you, Mr. Ambassador.

                    provisional organization funding

    Mr. Rogers.  Now, last year you asked for $4.5 million for 
the U.S. contribution to two provisional organizations, the 
Comprehensive Test Ban Treaty, CTBT Preparatory Commission and 
the Biological Weapons Revision Conference.
    At last year's hearing I pointed out that your request was 
insufficient, because there would be bills for the Chemical 
Weapons Convention, Preparatory Commission. What is the total 
amount of the bills that you referred to that you expect to 
receive in fiscal year 1997 for these three organizations; 
CTBT, Preparatory Commission, the CWC Preparatory Commission, 
and the Biological Weapons Revision Conference?
    Mr. Holum.  The total comes to $12.909 million for fiscal 
year 1997. The current requirements have dropped somewhat from 
our earlier projection.
    Mr. Rogers.  Now, your request of $4.5 million was off by 
some $8 million, give or take. How could you miss it that much?
    Mr. Holum.  I don't think we missed it that much. I think 
we started with first things first. As I said in my statement, 
we went to work on finding reprogramming sources for the bills 
that were coming due first which constituted the arms control 
portion of the $10 million reprogramming request. We still 
anticipated and have been refining our projections of the 
actual cost for the CTBT which wasn't included and the balance 
of the Chemical Weapons Convention cost.
    Mr. Rogers.  In anticipation of your needs, we gave you 
more money than you requested. We gave you access to a $10 
million pot of money that could be transferred to the 
International Conferences Account at State. You asked for $6.5 
million; later revised to $5.5 million for the CWC Preparatory 
Commission and the Biological Weapons Revision Conference.
    When that reprogramming came up, we asked you for your plan 
to pay for the $13.4 million; or now $12.9 million, in expected 
costs. We didn't get one. Two days ago, we approved $2.5 
million of the request and told you that we would consider the 
balance once we received the plan. We've yet to receive the 
plan. We've been talking about this for how long? Two months. 
So, show us the plan, and we will show you the money.
    Mr. Holum.  We're working on the plan and expect to have it 
to you shortly. One of the difficulties we've encountered in 
the context of the Chemical Weapons Convention is that we 
expected the treaty to be in force sooner so that there 
wouldn't be a request for funding for the Provisional Technical 
Secretariat because we would be funding the Organization for 
the Prohibition of Chemical Weapons, the OPCW, separately.
    So, we have a funding request, an unanticipated funding 
request because the treaty didn't go into force as quickly as 
anticipated. That's the sort of uncertainty I might say, Mr. 
Chairman, that we encounter consistently in this process, 
especially when treaties are just going into effect at 
uncertain dates and when the cost of running the organizations 
under those treaties can't be predicted with great confidence.
    The previous practice had always been to just take the 
projection of the international organization, to take the 
estimate in the case of the Chemical Weapons Convention, the 
Provisional Technical Secretariat, and say whatever they said 
was going to be the cost. We've requested a portion of that.
    We did that; our share of that. We did that in the case of 
the CWC and we ended up requesting more money than we needed. 
In part, because of our own efforts to keep the costs down. So, 
we shifted to a much more conservative approach of requesting 
only the funds, and in some cases, less than the funds than we 
think are likely to be expended in times of tight budgets so 
that we can have a better fix as we go through the year on the 
actual amounts required.
    Operating under that approach, which has its merit because 
it keeps a closer eye on the spending; also requires that we 
and the Committee interact much more frequently during the 
course of the year as the funding picture becomes clear. We 
will certainly do our best and we will try to do better in 
making sure that you're informed on a continuous basis.
    Mr. Rogers.  Well, we just can't do business that way. I 
mean you were off $8 million; 150 percent off. We've got to 
have some sort of order. And you're saying, I think you're 
saying, trust me. And I'd like to do that, but I need to verify 
it.
    Mr. Holum.  I'm not saying trust us. I'm saying that as we 
have the information and are able to identify funding sources 
for reprogramming, we will come to the Committee with it. But 
what we've had to do, because we've been short, is to try to 
deal with the most urgent things first.
    As you can imagine, when all of the foreign affairs 
agencies are scrambling to find resources, it's very difficult 
to locate sources for reprogramming. It generates a great deal 
of internal activity to come up with a plan. We will certainly 
do the best we can.
    Mr. Rogers.  Well, I'm not sure where we are. Have you just 
told me your plan or is there more?
    Mr. Holum.  No, I haven't. We will come forward with a plan 
hopefully within a short period. We're actively engaged in 
working on the additional elements to complete the 
reprogramming requirement for projections for arms control 
purposes.
    Mr. Rogers.  Well, I'm more confused now than I was when I 
started. I don't know where we are. Put it in 25 words or less. 
Where are we?
    Mr. Holum.  We are urging the Committee to provide the 
balance of the $4 million for the purposes of arms control that 
was not included in the response to the reprogramming request 
in your letter of yesterday. And we are working on a plan for 
reprogramming of the balance of the funds for those purposes 
that will be needed during the course of fiscal year 1997, and 
will be back to you shortly.
    Mr. Rogers.  Mr. Skaggs.

                ROLE OF OTHER EXECUTIVE BRANCH AGENCIES

    Mr. Skaggs.  Thank you, Mr. Chairman.
    Good afternoon, Ambassador. I wanted to pick-up on one of 
the comments that Mr. Livingston made in his statement earlier 
if I understood the drift, which was referring us to the 
several areas in the Executive Branch in which various arms 
control expenditures are occurring; the Air Force and one place 
or another. I don't know whether he mentioned the CIA, but 
there is plenty that goes on there.
    It seems to me that those are, if you will, the effects of 
the work that ACDA has done over the years; that is primarily 
compliance-related activities that are a necessary consequence 
of having achieved certain arms control regimes that we need to 
verify and assure compliance. I'm just wondering if I'm getting 
at this accurately in that sense or if not, if you will correct 
my misunderstanding.
    Mr. Holum.  No. I think that's an accurate description. A 
great deal of the work that's done by other agencies is 
derivative of the success in arms control that agencies working 
together, more often than not led by the Arms Control and 
Disarmament Agency, have achieved.
    The Air Force is one of the agencies that's very much 
involved because of specialized expertise on its part in the 
intelligence operation in monitoring of arms control 
agreements; in the same way as the intelligence community is 
involved.
    The Department of Energy is actively involved because of 
their interest in the negotiating phase in guarding their 
particular interest in protecting the safety and reliability of 
our nuclear stockpile.
    Once the Test Ban Treaty is negotiated, they have a bigger 
job in terms of ensuring that any activities we undertake are 
in compliance with the Comprehensive Test Ban, as well as 
providing technical expertise on monitoring and informing our 
own efforts to monitor compliance by others.

                      COMPLIANCE VERSUS MONITORING

    Mr. Skaggs.  But if it was long ago determined that ACDA 
was to be focused on policy initiatives, negotiation of 
agreements, and that we would farm out the compliance 
verification duties that might be a consequence of successful 
negotiations, then those are not duplicative of what you do in 
any way.
    Mr. Holum.  No. And we distinguish between compliance, 
which we do, and monitoring which the intelligence community 
does. They provide information in response to arms control 
agreements. They provide raw data. We evaluate to determine 
whether that's in compliance with the treaty.
    For these reasons I think, many of the same reasons that 
Congressman Obey raised before, we've been very careful not to 
include the intelligence community in the verification process. 
They're in the monitoring process. They provide the 
information, but they don't render a verification judgment. 
They don't set themselves up as a policy agency to say we think 
this is non-compliant. They say this is what's happened. And 
it's up to agencies with legal and treaty and other technical 
expertise.
    Mr. Skaggs.  They do the fact sheet of the conclusions.
    Mr. Holum.  Right.

                             CONSOLIDATION

    Mr. Skaggs.  On the issue of consolidation; within the 
recent past, how many reviews have been conducted about the 
advisability or not of submerging you into some other place?
    Mr. Holum.  Well, since 1992 I think five or six. I'm not 
sure which.
    Mr. Skaggs.  And who conducted them?
    Mr. Holum.  The Inspector General conducted a major one in 
1992. There were some external ones by the Stimson Center. 
There was the Vice President's review. There was one by the 
Department of State entitled State 2000. There was another one 
by the Inspector General. It was an element in our 1995, fifth 
year review. There was one by the Administration itself 
following the Inspector General's report in 1992.
    Mr. Skaggs.  Did any of those conclude that you should not 
remain independent?
    Mr. Holum.  I think there was one that didn't really 
analyze it; the State 2000 study. It had a one line reference. 
But all of the ones that studied the issue in detail have 
recommended that ACDA remain independent.
    Mr. Skaggs.  If you could just include some brief 
information on those various studies for the record, that would 
be helpful.
    Mr. Holum.  I will be happy to do that.
    [The information follows:]

[Pages 636 - 638--The official Committee record contains additional material here.]


    Mr. Skaggs.  I'm not sure how I'm doing on time, Mr. 
Chairman.
    Mr. Rogers.  You're okay.

                              STREAMLINING

    Mr. Skaggs.  The 1995 State IG report came up with several 
recommendations for streamlining and elimination of 
duplication. How are you doing on those?
    Mr. Holum.  Well, there were 28 recommendations in the 
Inspector General's report. 27 have been closed. All 28 have 
been resolved. One is still not closed. In fact, it relates to 
a subject we were talking about earlier, the evaluation of the 
implementation costs of arms control treaties now in 
negotiation.
    It's something that's very hard to get a handle on because 
most of the funds, as we have been discussing, are expended by 
other agencies that we don't have direct jurisdiction over. So, 
we're trying to come up with a plan for doing that. The 
Inspector General is satisfied with that approach, but it still 
hasn't been completed.
    Mr. Skaggs.  You're, in this sense, in a situation where 
you have the responsibility to report to us, but not the 
authority to force your sister agencies to help you meet your 
responsibility.
    Mr. Holum.  That's correct.
    Mr. Skaggs.  Did the IG come up with any items of waste or 
management error at ACDA in that 1995 report?
    Mr. Holum.  No.
    Mr. Skaggs.  I might have a couple more questions, Mr. 
Chairman. Let me yield back at this point.
    Mr. Rogers.  Mr. Dixon.
    Mr. Dixon.  No questions.

                     COMPREHENSIVE TEST BAN TREATY

    Mr. Rogers.  Now, you asked for $2.8 million in 1998 for 
the cost of the Comprehensive Test Ban Treaty. What do you 
think the actual costs will be?
    Mr. Holum.  More. The 1997 budget for the Preparatory 
Commission is $28 million. The U.S. assessed contribution is 
just over $7 million or 25 percent. That's all based on a spare 
Provisional Technical Secretariat. Staffed up as the year 
progresses, we anticipate somewhere around 120 people by the 
end of the calendar year.
    Those people will be on the payroll for less than a half a 
year. In 1998, with the full year's payroll, we would expect 
budgeting for staff and operations to be at least $20 million 
and that's just for that portion. This is the global amount, 
not our share.
    The 1997 budget also includes only about $12 million for 
installing the facilities required to monitor the treaty, the 
various sensors. In 1998, we expect that figure will increase 
to at least $60 million. It is frankly in the United States' 
interest to have those facilities in place even more rapidly 
because once they are on-line, our intelligence gains from 
monitoring even before the treaty is in force. So, we estimate 
that the 1998 Preparatory Commission's budget will at least be 
$80 million and could be as much as $100 million. So, the U.S. 
assessed contribution could be as much as $25 million.
    Mr. Rogers.  But you only asked for $2.8 million. Why?
    Mr. Holum.  Well, a part of the reason is that a major 
portion of our activity in connection with the test ban in 
fiscal year 1998 will be in our own work to install monitors. 
And the treaty provides that up to 50 percent of your 
contribution can be in the form of a credit for independent 
expenditures on monitoring equipment in your own country or 
elsewhere under the treaty.
    So, we will maximize the contribution credit. We don't know 
what it will be as yet. But we would like to have as much as 50 
percent covered by the contribution credit we gain for that 
purpose.
    Mr. Rogers.  That would come out of your budget also, would 
it not?
    Mr. Holum.  I'm sorry?
    Mr. Rogers.  The in-kind contribution will also be out of 
your budget?
    Mr. Holum.  That won't come out of our budget. It comes out 
of the activities of the agencies who are building thesensors, 
the Department of Energy and Department of Defense.
    Mr. Rogers.  Well--
    Mr. Holum.  I recognize that that still doesn't cover it. 
That we still have a substantial shortfall between the request 
and the projected U.S. share of the budget. We requested, as 
you've said, $2.8 million
    Mr. Rogers.  So, it could be a $10 million shortfall?
    Mr. Holum.  Right.
    Mr. Rogers.  How can----
    Mr. Holum.  I'm not sure how much it will be, but because 
there were so many uncertainties at the time that the budget 
was prepared. The treaty had not yet been agreed--so, there is 
going to be a great deal of uncertainty as to the cost and the 
pace of activity.
    Mr. Rogers.  We're running short of time. How can we write 
your budget? I don't know how to write your budget. You come in 
with a request of $2.5 million when you say it's going to be 
$20 million on one thing and we've asked for plans on the other 
and you say trust me. I don't know how we can write your 
budget. I want to. Believe me, I want to.
    Mr. Holum.  Well, I hope that you will--one thing to do is 
to divide our budget between contributions to treaties and the 
areas where there is dramatic uncertainty at the start of a new 
international operation. We will do our best to be 
conservative, but accurate. At the same time, the main part of 
our budget is quite predictable, relating to our ongoing 
activities for negotiation and implementation of longstanding 
existing agreements where we have a good solid fix on the cost. 
So, it's a portion of the budget where the uncertainty resides. 
And we need to work harder on that.
    What we did in the case of the CTBT is request the same 
amount that we requested at a comparable period or that we 
spent at a comparable period for the Chemical Weapons 
Convention.
    Mr. Rogers.  Well, India and Pakistan have not signed the 
treaty; have they?
    Mr. Holum.  That's correct.
    Mr. Rogers.  Wouldn't that blast a pretty large hole in the 
plan, if they don't sign?
    Mr. Holum.  Well, the treaty can't go into force unless 44 
indispensable countries sign, including India, Pakistan, and 
North Korea who haven't signed. The other 41 countries all have 
signed. At the same time, it is in our interest and we are 
committed to move as rapidly as possible to build the 
verification structure for two reasons.
    One is, we want the pressure to be on the hold-out 
countries. And we want the international community to be ready 
for this treaty to enter in force at the earliest possible 
time, which is three years from last September. At the same 
time, we want these verification assets in place because we 
gain advantages from them whether or not the treaty is in 
force. They add to our body of knowledge about the nuclear 
related activities of other countries.

                      chemical weapons convention

    Mr. Rogers.  Now, on the Chemical Weapons Convention, when 
and if it's ratified, the U.S. will be assessed for $25 million 
of the budget of the organization that will carry out the 
convention. That is expected to be $100 million. That's a huge 
amount. How can the budget of a start-up organization be $100 
million?
    Mr. Holum.  Because it actually started up three years ago. 
It's been building to this operation through a Preparatory 
Commission, setting up the basic structure prior to actual 
entry into force. There has been a ramp-up at the end because 
now is when they are training to go to work, but the basic 
structure, the Provisional Technical Secretariat has been in 
operation for several years.
    Mr. Rogers.  We asked for a report on this organization and 
why it cost so much, what the ultimate annual cost is expected 
to be, and what steps are being taken to control the costs. 
Your report indicates that costs should remain fairly steady. 
And it implies that the costs should remain at $25 million a 
year. If that's so, why does the budget contain not $25 million 
for the OPCW, but $46 million?
    Mr. Holum.  The other part of that is for inspections that 
we would be required to pay for, assuming that the Bilateral 
Destruction Agreement is in force. If the Bilateral Destruction 
Agreement with Russia is in force, we inspect and pay for the 
inspection of military installations in Russia. That amount is 
currently in the Department of Defense's account and it is in 
addition to the $25 million.
    If the Bilateral Destruction Agreement is not in force, 
those funds will also be spent, but they'd be spent because we 
would be obliged to pay for the inspections in the United 
States of our military facilities. That amount would then be in 
the Department of State's account. So, there are two separate 
parts to it. The payment for the international organization 
will be steady at $25 million, but our cost of inspecting will 
either be in the Department of State's account or in the 
Department of Defense's account for the additional portion.
    Mr. Rogers.  What's the status of the Bilateral Destruction 
Agreement?
    Mr. Holum.  It is not yet in force. We are continuing to 
press the Russians to bring it into force. We're placing the 
major emphasis at this stage on both countries' ratification of 
the CWC because frankly it gives us more information. It 
requires more complete destruction and it provides a better 
verification system.
    Mr. Rogers.  Well, if the Bilateral Destruction Agreement 
goes into effect, Defense covers the cost of that does it not?
    Mr. Holum.  That's true.
    Mr. Rogers.  Why wouldn't Defense cover the cost of 
inspections prior to that agreement since it is their 
facilities that will be inspected?
    Mr. Holum.  It's just because of the way we budget for 
expenditures. If it's done by the international organization, 
then it would be paid for out of the State Department's 
account. If the inspections are actually done by our On-Site 
Inspection Agency. That's in the Defense Department's budget. 
So, it depends on who does it.
    Mr. Rogers.  Is the Defense Department ready, absent a 
bilateral agreement, to have multi-lateral inspectors poking 
around and inspecting Defense facilities?
    Mr. Holum.  Yes.
    Mr. Rogers.  They are?
    Mr. Holum.  They've planned for that.

                chemical weapons convention ratification

    Mr. Rogers.  On the Chemical Weapons Convention, Article 10 
requires that signatories have a right to acquire chemical 
weapons defense technologies from other signatories. Does that 
not mean that other nations, potentially rogue nations, would 
be able to obtain information that would help neutralize our 
chemical warfare defenses and thus expose us to greater risks?
    Mr. Holum.  Article 10 is in the treaty because countries 
that are giving up the option of chemical weapons wanted to 
have assurance from the international community that if 
theirneighbors, and some of them live in dangerous neighborhoods, 
continue to develop chemical weapons, they will have the international 
community on their side. What is required under Article 10 is that we 
provide assistance to countries who are threatened or attacked by 
chemical weapons. That can be done with humanitarian or medical 
assistance. There is a paragraph three in Article 10 that refers to an 
obligation or an undertaking to provide or to facilitate the fullest 
possible exchange of technology and defensive equipment related to 
chemical weapons.
    The United States would not, certainly would not, interpret 
that treaty, or that provision, as requiring that we give away 
to any country anything that would compromise our national 
security. We would not find it possible in the words of that 
paragraph to export those kinds of technologies. It would be 
prohibited, in fact, under our export licensing laws.
    Mr. Rogers. Former Secretary of Defense Schlesinger says 
that ``Most nations do not care a fig for international norms 
and they remain free to violate the norms established by the 
Convention with relative impunity since the treaty is difficult 
to verify and more difficult to enforce.'' How do you respond 
to that?
    Mr. Holum. Well, I think what I refer to is our experience 
under the Nuclear Non-Proliferation Treaty. I anticipate, I 
expect, that countries will join the Chemical Weapons 
Convention. I expect that countries will not join the Chemical 
Weapons Convention in some cases because they like to maintain 
the option of chemical weapons. We've had the experience in the 
Nuclear Non-Proliferation Treaty in building an international 
regime that now is very nearly universal. Only five countries 
remain outside, and countries that I suppose you would think of 
as not caring a fig for international standards, nonetheless 
have joined including North Korea, Iran, Iraq, Libya and many 
others who we believe, nonetheless have nuclear weapons 
capabilities or intentions.
    What the treaty does is give us an additional tool for 
going after those countries. If we didn't have the Nuclear Non- 
Proliferation Treaty, we wouldn't have an agreed framework 
under which North Korea, under the threat of sanctions from the 
United Nations, is giving up its nuclear potential.
    By the same token, the Chemical Weapons Convention will 
give us more information to deal with chemical weapons 
ambitions in Member countries and in non-Member countries. And 
it will do what the Nuclear Treaty does on nuclear weapons and 
the Biological Weapons Convention on biological weapons, which 
was not the case now for chemical weapons, which is to make 
them illegal.
    Right now, it is perfectly legal for Libya to maintain a 
chemical weapons complex. We can be upset about it, but we 
can't do anything about it.

                     anti-ballistic missile treaty

    Mr. Rogers. Now, you are aware of the interest of this 
Committee on the issue of whether modifications to the Anti- 
Ballistic Missile Treaty will be submitted to the Senate for 
its advice and consent. Based on the agreements reached in 
Helsinki, what are the Administration's plans with respect to 
the submission of modifications to the treaty to the Senate?
    Mr. Holum. The National Security Advisor, Mr. Berger, has 
responded to Senator Lott's question on that subject. I'm in an 
uncomfortable position because I think it's Senator Lott's 
prerogative to release that response. But I note, according to 
the press comments that he has made, that he seems to be 
satisfied with the response.

                              streamlining

    Mr. Rogers. We never got your report that we asked for on 
the issue of eliminating duplication between ACDA and State on 
arms control issues. I know State hasn't done their piece, but 
that doesn't let you off the hook. Why is it that no one gave 
us the interim report on those discussions? We had asked for 
bi-monthly reports. And we have not received them.
    Mr. Holum. Mr. Chairman, I don't have a good answer for you 
on that. In terms of the bi-monthly reports, by the time we got 
the report language from you, it was late in the calendar year. 
We were focusing the major part of our attention on the basic 
report that was due at the end of January and really didn't 
have anything to report.
    I think there were some discussions with the staff. They 
obviously don't substitute for what you were requesting, but we 
just really didn't have anything to say because we were 
focusing on the major report. Now, as I understand it, our part 
of that has been done for some time, in part because I well-
remember our conversations on this subject last year.
    There is concern that in the context of the Administration 
reexamining the question of consolidation of foreign affairs 
agencies, we didn't want to move forward with the report in 
precisely the same context.

                             reorganization

    Mr. Rogers. What can you say about the possible 
reorganization? Where is it headed?
    Mr. Holum. That will be up to the President. Essentially, 
he will be considering a number of options. As you will recall, 
Secretary Albright said in her testimony, in her confirmation 
testimony, that she had an open mind on the subject.
    It was appropriate for her to have an open mind. She hadn't 
been involved in these discussions that went on especially in 
1993 and in 1995 in the Administration. So, she has been 
working very hard on this issue as have others. We all have an 
interest in having this issue resolved soon.
    Mr. Rogers. I have a number of questions which I can submit 
for the record.
    Mr. Rogers. Mr. Skaggs, anything?

                support from the intelligence community

    Mr. Skaggs. Just a couple of quick items.
    Generally, are you satisfied with the kind of support you 
get out of the intelligence community for your activities? And 
if there are any exceptions to that, I would be pleased to be 
able to meet with you in an appropriate setting to learn about 
them. I'm just curious given my responsibilities on the 
Intelligence Committee.
    Mr. Holum. On the whole, I'm very satisfied. In fact, 
during the course of the last two or three years, both because 
of our efforts and because of those of the intelligence 
community, we have dramatically improved our collaboration. 
We've become much more active in requesting specific reporting. 
They have been very careful to attend to the needs of their 
customers.

                 us geological survey's seismic network

    Mr. Skaggs. Finally, in another Subcommittee on this 
Committee, I learned that the U.S. Geological Survey is 
reducing and may be eliminating a lot of its work in its own 
seismic network. And I'm concerned about the implications that 
that has for treaty compliance monitoring activities. If you 
can look into that and see whether it is problematic from your 
point of view, and whether international security agencies 
ought to be making some contribution to the USGS budget.
    Mr. Holum. I'll certainly look into that.
    [The information follows:]

    It is my understanding that the Appropriations Committee has 
significantly reduced the U.S. Geological Survey's (USGS) support for 
the Global Seismic Network (GSN). The USGS supports 70% of the GSN. 
Such a reduction would adversely affect our ability to monitor and 
verify compliance with the Comprehensive Test Ban Treaty (CTBT).
    The GSN supplies about half of the stations in the auxiliary 
seismic network of the International Monitoring System established by 
the CTBT. Of the 120 stations in the auxiliary network, some 35 
stations are supported by the USGS. The GSN will be called upon when 
there is a requirement for additional data to identify the cause of a 
seismic event. (The national seismic network, which the USGS also 
operates, may be used to provide data in answer to an inquiry by a 
foreign nation about an unidentified seismic event in the U.S.) GSN 
data are also used routinely in CTBT research programs sponsored by the 
Department of Defense and the Department of Energy. In these ways, the 
USGS makes an invaluable contribution to our ability to carry out our 
monitoring responsibilities under a CTBT. For these reasons, the USGS's 
line item for the GSN should be fully funded at the Administration's 
request of $3.8 million.

    Mr. Skaggs. Thank you.
    Mr. Rogers. Thank you very much.
    Mr. Holum. Thank you, Mr. Chairman.
    Mr. Rogers. We are adjourned.

[Pages 646 - 674--The official Committee record contains additional material here.]





                           W I T N E S S E S

                              ----------                              
                                                                   Page
Albright, Hon. M.K...............................................     1
Burke, David.....................................................   419
Duffey, Joseph...................................................   419
Holum, J.D.......................................................   607
Kennedy, P.F.....................................................   375
Korologos, T.C...................................................   419
Lyman, P.N.......................................................   321
Richardson, Bill.................................................   321
Silverman, S.M...................................................   419
Williams-Bridgers, J.L...........................................   193







                               I N D E X

                              ----------                              

                           Secretary of State

                                                                   Page
African Crises Fund..............................................   162
Arms Control Ratification by Russians in the Duma................   140
Arrearage Payments to the U.N....................................   143
    Reforms Associated with Arrearage Payments...................   160
    Request for Arrears Payments--U.N. Reform....................   148
Biographical Sketch--Secretary of State Albright.................    22
Bombing of U.S. Facility in Saudi Arabia.........................   136
Budget in Brief--U.S. Department of State--Fiscal Year 1998......    24
Certification of Mexico as Cooperating in Fighting Drugs.........   137
Consolidation of ACDA with State Department......................   155
Dealing with Demand Problem of Drugs.............................   140
Developing Criteria for Certifying Countries as Cooperating in 
  Fighting Drugs.................................................   138
Duplication of Activities in the U.N.............................   152
Easing Travel Restrictions with Russia...........................   149
    Russia--Visa Issues..........................................   150
Expansion of the European Union..................................   156
FY 98 OMB Budget Request vs. Congressional Budget Request........   145
General Statement--Chairman Rogers...............................     1
Increases in FY 1998 Budget Submission...........................   158
International Cooperative Administrative Support Services--ICASS.   144
    Value of an Agency's Presence Overseas in Relation to ICASS..   154
NATO:
    Central and Eastern Europe Joining NATO......................   154
    Cost of NATO Expansion.......................................   157
    Expansion of NATO................................139, 141, 151, 155
Opening Remarks--Secretary of State Albright.....................     1
    Adequate Funding for State Department Operations.............     3
    Arab-Israeli Peace Process...................................     3
    Bipartisan Foreign Policy....................................     6
    Expansion of NATO............................................     2
    Humanitarian Crisis in Zaire.................................     3
    Payment of Arrearages........................................     5
    Peacekeeping Requirements....................................     6
    Reform in International Organizations........................     5
    Relations with Asia..........................................     2
    Relations with Mexico........................................     3
Questions for the Record:
    Chairman Rogers:
        Government Performance and Results Act (GPRA)............   166
    Congressman Forbes:
        Drug Certification Criteria..............................   185
        Environmental Issues.....................................   189
        Mexico...................................................   188
        Mexico Drug Certification................................   187
    Congressman Latham:
        Drug Certification Criteria..............................   191
        Middle East Peace Process................................   192
    Congressman Regula:
        Framework Convention on Climate Change...................   184
        Impact of Consulate Closings.............................   182
        NATO Expansion...........................................   179
    Congressman Taylor:
        Assistance to Russia.....................................   177
        Consulate Office in Eastern Siberia Region of Russia.....   175
        Russia--Visa Issues......................................   178
Radio Free Asia..................................................   164
Record Statement--Secretary of State Albright....................     7
Retention of Fees Proposal.....................................154, 159
    Forward Funding and Fee Proposals............................   163
Total Resource Needs for FY 1998.................................   147
Transition of Hong Kong to China.................................   157
U.S. Policy on Human Rights in China.............................   136

Office of the Inspector General for U.S. Department of State, U.S. Arms 
   Control and Disarmament Agency, United States Information Agency 
                    Broadcasting Board of Governors

ACDA Consolidation with the State Department.....................   235
Additional Efficiencies in State, USIA, and ACDA.................   228
    Areas Where Further Economization and Efficiencies are 
      Possible...................................................   229
American Institute in Taiwan.....................................   232
    Investigation................................................   233
    Status of Woods/AIT Investigation............................   233
Biographical Sketch--Jacquelyn L. Williams-Bridgers..............   227
Classification Reform............................................   237
    Report on Protecting and Reducing Government Secrecy--1997...   237
ICASS............................................................   231
    Costs of Implementation......................................   239
    Implementation at Posts......................................   241
    Monitoring...................................................   238
Counternarcotics Certification Process...........................   241
Evaluation of TV Marti...........................................   245
Incorporating Commerce Program Inspections with State Inspections   232
Nonimmigrant Visa Datasharing....................................   244
OIG Opinion of Adequacy of Resources for Security Overseas.......   247
OIG Time Spent Monitoring Implementation of International 
  Narcotics Programs.............................................   240
Opening Statement--Jacquelyn L. Williams-Bridgers................   193
Oversight of OIG.................................................   238
Questions for the Record:
    Chairman Rogers..............................................   252
    Congressman Forbes...........................................   262
    Congressman Skaggs...........................................   269
Record Statement--Jacquelyn L. Williams-Bridgers.................   198
Resource Needs for Visa Processing...............................   245
Rules and Regulations Applicable to AIT Employees................   235
    AIT Employees and the Hatch Act..............................   235
Scope of OIG Office of Cuba Broadcasting Investigation...........   245
    Draft USIA/OIG Information on the Office of Cuba Broadcasting   247
Selling Surplus Properties Overseas..............................   248
Size and Timing of Relocation from Bonn to Berlin................   249
    Status of Relocation of U.S. Diplomatic Presence from Bonn to 
      Berlin.....................................................   249
Top Three Financial and Management Problems......................   231
U.S. Information Service Presence in Germany.....................   250
Unaccounted for Visa Fees at the American Institute in Taiwan....   234

              International Organizations and Peacekeeping

Biographical Sketch--Ambassador Bill Richardson..................   336
Biographical Sketch--Ambassador Princeton N. Lyman...............   346
International Conferences........................................   371
New International Organizations..................................   370
Opening Statement--Ambassador Bill Richardson....................   321
    United Nations...............................................   322
    U.N. Reform..................................................   322
    U.N. Arrears.................................................   324
Opening Statement--Ambassador Princeton N. Lyman.................   337
    Budget Request...............................................   337
    Budget Strategy..............................................   337
Organization Review..............................................   362
Peacekeeping.....................................................   366
    Bosnia.......................................................   366
    Reserve Fund.................................................   368
Record Statement--Ambassador Bill Richardson.....................   326
Record Statement--Ambassador Princeton N. Lyman..................   339
Rwanda War Crimes Tribunal.......................................   372
    Assessed Funds for The Rwanda Tribunal.......................   372
United Nations:
    $123 Million Reduction in 1998-1999 U.N. Budget..............   351
    Arrears History..............................................   363
    Arrears.....................................324, 347, 352, 356, 364
    Borrowing....................................................   362
    Budget.......................................................   352
    Effect of Arrears on U.N. Reform.............................   355
    Inspector General............................................   373
    Non-U.N. Arrears.............................................   365
    Offset Against Arrears.......................................   369
    Other Countries Pushing U.N. Reform..............322, 348, 353, 373
        (Third World Countries)..................................   361
    Staff Cuts............................................350, 354, 368
    Tax Equalization Fund........................................   363
Withdrawal From Other Organizations..............................   370

           State Department Administration of Foreign Affairs

Agencies Agreement to ICASS......................................   407
Alternative Budget...............................................   396
Biographical Sketch--Patrick F. Kennedy..........................   394
Chief Information Officer........................................   398
China Facility...................................................   410
Construction and Rehabilitation Projects.........................   409
    Rehabilitation Projects for FY 1997 and FY 1998..............   409
Fee Retention Proposal...........................................   395
Funding Needs of Department in Out-Years.........................   405
Funding of Information Technology in Out-Years...................   404
G7 Meeting in Denver.............................................   403
Implementing Overseas Staffing Model.............................   408
Information Resource Management Program Board....................   400
Information Systems Upgrade......................................   399
International Cooperative Administrative Support Systems.........   403
Lease Purchases..................................................   410
    Kingston Lease Purchase Facility.............................   411
Lender and Minority Representation...............................   405
Number of Assistant Secretaries..................................   397
OMB Out-Year Projections for Department..........................   405
Opening Statement--Patrick F. Kennedy............................   375
Proceeds from the Sale of Surplus Property.......................   409
Questions for the Record:
    Environmental and ITU Conferences............................   416
    ICASS Implementation.........................................   412
    ICASS Methodology............................................   412
    State-Defense MOU on Security on the Arabian Peninsula.......   414
Record Statement--Patrick F. Kennedy.............................   381
Resources for New Computer Systems...............................   401
Resources for New Software Systems...............................   402
Security in the Middle East......................................   409
State Department Organization..................................396, 398
Status of Strategic Planning and Tactical Planning...............   400
Strategic Plan...................................................   401
Utilization of Modern Communication Technology...................   406
Wang Problem.....................................................   400
Year 2000 Problem................................................   402

    United States Information Agency Broadcasting Board of Governors

Agency Mission...................................................   550
Agency's Presence in Western Europe..............................   543
Budget:
    Compared to Public Information Spending of Other Nations.....   531
    Details of 1998 Program Reductions...........................   525
    Proposed Increase............................................   525
    Request......................................................   540
Country Priorities...............................................   526
Declassification.................................................   534
East-West Center:
    Written Testimony of Kenji Sumida............................   522
Effect of Downsizing on Foreign Policy...........................   525
Exchanges:
    Civic Education..............................................   546
    Competition of the Fulbright Program.........................   545
    Consolidation of Support Costs in Exchanges Account..........   545
    Foreign Government Matching Funds............................   546
International Broadcasting:
    Asia Transmission Plan.......................................   549
    BBG Budget...................................................   546
    Expiration of Funding for RFA................................   540
    Iran and the Middle East.....................................   544
    Major International Broadcasters--Languages and Hours 
      Broadcast per Week.........................................   532
    Radio Free Asia..............................................   527
    Radio Free Asia Budget.......................................   549
    Research--Proposed Budget Increase...........................   548
    RFA vs. VOA Broadcast Schedule...............................   528
    Sharing of Resources--VOA, RFE/RL and RFA....................   544
    Summary Statement of BBG Chairman David Burke................   498
    TV Marti Signal..............................................   534
    Video-Conferencing in the Radio Construction Account.........   542
    VOA Serbian Language Program Funding.........................   548
    Written Statement of David Burke.............................   501
International Cooperative Administrative Support Systems (ICASS).   527
North-South Center:
    Written Statement of Ambler H. Moss Jr.......................   514
Office of the Inspector General:
    Investigation of Alleged Leak of Draft Report on Radio Marti.   535
Program and Budget in Brief......................................   438
Question and Answers Submitted for the Record....................   554
Security Funding.................................................   550
Summary Statement of Director Joseph Duffey......................   419
Technology:
    Initiatives..................................................   539
Two-Way High Speed Digital Telecommunications Network............   536
    Video-Conferencing...........................................   539
    VSAT System..................................................   538
    Worldnet vs. VSAT System.....................................   538
Written Statement of Director Joseph Duffey......................   422

                U.S. Arms Control and Disarmament Agency

Anti-Ballistic Missile Treaty Questions..........................   643
Ban on Anti-Personnel and LandMines (in Director Holum's Opening 
  Remarks).......................................................   611
Biography of Director Holum......................................   631
Chemical Weapons Convention Questions............................   641
Chemical Weapons Convention Ratification Questions...............   642
Compliance Versus Monitoring Questions...........................   634
Comprehensive Test Ban Treaty Questions..........................   639
Consolidation Questions..........................................   635
Efficiency and Productivity Improvements (in Director Holum's 
  Opening Remarks)...............................................   612
Nuclear and Chemical Weapons (in Director Holum's Opening 
  Remarks).......................................................   610
Opening Remarks of Chairman Rogers...............................   607
Opening Remarks of Director Holum................................   610
Opening Remarks of Representative Obey...........................   609
Prepared Statement of Director Holum.............................   615
Provisional Organization Funding Questions.......................   632
Questions for the Record from Chairman Rogers....................   646
Reductions in Strategic Arms (in Director Holum's Opening 
  Remarks).......................................................   610
Reorganization Questions.........................................   644
Reorganization (in Chairman Rogers' Opening Remarks).............   608
Role of Other Executive Branch Agencies Questions................   633
Streamlining (in Chairman Rogers' Opening Statement).............   607
Streamlining Questions.........................................639, 643
Support from the Intelligence Community Questions................   644
U.S. Geological Survey's Seismic Network Question................   644