[Senate Hearing 106-402]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 106-402
 
        EXAMINING THE WORK OF THE OVERSEAS PRESENCE REVIEW PANEL

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

                                HEARING

                               BEFORE THE

                SUBCOMMITTEE ON INTERNATIONAL OPERATIONS

                                 OF THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             FIRST SESSION

                               __________

                           NOVEMBER 10, 1999

                               __________

       Printed for the use of the Committee on Foreign Relations

                               

 Available via the World Wide Web: http://www.access.gpo.gov/congress/senate


                         U.S. GOVERNMENT PRINTING OFFICE
62-155CC                         WASHINGTON : 2000




                     COMMITTEE ON FOREIGN RELATIONS

                 JESSE HELMS, North Carolina, Chairman
RICHARD G. LUGAR, Indiana            JOSEPH R. BIDEN, Jr., Delaware
PAUL COVERDELL, Georgia              PAUL S. SARBANES, Maryland
CHUCK HAGEL, Nebraska                CHRISTOPHER J. DODD, Connecticut
GORDON H. SMITH, Oregon              JOHN F. KERRY, Massachusetts
ROD GRAMS, Minnesota                 RUSSELL D. FEINGOLD, Wisconsin
SAM BROWNBACK, Kansas                PAUL D. WELLSTONE, Minnesota
CRAIG THOMAS, Wyoming                BARBARA BOXER, California
JOHN ASHCROFT, Missouri              ROBERT G. TORRICELLI, New Jersey
BILL FRIST, Tennessee
                   Stephen E. Biegun, Staff Director
                 Edwin K. Hall, Minority Staff Director

                                 ------                                

                SUBCOMMITTEE ON INTERNATIONAL OPERATIONS

                     ROD GRAMS, Minnesota, Chairman
JESSE HELMS, North Carolina          BARBARA BOXER, California
SAM BROWNBACK, Kansas                JOHN F. KERRY, Massachusetts
BILL FRIST, Tennessee                RUSSELL D. FEINGOLD, Wisconsin

                                  (ii)




                            C O N T E N T S

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                                                                   Page

Kaden, Lewis, Chairman, Overseas Presence Advisory Panel, 
  Washington, D.C.; Accompanied by Admiral William J. Crowe, Jr., 
  USN (RET.), Member, Overseas Presence Advisory Panel; and Hon. 
  Langhorne A. Motley, Member, Overseas Presence Advisory Panel..     3
    Prepared statement...........................................     5

                                 (iii)




        EXAMINING THE WORK OF THE OVERSEAS PRESENCE REVIEW PANEL

                              ----------                              


                      WEDNESDAY, NOVEMBER 10, 1999

                               U.S. Senate,
          Subcommittee on International Operations,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The subcommittee met at 2:32 p.m., in room SD-419, Dirksen 
Senate Office Building, Hon. Rod Grams, chairman of the 
subcommittee, presiding. Present: Senators Grams and Sarbanes.
    Senator Grams. Well, good afternoon, gentlemen. They have 
not given me a gavel. I do not think they trust me with a 
heavy, blunt object. But I will just knock here and we will 
bring this hearing to order.
    Thank you very much for being here. First, I'd like to 
welcome our witnesses today: Mr. Kaden, who is Chairman of the 
Overseas Presence Advisory Panel; Admiral Crowe who, in 
addition to serving on this panel, chaired the State Department 
Accountability Review Board following the terrorist bombings of 
the American embassies in East Africa; and also Ambassador 
Motley, a member of the panel as well.
    The list of accomplishments of each of these witnesses is 
so long that let me state for the record that we have a very 
distinguished panel whose combined expertise in military, 
economic, and diplomatic affairs is out of the ordinary even 
for this committee.
    The panel's mission was to find creative solutions to 
enhance the way the United States projects its nonmilitary 
presence abroad, and I believe you have done so. Your report 
details the failure of our current structure to effectively 
manage and finance our overseas presence and recommends eight 
categories of far-reaching changes. Now, I look forward to 
hearing about those today.
    Much of the media attention on the report is focused on the 
poor condition of many of our overseas posts. The folding chair 
embassy in Kiev, which is so crowded that employees must fold 
their chairs to get to their desks, the consular shack in 
Moscow to shelter visa applications because they could not be 
accommodated in the embassy, and the trailer staff in Angola 
who have worked in it for 8 years I think is unacceptable, as 
is the outdated and incompatible information technology that 
our overseas personnel are forced to put up with. And as the 
report notes, we do not have an Internet-based network which 
connects all agencies and posts, and many employees find the 
best way to communicate with colleagues in Washington, D.C. is 
from their home computers.
    Now, I believe that overcrowding and the lack of 
information technology are merely symptoms of longstanding 
failure to foster a culture of flexibility and innovation and 
develop a coherent interagency platform that would allow us to 
respond effectively to changing foreign policy priorities.
    I am not surprised by the shortcomings described in this 
report. I have held hearings which have underscored these very 
problems and neither, I am sure, does the General Accounting 
Office, which has completed numerous studies on management 
weaknesses and program risks at the State Department. But you 
have done a great service in raising the public profile of 
these issues in recommending very constructive changes.
    Now, to date, the State Department has resisted calls to 
fundamentally change the way it does business. Hopefully, the 
Secretary of State's response to your report spurs a top-to-
bottom review of our overseas foreign policy apparatus.
    Now, while I do have some questions concerning some of your 
recommendations, I appreciate that we are not suggesting we 
just throw more money at the problem. There is no doubt that a 
robust U.S. presence throughout the world will require 
continued and possibly increased resources. However, the panel 
points out clearly that these resources must be allocated in a 
different manner. More funding, if spent in the same way, will 
not be adequate. We need to reform the methods by which we 
operate overseas to reflect and accommodate a more complex 
environment.
    Also, as the report notes, we now have around 30 different 
agencies with personnel stationed abroad whose activities are 
not adequately coordinated. We need our foreign relations to be 
conducted at the highest level of integration and coordination 
and the highest level of representation of the sovereign 
interests of this country and the American people. We must 
ensure that our influence is used to advance the national 
interest and to ensure respect for American leadership abroad. 
National prestige is reinforced and enhanced when we operate 
with a coherent, concise, and understandable foreign policy. It 
is undercut when we are crippled by competing fiefdoms.
    I want to underscore that one of your main tasks was to 
determine how the U.S. Government could provide greater 
security for its overseas personnel in the face of budget 
restraints and increasing demands on our posts abroad. Now, I 
have looked into the mistakes that we made in the past, and I 
am committed to making sure that they do not happen in the 
future.
    Now, our embassies are not vulnerable because we lack 
security requirements; they are vulnerable because over three-
quarters of our embassies had those requirements waived. I 
understand that when the Inman-inspired security standards were 
put forward in the 1980's, a number of existing embassies did 
not meet the criteria. But I was surprised to find that many of 
the embassies, built and purchased since that time, still do 
not meet the Inman standards either.
    My bill, which is now included in the State Department 
authorization bill, takes an approach which is compatible, I 
believe, to the findings in your report; and I would be 
interested in your views about high level accountability and 
collocation which have met with opposition from State.
    Now, let me thank you once again for the sacrifices that 
you have made to serve on this panel. I appreciate the time and 
the effort that you have devoted to serve the best interests of 
our country, and I look forward to working with you to push for 
an overhaul of our overseas presence. I hope you will keep an 
interest in this area for the long haul because I guarantee 
that we will need to combine forces to eliminate the turf wars 
and the bureaucratic resistance that will accompany any kind of 
a push or any kind of an effort at reform. So again, gentlemen, 
I want to thank you very much for your work.
    I would like to now turn to the panel, and if you have any 
opening statements, the committee would like to hear them now.
    Mr. Kaden.

STATEMENT OF LEWIS KADEN, CHAIRMAN, OVERSEAS PRESENCE ADVISORY 
  PANEL, WASHINGTON, D.C.; ACCOMPANIED BY ADMIRAL WILLIAM J. 
  CROWE, JR., USN (RET.), MEMBER, OVERSEAS PRESENCE ADVISORY 
PANEL; AND HON. LANGHORNE A. MOTLEY, MEMBER, OVERSEAS PRESENCE 
                         ADVISORY PANEL

    Mr. Kaden.  Thank you, Mr. Chairman. I have submitted a 
statement for the record. I will just make a few points as we 
begin our dialog. We greatly appreciate your convening this 
hearing and the opportunity to discuss our panel's report with 
you. Let me just emphasize a few points from the report, and 
they echo themes in your statement.
    First, we make the observation--I think with some 
determination--that the activities, the functions performed by 
America's representatives overseas are extremely important. 
They face an array of challenges, an agenda that increases in 
scope and complexity on a regular basis. The old days of 
diplomats interacting with their government counterparts and 
taking their time to write an analysis of political or economic 
developments in the country in which they serve is long past. 
Today, as markets open, as political systems open, our 
representatives need to be on the ground aggressively 
interacting with the civil society, as well as the government 
in which they serve. And they face a daunting array of issues 
from global environmental and trade alliances, combatting drug 
traffic, terrorism, spreading disease, to dealing with the more 
traditional challenges of political and economic matters.
    Unfortunately, as our report also concludes, this is an 
area in which the Government stands in need of great 
improvement. This system is perilously close to breakdown, to 
failure. And it is not a product of inattention in the last few 
years. These are problems that have grown up over several 
decades through several administrations. Just as our panel was 
entirely bipartisan and included not only Admiral Crowe and 
Ambassador Motley, but leaders from the business community, the 
labor community, people who had served in Government over many 
administrations, so too these problems of neglect and 
inattention to the quality of management practices, of 
organization, of resources, of systems are the product of many 
years of allowing this system to deteriorate.
    But the net result is, as your statement indicated, 
facilities that are inadequate and dilapidated, technology that 
is outmoded, skill set and training and human resource 
practices that do not meet the standards of first-class 
organizations in both the public and the private sector, 
security measures that leave our representatives more 
vulnerable than they need to be to the threats that are in fact 
part of their life, part of the responsibilities they have 
undertaken.
    In response to that assessment of the condition of our 
overseas presence and the importance of those activities, our 
panel has put forward, as you indicate, an array of reforms and 
improvements we recommend. We do not think these are pie in the 
sky or difficult to achieve. Most of them are the nuts and 
bolts of how to administer these activities better, how to 
organize our resources in the most efficient manner, how to 
improve the skill set and quality, how to make use of the 
talent and resources of people who seek public service in 
representing the United States overseas.
    I might add that this is not the State Department alone. 
The State Department has the lead responsibility in this area, 
and they have some serious shortcomings to address. But it is 
really, as the report says, a responsibility of the U.S. 
Government as a whole. These problems grew up as a result of 
decisions and inattention to organizational and management 
practices throughout the Government and they need to be 
addressed in the same way. Representatives come from 30 
agencies, and it will require an effort from all those agencies 
to address it.
    That is why, after going through these reforms--and we can 
talk more about them in our colloquy--we suggest that the most 
important recommendation we make is on implementation. Moving 
forward on the improvements needed in our system of organizing 
resources and activities overseas requires, in our view, a 
partnership between the Congress and the administration. It 
requires leadership from the President, because many of these 
activities do cross agency lines. Only the President has the 
capacity to get all the agencies of the Government onto the 
same technology platform. He will need the help of Congress in 
doing that, but only the strength from the center, only the 
President's leadership, can address a circumstance that, as we 
say, is a disgrace and an embarrassment.
    The fact that if you work for the FBI, you cannot 
communicate to the office next door with a person representing 
the State Department or the intelligence community or the 
Defense Department, much less back to your agencies at home and 
across those lines to those whom you serve back at home and 
around the world is a shortcoming that no quality organization 
in the world accepts, no private sector business operating in 
many countries.
    I am part of a law firm of only a few hundred lawyers and 
we take for granted that we have the degree of communication 
capacity with our offices in Asia and Europe, as well as in the 
United States and with our 50 most important clients. Now, that 
is a product of technological developments in the last few 
years, but it is incumbent on the Government, as it is on other 
organizations, to keep pace with that measure of change.
    Finally, we think that this partnership can come about on a 
bipartisan basis. These are issues of good government that 
transcend the kind of policy differences that we all occupy 
ourselves with in other times. And we are hopeful that during 
the rest of 1999 and the year 2000, if the President and the 
Secretary of State join with Members of Congress, including 
this committee, we can create some momentum behind these 
improvements.
    They will not all happen overnight. Some of them do require 
resources, but as you indicate in your statement, this is not a 
report for which the basic theme is give us more money, give us 
more resources. What this says is the Government is not doing a 
good job of managing their resources made available to it. If 
they would do a better job through this partnership with the 
Congress, we believe more support will be forthcoming in those 
areas where investment is necessary for technology, for capital 
improvements, for security, for training.
    We also suggest that significant savings can be achieved to 
offset those investments in the area of downsizing, of reducing 
the size of some posts where there are simply too many people. 
If we give our people the right talents, the right tools, the 
right facilities, the right degree of security, we can do this 
job more effectively and more efficiently with fewer people in 
many of the posts around the world. There may be some posts 
where more resources are needed, but we think we can do the job 
more effectively with a significantly leaner and more agile and 
better equipped force.
    Those are the principal themes of our report, and once 
again, we welcome the opportunity to discuss the 
recommendations with you.
    Senator Grams. Thank you very much, Mr. Kaden. As I noted, 
your written statement will also be entered into the record in 
its entirety.
    [The prepared statement of Mr. Kaden follows:]

                   Prepared Statement of Lewis Kaden

    Good afternoon, Mr. Chairman and Members of the Committee. I am 
pleased to appear before you to discuss the report of the Overseas 
Presence Advisory Panel, released last Friday, November 5.
    Secretary of State Albright's charge to the Panel when we were 
established last February was to prepare a report and recommend 
criteria for the ``location, size, and composition of overseas posts.'' 
We were also to consider ``multi-year funding programs for the 
Department'' of State. The principal factors we were to take into 
consideration were (a) foreign policy responsibilities, (b) security, 
and (c) budget.
    Our Panel had 25 members, including serving and former ambassadors; 
senior representatives from AID, CIA, and Justice; former members of 
Congress; and representatives from business, non-governmental 
organizations, labor, and academia.
    We visited 23 posts overseas, a mix of small, medium, and large. We 
talked to hundreds of people at post and here in Washington. To learn 
from previous efforts and to avoid reinventing the wheel, we hired 
consultants to review the existing literature, such as previous 
studies, articles, speeches, and books. We also looked at the best 
practices of multinational corporations and the human resource 
practices of other governments operating overseas.
    The Panel had 10 main findings:

          1. Universality: To advance U.S. national interests overseas, 
        there is no substitute for face-to-face, day-to-day contact. 
        Our on-the-ground presence is more critical than ever before.
          2. Security: Thousands of our employees abroad continue to 
        face an unacceptable level of risk from terrorism and other 
        threats.
          3. Rationale for America's Overseas Presence: An extensive 
        overseas presence is vital to our efforts to ensure the 
        security and prosperity of the American people. Our posts are 
        both the vehicles to provide the ``traditional'' functions of 
        diplomatic work (such as managing bilateral relations and 
        building alliances) and the instruments for advancing less 
        traditional foreign policy priorities (such as building 
        democratic institutions and protecting the environment).
          4. Interagency coordination: While some 30 executive branch 
        agencies operate out of our diplomatic missions, there is no 
        rational interagency system for determining the size, shape, 
        and goals of our overseas presence. The ability of Ambassadors 
        to run their missions is undermined by their lack of control 
        over the resources and personnel ostensibly working under them.
          5. Presidential and Congressional leadership: The involvement 
        of both the President and the Congress is essential in 
        designing and funding our overseas presence.
          6. Resources: ``Rightsizing'' the U.S. Government's overseas 
        presence would likely result in some missions becoming smaller 
        and the resources of all agencies operating overseas being 
        distributed differently than they now are. Resulting budget 
        savings to the entire U.S. Government would help support the 
        necessary additional investments in technology, security, and 
        training the Panel calls for.
          7. People and human resources policies: We found talented and 
        dedicated staff struggling to meet the demands of an expanded 
        foreign policy agenda, with competition from the private sector 
        and hardship associated with overseas service threatening to 
        deplete the U.S. Government's talent pool. Personnel policies 
        must give more weight to family considerations and adopt best 
        practices for recruiting, training, evaluating, promoting, and 
        retaining talented people.
          8. Information technology and knowledge management: Our 
        missions abroad are ill-equipped with antiquated, inefficient, 
        and incompatible information technology systems.
          9. Capital needs and facilities management: Our employees 
        abroad in many places work in appalling conditions. In our 
        travels, we found worn, overcrowded, and inefficient 
        facilities. Many missions need significant capital improvements 
        to ensure security, improve working conditions, and equip 
        personnel with efficient and secure information and 
        telecommunications technologies.
          10. Dangers of inaction: All of the findings I have listed 
        together threaten to cripple America's overseas presence, with 
        serious consequences to our Nation.

    To remedy the situation, the Panel developed recommendations in 
eight general areas. The most important ones are:
    First, the Panel endorsed the security recommendations of the 
Accountability Review Boards that looked at the 1998 Africa embassy 
bombings, including support for the funding implications of required 
security upgrades. Our own recommendations focused on actions that 
would create a pro-security mindset among overseas personnel and 
establish clear-cut identification of responsibility and 
accountability.
    Second, the President should establish by Executive Order a 
permanent Interagency Overseas Presence Committee, to be chaired by the 
Secretary of State with membership drawn from those agencies with 
presence overseas. The Committee would:

   Review the existing location, size, and composition of all 
        posts and make changes accordingly. Significant savings to the 
        entire U.S. Government should be achieved though this right-
        sizing process.
   Use a uniform decision-making matrix to ensure consistency 
        with goals and objectives.
   Be innovative in the use of one-person posts and other 
        structures that stretch taxpayer resources and enhance 
        security.

    The Committee would also have a technology subcommittee whose 
immediate task would be to produce within 12 to 18 months an 
integrated, secure, unclassified Intranet and Internet facility at all 
posts for all personnel and with proper links back to the relevant 
Washington agencies. Within 18 to 36 months, the subcommittee would do 
the same for the classified environment.
    Third, the President and the Congress should establish an Overseas 
Facilities Authority (OFA) to replace the existing Foreign Buildings 
Office in the Department of State. The Secretary of State would chair 
the OFA and the Board of Directors would include representatives of 
agencies with presence overseas. The OFA would:

   Finance, design, build, lease, and maintain official and 
        residential facilities overseas pursuant to guidance from the 
        Interagency Overseas Presence Committee.
   Have the authority to charge and collect rent from all 
        agencies, and borrow long-term capital from the Federal 
        Financing Bank.
   Operate like a ``performance-based organization'' to ensure 
        attracting the best people and allowing for the most innovative 
        practices in that industry.

    The Panel also made a number of recommendations for specific 
improvements in the areas of human resources and training, consular 
services, administrative practices, and an enhanced role for 
ambassadors.
    The Panel's work is done. Each member, however, feels very strongly 
that our report must not become just one more study that gets filed 
away on the shelf. We urge the President, you in the Congress, the 
Secretary of State, and other heads of departments and agencies with a 
stake in our overseas activities to act promptly to make the changes we 
have put forward. What we have proposed is eminently doable--it simply 
requires the will to carry the recommendations out.
    Thank you very much. I would be pleased to respond to any questions 
you might have.

    Senator Grams. I might as well start out with the first 
question to you, Mr. Kaden. The Congress has stressed 
repeatedly that the State Department fundamentally needs to 
change as an institution to meet the requirements of conducting 
our foreign policy. The Overseas Presence Advisory Panel has 
made some recommendations that are consistent with those made 
by the Congress, such as the use of best practices, increased 
reliance on technology, as you have mentioned, greater 
interagency cooperation and also in cost sharing.
    Now, given the lack of responsiveness to the Congress on 
these issues, do you have any reason to believe or what would 
lead you to believe that the State Department will take the 
recommendations in this report and make those required changes?
    Mr. Kaden.  Well, I am comparatively new to this area, so 
it permits me a degree of optimism that some of my colleagues 
might not share. But I have discussed just that issue at length 
with the Secretary of State, with other leaders in the 
administration, and I am hopeful that in response to this 
report you will see some energy and momentum generated from the 
administration on some of these reforms. I know that Secretary 
Albright has set up some working groups since Friday in 
response to the report, and I know too that the senior staff in 
the White House is busy evaluating it and considering what 
their next steps are. So, I am hopeful that we will see the 
kind of momentum that I think is necessary.
    I am hopeful too that they will involve the congressional 
leadership in that process. This ought to be a shared 
enterprise. All of us have a stake in doing the job better, and 
even though very few of our recommendations require legislative 
action, I think the task of reform is one that should be 
undertaken on a partnership basis.
    Senator Grams. Admiral Crowe, would you add anything to 
that?
    Admiral Crowe.  Well, I am hopeful likewise. I associate 
myself very closely with the report and certainly with the 
remarks of Mr. Kaden.
    I was particularly pleased that the report supported the 
review board's findings on security. I must say, in all 
fairness, that the history of security reports and 
investigations is not encouraging as to whether we are going to 
get the kind of attention we need and whether people will truly 
respond.
    I would hope that the Congress takes this so seriously that 
they not only respond in terms of limiting money and so forth. 
It has always intrigued me that every year in the last few 
years our foreign policy funds are going down, but the Congress 
gives no direction as to what part of the ambitious foreign 
policy we have they would like to scale back or what they would 
like to do. I think when Mr. Kaden talks about a partnership, 
that it would be very helpful if they got into those kinds of 
things. If they are going to govern the budget and be very 
tight fiscally, then they are going to have to get into the 
substance of foreign policy as well as just the fiscal outline 
of it.
    In security this year, we have been pleased with some of 
the things that took place. I think the final conference is 
about $568 million for security, which is certainly a great 
deal more than the administration originally funded or 
requested. On the other hand, only $314 million of that is for 
structures and building structures. That is less than 50 
percent of what the State Department feels they can handle, and 
it is about one-third of what we recommended.
    Of course, in our situation on security, I think the real 
proof of the pudding is going to be in the next 8 or 9 years, 
whether the level of interest will remain high and whether they 
are really concerned. The past has shown that things peak, 
people are very sensitized, but in a matter of 12 months or 18 
months, they are back to business as usual.
    Senator Grams. Do you think things have dimmed since the 
bombings in our African embassies?
    Admiral Crowe.  I am sorry?
    Senator Grams. Do you think that type of urgency has dimmed 
since the bombings in Africa?
    Admiral Crowe.  I do not think there is any question about 
it. I am not so sure it has fallen that far.
    Senator Grams. But the urgency is not being felt as it was 
a year ago.
    Admiral Crowe.  We were full of very fine rhetoric for 
about 3 months there, particularly when we were seeing 
television coverage of the devastation, but the interest level 
has fallen down. I am very worried about it.
    Senator Grams. Well, we have two hopefuls. Mr. Motley, 
would you want to agree or----
    Ambassador Motley.  Yes. I think your question, the way you 
postured it, is a legitimate question based certainly upon 
previous happenings.
    I tell you what I think we are talking about is two things.
    One is obviously a change, and more fundamental change than 
jumps out at you unless you really work at this stuff.
    And the second thing is it is more than just the State 
Department. We are talking about really a fundamental change in 
how we operate overseas. If you would allow me, let me just 
take you quickly through why the findings created a void and 
our recommendations follow a pattern.
    What we have today is an interagency process that deals 
with policy, and it works reasonably well. It is called the 
National Security Council. All the agencies get in there and 
they hammer it out and get it done in different ways. That is 
here in Washington.
    Overseas the structure is you have an ambassador and 
country teams, and they work fairly well, absent the problems, 
the challenges of facilities and communications, but still they 
work fairly well.
    Now, what we are really talking about to focus on is not a 
policy. We are talking about everything else. We are talking 
about the structure that supports and provides for that. We are 
talking about the back room. There is no interagency structure 
in Washington to handle it. There are a couple of very good 
reasons. It is not sexy. It is not a crisis. It is does not 
have to be handled right away. But overseas you have it in the 
country teams. They have to get together to make it work.
    The void is between the platforms overseas and the 
interagency process in Washington. If you look at our 
recommendations, they follow a pattern to fill that void. One 
of the first things we said is that there is a national foreign 
affairs strategic plan. It is made in a State Department 
document. It has been somewhat consulted, but not vetted 
throughout the other 30 agencies, nor is it approved by the 
President. So, that is the first thing. You need to have a 
policy framework. What are our objectives and our priorities 
overseas? Once you establish that, then the rest of our 
recommendations flow very well. If you do that, then where 
should you be, in what number, and how?
    And that is the reason for preparing the Locations 
Interagency Committee that will decide. This is something new. 
The State Department, to a large degree, has all decided this. 
But these people have a right to be at the table, these other 
30 agencies.
    Then how do you build them, how do you maintain them, and 
the rest of it is the major, I think, centerpiece of our 
recommendations, the Overseas Facilities Authority, and with 
it, the Technology Subcommittee Interagency. Because what 
happens today, each one of the departments goes to their 
respective congressional appropriators, and they get different 
types of money to do some of the same things. AID has certain 
people that support them, the CIA, others, Department of 
Defense. So, you have at once the Department of Defense 
establishing a very good, nonclassified e-mail system, the CIA 
is doing the same sort of thing, and the State Department. What 
is lacking is one system--it is not rocket science--that they 
can all get together with to save the stewardship of the 
taxpayers' resources and make it work.
    So, that is the void I think that we are trying to fill. It 
is a huge change. There are problems. There are some people who 
say you take away from the Secretary of State's prerogatives. I 
do not think we have done that, but that is an issue that needs 
to be looked at.
    So, just amplifying on that, I think you are right. But I 
think it is change and it touches more than just the State 
Department.
    Senator Grams. So, is that a hopeful?
    Ambassador Motley.  Yes. Hope springs eternal. We have all 
seen the system. One of my partners was 20 years in the Foreign 
Service, and he says that every year they say things are worse 
than the last year and he says, they are right every year. So, 
I think, yes, it is a question--we have to do something, 
otherwise our presence overseas becomes a secondary asset.
    Senator Grams. Mr. Kaden, the Overseas Presence Advisory 
Panel recommends that the Secretary of State designate the 
Deputy Secretary as the individual responsible for taking 
charge of security of U.S. posts overseas, while the 
Accountability Review Board recommended that the Secretary of 
State should be the primary leader responsible for the security 
of our U.S. embassies. Now, understanding that the Deputy 
Secretary would be responsible for the day-to-day 
implementation of security concerns, do you think that this 
recommendation contradicts the intent of the ARB's conclusion 
that the Secretary must become more engaged in the issue of 
embassy security?
    Mr. Kaden.  No. I think we were careful in this report to 
indicate our full support for all parts of the ARB 
recommendation, but particularly for its views on 
accountability. It is the Secretary's responsibility. He or she 
must take that responsibility and be accountable for it.
    Our suggestion with respect to the deputy, as your question 
indicated, was that there needs to be someone with the day-to-
day responsibility for implementation, and because of the 
importance of that function and the extent to which it cuts 
across program and policy and administrative lines in the 
overseas activities of the government, we thought the 
appropriate person was the Deputy Secretary. Obviously, there 
is a role to play for other officials at other levels, the 
Under Secretary for Management, the Assistant Secretary for 
Diplomatic Security, and many from other agencies as well. But 
we thought clear lines of managerial responsibility were a good 
idea and entirely consistent with the ARB report.
    Senator Grams. Mr. Motley.
    Ambassador Motley.  It was a subject we discussed, and we 
had two members from the ARB. Dr. Davis also was on our 
committee. So, that kind of interchange was good.
    In my view what we are really looking at is we are not 
trying to take away from the law where the fundamental 
responsibility lies with the Secretary. What we are trying to 
do is establish a CEO/COO type of thing and put in one place 
above the other under secretaries who may have policy issues, 
who may have security interests, who may have others, one 
person as the COO where the buck stops. That was the intent.
    Admiral Crowe.  Mr. Chairman, could I add to that? I think 
what the Accountability Review Board was really getting at when 
they fingered the Secretary is we felt one of the great 
problems--and it is a problem of long standing and is probably 
at the root of our security problem--is that security is not 
taken seriously by the professionals throughout the world. They 
feel that it is somebody else's business. If you are going to 
change that culture, if you are going to have everybody assume 
some responsibility for security, that has got to stem from the 
top. That has got to come right from the Secretary herself, 
that security is a high priority, that I worry about it, that I 
will look into it, I will be visiting, I will be doing this, 
and I am sincerely committed to security. It was not our 
suggestion that she personally would administer. She just is 
overburdened in that regard. She has to have a point of 
contact. We suggested a single point of contact to handle 
security, but we were not suggesting that she run it all 
herself. That would be a very unrealistic suggestion.
    But it is important that she talk about security a lot, not 
just once a month or something, that she talk about it a lot 
and that she make sure that her feelings are conveyed 
throughout the structure.
    Senator Grams. Admiral, I would like to followup. After the 
August terrorist bombings, in violation of State Department 
guidelines, AID headquarters decided not to move its missions 
in Kenya and Tanzania into the more secure embassy compounds 
that are going to be built. AID only reversed itself after 
hearing from the Congress and U.S. officials in Kenya and 
Tanzania.
    Now, when you were last before this committee, you 
mentioned that you would support requiring a waiver of this 
magnitude to be made by the Secretary of State. Do you still 
believe that this would be the case?
    Admiral Crowe.  I am not quite sure what you are getting 
at. That the waiver must be----
    Senator Grams. Right. AID only reversed itself after----
    Admiral Crowe.  I understand that.
    Senator Grams.--the Congress and everything else. When you 
testified before this committee last, you mentioned that you 
would support requiring a waiver of this magnitude to be made 
by the Secretary of State.
    Admiral Crowe.  Absolutely. I would still support that.
    I would say, in all fairness to the AID organization in 
Nairobi, that the temporary embassy moved into their building 
immediately, and I am sure they were pretty sick of that after 
a while, in all fairness.
    But, no, I think that kind of decision should be made by 
the Secretary. On the other hand, as Ambassador Motley has 
said, the Secretary should make those decisions in Washington 
in a coordinated fashion. That is what gets the Ambassador in 
trouble all the time.
    Ambassadors, if they are sensitive and if they have any 
leadership experience, do not have trouble running the country 
team, but what they do have trouble with is they cannot control 
the composition of the country team, how many are there, what 
agencies are sending who, and those decisions are imposed upon 
them and they are made back here without vetting throughout the 
structure. It would help the Ambassador a great deal if 
Washington could tell him you will have so many of this, so 
many of that, and so many of that. And nobody can play with 
that without the higher officials here in Washington agreeing 
to it.
    But those kind of waivers should definitely come from the 
Secretary.
    Senator Grams. From the Secretary.
    Admiral Crowe.  Absolutely, because that is a philosophical 
thing. We have got to decide right now, as we begin to rebuild, 
if we get the money to rebuild, but if we are going to rebuild 
and go to the campus format, to have an individual agency 
change that or not cooperate with it, that is unacceptable. 
That must go to the high level.
    Ambassador Motley.  Mr. Chairman, if I might.
    Senator Grams. Mr. Motley.
    Ambassador Motley.  If you have an interagency committee to 
do the overseas facilities, as we are suggesting, and you take 
away a lot of these arguments about I do not want to be in this 
building because I cannot do this and the rest of it, I totally 
agree with you, collocating is, purely from a leadership and 
management point of view, out of sight, out of mind. If you are 
45 minutes away, you are not going to be going backward and 
forwards in the offices. It can be done, and I think that by 
creating this structure, we can get to that point that you are 
talking about, the collocation.
    In other words, if OFA was there, you probably would never 
have had this problem that has just come up. It would have been 
settled at that level prior to that.
    Senator Grams. Mr. Kaden?
    Mr. Kaden.  Well, I would emphasize the point that 
Ambassador Motley made. I think in terms of philosophy, the 
view of the panel was that collocation is a good principle, 
that it is part of creating a country team to have people 
working together, working closely together, have as much 
interaction among them as possible. And the campus concept 
where it is practical is probably the right approach.
    The interagency facility we suggest to take over the 
responsibility of buildings, construction, and maintenance 
would, as Ambassador Motley said, solve some of these problems. 
One of its principal contributions is intended to be provide 
more input, more participation for the agencies other than the 
State Department who are major users of the platform. It goes 
along with that that we suggest that it would rationalize the 
decisionmaking on staffing if each of those agencies also paid 
their fair share of the cost of space so that if you, for 
example, were running the FBI making a decision about how much 
resources you need in a particular country, you can take into 
account the cost of providing work space and facilities for 
those staff as well as the other costs associated with sending 
them. So, the creation of this interagency Overseas Facility 
Authority that we recommend solves several of those problems at 
once.
    Admiral Crowe.  Well, Mr. Chairman, I might just comment, 
in London we did not have a large foreign assistance program, 
as some of these other embassies do, but we had 26 agencies and 
they were all in the same building in the embassy. And that 
greatly facilitated our communication and work and it enhanced 
the position of the Ambassador as a country team leader, and it 
worked very well.
    Mr. Kaden.  I think one of the views the panel felt 
strongly about was the importance of upgrading skills, having 
the right talent mix in a particular post, given the array of 
challenging issues that that post faces. That ties into the 
strategic plan or the mission priority plan. That is more 
important than what agency they come from.
    In other words, the old debates about whether it is good or 
bad to have a separate commercial service, separate 
agricultural service, we think to a great extent those 
functions are working well. We saw a lot of examples of 
effective functions being performed by the Agricultural 
Service.
    The important thing ought to be that each Ambassador can 
identify the functions that need to be addressed and the best 
talent available to him to address it.
    One simple example: One of the lessons we heard over and 
over again, coming out of the financial crisis the last few 
years, was that the Government would have been well served if 
it had devoted some additional resources to providing 
assistance to countries entering market economy in building 
their own institutional infrastructure, having the accounting 
standards, and securities regulatory facilities, and bank 
oversight. That kind of investment would have paid off, and it 
is a relatively modest investment. But whether those personnel 
came from Treasury or Commerce or the Foreign Service or the 
Justice Department would in our view be less important. They 
may come from all of those agencies if you take them on a 
global basis. In any particular country, they may come from any 
of them depending on where the skills are available to do the 
task.
    Senator Grams. We have been joined by Senator Sarbanes. 
Senator, would you have a comment to make or a line of 
questions?
    Senator Sarbanes. Thank you very much, Mr. Chairman.
    First of all, I want to thank the panel for submitting this 
report in such a prompt manner on such a tight time table. I 
think it is enormously helpful.
    Mr. Chairman, we appreciate your calling this hearing 
almost instantly upon the receipt of the report.
    There are a couple of points I want to get at. First, I 
want to get at what I regard as this perennial chestnut that 
says, well, we do not need to put any more money in to solve 
the problem, we just need to do all these other things. There 
are lots of things that could be done, and there is always the 
cry for more money. While I accept the proposition that there 
are lots of things that could be done, if I were to tell you 
flat out that there was not going to be any additional money, 
no more resources, what would that do to the possibility of 
achieving your various recommendations?
    Mr. Kaden.  Thank you, Senator. We have identified a number 
of areas where additional investment and resources are needed. 
The technological improvements that we suggest are going to 
cost some money. Improvements in capital facilities and 
security does have a cost. We have specified all of that. 
Additional training. I think we have indicated when you add it 
up, that comes in our view to $500 million to $600 million 
above the current administration request based on the June 
supplemental.
    We have said at the same time, though----
    Senator Sarbanes. Now, what about the $1.3 billion a year 
on security? Is that in or out of that figure?
    Mr. Kaden.  That is in in the sense that our recommendation 
of $1.3 billion for capital improvements and security compares 
to about $900 million in the administration's June request. In 
other words, in response to Admiral Crowe's report and some 
legitimate pressure from Members of Congress to increase 
resources for security, the administration made a supplemental 
request that comes out on a normalized basis, after they ramp 
up over a few years, to $900 million. We changed that $900 
million in our recommendation to $1 billion and we add $300 
million for maintenance, both current and deferred. When I say 
$500 million to $600 million additional, that includes the 
additional money for security, the additional funds for 
technology and training.
    But we also say that the right-sizing process that we 
recommend, the interagency process to take a look at each post 
and come up with a staffing pattern that matches mission 
priorities, could produce significant savings. We drew that 
encouragement in part from the comments of Ambassadors from 
some of the large posts, including Admiral Crowe, based on his 
service in London, Ambassador Rohatyn in Paris, Ambassador 
Holbrooke in Bonn. Some of these posts, particularly the large 
western European, posts have grown too large. They could do a 
better job if they were leaner, faster moving, better equipped; 
and there are some real savings there. Those resources can be 
allocated to these areas of need.
    Admiral Crowe.  Well, Mr. Chairman, can I address that 
question directly, though? From a security perspective, if 
there is not going to be more money available in the out-years 
or appropriated this year, you are not going to have safe 
embassies anytime. You are going to continue to send people 
overseas in harm's way, just as soldiers, just as sailors, just 
as marines, without giving them a safe, reliable, and 
reasonable environment. I look at it not as a foreign policy 
issue. I look at it as a national security issue. If you are 
going to send people overseas, then you should protect them. 
Otherwise, do not send them.
    But I hear nothing about, when the budget is cut, well, do 
not send this or do not send that. But that is what you are 
saying when you cut that budget, and if you do not give more 
funds in security, that means we are not really interested in 
saving lives.
    Senator Sarbanes. Chairman Kaden, let me ask you this 
question. You say in your executive summary, the panel supports 
legislation proposed by the Office of Management and Budget to 
allow the Department to keep an additional $500 million of the 
consular fees it collects overseas in order to address critical 
shortfalls in infrastructure, personnel systems, capital needs, 
technology training, and other needs. Now, presumably on the 
basis of the analysis you just gave me, that $500 million is 
not encompassed within the figure you gave me. Is that correct?
    Mr. Kaden.  No. I think much of it is. Part of the thrust 
of that recommendation is to provide a predictable flow of 
funds. In other words, if Congress supported the Government 
keeping those fees and applying them to the capital needs and 
other requirements of the services the Government is providing, 
it would support one of the goals of the report, to ensure 
through all these measures more predictability in the flow of 
capital funds so that one could engage in the planning process 
to address security issues over a longer period of time without 
having the degree of uncertainty that now sometimes applies.
    Some of those additional fees are for new requirements that 
we identified, but not all. And, to a considerable extent, the 
$500 million is incorporated in the numbers we have been 
talking about, the additional resources required, the $1.3 
billion. Those are overlapping recommendations, not 
incremental.
    Senator Sarbanes. Well, I want to make sure I understand 
this, because I am having trouble with my math. You said $500 
million to $600 million more was what you needed in terms of 
extra money to do your recommendations. Is that correct?
    Mr. Kaden.  Yes.
    Senator Sarbanes. You then said that included within that 
was the additional security money which was $400 million of it 
because you go from $900 million to $1.3 billion. Correct?
    Mr. Kaden.  That is right.
    Senator Sarbanes. Now, that leaves another $100 million to 
$200 million over and above that.
    Mr. Kaden.  And much of that would go----
    Senator Sarbanes. But you have another recommendation that 
talks about leaving $500 million for personnel systems, 
technology training, and other similar things. Now, I cannot 
make that math work.
    Mr. Kaden.  That's why I said those are----
    Senator Sarbanes. I may be too much a prisoner of the old 
math.
    Mr. Kaden. --not entirely additive. On the capital 
requirement side where we see the administration asking for 
$900 million in its June supplemental, we would change that to 
$1 billion. That is plus $100 million. In addition, we would 
support $300 million a year on a recurring basis for 
maintenance so that one could catch up with deferred 
maintenance and continue maintaining these 12,000 facilities 
year by year. That is $400 million. Most of the additional 
incremental funds that are required are needed for investment 
and technology. We identify over a period of years an 
investment in technology of approximately $300 million, but it 
is going to take a number of years to do that. So, those are 
the principal areas of additional need. The training and other 
needs identified are in much smaller amounts.
    Senator Sarbanes. Where does the $130 million for 
communications and technology come from?
    Mr. Kaden.  That is part of the technology improvements 
that I mentioned. $130 million is the first phase which we 
estimate could be done over approximately 18 months to 2 years 
for a global network, Internet-based for unclassified 
communications. We suggest that be followed by a study of how 
to provide the same global network in the classified 
environment. That will take longer. But if you are adding up 
incremental requirements, that is all part of the $500 million 
to $600 million I identified above the administration's current 
position.
    Senator Sarbanes. All right. Well, I hope it is all there. 
I think it is important for you to state what it is that is 
needed and not to try to down-shade it. Otherwise, we do not 
really have an appropriate standard to work against.
    Mr. Kaden.  I think the report is clear----
    Senator Sarbanes. Something Admiral Crowe did do with his 
report is he was very clear about how much money was needed and 
how imperative it was and laid it out there. In fact, because 
of that, it became something of a benchmark, which I think to 
the extent we are even beginning to come anywhere near it, it 
was greatly helped by being given such a clear and indefinite 
standard to shoot for and also, of course, such a compelling 
rationale which we just heard enunciated a few minutes ago at 
the witness table.
    Mr. Kaden.  Well, I think on the security needs, we are 
four square with Admiral Crowe. I think the specifics of 
additional budgetary requirements are all in here. But perhaps 
what we will do is put them together in a one-page chart and 
get them to you.
    Senator Sarbanes. All right.
    I have one other question, if I may, Mr. Chairman. I gather 
you support the notion of universal presence for our embassies.
    Mr. Kaden.  Yes.
    Senator Sarbanes. It would be helpful if you would just lay 
out your rationale for that. I tend to agree with that, but I 
would be interested in hearing your rationale.
    Mr. Kaden.  This was a subject we discussed at the panel 
sessions at great length and discussed in the course of our 
visits to 23 countries. I think our conclusion goes along the 
following lines. We support the value to the national interest 
of on-the-ground presence essentially everywhere. There may be 
a handful of exceptions, but essentially we support universal 
presence through an ambassador because in our view there is no 
substitute for the kind of relationship building and 
interaction with the host country that comes through that 
presence.
    Now, it does not always have to be substantial in number, 
and it does not have to include necessarily each of the policy 
areas and certainly not all of the administrative support 
functions. We do support regional service centers for 
administrative support. We support bringing back----
    Senator Sarbanes. Like in the Caribbean, for example, I 
would assume.
    Mr. Kaden.  Yes, exactly. We support bringing back to the 
U.S. some of the paper processing and back room functions.
    But we do conclude that there is no substitute for being on 
the ground, interacting government to government, and our 
representatives with the elements of the civil society in the 
country they serve. Part of the reason for that is not only the 
array of issues on the agenda, but also the unpredictability of 
where the next challenge arises, where the next threat emerges, 
where the next opportunity for a constructive relationship that 
is part of an important global alliance on an issue may emerge. 
All of those factors support the notion of having an American 
presence interacting with the government and the society 
essentially everywhere.
    Of course, you hear arguments that the Internet and media 
has changed that, that the direct contact between the President 
and the members of the cabinet and foreign leaders has changed 
that. I think our conclusion, after a good deal of discussion, 
was that in fact those developments enhanced the need for on-
the-ground presence. It is the Ambassador's relationship 
building, it is the embassy's ties with the different 
constituencies in the society in which they serve that provide 
the foundation for effective interaction at higher levels and 
that provide the foundation for effective problem solving when 
a challenge or an opportunity does emerge.
    Senator Sarbanes. Now, the paper, in reporting on your 
report, has said--let me just read this. Although the report 
calls for spending $500 million to $600 million per year beyond 
the administration's budget request, which is of course the 
issue we were exploring here earlier, its authors claim the 
extra costs could be offset by such measures as reducing the 
size of diplomatic missions in countries that no longer require 
large American presence. Now, I skimmed your report very 
quickly. I did not come away with that conclusion. Is that part 
of your----
    Mr. Kaden.  I think it is there, very much so. One of the 
central recommendations we make is that the President establish 
by executive order this interagency committee on right-sizing 
and that he include on it the representatives of the 
departments and agencies with a major presence and platforms 
around the world in embassies around the world, and that over a 
course of 3 years, this interagency process attack the issue of 
staffing patterns and the match-up of staffing patterns with 
mission priorities post by post.
    Senator Sarbanes. So, I could then, in your view, 
reasonably take the view that I do not need to give you any 
more money because if we would just do this right-sizing, we 
will pick up from that exercise the money that is needed to do 
these other things. Is that correct?
    Mr. Kaden.  We think there are substantial savings to be 
realized, but we cannot quantify those until you go through the 
process. We believe there are significant savings to be 
achieved through the right-sizing. We say, by way of example, 
that if you were able to reduce by 10 percent the total number 
of personnel, all agencies around the world, U.S. nationals and 
foreign nationals, that amounts to $380 million. But you have 
to go through the exercise in 160 embassies, matching 
priorities with staffing patterns for all agencies, in order to 
know the answer to that. The investment in technology and 
security and the other areas we believe has to be made 
notwithstanding that. Whether at the end of the day they 
balance perfectly or they come close depends on the 
effectiveness of that interagency process.
    Senator Sarbanes. Well, it seems to me you are leaving it 
open to the interpretation that I just advanced. I myself am 
not comfortable with that because I think we have been short-
changing the investment and we need to make it. But if you come 
along and tell me, look, you could make all these other changes 
in the workings of the system and the savings you would accrue 
by making all these other changes would pay for the additional 
things that we think ought to be done, it seems to me that is 
an invitation to go down the path of linking directly together 
those changes with those investments. So, in effect, we say, 
well, we don't really need to provide any more money. All we 
need to do is see that they do this, as you call it, right-
sizing, and the process of doing the right-sizing will provide 
the money to do these other measures.
    Mr. Kaden.  I think the way we have been describing it is 
what it invites is a partnership between the leadership of 
Congress and the administration in improving the way we 
organize and deploy these resources. If you do that, we will 
improve the management and effectiveness of these activities. 
We will save some resources by the right-sizing and allocation 
of those resources, and we will make the needed investments. 
Now, whether at the end of the day--it is highly likely, as 
this report says, that the needed investments will more than 
offset the savings. But the savings are significant and the 
savings will come if we attack the process of reform with vigor 
and a seriousness.
    Admiral Crowe.  I really think, Senator, we are going to 
have to spend some money in the short term in order to 
recognize or realize savings in the long term. They are not 
going to happen the same time. I know in the military business, 
you know, when you close a base to save money, closing a base 
costs more than keeping the base for a while.
    Mr. Kaden.  But the thing that was striking to us was how 
many Ambassadors came to us and said there are 2,000 or 2,200 
people in London. I am not sure we need that number to do the 
job effectively in the year 1999. Or there are 1,500 people in 
Paris and that may have made sense 30 or 40 years ago, but 
maybe not today. And on the other hand, the resources we 
allocate to some countries in Asia or some places in Latin 
America may be short of the kind of talents and mix of skills 
that we need in those posts.
    Senator Sarbanes. Yes. I think you are giving us a little--
Mr. Chairman, if I may say so--not this Mr. Chairman, but that 
Mr. Chairman--bit of an Alice in Wonderland scenario. You need 
security clearly, which is big dollars. You need technology. 
You need personnel training. True, some of the embassies are 
over-staffed, but almost in the same breath, what I hear you 
saying is, well, other embassies are understaffed. Presumably 
that will be in some rough balance. So, it still seems to me 
you come out needing an infusion of resources into the system 
if it is going to have any chance of working. Unless you put 
some resources in, you do not create the kind of lubrication 
with which you can make some of these changes and introduce 
some of this flexibility in order to move things around.
    Mr. Kaden.  Well, you are absolutely right. As Admiral 
Crowe said, you need to make investment up front as part of the 
process of reform. But I think our panel believed that this 
effort to create the right size and shape of missions was 
equally important. And if there are too many people and a poor 
allocation of those resources, then that is part of the process 
of reform too. That is also part of setting the foundation for 
supporting the investment.
    There are skeptics about these activities. We have to 
acknowledge that. So, as a Government, we need to be able to 
stand up and say we are doing these activities in the most 
effective, most efficient manner possible. Then the case for 
making the investment in technology and facilities and better 
buildings will be much easier to make, much more effective.
    Senator Sarbanes. Well, we have said that to the U.N. We 
said, you got to do these reforms or we will not give you the 
money. They did some of the reforms, not all of them, but they 
made some of the changes. They still do not have the money, and 
their system is completely, sort of almost breaking down now as 
a consequence.
    Thank you, Mr. Chairman.
    Senator Grams. Thank you very much, Senator Sarbanes.
    Gentlemen, I apologize. I have got about 4 minutes before I 
have to leave. So, I wanted to ask one question to wrap some of 
this up.
    One of the things the panel's report calls for is the 
creation of an Overseas Facilities Authority which would 
operate more like a private sector real estate entity. Now, you 
mentioned that the OFA would be able to issue a debt or take 
loans from the Federal Financing Bank of the U.S. Treasury. So, 
I guess the question I would ask you gentlemen is what level of 
debt do you think is prudent for the institution to incur, and 
what level would be cause for alarm? Now, you say there is some 
level they could, but there must be a level that you would be 
afraid if they got in too deep. Mr. Kaden?
    Mr. Kaden.  Yes. I think that is related to the rent 
charging or transfer pricing mechanism that we recommend as 
part of that. In other words, this government chartered 
corporation responsible for the buildings and grounds function, 
as I describe it, would have representation from all the 
agencies who use the platform. It would have the capacity to 
charge them rent for the facilities. That rent flow would be a 
definable capital base, if supported by Congress, because it is 
still subject to the normal congressional appropriation 
process. But that would establish the predictable flow of funds 
that creates the foundation for use of flexible financing 
tools, including access to the Federal Financing Bank.
    We did not take the position that this was a proposal to 
circumvent in any manner the normal appropriations process. In 
other words, Congress should have exactly the same oversight it 
has today over the capital needs process and the appropriation 
process, but more flexible financing tools, including access to 
the Federal Financing Bank, including in some respects use of 
lease-purchase financing, would be part of an approach of 
providing a more predictable flow of funds to address this 
billion or $1.3 billion a year of capital improvements for 
security that we recommend and that Admiral Crowe's ARB 
recommended.
    Senator Grams. Mr. Motley, the panel makes recommendations 
to reinforce the Ambassador's authority and gives the 
Ambassador more freedom to innovate. What barriers did you 
personally experience as an ambassador to creating a most 
productive environment possible and how will these 
recommendations help alleviate some of the problems that you 
probably faced?
    Ambassador Motley.  My experience goes not only serving as 
Ambassador, but I have co-chaired the Ambassadorial seminar for 
the last 15 years. So, 600 of the people that are nominated and 
confirmed here end up in the seminar that I run at the State 
Department. It is just a hobby and an avocation.
    But what I have found is the biggest frustration with 
Ambassadors is how to manage Washington, not how to manage 
their----
    Senator Grams. That is a task.
    Ambassador Motley.  Yes, and they have varying degrees of 
success on that factor.
    The law is very clear. It requires the Ambassador to 
direct, coordinate, and supervise all executive branch 
employees and all of their activities. It is a fairly clear 
piece of law. The President's letter that reinforces that goes 
in and tries to clarify things that have happened in other 
administrations. In fact, following an instance in the Reagan 
administration where an ambassador was misinformed by a 
national security officer, the following letter issued by the 
President said you will take instructions from the Secretary of 
State or me personally and no other way, that you could not 
speak on behalf of him.
    So, those two are the kind of things. It is more dealing 
with Washington than it is on the ground. On the ground, the 
country team thirsts for leadership, looks for it. If it is 
provided, it works well. It is really getting through this 
thicket we are trying to get past now by creating this other 
interagency mechanism.
    Senator Grams. Between the Ambassador and Washington, did 
you see any lack of coordination between various agencies 
overseas to be a problem as well?
    Ambassador Motley.  Sure. It happens. It happens in the 
best of families. Each agency has, going over there, their own 
idea of what they want to do or not do. So, it falls to the 
Ambassador to make sure that it all fits within the overall 
plan, what are the objectives of the United States. We tell 
Ambassadors there are four basic things that they should look 
for, and if it does not fit one of those four, that nobody 
should be doing it. So, it really is individual perspectives 
here that are not coordinated that then get out in the field 
and then they have to be kind of brought together.
    Admiral Crowe.  Can I add a little to that?
    Senator Grams. Yes.
    Admiral Crowe.  For example, we have been under fiscal 
pressure for now quite some years, and while I was 3 and a half 
years in Great Britain, we reduced the size of the embassy 
about 15 percent. While we were reducing it 15 percent, the 
other 25 agencies that were in the embassy either increased or 
did not reduce any. They were not under similar instructions, 
and they chose to take their reductions in moneys here in 
Washington and keep their overseas presence large while the 
State Department was steadily cutting back. And the Ambassador 
had no control over that at all.
    Also, I had a real run-in with a Washington Department, 
which I will not mention, but they had a foreign policy issue 
that involved several countries, and I got a call saying, we 
are sending over a big delegation to check with Great Britain 
once more to be sure they are aboard. I said, they are aboard. 
We see them every day. There is no problem. These other 
countries you are dealing with may need your presence, but I 
can guarantee you there is not a problem in Great Britain. They 
will vote with you and they will support you. He insisted on 
coming anyway. I did not have any control over that. I thought 
it was totally unnecessary. It was a hell of a waste of money.
    Senator Grams. Mr. Kaden, did you have----
    Mr. Kaden.  Well, I think we saw many examples of the kind 
that Ambassador Motley and Admiral Crowe have mentioned. The 
point that it brought home to me is it is a complex job being 
an ambassador in a large post where 20 or 30 agencies are 
represented. It requires unusual skills of leadership and 
management. We saw some very good examples of strong 
Ambassadors creating effective country teams. We saw some 
examples on the other side of that fence too.
    I think the lesson the panel drew from that was that the 
Ambassador's authority, as leader of that team, has to be clear 
and transparent. We suggest that the President's letter be 
clarified and incorporated in an executive order. So, it is 
more transparent.
    And second, it goes without saying that the Nation's 
interest is well served when the President selects and the 
Congress confirms quality Ambassadors because this is a job 
that is not a place for anything but high quality managers and 
leaders.
    Senator Grams. Just one final question. Admiral Crowe, the 
panel urged the State Department to continue to implement the 
recommendations made by your Accountability Review Board. Now, 
your ARB report called--and I quote--flying glass the most 
dangerous element in the Nairobi and Dar es Salaam bombings and 
said that mylar coated windows did not provide sufficient 
protection. So, I guess the question is, has the State 
Department moved toward installing the laminated glass that you 
called for?
    Admiral Crowe.  They are certainly looking into it and they 
are moving pretty fast. Of course, you are in an area here 
where it is sort of like the Internet. It moves ahead of you. 
You keep trying to catch up with it. Well, the experimentation 
on glass has the same problem. They are still using mylar 
because it does have some minor protections, but they are 
trying to move to another degree that will also prove to be 
very expensive, incidentally. But, yes, they are going, I 
think, in the right direction.
    Incidentally, our report also mentioned a great deal of 
procedures that had nothing to do with money, and I think the 
State Department has moved on all of those. I am very 
encouraged in that regard.
    Senator Grams. So, I think you would be optimistic then 
that some of the other recommendations of the ARB are being 
implemented as well, or do you have any concerns?
    Admiral Crowe.  No. I think some of them are, yes. I think 
a great many are.
    Senator Grams. At a pace that you would be happy or 
satisfied with?
    Admiral Crowe.  Well, I will never be happy with the pace, 
but certainly it is as I can reasonably expect. And it is a big 
problem. You start talking about 240 installations, even if you 
are just concentrating on something like glass, getting that 
organized and the priorities and who moves first and so forth.
    Also, incidentally, it is not just a matter of laminated 
glass. I hate to get technical but the frame itself has to be 
anchored to the core part of the building, and then that 
laminated glass put in that. That is a big job.
    Senator Grams. Any other final comments?
    Mr. Kaden.  I think this is an area where the Secretary and 
Under Secretary Cohen and Assistant Secretary Carpenter have 
really put their shoulder behind the ARB report and they have 
been making some progress.
    Senator Grams. Well again, gentlemen, I want to thank you 
very much for your work and your diligence and your time and 
coming before this committee.
    I will just ask Senator Sarbanes if he has any additional 
questions.
    Senator Sarbanes. No, thank you.
    Senator Grams. All right. Well, again, just thank you very 
much.
    One thing I would like to do is leave the committee hearing 
record open for at least 3 more business days in case any other 
members would like to submit questions that they have or 
concerns to you gentlemen. Again, I want to thank you very much 
for your work.
    Mr. Kaden.  Thank you.
    Senator Grams. The committee is completed. [Whereupon, at 
3:36 p.m., the subcommittee was adjourned.]

                                    

                                   
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