[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]
RIGHT SIZING THE U.S. PRESENCE ABROAD
=======================================================================
HEARING
before the
SUBCOMMITTEE ON NATIONAL SECURITY,
VETERANS AFFAIRS AND INTERNATIONAL
RELATIONS
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
MAY 1, 2002
__________
Serial No. 107-189
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
______
86-342 U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 2003
____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpr.gov Phone: toll free (866) 512-1800; (202) 512�091800
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COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut MAJOR R. OWENS, New York
ILEANA ROS-LEHTINEN, Florida EDOLPHUS TOWNS, New York
JOHN M. McHUGH, New York PAUL E. KANJORSKI, Pennsylvania
STEPHEN HORN, California PATSY T. MINK, Hawaii
JOHN L. MICA, Florida CAROLYN B. MALONEY, New York
THOMAS M. DAVIS, Virginia ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
BOB BARR, Georgia DENNIS J. KUCINICH, Ohio
DAN MILLER, Florida ROD R. BLAGOJEVICH, Illinois
DOUG OSE, California DANNY K. DAVIS, Illinois
RON LEWIS, Kentucky JOHN F. TIERNEY, Massachusetts
JO ANN DAVIS, Virginia JIM TURNER, Texas
TODD RUSSELL PLATTS, Pennsylvania THOMAS H. ALLEN, Maine
DAVE WELDON, Florida JANICE D. SCHAKOWSKY, Illinois
CHRIS CANNON, Utah WM. LACY CLAY, Missouri
ADAM H. PUTNAM, Florida DIANE E. WATSON, California
C.L. ``BUTCH'' OTTER, Idaho STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia ------
JOHN J. DUNCAN, Jr., Tennessee BERNARD SANDERS, Vermont
------ ------ (Independent)
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
James C. Wilson, Chief Counsel
Robert A. Briggs, Chief Clerk
Phil Schiliro, Minority Staff Director
Subcommittee on National Security, Veterans Affairs and International
Relations
CHRISTOPHER SHAYS, Connecticut, Chairman
ADAM H. PUTNAM, Florida DENNIS J. KUCINICH, Ohio
BENJAMIN A. GILMAN, New York BERNARD SANDERS, Vermont
ILEANA ROS-LEHTINEN, Florida THOMAS H. ALLEN, Maine
JOHN M. McHUGH, New York TOM LANTOS, California
STEVEN C. LaTOURETTE, Ohio JOHN F. TIERNEY, Massachusetts
RON LEWIS, Kentucky JANICE D. SCHAKOWSKY, Illinois
TODD RUSSELL PLATTS, Pennsylvania WM. LACY CLAY, Missouri
DAVE WELDON, Florida DIANE E. WATSON, California
C.L. ``BUTCH'' OTTER, Idaho STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
Lawrence J. Halloran, Staff Director and Counsel
Thomas Costa, Professional Staff Member
Jason Chung, Clerk
David Rapallo, Minority Counsel
C O N T E N T S
----------
Page
Hearing held on May 1, 2002...................................... 1
Statement of:
Ford, Jess T., Director, International Affairs and Trade
Division, U.S. General Accounting Office; and Lewis B.
Kaden, Davis Polk & Wardwell, New York, NY, former
chairman, Overseas Presence Advisory Panel................. 52
Green, Grant S., Jr., Under Secretary for Management, U.S.
Department of State; and Nancy P. Dorn, Deputy Director,
Office of Management and Budget............................ 6
Lawson, Ken, Assistant Secretary for Enforcement, Department
of the Treasury; Andrew Hoehn, Deputy Assistant Secretary
of Defense for Strategy, Department of Defense; and Robert
Diegelman, Acting Attorney General for Administration,
Justice Management Division, Department of Justice......... 86
Letters, statements, etc., submitted for the record by:
Diegelman, Robert, Acting Attorney General for
Administration, Justice Management Division, Department of
Justice, prepared statement of............................. 120
Dorn, Nancy P., Deputy Director, Office of Management and
Budget, prepared statement of.............................. 35
Ford, Jess T., Director, International Affairs and Trade
Division, U.S. General Accounting Office, prepared
statement of............................................... 56
Green, Grant S., Jr., Under Secretary for Management, U.S.
Department of State, prepared statement of................. 9
Hoehn, Andrew, Deputy Assistant Secretary of Defense for
Strategy, Department of Defense, prepared statement of..... 109
Kaden, Lewis B., Davis Polk & Wardwell, New York, NY, former
chairman, Overseas Presence Advisory Panel, prepared
statement of............................................... 77
Lawson, Ken, Assistant Secretary for Enforcement, Department
of the Treasury, prepared statement of..................... 89
Shays, Hon. Christopher, a Representative in Congress from
the State of Connecticut, prepared statement of............ 3
RIGHT SIZING THE U.S. PRESENCE ABROAD
----------
WEDNESDAY, MAY 1, 2002
House of Representatives,
Subcommittee on National Security, Veterans Affairs
and International Relations,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:06 a.m., in
room 2154, Rayburn House Office Building, Hon. Christopher
Shays (chairman of the subcommittee) presiding.
Present: Representatives Shays, Kucinich, Lewis, Watson,
Putnam, Tierney, and Gilman.
Staff present: Lawrence J. Halloran, staff director and
counsel; Thomas Costa, professional staff member; Jason M.
Chung, clerk; David Rapallo, minority counsel; and Earley
Green, minority assistant clerk.
Mr. Shays. Good morning. Welcome to our hearing entitled
Right-Sizing the U.S. Presence Abroad.
Last year the Office of Management and Budget, OMB,
concluded, ``The U.S. overseas presence is costly, increasingly
complex, and a growing security concern'' with no mechanism to
assess the overall rationale and effectiveness of where and how
U.S. employees are deployed.
The President called for reforms to ensure U.S. national
security and foreign policy interests are advanced by the right
number of people with the right expertise at the right foreign
posts. That was by no means the first call to right-size the
U.S. Government presence abroad.
In the wake of the 1998 embassy bombings in Africa, the
State Department undertook a costly program to harden U.S.
diplomatic posts and reassess the need for large, multi-agency
delegations in so many embassies.
In November 1999, the State Department's Overseas Presence
Advisory Panel recommended creation of a formal inter-agency
process to rationalize the size and scope of U.S. Government
activities abroad, aligning resources with overall policy goals
and security requirements, yet today, 4 years after terrorists
successfully targeted our embassies, no one can determine with
any precision the total number of executive branch employees
working in foreign posts.
Nearly a decade after the end of the cold war there is no
systematic way to shape the U.S. foreign presence to meet new
U.S. goals in a more dynamic, far more dangerous world. Federal
agencies often set overseas staffing levels and pursue missions
that may not coincide with State Department goals. Duplicative
administrative systems waste resources.
Security can be compromised when too many people occupy
already-crowded facilities to conduct activities effectively
accomplished here at home, regionally abroad, or over the
Internet. Presiding over this dysfunctional diplomatic family
is the U.S. Ambassador, personally charged by the President
with ``full responsibility for the direction, coordination, and
supervision of all U.S. Government executive branch
employees.'' In fact, at most posts the U.S. Ambassador is
little more than the titular leader of two-thirds of the U.S.
citizens assigned there. That gap between responsibility and
authority undermines the cohesion and effectiveness of our
Nation's mission and message abroad.
Last year in London, then-U.S. Ambassador to the United
Kingdom Phillip Lader described the illusory aspects of
Ambassadorial power this way. He said--I smile every time I
read it--``Running an embassy was like being given command of a
great ocean liner, only to learn the wheel you're turning to
steer the ship of statecraft is not even attached to the
rudder.''
In preparation for today's hearing, we were briefed by
three Ambassadors who echoed the need to better target all U.S.
Government resources, not just State Department personnel and
assets abroad.
We also received a written statement from former Ambassador
Felix Rohatyn, who, while in Paris, led efforts to right-size
embassy operations with an entrepreneur's disdain for hide-
bound customs and a zest for innovation.
They persuasively stress the need for a united, efficient,
and effective voice for U.S. policy and priorities,
particularly in regions of the world seething with hate and
resentment of our strengths and values.
Our witnesses today bring experience, depth of insight, and
breadth of knowledge to our discussion of right-sizing U.S.
presence abroad to meet our mission as a beacon of freedom and
economic advancement to the world. We appreciate their being
here today and we look forward to their testimony.
[The prepared statement of Hon. Christopher Shays follows:]
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Mr. Shays. At this time the Chair would recognize Mr.
Kucinich.
Mr. Kucinich. I want to thank the Chair for this
opportunity to make a statement and to advise you that I have
to momentarily go to a markup, and I appreciate the chance to
be here and join you.
Mr. Shays. I understand.
Mr. Kucinich. I want to thank our witnesses for appearing
here today and to thank all of those who serve our country
abroad through the State Department for the wonderful work that
they do.
Today we gather to discuss right-sizing the U.S. presence,
particularly the State Department presence, abroad. While I am
confident that our distinguished chairman retains an open mind
as to what the right size of this presence really should be,
I'm concerned that for some right-sizing means down-sizing.
Our corps of State Department personnel overseas plays a
critical role in our Nation's foreign policy. These men and
women are the public face of the U.S. Government abroad. In
countries with which the United States has a particularly
important economic or strategic relationship or particularly
volatile one, the individuals in the State Department are
instrumental in advancing American interests. They are often
instrumental in helping to defuse conflicts that might
otherwise require military action. But the conditions in which
these men and women work belie their importance in our foreign
policy apparatus.
The findings of the Overseas Presence Advisory Panel
created by Secretary Albright after the 1998 embassy bombings
in Africa are instructive. The panel's conclusion is stark and
alarming. ``The condition of U.S. posts and missions abroad is
unacceptable,'' going on to say, ``The panel fears that our
overseas presence is perilously close to the point of system
failure.''
Specifically, the panel cited a lack of adequate security,
a lack of common Internet and e-mail communications network;
``shocking shabby and antiquated building conditions''; ``worn,
overcrowded, and inefficient facilities''; and staffing
shortages that lead to substandard consular services.
Unsurprisingly, the panel also noted that, ``morale has
suffered.''
I think it is important for us to note the panel's approach
to these problems. The panel also said that new resources will
be needed for security technology and training and to upgrade
facilities, and went on to say that in some countries where the
bilateral relationship has become more important, additional
posts may be needed to enhance the American presence or to meet
new challenges.
Now, in August the administration announced its intention
to implement the panel's recommendations, but the
administration's budget allocations cast doubt on its
commitment to implementing these recommendations. International
affairs functions will be allocated $25 billion next year.
That's less than fiscal year 2002. Yet, I might add that
Defense spending will be near $400 billion. Missile defense,
alone, will receive $8 billion next year, about as much as the
State Department's entire budget.
In addition, the number of direct hire positions abroad
stands at only 18,000, 4.5 percent less than in 1995 and nearly
60 percent less than in 1966. These individuals are being
forced to make do in substandard conditions.
In today's complex world, U.S. personnel overseas play as
important a role as ever. Mr. Chairman, our overseas personnel
and our foreign policy which they are called upon to execute
certainly deserve better attention, and I want to thank the
Chair for providing this opportunity to see that happen, so
thank you.
Mr. Shays. I thank the gentleman.
I recognize he has other activities he needs to get to.
At this time the Chair would recognize Diane Watson. Any
statement you would like to make?
Ms. Watson. Not at this time, Mr. Chairman.
Mr. Shays. Nice to have you here. Thank you.
And then the vice chairman of the committee, Adam Putnam.
Mr. Putnam. No statement, Mr. Chairman.
Mr. Shays. Well, that enables me to get right to our
witnesses. It enables the committee to get right to our
witnesses.
First, before swearing in, let me get rid of the business
of the committee, just the requirement. I ask unanimous consent
that all members of the subcommittee be permitted to place an
opening statement in the record and the record remain open for
3 days for that purpose. Without objection, so ordered.
I ask further unanimous consent that all witnesses be
permitted to include their written statement in the record.
Without objection, so ordered.
We have three panels today. Our first panel is the
Honorable Grant S. Green, Jr., Under Secretary for Management,
U.S. Department of State; and the Honorable Nancy Dorn, Deputy
Director, Office of Management and Budget.
We're delighted both of you are here. We will ask you, as
we ask everyone, to stand and we'll swear you in.
I'd just put for the record the only one who has never been
sworn in is Senator Byrd. I chickened out.
[Witnesses sworn.]
Mr. Shays. Note for the record our witnesses have responded
in the affirmative. Actually, I think being sworn in is an
honor, frankly. We take your testimony very seriously and we
are very grateful you are here.
We will start with you, Mr. Green.
STATEMENTS OF GRANT S. GREEN, JR., UNDER SECRETARY FOR
MANAGEMENT, U.S. DEPARTMENT OF STATE; AND NANCY P. DORN, DEPUTY
DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET
Mr. Green. Thank you, sir. Mr. Chairman and members of the
subcommittee, I am pleased to be here this morning to testify
on the importance of ensuring that the United States has the
right people in the right places with the right resources to
advance America's foreign policy interests. Contrary to some
folklore and, as Mr. Kucinich mentioned, right-sizing does not
necessarily mean staffing reductions. In some locations, right-
sizing can, in fact, lead to a reduction in staff, but true
right-sizing, however, may require new staffing and new
resources at posts that currently lack both.
As was mentioned, the number of U.S. direct hire positions
under the authority of the chiefs of missions now stands at
18,000. The current level is essentially at the same as in 1990
and reflects a 4.5 decline since 1995 and is certainly smaller
now than in 1959, when it stood at 24,000 direct hire, and at
its peak in 1996 at 42,000. Since at least the 1950's, the
State Department representations is a third or less of all
overseas staffing.
Rationalization of the U.S. Government's overseas presence
is no easy task. Past efforts to develop an interagency
staffing methodology have not succeeded. The Overseas Presence
Advisory Panel, for example, did not develop a methodology,
even though doing so was part of its original charter. And the
followup interagency right-sizing effort in 2000 also could not
reach agreement on a methodology. But past difficulties are no
reason not to try. Rationalization of our overseas presence is
one of the President's management agenda initiatives. As a
first step, President Bush, in his May 2001, letter to chiefs
of missions instructed them to review closely staffing at their
individual posts to ensure that their staffing levels were
neither excessive nor inadequate to meet mission goals.
We are working very closely with OMB on a number of right-
sizing issues, including data collection, establishment of a
regional center in Frankfurt, and examination of the European
and Eurasian Bureau overseas posts and development of an
embassy construction financing mechanism that will include cost
sharing with other agencies.
In addition, OMB has been working with us on right-sizing
issues we have been addressing, including revising the mission
performance plan process.
In addition, the General Accounting Office has kept us
informed of its Paris staffing review and has briefed us on the
conceptual framework it is developing. The Department of State
is committed to working with OMB and the GAO in the development
and implementation of a successful right-sizing initiative.
In a related area, let me say that we believe there is
still no substitute for face-to-face interaction with host
governments and publics. State continues to support the
principle of universality under which the U.S. Government
maintains an on-the-ground presence in virtually all nations
where we have diplomatic relations.
We agree with OPAP's conclusion that today a universal, on-
the-ground overseas presence is more critical than ever to the
Nation's well-being.
While we believe strongly in the need to maintain an on-
the-ground presence in virtually all nations with which we have
diplomatic relations, the Department of State pursues
regionalization initiatives where appropriate. We rely heavily
on centralizing a variety of administrative, consular, and some
policy functions such as labor attaches and science and
technology officers, either overseas or in the United States.
We currently have four U.S. regional centers: the Ft.
Lauderdale regional center, which provides support services to
our posts throughout the Western Hemisphere; the National Visa
Center in Portsmouth, New Hampshire; and the Kentucky Consular
Center in Williamsburg, Kentucky, which performs a variety of
consular tasks traditionally carried out at individual posts
overseas. We also have the Charleston Financial Services Center
in Charleston, South Carolina, which already provides support
for our Western Hemisphere post and is in the process of
assuming financial functions for our European and African posts
which were formerly carried out at Embassy Paris.
In addition, the Department has also begun to shift routine
passport production from overseas posts to U.S. domestic
passport agencies in order to take advantage of the high
security photo-digitization process installed here in the
United States.
When relocating to the United States is not feasible, U.S.
Government agencies, including State, may use embassies and
consulates such as Frankfurt and Hong Kong as regional
platforms for their activities. A major regionalization effort
currently underway is the 23-acre Creek Bed site in Frankfurt,
Germany, which formerly housed the Department of Defense's
469th Hospital. Creek Bed will not only become the new site for
consulate Frankfurt, but also be the location for a regional
support center and home to numerous personnel from other
agencies with regional responsibilities in Europe, Eurasia,
Africa, and portions of the Middle East.
Another initiative which you no doubt have heard about are
the American presence posts. These are creative and cost-
effective ways to give the United States more visibility in
places we would otherwise not be represented. Under former
Ambassador Felix Rohatyn's leadership, five APPs were opened in
France. The experience of those APPs shows what can be
accomplished with a determined chief of mission and a committed
staff using a creative and modern approach to doing business
and mission resources. Obviously, such posts pose security
concerns, but we will continue to consider proposals from
chiefs of mission for additional APPs as they arise.
In conclusion, let me say that we are working very closely
with the Office of Management and Budget on its right-sizing
effort as part of the President's management agenda. We believe
that is the appropriate mechanism for further study and
resolution of this issue.
Mr. Chairman, I would be happy to answer any questions you
or other members of the subcommittee may have at this point.
Mr. Shays. Thank you, Mr. Green.
[The prepared statement of Mr. Green follows:]
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Mr. Shays. Could you just clarify one point? You talked
about the service western facilities, and then you said they
will also serve European facilities. Are western and European
the same?
Mr. Green. No. Eurasian--in Frankfurt, sir?
Mr. Shays. No. You had just made the mention--it's not a
big deal, but I want to just clarify it. You made reference to
one of the facilities in the United States that was presently
servicing western facilities.
Mr. Green. Western Hemisphere facilities, Charleston. The
Financial Service Center in Charleston is presently serving
Western Hemisphere posts.
Mr. Shays. OK. And will add?
Mr. Green. And will add additional European posts as we
move the Paris personnel.
Mr. Shays. Right. I understand. Thank you.
Ms. Dorn, thank you for being here. It is nice to have you
working for the administration in such an important role. As a
former House employee, it is good to see you here.
Ms. Dorn. Thank you, Mr. Chairman. It is a pleasure to be
here. I look forward to our discussion this morning, as this is
a matter of great interest to the President and to the Office
of Management and Budget. We welcome to opportunity to testify
on the important topic of right-sizing the U.S. Government's
presence overseas.
I want to commend the State Department and the other U.S.
Government agencies who are appearing before the committee
today for their serious efforts to undertake this topic and to
address this problem, as well as the work of the General
Accounting Office.
The U.S. Government's presence overseas is indispensable in
projecting our policies and values and in promoting and
protecting our interests overseas. Having said that, I would
also state that our presence overseas is costly, both in terms
of dollars and in terms of risks.
As you've pointed out, we currently have more than 60,000
U.S. Government employees at 260 posts overseas. This includes
not only the State Department presence, but other U.S.
Government agencies, as well as Foreign Service hires. More
than 50 U.S. Government agencies and entities are represented
in overseas posts. Costs are high. The average cost of having
one full-time direct hire American family overseas in a U.S.
embassy is about $339,000. There's a wide disparity of cost
among agencies who have overseas employees, ranging from a low
of about $129,000 to a high of about $665,000. Currently, OMB
is surveying what authority is being used to justify overseas
presence, as well as numbers and costs. And in many places our
embassies are not sufficiently secure.
These considerations put a premium on getting the right
number of people doing the right jobs at the right places, as
Mr. Green has noted.
The administration is committed to improvement in this
area. Last August, the President's management agenda, including
right-sizing America's presence abroad, is one of its key
initiatives. This will require a long-term effort, cooperation
and coordination with multiple agencies, and I would add we
welcome the work of the GAO and look forward to their continued
contributions to our knowledge of this area. It also will
require that we work with Congress to address our needs and any
outstanding requirements that we may have.
OMB is engaged in this effort, and I'd like to outline just
a few of the steps that we are undertaking.
For the first time, starting in October of last year, OMB
is gathering comprehensive data on the number and functions of
staff working abroad. Beyond the State Department who people
think of as our presence overseas, we have, as I said, over 50
agencies who have employees overseas.
In conjunction with State, we are working to establish the
regional presence in Frankfurt, Germany, which the Under
Secretary mentioned. I believe that this can serve as a model
for right-sizing in Europe and it can serve as a model for
handling regional functions in other parts of the world, as
well.
We are undertaking a pilot right-sizing project in the EUR
Bureau, which is the largest region in terms of embassy
presence and employees. We are also developing a proposal to
establish a mechanism to equitably share costs among agencies
in construction of new embassies.
Putting more emphasis on the mission planning process--in
fact, I think the first of the 2004 rounds of that occurred
just yesterday in terms of sitting down with multiple agencies,
looking at a single post--in this case I think it was Korea.
We're looking at workload requirements by priority. We've
reduced the number of priorities that an embassy can have from
fifteen to five so that we can actually get down to a serious
discussion of what their priorities are and judge what
resources are being put against those priorities. And we are
also asking for the Ambassador to certify the work of this
mission planning process to ensure that the Ambassadors are,
indeed, an active part of this.
We are also encouraging agencies to consider the full cost
of sending people overseas. Using the A-11 process, OMB is
instructing agencies to articulate specifically what the cost
and the number of their employees overseas are as we run up to
the 2004 budget process.
Mr. Chairman, I can say that the Office of Management and
Budget is interested in this project more for the management
side than for the budget side. We have requested more than $1
billion in fiscal year 2002 for embassy construction and
security improvements. There is no question that we will spend
the money, and a substantial sum of it, to secure our embassies
and to ensure that the U.S. presence abroad is sufficient. The
question is: will the money we spend delivery a U.S. Government
presence that is right-sized and secure? I certainly think we
can accomplish this.
I look forward to the discussion this morning and to
answering any questions that you may have.
Mr. Shays. Thank you.
[The prepared statement of Ms. Dorn follows:]
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Mr. Shays. The Chair would like to note that Mr. Gilman
came in after I asked for any statements. He usually has a
statement. I'd welcome him having a statement if he'd like to
read it.
Mr. Gilman. Thank you, Mr. Chairman. I just would like to
first of all thank you for calling this important hearing. The
International Relations Committee has also taken an active
interest in this topic. It's regrettable Department of State
seems to have set aside its right-sizing exercise in the light
of increased resources for the Government more generally and
for foreign affairs, in particular. Hopefully, this hearing
will keep the Department focused on this subject.
I'd also note that the security imperative to reduce the
footprint of the United States abroad is another reason to
continue a right-sizing initiative. Also, Ambassadors must be
able to exercise their alleged full authority in their
respective posts. We have in the Department of State a Foreign
Service with as many senior Foreign Service officers--in other
words, flag and general office rank equivalents--as the
Department of Defense requires to run a military establishment
of our Nation. Something is clearly lacking here.
The Department must not confuse our interest in an active,
vigorous, prepared State Department with one that is poorly
managed and inappropriately deployed.
Thank you, Mr. Chairman.
Mr. Shays. Mr. Gilman, would you like to start with
questions, or shall I?
Mr. Gilman. I will be please to follow your questions.
Mr. Shays. Thank you.
Let me just say I get the sense that almost everyone agrees
that we have a right-sizing problem. Would you agree with that,
Mr. Green and Ms. Dorn?
Mr. Green. Yes. Yes, sir, I would.
Ms. Dorn. Yes, sir, I do.
Mr. Shays. OK. And I think most people agree that it
doesn't necessarily mean that we would reduce the number of
employees. It means that we want the right size, not just in
terms of the overall, but in terms of each responsibility and
function. There may be a need to have more in a certain area
and a need to have less in other areas. But ultimately we
realize that we've got a problem.
Mr. Green, do you hear complaints from our Ambassadors or
chiefs of station that they do not have a handle on all the
different Government agencies that use their resources? That's
a pretty common concern.
Mr. Green. Yes, sir, we do. I travel quite extensively in
all areas, regional areas, and I have consistently heard from
chiefs of mission in essence the difficulty that they have in
really getting a handle on not necessarily the people they
have, because they can count noses, but they have very little
insight into the other agencies' budgets for their particular
posts and have, to some degree, little control over--while, as
Mr. Gilman says, de jure they have great authority. De facto
they have considerably less authority. There is a process by
which agencies request to send additional people to post. That
is the Ambassador's decision. It is appealable if it doesn't
comport with what a particular agency wants. But you can
imagine the difficulty that a chief of mission would have in
turning down a request because he doesn't always know or hasn't
always had a good sense for what those other agencies'
priorities may be at a particular post.
I think the new mission performance plan process that was
put into place this year and is much tighter will give a chief
of mission a much greater sense of not only what his priorities
are, but what are the priorities for the other agencies at his
post and what his people are spending their time doing. It's a
much more objective report than flows into our budget process.
Mr. Shays. In many cases the number of employees working in
an embassy, the vast majority, two-thirds to three-quarters of
all employees tend to be nationals, not American citizens. They
tend to have tenure that goes well beyond 3 years. They may be
there 20 or 30 years, frankly.
Mr. Green. Yes, sir.
Mr. Shays. So they have tremendous institutional knowledge.
Of the one-third or 25 percent that are left, the American
employees, they are rotated. Of that one-third or one-quarter
that's left, about two-thirds of them are not Foreign Service
employees. They are agency employees.
So you have a circumstance where an ambassador comes in or
a chief of mission comes in and they are basically in charge of
an organization in which they, on paper, appear to have very
little control. Obviously, they have a lot of control over the
nationals, but they don't have the institutional knowledge of
the nationals.
This has been an issue that our committee has been looking
at for a number of years. Members of the committee have gone to
various embassies. It just stares you in the face. What stares
me in the face is that we really haven't done anything about it
for literally decades. This has been a problem that has been
festering.
I'm sorry for such a long introduction, Ms. Dorn, but I'm
struck with the fact that the only one who can truly bring some
closure to this effort or begin to have real impact is OMB. And
I'm interested to know what type of political capital the
director and you and others are willing to use to move this
forward.
Ms. Dorn. Well, Mr. Chairman, we take it very seriously.
The President has articulated this as one of his goals in the
management agenda, which we are pursuing with vigor. The first
step in correcting the ongoing problem--and I think you've
outlined it pretty well--is to see what the landscape really
looks like, how many agencies we have and how many places all
over the world, what the underlying costs are, and how those
costs are accounted for.
We are in the process of doing that. We started in October,
and I think we--I'd say we are probably 95 percent of the way
to at least having an idea of what the ground truth is.
The other issue that you touched upon, which is the policy
of the U.S. Government, the priorities for the agencies do
cross various agency jurisdictions. I mean, in terms of
coordinating the policy priorities for the administration, it
involves the State Department, the Treasury Department, the
Defense Department, and a whole host of others. OMB does sort
of sit at a central role in both the policy and budget, and I
think that we can at least help devise a system by which these
considerations are put on the table and decisions can be made
by the principals.
One of the things that has struck us in our assessment of
the ground truth is that in many cases agencies have
established presence overseas without, I'd say, full visibility
of the Cabinet official. In many cases, they established a
presence overseas some years age and that has been continued,
you know, as administrations change and as Ambassadors change.
It becomes a status quo thing. Well, ``We have X number of
employees from the Treasury department because that's what we
had last year.'' You know, that's not really the right answer
to this question.
So I would say that we are very serious about getting a
full accounting of this, both from a budgetary, a management,
and a policy sort of level, and we have actually had a good
deal of cooperation from the other agencies, as well as from
the State Department. I'm optimistic that in the 2004 budget
process that we're going to be able to shed some light on this
and make some progress.
Mr. Shays. Thank you. What I've done is I've rolled over
the time for the Members for 10 minutes for each question. I
will be going to Diana Watson for 10 minutes in just a second,
and then I will be going to--I guess, Ben, I'm going to go to
you after Ms. Watson, and then Ron, and then, Adam, we'll go to
you.
Let me ask you, Mr. Green, given all the things on the
agenda at the State Department, as important as this may appear
to many of us, it can't really rank up all that high in the
list of interest. I mean, there's a lot of political capital
that would probably have to be used in the dialog with,
frankly, a number of different Secretaries who somehow, for
some reason, demand that they have the same numbers. Can you
give us a sense of where this stands?
Mr. Green. Yes, sir. As Ms. Dorn said, this is one of the
items among very few, frankly, on the President's management
agenda. I think the fact that it is one of a few--and I sit on
the President's Management Council. I know the importance that
the administration places on those agenda items. We take right-
sizing very seriously. We talk about it almost daily. We know
it is something that people have tried to fix in the past. It's
something that hasn't been fixed. It's something where we need
to develop a methodology that we all can agree to. That is one
of the reasons that we solicited the support of OMB, because
you're very right, the political equities here in town when you
start banging heads with another agency, we need an honest
broker who can help us do that.
You know, we have oversight committees that look at the
State Department and say, ``Why haven't you right-sized?'' The
same is not always true for those committees who look at other
agencies. There's no pressure or hasn't been pressure for them
to do the same thing. So we need the help from OMB. And, as Ms.
Dorn said, we are in the final processes now of defining the
world and identifying what we have out there, and then, through
the new MPP process, defining what are our goals. And, Mr.
Ambassador, what are your post priorities? And then all of that
is rolled up by the bureaus, who establish their own internal
priorities, and ultimately flows into how many bucks you get at
the end of the day for people or buildings or security or
whatever.
Mr. Shays. I don't have another question, but I just would
point out to the Members that the first panel is basically
giving us a Government-wide policy position. I think the policy
of the Government is pretty clear, but we'll want to delve into
it a bit more. And then the second panel is giving us an
outside view from the GAO and also from the Overseas presence
Advisory panel, which has been referred to. And then we are
going to hear from embassy tenants abroad. Particularly, a
major use is Treasury, Defense, and Justice.
Given that I seem to be putting the focus on right-sizing
and tenants as if somehow they don't provide a valuable
function, I just want to state for the record that I think
their presence is absolutely essential. I believe that they
provide a creativity that you wouldn't necessarily get in the
State Department. The State Department has its mission and does
it extraordinarily well, but sometimes State can talk in
tongues and sometimes you need people who have particular
expertise to maybe be a little more direct.
I think the synergy between State and these outside
tenants, so to speak, can be quite helpful, but we do want that
right-sizing.
Sorry for the long explanations I'm making.
At this time I'd recognize the gentlelady from California,
Ms. Watson, for 10 minutes.
Ms. Watson. Thank you so much, Mr. Chairman, for holding
this most essential hearing. I want to thank Ambassador Green
and The Honorable Nancy Dorn for coming here and sharing with
us your critical thinking on right-sizing.
I don't think the APP approach ought to be based on the
Paris model because it is unique. Maybe Paris, Rome, and London
are unique among our missions throughout the world.
I must applaud your statement, you written testimony,
Ambassador Green, and just emphasize it again and again. We
need to look at all of our missions abroad and, rather than
putting them on a list--and I served out in Micronesia, and
when I went back to give them a proposal in the State
Department on the needs at my mission I was pretty much laughed
at because they said, ``We have 80 on the list ahead of you.''
So I simply said, ``Is a life in Paris, Rome, London more
valuable than a life in Micronesia at the embassy? Put me on
the list as No. 81, record me. Let them know I was here. Here's
my package and my proposal.''
That all boils down to this: what we have to do is look at
our missions. And what is that mission abroad? It's right in
here. I read your presentation. We must represent the United
States. If we close off our embassy because it is inadequate,
it is too small, we have nowhere to entertain, we do not
interact with the people in the country that we serve in and
those people that come to it in a way that is representative of
the United States.
There is so much that needs to be done in terms of our
relationship with our host nation that I hope you are looking
at, because what I found in my experience is that the embassy
was closed off away from the people. I opened my residence for
an all-day Thanksgiving. I was told there was no money for
that. I said, ``Did I ask for money.'' I did it out of my own
pocket because what I was trying to establish is a better
relationship with the host country.
Why were we there way hidden down in Micronesia? We were
there because we had the exclusive denial to use those waters
if there should be trouble popping up again in that area.
Second World War--all of you know Saipan, Peleliu. Same area.
So we need the mission, but at the time we established it it
was very useful, then it became usable, and I think now it is
useless. That's the feeling I got when I'd go to Washington.
They would say to me, ``Well, no one can find that embassy.''
And I would say to them, ``The terrorist mentality is that you
strike where you have the weakest link.'' ``Well, they'll get
caught in customs.'' I said, ``Do you think that they will come
through waving, `I'm here'?'' No, they're going to come through
the mangrove on a little ship like the rest of the fishermen.
Here's the bottom line, and I'd like some comment. Are we
looking at our missions in terms of the relationship between
the United States, the country and the region--and I saw the
regionalization approach here in your statement. I want to
thank you for that. Do we find them useful, or are they useless
to us in this current time? If we are fighting terrorism--the
terrorists aren't only in Afghanistan. They're all over the
globe--should we not look at all of--and you can comment on
this. I know it is a financial issue. But shouldn't we look at
all of our missions and our presence wherever we are, wherever
we send American personnel and hire locally and as to how
useful they can be in expressing American values and
principles? I think they are our front line in communicating
what we believe in. In some way we fail that because I couldn't
get additional employees. There are 607 islands, four in the
federation, and one person in my embassy to go out and monitor
and oversee all the moneys that we shun into there.
So my question to both of you is: are we also, as we look
at right-sizing, looking at the role our missions can play,
wherever we are, in spreading and inter-relating with the
people, regardless of the cost?
You know, I was turned off so many times because there was
a cost. They'd just simply say no. I'm trying to pass on to
them what the needs really are in terms to improve our
relationship.
So I know we are governed by the budget, but are we
reevaluating the missions to see how they rank on a scale in
terms of their usefulness?
Mr. Green. Let me try to answer that. It has----
Ms. Watson. I know it is rough.
Mr. Green [continuing]. A number of different facets to it.
But let me assure you that all of our missions are important.
Yes, we are budget constrained, but all of our posts overseas
are regularly reassessed, and we try to redeploy resources as
situations emerge and as new requirements are identified.
Let me just give you one example. In the 1990's, the direct
hire positions in the former Soviet block more than doubled
from 760 to over 1,700 because of the change in that situation.
I mentioned before the MPP process, the mission performance
plan process, where Ambassadors highlight their requirements.
Since you were there, we've modified that considerably.
It's not nearly as painful an experience as you probably went
through. It is much more objective.
Our purpose--and that, of course, from all countries within
a particular bureau, that feeds into the bureau, and then they
assess the overall bureau needs within the resources we have.
But that, again, is a much more direct link to the resources
that you might need in Micronesia or anywhere else.
We are very sensitive, very sensitive to the impact of one
or two people in a small post as opposed to one or people in a
large post. A couple of people in Paris doesn't make a bit of
difference to the functioning of that embassy, but one or two
people in a small post where you've got a half a dozen
Americans makes a tremendous difference.
Part of our success, I hope, in resolving some of those
problems, certainly on the personnel side, is the tremendous
success that we have had in recruiting since Secretary Powell
assumed command of the State Department. We have had greater
success than any time since the early 1980's in attracting new
Foreign Service officers into the Department. That ability to
fill some of those vacancies that exist overseas will partially
help solve some of the problem that you mentioned--shortage of
people. But also, within the MPP process and the bureau
performance plan process, the Deputy Secretary and I--he chairs
and I participate every year, and we will be doing it again in
July, a review of every bureau's requirements, not only the
regional bureaus but also the functional bureaus. The assistant
secretary comes before us and justifies their need in both
personnel and resources.
Those are for the first time in people's memory--and I have
to defer to the people who have been around the State
Department for a lot longer than I have--it's the first time
that we have had a rigorous process. It's not perfect, and it
will get better this year than it was last year, but it is the
first time we have had a rigorous process to really challenge
and insert into the dialog some of the requirements that you
mentioned--small posts, posts where there may be an emerging
terrorist threat, posts that have other difficult problems,
whether it be HIV/AIDS or drugs or terrorists or what have you.
That's where that emphasis will go, and those decisions are
made at the Deputy and the Secretary's level.
Ms. Watson. I know that there are organizations where the
Ambassadors belong and talk among themselves, but what might be
a really important function in your department is to call
recent Ambassadors who are no longer serving together and talk
about our mission in light of September 11th. I think you would
get some very helpful insights on what we could do, because
yes, we did those plans. We put those goals that we had into
writing, sent them back to the State Department, but we were
not able to get responses to our request. There was always a
budget cap, and so we were always short-handed.
But I think it might be helpful to you to gather a group of
us together for a day and let us give you the results of our
experience and what we think can be done to strengthen our
position abroad.
I started a newspaper while I was there because we had a
big cholera outbreak. There was no way to communicate to the
people in the rain forest, so we got this little piece together
and took it out to their little shanties that they had in front
of their homes. There were ways that we could communicate some
of the--not democratic principles, but some of the health care
issues to the people that have no radios, televisions, no way
to know.
So we could be maybe helpful to our government, to the
State Department in terms of building up a stronger and more
relevant presence in our missions that I think will go a long
way to counter what is going out from the Middle East around
the globe. And it is very, very frightening, the feedback we're
getting.
In my District and among the various groups there, it is
frightening what we're hearing.
I think we could be helpful to you----
Mr. Green. Thank you.
Ms. Watson [continuing]. In giving you kind of a conclusion
and summary of what we experienced.
Mr. Green. We need all the help we can get.
Ms. Watson. OK. Thank you.
Mr. Green. Thank you.
Ms. Watson. Thank you, Mr. Chairman.
Mr. Shays. Thank you, Ambassador. I bet you were very
effective.
Ms. Watson. We worked at it.
Mr. Shays. It's a great opportunity.
Ms. Watson. Yes.
Mr. Shays. Mr. Gilman.
Mr. Gilman. Thank you, Mr. Chairman.
I note that the GAO's report suggested in their summary
that we might consider establishing a Washington-based inter-
agency body to oversee the right-sizing process and ensure
coordination. What's your comment with regard to that?
Ms. Dorn. Well, Mr. Chairman, I think the President has
made this a priority and he has put his Office of Management
and Budget on the case. We are engaged, as Under Secretary
Green said, because we have both a budgetary and a policy and
an inter-agency sort of overview, or that's sort of our
perspective on this problem, so we have--we are comfortable
with proceeding in that manner right now, and I think we will
have some results to show probably later this year.
Mr. Gilman. And, Ms. Dorn, let me ask you, How successful
has OMB been in obtaining useful and complete staffing and cost
data from agency's operating overseas?
Ms. Dorn. I would say, Mr. Gilman, that we started in
October with a data call to all the agencies. We have had to go
back to some of them a number of times the clarify the data
that they provided. Frankly, a number of the Cabinet-level
officials were not fully aware of how many folks that they had
in how many places and what duties they were performing. I'd
say we're about 95 percent of the way there. We are still
working with a couple of the law enforcement agencies and with
the Defense Department to further clarify the data they've
provided, but I think we are just about there.
Mr. Gilman. How successful have you been in establishing a
Government-wide system to review post staffing?
Ms. Dorn. On that one I think we are still working with the
State Department, and we are using the data provided by GAO on
a mechanism to assess those kinds of questions. Until we get to
that, I wouldn't say that we're going to have much success in
this project, but I think we will have some progress to report
to you probably later this year.
Mr. Gilman. When do you anticipate you will be in a
position to establish that kind of a system?
Ms. Dorn. I think we will have the beginnings of that later
this year.
Mr. Gilman. Do any of the Departments fully recognize a
budget for the cost of putting individuals abroad?
Ms. Dorn. Agencies have varying degrees of data on how much
it costs. Part of the problem here, though, is that if the
Treasury Department or the Justice Department sends one of
their officials to an embassy in Europe, they pay for certain
costs, but other costs are borne by the State Department in
terms of security, in terms of sort of the base platform.
One of the things that we are looking to do in the next
budget is to provide a method to assess these agencies more
fully for the cost of having employees from other agencies at
the State Department, probably perspectively in terms of new
embassy construction.
We are in the process of building new embassies in about--
Grant, how many would you say? About 10?
Mr. Green. About 10 a year, 9 or 10 a year.
Ms. Dorn. About 9 or 10 a year. As we construct new
embassies, I think we will have kind of a clean slate to build
from so that we can assess, you know, what agencies other than
the State Department should be there, what their relative needs
are, what their costs are, and have a more transparent and more
accurate way to account for the costs that currently--some of
which are now being borne, I think, entirely by the State
Department.
Mr. Gilman. Well, Secretary Green, when they have new
agency assignments to the State Department and there are extra
costs, how do you pick those up in a budget?
Mr. Green. Sir, we have a system currently at post called
``ICASS.'' It's a sharing of administrative costs, for example.
Let's say that the State Department is in the best position to
do all travel arrangements. Well, people will pay a certain
amount, or administrative arrangements. Other agencies will pay
a share of that. Very frankly, State Department ends up
budgeting about 70 percent of it. The rest is shared among the
agencies.
What Ms. Dorn was referring to and which we think will be a
great incentive, and it goes back to, very frankly, many
agencies not having a very good handle on what it costs, how
many people they've got overseas, and what they're doing, but
certainly how much it costs is the cost sharing, so that when
we build a new embassy and a particular agency says, ``I need
15 desks, and they need to be in classified space,'' which is
quite expensive, that agency is going to have to evaluate
whether they can support within their budget the cost of those
15 people and the cost of that construction, because our intent
is to charge them for that.
Mr. Gilman. But on occasion you have to pick up
additional--the State Department has to pick up the additional
cost from those agencies; is that correct?
Mr. Green. We do now, but, as best we can, we spread the
administrative general support costs across agencies. But what
we're talking about with the new construction, which we have
never done before, is actually charging an agency or department
for their share of how much space they are going to occupy. We
feel that will be--I don't want to say a disincentive, but it
at least will make them think very hard about how many people
they are going to put at that post, because we are not talking
about a few thousand bucks for administrative costs or use of
the motor pool or support for travel services, but we're
talking about major construction costs.
Mr. Gilman. So these would be some incentive to put staff
in less expensive rather than in expensive locations?
Mr. Green. Well, not that as much as look at the number of
staff that you were going to put in a location. We have certain
criteria in all of our new embassy construction which says it
has to meet certain blast restrictions and setback restrictions
and so on, and then, when you get into classified space, there
are other requirements that we have to adhere to, and that's--
so if you pay $100 a square foot in unclassified space,
classified space may cost you $200 a square foot, and you need
``X'' number for the number of folks you want to put there, and
so we feel that will----
Mr. Gilman. Just one last question, Mr. Chairman.
Embassies tend to have small working groups and sometimes
too many managers. Does OMB have any thoughts about the proper
ratio of managers to non-managers--in other words, span of
control in embassies?
Ms. Dorn. Mr. Chairman, I don't think we have fully
evaluated that yet. We are still in the process of figuring out
how many people we have and what they're doing in these
embassies. And I think there is an issue here, however, and
that is: in a specific embassy you have, you know, 25 State
Department employees and you have 15 Treasury employees and you
have, you know, four Justice Department employees. You know,
we've got to both assess how those missions fit into the
overall plan, but we've also got to figure out a management
structure that actually works.
I think in the past this has not been identified as a major
priority. One of the things that OMB has suggested strongly is
that the Ambassador, himself, be involved in approving an
embassy structure and plan and be--that the cost of these
things be more visible. Instead of the Treasury Department
paying sort of the direct personnel costs but none of the
infrastructure costs, we are trying to again elevate that so
that it is visible and it is also more relevant to the
embassies of today. We don't have embassies any more where the
State Department is the only employee, nor should it be that
way. We have embassies, as you pointed out, Mr. Chairman, that
these other agencies have a vital role to play. It's just a
question of the proportion and the mission and the currency of
that, because, as priorities change and policies and as the
world moves forward, you know, this has got to be reviewed on a
regular basis and it has got to be kept current.
Mr. Gilman. Thank you.
Thank you, Mr. Chairman.
Mr. Shays. Thank you.
Mr. Lewis.
Mr. Lewis. Thank you, Mr. Chairman.
Secretary Green, how do physical security requirements
affect your staffing levels?
Mr. Green. Well, each post, of course, has a basic basket
of security requirements that are necessary. It certainly, to a
great degree, depends on where that post is and what the threat
is.
Adding or taking away people from a post on the margins
doesn't significantly--doesn't affect the security requirements
at that embassy. What does affect requirements more than
physical security is the need for classified space. As new
agencies--as agencies which require classified space--the law
enforcement community, the drug enforcement community, those
dealing with terrorism--as they increase the numbers of their
people which do require classified space, that runs our costs
up. But physical security--guard force, the number of regional
security officers and assistant regional security officers and
so on that we have at the post--will not vary greatly with
small increases or decreases in personnel.
Mr. Lewis. What's the most serious physical security
challenge that you're facing today with missions around the
world?
Mr. Green. I would say it is location, vulnerability of
many of our embassies, residences, office buildings where, in
many, many places, whether it is Paris or Belgrade, we are in
old buildings right on the street, vulnerable. I think that's
our greatest challenge.
As we build new embassies, we are finding, selecting
compound areas where we have the appropriate setback, the 100-
foot setback, and we are using construction techniques that
provide us more protection against blast, as an example. But I
think that we are vulnerable in many of our missions.
Mr. Lewis. Are you finding that most of the host countries
are helpful and supportive?
Mr. Green. Very cooperative. Yes. I can't think of a single
country that doesn't provide adequate police, law enforcement
protection, and even when we ask for additional if we have a
threat, which we have dozens daily. We often will ask for
additional protection, and it is always forthcoming.
Mr. Lewis. OK. Thank you.
Mr. Shays. Thank you. I just want to ask a few more
questions just for the record and then we'll get on to our
other two panels.
Mr. Green, you made a reference to the fact that the
Overseas Presence Advisory Panel did not provide the
methodology to right-size, even though they were required to.
It seemed like a little needle in there. I was just curious.
Mr. Green. No.
Mr. Shays. OK. I thought maybe you'd want to just expand.
Mr. Green. My understanding was that the original charter
for OPAP--and Mr. Kaden can certainly correct that--that the
original charter did call for OPAP to make a recommendation on
that.
Mr. Shays. And was your point in mentioning that it is
difficult to know what to do----
Mr. Green. Yes. Absolutely. We've many attempts to----
Mr. Shays. So your point is basically, even if you feel
that was the mandate, it wasn't--you were not seeing it come.
You're not being provided that kind of guidance, and so you all
are still trying to sort out what kind of methodology you will
be using?
Mr. Green. Yes, sir. And post-OPAP, as you know, there was
an inter-agency group that went out and visited six posts, and
they couldn't agree on a methodology.
Mr. Shays. Right.
Mr. Green. So I only point that out because this is a very
difficult problem, but we are going to fix it.
Mr. Shays. Well, a good way to start is, obviously, the way
you all are doing it. But, Ms. Dorn, I mean, obviously, we need
to know--and every department should know, and agency--how many
people they have overseas and where they are, and every
Ambassador should know who they have in their embassy and what
they're doing, and there needs to be a recognition that the
President is very clear on this. He has made it very clear the
power and responsibilities of the Ambassadors, the chiefs of
missions, and he should, as President, expect that his
Secretaries are going to respond to that and respect that.
I think it will be helpful. We learned that some
Ambassadors have shared that letter with all their employees
and some haven't, and I think that will be a good way to begin
that process.
I would conclude by saying to you it seems so logical to me
that, if you charge the full cost for whatever service is being
provided, cost is a great way to know how to allocate
resources. I mean, the Soviet system kind of fell apart because
they spent money in ways they didn't and shouldn't have spent
and under-spent in other areas. When you get cost involved, you
begin to say, well, ``How much do you really want this.''
So it would seem to me--I mean, business is doing this. The
nonprofit sector is doing it. They have overhead services they
provide, and now they tell their different units within a
business, ``You will be able to decide whether you want to use
these services from us or go outside. If you want the
advertising services to be from outside, you can do that. And
if you don't want to use the services you don't have to, but if
you do use the service you have to pay for it.'' Great change
has happened in that process.
I want to know from you, Ms. Dorn, if you have any handle
yet--it is in your statement as to why some costs per person,
USAID, $129,000 per employee, up to State, U.S. Secret Service,
$665,000. I mean, is there anything that you could share with
us now as to say why it would be so different?
Ms. Dorn. Well, I think part of it is that these agencies
have accounted for things using different requirements. USAID,
as you know, has people all over the world. They have pretty
well-established sort of rules about what they pay for and may
have, I would say, a better sort of enforcement mechanism to
judge these costs.
Mr. Shays. We may have a best business practices that you
can identify and then get the other departments----
Ms. Dorn. I think it is more of a standard operation at AID
to put people overseas, and so they have a little bit better
handle on how much it really costs and what costs are included
in that. U.S. Secret Service may, to their defense, have some
additional requirements that AID does not have.
Mr. Shays. The difference is so significant.
Ms. Dorn. Right.
Mr. Shays. So significant.
Ms. Dorn. It is extremely significant, and I would say that
therein lies the problem.
The other comment that I would make, Mr. Chairman, is that
I think we are all in agreement that we have a problem and that
we have a project underway to bring more clarity and more
transparency to what is being done now and why, and even a
process to start to prioritize, from a policy perspective, what
is important at the different posts and what the composition
should be.
When we get to the point where we start to actually assign
specific costs to different agencies for their presence
overseas, I'm not prepared to say that there won't be some who
think that is controversial. I think we've had a little
experience with this at OMB in terms of basically making costs
more transparent and putting them on the shoulders of those who
should be paying for them. I'm not sure that it's going to be
all that easy. It is also not going to be a single year kind of
project.
So we welcome the help of this committee and the interest
of this committee in this endeavor.
Mr. Shays. That's a great lead-in to just say that this
committee--none of us can be certain whether we'll be back
again next year, but I know that if I have any oversight over
this issue that we would like you all to come back. We would
like to be able to give you a sense that we are going to try to
measure how you are doing, but we really, truly want to help
you in any way that we can, any suggestions you have on how we
can help this effort.
I, for instance, think you should be working with the
Budget Committee. They've done their budget resolution in the
House. They have staff. They have a macro view. They look at
the total picture, as appropriators sometimes segment it, and I
think they could be a tremendous ally in this effort. Knowing
the chairman of the Budget Committee, I think he would relish
getting into this. It could be a huge difference in terms of
efficiency and effectiveness.
Ambassador, do you have any questions you want to ask, or
comments?
Ms. Watson. No. I just want to invite the two witnesses to
come to my office. We can sit down and I will share--I'm going
to send you a letter and make a request, but I think the input
would be very helpful as you go about shaping your programs. I
want to commend you. I think you are right on target and I
think that this review is absolutely essential in the light of
what's happening around the globe today.
Thank you very much for your testimony. I look forward to
meeting with you and maybe laying out a blueprint.
Mr. Green. Thank you very much.
Ms. Dorn. Thank you.
Mr. Shays. Mr. Gilman, any other comment you'd like to
make?
Mr. Gilman. I'd thank the panelists for taking their time
to be with us today. Thank you, Mr. Chairman.
Mr. Shays. Thank you.
Is there any comment that you want to make, a brief comment
before you leave, anything that you want to put on the record
that we should put on the record?
[No response.]
Mr. Shays. Thank you both for being here. Thanks so much.
Mr. Green. Thank you.
Ms. Dorn. Thank you.
Mr. Shays. The second panel is comprised of: Mr. Jess T.
Ford, Director, International Affairs and Trade Division, U.S.
General Accounting Office; and Mr. Lewis B. Kaden, now of Davis
Polk & Wardwell, New York, NY, former chairman, Overseas
Presence Advisory Panel.
Welcome to both. I'll ask you to stay standing. I'll swear
you in while you are up, and if you have anyone else that might
be testifying in addition to you that might respond to any
questions.
[Witnesses sworn.]
Mr. Shays. Note for the record our witnesses have
responded, for the record, in the affirmative.
Mr. Ford, we'll start with you. And I'd like you to say
whatever you need to say for the record, and if there's any
comments you want to make in response to the first panel before
we even ask them, you can do that. It might save some time in
the process.
Welcome both of you. Mr. Ford, you have the floor.
STATEMENTS OF JESS T. FORD, DIRECTOR, INTERNATIONAL AFFAIRS AND
TRADE DIVISION, U.S. GENERAL ACCOUNTING OFFICE; AND LEWIS B.
KADEN, DAVIS POLK & WARDWELL, NEW YORK, NY, FORMER CHAIRMAN,
OVERSEAS PRESENCE ADVISORY PANEL
Mr. Ford. Thank you, Mr. Chairman and members of this
subcommittee. I'd like to have my full statement entered for
the record.
I think some of the comments I'm going to make in my
opening statement will address some of the issues that were
raised by the earlier panel, and I will be happy to shed any
further light, to the extent I am able to do so, on some of the
comments that were raised regarding the methodology, since
that's one of the main things that we are currently working on.
We're calling it a ``framework.'' ``Methodology'' has a certain
meaning in GAO, so we're not quite there calling it a
methodology yet, but we are going to try to come up with some
suggestions on how we think this process could be moved along.
I'm pleased to be here today to talk about our ongoing work
on right-sizing our overseas presence. As noted by OMB earlier,
we have about 60,000 U.S.-funded employees overseas. For our
purposes, we are defining right-sizing as ``aligning the number
and location of staff assigned to U.S. embassies with foreign
policy priorities, security, and other constraints.''
This committee asked us to determine what right-sizing
actions might be feasible to reduce costs and security
vulnerabilities while retaining effectiveness in meeting
foreign policy objectives. To do this, we are developing an
analytical framework to help the decisionmakers make more
rational staffing decisions.
My testimony will highlight staffing issues that we
identified based on a case study that we did at the U.S.
embassy in Paris. In addition, I will briefly discuss some of
the steps needed to develop a mechanism to move the right-
sizing process forward while ensuring greater transparency and
accountability over overseas staffing decisions.
Drawing on our prior and ongoing work, we are developing a
framework that we believe will provide a foundation for the
executive branch to assess staffing at embassies and to
determine the right number and mix of staff. Our framework is
designed to link staffing levels to three critical elements of
overseas operations: physical security, mission priorities and
requirements, and operational costs.
The first element includes analyzing the security of
embassy buildings, the use of existing secure space, and the
vulnerabilities of staff to terrorist attacks. It is important
to remember that an estimated 80 percent of U.S. embassies and
consulates do not currently fully meet security standards. The
amount of secure office space may place constraints on the
number of staff that should be assigned.
The second element involves analyzing the placement and
composition of staff overseas based on U.S. foreign policy
goals and objectives. Our framework focuses on assessing
priorities and validating workload requirements.
The third element involves developing and consolidating
cost information from all agencies at a particular embassy to
permit cost-based decisionmaking.
We believe that after analyzing these three elements,
decisionmakers should be then in a position to determine
whether right-sizing actions are needed to add staff, reduce
staff, or change the staff mix at an embassy overseas.
We have identified some options that we think should be
considered in this regard, including relocating some functions
back to the United States or to regional centers and out-
sourcing certain functions to the private sector, where
sufficient support is available.
We believe the basic framework we are developing can be
applied worldwide; however, additional work may be needed to
refine the elements and to test the framework at embassies at
various working environments.
Our work in Paris illustrates how the framework we are
developing could affect embassy staffing. Currently, there are
about 700 employees from 11 major Federal agencies located at
the Paris embassy. I might add this number is only related to
the people assigned to the embassy proper. There are about
another 190 people who work in other parts of France.
In applying the framework to the embassy, we found that
security, workload, and cost issues need to be considered,
including the following:
There are serious security concerns in at least one embassy
building in Paris, which suggests a need to consider staff
reductions unless building security can be improved. This
building is located in the heart of a terrorist district--
excuse me, tourist district. That was a bad one. [Laughter.]
Although it could be a terrorist District--on main streets
with little or no protective buffer zone. Other embassy
buildings are also vulnerable. Relocating staff could
significantly lessen the number of people at risk.
It is hard to say with any degree of certainty how many
staff are needed in Paris. The embassy's goals and Washington's
demands are not prioritized, and each agency uses separate
criteria for placing staff in Paris. State Department staff at
the embassy reported that non-prioritized workload demands from
Washington result in missed opportunities for addressing
important policy issues.
We believe that a disciplined and transparent process
linking priorities and staffing and a reduction in non-core
tasks could suggest opportunities to reduce or relocate staff.
The lack of comprehensive cost data on all agency
operations, which we estimate is in excess of $100 million
annually in France, and the lack of embassy-wide budget
complicate the possibility of making sound, cost-based
decisions. Development of these data would help determine the
tradeoffs associated with the various alternative approaches
for doing business. The U.S. Ambassador to France acknowledged
that the lack of cost data is a serious cost for him.
Our work in Paris suggests that there are alternatives that
could reduce the number of staff needed at the embassy,
particularly for some support functions which represent
approximately one-third of the number of personnel assigned
there. Among the options we've identified are relocating
functions back to the United States--in fact, the State
Department has recently announced it is going to send back over
100 people to their Charleston Financial Center--relocating
staff to some regionalized positions, posts in Europe which
have more-secure facilities available, such as in Frankfurt,
and also looking at the potential for out-sourcing some
functions, mostly administrative in nature, which we think
could be handled by the private sector.
We believe all of these options should be closely examined.
We also believe that setting priorities and validating workload
requirements could lead to other staffing adjustments.
Mr. Chairman, the development of a framework to assess
embassy security, mission, and cost, and to consider alternate
ways of doing business is only the first step. Providing
greater accountability, transparency, and consistency in
agencies' overseas staffing decisions will require much greater
discipline within the executive branch. We believe that, for
the President's management initiative to be fully successful,
the executive branch will need to develop a mechanism to
effectively implement a right-sizing framework.
Based on our discussions with experts and agency officials,
we have identified four possible options.
One could be establishing a Washington-based inter-agency
body to oversee the right-sizing process and ensure
coordination among the various parties.
A second option would be establishing an independent
commission to consider whether more or fewer staff are needed
and to make recommendations.
A third option would be placing the responsibility for
approving overseas staffing within the Executive Office of the
President.
And a fourth possibility would be requiring embassies to
certify that staffing is commensurate with the security risks,
embassy priorities, and requirements in cost.
Ultimately, the executive branch must decide which options
will help achieve the overall goal of establishing a rational
process for assigning staff overseas.
This concludes my comments. I would be happy to answer any
questions.
Mr. Shays. Thank you very much.
[The prepared statement of Mr. Ford follows:]
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Mr. Shays. Mr. Kaden, I invite you to make your testimony.
Mr. Shays. Could you just first inform me--and I should
know this, but for the record, how long did your commission
work on this project? How long have you been involved in this
issue?
Mr. Kaden. The Overseas Presence Advisory Commission began
its work early in 1999, around the beginning of 1999, issued
its report at the end of that year, and was active in the early
stages of implementation through 2000 until the end of the
Clinton administration.
Mr. Chairman, I have submitted my statement for the record.
Let me make a few observations about this subject.
First, I want to thank you, Mr. Chairman, and this
committee for taking an interest in this subject. It is, to
those of us who did work on the Overseas Presence Advisory
Commission and its report, it is very gratifying to see the
issue on the agenda of this committee. I think you can be very
helpful.
When I was engaged in that work during 1999 and 2000, I can
say that I spent a great deal of time with some of your
colleagues, and particularly on this side of the Capitol Mr.
Gilman and his committee, Mr. Rogers and his Appropriations
Subcommittee were enormously helpful and supportive to us, and
those interactions were an important part of whatever effect we
had in raising this important issue of concern.
Let me tell you a bit of a story about why right-sizing
became so central to OPAP's report and recommendations. When I
began--when I undertook that work and began to talk to people
on my panel and others at posts around the world, I was
immediately struck by one thing. I visited with Admiral Crowe
who had been in London and had just concluded the Commission of
Inquiry on the East Africa bombings and was a member of my
commission, and with Richard Holbrook, who had been in Bonn,
and with Ambassador Rohatyn, who was then in Paris, and I said
to each of them, ``What should I focus on as I begin this
panel's work?'' and they each said, ``right-sizing,'' in so
many words, because their experience in those western European
capitals had left them with a question in their minds about why
we need 1,200 or 1,300 people in London, 900-plus in Paris,
large number in Bonn, when the challenges in other parts of the
world seem so great and staffing so limited, and other
countries doing a quite effective job in those western european
capitals had much smaller staffs.
The combination of mission priorities and security and cost
effectiveness raised in the minds of those, among our most
distinguished public servants, that question.
I then visited with Admiral Troyer in Beijing, our then
Ambassador in Beijing, and Governor Celeste, who was in New
Delhi, and they made a pretty effective--and said the same
thing, ``What should I concentrate on?'' And they said right-
sizing, but their argument, which was quit effective, was the
that challenges in those posts were growing by the day, were
poorly served by not only the numbers but the type of skills
represented in their posts, and they thought a right-sizing
process would lead to stronger staffs with a better mix of
skills able to confront the growing challenges in those that
the United States faced in achieving its aims in those
countries.
I think by the end of our work we had come to the
conclusion that right-sizing had to be front and center, but
that it was closely related to all the other recommendations
about improved technology, better human resources and personnel
practices so that you had the right skills and training, better
facilities, both residential and for work, a better priority-
setting process--that all of those fit into the task of right-
sizing.
Now, I think the good news is that, since the beginning of
this administration, I, for one, have been encouraged by a
couple of things. As I said in my statement, Secretary Powell
met with me and Frank Carlucci on the first day in his new
office and emphasized his determination to do something in this
area of overseas presence reforms.
And the President then put it on his management agenda last
August, which I was, frankly, surprised to see and pleased to
see.
I think, as Ms. Dorn told you, OMB seems to be taking a
lead and digging in to trying to make some progress in this,
and that's extremely satisfying.
It won't be easy. I don't really know what to make--I don't
think it's all that important to get into it, but I don't know
quite what to make about Mr. Green's comment about OPAP not
putting forward a methodology, because I think our conclusion
was quite clear that past efforts to develop numerical formulas
about what a large post or a middle-sized post or a small post
should look like were not serving our Nation's interests well;
that what you had to do was have an effective inter-agency
process with leadership from the White House, which is the only
part of our government that can ensure the effective
participation of all the other agencies and departments. As
distinguished an American and as well-respected around the
world as Secretary Powell is, the fact is that by himself,
unless he has the President's mandate behind him, he can't
ensure the effective participation of the Pentagon, the
intelligence agencies, the Justice Department, the Treasury, in
agreeing on what proper staffing ought to be in any particular
post in the world. It's hard enough in the White House to get
those agencies to agree on policy initiatives. That's why we
have the process of policy coordination, it's so intricate.
So it requires White House leadership, and that's what we
said. It requires an inter-agency process with all the agencies
participating, and that's what we recommended. And it requires
the active involvement of the chief if mission, the Ambassador,
and he or she needs to be charged with setting priorities in an
effective way, communicating them with the relative agencies,
interacting back with the interagency group in Washington about
those priorities, and using those priorities together with
security risks and cost effectiveness as the criteria for
determining an appropriate staff, which is exactly what the GAO
report has recommended, I think entirely consistent with the
OPAP recommendation.
Now, to me that's a methodology. That's a procedure. You
then have to take it and apply it one by one to the posts. You
can start with whatever priority post you want, and we would
urge that they start with some of the big European posts where
there may be gold in them hills in terms of efficiency and
reductions, and start with some of the really challenging posts
elsewhere in the world where probably we are going to need new
and different and more resources. And some of those are the
large posts like New Delhi and Bangkok and Beijing, but some
are the smaller posts in the stands and the caucuses and areas
of the world where the challenges, as you well know, Mr.
Chairman, to our Nation's interests, both security and
otherwise, are tremendous.
So this is not an easy task. I am a bit encouraged by the
administration's response, but they're going to need your
oversight and your support and your encouragement to make sure
they keep at it and keep in touch with you.
And at the end of the day I'm not smart enough to predict
whether we'll have fewer people in the aggregate or more, but
we'll have different skills and we'll have different numbers in
different places, and I think what I can safely say is that
some of these other agencies you're going to hear from on the
next panel are going to need increasing overseas forces. That's
certainly true in the law enforcement community, of the
economic community, including Treasury, and some of the
commercial-oriented departments like Agriculture and Commerce.
I think that will well serve our interests, because that will
give us the added expertise and skills that we need to meet the
current challenges. You could add to that some of the public
health challenges, as well.
So I was very pleased to hear that this committee was
taking an interest in it and I commend you for this hearing.
Although my charter is long gone and what limited function I
had is over, I am always available to help this committee or
any other as you pursue these goals.
Mr. Shays. Thank you, Mr. Kaden.
[The prepared statement of Mr. Kaden follows:]
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Mr. Shays. Mr. Kaden, your work will result in some very
major changes, I think, and the work of GAO. I see a tremendous
agreement that we need to do something, and, you know, it truly
does stare us in the face. I mean, there's not much room for
debate, frankly, so how we do it will be the issue.
The only group I would add in terms of that cooperation,
having the President and OMB focused on it, having Congress
focused on it, we do need the cooperation of the various
departments and agencies. They've got to buy into this, and
then they've got to have it filter down to the people that can
make it happen.
Mr. Gilman, I'd be happy to start with you.
Mr. Gilman. Thank you, Mr. Chairman. I want to welcome Mr.
Kaden. He appeared before International Relations Committee on
several occasions. The testimony is still appropriate. As
chairman of the Overseas Presence Advisory Board, you did some
outstanding work.
Mr. Kaden, what can be done to strengthen Ambassadorial
authority without undermining the independence of other U.S.
agencies?
Mr. Kaden. I think there are two things. One is we
suggested that the President clarify the executive order
setting out the Ambassador's authority and make clear what the
chief of mission authority meant and how much it extended to
the full range of activities in a particular mission. I think
that's important, as well as the tone and the message the
President sends.
Our Ambassadors, after all, are the President's
representatives, the Nation's representatives. They don't work
just for the State Department or for any other department. We
mean it when we say they're the chief of mission and the chief
of all the personnel in those departments.
The other thing, which goes without saying--and this is a
conversation, Mr. Gilman, I think you and I have had before--we
need to find and appoint and confirm the very best chiefs of
mission we can from both the career service and from outside
the career service, because the one thing our panel discovered
with great clarity as we visited so many posts is nothing makes
as much of a difference in the quality of mission and its
ability to achieve the priorities that are set than the quality
of its chief. We had in those years--and I'm sure we have
today--some terrific chiefs of mission, but we probably also
have some that are a little weaker than they ought to be. And
so that whole process, which is something that both Congress
and the President are involved in, is a very important part,
too, of improving our overseas presence.
Mr. Gilman. Mr. Kaden, what have you found to be the major
obstacles to a meaningful right-sizing in our Federal
Government?
Mr. Kaden. My own view is--and I haven't spent enough time
in Washington to claim to really understand the processes of
our government, but my own view is that it is more the inertia
of dealing with complex inter-agency issues. Each of the major
departments has a clear idea of its own agenda and its own
priorities, and on the top level at a high altitude, the
department heads that I've talked to have a determination to
address these problems. But getting them all down through the
ranks to work together on whether it's right-sizing or
developing a common technology platform or cooperating on a
cost allocation system or developing a better way of building
facilities and going through that planning and design process,
it's not easy when you have so many agencies and so many
conflicting priorities. To me, that's why you need the
coordinating leadership, whether it is from OMB or from some
other part of the White House.
Mr. Gilman. Thank you, Mr. Kaden.
Mr. Ford, while we are undergoing an aggressive program to
reconstruct and replace some of the embassies around the world,
do you think that the right-sizing program can be established
and fully in effect in time for staffing decisions to be
perfected in the size of the new post?
Mr. Ford. We understand the Department of State, in the new
embassy building program, is attempting to have a more
disciplined approach in identifying what the actual
requirements at the new embassy will be. I think the key issue
here is the various agencies that are going to be housed at a
new embassy. Validating their requirements is a part of the
process that State hasn't yet been able to undertake, and it
may be, as Mr. Kaden just said, it may be that OMB is going to
have to be the ultimate arbiter in identifying what those
requirements are, because that is what is going to drive the
size of the embassy. And it is an opportunity before the
embassies are built to make sure that we've got the right
number of people in these embassies and that they are all
properly validated, so I think there is an opportunity there--
probably a better opportunity than the ones that have already
been established. But I also think that it may be somebody like
OMB that's going to have to be the agency that is going to
require the validation of those requirements.
Mr. Gilman. Realistically, do you think you can accomplish
that?
Mr. Ford. I think it is--yes, I do. I think it is possible
to do it. I think some agencies have pretty good matrix on
validating how many people they need, and I think that it is
doable. I think it just takes--it's going to take some time and
effort to make sure they ask the right kind of questions.
Mr. Gilman. And, Mr. Ford, can State enforce the
requirements that the Foreign Service officers are supposed to
be worldwide available?
Mr. Ford. Yes, sir. They are supposed to be worldwide
available. The Department of State has a bidding process which
allows employees to put a preference in where they want to be
assigned, and the Department makes decisions based largely on
that bidding process.
We have found that, particularly with regard to what are
called ``hardship posts,'' that it is difficult for the
Department to get many of its officers to bid for these
positions.
Mr. Gilman. Well, Mr. Ford, if I might interrupt, how many
then are worldwide available today?
Mr. Ford. I believe the current staffing profile for the
Department for U.S. direct hires is around 16,000.
Mr. Gilman. And are all of those 16,000 worldwide
available, or do they--are they dependent upon a choice of
posts?
Mr. Ford. They are worldwide available as far as the State
Department is concerned. I mean, the State Department can
direct someone to go to any post in the world.
Mr. Gilman. Regardless of the choice system?
Mr. Ford. That's correct. They have that authority.
Mr. Gilman. And just one last question. Is State Department
personnel office making an effort to reevaluate overseas jobs
in light of advances in technology?
Mr. Ford. I know that they have a number of initiatives,
technology initiatives at the Department of State that are
designed to find better ways of doing business. There were some
discussions earlier about the lack of communications and things
of that nature. We believe that those efforts could, if they
are married up with the staffing requirement process, lead to
assigning the right number of people to the right places.
Mr. Gilman. Thank you. I want to thank our panelists, Mr.
Kaden and Mr. Ford, for being with us.
Thank you, Mr. Chairman.
Mr. Shays. Thank you, Mr. Gilman.
Mr. Gilman, I want the record to state that this committee
recognizes that your committee has been very active in this
when you were chairman of the committee, and that's one reason
why we're pursuing it, because of this being brought to our
attention by Mr. Gilman.
Candidly, I don't have a lot of questions to ask either of
you. I think your statements were pretty clear. You both are a
tremendous resource.
Mr. Kaden, still, even though you are not actively pursuing
this, you will be an excellent resource for our committee. We
appreciate that you took the time to be here.
Mr. Ford, obviously we will be putting you to work
continually on this.
I just will say for the record there is going to be no
excuse if we don't deal with this issue. It would be just
absolutely, given our national security needs and the needs to
use resources well, given the need to protect our employees,
given budgetary challenges, to not use employees well and
effectively and where they are needed just can no longer be
tolerated. And given that the President has--and I'm just kind
of echoing your remarks, Mr. Kaden--given this is one of his
high priorities, the State Department only has--not only, but
they're suggesting set five priorities and then work on them. I
can't say it will be one of only five, but it is one of a few
that will be our priority, and certainly, as it relates to the
State Department, our highest priority.
Do either of you have any kind of closing comment that you
want to make, any question that we should have asked that we
didn't?
[No response.]
Mr. Shays. Well, your testimonies both were very helpful.
We really appreciate your being here. Thank you very much.
Mr. Kaden. Thank you.
Mr. Ford. Thank you.
Mr. Shays. At this time we'll call our third panel: the
Honorable Ken Lawson, Assistant Secretary for Enforcement,
Department of the Treasury; the Honorable Andrew Hoehn, Deputy
Assistant Secretary of Defense for Strategy, Department of
Defense; and the Honorable Robert Diegelman, Acting Attorney
General for administration, Justice Management Division,
Department of Justice.
I'll state, before I swear any of these gentleman in, that
the work of all three departments is absolutely essential, and
we appreciate their being here and appreciate what they do here
at home and obviously overseas, as well.
If you'll stay standing, I'll swear you in, and anyone else
that may assist you.
[Witnesses sworn.]
Mr. Shays. Note for the record that all three have
responded in the affirmative.
Mr. Lawson, were you in the military?
Mr. Lawson. Yes, sir, I was.
Mr. Shays. Well, you waited for me to tell you to be
seated. I figured that. [Laughter.]
I'm delighted that all three of you are here. I'd ask you
to put the microphone up, make sure it is turned on, and we'll
start with you, Mr. Lawson, then Mr. Hoehn, and Mr. Diegelman,
we'll end with you.
Thank you.
STATEMENTS OF KEN LAWSON, ASSISTANT SECRETARY FOR ENFORCEMENT,
DEPARTMENT OF THE TREASURY; ANDREW HOEHN, DEPUTY ASSISTANT
SECRETARY OF DEFENSE FOR STRATEGY, DEPARTMENT OF DEFENSE; AND
ROBERT DIEGELMAN, ACTING ATTORNEY GENERAL FOR ADMINISTRATION,
JUSTICE MANAGEMENT DIVISION, DEPARTMENT OF JUSTICE
Mr. Lawson. Thank you, sir.
Mr. Chairman and distinguished members of the subcommittee,
thank you for this opportunity to describe the Department of
Treasury's strategy and procedure used to coordinate the
placement of overseas personnel with Department of State.
Although I have submitted a written testimony for the
record, let me briefly describe some key points.
The Office of Enforcement, along with the Office of
International Affairs at main Treasury, and several key bureaus
of the Treasury Department have had an international presence
for more than 50 years. Each office has a direct strategic,
supportive, or crucial enforcement role in implementing U.S.
Government policy, yet an ongoing review of positions abroad is
vital for security, cost, and policy reasons.
Moreover, this is a timely subject, given our country's
ongoing efforts to combat the global scourge of terrorism, both
at home and abroad. The demand of our resources abroad are
expanding and a need to coordinate the Treasury Department's
efforts to protect our homeland with the Department of State
and other departments and agencies is essential. Our ability to
share information, work directly with foreign counterparts, and
the ability to react quickly to changing trends is essential
not only for our battle against terrorism, but for other
critical missions such as controlling trans-national crime,
promoting U.S. interest in foreign markets, and providing
essential technical assistance and training to our counterparts
overseas.
As I have mentioned, coordination of our international
presence is essential to ensure that the respective missions of
the various agencies and departments, including Department of
Treasury, are fulfilled, and that the U.S. Government is
speaking with a unified, coordinated voice abroad.
Treasury's goals and objectives are fully integrated into
the U.S. strategic plan for international affairs and involve
these national and international interests: expand exports and
open markets; maintain global growth and stability; promote
economic development; manage the entry of visitors and
immigrants; safeguard the borders of the United States; combat
international terrorism, crime, and narcotics trafficking.
The Department of Treasury, in reaching these goals,
reports annually to the State Department on the number of staff
positions by Treasury components, by embassies and consulates,
or proposed changes for the next 3 years, and Treasury follows
the inter-agency clearance process to secure the approval of
the U.S. Ambassador, chief of mission.
Treasury submits detailed justification for all proposed
overseas staffing changes, additions, or subtractions to the
chief of mission, with a copy to Department of State. State
officials also provide to the chief of mission and to
Department of Treasury its views on the necessity of overseas
staffing changes proposed by Treasury.
The increasing demands of Treasury regarding homeland
security through its financing and international financial
markets require a vibrant overseas Treasury presence. It is
important to note that this total number of Treasury employees
include Americans posted abroad, local hires, foreign
nationals, and personal contractors.
Let me give you a breakdown of Treasury's personnel abroad,
as reported by OMB as follows:
For departmental offices, including technical assistance,
we have a total of 112 persons, and this includes the Office of
International Affairs and Treasury. For the Customs Service, it
accounts for approximately over 300 persons abroad, and Customs
is focused on cargo security and terrorist financing. The
Secret Service has a total of 93 persons abroad, where their
work focuses upon financial crimes and counterfeiting. The
Bureau of Alcohol, Tobacco, and Firearms accounts for five
persons abroad, focusing on firearm work and also diversion
cases, tobacco and alcohol. The IRS, both civil and criminal
divisions, have a total of 58 persons abroad, where the
criminal division focuses upon money laundering and tax evasion
cases.
I must say the Treasury Department has been very flexible
in its allocation of resources. Although we have these people,
we recognize when there is no longer a need for a given office,
either for enforcement or non-enforcement personnel. The
Treasury Department has been willing to relocate those
resources to areas where such personnel are needed.
This plan will continue where Treasury operates, since we
are dedicated to efficient use of resources abroad. We look
forward to working with the State Department to ensure we do
not have resources where the problems do not exist.
Now, just to address the issue of regionalization that was
raised earlier, the Department of Treasury law enforcement
bureaus, as well as our non-enforcement offices, have
traditionally practiced the concept of regionalization in
varying degrees, the practice by which a region is covered by a
personnel stationed in one overseas post. The concept has
proved beneficial in certain locations, but we've recognized
that we need to have a presence where the crime is, so we may
have a regional office but we may need an office in, say, Spain
as opposed to just a regional office in Paris. That's in place
of Secret Service.
I'll note, Mr. Chairman, Treasury and its law enforcement
bureaus recognize that we must work together with all agencies
to ensure the effective use of our foreign assets.
This is the end of my oral testimony. I will be glad to
answer any questions, sir.
Mr. Shays. Thank you very much, Mr. Lawson. We will have a
few questions. We appreciate your statement.
[The prepared statement of Mr. Lawson follows:]
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Mr. Shays. I would want to say for the record that when I
have gone overseas to deal with this issue and issues dealing
with, for instance, questions dealing on financial matters and
how we track down people who have fled this country or dealing
with terrorist issues, dealing with Defense issues, we have
found all of your people very helpful, very informed, very
talented, and I'm grateful to have been able to utilize and
have those opportunities to meet with them and to learn so much
from them.
Mr. Hoehn.
Mr. Hoehn. Thank you, Mr. Chairman, for the opportunity to
appear before this committee on behalf of Secretary of Defense
Rumsfeld.
As you know, our Defense responsibilities span the globe,
and the Secretary of Defense has developed a strategy to meet
the many challenges we face. That strategy was outlined in the
quadrennial Defense review report that he submitted to Congress
last September.
The ongoing war on terrorism is the first real test of this
strategy, and we need your support to ensure success in this
war. A strong and effective overseas posture is critical to
support our Defense strategy, including the support we provide
to U.S. diplomatic missions overseas.
There are three basic components to our representation at
and support to the diplomatic missions. These are: our security
assistance offices, which operate in support of the State
Department; our Defense attache offices; and the U.S. Marine
Corps security details.
Although there is no single criterion or methodology by
which to determine our support to diplomatic missions, indeed
most support is country-specific, as has been discussed earlier
today. The Department of Defense has applied the discipline of
right-sizing, as emphasized by the president's management
agenda, to satisfy our changing requirements.
For example, personnel assigned to our security assistance
offices have decreased by roughly 25 percent over the past 10
years. At the same time, on the basis of advice provided from
our regional commanders, we have established 35 new offices to
meet changing requirements. Our security assistance personnel
today are capped at roughly 630 people.
Similarly, our Defense attache personnel are capped at
approximately 1,000 people, and have been significantly
realigned in recent years to meet changing requirements. We
have closed some 29 stations and reduced another 35 offices. At
the same time, we have established 20 new attache offices and
expanded 20 other stations. I believe this is very much in line
with the recommendations that were offered on the prior panel.
Finally, our most visible presence at U.S. embassies and
posts are the 1,135 Marines with the Marine Security Guard
Battalion. The assignment of Marine security details is under
continuous review and is accomplished in close coordination
with the State Department.
I have identified more details on how we determine our
staffing levels in order to right-size our presence overseas in
my written statement, which I have provided for the record. I
am available to you for your questions.
Thank you, sir.
Mr. Shays. Thank you very much.
[The prepared statement of Mr. Hoehn follows:]
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Mr. Shays. Mr. Diegelman.
Mr. Diegelman. Thank you, Mr. Chairman. First of all, thank
you very much for the invitation to testify, but then also
thank you for holding a hearing on this critical topic. One of
the benefits of going last with three panels like this is first
of all you get an opportunity to hear everybody else's
testimony, but also you get the opportunity to avoid some of
the hard questions that people get to throw at you. So I'm
going to--I have submitted a detailed statement for the record,
but I do want to point out a couple key items that I think--I'm
not going to repeat what you've heard, because I believe
there's a lot of consensus among all of the witnesses, but I do
want to point out some differences in approach and even some
suggestions to where you can possibly go next, or where all of
us can go next.
First of all, in terms of the Department of Justice, we
have a limited but growing presence abroad. If the world
changed in 1989 with the Berlin Wall coming down, it also
changed in 1998 with the attack on our embassies in Africa. It
also very, very significantly changed for the Department of
Justice and I believe for everybody else on September 11th of
last year.
The Department of Justice has a very limited but growing
presence abroad. Ending with fiscal year 2001, Justice had only
about 1,675 full-time and part-time employees and foreign
nationals in 79 countries, which is a very, you know, very
minimal presence, if I might say so. In 2002, with the
appropriation for 2002 and also the counter-terrorism stuff,
we're going to increase by an additional 75 employees, and most
of those employees and additions will be in the FBI and the
Criminal Division.
Justice is a large, complex agency with almost 39-some
agencies within it. Out of them, only five of them actually are
represented abroad--the obvious ones, the FBI, the DEA, the
INS, the Criminal Division, and also the Civil Division, but
the Civil Division really has a very minor presence. It has
only three employees in London.
Traditionally, violations of U.S. criminal laws have been
addressed by law enforcement and prosecution resources here
exclusively in the United States. The last 20 years have seen a
very dramatic impact on the globalization of crime, both with
technology and the nature of the drug problem and the terrorism
problem. We have ever-increasing threats to U.S. citizens,
assets, and interests at home and abroad posed by international
terrorism, organized crime, narcotics trafficking, money
laundering, and all manner of trans-national criminal activity.
It has created a very critical need to place law enforcement
agents and attorneys, in some cases criminal prosecutors, in
specific locations abroad.
Since September 11th the Department of Justice has very
actively been working more closely with law enforcement in
countries all around the world, some 79 different countries.
The overseas Presence Advisory Panel that Mr. Kaden
testified was the first attempt in 1998 to look at the issue of
right-sizing in a very considered and thoughtful way, and I
think his testimony also reflects that. Immediately after the
issuance of their report, the then Attorney General of the
United States, Janet Reno, and the Secretary of State both
agreed that they would take the law enforcement presence abroad
and just use it as a possible test case to come up with some
way of determining how a law enforcement presence should be
sized in each of our locations.
We set up an inter-agency task force involving our
colleagues from both Treasury and also the Department of State,
and then we did undertake a pilot study that took us to U.S.
missions in Paris, Mexico City, and Bangkok.
I was a member of that working group, so I know both what
was on the ground and the considerations that all of us entered
into, and we did produce an approach in the law enforcement
area that I think is worthy of this panel's consideration and
also GAO, OMB, and the Department of State.
We spent a lot of time in Paris, a very large mission. I
would simply say that we learned a lot by actually talking to
the people. We stayed on the site a week. We had a panel of
about six members.
Let me just very quickly tell you about Justice abroad one
more time. Really, our focus is mainly four targets: counter-
terrorism, narcotics trafficking, international crime, and
immigration.
We have placed our people where the problems are, where the
issues are. Our goals and purposes in putting people abroad
really supports the U.S. strategic plan for international
affairs, the two major law enforcement goals.
I'll give you an example. The Federal Bureau of
Investigation today carries out a mandate of more than 50
statutes which provide extra-territorial reach, many of them
providing exclusive jurisdiction to the FBI. Over half of these
have been passed since 1980. They address violence,
international airports, foreign murder of U.S. nationals,
international parental kidnapping, violence against maritime
navigation, copyright and intellectual property fraud,
telemarketing fraud, use of weapons of mass destruction,
terrorism, and air piracy.
Obviously, we have a very heavy agenda for being abroad,
and it completely matches up with, from our perspective, the
U.S. strategic plan for international affairs.
Let me just very quickly recap what the working group did.
We have been very actively involved with State and Treasury.
We came to a simple conclusion. It's not easy to come up
with a way to right-size, but we do think it is doable. We do
think that there are criteria that should be taken into
consideration, that it should not be a numerical formula, that
in reality there ought to be a range of criteria that can be
applied by an inter-agency team, and basically my testimony
does tick all this off. I'll be glad to supply a little bit
more detail for the record if you'd like it, but we see
basically eight criteria that should be used in evaluating the
law enforcement presence abroad:
No. 1, the trans-national crime threat that is present at
the site;
No. 2, the non-crime-control policy interest for being in
there. Very frequently the crime issue impacts in any country
on the development of democratic institutions and a free market
economy.
No. 3, the host nation law enforcement capability.
Four, the host nation's commitment. Do they want us there
or not? And how big do they want us there?
No. 5, the geographic regions served by the mission.
No. 6, the role performed by U.S. law enforcement
personnel.
No. 7, the resource and security constraints.
And, No. 8, the possibility of overlapping missions with
anyone else that is presently at the site.
I can give you a more-detailed summary of the eight
criteria. I will point out that we applied these in three major
large missions--Bangkok, Mexico City, and Paris. We also out-
briefed the chief of mission in each one of the sites, and the
reaction to it was very positive and they thought usable.
I'll make some final observations. One, we do believe that
this is doable. Justice is more than willing to participate in
an inter-agency effort to take the next step. We just made a
major staff commitment the last time around, but we're willing
to make the same type of commitment.
The word of caution we would add is that none of us should
be looking for silver bullets or easy answers to this. It is
not just simply a three-factor analysis; it is a multi-varied
analysis that you have to do. When I say that, the drivers
should not just simply be cost and security. The driver's
really have to focus on operational necessity and mission
effectiveness at the missionsite.
We believe that if you take the June 21st report that we
issued as a working group as a starting point and build around
it an inter-agency group, you can take it the next step.
The key features of taking it the next step are actually
turning those eight concepts into some operational questions
that could be used by an assessment team. We would underscore
that we have to avoid the one-size-fits-all approach and we
believe that there should be an inter-agency--strong inter-
agency participation and this should be transparent. This
should not be a situation where one group or the other just
lays out the formula for everybody to play by. We've got to
work it out together. We think it is workable, and I think we
are off to a good start.
I will be glad to answer any questions you might have, Mr.
Chairman.
[The prepared statement of Mr. Diegelman follows:]
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Mr. Shays. I thank you all very much. Mr. Diegelman, I
think you took advantage of being last and did a nice service
to the committee in kind of summarizing some points. I
appreciate the testimony of all three of you. It is very
helpful.
You, Mr. Diegelman, seemed to make it very clear that the
Attorney General would be cooperative and the Department will
be cooperative in this effort. I'd like to know, Mr. Hoehn and
Mr. Lawson, what kind of cooperation we can expect from
Treasury and Defense in this effort to right-sizing our
missions.
Mr. Lawson. I think there's no question, sir, that the
Department of Defense will be cooperative in this effort. I
think Mr. Diegelman's points are quite accurate, particularly
on the issue of the inter-agency approach and the idea that,
although no one-size-fits-all, we do need to work out criteria
by which to right-size, and that this inter-agency approach
must be transparent to all parties as we're working through it.
There is no question that the Department of Defense will be
committed to that.
Mr. Shays. Thank you. Mr. Lawson.
Mr. Lawson. I must say the same. As you know, Secretary
O'Neill served on OPAP prior to his service as Secretary of
Treasury, and he agrees with right-sizing, but not necessarily
down-sizing. Due to the problems that exist with trans-national
crime, we may need a clear presence from Secret Service that--
--
Mr. Shays. I'm going to make it very clear that we don't
even need to go any further in this issue. Right-sizing means
right-sizing. It may be up, it may be down, it may be staying
the same. We all agree on that.
Mr. Lawson. All right, sir.
Mr. Shays. So you don't need to be concerned that when you
go back we'll have assumed that you said we can down size.
Mr. Lawson. Yes, sir.
Mr. Shays. You won't get in any trouble that way, sir.
Mr. Shays. All right, sir. Short answer--we're willing to
cooperate.
Mr. Shays. Willing would be very helpful, and hopefully
even eager.
Let me ask you, though, what are the practical challenges?
I mean, as I meet--when I go to every mission I sometimes meet
with Treasury, but I almost always meet with people from the
Justice, Department of Defense. Let me say the Defense
Department has some of the best contacts in country with
important nationals, and it has been a tremendous asset for me
to have the Department of Defense introduce me to people who I
need to meet with in my work. I appreciate that. But what are
the practical challenges that a chief of mission has, an
ambassador has in knowing about the work in each of your
different departments?
I would think, for instance, with Justice there are just
some things that Justice doesn't even, you know, go out of its
way. It's basically on a need-to-know basis. So tell me how we
sort out the practical application of the chief of mission
knowing what you all are doing.
Do you want to start, Mr. Diegelman?
Mr. Diegelman. Yes. I'll tell you my personal observation.
My personal observations are that an awful lot of it really
turns around the mission performance plan, and when I say that
I think over the last couple of years----
Mr. Shays. Mission of the embassy or the mission of the
various departments?
Mr. Diegelman. The mission, that's for the embassy.
Mr. Shays. Right.
Mr. Diegelman. Each embassy does produce an MPP in the
spring, a mission performance plan. I think one of the concerns
that we have had in the past is that very frequently it seems
to be a chief of mission to Washington discussion and not an
on-sight discussion.
The mission performance plan really should involve all of
the players that are onsite at a mission in its development and
determination or priorities. That is a way in which the chief
of mission or the Deputy Chief of Mission could actually reach
out to the law enforcement presence that is there in that
embassy or there in an annex to that embassy and actually
involve them in the planning and the determination of
priorities.
No question about it, very frequently some of the work that
we're involved in, particularly in the FBI, is basically
undercover investigative work and we're not going to lay
everything out on the table, but surely any chief of mission
ought to know how many people are present in his mission, how
many--just what they're doing, generally, and how they support
the priorities of that mission.
I think the answers can be found in the MPP, and also all
the agencies, including us, playing according to national
security directive, decision directive 38, in terms of making
sure that the chiefs of missions know what assets we're putting
into the mission.
Mr. Shays. Thank you.
Mr. Lawson.
Mr. Lawson. Sir, I think that one thing has been helpful
has been meetings with law enforcement bureaus at these
embassies. These meetings are held by the Deputy Chiefs of
Mission to ensure there is no conflict in terms of cases or
investigations.
I find from Treasury law enforcement bureaus and also
working with the FBI that, by virtue of having these
discussions on a weekly basis, this assures us no conflict and
ensures that everyone understands what missions are to be
accomplished and that we're working together.
Mr. Shays. Thank you.
Mr. Hoehn.
Mr. Hoehn. Yes, sir. Regarding challenges, the first that I
would observe is that, in two of our functions--that of our
Defense attache, our attache is, in fact, the military advisor
to the chief of mission, and so there is a very close
relationship there in terms of the function that the attache
performs and that of the chief of mission.
Second, our security assistance offices are actually
working on behalf of the State Department at the missions, and
so again there is a very close relationship. And, as I
mentioned, the role of the Marine security details at each of
the missions is done in very close collaboration with the State
Department.
But that leaves unsaid the issue that we highlight in our
own strategy, and that's one of uncertainty. And so when we
look in our requirements and then when we look downstream at
some of these requirements, it is often difficult to project
exactly what those needs will be. None of us I think could have
imagined even a year ago the requirements that we face now in
central Asia and particularly in Afghanistan.
And so, I think as we look at this right-sizing initiative
and as we address these challenges, we will have to build
sufficient flexibility into our approach here so that we can
meet changing needs not just over time but sometimes in time to
face the requirements that we confront.
Mr. Shays. Having the right number of people in the right
place is obviously the key objective. It is a little
disconcerting to read such disparity in terms of per person,
per employee, per government employees' cost. I'm wondering if
you can shed any light on such high costs for Secret Service.
Mr. Lawson. I'll be glad to, sir.
Mr. Shays. OK.
Mr. Lawson. The figure that was given to you was extremely
high and perhaps----
Mr. Shays. A little louder.
Mr. Lawson. I'm sorry. The figure that was given to you was
not correct. That figure was based on a study conducted by OMB
where Secret Service provided a worst-case scenario, and it was
based on having an agent in a new office in the most expensive
foreign embassies--Hong Kong and Rome. And, by virtue of going
on the high end, that's where we got $665,000. But trying to be
completely candid with OMB in thinking about a worst-case
scenario, I think that gives the wrong picture as to how much
it costs to have a Secret Service agent.
Mr. Shays. If I hadn't asked that question, you would have
found a way to bring it in, wouldn't you, for the record,
because this is an important point.
Mr. Lawson. It is. Yes, sir, because----
Mr. Shays. So would you have found a way?
Mr. Lawson. At the very end when you say, ``Is there
anything you would like to say,'' I'd have something to say,
sir.
Mr. Shays. OK.
Mr. Lawson. And I also have charts to provide.
Mr. Shays. OK.
Mr. Lawson. All right?
Mr. Shays. Well, they'll all be in the record.
Mr. Lawson. All right, sir. Just bottom line, it does not
cost that much money for a Secret Service agent to do his job
at a foreign embassy. The correct figure, sir, is around
$400,000, and we're looking at, say, other costs than just
salary and benefits, sir. But for all our bureaus it does vary,
depending on where your location is and also the mission. So to
develop a correct figure for our bureaus we need to look at one
location across the board--let's say Mexico City. Look at it
for ATF, Customs, Secret Service, and then develop a number.
But the number you heard earlier is incorrect.
Mr. Shays. OK. The number 400,000 still is a pretty penny
for an individual that you just mentioned, a more realistic
cost. Just shed some light as to why it would be that number,
that amount.
Mr. Lawson. Well, sir, what was calculated by Secret
Service, we're not just looking at the individual's salary.
Mr. Shays. Right.
Mr. Lawson. We're also looking at perhaps for equipment,
furniture, housing costs. If this person is bringing a----
Mr. Shays. What would be unique, though, to Secret Service
that would be above and beyond housing--you know, I'm assuming
the housing would be the same whatever employee we had--
Defense, the Treasury, State Department, as well. So what would
be an additional cost for the Secret Service? They still seem
to be at the higher end.
Mr. Lawson. That figure, again, is based on placing a
Secret Service agent with a family of four in, say, Rome or
Hong Kong, a high-end location versus a low-end location. But,
to answer your question directly, there would be no difference
in cost for a Secret Service agent or for a Defense employee
for just salary and benefits, sir.
Mr. Shays. You know, let me just--my counsel has pointed
out that the per average cost of all employees is about 339. I
get the feeling that this number--we need to nail this number
down a bit more, obviously, in terms of comparing the same
requirements and so on.
Mr. Lawson. Yes, sir.
Mr. Shays. Is there a difference in--let me back up and say
when you all feel there is a need to add to a mission--excuse
me, I don't want to confuse mission and mission. When you feel
there is a need to add employees to overseas, what process do
each of your departments follow?
Mr. Lawson. We comply with the NSDD 38, through State,
coordinate for our bureaus through the Under Secretary of
Treasury to ensure that everyone is on the same sheet of music,
sir, and then there is an evaluation of cost and need to ensure
that we are not placing a person in a location when there's not
a true need.
And let me say this for Secret Service. Secret Service has
closed locations, such as closing its Ottawa office once it
realized there was no longer a law enforcement need there, and
transferred it to Ronset, where there was a need, where they
found counterfeiting occurring and prevalent pattern as opposed
to Ottawa, sir.
Mr. Shays. Let me just go down the line here.
Mr. Hoehn. Yes, sir. Similarly, we adhere to the procedures
identified in NSDD 38. In this instance, we have an internal
review process within the Department of Defense for the three
different functions that I outlined, but ultimately the chief
of mission has the approval authority for any increases or
decreases to the size of our presence, and so we have both an
internal review process, but then we work that very carefully
with the chief of mission.
Mr. Diegelman. I can just basically second what has already
been said. We follow the NSDD approach, NSDD 38 requirements,
but also internally we do our own internal assessment why
there's a need in that particular site, and that particularly
looks at either investigative leads that we have, caseloads
that we have, contacts that we have with foreign governments.
The FBI is mainly leading the charge on this right now,
particularly in the wake of September 11th, where we actually
are getting investigative leads related to terrorism,
investigations that can only really be handled onsite. So we do
an evaluation of how many leads, how many cases, the level of
cooperation of law enforcement agencies before even kicking off
the NSDD 38.
Mr. Shays. Do overseas positions receive Ambassadorial
approval prior to the staffing decision and before the budget
allocations are made?
Mr. Diegelman. My answer to that is yes for the Justice
Department. It's supposed to be that way. Now, that doesn't
mean that always happens, but my answer to that is yes.
Mr. Shays. All right. I think that's probably a more
accurate description, ``It's supposed to happen.'' I'm not sure
it does happen.
Mr. Hoehn.
Mr. Hoehn. I would agree it is supposed to happen that way.
I can't attest to you here that it always happens.
Mr. Shays. Mr. Lawson.
Mr. Lawson. I have to agree, too, sir.
Mr. Shays. You know, I think this issue is pretty clear-cut
for us. I care most about the fact that you can convey that
there will be cooperation from your superiors, and I think
that's going to be absolutely essential. I do recognize that
each agency, each department has its separate missions. We want
to have that work in tandem with the focus of the mission, but
the bottom line is that sometimes the focus of the Ambassador
may not be the focus of each of your mandates, and your
mandates are clearly directed by the President, by the
Secretaries, and also by Congress. You have certain missions to
fulfill, certain objectives, certain things that you have to
get done. But I think it is clear to you all, it is clear to
the committee that there can be better coordination, there can
be better cooperation.
I think the thing that I find the most troubling--
``troubling'' is not the right word, but the area where I would
find it difficult if I were an ambassador or chief of a
mission, in general, that I have more than half my employees
are nationals. They probably respond to the wishes of the
embassy closely because those jobs are fairly well paid and we
have excellent employees working for our embassies that are
nationals. But they have long-term knowledge that supersedes
almost any employee, American employee, because of the
rotations that we have. That would be a challenge.
It would also be a challenge, I think, for an ambassador to
step in, know the resources he has available--or she--to its
own Foreign Service employees, and then to see an agency come
in with, you know, significant resources that are dedicated for
carrying out the functions of that particular effort.
I think that we've got to find a way to somehow understand
the kinds of resources each agency and each department is
dedicating. And I don't want to have it be--I wouldn't want it
to be a dumbing down, like everything had to be the average,
because somebody didn't have enough money nobody gets enough
money. That's not what I'm suggesting. But it does represent a
challenge for, I think, morale, I think for making sure that
the embassy is doing what is required.
I would love for us in this process to know the true cost.
First of all, I'd like you all to be able to tell me, if I
instantly asked--I might even ask you--how many employees you
have around the world to the number. And it seems to me we
should be able to know it. It shouldn't take days or weeks. It
should be just something we know. That seems fairly clear.
But it seems to me that every agency and department should
have a clear sense of what they're spending in each mission
around the world, and to be able to justify it, and then we
should be able to have an open and candid conversation as to
why does Treasury devote this much per employee versus what
Defense would or versus what Justice would and so on.
I don't have any additional comments.
Is there anything you want on the record?
Mr. Costa. Yes.
Mr. Shays. We're going to allow the professional staff to
ask two questions, and then I'm going to let you all close up.
Yes, sir?
Mr. Costa. Thank you, Mr. Chairman.
Previous panels mentioned putting a rent charge on new
buildings or existing buildings, and I'm wondering what your
departments feel about the rent option, and if it were enacted
how would that affect your operations overseas?
Mr. Lawson. With treasury?
Mr. Costa. We'll go down the line.
Mr. Lawson. We'll pay our fair share, but we would like to
have some type of notice so we include that in our base so we
can budget for it.
Mr. Costa. Thank you.
Mr. Hoehn. I think it is our view that we'll work within
the administration on this initiative of capital cost sharing,
but I would highlight that there are some important issues that
would need to be resolved, not least of which would be the
congressional oversight of different agency budgets, so we
would now see in this instance, where the capital costs for new
construction might be spread among all of our agency budgets,
as opposed to contained in any single agency budget, and that
might prove to be a very difficult issue for you.
Mr. Shays. I'm sorry. I should understand that but it's
just going through me. Are you saying you would spread out the
cost? Wouldn't it be better to have it be allocated per
department? What am I missing here? Explain it to me.
Mr. Hoehn. As I understand it, if the costs were allocated
on a pro rata basis in terms of----
Mr. Shays. Right.
Mr. Hoehn. Then that would be reflected in each of our
budgets.
Mr. Shays. Correct.
Mr. Hoehn. And therefore, when oversight is given here in
Congress, you would have a number of different committees
looking at different agency budgets that would have that pro
rata share.
Mr. Shays. Correct.
Mr. Hoehn. As opposed to seeing the entire capital cost for
the investment in the State Department's budget, which is the
case today.
Mr. Shays. All right. The value, though, of doing it per
department is that you would begin to--you all would say,
``Well, this is worth it to me and this isn't.'' You would
begin to know how you would want to allocate your resources to
maximize your particular mission. And so I hope I'm not
misunderstanding you.
I think your concern is--let me ask you to make sure I'm
understanding. It's your concern that when you go through the
appropriation process one committee might have one standard of
dealing with what you should be allowed to spend overseas
versus what another committee would have when Defense goes
before the Defense Appropriations Subcommittee versus Treasury
going before its subcommittee, it's your concern that there
would be a failure to recognize differences in cost?
Mr. Hoehn. That's correct, sir.
Mr. Shays. Yes. I understand that. I do.
Mr. Diegelman, did you want to----
Mr. Diegelman. The only thing that I could add is that, you
know, I agree with my colleagues. We will clearly pay our fair
share. But I think real consideration has to be given to the
comment that I made earlier in my testimony in that cost should
not be the driving feature of whether we open or place somebody
in a particular mission or not. In today's world, we happen to
be a growth industry. The change in our own presence abroad
since 1991 has been dramatic. The FBI in 1991 had 17 legal
attaches. It now has 46. And these legal attaches are very
small organizations, generally three people, just the assistant
legal attache, the legal attache, the administrative officer.
We're talking about three and four people in a mission in
critical locations like Kabul and Abu Dhabi and Kuala Lumpur as
we engage in the war against terrorism. We shouldn't have to
make the decision to put three people or not three people in a
particular site because the rent charge is too high.
Mr. Shays. You know what? Can I say, though, if you follow
that logic you could apply it to anything in government. I
would like to read the answer to your question differently, and
then I'd like you to tell me if you agree.
Mr. Diegelman. Yes.
Mr. Shays. That Congress has to recognize that you have a
significant mission and should be willing to pay the cost, but
we shouldn't disguise the cost or not know what it is costing.
Mr. Diegelman. I agree with your statement.
Mr. Shays. OK.
Mr. Diegelman. It is a fair and accurate statement of what
I said.
Mr. Shays. OK.
One last question?
Mr. Costa. Actually, a question about reviewing staff
abroad. It's a question of how often do you review positions to
see if they're still necessary. For example, the CDC has a
sunset provision on all of its staff overseas. What sort of
review process do you have to gauge whether those staff are
still needed?
Mr. Lawson. Sure. Our bureaus--the Treasury, Secret
Service, Customs review regularly whether or not they need
staffing in a given office. As I said before, Secret Service
has reviewed the Ottawa office and realized it no longer needed
that office to accomplish its mission; therefore, it closed
that office and it opened another office because they found
criminal activity had transferred to Toronto. So our bureaus
regularly review the need for an office in a given foreign
embassy.
Mr. Costa. How often does that occur?
Mr. Lawson. Yearly. I cannot say that every law enforcement
bureau does it yearly, but I can tell you that Secret Service
does and Customs does.
Mr. Hoehn. Similarly, our requirements are reviewed
annually, and, as I noted in my remarks, we have made a number
of changes over recent years. I can't say that every function
in every post is reviewed annually, but we do have an annual
review process that's underway in which these determinations
are being made. And in some instances, because of some very
rapidly developing requirements, we've had to expedite some of
the changes that we had in place, that we had planned for
upcoming years, and move them into this year, particularly some
changes in central Asia that are now in place.
Mr. Diegelman. We also have an annual review process
basically as part of our budget formulation process, but then
also we normally do not permanently station anybody abroad. We
normally do it in 1 or 2-year terms, tours of duty, and then
reexamine that at the end of that term to decide whether we're
going to keep those people in that location.
Mr. Costa. OK. Thank you.
Thank you, Mr. Chairman.
Mr. Shays. Thank you.
Gentlemen, do you have anything that you feel needs to be
part of the record? I'd truly welcome it, any closing comments.
Mr. Lawson. No, sir.
Mr. Hoehn. No, thank you, sir.
Mr. Diegelman. Just to thank you once again for holding the
hearing. I think it is a critical issue, and we are very
actively interested in staying about.
Mr. Shays. Well, thank you. I feel that OMB and the
President has the cooperation of your departments, and that's
appreciated, and certainly we appreciate your cooperation and
look forward to a continued dialog.
I'll state again for the record, the work that our
embassies do is actually vital. It's clear it is more important
than ever. The work that is done by both employees of the State
Department and employees of other departments and agencies of
our Government is absolutely vital, as well, and we just want
to make sure that we have the right size in every case, and
that may, in fact, mean that we have more in some and less than
others, but we will all benefit.
So I thank you very much. At this time the hearing is
closed. I thank our reporter. Thank you.
[Whereupon, at 12:34 p.m., the subcommittee was adjourned,
to reconvene at the call of the Chair.]