[Senate Hearing 107-17]
[From the U.S. Government Publishing Office]





                                                         S. Hrg. 107-17

 STATE DEPARTMENT REFORM: REVIEWING THE REPORT OF THE INDEPENDENT TASK 
 FORCE COSPONSORED BY THE COUNCIL ON FOREIGN RELATIONS AND THE CENTER 
                FOR STRATEGIC AND INTERNATIONAL STUDIES

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

                                HEARING

                               BEFORE THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                            FEBRUARY 28, 2001

                               __________

       Printed for the use of the Committee on Foreign Relations


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

                    U.S. GOVERNMENT PRINTING OFFICE
71-539 DTP                  WASHINGTON : 2001




                     COMMITTEE ON FOREIGN RELATIONS

                 JESSE HELMS, North Carolina, Chairman
RICHARD G. LUGAR, Indiana            JOSEPH R. BIDEN, Jr., Delaware
CHUCK HAGEL, Nebraska                PAUL S. SARBANES, Maryland
GORDON H. SMITH, Oregon              CHRISTOPHER J. DODD, Connecticut
CRAIG THOMAS, Wyoming                JOHN F. KERRY, Massachusetts
BILL FRIST, Tennessee                RUSSELL D. FEINGOLD, Wisconsin
LINCOLN D. CHAFEE, Rhode Island      PAUL D. WELLSTONE, Minnesota
GEORGE ALLEN, Virginia               BARBARA BOXER, California
SAM BROWNBACK, Kansas                ROBERT G. TORRICELLI, New Jersey
                                     BILL NELSON, Florida
                   Stephen E. Biegun, Staff Director
                Edwin K. Hall, Democratic Staff Director

                                  (ii)

  


                            C O N T E N T S

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                                                                   Page

Carlucci, Hon. Frank C., chairman, Independent Task Force on 
  State Department Reform; former Secretary of Defense and 
  National Security Advisor, Washington, DC......................     4
    Prepared statement...........................................     8
Donilon, Hon. Thomas E., member, Independent Task Force on State 
  Department Reform; Executive Vice President, Law and Policy, 
  Fannie Mae; former Assistant Secretary of State for Public 
  Affairs; State Department Chief of Staff, Washington, DC.......    11

                                 (iii)

  

 
 STATE DEPARTMENT REFORM: REVIEWING THE REPORT OF THE INDEPENDENT TASK 
 FORCE COSPONSORED BY THE COUNCIL ON FOREIGN RELATIONS AND THE CENTER 
                FOR STRATEGIC AND INTERNATIONAL STUDIES

                              ----------                              


                      WEDNESDAY, FEBRUARY 28, 2001

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 11:05 a.m. in 
room SD-419, Dirksen Senate Office Building, Hon. George Allen, 
presiding.
    Present: Senators Helms, Frist, Chafee, Allen, Brownback, 
Biden, Sarbanes, Dodd, and Bill Nelson.
    Senator Allen. The committee will please come to order. I 
want to welcome everyone this morning and say good morning to 
my colleagues on the committee, and it is good to see Secretary 
Frank Carlucci here and Hon. Thomas Donilon. We thank you for 
being here this morning.
    This hearing is on the overall issue of the State 
Department reform, in particular the report from the 
independent task force studying this matter. It is hard to 
imagine a task force with better-credentialed, qualified and 
experienced individuals than the two that are before us today, 
as we well know.
    Frank Carlucci has an extensive background as Secretary of 
Defense and National Security Advisor, and is the chair of the 
Independent Task Force. Mr. Donilon is a member of the 
Independent Task Force on State Department Reform, and also 
Executive Vice President of Law and Policy with Fannie Mae, 
former Assistant Secretary of State for Public Affairs, and the 
State Department Chief of Staff and, most importantly, is a 
proud graduate of the University of Virginia for his law 
degree.
    We are all happy about that, Mr. Chairman, with the 
University of Virginia's victory over a team to the south that 
still is ranked higher than the Wahoos. Nevertheless, I am 
honored to be designated as chair for this hearing, and also 
chair of the Foreign Relations subcommittee which deals with 
International Operations and Terrorism.
    As we all know, the subject matter and the jurisdiction of 
that Subcommittee on International Operations and Terrorism 
very much cares about the operations of the State Department, 
and I look forward to working with members of the full 
committee and the subcommittee, and then certainly will listen 
very carefully and read carefully the recommendations.
    This committee I think will work very closely also with 
Secretary Powell in reviewing the necessary reforms for the 
Department of State and Foreign Service to make it an agency 
that can advance our national interest in an efficient manner 
and, as we approach the reauthorization season for the 
Department of State, I will certainly bear in mind the views, 
and I am sure the committee will as well, of this distinguished 
panel today about improving the national security tools of 
which, of course, the State Department is an important part.
    Chairman Helms and I see today's hearing as an effort to 
meet a challenge described by then Secretary-designate Colin 
Powell during his confirmation hearing, namely that of carrying 
out the international leadership role which our own success has 
brought us. At that very hearing, General Powell pointed out 
that our State Department and its professionals are on the 
front lines of the American engagement, and it is an American 
engagement in a rapidly, quickly changing world, with more 
demanding and more complex problems that might have been faced 
in previous years.
    He raised concerns about adequate funding for the State 
Department and their personnel, and their facilities, and their 
infrastructure. The Independent Task Force actually in many 
regards echoes Secretary Powell's concerns and proposed a 
strategy called Resources for Reform, including the 
implementation of management techniques which are borrowed from 
the private sector, which I think is great. In fact, that is 
what all government ought to do.
    From my experience as Governor of Virginia, such management 
policies that rely on quantifiable and disciplined 
decisionmaking processes, as well as trying to have clear 
measurements of whether somebody is following through on those, 
and performance-based measurements are a good idea. It is good 
for management of the taxpayers' money, and it makes the 
operation the most up-to-date and efficient as possible. 
Whether that is the Department of State or any other agency, 
and I look forward to working with this committee and the 
Secretary in implementing such performance-based management 
approaches.
    One area where I would like to pay particular attention is 
the development of a rational and efficient information 
technology and knowledge management program within the 
Department of State. I understand that the Department is still 
suffering under a woefully antiquated and disjointed 
information technology architecture, with systems that cannot 
even communicate within the same agency, much less communicate 
with Washington and a post in some foreign embassy.
    Now, this is pitiful, and we must find a way to bring the 
entirety of our foreign policy apparatus into an architecture 
which will allow a seamless, near instant, and complete 
communications system which is so critical in this information 
and, obviously, for proper operations.
    For our part, the timing of today's hearing is certainly 
appropriate, and timely, in light of the unfolding budget 
process and authorizations planning which are now underway in 
the State Department, and although we have just at this point 
been given the administration's budget blueprint, this 
committee is pleased to open a door to the task force's 
concerns. We want your insights, your ideas, and your 
suggestions.
    We welcome you, and look forward to your testimony, and 
after Senator Biden's opening statement we will hear first from 
Secretary Carlucci, and then Mr. Donilon.
    Senator Biden. Thank you very much, Mr. Chairman. Mr. 
Secretary, good to see you. It has been a while. I will tell 
you, sitting there looking at you, I realize how long I have 
been here, and you have had a lot of tough assignment in this 
Government over the years, and this may be one of the tougher 
ones. Talking about the Gordian Knot in the State Department, 
but I want to thank you and my friend--I want to have full 
disclosure here, Mr. Chairman. I consider Tom Donilon one of my 
closest friends, so if I say nice things about him, it is 
because I have to, but Tom, thanks for being here.
    The Carlucci report underscores the need to make changes in 
the Department both in the institutional and on the financial 
front. I do not have any doubt the Department is in need of 
institutional reform and improved management, but many of the 
State Department's problems, in my view, just hanging around 
this place for 28 years, derive from the fact that it is 
starved for resources. Compared with other agencies in the 
national security world, the Defense and Intelligence Agency, 
the Department is clearly the poor cousin. Funding for the 150 
function, the international affairs account, is just $20 
billion a year, or 1 percent of the Federal budget. We cannot 
afford to continue that, and we cannot afford to not do more.
    Moreover, in the past, we have afforded more. Spending on 
foreign affairs in fiscal 2001 was $23 billion, which is well 
below the historic levels. It is 7.6 percent below the average 
of the last 20 years, and 37 percent below the peak in the mid-
eighties, so we need to provide more, because the resources are 
so badly needed.
    In late 1999, the Overseas Presence Advisory Panel reviewed 
the state of our national diplomatic infrastructure and found 
it badly wanting. I just want to read one paragraph from it. It 
says, ``Insecure and decrepit facilities, obsolete information 
technologies,'' as pointed out by the acting chairman, 
``outdated human resource practices, outmoded management and 
fiscal tools, threaten to cripple American overseas presence, 
which is perilously close to the point of systems failure.'' 
This description hardly seems worthy of a great power.
    To be sure, Congress has appropriated increased funds for 
the State Department in recent years, but addressing the 
Department's infrastructure and security deficiencies is a 
long-term and expensive project. I would just note, Senator 
Helms and I have been struggling, as has been the 
Appropriations Committee, with just dealing with making our 
foreign embassies secure, let alone functional, just physically 
secure. I mean, we're talking about a significant amount of 
money and a significant commitment.
    Some 80 percent of our embassies, for example, do not meet 
our present security standards. It will take a long time, a lot 
of money, and an awful lot of will to replace or renovate all 
of these embassies.
    So I have reviewed the Carlucci report, and agree with many 
of your findings, Mr. Secretary, regarding the deficiencies 
that it points out. The Department needs to recapture the lead 
role in the executive branch in making foreign policy. 
Ambassadors should have greater control of personnel and 
financial resources at their post, regardless of the agency 
that sent them, and the Department needs more modern computers, 
more personnel, better and safer facilities, and the list goes 
on.
    I would say that I can understand, after having been here a 
while, why some Secretaries when they come in essentially go to 
that one floor, surround themselves with seven or eight people, 
and try to run the operation from there.
    I mean, one of the people who I really--I do not know 
whether you interviewed him as part of the report, I should 
know--Felix Rohatyn, our Ambassador to France, hard-nosed guy, 
tough businessman, I thought a hell of an ambassador, spoke the 
language, knew the culture, I mean, my Lord, I went to see him 
on a matter unrelated to the personnel, or unrelated to the 
State Department, and I spent a weekend. He asked me to stay on 
another 2 days, or almost 2 days, just for him to let me know 
how badly run he thought the management of the State Department 
was, as well as the resources.
    So I compliment you for being willing to do this, both of 
you, and I must say I think we may have delivered to us the 
right Secretary of State at the right time, because I think in 
order to be able to convince the Congress of the need for 
resources we have got the most persuasive guy we could have in 
our new Secretary of State, and I would note parenthetically, 
Mr. Chairman, I thought he did a pretty good job on this recent 
trip, particularly his comments in Europe, which I think are 
going to settle a lot of nerves, where he said, we went in 
together, we will come out together, and so right now he is 
high on my list.
    I think you have got a great ally in him, and hopefully us 
implementing a significant portion of what you are 
recommending. I thank you both for being here, and at some 
point, Mr. Chairman--since I am cochairing the hearing on 
Colombia downstairs on the second floor. I will be in and out, 
so I apologize if that occurs.
    Senator Allen. Thank you, Senator Biden. We understand. 
There are a lot of things going on at the same time around 
here.
    We would first like to hear from the gentleman who authored 
the Carlucci report. Mr. Carlucci, would you please present 
your views to us?

 STATEMENT OF HON. FRANK C. CARLUCCI, CHAIR, INDEPENDENT TASK 
   FORCE ON STATE DEPARTMENT REFORM; AND FORMER SECRETARY OF 
     DEFENSE AND NATIONAL SECURITY ADVISOR, WASHINGTON, DC

    Mr. Carlucci. Thank you, Mr. Chairman, distinguished 
members of the committee. It is a pleasure to appear before 
you, and I commend you for holding an early hearing on this 
very important subject. I have written testimony. With your 
permission, I will submit it for the record and make some 
informal comments, and I will try to be brief.
    Senator Biden, Felix Rohatyn was a member of our group.
    Senator Biden. Was he? I should have known that.
    Mr. Carlucci. He also has had a separate conversation with 
Colin Powell about the management of the State Department. He 
does feel very strongly, and I have talked at length with Felix 
about this. His views are very solid. They are very good.
    Senator Biden. I agree with you.
    Mr. Carlucci. You have outlined, both you, Mr. Chairman, 
and Senator Biden, the problem. It is worth repeating once 
again, because it has become a litany. Obsolete 
telecommunications facilities, often unsafe and unsecure 
working environments, poor congressional relations I would add 
to the list, Senator Biden, a dysfunctional personnel system, a 
shortage of FSO's, inadequate training, and a lack of 
ambassadorial authority over other agencies. One could go on 
with additional problems. That is just the start of the list. 
It is an institution that is literally crying out for reform, 
and the series of blue ribbon panels, including the Kaden 
Commission report, and another I chaired, all came to the same 
conclusion.
    Consequently, when the Council on Foreign Relations and 
Center for Strategic and International Studies [CSIS] 
approached me to be chairman of this Task Force, I said no. We 
do not need another blue ribbon panel. We have had enough blue 
ribbon panels. They all came to the same conclusion. They said 
no, this is going to be an action-oriented document, we are 
going to summarize and synthesize the recommendations of the 
blue ribbon panels. That is actually what has been done.
    Under the very able drafting of Ian Brzezinski we think we 
have provided a road map for the new Secretary to jump-start 
the reform process. The report has received a fair amount of 
attention, and I credit that to the bipartisan nature of the 
group. We had senior people, including people off the Hill of 
both political parties, and it was interesting that we came 
together very quickly on two conclusions.
    One is that the State Department is in an advanced state of 
disrepair, and this is, as you pointed out, Senator Biden, to a 
large measure a resources problem, but we would argue that it 
is not totally. The State Department, and I speak as one who 
was a Foreign Service officer for 26 years, has never been able 
to manage itself properly. It suffers from long-term 
mismanagement. As you pointed out, certain Secretaries take a 
look and say, well, I will closet myself and just concentrate 
on foreign policy instead of on the management of the 
Department.
    What is needed, of course, is both resources and reform. 
Without the reform, we are not going to get the resources from 
the Congress, and without the resources, there are a lot of 
things that we are not going to be able to do, hence, the heart 
of our report, as you pointed out, Senator Biden, is the 
resources for a reform strategy. There are three components to 
that strategy. One is Presidential leadership, another is to 
clarify the interagency relationships and responsibilities, and 
the third is to revitalize the State Department. Let me comment 
briefly on each.
    Presidential leadership. We think there should be a 
Presidential directive declaring reform of our foreign policy 
apparatus to be a national security priority, and spelling out 
the steps the President expects to take. We would like to see 
the President use his podium to educate on the issue. We would 
like to see it figure in a major speech to the American people.
    Third, we think the President needs to reach out to the 
Congress on this issue. In particular, I might say, he needs to 
consult with the leadership of this committee, because it has 
to be a full partnership. If we are going to reform our foreign 
policy institutions, we are going to have to walk hand-in-hand 
down the road together.
    Second, clarifying interagency roles and responsibilities. 
Here, too, we think a Presidential directive is in order, 
reaffirming that the Secretary of State is the President's 
principal foreign policy advisor, spokesman, and foreign policy 
implementer. The same directive could spell out the 
coordinating role of the National Security Advisor.
    We think the President has to reinforce the authority of 
the ambassador. Every President since Kennedy has issued a 
letter telling ambassadors they are in charge, but they 
frequently are not in charge. We need to find a way to put more 
teeth in the Kennedy letter.
    The ways I can think of are to give the ambassador more say 
over other agency's budgets, the agencies that are involved in 
his or her country, to make agencies pay attention to the 
ambassador's efficiency report on agency heads who are assigned 
to his or her country, and to give the ambassador, absolute 
authority to send home immediately people who do not function 
as full players on the country team.
    Third, we think there should be an integrated national 
security budget. Now, we are not trying to tell the Congress 
how to organize itself, and the usual rejoinder is, well, the 
Congress cannot handle an integrated budget. But surely it 
would be useful for the Congress, at least this committee, to 
see the tradeoff between State and Defense, as opposed to the 
tradeoff between State and Justice and Labor. The President can 
display the budget any way he wants, and we think there ought 
to be an integrated national security display.
    The third component is to move immediately to revitalize 
the State Department. The State Department badly needs a chief 
operating officer. For far too long, the budget and policy 
functions have been bifurcated, and should he be confirmed by 
this committee, I think Rich Armitage would be an ideal chief 
operating officer. Rich worked for me in the Pentagon. He is 
absolutely superb.
    The State Department needs to reshape its human resources 
programs, and I had a conversation with the State Department 
this morning on this. They are moving on such things as spousal 
assignments, but there are a whole host of other problems to be 
addressed. Recruitment takes far too long, a couple of years to 
get somebody on board.
    Training is inadequate. They do not have sufficient people 
to rotate into training programs. The up-and-out system has had 
the unintended effect of forcing out some of the better people. 
The grievance mechanism, based on legislation passed by the 
Congress many years ago, is very inflexible for what should be 
a fast-moving agency, and we need to find ways to bring in more 
specialists.
    To do this, the Foreign Service Reserve System could be 
revitalized. It used to work pretty well. Of course, in our 
overseas establishment we have to right-size. That does not 
automatically mean cutting. We need to find new concepts for 
our embassies. Felix Rohatyn is a staunch advocate of this.
    Third, the State Department culture needs to change. This 
is probably the most controversial recommendation of the Task 
Force. Back when I went into the Foreign Service, the emphasis 
was on government-to-government relations. Today, the 
interaction has to be with all of the elements of society, with 
the educational institutions, the health institutions, the 
church, the press, the politicians, the economists, and the 
businessmen.
    The embassy has to be able to reach out, interact with 
these elements of society, and analyze the society as a 
totality. We also have to do a lot better at public diplomacy. 
Senator Helms, you were responsible for bringing the USIA into 
the State Department, and hopefully that will improve the 
public diplomacy component.
    The press says, hurrah, when you talk about a more open 
State Department. The State Department Foreign Service officers 
tend to be a little defensive. They say, well, we are changing 
and, indeed, they are, but our argument is, it needs to change 
faster.
    Then there is the question of infrastructure, particularly 
telecommunications. That is, in my judgment at least, a simple 
question of money. The report that I chaired a while back 
recommended a $400 million telecommunications fund. I had had a 
telecom company that I happened to chair take a look at it, and 
they came up with a figure. It was scaled back to a pilot 
program, I am told, here on the Hill. I would argue that the 
State Department ought to go big. We know enough about 
telecommunications to know that we can let a master contract, 
modernize the system, and do it effectively and efficiently. It 
badly needs to be done.
    Security goes without saying. I am sure this committee will 
support the security upgrades that are needed, but the State 
Department is not very good at real estate. The foreign 
buildings operation is a bureaucratic institution. The Kaden 
Commission came up with the idea of an overseas facilities 
authority, a federally chartered agency that would be able to 
employ private sector techniques that have been so successful 
in the real estate area. I happen to think that is a very good 
idea. The idea, by the way, came, I am told, from our current 
Secretary of the Treasury, Paul O'Neill.
    Finally, the State Department needs to upgrade its 
congressional relations. For far too long, that has not been a 
choice assignment. The Secretary needs to find ways to induce 
better people to go into congressional relations, and 
congressional relations needs to see itself as a facilitator of 
information, not as a funnel through which all information must 
pass. I can remember the days when all of us in the State 
Department were up on the Hill. For some reason, that has all 
changed, and it is a more constricted environment.
    We have conveyed our report to the Secretary of State. In 
fact, we had the first appointment after his swearing in. That 
was symbolically important. He indicated that he was going to 
take the report very seriously. He obviously could not be 
expected to endorse everything in it at that time, but he 
indicated that he intended to follow the general thrust.
    So far, he has made all the right moves. I know he can 
count on your support. As I think you, Senator Biden, 
suggested--I guess it was you, Mr. Chairman, we might be at the 
right moment. We have a recognized need. We have a Secretary of 
State with managerial experience who intends to manage, and he 
has made that clear.
    The other day I was in a meeting with him, and somebody 
said, well, I have a personnel problem, who do I go to. He 
said, you go to me. I am the chief personnel officer of this 
Department. Well, that is unusual for a Secretary of State to 
say.
    He has also got the stature, I believe, to command 
attention, both on the Hill and in the public. I sensed from 
this committee, and I testified in the House the other day, 
that there is great receptivity here for supporting the kinds 
of things that need to be done. I know he looks forward to 
working with you on the management of the State Department.
    [The prepared statement of Mr. Carlucci follows:]

              Prepared Statement of Hon. Frank C. Carlucci

    Mr. Chairman, thank you for inviting me to appear before your 
Committee in my capacity as chairman of an independent Task Force which 
recently issued its report on State Department reform.
    Allow me to commend you for making State Department reform the 
subject of one of your Committee's first hearings in the 107th 
Congress. Few bureaucracies are in greater need of renovation than the 
Department of State. Indeed, the facts reviewed in our Task Force 
report make this point all too clearly.

   The Department's human resource policies are dysfunctional. 
        They have generated a severe crisis in morale among State 
        Department employees and serious workforce shortfalls, 
        including a deficit of some 700 Foreign Service Officers (FSOs) 
        or nearly 15 percent of FSO requirements.

   The Department's communications and information management 
        infrastructure is outdated. Ninety-two percent of overseas 
        posts are equipped with obsolete classified networks, some of 
        which have no classified connectivity with the rest of the U.S. 
        government. Unclassified systems also are antiquated and 
        inadequate.

   Many Department of State facilities at home and overseas are 
        shabby and insecure. They frequently do not meet Occupational 
        Safety and Health Administration (OSHA) standards. Nearly 25 
        percent of all posts are seriously overcrowded. Moreover, 88 
        percent of all embassies do not fulfill established security 
        standards, and many require major security upgrades.

   Ambassadors deployed overseas lack the authority necessary 
        to coordinate and oversee the resources and personnel deployed 
        to their missions by other agencies and departments.

   Policymaking and budget management within the Department are 
        bifurcated.

   The Department's professional culture remains predisposed 
        against public outreach and engagement, thus undercutting its 
        effectiveness at public diplomacy, an increasingly important 
        priority of foreign policy.

    This condition--I am tempted to say ``state of affairs''--is not 
only a disservice to the high-caliber men and women of the Foreign 
Service and Civil Service who serve their country under the Department 
of State. It also handicaps the ability of the United States to shape 
and respond to the opportunities and growing challenges of the 21st 
century. If this deterioration continues, our ability to use statecraft 
to avoid, manage, and resolve crises and to deter aggression will 
decline, increasing the likelihood that America will have to use 
military force to protect our interests abroad.
    In short, reversing this decline must be a top national security 
priority.
    Before I address the key elements of the reform action plan 
articulated by our report, allow me to underscore three key aspects of 
our Task Force.
    First, this initiative was sponsored jointly by the Council on 
Foreign Relations (CFR) and the Center for Strategic and International 
Studies (CSIS). I am particularly grateful to Les Gelb and Paula 
Dobriansky of the CFR and CSIS' John Hamre. They not only provided us 
with much needed organizational support, they are the ones who 
generated this Task Force and asked me to serve as its chairman. They 
also brought to our effort their considerable experience and insight 
into the making of U.S. national security policy.
    Second, the mandate of the Task Force was clear from the outset. 
There have been a plentitude of blue ribbon panels and commissions that 
have examined the institutional problems besetting the Department of 
State. Our intent was not to reinvent the findings and recommendations 
of these outstanding studies, but to synthesize them into an action 
plan of concrete steps. Our hope is that this report will assist the 
new administration jump start the revitalization of the State 
Department and, thus, of its role in U.S. national security policy.
    Third, if the Task Force fulfilled its mandate, it was in no small 
part due to its composition. Our group is bipartisan in character. Its 
members include those who served at the highest levels in both 
Democratic and Republican Administrations and on both sides of the 
aisle in Congress. And, our Task Force includes those who served on 
more than several of the important blue ribbon commissions whose 
conclusions were the starting point for our endeavor.
    Mr. Chairman, past efforts to repair the machinery of American 
foreign policy included initiatives by previous Secretaries of State, 
numerous high-level task forces, and legislation passed by Congress. 
However, they have been often received by the State Department and 
other agencies with grudging enthusiasm at best. More often than not, 
such initiatives encountered strong bureaucratic resistance.
    As a result, reform efforts have amounted to a series of half-
hearted, selective, and ultimately insufficient half-steps. The 
deterioration of America's foreign policy apparatus continues on a 
downward spiral that must be reversed. Indeed, Congress has, with 
justification, become skeptical of appropriating resources for the 
Department of State, which has been burdened with an image of being 
fundamentally flawed and wasteful, if not irreparable. However, without 
resources, reversing the decline of the nation's foreign policy 
machinery becomes increasingly unattainable.
    How to break this downward spiral was the key question on the minds 
of the members of my Task Force, and our answer, the Task Force report, 
is presented in the form of two memoranda, one to the President and one 
to the Secretary of State. Since effective reform will require the 
partnership of both sides of Pennsylvania Avenue, I am confident that 
the elements of these memoranda are equally relevant to this committee 
and its responsibilities over America's foreign policy.
    The heart of our report is a ``resources-for-reform'' action plan. 
The action plan recognizes that while resources will be necessary for 
reform, reform will be necessary to obtain those resources from 
Congress. The Task Force report asserts that if Congress is convinced 
that fundamental reform is underway, it will provide the resources 
required to modernize and revitalize the foreign policy apparatus.
    Mr. Chairman, it is my hope that you will agree with that 
assertion.
    The core components of the ``resources-for-reform'' action plan 
are: (1) the establishment of a strong Presidential mandate for reform; 
(2) a clear tasking of responsibilities and authorities among the 
principal national security departments; and (3) concrete steps that 
can be initiated immediately to renew the Department of State.
    Allow me to review each of these elements briefly.
                          presidential mandate
    First, establishing a Presidential mandate for reform. The Task 
Force firmly believes that attention and commitment from not only the 
Secretary of State, but also personally from the President himself, is 
the imperative impulse for State Department renewal.
    The requisite presidential mandate for reform will require the 
following:
    First, a presidential directive (or directives) should be 
promulgated that declares reform of the Department of State to be a 
national security priority. It should articulate a comprehensive plan 
to reform the Department and its role in national security affairs. (In 
a moment, I will explain in a bit more detail what should be the 
content of this directive.)
    Second, the President should also use his ``bully pulpit'' to 
publicly reinforce the reform mandate. Toward this end, the Task Force 
urges that renewing the Department of State should be one of the themes 
of his first address to the nation.
    Third, the President should personally engage Congress to foster a 
partnership in this reform. He should personally meet with the 
Congressional committees that have jurisdiction over the State 
Department in order to explain to them the ``resources for reform'' 
action plan.
    Presidential directives, use of the President's first national 
address, and a partnership with Congress would provide much needed 
political and bureaucratic leverage for the Secretary of State and his 
efforts to drive the reform effort to a successful completion.
        clarifying interagency relationships and responsiblities
    The second element of the Task Force's action plan is the 
establishment of a sound organizational structure for the coordination 
of government agencies and departments responsible for national 
security policy. Toward this end, the Task Force calls for Presidential 
guidance that:

   reasserts the Secretary of State's role as the President's 
        principal advisor and spokesman on foreign affairs and the 
        leading role of the Department of State in the implementation 
        of U.S. foreign policy;

   strengthens the coordinating authorities that ambassadors 
        exercise over officials from other departments and agencies 
        serving at their embassies;

   and, initiates the annual presentation of an integrated 
        national security budget. (This document should define and 
        explain the linkages and trade-offs between the different 
        instruments of diplomacy, intelligence, defense, and 
        international economics and the budgetary decisions upon which 
        national security policy ultimately rests.)
                   reforming the department of state
    The third element of the Task Force's action plan are concrete 
reforms to overcome the Department's institutional disarray and 
dilapidated infrastructure. I will review them briefly:
    First, a key priority must be the re-centralization of the 
Department's budget and management authorities and their reintegration 
with the Department's policy-making process. The Secretary should 
conduct himself as State's Chief Executive Officer. He should empower 
his Deputy Secretary to act as the Department's Chief Operating Officer 
with line authority over its finances, administration, and human 
resources.
    In other words, the Deputy Secretary should return to his original 
role as the Department's top manager.
    Second, there is no greater imperative for the Department of State 
than correcting its dysfunctional human resources practices. As I 
mentioned earlier, they have generated a serious morale crisis. The 
Task Force endorsed the recommendations of the Overseas Presence 
Advisory Panel which called for improvements in the selection and 
recruitment of personnel, expanded professional development 
opportunities with an emphasis on leadership training, and enhancing 
the quality of life the Department provides its employees and their 
families.
    Third, among the most challenging priorities identified in our 
report is the need to transform the State Department's culture into one 
that emphasizes and embraces public outreach and engagement as a core 
function of diplomacy and statecraft. Today, the Department's 
professional culture remains predisposed to ``information policing'' 
rather than ``information providing.'' In the information age--an age 
of increasingly open societies--effective diplomacy requires not only 
explaining America's positions and views to foreign governments, but 
also to their citizens.
    Fourth, it is common knowledge that State Department facilities, 
both at home and overseas, are dilapidated and insecure. Fixing these 
problems, including a much needed modernization of State's 
communications and information equipment, will not only require 
additional resources, but also significant reform of how the U.S. 
Government manages the buildings and infrastructure supporting its 
foreign policy operations.
    For example, the highly inefficient Office of Foreign Buildings 
Operations should be eliminated. Its functions should be transferred to 
an ``Overseas Facilities Authority'' established as a federally charted 
government operation. The Department of State needs to get out of the 
business of building and renting office space. And, OFA provides an 
effective means to inject a high degree of privitization and 
professionalization into the management of U.S. overseas 
infrastructure.
    Finally, the Secretary of State needs to engage Congress more 
rationally and with greater energy. Our Task Force suggests steps to 
upgrade the Department's Legislative Affairs Bureau. It also urges the 
Secretary to commit himself to meet informally on a monthly basis with 
the Chairmen of Congressional Committees with jurisdiction over foreign 
policy and to instruct his subordinates down to the Deputy Assistant 
Secretary level to do the same with relevant Subcommittee Chairmen, key 
legislators, and Congressional staff.
    These are not all the specific recommendations presented in the 
Task Force report, but I hope they convey the Task Force's focus on 
concrete recommendations that are immediately actionable.
    The Task Force believes that the determined execution of the 
``resources for reform'' action plan will immediately boost State 
Department morale, revitalize the Department's central role in the 
making and implementation of national security policy, and provide a 
sound foundation for a genuine partnership with Congress in this reform 
endeavor.
    Mr. Chairman, the recent change in administrations here in 
Washington provides an ideal time jump start the process of State 
Department reform. The new President and his Secretary of State have a 
clean slate that can be used to effectively force the implementation of 
difficult decisions and departures from long-standing practices. And, 
we have in Colin Powell a Secretary of State determined to renew his 
Department.
    On the Monday following President Bush's inauguration, I visited 
Colin Powell and formally presented to him our Task Force report. I 
emphasize the word formally because I know that he personally kept 
abreast of the Task Force's deliberations and the evolution of this 
document. In our meeting, Secretary Powell expressed appreciation for 
the Task Force's focus on actions that could be implemented with 
dispatch, because, as he said repeatedly during our meeting, that is 
exactly how he intends to act.
    Mr. Chairman, I urge you and your colleagues to give him your full 
support. Thank you.

    The Chairman. Mr. Chairman, I have to go to another 
meeting. One point, if I could--and thank you both for coming, 
and I want to read everything you have said over and over 
again. Are you familiar with Felix Rohatyn, the Ambassador to 
France?
    Mr. Carlucci. Yes. He was a member of our group.
    The Chairman. Well then, I am sure you know what he did as 
an experiment in France, sort of like a bank has teller 
windows. He said, the people were all concentrated right there 
in Paris, and people in the rest of the country did not know, 
and do you think that is a good idea?
    Mr. Carlucci. I think it is an excellent idea to get people 
out, and there are a lot of functions in these large embassies, 
voucher processing and other things that could be done back in 
Washington. They could even be contracted out.
    The Chairman. Of course, the cost is no greater, and when 
you have the fax machine and all the rest of it you have got 
half of it lit, and it makes an important point with people in 
the community, in this city and that city, and the other city, 
but I thank you very much. It is good to see both of you again, 
and thank you for helping us on this hearing.
    Mr. Carlucci. Thank you, Mr. Chairman.
    Senator Allen. Thank you, Mr. Chairman.
    Mr. Donilon.

 STATEMENT OF HON. THOMAS E. DONILON, MEMBER, INDEPENDENT TASK 
FORCE ON STATE DEPARTMENT REFORM; EXECUTIVE VICE PRESIDENT--LAW 
AND POLICY, FANNIE MAE; AND FORMER ASSISTANT SECRETARY OF STATE 
     FOR PUBLIC AFFAIRS, STATE DEPARTMENT CHIEF OF STAFF, 
                         WASHINGTON, DC

    Mr. Donilon. Mr. Chairman, Senator Helms, Senator Biden, 
members of the committee, my name is Tom Donilon. I appear as a 
proud graduate of the University of Virginia Law School. I will 
underscore that again.
    Senator Biden. Graduate school doesn't count for the 
basketball team. I keep trying to claim Syracuse basketball 
over Delaware. It does not work.
    Mr. Donilon. We are not fair weather alums at Virginia, 
Senator.
    I appreciate the opportunity to appear before you as a 
member of Secretary Carlucci's Task Force. I am privileged to 
be at the same table with him today.
    I also appear as a former senior official of the State 
Department who cares deeply about the men and women of the 
Department who believes that its functioning as a first class 
and effective organization is essential to our national 
security and believes the Department is in very serious need of 
reform and resources, as Senator Allen, you and the other 
members of the committee, and Secretary Carlucci have outlined, 
but in the words of the Task Force, ``the deterioration of 
America's foreign policy apparatus is now in a downward spiral 
that must be reversed.''
    Our report is a call to action to reverse that downward 
spiral and a challenge to the President to make revitalization 
of our foreign policy tools a top national security priority, 
and it challenges the Congress to provide the necessary 
resources to do so.
    I want to compliment Secretary Carlucci for spearheading 
this thoroughly bipartisan effort and the committee for 
considering reform and resource issues so early in your agenda. 
I also note the great work of Ian Brzezinski as the project 
coordinator for our group.
    These issues are not unfamiliar to the members of this 
committee. Senator Helms and Senator Biden have been working on 
efficiency and reorganization issues with the State Department 
for a long time, but there is a lot more to be done.
    We have never demanded more from the Department. If one 
consensus has emerged as a core principle of United States 
foreign policy since the end of the cold war, it is the 
continuing imperative of international leaders and the United 
States' international leadership and engagement and, indeed, it 
is the central lesson of the last century, and the requirements 
of this leadership, Senator Allen, as you indicated, have 
become increasingly complex and demanding and, at the same time 
we are making unprecedented demands on our policy structures 
and people, we are asking them to do it from a deteriorating 
platform around the world.
    As Secretary Carlucci said, and I will just say a couple of 
informal things because he has covered the report fairly 
comprehensively, as Secretary Carlucci said, the task force 
undertook to review and synthesize the best work and 
recommendations of a number of recent studies on the condition, 
role, and future of the State Department, and these prior 
reports are listed and their findings are summarized in the 
appendices to the report.
    I want to draw the committee's attention, though, to two of 
these reports, because I think they are quite important. The 
first is the report of the Accountability and Review Boards on 
the August 1998 Embassy Bombings in Africa, where some 220 
people were killed, including a dozen Americans, and over 4,000 
people were injured.
    The second report is--it has been referenced a couple of 
times, the Kaden report. I do that for two reasons. No. 1, the 
membership of these committees was superb, Admiral Crowe, the 
former Chairman of the Joint Chiefs and later Ambassador to the 
United Kingdom chaired the Accountability Boards, and the 
overseas advisory panel was chaired by a preeminent member of 
the bar and had, as Secretary Carlucci alluded to, significant 
participation by the private sector.
    Jack Welch, chairman of GE, Paul O'Neill, then at Alcoa, 
now Secretary of the Treasury, were active members of this 
panel, and I point to these reports because I think they put us 
on notice, they put the committee on notice and they put the 
executive branch on notice with respect to the crisis in the 
physical condition and the security of our U.S. posts abroad.
    Senator Biden quoted from the Advisory Panel on Overseas 
Presence: ``the United States overseas presence which has 
provided the central underpinnings of U.S. foreign policy for 
many decades is in a near state of crisis.''
    Admiral Crowe noted in his transmittal letter to Secretary 
Albright after the bombings in Africa in August 1998: ``a 
collective failure by several administrations and Congresses 
over the past decade to invest adequately in efforts and 
resources to reduce the vulnerability of U.S. diplomatic 
missions around the world.'' He called it a collective failure 
of both the Congress and several administrations.
    As I have said, I point to these reports because they put 
us on notice that a decade of failure to invest on a sustained 
basis in overseas infrastructure and security have placed us in 
a perilous condition, and failure to address this condition I 
believe is a failure to address central a national security 
concern.
    Let me underscore three quick points from the report. The 
first is the focus on management, as Senator Biden alluded to, 
and this is really key. At the State Department, at the highest 
levels, management is the easiest thing to slip to the bottom 
of the list.
    The State Department essentially is a policy organization. 
Policy development and policy execution is the glamorous aspect 
of being at the State Department. It is what gets rewarded. It 
is what gets noticed. Management is not glamorous. Management 
is hard work. It does not get noticed, it does not get rewarded 
the way it should, and I know from my own experience at the 
State Department, when you are at the highest levels there, 
that is the easiest thing to slip into the background of your 
day-to-day activities.
    We make a couple of specific recommendations in the 
independent task force report which I think are absolutely 
critical, and I will just underscore one, and that is, as 
Secretary Carlucci said, that the Deputy Secretary of State 
essentially serve as chief operating officer of the State 
Department. There have been different models over the years 
there, but many times the Deputy Secretary of State has had 
nothing to do with the administration of the Department.
    Underneath the Deputy Secretary of State, I would 
centralize budget, finance, administration, and human 
resources, and make the Deputy Secretary of State responsible 
to the building and to this committee for running the 
Department, and as the report says, this should be a person who 
relishes running a large organization, that is a special 
person, someone who really finds management rewarding day-in 
and day-out.
    In the Appropriations bill last year there was passed a 
bill that indicated there should be a second Deputy Secretary 
of State for Management and Resources. Our report recommends 
against that, and I think with good reason. I think that just 
duplicates the problem. You would again put management over to 
the side, as opposed to bringing management to the center.
    I would instruct the Department, and again I do this with 
some hesitation, because I am sensitive to allowing the 
Secretary of State to construct the Department any way that he 
or she sees fit, but I would instruct the Department from here, 
or tell the Department that it is the committee's 
recommendation and expectation that the Deputy Secretary of 
State be the chief operating officer of the Department.
    Second, physical security and infrastructure. We have 
discussed that here. The Department's overseas physical 
presence is dilapidated, ill-equipped, and secure, and the 
result of many years of inadequate resources have to be 
addressed. Admiral Crowe set forth in the Accountability Board 
Report a plan, a decade-long plan for renewing the physical 
infrastructure and ensuring security of our embassies abroad.
    My strong recommendation to this committee demand from the 
State Department a multi-year, decade-long plan that you work 
closely with them on implementing it, and that it be fully 
funded over the course of the decade. Not to do so will put us 
back in the same place where we were when Admiral Crowe made 
his recommendations.
    It is very interesting, if you read his transmittal letter 
to Secretary Albright in January 1999, he indicates that many 
of the recommendations that he is making here were 
recommendations that were made by Admiral Inman after the 
Beirut Embassy bombings, and what happened is, you have a 
tragedy, you have a report, the money goes up, the attention 
gets focused, and then it slips away, until you have another 
tragedy and another report, and another increase in funding, 
and then it slips away.
    I would really encourage this committee to demand that the 
State Department have a plan to implement physical security, 
physical infrastructure improvements over the next decade at 
the State Department, and that we not fall into that same 
pattern again of a lot of attention and then it slipping away. 
It is going to take sustained attention in order to get this 
done.
    Third and last, communications. Senator Allen, you 
mentioned that no American company of any scope that I know of 
would ever operate the way the State Department operates today. 
You have situations where people in the same building cannot 
send an e-mail to someone in an office next door. Again, no 
American corporation would operate this way.
    American corporations, as you know from the state you come 
from, have spent an enormous amount of resources over the last 
6, 7, 10 years in investing in IT [information technology], and 
we should--again, I would recommend to this committee that it 
demand a plan from the State Department as to how it is going 
to, on the unclassified portion of the Department first, ensure 
that you have at least off-the-shelf capabilities of e-mail, 
and Internet access, and then move on over the course of 
several years to bringing up to speed the classified systems.
    I think--Secretary Carlucci chaired the Simpson report, the 
Simpson report which indicated that it would cost $400 million 
to accomplish both these goals. It is a small amount of money 
to pay in the context of IT investment in the United States 
today.
    Finally, Senator Biden, I believe that you are absolutely 
correct that the stars are aligned here, potentially. We have a 
Secretary of State of great stature and experience, who has 
made appropriate funding and sound management of the Department 
a top priority. We have the largest surpluses projected in the 
history of our country.
    We are now talking about--we are having a serious national 
discussion about a very large tax cut. We have the leadership, 
we have the opportunity, and we have the resources to turn the 
State Department into a first-class organization, and I think a 
failure to do so would be a failure to pursue an important 
national security concern.
    Thank you.
    Senator Allen. Thank you both very much. We very much 
appreciate listening to your remarks, your enthusiasm, and your 
insight. Since we budgeted an hour for this hearing, I would 
say we limit comments and questions to 5 minutes, if that is OK 
with the committee. I just want to followup and then go to 
Senator Biden, and we will go as members are in and out.
    As far as the information technology aspects of it, and any 
aspect of government, and I know you both, especially Secretary 
Carlucci has been in the private sector. One thing that is 
important for continued support for funding of any project or 
any mission is some way of measuring performance and that is 
probably a very difficult thing to do in the Department of 
State. It is not like the Department of Commerce, or the 
Department of Transportation, or Justice, and Crime rates and 
investment rates, jobs being created, or welfare rolls going 
down, or those sorts of things.
    But to the extent that you could, it would be great, and I 
think this would be very helpful for getting that sustained 
funding that there is a strategic plan, and even if you just 
put it into the area of information technology, a strategic 
plan, here is what needs to be done to coordinate these--it is 
really--their IT departments are over 40 different agencies 
being developed, but here is the plan, here is the cost, and 
here are the guidelines, and here are the measurements, and as 
it goes over the years you see a quantifiable, measurable, 
somehow measurable difference in it.
    So my question to you all, whichever one of you gentlemen 
want to answer this, as far as performance basing this, and 
their IT systems, which are developed over 40 agencies, do you 
believe that the CIO, the chief information officer at the 
State Department, has the budget authority and the managerial 
control necessary to actually effectively coordinate this 
modernization?
    Mr. Carlucci. I will let Tom, whose experience is more 
recent than mine, answer that in more detail. My initial 
reaction to your question is no. That is why we need a chief 
operating officer. You need somebody who can bring together 
both budget and programs and traditionally, as Tom indicated, 
the program people have run the State Department.
    I came up through the political side. That was always the 
choice cone. We rose faster than anybody else. Management was 
not given a premium, so you have got to bring resources and 
management together if we are going to have an effective IT 
program. I think the idea that you set forth of benchmarking it 
so you can measure the progress is the way it ought to go.
    Mr. Donilon. Mr. Chairman, I think it can be scaled. There 
is a challenge, and it is because you have numerous agencies at 
each of these posts, a couple of dozen agencies at some posts. 
I think I would recommend the following: No. 1, that the 
President instruct all agencies with operations abroad that 
they have to work with the chief information officer, whoever 
that is at the State Department, to develop in a set period of 
time, say 24 months, an integrated IT system at posts abroad.
    No. 2, that there be a schedule for bringing on a set 
number of posts per year, that there be a list of off-the-shelf 
products, specific products that you want folks to have at 
embassies--again, it does not have to be exotic. As you know, 
the state of--you know, I work for a company where it is not 
imaginable that you could operate without being able to 
communicate instantaneously with your colleagues day-in and 
day-out.
    So a Presidential instruction, develop an ability for 
agencies to talk to each other at posts, have a schedule as to 
when each of the posts should be online, have a set list of 
off-the-rack products, and complete it in a set amount of time 
for the unclassified portion of the traffic, and then move over 
the next period of 24 or 36 months to the classified portion. I 
think it is eminently doable, and affordable.
    Senator Allen. You actually think the $400 million is a 
correct figure?
    Mr. Carlucci. Let me comment on that.
    Senator Allen. I believe you can spend more money more 
quickly and waste it as well if you do not do it right, and if 
you say--whatever that figure is had better be accurate.
    Mr. Carlucci. There are various estimates. It is a ball 
park figure. We did not do any kind of scientific survey. I 
think a survey would need to be done. The estimates range 
anywhere from $200 to $400 million. I can tell you, coming from 
the Pentagon, whatever it is, it is a small amount of money.
    Mr. Donilon. That does not go unnoticed at the State 
Department. I think, Senator, as I said at the beginning, I 
would demand a plan of the State Department.
    I agree with you, you can make a lot of mistakes in the IT 
world and you can get off-track, particularly in a culture that 
is not precise in terms of business practices, but I think you 
need to get a plan from the Department over a set of years, 
showing you exactly what they are going to do year-in and year-
out, who is going to do it, and how much it costs, and 
encourage them to report to you every quarter or twice a year 
to show you what the progress is and to put up a chart saying, 
this is how far we have gotten, but I agree with Secretary 
Carlucci, I think you need to demand a comprehensive approach 
and a plan before you fund it, but then go ahead, oversee it, 
interact and fund it.
    Mr. Carlucci. I think there is a role for the National 
Security Council here as well in bringing other agencies into 
line, but State can take the lead.
    Senator Allen. Thank you both very much. Senator Biden.
    Senator Biden. Thank you. In your report, Mr. Secretary, 
you point out 700 Foreign Service positions need to be filled. 
Why are they empty?
    Mr. Carlucci. Well, part of the reason is the recruitment 
process. If you have got delays of 1 to 2 years in coming on 
board, it is very hard for a young person to sustain himself or 
herself. We have talked to some of the people at our Foreign 
Service schools. At Georgetown Foreign Service School the 
students are not electing to go into the Foreign Service. They 
are discouraged. They are moving into other areas.
    Whether it is the financial attractiveness of those other 
areas or not, I cannot say, but I think in part because the 
State Department is not viewed as a place where one can have a 
rewarding career anymore. Since we came out with this report I 
have had two or three potential applicants come to see me to 
say, well, should I do this or shouldn't I, I have been 
accepted, I am really in a dilemma, if it is not well-managed, 
can I expect a good career path. I think it is a chicken-and-
egg question here. We are not getting the best and the 
brightest, as we used to do.
    Senator Biden. Tom.
    Mr. Donilon. I think it is a matter, it needs to be fully 
funded, No. 1. No. 2, there needs to be a big recruitment 
effort. It is a problem faced all across the government in 
terms of recruitment for talent, particularly given the fact 
that, as Secretary Carlucci said, the financial compensation 
gaps are widening, in terms of the gap between the private-
public sector, but also there needs to be a pitch. There needs 
to be shown a career path that makes sense, training that makes 
sense.
    At the Pentagon, Mark Grossman, the Director of the Foreign 
Service, told me yesterday that at the Pentagon at any given 
time some 15 percent of the personnel are on training, and that 
is because they have enough officers and enlisted people to be 
able to do that. They are so stretched at the State Department 
those opportunities are not there.
    And last, I think it does need leadership. It needs 
recruitment, and the personnel system needs attention from the 
top of the State Department, as it does in any large 
organization.
    Senator Biden. One last question. I have been spending, and 
I suspect most of my colleagues have, and Secretary Carlucci, 
your experience at Defense, I have been spending a great deal 
of time on quality of life issues for the military. I mean, it 
has amazed me, quite frankly, how much time I spend.
    I would have thought--I am not on that committee, but 
because of Dover Air Force Base in Delaware I have become over 
the years so deeply involved with their interests and needs, 
and then getting very involved in what is going on in the 
Balkans, and actually being onsite eight or nine times, and the 
more I have dealt with the military, the last 6 or 8 years, I 
mean, the single biggest thing that comes through is quality of 
life, literally just what barracks you sleep in, what the food 
is like, just simple, basic things, is there a day care center, 
and one of the things that I am finding is that as I focused on 
that, more than I ever intended to, the results are pretty 
dramatic. You get a pretty big bang for the buck back, 
according to the commanding officers.
    For example, over in the Balkans, I mean, Fort Bondsteel, 
you have been over there, I mean, I am telling you, it is--they 
did it right. They did it right. They paid attention to the 
quality of life, the food is incredible--I mean, my son, who is 
assigned to Pristina for 6 months to a year with the Justice 
Department, I was going to be over there, I said, do you mind 
coming to Bondsteel? He said, hell, no, I will meet you there, 
can we stay overnight. I mean, literally, not figuratively. 
State Department guys, the folks there with the U.N. assigned 
missions, they want to get to Bondsteel. They want to go with 
the military. I mean, literally, not figuratively.
    The places where they are living, there is no heat, there 
is no--I mean, and so I guess what I am driving at is, it seems 
to me that, as I in the years, as many as I have been doing 
this, a long time, been to embassies all around the world, the 
quality of life is abysmal in some of these places. I mean, 
literally abysmal. I do not know why anybody would do it.
    Now, when there was still a lot of cachet in being in 
Moscow, which is always abysmal being in Moscow, you said, 
well, it is Moscow, you know. It is an important post. I am 
here because, as policy people that was a career path. I mean, 
you are not going to go very far. The first 20 years of my 
career here, in the State Department, if you did not go through 
Moscow somehow, it was not going to happen.
    But by and large, across the world, 70 percent of the 
places I have been, the quality of life, I mean, is really 
lousy, and one of the things that I focused on is the way in 
which spouses of State Department personnel assigned abroad are 
so significantly limited in what they can do and not do.
    Is there any attention--I know this is sort of a hobby 
horse of mine--any attention paid to spouses, and by the way, I 
have long thought that spouses of ambassadors should get paid. 
I really mean that, because they perform--I am not joking. I 
sincerely mean it. They have a major function in most 
embassies.
    But at any rate, that is my question.
    Mr. Carlucci. Senator Biden, I can remember the days when 
we had to include an evaluation of the spouses in the 
efficiency report. That was done away with for good and sound 
reasons, but it underscores the point you make that they are 
full partners. This is one of the things Mark Grossman has 
worked on as Director General, and I hope the new Director 
General, whoever that might be, will pick up the ball.
    In fact, I talked to Grant Green this morning. He said they 
are pursuing vigorously a spousal assignment policy, so that 
the spouses, if they want to work, can have an opportunity to 
work at the post. I found in my experience that has a very big 
morale effect.
    Senator Biden. It sure does, and today, much more than when 
you and I started, you know, most of the spouses attracted to 
the people who are in the State Department, which are generally 
pretty bright people, academically fairly ambitious, are pretty 
ambitious and qualified people themselves, so it is not like we 
are asking somebody to tag along. You have doctors, lawyers, 
professionals--I think that complicates it a lot.
    But at any rate, I appreciate the report. I hope this time 
we actually do something. I hope we actually stick to it and 
follow through on your recommendations. I cannot think of 
anything that I have any disagreement with in terms of the 
recommendations made.
    But anyway, thank you very much.
    Thank you, Mr. Chairman.
    Senator Allen. Thank you, Senator Biden. You have a record 
that he has found nothing to disagree with you on. That is 
amazing.
    Senator Sarbanes.
    Senator Sarbanes. Thank you, Mr. Chairman. First of all, I 
want to thank Secretary Carlucci and Tom Donilon and all of 
their colleagues on the panel for a fine piece of work. I think 
this has the prospects of making a very important contribution, 
and I particularly appreciate your taking all the other studies 
and seeking to synthesize them into an action program that is 
exactly what is needed.
    We do not really need another comparable kind of study. 
They have been done over and over again, and by some extremely 
competent and dedicated people, and so I am hopeful this will 
make a major impact.
    I have two or three questions, though, I want to put first 
of all. I am a little concerned by the, if you do the reform, 
you will get the resources mantra, and the assumption that is 
the only way Congress will provide the resources. We should do 
the reform, but in my mind we need to give some resources very 
fast, probably ahead of the reform.
    In fact, some of the reforms, in my view, are really almost 
conditional on getting the resources. It is almost the other 
way around. If you want to implement these reforms, you need 
the resources. Embassy security ought not to wait on reforms, 
in my opinion. The information systems ought not to wait on the 
reforms, other than the reform is needed to set up an 
appropriate structure to implement the information systems, so 
I just add that as a sort of caveat to what you have said.
    I do not want to get into the situation--I have seen it 
happen before--where the Department is sort of being held 
hostage to getting the resources because they have not 
completely carried through this sort of wide, sweeping reform 
agenda, and the people up here are still holding out on them 
because they have not done yet this further thing, and so 
forth, and particularly in view of this perspective that I 
have, that you need some lead resources to help achieve the 
reforms. Could you comment on that?
    Mr. Carlucci. We deliberated considerably on that very 
point, and we were careful to avoid any kind of a contract or 
bargain, because one is not dependent totally on the other. We 
did not set priorities. We did not say one ought to go before 
the other. In fact, the State Department is already moving on 
some reforms. As you point out, resources are absolutely 
essential for telecom upgrades and for embassy security, and so 
we want to see them moving hand-in-hand, but we never thought 
one was totally dependent on the other.
    Senator Sarbanes. I think that is important. I think we 
need to have you on the record in that regard, so we do not 
have a situation up here where people are holding back from 
giving the resources because you say, quote, ``the reform 
agenda has not been completed.''
    Mr. Donilon. Senator Sarbanes, I filed an additional view 
to the Task Force, but with that as its major theme.
    Senator Sarbanes. I apologize to you. It was all I could do 
to handle the report. I did not get to the additional comments.
    Mr. Donilon. For the record, I will say, though, to get 
this on the record, reform is necessary at the State 
Department, but a lot of the deficits, deficiencies we 
identified in the course of the Independent Task Force report, 
and in the previous reports on the results of resource 
starvation, and there is a current and urgent need for some 
real baseline increases for specific challenges.
    Senator Sarbanes. Mr. Chairman, I have two more questions I 
want to put. One is, I will save what I regard as the most 
important one till the end. The second one is, you say the 
Secretary of State should be the President's principal foreign 
policy advisor. The NSC ought not to have an operational role, 
as I understand the report.
    You talk about the rivalry and duplication between the 
State Department and the NSC, and yet you recommend that the 
NSC create a new strategic planning office for long-term 
planning. Would not this proposed office be a rival of the 
State Department Policy Planning office and, in effect, 
undercut what you are trying to achieve?
    Mr. Carlucci. Senator Sarbanes, we see it as supportive. Do 
not forget that the National Security Council includes the 
Secretary of State. We tend to think of the National Security 
Council staff as autonomous, and it really is not. It is a 
staff arm of the National Security Council. Any kind of 
strategic planning is going to have to take a broad outlook. 
You cannot just plan for foreign policy in isolation from 
national security policy. National security policy has to be an 
integrated policy developed with input from the Department of 
Defense, the CIA, the Justice Department, whatever other 
departments might be involved. You move from there to your 
foreign policy strategy, but foreign policy strategy has to fit 
into a context. Hence we think there should be a long-term 
strategy of planning organization as part of the National 
Security Council staff.
    Senator Sarbanes. Mr. Chairman, if you would indulge me to 
put the final question.
    Senator Allen. Go ahead, Senator Sarbanes.
    Senator Sarbanes. I want to talk about the chief operating 
officer and linking that with the Deputy Secretary of State. I 
think we need a chief operating officer, obviously. I guess I 
have some concern about whether it should be the Deputy 
Secretary of State, and let me outline what those concerns are.
    First of all, it would seem to me that you have the 
question of whether the chief operating officer is going to be 
a career person who has worked up through the ranks of the 
Department and knows it intimately, and so forth, or whether 
you are going to bring in someone from outside to manage the 
Department.
    Now, you can bring in some good managers, but they always 
have to get up to speed in terms of the Department, so that is 
the first sort of question I have, and second, the Deputy 
Secretary of State has outside functions, so to speak, being 
Acting Secretary when the Secretary is on travel, so he has 
this public face that the Deputy Secretary has to exercise, so 
I am just wondering whether--I mean, you rejected the notion of 
the Deputy Secretary, an additional Deputy Secretary, as I 
understand, as the chief operating officer and said, well, that 
would put it out of the loop. It is not clear to me why that 
would put it out of the loop.
    And of course, if you had two Deputy Secretaries, then that 
one could be a career person. He could be like the top civil 
servant in other foreign ministries around the world. Did you 
wrestle with that? I would like to hear your thinking.
    Mr. Carlucci. We did have some discussion around that 
point. Most of us on the Task Force felt that the dual deputy 
system was a very awkward system. I have seldom seen dual 
deputy systems work. In fact, I abolished one when I went into 
the NSC in the wake of the Iran-Contra affair, because it 
institutionalizes competition between the deputies.
    Whether it should be somebody with experience in the 
Foreign Service, or business experience, or foreign policy 
experience, ideally the individual would encompass all three. I 
think the proposed incumbent for that job, Rich Armitage, does 
have the necessary qualifications. He understands bureaucracy.
    He is not a Foreign Service officer, but he is a graduate 
of the Naval Academy, he served in the military, served in 
senior positions in the Pentagon, and it has worked in the 
Pentagon model. The Deputy Secretary of Defense is in effect, 
the chief operating officer of the Pentagon. So I think you 
have got the right individual, and I know General Powell has 
great faith in Rich Armitage.
    Senator Sarbanes. Tom, do you want to add to that?
    Mr. Donilon. I think a dual Deputy Secretary of State would 
be duplicative of the Secretary for Management, and what we are 
trying to get to is a real centralization at the top of budget 
finance administration, human resources, and placing a big 
priority on it, and I think having a Deputy Secretary of 
State--and I have wrestled with that.
    I had some hesitation about it, with a predilection toward 
allowing the Secretary of State to pick his or her team. I 
think the management problems are so severe that a chief 
operating officer at the top of the place, who is--I would 
recommend an outsider coming in is necessary to bring energy, 
to bring management policy together from the top, and to make 
it a priority.
    So I understand your concerns, but I think at the end of 
the day I think the problems are so severe that it needs to be 
done this way.
    Senator Sarbanes. Mr. Chairman, thank you, and I thank 
Senator Nelson for your indulgence, and again I want to thank 
Secretary Carlucci and Tom Donilon for their contribution. We 
appreciate it very much.
    Senator Allen. Thank you, Senator.
    Senator Nelson.
    Senator Nelson. Just a quick question. Thank you for 
coming. Thank you for your work. Thank you for your public 
service. This past weekend, I spent the weekend with the CINC 
of the Southern Command, and with a lot of the State Department 
personnel in Colombia, and I was impressed with both.
    Last year, the Washington Post did a series of articles 
about the influence of the CINC's, so should we be concerned 
about their foreign policy role, and is there sufficient 
coordination with the State Department?
    Mr. Carlucci. Obviously, we have to be concerned that there 
be sufficient coordination. My experience has been that the 
CINC's are quite willing to take policy guidance. One of the 
task forces, or one of the blue ribbon panels, I forgot which 
one, recommended upgrading the political advisors to the 
CINC's. We have had some very talented people as political 
advisors to the CINC's. I know Wes Clark had Mike Durkee, and 
he depended heavily on Mike Durkee.
    So if a CINC is a good CINC, and the political advisor is a 
good political advisor, it will work, but you cannot build a 
system that bad people will not disrupt, so I think the 
emphasis really has to be on quality on both sides.
    Senator Nelson. Thank you, Mr. Chairman.
    Senator Allen. Well, thank you both, both witnesses for 
your insight, and all of the work you have put into this, and 
we very much appreciate it.
    Mr. Carlucci. Mr. Chairman, may I make a closing comment?
    Senator Allen. Sure.
    Mr. Carlucci. This would not have been possible if it had 
not been for Ian Brzezinski, who pulled it all together. He did 
the drafting, and he did a marvelous job. I would like to give 
him full credit.
    Senator Allen. Good work, Ian. There are members who are 
not here and, if you would, please indulge those members. They 
may want to submit some questions in writing to you, and if 
that would be permitted, we would certainly appreciate it.
    Mr. Carlucci. We would be happy to do that.
    Senator Allen. Thank you both very much. The hearing is 
adjourned.
    [Whereupon, at 12:10 p.m., the committee adjourned.]

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