[Senate Hearing 110-684]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-684
 
A DOMESTIC CRISIS WITH GLOBAL IMPLICATIONS REVIEWING THE HUMAN CAPITAL 
                     CRISIS AT THE STATE DEPARTMENT

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



                                HEARING

                               before the

                  OVERSIGHT OF GOVERNMENT MANAGEMENT,
                     THE FEDERAL WORKFORCE, AND THE
                   DISTRICT OF COLUMBIA SUBCOMMITTEE

                                 of the

                              COMMITTEE ON
                         HOMELAND SECURITY AND 
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 16, 2008

                               __________

       Available via http://www.gpoaccess.gov/congress/index.html

       Printed for the use of the Committee on Homeland Security
                        and Governmental Affairs



                  U.S. GOVERNMENT PRINTING OFFICE
44-126                    WASHINGTON : 2009
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing 
Office  Internet: bookstore.gov Phone: toll free (866) 512-1800 
Fax: (202) 512-2250  Mail: Stop IDCC, Washington, DC 20402-0001




        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
MARK L. PRYOR, Arkansas              NORM COLEMAN, Minnesota
MARY L. LANDRIEU, Louisiana          TOM COBURN, Oklahoma
BARACK OBAMA, Illinois               PETE V. DOMENICI, New Mexico
CLAIRE McCASKILL, Missouri           JOHN WARNER, Virginia
JON TESTER, Montana                  JOHN E. SUNUNU, New Hampshire

                  Michael L. Alexander, Staff Director
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
                  Trina Driessnack Tyrer, Chief Clerk


  OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL WORKFORCE, AND THE 
                   DISTRICT OF COLUMBIA SUBCOMMITTEE

                   DANIEL K. AKAKA, Hawaii, Chairman
CARL LEVIN, Michigan                 GEORGE V. VOINOVICH, Ohio
THOMAS R. CARPER, Delaware           TED STEVENS, Alaska
MARK L. PRYOR, Arkansas              TOM COBURN, Oklahoma
MARY L. LANDRIEU, Louisiana          JOHN WARNER, Virginia

                   Richard J. Kessler, Staff Director
            Thomas J.R. Richards, Professional Staff Member
             Jennifer A. Hemingway, Minority Staff Director
                    Jessica K. Nagasako, Chief Clerk


                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Akaka................................................     1
    Senator Voinovich............................................     3

                               WITNESSES
                        Wednesday, July 16, 2008

Ambassador Harry K. Thomas, Jr., Director General of the Foreign 
  Service and Director of Human Resources, U.S. Department of 
  State, accompanied by Linda Taglialatela, Deputy Assistant 
  Secretary, Bureau of Human Services, U.S. Department of State..     5
John Naland, President, American Foreign Service Association.....    20
Ambassador Ronald E. Neumann (Ret.), President, American Academy 
  of Diplomacy...................................................    22

                     Alphabetical List of Witnesses

Naland, John:
    Testimony....................................................    20
    Prepared statement...........................................    43
Neumann, Ambassador Ronald E. (Ret.):
    Testimony....................................................    22
    Prepared statement by Ambassador Thomas D. Boyatt............    48
Taglialatela, Linda:
    Testimony....................................................     5
Thomas, Ambassador Harry K. Jr.:
    Testimony....................................................     5
    Prepared statement...........................................    37

                                APPENDIX

Questions and Responses for the Record from:
    Mr. Thomas, with attachments.................................    53
Background.......................................................   137
``Report on Senior Executive Pay for Performance for Fiscal Year 
  2007,'' July 2008, submitted by Senator Akaka..................   147
Chart entitled ``Staffing Shortfalls for Foreign Service 
  Officers,'' submitted by Senator Akaka.........................   162


A DOMESTIC CRISIS WITH GLOBAL IMPLICATIONS REVIEWING THE HUMAN CAPITAL 
                     CRISIS AT THE STATE DEPARTMENT

                              ----------                              


                        WEDNESDAY, JULY 16, 2008

                                 U.S. Senate,      
              Subcommittee on Oversight of Government      
                     Management, the Federal Workforce,    
                            and the District of Columbia,  
                      of the Committee on Homeland Security
                                        and Governmental Affairs,  
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:04 p.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Daniel K. 
Akaka, Chairman of the Subcommittee, presiding.
    Present: Senators Akaka and Voinovich.

               OPENING STATEMENT OF SENATOR AKAKA

    Senator Akaka. This hearing will come to order. I want to 
thank the witnesses for being here at this hearing.
    Today, the Subcommittee on Oversight of Government 
Management will examine the State Department's human capital 
crisis. As we approach an Administration transition, perhaps 
the greatest problem facing the State Department is the lack of 
adequate staffing resources needed to meet its mission. Eleven-
thousand-four-hundred-and-two men and women bring U.S. 
diplomacy to 162 countries around the world through 266 
embassies, consulates, and other posts. This thin line of 
career foreign policy professionals and support staff are our 
first line of defense in most of the world. They are our eyes 
and ears. In most countries, they are the face of America.
    Our standing and respect in the world is in dire need of 
improvement and our national security relies heavily on our 
standing in the world. The ability of the United States to 
execute its foreign policy priorities depends on these 
professionals to implement the policy. However, I am concerned 
that we are not investing enough in these employees so that 
they have the capabilities and means to perform their crucial 
and critical mission.
    Secretary Powell launched the Diplomatic Readiness 
Initiative in 2001 to boost the presence of U.S. foreign policy 
overseas. As a result, more than 1,069 new positions were 
created. Since then, Iraq and Afghanistan have consumed our 
diplomatic readiness and placed high demands on resources and 
staffing of Foreign Service officers and Civil Service 
personnel.
    To address this issue, Secretary Rice launched the 
Transformational Diplomacy Initiative in 2006, which included a 
global repositioning effort to move Foreign Service positions 
from Washington, DC and elsewhere to mostly hardship posts in 
critical emerging areas, including Africa, South and East Asia, 
and the Middle East. However, according to the State 
Department's recent figures, there is a shortage of more than 
1,500 Foreign Service staff worldwide.
    As this chart shows,\1\ there is a 13.3 percent vacancy 
rate for the Foreign Service at home and abroad. Domestically, 
the rate is 18.2 percent, and overseas, the rate is 11.3 
percent. The most striking number is the Near East Asia vacancy 
rate of nearly 20 percent.
---------------------------------------------------------------------------
    \1\ The chart referred to appears in the Appendix on page 162.
---------------------------------------------------------------------------
    I understand that this rate is inflated because many vacant 
positions are filled by Foreign Service officers on temporary 
duty assignment from other locations. This is fuzzy math, 
because staff are being taken away from their home duty 
station, creating a deficit there, and filling slots that 
should be served by permanent staff. U.S. diplomacy deserves 
greater stability than that.
    What this chart does not show is the staffing deficit of 
mid-level officers. A lack of mid-career officers has left 
embassies with junior officers performing tasks above their 
grade while senior officers are being pulled in too many 
directions. Furthermore, since the State Department does not 
hire new employees into mid-level positions, this shortage 
could follow that group of employees in the Department for 
years to come.
    There are issues in both the career Foreign Service and 
Civil Service. In May and September 2007, the State Department 
Office of the Inspector General issued two reports with more 
than 60 recommendations for the Director General and the Bureau 
of Human Resources regarding the Department's human capital. 
The report highlighted a broad range of issues for the Human 
Resources Bureau and Under Secretary for Management, such as 
the recruitment and hiring process needs to be improved, there 
is a deficit of human resources professionals, employees need 
better training and professional development, and overall, 
there needs to be greater use of authorized flexibilities and 
coordination on human capital issues department-wide.
    The Director General is aware of these issues and working 
with the IG's Office to address them. Progress has been made in 
developing a strategy to respond to most of the 
recommendations. Fewer than 10 items remain open, but these 
include an external review of the future of the Civil Service, 
certification for human resources professionals, improvements 
to the career entry program, and better financial controls. 
These are important issues and need to be resolved before the 
next Administration takes over.
    In addition to the IG report, the Foreign Affairs Council, 
the Center for Strategic and International Studies, the Project 
on National Security Reform, and the Government Accountability 
Office have weighed in on the readiness of our diplomatic 
corps. In the coming months, the American Academy of Diplomacy 
and the Stimson Center will provide a zero-based budget report 
for investing in the State Department's human capital. As an 
Advisory Council member, I look forward to reviewing these 
recommendations.
    Too often, human capital and agency management are lost 
amongst the many priorities of agency leadership. Senator 
Voinovich and I have worked for years to elevate the priority 
of these issues at all Federal agencies. I am certain we will 
continue to do so with the next Administration. I look forward 
to hearing your strategy for addressing these issues as we 
approach the transition.
    I am so glad to have our Ranking Member here, Senator 
Voinovich, and we will call on him after I tell you that 
yesterday, July 15, was Senator Voinovich's birthday, and 
belatedly, I want to wish him a happy birthday.

             OPENING STATEMENT OF SENATOR VOINOVICH

    Senator Voinovich. Thank you very much. Those macadamia 
nuts were well received. My wife and I will enjoy them.
    I just want to say that I am really pleased we are holding 
today's hearing. Senator Akaka and I have been working with the 
issue of human capital for a long time. As a member of the 
Foreign Relations Committee, we had Joe Nye and Dick Armitage 
testify about the human capital challenges in the State 
Department, and I am sure, Senator, as you travel the country 
and the world, you have had a chance to talk to some of our 
folks from the State Department. I really think that we are on 
the eve of meaningfull reform.
    At a time when our public diplomacy is arguably at its 
lowest point in history, the State Department is chronically 
understaffed, limiting its ability to overcome significant 
challenges, including shared missions and responsibilities with 
other agencies. The State Department faces a shortfall of about 
2,400 personnel focused on core diplomatic efforts. One out of 
every five employees holds a job designated for a more 
experienced person. In restructuring agencies responsible for 
our national security, such as the Department of Defense and 
the intelligence community, we have largely neglected the soft 
power needs of the State Department.
    We should consider ourselves lucky that the men and women 
of the State Department have answered the call to serve, and 
through their leadership and dedication helped our Nation avoid 
the news stories which often drive change. These dedicated 
public servants must no longer be taken for granted.
    Last year, the Foreign Affairs Council found that the 
Department of State lacked the personnel necessary to meet its 
priority missions, a theme carried in other reports by the 
Center for Strategic and International Studies. The Foreign 
Relations Committee, as I mentioned, held a hearing earlier 
this year where we discussed the concept of smart power, which 
seeks to better match our strategies and structures at home to 
the challenges that we face abroad.
    Senator Akaka, one of the things it seems to me that we 
have to start looking at is how are we allocating resources. 
Even the Department of Defense sees this need. General Jones 
spent some time with me a year ago discussing the need to 
reallocate some of our funds to the State Department if we 
really want to make diplomatic progress. That way we can help 
avoid having to bring in military forces. It is going to take 
some reallocation of our limited resources.
    In September, we are going to formally receive the 
recommendations from the American Academy of Diplomacy Advisory 
Council, which I am honored to be a member of. The Academy will 
likely recommend a 16 percent increase in the State 
Department's workforce. Together, these reports demonstrate the 
need for a strong diplomatic corps, recognizing that diplomacy 
occurs in the embassies and consulates around the world, not 
inside the beltway.
    I question how many reports it will take before we are 
honest with ourselves and the American people about the 
challenge we face. How we allocate our resources in support of 
public diplomacy is a question that must be answered if we are 
to meet those goals.
    Too often, we hear agency officials tell us that they have 
adequate resources to get the job done. Today's hearing is an 
exception, however. The testimony from the State Department 
makes clear that Congress's failure to provide the tools 
necessary to get the job done has resulted in a situation that 
can no longer be ignored. Although I have often said we need to 
do more with less, there comes a time when our priorities must 
be reset.
    Ambassador Thomas, I commend you for recognizing the 
challenge and your responsibility in ensuring the State 
Department's workforce receives the support necessary to 
effectively carry out its duties. The Department has made 
significant progress in addressing the recommendations from the 
State Department Office of Inspector General and your results 
have been met with some success.
    According to the Partnership for Public Service's Best 
Places to Work Ranking, the State Department is one of only two 
large agencies with a double-digit increase in overall employee 
engagement. The same survey showed room for improvement in 
promoting worklife balance and family-friendly culture, and 
that is why I am proud to be working with several of my 
colleagues to address the cost-of-living issue facing less-
seasoned officers assigned to overseas posts.
    Going forward, it would be irresponsible to allocate 
additional funds absent an oversight mechanism so we can 
measure the results of our efforts. We must balance identified 
needs in critical occupations with new demands resulting from 
implementation of programs such as the Western Hemisphere 
Travel Initiative.
    As we dedicate additional resources, we should take a 
closer look at the training provided to our men and women in 
uniform and the framework provided by the Goldwater-Nichols 
Act. Training must become a cornerstone of the State 
Department's workforce planning.
    The inauguration of our next President is 6 months from 
now. In addition to selecting qualified individuals to lead the 
Department of State, the new Administration will have the 
challenge of presenting its first budget that balances many 
competing priorities and takes into account our growing budget 
deficit. Future budgets must ensure that the State Department 
is resourced appropriately to meet its mission and strengthen 
its global posture. Otherwise, we diminish our ability to 
foster democratic principles and to influence world opinion.
    The international environment will continue to reflect the 
dangers and opportunities of today. The State Department should 
be a model for global outreach and negotiation. Creating a more 
secure, democratic, and prosperous world for the benefit of the 
American people requires a highly skilled workforce that is 
held accountable for their individual performance.
    And again, Mr. Chairman, thank you for holding this hearing 
today.
    Senator Akaka. Thank you very much, Senator Voinovich.
    I want to introduce our first panel today, Ambassador Harry 
K. Thomas, who is Director General of the Foreign Service and 
Chief Human Capital Officer of the U.S. Department of State. 
Accompanying him is Linda Taglialatela, Deputy Assistant 
Secretary, Bureau of Human Resources, U.S. Department of State.
    As you know, our Subcommittee requires that all witnesses 
testify under oath. Therefore, I ask you to please stand and 
raise your right hand.
    Do you solemnly swear that the testimony you are about to 
provide this Subcommittee is the truth, the whole truth, and 
nothing but the truth, so help you, God?
    Ambassador Thomas. I do.
    Ms. Taglialatela. I do.
    Senator Akaka. Thank you very much. Will the record note 
that our witnesses responded in the affirmative.
    Before we begin, I want to remind you that although your 
oral statement is limited to 5 minutes, your full written 
statement will be included in the record.
    Ambassador Thomas, will you please proceed with your 
statement.

   TESTIMONY OF AMBASSADOR HARRY K. THOMAS, JR.,\1\ DIRECTOR 
GENERAL OF THE FOREIGN SERVICE AND DIRECTOR OF HUMAN RESOURCES, 
 U.S. DEPARTMENT OF STATE, ACCOMPANIED BY LINDA TAGLIALATELA, 
  DEPUTY ASSISTANT SECRETARY, BUREAU OF HUMAN SERVICES, U.S. 
                      DEPARTMENT OF STATE

    Ambassador Thomas. Chairman Akaka, Ranking Member 
Voinovich, thank you for this opportunity to testify before you 
today to address the Department of State's efforts to hire, 
develop, position, and support our dedicated corps of Foreign 
Service, Civil Service, and locally employed staff to meet the 
challenges of our worldwide mission.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ambassador Thomas appears in the 
Appendix on page 37.
---------------------------------------------------------------------------
    The Bureau of Human Resources has the critical 
responsibility to manage the Department of State's greatest 
asset, our people. Maintaining the highest standards of 
operational readiness worldwide is an increasingly challenging 
undertaking, as a number of positions at the most difficult and 
dangerous posts continue to rise without a concomitant increase 
in resources. The Department's foreign policy objectives have 
led to a proliferation of much needed language-designated 
positions, many of which require lengthy training.
    We have the world's finest diplomatic service and morale 
remains high. We are very proud that the Foreign Service 
attrition rate continues to be the lowest in the U.S. 
Government, and the Civil Service attrition rate is half that 
of other Federal departments and agencies, and that we remain 
the No. 1 choice for college students seeking a public sector 
career. But challenges remain and we need the resources to meet 
them.
    State Department employees are serving in more remote, 
isolated, and dangerous locations than ever before. There are 
over 900 positions overseas that are designated unaccompanied 
or limited accompanied for reasons of hardship or danger. That 
means that approximately one out of every 13 Foreign Service 
personnel is serving in a location that is too dangerous for 
families to accompany.
    The HR Bureau is committed to ensuring that these employees 
and the rest of our personnel receive the support and training 
they need to succeed. We have adapted and streamlined our 
recruiting, hiring, and assignment process in line with the 
Department's policy priorities and increased our support to 
employees and families experiencing unaccompanied tours. We 
have drawn on talented Civil Service employees and eligible 
family members to fill positions in Iraq, Afghanistan, and 
other hardship posts. We are pursuing ways to take care of the 
dedicated locally employed staff that plays a critical role in 
supporting our missions.
    We have introduced a career-enhancing rotational program 
for mid-level Civil Service employees and rolled out a new 
performance evaluation form for Civil Service personnel. We 
have reinvented the way personnel actions are initiated and 
processed. We have automated the Foreign Service retirement 
process. We are implementing a tiered services concept that 
consolidates human resource functions.
    These initiatives address the vast majority of the 
recommendations made by the Office of the Inspector General 
based on their late 2006-early 2007 inspection of the HR 
Bureau. We maintain an ongoing dialogue with the inspectors and 
have accepted or otherwise reached agreement on 51 of the 59 
OIG recommendations. We will continue to work with the OIG to 
resolve the eight outstanding recommendations.
    As Secretary Rice has repeatedly testified, staffing needs 
exceed our current resources. The talented men and women that 
we are recruiting in the Department are seeking greater 
responsibilities and more management experience at earlier 
stages in their career. So we continue to give the very best of 
them stretch, or above-grade assignments, as a means of 
ensuring that the very best have a more rapid means of 
escalating to the senior ranks.
    One of the unintended consequences of the deficit of 
officers is that only 19 percent of mid-level slots go to mid-
level officers. But I am pleased to say that these men and 
women are excelling in their jobs.
    The Department's fiscal year 2009 budget request also 
includes funding for Foreign Service compensation reform, one 
of our top legislative priorities. The Foreign Service 
compensation reform provisions in the Department's fiscal year 
2008 and 2009 authorization package, if passed and enacted, 
would eliminate the nearly 21 percent overseas pay gap in base 
salary faced by FS-01 members and below serving overseas. We 
look forward to working with Congress to pass these crucial 
reforms to eliminate the growing financial disincentives to 
serve abroad.
    With the support of Congress and the enactment of the 
fiscal year 2009 budget request, I am confident that we can 
continue to attract and retain a skilled workforce to serve the 
American people.
    Senator Akaka. Thank you very much, Ambassador Thomas.
    Ambassador, in a 2003 report, GAO looked at what 
characterized successful transition planning. They identified 
successful organizations as those which identify, develop, and 
select their human capital to ensure that successors are the 
right people with the right skills at the right time for 
leadership, and what I just said is something that Senator 
Voinovich always echoes.
    GAO recommended best practices for human capital transition 
planning, and I am asking you to tell us what or if the State 
Department engages in these practices, and let me mention some 
of these. These include attention and active support for the 
top leadership, link to strategic planning, identify talent 
from multiple organizational levels early in career or with 
critical skills, emphasize development assignments in addition 
to formal training, address specific human capital challenges, 
such as diversity, leadership capacity, and retention, and 
facilitate broader transformation efforts.
    Can you tell me how the State Departmentapproaches this 
transition planning?
    Ambassador Thomas. Senator, Secretary Rice has named 
Ambassadors William Burns and Patrick Kennedy to lead our 
transition effort. She has also named the Executive Secretary 
of the Department, Daniel Smith, to be the day-to-day manager 
of the transition process. Senator, it is the tradition in the 
State Department that the Executive Secretary, who is also the 
Special Assistant to the Secretary, manage the day-to-day 
transition process.
    We are very confident that we will meet with the transition 
team as soon as they would like to present the strategic plan 
that we have for the State Department, and they will include 
everything, as you said, human capital, our efforts to recruit 
a more diverse Foreign Service that reflects America, a more 
talented Foreign Service and Civil Service. We have complete 
plans, and we are confident that our transition process will 
run smoothly as it has in the past.
    Senator Akaka. And you have mentioned these names, Burns, 
Kennedy, and Smith----
    Ambassador Thomas. Yes, sir.
    Senator Akaka [continuing]. As being part of this?
    Ambassador Thomas. Yes. They have been named by the 
Secretary.
    Senator Akaka. The Fiscal Year 2008 Emergency Supplemental 
Appropriations Act included a $25 million provision for the 
State Department to address its staffing shortfall. The Act 
also included an additional $20 million in bridge funding for 
fiscal year 2009. How do you plan to spend these funds to 
reduce the staffing and skills shortfalls, and are these funds 
sufficient?
    Ambassador Thomas. Thank you for that question, Senator. We 
very much appreciate the fact that the Congress of America has 
given us some of the funding that we requested for that. We are 
going to use that $25 million and part of the $40 million in 
FY2009 bridge funding to hire 140 personnel above attrition. 
But as you stated, Senator, the Secretary and President have 
asked for over 1,000 new positions at the State Department and 
300 at U.S. AID. So while we thank the Congress for this, we 
view this as only a downpayment on what we will need to 
accomplish our goals and objectives.
    Senator Akaka. I would like to see a copy of your strategic 
plan for the obligated funds once it is completed.
    Ambassador Thomas. We would be happy to send it to you, 
sir.
    Senator Akaka. Ambassador, approximately 20 percent of FSOs 
have served in the Baghdad embassy. I am told that you are not 
staffing the Iraq Provincial Reconstruction Teams with junior 
officers. There is a 13 percent worldwide staffing shortage and 
19 percent staffing shortage in the Near East Asia region and a 
minimum training requirement of 2 years for language training 
in Arabic, one of the more difficult subjects. This calls into 
question the sustainability of our diplomatic presence in Iraq. 
What strategy do you have to address the short-term and long-
term integrity of our diplomatic presence?
    Ambassador Thomas. Well, Senator, again, thank you. I would 
like to clarify. We do have entry-level or junior officers 
serving in Iraq and Afghanistan and all of our other hardship 
posts, including the Provincial Reconstruction Teams, sir. What 
we do, however, is we vet everyone before they go to Iraq for 
area experience, language experience, and ability to serve in a 
hardship post.
    Last year, in October, when I became Director General, we 
designed a plan with Ambassador Crocker to vet everyone before 
they serve in Iraq, all of our volunteers, to make sure they 
are the right fit because this is dangerous and a difficult 
assignment. So we do vet them to make sure that they fit. But 
we take the entire Foreign Service. When Ambassador Kennedy 
visited Iraq in the fall of 2007 and this year in March 2008, I 
sent my deputy, Teddy Taylor, to Iraq to review each assignment 
and position description to ensure we had the right fit and the 
right number of people to meet the challenge of service there. 
I am confident that we do, but it is an organic process and we 
continue to review.
    Right before I came here, sir, I briefly stopped by one of 
the luncheons that we have for people interested in 
unaccompanied tours. We had two people home from Iraq briefing 
people and it was an overflow of people, Foreign Service and 
Civil Service, who were interested in serving in Iraq.
    Senator Akaka. Ambassador, how does the State Department 
identify and develop high-potential employees in both the 
Foreign and Civil Service to take on a future management role?
    Ambassador Thomas. Well, sir, as you rightly pointed out, 
Secretary Powell initiated management and training courses at 
each level for Foreign Service and Civil Service employees and 
we have made those mandatory. And I do not grant waivers except 
for reason of health or emergency, and everyone knows it is 
mandatory. We have to institutionalize management and training.
    The big cry that I hear from our junior officers is they 
want leadership and they want training and I think it is 
incumbent upon us in the Foreign Service and the leadership of 
the Civil Service to ensure that people get this training and 
that the Foreign Service Institute is doing a wonderful job 
doing this at each level. For the senior classes, I personally 
go and talk to each one of them to remind them of the 
responsibilities they are going to undertake and the fact that 
we expect them to behave with the highest personal and 
professional integrity.
    Senator Akaka. Thank you, Ambassador. Senator Voinovich.
    Senator Voinovich. The 2009 budget is being examined right 
now. In light of the human capital challenges and what the 
Secretary has recommended, is the Department's budget adequate 
to get the job done? The next President is going to be living 
with the 2009 budget and won't have a chance to shape the 
budget until their 2010 submission.
    Ambassador Thomas. Right.
    Senator Voinovich. How does that 2009 budget look today?
    Ambassador Thomas. Senator, we believe this is just the 
first of what we will hope will be several increased budgets. 
Obviously, I cannot speak for the next President or Secretary 
of State. But we hope that the 1,500 people that we would like 
to be hired for the State Department and U.S. AID are the 
initial tranche of what we need to train and staff our missions 
around the world.
    Clearly, it is not only Iraq and Afghanistan. We have had 
to open missions in Asia, in Central Europe, in Newly 
Independent States at consulates and places where we previously 
did not have them. The fact that India, China, Mexico, that 
they are becoming economic success stories and their people are 
traveling, wanting to study in the United States, put increased 
burdens on our consular staff and that needs to be increased.
    We have, as you know, terrible challenges with narcotics, 
terrible challenges with security. Our diplomatic security 
staff, we are asking to be increased. So we think this 1,500 is 
just an initial step in what we will need to have a more robust 
and effective State Department and U.S. AID.
    Senator Voinovich. What impact will the continuing 
resolution have on some of your plans?
    Ambassador Thomas. Well, sir, what we will do is we will 
have our next what we call A-100 or orientation class for the 
next fiscal year will be in January 2009, and we will have 
subsequent classes. It takes us 9 months to 1 year to fully 
train a Foreign Service officer to be overseas or to be in 
Washington. For a specialist, our diplomatic security agents, 
our office management specialists, it can take 3 to 6 months to 
train them to be overseas. So this is a long-term process. For 
the money that you have given us for the 140 people over 
attrition, we will just start to get those people overseas in 
mid- to late-2009, so this is a very long process.
    Senator Voinovich. Are you going to be able to begin with 
this Reconstruction and Stabilization Civilian Management Act?
    Ambassador Thomas. Ambassador Herbst's office, sir?
    Senator Voinovich. Yes, and also the concept of identifying 
people in other Federal agencies that----
    Ambassador Thomas. Yes, sir.
    Senator Voinovich [continuing]. Can help with some of the 
challenges that you face. Is this budget going to allow that to 
begin?
    Ambassador Thomas. Yes. That is a separate office. That is 
Ambassador Herbst's office and we very much appreciate the 
funding that we got from Congress for that. That is an 
important office because we have crises all the time that we 
need immediate response to where we, as Foreign Service 
officers or generalists, will never have the expertise. We will 
never have the civil engineer or the veterinarian or the fire 
response or the bomb response person that is needed to staff 
countries in terms of crisis. So that is the idea behind 
Ambassador Herbst's office and we do believe that funding will 
enable Ambassador Herbst and the Department to begin work on 
this.
    Senator Voinovich. So it is your learned opinion that we 
have enough money to at least get this new initiative off the 
ground?
    Ambassador Thomas. Yes, sir, off the ground.
    Senator Voinovich. And you have said that you are not 
having any problem with recruiting people, that is----
    Ambassador Thomas. To Mr. Herbst.
    Senator Voinovich. I am talking about the Department's 
overall challenges in terms of bringing on new people.
    Ambassador Thomas. No. I think we are very--what we found 
is a clarification. It used to be that 25,000 people registered 
for the Foreign Service exam, but traditionally, only 10,000 to 
12,000 showed up. So last year, when we started the new exam, 
we put an automatic charge to your credit or debit card of $50 
if you did not show up, and now we get about 99 percent show 
up. So we are really getting what we intended.
    The one thing that we have found with the new exam, the 
written part remains very difficult, as it should, and merit-
based, very difficult to pass, but we are having more people, a 
higher percentage of people, pass the oral exam. So we think 
that we are on the right track.
    Senator Voinovich. And you do not have to deal with the 
Office of Personnel Management?
    Ambassador Thomas. No. For the Foreign Service----
    Senator Voinovich. You have your own operation so you don't 
have to worry about OPM.
    Ambassador Thomas [continuing]. We do that. Civil Service, 
we do work with them. Sir, we work with OPM. Foreign Service, 
we do ourselves. And I visit colleges and universities. We have 
17 diplomats in residence at universities and colleges around 
the world. I think one of the things we are most proud of, when 
I joined the Foreign Service, we had people from about 30 
States and really about 30 schools. Now, we have people from 
all 50 States, schools all around the country. We visit them. 
We recruit from these schools. We have targeted organizations 
and we think we are now much more broadly reflective of 
America.
    Senator Voinovich. Last year, in a May 2007 report, the 
Inspector General recommended that the Under Secretary for 
Management institute a high-level review of the options for the 
future of Civil Service in the Department, and Senator Akaka 
and I discussed the same issue at our August 2007 hearing. What 
is the status of this review?
    Ambassador Thomas. Sir, I am going to ask my colleague to 
answer that question.
    Ms. Taglialatela. Good afternoon, Senator.
    Senator Voinovich. Good afternoon.
    Ms. Taglialatela. We have been working very closely with 
the Management Office under the Under Secretary for Management 
to discuss what ways we can find to make improvements. We have 
not commissioned an external group, but we do work on this 
issue within the Department. We have done a number of things 
since the arrival of Secretary Powell and then his successor, 
Secretary Rice.
    We have looked at ways to create one-team, one-mission. We 
have gone out of our way to bring the Foreign Service and Civil 
Service closer together by building a bridge where Civil 
Service employees provide continuity and institutional 
knowledge and the Foreign Service brings their foreign policy 
and expertise to the table.
    We also have created a mid-level rotation program for our 
Civil Service employees to give them a broader perspective of 
what goes on in the Department. We have over 200 Civil Service 
employees currently serving in Foreign Service positions 
overseas, again, to find a way to bring the two services closer 
together and to make it a more workable arrangement between the 
two.
    Senator Voinovich. You have the recommendations, don't you, 
the written recommendations from the Inspector General?
    Ms. Taglialatela. Yes, sir.
    Senator Voinovich. Do you have a document that shows what 
the IG recommended and what the Department has done so that you 
could share that with the Subcommittee?
    Ms. Taglialatela. Sir, that recommendation remains open, 
but we will be submitting a response to the OIG on what we are 
currently doing.
    Senator Voinovich. Well, I would like to know, too. Usually 
what we would like to see is when somebody makes a 
recommendation, the Department either says we don't agree with 
them or we do agree with them and here is what we are doing to 
meet the recommends. I would like to have that document and I 
suspect that, Senator Akaka, you would like to have the same 
thing.\1\
---------------------------------------------------------------------------
    \1\ The report submitted for the record by Senator Akaka appears in 
the Appendix on page 147.
---------------------------------------------------------------------------
    Senator Akaka. Yes.
    Ms. Taglialatela. Thank you, sir.
    Senator Voinovich. Can you get that for us?
    Ms. Taglialatela. Sure.
    Senator Voinovich. Thank you. Senator Akaka.
    Senator Akaka. Thank you very much, Senator Voinovich.
    I have a second round of questions here, Ambassador. Two 
State Department Office of Inspector General reports were 
released in 2007. Eight of the 59 formal recommendations, I 
understand, remain open. What is being done to ensure that 
these remaining eight recommendations will be addressed before 
the Administration transition? What is being done?
    Ambassador Thomas. Senator, we understand that. Some of 
these recommendations, however, are dependent on increased 
funding because the OIG asked us to hire new people, train new 
people to oversee or to do jobs, and without funding to do 
that, we won't be able to meet all of those recommendations.
    Senator Akaka. Are there any recommendations you disagree 
with, and if so, can you explain it?
    Ambassador Thomas. To my knowledge, sir, there are no 
recommendations we disagree with.
    Senator Akaka. Mr. Ambassador, I am concerned that FSOs are 
being penalized for taking positions in functional bureaus like 
the International Security and Nonproliferation Bureau. As this 
board shows, according to the tips from the 2007 Foreign 
Service selection boards, and I am quoting, ``proven and 
ongoing competence in primary cone is a requirement for both 
classwide and conal promotion, particularly at the FS-02 level 
and above. Extensive out-of-cone service could place employees 
at a disadvantage for promotion.'' Why are employees being 
disadvantaged for out-of-cone service?
    Ambassador Thomas. Sir, I find that surprising. To my 
knowledge, we have four career Foreign Service officers, 
including one who is a senior Foreign Service officer and a 
former ambassador, serving in the ISN Bureau. So I will be 
happy to double-check, but that is my understanding, sir.
    The way our system works, sir, that when you come in--most 
of us do a consular tour, issuing visas. I am a political 
officer. After that, I did several political jobs overseas, but 
I also did out-of-cone tours, and those out-of-cone tours 
benefited my career greatly. An out-of-cone tour was at the 
National Security Council. We have out-of-cone tours at the 
Office of the United States Trade Representative (USTR). We 
have out-of-cone tours working at DOD in the Foreign Commercial 
Service. So I think that out-of-cone tours can help, but 
obviously there has to be balance. As a person rises in the 
Foreign Service, you have a choice of whether you do an out-of-
cone tour, and when you become a senior officer, you are doing 
everything.
    Senator Akaka. Would a member of the Foreign Service or 
Civil Service be disadvantaged if they are assigned to another 
department or agency, such as Defense or the CIA or assigned to 
a university faculty?
    Ambassador Thomas. Not at all, sir. Again, I was promoted 
to the senior ranks myself while serving in the National 
Security Council, and I think we have plenty of examples of 
that and we encourage interagency cooperation and we have 
increased the number of slots, both student and teaching, at 
the War Colleges. We would like to have more slots at the 
Command and Staff College, but we need more people and 
resources to do that, sir.
    Senator Akaka. Ambassador, the Canadian Government has 
something called the Accelerated Executive Department Program, 
which prepares individuals for senior leadership positions 
through the support of coaches and mentors, formal training 
events, and placements in a series of challenging developmental 
assignments which have individuals work in areas that they are 
unfamiliar or challenging to them in a large number of 
agencies. The Senior Executive Service is supposed to function 
in a similar manner. The Foreign Service emphasis on staying 
within one's cone seems to limit that possibility. Could you 
comment about this?
    Ambassador Thomas. Sure, sir. We very much believe in 
mentorship. We also believe the best should have the 
opportunity for rapid promotion. Each junior officer class, 
each specialist class on their first day has a class mentor, 
always a senior officer who participates in programs through 
their training process. We have a very robust mentorship 
program at all levels for the Civil Service. Again, I, myself, 
participated as a mentor to a Civil Service person who I am 
proud to say has just gone off to Sierra Leone. We have a very 
robust program in that. There is also a lot of informal 
mentoring.
    Then we have formal counseling. Each year when you get your 
evaluation, it is mandatory that you have had counseling by 
your supervisor two times before you get your evaluation and we 
really enforce that and we are now enforcing it even more so 
via technology. We are very proud of that and I think that our 
system has worked very well in giving the best of our officers, 
specialists, and Civil Service personnel increased opportunity.
    I think we are proud that we have one of the more robust 
Presidential Management Fellowship Programs in the U.S. 
Government, the second largest after the Department of Defense. 
We have the College Entry Program. We are trying.
    Senator Akaka. According to the Project on National 
Security Reform's Human Capital Working Group literature 
review, human capital is crucial to the functioning of the 
interagency system. Furthermore, there is a need to build a 
joint culture among national security personnel. How do you see 
the Civil Service and Foreign Service at the State Department 
participating in this interagency system?
    Ambassador Thomas. Senator, we very much support that. We 
have people, as I said, in many agencies, USTR, the National 
Security Council, CIA, DOD, DOE, and Foreign Agricultural 
Service. We very much believe in that. We also have political 
advisors, and in our new budget request, we have set about 
slots for about 200 people at different agencies, including 
political advisors, national security professionals, and 
students and faculty, training at the various War Colleges. We 
very much support interagency.
    Senator Akaka. Thank you for your responses. Senator 
Voinovich.
    Senator Voinovich. The GAO recommended the Department 
consider an assignment system that allows longer tours of duty 
and consecutive regional assignments. The recommendations were 
made to improve foreign language proficiency and foster greater 
cultural understanding. How is the State Department meeting 
this recommendation? Or did you find it valid?
    Ambassador Thomas. Yes and no in a certain sense, sir. 
Clearly, we encourage people to take our super-hard languages, 
Arabic, Chinese, Korean, and Japanese, and that takes 2 years 
of study and we expect and encourage those officers to remain 
in that area of responsibility. And many, if not most, do. They 
will go from mainland China perhaps to Taiwan, then to a 
consulate back to Washington working in the East Asia and 
Pacific Bureau.
    Some officers who are taking a romance language that they 
would have studied in their first couple of years decide they 
want to broaden their experience, become more skilled, to take 
another language. When I was a junior officer, I studied 
Spanish. After 8 years in the Foreign Service, I decided I 
should broaden myself by studying Hindi. Then I decided to 
study Bengali, and I have stayed in the South Asia region.
    So we have a mix and it depends on what languages you are 
studying, but at the same time, we want to give people 
opportunities. So if you decide that after a few years working 
in Western Hemisphere that you would like a new opportunity to 
go to Asia, study Chinese or Japanese for 2 years, we encourage 
that.
    Senator Voinovich. The Department of Homeland Security 
recently issued its changes to the visa waiver program to 
implement the Electronic System for Travel Authorization 
(ESTA). It is going to require all visa waiver program 
travelers to either obtain advance authorization to travel 
using ESTA or obtain a visa before traveling to the United 
States. The GAO estimates that ESTA could double the number of 
visa applicants from visa waiver countries because ESTA could 
deny an estimated 1 to 5e percent of those travelers.
    In May, GAO issued a report and said that State has not 
developed plans to manage that increased demand or estimated 
what additional resources will be needed to meet the demand for 
the embassies in the VWP countries. GAO found that 3 percent of 
current VWP travelers have to apply for a visa, it would result 
in a visa demand that would overwhelm the Department's current 
staffing and infrastructure.
    One of the things that I am sure that the State Department 
was embarrassed about was the fiasco that we had in terms of 
the issuing of passports.
    I would just like to know whether or not you are at all 
aware of this issue----
    Ambassador Thomas. Well, sir----
    Senator Voinovich [continuing]. And what is being done to 
plan for it. I think you know that one of the reasons why we 
changed the visa waiver program and allowed other countries to 
apply for entry was that this was a major public diplomacy 
problem. If we find ourselves with another embarrassing 
situation as we had in the past, it is not going to look very 
good for anyone.
    Ambassador Thomas. I agree with that, sir. I am clearly 
aware, as all Department employees are. I am not, however, 
responsible for consular affairs. We have a brand new Assistant 
Secretary. I will ask her to send you a report on that.
    But I will say that we have--our consular needs are 
expanding. Last week, I visited Monterrey and Nuevo Laredo, 
Mexico, where we have many entry-level officers performing 
consular work, to observe that work. Last fall, I worked on the 
Passport Task Force to see what challenges we face, and they 
are numerous.
    We are dedicated to protecting America and making sure that 
only those who are qualified to travel are able to enter our 
country and doing this in an efficient manner, but I would have 
to ask the Assistant Secretary for Consular Affairs to answer 
that question.
    Senator Voinovich. OK. You will get that for me, then?
    Ambassador Thomas. Yes, sir.
    Senator Voinovich. Thank you. Ambassador Thomas, Ambassador 
Naland's testimony suggests that the State Department may be 
moving to leave unfilled about 20 percent of the Foreign 
Service jobs due for reassignment next summer. What is the 
rationale behind such a plan and how were these positions 
selected?
    Ambassador Thomas. Sir, I am not sure where Mr. Naland got 
that information from and that 20 percent, but I will say this, 
we are doing a freeze. Unfortunately, we have had to do freezes 
several times in the last 25 years. This is not new and this 
results because we don't have enough personnel or resources. We 
want our people to--because we don't have enough, we have to 
prioritize. Where do we need the most people and resources?
    And what we have done is we have looked at approximately 
200 positions overseas and in Washington that will not be 
filled next year. What we have done is we have worked with the 
regional bureaus and the function bureaus and the assistant 
secretaries. We have given them each a number on a proportional 
basis and we are allowing them to decide which jobs will be 
filled and which will not be filled. That report from them is 
due to us at the end of this week and then we will make a 
decision. It is not something that we would like to do, but we 
have to do because we don't have enough people.
    Senator Voinovich. Maybe I am not understanding it right. 
Several minutes ago, you indicated that you had a budget to get 
you off the ground and I assumed that it meant that you would 
be able to take care of positions that you would be losing 
through attrition or otherwise. Are you saying that the reason 
why you are doing this is because of the fact that these jobs 
are no longer needed?
    Ambassador Thomas. No, sir. What I said was that, and 
pardon if you misunderstood me, is that we had enough money to 
get off the ground for Ambassador Herbst's office, the Office 
of Stabilization and Reconstruction. In terms of jobs that we 
are trying to fill for next summer, right now, we have to do 
that now for next summer because people have to be trained, 
assigned, and decide where to go, and we always do that a year 
in advance.
    Senator Voinovich. So you don't have enough money to do 
that?
    Ambassador Thomas. We don't have enough people to do that 
or money.
    Senator Voinovich. So what you are saying is that the money 
that has been made available isn't enough?
    Ambassador Thomas. Yes.
    Senator Voinovich. OK. Well, that is not what I heard the 
last time.
    Ambassador Thomas. Well, I am sorry, sir, but I was only 
talking about Ambassador Herbst's job.
    Senator Voinovich. Yes. Well, maybe what you ought to do is 
divide up the various ambassadors' jobs and give us a breakdown 
of where you have the people to do the job and the areas where 
you don't have the people to do the job so we are at least 
aware of the bureaus which need additional resources.
    Ambassador Thomas. OK.
    Senator Voinovich. If they will let you do that.
    Ambassador Thomas. Yes. Happy to do that.
    Senator Voinovich. Yes. We would be most grateful. We 
recently authorized $50 billion under PEPFAR to combat AIDS 
overseas. Are you familiar enough with the budget, your foreign 
operations budget? Will that money have to compete with other 
things that are already in the budget? One of the concerns that 
we have is that, although a very good public diplomacy program 
with significant support, it is a significant sum of money. 
What worries many of us, including who voted for the 
authorization, is that we know PEPFAR is going to compete with 
other priorities in the foreign operations budget. What is 
going to give in order to make money for that program?
    Ambassador Thomas. Sir, you might be talking about PEPFAR, 
I am not sure.
    Senator Voinovich. Yes, I am.
    Ambassador Thomas. Again, I don't have responsibility for 
that or that part of the budget, but we will be happy to send 
you the Department's position on that.
    Senator Voinovich. Mr. Chairman, it might be good to just 
get them all in here to talk about human capital throughout the 
place and where are we at. So often, we get the impression that 
things are going to be fine, and then really when we pierce the 
veil, we see a different picture. The sooner we get the real 
information, the better off we are going to be. Perhaps maybe 
when we get these reports back from these various organizations 
that we will have a better understanding, at least from their 
point of view, whether or not we have got the resources to do 
the job that we think needs to be done.
    Senator Akaka. Yes, Senator Voinovich. Thank you.
    We will do another round here. Ambassador, the 2007 State 
Department IG report discusses a shortage of mid-level Foreign 
Service officers. However, only FSOs are hired as entry-level 
officers. This could affect the Foreign Service, of course, for 
years to come. How do you plan to address the immediate and 
long-term issues of a shortage in current mid-career officers?
    Ambassador Thomas. In two ways, sir. We believe that our 
current promotion statistics will erase that mid-level deficit 
by 2010. We also will continue to recruit robustly. We believe 
that it is essential that we, along with the military, remain 
the up-or-out systems, where you have to come in as a junior 
officer, learn the art of diplomacy, take the same training, 
work the same jobs, and then manage and supervise your way up 
the chain. That is the most effective way and that is what we 
plan to continue to do, sir.
    Senator Akaka. Ambassador, of the Foreign Service 
generalist positions, public diplomacy is understaffed and 
underfunded. Changing the perception of Americans, especially 
in the Middle East, is critical to our national security. There 
are many inexpensive ways of reaching out to the younger 
generation of people through the Internet and news media. What 
training are you providing on the use of news media, 
technology, in support of public diplomacy?
    Ambassador Thomas. Sir, the R Bureau, which is responsible 
for public diplomacy, and the Foreign Service Institute have 
many training programs at all levels for people in public 
diplomacy, not only in speeches, but in how to interact with 
different organizations. We have plenty of programs, sir. We 
have cultural programs at our missions. We take advantage of 
technology. We use Facebook, we use the Internet to advertise, 
to push our message. We use pop-up technology, all these things 
that we find the rest of the world familiar with.
    But we also do our traditional cultural programs where we 
bring music groups. We have jazz ambassadors. We have Kennedy 
Center cultural programs that we bring overseas. We also bring 
people to America, exchange programs. We are very excited that 
we have brought people not only from Iraq, but from Iran--
wrestlers and weight lifters from Iran. We have brought poets 
from Iraq to America. So we have a very robust two-way program. 
Clearly, the needs are great and there are more things we could 
do and we have to take better advantage of technology because 
these cultural programs are very expensive.
    Senator Akaka. While you all have indicated that you have 
plenty of applicants to the Foreign Service, I have many 
concerns about the recruitment and hiring process for Civil 
Service servants.
    Ambassador Thomas. OK.
    Senator Akaka. Agencies often aren't using news media 
technology, such as social networking websites, to maximize the 
potential to find the right applicants. What are you doing to 
attract the most qualified candidates for Civil Service 
positions?
    Ambassador Thomas. We do some of the same things we do for 
the Foreign Service, sir. We have a very robust website at 
careers.state.gov. This summer, we are having an intern summit. 
We are asking all of our interns who would like to take the 
Foreign Service exam to take that. For the first time, we are 
going to be tracking our interns, something we did not do 
before. And again, we have diplomats in residences at our 
colleges and universities. We work closely with organizations, 
fraternities, sororities, and professional organizations, to 
recruit the broadest part of America.
    Senator Akaka. This is my final question, Ambassador. After 
you have found the right candidates, too often the hiring 
process requires candidates to fill out more information than 
should be required for an initial screening. This issue came up 
in one of the Subcommittee's hearings in May on recruiting 
Federal workers, and this deters highly qualified applicants. 
What are you doing to reform the hiring process so it is more 
streamlined and candidate-friendly?
    Ambassador Thomas. Well, sir, we agree with that assessment 
and we have done something about it. We looked at the biography 
part of the Foreign Service exam. It was taking some people two 
to eight hours to fill out. This was a new exam, and we heard 
some criticism of it. We tried something new and we found out 
that it was taking people too long and it was discovered and we 
decided to shorten it. So we are shortening the biography part 
of it.
    But I would like to point out, when we wanted to shorten 
the registration to just a post card, it would have cost us 
over $1 million to do that in terms of contracting, in terms of 
the Federal Paper Reduction Act and other issues. So we had to 
only spend about $200,000 to shorten it and we will seek funds 
in the future to streamline it even further.
    Senator Akaka. I said that was my final question, but let 
me ask one more question. I want to go back to the issue of 
transition, which I began with.
    Ambassador Thomas. OK.
    Senator Akaka. What are your top three recommendations for 
the next Administration as they look at human capital issues 
within the State Department?
    Ambassador Thomas. I would ask the new Administration to 
give us sufficient funds to enable us to hire talented Civil 
Service and Foreign Service employees and to retain locally-
employed staff. Our locally-employed staff around the world are 
the institutional backbone of our embassies, and because of 
FOREX exchange losses and increased opportunities that they 
have that they did not have in previous years, some of the most 
talented ones are starting to leave us. I would also ask for 
more funds for technology to enable every employee to have a 
FOB, a Blackberry, or a laptop, which would make them much more 
efficient.
    And I would ask for some type of consideration that will 
allow us to have more flexibility with the Civil Service. 
Foreign Service has rank in personnel, which works very well. 
Civil Service, we really need some kind of pilot program so 
that we can retain the best and the brightest so they will not 
feel stifled and that they can get fairly rapid promotions.
    Senator Akaka. Thank you very much, Mr. Chairman. Senator 
Voinovich.
    Senator Voinovich. I understand that in your testimony, you 
mention that the Department is pursuing ways to ``take care of 
locally-employed staff.''
    Ambassador Thomas. Yes.
    Senator Voinovich. Could you give me some examples of the 
steps the Department is taking? Are you running into any 
difficulties in terms of getting locally-employed people to 
come to work for the State Department?
    Ambassador Thomas. Sir, one of the ways we are looking at 
assisting local-employed staff is through a brand new voluntary 
retirement scheme that would allow us to have a voluntary 
retirement scheme for locally-employed staff worldwide where it 
would be like a Thrift Savings Plan ``lite'', where they would 
put some of their funds in. The U.S. Government would not match 
it, but they would put it in a very well-known investment 
house. That will help, because what we have is some countries 
where people have pension plans that they can't trust or other 
countries where inflation or foreign exchange is hurting 
people, and we don't want people to live in penury after years 
of dedication to the U.S. Government. So that is one of the 
things----
    Senator Voinovich. But it is a separate pension system? In 
other words, they live in the country and they are part of that 
country's pension system, and what you are saying is that in 
some instances, they are a little bit leery of their own 
governments: You are saying to enhance the attractiveness of 
their coming to work for the State Department, that you would 
offer them a retention incentive.
    Ambassador Thomas. Yes, and to retain them.
    Senator Voinovich. Yes.
    Ambassador Thomas. And to retain them.
    Senator Voinovich. Recommitment and retention are key 
factors. As an example, I have a very good friend and very 
talented young lady and I thought she was going to go to the 
embassy and she decided instead to go to the E.U.
    Ambassador Thomas. Yes, sir.
    Senator Voinovich. How about integrating civil servants 
into overseas posts?
    Ambassador Thomas. Well, right now, we have civil servants, 
sir. We have approximately 200 Civil Service personnel working 
overseas. Our agreement with the American Foreign Service 
Association is about 50 Civil Service personnel each year go 
overseas to jobs that Foreign Service officers, for whatever 
reason, are unable to fulfill, and we find that this is 
remarkable. It allows the Civil Service personnel to broaden 
their skills or obtain language skills. Some of them decide 
they would like to enter the Foreign Service and take the 
examination. Others decide they would like to come back to 
their jobs, and we encourage that.
    Senator Voinovich. How long is their tour?
    Ambassador Thomas. It depends where they go, sir. Some 
posts, 1 year. Others, 2 years. As I said earlier, sir, my 
mentee, who wanted to go overseas this year, when he first 
started looking, all of the civil servants for the posts he was 
looking at were extending because they liked the work, the 
challenge of the work that they were doing. So this is 
something that we very much----
    Senator Voinovich. But there is some option to those people 
that are there, you give them like a year, and if they want, 
they can re-up for another year?
    Ambassador Thomas. Yes.
    Senator Voinovich. Well, I have always thought that many 
don't want to be away from their families for that long. In 
many instances, they do have their families with them. It just 
seems that sometimes people just get to know the culture and 
key folks. It is time for them to move on. Does the Department 
ever look at the situation in which these individuals find 
themselves and say, based on the circumstances in the country, 
etc., that rather than sticking to the 3-year rotation, that we 
will allow them to stay for another year because of----
    Ambassador Thomas. Sure.
    Senator Voinovich [continuing]. The importance of the post?
    Ambassador Thomas. Yes, we do.
    Senator Voinovich. I was just thinking that so many of our 
slots are filled with political ambassadors. They are only 
there for a short time and then they all have to submit their 
resignations with the change in Administration.
    Ambassador Thomas. All ambassadors, sir, submit their 
resignation at the election----
    Senator Voinovich. Yes.
    Ambassador Thomas [continuing]. And then it is up to the 
new President to accept or reject career or political.
    Senator Voinovich. Do you have any statistics on how long 
they can remain in their posts?
    Ambassador Thomas. It is up to the new Administration, sir. 
What has happened with Secretary Albright and Secretary Powell, 
they did not--some people chose to leave on January 21. Others 
said, I have a kid in school or I have a medical need or I am 
negotiating something. Can I stay 30 days, 60 days, 90 days, 
and each Secretary made the decision by him or herself, and I 
suspect that probably would happen again in the future.
    Senator Voinovich. Even with somebody who has been there--
that is a member of the Foreign Service who has been there for 
a year and they would say goodbye?
    Ambassador Thomas. Well, sir, again, it is up to the 
President and the Secretary of State.
    Senator Voinovich. What is the custom?
    Ambassador Thomas. The custom with the Foreign Service has 
been, a career officer, is that they are allowed to stay on 
average 3 years. This is something that Secretary Shultz put in 
place and subsequent Presidents have followed pretty much.
    Senator Voinovich. That is good.
    Ambassador Thomas. Yes, sir.
    Senator Voinovich. OK. Thank you, Senator.
    Senator Akaka. Thank you very much, Senator Voinovich.
    I want to thank our witnesses, Ambassador Thomas and Ms. 
Taglialatela, for your responses and to tell you that it will 
be helpful to us. As you can tell, we are trying to get 
information to help us with the decisions we need to do here. 
So again, thank you very much for being here.
    Ambassador Thomas. Thank you both for your questions and 
your support, and I promise that we will endeavor to get the 
answers to your questions sooner.
    Senator Akaka. Thank you.
    Now, I would like to invite the second panel to come to the 
desk. We have John Naland, President, American Foreign Service 
Association. We also have Ambassador Ronald E. Neumann, 
President, American Academy of Diplomacy.
    As you know, our Subcommittee rules require that all 
witnesses testify under oath, so I ask you to please rise and 
raise your right hand.
    Do you solemnly swear that the testimony you are about to 
give this Subcommittee is the truth, the whole truth, and 
nothing but the truth, so help you, God?
    Mr. Naland. I do.
    Mr. Neumann. I do.
    Senator Akaka. Thank you very much. Let the record note 
that the witnesses answered in the affirmative.
    I just want to remind you that your full written statements 
will be included in the record. Mr. Naland, will you please 
begin with your statement.

   TESTIMONY OF JOHN NALAND,\1\ PRESIDENT, AMERICAN FOREIGN 
                      SERVICE ASSOCIATION

    Mr. Naland. Sir, thank you very much. Mr. Chairman, Senator 
Voinovich, the American Foreign Service Association (AFSA) 
welcomes this opportunity to speak on the subject of the 
Department of State's human capital crisis. Our Nation's career 
diplomats are grateful to you for convening this hearing.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Naland appears in the Appendix on 
page 43.
---------------------------------------------------------------------------
    The title that you selected for today's hearing could not 
be more accurate. As America prepares to hand over 
unprecedented foreign challenges to a new President, our 
Nation's lead foreign affairs agency is hobbled by a human 
capital crisis. My written testimony documents many of these 
problems. They include approximately 12 percent of overseas 
Foreign Service positions are now vacant. Approximately 19 
percent of mid-level positions are held by employees stretched 
into those jobs. Many positions are held by people lacking 
necessary language proficiency.
    Diplomats continue to be shortchanged when it comes to 
training, especially long-term professional training. As a 
result, today's Foreign Service does not have to a sufficient 
degree the knowledge, skills, abilities, and outlooks needed 
for 21st Century diplomacy.
    Because our Nation has underfunded diplomatic engagement 
while building up military muscle, the overstretched U.S. 
military has increasingly taken on tasks once assigned to our 
diplomats and development professionals. Secretary of Defense 
Robert Gates gave another outstanding speech just yesterday 
warning of this trend, and I really commend that speech to you, 
sir.
    The work of diplomacy is becoming increasingly dangerous. 
Since 2001, the number of unaccompanied positions has 
quadrupled to over 900. The Foreign Service is facing an 
unprecedented operational tempo. Over half of the Foreign 
Service has served at a hardship post in the last 5 years. Over 
30 percent has served in an unaccompanied position in the last 
5 years. Over 20 percent has served in war zone Iraq or 
Afghanistan. With two-thirds of the Foreign Service forward 
deployed overseas and two-thirds of them serving in hardship 
posts, there is no remaining bench strength with which to staff 
future new contingencies.
    I have to disagree with the Director General. In my view, 
morale in the Foreign Service has declined. Inadequate 
staffing, insufficient budgets, and poor management have left 
the Foreign Service a career out of balance. Many employees 
have concluded that their loyalty has been a one-way street, as 
their employer has not reciprocated with needed resources and 
benefits. These harmful trends have been accumulating for a 
number of years. Unfortunately, little has been done to 
ameliorate them.
    The Bush Administration dramatically increased Foreign 
Service staffing demands without taking decisive action to 
increase personnel. While AFSA strongly endorses the 
Administration's fiscal year 2009 budget request for over 1,000 
additional employees, we regret that the Administration waited 
until its final year in office to seek these long-needed 
staffing resources.
    For its part, in all honesty, sir, Congress did not even 
fund the Administration's inadequate fiscal year 2005 to fiscal 
year 2008 budget requests, which sought to add an additional 
760 State Department positions. Again, while AFSA lauds 
Congress for including some funding for new positions in the 
recent Iraq supplemental, much more is needed.
    Congress has yet to correct the growing inequity in the 
Foreign Service pay schedule. Due to the exclusion of overseas 
Foreign Service members from receiving the locality pay 
adjustment given to other employees, junior and mid-level 
employees take a 20.89 percent cut in base pay when 
transferring abroad.
    As a result of these factors, the next Secretary of State 
will inherit a human capital management system that is in 
crisis and a Foreign Service that is at a tipping point. This 
will saddle the next Administration with serious logistical 
constraints when implementing their foreign policy initiatives. 
Thus, now is the time to address these urgent human capital 
needs. The next President will want a strong diplomatic corps 
to work hand-in-hand with our strong military. Delaying sending 
in diplomatic reinforcements would reduce the new President's 
flexibility in crafting a foreign policy. Thus, I urge timely 
passage of the full pending fiscal year 2009 budget request for 
the State Department and U.S. AID.
    To sum up, it is vital to reverse years of underinvestment 
in Foreign Service staffing and training. Today's Foreign 
Service is too small and lacks the proper mix of skills, 
knowledge, and abilities. We need a grand bargain that couples 
the significant expansion of the Foreign Service with a 
strengthening of the professional development system. The 
Foreign Service needs a 15 percent training complement like 
that afforded to the military. Also like the military, we need 
benchmarks for required career-long training to ensure that we 
receive preparation needed to be effective agents of foreign 
policy development.
    Thank you again for holding this timely hearing and I would 
be happy to answer questions.
    Senator Akaka. Thank you very much, Mr. Naland. Ambassador 
Neumann.

 TESTIMONY OF AMBASSADOR RONALD E. NEUMANN (RET.), PRESIDENT, 
                 AMERICAN ACADEMY OF DIPLOMACY

    Mr. Neumann. Mr. Chairman, Senator Voinovich, thank you for 
inviting me today to replace my colleague, Ambassador Tom 
Boyatt. You have his full statement and I would request that it 
be entered in the record.\1\
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Boyatt submitted by Mr. Neumann 
appears in the Appendix on page 48.
---------------------------------------------------------------------------
    I would like to make a few oral remarks. Simply put, the 
Secretary of State lacks the tools, people, competencies, 
program, and funding to meet U.S. foreign policy demands 
effectively.
    To examine this problem, the American Academy of Diplomacy 
joined the practical background of many with government 
experience with the budget expertise of the Henry L. Stimson 
Center. We are grateful, Mr. Chairman and Senator Voinovich, 
that you have agreed to work with us. Essentially, this is a 
study to match resources with known requirements for all parts 
of the Function 150 account under the authority of the 
Secretary of State. We are looking at four broad areas: Core 
diplomacy, developmental diplomacy, public diplomacy, and 
crisis response. We have also looked at authority shortfalls.
    The problems are longstanding, growing over many years and 
Administrations to a magnitude that now threatens the 
successful conduct of diplomacy. Let me note just a few 
examples.
    In Afghanistan, where you know I served until last year, 
our Provincial Reconstruction Teams have each one State 
Department and one U.S. AID officer. With the best luck with 
rotations, we will only cover this need 10 months out of every 
12. Two months out of every 12, we will be gapped, and that is 
our best.
    U.S. AID lacks the contracting officers and supervision to 
flexibly manage its work. Since 1990, we have expanded the 
assistance budget 60 percent and reduced the workforce by about 
one-third. Is it any wonder that supervision is lacking and 
contractor problems dominate the headlines? And the world has 
changed. NGOs, multilateral organizations, and businesses all 
play a more prominent role in foreign affairs, but we have not 
staffed to deal adequately with these actors.
    We have no reserve in personnel or budgets to deal with 
crisis. We pay a serious opportunity cost in time lost as we 
struggle to reprogram funds, enact supplementals, and scrounge 
staff. The staff we grab for crises, leave great gaps behind, 
work undone. Funds come too late for initial impact, when we 
could do the most good. And we pay for this in our performance 
in crises and elsewhere as we pay for the lack of proper 
advance training.
    For these reasons and on the basis of our study, we will 
endorse the State Department's request for additional State 
Department and U.S. AID personnel and for a crisis fund. We 
fully support passage of a Civilian Response Readiness Corps, 
S. 613, that has already passed the House.
    Because our study looks further, 5 years, than a single 
budget, we call for more. These changes need to be part of the 
base budget because the needs are continuing. We call for a 
rebalancing of the remilitarization of diplomatic and 
development functions, the same issue to which Secretary Gates 
spoke yesterday. I have a copy, by the way, if your staff needs 
it, of his speech. This is not an issue of protecting 
bureaucratic turf. Rather, it recognizes that putting 
everything on the military detracts from their prime war 
fighting mission.
    And second, the military lacks the ability to couple short-
term response with long-term development. They can build a 
school quickly, but they cannot get the support for that school 
into the national education program. They can outperform U.S. 
AID in building a generator for a small city in Afghanistan, 
but they cannot integrate it into a national grid or long-term 
development of revenue collection to keep it functioning. There 
is room for everyone, but the civilians need the resources and 
authorities to hold up their end.
    Our precise recommendations are still in review, but I can 
give you a general sense of where we are coming out. We believe 
that there will be a need for about 1,250 additional personnel 
each for core diplomacy, for U.S. AID, and for training. We 
will have precise recommendations in the early fall, and I hope 
we will be able to review them with you in detail.
    Mr. Chairman, Senator Voinovich, the next Administration of 
whatever composition will have to deal with multiple problems, 
from terrorism to globalization, environmental degradation, and 
failed states. Opportunities also abound, from nonproliferation 
to improving financial systems and systems in the reach of law. 
These critical challenges and opportunities can only be met 
effectively through a significantly more robust capacity that 
features skilled diplomats and foreign assistance 
professionals.
    Thank you for your attention. I would be happy to respond 
to your questions.
    Senator Akaka. Thank you very much, Ambassador.
    You heard the State Department's response to our questions 
and I just want to ask you both, do you have any comments on 
their responses? Mr. Naland.
    Mr. Naland. Well, sir, as representatives of the 
Administration, the Department's spokesmen, spokespeople, need 
to toe the line, toe the Administration line, so they can only 
go as far as the Office of Management and Budget has approved. 
And so the Director General, because there is a robust fiscal 
year 2009 request out there, he was able to speak to that, but 
I don't think he is in a position to go much more beyond that, 
whereas we--I, representing the union, and Ambassador Neumann, 
as a retired ambassador--are more free.
    So I would say that the Department's spokesmen painted a 
rosy picture, but that is kind of his requirement, I believe. 
So I would paint it not so rosy.
    Senator Akaka. Ambassador Neumann.
    Mr. Neumann. Thank you. I am not sure if this is a 
disagreement--I don't actually think so--with Director General 
Thomas. I think the bottom line to the question you asked him 
at one point is they do not have enough. They are asking for 
more, and if the 2009 budget were funded, they would be in a 
better position. But I would--and again, I think this is not 
disagreement--I would underline that means we will be in a 
better position in 2010 or 2011, after you take the money of 
2009 and you hire the people and you train them and you begin 
to deploy them into the field.
    We are in bad shape and we have to recognize that with the 
best plans now, including what the Department is asking for, 
and your response, we have serious time lags that we will 
continue to pay for, and the time lag question is one that--I 
think perhaps if you permit me to just take another minute--we 
need to focus on more because I think Washington is sort of a 
policy town. When we have made a policy decision, there is a 
sense of action completed, and we often don't focus on how long 
it takes.
    I was very aware of this in Afghanistan, where, for one 
example, the Administration made a correct decision in 2006 to 
ask for a large budget in 2007, in the supplemental. That goes 
up in February, is voted on in the summer. Funds get out in the 
fall. By the time you do engineering studies, say, for a road, 
winter is setting in and you turn dirt in 2008 for a decision 
you made in 2006, and that is a long time in the middle of a 
war.
    When we do not keep personnel costs in balance and when we 
do not keep the flow of people and of training and resources 
moving steadily, then we have that same kind of price to pay in 
our personnel and in our effectiveness and the same inability 
to speed it up. So that is my biggest concern.
    I did hear, I think it was Senator Voinovich, asking about 
length of tours. I strongly believe that there are certain 
places where we need to keep people much longer. Not everyone 
every place. There are prices to be paid in family and welfare, 
and some of these jobs, of course, you can get a little hurt 
in. But we paid a terrible price for effectively having an 
institutional frontal lobotomy once a year in the Embassy of 
Afghanistan. We turn everybody over. Now, you have some very 
dedicated people who offset that, my colleague, Ambassador 
Ford, who is going back to Baghdad this summer for the third 
year. I had people in my embassy who had been in Afghanistan 
for several years who stayed. But there are very few and it 
takes a long time to build up the competence. Not everybody 
needs to be there, but you can't all go dumb at the end of the 
year.
    That, I think, is more than enough. Thank you, sir.
    Senator Akaka. Thank you. Mr. Naland, to be more specific, 
the State Department talked about using Civil Service personnel 
to fill FSO billets. What do you think about that?
    Mr. Naland. Well, sir, that program has been around a long 
time. I have served at overseas posts where Civil Service 
employees were filling in and it has worked very well. The 
concern I have is if you get a much more expanded program or if 
you start targeting the counselor section or the deputy chief 
of mission, that is when you start putting in Civil Service 
employees who don't have the overseas experience in a position 
that I think you really need experienced people. And then you 
take away that opportunity from a Foreign Service member who 
is, one, in an up-or-out system, and two, who hopefully you are 
preparing to be a deputy chief of mission or ambassador.
    So I completely understand the value of having Civil 
Service employees who are in Washington working on foreign 
policy to have an overseas experience so they can see it 
operating on the ground, but there has to be a balance, and if 
you start flooding overseas posts with Civil Service employees 
who don't have the experience and if you put them at an upper 
or mid-level position, then you are taking those developmental 
opportunities from the Foreign Service, which the Congress, in 
the Rogers Act of 1924, said that the Foreign Service is the 
main group of people who are going to be doing this stuff.
    So I understand the need and the interest in giving Civil 
Service employees more of a rounding over there, but you need 
to carefully balance the fact that the Congress has created a 
Foreign Service as a separate system to have the brunt of these 
responsibilities overseas.
    Senator Akaka. Mr. Naland, you heard how the State 
Department plans to invest part of the funds appropriated from 
the Emergency Supplemental Appropriations Act for fiscal years 
2008 and 2009. How much of the $45 million in funding for 
staffing resources do you believe needs to be invested in the 
training and professional development of current employees 
versus the hiring and training of future employees?
    Mr. Naland. Sir, there is no one more in favor of training 
than I am, but the situation the Department faces right now are 
these gaping gaps overseas. The Director General said it was 
200. I had heard that it was a higher percentage. But if he 
says the money that has been appropriated will hire 140, those 
140 need to be hired tomorrow and put in the orientation 
training and the consular training and the other training and 
then they just need to go straight out to posts to fill these 
positions that are unstaffed.
    I think it will be the 2009 budget, and the American 
Academy of Diplomacy project, I think, will document this. 
Once, if the Congress does appropriate more, higher numbers, 
and I am talking the 1,076 that the Administration is 
requesting, once you get those numbers appropriated, then you 
can start building in the training complement that Secretary 
Powell wanted to build, but he started and then it went to 
Iraq.
    So now it is an urgent need to get those new positions out 
overseas doing the jobs, unfortunately. But as more funding is 
appropriated, if it is, new positions above that hopefully will 
go into training because as my testimony states, I think we do 
need a Goldwater-Nichols II kind of thing.
    I had the opportunity to go to the Army War College. I had 
the opportunity to work in industry. But that is rare for a 
Foreign Service officer. I think all of my colleagues need to 
have at an NGO or Homeland Security or the Department of 
Defense or CIA--and all of my colleagues need to attend some 
kind of service college. The State Department used to have its 
own senior seminar, but we abolished that. So there is no one 
more in favor of training than I am, but I just don't think we 
can do that right now until a lot more positions are provided.
    Senator Akaka. Thank you. Senator Voinovich.
    Senator Voinovich. We are going to be anxious to get the 
reports from the Academy, Ambassador Neumann. It seemed that 
when Secretary Powell came on board and brought Dick Armitage 
with him, that there was a shift in the management of the State 
Department, and that somebody was paying attention to the 
people employed by the State Department and the human capital 
challenges.
    Then he was replaced by Secretary of State Rice. I will 
never forget that when they suggested Zoellick for that job, I 
was quite concerned because I didn't really think that Zoellick 
should have that job. I didn't think that management was his 
forte. And then he left and we had Henrietta Fore, and now we 
have Mr. Kennedy, who everyone says is kind of good.
    Are any of these reports going to come back with 
recommendations on what the relationship with the Secretary 
should be and where human capital ought to be in terms of its 
priority in the Department? Senator Akaka and I started out 
when human capital was given little consideration here. Now we 
have the Chief Human Capital Officers Council that meets 
together. I would be interested in your comments about perhaps 
a job description for the person that should have that 
responsibility and what the relationship should be.
    I just think that in spite of Secretary Rice's 
conscientious focus that we have really fallen down in the last 
several years. I am concerned that morale is really low. The 
question is whether or not folks are going to stick around 
until the next group comes in to find out whether or not things 
are going to get any better. But I would be interested in your 
comments, both of you, for that matter.
    Mr. Neumann. Did you want me to start?
    Senator Voinovich. Yes.
    Mr. Neumann. I spent 37 years in the Foreign Service and I 
have often thought that there must have been some really golden 
age of morale, because in 37 years, I think I heard every year 
that morale was lower than it had ever been before. So it must 
have started very high, indeed. [Laughter.]
    That said, I would say, first of all, in answer to your 
particular question, there is nothing in the reports we are now 
working on which goes directly to what you asked about, that is 
creating this sense of downward loyalty and respect. I think 
that is an important question, but it is not the question of 
numbers and direct fiscal resources and personnel which we have 
focused the report on.
    My own observation--Mr. Naland will have his--is that this 
is an area in which the Department has not been good throughout 
my career. When I was an Army officer, an infantry officer, we 
were very keen on the idea that loyalty had to be a two-way 
street. You had to have loyalty down in order to get loyalty up 
to get esprit. I don't think Secretary Rice is particularly 
bad. I think she does care about people. But I think the 
Powell-Armitage period, coming with their military background, 
was a particular blip. That was the outlier. It was a good 
outlier, but that was the outlier of the system.
    Senator Voinovich. It would be interesting to look at the 
management style and what they did and why was there 
receptivity to their plans.
    Mr. Neumann. Because people felt like they cared about 
them.
    Senator Voinovich. What are the things that they did that--
it is an intangible to a degree, that may help the next 
Secretary of State improve morale, or in the alternative, maybe 
even have something put together for the next President in 
terms of the kind of person that they should be looking for to 
hold the Under Secretary for Management port. We must address 
the problem of low morale, given the number of State Department 
employees that can retire tomorrow.
    Mr. Neumann. So far, they are not.
    Senator Voinovich. Yes.
    Mr. Neumann. I mean, up until now, cross my fingers, knock 
on wood, but the attrition rates are staying pretty close to 
historical norms. I think Mr. Naland has noted that there is a 
little blip, but it is not clear if it is changing.
    I do think, sir--I agree with you, but I think it has to go 
much deeper. I think we are talking about an institutional 
culture. We have to have a series of Secretaries and a series 
of leaders who demonstrate by their own action that they are 
fighting for their people, they are fighting for their budget, 
and they are fighting for their welfare. And that has to be 
replicated all the way down.
    We have not particularly taught that, nor have our officers 
necessarily exercised the kind of leadership that they complain 
about not getting from their superiors. And I have known for 30 
years secretaries who felt they didn't get enough respect from 
junior officers, which suggests to me that they are not 
treating their subordinates any better than the folks on top 
are treating them. We have to work on the entire culture up and 
down the chain if we are to really change that part, but at the 
end of the day, it begins at the top with leadership.
    I hope that isn't too long of an answer to say, yes, I 
agree.
    Senator Voinovich. Well, it would be welcome if there was 
some evaluation of what some of the ingredients that should be 
present for this to occur. I mean, I know when I was governor, 
we trained 56,000 people in Total Quality Management. I went to 
school for a week with my labor leaders. I made it a top 
priority. Frankly speaking, one of the biggest problems I had 
was with middle management because they had grown up in a 
system where they were told what to do and then they got there 
and they figured, now it is my turn to dish it out. So we had 
to break that.
    But maybe that is an approach that could be used. I think 
it is, again, intangible, but I think it is one that, if 
identified, can be addressed.
    The other thing that I am interested in is that we have a 
new enemy out there today that is a little different than what 
we have had before. It is Islamic extremists, religious 
fanatics that have hijacked the Koran and persuading people 
that the way to heaven is jihad.
    Would either one of you want to comment about how this has 
placed a different dimension on the State Department in terms 
of its relationship with the Defense Department? I have 
Secretary Gates' speech here and I will read it. Would either 
one of you want to comment on this? Is this something new that 
needs to be taken into consideration in terms of how we deploy 
people and what we ask them to do?
    Mr. Naland. Well, sir, my next assignment is to Forward 
Operating Base War Horse in Baquha of Diala Province in Iraq, 
and it is the first time I will have led a Provincial 
Reconstruction Team, I can tell you that. So the Foreign 
Service has changed dramatically. We have 900 unaccompanied 
positions, which is--if you think of DOD, 900 sounds like a 
teeny number, but for the Foreign Service, it is a huge number. 
So the Foreign Service career has changed dramatically, and so 
we are working more with the military.
    As Secretary Gates has said, the military has taken on 
tasks that they really shouldn't be doing. A general once said, 
don't equate enthusiasm with capability. The gung ho--and I was 
an Army officer. The Army will try anything if there is a 
vacuum, but there shouldn't be that vacuum. The Foreign Service 
should have the strength and the training, not just point us 
there and say, go do it, but give us the training.
    So the world has changed. It is more dangerous for the 
Foreign Service. We had a consulate in Turkey attacked last 
week. And that raises a whole other issue of the kind of 
embassies we are building around the world and where are they 
and risk management as opposed to risk avoidance. So the 
Foreign Service is a risky occupation and that is just the way 
it is. As long as the Congress appropriates funds for embassy 
security and we hopefully build reasonably secure embassies 
from which we can do our job, not just sitting on some 
mountaintop, the Foreign Service will be out there, will be 
working with the military, and I am sure Ambassador Neumann 
could----
    Mr. Neumann. I seem to have a certain talent for picking 
the kind of places you were talking about, Senator Voinovich, 
since I was ambassador in Algeria where there was a blanket 
death threat to all foreigners and about 16 months in Baghdad 
before going to Kabul. I have served also in Bahrain and Abu 
Dhabi, Iran before the revolution, and Yemen.
    I think there are two different kinds of challenges that 
are coming. One is specifically with the military interaction. 
The other is more generally in the Muslim world. On the 
military, I think what you are seeing is, first of all, we are 
operating jointly at a much lower level than we have ever done 
before, and that is putting a strain on the military, as well, 
because even though they are far more geared to the idea of 
joint training and training their people for joint work, that 
traditionally was something that began at the lieutenant 
colonel, upper lieutenant colonel level, and colonel level. Now 
you have all these PRTs run by lieutenant colonels who have 
never had joint experience themselves, with mid-level State 
Department officers who have had no training in jointness.
    This goes back to, again, the need that Mr. Naland and our 
report are flagging for training. I have been giving lectures 
at Fort Leavenworth at the Command General Staff College. They 
are avidly seeking State officers to participate in their 
training. That training has been substantially re-geared since 
I was an officer many years ago. It is now much broader in 
concept. They are very aware of the need for this jointness. 
But they can't get the civilians to play because there are no 
civilians to send. So we need more of the training.
    The other is the civilians do not have the resources in 
personnel and in authorities to hold up their end. It is 
causing a lot of frustration in our military colleagues and you 
get a lot of finger pointing back and forth. There are a lot of 
reasons for that. I won't take your time today. But there is an 
authority gap at the middle. We are very focused on policy, 
somewhat on resources. We are not producing the changes in the 
ability to handle, what I would call the operational level 
overseas. I think this is a significant issue in Afghanistan.
    More broadly outside the military, we are suffering from 
the absence of people who can hold their own in public 
discussion in Arabic. We have all the staffing gaps, things we 
talked about, but Arab countries are very oral and personal and 
we get a lot more out of the person who can engage in a smaller 
forum directly because of the ripples that spreads. It is very 
counter intuitive for Americans. We are very focused on 
electronic media, what gives you the most hits, Internet sites. 
These things have very little credibility in the Arab world. 
Much more credibility is gained by the individual who can make 
an effective back-and-forth with people, and we have very few 
personnel with the language level.
    We have a lot of people intellectually who can do it, very 
few with the language level to be able to actually interact in 
that way. I think if we had 100 people who spoke really top-
flight Arabic, we would get five times more out of them than we 
would get out of any amount you could put into television and 
broadcasting.
    Senator Voinovich. I am sorry, Senator. I took much more 
time than I was alloted.
    Mr. Neumann. I am sorry for such a long answer, sir.
    Senator Voinovich. That is fine.
    Senator Akaka. Thank you, Senator Voinovich.
    Ambassador Neumann, in your testimony, you mentioned the 
need to fill all current vacancies and increase staffing by 
over 3,000 positions. However, the State Department only hires 
FSOs into entry-level positions. It will take years before 
these employees have the experience required for mid-level 
supervision, and you mentioned that in your responses it takes 
time before they are finally in service. How would you 
recommend the State Department address the current shortfall in 
staffing?
    Mr. Neumann. I do think we should meet it as the Director 
General has said, as the Ambassador has testified. I do think 
we should move people up inside for a whole variety of reasons 
that have been mentioned. I think it is a problem, but when you 
look back at the expansion of our armed forces in war, we are 
capable of moving people rapidly.
    I don't know whether this question has been looked at 
already, what kind of accelerated training do we need to be 
designing now in order to put the people in place if we get the 
money and get the positions that we are asking for? I hope that 
we are already in the Director General's Office of FSI thinking 
about how we are going to do internal rapid promotion to deal 
with expansion, what supplementary training are we going to 
have to do rather than just learning by having problems. I have 
not asked that question. It is certainly one worth looking at, 
and I suspect that we are going to have to have some authority 
to deal with some of the increased positions through temporary 
hiring, as U.S. AID is doing.
    U.S. AID for many years has not had the personnel it needs 
to run its jobs. It has done personal services contracts. We 
might look at some of that for key positions--well, key 
positions is a bad word, but for certain things to bridge a 
gap. It is not a good way to build a career service because you 
lose a lot of people you get in. They learn and you lose them. 
They walk out the door.
    But I think we should be looking at internal promotion. We 
get into a lot of other issues if we try to break out of that. 
But how do we do it most effectively? How do we have the 
foresight to run it and what steps do we look at to ameliorate 
the gaps between when we have the positions authorized and when 
we have built a full Foreign Service.
    Mr. Naland. Sir, if you look at the Inspector General's 
report, the September 2007 volume, there is an Appendix A that 
has a chart, and Director General Thomas, I believe, referred 
to this, showing how the existing mid-level deficits will be 
closed in approximately a year and a half through normal 
promotion from within.
    Mr. Neumann. Not if you are taking them for training.
    Mr. Naland. Not if you are taking them for training. So the 
existing gaps with continued hiring and attrition will be 
closed through training--I mean, through promotions. If there 
are large numbers coming in, which we obviously recommend, I am 
sure that Congress would phase that in, and so it might take 4 
or 5 years for the full number to be phased in, and then you 
might have to wait 5 years to have the mid-level training 
course that the Foreign Service doesn't have but all the 
uniformed services do. So it might take a little while, but by 
the second term of the next President or the first term of the 
President after that, it will be taken care of.
    Senator Akaka. You both have backgrounds in the Foreign 
Service. What is your perspective on the Civil Service and the 
interaction between the two services? Mr. Naland.
    Mr. Naland. Well, sir, I represent the Foreign Service, so 
I speak from that perspective. There has been--and Secretary 
Powell very much tried to get past this rivalry. There has been 
a rivalry between the Foreign Service and the Civil Service. I 
am not an expert on the Civil Service system. You all are much 
more experts than I am, but the Foreign Service system makes a 
lot of sense to me. It is a rank in person position. You can 
move around to different jobs and you don't take a pay cut, 
unless you go overseas, but that is another issue. Whereas the 
Civil Service, you are what your position is and it is a much 
more rigid system.
    So I think, as maybe Linda Taglialatela or maybe the 
Director General was saying, more work needs to be done on 
reforming the Civil Service to give them some more 
opportunities, and if they weren't in such a straightjacket, 
then they wouldn't feel so envious sometimes of the Foreign 
Service.
    So some reform is needed, I certainly agree to that. But 
again, I go back to the Rogers Act of 1924 that said we need a 
Foreign Service to do the Foreign Service thing. So there is 
going to be some crossover there, but if the Civil Service just 
floods into the Foreign Service, then it would destroy the 
Foreign Service.
    Senator Akaka. Mr. Ambassador, do you have any comments 
about that?
    Mr. Neumann. I fundamentally agree. I mean, I have more of 
the overseas perspective because most of my domestic jobs have 
not had a lot of Civil Service contact, so I don't want to 
speak to things you know more about than I do, sir. From the 
overseas position, I have been enormously grateful to very 
dedicated civil servants who have come out on volunteer tours 
and worked in my section in Baghdad and my embassies in Kabul 
and Bahrain. They have been vital to us.
    I favor a flexibility at the margin for both services. I 
would not favor taking away the Foreign Service, or for that 
matter, trying to shoehorn a great many people who want a 
certain amount of stability in their lives into accepting the 
requirements for regular movement. Remember, under normal 
practices with the five/eights rule, a Foreign Service officer 
has very limited time back in Washington and then you have to 
get yourself back overseas, often to a difficult job.
    If we were to deal with some much larger merger, you would 
either impose a great many demands on the Civil Service, which 
people did not sign up for, or you would have to make a great 
many exceptions. I think this simply takes a limited number of 
problems that we have now, which we are beginning to get a 
sense of how to fix, and gives us a whole shovelful of 
additional problems that we have no idea how to cope with. So I 
would stay away from that one.
    Senator Akaka. Following his questions, I will ask my final 
questions. Senator Voinovich.
    Senator Voinovich. Would either one of you want to comment 
on the problems that you have experienced over the years 
because of continuing resolutions and how they have impacted 
your operations? The reason I am asking this question is I am 
trying to put together a paper right now on the downside of 
continuing resolutions in terms of the management of our 
Federal Government, and in some instances, it now contributes 
to the spending of a lot of money that probably wouldn't have 
to be spent if we managed our government the way we were 
supposed to.
    Mr. Neumann. I would comment a little bit. Obviously, I 
think one should be careful not to attribute to the continuing 
resolution problems which are inherent in year-by-year 
appropriations. You don't know when you are in the field what 
your final number is until you have a final number. That is 
true of both.
    The continuing resolution, though, has, at least in my 
experience--let me just focus on Afghanistan--two particular 
problems, one which is worldwide. That is it does not make any 
allowance for major changes in circumstances from the previous 
year, like inflation, so that in effect, a continuing 
resolution may be a resolution to decrease the effective 
budget.
    Second, it makes it very difficult to tell where you are 
going, so that, for instance, one planning example that goes 
to, I think, the question you asked, sir, we were dealing with 
trying to lay out what we would do with the 2007 supplemental, 
which had not yet been voted on, and with the proposed 2008 
supplemental and how to cross-level programs between them so 
that we--for instance, you would use some money to do an 
engineering study so that by the time you got the next 
appropriation, you would be ready to move and build a road 
rather than starting a whole process in that project.
    When the decision was made to do a continuing resolution 
for 2007, that effectively required us to relook at three 
budget years in order to redo that cross-leveling process, 
because we were going to be, I think, if I remember right, 
about $150 million lower by virtue of continuing resolution 
than we had expected to be in a new appropriation, which seemed 
to have fairly broad support.
    Now, that wouldn't always be true in every country, where 
you wouldn't necessarily know or have the same level of 
support, but in that case, it did slow us down and require a 
pretty considerable expenditure of effort to try to figure out, 
if you couldn't do the things you were going to do, which 
pieces would you do where and how would you move them around.
    Senator Voinovich. Over the years, I have been involved 
with pay-for-performance in the Senior Executive Service. I can 
remember being in an embassy 4 or 5 years ago where I was 
having dinner and talked about pay-for-performance and the wife 
of the ambassador said, ``Well, here is the deal. You have five 
people who are OK. You have got five people that are a little 
better. And then you have got five of them that are really 
super-hitters and the fact is they all get kind of treated the 
same way.'' Would either one of you want to comment on that in 
terms of management and rewards?
    Mr. Naland. Well, sir, the Senior Foreign Service is now 
under pay-for-performance----
    Senator Voinovich. Yes.
    Mr. Naland [continuing]. And the pay increase that the 
Congress voted for last year was apportioned according to a 
pay-for-performance-graded schedule and the top performers, as 
judged by their promotion selection boards, got a higher 
increase than the people in the middle and the people in the 
lower end. I am not Senior Foreign Service myself, but my 
understanding is that it has been implemented by the Department 
of State as intended and that not everyone got the same thing. 
It was the better performers who got----
    Senator Voinovich. But what has the feedback been, good 
thing, bad thing, neutral?
    Mr. Naland. Sir, I really couldn't address that. There have 
been no complaints, I will put it that way.
    Mr. Neumann. My overall sense is that it has worked 
reasonably well. It is much harder to do in the governmental 
environment than it is in a private business because you don't 
have the bottom line of dollars and cents, which allows a much 
clearer determination in private business. So there is always 
going to be a subjective quality to pay-for-performance when 
you try to apply it to something like the Foreign Service. What 
is the bottom line that you are measuring? It becomes rather 
subjective.
    My sense overall is that in the Senior Foreign Service, it 
has worked reasonably well, probably not worth throwing out the 
baby with the bathwater, but I think you can make too much of a 
theoretical argument in favor of it given the problems of 
implementing it.
    I would be very dubious about trying to push it down into 
the system as a whole. That is only my personal prejudice. I 
think the redeeming element now is that you have the promotion 
panels making these judgments. If you get to the point where it 
is a supervisory judgment, the risk of politicizing the process 
would, I think, be very serious and I would have great 
reservations about it. But I have not studied it fully. It is 
my horseback judgment.
    Senator Voinovich. Senator Akaka talked about the Civil 
Service and maybe expanding those assignments into some new 
areas. Do you think that we are managing the locally-hired 
people as we should? My gut tells me that if you have some 
locally-hired people and they are pretty good folks, that it is 
a pretty good public relations thing for the local embassy.
    I think we ought not to send any non-Foreign Service person 
or political appointee, to be an ambassador to a country where 
they don't speak the foreign language. When you have people who 
know the language they have a real ability to do a whole lot of 
good. Do you think we are utilizing these people enough, or----
    Mr. Neumann. No, I don't. On the local employees, I think 
we could do better by them. Obviously, it is a question that 
has a lot of variation. When you are talking locally-engaged 
employees in London or Paris, you have quite a different 
situation. In developed countries, they usually have a national 
retirement scheme of some kind into which we, as an employer--
my understanding is we also pay. I think that is correct.
    The biggest problem is in many countries where there is not 
an adequate scheme, if they are developing countries, or if 
there is, there is very little confidence that the law will 
actually be reflected in the reality. In those places, I 
believe we really ought to do a bit more. I am glad we are 
going to be prepared to invest their money for them, if I 
understood the Director General correctly, but our sole 
contribution, if I understood him, seemed to be that we would 
waive the brokerage fee. I think we should be a little more 
generous in terms of retirement contributions. I have not 
studied it. I certainly don't want to pronounce for the 
Academy.
    There are limits to what we can do with locals. There are 
many countries in which they come under political pressures, 
under familial pressures that you also have to understand how 
far you can ask them to be fully loyal.
    Senator Voinovich. Right.
    Mr. Neumann. But they do an awful lot for us. They make it 
possible for us to survive. I had employees in Afghanistan who 
worked two generations with the embassy, some of them who took 
care of the embassy in the many years when we had no Americans 
there. Some of them were tortured by the Communists and then by 
the Taliban for protecting our facilities or for presumed 
knowledge. One of them hid out for 3 days in the basement until 
the rockets let up so he could come out again. And they 
remained loyal all this time. We do extraordinarily little for 
those kind of people.
    Senator Voinovich. Thank you. Thank you, Senator.
    Senator Akaka. Thank you very much, Senator Voinovich.
    My final question to both of you, if you had three 
recommendations you could make to this Administration in its 
last 6 months and also to the incoming Administration to 
address the human capital and management issues at the State 
Department, what would they be?
    Mr. Naland. Sir, I guess I would focus on the next 
Administration. I would say that the next Administration, if 
they want a strong diplomacy, really need to come forward and 
ask for the resources for diplomacy. And they really need to 
look at the training issue. There is this feeling in the 
Foreign Service that we don't need training, and I understand 
the Navy used to be like this, that if you weren't at sea, you 
were wasting your time. And in the Foreign Service, there is 
sometimes a feeling that if you are not overseas, you are 
wasting your time.
    There needs to be this understanding that has gone through 
the military now after Goldwater-Nichols that you need 
training, and if the Congress has to put benchmarks that have 
to be followed, then yes. So I would say focus on training.
    And then the next Secretary, whether he or she wants to or 
not, needs to focus some time on these management issues. We 
have had extraordinary Secretaries like George Marshall, George 
Shultz, Colin Powell, who just did it naturally, but whoever 
the Secretary is, whether they want to or not, they really have 
to spend some time on these issues because when the Secretary 
does, then all of the people below him pay a lot of attention. 
And it is kind of like a university president. Whether they 
like to or not, they have to raise funds. They just can't be a 
scholar. Well, the Secretaries, they can't just be a policy 
wonk, has to focus on management. So those are the things that 
I would recommend.
    Senator Akaka. Thank you very much, Mr. Naland. Ambassador 
Neumann.
    Mr. Neumann. I had the benefit of being able to think a 
little while Mr. Naland had to jump into that question. I think 
the first thing is--and again, it really is the next 
Administration because the time is up for getting new 
resources.
    First, is to recognize that there must be a paradigm shift 
in the State Department budget, that it is really the national 
security budget. The things that need to be done in the 
magnitude that need to be done cannot be incorporated by 
percentage shifts on the margin of the existing base, and that 
requires an acceptance that they are not starting from the 
existing budget plus or minus 2 or 3 percent. If they don't do 
that, they will try to shoehorn, cram things somehow, tease 
them out, and get a supplemental. None of those things will 
work.
    Second, I would say to the Secretary of State, you have to 
fight for the budget within the Administration. If you do not 
have acceptance from OMB that this paradigm shift is going to 
occur in the budget, then you will spend a lot of time putting 
it together in the Department and watch it come back to you in 
shreds and tatters.
    And third, the Secretary has to work personally with 
Congress to craft acceptable ways of going forward that both 
parties and both Administrations can accept and to build a base 
that can sustain a different approach over multiple years, over 
time, over Administrations and parties. We may not get back to 
bipartisanship in foreign policy, but we have to get back to 
bipartisanship in the establishment of a qualified diplomacy.
    Senator Akaka. Well, I want to thank both of you very much 
for your responses. The lack of adequate investment in the 
State Department's most valuable asset, which Senator Voinovich 
and I feel are the employees, is reaching critical mass. In the 
next 6 months, I hope the current Administration continues to 
develop strategies to invest in the staffing shortfalls, and we 
need to look at the incoming Administration. I hope that we can 
continue to work together to develop recommendations and 
elevate the priority of these issues we have been discussing.
    Again, I want to thank all of our witnesses for being here 
today. The hearing record will remain open for one week for 
Members to provide additional statements or questions for the 
record.
    This hearing is adjourned.
    [Whereupon, at 4:17 p.m., the Subcommittee was adjourned.]


                            A P P E N D I X

                              ----------                              

[GRAPHIC] [TIFF OMITTED] 44126.001

[GRAPHIC] [TIFF OMITTED] 44126.002

[GRAPHIC] [TIFF OMITTED] 44126.003

[GRAPHIC] [TIFF OMITTED] 44126.004

[GRAPHIC] [TIFF OMITTED] 44126.005

[GRAPHIC] [TIFF OMITTED] 44126.006

[GRAPHIC] [TIFF OMITTED] 44126.007

[GRAPHIC] [TIFF OMITTED] 44126.008

[GRAPHIC] [TIFF OMITTED] 44126.009

[GRAPHIC] [TIFF OMITTED] 44126.010

[GRAPHIC] [TIFF OMITTED] 44126.011

[GRAPHIC] [TIFF OMITTED] 44126.012

[GRAPHIC] [TIFF OMITTED] 44126.013

[GRAPHIC] [TIFF OMITTED] 44126.014

[GRAPHIC] [TIFF OMITTED] 44126.015

[GRAPHIC] [TIFF OMITTED] 44126.016

[GRAPHIC] [TIFF OMITTED] 44126.017

[GRAPHIC] [TIFF OMITTED] 44126.018

[GRAPHIC] [TIFF OMITTED] 44126.019

[GRAPHIC] [TIFF OMITTED] 44126.020

[GRAPHIC] [TIFF OMITTED] 44126.021

[GRAPHIC] [TIFF OMITTED] 44126.022

[GRAPHIC] [TIFF OMITTED] 44126.023

[GRAPHIC] [TIFF OMITTED] 44126.024

[GRAPHIC] [TIFF OMITTED] 44126.025

[GRAPHIC] [TIFF OMITTED] 44126.026

[GRAPHIC] [TIFF OMITTED] 44126.027

[GRAPHIC] [TIFF OMITTED] 44126.028

[GRAPHIC] [TIFF OMITTED] 44126.029

[GRAPHIC] [TIFF OMITTED] 44126.030

[GRAPHIC] [TIFF OMITTED] 44126.031

[GRAPHIC] [TIFF OMITTED] 44126.032

[GRAPHIC] [TIFF OMITTED] 44126.033

[GRAPHIC] [TIFF OMITTED] 44126.034

[GRAPHIC] [TIFF OMITTED] 44126.035

[GRAPHIC] [TIFF OMITTED] 44126.036

[GRAPHIC] [TIFF OMITTED] 44126.037

[GRAPHIC] [TIFF OMITTED] 44126.038

[GRAPHIC] [TIFF OMITTED] 44126.039

[GRAPHIC] [TIFF OMITTED] 44126.040

[GRAPHIC] [TIFF OMITTED] 44126.041

[GRAPHIC] [TIFF OMITTED] 44126.042

[GRAPHIC] [TIFF OMITTED] 44126.043

[GRAPHIC] [TIFF OMITTED] 44126.044

[GRAPHIC] [TIFF OMITTED] 44126.045

[GRAPHIC] [TIFF OMITTED] 44126.046

[GRAPHIC] [TIFF OMITTED] 44126.047

[GRAPHIC] [TIFF OMITTED] 44126.048

[GRAPHIC] [TIFF OMITTED] 44126.049

[GRAPHIC] [TIFF OMITTED] 44126.127

[GRAPHIC] [TIFF OMITTED] 44126.051

[GRAPHIC] [TIFF OMITTED] 44126.052

[GRAPHIC] [TIFF OMITTED] 44126.053

[GRAPHIC] [TIFF OMITTED] 44126.054

[GRAPHIC] [TIFF OMITTED] 44126.055

[GRAPHIC] [TIFF OMITTED] 44126.056

[GRAPHIC] [TIFF OMITTED] 44126.057

[GRAPHIC] [TIFF OMITTED] 44126.058

[GRAPHIC] [TIFF OMITTED] 44126.059

[GRAPHIC] [TIFF OMITTED] 44126.060

[GRAPHIC] [TIFF OMITTED] 44126.061

[GRAPHIC] [TIFF OMITTED] 44126.062

[GRAPHIC] [TIFF OMITTED] 44126.063

[GRAPHIC] [TIFF OMITTED] 44126.064

[GRAPHIC] [TIFF OMITTED] 44126.065

[GRAPHIC] [TIFF OMITTED] 44126.066

[GRAPHIC] [TIFF OMITTED] 44126.067

[GRAPHIC] [TIFF OMITTED] 44126.068

[GRAPHIC] [TIFF OMITTED] 44126.069

[GRAPHIC] [TIFF OMITTED] 44126.070

[GRAPHIC] [TIFF OMITTED] 44126.071

[GRAPHIC] [TIFF OMITTED] 44126.072

[GRAPHIC] [TIFF OMITTED] 44126.073

[GRAPHIC] [TIFF OMITTED] 44126.074

[GRAPHIC] [TIFF OMITTED] 44126.075

[GRAPHIC] [TIFF OMITTED] 44126.076

[GRAPHIC] [TIFF OMITTED] 44126.077

[GRAPHIC] [TIFF OMITTED] 44126.078

[GRAPHIC] [TIFF OMITTED] 44126.079

[GRAPHIC] [TIFF OMITTED] 44126.080

[GRAPHIC] [TIFF OMITTED] 44126.081

[GRAPHIC] [TIFF OMITTED] 44126.082

[GRAPHIC] [TIFF OMITTED] 44126.083

[GRAPHIC] [TIFF OMITTED] 44126.084

[GRAPHIC] [TIFF OMITTED] 44126.085

[GRAPHIC] [TIFF OMITTED] 44126.086

[GRAPHIC] [TIFF OMITTED] 44126.087

[GRAPHIC] [TIFF OMITTED] 44126.088

[GRAPHIC] [TIFF OMITTED] 44126.089

[GRAPHIC] [TIFF OMITTED] 44126.090

[GRAPHIC] [TIFF OMITTED] 44126.091

[GRAPHIC] [TIFF OMITTED] 44126.092

[GRAPHIC] [TIFF OMITTED] 44126.093

[GRAPHIC] [TIFF OMITTED] 44126.094

[GRAPHIC] [TIFF OMITTED] 44126.095

[GRAPHIC] [TIFF OMITTED] 44126.096

[GRAPHIC] [TIFF OMITTED] 44126.097

[GRAPHIC] [TIFF OMITTED] 44126.098

[GRAPHIC] [TIFF OMITTED] 44126.099

[GRAPHIC] [TIFF OMITTED] 44126.100

[GRAPHIC] [TIFF OMITTED] 44126.101

[GRAPHIC] [TIFF OMITTED] 44126.102

[GRAPHIC] [TIFF OMITTED] 44126.103

[GRAPHIC] [TIFF OMITTED] 44126.104

[GRAPHIC] [TIFF OMITTED] 44126.105

[GRAPHIC] [TIFF OMITTED] 44126.106

[GRAPHIC] [TIFF OMITTED] 44126.107

[GRAPHIC] [TIFF OMITTED] 44126.108

[GRAPHIC] [TIFF OMITTED] 44126.109

[GRAPHIC] [TIFF OMITTED] 44126.110

[GRAPHIC] [TIFF OMITTED] 44126.111

[GRAPHIC] [TIFF OMITTED] 44126.112

[GRAPHIC] [TIFF OMITTED] 44126.113

[GRAPHIC] [TIFF OMITTED] 44126.114

[GRAPHIC] [TIFF OMITTED] 44126.115

[GRAPHIC] [TIFF OMITTED] 44126.116

[GRAPHIC] [TIFF OMITTED] 44126.117

[GRAPHIC] [TIFF OMITTED] 44126.118

[GRAPHIC] [TIFF OMITTED] 44126.119

[GRAPHIC] [TIFF OMITTED] 44126.120

[GRAPHIC] [TIFF OMITTED] 44126.121

[GRAPHIC] [TIFF OMITTED] 44126.122

[GRAPHIC] [TIFF OMITTED] 44126.123

[GRAPHIC] [TIFF OMITTED] 44126.124

[GRAPHIC] [TIFF OMITTED] 44126.125

[GRAPHIC] [TIFF OMITTED] 44126.126

                                 
