[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]





      U.S. AID TO PAKISTAN (PART II): PLANNING AND ACCOUNTABILITY

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

                                HEARING

                               before the

                   SUBCOMMITTEE ON NATIONAL SECURITY
                          AND FOREIGN AFFAIRS

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 16, 2010

                               __________

                           Serial No. 111-162

                               __________

Printed for the use of the Committee on Oversight and Government Reform










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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                   EDOLPHUS TOWNS, New York, Chairman
PAUL E. KANJORSKI, Pennsylvania      DARRELL E. ISSA, California
CAROLYN B. MALONEY, New York         DAN BURTON, Indiana
ELIJAH E. CUMMINGS, Maryland         JOHN L. MICA, Florida
DENNIS J. KUCINICH, Ohio             MARK E. SOUDER, Indiana
JOHN F. TIERNEY, Massachusetts       JOHN J. DUNCAN, Jr., Tennessee
WM. LACY CLAY, Missouri              MICHAEL R. TURNER, Ohio
DIANE E. WATSON, California          LYNN A. WESTMORELAND, Georgia
STEPHEN F. LYNCH, Massachusetts      PATRICK T. McHENRY, North Carolina
JIM COOPER, Tennessee                BRIAN P. BILBRAY, California
GERALD E. CONNOLLY, Virginia         JIM JORDAN, Ohio
MIKE QUIGLEY, Illinois               JEFF FLAKE, Arizona
MARCY KAPTUR, Ohio                   JEFF FORTENBERRY, Nebraska
ELEANOR HOLMES NORTON, District of   JASON CHAFFETZ, Utah
    Columbia                         AARON SCHOCK, Illinois
PATRICK J. KENNEDY, Rhode Island     BLAINE LUETKEMEYER, Missouri
DANNY K. DAVIS, Illinois             ANH ``JOSEPH'' CAO, Louisiana
CHRIS VAN HOLLEN, Maryland
HENRY CUELLAR, Texas
PAUL W. HODES, New Hampshire
CHRISTOPHER S. MURPHY, Connecticut
PETER WELCH, Vermont
BILL FOSTER, Illinois
JACKIE SPEIER, California
STEVE DRIEHAUS, Ohio
JUDY CHU, California

                      Ron Stroman, Staff Director
                Michael McCarthy, Deputy Staff Director
                      Carla Hultberg, Chief Clerk
                  Larry Brady, Minority Staff Director

         Subcommittee on National Security and Foreign Affairs

                JOHN F. TIERNEY, Massachusetts, Chairman
CAROLYN B. MALONEY, New York         JEFF FLAKE, Arizona
PATRICK J. KENNEDY, Rhode Island     DAN BURTON, Indiana
CHRIS VAN HOLLEN, Maryland           JOHN L. MICA, Florida
PAUL W. HODES, New Hampshire         JOHN J. DUNCAN, Jr., Tennessee
CHRISTOPHER S. MURPHY, Connecticut   MICHAEL R. TURNER, Ohio
PETER WELCH, Vermont                 LYNN A. WESTMORELAND, Georgia
BILL FOSTER, Illinois                PATRICK T. McHENRY, North Carolina
STEVE DRIEHAUS, Ohio                 JIM JORDAN, Ohio
STEPHEN F. LYNCH, Massachusetts      JEFF FORTENBERRY, Nebraska
MIKE QUIGLEY, Illinois               BLAINE LUETKEMEYER, Missouri
JUDY CHU, California
                     Andrew Wright, Staff Director











                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on March 16, 2010...................................     1
Statement of:
    Feldman, Daniel, Deputy to the Special Representative for 
      Afghanistan and Pakistan, U.S. Department of State; and 
      James A. Bever, Director, Afghanistan-Pakistan Task Force, 
      and Deputy Assistant Administrator, Asia and Near East 
      Bureau, U.S. Aid...........................................     8
        Bever, James A...........................................    18
        Feldman, Daniel..........................................     8
Letters, statements, etc., submitted for the record by:
    Bever, James A., Director, Afghanistan-Pakistan Task Force, 
      and Deputy Assistant Administrator, Asia and Near East 
      Bureau, U.S. Aid, prepared statement of....................    21
    Feldman, Daniel, Deputy to the Special Representative for 
      Afghanistan and Pakistan, U.S. Department of State, 
      prepared statement of......................................    11
    Tierney, Hon. John F., a Representative in Congress from the 
      State of Massachusetts, prepared statement of..............     4

 
      U.S. AID TO PAKISTAN (PART II): PLANNING AND ACCOUNTABILITY

                              ----------                              


                        TUESDAY, MARCH 16, 2010

                  House of Representatives,
     Subcommittee on National Security and Foreign 
                                           Affairs,
              Committee on Oversight and Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:05 a.m. in 
room 2154, Rayburn House Office Building, Hon. John F. Tierney 
(chairman of the subcommittee) presiding.
    Present: Representatives Tierney, Kennedy, Van Hollen, 
Murphy, Welch, Driehaus, Quigley, Chu, Flake, Luetkemeyer, and 
Lynch.
    Staff present: Andy Wright, Staff Director; Elliot 
Gillerman, Clerk; Talia Dubovi, Counsel; Scott Lindsay, 
Counsel; Steven Gale, Fellow; LaToya King, Fellow; Aaron 
Blacksberg, Intern; Bronwen DeSena, Intern; Adam Fromm, 
minority Chief Clerk and Member Liaison; Stephanie Genco, 
minority Press Secretary and Communications Liaison; 
Christopher Bright, minority Senior Professional Staff Member; 
and Renee Hayes, minority Fellow.
    Mr. Tierney. A quorum being present, the Subcommittee on 
National Security and Foreign Affairs, the hearing entitled, 
``U.S. Aid to Pakistan, Part II: Planning and Accountability,'' 
will come to order.
    I ask unanimous consent that only the chairman and ranking 
member of the subcommittee be allowed to make opening 
statements, and without objection it is so ordered.
    I ask unanimous consent that the hearing record be kept 
open for 5 business days so that all members of the 
subcommittee will be allowed to submit a written statement for 
the record. Without objection, so ordered.
    Good morning.
    I want to thank you both for coming here today. We are 
going to continue our ongoing oversight of the planning, 
accountability, and effectiveness of U.S. aid to Pakistan.
    On October 15, 2009, President Obama signed the Enhanced 
Partnership with Pakistan Act. It is informally known as the 
Kerry-Lugar-Berman Bill, tripling U.S. civilian economic and 
development assistance to Pakistan to $1.5 billion annually 
until 2014. While Kerry-Lugar-Berman was a largely bipartisan 
demonstration of U.S.' commitment to long-term assistance to 
Pakistan, serious concerns remain regarding the ability of 
USAID and the State Department to effectively and efficiently 
manage and account for such a massive increase of assistance.
    In November 2009, I led a congressional delegation to 
Pakistan in order to investigate, among other things, the 
status of the U.S. assistance programs and the State 
Department's and the USAID's capacity to manage and oversee 
Kerry-Lugar-Berman funding. After four trips, it is apparent 
that the security environment in Pakistan has grown markedly 
worse in recent years.
    During the congressional delegation, we met with Pakistan 
civilian leadership, its political opposition, and a wide 
variety of civil society members, NGO's, and international 
contractors. We also traveled to Peshawar to deliver aid 
supplies directly to the principal hospital that had been 
receiving wounded from the many bombings during the past year.
    Following that trip, in December 2009 the administration 
announced its new regional stabilization strategy for 
Afghanistan and Pakistan. That plan will ``increase direct 
assistance through Pakistani institutions,'' mainly the 
ministries and local NGO's, and focus more money on high-impact 
projects such as major energy and water infrastructure.
    The plan also promises to reduce USAID's over-reliance on 
large international contractors as implementing partners.
    I want to state at the outset that I am supportive of 
exploring a new AID approach and appreciative of the time and 
energy that our witnesses and the administration have put into 
crafting the administration's new strategy. That said, given 
the importance of U.S. national security interests in Pakistan 
and the magnitude of the U.S. taxpayer dollars authorized for 
development and economic assistance there, it is critically 
important that we carefully scrutinize plans for implementation 
of the new strategy, and particularly its accountability 
mechanisms. In short, we must make certain that the 
administration's new strategy will not send more money through 
weaker systems--systems that lack the internal controls 
developed with time and experience.
    This presents several challenges. First, how will the State 
Department and USAID gain visibility into the operations of 
ministries that have historically resisted robust oversight? In 
light of Pakistan's sensitivities regarding impingements on its 
sovereignty, this challenge will be particularly acute.
    Second, I am concerned about USAID's internal capacity to 
oversee and account for funds directed through Pakistan's 
ministries and local NGO's. For years USAID has been 
marginalized and stripped of personnel, while at the same time 
U.S. foreign policy has increasingly emphasized aid delivery in 
high-risk conflict and post-conflict countries like Iraq, 
Afghanistan, and Pakistan.
    This challenge is only made more difficult by the current 
security environment that makes it very difficult for either 
USAID personnel or western ex pats to see let alone actively 
manage or oversee many projects, particularly those in the 
federally administered tribal areas [FATA], in the Northwest 
Frontier Province.
    I plan to continue to work with Congress and the 
administration to bolster USAID's internal staffing and 
capability. We must reverse USAID's decline in the last decade 
if it is to serve as a central tool of U.S. foreign policy in 
South Asia or the Middle East, a task it has been assigned but 
not given the tools to fulfill.
    I also want to highlight the recent challenges that the 
U.S. Embassy in Islamabad has had in obtaining visas from 
Pakistan for critical U.S. Government personnel from State, 
USAID, and the Department of Defense. Many of the visa 
applications have been denied or delayed, including visas for 
auditors, accountants, and inspectors--the very people that 
both the agencies and the Congress rely on to make sure that 
civilian assistance is spent as it is intended.
    From the position as chairman of the National Security and 
Foreign Affairs Subcommittee, I want to make clear to the 
government of Pakistan that the U.S. civilian assistance comes 
as a package: funding, programming, and oversight. Pakistan 
cannot accept the funding but deny U.S. agency the personnel or 
the access for critical oversight.
    I asked both witnesses here today to keep the subcommittee 
informed regarding developments with the visa applications for 
their agencies' respective personnel and to only fund programs 
and projects for which they have the personnel in place to 
perform the proper oversight.
    The third issue of concern to me is to ensure that U.S. 
funds directed to Pakistan's ministries are supplementing 
Pakistan's funding of those ministries, not simply displacing 
it. At the end of the day, the government of Pakistan must own 
and take responsibility for each of the projects we embark on 
together. Instilling a sense of such ownership will be a 
critical and delicate challenge going forward.
    I am a strong believer that the U.S.' civilian assistance 
to Pakistan is critical to the stabilization and the health of 
Pakistan, and to long-term U.S. national security interests. 
The Kerry-Lugar-Berman is a major down payment on our shared 
future. In the best circumstances, however, it is an 
extraordinary endeavor to create, manage, and oversee billions 
of dollars in development assistance programs, and Pakistan is 
not in the best of circumstances. That is why this subcommittee 
has made a great effort to exercise proactive oversight in 
order to ensure that critical accountability mechanisms are in 
place from day one.
    With that said, I would like to defer to my colleague, Mr. 
Flake, for his opening remarks.
    [The prepared statement of Hon. John F. Tierney follows:]



    
    Mr. Flake. I thank the chairman for holding this hearing 
and also undertaking the Co-Del a while ago. I wish I could 
have gone. It would have been helpful, and I look forward to 
the testimony today.
    It was interesting, when this package was announced, 
certainly in Pakistan, I don't think any aid package has been 
met with such derision from the recipients. It certainly piqued 
our interest here to see how it was played there. Obviously , 
we know it was for domestic politics, but I think it is safe to 
say that it is difficult to see or to assume that any country 
could receive this amount of aid and be able to transition that 
quickly, as well as our aid agencies to ramp up this 
substantially in this short period of time, as the chairman 
said, in the best of circumstances, and these are not the best. 
So I look forward to the testimony and all you have to say.
    Mr. Tierney. Thank you.
    Just a quick aside to that. After the Kerry-Lugar-Berman 
bill passed--and this committee had quite a bit to do with 
that, as Jeff knows--we had an occasion to speak both in 
Pakistan and back here at home, but what is indicative, I 
think, is one occasion up in Cambridge, Massachusetts, where I 
spoke before a few hundred Pakistanis, when I got through one 
half of the room was mad that we had put these sanctions on, 
not the sanctions but the conditions, and the other half of the 
room was mad because they weren't strong enough. They were all 
Pakistani, so it depends on how you break down on that.
    With that, we'd love to hear from our witnesses. We have 5-
minute remarks, as you know.
    We swear our witnesses in on this committee, so I ask the 
witnesses to please stand and raise your right hands.
    [Witnesses sworn.]
    Mr. Tierney. Let the record please reflect that both 
witnesses answered in the affirmative.
    I would like to give a brief introduction of our witnesses.
    Mr. Daniel Feldman serves as a Deputy to the Special 
representative for Afghanistan and Pakistan at the U.S. 
Department of State. He previously served as Director of Multi-
Lateral and Humanitarian Affairs for the National Security 
Council, where he was responsible for global human rights 
issues. A former congressional staff member, Mr. Feldman has 
also served as counsel and communications advisor to the Senate 
Homeland Security and the Government Affairs Committee. Mr. 
Feldman holds a B.A. from Tufts University in Massachusetts and 
from Princeton University's Woodrow Wilson School and a J.D. 
from Columbia University Law School.
    Mr. James Beaver currently serves as Director of the 
Afghanistan-Pakistan Task Force of the U.S. Agency for 
International Development, where he oversees more than $4 
billion in U.S. assistance to Afghanistan and Pakistan. A 
member of the Senior Foreign Service, Mr. Beaver previously 
served as Senior Deputy Assistant Administrator for the Middle 
East, providing leadership for $2.5 billion in U.S. assistance 
to the Middle East and North Africa. Mr. Beaver holds a B.A. 
from Cornell University and an M.S. from Georgetown University.
    Again, thank you both for making yourselves available today 
and for sharing your considerable expertise. You both are 
experienced witnesses before Congress, so I know you know the 
drill. Five minutes if you can keep it reasonably close to 
that. We have all read or will read your remarks, and then we'd 
like to get to the question and answer period if we could.
    Mr. Feldman, let's start with you, please.

      STATEMENTS OF DANIEL FELDMAN, DEPUTY TO THE SPECIAL 
REPRESENTATIVE FOR AFGHANISTAN AND PAKISTAN, U.S. DEPARTMENT OF 
STATE; AND JAMES A. BEVER, DIRECTOR, AFGHANISTAN-PAKISTAN TASK 
 FORCE, AND DEPUTY ASSISTANT ADMINISTRATOR, ASIA AND NEAR EAST 
                        BUREAU, U.S. AID

                  STATEMENT OF DANIEL FELDMAN

    Mr. Feldman. Thank you very much, Chairman Tierney and 
Ranking Member Flake, for the opportunity to be here and to 
discuss our efforts to enhance planning and accountability of 
U.S. development assistance to Pakistan.
    I will give a more pared-down and focused version of the 
written testimony, just so we have a kind of baseline for our 
conversation afterwards, and then I will also welcome the 
opportunity to speak afterwards once we start Q and A. I am 
happy to address the visa situation or some of the other 
specific issues you raised in your opening statement.
    As you know, Pakistan faces threats of many forms. The 
security situation weighs heavily on all Pakistanis. Too many 
of the country's citizens do not have access to functioning 
health or education systems. Pakistan's energy crisis leaves 
businesses and homes in the dark many hours in the day, and the 
looming water crisis poses an existential threat to Pakistan 
and its neighbors. All these factors increase the stakes on the 
effectiveness of our assistance programs. Your committee 
rightly identifies the crucial role of proper planning and 
oversight in the success of our efforts.
    Since 2002 when the U.S. reengaged with Pakistan, a large 
percentage of our civilian assistance has been tied up in large 
contracts and grants with U.S. organizations that have produced 
uneven results, have lacked flexibility, have not provided 
optimum value, and have not built sufficient Pakistani 
capacity. Much of our past programming did not address the 
issues most important to Pakistanis, such as energy and water.
    Pakistanis believe that a high percentage of U.S. resources 
do not reach them, given our work and our people have been 
mostly invisible to the average citizens of the country. The 
average Pakistani has perceived our assistance as being too 
strongly tied to their country's military and intelligence 
cooperation with the United States rather than being aimed for 
the long-term well-being of the country's citizens.
    All this pointed to a very large and expensive missed 
opportunity which we have tried to rectify over the course of 
the past 14 months. U.S.G. assistance in Pakistan now aims to 
expand our relationship beyond predominantly security issues, 
providing instead a more balanced approach that will help the 
Pakistani people overcome the political, social, and economic 
challenges that threaten the country's stability.
    As you referenced, in the regional stabilization strategy 
that we circulated earlier to the Hill, we hope to address 
first of all the immediate energy, water, and related economic 
crises; second, support broader economic and political reforms 
that are necessary for political growth, sustainable growth; 
three, improve health care and education; four, help Pakistan 
respond to the humanitarian challenges caused by extremist 
violence and natural disasters, and; five, combat extremism.
    We have a remarkable opportunity before us to deliver this 
more effective and balanced environment for delivering civilian 
assistance. This is formed, in large part, as you noted, by the 
passage of the Enhanced Partnership with Pakistan Act, the 
Kerry-Lugar-Berman legislation, as well as the initiatives that 
have been undertaken thus far by President Obama, Secretary 
Clinton, Ambassador Holbrook, and others in the executive 
branch.
    How we are responding to these opportunities is through 
several broad categories of reformulated vision toward 
assistance. First of all is the emphasis on smaller and more 
flexible contracts. To provide more flexibility and improve 
monitoring and oversight, we are shifting away from large U.S.-
based contracts to smaller, predominantly Pakistani ones, with 
fewer sub-grants and subcontracts. These will be managed by our 
increased number of staff in the field.
    Second is decentralization. Within the next few months, 
USAID teams will be placed in Lahore and Karachi, in addition 
to the current offices in Islamabad and Peshawar. A 
decentralized programming platform will enable more location-
appropriate development activities at the provincial and 
district level, make it easier for U.S. officials in the field 
to oversee and monitor programs and prevent fraud, and allow 
more regular engagement between our personnel and the 
populations we aim to benefit.
    Third is the meaningful assistance. Relevant and effective 
assistance must materially address the issues that count most 
to the average Pakistani. The overwhelming message conveyed to 
the Secretary and Ambassador Holbrook during their visits to 
Pakistan was the need for assistance with the country's chronic 
power and water shortages. In response, we have begun projects 
to reduce the hours of power blackouts, make more potable water 
available to poor communities, and improve the availability and 
management of irrigation water for farms.
    As these projects move quickly from feasibility to 
implementation, we will begin the same process for projects 
that address other priority Pakistani needs, including medical 
and educational facilities.
    Fourth is the increased assistance, as you have mentioned, 
provided through and to Pakistani institutions. In order to 
maximize the amount of our resources that will remain in 
Pakistan, we are transitioning our assistance modalities. We 
will do so by decreasing our reliance on large international 
contractors and aim instead to build institutional capacity and 
sustainability by increasing direct assistance to Pakistani 
implementing partners. While these arrangements involve 
transfers to Pakistani institutions, this is not blank check 
budget support; instead, they are the results of negotiations 
with USAID regarding how the funds will be spent, how progress 
will be monitored, and how the financial arrangements will be 
implemented.
    In the case of budget support transfers, there will be 
targeted institutions and uses rather than general budget 
support, as was previously provided in the past.
    All this goes to the issue of improved accountability and 
oversight. Our stated policy goal of working more through 
Pakistani institutions does have the potential to contribute to 
corruption, as we recognize. To mitigate this risk, we are 
increasing the number of direct hire contracting staff and 
Inspector General personnel that will reside in Pakistan.
    We are also expanding the use of Pakistani public 
accounting firms to conduct financial audit of funds, provide 
to Pakistani NGO's, train Pakistani public accounting firms and 
Pakistan's Auditor General on how to conduct audits to U.S. 
standards, help the Pakistan Auditor General conduct financial 
audits of funds provided to Pakistan government entities, and 
build the capacity of the Pakistan government to carry out or 
assist with investigations and coordinate audits and 
investigations among the U.S. Inspectors General and the GAO.
    In the past 2 months, over $26 million in contracts to 
buttress audit and monitoring capabilities in Pakistan have 
been awarded using ESF.
    The Secretary, Ambassador Holbrook, our entire team at the 
Special Representative's office who work on Pakistan believe we 
have a duty to ensure that USG resources are used for the 
purposes intended by Congress, and the reforms I have outlined 
will, over time, decrease cost for assistance programs, 
increase the amount of U.S. assistance directly benefiting the 
Pakistani people and Pakistani institutions, and ensure much 
better development effects.
    I am happy to talk about any of the details during the 
question and answer.
    [The prepared statement of Mr. Feldman follows:]



    
    Mr. Tierney. Thank you, Mr. Feldman.
    Mr. Bever.

                  STATEMENT OF JAMES A. BEVER

    Mr. Bever. Thank you very much, Chairman Tierney, Ranking 
Member Flake, other distinguished members of the committee. 
Thanks for your invitation to USAID to speak with you this 
morning.
    Chairman, I particularly appreciate your longstanding 
support for rebuilding America's Foreign Assistance Agency, 
especially the staffing. Thank you, sir.
    When USAID reopened its mission in Pakistan in 2002, I had 
just come back from serving 4 years in India as the Deputy 
Mission Director. I was then serving as the Director for South 
Asian Affairs and, of course, Pakistan and Afghanistan had 
become our biggest responsibilities at that time. As you know, 
we started out with a very large cash transfer at that point to 
the government of Pakistan, and then gradually grew that into 
primary health care and education attention, in coordination 
with other donors.
    Following President Obama's strategy review, we now have a 
focus on forging new partnerships with Pakistan and with 
Pakistani entities, as well as rebuilding the capacity of 
Pakistan public institutions, as well as its private 
institutions, in affecting lives of individual Pakistanis.
    I am going to talk just briefly about the civilian 
assistance strategy, about local implementation through 
Pakistani institutions, some of the safeguard mechanisms, FATA 
development, and a little bit on democracy governance, as you 
know, under the Enhanced Partnership with Pakistan Act, which 
authorizes tripling of U.S. civilian assistance, bringing our 
funding up to $1.5 billion annually as a target.
    Our three foci, if you will, for our assistance is on 
infrastructure and constraints to infrastructure for 
development in Pakistan; second is on building the capacity of 
the government of Pakistan to deliver key and appreciated 
services to its people and to improve the connectivity between 
the people, the governed, and the governing; and, finally, to 
improve the capacity of the Pakistan institutions to be able to 
implement on their own.
    Terms of our presence in the country. As you know, at the 
time actually that I served in Pakistan, which was as a 
Division Chief for energy assistance about 25, 26 years ago in 
the War against the Soviets next door, we had many, many 
American AID officers in Islamabad and elsewhere around the 
country. And as a matter of fact, we were the second-largest 
staffed operation in the world next to Egypt at that time. 
Today, although of course we had a large hiatus in the 1990's, 
we have about 30, 35 U.S. Foreign Service officers at our AID 
operation, plus another couple dozen what we call U.S. personal 
service contractors, and over 100 Foreign Service nationals. 
This is much smaller than we had back in the years during the 
1980's.
    But thanks to the Enhanced Partnership Act, we do plan to 
increase these levels, in consultation with the Embassy 
colleagues and Ambassador Patterson and our colleagues here in 
Washington. We will be increasing our American staff 
significantly, as well as our Pakistani staff, which is 
extremely important. Our Pakistani staff are world class, are 
our eyes, our ears, and our brains, and our continuity from one 
American rotation, if you will, to another.
    So we will be building up our project management 
capability, our financial oversight capability, and our 
procurement capability, and our legal capability. I can go into 
more of that if you would like.
    We will also be focusing more on the provinces, not just 
the Federal Government in Islamabad, which is extremely 
important, but also the legitimate provincial government 
authorities who, for example, have responsibility for education 
in the country of Pakistan.
    In terms of local implementation, we will be moving to find 
ways--and we are already aggressively pursuing this--to 
diversify our mechanisms and our partners. I think this is 
sound U.S. foreign policy. I think it is sound U.S. foreign 
assistance technique. It is not to the exclusion of our 
existing partners. There will be a role for them, too. But we 
are trying to broaden and diversify the players who can deliver 
the American assistance program and also strengthen their 
capabilities, whether it is in the government, private sector, 
or civil society in Pakistan.
    In terms of oversight and monitoring, my colleague, Dan 
Feldman, has already addressed those. I can go into some of 
those in more detail later. I just want to stress that we 
believe in AID and that the IG and the GAO are our best 
friends. They are like our family physician that travel with 
us. We may not always like the techniques they use to identify 
what is needed in our health, but it is good to know what the 
diagnostics are so we can deal with them. We coordinate closely 
with them, accordingly.
    In FATA, I will just say that we are very proud, despite 
very dangerous situations in the FATA--the Federal Administered 
Tribal Areas. We have been able to implement over $140 million 
of social and economic support projects, mostly at the 
community level, in all seven of the FATA agencies and in all 
six of the Frontier regions.
    I have to stress, Mr. Chairman and other Members, in my own 
view, having spent 9 years living in South Asia and in other 
dangerous parts of the world additional years, this is the 
bravest, most courageous, riskiest, but most overdue action 
that I can think of in the U.S. foreign assistance program.
    In democracy governance, one thing I would like to just 
state specifically is that we will continue to support the 
government of Pakistan in its development of its own 
parliament, and we are providing assistance to the government 
of Pakistan to construct a capability so that there are staff 
support for the members of its [foreign word], of its 
parliament, and to help them with rule of law, however, 
complicated and challenging that is, because it is those values 
that connect most deeply among the Pakistani people when you 
think of democracy and governance.
    In closing, I just want to say thank you again for inviting 
us, and I want to just dedicate our testimony today to those 
very brave American third country national and Pakistani staff 
at our embassy, including our AID mission, who risk their lives 
every day to carry out U.S. foreign policy and to make Pakistan 
a better, more representative government.
    Thank you, sir.
    [The prepared statement of Mr. Bever follows:]



    
    Mr. Tierney. I want to thank both of the witnesses. Mr. 
Bever, I appreciate your latter remarks. I am sure Mr. Flake 
and the other Members here do, as well.
    We don't mention often enough the serious sacrifices being 
made by those families, the important role they play, even 
though we do have Admiral Mullen and most of our generals over 
there talking about the fact that this cannot be won solely 
militarily and that we have to have people willing to do those 
jobs, so I appreciate your bringing that up.
    We are going to start the 5-minute rounds of questioning, 
and I would like to start just by reading to you both a quote 
from an economic officer at USAID who filed this dissenting 
cable on October 2, 2009. In it, it says: the USAID mission in 
Pakistan is receiving contradictory objectives from Ambassador 
Holbrook.
    On the one hand, it is expected to achieve high impact 
counter-insurgency and broad-based economic development 
objectives as quickly as possible, especially in those areas 
more susceptible to radical Taliban recruitment. On the other 
hand, it is asked to do this by working through national and 
local government channels and host country contractors and 
NGO's and not through U.S. contractors and NGO's, to avoid the 
overhead charges of the latter and to improve the institutional 
capacity and legitimacy of government agencies and local 
institutions. These are all worthy goals and USAID can achieve 
them all; however, they are contradictory objectives without a 
reasonable transition period for the latter.
    Can you give me your reaction to that statement, and what 
we are doing to address those concerns?
    Mr. Feldman. Chairman Tierney, we certainly value the 
dissent channel quite a bit. This was an issue that came up at 
the very outset of our move to push toward more local 
Pakistani. We have had a variety of meetings in post and 
briefings with staff and Members about this. I think that was a 
concern at the very outset of this process.
    Mr. Tierney. It was a concern while we were there at about 
that time.
    Mr. Feldman. Yes. The announcement initially was at the end 
of the fiscal year, so right around September 30th, October 
1st, at the time this cable was written, there was a lot of 
anxiety I think because of a lack of communication about 
exactly what would be done, how quickly we were going to start 
this initiative. I think that we have certainly worked our way 
through virtually all those concerns at this point.
    Primarily, we started a review of every major contract 
through--and I think there were a lot of existing contractors, 
including NGO's and others, who were quite concerned that the 
contract may end in 90 days and they wouldn't be able to do it. 
We have thus far only terminated one contract in the last 4 or 
5 months since this review has happened. It was only a $2.5 
million contract. Everything else has continued through the 
next year.
    Mr. Tierney. Nobody has been asked to wind down or----
    Mr. Feldman. None of them are winding down, and we said 
that if they were going to wind down we would give them 45-day 
notice. None of that has happened, and we don't have the intent 
for anything like that to happen. What we have done is, I 
think, put the international contracting community on notice 
that for new contracts, and as we start expending and 
disbursing most of this new Kerry-Lugar-Berman money and 
others, we are looking to first issues to Pakistani 
implementers and NGO's to fill the capacity, as I discussed.
    We have always said that we will reserve the right that if 
there is not the ability or capacity there that we will 
continue using international contractors. We work actively with 
the international NGO community, as well as the local Pakistani 
NGO's. In fact, we have on Ambassador Holbrook's staff someone 
dedicated just to NGO relationships and working with NGO's on 
these issues. So we are in no way trying to terminate that, but 
we are trying, as I outlined in the opening statement, to 
really build local capacity and to do that as quickly and 
effectively as possible.
    So I think that we are well beyond those problems, but I 
refer to Jim to see what his sense is.
    Mr. Tierney. Thanks. Can both of you gentlemen assure the 
subcommittee that you will keep it informed regarding the visa 
issue, developments on that, and regarding your agency's 
personnel, and give us some assurance that you will only fund 
those programs and projects for which personnel are in place to 
perform the adequate oversight?
    Mr. Feldman. On the issue of visas, there has been a 
backlog, and it was very problematic, but we have made very 
substantial progress over the last few months on the visa 
issue, working very closely with the government of Pakistan. 
Ambassador Haqqani is in our office very frequently giving us 
updates on that issue. I think there was a backlog of about 500 
visas in January. It is down to, I believe, less than 200 at 
this point. So we are actively moving through those, and we 
have made it very clear that this is in the best interest not 
only of us but of the Pakistanis, since many of these are 
auditors, in order to be able to go through----
    Mr. Tierney. That is exactly the point. We need some 
assurances that we are not going to start spending this money 
without those auditors and other people in place to monitor it.
    Mr. Bever.
    Mr. Bever. If I could just comment, I share Dan's concerns 
about this. Of particular concern to us is when we have visa 
problems for Inspectors General from Manilla or of our security 
people that we need from our Washington security office who we 
need to get out to post to consult with our own internal 
security people to make sure that the lives of our employees, 
be they Pakistani or American, are safeguarded as much as 
possible.
    Without the ability to have an independent Inspector 
General function out there at post, or without the ability to 
keep our people as safe as is reasonable given the risks, we 
will not be able to function as productively, and we would have 
to change the way we do our business or even think through what 
business we do.
    Mr. Tierney. Can I take that as a yes, that we will not be 
spending this money where there is not the adequate personnel 
for auditing and oversight in place.
    Mr. Feldman. Yes, absolutely.
    Mr. Tierney. Mr. Feldman says yes. Mr. Bever, do you say 
yes, as well?
    Mr. Bever. Yes, sir.
    Mr. Tierney. Thank you.
    Mr. Flake.
    Mr. Flake. Thank you.
    Thank you for the testimony.
    When we are talking about building capacity with the 
institutions there, you mentioned they are trying to hire 
firms, Pakistani CPA firms and others, to audit a lot of this. 
How is that going so far? How much capacity needs to be built 
there before you can transition a lot of the work from 
international contractors? Mr. Feldman.
    Mr. Bever. Maybe I could start, Congressman.
    Mr. Flake. Go ahead.
    Mr. Bever. Well, AID has a long history of doing pre-award 
audits, for example, and of seeking to build local capacity, 
including through our Inspector General operations. They often 
will reach out to local CPA firms affiliated with international 
CPA firms, Americans in particular, so in many of the countries 
we work, including in Pakistan, there is some depth there for 
us to work with.
    We now have in place a number of local Pakistani CPA firms, 
and we have asked our IG to give us the--I would say the Good 
Housekeeping Seal of Approval on those local Pakistani firms so 
that we know that when we use them, they are ones that our own 
IG, Inspector General, operation is comfortable with. So we 
would often go to those that have also worked, for example, to 
do the audit, financial audit work for the World Bank or for 
the British or for the Asian Development Bank. So we try a 
number of different ways to go about this to make sure we get 
good, high-quality operations to do that internal audit.
    Mr. Feldman. If I could just add, although I defer to Jim 
on the specific numbers, but we have been actively seeking to 
increase those number of pre-vetted Pakistani CPA firms. I 
think it has gone from five or six at the end of last year to 
close to twenty at this point. I have seen between 16 and 20. I 
know we are in the process of vetting quite a number of them. 
And then, in terms of the actually pre-award surveys, I believe 
over 100 Pakistani organizations have been identified for pre-
award surveys, and about roughly 40 are completed or underway, 
and so the process of vetting on the financial and accounting 
side is very much underway at a very robust level.
    Mr. Flake. We mentioned the reaction to the conditions that 
was placed on the money by the Pakistani government. Have they 
reconciled with that? Are they okay? And is their displeasure 
manifested in other areas, or areas other than visas? Just tell 
me how that process is going.
    Mr. Feldman. I was actually very involved in the aftermath 
of the Kerry-Lugar-Berman legislation and I worked with 
Chairman Berman, Chairman Kerry, and Foreign Minister Karachi 
when he was here to try to work through some of these issues, 
including the ultimate production by the Congress of the joint 
explanatory statement on Kerry-Lugar-Berman.
    It was a backlash which we perhaps should have anticipated 
but we didn't. It had been so long in the making and there had 
been so much news about it, that we didn't expect this. I think 
it is fair to say that a large part of this was jammed up for 
domestic political purposes that, once we were able to get the 
explanatory statement out and once people were actually able to 
focus on what is actually in it.
    I think there was so much misinformation about this 
impinging on the sovereignty of the Pakistani government on 
what exactly, how onerous the conditions might be, what sorts 
of reporting there may be. Once we were able to get through the 
initial few weeks and actually get people to read what the 
legislation actually did and what it would require and what the 
opportunities are, it has been a much more cooperative, 
facilitative environment.
    I think having Senator Kerry there to explain it was very, 
very helpful, including with the Parliament. The Secretary's 
trip I think really was a kind of turning point, and at one 
point she said quite bluntly in a town hall, ``Look, if you 
don't want it, don't take it.'' And I think since that point we 
have really kind of turned the corner and we have not seen any 
sort of kind of negative press like this over the last few 
months.
    Mr. Bever. If I might just add, there is one important 
evolution now over about 8 years ago. Eight years ago, when we 
did the first big cash transfers, $600 million, it was very 
difficult to get the Pakistan government to cooperate with us 
in certain ways we needed in order to have rights of audit in 
the right places we had to have them, but we now have an 
agreement with the Supreme Audit Institute of the Government of 
Pakistan that will allow us, in fact, to audit and to have our 
auditors and our CPA firms and the Pakistan CPA firms enter 
into audit wherever we feel we need to have it. That is an 
important step forward. And we have learned some lessons, and 
so has the government of Pakistan in this regard.
    Mr. Flake. Very quickly, Mr. Bever, the security situation 
in the FATA for our contractors and grantees, is it improving 
generally or does it go up and down depending on government 
action in the area?
    Mr. Bever. I would say the latter. It goes up and down. It 
is, of course, a risky place and a sometimes dangerous place. 
That has not stopped us from being able to help the FATA 
Secretariat and the FATA Development Authority from being able 
to do what they need to do with our help, but it requires a 
great deal of sensitivity, and particularly in Waziristan, of 
course, because of the fighting that has made it especially 
complicated. We are very mindful of the risks at play there, 
including for the Pakistanis that work with us.
    Mr. Flake. Thank you.
    Mr. Tierney. Thank you.
    Mr. Quigley, you are recognized for 5 minutes.
    Mr. Quigley. Thank you, Mr. Chairman.
    Mr. Chairman, I join you and other Members in thanking your 
efforts in Pakistan. We recognize how difficult they are, but 
to get past the specific points today, how do we overcome what 
seems to be overwhelming distrust by the Pakistani people 
toward our Government and our aid?
    My numbers may be old, but they are from last year that 64 
percent of the public see the United States as an enemy, and 9 
percent of them see us as a partner. Obviously, this comes from 
many reasons. You would know better than myself, but obviously 
the drone attacks contribute to this significantly, and whether 
or not you can argue that those are a good idea, they seem to 
be having a very negative impact on how people react to us.
    And if, at least in large part, these efforts are to win 
the hearts and minds of the Pakistani people, gentlemen, 
doesn't it seem like they just blow away all your efforts and 
no matter what you do and how much money we spend and how 
efficiently we spend it, the drone attacks seem to be literally 
destroying our efforts to win the hearts and minds?
    Mr. Feldman. Congressman, I can't comment on the drone 
attacks, but I would say that the effort to rebuild our 
reputation and nation relationship with the Pakistani people is 
the chief underlying framework of how we are proceeding with 
our relationship there. And it goes back, again, to the 
question, I think, that Congressman Flake asked on Kerry-Lugar-
Berman. There is a great degree of skepticism in Pakistan about 
America, but it is----
    Mr. Quigley. Do you think these numbers are in the ball 
park?
    Mr. Feldman. I think they are in the ball park, yes. I 
think that we are working on moving them up. I think we have 
seen some increases. When Secretary Clinton was there, they 
certainly rose. I am not sure where they currently stand right 
now. But yes, the perception of Americans is not a positive 
one, and it is formed by a history where they have seen our 
interest wax and wane based primarily on our security and 
military interest. They see it as a very self-interested 
relationship.
    They don't believe that we are interested in a longer-term 
relationship, and that is why so much of our work has been to 
emphasize that this is a long-term relationship, that it is 
based on a civilian relationship as well as a security one, 
that it is a people-to-people relationship. This was the entire 
theme of the Secretary's trip last fall, where she talked about 
turning the page and building this civilian relationship.
    I think that it will take time to do, but I think that we 
are going in the right direction and it has already showed some 
successes. I think it is, in part, given our many high-level 
principal visits. Ambassador Holbrook has been there, I think, 
eight times in the past year, is headed there again at the end 
of the month. Admiral Mullen has been there a number of times, 
the Secretary, obviously, President Obama referencing it.
    Obviously, the interest of Congress in Kerry-Lugar-Berman, 
but as well as the ongoing strategic dialog, which Secretary 
Clinton is hosting here next week with Foreign Minister Karachi 
leading the Pakistani delegation, and trying to demonstrate the 
breadth and depth of the issues that we have to discuss, rather 
than seeing it through the very narrow military security prism.
    In terms of how we are seeking to use the Kerry-Lugar-
Berman money, it is to do exactly what you have said in some 
part. It is to have impact, use the money, obviously, 
efficiently and to build sustainability. But as we have laid 
out in our regional stabilization strategy and others, we have 
also highlighted these high-visibility, high-impact projects in 
five or six different key areas, which is meant to demonstrate 
what America's commitment is over the long term in energy, as 
the Secretary announced on her visit, with $125 million toward 
efficiency mechanisms that put many more watts on the grid, but 
also in water and agriculture and health and education and 
governance. And we are in the process of developing those right 
now, as we are also continuing the work that we have done in 
development in that country over the years.
    So we are very cognizant of that relationship, of the 
perception of the Pakistani people, and of trying to change 
that, and we are there for the long term, and we think that 
over time, as that becomes evident, that those perceptions will 
change.
    Mr. Bever. If I might just add to that briefly, Chairman, I 
would just say what will be important to the Pakistani people, 
in my own experience, is that long-term commitment, and that is 
why I think the enhancing partnership with Pakistan is so 
important.
    Mr. Quigley. Excuse me. You don't want to react to my 
question as to how much of an impact the drone attacks have, 
either?
    Mr. Bever. I cannot comment on that, sir. I just know that 
what we are talking about here do not lend themselves to 
dronable solutions.
    Mr. Quigley. And, Mr. Chairman, I know my time is up.
    Mr. Tierney. For some time now, yes.
    Mr. Quigley. I appreciate it. I think mine might have been 
30 seconds, but the point being a perusal of Pakistani 
newspapers, despite all your best efforts, seem to show that 
the drone attacks and, again, whether or not we think it is 
rational, the trial of a female doctor just blowing away all 
your efforts as it gets to the hearts and minds of the 
Pakistani people.
    Mr. Tierney. I would just comment on one thing on that. If 
you read the Pakistani papers about the Kerry-Lugar-Berman 
thing you have an entirely different impression from what 
reality was on the ground, too, so I think there is----
    Mr. Quigley. Which is frustrating.
    Mr. Tierney. It is frustrating. It is hard to tell really 
what is going on, whether it is manipulation or accurate 
reporting on that.
    Mr. Luetkemeyer, you are recognized for 5 minutes.
    Mr. Luetkemeyer. Thank you, Mr. Chairman.
    In some of the information we have here, there is a quote 
from June 29th to the New York Review, something to the effect 
that says, rather, we can expect a slow, insidious, long-
turning fuse of fear, terror, and paralysis that the Taliban 
had lit and the state is unstable and partly unwilling to 
douse. With the recent arrests that have come about in Pakistan 
and their seemingly different approach to dealing with the 
Taliban, do you see an improvement in the government's ability 
to control its own destiny here, or is it still as unstable or 
more unstable than what the original comment was made almost a 
year ago?
    Mr. Feldman. We are certainly happy to offer any sort of 
briefings to you or others about the arrests and include the 
intel component which I can't really speak to. I think that 
there are a number of indicators that our relationship with the 
government of Pakistan is on increasingly stable and more 
constructive grounds, due to actions on both sides. It is one 
that both we and the Pakistani government have invested a lot 
of time and effort into over the past 14 months. I think that 
is beginning to show dividends.
    Mr. Luetkemeyer. Mr. Bever, what is your thought?
    Mr. Bever. I would just add that I think what we have seen 
over the last year and a half is a more conscious effort by the 
government of Pakistan, when it does have to take certain 
military actions in populated areas, that they have learned 
some lessons from the approach they took in the Mulakan and 
Swat and Mongora areas.
    As they have moved into Waziristan with better joint 
civilian planning for better pre-staging of supplies for 
populations that escape from those areas because of the 
fighting, and for better pre-planning to go back in to try to 
re-establish stability in those areas. To me that is a signal 
of better consciousness, both within the military of the 
Pakistan government and the civilian sides, of the importance 
of doing these kinds of stabilization efforts for their 
security and a more humane way and for more rapid recovery.
    Mr. Luetkemeyer. Well, it seemed that the more stable a 
government, the more effective our aid would be to the people 
of Pakistan. I would assume that we would be supporting them in 
those endeavors and hope that they will be able to do a better 
job of controlling their country and the various factions in 
there; otherwise, the aid is going to fall in the wrong hands, 
I would assume.
    Do you have any way to measure how our aid is being 
effective, how effective it is, the number of schools or water 
projects or more kids being educated or more people having less 
disease? I mean, do you have some measurable way of seeing what 
we have been doing, what the outcomes are?
    Mr. Bever. Yes, in those areas where we operate, we do 
baseline surveys, we do monitoring, we do interim assessments, 
as well, to see how many more children are able in a certain 
catchment basin, let's say of population, able to get some 
minimal primary education, for example, how many more girls are 
coming back in to school because we have combined a feeding 
program, like our Head Start, for example, so that, in fact, 
they are, in fact, more motivated to come in to school.
    We do monitor the maternal child health statistics and 
maternal morbidity and infant mortality. So those are the kinds 
of measures we try to take as we operate how many--what kind of 
community development activities, how much community 
participation we are getting, including female participation in 
the communities, especially difficult in areas of FATA, for 
example. We do have ways to do that, and if you would like more 
information we can make that available to the committee.
    Mr. Feldman. I would also add that the White House has 
undertaken their metrics process, which has been ongoing over 
the past 6 or 8 months. I know that the first report due to 
Congress I believe will come at the end of this month.
    Regarding FATA, in particular, just to amplify what Jim 
said, I think there is a sense that, because of the security 
issues, because of other ongoing concerns, that there is not 
necessarily much that we have been able to do there, and that 
is very much not the case.
    Just since September 2009 USAID and OTI have completed 32 
activities totaling over $1.6 million. These have included 
repaving seven roads, fifteen water supply and sanitation 
activities, four flood protection walls, three electricity 
system rehabilitations.
    Mr. Luetkemeyer. Okay. Very good. That was my question. 
Before my time runs out I have one more question. Thank you. I 
didn't want to interrupt you here, but I do have one more 
question I want to get to real quickly.
    I know in Afghanistan we are using the National Guard 
operation where we have National Guard individuals who have a 
background in agriculture to come in and help train and work 
with the Afghanis to try and teach them some different farming 
methods, as well as help establish new markets for their 
farming products. Is there something like that that is being 
thought of as a way to implement in Pakistan, as a way to gain 
the trust of the Pakistani people, the various factions there?
    I know that seems to be what is working in Afghanistan, and 
it is a great way to turn the people to realize that we are 
there to help, not to harm. Is there anything like that under 
consideration, or is that strictly something that is only used 
in Afghanistan?
    And, Mr. Chairman, I do appreciate your indulgence.
    Mr. Bever. At this time no, although I must say we are 
extremely grateful to the U.S. National Guard from, I think, 
nine States now in Afghanistan that are operating there on 
agricultural development teams, together with U.S. Department 
of Agriculture and our own AID advisors. At this time, to the 
best of my knowledge, we are not planning or thinking of that 
on the Pakistan side. We have other ways to deliver 
agriculture-related assistance, together with USDA, by the way.
    Mr. Luetkemeyer. Well, the reason for the question was you 
made the comment about building relationships with the people, 
we have to earn their trust, and it seems to be working in 
Afghanistan. I was seeing if that was something you would be 
thinking about as trying a way to earn the trust of the people 
of Pakistan, as well.
    Mr. Chairman, I do appreciate your indulgence. Thank you 
very much.
    Mr. Tierney. Thank you for your comments. Thanks for your 
questions.
    Mr. Murphy, you are recognized for 5 minutes.
    Mr. Murphy. Thank you, Mr. Chairman.
    I appreciate your testimony here today. I want to get back 
to this question we have been tossing around about metrics. As 
compelling as data is about the number of roads paved and the 
number of children educated, it strikes me that that is 
ultimately not why we are there. If just investments in social 
infrastructure and in hard infrastructure were our end product 
here, then we should be in a lot of places in the world. The 
metric here ultimately is to Mr. Quigley's point, is whether or 
not we are creating the conditions upon which people will feel 
better about the United States and feel less inclined to move 
into an extremist movement there that threatens both the 
stability of the country and threatens the United States.
    So I guess my question is: do you think about how we 
measure that? And what are the ways in which we can do it?
    I think I agree it is hard to do that on a national basis 
because we have a lot of other competing factors that are hard 
to measure for, but I wonder if there are ways to do that on a 
localized basis in areas of the country that we have heavy 
investments in and where we are paving roads and putting kids 
to school and setting up health clinics. Is there a way to 
measure what the sentiment there is to the United States and 
what the local activity of extremist groups are in those areas? 
I would be interested to hear a little bit about how we measure 
what is our ultimate objective rather than our intermediary 
objective of making the investments and making them stick.
    Mr. Feldman. On the more macro picture, the combating 
extremism is obviously a core reason, if not the core reason, 
for part of our assistance programs, as laid out, again, in our 
regional stabilization strategy; in fact, the kind of central 
focus of the President's speech on Afghanistan and Pakistan on 
December 1st. So clearly how successful we are in ultimately 
combatting extremism is critical to this.
    The metrics in terms of actually gauging and evaluating 
that are obviously a lot more difficult. I mean, it is 
something that is part of every conversation. There are more 
specific aspects that we attempt to use in combatting 
extremism, the new public diplomacy and counter-propaganda 
programs that we have had in trying to get out more moderate 
voices more frequently. But in terms of actually how we gauge 
the moderating impact or even whether we will have access to 
that information--and certainly not yet. I think at this point 
it is a far longer-term process--is one that we are continuing 
to evaluate how we best capture that information.
    In the relative short-term, the outputs are the easiest 
gauge, but clearly they don't tell the whole story, as well, 
and we have to say not only how many schools are built, but how 
they are then used and what the sustainability is and 
ultimately what the literacy rate in that region is. And so it 
is a constant process of adjusting that as we get the 
information and over the course of time. But with the ultimate 
goal, the combatting extremism, is certainly a core piece of 
that.
    Jim might have more specifics.
    Mr. Bever. That is a very good question. I would just add 
that in the end one of the metrics I kind of keep in my mind is 
the continuity and the strength of the civilian government and 
the existence of the civilian-lead government in Pakistan. It 
is an indicator to me of their satisfaction with a civilian-
elected and a civilian-led government because, as you know, the 
rotations over time of civilian government versus military 
government and strengthening that relationship between the 
people, as I said earlier, the governed and the governing, is 
extremely important.
    I think we will see indicators of that in the coming months 
in Pakistan, because they are now going through, in each 
province, decisions by each provincial assembly as to how they 
will hold their own local elections, their equivalent of 
district or they used to be called nauseam elections. That I 
think will be--you asked at the local level--an indicator of 
what are the people thinking about the way that Pakistan 
government is moving forward in servicing its people. And it 
will be a mixed story. I am absolutely sure it will be a mixed 
message.
    To me, rule of law is extremely important, and how they 
perceive rule of law at the local level, how they perceive 
corruption by local officials or not at the local level, and 
how they perceive delivery of services and their demand for 
those services at the local level.
    Mr. Murphy. I understand how difficult this is, and I 
understand even when you are talking about local measurements 
like election results it is very difficult to extrapolate that 
simply to U.S. aid versus a lot of other factors, but to the 
extent, Mr. Feldman, you were talking about the White House's 
new effort to try to implement metric strategies, I think to 
the extent that we can try to get at our end goal and in some 
way measure that back to where we have made investments and 
where we haven't, it makes it a lot more helpful for those of 
us who right now are operating on faith and who believe this is 
the right strategy, to go back and translate that to our 
constituents back home that are sometimes skeptical of us 
spending this amount of money abroad instead of here at home. 
So I would encourage you to continue to think about how to best 
measure that.
    Mr. Tierney. Thank you, Mr. Murphy.
    Mr. Lynch, you are recognized for 5 minutes.
    Mr. Lynch. Thank you, Mr. Chairman.
    I want to thank both of our witnesses for your help with 
the committee's work.
    We were in Pakistan several weeks ago meeting with some of 
the USAID and some of our NGO's there, and there was some 
concern raised about the--well, the focus is right, I think, in 
terms of the federally administered tribal areas and the 
Northwest Province; however, there was some concern about the 
safety of NGO personnel in some of those regions, and there was 
a sort of a reassessment going on, I guess you could call it, 
where western employees were sort of hunkering down in areas 
closer into Islamabad and trying to get services out to the 
population in those areas through Pakistani nationals, and it 
was a sort of a--they were changing it on the fly and there 
were even sustained concerns about the safety of those 
Pakistani nationals doing work on our behalf or on behalf of 
the Pakistani people.
    I was just trying to get a sense of how much is that 
affecting the efficacy of our attempts here to bring capacity 
to those governments in the tribal areas in the Northwest 
Frontier Province.
    Mr. Bever. I appreciate your question, Congressman Lynch. 
It is one on our minds all the time. It is our preeminent 
concern, frankly.
    We have, both in Afghanistan and Pakistan, we have lost a 
lot of people paid under our assistance programs, more, of 
course, in Afghanistan than in Pakistan. The local nationals--
in this case Pakistanis--are the ones who are most exposed. We 
know the head of CHF was murdered in Peshawar a year ago, along 
with one of his Pakistani staff. There have been kidnappings of 
staff from our NGO's, so what we----
    Mr. Lynch. Sir, could I ask you to just speak up a little 
bit? I am an old iron worker and I have bad hearing.
    Mr. Bever. Sure. What we have tried to do now and since the 
time you were there is whenever any of our partners come to 
us--and it is usually at their initiative--to say, Will we 
provide funding to them so they can adjust their agreements, 
their contract or their grant or their cooperative agreement, 
as we call it, to allow some expenses to improve their 
security. We look at that very seriously and make sure, in 
consultation with our security office regional diplomatic 
security people at the embassy, that we come to a mutually 
agreeable accommodation so that, in fact, they can try to 
improve their security.
    We also have to count on the Pakistani security services, 
themselves, to assist us with the right kind of information 
about areas where these people work and where they have to go 
into and come back and commute back and forth. So we have done 
that kind of coordination since the time that you were there 
and raised some of these concerns and were responsive to them.
    So it has not stopped us from being able to operate and to 
be able to support FATA, Secretariat, and others, for example, 
or even in the Northwest Frontier, but it is certainly 
something that constrains us on any given day.
    Mr. Lynch. Okay. All right. I am just about out of time. 
Mr. Feldman, would you like to add to that, please?
    Mr. Feldman. I completely agree with what Jim said. I mean, 
it is a constant calibration between, obviously, having to be 
mindful of the security situation and wanting to protect lives 
while also trying to do the critical assistance work that we 
continue to do in those areas.
    I would give as a recent example the United States has 
agreed to provide $55 million for reconstruction projects in 
South Wajiristan, focused on roads, dams, rehabilitation, and 
power grid. General Zubear has worked very closely with 
Ambassador Rafo and our Embassy in Islamabad to ensure that 
access for U.S.-funded Pakistani monitors would be one of their 
top priorities. And so as we continue to try to put forward--
and there is a range of other oversight mechanisms we have 
tried to put in place, which I would be happy to talk about 
later, fixed reimbursement agreements and things like this--but 
we have tried to work with and mitigate, to the extent we can, 
the security situation while still being very cautious about 
risking lives.
    Mr. Lynch. Thank you, Mr. Chairman.
    Mr. Tierney. Thank you, Mr. Lynch.
    Mr. Van Hollen, you are recognized for 5 minutes.
    Mr. Van Hollen. Thank you, Mr. Chairman. And thank you both 
for your service. I want to commend you and the whole team on 
what I think has been significant progress over the last year 
or so in Pakistan, and I think we are beginning to see the 
results, at least with respect to responsiveness and engagement 
with the government of Pakistan in fighting the most extreme 
elements. It wasn't long ago that President Musharraf was 
entering into non-aggression pacts with the Pakistani Taliban 
in Swat Valley. Largely as a result in the change in government 
and the engagement of the new administration, a diplomatic, 
political, economic offensive, you have a much greater degree 
of cooperation and engagement.
    Not only has the military gone after the Pakistani Taliban, 
but they have also taken very important steps in going after 
elements of the Afghan Taliban based in Pakistan. We saw that, 
obviously, with the arrest of Mua Omar's operation head and the 
arrest of the shadow Governors and other signs of greater 
cooperation.
    That is a result, I believe, of greater confidence and 
cooperation between the U.S. Government and the Pakistani 
government, and a view on the Pakistani side that they have a 
big stake, as well, in defeating extremism, whether it is the 
Pakistan Taliban or ultimately trying to resolve the situation 
with the Afghan Taliban.
    So I think that is important progress, and I think it is 
the result, in part, of engagement at all levels, including 
economic engagement, and sending the signal that we are there 
for the longer term.
    I commend you on the idea of trying to channel more 
resources through Pakistani contractors and indigenous 
institutions, with the caveat, of course--and you have raised 
this--that we have to make sure there is transparency and 
accountability. As we put more funds through local 
organizations and build capacity, we need to make sure that 
those moneys are being well-spent.
    So there is building this relationship with the government, 
but we are all frustrated with the fact that if you take a poll 
in Pakistan today among the Pakistani people, the United States 
is held in very low regard. And, as the chairman pointed out, 
the Kerry-Lugar-Berman legislation aid, it was like kicking the 
gift horse in the mouth, although we don't see it as a gift, we 
see it as part of our engagement and interest. At the same 
time, it was something that was a good thing.
    So while I like the idea of channeling more funds and 
building capacity, at the same time those American taxpayer 
dollars are not necessarily--we don't get the credit 
necessarily for those investments in the mind of the Pakistani 
people, and I think there is a real feeling what while we 
pumped millions and millions of dollars into important things 
like institution building and democratic building, that if you 
were to turn around and ask the average Pakistani citizen, what 
has the United States done in terms of economic development, it 
is hard for them to identify something.
    So my question is: in addition to doing these kind of 
things, should we not also think of doing some of the things we 
used to do in the past? USAID used to do much bigger 
investments that were important investments in the country, but 
at the same time drew the national attention of the Pakistani 
people, clearly identified as an investment being made in the 
United States in the future of Pakistan and the future 
relationship, because there is a concern that after spending 
all of this money, especially as you channel it more through 
the government of Pakistan, which builds capacity, that no one 
in Pakistan, among the Pakistani population, can say, yes, the 
United States helped us in this particular, concrete way.
    If you could, respond to that and what ideas you have with 
respect to some of these other projects.
    Mr. Bever. Congressman, we certainly agree with your 
comments. It is important that the Pakistani people have some 
visibility and see the benefits of cooperation with the 
American people and the American assistance with our people's 
money. So we are looking and have already initiated the first 
wave in the last few months of assistance to the energy center, 
trying to rehabilitate and repair some of their existing power 
systems. They will see that to the extent they see things 
quickly in the press. They should also see it in terms of the 
effects in certain parts of the country on their load shedding.
    Now, again, these are just the first steps.
    It is a country of 157 million people, plus or minus. It is 
more than half the population of our country. So when you take 
that, even with a very generous assistance program we have now, 
it is still less than $8 or $9 per capita in the country. So we 
have to do this extremely catalytically, and we have to be very 
thoughtful on how we approach this.
    So we will be working in energy, which all Pakistanis can 
immediately identify with as a need. We will be working in 
water, which is an extremely important feature for the 
Pakistanis, both in agriculture, in quality of water, potable 
water in their communities, but also on water distribution 
systems and, obviously, because of base and treaty concerns 
that are also political concerns in the country.
    So those are just some quick examples, but we want to make 
sure, as we do those more-infrastructure programs, that the 
policy reforms are there, too, so that our people's money is 
put into programs that, in fact, will be sustainable 
financially.
    Those are the two examples I would like to share with you.
    Mr. Feldman. Thanks, Congressman Van Hollen. I appreciate 
your stage setting, as well, because I think it is critical, as 
we think about how we continue to move forward, what the 
metrics are, recognizing that there is still a sense of great 
skepticism about the American relationship among Pakistanis. 
Just a year ago the Taliban were 100 miles from Islamabad. We 
were facing a quite critical scenario.
    And over the course of the past year, through the increased 
cooperation at every level of Government, we have seen the 
development of a far more cooperative, constructive, civilian-
based relationship, which I think is starting to yield real 
benefits now, but it will take, I think, a significant amount 
of time to continue to see these benefits, as per their earlier 
questions about how do you actually engage something like 
combatting extremism.
    Your question on how these benefits help to accrue to the 
United States, how people focus on what the United States has 
contributed to them in our development projects is obviously 
one that the development community grapples with all the time. 
As we came to it in terms of looking at how we could best use 
this Kerry-Lugar-Berman money, we also went through the exact 
same calculus, and we have really tried to walk the line 
between continuing to do the institutional capacity building as 
we have done over time, but also demonstrate, and this is where 
this whole term of either signature projects or high-impact, 
high visibility projects has come from, but to do at least one 
type of those projects in each of the five or six main sectors 
we have identified that are most important to Pakistanis, 
starting with energy, given the Secretary's trip last fall, and 
the second one being water, showing that we are hearing the 
concerns of the Pakistani people beyond just the border 
regions, beyond where we are seen to have a more narrow, 
targeted interest.
    I think the process that evolved as we considered what we 
could do in the energy field was a very instructive one. I 
think we started with the idea of let's build something big 
that we can stand on and have a ribbon cutting, and everyone 
will know that America built this. And as we looked more and 
more into it, first of all, the costs were exorbitant, the 
sustainability issues were there. It was questionable what the 
needs were.
    As we started looking more at the actual needs, it became 
far more clear that working on the efficiency issues, working 
on getting more watts on the grid, avoiding some of the 
blackouts in high consumer and commercial areas, which we could 
do relatively quickly and easily through this $125 two-well 
project, would be far more constructive, far more efficient, 
and more sustainable.
    And so instead of the kind of signature energy project, a 
dam or something like that, we have come up with this signature 
energy initiative. I think that the same process is unfolding 
in many of the other sectors. In education we could have looked 
at building an American university, but again how sustainable 
is that over the long term. What is the commitment there? Does 
that become a target in and of itself?
    So I think, although we are still very much in the process 
of trying to determine which direction we are going in and 
USAID and State together are actively looking at a number of 
these projects in the remaining sectors, something like a 
center of excellence at an existing university or some sort of 
faculty, which would be seen as this is a gift of the American 
people or done in conjunction and cooperation with the American 
people, helps to build that, but is also not necessarily the 
grand bricks and mortar vision that we had of big development 
projects.
    Mr. Tierney. Thank you, Mr. Feldman.
    Mr. Welch, you are recognized for 5 minutes.
    Mr. Welch. I thank you very much.
    The dilemma I think all of us have is, number one, what is 
the basic purpose of the aid, and it has to be tied obviously 
to national security, however else we describe it, and, number 
two, in order to deliver that aid, how can it be effective, how 
can we get our money's worth. The models that we have used, 
whether it was depending on international contractors or NGO's, 
where there is a high overhead, whether it is dependent on 
Pakistani ministries where there is a high level of corruption, 
and whether it is dependent on NGO's, where there are huge 
oversight problems. The only way we can be successful--and I 
will just ask you this--is whether we have, Mr. Bever, and 
honest and a competent Pakistani partner. I mean, would you 
agree with that?
    Mr. Bever. Absolutely.
    Mr. Welch. So if we don't, I mean, there are disputes 
between the military and the civilian government. There is a 
weak civilian government that is up and down. Other than for 
purposes of domestic consumption and the need that we have to 
at least appear that we are attempting to win hearts and minds 
through development projects, through economic opportunity 
projects, through education projects, if we are honest with 
ourselves and ask the hard question, can we realistically be 
successful when the implementation and execution really 
requires an honest partner in Pakistan.
    Mr. Bever. Well, this is one of the purposes of our 
financial pre-award assessments. It is our procurement 
officers, it is our controllers, it is our project officers 
also that check out these organizations before we----
    Mr. Welch. See, this is my point.
    Mr. Bever [continuing]. Provide assistance to them.
    Mr. Welch. It is a real dilemma. I don't mean to be 
challenging, because I know you are doing your level best. 
Obviously, it is desirable for us to be doing projects that are 
going to improve the lives of Pakistani people.
    But there is a hard question that we have to ask. We can 
have all the auditors in the world. We can have all of the 
honest NGO's in the world. But if there is not a mechanism that 
is solid in Pakistan, we are going to have Iraq all over again. 
I mean, that is the hard question. And what you seem to be 
acknowledging is that we really do need an honest partner 
there.
    Mr. Feldman, how about you?
    Mr. Feldman. Of course I absolutely agree that we need an 
honest partner. We are doing everything that we can to work 
with the honest partners, to identify those, to vet them, and 
to make sure----
    Mr. Welch. And politeness requires that we say kind things, 
but the mechanisms over there don't exist. It is our need now, 
because we have an urgent national security need, things have 
changed, apparently somewhat for the better, as Mr. Van Hollen 
has mentioned.
    But I think most of us would probably come to the 
conclusion that it had much more to do with the self-interested 
conclusion made by the Pakistani military that the Pakistani 
Taliban were starting to cause trouble that made their lives 
difficult. It was not a result of the Kerry-Lugar-Berman aid. 
Would you agree with that?
    Mr. Feldman. I think it is a combination of factors. I 
think that it is an evolving, changing relationship that is 
dependent on many things, and I think that the Kerry-Lugar-
Berman aid will be quite critical for that.
    Mr. Welch. When I was there, I just was there with the 
chairman, and what was really apparent when you are there is 
how incredibly difficult it is to actually get a water project 
and education project, you name it, how hard it is to actually 
do it. And we can talk here, and we can talk about metrics, but 
there is an abstract quality to it because the people on the 
ground, the security challenges they face, the lack of 
infrastructure, administrative infrastructure to make it 
happen, these are enormous impediments to the best intention, 
the best and hardest-working people.
    For domestic reasons here, we have to act beyond military, 
but on the other hand, with all of the practical problems, I 
wonder whether it doesn't make sense to do a big, visible 
project, somewhat like the approach described by Mr. Van 
Hollen. It is easier to control the money, more confidence that 
you will get a dollar's worth of--well, maybe 70 cents worth of 
work for a dollar's worth of income. It is a substantial and 
visible project.
    I know my time is up, but I would ask each of you to 
briefly comment on that.
    Mr. Bever. I would just comment that in my experience with 
Pakistan over a quarter of a century and half my career, there 
are leaders in Pakistan, there are reformers in Pakistan.
    Mr. Welch. Right. I know that.
    Mr. Bever. There are many Pakistanis of very high 
integrity, such high integrity that sometimes in past 
governments they could not be trusted and they were sidelined, 
and some of them are back. There is a growing, I think, 
appreciation by the Pakistani business community and Pakistani 
civil society that they have to take more charge at their 
levels for the future of their country and to hold their 
leaders as accountable as we hold our leaders accountable.
    I think that is a very important phenomenon that is 
evolving in Pakistan today, and obviously the extremist threats 
to the country's future help to mobilize that, whether it was a 
tax on universities or police stations in Lahore, regardless of 
those things that were going on in the FATA and NWFP.
    I think the real future of that country and our assistance 
to it is linked to our ability to support those who have the 
courage inside their own society to transform their own 
society, and that is where we will be most effective and, over 
the long run, getting to Congressman Van Hollen's question 
also, that is where the Pakistani people will thank the 
American people the most, but it will take time.
    Mr. Tierney. Thank you, Mr. Welch.
    Mr. Driehaus, you are recognized for 5 minutes.
    Mr. Driehaus. Thank you very much, Mr. Chairman, and thank 
you, gentlemen, for being here today.
    I just wanted to follow up on Mr. Van Hollen's comments 
about the Pakistani perception of U.S. aid in Pakistan. I am a 
former Peace Corps volunteer, and I am curious as to how we are 
engaging in soft diplomacy. There are many projects, massive 
projects, littered around developing countries that were done 
counter to the will of the people in certain countries, that, 
because of one reason or another, were failures and they stand 
out as failures of U.S. aid policy in those countries. Yet, we 
know that soft diplomacy often works very effectively in terms 
of changing opinion toward the United States of folks that are, 
you know, obviously living in those countries.
    So I was wondering just if you could start off by telling 
me what we are doing to engage in soft diplomacy in Pakistan.
    Mr. Feldman. I guess, Congressman, first of all I would say 
it would depend in part on how we define soft diplomacy. But in 
terms of if it also includes democracy and governance related 
activities, whether it is just person-to-person contacts, which 
is going to be one of the key areas for the strategic dialog 
next week, and continuing to build those ties with NGO's, 
obviously, continuing to build ties with both Federal and 
provincial leaders, parliamentarians, and other elected 
leaders, the democracy in governance program--and Jim can give 
more details--has a parliamentary strengthening dimension to 
it, a local governance dimension to it, an elections-based 
dimension to it.
    I know that NDI and IRI and other organizations are very 
interested in continuing to do more. There is a whole range on 
the softer diplomacy. There is a whole range of kind of 
communications mechanisms. Our new Under Secretary of 
Diplomacy, Judith McHale, has put together a very robust 
communications strategy which has already started putting out 
bids for children's educational TV programs in local languages, 
other communications programming, radio, television, using new 
social media networks, cell phones, and other things.
    So there are a range of activities that are currently in 
the works and starting to be implemented, but I am happy to 
come back and----
    Mr. Driehaus. Well, I guess I am concerned that those all 
seem to be up here, and what are we doing at the ground level 
and in the villages, in the cities in terms of touching people, 
face to face, in terms of Americans on the ground and engaging 
in some type of cultural exchange in addition to development, 
because, when we talk about democratization, when we talk about 
Federal Government intervention with the Pakistani government, 
that is a bit different than being at the village level and on 
the ground.
    Mr. Bever. If I could just add, Congressman, one of the 
evolutions you will see this year in our program, security 
permitting, will be deepening our presence in the country. We 
will be moving out of just Islamabad--I am talking about AID--
and establishing regional offices in Lahore to service the 
people of Punjab and Karachi, to service the people of the 
Sindh and Balujistan, in addition to a very modest presence in 
Peshawar, which is constrained right now for American officers 
by security.
    That will enable American officers--again, I am talking 
AID, and sadly we don't have a Peace Corps presence there--to 
be able to get out with the people more, with the business 
community, with the local associations, with women's groups, 
with communities, with the Governors and the district 
officials, the kinds of things we used to be able to do 25 
years ago when I first served there, and that we have all been 
wanting to do.
    That is why we will be basically tripling over time, over 
the next two fiscal years, assuming funds are available, our 
American officer presence, but we are also going to be more 
than doubling our Foreign Service national Pakistani staff to 
also serve in Lahore and in Karachi and be able to help us get 
out more, as well.
    Mr. Driehaus. With regard to the AID assistance delivery 
and the transference to local NGO's, what lessons have we 
learned in terms of accountability and sustainability in terms 
of Pakistani NGO's and how they are able to engage in 
development? And do we have outcomes measurements that we are 
using to hold them accountable, similar to what we would be 
doing with international NGO's and American NGO's operating 
with USAID contracts?
    Mr. Bever. A number of questions in your larger question 
there.
    Mr. Tierney. That is a clever tactic Mr. Driehaus uses to 
eat up his 30 seconds remaining. But please go ahead and 
respond.
    Mr. Bever. First and foremost, we do have to assess the 
capability of these groups. We have to make sure they are 
actually registered with their own government, that our 
financial analysis and those of our Pakistani firms that we use 
assure that, in fact, they are following their own law, first, 
to make sure they are accountable.
    We also have learned some lessons about how we do our 
grants, because we are talking NGO's. They are usually grants. 
So we don't necessarily always give it all in one big amount of 
money up front; we tend to give an initial amount, see how they 
do, give an incremental amount, see how they do, and then give 
a final amount, those kinds of things to meter the flow of 
money, to make sure we get the performance that they told us 
they want to do, and we are assisting them in what they claim 
they are good at. That is why we provide grants or cooperative 
agreements.
    In the case of cooperative agreements, we have a clause 
that is called substantial involvement. It means the U.S. 
Government has a much deeper relationship with the grantee than 
under a normal grant arrangement, and we exercise that through 
our assistance officers that have Federal warrants.
    Those are just some examples.
    In terms of measurement, every one of our program 
activities has to have a measurement and monitoring plan, and 
we make that available to the Inspector General to hold us 
accountable in the way we do our business, as well.
    Those are some of the lessons we have learned over time, 
Congressman.
    Mr. Feldman. May I just add one thing to it? I mean, one 
thing which I think you are very right to focus on is the 
impact on the ground, but in an example like Swat, just since 
September the combination of the work of the Pakistani 
government in helping to return IDPs, but also the USAID work 
has really contributed to a resumption of normalcy there which 
I think would have been unimaginable 6 months ago.
    So helping to rebuild government of Pakistan offices, 
helping to rebuild schools and thereby enabling people to 
return and resume that degree of stability I think has been 
very significant, from both a national security strategic sense 
as well as what our overall development goals are.
    Mr. Bever. If I can just add, we also vet our partners. We 
are required to check to make sure that the partners we provide 
assistance to are not on certain terrorist lists. We make sure 
that our partner organizations are in good stead with their own 
government from a financial perspective on their own, whether 
they pay taxes or whatever their particular rules are.
    And we are particularly mindful of what was called the 
Negroponte guidance from the last administration, which 
basically asks us to assess the risk in each of our partners 
and to adjust our controls depending upon the risk we assess 
with that particular partner in that particular geographic area 
from a point of view of the money going to hands to whom it 
should not go.
    Mr. Tierney. Thank you very much.
    Ms. Chu, you are recognized for 5 minutes.
    Ms. Chu. Well, last week militants stormed the northern 
Pakistani offices of World Vision and killed six workers, 
injuring five. It is the world's largest Christian charity and 
works in some of the poorest and most politically unstable 
places on earth, and also educates and employs local women. All 
these factors make it a target for extremists.
    My question is, concerning this situation, what 
implications does this have for Pakistani NGO's that receive 
aid, and what about their safety and security?
    Mr. Feldman. Certainly we condemn the actions on World 
Vision, and we are very, very sorry and troubled to have seen 
that incident, but it is, unfortunately, not uncommon for NGO's 
and others doing this type of work to be targeted. We are 
continuing to work, as we discussed here today, within the 
constraints that we have to walk that fine line between 
continuing the very important assistance work, the work focused 
on women's issues and some of the other things that World 
Vision was doing, in the neediest areas with the security 
concerns.
    So I know Jim can talk a little bit more about the kind of 
security mechanisms that we try to put in place or try to work 
through in the most conflict-ridden areas, but it is, as I have 
said, a constant calibration that post tries to work through in 
terms of where we will continue to target our work, to target 
our resources, to try to continue the assistance, while also 
being as cognizant about the real risks that people are facing, 
and trying not to put them directly into harm's way.
    Mr. Bever. I would just add that in this case World Vision, 
they were not a direct recipient of USAID, but where they are 
we have urged our partners to come to us and say, If you 
perceive security risks, please describe them to us. Tell us 
what you feel you need for your people while they are 
traveling, if it is the kind of vehicles they travel in, if it 
is the protection around where their offices are, those are the 
things we can help with financially as part of a grant or 
cooperative agreement or contract. And we have had a lot of 
experience in this, but they do have to take some initiative to 
come to us if they perceive problems.
    But we are not being just passive that way. We have also 
reached out to them. I met with every chief of party of every 
contractor, grantee, and implementing partner in Pakistan when 
I was there in the fall, and I will be going out again soon. I 
will meet with them again. And one of the things we did talk 
about was security. Again, these were ones we support.
    They, however, are in close touch with others who we don't 
support, and they share information, and we have told them 
anyone who is U.S. registered is welcome to come to, now I 
think it is a monthly, briefing with the Diplomatic Security 
Officers, and USAID has our own security officers at the post 
in Islamabad, where they share information, they hear about 
those concerns, they get advice, and there are ways to sort of 
establish best practices, because their own network is faster 
and better even than ours, frankly. And there are other 
techniques that could be used, but this is not the appropriate 
forum to discuss that. But we could discuss it offline if you 
would like.
    Thank you.
    Ms. Chu. Just as a follow-up, I know that many of the 
attacks have targeted local Muslim women who were involved with 
American aid organizations. Is there a way to balance the 
safety of these women involved in these programs without 
compromising our goal of advancing the rights of women and 
girls in Pakistan?
    Mr. Bever. Obviously we encourage women's groups or women 
to participate in all the programs of our assistance. It is, 
first and foremost, the responsibility of the Pakistani 
security entities to protect their citizens. That said, there 
are some things, for example, in schooling and education that 
we have learned that if schools need walls built around them to 
protect the children, including the girls, that that is a very 
legitimate thing for us to do with the American people's money 
since we want the education to happen and we want more girls, 
in particular, to participate in the education system. That is 
a simple thing, very simple, that, in fact, does make a big 
difference.
    Another, frankly, is training female teachers. The more 
that there are female teachers in the country, the more 
families are willing to allow their daughters to go to school, 
because they feel that the teachers will be more responsive to 
them and less of a possible personal security threat to them.
    These are things Pakistanis have told us, lessons they have 
learned that we want to be able to help support.
    Ms. Chu. Thank you.
    Mr. Tierney. Thank you very much.
    We have finished our first round of questioning. With your 
indulgence, I am going to see if the Members want a question or 
two more before we fold here today.
    I am going to start that. Mr. Flake has deferred, and I 
appreciate that.
    Mr. Bever, we concentrate a lot in this committee on the 
personnel over there and the ramping up of U.S. personnel. Many 
of us have the impression that we were hollowed out over a 
period of time and now we have to get our capacity back. So if 
we are decentralizing, we are going to smaller predominantly 
Pakistani contracts that need oversight from people in our 
USAID, what is the recruitment process we have to get people in 
and how is that going? What do our numbers look like? What is 
the training process, so we get them up to the capacity that 
they can actually supervise and manage other people, as opposed 
to just do certain functions?
    I think, last, that leads to a question that was discussed 
a little bit beforehand: what, if any, legal authorities does 
USAID need in order to do that recruitment training and 
retention of sufficient numbers of personnel for service in 
Pakistan?
    Mr. Bever. Thank you. Mr. Chairman, if one looked at, say, 
contracts officers or procurement professionals, for example, 
we now have about a half a dozen in Islamabad. These are U.S. 
contracts and agreements officers, not to mention Pakistani. We 
expect to expand those procurement officials in country over 
the coming year, probably doubling them. We expect to move them 
out into the local areas, into Lahore and Karachi, as well, to 
help oversee our projects as we get----
    Mr. Tierney. So you will have a total of 12 in the entire 
country?
    Mr. Bever. It will be approximately 12, as I understand it.
    Mr. Tierney. So do those 12 people essentially do all of 
the procurement or overseeing all of the procurement?
    Mr. Bever. They also have Pakistani negotiating assistants 
and others that have experience doing this with World Bank or 
ADB or others from whom we have hired some of these staff to be 
able to help us, and we bring in----
    Mr. Tierney. But you want those people, the procurement 
officers, to be able to know whether or not the Pakistani staff 
is performing up to sufficient----
    Mr. Bever. Yes.
    Mr. Tierney [continuing]. And knowledgeable.
    Mr. Bever. Yes.
    Mr. Tierney. So still you are going to get----
    Mr. Bever. We are still building. We are still building, if 
that is what you are saying.
    Mr. Tierney. How many eventually would you like to have?
    Mr. Bever. I would think we want to move up to 16 or 24, 
something like that, between the American and the Pakistani 
staff over time.
    Mr. Tierney. So basically by the time we are in our last 
year of this Kerry-Lugar-Berman money, you will be getting up 
to a point where you want to be?
    Mr. Bever. I think we can move much faster. We are trying 
to do this this year and next fiscal year.
    Mr. Tierney. I see. So you are going to do a half dozen 
more this year, but then maybe double it up in the next year?
    Mr. Bever. That is what we ought to be doing. And not just 
in that case, but in terms of project officers and others I 
think we have to face the reality--and you are aware of this, 
Mr. Chairman, that after 7 or 8 years of working in these 
highly risky conflict zones where usually they are officers 
unaccompanied by their families, their spouses, it has taken 
its toll on the agency, and that is why we appreciate the 
support for the DLI part of it, development and leadership 
program.
    Those people do have to be brought in, trained up, and then 
assigned to some of these more challenging posts. That will 
take time. That is why we are moving to expand the number of 
mid-career development professionals we are bringing into the 
development leadership initiative, and we are also now 
recruiting outside to bring people in under what we call 
Foreign Service limited hire, which are Foreign Service 
officers, but they are limited to 5-year appointments at a time 
that can be renewed once.
    So it is a technique we have developed in Afghanistan, and 
we started in Iraq. I was also the Deputy Assistant 
Administrator for Iraq for 2 years.
    Mr. Tierney. Are these people experienced in particular 
areas that you are going out for these 5-year periods?
    Mr. Bever. We look for people who have had conflict zone 
experience. Generally our requirements are pretty stiff. We 
look for master's degree plus 8 years experience, of which four 
has to be in conflict zones. When we can't get that, we then 
ask for 8 years, even more years of work experience, and then 
we do, of course, personal references on all of them.
    But I guess the other thing I would just want to say here 
is that, in terms of training them, this also takes time. It is 
a difficult thing to do in the conflict setting, which is why 
we try to find people who have already got some of this 
experience to bring into the----
    Mr. Tierney. Do you have any success in bringing back 
former USAID personnel?
    Mr. Bever. We have. We have reached out to former senior 
Foreign Service and regular Foreign Service officers, and with 
the help of Congress we have special provisions to bring a 
limited number of officers back who can be sworn in again and 
retain their annuity, as well. So in terms of certain 
authorities that would be helpful to us, Congress has been 
forward-leaning on that. We can bring certain personal service 
contractors onboard, as well as Foreign Service limited 
officers.
    I think the time will come, though, when we need to find 
ways to retain, how to retain these officers in these posts 
that are both dangerous and they are away from their families. 
What are the motivations to keep them there a second year, or 
even a third year? For example, can we relocate families closer 
by in that theater, which is what was done in the Vietnam war, 
so that both military and civilian officers, in fact, would 
stay longer?
    Are there other financial incentives that potentially could 
be provided, or caps lifted on the pay that they can earn? 
These are just a couple of simple examples that we really need 
to be looking at to retain the officers once they get there. 
They will be four times more effective in their second year 
than they are in their first year.
    Mr. Tierney. Do you have somebody in your office that you 
could delegate to deal with Mr. Flake's staff and our staff 
here to maybe talk through some of those issues in more detail?
    Mr. Bever. We would be happy to. Absolutely.
    Mr. Tierney. The staff director, Mr. Wright, will contact 
you and follow up on that.
    Mr. Bever. Okay. I would just add that we have done 
something unique in AID's history in the last 6 months, both 
for Afghanistan and Pakistan. Recognizing the challenge to get 
senior officers of the current corps to come to post, we have 
designated all the office director positions, of which there 
are approximately 10 in both posts, as what we call senior 
management group officers, and that means the Administrator 
personally approves who goes there, and they have to be what we 
call FS-1, class one officers, at a minimum, or senior Foreign 
Service Officers to go. So normally those designations are 
required only for mission directors or deputy mission 
directors, so we have stepped up to the plate here and stepped 
up the internal incentives for our officers to serve there.
    Mr. Feldman. Mr. Chairman, may I just say, in addition to 
that, that the number of direct hires I believe throughout 
Pakistan has increased 70 percent from 2008. I think it has 
gone from 336 to 580, with plans to add another 125 by 2011. So 
we also are closely monitoring the staffing situation, trying 
to get the best people out there as quickly as possible, and 
would be happy to join in any sort of briefing on those issues.
    Mr. Tierney. Thank you.
    Mr. Flake. I was just going to ask if you can give us a 
ball park number on how many you have been able to bring back, 
the Foreign Service officers, through this program?
    Mr. Bever. I am going to have to give that to you 
separately, but I can tell you I spend a part of every day 
calling colleagues who used to work for AID seeing if we can 
attract them back, and they are serving in Iraq, they are 
serving in Afghanistan, they are serving in Pakistan.
    For example, our deputy director who is in Peshawar is a 
rehired senior Foreign Service officer. One that we are 
currently attracting, trying to bring to Karachi, will be a 
rehired senior Foreign Service Officer. We also have looked to 
other missions to loan their mission directors or their 
deputies to Pakistan, and we have brought three other mission 
directors out to Pakistan to help us over the past fall and 
winter. So we are doing everything we can to bolster the senior 
level of the mission.
    Mr. Tierney. Thank you.
    Does any other Member wish to ask an additional question? 
Mr. Lynch.
    Mr. Lynch. Thank you, Mr. Chairman.
    Just to illuminate the problem we are having in attracting 
former or retired members, Federal employees, up until about 6 
months ago, we could not get very highly skilled Federal 
employees to come back to work for the Government because they 
would have to, under the law, forfeit their annuity.
    Now, the corporate world has this right where if they have 
a special problem they just pull people back in out of 
retirement to go to work for them. That person has no learning 
curve. They know the business as well as anyone. But we in 
Government prevented some of our most skilled Foreign Service 
officers to come back into Government because we would require 
them to forfeit their retirement.
    About 8 months ago, Senator Akaka and I got together. We 
changed that under the Defense authorization bill, but only for 
the last 6 months have we started to reach out to former 
Federal employees. These are highly skilled folks that have 20, 
30 years experience, but it has only been in the last 6 months 
that we have been able to bring folks back.
    One of the things I wanted to raise with you, sir, is I 
think we only allowed them to come back for 2 to 3 years, and 
then that expires. I am just asking, you are talking about a 5-
year, these special contracts. We might have to amend that to 5 
years in order to get them to come back under your program. So 
maybe that is something that we could work on together. I 
happen to Chair the Subcommittee on Federal Employees, so maybe 
that is something we could work on.
    Mr. Bever. We would welcome working with the committee, 
yourself, sir, and others on this. I am not aware of that 
particular limitation, but if it is there--I'd have to check 
the legislation again--and then we could extend it, that would 
be helpful.
    I will just toss one suggestion out. This is not Pakistan, 
but it is really Afghanistan related and Iraq related up to a 
certain point. Our brave soldiers that serve in war time, in 
war theater, are exempt from Federal tax during the time that 
they are there, as I understand it.
    Also, our grantees and our contractors who are there under 
our pay are exempt from the first certain amount of their 
income on Federal income tax, though they have to pay some on 
certain benefit kinds of packages. I think it is $75,000 or 
$90,000. The only Americans in harm's way who do not receive 
that financial incentive to serve and continue to serve are 
U.S. Government civil servants and Foreign Service officers who 
are in harm's way in these war theaters.
    So I will just toss that out as something to think about, 
whether there is a way for those officers who are in harm's way 
in the same places where all other Americans who are there 
receive some benefit as a representation of the risk they are 
taking, might be able to benefit from this in the future is the 
kind of thing that I think will help both attract and retain 
officers in the field.
    Mr. Lynch. I totally agree with you. We have, especially in 
Afghanistan and in Iraq, where we have Agricultural Department 
employees in there, we have a lot of civilian employees in 
there, and they are not being treated nearly the same way in 
benefits or even when they get injured in a war zone. There is 
a whole different way of treating them.
    It looks like I might have another minute left.
    Mr. Tierney. A minute and 8 seconds.
    Mr. Lynch. A minute and 8 seconds. Can you just give me a 
real thumbnail on Swat Valley, because I know that we are 
putting a lot of money in there. I had a chance to chat with 
Ambassador Patterson a few weeks ago, and that is sort of a 
microcosm of our effort there in Pakistan in terms of pushing 
the capacity of the Government out into some of these tribal 
areas. Could you just give me a thumbnail on that?
    Mr. Bever. Well, I can give you my own historic 
perspective. When I lived there I used to go fishing for trout 
in Swat Valley, it was that safe, and it was a beautiful 
tourist area. Now, of course, it is a different situation, and 
I, too, was alarmed, as Dan said earlier in our testimony, at 
how close the extremist elements were to Islamabad. That 
resonated throughout the country.
    Today we are working very closely with the Pakistan 
government and the Northwest Frontier government, as well as 
with General Nadim and First Corps and others, and with 
Pakistani institutions, Parsa among them, to assist in the 
Northwest Frontier, especially Mingora and Swat, with 
everything from reconstruction of those facilities that were 
damaged, but, more importantly, building back, actually 
increasing the presence of the Pakistan civilian government.
    Where they used to have one administrative center that may 
have been blown up by the Taliban when they left, there will be 
two or three administrative centers. Where there was one police 
building, there will be two or three. Where there was one 
clinic, there will be two or three. Those are ways to deepen 
the government service delivery, and the Pakistan Civil Service 
are returning to the area and working. So we have spent quite a 
few hundred million dollars there, $350 to $400 million, in 
relief efforts and reconstruction. There will be more to come.
    Mr. Lynch. Thank you for your indulgence, Mr. Chairman.
    Mr. Tierney. Thank you very much.
    Any other Member wish to ask additional questions?
    [No response.]
    Mr. Tierney. There being none, let me leave this last 
question with you gentlemen. Can you tell us how much of 
President Bush's $750 million program for FATA has actually 
been obligated or spent in that region?
    Mr. Feldman. I don't have that information off the top of 
my head, but we would be happy to----
    Mr. Tierney. Could you give us a status report on that, on 
how much has been spent, how much has been obligated, and how 
much remains out there, and why it still remains?
    Mr. Feldman. Sure. We will do that.
    Mr. Tierney. And what his plans may be?
    Mr. Bever. We will get back to you on that.
    Mr. Tierney. Thank you, Mr. Flake. We thank our witnesses 
very much for your testimony, both written and oral, and your 
time and your staff's, as well. We appreciate it. We look 
forward to dealing with you in the future, and we will 
definitely ask Mr. Alexander and Mr. Wright from the committee 
staff here to talk with Mr. Bever about some of those 
incentives, as well as the tax situation that he brought up.
    Thank you both.
    Mr. Bever. Great. Thank you.
    Mr. Feldman. Thank you.
    Mr. Tierney. This meeting is adjourned.
    [Whereupon, at 11:51 a.m., the subcommittee was adjourned.]

                                 
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