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Department Seal Under Secretary of State for Management Bonnie R. Cohen and
Assistant Secretary of State for Administration Patrick Kennedy
Testimony before the Subcommittee on Commerce, Justice, State and the Judiciary, House Appropriations Committee
Washington, D.C., April 14, 1999

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"Department of State Management Issues and the FY-2000 Budget"

UNDER SECRETARY COHEN: I would like to thank Chairman Rogers, Ranking Member Serrano and the other Members of this Committee for this opportunity to discuss management issues at the Department of State and our FY 2000 budget request for State operations.

In my year and a half at the Department, I have been struck again and again by the scope and complexity of our activities and the need for adequate resources. I would like to begin with a brief review of some of these activities undertaken by the Department of State and other U.S. Government agencies overseas. While you are very familiar with what goes on in our embassies, not enough people know the full range of activities in which we engage.

The Department of State is the overseas platform on which America conducts its policy, encourages exports, and combats international terrorism and drugs, among many other activities. To carry out its global responsibilities, the Department of State maintains 260 diplomatic and consular posts which provide the necessary infrastructure for about 30 other U.S. Government agencies. Our diplomatic posts not only carry out our relations with foreign leaders, they also assist American citizens, support U.S. business and develop the extensive local contacts that are essential to effective relations.

And in times of crisis, our activities only intensify. Since the NATO bombings began in Yugoslavia a few weeks ago, the Department has carried out the evacuation of Embassy Belgrade personnel and dependents and assisted American citizens in departing the country. Even after their own evacuation to Budapest, Embassy Belgrade staff continued to assist American citizens still in Yugoslavia, including sending embassy cars and drivers to the Hungarian-Yugoslav border to pick up families with infant American citizens. We also evacuated dependents from Embassy Skopje in neighboring Macedonia after a mob stormed the embassy to protest the NATO airstrikes in Serbia and Kosovo, knocking down parts of the perimeter fence and setting fire to cars in the embassy parking lot.

In the first week of the airstrikes, dozens of anti-bombing demonstrations were held at our embassies overseas in locations ranging from Russia to Canada to Australia. Our embassy in Moscow was machine gunned by a masked man after he attempted and failed to fire two rocket-propelled grenades at the building. In light of the possible worldwide reaction to the airstrikes, we heightened our already high state of readiness at all of our overseas posts, focusing particular attention on countries bordering Yugoslavia and countries with large Serb populations. Additional Diplomatic Security agents were dispatched to Skopje, Tirana, and elsewhere to augment security at the embassies. In fact, of 204 DS special agents assigned to our field offices here in the U.S., all but 8 are currently out on security augmentation teams, protective details, or in training.

Today, more than ever before, U.S. diplomacy is a direct reflection of our domestic priorities. Agencies from Defense to Commerce to the Centers for Disease Control (CDC) to Health and Human Services (HHS) to the Environmental Protection Agency (EPA) carry out responsibilities in our embassies, and Department of State employees comprise only one-third of our civilian presence abroad.

However, cost-cutting over several years had real consequences. As I have mentioned before, the state of disrepair of many of our buildings overseas is shocking. As to security, our top priority, over 80% of our embassies do not have adequate setback from the street and are in need of substantial security improvements. This Department needs a sustained infusion of funds for building security, people and training, or we will not be able to maintain our worldwide activities. We will not be able to offer U.S. Government employees, and everyone who does business with the Department, a safe, secure, and well-managed environment.

In the last two years, with Congress's bipartisan help, we have begun to reverse this erosion in diplomatic readiness. I thank you again for your support, in particular for the President's $1.4 billion request in the FY 1999 Emergency Security Appropriation.

Budget Summary

The FY 2000 State Programs budget request for direct appropriations of $2.9 billion includes the tail of that Emergency Appropriation ($254 million) and also reflects the integration of the former USIA and ACDA operating accounts with State Program appropriations. The basic State Department operating budget request is an increase of $132 million or 5.3% over FY 1999 base appropriation levels. Almost $100 million of that is for wage/price inflation. (Pat Kennedy will discuss ACDA and USIA.)

As we discussed in the February 24 hearing on security, it will continue the program of security initiatives to bring our diplomatic facilities to heightened security standards and maintain them. The request will meet mandatory worldwide wage and price inflation and annualize the cost of the FY 1999 hiring plan.

The FY 2000 Diplomatic and Consular Programs request includes $69 million for the programs and activities of the three bureaus for arms control, nonproliferation, and political-military affairs that have resulted from the integration of ACDA into the Department of State on April 1.

The Diplomatic and Consular Programs request also includes $418.2 million for information and cultural programs and activities relating to public diplomacy. The Exchanges appropriation adds an additional $210.3 million to the public diplomacy operating request.

The FY 2000 request of $90 million for the Capital Investment Fund is a net decrease of almost $48 million from FY 1999 levels. Combined with Expedited Passport Fees, this fund will continue the Department's strategic upgrade of information technology for the new millennium.

The FY 2000 request of $483.7 million for the Security and Maintenance of U.S. Missions appropriation is a decrease of $549.9 million from the FY 1999 enacted level and reflects reductions from one-time Emergency Supplemental funding provided for worldwide security upgrades. It also reflects the integration of overseas lease costs for former USIA employees transferring to the Department of State as part of the integration of foreign affairs agencies.

The Secretary continues to argue for a multi-year funding program to improve the security of our personnel and facilities overseas, engaging the White House, the Office of Management and Budget and you and your colleagues in Congress on the best way to move forward on necessary funding.

I would now like to turn in more detail to some of our management initiatives.

First, we have brought on board new leadership in some key management areas in the past year. Assistant Secretary for Diplomatic Security David Carpenter took his post immediately after the August bombings and brings to the Department 26 years of experience with the Secret Service. He is the first Assistant Secretary for Diplomatic Security with a law enforcement background. Chief Financial Officer Bert Edwards brings 34 years accounting experience at Arthur Andersen, LLP, the international accounting firm, where he was a partner and consultant. Chief Information Officer Fernando Burbano joined the Department in May last year after years of public and private sector experience in the information technology field, including as Director of Information Systems for the National Library of Medicine at the National Institutes of Health.

And of course you all know of the depth of experience and capabilities of Pat Kennedy, Assistant Secretary for Administration at the Department. Two weeks ago, on April 1, ACDA officially ceased to exist, and we welcomed 257 former ACDA employees into the Department of State. We have been working very hard to ensure that the transition runs as smoothly as possible. I now turn to Pat to tell you more about where we stand on the integration of ACDA and USIA with the Department of State.

ASSISTANT SECRETARY KENNEDY: Thank you for this opportunity to address the status of reorganization efforts. They are substantial, and reflect the high priority the President and the Congress give to this issue.

The Foreign Affairs Reform and Restructuring Act requires the President to submit a detailed Plan and Report to the Congress, which he did on December 30, 1998. The Administration has submitted a revised Plan and Report, which took into account a number of comments from the Congress and from interested NGOs and others.

We are continuing intensive planning so we can move quickly on implementation. Planning involves everything from personnel and floor space to how best to assure the key missions of public diplomacy, arms control and nonproliferation, and sustainable development. In this regard, on February 2, Secretary Albright wrote welcoming letters to the heads of the other three affected agencies -- ACDA, USAID, and USIA. They highlight the importance of these foreign affairs agencies' missions, and note our plans for new structures in the Department.

The Secretary and others have held a number of town meetings and other discussions with employees, here and abroad. Information is on an Internet web site, and the Foreign Service Institute (FSI) will conduct a special course for incoming State employees. In short, we are doing all we can to ensure that reorganization is implemented in an open and transparent environment.

ACDA

The integration of ACDA into the Department has resulted in the formation of two new bureaus and the restructuring of the Political-Military Affairs Bureau, thereby reducing the number of bureaus in the two agencies from five to three. This reorganization places arms control and nonproliferation priorities squarely at the heart of the U.S. national security and foreign policy. The FY 2000 budget request of $69 million for arms control, nonproliferation and political-military affairs is necessary to strengthen and preserve U.S. national security by advocating, formulating, negotiating, implementing, and verifying effective arms control, nonproliferation, and disarmament policies and agreements.

The President's arms control agenda for FY 2000 includes ratification and implementation of the Comprehensive Nuclear Test Ban Treaty (CTBT) and START II; implementation of INF, START I, the Chemical Weapons Convention (CWC) - including building a chemical laboratory to perform sample analyses, as mandated by the U.S. Senate resolution on the advice and consent to ratification, - the Treaty on Conventional Forces in Europe (CFE) and the Nuclear Non-Proliferation Treaty (NPT); and negotiation of the Fissile Material Cutoff Treaty (FMCT) and the Anti-Personnel Landmines (APL) agreement, as well as further arms control reduction talks and activities. In addition to advancing the President's arms control agenda, the new structure brings greater focus to preventing the proliferation of weapons of mass destruction and to the important issues of security assistance, arms transfers, defense trade controls, and regional security policies.

Public Diplomacy

As Secretary Albright has noted, the expansion of democracy and the spread of global communications have made public diplomacy ever more central to the conduct of our foreign policy. The conduct of relations between governments must be supplemented by expanded efforts to engage foreign publics, NGOs, the private sector, and policymakers whose work affects the international climate for the success of U.S. foreign policy. Reaching these key sectors in foreign societies is public diplomacy's aim. Integration of public diplomacy activities in the Department of State will strengthen our foreign policy by assuring that public diplomacy is fully factored in at the outset of policy development.

Specifically, U.S. public diplomacy promotes the advancement of national security and other foreign policy goals such as the establishment and consolidation of democracies and the rule of law, the advancement of human rights, the development of economic prosperity and open markets, the protection of the world environment, and the international free flow of information. Other important objectives include empowering women, supporting anti-corruption efforts, combating terrorism, abating the illegal drug trade, establishing bilateral and multilateral coalitions to support key goals and promoting free elections, conflict resolution and civic education. Public diplomacy achieves longer-range policy objectives through international information programs and educational and cultural exchanges and other programs. Exchanges create opportunities for U.S. and foreign publics to understand each other's societies and culture directly. Building mutual understanding improves the context in which the United States can articulate its purposes and actions abroad.

In FY 2000, the budget request for all public diplomacy programs currently carried out by the U.S. Information Agency totals $1.147 billion. Of this amount, $452.6 million is for broadcasting activities of the Broadcasting Board of Governors, and $694.7 million is for non-broadcast activities of the Department of State. The latter request includes funds to expand exchanges, such as the Fulbright Program and bilateral programs with China and Germany; upgrade information technology for public diplomacy program uses; and cover mandatory costs to maintain a viable overseas public diplomacy presence.

UNDER SECRETARY COHEN: Thank you, Pat.

Y2K and Information Technology

Turning to the Y2K issue, let me first say, the Department of State will be ready for Year 2000. And in stating this, we appreciate the emergency funding the Congress has approved to help us do so.

Year 2000 readiness is one of our top priorities and the highest levels in the Department are actively involved in its management. Secretary Albright has raised the Y2K issue with foreign leaders and will continue to do so. We are confident of our progress and in particular, I would highlight the following:

As of today, a Department-wide moratorium on information technology systems development not related to Y2K solutions has resulted in deferring 26 such projects. On March 16, 1999, I extended this moratorium to changes proposed for operating systems, effective July 1, and applications, effective September 1, until Year 2000 is behind us. This will stabilize the operating environment and allow us to focus our attention on additional testing of systems and business continuity and contingency plans.

Moreover, because of possible risks to our own operations from internal and external sector failures, we are developing business continuity and contingency plans, reflecting the Department's responsibilities both domestically and overseas. To do so, we are taking the following initiatives.

There are restraints. We have limited time, limited resources, and limited knowledge of what will actually happen. And to be realistic, the United States is not going to solve the world's Y2K problems. However, through this Working Group we will do our best to deal with the situation.

I also brought with me today a toolkit which each of our embassies is using to develop contingency plans. Each Chief of Mission will certify by April 16th that his/her plan is complete - that it ensures the safety and security of staff and dependents, the protection of U.S. citizens residing in or traveling to the host country, and the continuity of critical mission functions.

We are also establishing an Emergency Response Y2K Task Force to supplement our existing response capability in case of serious infrastructure failures.

The Department is enhancing information systems security by upgrading our information technology (IT) security infrastructures, deploying new network intrusion detection and response capabilities, and investing in additional training to improve our employees' awareness and skill in maintaining computer security. Our improved security posture is reflected in the significant progress we have made in correcting the problems identified in the most recent GAO audit of our unclassified network. We are in the process of implementing an aggressive certification and accreditation process to ensure that the security anomalies identified by the GAO report have been and remain resolved as reported.

Here I note a unique aspect of the Department's IT infrastructure. Because of our concern for the security and integrity of diplomatic communications, we must maintain two separate world-wide networks--one classified and one unclassified. This is expensive but necessary until reliable modern multilevel security systems are invented.

Personnel/Training

People are our most significant asset in the conduct of foreign policy. As such, employment and development are two of our highest priorities. We have instituted an aggressive hiring program in order to continue to employ "the best and the brightest." We continue to assess and revise our training and developmental programs to better prepare our personnel for the 21st century and the challenges ahead.

Our most difficult choices involve how best to allocate our limited personnel resources in line with the Administration's and Department's goals and priorities. In addition to our annual budget/financial planning process, where we assess our requirements and reallocate resources according to our priorities, we have also initiated a series of reviews to examine our activities worldwide. These include a blue ribbon panel to look at our overseas presence, which I will discuss in more detail later, the Overseas Staffing Model, and domestic staffing guides that we are developing to better define our requirements.

The need for adequate training competes directly against the need to have personnel in the field - people simply cannot be in training and be performing important activities overseas at the same time. We are constantly looking for improved ways to train our people - for example, finishing Chinese hard language training at post - but the basic fact is that training is a resource-intensive activity. Last year, almost 40% of language-designated positions were filled with officers lacking the requisite language skills.

To further exacerbate our staffing situation, there will be a significant increase in Civil Service retirements. We project that between 1998 and 2010, over 1,200 out of our 5,000 Civil Service employees at State will become eligible to retire. These departures will dramatically undermine the Civil Service continuity in the senior level management and policy positions.

In FY 1998, we were able to begin to address these challenges by stabilizing our employment at FY 1997 levels. We have initiated more aggressive hiring programs. On Saturday, February 27, we held a widely-advertised Job Fair to recruit both Civil Service and Foreign Service information technology specialists. We advertised at universities, in the Washington Post and the Wall Street Journal, and elsewhere, and we were pleased that approximately 1,400 people attended. We were able to test and fingerprint people while they were there, and we processed over 1,100 Foreign Service and Civil Service applicants that day. Thus far, we have made over 120 offers for the Foreign Service, conditional on security clearances. The Department has also made 70 Civil Service job offers to date, and we expect to be able to offer another 30 within the next few weeks. As it turns out, with the widespread advertising and openness at the Job Fair, we had a much more diverse pool of applicants from which to choose people, which you know has long been a struggle for the Department.

We have initiated a pilot program, the Foreign Language Fellows, to provide some relief in hard language designated positions. The pilot is limited to the National Security Education Program participants, who owe service to the federal government as repayment for educational grants. These individuals are language-qualified in hard languages such as Chinese and are being hired on limited appointments to work in consular sections.

In addition, the Department has contracted with STG, Inc. and McKinsey & Company to examine our ability to attract, retain, and develop executive talent. They have completed a survey of Civil Service and Foreign Service senior managers and senior-level and mid-level employees. We are particularly interested in the mid-level employees, since they will be the Department's leaders in the next 10-15 years. The surveys asked each of the groups to assess, from their perspective, the Department's ability to attract, retain, and develop the workforce. We are able to compare our employees' attitudes, professional insights, and employment practices to those of high performing companies, which have already been surveyed by McKinsey.

The consultants are now working with Department officials to develop action plans appropriate for each of our employment groups, to improve our internal personnel management, and to make us more competitive in today's job markets.

Training for our foreign national employees is also an area where we can and must do more. In FY 1999, we are holding more sessions for foreign national employees than ever before – 25 offerings – which will train about 625 employees. While a good step forward, that number represents less than 5% of the 18,000 foreign national employees who play a critical role in supporting our missions overseas.

Border Security/Consular Affairs

The Department undertook a massive infrastructure project in Mexico to carry out the mandate of Section 104 of the 1996 Illegal Immigration Reform and Immigrant Responsibility Act, and we now are up and running with the "laser visa" at all of our border posts. We have adjudicated nearly 300,000 cases, and nearly as many of these very secure "laser visa" documents are now being used by Mexican border crossers in place of the old and easily forged cards. Card production by the Immigration and Naturalization Service was boosted dramatically by the opening of the facility in Corbin, Kentucky, and we plan to begin taking applications in Monterrey and Mexico City in May and June to take advantage of that new capacity by INS.

Nevertheless, in our briefings of Committee staff the Department of State has long maintained that it would require at least five years to issue and produce the 5.5 million replacement Border Crossing Cards in Laser Visa format and keep pace with new applications from Mexicans for this document. Our best estimate for completion at projected rates of adjudication and production remains sometime before the end of calendar year 2003.

We also continue to seek ways to increase the integrity of the U.S. passport. In November, 1998, the National Passport Center in Portsmouth, NH, began issuing a new passport in which the recipient's photograph is printed as a digital image directly on the data page. The New Orleans Passport Agency will become the second agency to issue photodigitized passports when it begins production of the new books later this month. When the New Orleans Agency is fully converted, over 40% of all passports produced domestically will be of the new type. During the next year, the new technology will be installed at all passport agencies. This will be a signficant deterrent to photosubstitution and fraud. Soon the new technology will benefit consular officers and the American public overseas. Because digital images can be transferred across computer networks, an American citizen who loses a passport abroad will be able to have his/her identity verified from the Department of State's central microfilm files and receive a new passport quickly.

Other changes made to the passport book include a security film which covers the data page and features a multicolored hologram-like image which protects the digital photograph and personal data of the bearer; the use of purple ink rather than blue for the pre-printed text in the book; and the addition of Spanish translations of the pre-printed captions and the Secretary's message.

We have a new initiative for improving customer service in our consular sections, based on a successful year-old public-private partnership with the Disney Corporation. Last May, a team from Disney accompanied us on a trip to the Dominican Republic and Haiti, where they offered us several useful recommendations. A visit to a consular section creates the strongest, and sometimes the only, impression most foreigners have of the United States. The Disney approach to quality service has taught us that low cost, practical management improvements and greater attention to courtesy can enhance the impression most foreigners have of the United States. Since then, the Bureau of Consular Affairs (CA) and the Office of Foreign Buildings Operations have been implementing the recommendations and continuing this unique relationship with Disney. CA is actively promoting the Disney service approach through communications to the field, consular training, and a series of best practices conferences.

One step we are taking is to develop clear, user-friendly, and distinctive graphic signs and symbols to help people recognize and feel more comfortable in our embassies. With the help of graphic design consultants, we are developing a new approach for sharing information with our customers, incorporating graphic symbols into both our facilities and Consular Affairs documents to improve communication with the public.

Planning

With the incorporation of significant improvements in both data collection and the use of information technology, we have streamlined and greatly enhanced our ability to tie resources to our strategic goals and to bring the Department's Performance Plan into closer compliance with GPRA. This year we are using a website to provide guidance to our posts abroad on every aspect of the preparation of their Mission Performance Plans. In addition, information collected in this year's Mission Performance Plans will automatically roll-up into a global data base, allowing our bureaus to integrate the collected information into their Bureau Performance Plans. The software for these improvements was developed over the second half of 1998 and was tested in Washington in January and February this year. It has been deployed to all of our missions overseas.

I take the issue of recommendations by the Inspector General very seriously. I meet regularly with the Inspector General and receive a monthly report on all outstanding recommendations and areas of impasse. As a result, over 60 of the recommendations in management areas have been brought to closure in the past month alone.

In addition, the Department received an unqualified ("clean") opinion on our Fiscal Year 1997 Financial Statements. The Department is one of only eleven major U.S. Government agencies to have done so. We expect to repeat this for FY 1998 in the audit currently being completed.

Foreign Buildings

Through the Office of Foreign Buildings Operations, the Department manages almost all of the non-military property owned or leased by the U.S. Government overseas, over 12,000 properties. The estimated value of these Government-owned properties is about $10 billion. Our total real property sales for FY 1998 totaled about $103 million.

We are continuing to take a critical look at our overseas properties and how we dispose of them. The Real Property Advisory Board, a seven-member panel that includes senior Department executives and real estate executives from other U.S. Government agencies including the Postal Service and GSA, is fully operational. The Board reviews the facts surrounding property disposal disputes -- whether a property should be sold -- and makes its recommendations to the Department's Assistant Secretary for Administration for his decision. We have segregated the accounting for sales as GAO requested. In addition, we have signed an MOU with the Office of Inspector General to have the IG independently identify possible surplus property overseas on a scheduled basis for each post, a process which has already begun. We will be carefully evaluating the IG's recommendations.

Chelston, the official residence of the U.S. Consul General in Hamilton, Bermuda, is currently for sale. Sinclair Realty in Hamilton and Christie's Great Estates share the listing. The property is being marketed worldwide. The listing also appeared in the Wall Street Journal on April 2.

The Department plans to continue to use sales from property to make cost effective property acquisitions in locations where the Department leases facilities. This will assist in the effort to hold the line on cost increases in the leasehold account.

A group of Harvard Business School students completed a study of our real estate practices last year, bench-marking our operation against the best practices of U.S. multinational private industry, and its findings were very favorable. In order to improve further our real estate program, we are implementing some of the report's recommendations, such as strengthening our cooperative relationship with the Office of Inspector General.

This year, we asked the Harvard Business School to review the Department's approach to funding capital projects relative to other governments, multinational organizations, and private-sector firms that to some extent have similar property portfolios and a similar cost of funds. We look forward to the report that will be finalized in early May and expect that it will recommend financial arrangements and opportunities to form partnerships with private sector firms.

We have instituted a priority-setting process involving the Under Secretary for Political Affairs, the regional bureaus, the Bureau of Diplomatic Security, and the Bureau of Administration's Office of Foreign Buildings Operations to allocate our resources for building projects according to our most important needs. Since funds became available in the Emergency Security Appropriation, we have acquired land at one post and are under construction. We have made substantial progress toward acquiring sites at four more locations. An Architecture/Engineering firm has been selected for one post, and we have prequalified a design/build contractor for another. For new construction projects, as appropriate, we are also employing best practices.

As of April 9, 1999, we have committed approximately $13.7 million from the Emergency Security Appropriation for setback acquisitions at posts around the world. We have completed 24 acquisitions (purchases and leases) of land for setback at ten posts. We continue negotiations on about 45 others.

Although we are embarking on a large, multi-year construction program for new embassy facilities, we still have an aging inventory of over 3,000 Government-owned and long-term leased properties that must be maintained. The average age of our facilities overseas is almost 40 years. Relatively few of these will be replaced under the new construction program. The rest have to be maintained, repaired, and/or rehabilitated to ensure they provide secure and functional office and residential space for U.S. Government employees and their families overseas.

There are currently more than 3,600 facility maintenance, repair, major rehabilitation, and improvement projects that would require more than $700 million to implement. Since there is limited funding we are placing primary emphasis on those projects impacting the safety and security of employees.

Security

I would now like to give you an update on security and our implementation of the FY 1999 Emergency Security Appropriation. To make sure we are spending the money effectively and efficiently, we have established a separate accounting system for funds from the supplemental. As I mentioned in February, we have sought help from the private sector and consulted with OMB, GSA, the Army Corps of Engineers, Mobil, major multinational companies, and others to benefit from their expertise and their approaches to large scale, cost effective construction. We have detailed month-by-month plans for obligating funds and implementing programs, and we are providing careful oversight through weekly status meetings and quarterly offsites. Our next full day offsite meeting will be in two weeks, and afterward we look forward to the opportunity to share our accomplishments to date in greater detail with members of your staffs.

In Nairobi and Dar es Salaam, we continue to move ahead with the construction of our new chanceries. The embassy in Dar has already moved from temporary facilities to a more secure new interim office building; the same process will be completed in Nairobi this summer.

After the bombings in East Africa, we began a Model Embassy project to determine what typical U.S. missions should look like. We are examining the size and nature of our regional presence and opportunities to improve efficiency and reduce staff presence through enhanced communications and information processing. As we then build new facilities around the world, we will use the conclusions from this project and tailor each to particular regional circumstances. The overall goals are to reduce the number of employees exposed to potential violence, and to identify the resources needed best to protect those who remain. We expect to have recommendations in May.

Half of the new Diplomatic Security agents funded by the Emergency Appropriation have been hired already. We have also increased local guards by over 2,000 around the world. Our global surveillance detection program is ongoing and 149 posts now have an up-and-running surveillance detection program. We have now shipped 86 new bomb detection units to posts, and we plan to ship 200 more by the end of this fiscal year. 350 new metal detectors are being deployed to posts with 446 more to be shipped by the end of this fiscal year. We have deployed 60 "back scatter" x-ray units with 81 more ordered and to be shipped by the end of this year. Since June 30, 1998, over 248 additional time-lapse VCRs have been deployed overseas. Of the 100 crisis management exercises to take place at posts this year, 43 have already been completed. One hundred more are planned for FY 2000. We have also trained almost 1,000 employees domestically so far this fiscal year.

The Secretary has just submitted to you her report on the Department's actions taken in response to the program recommendations of the Accountability Review Boards (ARBs) which she convened following the tragic bombings in Nairobi and Dar es Salaam. Jointly chaired by retired Admiral William J. Crowe, Jr., the Boards concluded that the Department "must undertake a comprehensive and long-term strategy for protecting American officials overseas, including sustained funding for enhanced security measures, for long-term costs for increased personnel, and for a capital building program based on an assessment of requirements to meet the new range of global terrorist threats." As the Secretary's report explains, the Department of State agrees with all of these recommendations and is committed to implementing them aggressively with only slight differences of tactics on a few.

The Department requested $304 million in FY 2000 for worldwide security upgrades, including $268 million for the tail of the security supplemental and $36 million for additional site acquisitions and designs. The Department also requested $3 billion in advance appropriations in FY 2001 through FY 2005 for new construction. We are aware that the Congress and Admiral Crowe have criticized this request as insufficient to meet security needs. The Department requires a significant and sustained commitment of resources to address all security requirements. The Administration wants to work together with the Congress to fund the best possible program within the constraints of the budget.

As the Secretary has said, "I continue to advocate a multi-year funding program adequate to implement the recommendations of the Boards. But in so doing, I note another key ARB recommendation that 'additional funds for security must be obtained without diverting funds from our major foreign affairs programs.' This is essential, for it would be folly for our nation to provide its diplomats with the security they need, while depriving them of the resources they must have to protect and promote American interests."

With funding budgeted within the FY 1999 appropriation, State has also joined with representatives from other agencies to establish a high-level panel to review overseas presence. The panel began its work in early March and will conclude during the summer of 1999. It is chaired by Lewis Kaden, a prominent New York attorney, and includes distinguished representatives from the private sector and government, including Admiral Crowe, Jack Welch of General Electric, former Members of Congress David Skaggs and Alan Simpson, and Ambassadors Felix Rohatyn and Jeffrey Davidow. The panel's mandate is to look at the level and type of representation required abroad to carry out America's foreign policy interests given resource constraints, advances in technology, and the worldwide security situation. This will include a close look at the idea of "regional embassies" and the trade-offs entailed in such an approach. The panel will also recommend criteria for reshaping our missions overseas to maximize effectiveness and security.

In response to recommendations made by the Accountability Review Board, the Department is also developing options to improve the structure and management of the security function of the Department of State. The goals of the study are to enhance the security management of U.S. missions abroad and the Secretary's ability to ensure the security of all U.S. Government personnel abroad. With the help of an outside contractor to maximize objectivity and accelerate the process, the study will clarify responsibilities and define methods for better coordination and responsibility assignment.

As we have outlined, the Department is making strides to address a range of management issues and to improve our ability to do America's work around the world. With your assistance, we can work to sustain these programs, our diplomatic readiness, and the people we need to serve America and our nation's interests. Thank you very much.

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