[Senate Hearing 110-679]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-679
 
                 NATIONAL SECURITY BUREAUCRACY FOR ARMS
                   CONTROL, COUNTERPROLIFERATION, AND
                   NONPROLIFERATION: THE ROLE OF THE
                  DEPARTMENT OF STATE--PARTS I AND II

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

                                HEARINGS

                               before the

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

                                 of the

                              COMMITTEE ON
                         HOMELAND SECURITY AND
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                        MAY 15 AND JUNE 6, 2008

                               __________

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

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




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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

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

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


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

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

                   Richard J. Kessler, Staff Director
             Joel C. Spangenberg, Professional Staff Member
             Jennifer A. Hemingway, Minority Staff Director
            Thomas A. Bishop, Minority Legislative Assistant
                    Jessica K. Nagasako, Chief Clerk












                            C O N T E N T S

                                 ------                                
Opening statement:
                                                                   Page
    Senator Akaka................................................     1

                               WITNESSES
                         Thursday, May 15, 2008

Hon. Thomas Graham, Jr., Former Acting Director, Arms Control and 
  Disarmament Agency.............................................     4
Hon. Norman A. Wulf, Former President's Special Representative 
  for Nuclear Non-Proliferation (1999-2002); Former Deputy 
  Assistant Secretary of State for Nonproliferation (2001-2002); 
  Former Deputy Assistant Director, Nonproliferation and Regional 
  Arms Controls, Arms Control and Disarmament Agency (1985-1999).     6
Andrew K. Semmel, Former Deputy Assistant Director, Nuclear 
  Nonproliferation Policy and Negotiations, U.S. Department of 
  State..........................................................     7

                          Friday, June 6, 2008

Patricia A. McNerney, Principal Deputy Assistant Secretary, 
  Bureau of International Security and Nonproliferation, U.S. 
  Department of State, accompanied by Linda S. Taglialatela, 
  Deputy Assistant Secretary, Bureau of Human Resources, U.S. 
  Department of State............................................    31

                     Alphabetical List of Witnesses

Graham, Hon. Thomas Jr.:
    Testimony....................................................     4
    Prepared statement...........................................    53
McNerney, Patricia A.:
    Testimony....................................................    31
    Prepared statement...........................................    92
Semmel, Andrew K.:
    Testimony....................................................     7
    Prepared statement...........................................    83
Wulf, Hon. Norman A.:
    Testimony....................................................     6
    Report on Securing the Nonproliferation Capability of the 
      Department of State........................................    67

                                APPENDIX

Charts submitted by Senator Akaka................................   104
Background for May 15, 2008......................................   108
Background for June 6, 2008......................................   113
Post-Hearing Questions and Responses for the Record submitted by:
    Hon. Graham..................................................   118
    Hon. Wulf....................................................   121
    Mr. Semmel...................................................   130
    Ms. McNerney and Ms. Taglialatela............................   134


 NATIONAL SECURITY BUREAUCRACY FOR ARMS CONTROL, COUNTERPROLIFERATION, 
   AND NONPROLIFERATION: THE ROLE OF THE DEPARTMENT OF STATE--PART I

                              ----------                              


                         THURSDAY, MAY 15, 2008

                                 U.S. Senate,      
              Subcommittee on Oversight of Government      
                     Management, the Federal Workforce,    
                            and the District of Columbia,  
                      of the Committee on Homeland Security
                                        and Governmental Affairs,  
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:05 p.m., in 
Room SD-342, Dirksen Senate Office Building, Hon. Daniel K. 
Akaka, Chairman of the Subcommittee, presiding.
    Present: Senator Akaka.

              OPENING STATEMENT OF CHAIRMAN AKAKA

    Chairman Akaka. I call this hearing of the Subcommittee on 
Oversight of Government Management, the Federal Workforce, and 
the District of Columbia to order.
    I want to welcome our witnesses. Thank you so much for 
being here today. Some of you have worked on the Hill and your 
experiences will certainly contribute here today.
    As you know, this is the second in a series of hearings 
that the Subcommittee is holding to explore the effectiveness 
and efficiency of government management in various aspects of 
national security.
    The first hearing considered proposed reforms to the U.S. 
export control system. Today's hearing focuses on the 
management of the arms control, counterproliferation, and 
nonproliferation bureaucracy at the Department of State, 
commonly known as the ``T Bureau.''
    Just as our last hearing disclosed serious problems in our 
export control licensing system, this hearing will examine 
disturbing management issues in the T Bureau. These issues 
include a hostile political environment, a poorly conducted 
reorganization in 2005, and a resultant loss of well-qualified 
Federal Civil Service employees. Senator Voinovich and I 
recently requested the Government Accountability Office examine 
in depth these disturbing developments.
    Arms control, counterproliferation, and nonproliferation 
are critical functions to our national security. If this 
bureaucracy is not doing its job, our security is jeopardized 
and the leadership of this bureau and the Department of State 
should be held accountable.
    Our arms control, counterproliferation, and 
nonproliferation bureaucracy has evolved since the end of the 
Cold War. In 1961 during the Kennedy Administration, the Arms 
Control and Disarmament Agency (ACDA) was established to 
address the growing international security threat posed by 
nuclear weapons and fears of a dangerous missile gap between 
the U.S. and the Soviet Union. But after almost 40 years of 
performing admirably, ACDA was disestablished. Its role and 
responsibilities were placed under the Department of State 
since some viewed its stand-alone role as out of place in the 
post-Cold War world. This, in my view, is a tragic mistake.
    Despite the many international efforts to control the 
proliferation of weapons of mass destruction, these weapons, 
especially nuclear, continue to pose a threat to international 
security.
    India and Pakistan detonated nuclear devices in 1998 
causing a regional nuclear crisis. North Korea, which opted out 
of the Nonproliferation Treaty in 2003, detonated a nuclear 
weapon in October 2006. Iran's nuclear program threatens 
stability in the Middle East. Pakistan's A.Q. Khan ran a secret 
black market of nuclear items which revealed a growing demand 
for nuclear weapons. Osama bin Laden has called the acquisition 
of a weapon of mass destruction a religious duty.
    For the United States to handle these national and 
international security issues, we need not just good policies 
and international agreements but a healthy organizational 
structure to implement policies.
    My goal in this hearing is to identify possible 
recommendations for improving the arms control, 
counterproliferation, and nonproliferation bureaucracy.
    The Department of State is the lead agency for managing 
U.S. arms control, counterproliferation, and nonproliferation 
efforts. The Under Secretary for Arms Control and International 
Security leads the bureaus of International Security and 
Nonproliferation, Political Military Affairs, and Verification, 
Compliance, and Implementation.
    If you will see these three charts that we have here,\1\ 
you will see that this bureaucracy has changed from 1999 when 
it was an independent agency, known as ACDA, until today. ACDA 
was merged into the State Department bureaucracy where its long 
term and worldwide focus has unsuccessfully competed against 
prevailing regional and bilateral interests.
---------------------------------------------------------------------------
    \1\ The charts submitted by Senator Akaka appears in the Appendix 
on page 105.
---------------------------------------------------------------------------
    From 2005 until today, these charts clearly demonstrate the 
elimination of bureaus singularly focused on arms control and 
nonproliferation. These charts begin to tell the story of how 
our country's security has been imperiled by bureaucratic 
reorganization. If this Administration cannot begin to correct 
the damage, the next Administration must do that.
    A number of concerns include: The loss of independent 
agency status for the arms control, counterproliferation, and 
nonproliferation bureaucracy, making it less responsive to 
national needs.
    Another is a loss of experienced Federal employees, 
especially those with critical physical and social science 
backgrounds.
    Another is the overburdening of an assistant secretary 
handling arms control and nonproliferation.
    And another is the fear that other nations may perceive our 
concern for these critical national issues as weak and fleeting 
since the arms control bureau was merged into another bureau.
    Some of the reforms I want to explore are: (1) 
Reestablishing an independent arms control agency or granting 
greater autonomy through the existing bureaus within the 
current structure, (2) Updating the bureau structure to support 
a greater focus on nonproliferation and arms control efforts, 
and (3) Ensuring that there are enough qualified arms control, 
counterproliferation, and nonproliferation professionals to 
carry out national policies and our international obligations.
    We cannot wait until terrorists or more unfriendly states 
obtain a nuclear weapon.
    Today's hearing will help us identify ways to reform the 
key government agency responsible for preventing this from 
happening.
    I want to at this time welcome our witnesses to the 
Subcommittee.
    Ambassador Thomas Graham, Jr., Former Acting Director and 
Deputy Director, Arms Control and Disarmament Agency.
    Andrew K. Semmel, Former Acting Deputy Assistant Secretary 
for Nuclear Nonproliferation Policy and Negotiations, 
Department of State.
    And Ambassador Norman Wulf, Former Deputy Assistant 
Director for Nonproliferation and Regional Arms Control, Arms 
Control and Disarmament Agency.
    As you know, it is a custom of this Subcommittee to swear 
in all witnesses and I would ask you to please stand to take 
the oath. Will you raise your right hand?
    Do you swear that the testimony that you are about to give 
this Subcommittee is the truth, the whole truth, and nothing 
but the truth, so help you, God?
    Mr. Graham. I do.
    Mr. Wulf. I do.
    Mr. Semmel. I do.
    Chairman Akaka. Thank you very much.
    Let the record note that the witnesses answered in the 
affirmative.
    Before we start, I want to let you know that your full 
written statements will be part of the record. I would also 
like to ask you to keep your remarks brief and I certainly look 
forward to your testimony.
    So, Ambassador Graham, will you please proceed with your 
statement.

  TESTIMONY OF THE HON. THOMAS GRAHAM, JR.,\1\ FORMER ACTING 
  DIRECTOR AND DEPUTY DIRECTOR, ARMS CONTROL AND DISARMAMENT 
                             AGENCY

    Mr. Graham. Thank you, Mr. Chairman, for the opportunity to 
come here and participate in this hearing on the national 
security bureaucracy for arms control and nonproliferation.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Graham appears in the Appendix on 
page 53.
---------------------------------------------------------------------------
    I personally, along with many others, appreciate your 
interest in this subject which is important to the future 
security of our country. I also thank you for your perceptive 
opening remarks.
    On April 1, 1999, the U.S. Arms Control and Disarmament 
Agency (ACDA), a mainstay of the U.S. national security policy 
since 1961, went out of business.
    As part of a reorganization of foreign affairs agencies in 
1998 and 1999, the main functions of ACDA were absorbed by the 
State Department.
    Was this a wise decision? Are America and the world safer 
with the arms control portfolio integrated into the range of 
foreign policy concerns that occupies the State Department 
rather than constituting the sole responsibility of a 
specialized agency?
    President Kennedy and his Secretary of State, Dean Rusk, 
strongly supported the legislation that established ACDA.
    The fundamental rationale for not placing the arms control-
nonproliferation bureaucratic structure within the State 
Department structure was and is that the pursuit of arms 
control and disarmament goals will often conflict with the 
primary mission of the Department of State which is to foster 
good relations with other countries.
    For example, to press Pakistan on nuclear nonproliferation 
issues or criticize Russia for perceived arms control treaty 
violations can be contrary to pursuing with those countries 
good relations and will often be opposed by the regional State 
Department bureau responsible for relations with the country in 
question.
    Most often in the competition of ideas within the State 
Department, interests of improved short-term bilateral 
relations will prevail over arms control, disarmament and 
nonproliferation interests.
    The early years of the agency in the 1960s were prosperous 
and successful as Secretary Rusk believed in and supported the 
role of ACDA.
    Over strong opposition by the State Department, ACDA 
successfully pressed for the Nuclear Nonproliferation Treaty 
(NPT), which is now considered a centerpiece of international 
security.
    Other highlights, all of which depended on the existence of 
an independent arms control agency, were negotiation of the 
SALT agreements, negotiation of the START agreements, 
negotiation of the chemical weapons convention, the extension 
of the nuclear weapon test moratorium in 1993, the indefinite 
extension of the NPT, and the negotiation of the comprehensive 
test ban treaty.
    However, in the 1990s, the Department of State pressed for 
the termination of ACDA and the merger of its functions into 
the Department of State. While this effort failed in the early 
1990s, it succeeded later in the decade with the support of the 
new Republican-led Congress in place after 1994.
    However, this step was taken pursuant to a compromise 
solution agreed to by ACDA and the State Department, supported 
by the White House and the Congress. This compromise solution, 
reached in 1999, contains certain conditions which it was 
intended, if not observed in the future, would remove the 
legitimacy of this new bureaucratic and legislative 
arrangement.
    These were principally the preservation of the independent 
arms control advocacy role within the government at the highest 
levels and that the ACDA arms control-nonproliferation 
functions transferred would be strengthened and have the lead 
role in the Executive Branch.
    However, the Bush Administration chose not to appoint 
officials who were committed to the success of arms control-
nonproliferation policies and not to observe the conditions of 
the 1999 decision.
    Rather the arms control process was destroyed by the 
abrogation of the ABM Treaty by the United States, the 
abandonment of the START process, initiated by President 
Reagan, and many other comparable actions which resulted, among 
other things, in the grave weakening of the NPT.
    On top of all of this, Secretary Rice essentially abolished 
the Arms Control Bureau and reconstructed the Nonproliferation 
Bureau in the State Department so as to make it much more 
difficult to develop and follow nonproliferation policies.
    Mr. Chairman, it is of the highest priority that the United 
States return to its traditional role of pursuing a world order 
built on rules and international treaties designed to enlarge 
international security and lead the world to a safer and more 
stable future. Only with a workable bureaucratic structure in 
place to support sound arms control-nonproliferation policies 
and agreements can this be accomplished.
    The structure built on the 1999 compromise has demonstrated 
that it cannot work. The soundest solution would be for 
Congress to reestablish by statute an independent arms control 
agency. In that way, the independent voice for arms control and 
nonproliferation can best be preserved, and even if there 
should be sometime in the future another attempt to marginalize 
the arms control-nonproliferation process, with an independent 
agency in place, it can always be brought back by a subsequent 
Administration.
    However, having said this, if the independent agency 
concept proves not to be politically possible, at a minimum I 
would urge that the Congress should require by law observation 
of all the conditions agreed as part of the 1999 compromise 
solution.
    Thank you, Mr. Chairman.
    Chairman Akaka. Thank you very much, Ambassador Graham.
    And now we will hear from Ambassador Wulf.

  TESTIMONY OF THE HON. NORMAN A. WULF,\1\ FORMER PRESIDENT'S 
  SPECIAL REPRESENTATIVE FOR NUCLEAR NON-PROLIFERATION (1999-
     2002); FORMER DEPUTY ASSISTANT SECRETARY OF STATE FOR 
NONPROLIFERATION (2001-2002); FORMER DEPUTY ASSISTANT DIRECTOR 
 FOR NONPROLIFERATION AND REGIONAL ARMS CONTROL, ARMS CONTROL 
               AND DISARMAMENT AGENCY (1985-1999)

    Mr. Wulf. Thank you, Mr. Chairman and thank you for this 
opportunity to appear before this Subcommittee.
---------------------------------------------------------------------------
    \1\ The report entitled ``Securing the Nonproliferation Capability 
of the Department of State,'' submitted by Mr. Wulf appears in the 
Appendix on page 67.
---------------------------------------------------------------------------
    I, like my colleagues, found myself nodding in agreement 
with much of your opening statement.
    I am here today to present a report that was prepared by a 
volunteer task force. The genesis for the report was a concern 
among many of us that the State Department no longer had the 
capability of meeting the nonproliferation challenges that are 
facing us today.
    We were catalyzed into action by the statement of Defense 
Secretary Gates last fall. He gave a speech decrying the 
abolition of, ``Cold War Agencies,'' specifically citing the 
USIA. He also expressed concern that the present State 
Department structures were inadequate to meet development 
assistance needs.
    Well, for us, another Cold War agency that was abolished 
along with USIA was the Arms Control and Disarmament Agency. 
And we believe and our report stresses that there are serious 
problems in the State Department structures supporting arms 
control and nonproliferation.
    What I would like to do is briefly summarize the report's 
findings. I will hopefully have the opportunity to express my 
personal views at a subsequent point.
    Our group believes that the organizational capacity of the 
State Department must be strengthened to meet nonproliferation 
and arms control challenges.
    Critical personnel have left. The Arms Control Bureau has 
been abolished. The bureau whose mandate includes 
nonproliferation is burdened with tasks outside of its 
traditional purview, and the State Department is simply not 
organized to ensure that these critical issues are accorded the 
priority that they deserve.
    Regarding bureau structure, the report suggests 
streamlining the work of the Nonproliferation Bureau. This 
means removing issues such as missile defense, the U.N. First 
Committee or the Conference on Disarmament from that bureau and 
allowing it to focus solely on nonproliferation issues.
    The report recommends that these issues that have been 
removed and others related to arms control be addressed in one 
bureau, either a separate bureau devoted to arms control as in 
the 1999 approach or consolidated into the existing 
Verification and Compliance Bureau.
    Regarding verification and compliance, the report urges 
that steps be taken to reduce bureaucratic turf battles that 
exist among the bureaus in the T family and free up resources 
by reducing verification activities to those required to meet 
statutory requirements.
    To address the growing staffing problems, the report 
recommends taking steps to halt further departures, improve 
morale, and to encourage those who have gone to other agencies 
to return.
    Reliable career paths must be developed for both Civil 
Service and Foreign Service. It is not acceptable, in our 
judgment, to rely on other departments for all technical 
expertise, but that is increasingly becoming the case as steps 
to recruit and retrain scientists and others with technical 
expertise are scaled back.
    As a part of the State Department, it is appropriate that 
certain office director positions in these functional bureaus 
be made available to Foreign Service officers, but it must be 
recognized that doing so reduces the management positions 
available to Civil Service employees. This not only makes a 
service in the State Department in these areas less attractive, 
but it also is made less attractive by the continuing decline 
in the number of SES positions available to the 
nonproliferation area.
    Finally, the group believed that the Foreign Service must 
take steps to develop career paths that reward and do not 
punish Foreign Service officers working in the nonproliferation 
area.
    The area in which there are differing views among those 
preparing this report was how to ensure that nonproliferation-
arms control equities were heard at the highest levels.
    Some argued for reliance on personal relationships among 
the various State Department officials. Some urged use of the 
existing statutory authority allowing the Under Secretary a 
separate voice from the State Department and some urged the 
creation of an independent agency.
    As I indicated, we could not reach any agreement and all 
those options are included in the report.
    Since my time has expired, I will stop at this point, but I 
hope that I could have the opportunity at some point to express 
my view as to which of these options I would support. Thank 
you, sir.
    Chairman Akaka. Thank you very much, Mr. Wulf.
    And now, we will hear from Mr. Semmel.

    TESTIMONY OF ANDREW K. SEMMEL,\1\ FORMER ACTING DEPUTY 
  ASSISTANT SECRETARY FOR NUCLEAR NONPROLIFERATION POLICY AND 
             NEGOTIATIONS, U.S. DEPARTMENT OF STATE

    Mr. Semmel. Thank you, Mr. Chairman.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Semmel appears in the Appendix on 
page 83.
---------------------------------------------------------------------------
    I share my colleague's applause of your opening statement. 
I think you touched upon the critical issues that we need to 
address here.
    And thank you again, as my colleagues have, for the 
opportunity to discuss some of the important management and 
organizational issues of the so called T Bureaus of the 
Department of State.
    Mr. Chairman, I am going to go to my statement very quickly 
but during my tenure as the Deputy Assistant Secretary--I left 
the Department in December of last year--I served under five 
different assistant secretaries or about one assistant 
secretary on average ever 11 months. Three served in acting 
capacity and only two were confirmed by the Senate.
    When I left in December, all four occupants in the front 
office of the ISN Bureau held acting positions or temporary 
positions and three were political appointees.
    The reason I mentioned this is there is a price to pay with 
leadership instability and frequent change. It makes 
formulating and implementing our arms control and 
nonproliferation policies more difficult at home and abroad. It 
weakens the Bureau's voice in the department and in the 
interagency fora. It creates confusion among the permanent 
staff whose expertise and experience are vital for continuity 
and clarity, and it impairs our ability to negotiate with 
counterparts in other countries.
    Turning to the Arms Control and Nonproliferation Bureau 
merger, I was a member of the senior management panel appointed 
in September 2005 tasked with implementing the merger of the 
Arms Control and Nonproliferation Bureaus.
    I might point out that I recall that no one in the 
Nonproliferation Bureau at the time and I was told by the 
senior leadership in the Arms Control Bureau that no one there 
really supported or thought this was a good idea at the outset.
    The case was made for the merger on the grounds of 
minimizing duplication and redundancy and on the benefits of 
streamlining and cost savings.
    There are a number of, what I call, anomalies in that 
merger which I want to point out, Mr. Chairman.
    What I mean by anomalies is the sort of developments that 
occurred outside the normal that have a bearing on the efficacy 
of the new ISN Bureau.
    The first is that the combined workforce of the new ISN 
Bureau resulted in substantially fewer full-time equivalents. 
This is permanent personnel, about a 16 percent reduction than 
the combined workforce of the two bureaus prior to the merger. 
Several offices were severely truncated in size and remain 
understaffed today. One office was cut nearly in half.
    Paradoxically, the newly named Verification, Compliance and 
Implementation Bureau which had received a critical review by 
the Office of the Inspector General and a recommendation for 
reduction in size and responsibilities was, in fact, expanded 
in size and function.
    The second point that I see as an anomaly of that merger: 
The report of the Inspector General concluded that the 
Nonproliferation Bureau was overworked and was well led and 
that the Arms Control Bureau was underemployed and had low 
morale. Despite this, the leadership of the ISN Bureau was 
almost exclusively drawn from the Arms Control Bureau.
    Three of the four ISN front office leaders and the special 
assistant were chosen from the Arms Control Bureau by the then 
Under Secretary of State for Arms Control and International 
Security. In the process of doing that, the arms control 
function was deflated and the role of the Arms Control Bureau 
was elevated, at least the leadership.
    There are other things that happened and I will not go into 
them, but one of them was, as was mentioned already, that staff 
flight that took place, i.e., members either went into early 
retirement, sought other jobs, and so forth.
    Finally, I would mention that the senior management panel, 
on which I served, interestingly enough was composed of four 
political appointees, political appointees including myself, 
who had dim knowledge about the Foreign Service and Civil 
Service personnel systems.
    We were required to function pretty much in secrecy and we 
were bereft of the day-to-day help of the human resources 
elements within the State Department.
    The bottom line on the merger, as I see it, is that the 
merger of the Arms Control and the Nonproliferation Bureau has 
done little to strengthen the voice in the State Department on 
nonproliferation and arms control.
    I see my time is running out, Mr. Chairman, but I want to 
mention four things that could be done.
    One of them is a cultural change in the State Department 
and that is to change the internal biases and the working 
assumptions within the State Department, so that serving in 
functional bureaus, like the ISN, yield greater rewards and 
greater status than they now enjoy.
    Another one is to have the Foreign Service Institute 
institute courses on multilateral diplomacy and on arms control 
and nonproliferation which they are starting to do just now.
    The second broad suggestion I mentioned in my statement 
pertains to separate entity which has already been discussed. 
Whether it is based on the model of the Arms Control and 
Disarmament Agency or some other mechanism, some separation 
would give it greater independence and voice within the State 
Department, greater clarity and visibility when dealing with 
foreign countries.
    The third suggestion is organizational reform and there are 
a series of suggestions I make in my paper, a half dozen or so, 
that could be made that would work to improve the structure and 
the process as well as maintain, attract and maintain the 
skills in the State Department for arms control and 
nonproliferation.
    The fourth area I mention almost gratuitously is what I 
call policy. Any organizational change, whether it is on the 
margins or if it is fundamental change such as creating a new 
independent organization, can only be as good as the soundness 
of the policy of the new Administration and the leadership that 
is set up to manage that policy.
    I conclude, Mr. Chairman, by simply saying that there are a 
number of options that we have on this panel laid out today and 
more I suppose that we will discuss in the questions and 
answers.
    And sorting through all of these maze of options is a 
difficult chore. It would be a wise thing, it seems to me, to 
create a bipartisan blue ribbon task force to think through 
some of these recommendations and others, on what our 
nonproliferation and arms control policy agenda should be and 
how this agenda should be structured and managed to optimize 
chances of success in furthering our national interest.
    This should be done as soon as possible so that its 
findings and recommendations are available for consideration by 
the next Administration. Thank you.
    Chairman Akaka. Thank you very much, Mr. Semmel.
    I thank you very much for your testimonies and the 
recommendations that you are making to this Subcommittee.
    I would like to ask my first question to Ambassador Wulf 
and also Mr. Semmel.
    Ambassador Graham states that enforcing the terms of the 
1998 ACDA compromise solution is better than reestablishing an 
independent agency for arms control and nonproliferation. If 
you could choose between an independent agency or a semi-
autonomous agency status for arms control and nonproliferation 
within the State Department, which would you choose and why?
    Ambassador Wulf and also Mr. Semmel.
    Mr. Wulf. It is a question that I have wrestled with 
myself, and the answer that I came out with is clearly, I am 
strongly in favor of an independent agency.
    The primary reason for favoring an independent agency is 
that an independent agency gives independent representation in 
the inter-agency process at every step in the process whereas, 
if you are a semi-autonomous agency, the benefit of that is the 
State Department need not and probably would not form its own 
nonproliferation and arms control bureaus.
    But the compromises and decisions that have to be made with 
respect to the State Department's position would be made solely 
by the State Department. Whereas if you have a separate agency, 
you have a State Department position going into an inter-agency 
meeting and presumably the independent agency position which 
may or may not be different.
    So for those reasons, I think an independent agency is far 
preferable. There are a variety of other reasons I could add as 
well, but that is the fundamental one. Thank you.
    Chairman Akaka. Mr. Semmel.
    Mr.  Semmel. Yes. It is a good question. I think we have 
all wrestled with this and I know that the document that Mr. 
Wulf has identified that was put together has a series of pros 
and cons which I think summarize, in many respects, the 
benefits or the lack of benefits of an independent or semi-
independent or semi-autonomous organization dealing with these 
issues.
    I have to tell you, and this is not a cop out, but I am 
somewhat agnostic about that because I think there are strong 
arguments on both sides. I think certainly what we want to give 
the function of pursuing sound arms control, nonproliferation 
policy much greater visibility and a stronger voice within the 
national security bureaucracy.
    Any organization, whether it is a separate organization 
like the ACDA, will only work if the senior leadership want it 
to work. In other words, you can design on paper a seemingly 
infallible organizational structure, but if the leadership does 
not want it to work for whatever reason, you may get a seat at 
the table on the critical issues but you may not be heard, if 
you are at that table.
    So it really depends upon what comes down from the top. I 
personally think that there is some strong merit in a separate 
organization either within the State Department or outside the 
State Department like one modeled after ACDA.
    The other point I would mention, Mr. Chairman, is that if 
we are thinking about the new Administration, and this is 
perhaps obvious, but if we are thinking about a new 
Administration, going back to a separate entity like ACDA or 
whatever it may be, whatever its merits and it has considerable 
merits, will require a considerable amount of effort on its 
part at a time in which they are reorganizing the entire 
government or reorganizing much of the entire government, and 
something has to give in that process.
    The presumption is the new Administration will want to 
embark on a whole series of, perhaps, new initiatives in the 
area of arms control and nonproliferation. Can it do everything 
at once? Can it reorganize and still pursue these new 
initiatives? It may be too much carrying capacity, too much of 
a load for a new Administrative. So I would caution against 
that in terms of taking on too much at once.
    Chairman Akaka. Ambassador Graham, would you want to 
respond to their answers?
    Mr. Graham. Thank you, Mr. Chairman.
    I very much agree with my two colleagues that, if possible, 
a separate agency would be the best solution.
    As I said in my opening remarks, it has long been 
recognized that there is an inherent conflict between arms 
control and nonproliferation policies and the central mission 
of the Department of State--enhancing for lateral and 
multilateral relations with other countries--and to put them 
together almost inevitably is going to lead to the downgrading 
of arms control and nonproliferation policies which, I believe 
in the age in which we live, are essential to our national 
security.
    Secretary Dean Rusk said, ``Disarmament is a unique problem 
in the field of foreign affairs. It entails not only a complex 
of political issues but involves a wealth of technical 
scientific and military problems which, in many respects, are 
outside the Department's formal concerns and in many instances 
reach beyond the operational functions the Department is 
designed to handle.''
    And critical in all of this, if nonproliferation-arms 
control is important as I and my colleagues believe that it is, 
it is essential to preserve that independent advocacy voice 
which means that the person, the official who is in charge of 
arms control and nonproliferation has the right to go to the 
President if he or she believes it is necessary and also has 
the right to have a seat on the National Security Council when 
arms control and nonproliferation issues are discussed and to 
have a separate vote, in other words, to be able to vote in 
favor, if he or she so chooses, for a nonproliferation proposal 
even if the Secretary of State disagrees.
    Well, I would submit that it defies human nature to give 
such a vote to someone who works for the Secretary of State. My 
guess is his performance evaluation might be adversely affected 
if he were to vote contrary to what the Secretary of State 
wanted, and that is why, in my view, an independent agency is 
far and a way the best solution if we want to have the best 
policies.
    Chairman Akaka. Ambassador Wulf, you wanted to say 
something?
    Mr. Wulf. Yes. Thank you. I wanted to elaborate, if I 
could, a little bit on why I think an independent agency is the 
best way to go.
    First, it is worth noting, as Ambassador Graham did, the 
Department of State's focus must be upon the totality of U.S. 
interests with a given country. Contrast that with an 
independent agency whose single focus is nonproliferation or 
arms control.
    The result is that the State Department is often forced to 
focus on the crisis of the day and that often times will lead 
to some compromise on nonproliferation principles.
    I would suggest as a general proposition that incremental 
decisionmaking on any issue will almost always lead to a 
weakening of the general principle. The classic example of this 
is the decision to engage in civil nuclear cooperation with 
India.
    We abandoned the principle that all nonproliferation is 
bad, but India did not abandon its principle that it wanted to 
maintain and build its nuclear weapons capability.
    I would also submit that the time horizons that the 
Department of State often times thinks in are dictated in part 
by the 3-year rotational assignment that Foreign Service 
officers have.
    I am not suggesting Foreign Service officers are incapable 
of thinking in long terms perspectives, but I am suggesting 
there is a fundamental difference between a career civil 
servant who has worked in this one area for 20 years and a 
Foreign Service officer that came in last year and began 
working on a given issue.
    I also think that an independent agency is best able to 
design a personnel system that emphasizes career civil servants 
and recruits people with technical expertise or scientific 
knowledge. It can create an environment where there is a 
synergy between, what I will call, techies and policy wonks.
    Time horizons are not influenced by Foreign Service 
rotation but Foreign Service officers can still make valuable 
contributions by working in that independent agency as, indeed, 
was the case with ACDA.
    While the crisis of the day, whether it is North Korea or 
Iraq, will command the headlines and the senior level 
attention, someone needs to maintain and improve the overall 
nonproliferation regime.
    The expertise within the U.S. Government in, for example, 
IAEA safeguards, continues to dwindle. Yet those safeguards are 
the first line of defense against nuclear proliferation. 
Neglect of the NPT has been noted by friends, both domestic and 
foreign. So that the experience to date, I would suggest, is 
that the State Department is not capable of supporting arms 
control and nonproliferation policy in the manner in which it 
needs.
    I would also pick up a point I think you had in your 
opening statement, Mr. Chairman, and that is that the creation 
of an independent agency will send a clear message to the rest 
of the world, friends and allies who may fear that we have lost 
our way, they will be reassured by the creation of a new agency 
and they will believe once again that the United States 
continues to see nonproliferation and arms control as essential 
components of international security.
    And I think for those tempted to proliferate, I think the 
message would be sent that the United States is ready to 
maintain a leadership role against proliferation.
    Finally, I would emphasize that with an independent 
agency--Mr. Semmel outlined some of the deficiencies in Senate-
confirmed individuals that now occupy the Department of State. 
With an independent agency, you will have a multiplicity of 
Senate-confirmed individuals.
    When a U.S. official engages in discussions with a foreign 
country, that country matches the rank of the individual coming 
there. What is now being done by office directors should be 
done and used to be done by people confirmed with the advice 
and consent of the U.S. Senate. Thank you, sir.
    Chairman Akaka. Thank you. Ambassador Graham, of course, 
has mentioned the independent agency and so have you.
    So, Ambassador Wulf, could you elaborate for me why a semi-
autonomous agency within the State Department, roughly modeled 
on the National Nuclear Security Administration, can be an 
improvement over the existing model?
    Mr. Wulf. I think it could be an improvement over the 
existing model, but I do not think it would be as good as an 
independent agency; and the fundamental reason is, as a semi-
autonomous agency, they would be subject to the direction of 
the Secretary of State; and the likelihood, as Ambassador 
Graham has indicated, of someone who works directly for the 
Secretary of State taking a totally contrary view to the 
Secretary is very small.
    We had some recent experience with that model. The ACDA 
merger legislation provided the Under Secretary, the ``T'', 
with the possibility of an independent voice at the NSC 
meetings. It worked ``sort of'' well, I would say, during the 
end of the Clinton Administration but not terribly well, and it 
certainly has not worked, I do not think at all, during the 
last 7 or 8 years.
    There are those who claim that the model in the Department 
of Energy has not worked very well either. But I think the 
biggest drawback to a semi-autonomous agency is the lack of a 
separate voice at inter-agency meetings.
    If you are a part of the State Department, you will 
represent the Department of State's views. You will not have an 
independent voice to represent a view contrary to the State 
Department's views.
    Chairman Akaka. Thank you. Would any one, Ambassador Graham 
or Mr. Semmel, want to comment on the semi-autonomous model?
    Mr. Semmel. Well, just one general comment, Mr. Chairman, 
and this is perhaps in the area of the obvious.
    As you know, President Bush, Secretary Rice, Secretary 
Gates, and most commentators on national security and foreign 
policy have pointed out that the challenge with the threat of 
proliferation of weapons of mass destruction, missiles and the 
materials and technology associated with that getting into the 
wrong hands constitutes the most significant threat that we 
face. It is what I like to call column ``8'' on the front page, 
the upper fold of the newspaper type of issues that we have to 
deal with in the world.
    And right now the structure that we have is embedded in the 
State Department seems to be a disconnect between the saliency, 
if you want to call it, of the issue area that we are facing, 
an issue area that is going to grow and expand by the way. It 
is not going to retract unless we do something about it and are 
successful.
    So that the current organizational arrangement that we 
have, it seems to me, is inadequate to measure up to the 
dangers that we face in this area; any incremental change, it 
seems to me, whether it is organizational or dealing with 
personnel, resources, and the like of this function, whether it 
is a semi-autonomous entity within the State Department or an 
independent agency, I think would be an important step, the 
right step in the direction that we have to face. I think both 
Ambassador Wulf and Ambassador Graham have already pointed out 
some of the positives of a separate organization.
    I only made that one caveat about the difficulty of making 
a transition again. This would be the third. If the new 
Administration coming in were to want to have either a semi-
independent or independent, this would be the third major 
reorganization in 10 years. All of them were deemed to be 
necessary. All of them have been problematic.
    None of them really solved the problem, I think, in a 
satisfactory manner, and whether we want to go through that 
again, I think, is a question we really have to think through.
    Chairman Akaka. Thank you.
    Ambassador Graham, I have a question for you, but you may 
begin with your comment that you want to make.
    Mr. Graham. I would just like to add, Mr. Chairman, that 
the problem with a semi-autonomous agency, if we want really 
sound nonproliferation and arms control policies, is that it is 
not independent.
    From time to time in order to clearly present the arms 
control-nonproliferation alternative at the highest levels of 
our government so that the President, the Cabinet can 
understand all that is involved, the person responsible for 
arms control-nonproliferation policy may have to take a 
position contrary to the Secretary of State, and that is 
difficult to do when you work for the Secretary.
    As one example that comes to mind, during the 1980s or 
early 1990s, according to law, the Arms Control Agency, the 
Department of Defense and the Department of State were required 
to submit recommendations to the President as to whether or not 
Pakistan should be recertified each year that they did not have 
a nuclear weapon and, therefore, it was OK to sell military 
equipment, and in particular, fighter-bombers to Pakistan.
    And for several years the Department of Defense would 
recommend certification and the Department of State would 
recommend certification. The Afghan war was going on but ACDA 
always recommended not to certify. And in fact, Pakistan did 
have a nuclear weapon, at least they had parts of a weapon that 
could quickly be assembled into a workable weapon.
    Eventually when the Afghan war ended, President Bush chose 
the ACDA option but the President had it in front of him every 
year, which he would not have been the case had there not been 
an independent agency. I do not think an autonomous agency 
within the State Department could do that.
    Chairman Akaka. Thank you.
    Ambassador Graham, you have identified a number of 
instances where the current Administration has abandoned its 
commitment to arms control and nonproliferation. Let me give 
you some examples.
    The rejection of the anti-ballistic missile treaty. The 
abandonment of the Second Strategic Arms Reduction Treaty and 
the decision not to continue pursuing the ratification of the 
Comprehensive Test Ban Treaty.
    In this post-September 11, 2001 world, does the current 
organization best support this new strategic priorities as the 
Secretary states, ``to prevent the acquisition of WMD by 
terrorists and hostile states and contribute to the 
international effort to secure and remove and eliminate WMD, 
their delivery systems and related materials through diplomacy 
and counterproliferation efforts.''
    Does the current organization, in the post-September 11, 
2001 world, best support the new strategic priorities?
    Mr. Graham. You will be getting my personal opinion, of 
course. I would say no because I believe that part of the 
effort to reduce the threat to the United States of weapons of 
mass destruction, particularly nuclear weapons of course, but 
all weapons of mass destruction, is intimately related to the 
advancement of and success of sound arms control and 
nonproliferation policies.
    The chemical weapons convention, for example, prohibits 
chemical weapons worldwide, at least to all of those countries 
that have signed up to it.
    That helps with limiting the possibilities of the 
proliferation of chemical weapons and the ultimate use of them 
by terrorists. The fewer such weapons that exist, the more the 
world community moves towards zero, the less is the likelihood 
that terrorists are going to be able to have them and use them.
    With respect to the ABM treaty and the START II treaty, it 
remains in our interest, while at the same time dealing with 
the terrorist threat based on WMD, to stabilize at lower levels 
the nuclear weapon balance with Russia and those two treaties 
greatly contributed to that.
    The reason that the START process ended which had been 
begun by President Reagan and there are no more negotiated 
reductions, negotiated reductions in long-range nuclear weapon 
systems, is that when we withdrew from the ABM treaty, the 
Russians had always made it clear that they would not continue 
with the START, the second START treaty, unless the ABM treaty 
was in force. We withdrew so they backed away from START II and 
that was the end of it and that was most unfortunate.
    With respect to the test ban, the test ban will help in 
inhibiting proliferation of nuclear weapons around the world in 
two ways. First, more than any single thing the United States 
could do, it will strengthen the nuclear nonproliferation 
treaty and make it more effective because from the earliest 
days it has been clear that the quid, the principal quid that 
the rest of the world wanted for giving up nuclear weapons 
forever from the nuclear weapons states, for their quo of 
giving up nuclear weapons forever was the test ban. If we are 
going to give up nuclear weapons forever, at least the nuclear 
weapon states could stop testing was and is the viewing the NPT 
nonnuclear weapon states.
    The NPT is based on a compromise. It was not a free gift 
from the rest of the world. It was a compromise, a strategic 
compromise; and the principal, the most important part of the 
price that the nuclear weapons states paid for stopping 
proliferation with the NPT was the test ban. So it is very 
important to the long-term health of the NPT.
    And second, with the test ban in force, it is going to be 
not impossible but much more difficult for additional states to 
acquire nuclear weapons.
    Yes, you can assemble a Hiroshima-type bomb without 
testing, yes, you can do that. But there are many other things 
in creating a nuclear arsenal that the test ban monitoring 
system would detect.
    When the Kursk submarine exploded in the Arctic waters, a 
small conventional explosion underwater, some of the test ban 
monitors picked that up 3000 kilometers away. So it would 
improve the proliferation situation.
    So in dealing with the world that we have today, which is 
one of declining order, a threat of weapons of mass 
destruction, particularly nuclear weapons spreading to unstable 
countries and terrorist organizations, a less than perfect 
relationship with Russia and China, these measures are an 
important part of our national effort to enhance our security 
and the security of the rest of the world and they should not 
be abandoned. They should be pursued.
    Chairman Akaka. I am glad to hear the last sentence you 
made because I wondered if you thought it was a national 
security concern and you just mentioned that.
    Ambassador Graham, you just said ``dealing with the world 
that we have today.'' When ACDA was the lead agency for arms 
control and nonproliferation, its director could appeal 
directly to the President for support.
    You mentioned in your testimony that Under Secretary of 
State for Arms Control and International Security who is also a 
senior adviser to the President and Secretary of State can 
still appeal to the President.
    What is the difference today?
    Mr. Graham. Well, the difference is twofold. One, he works 
for the Secretary of State, and two, in this Administration, at 
least my understanding is, the various Under Secretaries have 
never availed themselves of that right.
    It only works if, in the inter-agency struggles over what 
is the soundest approach to particular arms control and 
nonproliferation policies, the ACDA Director or the arms 
control-nonproliferation director, Under Secretary, whatever he 
may be called, is free to approach the President directly.
    Now, if he works for the Secretary of State, he is 
obviously bypassing the Secretary of State, but he is not if he 
is head of an independent agency.
    And the independent arms control and disarmament agency 
directors in the past actually did avail themselves of that 
right.
    I remember once I was doing some research for the 
confirmation of a ACDA director in the 1980s and I do not have 
any figures for the 1980s and 1990s; but I do remember this 
that we found, just by looking at White House logs, that 
Ambassador Gerard Smith, who was the director of the Arms 
Control Agency from 1969 to 1973, had 46 private meetings with 
President Nixon during his 4-year stay there. His successors, I 
think, had far less, but they did have some.
    During the year that I was acting director, on the nuclear 
test ban issue, I personally experienced and utilized the right 
at an NSC meeting to cast my own vote and I did so twice on the 
decision to extend the test ban moratorium in 1993.
    So it was a real, particularly the second vote on the test 
moratorium, it was a real right and it was utilized. It is much 
more difficult for an Under Secretary, two levels down from the 
Secretary of State, to do that.
    We tried to fashion the 1999 compromise so that the legal 
right to do that existed, but the only way it would have ever 
had a chance of working, although this is difficult, would have 
been for the Under Secretary to frequently use it, to establish 
that precedent that it would be used with some frequency, that 
is, both the access to the President and the separate vote at 
the NSC.
    Chairman Akaka. Do you think the Under Secretary is 
silenced before his views can be presented before the National 
Security Council or President?
    Mr. Graham. If he is silent, can his views be----
    Chairman Akaka. Yes.
    Mr. Graham. I would think not. My guess is if the National 
Security Council members, the principals, when they are 
discussing whatever nonproliferation issue of the day it may 
be, if nobody mentions the Under Secretary, nobody is going to 
think of him. That would be my guess as to what would likely 
happen, that the only way that his views or her views would 
register on National Security Council principals is if he or 
she were there expressing them.
    Chairman Akaka. Mr. Semmel.
    Mr. Semmel. May I just make one caveat to what Ambassador 
Graham just mentioned and that is going back to a point I 
alluded to before that. If the Under Secretary for Arms Control 
and International Security has the full confidence of the 
Secretary of State and if the Secretary of State makes it 
known, through whatever means, but certainly makes it known 
that the Under Secretary has his or her full confidence and 
speaks on her behalf on these issues, that automatically 
elevates the Under Secretary's role in the inter-agency fora, 
the National Security Council, and so forth.
    I don't want to be trite about this, but I used to teach 
political science and my favorite definition of politics, which 
is what we are really talking about, is that it is a process 
involving mobilization of bias. It is mobilization of a point 
of view that you favor and somebody else does not favor.
    So that the Under Secretary, if he or she is able to have 
allies within the Administration at senior levels, there is a 
lot of articles, for example, that when Mr. Bolton was Under 
Secretary of State he had very close relationships with the 
White House over at the Vice President's office.
    And in the inter-agency fora at the senior levels of 
National Security Council, you could begin to, as Under 
Secretary, mobilize those assets in terms of the process.
    So while I agree basically with what Ambassador Graham is 
saying, I think that having a separate vote has much more clout 
in the process. There are ways in which that can be mollified 
somewhat. Thank you.
    Chairman Akaka. Thank you very much for that.
    Mr. Semmel, you mentioned that the State Department Office 
of Inspector General pre-determined the outcome of its T Bureau 
investigation findings in 2004 and 2008. These findings had an 
impact on the 2005 reorganization.
    Can you elaborate on this?
    Mr. Semmel. What I said in my statement was that it was the 
feeling, it was the judgment of those of us who were involved 
with the Office of the Inspector General that somehow or 
another the outcome of its investigation was going to be 
determined even before the investigation took place.
    Whether we were right or wrong on that, as subsequent 
developments unfolded, I think we were right that somehow or 
another we knew what the end result was going to be before the 
process began.
    I think because it was made known to us at the outset that 
there was considerable redundancy of functions between the Arms 
Control Bureau and the Nonproliferation Bureau and that others 
at senior levels were talking about the need for us to readjust 
to the post-September 11, 2001 security world that we faced and 
that this was one way in which we could make that kind of 
adjustment.
    There was a perception also and others can comment on this 
on this panel and outside that the current Administration had 
given far less weight to the function of arms control.
    Subsequently it was determined in the Inspector General's 
report, as I mentioned in my opening statement, that the Arms 
Control Bureau was deemed to be under-worked. They had a lot of 
people not doing a whole lot of work simply because they were 
not assigned a lot of work.
    It was, again, the senior level policy preferences sort of 
seeped down and manifested itself in a way in which these two 
bureaus functioned. Whereas the Nonproliferation Bureau which 
was a policy area in which the Administration did give 
considerable credence to in terms of preventing weapons of mass 
destruction getting in the wrong hands, was an area that was 
deemed to be very important and a high priority within this 
Administration.
    So putting all of that together, there was the deep 
suspicion at the outset that if it is not broke, do not fix it. 
The system was working pretty well in terms dealing with 
nonproliferation and that merging the two bureaus together was 
not the optimum strategy for us to engage in at this point in 
time, particularly the way in which it unfolded.
    There was the perception that somehow or another the Under 
Secretary at that point liked the leadership in the Arms 
Control Bureau but did not like the function. He liked the 
function in the Nonproliferation Bureau but did not like the 
leadership. And when the two merged, certainly that was the 
outcome.
    In other words, if our perceptions were correct at the 
outset, indeed, that is the way in which the merger unfolded 
where you had the leadership of the Arms Control Bureau which 
had very little to do, taking over basically the leadership of 
the new combined International Security and Nonproliferation 
Bureau.
    Others can comment on this as they see fit. So most of what 
we thought was a part of the motivation behind the request for 
the Office of the Inspector General to look into the possible 
merger of these two bureaus did, in fact, unfold in their 
report and the subsequent merger that took place.
    Chairman Akaka. Ambassador Wulf.
    Mr. Wulf. Could I just add my understanding, and I have to 
say that I have never read the entire contents of the IG's 
report. I have been only shown portions of it.
    My understanding is the IG concluded that the 
Nonproliferation Bureau was doing extremely good work but, as 
Andy indicated, it was overworked.
    The Arms Control Bureau was under worked and the IG 
recommended the merger of arms control and nonproliferation. I 
would suggest that those who sought the abolition of the Arms 
Control Agency in the 1990s did not do it because they were 
proponents of the Department of State. They did it because they 
disliked arms control and I would suggest that the merger in 
2005 was largely driven by the same motivation, a dislike, a 
distrust of arms control.
    I am taken, personally, by the fact that we have three 
Secretaries--Secretary Kissinger, Secretary Shultz, Secretary 
Perry and former Senator Nunn saying we are really at a very 
serious point with respect to nuclear weapons and we really 
need to start doing things much differently than we have been 
doing it.
    I do not believe that the Department of State structure can 
meet the challenge that those four have posed to the political 
establishment as to what needs to be done to enhance our 
national security.
    Thank you.
    Chairman Akaka. Thank you.
    Mr. Semmel, you mentioned that the 2005 Bureau 
reorganization has done little to strengthen the voice of the T 
Bureau on nonproliferation and arms control issues.
    What is your net assessment of the effectiveness of this 
reorganization?
    Mr. Semmel. Mr. Chairman, one of the things that did result 
from the merger that took place is that the new bureau, the 
International Security and Nonproliferation Bureau, the ISN 
Bureau, did create two new offices. It created two new offices, 
one to deal with weapons of mass destruction terrorism, called 
WMDT office, and another to work on questions of 
counterproliferation and interdiction issues in which the 
Proliferation Security Initiative, something calculated PSI, 
was the focal point.
    I think those were creative additions. Whether they should 
be lodged in the ISN Bureau or not is another question, but 
certainly they were a creative policy for this bureau. I think 
that is a step forward in the reorganization. I think that made 
a lot of sense.
    There was also an office or suboffice created to deal with 
strategic planning which really had been moribund, I think, in 
this area for sometime.
    I do not want to convey the impression that this merger is 
all sort of backsliding or negative. There were some creative 
things.
    Maybe the fourth thing I can say on the positive side is, 
and this may be real conjecture, that subsequently when the 
current Assistant Secretary for International Security and 
Nonproliferation, who, by the way, is now acting as the Under 
Secretary, probably has given some strength to this bureau 
because he has the confidence of the Secretary of State. They 
have worked together at the National Security Council, and 
elsewhere.
    So, from a personal relationship, the interpersonal 
dynamics which are very important in policy making as they are 
up here in the Senate, as I used to recall, probably gave some 
additional strength to the International Security and 
Nonproliferation Bureau, given that confirmation of the current 
Assistant Secretary.
    But I see nothing apart from that that gives us greater 
entre into the senior decisions at the National Security 
Council. I do not see our issues being given greater weight in 
the inter-agency fora.
    As I mentioned in my statement, the size of the bureau has 
been truncated as a result of the merger, about 16 percent 
fewer persons than one might have expected.
    Across the board, the nonproliferation and arms control 
function has been a voice that simply is, I would not say 
silenced, but certainly has been subdued in the process. I say 
that only in the context that the issues that we are dealing 
with are going in this direction and the organization that we 
are dealing with are going up in another direction, and there 
is a wide gap between what we need to do organizationally and 
other means in dealing with these issues.
    So I do not see any major leaps forward in terms of this 
organization even though it was designed to strengthen the 
voice certainly within the Department and within the inter-
agency fora. I do not see that happening. I do not see that 
happening in terms of our international negotiations as well.
    As Ambassador Wulf pointed out, there are fewer senior 
officials with senior ranks who are engaged in those 
international negotiations and much of that responsibility 
falls to more junior persons such as the Deputy Assistant 
Secretary, and myself, office directors, and others.
    So I think the net result, despite some positives that one 
should not discount, the net result is I think at best a static 
organization in terms of its strengthening the role in this 
particular policy area.
    Chairman Akaka. Mr. Semmel, you mentioned that the senior 
management panel, the group that led the 2005 reorganization, 
did not directly benefit from the Department's human resources 
expertise.
    In what ways would this panel have benefited from human 
resources expertise?
    Mr. Semmel. Thanks. I could wax on this issue for sometime, 
Mr. Chairman. But let me just say that, first of all, the 
senior management panel was asked to make recommendations on 
the decisions that were subsequently made on the 
reorganization. Our recommendations were not all accepted by 
the Under Secretary when we made recommendations to him.
    We got involved in some very micro-planning. We had little 
name cards for every member of the ISN Bureau and began to 
place them in bureaus and offices within the bureaus, and so 
forth. It was micro-management of the highest order.
    Specifically on your question, without getting into the 
internal workings of the senior management panels, which I do 
not think I should do, there was a decision that was made early 
on to not have present during our deliberations, which were in 
secret I might point out, members of the human resources 
offices, both within the T family or within the larger 
Department of State for reasons that I objected to, but for 
reasons that we do not have to get into at this point in time.
    So there we were in a sense, as I characterize it, feeling 
our way in the dark on issues. Eventually we did get obviously 
human resources people engaged who knew the personnel system, 
Civil Service, Foreign Service personnel systems but not during 
our deliberations. It was outside of the deliberations, which I 
believe was a mistake.
    In other words, as I described in my statement that 
initially the four members of the senior management panel were 
all political appointees, including myself, who had limited 
experience in personnel management within these two personnel 
services in the Department. You could measure the number of 
years of experience in the State Department on my two hands.
    We really did need some additional expertise to help guide 
us through some of these decisions, but it was decided at that 
point in time that they would not be included in the room when 
we were deliberating and I think that was a mistake in terms of 
the efficacy of our group, in terms of wisdom of the kinds of 
options that we were deciding upon. It was one of the anomalies 
I pointed out in my opening statement.
    Chairman Akaka. Ambassador Wulf.
    Mr. Wulf. Could I just add that I have stayed in contact 
with many of the colleagues that I used to work with in ACDA 
and in the State Department, for 3 years, before retiring. And 
I never saw a more dispirited bunch of people in my whole life 
than those who went through the 2005 reorganization.
    In 1999, when ACDA was merged into the State Department, we 
went out of our way to be as transparent as possible, to share 
fully the information and to make sure everybody was treated 
fairly.
    This approach that Mr. Semmel has described, and I commend 
him for his efforts to try to make it a more fair process, was 
characterized to me by one of the lawyers in the legal 
adviser's office as within the letter of the law but certainly 
not what anybody would call good management practice, and I 
think the bitterness that was generated by how it was done 
continues to this day. You have a very demoralized staff as a 
result of how the 2005 merger was handled.
    Chairman Akaka. I have one more question for Mr. Semmel, 
and following that question, I am going to ask the panel if 
they have any final comments to make to the hearing.
    Mr. Semmel, you argue that changing the cultural biases in 
the State Department is worth doing since regional bureaus tend 
to be favored over functional bureaus within the Department.
    How would you recommend the Department change these 
cultural biases?
    Mr. Semmel. It is a very difficult thing to do because, Mr. 
Chairman, I do know there have been efforts in the past to 
address this question and address this issue. They have not 
amounted to any substantial change. I think this is because 
this is a part of the personality of the State Department, part 
of the personality of the Foreign Service that is very 
difficult to change. Personalities are very difficult to change 
in general.
    I do not know if in the wake of the merger that we were 
just talking about, that created the ISN Bureau, that one of 
the things I personally suggested to the Under Secretary which 
came to fruition sometime later, was that we set up within the 
T group our own task forces within this family, within the T 
family, our own task forces on the Foreign Service and a 
separate task force on the Civil Service to see whether or not 
internally we could make some positive changes so that we could 
recruit Foreign Service officers who are essential for our 
function, retain them, and find a good satisfactory post-
service employment after they leave the ISN Bureau, and the 
functional bureaus.
    But the problem is a much larger one. The problem is a 
State Department-wide problem and it is one in the Foreign 
Service. And I think that again to try to fundamentally change 
something, it needs to come from the top down. It needs to come 
from the Secretary. It needs to come from the management bureau 
within the Department, and so forth.
    So I think every time there is a new Administration, there 
is an opportunity for beginning to take a re-look at, take 
another look at the way in which we are organized. The new 
Administration may very well want to do that.
    I think civil servants tend to be looked upon as 
technicians. They tend not to serve in our foreign country 
posts. I think that serving in international institutions is 
looked upon with disfavor as I mentioned. I think much of the 
State Department also looks upon multilateral diplomacy and 
international organizations as feckless organizations that do 
not accomplish very much. These are all things I think that are 
out of step with the way in which the world is evolving.
    So it is very difficult to make those changes from the 
bottom up. They really have to come from the top down. Somebody 
has to say, this is the way we are going to do business and 
these are the ways we are going to change the way in which we 
function.
    It is not easy. It will take a long time to transform any 
personality or any inbred cultural attributes, but I think it 
would certainly enhance this function of arms control and 
nonproliferation as well as some of the other so-called 
functional bureaus and the conduct of foreign policy by giving 
some greater voice to multilateral diplomacy.
    But I do not want to suggest that it is going to be easy. 
It is something that I do advocate and I think should be done. 
It should be a sustained effort because it requires a sustained 
effort from the top down.
    Chairman Akaka. I want to ask the panel to close with any 
summary remarks they may have on this hearing.
    You have all recommended ways to the improve arms control, 
counterproliferation, and nonproliferation bureaucracy. In 
addition to what I just asked you to do, I am going to ask you 
to, if you would, mention your top three recommendations to 
address the staffing, management and organizational challenges 
that we face.
    Ambassador Graham.
    Mr. Graham. Thank you, Mr. Chairman. First, let me again 
commend you for holding this hearing.
    Just from my own personal perspective, I think these issues 
are very important and little attention has been paid to them 
for years and, as a result, developments have taken place which 
affect our national security in a negative way which, if these 
issues had been addressed earlier, perhaps the result might 
have been somewhat different.
    We live in, in my opinion, Mr. Chairman, a very dangerous 
world today. It is, at least in part, featured by a decline in 
world order everywhere, certainly in many places. I have heard 
experts say that there are 50 to 70 countries that are sliding 
into the failed or failing states category, and as such, a 
breeding ground for international terrorists and then we have 
the strengthening of international terrorism worldwide and the 
terrorists desire to acquire weapons of mass destruction, 
particularly nuclear weapons. As you said in your opening 
remarks, Osama bin Laden said that acquiring nuclear weapons is 
a religious duty.
    And the technology is so much more available or at least 
much of it is. I can remember in the early 1990s there were 
very strict controls on computer technology. There had existed 
computers of great power which are very useful in nuclear 
weapons programs, and these computers were in the possession of 
only a few governments. No one else. Well, it was not long ago 
that the technology developed in a way that you or I could walk 
into a shop in Hong Kong and walk out with a computer 
capability comparable to those computers that used to be 
possessed by only a few nations.
    So the potential for nuclear weapons and other weapons of 
mass destruction to spread is considerable. It is going to 
require a serious effort to persuade some countries not to 
acquire nuclear weapons.
    In 1958, the British Prime Minister said, during a 
television interview, that our independent contribution--he 
meant by that, the British nuclear weapons program--puts us 
right where we ought to be, a great power; and 3 years later, 
President de Gaulle said something similar in a speech. ``Any 
great state that does not possess nuclear weapons when others 
do makes itself hostage to fortune.''
    The Indian prime minister said something to that effect, 
India is a big country now, we have the bomb, in 1998.
    Nuclear weapons, particularly nuclear weapons, carry with 
them political prestige that is attractive over and above any 
military utility they might have, which in most cases is 
negligible.
    We have a situation where the nuclear nonproliferation 
treaty is much weaker than it used to be. The NPT nuclear 
weapon states have not delivered on their disarmament 
obligations. Indeed, we have gone in reverse direction since 
1995 and since Norm's work in 2000.
    These are very worrisome conditions to anyone who cares 
about our country's national security. And it is clear, the 
United States cannot go it alone under these conditions. We 
need allies. We need multilateral treaty arrangements that we 
can rely upon. We need international security treaty regimes 
which we can rely on both because they are soundly conceived, 
but also because they are effectively verifiable.
    It will be very difficult for us to improve the situation 
and develop the international cooperation that we need to have, 
to expand the multilateral treaty arrangements that we need, to 
strengthen the international security treaty regimes that are 
essential to controlling the proliferation of nuclear weapons 
and other weapons of mass destruction which can arrest the 
potential for grave danger to our country unless we have in our 
government a bureaucratic structure that is capable of 
developing sound policies to meet these threats.
    That is not to say that the arms control or 
nonproliferation alternative always should prevail, but it is 
extremely important for the President and the National Security 
Council to have that alternative in front of them as one 
possibility to consider.
    So I would urge serious consideration by the Congress of 
the creation through legislation of some sort, of an 
independent agency that can help strengthen our security in a 
very difficult and dangerous age.
    Chairman Akaka. Thank you. Ambassador Wulf.
    Mr. Wulf. As my colleagues have mentioned, I also extend my 
thanks for this hearing on this extremely important topic 
obviously, Mr. Chairman.
    A couple of comments on comments by others. Personalities 
clearly matter, but one should not put a system solely at risk 
because personalities change.
    I think the way to look at the issue of what structure is 
required is not, ``well, we get the right people in place and 
they will work with each other and things will work out just 
fine.''
    I think the better way to look at the issue is, assuming 
that you have the right people in place, that they are good and 
competent people, how can we design a structure to make them 
even more effective and hopefully perhaps a little less 
susceptible to changing political whims?
    An example that builds on one Ambassador Graham cited, is 
the CTBT itself. Early on in the Clinton Administration when a 
lot of people were not yet in place in the various departments 
and agencies throughout the government, the question of what 
position should the United States take on a comprehensive test 
ban was hotly debated.
    The State Department early on decided on a compromise 
position which I will characterize as a limited number of tests 
per year at a lower threshold than the existing threshold that 
was in place at that time.
    ACDA took zero tests and zero yield as its preferred 
approach and it kept that option alive. It could not force the 
rest of the inter-agency to accept that, but it kept it alive 
until the Department of Energy had enough people in place and 
Secretary O'Leary got enough advice from enough different 
quarters that she came to the conclusion that was the best 
option, and it ultimately was the position adopted by the U.S. 
Government.
    Had there not been an independent agency like ACDA, that 
option would no longer have been on the table by the time the 
Secretary of Energy and the Department of Energy was organized 
enough to promote that option.
    I think there is something to be said for a small agile 
agency made up of, shall we say, similarly motivated people as 
opposed to a small part of a very large agency.
    I think, for example, that when I was a Deputy Assistant 
Director in ACDA I spent perhaps 10 percent of my time keeping 
my senior management informed of what the bureau was doing. I 
contrast that to when I was a Deputy Assistant Secretary in the 
Department of State and I probably spent 40 percent of my time 
trying to keep my senior management informed of what my part of 
the bureau was doing instead of actually doing things.
    It is simply, shall I say, the difference between 250 
people and what is the Department now? Around 19,000. So there 
is something to be said for the culture that comes with a small 
dedicated agency with people similarly motivated.
    There has also been a question about whether the 
substantive issues that will face the new Administration at the 
start are so big that we should not take time away from them to 
work on structure? You have to turn that question around. Can 
you do the substance if you do not have the structure?
    I would argue that you can work on both. I would urge that 
whoever is the President-elect spends his time during the 
transition addressing the question of what kind of priorities 
he wishes to achieve during his presidency in the areas of arms 
control and nonproliferation? What structure do I need to 
achieve those priorities? And if he reaches a conclusion which 
I recommend, that is an independent agency, he begins drafting 
during the transition and begins working with the Congress to 
lay the groundwork for prompt action on that.
    I believe the time period between the introduction of 
legislation to create ACDA back in 1961 and its enactment was 
something a little over 3 months. It can be done, Mr. Chairman, 
and I think you can address structure and address substantive 
issues.
    So my top three recommendations, I only have two. Draft 
legislation now creating an independent agency and the mandate 
of that agency should be nonproliferation, 
counterproliferation, safeguarding of nuclear materials and 
arms control, and I am not putting arms control last because I 
think it is least important.
    And I would say the second recommendation is an interim 
step until such an independent agency is established would be 
to recreate the Arms Control Bureau in the Department of State 
and remove from the nonproliferation bureau issues like missile 
defense and the Conference on Disarmament.
    Thank you very much, Mr. Chairman.
    Chairman Akaka. Thank you very much, Ambassador Wulf. Mr. 
Semmel.
    Mr. Semmel. Thank you, Mr. Chairman, and, I too 
congratulate you on this hearing. I think it is absolutely 
important and it certainly is timely.
    Let me say, first of all, to echo some of the comments that 
my colleagues have made, that we are, I think, at a critical 
juncture on this issue in terms of our national security, in 
terms of world affairs, and I think the new Administration, 
whoever it is, whoever comes into the White House and the State 
Department will be tested the very first day. I think the 
issues are boulders rolling down hill towards the next 
Administration. They are going to have to contend with them now 
or as soon as possible.
    As I have mentioned in my longer statement, the tide is not 
moving--the trend lines are not moving in the right direction 
right now. I think it is going to be very difficult for the new 
Administrative as the problems begin to pile up.
    I mean to suggest that there is state of urgency about this 
issue and about doing it right as we move into the next 
Administration. Having said that, I think it would be correct 
for me to say there have been some very constructive things 
done over the last few years. We ought not to forget those 
things.
    Innovations have taken place across-the-board in dealing 
with the issue of nonproliferation and counterproliferation 
include the Proliferation Security Initiative and there has 
been some stock pile reductions. We have had a moratorium on 
testing since the early 1990s. We have not produced any fissile 
materials in a long time, etc., and there are a number of 
negatives that have been pointed out already.
    I think the NPT is hanging on not by a thread but certainly 
the Nuclear Nonproliferation Treaty is being very stressed 
right now and will become even more so if we do not get the 
right answer to Iran and North Korea. If what comes out of 
those two processes in dealing with their nuclear programs are 
unsuccessful, I am not sure where we are going to stand with 
the Nuclear Nonproliferation Treaty.
    The conference on disarmament in Geneva has been virtually 
at an impasse for at least 10 years, and not produced much that 
we can shout about, and enforcement of IAEA reports have been 
somewhat lacking at the moment. So there are some positives and 
negatives and we can actually expand upon those if we wanted 
to.
    The three priorities, if you will, that come to mind for me 
is, first of all, per your question, we need to elevate the 
status and the role of this function within the State 
Department, within the U.S. Government. It has to be elevated 
because of the nature of the challenge, the nature of the 
threat that exists now and that is going to grow in the future. 
It is not going to dissipate in the immediate future.
    Whether that involves the strengthening, or rather the 
creating of a semi-independent entity within the State 
Department, or an independent entity, or strengthening the role 
of the Under Secretary, any one of those, it seems to me, would 
move in the right direction but, as I say, I am somewhat 
agnostic about this.
    I would say this, that if the new Administration has a set 
of ambitious nonpoliferation goals, whatever those goals may 
be, maybe a departure from where we are, or augmentation of 
where we are at right now, then it will not be able to 
accomplish those ambitious goals in the absence of some kind of 
restructuring and strengthening of this role within the State 
Department, or within the national security bureaucracy.
    So the first thing is to strengthen and elevate the status 
and role of this function.
    Second, I like to combine what is desirable and what is 
doable, and one of the things that I think can be doable over 
the long run is to increase the funding, programmatic funding, 
on this function. Programmatic, by that I mean, obtaining--and 
Congress can play a role in this obviously--funding in the 
areas of cooperative threat reduction, in the area of 
redirection of former weapons scientists, funding for the 
International Atomic Energy Agency, and export controls, and so 
on. That is a doable priority.
    And so is, I think, augmenting the personnel, not only the 
numbers of people working in this function, but also the skills 
that they have, which are oftentimes technical skills. We need 
to recruit more physical scientists, natural scientists, and 
engineers into this area. And one of the ways we might do this 
is, as I suggest in my paper, is to revive something akin to 
what used to exist, namely, the Foreign Service Reserve Officer 
system where the Foreign Service Reserve Officer system was 
developed to find skills that could otherwise not be found 
within the State Department through its normal recruitment 
system.
    The third area is, as I mentioned, and you and I have 
talked about, Mr. Chairman, to change the rewards structure in 
Foreign Service. That is to say, to make part of a Foreign 
Service career path the inclusion of service in a functional 
bureau, that all foreign officers at one point or another in 
their career should be required to serve in some functional 
bureaus. It does not have to necessarily be the ISN Bureau, to 
get that kind of experience that they would otherwise be 
lacking.
    If you change that reward structure, you are going to get 
more interest and more ability to recruit and retain Foreign 
Service officers in this function. Thank you.
    Chairman Akaka. Well, I thank you so much. You have been 
very helpful to us. I thank all of you.
    Mr. Graham. Mr. Chairman.
    Chairman Akaka. Yes, Ambassador Graham.
    Mr. Graham. Mr. Chairman, I apologize for intervening here 
at the end, but I realize I forgot to give you my 
recommendations.
    My recommendations, well, first let me say I do support the 
recommendations that Ambassador Wulf and Mr. Semmel have 
suggested. They all seem very sound to me.
    The ones I would focus on myself is, first, draft 
legislation for an independent agency.
    Second, I hope the Senate early next year will take a close 
look at those individuals who are going to be selected to have 
responsibilities in the arms control and nonproliferation area 
and question them to get a sense as to whether they are 
interested and support these policies at least in general 
terms.
    Third, it seems to me that substantively next year the 
overridingly most important arms control-nonproliferation issue 
will be ratification of the comprehensive test ban treaty as 
has been urged by Messrs. Shultz, Nunn, Kissinger, and Perry. 
And along with that, it is important for the Congress to keep 
up the funding, as Mr. Semmel has suggested, for the 
comprehensive test ban treaty office in Vienna that operates 
the worldwide verification system and the International Atomic 
Energy Agency. Thank you.
    Chairman Akaka. Thank you very much, Mr. Ambassador.
    I want to say that your recommendations highlighted many 
fundamental improvements that can be implemented now and also 
when the next Administration comes, and we are working on that.
    This Subcommittee will continue to focus on reforms to 
critical aspects of our national security. Over the next few 
months we will continue to examine the arms control and 
nonproliferation bureaucracy. We will also look into ways to 
improve our foreign assistance and public diplomacy 
bureaucracies and processes.
    These are our plans and I was glad, ambassador, in your 
remarks that you mentioned that our country should have allies 
as well as international treaties in our relationships.
    All of this will be helpful to us, and so again, thank you 
so much for your comments and your testimonies.
    The hearing record will be open for one week for additional 
statements or questions other Members may have.
    This hearing is adjourned.
    [Whereupon, at 3:52 p.m., the Subcommittee was adjourned.]


 NATIONAL SECURITY BUREAUCRACY FOR ARMS CONTROL, COUNTERPROLIFERATION, 
   AND NONPROLIFERATION: THE ROLE OF THE DEPARTMENT OF STATE--PART II

                              ----------                              


                          FRIDAY, JUNE 6, 2008

                                 U.S. Senate,      
              Subcommittee on Oversight of Government      
                     Management, the Federal Workforce,    
                            and the District of Columbia,  
                      of the Committee on Homeland Security
                                        and Governmental Affairs,  
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:06 p.m., in 
Room SD-342, Dirksen Senate Office Building, Hon. Daniel K. 
Akaka, Chairman of the Subcommittee, presiding.
    Present: Senator Akaka.

               OPENING STATEMENT OF SENATOR AKAKA

    Senator Akaka. I call this hearing of the Subcommittee on 
Oversight of Government Management, the Federal Workforce, and 
the District of Columbia to order. I want to welcome our 
witnesses today, and I want to thank you so much for being 
here.
    This is the third in a series of hearings that I am holding 
to explore the effectiveness and efficiency of government 
management in various aspects of national security. The first 
hearing considered proposed reforms to the U.S. export control 
system. During the second hearing, former Administration 
officials discussed the management of the arms control, 
counterproliferation, and nonproliferation bureaucracy at the 
Department of State, commonly known as the ``T Bureau.'' 
Today's hearing will allow us to hear from current State 
Department senior leaders about these same issues within the T 
Bureau and give them the opportunity to respond to the 
testimony of our previous witnesses. As I mentioned to the 
witnesses at our last hearing, Senator Voinovich and I recently 
requested the Government Accountability Office to examine the 
effect of organizational changes on the State Department, 
specifically on its capabilities and resources.
    The major powers of the world signed the Nuclear 
Nonproliferation Treaty in 1968. Since then, four other 
countries have developed nuclear weapons through their efforts 
outside of the NPT. And now we confront the desire of 
terrorists to obtain similar weapons. The nuclear genie has 
emerged from the bottle. We must re-cork it before 
international security is further threatened.
    Leading Presidential candidates have spoken forcefully 
about containing the proliferation of nuclear weapons. Senator 
McCain recently declared that his highest priority, if elected, 
is to reduce the danger that nuclear weapons will ever be used 
while strengthening all aspects of the nonproliferation regime. 
Senator Obama is also dedicated to bolstering the NPT and 
securing loose nuclear materials. Both candidates have 
committed themselves to fighting proliferation. However, both 
candidates know that policy statements are not enough. 
Statements need to be matched by action.
    The right policies are critical, but equally important are 
effective and efficient institutions to support policy 
implementation. My goal in this hearing, along with examining 
possibly damaging personnel practices that occurred during the 
T Bureau's reorganization during 2005, is to identify possible 
recommendations for improving the arms control, 
counterproliferation, and nonproliferation bureaucracy.
    As you can see in the three charts that I have on my 
right,\1\ the Department of State leads U.S. arms control, 
counterproliferation, and nonproliferation efforts. The Under 
Secretary for Arms Control and International Security leads the 
bureaus of International Security and Nonproliferation, 
Political-Military Affairs, and Verification, Compliance, and 
Implementation.
---------------------------------------------------------------------------
    \1\ The charts submitted by Senator Akaka appears in the Appendix 
on page 105.
---------------------------------------------------------------------------
    This bureaucracy has changed in two significant ways from 
1999 until today. First, ACDA, which was an independent agency 
that led the national arms control and nonproliferation effort, 
was merged into the State Department bureaucracy where its 
multilateral and long-term focus has largely taken a back seat 
to the prevailing regional and bilateral interests of the 
Department.
    These charts demonstrate clearly the second significant 
change to this bureaucracy. In 2005, the bureaus singularly 
focused on arms control and nonproliferation were eliminated 
and merged into the International Security and Nonproliferation 
Bureau. I am concerned that this merger further weakened the 
State Department's ability to implement effective arms control 
and nonproliferation policy. I believe that steps must be taken 
quickly to repair damage that has been done.
    The number of controversial issues from the 2005 
reorganization include: The absence of human resources and 
Civil Service personnel from the Senior Management Panel, which 
had the responsibility of crafting the reorganization and 
reporting its recommendations to the Under Secretary; the 
significant reduction in the number of full-time equivalent 
personnel despite the creation of two new offices within the 
International Security and Nonproliferation Bureau; the loss of 
an independent arms control bureau, which may have convinced 
other nations that America was not committed to reducing 
weapons of mass destruction; an inadequate process for 
selecting strong leaders with distinguished backgrounds for the 
bureaus; and concern that morale problems have discouraged 
well-qualified and experienced career employees in the T Bureau 
from remaining in the Department.
    In addition to gaining a better understanding of the impact 
of the reorganization on the T Bureau, I also want to explore 
possible reforms, including: Reestablishing an independent arms 
control and nonproliferation agency that is modeled on ACDA; 
creating a semi-autonomous arms control and nonproliferation 
agency within the State Department; reestablishing an arms 
control bureau alongside nonproliferation and verification and 
compliance bureaus within the T Bureau; elevating the role of 
the head of the arms control, counterproliferation, and 
nonproliferation bureaucracy to have an unobstructed and 
clearly defined role in national security decisions; and, 
following in the footsteps of former Secretary of State Colin 
Powell, finding ways to address the diplomatic and human 
capital readiness challenges confronting the T Bureau so that 
there are enough qualified arms control, counterproliferation, 
and nonproliferation professionals to carry out national 
policies and our international obligations.
    We need to work together to prevent terrorists and rogue 
nations from obtaining a nuclear weapon. This hearing, taken 
with the last hearing on this subject, is particularly 
important since it will help clarify the challenges ahead and 
provide possible solutions.
    Again, I want to welcome our witnesses to this Subcommittee 
today: Patricia McNerney, Principal Deputy Assistant Secretary 
for the Bureau of International Security and Nonproliferation, 
Department of State, and Linda Taglialatela, who is Deputy 
Assistant Secretary for the Bureau of Human Resources, 
Department of State.
    It is the custom of the Subcommittee to swear in all 
witnesses, and I would ask both of you to stand and raise your 
right hand. Do you solemnly swear that the testimony you are 
about to give this Subcommittee is the truth, the whole truth, 
and nothing but the truth, so help you, God?
    Ms. McNerney. I do.
    Ms. Taglialatela. I do.
    Senator Akaka. Thank you very much. Let it be noted for the 
record that the witnesses answered in the affirmative.
    Before we start, I want you to know that your full written 
statement will be part of the record. Also, I would like to ask 
you to keep your remarks as brief as you can.
    And with that, Ms. McNerney, please proceed with your 
statement.

    TESTIMONY OF PATRICIA A. MCNERNEY,\1\ PRINCIPAL DEPUTY 
   ASSISTANT SECRETARY, BUREAU OF INTERNATIONAL SECURITY AND 
  NONPROLIFERATION, U.S. DEPARTMENT OF STATE, ACCOMPANIED BY 
 LINDA S. TAGLIALATELA, DEPUTY ASSISTANT SECRETARY, BUREAU OF 
           HUMAN RESOURCES, U.S. DEPARTMENT OF STATE

    Ms. McNerney. Thank you, Senator. Mr. Chairman, I also just 
wanted to note, I am serving as the Principal Deputy Assistant 
Secretary for the International Security and Nonproliferation 
Bureau, not the Human Resources Bureau. In that capacity, I am 
currently the acting head of that bureau, for the record.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. McNerney appears in the Appendix 
on page 92.
---------------------------------------------------------------------------
    Senator Akaka. Thank you for that.
    Ms. McNerney. Mr. Chairman, thank you for this opportunity 
to discuss the State Department's role in protecting U.S. 
national security and ensuring that we are responding 
appropriately and robustly to today's nonproliferation and 
international security challenges.
    When Secretary Rice began her tenure, she called upon the 
Department of State to transform the way we think about 
diplomacy and to consider how we might best use our diplomatic 
tools to meet today's threats and prevent tomorrow's problems. 
Thanks to that vision of Secretary Rice, we reshaped the 
structure of the so-called T Bureaus, moving away from a system 
designed to address the challenges presented by the Cold War 
toward a structure more capable of countering today's 
nonproliferation and international security challenges. By 
creating a robust Bureau of International Security and 
Nonproliferation, strengthening the Bureau of Political-
Military Affairs, and expanding the Bureau of Verification and 
Compliance's mandate to include treaty implementation, 
Secretary Rice not only effectively enabled the Department to 
better respond to the challenges of the post-September 11, 2001 
world, but strengthened our commitment and our ability to 
support the nonproliferation and arms control regimes already 
in place.
    With the merger of the Arms Control and Nonproliferation 
Bureaus to form the Bureau of International Security and 
Nonproliferation, the redundancies lingering from the 1999 
merger of the Arms Control and Disarmament Agency into the 
Department were removed.
    As a bureau that covers both traditional and non-
traditional security threats, I believe we have thoroughly and 
effectively enabled each of our 13 offices to examine and 
monitor the multifaceted elements of nonproliferation and arms 
control. Our offices not only focus on conventional, nuclear, 
missile, chemical, and biological threat reduction; WMD 
terrorism; but also on the nexus between WMD and terrorism, and 
on complex regional affairs and their effect on 
nonproliferation and international security. By placing a 
greater focus on counterproliferation and global cooperative 
threat reduction in addition to multilateral and bilateral 
engagement, we have enhanced our national ability to engage on 
the full range of nonproliferation issues.
    I am proud of the work that the ISN Bureau and its highly 
skilled Civil Service and Foreign Service officers have done in 
leading the U.S. Government's nonproliferation and security 
efforts. We continue to attract and retain exceptionally 
qualified and motivated individuals, with many young and 
talented officers who are our best investment in future 
capability to address these security threats.
    With more than 180 civil servants, as well as Foreign 
Service officers, we feel confident that the quality of work 
produced by our bureau reflects positively on the caliber of 
its employees and the quality of our work environment. All of 
the T Bureau employees have been strongly encouraged to take 
training courses at the Foreign Service Institute and other 
outlets to continue to enhance their skills and expertise, and 
to work with their leadership to develop a long-term career 
plan to include training opportunities.
    Additionally, we have implemented a new T Family Award for 
Excellence in International Security Affairs in order to 
recognize the outstanding Foreign and Civil Service employees 
in the Arms Control and International Security field, and to 
further motivate our employees to strive for excellence.
    As Senator Lugar noted when he participated in the 
announcement of the reorganization by Secretary Rice in 2005, 
the changes made by the Secretary to enhance our 
counterproliferation, counterterrorism, and threat reduction 
efforts ``are important reforms that will both streamline 
governmental action and provide greater safety for all 
Americans.'' We have worked hard to achieve success 
internationally as well as domestically, through implementing 
the Secretary's and the President's vision in creating a 
workforce prepared to meet these challenges of the 21st 
Century.
    I look forward to any questions you have for me, as well as 
my colleague from the Human Resources Bureau, and we appreciate 
your time. I have a longer statement that I would ask be 
submitted for the record. Thank you, Mr. Chairman.
    Senator Akaka. It will be included in the record.
    Well, thank you very much. I would like to direct my first 
question to Ms. Taglialatela.
    Ms. Taglialatela, in previous testimony, we heard that 
there has been a significant loss of civil servants from the 
State Department in recent years. A Nonproliferation Bureau 
career officer who retired a few weeks after the reorganization 
in the year 2005 mentioned in an article in Arms Control Today 
that the reorganization of the bureaus in 2005 led many 
experienced career officers to leave the new International 
Security and Nonproliferation Bureau.
    How much attrition has the ISN Bureau experienced since the 
implementation of the reorganization of 2005?
    Ms. Taglialatela. Thank you for that question, Mr. 
Chairman. I would like to say that during the reorganization, 
while the final decisions on specific person placements were 
made by the individuals who were the managers of the bureau, 
the Bureau of Human Resources and a representative from the 
Office of the Legal Adviser at the State Department, and I can 
assure you that there were no violations of Merit System 
principles and there were no violations of any law or 
regulation.
    At the same time, when we worked and developed the 
crosswalk between the two bureaus, we put the two bureaus 
together, and we ensured that everyone had a position to go to, 
that no one was displaced, that no one lost grade and no one 
lost salary. Some people, because of the positions that they 
were moved into, may have felt that there were opportunities 
elsewhere or it was time for them to leave.
    This is the sort of phenomenon that happens any time there 
is management and organizational change. You will find people 
who are uncomfortable with the way things are, and they choose 
to leave. There was a number of--not a large number, but there 
was a number of employees who chose to either find other work 
and/or retire. I do not believe that in the more recent years 
since then, the initial merger, that we have had any large 
increases or continued large amounts of attrition in the 
bureau. It has pretty much stabilized.
    As you may be aware, the State Department has one of the 
lowest attritions in the Federal Government. We run below the 
average on our Civil Service. Our attrition overall is about 8 
percent a year, whereas the Federal Government is about 12 
percent on Civil Service. And basically, the bureaus have fit 
into that average and maintained similar comparable attrition 
numbers to the State Department on the whole.
    Senator Akaka. How does this compare to the typical 
attrition from the Arms Control and Nonproliferation Bureaus 
from 1999 to 2005?
    Ms. Taglialatela. I do not have specific numbers on what 
the attrition was from 1999. Basically, again, when the merger 
took place and we also merged individuals from the U.S. 
Information Agency, everyone from both of those agencies were, 
again, guaranteed a crosswalk position at grade without loss of 
salary into the new, redesigned organization. Again, if people 
chose to leave, it was because they did not want to become part 
of the State Department proper or they had other opportunities 
elsewhere.
    Ms. McNerney. Mr. Chairman, I might just add on that point 
that if you look at a snapshot of vacant positions in August 
2005, just prior to the reorganization, between the 
Nonproliferation Bureau and the Arms Control Bureau, that rate 
was about 12 percent. If you look at what we have now in 2008, 
that rate is about 8 percent. So we are actually doing better 
as a bureau under the new construct than we were with the two 
bureaus.
    Senator Akaka. Ms. Taglialatela, in previous testimony, we 
heard that the number of full-time equivalent employees, FTEs, 
was reduced by the merger of the Arms Control and 
Nonproliferation Bureaus. Were any FTE positions eliminated? If 
so, why were they eliminated?
    Ms. Taglialatela. Thank you for the opportunity to explain, 
Mr. Chairman. There were no positions eliminated or taken away 
from the T area when the merger took place, the merger of the 
Arms Control Bureau and the Nonproliferation Bureau. What 
happened was in the decisions that went forward in a 
reprogramming letter, there were decisions to rearrange the 
functions within the whole T area. Some positions went to the 
Bureau of Political-Military Affairs. Some positions shifted to 
the Verification, Compliance, and Implementation Bureau. So 
there was not a loss of total FTE. What happened was it was a 
shift. And the total number of FTE left in the new bureau was 
probably less than what was in the Bureau of Arms Control and 
the Bureau of Nonproliferation only because some of those 
functions were shifted to other areas.
    Senator Akaka. Did you have an overall strategic plan, 
including the human capital aspects, for the reorganization? 
And if you did, what was that plan?
    Ms. Taglialatela. From the standpoint of the Bureau of 
Human Resources and the management area in the State 
Department, we were involved in reviewing the organizational 
structure that was proposed and sent forward in the 
congressional notification. We were involved in making sure 
that all of the offices had work statements determining what 
functions would be performed by the newly formed offices 
because there was a realignment of functions in the new 
organization. And we looked at the number of positions to 
ensure that there was a crosswalk of if there were X number of 
positions in the two bureaus, that many positions plus the ones 
that went to either the Bureau of Political-Military Affairs 
and the Verification, Compliance, and Implementation Bureau 
both got--that all of the people in positions were accounted 
for.
    From a standpoint of strategic planning, we looked at the 
resources and made sure that the skill sets were transferable 
between the two bureaus. But as far as actually assigning 
people and/or looking for any staffing gaps, we did not do that 
at the time.
    Senator Akaka. Ms. McNerney, in the previous hearing on 
this matter, I was disturbed by a witness who stated that the 
office responsible for nonproliferation had to rely on 
temporary help--interns, short-term scholars, and retirees. For 
me, this was shocking.
    How much temporary help is currently assisting the ISN 
Bureau?
    Ms. McNerney. Well, Mr. Chairman, we maintain, obviously, a 
high level of full-time employees that do our day-to-day work, 
but we actually think we benefit by a number of consultants 
that are--for example, recently retired Ambassador Don Mahley, 
who brings a wealth of years of experience in arms control, we 
have retained that ability. We have tapped him to continue to 
negotiate some specific arms control kinds of agreements. 
Again, we rely on what we call AAAS fellows. These are 
scientific experts that come into the Department for a year or 
two. Our bureaus actually are one of the key areas to attract 
these kinds of fellows that we think augment our capabilities 
and our scientific reach-back. Often they come from the labs 
and places like that, and we have got about 20 percent of all 
the Department's AAAS fellows.
    Additionally, sometimes young students come in on an 
internship, and this is a good way to get to see some of these 
students as they are coming out of school. Oftentimes, they 
will apply later for full-time positions, and having worked in 
the bureau, we know whether they are talented, what their 
expertise is. And so, again, this is a program that I actually 
think is very helpful and useful to us. But certainly the real 
day-to-day work, the long hours, the hard work that gets done 
by our staff, it is done by our full-time workforce. And that 
is what we rely on for the bulk of our work.
    Senator Akaka. Ms. McNerney, a previous witness testified 
that one of the goals for the 2005 merger of the 
Nonproliferation and Arms Control Bureaus was to achieve 
greater efficiencies and to reduce costs through streamlining 
and consolidation. Have you or the Department examined the 
effects of the 2005 merger to determine if it generated any 
cost savings?
    Ms. McNerney. I am not sure about cost savings, but if I 
would look at it more from the policy standpoint of how we are 
accomplishing our core objectives, one thing, we review 
regularly where our key priorities are. For example, at the 
time of the reorganization, there were only just over two full-
time equivalent staff in our Regional Affairs Bureau working on 
Iran. Obviously, Iran is a key challenge of the day, and so we 
have moved a number of our FTEs from other offices to that 
office to greatly augment our team that deals with the Middle 
East and Iran.
    Similarly, our counterproliferation initiatives that does a 
lot of the work to interdict shipments of concern, look at 
financial measures that we do to support our Iran policy and 
our North Korea policy, we thought that we needed to have 
additional individuals working on those key core issues. And 
so, again, we shifted some from other offices into that office 
in order to focus on those areas. And just recently, we 
followed up with some of our WMD terrorism personnel that were 
still straddling two bureaus to move them into our WMD T Bureau 
to really focus the leadership and attention in one group. So 
that is the kind of thing we are doing on a regular basis to 
make sure that our people are meeting the key challenges of the 
day.
    The actual costs, what has really been the case across the 
Department and across government, is we are all having to 
readjust our costs and our figures, the appropriations that we 
get. We have been working under CRs a couple years in a row, 
and so travel monies are tighter. Our program monies are 
tighter. And so I personally have really focused in on reducing 
any kinds of contract employees that really do cost a lot more 
than your standard government employee and trying to eliminate 
those kinds of costs so we can focus them on the core mission, 
which is to address threats like Iran, like North Korea, like 
terrorist access to nuclear weapons and nuclear materials.
    Obviously, we have got a responsibility to meet those core 
challenges, and so under tight budgets and constraints that we 
all face across the Department, I think it is incumbent on the 
leadership of our bureau to look at those costs in that context 
and try to move and shift resources.
    Senator Akaka. Ms. McNerney, you mentioned in your 
testimony that the new T Bureau structure is more capable of 
countering nonproliferation and international security 
challenges. Can you explain this in more detail?
    Ms. McNerney. Yes, sir. Before this reorganization, we did 
not have an office that was devoted to counterproliferation 
initiatives. This has been a really key area for us in the last 
several years as we address North Korea and Iran. We now have 
an office that looks at interdictions on a regular basis, that 
looks at our financial measures against banks that might be 
supporting proliferation activities, companies, front companies 
that might be part of larger networks to try to avoid some of 
our other programs designed to impede proliferation activities. 
It is an office that focuses on the new resolution, Security 
Council Resolution 1540, which was adopted in 2004, looking at 
a broad-based increase in every State's export control 
authorities, laws, implementation. So that is one area where we 
certainly have retooled and refocused ourselves, and that 
office did not exist before this merger.
    A second office that did not exist before this merger dealt 
with WMD terrorism. There is, obviously, in government a large 
WMD community, a large terrorism community, but often there is 
that seam in between where you are not really bringing the two 
communities together and focusing on that nexus between WMD and 
terrorism. And so we created an office as a result of--the 
Secretary created this office as a result of the merger to 
better focus and drill down on this particular threat. And 
through that, we have evolved what is called the Global 
Initiative to Combat Nuclear Terrorism and really reached out 
across the world to develop capabilities in other governments. 
Currently, there are more than 70 governments now participating 
in that initiative, and that is a partnership globally that did 
not exist 2 years ago. And so that is the kind of thing that 
the bureau really has focused on.
    Additionally, we have sort of retooled some of our offices 
to focus on the problems of nuclear energy today, for example. 
There is a growth of nuclear energy, but obviously with that 
responsibility comes to reduce the proliferation risks of civil 
nuclear energy. And so even as we are looking to work with 
countries to have that capability, which is one of the promises 
of the Nonproliferation Treaty, we are trying to do it in a way 
that ensures that things like enrichment and reprocessing, 
which have a much greater capability to be misused or diverted 
for proliferation activities, we're trying to eliminate those 
kinds of aspects of the nuclear program through things like an 
assured fuel supply with the IAEA and other initiatives of that 
sort.
    So, I think if you really look at sort of what we are doing 
as a bureau, how we are integrated better with the Department, 
one of the key things is our team really has been part of Nick 
Burns' team and now Bill Burns running Iran policy. We have 
integrated very closely with that process because we are in the 
State Department. We are not fighting each other. Obviously, 
people have disputes over policy all the time, but they get 
worked out. But we are supporting that process in a direct way. 
Obviously, when the Secretary has an issue related to 
proliferation, she has us to call upon, and we are obviously 
working her broader agenda and the President's broader agenda. 
When she has meetings with the President on our issues, she 
brings the Under Secretary, John Rood, to those meetings and 
obviously relies on him, and he obviously relies on us for all 
of that work and expertise.
    So, it takes time because the ACDA merger brought us into 
the Department, but kind of just plopped it in the middle. Then 
I think this second reorganization really integrated us further 
into the work and the challenges we are facing today. And, it 
takes time, but we are really working, I think, as a team 
throughout the Department.
    For example, if you look again at the North Korea issue, 
Assistant Secretary Chris Hill relies on us to support all of 
the settlement actions. We have a nonproliferation disarmament 
fund, and we are funding all the actions to eliminate 
components from the reactor at Yongbyon, and that has been 
something that our bureau has really led the charge on.
    So I think there are always going to be personnel 
departures. Unfortunately, when we were being stood up through 
this reorganization, the government was also standing up the 
new DNI with a lot of new jobs that had better resources 
attached to some of those jobs, and they were able to steal a 
few of our people. But some of them went over and they realized 
they did not like it as much, they wanted to be back at the 
Department and working on these vital issues, we think, for 
national security.
    Senator Akaka. Ms. McNerney, when the Arms Control Bureau 
was abolished in 2005, some of the functions and staff were 
transferred to the International Security and Nonproliferation 
Bureau. In previous testimony, it was argued that this action 
made it much more difficult to achieve priority U.S. 
nonproliferation objectives.
    The Office of Inspector General's reports from December 
2004 noted that the State Department's Nonproliferation Bureau 
was already burdened with a wide range of issues. When you add 
to this list responsibility for topics such as missile defense, 
the chemical and biological weapons conventions, and the 
Fissile Material Cut-Off Treaty, one result, a previous witness 
argued, is an Assistant Secretary who is spread too thin to 
provide the senior policy leadership necessary in this critical 
area of national security.
    What would your response be to this assertion?
    Ms. McNerney. Well, I guess what I would argue is that, in 
fact, by merging these two, we have--and some of the 
responsibility of the Arms Control Bureau went to another 
bureau, so these were divided.
    Another aspect of that merger was there was a new Deputy 
Assistant Secretary position created, so it actually gave 
greater day-to-day front office management over a number of 
these issues by having an additional Deputy Assistant Secretary 
focused on the issues.
    The other part is, again, we did not just give all that 
responsibility in sort of one chain. For example, the Fissile 
Material Cut-Off Treaty became a core responsibility of the 
Deputy Assistant Secretary who is responsible for nuclear 
affairs. And so they are really integrating that into our 
larger agenda on a number of these nuclear affairs, the NPT 
Treaty, etc.
    You look at the Chemical Weapons Convention, again, 
integrating that into our broader chemical, biological office 
that has the range of issues.
    Then on the missile defense--the Missile and Space Policy 
Office, that office was originally put in the Verification, 
Compliance, and Implementation Bureau, and it was soon realized 
that it just didn't fit well there, that it fit more broadly 
into our larger nonproliferation agenda, and so that office, 
with the full complement of personnel, was later then moved to 
the International Security and Nonproliferation Bureau in order 
to accomplish that mission as well.
    So we think we have got a pretty good--people are working 
hard, obviously, and lots of long days, but I think we have got 
a pretty good mix and balance in our issue area.
    Senator Akaka. Ms. Taglialatela, in our previous hearing 
testimony, it was stated that the Senior Management Panel, the 
panel tasked with crafting the recommendations for the 
reorganization, operated in near secrecy without the direct 
benefit of the Department's human resources expertise. Why was 
the Under Secretary for Management not put in charge of 
implementing this reorganization?
    Ms. Taglialatela. Mr. Chairman, I apologize, but I do not 
know why senior management made the decision. Generally at the 
Department, when a reorganization or merger has been approved 
through congressional notification, the actual implementation 
is left up to the individual bureaus. In the case of the 
merger, the then-Under Secretary for Arms Control and 
International Security formed a Senior Management Panel made up 
of Deputy Assistant Secretaries from each of the three 
bureaus--being Arms Control, Nonproliferation, and 
Verification, Compliance, and Implementation--to sit down and 
work through the actual reassignment of individuals. Also 
included was the executive assistant to the Under Secretary.
    At that time initially, they started to meet to work 
through the concept, sort of the idea of where people would go. 
Some of the employees expressed concern both to the employees' 
union, being the American Foreign Service Association and the 
American Federation of Government Employees, as well as some of 
the employees expressed their concerns within the T hierarchy, 
and they asked that a member from the Bureau of Human Resources 
and a member from their Executive Director Office sit in on the 
meetings.
    When they had their initial preliminary planning meetings 
and started talking about actually moving people, I personally 
sat in on a number of those meetings. We did begin halfway 
through the process to have meetings with the employees. I will 
tell you that had I been left in charge, I probably would have 
done it differently and engaged the employees much sooner. But 
when they had finalized their organizational structures and 
started to identify people, they did meet with employees. They 
did offer them an opportunity to express where they might like 
to go, which of the offices they would be most interested in. 
Some of them had obviously specific places that they were well 
suited for, which was basically where they were in the old two 
bureaus. They moved into similar positions under the new 
bureau, and they moved forward.
    I think in hindsight, the process could have been a little 
more transparent. It could have been a little more informative 
throughout the process. This is not the first merger or 
reorganization I have been through in the Department. I think 
that every one of them has had its share of problems because I 
think employees, when you start talking about their occupations 
and their careers, everyone gets very nervous, very excited 
about what is going to happen to them specifically, as well as 
what is going to happen to their office, their organization, 
and their colleagues. We probably should have done things a 
little bit differently. But in the end, employees were kept 
aware of what was happening and were allowed to express their 
interests in what they would like to do.
    Senator Akaka. Ms. Taglialatela, I have a series of 
questions I would like you to answer about personnel 
management, and you can even answer yes or no, if you wish. And 
here are the questions.
    Is it normal procedure there for career staff to be removed 
from management positions and be replaced by someone with less 
rank and experience?
    Ms. Taglialatela. It is not normal to do that, sir. What 
happens in a merger when two organizations that are performing 
similar functions or you are going to merge two similar offices 
together, you always start out with two office directors, 
possibly two deputy office directors, several branch chiefs. 
And when you merge the offices together, you have to figure out 
first what is the best appropriate organizational structure. 
Then what you have to do--and that is where the Bureau of Human 
Resources participates, is in the design of those 
organizational structures. Then it is up to the managers who 
are well aware of the capabilities of the individuals, their 
contributions, what abilities and skills they have as managers, 
as well as their expertise in the area, and figure out how best 
to place people within the organizational structure that has 
been approved.
    Senator Akaka. Is it common to name detailees from other 
agencies in positions such as acting office directors?
    Ms. Taglialatela. It is not prohibited; it is something 
that is not encouraged. Obviously, we look to put individual 
employees from within the Department in those key jobs as a way 
of giving them opportunities to expand their career, to enhance 
their abilities to perform and to retain the talent and 
expertise within the Department.
    Senator Akaka. Is it normal to have employees indicate job 
preferences without position or office descriptions being 
provided?
    Ms. Taglialatela. Yes and no. I think when you look at 
organizational--when you are taking two functions and putting 
them together, one of the first things that they did in the T 
reorganization is look at their office structures and determine 
how many people were needed--sort of guesstimate how many 
people would be needed in each of the offices to perform the 
functions. Based on that, there were generic descriptions of 
what each of these offices would do, the kinds of functions 
they would perform, the areas of responsibility they would 
have. And they asked people to identify where they might like 
to work based on that, with the understanding that no one was 
going to lose grade. Obviously, some people would be moved at 
grade, but if they departed, their jobs would be reclassified 
and reassessed to fit better into the organization.
    I think some people were a bit concerned because, yes, if 
you do that, then you are never sure what the grade of the job 
is you are going into. But everyone was guaranteed up front 
that no one would lose grade. So that there shouldn't have been 
concern about where they fit into the organization and what 
their role would be.
    Senator Akaka. Is downgrading SES level office director 
positions to the GS-15 level a normal practice at the State 
Department?
    Ms. Taglialatela. I would not say that it was normal. It is 
a practice that goes on because when you redefine the work 
being performed, sometimes the grade of the job goes down; 
sometimes the grade of the job goes up.
    Senator Akaka. Is it normal for the State Department, 
specifically the T Bureau, to not notify employees of promotion 
opportunities for which they may be well qualified?
    Ms. Taglialatela. When there are promotion opportunities 
anywhere in the State Department, they are to be advertised in 
the appropriate forum through Merit Promotion Vacancy 
Announcements and individuals are allowed to apply and 
considered fairly and equitably for those positions.
    Ms. McNerney. Mr. Chairman, I might add as well, something 
we have done to try to encourage even better transparency is 
not only expect officers to look at the normal Federal sites 
for notification of positions, but also to e-mail to each and 
every officer any opening and vacancy so that they are aware of 
that and have the opportunity to compete for such a position.
    Senator Akaka. Ms. Taglialatela, I understand that the 
State Department's Office of Inspector General reports released 
in December 2004 concluded that the Nonproliferation Bureau was 
overworked, the Arms Control Bureau was underworked, and that 
another bureau--the Verification and Compliance Bureau--should 
be downsized and its responsibilities severely reduced. 
However, the newly merged International Security and 
Nonproliferation Bureau was reduced in staff size, according to 
a previous witness, far below the total size of the combined 
number before the merger, while the newly named Verification, 
Compliance, and Implementation Bureau grew in size and 
responsibilities.
    Can you explain to me this apparent departure from the 
findings and conclusions of the OIG?
    Ms. Taglialatela. We monitor the compliance responses to 
the OIG. We are not responsible for ensuring that they are 
implemented. Any time the Inspector General's office does an 
inspection of an organization and they have a list of 
recommendations, it is incumbent upon the appropriate bureaus 
to provide response.
    In the case of the reorganization, I can only assume that 
ISN provided responses--ISN, VCI, and the Under Secretary for 
Arms Control and International Security--to the Inspector 
General which defined how they were going to allocate their 
resources and why--if, in fact, the recommendations were to 
reduce the Verification, Compliance, and Implementation Bureau, 
why, in fact, it grew.
    Ms. McNerney. Yes, just on that point, obviously this was a 
decision by then-Under Secretary Bob Joseph and Secretary Rice. 
But my understanding is they looked at the recommendations from 
the OIG and felt that a way to address the core concerns laid 
out by the OIG was to take some of the responsibility of the 
Arms Control Bureau and add them to the Verification and 
Compliance Bureau. And so it is that shifting of responsibility 
which meant some shifting of personnel. But there certainly was 
no overall reduction in people, and if you look at the two--if 
you look at the International Security and Nonproliferation 
Bureau, it is obviously much larger than the original NP Bureau 
or the original AC Bureau. But the additional people that would 
have been in one of those bureaus, basically the Arms Control, 
were shifted to the Verification and Compliance Bureau. And so 
they had more responsibility and, therefore, more personnel 
were put towards that new responsibility.
    There was just a very small shift of four personnel to the 
Political-Military Affairs Bureau, so that was quite minor.
    So, overall, the International Security and 
Nonproliferation Bureau certainly grew as a single bureau, but 
then overall, the numbers pre-reorg and post-reorg within the T 
Bureaus stayed static.
    Ms. Taglialatela. May I add a comment, please?
    Senator Akaka. Yes.
    Ms. Taglialatela. I think one of the things--and I am not 
sure what specifically your witness was alluding to, but one of 
the things that I would like to make clear is that from 2004 to 
the present time, the State Department has not received any 
additional resources. A lot of our resources have gone to 
staffing our embassy in Iraq, our embassy in Kabul, expanding 
our presence in Pakistan. And because of that, we have taxed 
the bureaus for reductions to gather up new positions that can 
be reprogrammed to these priorities.
    So since 2004--or 2005, the bureaus domestically have all 
lost resources because of reprogramming to these priorities. So 
over time, I believe ISN has lost resources that were not 
necessarily attributed to the fact that we did not believe they 
needed them, but because the Secretary declared we had a 
priority that we needed to staff to 100 percent, and we moved 
resources to that priority.
    Ms. McNerney. But just to follow up on that, we all across 
the Department, all bureaus were required to give the Under 
Secretary for Management sort of a snapshot of where we could 
impose cuts. And it was our view that given that we had just 
gone through this exercise, we really were pretty close to the 
bone in terms of our staffing. And he agreed with that, Pat 
Kennedy, the Under Secretary for Management. So we were as a 
bureau certainly less impacted than others around the 
Department, including many of the regional bureaus.
    Senator Akaka. Ms. Taglialatela, I heard in previous 
testimony that three of the four International Security and 
Nonproliferation Bureau leaders, as well as the Special 
Assistant, were chosen from the Arms Control Bureau by Bob 
Joseph, who was then the Under Secretary for Arms Control and 
International Security. This appears to go against the Office 
of Inspector General's December 2004 findings.
    Why would the Under Secretary choose to eliminate leaders 
from the Arms Control Bureau, which has, in the words of the 
OIG, faced--and I am quoting--``palpable morale problems''?
    Ms. Taglialatela. My understanding is that at the time, if 
I remember correctly, Mr. Semmel, who came from the 
Nonproliferation Bureau, Mr. Mahley, and Mr. Record, both who 
came from the Arms Control Bureau, were made the Deputy 
Assistant Secretaries. They had all previously been Deputy 
Assistant Secretaries, and they continued to serve as Deputy 
Assistant Secretaries. Only at the time of their departures 
were adjustments made to the staffing of the Deputy Assistant 
Secretary positions.
    Senator Akaka. I understand that the Under Secretary for 
Management, Henrietta Fore, met in December 2005 with at least 
11 individuals who had expressed concerns about the 
implementation of the T Bureau reorganization. Their concerns 
included the complete absence of career civil servants advising 
the panel charged with reorganization and a lack of 
transparency in the selection process for acting office 
directors.
    Was any action taken to address their concerns?
    Ms. Taglialatela. Yes, Mr. Chairman. Based on that meeting, 
along with issues raised by the two employee unions, the Under 
Secretary, Henrietta Fore, had a conversation with then Under 
Secretary Joseph, and the two of them decided that it would be 
appropriate for a person from the Bureau of Human Resources to 
sit on the Senior Panel. I was asked to join the Senior Panel. 
I participated in many of their meetings. We talked about the 
assignment of employees. I focused primarily on the grades and 
previous jobs of the employees and where they were being 
crosswalked to. When it came down, again, to two individuals 
who had similar backgrounds and were serving in similar 
positions and one of them was being reprogrammed because we did 
not need two, such as deputy directors or branch chiefs or 
division chiefs, they were the ones who made the final 
decisions because they knew the individuals and their specific 
strengths, weaknesses, their specific expertise, and they made 
the final decisions. I ensured that everybody was being looked 
at in a fair, honest way. When there were promotion 
opportunities, they were advertised. People were given the 
opportunity to compete.
    So I believe that, in essence, the process was fair, and 
the Under Secretary for Management was very concerned and made 
sure that there was fair representation for the employees. She 
also attended a townhall meeting with them, at which Under 
Secretary Joseph was present, and from that time forward, we 
had periodic townhall meetings with all of the employees to 
answer their questions.
    Senator Akaka. Mr. Warren Strobel, formerly of the Knight-
Ridder news service, wrote an article in which he mentioned 
that a half-dozen State Department employees who were very 
concerned about the loss of knowledgeable experts in the newly 
merged bureaus would only speak on condition of maintaining 
their anonymity because they feared retaliation.
    From your perspective, do you think these employees had any 
reason to fear retaliation?
    Ms. Taglialatela. From my perspective, no, sir.
    Senator Akaka. Mr. Strobel from that news service 
identified Thomas Lehrman, who headed the new Office of Weapons 
of Mass Destruction Terrorism, as advertising for government 
positions, citing political loyalty to President Bush and 
Secretary of State Rice as a qualification. I am very troubled 
by this report because it clearly violates the Merit System 
principles. Is this story true? If so, what specific actions 
were taken to correct Mr. Lehrman's actions?
    Ms. Taglialatela. Mr. Chairman, I am sorry to say that is a 
true story. The individual did send out such an e-mail to a 
number of colleagues and associates asking if they were 
interested in positions. When we found out about it, we asked 
him and made sure that he responded and sent out a follow-up e-
mail basically taking down the offer for employment. We 
explained to him very clearly that there is an appropriate 
process by which we advertise jobs at the State Department. And 
we told them if they wanted to go ahead and advertise jobs, 
that we would work with them to do so.
    Senator Akaka. Was any Department or bureau-wide training 
conducted to prevent this from happening again in the future?
    Ms. Taglialatela. No, sir. We talked specifically to the 
Executive Office, who is responsible for posting or advertising 
their vacancies. The people who were responsible for filling 
positions in the bureau were not aware of what this gentleman 
did until we saw the e-mail that went out. It was an informal 
job advertisement as opposed to an official advertisement from 
the Department. But you would have to ask someone in the bureau 
if senior management talked to all of their managers about this 
issue.
    Ms. McNerney. I can discuss what we do now. That obviously 
was an appalling action on the part of that particular officer, 
and he came to realize that he had obviously acted outside of 
his responsibility.
    When we look at employment now, I make sure that any time 
there is a vacancy that the office director begins to talk to 
their Deputy Assistant Secretary, about what are the needs, 
what are the gaps, what kinds of employees do we want; and then 
we work closely with our Executive Office within the bureau to 
create the position description; and then we move to do that 
through the normal advertisement channels. So there has been 
reoccurrence of such an activity, and I think all of our office 
directors are working very closely with their Deputy Assistant 
Secretaries as well as the front office management to be sure 
that we are doing this by the book. And I certainly would not 
tolerate such behavior.
    Senator Akaka. Well, Ms. McNerney and Ms. Taglialatela, 
recently I held a hearing on the Federal hiring and recruitment 
process. One of our witnesses was a chief human capital officer 
from the Nuclear Regulatory Commission. While NRC has some 
unique hiring flexibilities, they have a robust and effective 
recruitment process that could be applied to any Federal 
agency. For instance, NRC has partnered with the University of 
Puerto Rico to hire and further train engineering students. 
Additionally, all the managers at NRC also serve as recruiters 
at conferences and meetings, and I was glad to hear you mention 
in your statement that you have interns that come in. These are 
ways of dealing with the problems we have with personnel 
hiring.
    What similar recruitment efforts could be done at the State 
Department to improve the staffing needs in the scientific 
fields?
    Ms. Taglialatela. Mr. Chairman, we have a very robust 
recruiting program. The State Department is very concerned 
about the baby-boomer retirement tsunami that is beginning now. 
We assume we are going to lose a lot of our talent. For the 
last 5 years, we have been the No. 2 agency in the Federal 
Government for recruiting Presidential Management Fellows, some 
of whom are educated in the scientific and technical areas, 
some of whom have other job experiences in the area of arms 
control and nonproliferation.
    We also have an active program--called Pickering and Rangel 
Fellows--which are predominantly geared towards the Foreign 
Service, but they do come on board and work in various areas, 
both in Washington and in our embassies overseas, again and who 
have scientific and interests in arms control and nuclear 
nonproliferation.
    We have partnered very closely on the AAAS program, and as 
Ms. McNerney said, we use them quite frequently. They have 20 
percent of our AAAS fellows in their program. And we do use 
intern programs to the fullest extent. We usually, particularly 
during the summer, as we are beginning the summer right now, we 
will have over a thousand interns in Washington and in our 
embassies overseas, again, trying to encourage people to be 
interested in and look to some of the career occupations that 
we have at the Department so that we can start interesting them 
in a career at the Department. So we have a very robust program 
that we are working on.
    We have also created some additional programs. We have 
Jefferson Science Fellows who we bring in for a year from the 
academic. We usually have five to ten a year. They come in, 
they work in various bureaus, providing and lending support to 
those bureaus on various scientific, technical areas. When 
their year is completed, they go back to their universities, 
and they remain a consultant to the Department for the next 4 
to 5 years. So we are looking strongly at creating that 
interest in the community.
    We also have in our embassies overseas what we call 
environmental, scientific, and technical technology officers. 
These are people who have very specific interests in the area, 
and they work very closely with the people in the T Bureaus as 
well as in OES on these kinds of issues. They develop their 
expertise through the Foreign Service Institute and their 
experiences overseas, and we do attempt to rotate them back to 
Washington into bureaus like ISN, VCI, and PM.
    Ms. McNerney. Mr. Chairman, just following on that, I think 
if we really were--there are a lot of people who kind of keep 
looking back to 2005, and obviously any reorganization has 
turmoil to it. I think if we are really looking at what we have 
now, I think we have got the right structure, but people are 
really at the heart of how we can do our jobs. We have some 
terrific top-level managers that are reaching retirement age. 
In 5, 6 years, they are gone. How are we building a workforce 
that can go beyond? And one of the ways that we are doing it at 
the bottom levels is obviously the Presidential Management 
Fellowships. These are the entry-level talented officers, many 
of them Master's programs, some Ph.D.s One of my colleagues 
behind me is PMF, and she is about to go off to Lawrence 
Livermore Lab for 2 months and really develop some of that kind 
of expertise.
    We have some of our PMFs out to embassies in Abu Dhabi, for 
example, where you really have the question of transshipment of 
proliferation-related items to Iran, and so really 
understanding what is going on, how they can interact.
    We have sent some of our officers--one of our officers 
right now is doing a rotation at the National Security Council, 
developing really kind of that leadership expertise at the mid-
level, but she was a PMF who spent time in Beijing. So there is 
this requirement to really give opportunities and an expansive 
kind of look.
    Then there is the mid-career--there are just less of them 
because there was that period where there was less hiring. But 
one thing we have done is I have worked with Pat Kennedy to 
approve creation of a position at our UN mission to the IAEA 
and try to build up a rotation there where we can develop the 
safeguards capabilities because that is such an essential piece 
of what we do in terms of applying safeguards to programs like 
Iran, like North Korea, and so building up those kinds of 
rotations where they see the IAEA and how it works on the 
ground. But we have got to be recruiting good people.
    We recently opened a position in our bureau for a PMF, and 
20 percent of all PMFs applied for that one single position. So 
we are getting the best and the brightest, and I could not 
believe the resumes. I mean, just every one of them quite 
talented. So it is very competitive, obviously, and that is a 
good thing. And we are recruiting some of the best, but we need 
to do more. And we obviously do it within the limitations of 
our budgets and our personnel ceilings.
    Senator Akaka. Thank you.
    Ms. Taglialatela, one of the significant barriers to 
Federal service for many scientists or other professionals is 
the student loan debt and comparatively low salary in the 
Federal Government compared to the private sector. Agencies 
have been authorized to pay back student loans for an employee 
up to $10,000 per year and $60,000 aggregate. In fiscal year 
2006, the State Department provided loan repayments to 869 
employees totaling more than $4 million.
    How much do you see debt from student loans as a factor in 
the State Department's recruitment of scientists and 
professionals?
    Ms. Taglialatela. Mr. Chairman, thank you for that 
question. Student loan repayment is a significant issue with 
the younger generation. What we have found is that with the 
rising costs of education throughout the country, it is very 
difficult for young people to enter into the Federal Government 
at the salaries which we are able to offer without student loan 
repayment.
    What we are proud of at the State Department is that we are 
one of the top agencies and we are a best practice across the 
Federal Government for student loan repayment. We have one of 
the most robust programs in the Federal Government. Based on 
the amount of money we are able to put into the program, we are 
able to offer individuals $4,600 or the maximum amount of their 
loan, because some are nearing the end of their loan, to people 
to pay towards their student loan repayment. It is an 
incredible incentive for young people.
    Senator Akaka. Can you tell me or provide for the record 
the number of staff in the ISN Bureau who have attended the 
Leadership and Management School, how many have participated or 
are participating in the SES candidate development program, the 
Council for Excellence in Government Fellow program, the Civil 
Service Mentoring program, the Situational Mentoring program, 
and the Civil Service Mid-Level Rotational program?
    Ms. Taglialatela. Unfortunately, sir, I do not have that 
information handy, but I would be more than happy to provide it 
for the record, sir.

                  INFORMATION PROVIDED FOR THE RECORD
    As of March 2008, 67 out of 130 eligible employees at the GS-13, 
GS-14, and GS-15 levels from the International Security and 
Nonproliferation (ISN) Bureau have completed leadership training at the 
Foreign Service Institute (FSI).
    One ISN employee was selected for the Department of Homeland 
Security's Career Development Program (an SES training program) 
beginning in 2007 and running into 2008. He remains an ISN employee, 
and the Department funded his training costs, totaling around $40,000.
    The ISN Bureau has four mentees and four mentors in the 2008 Civil 
Service mentoring program, as well as five mentors who have volunteered 
as situational mentors. The ISN Bureau also has one participant in the 
current Civil Service Mid-Level Rotational program.
    No employees from the ISN Bureau have participated in the Council 
for Excellence in Government program since the bureau's creation in 
2006, due in part to the high cost of the program.

    Ms. McNerney. I might just add on that, I know we have 
certainly encouraged participation in many programs, but we as 
a bureau and as the Department have--unlike some of our 
agencies, we have very limited funding for things like the SES 
training program, which I think costs some $15,000, $20,000 for 
an officer to do. When we encourage training, we encourage them 
to go to the Foreign Service Institute where everything is free 
for us as a bureau, and so that is really the mechanism by 
which we encourage most of our training.
    There have been a couple instances where there might be 
some sort of fellowship training. One officer with Harvard 
negotiated so that he only had to pay a small amount, and they 
picked up a lot of it. And it is that kind of thing where if we 
can even get a little seed money and get our officers out, we 
certainly encourage that. But these things cost money. The 
State Department has budget constraints, and so there are 
limits on the kinds of things one can encourage.
    Senator Akaka. Ms. McNerney, I have heard recommendations 
from previous witnesses about the need for a career path that 
develops scientific skills within the ISN Bureau. Do you agree 
with this assessment? If so, where is the ISN Bureau falling 
short in its current training and career paths for civil 
servant scientists? And what do you envision the career path to 
include that is different?
    Ms. McNerney. Well, I would just sort of reiterate that a 
lot of the scientific training comes before an officer arrives, 
so we try to recruit those with a scientific background. Some 
of the ways that we try to encourage sort of on-the-job 
training is through these kinds of rotations to our labs. This 
position we have created at the IAEA to try to increase the 
understanding of safeguards and how they are applied through 
training opportunities at the Foreign Service Institute, 
through the recruitment of these AAAS fellows where you bring 
in those with some science background that can basically be on 
the staff, and it is a resource for other officers who may not 
have quite that same background. And sometimes someone with the 
real hard-core science background does not necessarily know how 
to integrate it into the policy discussions. And so that can be 
a resource where you have people who understand the policy 
ramifications more that can tap into some of that scientific 
expertise.
    We also work closely with the Department of Energy, the 
Department of Defense, others that--they obviously bring--as 
well as our intelligence community many times to augment a 
delegation to support U.S. interests. We will look to some of 
those experts around the government. We do not limit ourselves 
simply to what is on the State Department manifest. And so 
there are really a range of ways, but, again, I would get to 
the point of recruitment and some of these younger officers, 
getting them in. Our current front office structure at the 
senior levels, we have one officer with a Ph.D., one with a 
M.D,, another with a Master's, and myself with a law degree. So 
we have kind of covered the range of alphabet soup of degrees 
out there, and I think having that blend and that mix is really 
part of the effort as well.
    Senator Akaka. Ms. McNerney, what positions at the 
ambassadorial level are reserved for Civil Service substantive 
experts?
    Ms. McNerney. That is one of the areas, I think, where 
there is--obviously within the Foreign Service they guard 
closely their ability to maintain the ambassadorial rank 
positions. And so we are somewhat limited, really, in having 
those. We do have the Ambassador to the Conference on 
Disarmament who reports to our bureau. We also have the 
Ambassador to the Organization for the Prevention of Chemical 
Weapons (OPCW). Again, that is a direct report to our bureau. 
And we have on staff now--both have retired this year, 
actually. They have kind of tapped out, but Ambassador Don 
Mahley and Ambassador Mike Guhin, what we have done is retained 
them and their expertise through contract to continue doing 
work for us even as they have retired. And that is an important 
aspect of maintaining some of the expertise we have spent so 
many years developing as well.
    Senator Akaka. Ms. McNerney, I notice that few of your 
senior leaders--that is, office director and above--are female 
career civil servants or Foreign Service officers. What is your 
plan to develop women and minorities for senior leadership 
roles in the ISN Bureau?
    Ms. McNerney. Well, actually, things have changed a bit. 
People are kind of joking that I am turning it into an all-
female staff. But in our front office, myself and Mary Alice 
Hayward are two of the senior officers. We have additionally 
two male officers, one of them who is Acting Deputy Assistant 
Secretary, also of minority descent--Asian American. And when 
you look down to our office directors, we now have Ambassador 
Rita Ragsdale, who is one of the Ambassadors, one of the office 
directors, as well as an additional Foreign Service officer who 
heads our Export Control Office, as well as another female 
officer who runs our missile technology regime.
    Then if you look down another layer, the women really--a 
number of them are deputies, and a number of officers as well 
that we are really kind of bringing up the ranks.
    So, some of this is generational as kind of the development 
process happens. But I certainly think if you look really 
across the bureau at both the leadership, the emerging 
leadership of women, and the sort of mid-level as well as the 
entry level, you see a lot of very capable women, strong women, 
and I think also we try to--obviously want to attract across 
the board not only from the female standpoint but all 
minorities, and try to really attract and have a talented but 
diverse workforce. And I think we are succeeding there.
    Senator Akaka. Now that you have used the word 
``minorities,'' let me ask you, what are your plans to develop, 
bringing in what we call a diverse group of personnel, into 
your Department and to diversify the personnel there?
    Ms. McNerney. Obviously, we do all our hiring through the 
legal processes that are put before us. But, I think, all 
things considered, we are doing a pretty good job of attracting 
a pretty diverse workforce. The Department traditionally was 
sort of the white man's group, and I think Secretary Rice likes 
to look back at the last 12 years, and it certainly has been a 
different face at the top, which also sends a very strong 
message for recruitment as well. And I think certainly one of 
the things I have tried to look at not only looking at those 
with the top credentials, but seeing if there are some talented 
young officers that maybe did not have the opportunities for 
schooling or for education, but they look like they are bright 
and they want to work hard, look at ways we can really help 
them integrate into our workforce and to ensure through legal 
methods that we have the kind of workforce that one would 
expect at the State Department.
    Senator Akaka. Ms. Taglialatela, would you care to make 
comments on this question that I just asked?
    Ms. Taglialatela. It has been the policy of the Department 
and our goal to have a diverse workforce. Particularly when you 
look at what our role is, we want to be the face of America, in 
our embassies overseas, and here in Washington as well. And 
this is where we have relied very heavily on the Presidential 
Management Fellows. We have a very engaged career entry program 
for recent college graduates, and we also rely very heavily on 
our internship program to attract a diverse population.
    The State Department has 17 diplomats in residence who are 
all career Foreign Service officers, many of whom have served 
as Ambassadors, located at universities throughout the United 
States. While they are assigned to a particular university, 
they actually cover regions, and they deal with particularly 
diverse populations where they seek out and try to make young 
people aware of what the State Department is, what we do, what 
are the opportunities there for you, and encourage them to 
consider the State Department as an internship.
    We find that many young people who have no idea what the 
State Department is or truly what we do, once they come to an 
internship for a summer as a sophomore or a junior, many get 
hooked on what we do and start to think about it as a career 
for the future. So we really rely very heavily on our diplomats 
in residence and other individuals who travel around the United 
States to encourage young people to consider it as an 
occupation.
    Senator Akaka. I will have two more questions for both of 
you. In previous testimony, it was suggested that the Foreign 
Service creates few incentives for Foreign Service officers to 
obtain the knowledge for leadership positions in 
nonproliferation and arms control. How would you develop a 
career path for FSOs in these areas?
    Ms. McNerney. Well, one of the challenges we really do have 
as a bureau is attracting Foreign Service officers. And I think 
that the reason for that is in terms of if you are looking at a 
career track as a Foreign Service officer, spending a couple 
years at a bureau, a functional bureau, really does not build 
the kind of relationships out to the embassies, because the 
regional bureaus control the hiring out at those embassies. And 
so it has been a perennial challenge for us to really attract 
good officers. And those that work the issues out in a post, we 
work with very closely. There is usually a political-military 
officer who does the range of nonproliferation and security 
issues out at an embassy, and that individual builds those 
relationships with us back here, but when they come back to 
Washington, tend to want to go to the regional bureaus. And the 
best and the brightest--the ones you want to attract, 
obviously--are obviously going to be looking at their career 
and their future and trying to build that.
    So it really has been a challenge for us to be able to get 
the top Foreign Service officers. In fact, many of our postings 
for vacancies just go unfilled. And so what we do instead is 
try to convert those for short-term hiring and at least get an 
ability to bring in some talented people to do the work that is 
required, because we do need to be meeting our requirements 
regardless of whether we can attract the Foreign Service.
    I have talked to the Director General about this, and I 
just have really encouraged him to think about how he can 
seriously take a look at attracting good Foreign Service 
officers through incentives. And if there isn't a mechanism or 
if it is decided that they would like to keep the status quo, 
then we need to seriously consider switching those to Civil 
Service positions, because certainly the workload is not going 
away just because a Foreign Service officer does not bid on a 
post. But, I think certainly, if we are talking about building 
the expertise of the Foreign Service in these areas--and these 
are great challenges of the day, obviously--a tour in one of 
our bureaus certainly would be an ideal way to develop that 
kind of capability.
    Senator Akaka. Would you care to make a comment on that, 
Ms. Taglialatela?
    Ms. Taglialatela. Yes. The Director General is fully aware 
of the problems we have recruiting people to the non-
traditional Foreign Service bureaus, the functional bureaus in 
particular. And I think we are always encouraging officers to 
do a tour in a bureau that is not traditional to his or her 
occupational series or career track.
    What we have done for the Foreign Service officers is 
create a career development plan that says before you can move 
from the Foreign Service into the Senior Foreign Service, you 
have to have done a number of things. And based on the 
individual cones, we encourage officers to serve out of their 
particular career track. We encourage them to serve in bureaus 
other than regional bureaus. But along with that, we encourage 
them to learn more than one language, serve in several 
different bureaus in several different regions when they are 
overseas. We are attempting to stimulate them to become true 
generalists, have broader backgrounds, and hopefully this way 
we will encourage them to look at these opportunities.
    Right now, because of the demands on Iraq, Afghanistan, 
Pakistan, China, India, and the fact that we have not gotten 
additional Foreign Service officers, unfortunately we have a 
shortage of Foreign Service officers, particularly at the mid-
levels, to fill positions. We have asked in our 2009 budget for 
additional resources. We are working with Congress as they look 
at our 2009 budget to see if, in fact, we can get additional 
resources. But as long as there are more jobs than there are 
people, obviously they are going to pick the jobs that they 
find to be more career enhancing in their perspective.
    Senator Akaka. Do you have any recommendations for 
improving the organizational structure and staffing for the T 
Bureau? If so, what are your top three?
    Ms. McNerney. Well, I guess I have read the transcripts 
from the last hearing. The one thing I would recommend highly 
that we do not try to do is re-create a separate agency. I 
would bet some money that if you went around and polled the 
employees and asked them, ``Do you want to work at the State 
Department or a separate agency?'' you would hear 
overwhelmingly that these officers are proud to be working at 
the State Department. They feel they are integrated into the 
policy structure, and that is where they certainly would like 
to stay.
    I think an area for encouragement, sort of my second point, 
would be if you are going to continue to encourage officers to 
stay with it, move up the chain, you have got to have 
incentives for movement up to the SES level. There has been a 
reduction across the government, I believe--Linda can get into 
that--in the number of SES slots. And so there is limited sort 
of ceilings for people as they are moving up the chain. And so 
looking at whether you cannot create a few more of these kinds 
of incentives to young officers that see a career path that is 
not going to stop at a GS-14 or GS-15 is obviously essential to 
continuing that kind of movement.
    And then I think the third recommendation might be to look 
at whether there isn't a way to hire a little bit uniquely for 
some of this expertise that we need to attract. The hiring 
processes are cumbersome, and you have requirements about how 
you go about attracting good people. We, as I say, do it by the 
book, but it is pretty difficult to find someone with some of 
the background and capability using sort of the typical 
processes unless you are going to start sort of young, as I 
discussed, and kind of train them and groom them. And then, of 
course, any officer for any sorts of reasons can decide they 
want to move to another agency, move to another bureau within 
the Department, quit government and move somewhere else, take a 
break from working for a period of time. All those things 
through all of it, nothing is sort of fail-safe as you develop 
these kinds of incentives. But I think to the degree that we 
sort of see long-term ability to move up the chain and to have 
some of the rank and position, that is a great incentive for 
Civil Service officers.
    Senator Akaka. Ms. Taglialatela.
    Ms. Taglialatela. Thank you, sir. One of the things we did 
2 years ago was we created our Civil Service Mid-Level Rotation 
program. This program allows a number of Civil Service 
employees to apply, and once selected, swap jobs so that there 
is no vacant job, but they all move to a different bureau. Most 
of them have analytical reporting, writing, advocacy kinds of 
training backgrounds so that at the GS-12/GS-13, they are 
actually learning to use their skills in a different 
substantive area.
    Sometimes it is more difficult to do it in highly technical 
areas such as the T Bureau family, but one of the things we 
could consider to give them greater experience is to allow 
them--or set up something within just the T family where they 
rotate amongst the bureaus there and develop different 
perspectives of the same sort of subject matter.
    As far as the SES program goes, the State Department has 
implemented a SES candidate program. We are in the process of 
selecting the candidates. We have 98 candidates applying for 
five to six candidate positions. We will be interviewing 
candidates in the next month. There are highly qualified 
candidates from throughout the Department, but including the T 
family.
    Another thing we probably need to look at in greater detail 
is opportunities for either training or developmental 
assignments for individuals. I think one of the things that is 
very frustrating across the State Department is the fact that 
we do run two personnel systems. Civil Service employees tend 
to get in a position and stay in them for a very long time, 
very traditional to all the other Federal agencies. 
Unfortunately, we have Foreign Service officers who rotate 
every 2 to 3 years in Washington and overseas, and I think 
people get the lust to move on, do different things, have 
greater experiences because they see their colleagues who are 
sitting right next to them doing just that.
    So it has presented a problem to the Department which we 
are looking at, such as through the Civil Service Mid-Level 
program and other kinds of training programs and developmental 
assignments to help the Civil Service get greater flexibility 
in being able to move around the Department.
    Senator Akaka. I would like to thank both of you for your 
testimony and your responses. However, I am concerned that the 
arms control, counterproliferation, and nonproliferation 
bureaucracy has been crippled by the 2005 bureau reorganization 
as well as by the ACDA merger with the State Department in 
1999. I am not convinced this bureaucracy in its current state 
has the human capital and organizational structures in place to 
respond to future challenges. This Subcommittee will continue 
to focus on reforms to critical aspects of our national 
security. Over the next few months, we will examine the foreign 
assistance and public diplomacy bureaucracies and processes.
    I will also be looking at transition planning. There will 
be a new President next January and new leadership at the State 
Department. We must take every step to ensure continuity in key 
positions at the Department, especially in light of the high 
rate of retirements within the Foreign and Civil Service ranks.
    Before we adjourn, I want to acknowledge a large group of 
students from California who I understand are in this audience. 
Is that correct? Yes. Well, welcome. I am glad you are here, 
and I want to express the hope that you have paid attention to 
the opportunities for public service in the State Department. 
And I hope you would look with interest in taking up some of 
those opportunities. And I want to welcome you from California 
to this hearing.
    The hearing record will be open for one week for additional 
statements or questions other Members may have.
    This hearing is adjourned.
    [Whereupon, at 3:38 p.m., the Subcommittee was adjourned.]
                            A P P E N D I X

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