State Dept on Embassy Workers Unionization: Yo! Could Put U.S. National Security at Risk

— By Domani Spero

Eric Katz via govexec.com: State Department Says Unionizing Its Foreign National Workers Would Threaten Security

The International Federation of Professional and Technical Engineers — a union housed within the AFL-CIO — reached out to the State Department about the possibility of unionizing more than 40,000 “locally employed” staff in foreign countries. State responded that it does not have the legal grounds to seek a collective bargaining arrangement with the employees.

Additionally, the State Department said it simply had no interest in seeking to unionize the employees.

“Such unionization at diplomatic and consular missions is fundamentally incompatible with the basic functions and operations of such missions,” Steven Polson, State’s chief labor-management negotiator, wrote in the letter.

He added unionization “could, frankly put our foreign relations and national security at risk.”  

According to govexec, Mr. Polson cites the potential “logistical nightmare” of collective bargaining with foreign nationals paid under 176 different local compensation plans. And apparently,  “labor laws in certain countries prohibit their citizens from maintaining union representation.”

The report also said that Mr. Polson “encouraged foreign national employees to join “[locally employed] staff associations,” which could “meet regularly with post management to discuss concerns and resolve issues” and declared the “department has no interest in pursuing this discussion further.”

n 2009, Eddy Olislaeger, a veteran FSN at the US Embassy in Brussels founded the International Foreign Service Association (IFSA). The group wrote to then Director General of the Foreign Service Nancy Powell (now current US Ambassador to India) seeking her help in “formalizing a working relationship between IFSA and the State Department.” The State Department declined IFSA’s request on the basis that it was an attempt to establish a union.

More on this issue from the FSNs perspectives see:

Last Friday, IFSA issued a statement expressing disappointment “by the State Department’s continued rejection of any form of social dialogue with the largest component of its workforce.” It calls Mr. Polson’s argument against unionization “humiliating to the thousands of loyal and dedicated LE staff, let alone the 12,000+ men and women who work in security positions all over the world protecting US diplomats, US citizens and embassy facilities.”   The statement also notes that “Locally employed staff work in a legal vacuum, a system of Catch-22 rules and regulations, a compensation plan that lacks transparency, the absence of a system of accountability for management and a corporate culture that is not conducive to openness.” It expresses its commitment on continuing “to seek a dialogue aimed at breaking down the inequities in our workplace.”  Read in full here.

The current number of local employees working at U.S. Embassies worldwide as of March 2013 is 45,576.  A 2007 State/OIG report noted that since 1998, far more local embassy employes have been killed in the performance of their duties than have American Foreign Service employees.  The report points out the need for the Department “to codify in one place and strengthen its commitment to LE staff.”  That report recommended not only the development of “a bill of rights for locally employed staff” but also the establishment of a “a locally employed staff ombudsman position.” Neither of those recommendations, as far as we know has been implemented by the State Department.

In 2008, State/OIG did an inspection of the compensation issues of local embassy staff.  A report it issued on April 30, 2009 (Review of Locally Employed Staff Compensation Issues (ISP-I-09-44) included the following:

The U.S. is falling behind in providing a competitive compensation package for LE staff that is commensurate with their experience, technical skills,and responsibilities. Office of the Inspector General (OIG) survey data show that the U.S. Government is implementing average salary increases that are approximately 60 percent of what could be termed “prevailing practice.”

U.S. missions worldwide told the OIG team of their concerns about the current LE staff compensation review process, including discontent with off-the-shelf salary survey data, lack of transparency in the process, disparities between the salary and budget cycles, the use of outmoded and cumbersome communication technology, and the lack of interagency involvement and decision making.

Here’s the funny part, please get ready to laugh.

Image via Wikimedia Commons by Saibo

Image via Wikimedia Commons by Saibo

The State Department through it’s HR office on Overseas Employment (HR/OE/CM) spends an extensive amount of time and energy  in the the local employee compensation reviews/surveys to determine prevailing practice.

That’s a largely wasted exercise since the Department and other agencies “cannot” fund the suggested locally employed embassy staff salary increases.

State/OIG noted then that “the current system is inappropriate and inefficient, does not meet the requirements of the FSA, cannot be justified or explained, and cannot be regarded as professional treatment of an irreplaceable, valued group of employees.”  The OIG team also found situations in which “embassies were losing staff to other employers, an occurrence often attributed to the inability of the Embassy to achieve pay parity with the local labor market.  Some missions found that it was difficult to replace employees who left to take other jobs, particularly in countries with low unemployment rates.”

That State/OIG report cited 27 missions which presented “compelling arguments that their lower grade employees fall short of minimal living standards.” These arguments included accounts of LE staff doing the following:

  • removing children from school
  • cutting back to one meal a day
  • sending children to sell water or little cakes or toiletries on the streets
  • foregoing prescription medication because they cannot afford the co-pay
  • resigning to move back to their hometown because they cannot afford to live in the post city
  • sending their families back to their home country because they cannot afford to live in the host country
  • the cost of rice for an average family equating to half the monthly wages of over 60 percent of the staff
  • employees depending on salary advances and defaulting on loans in order to cover basic expenses
  • grades 1 to 3 earning less than $1.00 per day
  • employees paying at least $250 a month for a single room apartment with a salary of $250 to $400 a month
  • up to 50 percent of salary being spent on groceries, and 40 percent on
  • utilities salaries falling short of official poverty levels

State/OIG has that in its report on local compensation issues. The report presumably was read by somebody with the appropriate pay grade at the State Department.  Read. Checked.

That’s from a four-year old report.  But we recently heard that in one European post, the bureau with the highest attrition rate for local employees, one post has not had a salary increase in about 10 years.

Look — the State Department collected $3.1 billion in consular fees in FY2012.   That large pie shows allocation to Resource Management for American Salaries at $433,508,000 and to the Foreign Service Institute-Consular Training, Conferences, and Workshops at $7,054,000.  We could not find allocation of any sort for local employees.  Despite the budget constraints, it’s not like the State Department is not pulling in shovels of money from its consular operation, because it is.  If you can allocate $430 million to the salaries of American employees, it is hard to understand why can’t you find a slice of that pie for the salary increase of local employees.

Is it that funds for local employees is not  a priority?  Is it that the State Department takes them for granted, after all, they chose to work for the USG? And, of course, will continue working for the State Department whether they get salary increases/pay parity or not.  Some decades ago, the USG also decided that local employees need not even be members of the Civil Service for retirement purposes.  This group of people cannot vote or contribute to U.S. social security.  Is it that they’re foreign nationals and Congress has no real interest in them?  There are 45,576 of them and aren’t they all just happy to have jobs working for Uncle Sam who takes care of them when he can?

Foreign Service Nationals are apparently the “sturdy backbone” that holds together our diplomatic missions overseas. And  because we treat them so well and all, there is absolutely no reason why they should ever need a union, or a bill of rights, or an ombudsman.  And if they get killed in the line of duty, well then …. they’d be lucky if they find a USG official to fundraise for their next of kin on his own time.

If this group of employees were a book, the following would be printed in bold on the dust jacket:

“FSNs provide more than services and corporate memory. They are the backbone of the Department and play an essential role in achieving U.S. foreign policy objectives. Their loyalty and dedication are legendary. Many FSNs have given their lives protecting U.S. embassies and employees.”

State Magazine (Official Magazine of the U.S. Department of State)

“Of approximately 40,000 FSNs employed worldwide by all U.S. agencies, 32,000—80 percent—work for the Department. Their knowledge, special skills and rich network of local con- tacts are priceless. They share our vision, our challenges, our risks and our burdens.”

Ambassador W. Robert Pearson (Director General of the Foreign Service, 2003-2006)

“I would like to say a special thank you to our 53,000 Locally Employed Staff serving around the world. These dedicated men and women perform many critical tasks and generously share their experience and wisdom with their American colleagues.

Ambassador Nancy Powell (Director General of the Foreign Service, 2009-2012)

“Consul generals come and go, ambassadors come and go, Secretaries come and go, but our locally employed staff really provides the continuity. You provide the memory bank of everything that went before, and we could not do this work without you as our colleagues working side by side every single day.”

Hillary Rodham Clinton (Secretary of State, 2009-2013)

“Americans who serve overseas are blessed to never serve alone. We rely on the support and the friendship and the wise counsel of our locally employed staff, and we trust our cause to their courage. Local employees around the world commit themselves to building strong and lasting relationships between their home countries and the United States, and they often serve for decades with loyalty and with devotion. You teach a steady stream of American diplomats who serve among you for a few years all about the values and virtues and beauties of your country and of the spirit of your people. You are the sturdy backbone that holds together the kind of mission that we are engaged in, and we are enormously grateful to you for that.”

John F. Kerry, Secretary of State, March 1, 2013

 

Perhaps what  Mr. chief labor-management negotiator failed to explain is if 45,576 local embassy employees were to unionize, they could potentially immobilize embassy operations in over 280 locations. In which case, every mission would have to implement a policy of “all-purpose duty,” as US Embassy Moscow did in 1986 whereby all embassy employees were expected to pick up all of the tasks previously handled by the Foreign Service Nationals, in addition to their official responsibilities.  In Moscow, the Ambassador spouse was not spared as her household staff was also pulled out and she had to double as hostess and cook.  In this scenario, even the most tedious tasks, such as washing embassy cars, shoveling snow, cutting grass, cleaning bathrooms, answering phones, printing visas, clearing goods through customs, etc. etc….will become the responsibility of the American diplomatic officials, in addition to their own duties and responsibilities.

We live in an interconnected world, more so now than five years ago.  The linkages already exist.  A time will come in the not too distant future when Mr. Polson’s “staff associations” will become one, whether the State Department choses to recognize it or not.

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Ex-State Dept Contract Employee And Husband Plead Guilty To $53 Million Fraud

— By Domani Spero

We have previously posted about this case in May 2013 (See State Dept Contract Employee/Husband Indicted For Alleged Secret Scheme to Steer More Than $60 Million Contracts to Their Company).

On August 2, the USDOJ announced that the former contract employee Kathleen D. McGrade, age 64, and her husband, Brian C. Collinsworth, age 47, of Stafford, Va., pleaded guilty to major fraud against the government. Sentencing is scheduled for November 2013. Each faces a maximum sentence of 30 years imprisonment. The Daily Caller who broke this story in 2011 says that McGrade was a contractor working for the State Department’s office of Overseas Building Operation.

Via USDOJ:

ALEXANDRIA, Va. – Kathleen D. McGrade, age 64, and Brian C. Collinsworth, age 47, of Stafford, Va., pleaded guilty today to major fraud against the government, conspiracy to launder monetary instruments, and engaging in unlawful monetary transactions.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Harold W. Geisel, Acting Inspector General for the Department of State; and Thomas J. Kelly, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Section, Washington, D.C. Field Office, made the announcement after the plea was accepted by United States District Judge Liam O’Grady.

“Defendants McGrade and Collinsworth- now convicted felons-defrauded and stole from the American people, plain and simple,” said U.S. Attorney Neil H. MacBride.  “We, along with our law enforcement partners, are committed to ferreting out and prosecuting those that destroy the integrity of the government contracting process.”

“I commend our investigators on their excellent work in this case, and diligence in protecting taxpayer dollars,” said Harold W. Geisel, Acting Inspector General, U.S. Department of State and Broadcasting Board of Governors.

“The scope and breadth of this fraud is reprehensible, not just because of the dollars involved, but because of the position of trust that Ms. McGrady held,” said Special Agent In Charge Kelly.  “Her actions denied small businesses the opportunity to compete for these government contracts and that is unacceptable.  Today’s pleas put corrupt business owners like Ms. McGrade and Mr. Collinsworth on notice, that the government will get to the truth no matter how they try to disguise their business transactions.  IRS-CI will continue to work with the United States Attorney and our other law enforcement partners to root out these corrupt business owners.”

McGrade and Collinsworth were indicted on April 25, 2013, by a federal grand jury on charges of conspiracy, major fraud against the government, wire fraud, false statements, and engaging in unlawful monetary transactions.  Each defendant faces a maximum penalty of 30 years imprisonment when they are sentenced on November 8, 2013.

In a statement of facts filed with the plea agreement, the defendants admitted that McGrade was a contract employee for the Department of State and performed the role of a contract specialist for an office that awarded construction contracts for work done at U.S. embassies worldwide.  Collinsworth worked at one of the companies that received contracts.  In 2006, the defendants married, but did not tell others at the Department of State.  The defendants started a company, the Sterling Royale Group, or SRG, with McGrade serving as the president and Collinsworth the vice-president and project manager.

In late 2007, McGrade caused a State Department contracting officer to sign a contract between the Department of State and SRG, and McGrade failed to disclose her role in SRG, her marriage, or that proper contracting competitive procedures had not been followed.  The contract made SRG eligible to receive task orders for work to be done at embassies and McGrade  began steering work to the company. She acted as the contract negotiator between the Department of State engineers responsible for getting the jobs done, on the one hand, and Collinsworth, who was acting on behalf of SRG and the subcontractors, on the other.  Between 2008 and 2011, McGrade caused  Department of State contracting officers to sign 17 task orders awarding work worth almost $53 million.  In 2010, the defendants also lied about their marriage to investigators conducting McGrade’s background investigation regarding renewal of her security clearance.

In the summer of 2011, a news article disclosed the defendants’ marriage and the Department of State terminated her employment.  The Department of State, however, had paid SRG about $39 million, and after the defendants had paid their subcontractors, they still had millions of dollars.  Among other things, they bought houses, a condominium, a yacht, a Lexus automobile, jewelry, and a Steinway piano with the fraudulently obtained money.  The defendants have agreed to forfeit all of those items.

This case was investigated by the Department of State, Office of Inspector General, and the Global Illicit Financial Team, a task force led by the Criminal Investigation Section of the Internal Revenue Service.  Assistant United States Attorneys Jack Hanly and Mark Lytle are prosecuting the case on behalf of the United States.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.

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