@StateDept Projects Over $1.4Billion Loss in Consular Fees This Fiscal Year, Plus Comparable Losses Next FYs

HFAC/Oversight and Investigations Committee
July 212020 10:00 AM
Witnesses

Ian Brownlee
Principal Deputy Assistant Secretary, Bureau of Consular Affairs
U.S. Department of State

Karin King
Deputy Assistant Secretary, Overseas Citizen Services
U.S. Department of State

The State Department projected a $1.4 billion loss which is about 50 percent of Consular Affair’s revenue this fiscal year (ending September 30, 2020). It is also facing comparable losses in FY2021 and FY2022.
This is a big deal.
PDAS Brownlee told the committee that CA is looking at $359M savings from FY2020  — he talked about significant reduction in this year’s spending but only cited contractors in visa waiting rooms, and a number other unspecified projects domestic and overseas that would be impacted. He did say that services for American citizens “will not be put out of business.”
Where are we going to see funding cuts?
The reality though is consular fees do not just fund visa operations overseas but also passport operations domestic and overseas. It also funds various parts of the State Department. And most notably, it funds 4,859 U.S. Direct Hire personnel under Consular Affairs and “partner bureau positions.” A $1.4 billion loss this fiscal year and in each of FY2021 and FY2022 will have a cascading effect in various parts of the organization.
Revenues from Department-retained consular fees and surcharges fund Consular and Border Security Program (CBSP) activities. The State Department’s congressional justification in FY 2020 for CBSP funding includes the following:
  • Consular Systems and Technology: $453.4 million
  • Domestic Executive Support: $34.3 million
  • Fraud Prevention Programs: $5.4 million
  • Visa Processing: $237.5 million
  • Passport Directorate: $810.3 million
  • American Citizen Services: $16.2 million
  • Consular Affairs Overseas Support: $964.6 million
  • FSN Separation Liability Trust Fund: $4.9 million

CBSP SUPPORT/DEPARTMENT OF STATE PARTNERS: $524.3 million

  • Bureau of Administration: $53.8 million
  • Bureau of Diplomatic Security: $66.3 million
  • Foreign Service Institute: $25.9 million
  • Bureau of Information Resource Management: $58.3 million
  • Office of the Legal Advisor: $0.3 million
  • Bureau of Overseas Building Operations: $264.4 million
  • Repatriation Loans: $0.8 million
  • Comptroller and Global Financial Services (CGFS): $1.0 million
  • Confidential Investigations: $0.2 million
  • Post Assignment Travel: $39.1 million
  • Bureau of Human Resources: $13.9 million
CBSP STAFF / AMERICAN SALARIES: $703.5 million

Human resources are a vital component of CBSP activities. The Department devotes a significant amount of effort and resources towards increasing efficiency and capacity in the visa and passport processes, ensuring adequate staffing levels both domestically and overseas. The FY 2020 Request of $703.5 million, a $58.7 million increase from the FY 2019 Request, supports 4,859 U.S. Direct Hire personnel. These positions are primarily in the Bureau of Consular Affairs but also include CBSP-funded partner bureau positions. This increase restores the eight percent reduction included in the FY 2019 President’s Budget Request and annualizes costs associated with the Department’s FY 2018 and proposed FY 2019 Strategic Hiring Plans.

 

 

 

USEU Gordon Sondland’s Home Renovation in Brussels: Much Higher Than First Reported

 

WaPo and Vanity Fair both reported about the renovation at the Chief of Mission Residence in Brussels, the official residence of the US Ambassador to the European Union Gordon Sondland. Excerpt via Vanity Fair:

A sampling of State Department contracts reveals that since September 2018—just a few months after Sondland’s Senate confirmation—the embassy in Brussels has been awarded $95,109 for a pergola, $13,301 for a pool-Jacuzzi heating system, $33,625 on wooden household furniture, $208,683 on a professional kitchen remodel, and two bathroom renovations, one costing $53,809 and the other $82,354. Additionally, the State Department spent $103,748 on a hotel, to ostensibly serve as an alternate residence to the embassy while the building undergoes renovations for months of September and October of this year. (In a statement, a spokesperson for the State Department confirmed that updates to the residence had been funded in 2019 “as part of its regular 17-year cycle of reviewing and refreshing furnishings and interior décor in representational residences.”)

WaPo’s reporting estimates the renovations at nearly $1 million including a $209,000 professional kitchen, and a $223,000 family kitchen. The actual obligation may  actually be higher than first reported.
A sourced familiar with the matter told us that the Chief of Mission Residence (CMR) was built in 1990 so one’s guesstimate is that the residence is  due for renovation as one of those “representational spaces.” The first contracts were awarded in September 2018, just two months after Sondland got to Brussels. (Sondland was confirmed via voice vote on June 28, 2018). Folks who understand how funding in government works can see that this “wasn’t all his initiative.” But .. because there’s always a but,  we understand from our source that the great bulk of the project items were added “more recently.” The Bureau of Overseas Building Operations  (OBO) reportedly approved all of it and the Office of Acquisition Management (State/AQM) awarded the contracts.
So a fairly modest renovation project was amped up until the contract award to an 8A firm reached $2.5 million?  More? Our source also told us, “Whether that much renovation was needed, or exactly how lavish is too lavish for a representational residence, I can’t say.”
Definitive Contract 19AQMM19C0088 is a Fixed Price Federal Contract Award. It was awarded to Pono Aina Management LLC of Oklahoma on Jun 12, 2019. The definitive contract is funded by the Bureau of Overseas Building Operations (DOS). The potential value of the award is $2,504,000 with potential end date of June 11, 2020. The solicitation procedure is marked “simplified acquisition” and  the set-aside type is marked “8(A) Sole Source.”

Burn Bag: Hello! Hello! Anybody Home?

 

Via Burn Bag:

“I’ve been trying for several days to call the OIG hotline. Even though the recording says it is staffed during business hours, I tried several days and always got the recording.  I did find a phone book online called called someone in the OIG office who returned my call but I think there is either a backlog or my information isn’t important.  At least I tried to report potential fraud and mismanagement.”

We asked State/OIG about the Hotline, and we received the following response:

“We take our hotline obligations very seriously, and we review all information that we receive. OIG’s hotline unit is staffed with analysts who receive and review allegations regarding fraud, waste, abuse, mismanagement, or misconduct affecting Department of State and U.S. Agency for Global Media programs and operations. If our hotline staff cannot answer a call during regular business hours, callers are directed to the hotline voicemail, where they should leave a message. Our hotline analysts regularly check those messages. In addition, complainants can use the hotline form on the OIG website at www.stateoig.gov/hotline-form. Once the form is submitted, a message appears on the screen explaining that the complaint was received. Hotline complaints may also be mailed to our office at: U.S. Department of State, Office of Inspector General, P.O. Box 9778, Arlington, VA 22219. As our website explains at www.stateoig.gov/hotline, once we receive a complaint—regardless of the format—we may take a number of different actions, including contacting the complainant for additional information.”

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Pompeo on @StateDept: What They Needed Wasn’t More Money, What They Needed Was a Leader Who … Who’s That?

The Trump budget proposal for the FY2020 State Department funding is now out. HFAC already called the proposal which includes a 23% cut ‘dead on arrival” on Capitol Hill. Even if this request doesn’t pass, it clearly reflects the administration’s views on diplomacy and development. If a Foggy Bottom joker starts calling prior State Department funding levels unsustainable, we may fall off our chair and scream out loud. The Administration’s budget request for DOD was $686.1 billion in FY2019 and $750 billion in FY2020. And $750 billion is sustainable? Anyway, brief run-down of the budget requests in the last few years:

FY2017:  The FY2017 budget request under the Obama Administration amounted in $52.78 billion in new budget authority for the State Department, Foreign Operations, and Related Appropriations (SFOPS). When Congress passed the appropriations bill, the  total enacted SFOPS funding for FY2017 was $57.53 billion, an 8.8% increase over the FY2016 SFOPS funding level. According to the CRS, the increase is entirely due to a 40% total increase in Overseas Contingency Operations (OCO) funding.

FY2018: President Trump submitted his FY2018 budget request to Congress on May 23, 2017. The request sought $40.25 billion (-30% compared with FY2017 enacted) for SFOPS, including Overseas Contingency Operations (OCO) funds. The 115th Congress enacted the Consolidated Appropriations Act, 2018, which provided FY2018 funding for the Department of State, Foreign Operations, and Related Programs (SFOPS). Division K of the act―State, Foreign Operations, and Related Programs (SFOPS)― provided a total of $54.18 billion, including Overseas Contingency Operations (OCO) funds and rescissions. This represented a decrease of 6.1% from the FY2017 actual funding level according to the Congressional Research Service (CRS).

FY2019: The Trump Administration submitted to Congress its FY2019 budget request on February 12, 2018. The State Department budget proposal under Rex Tillerson included $41.86 billion for the Department of State, Foreign Operations, and Related Programs (SFOPS). CRS notes: Comparing the request with the FY2018-enacted funding levels, the FY2019 request represents a 22.7% decrease in SFOPS funding. The proposed State and related agency funding would be 18.2% below FY2018 enacted and the foreign operations funding would be reduced by 24.7%. Both the House and Senate appropriations committees have approved FY2019 SFOPS bills that include funding at higher levels than the Administration requested and equal to or greater than FY2018 enacted funding. Congress eventually appropriated $56.1 billion, ensuring that the agency has the resources it needs.

FY2020: Trump’s FY2020 budget request for the State Department, the first under Pompeo, proposes $40 billion for the State Department and U.S. Agency for International Development (USAID). State’s Bureau of Budget and Planning guy Doug Pitkin said, “the last two budgets, for example, included reductions to State and AID personnel. This budget does not propose that.” He also argued that despite the almost 25% cut, this  budget request apparently “does support diplomacy and development”.

All that to highlight what Secretary Pompeo said in an interview recently. Secretary Pompeo  (who we imagine is known …er fondly in Foggy Bottom as Swagger Mike) gave an interview to McClatchy’s Kansas City Star and Wichita Eagle on March 11. We must admit that since this was an interview, we certainly could not blame his speechwriters for the gems here. Neither the video nor the transcript of this interview appears on state.gov, as of this writing but the reporters have a short video clip which we embedded below, and you can read the report with the quotes here.

“I’ll testify on Capitol Hill in a week or two on our budget and I’m very confident that the State Department will have the resources it needs,” Pompeo said. “It always has. President Trump has ensured that it has. And we’ll get to where we’ll need to be.”

 

 

“The people at the State department understand what’s going on,” Pompeo said.

 

“What they needed wasn’t more money,” he said. “What they needed was a leader who was prepared to empower them, was prepared to let them go out and do their job.”

“When I talked about swagger it was about going out in the world and having the confidence that as an American diplomat you represent the greatest nation in the history of civilization,” he said.

“That’s what the people of the State Department want and need. We’re giving it to them in spades. They’re responding to it wonderfully. We’re doing wonderful work all around the world.”

Trump Shutdown Day#27: @StateDept, Also a National Security Agency, Now Says, We Just Found Some Money, Come Back to Work

Posted: 4:19 am EST

On January 17, on the 27th day of the Trump Shutdown, the State Department released an  Urgent Message from the Deputy Under Secretary for Management William Todd instructing employees to return to work on their first work day in Pay Period 2, which is either January 20, or January 22 depending on their  location and start of their work week.  Apparently, he has found some money to pay employees, and this would allow the agency to resume most personnel operations.  Which should be a relief to agency employees here and in over 275 overseas locations where people are worried not only about paying their bills, but also something as basic as obtaining heating oil during the winter months. We’re not sure if this would save those who are already considering curtailments, even resignations, and seeking work elsewhere.

Mr. Todd’s message did not explain where he found the money, why it took four weeks to find it, and why we’re just seeing “national security agency” and “imperative” to describe the State Department and its mission on the 4th week of the shutdown.

Given the poor track record here, we’re concerned that people are asked to go back to work while the State Department is “taking steps to make additional funds available to pay employee salaries.”

What does that even mean? Where is the State Department getting those additional funds? Is it planning to break into Fort Knox?

Also we’re not sure who were actually told about this in the “M” family bureaus. Apparently, people are calling FSI to see what this means. Can they go back to language training even if many of the instructors are contractors?

Reported FSI’s response, “We don’t know. We found out when you did.”

Holy guacamole, so Deputy M’s message is just like a presidential tweet but longer than 280!

ABC News has this nugget from an unnamed spox:

While the department could have taken this step to pay employees as soon as the shutdown started, it didn’t largely because no one anticipated the shutdown to last this long.

“It has become clear as the lapse has continued to historic lengths that we need our full team to address the myriad critical issues requiring U.S. leadership around the globe and to fulfill our commitments to the American people,” a State Department spokesperson told ABC News. “We are also deeply concerned about growing financial hardship and uncertainty affecting Department employees whose salaries and well-being are affected by the unprecedented length of the lapse.”

Whaaaat? Also U.S. leadership yabayabado frak!

The United States has become the subject of alarm and jokes from all continents except perhaps from the sober penguins of Antarctica. In these abnormal times, the Emperor penguins, by the way, boldly  want to know how many more bananas do we want?

Politico’s Nahal Toosi also has a comment from longest serving M, Patrick Kennedy:

Pat Kennedy, a former senior State Department official who oversaw management issues at the agency for years, said Thursday that diplomats should have been exempted from the shutdown from the start.

“As a national security agency, no one should have ever been furloughed” at the State Department, he wrote in an email. “And the available funds balances should have been utilized from the beginning so that all employees were paid all along.”

What that State Department spox forgot to add to ABC News is — “M” shoes are too big to fill for some people. Who knew?  (see Wait – @StateDept Has a Deputy “M” Again, a Position Discontinued by Congress in 1978). We should note that the State Department had a Senate- confirmed M, and a Senate-confirmed DGHR when Rex Tillerson took office but both were gone fairly quickly under T-Rex’s watch.

Also two years on in this administration, the State Department still does not have a Senate-confirmed Under Secretary for Management. The first Trump nominee for M during Tillerson’s time had an SFRC hearing but was then withdrawn. The second Trump nominee for M, Brian Bulatao, this time under Pompeo, had his nomination returned to the president at the end of last Congress. That nomination was resubmitted to the U.S. Senate on January 16. Since the GOP has an expanded majority in the U.S. Senate, we expect that this nomination will get through the confirmation process at some point, unless a GOP senator finds some issue with it.

Below is the Deputy M message, original statement posted here:

As a national security agency, it is imperative that the Department of State carries out its mission. We are best positioned to do so with fully staffed embassies, consulates, and domestic offices.

Recognizing the increasing hardship to employees caused by the ongoing lapse in appropriations, the Department is taking steps to make additional funds available to pay employee salaries. By taking these steps, the Department expects to be able to resume most personnel operations and fund most salaries beginning with Pay Period 2. As a result, all State Department direct-hire employees and State Department locally employed staff are expected to report to work on their first work day in Pay Period 2. For most employees, that will be January 22. For some overseas posts, where Sunday is the first day of the work week, that will be January 20. Contractors should contact their COR for reporting instructions.

Employees will be paid for work performed beginning on or after January 20 and will receive paychecks for Pay Period 2 on time on February 14. Beyond Pay Period 2, we will review balances and available legal authorities to try to cover future pay periods.

Employees, including those who have performed excepted functions, will not be paid for Pay Period 26 and Pay Period 1(the time period between December 22, 2018, and January 19, 2019) until FY 2019 appropriations are enacted.

Although most personnel operations can resume, bureaus and posts are expected to adhere to strict budget constraints with regard to new spending for contracts, travel, and other needs, consistent with Section B of the Department’s guidance on lapse in appropriations.

Thank you for your continued cooperation.

Very Best Regards,
Bill Todd
Deputy Under Secretary for Management

Please note that even if State Department employees start getting paid again, there are thousands more federal employees who are forced to work without pay, and many more sent home without pay. Here are some upcoming dates in the next couple of weeks. See more at CNBC:

Jan. 20: Deadline to make early food stamp payments

Jan. 25: Workers start missing next paychecks

Jan. 28: IRS expected to start accepting tax filings

Jan. 29: State of the Union

Feb. 8: Third missed paycheck

This is no way to run a country, but this is how our country is run these days. No wonder the Emperor penguins in Moscow are also laughing their heads off.

Trump Shutdown Day #21: Across America, Federal Hostages Are Hurting

Posted: 1:06 am EST

Today marks the 21st day of the Trump Shutdown, making it exactly as long as the 1995 Gingrich Shutdown, a 21-day shutdown which was apparently caused  by this pettiness: “Gingrich confessed he’d forced the closing of the federal government partly because Bill Clinton had relegated him to a rear cabin aboard Air Force One on the way home from Yitzhak Rabin’s funeral in Jerusalem.”

Then as now, the federal government furloughed 800,000 workers.

By Saturday, this sh*tshow, which somebody publicly said he is proud to own, will be the longest shutdown in history. Congress can do its duty as an equal branch of our government and pass a bill over the president’s objections and re-open the government. This requires a two-thirds vote in the House and in the Senate. A two-thirds supermajority in the Senate is 67 out of 100 senators, and  two-thirds supermajority in the House is 290 out of 435 representatives. The 116th Congress is now a 47 Democrat, 53 GOP split  in the Senate, while the House is 235 Democrat, 199 GOP. See the challenge there? But there is apparently already a bill to reopen the government, why won’t they call it on the floor for a vote? Is the leadership afraid that it will pass both houses, and the president would look worse when he vetoes it?

James Fallows writes: “On December 18, Mitch McConnell’s GOP-run Senate passed, on a unanimous voice vote, a “clean” funding measure, to keep the government open and postpone funding fights about “the wall.” They did so with guidance from the White House that Donald Trump would go along. Then the right-wing mocking began; then immediate funding for the wall became an “emergency”; then Trump preferred a shutdown to appearing to “lose.” Mitch McConnell’s GOP of course switched right along with him—and against the measure all of its members had supported just days ago. One man’s insecurity, and his party’s compliance, are disrupting millions of lives.”

Well, maybe some of these folks really believed that a 30-foot wall works over a 35-foot ladder or 30-feet tunnel or maybe all their spinal bones are just made of jello. The larger public may soon start to realize that these elected representatives do not much care for 800,000 of their fellow Americans and their families. Or care much for their fellow citizens and their families who rely on the people and services that make our government work. We’ve taken for granted that the checks and balances in our system works … but take a look.

As this shutdown continues, we are struck at the high tolerance for people and their families to be put in great hardship, all for a fucking wall that Mexico was supposed to pay.

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#TrumpShutdown Enters 18th Day, At Least $2.5B in Costs and Counting, With No End in Sight

Posted: 2:38 am PST

On January 3, the Democratic-led House passed spending bills with a handful of Republicans joining them to reopen the government without funds for the border wall. Senate Majority Leader Mitch McConnell has already said repeatedly that he won’t bring the measures up for a vote even if similar legislations made it through the Senate a couple of weeks ago. Those bills were indeed DOA in the Senate, which means, this shutdown will go on and on for now.

Three weeks ago when the shutdown started the State Department issued a notice that required the agency to “immediately commence shutdown procedures.”  The exceptions being those accounts that “initially have available balances” and the employees worldwide working in those funded entities supposedly were informed to continue to report to work.

Accounts subject to lapse in appropriation:

Diplomatic and Consular Programs
Office of the Inspector General
International Boundary and Water Commission Salary and Expenses
American Sections (Note: your blogger doesn’t know what this includes)

Accounts not subject to lapse in appropriation:

Worldwide Security Protection (Covers all DS and 90+ security positions in other bureaus)

Diplomatic Security
Bureau of Medical Services: Directorate of Operational Medicine
Bureau of Administration: Office of Emergency Management

Consular and Border Security Program (Covers all of CA and other consular support personnel)

International Cooperative Administrative Support Services (ICASS)

State Working Capital Fund services

Embassy, Security, Construction, and Maintenance (Covers all of OBO)

Educational and Cultural Exchange Programs

American Institute in Taiwan

Global Health (S/GAC & PEPFAR)

International Narcotics and Law Enforcement

Migration and Refugee Assistance

The announcement also notes that the employees excepted list is subject to change, which could lead to additional employees receiving furlough notices “if the lapse is expected to continue.” 

We understand that Diplomatic Security is already urging the “prudent use of overtime” to slow down the drawdown of its residual funding. No one is talking about it yet, but how long will the State Department continue to pay for its local employees including guards at 277 overseas posts without regular funding? How long will those “initial balances” last? State Department furlough guidelines says that standard procedures to process local employee staff payroll must be followed and that under no circumstances should alternate means be used to pay LE staff salaries, such as using petty cash. What are they going to do with contract guards? 

The State Department’s school, the Foreign Service Institute (FSI)is now closed to all students for the duration of the furlough period. The closure apparently also includes its online student portal. At least one small government contractor at FSI has laid off people just in the last 48 hours. Several dozen employees were affected. Family members working as contractors or subcontractors are affected. If this shutdown continues, married couples working for Uncle Sam and or government contractors will suffer a double whammy — one partner is laid off, and the other partner is working with no pay (this is not to say that single employees do not have bills and loans to pay, because they do, too).  There are also couples working for Uncle Sam as tandem, and both partners are considered “essential” with no pay. And what about one-income FS  families where a significant portion of spouses are not employed/could not get employed overseas?  This is not the first government shutdown, of course, but this is perhaps the most worrisome (until the next one) simply because of erratic pronouncements at the top, and a president who threatens to drag this out “for months or even years.”

The State Department’s Overseas Buildings Operations whose mission is “to provide safe, secure and functional facilities” for overseas mission is said to be running low on fuel. If OBO which typically has “no-year” funding is in trouble, that could mean a whole lot of the entities that initially had “available balances” may also be running into problems as the shutdown enters its third week. OBO has several ongoing projects overseas including 53 projects now in design or under construction. Furlough guidance states that OBO may “continue previously awarded construction and renovation projects for which adequate funds were obligated unless adequate supervision cannot be provided, in which case consider suspension of work if contractually permitted and practically feasible.” 

Diplomatic Post Offices are reportedly not affected by the shutdown at this time, but we’re hearing that the situation will not be the same if the shutdown is not lifted by the end of January. 

Remember the non-emergency personnel and family members evacuated from the US Embassy Kinshasa in December? The evacuees arrived in the DC area just before the shutdown and are now on furlough, too. Guess who’s processing their evacuation vouchers? Nobody. 

The agency shutdown guidelines also says that “Reassignment of personnel already planned may be continued, such as Permanent Changes of Station (PCS), only if funds have been previously obligated.” A host of nominees were just confirmed by the U.S. Senate recently but since no one knows for sure who will be confirmed, we don’t know how travel and relocation funds could have been appropriated ahead of time.Posts may see their new ambassadors soon, or they may not. One source told us that no one is getting orders or travel authorizations at this time. Can somebody please give us a confirmation on this?

We’re also now hearing talks about Consular Affairs’ funding issue, which is largely a self-funded operation, so help us out here — we’re perplexed about that. How is it running out of funds when its funding is not congressionally appropriated?  

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Trump Threat: Cutoff Aid to Central America’s Northern Triangle

In October 2018, the Congressional Research Service (CRS) notes the following about the “northern triangle”:

“Instability in Central America is one of the most pressing
challenges for U.S. policy in the Western Hemisphere.
Several nations—particularly El Salvador, Guatemala, and
Honduras in the “northern triangle” of Central America—
are struggling with widespread insecurity, fragile political
and judicial systems, and high levels of poverty and
unemployment.
[…]
On October 22, 2018, President Trump said he intends to
cut off, or substantially reduce, aid to the northern triangle
countries. He has significant discretion to do so with funds
appropriated in FY2018, since Congress designated “up to”
$615 million for the Central America strategy, effectively
placing a ceiling on aid but no floor. The Consolidated
Appropriations Act, 2018 (P.L. 115-141), also empowers
the Secretary of State to suspend and reprogram some aid if
he determines the northern triangle governments have made
“insufficient progress” in addressing various legislative
conditions.
[…]
Congress has placed strict conditions on assistance to the
northern triangle in an attempt to bolster political will in the
region and ensure foreign aid is used as effectively as
possible. According to the Consolidated Appropriations
Act, 2018 (P.L. 115-141),

 25% of assistance for the central governments of El
Salvador, Guatemala, and Honduras must be withheld
until the Secretary of State certifies that the
governments are informing their citizens of the dangers
of irregular migration, combating human smuggling and
trafficking, improving border security, and cooperating
with the United States to receive and reintegrate
repatriated citizens who do not qualify for asylum.

 Another 50% must be withheld until the Secretary of
State certifies that the governments are addressing 12
other concerns, including combating corruption;
countering gangs and organized crime; increasing
government revenues; supporting programs to reduce
poverty and promote equitable growth; and protecting
the rights of journalists, political opposition parties, and
human rights defenders to operate without interference.

The State Department certified that all three countries met
both sets of conditions in FY2016 and FY2017. For
FY2018, it has issued certifications for all three countries
regarding the first set of conditions but not the second set.

Read more: U.S. Strategy for Engagement in Central America: An Overview, October 2018 (PDF)

CRS R44812: U.S. Strategy for Engagement in Central America: Policy Issues for Congress 2017 (PDF)

Foreign Service Labor Relations Board Rules For @StateDept in 2014 MSI Case

AFSA has recently informed its members that the Foreign Service Labor Relations Board (FSLRB) has ruled for the State Department in the 2014 Meritorious Service Increase (MSI) dispute. The ruling affects approximately 270 Foreign Service employees: 

AFSA regrets to inform our members that on September 21, 2018, the Foreign Service Labor Relations Board (FSLRB) granted the Department of State’s exceptions (i.e., appeal) and set aside the Foreign Service Grievance Board’s (FSGB) December 8, 2017 Decision, which had found that the Department violated the procedural precepts by not paying Meritorious Service Increases (MSI) to approximately 277 Foreign Service employees who were recommended but not reached for promotion by the 2014 Selection Boards.  AFSA argued that the Department was required to confer MSIs on all eligible employees (up to the 10% limit set forth in the precepts) who were recommended but not reached for promotion.  The Department argued that it had the unilateral discretion to give MSIs to only 5% of employees ranked but not reached for promotion, since 5% was below the 10% limit.

Rather than give substantial deference, as is normally the case, to the FSGB’s interpretation of the parties’ agreement (i.e., the promotion precepts), two of the three FSLRB members (including the Administration’s appointee to the FSLRB) agreed with the Department’s arguments and found that the FSGB had misinterpreted the precepts.  The third member, Retired Ambassador Herman Cohen, dissented from the majority decision.  When a party seeks to establish that an arbitrator (in this case, the Grievance Board) misinterpreted an agreement, the party must provide that the decision “fails to draw its essence from the agreement.”  This is an extremely high burden to meet.  According to the case law, “great deference” is given to the arbitrator’s interpretation of the agreement “because it is the arbitrator’s construction of the agreement for which the parties have bargained.”   In this case, however, the FSLRB chose not to defer to the Grievance Board, ignoring the “great deference” practice.  Unfortunately, the FSLRB’s decision is not subject to judicial review.

AFSA says that it is “extremely disappointed by this decision.” Its notice to members notes that it prevailed in two earlier cases, the 2013 and 2014 MSI disputes. It also informed members that despite this ruling, it plans to proceed with the 2015 and 2016 MSI cases before the Grievance Board.

Excerpt from FSLRB ruling says:

The Grievance Board stated that it was “indisputably true” that, by its plain terms, the phrase “no more than [10%]” in the agreement means that the Agency may award MSIs to “10% or less” of eligible employees.29 As discussed above, the Grievance Board should have ended its analysis there, with the agreement’s plain wording. Instead, the Grievance Board found that, because the parties had different interpretations, the wording was ambiguous.30 But wording that is clear on its face does not become ambiguous simply because the parties disagree as to its meaning.31 Rather, a contract is ambiguous if it is susceptible to two different and plausible interpretations, each of which is consistent with the contract wording. 32 The interpretation adopted by the Grievance Board – that “no more than [10%]” means the Agency must award MSIs to no less than 10% of eligible employees33 – is not consistent with the plain meaning of the agreement’s wording. Consequently, it is not a plausible interpretation of the agreement.

FLRA Chairman Colleen Duffy Kiko who was confirmed by the Senate in November 2017 serves as the Chairperson of the FSLRB. The two other members of the FSLRB are Stephen Ledford, who previously served as the Director of Labor and Employee Relations at the U.S. Information Agency (USIA) and was sworn on his third term with FSLRB in 2015, and Ambassador (ret.) Herman J. Cohen, a career diplomat and specialist in African and European affairs who was appointed to his first term with the FSLRB in October 2015.

In his dissent, Ambassador Cohen writes:

For five years prior to 2014, the year covered by this case, the promotion precepts, negotiated between management and the union, were always the same: MSIs will be awarded to those recommended for promotion at a maximum of ten percent of those on the list, in rank order. With this practice having been followed year after year, it is quite normal that the union had the right to believe that the number would never be less than ten percent pursuant to the negotiated precepts. Ten percent was not part of a sliding scale. It was an agreed amount.

If management had changed that number from year to year, the situation for 2014 would have been totally different. The union would have demanded the right to negotiate that number.

For this reason, management’s decision to unilaterally change the number of MSIs was contrary to the precepts, despite the ambiguous language. Historical practice said that ten percent of those recommended, but not promoted, would receive MSIs. Secondly, management gave a reason for awarding only five percent MSIs in 2014. Management said it was “exercising its budgetary authority” to make the reduction. In other words, the funds were needed elsewhere.
[…]
In the specific year 2014, it appears that the need to save money by reducing MSIs had no relationship to overall budgetary needs. In short, management was saving money on MSIs, and using that “salary money” to pay for 35 sets of ambassadorial furniture, as one possible example. In 2014, management provided no reason to justify this reduction in this highest priority “salary” by higher priority needs elsewhere. Neither, to my knowledge, was there an overall government-wide freeze in MSIs that year.

The case is U.S. State Department v. AFSA. The FSLRB decision is available to read here or see this link: FS-AR-0007Dec 9-21-18

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Snapshot: Top 15 Recipients of U.S. Foreign Assistance, FY2019 Request

Via CRS: Department of State, Foreign Operations and Related Programs: FY2019 Budget and Appropriations | April 18, 2018 – August 9, 2018:

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