135. Memorandum From the Deputy Secretary of State (Christopher) to Secretary of State Vance 1

State-USIA Reorganization

Issues for Decision

Since the Stanton Panel’s report2 was made two years ago, there has been continuing discussion of how to organize our overseas information programs and of the relationship between USIA and the Department of State. Congress is keenly interested in the subject and in view of the President’s commitment to streamline the Executive Branch, it is appropriate for the Department to state its desires in this matter. Ambassador Reinhardt has promised to give Congress a reorganization plan by the middle of next month. The Senate version of the Department’s authorization bill contains a requirement that the President submit a report by October taking into account the studies discussed in this paper.

This paper describes the principal proposals for change and asks you to decide which of these will best contribute to improving the conduct of the country’s public diplomacy.

Definition of Programs Involved

The functions which are potentially subject to reorganization may be categorized as follows: (1) “cultural exchanges”, conducted domestically by State (through CU) and implemented abroad by USIA, (2) dissemination of current “policy information”, conducted by USIA (through the “fast news” wireless file distributed to Embassies and dissemination of news to foreign media by press attaches), (3) dissemination of “general information”, consisting of operation by USIA of libraries, information centers and media activity for the projection of [Page 526] American society abroad (e.g., films and lectures), (4) “policy advice” by USIA, consisting of analysis of foreign opinion and advice to State and other agencies on its implications for US policy, and (5) Voice of America (VOA) radio broadcasting. USIA has a separate personnel system which parallels that of the Foreign Service, consisting of separate and distinct domestic and overseas personnel categories.

Broad Options

Three broad sets of recommendations have been made: those of the Stanton Panel (supported by the Murphy Commission); those of the General Accounting Office;3 and those by Ambassador Reinhardt (substantially supported by the USIA Public Advisory Commission).

The Stanton proposals recommended that USIA’s information function be divided, with dissemination of policy information abroad and policy advice to the US Government on foreign opinion moving to State. These activities, together with PA, S/PRS, and a new bureau would be grouped under a new Deputy Under Secretary for Policy Information. Cultural exchange and general information programs would be combined in a separate Information and Cultural Agency, replacing the present USIA. In our missions abroad, the press attache would become a State Department official. The Voice of America would be made independent under a Board of Overseers on which the new Deputy Under Secretary and the Director of the proposed Information and Cultural Agency would sit for policy guidance purposes. The Stanton Panel also recommended the integration of all career USIA personnel into the Department; on this point the Murphy Commission differed, favoring the maintenance of separate personnel structures.

The GAO and Ambassador Reinhardt rejected almost all of Stanton’s findings, recommending only that the cultural exchange functions of State be transferred to USIA. The GAO drew no conclusion as to the relationship of the expanded USIA to State, whether it should be independent, partly in, or under State. Ambassador Reinhardt concluded that the expanded USIA should have a relationship under State similar to that of ACDA.

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VOA would remain in the expanded USIA in both the GAO and the Reinhardt plans. The VOA Director and the head of the cultural function in the new agency would be given enhanced status in the new organization.

In our study of the subject we considered other options, such as maintaining the status quo on the one extreme and USIA’s complete integration into this Department on the other. We question the first on the ground that Administration and Congressional interest in reform will probably not permit the present arrangement to continue. We would reject the second, since such a move would rekindle the debate over the mixing of foreign propaganda with domestic information functions and would produce an unmanageable situation for the two organizations’ personnel systems. The analysis which follows therefore concentrates on the recommendations of the Stanton Panel, the GAO report and the Reinhardt proposal.

Impetus for Change

Over the years a number of major concerns have been expressed on the issue of reforming the conduct of our public diplomacy. A recurring theme is the desire not to have the apolitical cultural exchanges tainted by association with propaganda activities.

A similar concern has been that VOA news should be objective and VOA should enhance its reputation for integrity to the level of the BBC (although BBC overseas broadcasting is acknowledged to be responsive to Foreign Office guidance). Senator Percy and Stanton are vigorous proponents of this concern. On the other hand, others have felt that VOA should be an effective tool of US foreign policy and, more generally, that USIA has too often acted without sufficient regard for approved policies. Senators Humphrey, Church and Javits have resisted Senator Percy’s desire to make VOA more independent.

An historic concern has been to keep USIA from engaging in domestic propaganda activity, as reflected in existing legislation. While the issue is not active now, the public and Congress are deeply opposed to any federal government involvement in the management of domestic news.

It is worth adding that there have been no assertions that USIA is performing unsatisfactorily—even the Stanton Panel found that its programs are working remarkably well. In assessing proposals for change we have therefore attempted to judge whether a particular proposal would be likely to make a real improvement, and is not simply organizational tinkering.


With the exception of cultural attaches in the major missions in Latin America, cultural and information activities before World War [Page 528] II were carried out on an ad hoc basis by ambassadors and their staffs. The war brought new realization of the importance of international information activities, and an Office of International Information and Cultural Affairs was established in the Department in 1945 under an Assistant Secretary for Public Affairs, but without specific authorizing legislation.

The Fulbright Act of 19464 financed the exchange of professors, students and others out of funds accruing from the sales of surplus U.S. properties abroad. The Smith-Mundt Act of 19485 for the first time provided specific legislative authority for the Department to conduct a program of international information and cultural exchange activities. The Smith-Mundt Act divided the Office of International Information and Cultural Affairs into two offices, one dealing with radio, press and film matters, and the other having responsibility for exchanges and libraries overseas. In 1952 these two offices were consolidated into a semi-autonomous International Information Administration within the Department.

In mid-1952 the Senate Foreign Relations Committee was directed by the Senate to study the objectives, operations and effectiveness of overseas information programs. In June 1953 a special committee, chaired by Senator Hickenlooper, submitted its report,6 which recommended that the International Information Administration be given greater autonomy within the Department, or be established as a separate agency. The Committee recommended that the Department retain the exchange of persons program, to avoid giving the educational exchange programs “a propaganda flavor.”

In the early months of the Eisenhower Administration, there was an intense debate on the role and locus of US international cultural and information programs. Secretary Dulles agreed with the recommendations of the Rockefeller Commission7 that the pattern of the past should be reversed and that information and cultural programs should be established in a separate agency outside the Department. The Commission called for the establishment of a new agency under the NSC, subject only to policy guidance from the Secretary of State.

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The Hickenlooper Committee, and another study committee in the field of information and cultural programs headed by William Jackson,8 sought to head off the Rockefeller Commission recommendations and to assure that the cultural and information programs should remain in the Department. These study committees actively pressed their dissent to the Rockefeller recommendations. Still, the President submitted to the Congress in June 1953 Reorganization Plan No. 8 establishing USIA,9 which absorbed the activities of the former International Information Administration. The final decision left exchange programs in the Department, as a result of a compromise between the views of Secretary Dulles and the two study committees. USIA thus came into existence in August 1953, and the Exchange of Persons Program became a division of the Office of the Assistant Secretary of State for Public Affairs.

In 1958 the Rockefeller Commission changed its views and proposed that USIA be brought back into the Department, under an Under Secretary for International Cultural and Information Affairs. By that time Secretary Dulles was no longer opposed to having USIA activities in the Department. In March 1959 legislation was drawn up aimed at returning USIA to State. The bill was never acted upon by the Congress, and the President established a Committee on Information Activities Abroad.10 With the waning days of the Eisenhower Administration, the idea of returning USIA to State was quietly shelved.

In late 1960 President-elect Kennedy set up various task forces, one of which dealt with the role of USIA. The Free-Davison task force recommended that USIA remain an independent agency, and that its director become an ex-officio member of the NSC. However, Senator Fulbright’s opposition to absorption of the State Department’s educational and exchange programs by USIA led President Kennedy to abandon the project, and to elevate the role of the cultural exchange program by establishing the Bureau of Cultural Affairs (CU) headed by an Assistant Secretary. The Bureau was strengthened by the passage of the Fulbright-Hays Act of 1961,11 which called for efforts to create [Page 530] greater mutual understanding by demonstrating US educational and cultural interests.

From 1961 until 1977 the organizational arrangements between USIA and CU have remained basically unchanged, despite references to the CU-USIA relationship in campaign platforms in 1968 and 1972. In 1973 the Chairman of the Senate Foreign Relations Committee, reacting to an invocation of executive privilege by the USIA Director, questioned the value of USIA activities and in a report suggested that some functions be undertaken under different organizational arrangements. Specifically, the Committee suggested that serious consideration be given to removing VOA from the Executive Branch entirely and establishing it as a division of the Corporation for Public Broadcasting.

Congressional Attitudes

Essentially, there is limited Congressional interest in the question of USIA’s relationship to the Department of State. If one were to poll the present Members of both houses on the subject today, probably 90% of the respondents would state disinterest or “no information about” reorganization possibilities.

Nonetheless, the other 10% include some important Members of the Congress whose views are critical to the Department of State and USIA.

In the Senate, those who favor sweeping reform are limited to a few, led by Senators Percy and McGovern on the Senate Foreign Relations Committee. They endorse the Stanton Report (and have been heavily lobbied by Stanton personally). Other Members of the Committee interested in this subject include Humphrey and Church, who are strongly opposed to the Stanton Report and who favor an approach closely akin to that of Ambassador Reinhardt. Our headcount of the Committee when it was to have considered the Percy amendment embodying the Stanton proposals12 was eleven opposed, and five in support. There is no significant interest in this question in the Senate outside the Foreign Relations Committee.

In the House, interest centers in the International Relations Committee. State Subcommittee Chairman Fascell and his ranking minority member Buchanan are the two principal interested parties. They both oppose the Stanton Report. Their views on a Reinhardt-type arrangement are probably favorable, although we have not consulted them on this specific proposal.

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There is strong support for USIA funding in general, and particularly for VOA, throughout the Congress. Ethnic groups in the United States feel that they are represented internationally by the VOA language services, and provide particularly strong support for VOA. The other activities of USIA are also popular, although without such a clearly defined constituency.

There is some general Congressional interest in the exchange program. The Hays-Fulbright Act still retains its positive halo and Fulbright’s crusade to maintain the exchange program within the State Department, “to avoid its becoming tainted as a propaganda device,” enjoys a residue of support, especially within the academic community. Our judgment is that this view has largely faded with Fulbright’s departure from the scene.

The bottom line in terms of Congressional attitude is that there is limited interest, and we have a reasonably free hand to approach the question of reorganization as long as we consult with those few who are clearly interested: Fascell, Buchanan, Humphrey, Church, Sparkman, Case, Percy, and McGovern. We can count on skepticism toward any reorganization which might be costly in terms of money or senior positions, unless we can demonstrate a real need.

Analysis of Reform Proposals

Stanton Panel

The key element of the Stanton Panel report and its most problematic feature is its proposal to separate “policy information” and “policy advice” from longer-range general information and cultural programs of USIA and CU, merging the former with the Department and giving the latter clear distance from policy information and advice functions. In the Panel’s view, policy information and policy advice activities (the wireless file, media guidance abroad, policy direction to VOA, and analysis of foreign media and public opinion) would benefit from closer proximity to those responsible for policy while the creation of a new Bureau of Policy Information, along with the establishment of a Deputy Under Secretary for Policy Information, would enhance the role of current information programs in the Department. The quality of policy information activities would improve and overseas posts would receive more timely and policy-relevant guidance.

The creation of a separate agency for Information and Cultural Affairs (which would include USIA’s cultural exchange and general information programs, but not VOA) would, according to the Panel, give general information and cultural activities greater credibility overseas since they would be disassociated from policy. Integrating the CU cultural exchange program with these other USIA programs would bring together all the functions having as their purpose increasing [Page 532] mutual understanding between the US and other countries, and establish a single line of responsibility to one headquarters agency, viz. the new Information and Cultural Agency under State, in that way correcting the present unnecessarily complicated division of similar work between USIA and CU.

Stanton contends that the establishment of an independent Voice of America would enhance VOA’s credibility overseas. Finally, the integration of the USIA’s career service in the Foreign Service would, in Stanton’s view, provide greater personnel flexibility.

A central argument against the Stanton recommendations is that information programs are an integral function and that fragmenting responsibility for that function (i.e., policy information and general information) among three agencies (State, the proposed Information and Cultural Agency and VOA) would not only be artificial, but would also risk undermining centrally-directed, coherent and policy-oriented information programs. In fact, USIA is finding that handling contemporary problems requires greater program unity, as reflected in its new “thematic program” technique. In Iran, for instance, this might take the form of a three-day seminar on petrodollar recycling attended by both American and Iranian journalists, bankers, academicians and government figures. Obviously the essence of such an approach is the combination of press, general information and exchanges in a single program. As the Stanton report itself acknowledged, “It was the unanimous opinion of the Public Affairs Officers and Cultural Affairs Officers with whom the Panel met that the overseas program itself must operate as a unit . . .”.

Implementing the Stanton proposal in the field would require establishing two offices (which may in some instances cause increases in staffing), one headed by a Press Counselor or Attache answering to the Department and another headed by an Information and Cultural Counselor or Attache answering to the new agency. In practice a foreign policy issue of topicality at one moment would be handled by the press staff while the same issue in its longer term context would be the responsibility of the information and cultural staff, leading to unnecessary confusion.

Another weakness of the Stanton proposal is that it would create an independent information and cultural agency but would take away the policy guidance that is necessary to provide a focus and aim for information and cultural programs. The probable effect of separation would be that general information programs, cut loose from association with current policy information and policy advice, would slide increasingly away from current foreign policy matters and more and more into the arts, without any link to practical issues and foreign policy goals. This danger is anything but hypothetical. The German, Japanese, [Page 533] French and Swedish governments have found that their overseas cultural operations are often beyond embassy control and that they frequently have little value or relevance to government objectives. The German and Swedish governments in the past year have consequently taken steps to integrate their information programs.

Creation of an independent VOA would greatly aggravate the long-existing tendency of VOA to ignore policy guidance. An independent VOA would be beyond effective day-to-day Executive Branch control and would greatly compound the difficulties which the Department and embassies have experienced when VOA follows its own political line. Policy control is now far from complete but it is increasing. The Stanton recommendations would move in the opposite direction. The putative advantage—that VOA broadcasters would gain in credibility through organizational independence—is unconvincing. VOA’s bureaucratic status would mean nothing to an overseas audience.

For the reasons outlined above, the Stanton recommendations are strongly opposed by the USIA career staff, American Foreign Service Association and American Federation of Government Employees (which is the exclusive bargaining agent for USIA employees).

The Stanton recommendations could be implemented under the Government Reorganization Act13 (subject to the one-House veto contained in that Act). However, the integration of the USIA and Foreign Service personnel systems would require separate legislation.

GAO Report

In May the GAO published an analysis of the recommendations of the Stanton Panel,14 prepared at GAO initiative and not at Congressional request. Central to the GAO analysis is its conclusion that the Stanton Panel failed to find sufficient defects in the present system to justify the sweeping changes proposed. “The (Stanton) Panel’s approach would achieve a certain tidiness on paper at the expense of arrangements that have essentially met the test of practicality and performance.”

The GAO opposed the Stanton recommendation to transfer USIA policy information and policy advice functions to the Department, though acknowledging that policy guidance by State to USIA could be improved. The GAO pointed out that the Department’s professional skills and procedures do not lend themselves to this journalistic role (although the Department would take over USIA personnel), and con[Page 534]cluded that giving the Department these responsibilities would accordingly make the presentation of US foreign policy abroad less effective.

The GAO report also rejected the Stanton Panel’s recommendation to make VOA an independent agency. In the GAO’s view there is no evidence that VOA now lacks credibility. Taking up the principal criticism by Congressional proponents of the Stanton recommendations, the GAO concluded that “there can be circumstances in which diplomatic needs ought to prevail over journalistic concerns.” It noted that instances of White House or State Department interference in VOA broadcasting are—and should be—highly unusual. The GAO recommended that the present structural relationship between VOA, USIA and the Department should be maintained, while recommending certain improvements in working coordination between the three organizations.

Addressing the Stanton recommendation which would reorganize information and cultural activities in US missions overseas, the GAO maintained that the proposed realignment of the functions would fragment information and cultural staffs and reduce the effectiveness of field operations.

The GAO endorsed the Stanton recommendation to transfer CU to USIA. Also, and relevant to the President’s interest in government reorganization, the GAO report noted that this step would permit the elimination of one Public Advisory Commission by consolidating the functions of the USIA and CU Public Advisory Commissions. The Stanton proposal would permit this consolidation as well.

The GAO offered no final recommendation on the relationship of the new agency to the Department, suggesting only that the choice be made after a careful study.

The GAO proposals could be accomplished under the Government Reorganization Act. Personnel could be moved to new or different agencies, but the personnel systems could not be integrated without separate legislation.

Report of the US Advisory Commission on Information

USIA’s Public Advisory Commission published in early May a report15 reflecting on the organizational proposals of the Stanton and GAO reports, and offering a number of additional specific recommendations on USIA programs and resource allocation.

The Commission favored transferring CU activities to USIA, saying that the continued divorce in Washington of the cultural and educational programs is “illogical and inefficient.” The Commission also [Page 535] found that VOA should remain “fully integrated with the agency responsible for administering the government’s foreign information program.” Given the importance of the VOA within USIA (one-fourth of personnel and budget) the Commission recommended that the VOA Director become a Deputy Director of USIA.

The Advisory Commission opposed the integration of USIA into the Department as it is currently organized. However, the Commission found merit in the eventual return of USIA to the Department under an outline calling for co-equal branches of political, economic and public diplomacy, and recommended that OMB and GAO undertake a study to test these principles.

The most noteworthy aspect of the Commission’s report lies in the fact that three of its authors were also members of the Stanton Panel, and their endorsement of the Commission’s views represents important defections from the Stanton recommendations. This fact was discussed during the Senate Foreign Relations Committee’s consideration of this issue, and may have been influential in the watering-down of Senator Percy’s amendment.

Reinhardt Proposal

At your request, Ambassador Reinhardt submitted his recommendations on reorganization (text at Attachment 2). In his approach to the problem, Ambassador Reinhardt set up broad criteria by which reorganization proposals should be judged, including: greater effectiveness in cultural and information programs, linking public diplomacy to the conduct of foreign policy, and providing for the integrity of educational exchange programs.

After discarding options which would either reject change or propose complete integration of USIA into the Department, Ambassador Reinhardt considered two choices: the Stanton Panel proposal or an arrangement along the lines of the GAO report—with the only difference that USIA would assume an ACDA-like relationship to the Secretary of State and would no longer report exclusively to the President.

Ambassador Reinhardt favored the second choice, arguing that exchange and information programs reinforce each other and that the conduct of foreign policy is promoted by organizational coherence rather than by fragmentation of responsibilities.

Ambassador Reinhardt proposed an ACDA-like relationship with the Department which would move USIA closer, in his view, to foreign policy but would preserve its professional and budgetary autonomy.

Regarding VOA, Ambassador Reinhardt concluded that VOA does not lack credibility—a point not contested by the GAO—and he therefore proposed continuing the present arrangement. He suggested, however, that the President should declare that news broadcasts would [Page 536] not be censored and that any instances of policy intervention would be reported to Congress.

The Reinhardt proposals would avoid causing the problems to USIA’s structure and to the morale of USIA’s career staff that could result from implementation of the Stanton report. In contrast, they would unify the exchange program with other information and cultural activities, in that way enhancing program coherence and central management.

Three questions arise from such a reorganization: whether this Department and its overseas posts would lose influence over the exchange program, whether Congress would continue to be generous in its financing of the programs, and whether the exchange program would be perceived as being “tainted” or submerged in USIA. It is important that in a reorganization the present separate appropriation for cultural exchange activities be maintained. Also, under a reorganization the Department should have responsibility for guiding cultural exchange program decisions.

Moreover, while the proposed statement of non-censorship could be useful in fulfilling the President’s desire to ensure VOA’s integrity, such a declaration would weaken USIA’s control over VOA and could lead to disputes over the nature of policy guidance to the Voice. Also, the requirement of reporting to Congress policy interventions with VOA would further expand de facto VOA independence.


In assessing the potential advantages and disadvantages of each of the courses of action analyzed in this paper, we have been guided by the view that our public diplomacy operates today in a generally effective manner and that no fundamental changes are desirable.

Policy Information and Policy Advice

The Stanton Panel proposed that the current USIA policy information and policy advice functions should be moved to the Department, placing general information activities in an independent agency. We see significant disadvantages in that alternative.

Information activities—whether directly related to US foreign policy or generally descriptive of American society and culture—are complementary. For instance, a spokesman’s credibility on policy issues is enhanced by his identification with general information and cultural programs. To fragment the information function would also disrupt the operation of the information programs by splitting up the USIA staff abroad which currently manages these programs.

USIA’s policy advice role, advising on the implications of foreign opinion for US policies and programs, is also related to the policy [Page 537] information function, and none of the reports recommend that they be separated. The professional independence of USIA in the policy advice field has tended to assure greater objectivity and wider scope in the reporting and analyzing of foreign opinion.

The advantages of organizational simplicity achieved by linking the policy information function with the policy-makers in the Department and placing that function alongside the bureau with comparable domestic responsibilities are outweighed, we believe, by the dislocations which would ensue. The result, in our view, would be weakened programs and less effective coordination between the various information and cultural functions. We support the GAO recommendations and Ambassador Reinhardt’s proposals, which would maintain the information function intact, and in USIA.

General Information

The task of depicting and interpreting American society and culture to foreign audiences is a specialized activity often requiring different skills from those necessary in traditional diplomacy. All the reports under consideration agree that the general information function should remain in USIA or (in the case of Stanton) in a successor agency. We agree, and make no recommendation for change.

Cultural Exchange

We concur with the findings of the various reports that all exchange activities should be consolidated in one agency. The Stanton Panel proposed that exchange activities be grouped in an Information and Cultural Affairs Agency, a successor to USIA, arguing that combining the current USIA and CU functions would have the advantage of simplifying communications channels. The Panel reasoned that the consolidation of exchange activities with the general information function would be beneficial to both, and facilitate program activities based on both exchange of persons and media products.

While consolidating exchange functions with general information in USIA is generally agreed to be advantageous, there are potential drawbacks: There is the risk that the Department’s influence on the exchange program, in support of foreign policy goals, will diminish. This is manageable, we believe, given the probability that existing coordination would be enhanced if USIA were moved closer to the Department, in a relationship comparable to that of ACDA.

Another risk lies in the possibility that the Congress may become more reluctant than in the past to fund exchange programs at present levels if the program is managed by USIA. Objections may also be raised to the potential “taint” of the cultural exchange programs by association with other activities of USIA. These are serious problems, [Page 538] but in our view might be substantially overcome by maintaining the exchange program’s present organizational and budgetary autonomy, under a separate appropriation. In addition, during hearings on this issue in coming weeks, efforts could be made to gain congressional support for the consolidation of the exchange program in one agency, on the grounds of greater managerial efficiency. It could also be pointed out to the Congress that over many years the management of exchange programs by USIA officers in our missions overseas has not proved to be a problem.

The consolidation of cultural exchange functions within the Department, rather than within USIA, is still another option. This alternative, however, would leave information activities in USIA divided, with State operating exchange activities both at home and abroad, and with closely allied general information functions remaining in the hands of USIA. A variation would be to place general information functions also in State. These courses have no congressional support, would fragment information and cultural activities and would threaten morale in the USIA career service. For these reasons we conclude that consolidation of cultural exchange and general information functions should be within USIA, rather than State.

Voice of America

The issue of VOA, with its tripartite mission of supporting American foreign policy, depicting American life and culture, and broadcasting the news, turns on the question of credibility. The Stanton Panel does not assert that VOA lacks credibility, but implies as much in recommending that its credibility would be enhanced by separation from USIA. The issue depends on a matter of judgment as to whether VOA is deficient in credibility, and whether giving it greater independence will produce a better result.

We are persuaded that separate billing as an independent agency will not appreciably alter VOA’s image as a US government entity. Further, if VOA acts more independently of US foreign policy, it will be less useful in promoting US foreign policy interests. It seems likely that a separate VOA, under a Board of Overseers, would be less responsive to US foreign policy concerns. There is no reason to believe that VOA’s credibility, which is considered high, would be substantially improved through the independent establishment of VOA outside both State and USIA.


In summary, we have examined the role of the various components of public diplomacy, with an eye to the special nature of each, in search of an organizational structure which would enhance our ability to pursue foreign policy interests through public diplomacy. In our view [Page 539] the proposal by Ambassador Reinhardt satisfies more of the necessary requirements than does any other proposal. We recommend you approve the memorandum to the President at Attachment 1.16

Attachment 2

Paper Prepared by the Director of the U.S. Information Agency (Reinhardt)17

Reorganization Proposal: International Information, Cultural and Educational Activities of the U.S. Government

I. Introduction

American “public diplomacy” includes three major elements: exchanges and cultural programs, information and persuasion, and radio broadcasting.

USIA employs almost 9,000 people and its FY 1977 budget is $263.9 million; of these totals, the Voice of America accounts for 2,300 employees and $68.0 million. (In constant dollars, the USIA budget has declined by almost 16% since 1969, and we have almost 20% fewer employees on our rolls in 1977 that we did eight years ago.) The budget of the educational and cultural exchanges program, which is staffed in Washington by 262 employees of the Department of State, is $59 million this year.

At posts abroad, the exchange, cultural and information/persuasion programs are under unified management by USIA officers. This unified approach has worked well for almost 25 years. Program management in Washington, however, has not been unified since President Eisenhower moved USIA out of the Department of State—but left the exchanges program behind—in 1953.18 Most observers agree that a different approach to program management in Washington would be beneficial. There are different approaches to reorganization before us, however.

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The purposes of this paper are to state the criteria by which reorganization proposals should be judged, outline the differing proposals for reorganization, and present a recommendation.

II. Assumptions, Criteria and Purposes

I take it as a given that the United States should have an agency which is engaged in enhancing long-term mutual understanding between this society and others. I take it as a given that the U.S. should have an agency whose purposes are to explain American foreign policy objectives to others and to create the basis for long-term understanding of, and support for, U.S. policy in critical sectors of other countries. I also take it as a given that USIA has not been as successful in this latter endeavor as it might have been; this reflects program deficiencies which we will attempt to remedy, but it also reflects past lack of interest in both USIA and the Department of State in creating a more harmonic relationship.

If, for example, the success of U.S. initiatives in such sensitive psychological areas as human rights, north-south relations, and the foreign perception of U.S. will and steadiness depends on the quality of our policies and diplomatic initiatives, it also depends on how we are “heard” and understood abroad—and by whom. Paradoxically, the explosion of international communications networks has accentuated the need for an institution which is single-mindedly devoted both to the creation of enduring intellectual linkages (exchanges) and the pointed presentation of U.S. society and purposes (USIA and VOA). In a world characterized by information dispersion, no other information network has the U.S. national interest in mind.

Within this context, the following criteria are pertinent in judging reorganization proposals:

—Does the proposal promise greater coherence to the whole range of U.S. cultural and information programs?

—Does the proposal have the promise of directing these programs increasingly to the national interest?

—Does the proposal provide for adequate foreign policy guidance, but safeguard the integrity of cultural and educational exchange programs?

—Does the proposal link “public diplomacy” to strategic foreign policy concerns in a way which enhances attainment of the latter?

—Does the proposal accomplish the foregoing without adding to the policy or management burdens of the Secretary of State and the President?

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Finally, I should note that USIA has been operating under a statement of mission issued by President Kennedy in 1963.19 It has become badly outdated. It is the subject of sharp, justified criticism by the Stanton Panel, a recent GAO study, and others. A new statement of mission from President Carter will be an important element of any reorganization. In my view, any such mandate should direct the new entity to:

—Foster improved international understanding by establishing and encouraging the flow of information and perspectives between Americans and the people of other countries, particularly those who shape attitudes, actions and reactions affecting the United States;

—Communicate to the people of other countries a balanced and comprehensive view of American life and thought, by direct contact and discussion, over worldwide radio and through available and acceptable media techniques in the countries concerned;

—Explain to people of other countries America’s foreign policy expectations, attitudes and objectives and, within this framework, to articulate and support U.S. policies and initiatives directly, advising American foreign policymakers on attitudes and opinions abroad that are relevant to U.S. interests.

III. The Options

There are four basic organizational options. Two, however, rally no support. The status quo, it is universally agreed, is inadequate. And almost every student of the problem has opposed the complete integration of USIA into the Department of State. The two major options now on the table are:

Option 1: the Stanton Panel report, presented in 1975 and supported by the Murphy Commission. It would combine CU’s exchange functions with the cultural and “long-range information” activities of USIA in a semi-autonomous agency. Under this proposal the “policy articulation and support” role of USIA, together with the press attaches abroad, would be assigned to the Department of State under a Deputy Under Secretary for Policy Information. The VOA would become an independent entity under a Board of Overseers (on which the Deputy Under Secretary would sit for policy purposes); to assure that the VOA presented an accurate account of U.S. foreign policy, spokespersons in the Department’s new Office of Policy Information would have direct access to broadcast time.

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Option 2: combining the present CU and USIA functions in a semi-autonomous agency with an ACDA-like relationship to the Secretary of State, on the assumptions that: (1) the benefits of mutual reinforcement between exchanges and cultural and information programs have been demonstrated by experience abroad; (2) the conduct of foreign policy is enhanced by organizational coherence, rather than further fragmentation. VOA would remain a major component of the new agency. Its straight news reporting would not be subject to prior censorship, although its commentaries and analyses would be informed by foreign policy guidance and considerations. The director of VOA and the head of the exchanges/cultural programs would have enhanced status in the new agency; the integrity of the cultural/exchanges programs would continue to be safeguarded by the Board of Foreign Scholarships.

IV. Discussion of Major Issues

Integration of CU and USIA . Exchanges programs are currently managed in the U.S. by the Department of State (CU), but the Department reimburses USIA to conduct the programs abroad. When USIA was separated from the Department in 1953, the separate headquarters jurisdictions were established, largely at the insistence of Senator Fulbright, to prevent the contamination of “culture” by “propaganda,” at least in the U.S. This argument is seldom heard in 1977, even from the thousands of American academics who have participated in various exchanges programs.

There is now almost universal support for integrating the Washington managements of CU and at least portions of USIA. The most cogent cases are contained in the Stanton Panel report and a GAO study to be published in early May. In 25 years of experience, there has been no serious criticism of the manner in which USIA has executed CU’s programs at its posts abroad. A single headquarters operations makes managerial sense.

The Stanton Panel recommended the division of the public diplomacy function in another way, as Option 1 above suggests. The GAO report, on the other hand, recommends against division of “culture” from the policy articulation and support roles of USIA on grounds which I support: The distinction between long-term and short-term public diplomacy programs is more apparent than real; it would perpetuate fragmentation at headquarters and export it to field posts. I believe there are ways to lend additional force to our support for strategic foreign policy concerns abroad without compromising the integrity of the exchanges programs or dividing our forces in embassies abroad.

Safeguards for Cultural Exchanges. It will be important, if we enhance the intellectual and organizational linkages between a new agency and the Department of State, that we not compromise the integrity of our [Page 543] long-term cultural and exchanges programs. I state this simply to underscore its importance to me. Those who argue that combining CU with USIA risks contamination of the exchange/cultural programs do so from what I regard as a false premise. The programs have, after all, operated without contamination and under the direct supervision of Department policymakers—and in the same USIA hands abroad—for 25 years. It will be important, however, to maintain the Board of Foreign Scholarships to assure the continued integrity of these programs.

USIA’s lawyers inform me that in uniting the functions of CU and USIA there is no legal contradiction between CU’s emphasis on “mutuality” and the “two-way character” of exchanges programs, on the one hand, and the statutory injunction that USIA not distribute its materials in the U.S., on the other. While this injunction should certainly be extended to the new organization, the Smith-Mundt Act (the source of this injunction) and the Fulbright-Hays Act (which governs the exchange programs) are not mutually exclusive. A Reorganization Plan would, of necessity, address the realignment of responsibilities assigned to State and USIA by Executive Order 1103420 and by Reorganization Plan No. 8 of 1953.

Loss of USIA Independence. There are differences of opinion but not sharp differences, so far as I can tell—as to whether an agency combining the present functions of USIA and CU should remain independent or bear a more direct relationship to the Secretary of State. Similarly, there are those who would prefer that the new agency have an ACDA or AID-type relationship—organizationally distinct but reporting to the Secretary—and others who believe it should move directly into the Department under the wing of a new Under Secretary.

In no case do I find the arguments, pro or con, overwhelmingly persuasive.

Continued independence has the advantage of lending modest additional status to public diplomacy; as a practical matter, it also leaves the agency without a real “home”, since Presidents have rarely given USIA much attention. Complete integration would maximize the harmony between public and classical diplomacy, but minimize the public standing of the former.

My recommendation is in behalf of the middle ground: an ACDA-like relationship to the Secretary of State which moves the new agency closer to foreign policy, but preserves its professional and budgetary autonomy, and keeps operational decisions and management problems off the Secretary’s desk. The American Federation of Government [Page 544] Employees (which has exclusive representation rights in USIA) would prefer an independent agency, but would not oppose less-than-independent status if it provided sufficient autonomy. AFSA wants all the functions combined, in or out of the Department. Apart from the Stanton Panel and the GAO report, no other important voices have declared themselves.

The Status of VOA. The future organizational status of the Voice of America provokes more public contention than any other element of reorganization.

As the Stanton Panel notes, VOA has operated under a three-point mandate for more than 15 years (a mandate endorsed by the Panel and written into law last year):21

VOA is to be a “consistently reliable and authoritative source of news . . . accurate, objective and comprehensive.”

—it is to “present a balanced and comprehensive projection of significant American thought and institutions.

—it “will present the policies of the United States clearly and effectively,” including “responsible discussion and opinion on these policies.”

Each element of the mandate suggests a different organizational status: independence if one focuses on integrity of the news, a direct link to the Department if policy presentation is to be the first priority, USIA if it is to represent the whole of American society. There is no perfect solution to the VOA problem, given the three-part mandate dictated by present legislation.

A further complication is that even were VOA to become fully independent, foreign listeners would continue to regard it as the official radio of the United States. Paradoxically, by giving Department spokespersons direct access to broadcast time, the Stanton Panel would reinforce this foreign perception.

The Stanton Panel’s priority concern was for VOA’s news credibility. I agree with the GAO report that the Panel ignored the fact that VOA’s present credibility with its audience is high—despite very occasional heavyhanded attempts at news management in recent years.

I believe the least-cost solution with respect to VOA is the organizational status quo, combined with an explicit statement by the President that there will be no prior censorship of news broadcasts; where extraordinary national interests do require policy intervention in news broadcasts, each such case should be reported in full to the Congress. [Page 545] (Commentary and analysis must continue to be subject to policy guidance; on this, nobody disagrees.)

No organizational formula—and perhaps particularly not independence—will insulate the Department or VOA from occasional complaints by American Ambassadors.

My recommended solution: (a) flies in the face of the Stanton Panel but is consistent with the GAO report; (b) will not be popular with all VOA employees, but will be strongly supported by other USIA and State officials; (c) will encounter opposition from a few Senators, but will be favored by powerful voices in both Houses of Congress.

Field Posts and Personnel Structure. The Stanton Panel, the GAO study, and other recent studies of public diplomacy have noted that cultural, information and educational activities abroad are administered effectively as integrated programs by USIA’s field posts. No troublesome “dichotomy” of information and culture is felt. Ambassadors have someone to turn to on the Country Team who directs and coordinates all aspects of public diplomacy. The arrangement works, and should continue.

As to the personnel systems: The Murphy Commission felt that in reorganization, “personnel functions, like budget and administration, should remain separate . . . amalgamation always remains as a future option.” I agree. Given the necessary structural upheavals of reorganization, the present separate but compatible personnel systems will give welcome stability to the career plans of the staff members of both institutions who will be involved in the changes. The option of personnel integration should remain open as an ideal—but future—goal.

V. Organizational Outline

The successor organization to USIA and CU will be headed by a Director and a Deputy Director, the former reporting to the Secretary of State and having an advisory and coordinating role with the NSC and other agencies concerned with foreign relations and international exchanges.

On the second tier of the new organization will be Associate Directors for (a) Exchanges and Field Support, (b) the Voice of America, (c) Management, and (d) Policy and Plans. Each will have unfettered access to the Director of the new organization, but will work closely with the Deputy.

The Assistant Directors for the five geographic areas will report to the Deputy Director.

The principal opportunities for saving money and positions lie in the offices of Management and of Exchanges and Field Support. These two sub-units will absorb between them ten offices now administered [Page 546] by Assistant Directors who report directly to the Director of USIA, and a number of functions associated with CU offices.

VI. The Process: Suggested Procedures

If you agree with a reorganization on this pattern, I suggest the following:

—Immediate designation of a small working group (no more than four or six people) from the Department and USIA, to draft a Statement of Mission, plan the most practical distribution and amalgamation of functions, and work with Department and USIA legal staffs on a detailed Executive Reorganization Plan establishing the successor organization to CU and USIA;

—Submission to the White House of a draft Reorganization Plan, with necessary back up, by May 20;

—Coordination of approach and efforts toward reorganization with OMB’s Reorganization and Management Staff, GAO, the two unions (AFGE and AFSA), and key members of appropriate Congressional committees and other Senators and Congressmen;

—White House submission of the Reorganization Plan to Congress by June 15;

The pace is being forced somewhat by the Hill. The Senate International Relations Subcommittee (McGovern) has already asked about reorganization; we understand that the House International Operations Subcommittee hopes to have your lead-off testimony on reorganization questions on May 26. (The GAO paper will be published in early May, we understand.) If the Administration has not submitted a plan by May 26—but is close to doing so—we might get the House Committee to delay the hearings for two or three weeks.

—If neither the House nor the Senate has disapproved the plan by August 15, rapid implementation beginning September 1;

—Completion of structural reorganization, in phases, by December 31. Plans for physical amalgamation and relocation should be incorporated in the 1979 budget, by amendment if necessary.

  1. Source: National Archives, RG 59, Records of the Under Secretary for Management (M), 1977–1978, Box 3, Chron May 1977. Unclassified. Drafted on May 27 by Spotts and Wingate Lloyd (M/MO). Concurred in by Joan Clark (M/MO), Moose (M), Kempton Jenkins (H), Frank Wisner (S/S), and Phillip Trimble (L). Printed from an unsigned copy. A handwritten note at the top of the memorandum reads, “5/29/77 to D.”
  2. Reference is to the Panel on International Information, Education, and Cultural Relations, chaired by former CBS President Frank Stanton. For the text of the report, March 15, 1975, see Foreign Relations, 1969–1976, vol. XXXVIII, Part 2, Organization and Management of Foreign Policy; Public Diplomacy, 1973–1976, Document 103.
  3. The Murphy Commission, known more formally as the Commission on the Organization of the Government for the Conduct of Foreign Policy, was established in 1972. It was given the mandate to investigate all of the entities involved in the foreign policymaking process and to make recommendations on the formulation and implementation of foreign policy. The Commission issued its report in June 1975. For a summary of the Commission’s recommendations with regard to public diplomacy, see Foreign Relations, 1969–1976, vol. XXXVIII, Part 2, Organization and Management of Foreign Policy; Public Diplomacy, 1973–1976, Document 106, footnote 4. The recommendations made by the General Accounting Office were not found but are summarized below.
  4. P.L. 79–584.
  5. P.L. 80–402.
  6. Senator Hickenlooper chaired a Senate Special Subcommittee on Overseas Information Programs, which submitted a report to the Senate on June 5, 1953. For a synopsis of the Hickenlooper Report and the subsequent legislation, see Congressional Quarterly Almanac, Vol. IX, 1953 (Washington, DC: Congressional Quarterly News Features, 1953), pp. 226–228.
  7. Also known as the President’s Advisory Committee on Government Organization. The PAGCO Final Report is in the Eisenhower Library, Records of the U.S. President’s Advisory Committee on Government Organization, Box 4.
  8. For text of the report of the President’s Committee on International Information Activities, submitted to President Eisenhower on June 30, 1953, see Foreign Relations, 1952–1954, vol. II, Part 2, National Security Affairs, Document 368.
  9. 18 Federal Register 4542, 67 Stat. 642.
  10. Known as the Sprague Committee after its Chairman, Senator Mansfield D. Sprague, the Committee was charged with reviewing the findings and recommendations of the Jackson Committee. It submitted its report to President Eisenhower on December 23, 1960. The final report is in the Eisenhower Library, Records of the U.S. President’s Committee on Information Activities Abroad, Box 25.
  11. P.L. 87–256.
  12. The Washington Post reported that on May 3 Percy submitted an amendment to the Foreign Affairs Authorization Act to break up USIA and create an independent Voice of America. (“Percy Introduced Legislation to Break Up USIA, Create Independent VOA,” Washington Post, May 4, 1977, p. A3)
  13. P.L. 95–17.
  14. Not found.
  15. Not found.
  16. Not found attached. Attachment 3, a copy of the Stanton Panel Report, was also not found attached.
  17. No classification marking.
  18. A reference to Reorganization Plan No. 8 of 1953.
  19. See Document 144 in Foreign Relations, 1961–1963, vol. XXV, Organization of Foreign Policy; Information Policy; United Nations; Scientific Matters.
  20. E.O. 11034, “Administration of the Mutual Educational and Cultural Exchange Act of 1961,” signed by President Kennedy on June 25, 1962.
  21. Section 206 of P.L. 94–350.