145. Letter From the Under Secretary of State for Management (Read) to the Associate Director for Organization Studies, Office of Management and Budget (Szanton)1

Dear Peter:

The March 2 draft reorganization plan for the International Development Cooperation Agency (IDCA)2 raises a number of fundamental questions about the functions of IDCA and its relationship to other development assistance organizations. We think these questions must be addressed before we can make meaningful detailed comments on a plan, and certainly before the plan is placed before Congress.

The plan is unclear on the central question of the nature of IDCA and its relationship to AID. The underlying McIntyre memorandum of February 15 states that AID will be “transferred” into IDCA.3

On the one hand, the plan permits an inference that AID is being abolished and totally absorbed by IDCA. Section 7 of the plan would transfer to IDCA those AID functions now specified in law and its total administrative funding. Section 2 of the plan gives the IDCA Director responsibility for the “exercise” of functions to be vested in IDCA which implies more of a management role than we had thought was intended. Moreover, §5 confers on the IDCA Director a broad power of reorganization. Section 9 contemplates OMB arrangements to terminate the affairs of any agency abolished by the plan; in light of §7 and the President’s authority to transfer all remaining AID functions by Executive Order, this could only refer to AID.

On the other hand, if the intent is to place all AID authority in IDCA which would delegate most of it back to AID, some effort seems necessary at this stage to indicate what this might look like.

Relationships between IDCA and the IO Bureau of the State Department, and the IFTC, are not addressed at all, but presumably will be left to Executive Orders. US support of UN and other IO development assistance programs has obvious foreign policy linkages which concern this Department. The reorganization plan plays an important background role in Congressional consideration of the IFTC legislation and the IFTC-IDCA relationship must be addressed.

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These questions also have a bearing on IDCA executive and personnel requirements (e.g., §§3, 4, 9).

We think it would be unrealistic not to anticipate Congressional interest in clarifying the status of AID, and IDCA operational arrangements and reorganization objectives, in order to better define the purposes of IDCA itself. We therefore believe that we must work out answers to these questions so that they are in hand when the plan is submitted.

This Department is particularly concerned to ensure in specific arrangements appropriate coordination of IDCA activities with broader US foreign policy interests, consistent with section 2 which places IDCA under the Secretary of State’s foreign policy guidance. In this regard, for example, the Secretary’s role under §622(c) of the Foreign Assistance Act4 as amended should be retained under the reorganization plan. The basic thrust of this subsection is to ensure overall integration of economic and military assistance programs and consistency with overall U.S. foreign policy. The retention of this responsibility in the Secretary of State is necessary if he is to fulfill his functions under §2 of the plan. We are concerned at the implications of any proposals to divide this responsibility.

In addition, we believe that the delegation of negotiation authority under §635 of the Foreign Assistance Act to the Secretary of State should be continued. The Secretary in turn can make an appropriate delegation of negotiation authority to IDCA, AID, and IFTC consistent with the Department’s Circular 175 procedures.5 Continuation of present practice in the case of AID would be consistent with §2 of the plan and with the spirit of recent amendments to the Case Act (§708 of P.L. 95–426, I U.S.C. 112b). The plan also should reflect the President’s decision, recorded in the McIntyre memorandum, that the IDCA Director will consult with the Secretary of State before submitting a budget to OMB.

Finally, we question the appropriateness of making the IDCA Director advisor to the National Security Council, since this seems fully included in the function of advisor to the President. The relationships between the Chairman of the DCC and the NSC are spelled out in detail in the March 22 decision of the President and subsequent implementing instructions.6

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We offer these as preliminary comments on the draft plan. More detailed comments seem premature pending a more complete outline of the concept of IDCA and a draft Executive Order and Presidential Message to accompany the plan.


Ben H. Read7
  1. Source: National Archives, RG 59, Records of the Under Secretary for Management (M), 1978–1979, Box 11, Chron March 7–13, 1979. No classification marking. Drafted by K. Scott Gudgeon (L/EB). Cleared in draft by Curtis Farrar (S/P), John Spiegel (D), Francis Kinnelly (OES), Paul Molineaux (M/MO), Alexander Watson (EB), and John Fox (IO).
  2. Not found. The final text of the plan is Document 146.
  3. See Document 144.
  4. P.L. 87–195.
  5. A reference to the Department of State procedure that ensures the legality and constitutionality of treaties that are made by U.S. officials, considers the foreign policy implications of the treaty, and assures that the Department of State is involved in the process.
  6. Not found.
  7. Read signed “Ben” above this typed signature.