Foreign Relations of the United States, 1977–1980, Volume XXVIII, Organization and Management of Foreign Policy

172. Memorandum From the Under Secretary of State for Management (Read) to Secretary of State Vance ¹

Washington, June 6, 1979

The Foreign Service Act Meeting, 10:00 a.m., June 7 ² I—Suggested Compromises and II—Next Steps

Cy:

I

My reflections on the remaining issues and intra-Service political problems on structure following your Tuesday meeting with the Vine and AFSA groups³ led me to the following conclusions and recommendations (which David and Peter ⁴ concur with in principle):

—First, we need to make additional accommodations to get important senior officer and AFSA elements of support within the Service.⁵

—Second, the compromise recommendations set forth below can be accomplished in a day or two with minimal rewriting of the bill and/or section-by-section analysis.

—Third, OMB interagency clearance on a 200 page bill is bound to take a week at the absolute minimum, and this rules out your appearance before Dante Fascell on the 13th.

—Fourth, with the additional changes recommended below, I consider it absolutely essential to get your decisions on the remaining issues and forward the bill with a cover message from you to McIntyre⁶ by the end of this week.⁷

Remember that in signing off on these final issues you are not establishing the final form of the bill. It is inevitable that agency changes will be suggested, and we will have to make decisions on them. We may wish to suggest other changes in the section-by-section analysis after that is circulated here.

We have to start counteracting the largely uninformed negative reactions to the bill within the Service and to make a major set of efforts here and abroad to do so, and I include suggestions on how to do so at the end of this memo. But we cannot promote or defend the proposal until it has your imprimatur. Pell and Fascell are both ready to move as soon as the Administration bill is forwarded. I suggest we reschedule your Fascell appearance for June 21 or June 27 (whichever SALT permits) which would be helpful in obtaining interagency clearance.⁸

The remaining issues that need your decisions and my suggested method of handling them are as follows:

1. Compatibility AID/ICA: In presenting the ICA and IDCA Reorganization Plans to Congress,⁹ Administration witnesses stated categorically in the same terms: “The Secretary of State will have no operational role with respect to the budget, management, personnel, or general day-to-day operations of the Agency”. Dante Fascell personally nailed this point down hard in the ICA hearings on October 18, 1977, p. 27.

In both Plans the Secretary’s role is limited to providing “guidance . . . as to the foreign policy of the United States”. You may wish to call Charlie Bray, as the senior officers urged, but major change is unobtainable.¹⁰

Recommendation: We should include in the bill a provision calling on foreign affairs agency heads to report on progress made in bringing about “maximum compatibility” between the personnel systems in accordance with one of the stated legislative objectives within 18 months after the effective date of enactment and annually thereafter.¹¹

2. SFS Ingress/Retention/Egress:

(a) Transition: At the Tuesday meeting and subsequently discussion has revolved heavily around whether the initial transitional time-in-class assigned to a career minister, FSO-1 and FSO-2 who opts to join the SFS within 120 days of the date of enactment should be three years or five years. I think practical considerations should govern this issue. We will have an unmanageable administrative burden if the great bulk of SFS three year limited renewable appointments at the end of an initial time-in-class period all start in the same year, and it would be far preferable to stagger them as suggested below.

Recommendation: In the section-by-section analysis we would state the intent that during the transition period you should exercise the authority to set differentiated time-in-class rules for the top three grades by establishing staggered three, four, and five year rules for newly designated SFS members in inverse relationship to the amount of time they had already spent in their class. As presently provided, no one’s present TIC would be extended if it would otherwise expire within the three to five year time frame.¹²

(b) Post Transition New System: Despite Vine et al.’s continuing preference for exclusive reliance on three year limited renewable appointments (LRA) for all SFS service under the new system after transition, I strongly recommend that we stay exactly with the present language of the bill which gives you complete authority and flexibility to use TIC’s and LRA’s and every other exit mechanism in any combination which may prove desirable.¹³ In the section-by-section analysis if we should take another step toward the senior officer group view, we could express the legislative intent that in general time-in-class rules for the SFS should not be extended beyond the limitation set elsewhere in the bill for all limited renewable appointments, but we should make a firm decision that there will be short TIC’s at the start of service in each of the top three grades before the LRA procedure goes into effect and say so in the analysis. (My own suggestion is 3, 4 and 5 years respectively for minister, minister-counselor, and counselor, but we should not be that specific even in the section-by-section analysis or it will attract legislative tampering.)¹⁴

3. Board of the Foreign Service: Although it goes against my own personal bias against placing advisory committees on a statutory basis, which is also an Administration formal position, I think we will gain support from some of the most senior officers and retired persons as well as from AFSA by inserting a BFS section in the bill which would be written to give you and your successors maximum possible flexibility. Such a section would read as follows:

Section _______. The Board of the Foreign Service.—The President shall establish a Board of the Foreign Service to advise the Secretary on matters relating to the Service, including furtherance of the objectives of maximum compatibility among agencies authorized by law to utilize the Foreign Service personnel system and compatibility between the Foreign Service and the Civil Service. The Board of the Foreign Service shall be chaired by a career member of the Senior Foreign Service designated by the Secretary and shall include senior representatives of the Department, the International Communication Agency, the Office of Personnel Management, the Office of Management and Budget, and such other agencies as the President may designate.¹⁵

We are going to have to ask the Board to endorse the bill, and particularly the SFS and performance pay provisions (which is the only way to obtain comparability of pay with the SES) and I think it would facilitate this process to include such a section.

4. Labor-Management Issues (Chapter 10): On the seven detailed issues presented by AFSA on Tuesday I recommend adopting the essence of four of them where they make a solid case in favor of adopting the identical language contained in Chapter 7 of the Civil Service Reform Act of 1978 and where we would not be able to withstand such amendments on the Hill by labor-inclined Members anyway. These four include:

(1) Identity with CSRA on the list of “reserved management rights” which would be precluded by statute from future bargaining but not made automatically negotiable because of the deletion;

(2) Use of the CSRA model prohibiting meetings between management officials and other groups of employees besides the exclusive bargaining unit concerning grievances, personnel policy and practice, or general conditions of employment, unless the union has the right to be present;¹⁶

(3) Attorney fees: The CSRA provides for reasonable attorney fees to be awarded in successful grievances or unfair labor practice. I do not see how we can do otherwise. In return I think AFSA would be willing to undertake initial screening of all individual grievances, which would be of considerable advantage to us.

(4) Management or labor organization grievances concerning alleged violations of collective bargaining agreements: The grievance chapter under existing law and in the proposed bill is limited to individual employee grievances against the agency. AFSA correctly points out that other federal labor relations statutes and executive orders also include authority for disputes resolution mechanisms for agency and labor organization grievances. This is a fairly major concession on our part, but I think it would be forced on us later on the Hill and I see no reason for distinguishing our system from others in this regard.

I recommend strongly against concessions to AFSA on the other points raised, and I think we would be foolish and taken to task by OPM to adopt their views in these matters:¹⁷

(1) Bargaining unit exclusions: I think we must insist that inspectors, officers engaged in personnel work, and those engaged in criminal or national security investigations or audits—all of which are intimately and unarguably management functions—should not be included as members of bargaining units because of the potential inherent conflict between management and labor interests. OPM would oppose any further concession on this point.

(2) Disputes panel: AFSA argues for finality of disputes panel decisions using the CSRA analogy. The latter machinery is tested, experienced and proven. Ours will be new and inexperienced. Disputes panel decisions, on affirmative action for instance, may or may not be “contrary to the best interests of the Service” but we should certainly fight to retain that authority in the office of the Secretary of State; and

(3) Picketing: I think the notion that we should authorize overseas picketing is absurd.

5. Chief of Mission Differential and Post Classification: It is now plain that we would pick up added senior officer and AFSA support and accordingly I recommend that we retain the four post classification system and the present feature of law which authorizes the President to establish Executive Level I, II, III, IV and V compensation for the Chiefs of Mission (which in turn would sanction continued use of the post classification system).¹⁸ We would continue, as the bill proposes, to let SFS officers who are appointed as Chiefs of Mission to elect whether to receive the specified Executive Level compensation for the classification of post to which they are assigned, although this would make them ineligible for performance pay, or to retain their SFS base compensation and to compete for performance pay. (We had originally thought that the uniform Executive Level IV compensation for Chiefs of Mission would help more other senior officers to benefit by raising the ceiling on hardship differential at Class IV posts, but we have new data which suggests that this is not the case.)

6. Other AFSA issues: Hydle’s final two points which he did not have time to spell out on Tuesday relate to:

(a) Alleged Disparities between extension of spouse benefits in the bill and benefits accorded to career employees. As acknowledged in Lars’ June 6 memo, this is a problem of “perception”. Close examination of the points he makes indicate the disparities are apparent, not real, and we can put some language in the section-by-section analysis to help allay such fears.¹⁹

(b) Staff Corps: Selection Out and Annuities. As the Hydle June 6 memo indicates “AFSA, including its staff corps members, has approved the concept of selection-out for staff corps”. The memo points out, however, that such approval is contingent on a grandfather clause for the transition period “protecting present FSS employees who are not eligible for immediate annuities, either by exempting them from such selection-out, keeping them on the roles until they become eligible for annuity, or giving them immediate annuities even if they have not become eligible under present legislation”. I recommend inclusion of such a grandfather provision in a new Subsection 2104(f) exempting present FSS members from substandard performance selection-out until they are eligible for immediate annuity.²⁰

Note: Under the new system after transition there is an inherent inequity built into the existing retirement law for present staff corps members because annuities on selection-out are limited to those who have reached 50 years of age, put in 20 years service, or reached a grade level which only the top FSS members can reach. It seems obvious that this provision should not be rank related, but that anybody should be qualified who has met the 50/20 formula. Unfortunately, there is no chance of getting this provision of law changed with OMB in the present budget climate, but I would be delighted if Congress were willing to extend such a benefit on AFSA’s or its own initiative. We want to avoid maximizing risk to the present special benefits retirement section by any initiatives we take in this area.

II

If you are willing to make decisions on the remaining issues listed above, I suggest the following next steps:

1. Call in the Senior Officer Group and Hydle seriatim and have you inform them of your decisions and ask for their support of the bill.

2. Call Dante Fascell and see if he will agree to your appearance on June 21 or June 27 (whichever SALT permits) to let us use this date to obtain earliest possible other agency clearances.²¹

3. Sign a letter to McIntyre which we would date on Friday or Saturday forwarding the revised bill and asking for expedited OMB interagency clearance citing the new Hill hearing date.²²

4. Suggestions for obtaining Foreign Service support: At the end of the meeting we should discuss the several steps we will need to take to obtain strong Foreign Service backing. These might include:

(a) Video taped Secretarial message to the Foreign Service when the Administration clears the bill. We have a first draft message, and we would propose to distribute copies of the tape to all posts as soon as it was cut.²³

(b) Preparation of toughest major questions and answers. This Q and A material, which might be worked into a second section of the video tape, will be essential for Hill presentations and presentations in Washington and in the field.²⁴

(c) Statements by Fascell/Pell. If they would be willing to do so, brief statements by Fascell/Pell about their willingness to undertake prompt consideration of the bill might be an effective final segment of the tape.²⁵

(d) Task Force:

—Washington. A central task force will be formed which I will chair with Harry Barnes as vice-chairman to plan and monitor all aspects of the effort to enact the bill. It will involve, of course, multiple appearances by Harry and myself and others with all elements of the Department and preparation of the Hill materials.

We should ask PA to make structure a “priority issue” and detail a writer to our Washington task force on this effort.

A related effort should involve work with influential retired ambassadors and Dave Newsom and Phil Habib should have key roles here. I would hope to enlist Carol Laise and Dean Brown²⁶ on a consultant basis to spark this move. We have already had press inquiries flowing from your recent remarks about reorganization²⁷ and we will try to get several well placed stories.

—Field. Our present plan is to “deputize all DCM’s” to be tasked in their managerial capacity with understanding and explaining the bill at their respective posts. From Washington we would send out teams of two or three, headed by persons intimately familiar with the bill such as Bob Gershenson, PER Deputy, and possibly persons (such as Walt Cutler) if we could immerse them sufficiently in the details of the bill, to meet with groups of DCM’s who would be brought together at 10 or 12 of the largest posts. We would also authorize AFSA chapter heads to come to such meetings, and we would, of course, use the team presence at the big posts to have them meet with all employees on those occasions.

(e) BFS endorsement and testimony in favor of the bill will be important both in Washington and the field.

(f) Obviously we will want to acquaint all principal officers in the Department as broadly as possible with the principal provisions of the proposal as well as all Chiefs of Mission, and we will utilize Chiefs of Mission meetings, Ambassadorial consultations in Washington, and travel schedules by the Assistant Secretaries for this purpose.

(g) In your own travels it will be more helpful than anything else if you can schedule brief meetings with staff at posts to make some of the principal points.

1. Source: National Archives, RG 59, Records of the Under Secretary for Management (M), 1978–1979, Box 8, Chron June 1–6, 1979. No classification marking.
2. No minutes of this meeting were found.
3. June 5. No minutes of the meeting were found.
4. David Newsom and Peter Tarnoff.
5. Vance wrote “yes” in the margin adjacent to this paragraph.
6. James McIntyre.
7. Vance wrote “OK” in the margin adjacent to the second, third, and fourth points.
8. Vance underscored “for June 21” and wrote “yes” next to it. He underscored “or June 27” and wrote “I will be in Tokyo” next to it. Vance was in Tokyo from June 25 to June 29 to attend the G–7 Summit.
9. For the ICA plan, see Documents 139 and 140. For the IDCA plan, see Document 146.
10. In your talk with Bray I also recommend you support a provision requiring mandatory conversion to Civil Service status within 3 years for the 900 ICA Domestic Foreign Service people following the 1981 termination of the present ICA/AFGE agreement. [Footnote is in the original.]
11. In your talk with Bray I also recommend you support a provision requiring mandatory conversion to Civil Service status within 3 years for the 900 ICA Domestic Foreign Service people following the 1981 termination of the present ICA/AFGE agreement. [Footnote is in the original. Vance wrote “OK” in the margin adjacent to this paragraph.]
12. Vance wrote “OK” in the margin adjacent to this paragraph.
13. Vance wrote a question mark in the margin adjacent to this sentence.
14. For commissioning and tax purposes we plan to revise the bill to refer to “limited renewable extensions” rather than “limited renewable appointments” for reasons we can detail but there is no change in substantive intent. [Footnote is in the original.]
15. In the margin adjacent to this paragraph, Vance wrote, “OK if we get commitment.”
16. Vance wrote “OK” in the margin between points (1) and (2).
17. Vance wrote “I agree” in the margin next to this paragraph.
18. Vance wrote “OK” in the margin next to this sentence.
19. Hydle’s June 6 memorandum was not found. Vance wrote “OK” in the margin next to this point.
20. Vance wrote “OK” in the margin next to this point.
21. Vance circled June 21 and placed a checkmark in the margin next to this point.
22. Vance placed a checkmark and wrote “OK” in the margin next to this point. See Document 173.
23. Vance wrote “OK” in the margin next to this point. The draft message was not found.
24. Vance wrote “Some one else should do this” in the margin next to this point.
25. Vance wrote “OK” in the margin next to this point.
26. Carol Laise was the former Director General of the Foreign Service and Director of Personnel. L. Dean Brown was a former Deputy Under Secretary of State for Management.
27. Not further identified.