Foreign Relations of the United States, 1977–1980, Volume XXX, Public Diplomacy

85. Memorandum From the Director of the Office of Management and Budget (Lance) to President Carter¹

Washington, August 26, 1977

SUBJECT

• Reorganization of State Department’s Exchange Program, the U.S. Information Agency, and Related Programs

In response to memos from Secretary Vance, Zbig Brzezinski, Barry Jagoda and me² on the subject of reorganization of our “public diplomacy” programs, you stated that you desired to study the question prior to making decisions on the issue. Accordingly, Reorganization Project and other OMB staff, after extended consultation with Zbig, Barry, David Aaron, John Reinhardt of USIA, and Warren Christopher and Joe Duffey from State, have drafted this memorandum for your consideration.

Our public diplomacy consists of cultural exchanges, the dissemination of information and the rendering of policy advice to the President and other officials making foreign policy decisions (see Attachment 1, page 1).³ These functions are now carried on by the Bureau of Educational and Cultural Affairs in the State Department (CU) and by the U.S. Information Agency (USIA) (see Attachment 1, page 2). Three issues are presented for decision:

1. Should CU and USIA be consolidated (page 2)?

2. If consolidation occurs, what should be the relationship of the new entity to the State Department (page 3)?

3. If consolidation occurs, what should be the relationship of the Voice of America to the new entity (page 5)?

1. SHOULD CU AND USIA BE CONSOLIDATED?

Discussion

There is a considerable body of opinion holding that a consolidation should be effected, on the rationale that locating complementary programs in a single location facilitates their orchestration toward like goals. CU carries on the cultural affairs function in Washington but cultural exchange is administered overseas by USIA personnel (as well as by 43 local Fulbright Commissions and by private U.S. organizations). It is this split in Washington leadership that is in large measure responsible for interest in reorganization. The single field organization attempting to orchestrate all of these programs must report to two separate leaderships, each of which maintains in Washington a separate set of regional bureaus and country desks.

A consolidation would produce a new organizational entity to which similar programs operated by other agencies and Departments might be added in the future.

Many academics, the Linowitz Commission,⁴ and the American Council on Education object to placing the educational and cultural exchange program in an agency whose functions they perceive as including the dissemination of “propaganda”, but any relocation of CU should include the Board of Foreign Scholarships (a Presidentially appointed Board created by the Fulbright-Hays Act⁵ to supervise the educational and exchange program and to select the program’s academic grantees). The Board should be able to continue to assure the non-political nature of the Fulbright Program. Further, the individual responsible for cultural and educational exchange in the new entity should have an appropriate rank—perhaps at the Deputy Director level—and consolidation should be accompanied by a new name that gives less prominence to the information function.

There are several other factors related to a decision to consolidate USIA and CU: A consolidation should include also consolidation of the advisory committees to USIA and CU, the U.S. Advisory Commission on Information and the U.S. Advisory Commission on International Educational and Cultural Affairs. Second, CU operates five reception centers for foreign visitors at major ports of entry into the U.S. Because these centers serve visitors under both AID and CU programs (about half from each), and because of their domestic location, the Chief of Protocol (Evan Dobelle) and Joe Duffey have suggested that they not be moved with CU but be placed in the Protocol Office.

Regardless of whether USIA is to be consolidated with CU, this is an appropriate time for a full review of USIA’s internal structure and personnel system, both of which appear to constrain rather than support the kind of creativity and venturesomeness that should characterize the agency. Director Reinhardt has begun such a review but would be greatly assisted in this task by a Presidential statement of support and encouragement. We urge that such a statement be made, either in your message transmitting the reorganization plan to Congress or in a separate memorandum to Director Reinhardt.

Recommendation

Consolidate the educational and cultural exchange activities of State and the information and cultural activities of USIA to produce a new organizational entity. A Presidential statement defining the mission of the new entity and assuring the continued integrity of educational and cultural exchange organization, activities and budget should accompany the consolidation.

This recommendation is supported by Zbig Brzezinski, Barry Jagoda, David Aaron, the Reorganization Project, OMB, State and USIA. No one in the Administration has expressed support for either retaining the status quo or following the Stanton Panel’s recommendation⁶ of placing “policy” information activities in State and “general” information activities in an independent agency (see Attachment 1, page 8).⁷

Decision

Agree

Disagree

2. IN THE EVENT OF CONSOLIDATION, WHAT SHOULD BE THE RELATIONSHIP OF THE NEW ENTITY TO THE DEPARTMENT OF STATE?

The more that public diplomacy programs should concentrate on building overseas support for current American policies, the closer to State (in terms of both policy guidance and organizational location) any new entity should be. To the extent that public diplomacy should concentrate upon enhancing a broader mutual understanding, the more distance from State is appropriate.

So long as the budget and operations of the new entity are separate from those of State, its formal relationship to State is likely to matter less than the strength of its leadership and the degree of interest shown by the Secretary of State. Even so, the acceptability of consolidation to the Congress, the agencies, and the interested public will be affected by questions of form. Accordingly, there has been considerable discussion among the participants in developing this memorandum as to whether the relationship of a consolidated entity to State should approximate that of:

—AID, an agency within State whose Administrator reports to the Secretary,

—ACDA, an agency outside State whose Director reports directly to the President, but acts “under the direction of the Secretary of State”, or

—USIA, an independent agency whose Director reports to the President, but receives foreign policy “guidance” from the Secretary of State.

(The details of these relationships are set forth in Attachment 2.)⁸

Recommendation

Secretary Vance prefers a relationship like that between AID and State, but has agreed to support an ACDA-like relationship as an acceptable compromise of the differing views on the subject. Zbig Brzezinski, Barry Jagoda, David Aaron, John Reinhardt, and the Reorganization Project, though inclined to a relationship like that between USIA and State, have agreed to concur in recommending an ACDA-like relationship. OMB’s International Affairs Division recommends maintaining the existing relationship between USIA and State.

Decision

Relationship approximating that of AID and State _______

Relationship approximating that of ACDA and State _______

Maintain existing relationship between USIA and State _______⁹

3. IN THE EVENT OF CONSOLIDATION OF USIA AND CU, WHAT SHOULD BE THE RELATIONSHIP OF THE VOICE OF AMERICA TO THE NEW AGENCY?

VOA is currently a component of USIA. It accounts for about one-quarter of USIA’s budget of $264 million. A decision as to the degree of VOA’s independence from the other aspects of public diplomacy depends upon the degree to which VOA’s news gathering and reporting should be independent of foreign policy guidance from State or other agencies.

The question of whether VOA’s news operations should enjoy the same independence as those of private broadcasting stations has long been argued among State, USIA, VOA, and interested outsiders. (There has been less controversy as to the propriety of State’s giving guidance where analysis and commentary are concerned.) Some have argued that as a U.S. Government radio station, VOA inevitably is taken by overseas listeners to represent official U.S. policy, and that therefore, its broadcasting activities (including news broadcasting) should not be inconsistent with official U.S. policy. Thus, in March 1975, State and USIA prevailed upon VOA not to carry the story of student demonstrations in Phnom Penh calling for Lon Nol’s removal because of the “possibility” that the broadcasting of such a news story “could be misconstrued as a signal that the U.S. Government was sympathetic to those demands.” Similarly, in October 1976, the U.S. Embassy in Tel Aviv forbade a VOA correspondent to check the veracity of a news story with a Palestine Liberation Organization spokesman because the U.S. does not officially recognize the PLO.

Those opposing this view take the position that we best demonstrate our strength as a nation by permitting VOA to broadcast the news without regard to official U.S. Government policy, while retaining for State the authority to provide guidance for analysis and commentary and to take VOA air time on its own to explain U.S. policy.

In a May 1977 memorandum, USIA Director Reinhardt stated that “VOA will be solely responsible for the content of news broadcasts.”¹⁰ Nevertheless, there are those who believe that only structural independence will assure that freedom. Among these are the Stanton Panel and Senator Percy, who have suggested that an independent VOA be headed by a board with both private members and one or more representatives of State and/or USIA. Others supporting news independence believe that it can be attained without structural independence if there is a strong Presidential statement guaranteeing the functional independence of VOA’s news gathering and reporting operations.

Recommendation

Retain VOA in a consolidated CU–USIA, with a strong Presidential guarantee of the independence of its news gathering and reporting operations. This is supported by Zbig Brzezinski, Barry Jagoda, David Aaron, the Reorganization Project, OMB, State, and USIA. No one in the Administration has expressed support for creation of a structurally independent VOA.¹¹

Decision

Agree _______

Disagree _______

1. Source: Carter Library, White House Central Files, Subject File, Foreign Affairs, Information-Exchange Activities, Box FO–35, FO–5 1/20/77–9/30/77. No classification marking. Lance sent the memorandum to the President under an August 26 covering memorandum. (Ibid.) In his August 29 Evening Report to Brzezinski, Henze stated: “USIA’s reorganization plan was carried in directly to President and acted upon by him without any further NSC or other White House Staff coordination. President’s decisions were very much in line with what we expected and it is good that he acted fast. Manner in which this was handled has left a number of loose ends, however, which I have been discussing during day with David [Aaron], Bob Gates, and Christine [Dodson]. We will follow up on those which seem to be our particular responsibility or in which we have particular interest.” (Carter Library, National Security Affairs, Brzezinski Material, Staff Evening Reports File, Box 4, 8/25–31/77) Henze addressed these “loose ends” in his August 30 Evening Report: “Discussed President’s decisions with Charlie Bray, who had only rumors about it. OMB neglected to tell USIA (Reinhardt is off on leave, returning only in second week of September). Advised Bray to get together with USIA and work on follow-up actions re President’s decision (press announcement, contacts to reassure academic community re CU, briefing of interested Congressmen) which he did today.” (Carter Library, National Security Affairs, Staff Material, Horn/Special (Henze), Box 5, Evening Reports File: 7–10/77)
2. See Document 64; Document 71; footnote 5, Document 65; and footnote 3, Document 70.
3. Attached but not printed is an undated paper entitled “Background Information on Public Diplomacy Programs and Reorganization.”
4. Reference is to the Commission on United States-Latin American Relations, chaired by Linowitz. The Linowitz Commission published two reports: The Americas in a Changing World and The United States and Latin America: Next Steps.
5. See footnote 5, Document 7.
6. See footnote 3, Document 1.
7. Attached but not printed is an undated paper entitled “Background Information on Public Diplomacy Programs and Reorganization.” Another copy of the memorandum indicates that Carter approved the recommendation. (National Archives, RG 306, USIA Historical Collection, Subject Files, 1953–2000, Entry A–1 1066, Box 43, USICA, Reorganization, 1974–1978)
8. Attached but not printed is an undated paper entitled “Analysis of Alternative Organizational Arrangements for a Combined USIA/CU Agency in Relation to the President, NSC, and the Secretary of State.”
9. The President did not approve or disapprove any of the recommendations.
10. See Document 47.
11. The President did not approve or disapprove any of the recommendations.