MANAGEMENT ISSUES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89-00066R000400070065-3
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 3
• Document Creation Date: December 22, 2016
• Document Release Date: January 10, 2011
• Sequence Number: 65
• Publication Date: April 14, 1986
• Content Type: CABLE

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TRANSMITTA SLIP DATE
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UNCLASSIFIED OUTGOING
Department of State TELEGRAM
PAGE 01 OF 22 STATE 115501
ORIGIN MHO-01
INFO
LOG-00
ADS-00
AID-00
OPR-01
AF-00
COMP-01
ARA-00
PM-10
SSO-00
, MFLO-03
MED-07
EAP-00
CPR-02
RP-10
OMB-01
OES-09
SIL-01
AS-02
PRS-01
OS-01
DSE-00
DRAFTED BY: N/MD:JSFORD:LGR
APPROVED BY: M:RISPIERS
M/MO: DHPETTERSON
M/DGP: GSVESI
OS: NSTEWART
S/S: KMOU 11411
DESIRED DISTRIBUTION
INR-10
EUR-00 SS-B0'
OIC-02
4. ALL CHIEFS OF MISSION WILL BE ASKED TO CAREFULLY
REVIEW STAFFING WITH SENIOR AGENCY OFFICIALS AT POST AND
TO REPORT THEIR FINDINGS BY MAY 2. AT THE SAME TIME,
ES-08
H-01 10-17
NEA-07
HA-09
L-03 AMAD-O1
MEEO-01
AIT-02
INM-01
PA-02 PC-OS
CA-02 51G-03
PER-03
FSI-06
5. CONCURRENTLY, A WORKING GROUP UNDER THE DEPUTY
A-02
USIE-00 MOFM-07
SP-02
SECRETARY WILL EXAMINE STAFFING OF REGIONAL OFFICES
SCT-04
/154 R
OVERSEAS. THESE RESULTS WILL BE FOLDED IN WITH THE COM
AND OTHER AGENCY FINDINGS, AND FORM THE BASIS FOR A
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HE END OF JULY. I MIGHT
ADD THAT I WAS PLEASED WITH THE TONE AND SUBSTANCE OF
THE MEETING, AND AM OPTIMISTIC THAT WE CAN ACHIEVE SOME
M/COMP: TMCOUILLAN
SENSIBLE SAVINGS. PLEASE GIVE THE MATTER YOUR CLOSE
S/S-U:RPACE
PERSONAL ATTENTION.
PEACE CORPS, USIA, AID, M/SDBU, M/FLO, M/EX, A/EX, CA/EX, M/MO/PS
------------------366544 142240Z /38
R 1419531 APR 86 ZEX
FM SECSTATE WASHDC
TO ALL 01PLOIIATIC AND CONSULAR POSTS
INFO USDOC WASHDC 0000
AMEMBASSY BEIRUT
AMEMBASSY KABUL
USDA WASHDC
FOR, AMB OR PRIN OFF FROM UNDER SECRETARY SPIERS,
E.O. 12356: N/A
TAGS: AMGT
SUBJECT: MANAGEMENT ISSUES
INFORM CONSULS,. PASS PADS AND OTHER AGENCY HEADS; OMB;
USDCC, FOR ITA/SHERW00D; USTTA/JERRY MANOLATOS; 0/S. GARY
JACOBS; USDA FOR OSEC/JOHN J. FRANKE, JR.; AID FOR R.T.
ROLLIS, JR.: USIA FOR W. K114GMA14: PEACE CORPS FOR FANELLI
1. SUMMARY. THE SECRETARY HAS CHAIRED A CABINET-LEVEL
MEETING IN THE WHITE HOUSE TO INITIATE A REVIEW OF
OVERSEAS STAFFING LEVELS. OUR 1986-7 SECURITY
SUPPLEMENTAL LEGISLATION IS MOVING THROUGH CONGRESSIONAL
COMMITTEE REVIEW. USING THE RIGHT TAGS ON MESSAGES ON
TERRORISM WILL REDUCE WASTEFUL AND POTENTIALLY DANGEROUS
DELAYS IN TELEGRAPHIC DISTRIBUTION IN THE DEPARTMENT.
WHILE THE HOUSE HAS APPROVED OUR PLAN TO CLOSE SEVEN
POSTS, IT IS STILL UNCLEAR HOW THE SENATE WILL REACT.
IMPORTANT VIDEOTAPES ON MANAGING OVERSEAS IN A CRISIS
ARE BEING POUCHED TO ALL POSTS.
2. THERE MAY BE CHANGES IN HOW OUR ANNUITIES ARE
TREATED FOR TAX PURPOSES. GUIDELINES SHOULD BE OUT SOON
ON CONVERTING ASSOCIATION CONTRACTS TO COMMERCIAL OR
PERSONAL SERVICES CONTRACTS. OUR REVIEW OF PRIVATE
SECTOR PERSONNEL PRACTICES MAY LEAD TO CHANGES IN THE
DEPARTMENT'S PROCEDURES AND POLICIES. ONE FUNCTIONAL
BUREAU IS SHOWING THE WAY ON FILLING SUMMER 1986
3. WHITE HOUSE OVERSEAS PRESENCE REVIEW: THE SECRETARY
APRIL 9 CHAIRED A WHITE HOUSE MEETING 014 OVERSEAS
STAFFING. OTHER FEDERAL AGEIJCIES WITH PERSONNEL
STATIONED OVERSEAS WERE ALL REPRESENTED BY CABINET
SECRETARIES, AGENCY HEADS OR THEIR DESIGNEES. CHIEFS OF
MISSION WILL RECEIVE MORE DETAILED ACCOUNTS OF THE
6. STATUS OF DIPLOMATIC SECURITY. LEGISLATION: THE
ADMINISTRATION'S DIPLOMATIC SECURITY AUTHORIZATION
REQUEST WAS SENT TO THE CONGRESS LAST DECEMBER 19. IT
C014SISTED OF THREE BASIC ELEMENTS: (A) CREATION OF A
BUREAU OF DIPLOMATIC SECURITY AND A DIPLOMATIC SECURITY
SERVICE; (B) THE SECRETARY'S RESPONSIBILITY FOR SECURITY
OF DIPLOMATIC OPERATIONS AT HOME AND ABROAD AND AN
ACCOUNTABILITY BOARD IN THE EVENT OF A SECURITY INCIDENT
INVOLVING EXTENSIVE PROPERTY DAMAGE AND/OR LOSS OF LIFE;
(C) AUTHORITY FOR A COMPREHENSIVE EMBASSY CONSTRUCTION
PROGRAM TOTALLING 4.4 BILLION DOLLARS OVER FIVE YEARS.
7. ON MARCH 18, THE FULL HOUSE PASSED All AUTHORIZATION
BILL, FOR THE PROGRAM BY A VOTE OF 389-7, AS PART OF AN
OMNIBUS ANTI-TERRORISM BILL. THE BILL WAS ESSENTIALLY
WHAT WE HAD REQUESTED AND PROVIDED FOR SUCH SUMS AS MAY
BE NECESSARY PURSUANT TO THE DEPARTMENT'S DIPLOMATIC
SECURITY PROGRAM, BUT LIMITED TO THE AMOUNTS SHOWN IN
THE DEPARTMENT'S FY-87 BUDGET IN BRIEF. (THIS FORMULA
WAS USED TO AUTHORIZE THE FULL 4.4 BILLION DOLLARS
REQUESTED OVER THE NEXT FIVE YEARS WITHOUT MENTIONING
SPECIFIC NUMBERS.) THE SENATE FOREIGN RELATIONS
COMMITTEE IS SCHEDULED TO CONSIDER AN AUTHORIZATION BILL
APRIL 30, AND HOPES TO COMPLETE ACTION ON THE.BILL BY
MAY 20.
8. WHILE THE HOUSE GAVE OUR AUTHORIZATION BILL AN
IMPRESSIVELY GOOD START,'WE CANNOT REASONABLY EXPECT THE
SENATE TO ACT AS QUICKLY. THE TIMING-AND LEVELS OF THE
APPROPRIATIONS COMMITTEES' FUNDING FOR FY-87 ARE
IMPOSSIBLE TO PREDICT NOW, BECAUSE BOTH ARE SUBJECT TO
BUDGET RESOLUTIONS WHICH HAVE NOT YET BEEN PASSED. THE
BOTTOM LINE IS THAT WE FACE A DIFFICULT ROAD AHEAD.
9. ACTION DISTRIBUTICII IN THE DEPARTMENT FOR TERRCR;SM-
RELATED TELEGRAMS: CABLES ON THIS URGENT SUBJECT
CONTINUE TO BE MISROUTED BECAUSE POSTS ARE NOT APPLYING
THE CORRECT TAGS. I URGE YOU IN THE STONGEST TERMS TO
ENSURE THAT YOUR DRAFTERS AND COMMUNICATIONS SECTIONS
UNDERSTAND THE TAGS AND USE THEM PROPERLY. THE ACTION
OFFICE OR BUREAU ON THESE CABLES IS DETERMINED BY THE
FIRST TAG ON THE TAG LINE. THUS, THE TAG LINE ON CAPLES
DEALING PRIMARILY WITH OPERATIONAL. SECURITY MATTERS AND
THREATS TO USG PERSONNEL AND PROPERTY SHOULD BEGIN WITH
THE ASEC TAG SO THAT ACTION WILL.BE ASSIGNED TO OS.
THOSE DEALING WITH THE DIPLOMATIC ASPECTS
OFINTERNATIO14AL TERRORISM SHOULD BEGIN WITH THE PIER
TAG, SO THAT ACTION WILL GO TO S/CT. ALL SUCH REPORTS
SHOULD CARRY "TERREP" OR "TERREP EXCLUSIVE", AS
APPROPRIATE.
MEETING AND SOME SPECIFIC INSTRUCTIONS. 10. POST CLOSINGS: AS I REPORTED EARLIER, WE NOTIFIED
THE CONGRESS MARCH 5 OF OUR INTENTION TO CLOSE SEVEN
IIUIfrI A(`(` F r i rn
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UNCLASSIFIED
Departnient of State
PAGE 02 OF 02 1
SMALL POSTS -- BREMEN, NICK, ROTTERDAM, SALVADOR DA
BAHIA, SEVILLE, TRIESTE AND WINNIPEG -- AS AN ECONOMY
MEASURE BY THE END OF THIS FISCAL YEAR. THE HOUSE
FOREIGN AFFAIRS COMMITTEE HAS GIVEN ITS APPROVAL, BUT
THE SENATE SITUATION IS STILL UNCERTAIN. WE STILL HOPE
TO ADVISE ALL CONCERNED POSTS DEFINITIVELY REGARDING
CLOSURE BY APRIL 15. IN THE MEANTIME, I APPRECIATE WHAT
THE AFFECTED EMBASSIES HAVE DONE IN PREPARING FOR POST
CLOSING ARRANGEMENTS AND PLANNING FOR WORKLOAD
TRANSFERS. THERE IS NOTHING DEFINITE TO REPORT ON
FURTHER POST CLOSINGS. WE'LL KEEP YOU POSTED.
11. VIDEOTAPES ON CRISIS SITUATIONS: VIDEOTAPES ON
'MANAGING CHILDREN DURING A CRISIS' AND 'MANAGING
BEFORE, DURING AND AFTER A CRISIS' WERE POUCHED TO ALL
EMBASSIES APRIL 5 WITH ACCOMPANYING WRITTEN MATERIAL
ADDRESSED TO THE CLO COORDINATOR OR TO THE POST SECURITY
OFFICER. THIS MATERIAL IS OF PARTICULAR IMPORTANCE AND
YOU SHOULD ACCORDINGLY ENSURE THAT ALL EMPLOYEES, FAMILY
MEMBERS, TEACHERS AND SCHOOL ADMINISTRATORS AND THOSE IN
THE U.S. COMMUNITY VIEW THESE TAPES AS SOON AS
POSSIBLE. MISSIONS WITH CONSTITUENT POSTS SHOULD MAKE
COPIES OF THE TAPES AND WRITTEN MATERIAL FOR THOSE POSTS.
12. POSSIBLE TAXATION OF ANNUITIES: MANY EMPLOYEE
QUERIES HAVE BEEN RECEIVED ABOUT POSSIBLE CHANGES III TAX
TREATMENT OF ANNUITIES. THERE HAS BEEN CONSIDERABLE
SPECULATION IN THE WASHINGTON POST AND OTHER PAPERS
ABOUT THIS QUESTION. BASICALLY, CURRENT LAW ALLOWS
ANNUITANTS TO ENJOY ENTIRELY TAX FREE ANNUITIES UNTIL
SUCH TIME AS THEY HAVE RECEIVED All AMOUNT EQUAL TO THEIR
CONTRIBUTIONS OVER THE COURSE OF THEIR WORKING YEARS.
TYPICALLY, A RETIREE'S ANNUITY CHECKS ARE TAX FREE FOR
THE FIRST 18 MONTHS OF RETIREMENT.
13. THE HOUSE-PASSED TAX REFORM BILL WOULD SPREAD OUT
THIS TAX BREAK, REQUIRING THAT MOST OF THE RETIREE'S
ANNUITY BE TAXABLE FROM THE MOMENT OF RETIREMENT. UNDER
THE HOUSE BILL, THE EMPLOYEE'S CONTRIBUTIONS, I.E., THE
TAX-FREE PORTION OF THE ANNUITY, WOULD BE CONSIDERED
RETURNED OVER THE EMPLOYEE'S ENTIRE LIFE EXPECTANCY IN
RETIREMENT.
14. UNDER THE CURRENT LAW, AN EMPLOYEE WHOSE RETIREMENT
CONTRIBUTIONS DURING EMPLOYMENT EQUALLED 15.0,000 WOULD
RECEIVE THE FIRST 550,000 DOLLARS WORTH OF ANNUITY
CHECKS TAX-FREE. UNDER THE HOUSE-PASSED BILL, ASSUMING
THAT ACTUARIAL TABLES PREDICT A 20-YEAR LIFE EXPECTANCY
FOR THE RETIREE FROM THE MOMENT OF RETIREMENT, THAT
550,000 OF TAX FREE ANNUITY WOULD BE SPREAD OUT OVER 20
YEARS, AT THE RATE OF 52,500 A YEAR.
15. THE SENATE FINANCE COMMITTEE IS CURRENTLY MARKING
UP ITS OWN VERSION OF A TAX REFORM BILL, WHICH CONTAINS
THE SAME NEW TAX TREATMENT FOR ANNUITIES, BUT THE
PROPOSED EFFECTIVE DATE OF THIS BILL MAY DIFFER FROM THE
HOUSE VERSION. THE HOUSE WOULD APPLY THE NEW TREATMENT
TO ANY EMPLOYEE WHO RETIRES ON OR AFTER JULY 1, 1986.
THE SENATE FINANCE COMMITTEE HAS NOT YET DECIDED THIS
ISSUE, BUT HAS SHOWN SOME INCLINATION TO PHASE IN THE
NEW TREATMENT OVER THE NEXT TWO TO THREE YEARS.
16. BUT THERE IS CONSIDERABLE UNCERTAINTY IN ANY CASE
ABOUT WHETHER ANY NEW TAX LEGISLATION WILL BE ENACTED IN
1986. IT NOW SEEMS LIKELY THAT A CHANGE IN TAXATION OF
OUTGOING
TELEGRAM
WILL BE AS EARLY AS THE JULY 1, 1986 DATE PROPOSED IN
THE HOUSE BILL. IN VIEW OF THE CIRCUMSTANCES, AND THEIR
EFFECT ON MANY EMPLOYEES, DEPARTMENT WILL KEEP POSTS UP
TO DATE ON THE PROGRESS OF THE BILL. '
17. PHASE-OUT OF CONTRACTS WITH EMPLOYEE ASSOCIATIONS.
AS YOU KNOW, WE HAVE DIRECTED POSTS TO BEGIN PLANNING
FOR THE PHASE-OUT OF THEIR SERVICE CONTRACTS WITH THEIR
EMPLOYEE ASSOCIATIONS. THIS COMES AS A RESULT OF GAO'S
REVIEW OF ASSOCIATION CONTRACTS WHICH CONCLUDED THAT
HOST DO NOT CONFORM TO FEDERAL REGULATIONS. WHILE WE
HAVE RESERVED THE RIGHT FOR POSTS TO USE THE
ASSOCIATIONS WHERE THERE IS NO ALTERNATIVE, FOR THE MOST
PART WE WILL REPLACE THEM WITH CONTRACTS WITH PRIVATE
FIRMS OR PERSONAL SERVICES CONTRACTS WITH INDIVIDUALS.
18. A WORKING GROUP CHAIRED BY M/MO IS DEVELOPING
GUIDELINES FOR THE CONVERSION PROCESS. THE GROUP HAS
MET WITH THE BUREAUS TO REVIEW THEIR DRAFT. THE ONE
AREA THAT STILL NEEDS WORK IS PROCEDURES FOR FUNDING AND
COST-SHARING OF PERSONAL SERVICES CONTRACTS. WHEN THIS
HAS BEEN COMPLETED, WE CAN REVIEW THE GUIDELINES WITH
THE OTHER FOREIGN AFFAIRS AGENCIES. BUREAUS WILL THEN
BEGIN WORKING WITH THEIR POSTS'ON THE PHASE-OUT OF
EMPLOYEE ASSOCIATION CONTRACTS.
19. PRIVATE SECTOR MANAGEMENT PRACTICES: I REPORTED TO
YOU IN FEBRUARY THAT WE HAD UNDERTAKEN TWO INITIATIVES
TO EXAMINE PRIVATE SECTOR PERSONNEL MANAGEMENT PRACTICES.
FIRST, MEMBERS OF THE MANAGEMENT COUNCIL TRAVELED TO 3M
HEADQUARTERS IN MINNESOTA WHERE WE DISCUSSED A NUMBER OF
PERSONNEL ISSUES WITH IN EXECUTIVES. SECOND, A STATE
DEPARTMENT TEAM SURVEYED THE MANAGEMENT DEVELOPMENT
PROGRAMS OF 17 OTHER TOP-RATED FIRMS. THESE INITIATIVES
AND THE TEAM'S FINDINGS ARE REPORTED IN THE COVER STORY
OF THE APRIL ISSUE OF STATE MAGAZINE WHICH IS NOW BEING
DISTRIBUTED.
20. THE ARTICLE DESCRIBES HOW COMPANIES ARE DEALING
WITH A NUMBER OF PERSONNEL MANAGEMENT ISSUES OF
CONTINUING CONCERN TO US: HOW FIRMS IDENTIFY AND
DEVELOP FUTURE LEADERS AND MANAGERS OF AN ORGANIZATION;
HOW THEY APPRAISE WORK PERFORMANCE, EVALUATE POTENTIAL,
AND DEVELOP CAREERS; HOW THEY SELECT PEOPLE FOR SENIOR
POSITIONS, AND WHAT FIRMS LOOK FOR IN RECRUITING. I
WILL ADVISE YOU FURTHER ON THIS EFFORT WHEN THE
MANAGEMENT COUNCIL HAS HAD A CHANCE TO REVIEW THE TEAM'S
FINAL REPORT AND RECOMMENDATIONS.
21. ASSIGNMENT CYCLE POSTSCRIPT: LAST MONTH I NOTED
THE GOOD PROGRESS PER IS MAKING Olt FILLING 19923 SUMMER
CYCLE POSITION VACANCIES, AND CITED SEVERAL MAJOR
FUNCTIONAL BUREAUS. OES, WHICH WAS NOT MENTIONED, HAS
FILLED ALL BUT ONE OF ITS VACANT SLOTS AND SHOULD SOON
FILL THE REMAINING POSLTION.
ANNUITIES WOULD BE PART OF ANY BILL THAT PASSED THE
CONGRESS, BUT THE EFFECTIVE DATES OF SUCH CHANGE ARE
VERY UNCERTAIN. IT IS UNLIKELY THAT THE EFFECTIVE DATE
!i CLASS I F I E0
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