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STATUS REPORT ON THE TRANSITION TO A

CIVILIAN–LED MISSION IN IRAQ

HEARING

BEFORE THE

SUBCOMMITTEE ON NATIONAL SECURITY,

HOMELAND DEFENSE AND FOREIGN OPERATIONS

OF THE

COMMITTEE ON OVERSIGHT

AND GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

OCTOBER 12, 2011

Serial No. 112–108

Printed for the use of the Committee on Oversight and Government Reform

(

Available via the World Wide Web: http://www.fdsys.gov

http://www.house.gov/reform
(II)

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

DARRELL E. ISSA, California, Chairman

DAN BURTON, Indiana

JOHN L. MICA, Florida

TODD RUSSELL PLATTS, Pennsylvania

MICHAEL R. TURNER, Ohio

PATRICK T. MCHENRY, North Carolina

JIM JORDAN, Ohio

JASON CHAFFETZ, Utah

CONNIE MACK, Florida

TIM WALBERG, Michigan

JAMES LANKFORD, Oklahoma

JUSTIN AMASH, Michigan

ANN MARIE BUERKLE, New York

PAUL A. GOSAR, Arizona

RAU ́ L R. LABRADOR, Idaho

PATRICK MEEHAN, Pennsylvania

SCOTT DESJARLAIS, Tennessee

JOE WALSH, Illinois

TREY GOWDY, South Carolina

DENNIS A. ROSS, Florida

FRANK C. GUINTA, New Hampshire

BLAKE FARENTHOLD, Texas

MIKE KELLY, Pennsylvania

ELIJAH E. CUMMINGS, Maryland, Ranking

Minority Member

EDOLPHUS TOWNS, New York

CAROLYN B. MALONEY, New York

ELEANOR HOLMES NORTON, District of

Columbia

DENNIS J. KUCINICH, Ohio

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

STEPHEN F. LYNCH, Massachusetts

JIM COOPER, Tennessee

GERALD E. CONNOLLY, Virginia

MIKE QUIGLEY, Illinois

DANNY K. DAVIS, Illinois

BRUCE L. BRALEY, Iowa

PETER WELCH, Vermont

JOHN A. YARMUTH, Kentucky

CHRISTOPHER S. MURPHY, Connecticut

JACKIE SPEIER, California

LAWRENCE J. BRADY, Staff Director

JOHN D. CUADERES, Deputy Staff Director

ROBERT BORDEN, General Counsel

LINDA A. GOOD, Chief Clerk

DAVID RAPALLO, Minority Staff Director

SUBCOMMITTEE ON NATIONAL SECURITY, HOMELAND DEFENSE AND FOREIGN

OPERATIONS

JASON CHAFFETZ, Utah, Chairman

RAU ́ L R. LABRADOR, Idaho, Vice Chairman

DAN BURTON, Indiana

JOHN L. MICA, Florida

TODD RUSSELL PLATTS, Pennsylvania

MICHAEL R. TURNER, Ohio

PAUL A. GOSAR, Arizona

BLAKE FARENTHOLD, Texas

JOHN F. TIERNEY, Massachusetts, Ranking

Minority Member

BRUCE L. BRALEY, Iowa

PETER WELCH, Vermont

JOHN A. YARMUTH, Kentucky

STEPHEN F. LYNCH, Massachusetts

MIKE QUIGLEY, Illinois
(III)

C O N T E N T S

Page

Hearing held on October 12, 2011 .......................................................................... 1

Statement of:

Kennedy, Patrick F., Under Secretary for Management, U.S. Department

of State; Alexander Vershbow, Assistant Secretary for International

Security Affairs, U.S. Department of Defense; and Alan F. Estevez,

Assistant Secretary for Logistics and Materiel Readiness, U.S. Department of Defense ............................................................................................ 5

Estevez, Alan F. ........................................................................................ 24

Kennedy, Patrick F. .................................................................................. 5

Letters, statements, etc., submitted for the record by:

Estevez, Alan F., Assistant Secretary for Logistics and Materiel Readiness, U.S. Department of Defense, prepared statement of ........................ 26

Kennedy, Patrick F., Under Secretary for Management, U.S. Department

of State, prepared statement of ................................................................... 8

(1)

STATUS REPORT ON THE TRANSITION TO A

CIVILIAN–LED MISSION IN IRAQ

WEDNESDAY, OCTOBER 12, 2011

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON NATIONAL SECURITY, HOMELAND

DEFENSE AND FOREIGN OPERATIONS,

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM,

Washington, DC.

The subcommittee met, pursuant to notice, at 10:01 a.m. in room

2154, Rayburn House Office Building, Hon. Jason Chaffetz (chairman of the subcommittee) presiding.

Present: Representatives Chaffetz, Tierney, and Quigley.

Staff present: Thomas Alexander and Richard A. Beutel, senior

counsels; Brien A. Beattie, professional staff member; Molly Boyl,

parliamentarian; Mark D. Marin, director of oversight; Rafael

Maryahin, counsel; Cheyenne Steel, press assistant; Nadia A.

Zahran, staff assistant; Ashley Etienne, minority director of communications; Carla Hultberg, minority chief clerk; Paul Kincaid,

minority press secretary; Adam Koshkin, minority staff assistant;

and Scott Lindsay and Carlos Uriarte, minority counsels.

Mr. CHAFFETZ. Good morning. The committee will come to order.

I would like to begin this hearing by stating the Oversight Committee’s mission statement.

We exist to secure two fundamental principles. First, Americans

have the right to know the money Washington takes from them is

well spent. Second, Americans deserve an efficient and effective

government that works for them. Our duty on the Oversight and

Government Reform Committee is to protect these rights. Our solemn responsibility is to hold government accountable to taxpayers

because taxpayers have a right to know what they get from the

government.

We will work tirelessly in partnership with citizen watchdogs to

deliver the facts to the American people and bring genuine reform

to the Federal bureaucracy. This is the mission of the Oversight

and Government Reform Committee.

I would like to welcome everybody to this hearing. It is entitled,

‘‘Status Report on the Transition to A Civilian-led Mission in Iraq.’’

I would like to welcome Ranking Member Tierney and other

members of the subcommittee and thank members of the audience

for their participation and attendance here today.

Today’s proceedings continue the subcommittee’s effort to examine the challenges facing the Defense Department and the State

Department as they transition from a military-led to a civilian-led
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effort in Iraq. This is the subcommittee’s second hearing on this

matter.

On November 17, 2008, the Bush administration and the Government of Iraq signed a Status of Forces Agreement which set a December 31, 2011 deadline for the departure of all U.S. military

forces from Iraq. To date, the Defense Department has redeployed

thousands of troops and dramatically reduced its footprint. From

all outward appearances, the Department seems to be hitting its

benchmarks.

As they draw down, the State Department is increasing its footprint. To fill the void left by the Defense Department, the State Department will hire thousands of private contractors to complete the

mission. In all, the State Department’s footprint will balloon to approximately 17,000 personnel. According to the Government Accountability Office, the GAO, nearly 14,000 will be private contractors.

These contractors will perform a wide range of tasks including

life support services and logistics. They will also recover downed

aircraft and personnel, dispose of ordinance and transport personnel. The State Department will also hire a private army of nearly 7,500 security contractors to do everything from guarding the

walls and gates to guarding VIP convoys and flying UAVs.

While they will have the ability of sense and warn of incoming

ordinance, they will not have the ability to shoot it down. I find

this puzzling and would like to discuss this further.

As the Defense Department winds down, the State Department

is ramping up in what may be more of a political shell game than

a draw-down of forces. When President Obama tells the American

people that forces will be out of Iraq, I am not sure the average

American understands that the troops will be replaced with a private army of security contractors.

Nevertheless, the State Department faces a daunting and unprecedented challenge. Many have expressed doubts as to whether

the State Department will meet the December 31st deadline and

whether it can oversee the administration’s surge in private contracting. According to the GAO, the State Department ‘‘has acknowledged that it does not have the capacity to independently acquire and oversee the scale and nature of contracted services needed.’’

The Commission on Wartime Contracting has also expressed tremendous concern. Last July, it wrote that despite interdepartmental efforts ‘‘the current planning for the Defense to State transition of vital functions in Iraq is not yet adequate.’’ On March 1st,

Commissioners Grant Green and Michael Thibault testified before

this subcommittee. When asked whether the State Department was

ready, they answered no. They explained that it has neither the

funds to pay nor the resources to manage the thousands of additional contractor employees.

Last week, six of the eight Commissioners testified before the full

committee about billions of waste, fraud and abuse in contracting,

something in the range of $30–$60 billion. They warned that the

State Department is struggling to prepare requirements for contractors and to effectively oversee them.
3

In other words, it appears the State Department has not made

enough progress to ensure a smooth transition. I hope it has a different message to convey this morning. A commitment from Ambassador Kennedy that the State Department will be fully capable

on January 1st would be a great start.

On a related matter, I would appreciate it if the Defense Department would clear up some confusion surrounding its draw-down.

There have been numerous reports that President Obama may

order thousands of combat troops to remain in Iraq at the Iraq

Government’s request to conduct training of the Iraqi military.

While I understand negotiations are ongoing with the Iraqi government, I believe the American people have the right to additional

clarity on how many troops will remain and what their mission and

legal status will be. The Iraqi Government has said that it will

strip away any U.S. troops that remain next year of the limited

legal immunity that they currently enjoy. No one here wants to see

brave American soldiers prosecuted in Iraqi courts for defending

themselves from insurgent attacks. Our troops should have the

same legal protections on January 1st as they did on December

31st. It is the President’s obligation to see that they do. With only

21⁄2 months, the administration must work quickly to get this done.

We have a distinguished panel here today that has been very involved in this and I appreciate each of your gentlemen joining us

here today. I look forward to hearing from this panel of witnesses.

I would now like to recognize the distinguished ranking member,

the gentleman from Massachusetts, Mr. Tierney, for his opening

statement.

Mr. TIERNEY. Thank you, Mr. Chairman.

Our current military operations in Iraq, Operation Iraqi Freedom, as we all know, began on March 20, 2003 when President

Bush ordered the invasion of Iraq. I can remember, as many of you

probably do, watching it on television. I watched with great trepidation, based on the weaknesses of the administration’s case for

striking in the first place.

Since then, our brave men and women in uniform have fought

hard to help return the country to civilian rule. After heroic sacrifices over 8 years, that has cost over 4,000 American lives and

nearly $1 trillion, the men and women of our armed forces can

leave Iraq with their heads held high. I am not so sure about those

policymakers who made the decision to put their lives and America’s treasure at risk.

We are now ready to enter the next stage of our efforts in Iraq.

In 2008, the Bush administration agreed to withdraw all U.S.

troops from Iraq by the end of 2011. The Obama administration

has tried to stick to that agreement and indicates that it is on

track to meet that deadline. I think that is what we will explore

here today.

The State Department has been charged with the responsibility

for supporting the stability and development of Iraq once the military has left. Now the task is to make sure that our military’s efforts are not squandered and that Iraq’s fragile stability is not lost.

Let me be clear, I strongly support the draw-down of military

forces in Iraq and the transition to a civilian-led mission.
4

I understand the extraordinary burden this will put on the State

Department, particularly since some who seem to be complaining

most about the transition and whether or not it will work are the

ones who voted against reducing the State Department’s budget

which is sort of a contradiction in the situation.

Our role today should not be to blame the State Department for

the military to civilian transition that been in process for 3 years

and is required by a bilateral agreement with the sovereign nation

of Iraq. Rather, our committee’s role should be to press for greater

management and oversight of the resources that State will be deploying in the name of the United States.

This is our third hearing on this topic in the last year under both

the Democratic and Republican majorities in the House. By most

accounts, State has made important progress and is now ready to

assume the mission. I want to acknowledge State for its hard work

in preparing for the transition.

Still, today I would like to address one ongoing concern I have

about the continuing use of private contractors in war zones. Just

last week, the full committee held a hearing on the Commission on

Wartime Contracting’s final report to Congress. At that hearing,

the Commission raised significant concerns about the future role of

private security contractors who will be employed by the State Department after the military leaves Iraq.

At the hearing, Commissioner Robert Henke highlighted a recently adopted Office of Management and Budget policy memo that

for the first time addresses the proper role of security contractors

in combat zones. The policy memo embraced a risk-based analysis

to determine what functions are inherently governmental and what

functions can properly be delegated to a contractor. It is an important step in the right direction.

The memo continues by defining specific examples of inherently

governmental functions that should never be performed by a private contractor. Notably it found, ‘‘Security operations performed in

environments where, in the judgment of the responsible Federal official, there is significant potential for the security operations to

evolve into combat’’ should be considered an inherently governmental function.

I would like to hear from our witnesses today, and specifically

Ambassador Kennedy, about the intended role of security contractors in Iraq after the transition. I would like you to specifically address OMB’s guidance that was cited by Commissioner Henke.

In his written statement today, Ambassador Kennedy said the

Department of State will employ approximately 5,000 private security contract employees in Iraq. I agree with his assessment but

this is a significant number. Beyond the number of security contractors that will be employed in Iraq, I am concerned about the

specific functions these contractors will be expected to perform.

For example, I understand the Department will employ a number

of contractors to be responsible for rapid response to security situations in the field in addition to the stationary security forces who

will be responsible for protecting the Embassy. These rapid response forces will be responsible for emergency response including

securing State Department employees in the case of an attack.
5

To my mind, this situation will almost certainly require the private security contractor to engage in combat. I think any reasonable person would see that to be in direct conflict with the OMB

policy memo and therefore an improper use of private security contractors under that guidance.

Ambassador Kennedy, I look forward to hearing how the Department plans to deal with this issue and others. I want to thank all

of our witnesses once more for showing your interest here today.

Mr. CHAFFETZ. Thank you.

Members will have 7 days to submit their opening statements for

the record.

I would now like to introduce our distinguished panel. We have

Ambassador Patrick Kennedy, the Under Secretary for Management, at the Department of State. Ambassador Alexander

Vershbow is the Assistant Secretary for International Security Affairs at the Department of Defense. Mr. Alan Estevez is the Assistant Secretary for Logistics and Materiel Readiness at the Department of Defense.

Pursuant to committee rules, all witnesses are to be sworn before

they testify, so I would ask you to please rise and raise your right

hands.

[Witnesses sworn.]

Mr. CHAFFETZ. Thank you. Let the record reflect the witnesses

answered in the affirmative.

In order to allow time for the discussion, please try to limit your

opening testimony to 5 minutes but we will be fairly generous with

those 5 minutes. It is also my understanding that the Department

of Defense will issue a joint verbal statement that will be given by

Mr. Estevez.

I would like to start with Ambassador Kennedy. You are now recognized for 5 minutes or little bit more if you need it.

STATEMENT OF PATRICK F. KENNEDY, UNDER SECRETARY

FOR MANAGEMENT, U.S. DEPARTMENT OF STATE; ALEXANDER VERSHBOW, ASSISTANT SECRETARY FOR INTERNATIONAL SECURITY AFFAIRS, U.S. DEPARTMENT OF DEFENSE; AND ALAN F. ESTEVEZ, ASSISTANT SECRETARY FOR

LOGISTICS AND MATERIEL READINESS, U.S. DEPARTMENT

OF DEFENSE

STATEMENT OF PATRICK F. KENNEDY

Mr. KENNEDY. Thank you, Mr. Chairman and Ranking Member

Tierney.

Thank you for inviting me to update the State Department’s

progress in transitioning from a military-led to a civilian-led presence in Iraq, from DOD’s mission to State’s mission. I ask that I

be permitted to submit my full testimony for the record.

Mr. CHAFFETZ. So ordered.

Mr. KENNEDY. Continued U.S. engagement with Iraq is essential.

A stable and self reliant Iraq is profoundly in the national security

interest of the United States. Our diplomatic presence is designed

to maximize influence in key locations, Erbil and Kirkuk in the

north, Baghdad in the center and Basra in the south. State will

continue the police development program, moving beyond basic po-
6

licing skills to provide police forces with the capabilities to uphold

the rule of law. The Office of Security Cooperation will help close

gaps in Iraqi security forces capabilities through security assistance and cooperation.

Turning now to our safe and secure management platforms, we

have made much progress since March when I discussed eight key

components to launching these platforms in Iraq. My written testimony details our progress in each area. I will focus here on contract oversight in security.

First, with regard to our entire support platform, we are not

struggling to award contracts. We have competitively awarded all

contracts for facility construction fit out, for security and aviation

support to stand up three diplomatic support hospitals and for life

support. We are mindful of recent reports such as that by the Commission on Wartime Contracting regarding waste. We understand

the extraordinarily difficult budget environment and have carefully

assured prudent use of our funding.

We have continued to work very closely with DOD every day at

unprecedented levels. The Joint DOD Equipping Board has identified more than 3,200 pieces of equipment worth approximately

$224 million to be transferred as excess, sold or loaned to State.

In the area of contracting and contracting oversight, throughout

our efforts, State is always cognizant of inherently governmental

functions.

We contract for services that are not inherently governmental.

State personnel were actively engaged with the Office of Federal

Procurement Policy in preparing its new policy letter. We continue

to focus on effective transition contracting and deploying experienced contracting personnel. State can surge resources to address

specific contingency needs through an internal funding mechanism

which is a 1 percent fee charged on all contracting services.

We have hired 102 additional contracting staff and support staff

over the past several years and made improvements in the area of

suspension debarment, increased competition and enhanced training.

In the area of security, task orders for static and movement security have been competitively awarded for all State sites in Iraq on

the basis of best value. In the past few years, State’s Diplomatic

Security Service has expanded its plan for oversight and operational control of private security contractor personnel. It will have

more than 175 direct hire, State Department personnel to administer the contract and its task orders in Iraq ensuring contract compliance by approximately 5,000 security contract employees.

These 5,000 will cover all of our sites in Iraq to protect U.S. Government staff, reflect State’s continuous operation in locations

where previously we had not been able to operate, guard forces in

Iraq or like other local guards, serving as the first line of our defense for our facilities and staff.

They differ, however, from our typical guard force in that they

have higher recruiting, screening and training requirements, a

higher percentage of American and third country national personnel and specialized weapons and equipment which are necessary to defend our personnel and facilities from attack.
7

In contingency areas such as Iraq and Afghanistan, our security

contractors are under the direct management and oversight of

State Department Diplomatic Security Service direct hire personnel. Their function was illustrated last September 13th during

the terrorist incident in Kabul where the Embassy security elements acted swiftly to protect Embassy staff and Afghan visitors

and moved them to safe locations, took defensive actions as directed by the Chief of Mission and acted in concert with host nation security forces.

We are staffed to achieve the operational measures and increase

direct oversight to ensure professionalism and responsibility of security contractor personnel. Diplomatic security personnel at each

post in Iraq and Afghanistan serve as managers for these security

programs. They provide direct operational oversight of all protected

motorcades in Iraq and Afghanistan. This is done for each and everyone.

We fully realize the scope of our diplomatic activities in Iraq are

beyond anything that we have done in the past. However, State

has a history of embracing challenges. We have the competence

and the personnel to mobilize in Iraq and we have DOD’s full partnership at every level from Secretary Panetta and Chairman

Dempsey to the excess property clerks on the ground.

With the teams in place, our executive steering group, our Baghdad team, joint State/DOD teams and State’s Iraq transition coordinator, we will deliver on this new State Department mission because it is in the U.S. national interest that we do so.

Thank you very much, Mr. Chairman, for inviting me and for

your continued support and that of Ranking Member Tierney for

the Department of State. I will welcome any questions you may

have.

[The prepared statement of Mr. Kennedy follows:]
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Mr. CHAFFETZ. Thank you.

I now recognize Mr. Estevez for 5 minutes.

STATEMENT OF ALAN F. ESTEVEZ

Mr. ESTEVEZ. Chairman Chaffetz, Ranking Member Tierney,

thank you for the opportunity to appear before you today.

We have a written statement to include in the record that provides a more general overview of the situation in Iraq. However,

in the interest of time, I would like to summarize the progress that

the Department of Defense has made as it supports the Department of State during the transition to civilian control in Iraq.

The Department of Defense remains fully engaged in support of

Operation New Dawn and is committed to a smooth transition to

the Department of Statement in support of the enduring diplomatic

and security assistance missions in the region. We are in execution

phase of this transition and are on track and in some cases, are

ahead of schedule with all of the logistics functions associated with

the draw-down of forces and support to the Department of State.

Both the Department of Defense and the Department of State

are committed to working together to achieve a successful transition. Although the Under Secretary of Defense for Acquisition,

Technology and Logistics is not responsible for establishing policy

in this area, we are responsible for many of the details associated

with the transition, including contracting support, maintenance

and supply support and other logistics components of the transition.

As the principal Deputy Under Secretary of Defense Acquisition,

Technology and Logistics testified on March 2, 2011, we have established a temporary Senior Executive Steering Group focused on

coordinating and synchronizing the materiel and support aspects of

the transition. Our combined Office of Secretary of Defense Joint

Staff Equipping Board has addressed the individual equipment

items that the Department of State has requested which range

from medical equipment to camera rocket protection.

As Ambassador Kennedy noted, to date we have identified more

than 3,200 end items that are being transferred, sold or loaned to

the Department of State. These items represent 100 percent fulfillment of the Department of State’s request for equipment support.

In addition to 60 Caiman plus mine resistant ambush protected vehicles that were approved for loan at the time of the last testimony,

the Department of Defense has since agreed to loan to the Department of State two Giraffe Radar rocket systems and a suite of 164

biometric collection and identification systems.

As of October 1, 2011, our force numbers are down to roughly

43,500. The contractor population also continues to decrease as the

number of military personnel lay support diminishes. We have also

made steady progress in executing the plan to retrograde and redistribute equipment.

Over the last year in Iraq, joint Department of Defense and Department of State teams have executed well coordinated plans that

have synchronized the handoff of responsibilities to the Department of State at those locations where the Department of State will

be the lead agency. The transition of these sites is not a turn key

operation and each site presents its own unique set of challenges.
25

As we resize these sites to fit the diplomatic mission, new perimeters continue to be established. Containerized housing units are

moved in accordance with mission requirements; utilities are being

rerouted; and as required, additional site preparation and force

protection materiels are being installed.

The Department of Defense is also providing a number of specific

functions on a reimbursable basis under the authority of the Economy Act. The LOGCAP IV Task Order was awarded to provide the

Department of State with base life support and core logistics services. This contracting mechanism is scalable and can respond to

changing conditions on the ground.

Food distribution as well as fuel supply and disposition services

will continue to be provided by the Defense Logistics Agency. The

Army Sustainment Command recently modified its contract for

maintenance of select equipment and is providing contract services

for static and movement security. The Defense Contract Management Agency and Defense Contract Audit Agency will continue to

provide administrative contract support and oversight. Again, the

Department of State will reimburse the Department of Defense for

all contracts and service support provided.

In closing, let me reassure you that the Department of Defense

is proactively partnering with the Department of State, is fully engaged in executing the draw-down of U.S. military forces and

equipment in Iraq, and remains agile enough to respond to any potential changes in these requirements.

Thank you for your time and I look forward to your questions.

[The prepared statement of Mr. Estevez follows:]
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Mr. CHAFFETZ. Thank you. I assure you that your full written

statements will be entered into the record. Without objection, so ordered.

I would now like to recognize myself for 5 minutes. Ambassador

Vershbow, I would like to start with you.

An article came out yesterday in the Philadelphia Inquirer with

the headline ‘‘U.S. Military Trainers Can Stay, Leader Says.’’ I am

troubled by what President Talaboni said, ‘‘We have agreed to retain more than 5,000 American trainers without giving them immunity. We have sent them our agreement to retain this number

and are awaiting their response, yes or no.’’

I find it deeply troubling that there is the prospect of our troops

being in Iraq without immunity. I think this is totally unacceptable. Can you please give us an update on the situation?

Mr. VERSHBOW. Yes, Mr. Chairman. I would be happy to respond.

Indeed there are some important issues raised by that article.

First of all, Iraq’s political leadership has indicated that they are

interested in a training relationship with the United States after

2011. We very much want to have an enduring partnership with

the Iraqi government and people and a relationship with the Iraqi

security forces would be a very important part of that relationship.

I think as you know we have long been planning to have the Office of Security Cooperation Iraq, OSCI, which would be under

Chief of Mission Authority, serve as the cornerstone of a strategic

security partnership and it would be the hub for a range of security

assistance and security cooperation activities. That, of course, is

the baseline.

We have been reviewing the official statement issued by Iraqi

leaders on training assistance on October 4th and discussing with

them how this fits into the principle of security cooperation under

the 2008 Strategic Framework Agreement. I should add that we

appreciate the democratic spirit displayed by Iraqi leaders in debating this important subject and we will continue discussions with

our Iraqi counterparts in the days ahead.

These negotiations are ongoing and it is premature to discuss

what any potential training relationship might look like.

Mr. CHAFFETZ. Will our troops have immunity, yes or no?

Mr. VERSHBOW. I will get to that issue, Mr. Chairman.

As we work to define the parameters of what it will look like, the

issues raised yet again in this article regarding status protections,

of course, will be an important issue. Again, I don’t want to get into

the specifics of the negotiations but we will always ensure that our

forces have the appropriate protections that they need when they

are deployed overseas.

Mr. CHAFFETZ. When you say appropriate protections, is that immunity?

Mr. VERSHBOW. I think there is a difference terminology implied.

Mr. CHAFFETZ. Yes. That is why I am seeking a little clarification

here. I am not feeling too comfortable at the moment. Will our

troops have immunity?

Mr. VERSHBOW. They will have status protections which has been

defined under the security agreement, the Status Forces Agreement, that now applies as indicating that our forces will be subject

to U.S. law rather than Iraqi law. We will be looking for something
33

going forward that provides a comparable level of protection. Exactly how that will be achieved, again, is the subject of ongoing negotiations.

Some of the personnel, as I mentioned, under the OSCI will be

covered under the Chief of Mission authority. The question that is

still being discussed is whether any additional personnel would be

involved and how they would be protected. We certainly take very

seriously the concerns you have expressed.

Mr. CHAFFETZ. Let me move on. I think this is a major, major

point of concern. It is obviously a major point of difference. It is

something that obviously must be resolved. It is totally unacceptable to think that our troops would be there without immunity as

they enjoy currently.

Ambassador Kennedy, let me go back to these lost

functionalities. Last time we gathered together, we were referred

to the July 12, 2010 Commission on Wartime Contracting Special

Report. It talked about the lost functionalities—this is on page 4

of that report. There were 14 specific security-related tasks now

performed by Department of Defense that State must provide as

the military draws down.

I know there has been progress on at least seven of those, but

could you give me an update as to of those 14 specific ones, what

are you not prepared to take care of?

Mr. KENNEDY. Mr. Chairman, as we outlined in my June 8th letter to the committee, we believe that we have covered the functions

that are absolutely essential to our operations there.

Mr. CHAFFETZ. Would that be all 14 of these?

Mr. KENNEDY. I think you can say we will have the ability to do

everything except, for example, the recovery of downed aircraft.

Should an aircraft go down, we will be able to move to recover the

personnel from those aircraft but because we don’t have quite the

heavy lift of the Department of Defense, we may not be able to recover the airframe itself.

Mr. CHAFFETZ. So of the 14, that is the only one that you are

concerned about?

Mr. KENNEDY. I am concerned about everything possibly going

wrong.

Mr. CHAFFETZ. But functionality?

Mr. KENNEDY. Earlier in your opening statement, you asked

about counter battery neutralization. We will have the ability,

thanks to my colleagues in the Defense Department with a system

which is called Giraffe, which is an early warning system that

tracks incoming rockets or mortars and gives us sufficient warning

to deal with that so that we will be able to sound the alarm.

In the construction activities that we are undertaking at all the

sites where our personnel will both work and live, we are constructing overhead cover that means should one of those missiles

or mortars strike one of our facilities—this has happened in Baghdad and the construction techniques we have been using in Baghdad have proven very, very effective—there is no penetration of the

building itself.

Mr. CHAFFETZ. Can we or will we fire back?

Mr. KENNEDY. Sir, the State Department has no howitzers and

no counter rockets. We will not fire back, that is not a diplomatic
34

activity. We now have a diplomatic mission in Iraq, not a military

mission, but if I might add, we are partnered extensively with the

Iraqi military and the Iraqi police who have been assisting us during the last few months we have been without such a counter battery fire ability and the Iraqi police and Iraqi military has been of

great assistance of disrupting the attempts of forces to attack our

facilities via rockets and mortars.

Mr. CHAFFETZ. God bless the men and women who are going to

continue to be there because if it is the policy of the United States

not to fire back, I have deep concerns. We will continue to discuss

this.

I have been very generous with my time. I now recognize the

gentleman from Massachusetts, Mr. Tierney.

Mr. TIERNEY. Thank you.

Ambassador Kennedy, will you describe or compare for me what

a normal State Department deployment to any particular country

would be and how that stacks up against what you are going to be

doing in Iraq. Take a non-conflict area and talk about size of operation for a comparably sized and populated country and how the

missions are going to vary.

Mr. KENNEDY. I think, Mr. Tierney, that in terms of the personnel deployed to do what I will call substantive and basic administrative and logistic work, our Embassy and consulates in Iraq

would be comparable to a similar country. What is different in Iraq

is the additional layers of security, medical and life support that

we have to provide there because our people cannot go shopping on

the outside. There is an active and ongoing threat to life and limb.

We have taken a package that is necessary to conduct the State

Department’s mission. There is obviously a police training component which does not exist in every country and then we have added

security, medical, logistics and life support that is appropriate for

the situation on the ground in Iraq but we very much believe, and

we think we are seeing evidence, that supplement, so to speak, will

be able to be withdrawn measure by measure over time as the security situation further stabilizes and as we are able to obtain

more goods and services on the local economy.

Mr. TIERNEY. In how many locales will State Department diplomatic personnel be located?

Mr. KENNEDY. Four, Mr. Tierney.

Mr. TIERNEY. Widely disseminated around the country or closely

knit?

Mr. KENNEDY. They will be in the north in Erbil where we have

two closely linked sites; in Baghdad where we have our Embassy

and two other compounds literally right across the street, a police

training compound on the other side of the river and a logistics hub

at Baghdad Airport. We will have a small consular presence co-located with the Office of Security Cooperation in Kirkuk and then

we will have a Consular General in Basra in the south, sir.

Mr. TIERNEY. There will be convoys, I assume, going from one to

the other from time to time?

Mr. KENNEDY. There will be supply convoys. Our plan is to conduct those movements via air.

Mr. TIERNEY. All to be via air?
35

Mr. KENNEDY. Obviously except the ones across the street and

the road to the airport is very often safe. We have an aviation capability, thanks to Congress’ assistance, that will enable us to

move personnel via either fixed wing in from Amman or Kuwait

and the long distances, Baghdad up to Erbil, Baghdad down south

to Basra, and then we have distributed helicopter rotary wing capability in order to move our personnel should it be required between nearly placed locations.

Mr. TIERNEY. You are essentially going to have no ground convoy

security issues?

Mr. KENNEDY. Obviously there are some movements within

Baghdad or outside of the compound in Basra where yes, there will

be security issues which is why we have turned to our colleagues

in the Department of Defense and they have been providing us on

loan with mine resistant transport vehicles.

Mr. TIERNEY. Who is going to provide the human security for

those convoys?

Mr. KENNEDY. That security will be provided by contractor personnel but each one of those movements with contract security personnel, each and every one of those will have a State Department

diplomatic security officer in the convoy who is the agent in charge,

using security parlance. He or she is in charge, they give the orders. The contractors only respond to the orders given by the diplomatic security Federal employee.

Mr. TIERNEY. Has there been any thought given to taking State

personnel from other locations around the world and locating them

in this conflict likely area and instead using the contactors elsewhere?

Mr. KENNEDY. We have analyzed that. I have a grand total of

1,800 diplomatic security special agents and about another 100 security professionals in my entire staff. I would have to strip the entire world, and given what we all know to be the threats against

U.S. interests around the world, plus my requirement to protect

the Secretary of State, distinguished foreign visitors to the United

States and enforce the passport and visa laws of the United States,

I simply do not have it. I have stripped to 175 to make sure that

I have professionals overseeing the contracts as a whole and then

a State Department direct hire professional in each one of those

convoys.

Mr. TIERNEY. The Secretary of State has written Members of

Congress indicating a concern for proposed reductions in the State

Department’s budget. If those reductions are enforced, will that impact your ability to hire and train additional people to perform that

function?

Mr. KENNEDY. It will, sir. We know that we have this mission.

We have been, I think, as judicious as possible, as streamlined as

possible, borrowing and receiving transfers of equipment from the

Department of Defense, but if the President’s budget request is not

enacted, we will have a severe difficulty maintaining our tasked

presence there in Iraq, Afghanistan, Pakistan and worldwide, for

that matter.

Mr. TIERNEY. I yield back for now. There will be another round,

I assume.

Mr. CHAFFETZ. Thank you.
36

Ambassador Vershbow, let us talk about the number of U.S.

troops. What are the Iraqis requesting or authorizing, how many

is the President authorizing?

Mr. VERSHBOW. Mr. Chairman, no decisions have been made.

Discussions are still ongoing on the nature of the relationship, from

which would be derived any number.

Mr. CHAFFETZ. The number of 3,000 to 4,000 troops that we hear,

is that accurate or inaccurate?

Mr. VERSHBOW. As I said, there are a lot of things going on in

these discussions which predates the announcement of October 4th

when the Iraqi leaders took the position they have taken regarding

no immunities. Obviously the discussions now have taken on a different dimension. Beyond that, I really cannot say because nothing

has been decided. The shape of the relationship will be determined

in part by how this issue of status protections is addressed.

It is a work in progress. Even as we speak, discussions are taking place between our Ambassador, the Commander, General Austin, and Iraqi leaders. It is really difficult to give you more than

that today.

Mr. CHAFFETZ. There was a report that General Austin had

asked for between 14,000 and 18,000 troops. Is that true?

Mr. VERSHBOW. Again, I cannot comment on internal deliberations. A lot of different ideas have been bounced around in the

course of the last few months.

Mr. CHAFFETZ. Do you know what the actual request was?

Mr. VERSHBOW. The military leadership was asked to provide a

range of options and they have done that. That was the basis on

which we engaged the Iraqis.

Mr. CHAFFETZ. Do you know what General Austin requested?

Mr. VERSHBOW. I cannot talk about that in an open session, Mr.

Chairman. It is classified.

Mr. CHAFFETZ. Fair enough.

When do we have to make this decision? I guess it is the end of

the year, right? Is there a particular timetable to this?

Mr. VERSHBOW. There is no absolute deadline. Right now we are

on the trajectory that was established by the agreement by the previous administration in November 2008 to draw down all of our

forces which are now around 43,000 and then move in 2012 to the

Office of Security Cooperation Iraq which would have 157 U.S.

military and DOD civilian personnel and additional security assistant team contractors supporting specific FMS cases.

The discussions that are going on now relate to what potential

additions to that presence would be agreed. Whether that would be

before or after the end of the year remains to be seen. Obviously

the discussions are ongoing. It might be simpler to reach the agreement before all of our forces have left, but we are talking about an

entirely different relationship in either case. I cannot predict when

these discussions will close.

Mr. CHAFFETZ. Thank you.

Ambassador Kennedy, let us talk about the hiring of all of these

contractors. When we get to January 1st, based on where we are

at here in October, where are we going to be on the staffing levels?

Are we set to hit 100 percent of the goal, if you can clarify that

a bit for me? There are obviously different categories. Security is
37

may be a bit more important but food service is going to be equally

as important. Where are we in that spectrum of being able to accomplish that goal?

Mr. KENNEDY. We have awarded contracts for all the services

that we require in Iraq at all the installations and those contract

task orders have been awarded. The contractors are in the process

of mobilizing. The medical contractor, for example, is already mobilized. The aviation contractor is already mobilized. The life support

contract has been awarded thanks to my colleagues at the Department of Defense, awarded on our behalf, and a contract that we

will fund. That contractor is mobilizing and it is, in fact, a contractor that DOD has been using at all the sites that we will be

engaged in except two and that is well on the way.

We believe that we will have no problem in those support services areas being fully staffed and fully supportive of our personnel

before December 31.

Mr. CHAFFETZ. Can we talk about the hospital? You mentioned

the hospital or medical needs. There has been some concern that

there won’t be the capacity to deal with a mass casualty event, that

the medical facility at the Baghdad International Airport will have

the capability to only handle six patients overnight. Do you have

any concerns with that?

Mr. KENNEDY. Mr. Chairman, yes, I do have a concern, but I also

have to operate in the realm of reality. We do also have a medical

unit at the American Embassy compound downtown. It is not a

hospital unit staffed with surgeons. Also because of our aviation capabilities, have the capability of quickly transporting personnel

who have been stabilized but need further surgery to locations such

as Jordan, Kuwait, Turkey or all the way to Europe should it be

required.

We believe we have put into place a layered system that would

be able to deal with what we foresee as the facts on the ground.

Mr. CHAFFETZ. Thank you. I will now recognize Mr. Tierney.

Mr. TIERNEY. Ambassador Kennedy, the protection for the

logistical contractors and various functions that they are doing

whether it be kitchen help or people over the police training area,

is that also going to be provided by private contractors?

Mr. KENNEDY. Yes, sir, that is within the number of 5,000 which

is approximately 3,500 static perimeter guards around our facilities

and 1,500 movement personnel.

Mr. TIERNEY. Will they be getting a similar type of State employee or security personnel supervision?

Mr. KENNEDY. Yes, sir. The Diplomatic Security Service will control both the static guards and the movement guards.

Mr. TIERNEY. Who specifically is going to be training the police

on that and under which program?

Mr. KENNEDY. That is under the Bureau of International Narcotics and Law Enforcement, the police training program under Assistant Secretary Brownfield’s leadership.

Mr. TIERNEY. It is a combination of State personnel?

Mr. KENNEDY. It is a combination of State Department personnel

and some contract trainers for some activities.

Mr. TIERNEY. Has there been any consideration given to doing

out of country training of these police personnel?
38

Mr. KENNEDY. There has been some consideration of that. I will

have to get back to you sir with more details. What we are trying

to do is a large number of people with sort of second echelon. The

Bureau of Narcotics and Law Enforcement and my DOD colleagues

have done a great job in training the police on the beat. This training is, in effect, advanced training and we believe that one of the

most important locations to do that is at the Baghdad Police College which adjoins the training center I mentioned.

Mr. TIERNEY. If you have done an analysis of the possible benefits of out of country training of that nature by the U.S. personnel

or by a combination of international personnel, I would like to see

it if you could.

Mr. KENNEDY. I will ask Assistant Secretary Brownfield to get

that to you.

Mr. TIERNEY. Who has been vetting and training the private contractors that are going to be providing security?

Mr. KENNEDY. The State Department Diplomatic Security Service runs background investigations on every single one of these individuals. They are given sir, what are called public trust clearances which is the equivalent to a secret security clearance, although they do not have the need to know. It is the same rubric,

police checks, national agency checks, interviews, vetting, records

checks. We feel very, very comfortable that the individuals we are

engaging to do this security work are of the highest standard.

Mr. TIERNEY. The Wartime Contracting Commission basically indicated they thought there should be consideration given to the

operational, the political and the financial aspects or risks of contracting functions on that. I am assuming you were precluded from

doing that because of the limitations you have in personnel? You

simply had to spread your people thin to manage and supervise

contractors and really didn’t have the opportunity to weigh it and

those other factors of risk?

Mr. KENNEDY. There are two parts to that. Obviously there is

personnel and resources. I only have 1,800 as I mentioned, but I

try to take the holistic approach. What I see are requirements in

both Iraq and Afghanistan, if I might add that. This is a surge; this

is not a permanent requirement that I see the Bureau of Diplomatic Security having to rise to adding 5,000 additional personnel

for the long haul, the number we will have in Iraq.

I see this as a surge. The State Department, other government

agencies have always dealt with surge requirements by turning to

contractors. To hire someone, to promise them a 20, 25 or 30 year

career when we do not see the need for their services beyond 3 to

5 years, just citing that as a factor, would saddle the State Department and the American taxpayer with a number of level of personnel that is not in the best interest.

Mr. TIERNEY. That would be one of the considerations I assume

they would want to measure. The other, of course, would be the potential of non-State Department or non-Defense Department people

performing an act or taking on some activity that totally puts the

country at risk or makes some political situation untenable.

Mr. KENNEDY. That is entirely possible, but that is why though,

all of our personnel, whether static or movement, act under the di-
39

rect supervision of diplomatic security special agents or security

protective officers who are all direct hire.

Mr. TIERNEY. What contingency plan does the State Department

have if facts on the ground change substantially enough that it is

no longer feasible to have private security contractors in use?

Mr. KENNEDY. I think that is an option I have thought about. I

cannot speak for my colleagues. I think I would have to report to

the Secretary that we would have to severely scale down our operations in Iraq. I have even done an analysis based upon an old

General Accounting Office study on the number of Federal law enforcement personnel in the entire Federal Service. Even if I took

10 percent of the Bureau of Prisons guards, I would not have

enough static officers there and the Bureau of Prisons might have

some comment on that.

I believe that these professionals that we engage that we vet,

that we rewrite the syllabus for their training, we spot check their

training, we direct their performance hands-on, eyes-on, I believe

that is the way to go.

Mr. TIERNEY. The plan is if it becomes untenable, then there is

a scaled down operation as opposed to hiring more and more contractors?

Mr. KENNEDY. I am sorry?

Mr. TIERNEY. So many things on the ground change and become

so violent over there.

Mr. KENNEDY. I am sorry, I thought you meant I could no longer

keep contractors there?

Mr. TIERNEY. Right and that is my point if it comes to a point

where the contractors are not feasible to operate where you have

made the analysis on that, it is not to keep loading them in hoping

things are going to change just to scale down operations?

Mr. KENNEDY. I think we have in our plan sufficient contractors

to provide perimeter security in cooperation with the Iraqi police

and military.

Mr. TIERNEY. I know you do but contingency plans are for when

that doesn’t work. I think I heard you say you would recommend

the Secretary scale back?

Mr. KENNEDY. Yes, sir.

Mr. TIERNEY. Thank you. I yield back.

Mr. CHAFFETZ. Mr. Estevez, do you have a dollar figure or estimate of what assets will be either turned over to the Iraqis or left

behind?

Mr. ESTEVEZ. There are a couple different programs we have for

turning things over to the Iraqis, including foreign military sales.

They are buying military equipment from us which is not left behind, basically new equipment. There are some things they have

purchased from us.

Mr. CHAFFETZ. What is the value? How much have they purchased?

Mr. ESTEVEZ. I am trying to give you a couple different pro- grams, under what we call foreign excess property is $321 million

to date. That will go up as we continue over the next 3 months to

draw down.

Mr. CHAFFETZ. That is where the Iraqi government pays the

United States.
40

Mr. ESTEVEZ. No, that is we give it to them. That is because the

cost benefit analysis is we don’t need this stuff. It includes T-wall

barriers and generators that don’t work in the United States and

vehicles that aren’t up to U.S. vehicle code. The cost benefit analysis says we save $600 million by not transporting that equipment

back to the United States where the military doesn’t have programs to sustain that.

Mr. CHAFFETZ. We didn’t try to trade it for something? We are

just handing it to them?

Mr. ESTEVEZ. It is in our benefit to help them build their capability so that their military and security forces can sustain.

Mr. CHAFFETZ. These are not all military assets?

Mr. ESTEVEZ. Again, we are talking about generators, housing,

air conditioners, TVs, things like that. Before it goes to the Iraqis,

we have processes that are for the United States—States say the

State of Utah wants that. They have capability to say we want

that.

Mr. CHAFFETZ. Sign us up.

Mr. ESTEVEZ. Your plan, you just have to pay the transportation

back to the United States for that piece of equipment.

I don’t think I have the dollar value of what we have given them

under what was 1202 authority which was authorized by Congress

to provide them with equipment they need to buildup their military

capability so that we can depart and they can sustain themselves,

for their internal security and eventually for external security for

the nation.

Mr. CHAFFETZ. Is there a way to look at the list of the assets and

say the State of Utah, if they want it, come get it.

Mr. ESTEVEZ. We have put that process in place.

Mr. CHAFFETZ. Process in place?

Mr. ESTEVEZ. Before we turn over something, we say here is the

list of equipment, Base X, that we are turning over to the Iraqis

and there is an organization called National Association of Surplus—it is NASAP—that screens that, the State of Utah says I am

looking for a generator for a hospital, they say a there is a generator available. Here is how you get it back and that becomes available.

Mr. CHAFFETZ. We don’t have time in these few minutes, but if

you could help clarify both the dollar value, the assets themselves

and these programs if they are available to States or municipalities, wherever they might be, that would be helpful.

Mr. ESTEVEZ. I would be happy to do that.

Mr. CHAFFETZ. Is there a grand total number of the assets we

are leaving behind?

Mr. ESTEVEZ. That is that number. There is about 50,000 other

pieces of military equipment that we have provided to the Iraqis

again under congressional authority.

Mr. CHAFFETZ. Do we have a dollar value?

Mr. ESTEVEZ. I do not have the dollar value on that but I can

get you the dollar value on that for the record.

Mr. CHAFFETZ. I would appreciate that.

Mr. ESTEVEZ. Let me see if I can give you the number that we

have given to the States. But I will give you that as well. Other

than that, nothing else if being left behind. We are retrograding,
41

other than those types of equipment that we really don’t need anymore. The process is that if it is needed in Afghanistan, it goes to

Afghanistan. If it is needed somewhere else in the U.S. Central

Command, it goes there. Most of the equipment there belongs to

the units that we deployed there and when they return, they carry

that back with them to the United States.

Mr. CHAFFETZ. The logistics of this must be amazing. If you could

please keep looking for that number. Let me go back to Ambassador Kennedy. I want to talk about the $481 million is my understanding for

the interim consular post. These are interim facilities, right? They

are supposed to last 3 to 5 years. This would be in Erbil and Basra

as opposed to building more permanent type structures? I know

there was a congressional funding issue here in play. The concern

is spending $481 million on what would be an interim facility that

is only going to last a few years.

Mr. KENNEDY. Mr. Chairman, I will get you the specific breakdown of that figure. We are being as minimalist as possible. We are

reusing T-walls, the sites we are using both in Basra, Erbil, Baghdad and Kirkuk are all former U.S. military troop sites, so we are

using equipment they are transferring to us under another one of

the programs you were just asking my colleague about.

Mr. CHAFFETZ. Am I off on the number, the $481 million for two

facilities?

Mr. KENNEDY. I think that number includes things that artificially inflate the number. I will give you a piece of paper on that.

Mr. CHAFFETZ. Fair enough. I would appreciate that.

The last thing I want to discuss here is what is happening with

Iran and their presence there. We have had previous incidents with

Iranian-made missiles being fired at us. What do you see happening right now? It appears they are just laying low waiting for

January 1st to come about and the concern is they are going to

step up these things and start to go after our 17,000 personnel

there. What is your assessment of the situation?

Mr. KENNEDY. My assessment is that Iran does not wish to see

a stable, democratic Iraq as a lynchpin of a new way of doing business in that part of the world and they will go to significant extremes to disrupt our efforts to assist the government and people

of Iraq to achieve the democracy. They have a fledging democracy.

It is building, it will take a while to build the democracy as I think

we know from our own country. It is in the interest of the Iranians

to disrupt our efforts and I believe that they will continue to do so.

Mr. CHAFFETZ. How do we defend ourselves? Basically, we are

taking a position that it is going to be our policy to just duck and

cover without the ability and the opportunity to fire back. How capable do we think the Iraqis are going to be to actually go out and

take out the threat of somebody actually continuing to fire upon an

embassy, for instance?

Mr. KENNEDY. Because of the excellent training and joint operations that our military has been conducting with the Iraqis over

the last few years, I believe, and I could ask my DOD colleagues

to comment, that the Iraqi capabilities are growing significantly

and continue to grow.

Mr. CHAFFETZ. Are they adequate?
42

Mr. KENNEDY. They are certainly not up to U.S. military standards, no, sir, but it is an effort that is on the upswing. I believe

they are cooperating with us. The Iraqi police are working with us

and I believe we will be able to accomplish that over time.

Mr. CHAFFETZ. I guess I am concerned about January 1st, which

isn’t too far around the corner. One of these letters from Joseph

McManus, Acting Assistant Secretary, Legislative Affairs, Department of State, back in July 2011 said ‘‘Although the competency

and capabilities of the ISF have improved in recent years, they are

generally capable of providing internal security for Iraq, they still

face specific capability gaps and continue to operate in an uncertain security environment.’’ This is just an ongoing concern. We

think we can expect the expansion of Iran’s presence there to try

to disrupt what is going on and I do not know how we would defend ourselves against it.

Mr. KENNEDY. I believe that our continued cooperation with Iraqi

officials—the Iraqis want to have a democracy in Iraq. They do not

want to be a satellite of Iran. There was a very, very bloody war

that took place several years ago between Iraq and Iran. I believe

we can count on the Iraqis to pursue their own self interest which

is to maintain a free democratic and stable Iraq and we need to

partner with them in that endeavor.

Mr. CHAFFETZ. Thank you. I yield.

Mr. TIERNEY. Ambassador, one of the tools, as a diplomat you

will recognize we are not using with Iran in this situation is diplomacy. I think that might have some limiting effects on our ability

to try and bring some order to what is going on in that part of the

world and is something for us all to consider.

I won’t ask you to comment on it because you are a diplomat and

I know what your answer will be. Certainly I think it is something

we should think about because we have all these people so well

trained as diplomats and then not use one of the tools in our arsenal on that.

Mr. Estevez, can you tell me how much money the Department

of Defense will no longer have to spend in Iraq once the transfer

is made over to State on an annual basis?

Mr. ESTEVEZ. I cannot. I will have to provide that for the record.

Mr. TIERNEY. Ambassador Vershbow, do you have any information on that?

Mr. VERSHBOW. I don’t have the numbers in front of me. We will

get back to you.

Mr. TIERNEY. I know Ambassador Kennedy does, don’t you?

Mr. KENNEDY. Figures I have seen, Mr. Tierney, say that the difference is approximately $50 billion a year by the Department of

Defense versus an estimated $6 billion a year for the Department

of State. I think that is a significant shift in mission; I think it is

a significant reduction in funding.

Mr. TIERNEY. I know we discussed it before. I thought these gentlemen had it. I wanted to make sure they had an opportunity to

say if they knew it was otherwise.

The $6 billion the Department of State has, are you now forced

under the current budgetary situation to take that from other Department of State activities or have you received adequate funds to

plus up that amount?
43

Mr. KENNEDY. In the President’s budget request for fiscal year

2012, the State Department budget is presented in two segments,

a regular budget and an overseas contingency operating budget

which is a parallel to what the Department of Defense has used for

many years. If the President’s budget request is enacted as requested, meaning both the regular budget and the contingency operating budget, we would not have to draw funds from the regular

to support the contingency operation.

Mr. TIERNEY. What would happen if the House budget, as it

passed the House, were the effective operating vehicle?

Mr. KENNEDY. At an 18 to 20 percent cut to State Department

operations, I literally, even though it is my responsibility to plan

for contingencies, my pencil can’t get there, sir.

Mr. TIERNEY. I think it is reasonable to assume if we want to

fund the $6 billion for your operation in Iraq, it has to come from

somewhere which means other areas that are already under funded

will be drawn down.

Mr. KENNEDY. Absolutely.

Mr. TIERNEY. Are you knowledgeable of any USAID activities

that will be continuing on in Iraq?

Mr. KENNEDY. I know that AID will continue to operate in Iraq.

There is funding requested in the Foreign Assistance Program for

them. Frankly, I am not an expert on the AID programs. I know

that we are making provisions, I and my colleagues, for the platform on which AID will have a presence in Iraq.

Mr. TIERNEY. That is what I was getting at. The security for AID

would be through you or directly on their own hires?

Mr. KENNEDY. Since they are under Chief of Mission authority,

their security will be provided by the Diplomatic Security Service.

Mr. TIERNEY. What steps have you taken at the State Department to deal with the issue of debarment and suspension? I know

First Kuwait couldn’t get debarred when there was little doubt it

should have been, so how are we improving that situation so contractors will always know there is some bite when they violate?

Mr. KENNEDY. Working with the Procurement Executive at the

Department, he has just issued a new State Department PIB that

increases substantially our ability to follow up on the Commission

on Wartime Contracting’s recommendations, not in this report but

in previous ones and we will be able to provide a greatly upgraded

ability to suspend and debar under the program we have set forward. I would be glad to send a copy of our new program to you

and your staff.

Mr. TIERNEY. Last, what measures has State taken to ensure

they will have adequate oversight of the LOGCAP IV when you

take over the contract and how long do you think that is going to

last? Will that be your vehicle after 2012?

Mr. KENNEDY. I think it will be a vehicle for more than 1 year.

We realize this is a major activity. Someone took a quote of mine

or one of my colleagues totally out of context saying that the State

Department does not have the resources to oversee the LOGCAP

IV contact. That is entirely true but there was a semicolon there

and that is why we, on a reimbursable basis, engaged the Defense

Contract Audit Agency and the Defense Contract Management
44

Agency as our partners in overseeing the LOGCAP contract. It will

be fully overseen and fully audited.

We are just using professionals from the Department of Defense

who have the career specific talents and abilities to do that kind

of life support contract which we don’t. I would never have engaged

in that route unless I had agreement with DCMA and DCAA to

provide us on a reimbursable basis the oversight that is required.

Mr. TIERNEY. Thank you. I yield back.

Mr. CHAFFETZ. I would now recognize the gentleman from Illinois, Mr. Quigley.

Mr. QUIGLEY. Thank you, Mr. Chairman.

Ambassador Kennedy, you just touched briefly on the debarment

issue. We have years of frustration to counter a report that promises hope as we finish our activities, the report you just referenced

to Mr. Tierney. Just to use a few examples of the frustrations we

might face here, the First Kuwaiti General Trading and Contacting

Co. as an example.

Do you recall being here 4 years ago in 2007 before this same

committee and we were talking about the construction and they

were the prime contractor to build the State Department Embassy

in Iraq. There were cost overruns of $144 million, labor abuses and

from what we now know, a kickback scheme involving hundreds of

millions of U.S. taxpayer dollars. Despite all these problems, the

State Department has allowed First Kuwaiti to continue to operate

around the world, including in Saudi Arabia and other countries.

If you cannot deal with that after all these years, what gives us

any hope that debarment and suspension will have some sort of effect because there is a new plan?

Mr. KENNEDY. I don’t want to debate specific numbers with you

because I would like to sit with you and discuss them, but there

were not cost overruns of $146 million, nor am I aware of a huge

kickback scheme for First Kuwaiti related to State Department activities amounting to hundreds of millions of dollars.

We monitored that. I will admit in building the American Embassy in Kuwait, the then Director of Overseas Buildings used a

construction oversight model which did not deliver everything that

I would have wanted if I had been the Under Secretary at that

time. That model has been changed.

The State Department outside of the contract in Baghdad has

never awarded a contract to First Kuwaiti. The references you

made to Saudi Arabia and also one in Indonesia were awarded to

an American company registered and operating in the State of

Maryland named Grunley Walsh. They subsequently sold to another American company called Aurora who utilized First Kuwaiti

as a subsidiary of theirs.

Mr. QUIGLEY. Doesn’t that seem like an obvious way to get

around?

Mr. KENNEDY. I am not a lawyer.

Mr. QUIGLEY. The fact they can actually use them anyway, it is

semantics that you are getting into at this point. We didn’t actually

do it, somebody else did. The fact that they are allowed to gets to

the point. I would love to have the private debate that you encourage about the problems that existed with First Kuwaiti.
45

Mr. KENNEDY. I would be glad to call upon you and I will seek

an appointment. We have no plans to use First Kuwaiti ever again.

The problems that arose in Baghdad were, in effect, almost parallel

to the awarding of the original contracts for Surabaya and for

Jeddah and the problems were unearthed along the way. The contract was already in place with the American company and we put

additional monitoring personnel on those.

Because of the potential cost to the American taxpayer of stopping a contract in the middle and breaking it and then trying to

restart it, we have been moving very, very expeditiously. The contract in Jeddah, in fact, is suspended. There is no work. I have

halted work on that. They are at 99 percent complete.

Mr. QUIGLEY. Were there problems or not? Why would you think

about stopping a contract in the middle if there weren’t any problems? What were the problems?

Mr. KENNEDY. The problems came out in Baghdad and in Surabaya and Jeddah in effect simultaneously.

Mr. QUIGLEY. What were the problems? If I had it all wrong,

what were the problems more specifically?

Mr. KENNEDY. Poor management onsite, on-scene.

Mr. QUIGLEY. Poor management created what problems?

Mr. KENNEDY. Time delays. We have State Department construction engineers and architects onsite. I think in the building trades

it is called the owner’s representative on-scene in Jeddah and in

Surabaya. Those representatives were constantly requiring work to

be stopped and work to be redone at the contractor’s expense, not

at ours.

That is the poor performance leading to seeing a product that

was not headed in the direction that we wanted. That is why we

have representatives onsite who can tell the contractor that wiring,

that wall is not built according to the specifications, the contract

and the bid documents. You tear it out, you get no additional funds

for correcting your errors.

Mr. QUIGLEY. I have run out of time. Can you quickly tell us how

many contractors has the State Department suspended or debarred

in Iraq?

Mr. KENNEDY. Suspended or debarred in Iraq, I don’t have that

number at the tip of my tongue. I will get that for you.

Mr. QUIGLEY. Can you get it to the full committee?

Mr. KENNEDY. Absolutely. We will address it to the chairman.

Mr. QUIGLEY. Thank you, Mr. Chairman.

Mr. CHAFFETZ. The gentleman yields back. I recognize Mr.

Tierney.

Mr. TIERNEY. Ambassador Kennedy, have you taken advantage of

the good offices of the Special Inspector General for Iraq or the

Government Accountability Office, or both at the outset of your

venture for what advice and counsel they may give you and lessons

learned on past contracting situations?

Mr. KENNEDY. Yes, sir. The Special Inspector General for Iraq,

the Government Accountability Office, the State Department’s Inspector General, have been engaged in an incredible number of inspections and oversights. I have a long list that I won’t bother to

read off to you of all the work they are doing. There are multiple

audits and inspections going on. I believe two of them, as we speak.
46

Mr. TIERNEY. That is one argument. The other is using them for

advice and counsel as you startup.

Mr. KENNEDY. We read every single one of their reports and use

those as lessons learned for the future.

Mr. TIERNEY. But you have not engaged directly with them at

any point in time?

Mr. KENNEDY. The Inspectors General do not like to give advice

because if they give advice, in effect they feel it is a pass they have

given me. I would say you have told me to do X, I did X, it didn’t

work.

Mr. TIERNEY. I had a different impression from talking to folks

over there but I understand that aspect of it but I do think it is

important to glean all the lessons learned that we can.

Mr. KENNEDY. I read every single one of the reports they have

done on the platform that I have built, my predecessors built and

we plan to continue.

Mr. TIERNEY. Thank you.

Mr. CHAFFETZ. I have one last question and will give you each

an opportunity to cite your biggest concern moving forward, but before we get to that, I am still concerned about the capability for

medical type situations with only six beds overnight. Does the

State Department have a plan for evacuation should that need to

occur? We are talking about 17,000 people. How do you address

that?

Mr. KENNEDY. We have been working with the Department of

Defense and with our embassies in Inman and Baghdad on mass

casualty scenarios using both our assets and assets that we might

be able to call upon from DOD. There is such a plan being developed.

I might point out the number is not 17,000; it is much closer to

16,000.

Mr. CHAFFETZ. I feel so much better.

Mr. KENNEDY. If you take just the State Department component

there, it is actually closer to maybe 10,000 plus my Department of

Defense colleagues.

Mr. CHAFFETZ. When you say 10,000, 10,000 what?

Mr. KENNEDY. I would say 10,500–11,000 State Department government employees and contractor support. As my colleagues from

Defense discussed, there is the Office of Security Cooperation

which is part of the Chief of Mission’s responsibilities but they

have their own personnel.

Mr. CHAFFETZ. As we move forward, would it be reasonable by

the end of the month you could provide me a specific number and

how that breaks down so there is no confusion moving forward?

Mr. KENNEDY. Today, if I tote up everything, the answer for

State and OSCI is 16,009. We track this very, very closely because

we have no intention of over building and I do not wish to under

build either.

Mr. CHAFFETZ. Thank you.

Let me start with Mr. Estevez. I want to wrap up here. We need

to be brief. Your biggest concern moving forward, the thing we

have to achieve and tackle by the end of the year?

Mr. ESTEVEZ. Under the current scenario of drawing down to

zero, aside from the OSCI presence in Iraq, it is a massive
47

logistical move, 43,000 folks in about 21⁄2 months, about 800,000

pieces of equipment to come out—actually closer to 850,000, so

from the standpoint of logistics, that is a phenomenal piece of

work.

We have done that and we have been doing this for the last 2

years really, the draw-down. We are confident we can do it but

there are always hitches in this type of operation. Should there be

successful negotiations, turning some of that around is also complicated but absolutely executable.

Mr. CHAFFETZ. Thank you. Ambassador Vershbow.

Mr. VERSHBOW. I think that from a policy point of view, between

now and the end of the year, we hope that we can come to an

agreement with the Iraqis on the full dimensions of a long term security relationship with that country that meets their needs and

which also serves our long term strategic interest.

I think the long term success of Iraq’s efforts to consolidate its

sovereignty, its democracy, its stability has become even more important in the wake of the Arab spring. The Iraqis face many

threats, some internal, some external. I share your concern, Mr.

Chairman, about Iran. As Ambassador Kennedy said, they don’t

necessarily have an interest in stability in Iraq or in seeing Iraq

become a sovereign state that determines its down destiny. Indeed,

Iranian militias are likely to continue to pose a threat to security.

That makes it all the more important that we develop a strong

and robust security partnership with the Iraqis that helps them

improve their abilities which have improved significantly since we

basically handed over the principal responsibility to them more

than a year ago. They recognize that they need additional support

going forward and I think it is in our strategic interest to develop

a relationship that meets their needs so we can help them counter

these threats and become an anchor of stability in a turbulent and

fast changing Middle East.

Mr. CHAFFETZ. Thank you. Ambassador Kennedy.

Mr. KENNEDY. When we started this transition process, my great

fear was that we would not be mission capable to take over the responsibilities given to the Secretary of State under the new system.

I believe that today we are mission capable. The remaining task is

to complete the physical plant build out. We have the aviation in

place, we have the security personnel in place, we have the logistics in place, we have the life support in place. All our building

projects are under way.

There have been the normal delays operating in a war zone from

delays getting steel into the country to we thinking the U.S. military would be offsite X on day one and they were offsite on day 27.

That is not pointing at them in any way, they have been absolutely

fabulous in their cooperation. We could not have asked for anything

more.

We are now mission capable but I still have to complete internal

and some external build-out of facilities within our compounds.

Mr. CHAFFETZ. Very good.

Thank you all for your commitment to our Nation and our country, the hard work and dedication and your patriotism. I appreciate

the staff that does so much of the work here in helping us along

the way. I thank Mr. Tierney.
48

I would also appreciate that if there are additional updates you

feel need to be brought before the committee, we would certainly

appreciate that.

The committee now stands adjourned.

[Whereupon, at 11:20 a.m., the subcommittee was adjourned.]

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