State assumed direct responsibility for arms control, nonproliferation, and disarmament issues when the Foreign Affairs Reform and Restructuring Act of 1998 abolished ACDA and transferred its functions to the Department of State, which in turn established two new State bureaus— the bureaus of Arms Control and Nonproliferation—headed by a new Undersecretary for Arms Control and International Security (the Undersecretary). Once these bureaus were established in April 1999, they were combined with State’s existing Bureau of Political-Military Affairs to form a new “T family” of bureaus. Subsequently in 2000, due to congressional concerns regarding effective verification of and compliance with arms control agreements, part of the Bureau of Arms Control became a separate Bureau of Verification and Compliance. In 2004, the State IG began reviews of the three new bureaus to examine the effectiveness of ACDA’s incorporation into State and the performance and interaction of the T bureaus. The IG found that the organizational structure did not meet current needs and was marked by unclear lines of authority, unproductive competition among offices, and uneven workloads. The IG also found that the management structure of the three bureaus was top-heavy, resulting in poor promotion prospects for junior civil service staff and the difficulty of attracting Foreign Service Officers (FSOs). The IG noted that State had yet to agree upon language formalizing the responsibilities of the three bureaus in its FAM 5 years after the merger. The IG recommended that the Secretary of State, in coordination with the Undersecretaries for the Management and T bureaus (1) form a task force to oversee the merger of AC and NP into a single bureau to improve the policymaking process; and (2) restructure the VC bureau into a smaller specialized entity better able to focus on its core mission. In response, State established a task force in August 2004 to evaluate the T bureaus’ organizational structure, recommend changes if necessary, and prepare a strategy for implementing structural changes. However, according to a senior State official, the task force disbanded without agreeing on a course of action. Nevertheless, the outgoing Secretary of State approved the merger in December 2004. He deferred the implementation of the merger until his successor could review the matter. The new Secretary reaffirmed the decision in February 2005 but deferred the matter until the Senate confirmed a new Undersecretary of State for Arms Control and International Security in May 2005. On July 29, 2005, State presented a proposed structure to Congress showing how the Arms Control and Nonproliferation bureaus would be merged into a new international security and nonproliferation bureau. The proposed new structure was put together by the new Undersecretary. It shifted significant responsibilities for implementing arms control agreements to the newly expanded and renamed Bureau of Verification, Compliance and Implementation. On September 12, 2005, the Undersecretary announced the establishment of the new International Security and Nonproliferation Bureau and the creation of a Senior Management Panel (SMP) to implement the merger, consisting of the three principal deputy assistant secretaries from the Arms Control, Nonproliferation, and Verification and Compliance bureaus, plus the U.S. Representative to the Conference on Disarmament, based in Geneva, Switzerland. On September 28, 2005, the SMP sent an e-mail and memo to staff summarizing the reorganization procedures and designating acting office directors to lead the new bureau. From October through December 2005, the SMP carried out other actions, including the preparation of final position and mission descriptions and the final placement or “crosswalk” of AC and NP bureau staff to their new positions in the ISN bureau in November 2005. The SMP was disbanded by January 2006 but only after the reorganization had substantively ended. The reorganization of the VCI bureau was finalized by March 2006. The reorganization affected 440 employees distributed among 30 offices and functions in 3 bureaus. Although State restructured the bureaus to better focus on post-September 11 challenges and priorities and combined related offices to streamline staff, it cannot demonstrate that it reduced inefficiencies and top-heavy management or that it eliminated mission overlap among the offices. Moreover, the reorganization failed to accomplish other goals that State officials said they hoped to achieve. Figure 1 shows how State organized its T bureaus before and after the reorganization, where it moved or combined old offices, and where it created new offices. State restructured key AC and NP offices and created new offices to better focus State’s efforts on post-September 11 challenges, such as interdicting illicit shipments of weapons of mass destruction (WMD) technology and increasing attention on WMD terrorism and threat reduction programs. For example, State designated a Principal Deputy Assistant Secretary (PDAS) for Counterproliferation Issues in ISN and created three new offices: The Office of Counterproliferation Initiatives was to take the lead in developing, implementing, and improving Proliferation Security Initiative (PSI) and other efforts to interdict or deny shipments of WMD and their delivery systems. The Office of Weapons of Mass Destruction Terrorism was to develop policy guidance and a diplomatic strategy. State officials noted that this office was created to address as an emerging challenge the need to counter the efforts of terrorists actively seeking weapons of mass destruction. In February 2006, the Undersecretary testified that this office would help bridge a gap between the government’s traditional state- focused WMD counterproliferation efforts and the focus of its antiterrorist intelligence efforts on individuals and groups. The PDAS of ISN stated in 2008 that this office also helped create the Global Initiative to Combat Nuclear Terrorism, which works to develop counterproliferation and interdiction capabilities in other governments. The Office of Strategic Planning and Outreach, in part, was to address a perceived gap in the ability of the T bureaus to innovatively address future threats, identify emerging proliferation threats, and develop a coordinated and strategic counterproliferation response. For example, the Undersecretary described the need to develop new ways to assess and counter the proliferation challenges posed by black markets, front companies, and global terrorist networks. In addition, State merged existing offices to reflect the greater priority it placed on these post-September 11 challenges, according to State’s July 2005 notification to Congress. For example, State merged offices from two bureaus to form the Office of Chemical and Biological Weapons Threat Reduction, which would lead new ISN efforts to prevent states or other entities from pursuing, using, or proliferating WMD weapons and their technology. State similarly merged two existing offices to form the Office of Missile Threat Reduction to take the lead in implementing policies and programs to counter the proliferation of ballistic and cruise missiles capable of delivering weapons of mass destruction and better coordinate these efforts with overall counterproliferation efforts. State reduced the number of offices and functions assigned to the affected bureaus, but cannot demonstrate how the merger reduced bureaucratic inefficiencies or redressed uneven workloads. Combining functionally compatible offices to streamline staff and reduce bureaucratic inefficiencies was the second objective of the reorganization. State documents and officials noted that State expected this reorganization would streamline and refocus these offices, make them operationally more effective, free up personnel resources, and make them available for higher priority missions. Overall, State combined 30 offices and functions present in the three- bureau structure into 26 offices and functions present under the new two- bureau structure. In particular, the merger of the AC and NP bureaus into the new ISN bureau resulted in an organization with fewer offices, functions, and staff. The reorganization consolidated 24 issue-related offices and functions present in the two old bureaus into 17 issue-related offices and functions in the new bureau. State also succeeded in slightly reducing its overall personnel positions in these bureaus. In October 2004, the AC, NP, and VC bureaus had a total of 440 staff positions; by November 2008, the ISN and VCI bureaus had a total of 434 staff positions. The reorganization affected four types of personnel positions: (1) civil service full-time equivalents (FTEs), which are positions funded by the bureau in which they are located; (2) Foreign Service FTEs; (3) other government staff (that is, personnel not directly funded by the bureaus such as detailees from other State bureaus, other government agencies, the armed services, and interns); and (4) contracted employees. In 2004, the AC and NP bureaus had a total of 314 staff positions. By 2008, after they had merged to form the new ISN bureau, that total had decreased to 291 staff positions. As depicted in figure 2, the new total reflects changes in the numbers and composition of the staff positions available to ISN, with declines in the number of civil service FTEs, Foreign Service FTEs, and other government staff, but a slight increase in the number of contracted employees. The reductions resulting from the merger of the AC and NP bureaus into the ISN bureau were largely offset by the augmented roles and increased staff given to the old VC bureau. According to State officials, Congress had made its acceptance of the new two-bureau structure conditional upon the transfer of some offices and duties to the newly expanded and renamed Bureau of Verification, Compliance and Implementation. The VC Bureau’s PDAS for Compliance Policy was re-designated as PDAS for Compliance and Implementation; moreover, the VC bureau’s Deputy Assistant Secretary (DAS) of State for Verification Policy was re- designated the DAS for Verification and Implementation. The number of offices and functions reporting to these officials initially rose from six to nine. This was in part due to State’s decision to shift responsibility for implementing strategic arms control agreements with the former Soviet Union, such as the Conventional Forces in Europe treaty and the Strategic Arms Reduction Talks, to VCI.