RESPONSES OF MADELEINE ALBRIGHT TO QUESTIONS ASKED BY SENATOR THOMPSON Question. The State Department, like many other federal agencies, is confronted by serious management problems that impede its ability to carry out its mission efficiently and effectively. GAO and Inspector General reports, as well as the State Department's own internal studies, have shown that top level attention has not been given to the stewardship of taxpayer resources. Congress has passed a series of laws designed to improve agencies' operations, most notably the Chief Financial Officers Act of 1990 (CFO Act) and the Government Performance and Results Act of 1993 (GPRA) Implementing the management of these reforms is a legal responsibility of each agency head.

GPRA requires executive agencies to issue, no later than September 30, 1997, a strategic plan covering at least five years. GPRA also requires agencies, beginning with fiscal year 1999, to develop annual performance plans. Are you aware of the State Department's requirements under the Government Performance and Results Act? Is the State Department prepared to meet these requirements?

Answer. I am fully aware of the GPRA requirement for the Department of State to develop a multi-year strategic plan and a performance plan for FY 1999. I am confident the Department will meet its requirements, not simply to comply with the law but also to improve the management of United States foreign policy and Function 150 resources. Strategic planning offers an effective means for demonstrating how our international affairs activities promote and defend critical American interests.

To make the Department's strategic planning effort lasting and meaningful, Deputy Secretary Talbott last September established a broad-based effort to design a coherent and comprehensive framework for the Administration's foreign policy goals, requirements, and accomplishments. An Advisory Group of ten Assistant Secretaries is working with a drafting team whose members are drawn from throughout the Department on this project. This is, I believe, the most serious effort the Department has ever made to align policy and management. If confirmed, I look forward to participating in the final formulation of the Department's strategic plan.

Question. What do you view as the State Department's "core functions" (i.e., those functions that are fundamental to the State Department's mission)? Do you see a need for any significant changes in how the Department conducts its operations and allocates its resources in order to better perform these functions?

Answer. The Department of State:

• Promotes American prosperity and security by representing the United States overseas; advocating U.S. polícies before foreign governments and international organizations; supporting official visits and other diplomatic missions; conducting public diplomacy; and assisting U.S. business.

• Exercises policy leadership, broad interagency coordination, and management of resources for the conduct of foreign relations.

• Conducts negotiations, concludes agreements, and supports United States participation in international negotiations of all types.

• Reports on and analyzes developments in foreign countries of relevance to the U.S. Government, including promoting American prosperity and security, and increased attention to issues of international crime, narcotics trafficking, human rights, terrorism and environmental protection.

• Protects and assists American citizens living or traveling abroad, and provides a security platform for all government agencies at our posts overseas.

• Provides passport and visa services.

I think it is premature for me to offer comments on what changes the Department might require. If confirmed, 1 will review the Department's on-going strategic planning project and take whatever steps are necessary to ensure efficient management of the Department.

Question. According to a recent GAO report (GAO/NSIAD-96-124), August 29, 1996, the State Department has not developed a strategy for adjusting to a future of continuously tight budgets. Have you thought about how you might adjust the activities of the State Department given the budget outlook for the foreseeable future?

Question. The GAO report (GAO/NSIAD-96-124) offers an excellent and detailed exposition of the principal role the Department plays in advancing the foreign policy and commercial interests of the nation, as well as in protecting our citizens abroad. It fails, however, to appreciate the Department's downsizing efforts.

The Department, cognizant of current fiscal realities, has through careful planning and financial management succeeded in absorbing a twenty percent reduction in real resources as a result of a series of flat budgets dating back to FY93. Since the beginning of FY93, the Department has reduced its work force by more than

2,200 and the Senior Foreign Service by more than 10 percent. During this same time period, we have also closed 30 posts and have significantly cut both overseas allowances and operating budgets.

The Department has also planned for the future. Several specific management initiatives will result in operating efficiencies and help cope with reduced budgets. First, the Department is developing a five-year strategic plan to improve linkages between resource availability, planning, and performance.

Furthermore, the International Cooperative Administrative Service System (ICASS), which has been endorsed by the President's Management Council and developed by interagency consensus, will become fully operational with the commencement of FY98. ICASS will distribute the administrative costs of our embassies and consulates in a more equitable manner among the various agencies whose offices abroad are supported by our posts.

The Department has also developed the Overseas Staffing Model as an analytical tool to enable us to staff our overseas missions. so as to achieve our principal foreign policy goals and objectives, carry out our legislative mandates, and provide administrative support for the U.S. Government's presence abroad.

Moreover, we are set to begin the implementation of our logistics reengineering program which will reduce the costs the Department incurs in the procurement of goods and services required to fulfill the Department's mission and support our personnel abroad.

Lastly, the Department plans to modernize our information resources, improve the management of our real property assets, and update the consular applications process so as to augment border security.

Question. The Chief Financial Officers Act requires all agencies to prepare and have audited agency-wide financial statements by March 1997. Will the State Department have an audited financial statement by March 1997 as required by CFO Act? If not, what problems are preventing State from complying with the law and what steps would you take to remedy these problems?

Answer. The Department of State will not have an audited financial statement by March 1997. However, OMB has granted the Department an extension until May 1997. By receiving the extension from OMB (with concurrence from the Office of the Inspector General), the Department is in compliance with the Chief Financial Officers Act (CFO) and the General Management Results Act (GMRA). We are confident that the audit of FŸ 1997 financial statement will be completed by the May deadline.

Over the past two years, the Department has made tremendous strides in improving the quality of its financial information. For example, we have resolved several long standing material weaknesses such as controlling proceeds from the sale of real property, upgraded our financial systems, and strengthened our financial processes and procedures. We will continue to devote significant management time and attention to continuing the improvement of State Department's financial information in conformance with the CFO Act.

Question. Implementing management reforms is.a major responsibility for each agency head. Once at the State Department, you will no doubt be consumed by critical foreign policy issues and crises that will demand a great deal of attention. Nevertheless, ensuring the efficient and effective operation and management of the State Department is essential to analyzing, communicating, and managing the nation's foreign affairs. How will you as Secretary of State meet the challenge of implementing required management reforms at the State Department?

Answer. While I will have some very talented people helping me on the management side at State, I want to assure the members of this Committee that I will be very much a "hands-on" manager. My ability to provide the quality of leadership on foreign policy issues expected by the Congress, the President, and the American people depends to a very great degree on the Department's personnel and the condition of its infrastructure.

I am committed to making improvements in the Department's structure and operations that will produce a more efficient and effective use of our resources. But I will also be the first to let the President and you know when we risk crippling our foreign policy by trying to perform critical missions on the cheap.

The Department already has a number of important management reforms under way that I intend to support fully. Principal among these is the International Cooperative Administrative Support Services system (IČASS). This is a new, transparent administrative cost-sharing system among all U.S. Government agencies with an overseas presence. ICASS empowers those at every post to determine what services they want and who will provide them, and shares the cost burden in an equitable

manner.

Another important effort is the development of the Overseas Staffing Model (OSM), by which the Department will calculate what its staffing needs are at overseas posts based on considerations such as the workload and the priority of the issues being addressed.

Lastly, we are re-engineering our entire logistics operation to improve the way we procure and deliver goods and services both here in Washington and at all overseas posts.

RESPONSES OF MADELEINE ALBRIGHT TO QUESTIONS ASKED BY SENATOR BENNETT

Question. Under the authority of U.S.C. 1182(a)(28) the Department of State has the authority to deny visas to aliens whose presence in the United States would be "prejudicial to the public interest." Yet in 1996 both the operational commander of Chinese forces during the Tiananmen massacre and the Chairman of China's leading arms-dealing company were given visas to enter the United States. What reps do you intend to take to ensure that major human rights violators and illicit arms dealers do not enter the United States in the future?

Answer. We share your concern that undesirable aliens not be issued visas to enter the U.S. A blanket exclusion on the basis of human rights violations does not exist, although the law does provide mechanisms for excluding undesirable applicants on an individual basis. Current immigration law allows for the exclusion of aliens who have been convicted of or have admitted to crimes of moral turpitude, and aliens who have engaged in acts of terrorism. On a case-by-case basis, aliens also may be excluded for foreign policy reasons, or for having engaged in conduct defined as genocide for purposes of the international convention on the prevention and punishment of genocide. The President also may exclude aliens or groups of aliens by proclamation when he determines that their presence in the U.S. would be detrimental to the interests of the U.S.

The section of law you refer to was repealed in 1990. Under current law, the standard for foreign policy exclusion is "potentially serious adverse foreign policy consequences."

Question. The Speaker of the House always seeks the advice of the Secretary of State in any question of whether to invite a foreign dignitary to address a Joint Session of Congress. Do you believe that it would be appropriate to issue such an invitation to His Holiness the Dalai Lama on his next visit to the U.S.?

Answer. The Dalai Lama is an internationally respected religious leader who is a committed advocate of nonviolent change and the peaceful resolution of disputes. He has been honored with the Nobel Prize for Peace. He has been received at the White House in his private, personal, and non-political capacity. Our policy with respect to Tibet is to support preservation of its unique cultural, linguistic and religious heritage. To that end we have urged the Dalai Lama and the Chinese authorities to engage in a direct dialogue on the future status of Tibet.

We appreciate the principle of consultation between Congress and the State Department on decisions of this bind. Should there be a request for our advice in the event of an actual invitation for the Dalai Lama to address the Congress, we will consider the matter carefully and offer our advice, taking into account our great respect for the Dalai Lama as a religious leader and U.S.-China relations.

Question. In January 1996 and again in December 1996 Iran test-fired Chinese C-802 cruise missiles in the Gulf. According to the U.S. Navy, up to 15,000 American service personnel are within range of these weapons. Transfer of cruise missiles to Iran is prohibited by Sections 1604, 1605 and 1608 of Title XVI of the National Defense Authorization Act for FY 1993 (Popularly known as the Gore-McCain Act) When do you intend to enforce this statute?

Answer. We are deeply concerned about China's transfers of sophisticated conventional weapons to Iran, particularly C-802 cruise missiles. We have pressed our concerns actively with China and will continue to do so. We will also continue to monitor these transfers closely to see whether they trigger U.S. sanctions. As you are aware, the Iran-Iraq Arms Non-Proliferation Act of 1992 provides for the imposition of sanctions when a foreign person or country transfers goods or technology "so as to contribute knowingly and materially to the efforts by Iran or Iraq * * * to acquire destabilizing numbers and types of [certain] advanced conventional weapons." Given that we know China transferred cruise missiles to Iran, we have focused our analysis on whether the transfers involved contributed materially to efforts by Iran to acquire "destabilizing numbers and types of advanced conventional weapons." The Administration has concluded at present that the known transfers are not of a destabilizing number and type. However, we will continue to monitor Chinese and Iranian activity for any additional transfers that might cross the threshold of sanctionable activity.

Question. On March 8, 1996, at page 26, The Washington Post reported that Chinese companies had exported to Iran "virtually complete factories suited for making deadly poison gases." The export of such equipment by foreign persons is a violation of Section 81 of the Arms Export Control Act. When do you intend to enforce this statute?

Answer. As I noted in my January 8th testimony, the most effective sanctions are multilateral-but there are times when an issue is so important to our national interests that we will act unilaterally. This Administration has already demonstrated a willingness to impose unilateral sanctions against Chinese entities involved in proliferation. For example, in 1993, the U.S. imposed sanctions against Chinese entities for transfers of missile-related equipment to Pakistan. If we determine that Chinese transfers trigger our laws, we will impose sanctions again.

The Administration has reviewed carefully the allegations of transfers from China destined for Iran's chemical weapons program. While we have not reached a conclusion that any of these reported transfers meet the specific legal requirements for triggering sanctions under U.S. law, we are deeply troubled with respect to transfers by Chinese entities of dual-use chemicals and equipment to Iran. We will continue to monitor the situation closely for any transfers that might cross the threshold of sanctionable activity.

I want to assure you that, if confirmed, I will give priority to preventing the spread of weapons of mass destruction, and that this will continue to be one of the Administration's highest foreign policy priorities.

Question. Quoting American intelligence officials, on August 25, 1996, The Washington Post reported that Chinese arms firms are constructing an entire factory to produce "M-11" ballistic missiles in Pakistan. The transfer of missiles equipment or technology by foreign persons is prohibited by Section 73 of the Arms Export Control Act. When do you intend to enforce this statute?

Answer. As I noted in my January 8th testimony, the most effective sanctions are multilateral-but there are times when an issue is so important to our national interests that we will act unilaterally. This Administration has already demonstrated a willingness to impose unilateral sanctions against Chinese entities involved in proliferation. For example, in 1993, the U.S. imposed sanctions against Chinese entities for transfers of missile-related equipment to Pakistan. If we determine that Chinese transfers trigger our laws, we will impose sanctions again.

The Administration has reviewed carefully reports of Chinese transfers to Pakistan of missiles, components and production technology. While we have not reached a conclusion since the 1993 sanctions determination that any of these reported transfers meet the specific legal requirements for triggering sanctions under U.S. law, we are deeply troubled with respect to continuing reports of Chinese missile cooperation with Pakistan. We will continue to monitor closely Chinese and Pakistani activity for any transfers that might cross the threshold of sanctionable activity.

I want to assure you that, if confirmed, I will give priority to preventing the spread of weapons of mass destruction, their delivery systems, and advanced conventional weapons, and that this will continue to be one of the Administration's highest foreign policy priorities.

Question. In a page 1 story of October 10, 1996, The Washington Times reported from a CIA Top Secret document that Chinese state-owned companies were conspiring to "deceive" American officials about "future" sales of illicit nuclear weapons-producing equipment and technology. What specifically did the Chinese Government promise in May 1996 with regard to nuclear exports and are they living up to that pledge?

Answer. On May 11, 1996, China stated publicly that it will not provide assistance to unsafeguarded nuclear facilities. In the course of discussions between the U.S. and China, and especially the April 19, 1996, meeting between Secretary Christopher and Chinese Vice Premier Qian, the Chinese provided clarifications and assurances regarding China's policies toward nuclear non-proliferation and nuclear cooperation with other countries. Senior Chinese officials informed the U.S. that the Government of China was unaware of any transfers of ring magnets by a Chinese entity, and they confirmed our understanding that China's policy of not assisting unsafeguarded nuclear programs will preclude future transfers of ring magnets to unsafeguarded facilities.

We follow up with the Chinese government on all credible reports regarding cooperation with unsafeguarded facilities. Our current information does not provide a basis for concluding that China has acted inconsistently with its May 11th state

ment.

Question. Is there any indication, no matter how slight, that Chinese state-owned firms are assisting any unsafeguarded nuclear facilities in Pakistan, especially at Kushab?

Answer. We follow up with the Chinese government on all reports regarding cooperation with unsafeguarded facilities. Our current information does not provide a basis for concluding that China has acted inconsistently with its May 11th statement that it will not provide assistance to unsafeguarded nuclear facilities.

Question. Is there any indication, no matter how slight, that Chinese companies are assisting, directly or indirectly, ballistic missile programs in Libya?

Answer. We are not aware of any credible evidence that Chinese companies are assisting Libya's ballistic missile program. However, we will continue to monitor Chinese and Libyan activity for any transfers that might cross the threshold of sanctionable activity.

Question. Is there any indication, no matter how slight, that Chinese companies are assisting ballistic missile programs in Syria?

Answer. We are aware of reports that Chinese companies have provided dual-use missile-related items to Syria, but we have not established whether these are being used in ballistic missile programs. We will continue to monitor Chinese and Syrian activity in this area.

Question. Is there any indication, no matter how slight, that Chinese companies are assisting chemical weapons programs in Syria?

Answer. We do not believe that Chinese companies are assisting chemical weapons programs in Syria.

Question. Is there any indication, no matter how slight, that Chinese companies are assisting ballistic missile programs in Iran?

Answer. The Administration has reviewed carefully allegations of transfers to Iran of missile-related equipment and technology. While we have not reached a conclusion that any of these reported transfers meet the specific legal requirements for triggering sanctions under U.S. law, we are deeply troubled by reports of Chinese missile cooperation with Iran. We will continue to monitor Chinese and Iranian activity for any transfers that might cross the threshold of sanctionable activity.

We would be happy to provide more detailed information in a classified briefing. Question. Is there any indication, no matter how slight, that Chinese companies are assisting biological warfare programs in Iran, Iraq, Syria, or Libya?

Answer. We are not aware of any credible evidence that Chinese companies are assisting biological warfare programs in Iraq, Syria, or Libya. We have received reporting regarding transfers of dual-use items from Chinese entities to Iranian government entities which raise concern. We would be happy to provide more detailed information in a classified briefing.

We have encouraged China to adopt comprehensive and rigorous national export controls to help assure that no such cooperation will occur.

RESPONSES Of Madeleine ALBRIGHT TO QUESTIONS ASKED BY SENATOR GRASSLEY

Question. Currently, the U.S. Trade Representatives office is involved in negotiations to bring China into the World Trade Organization. The negotiations are vital to many U.S. Companies. In the agriculture sector, for instance, the terms of accession will determine whether China becomes our largest export market or our toughest competitor for foreign markets. China is currently the world's largest pork producer, number two corn producer, and third largest sorghum producer.

China cannot be allowed to enter the WTO and receive full access the U.S. and other world markets, yet continue to limit access to its market and subsidize their own agricultural production. If this happens, our trade deficit with China will continue to rise. Also China will enjoy a substantial advantage over the U.S. in exporting to the growing Asian markets. Thus, American farmers could suffer from the lack of access to both China's market and other Asian markets.

The acting U.S. Trade Representative, Charlene Barshefsky, has been quoted in the press as saying China will only be allowed into the WTO "on commercially workable conditions as set by the WTO" and that she would "appeal to China to further open their market and meet WTO standards." Do you agree with this statement? Answer. I agree completely with Ambassador Barshefsky. Our long-standing policy is that China's accession to the WTO should be based on a commercially acceptable protocol package of commitments to open its markets and abide by WTO rules. The United States continues to press China vigorously to make the many changes required to bring its trade regime into line with WTO rules and standards. In addition, we have requested that China make significant commitments to liberalize its agricultural trading regime, including reforming its state trading system, making