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Plunderers & Pilferers 21 George Gedda Many of the dictators we have supported over the years have used their positions to amass large fortunes.

Counterpoint: Leaders and Experts 24 Leon B. Poullada Patrons and clerks of a store in Budapest get a The schizophrenic nature of the Foreign Service results grandstand view of the Hungarian insurrection, 30 years ago this month. Starting on page 26, our from widespread confusion over its mission. eyewitness account of the revolt and the Soviet inva- sion concludes with observations on the limited role the west has in Hungary today. Why Does the West Still Sleep? 26 Endre Mart on The free world failed to support the 1956 revolution in Hungary and today is only slowly encouraging reform.

Journal: The Million-Dollar Business 34 Fred Godsey A missionary’s pipe dream becomes a nightmare when an import plan turns out to involve contraband.

Association Views 3 Despatch 20 Letters 4 Foreign Exchange 36 Books 10 People 38 Clippings 14 Annual Report 41 Congress 16 Association News 48 10-25-50 19

Editor: STEPHEN R. DUJACK Senior Editor: FRANCES G. BURWELL Assistant Editor: NANCY L. BARTELS

Editorial Board “The Independent Voice of the Foreign Service” Chair: A. STEPHEN TELKINS Vice Chair: ANDREW STEIGMAN Members: THOMAS DOWLING The FOREIGN SERVICE JOURNAL is the magazine for dress changes to FOREIGN SERVICE JOURNAL, 2101 E LINDA JEWELL professionals in foreign affairs, published monthly Street NW, Washington, D.C. 20037. TERESA CHIN JONES except August by the American Foreign Service As¬ Microfilm copies: University Microfilm Library PATRICIA MALLON sociation, a private non-profit organization. Material Services, Ann Arbor, Michigan 48106 (October WILLIAM B. NANCE appearing herein represents the opinions of the writ¬ 1967 to present). Indexed by PAIS. ers and does not necessarily represent the official MAUREEN SANTINI The JOURNAL welcomes manuscripts of 1500- views of the foreign affairs agencies, the U.S. govern¬ 4000 words for consideration by the Editorial Board. ment, or AFSA. The Editorial Board is responsible Author queries are strongly urged, stamped envelope Advertising Representatives for general content, but statements concerning the required for return. All authors are paid on publica¬ policy and administration of AFSA as employee rep¬ tion. JAMES C. SASMOR ASSOCIATES resentative under the Foreign Service Act of 1980 in 521 Fifth Ave., Suite 1700 the ASSOCIATION NEWS and the ASSOCIATION VIEWS, New York, N.Y. 10017. and all communications relating to these, are the © American Foreign Service Association, 1986. (212) 683-3421 responsibility of the AFSA Governing Board. 2101 E Street NW, Washington, D.C. 20037. JOURNAL subscriptions: One year (11 issues), $ 15. Phone (202) 338-4045. JOSHUA B. POWERS, LTD. Overseas subscriptions (except ), add $3 per 46 Keyes House, Dolphin Square, year. Airmail not available. London SW1. 01-834-5566. Second-class postage paid at Washington, D.C., October 1986. Volume 63, number 9. ISSN International Representatives and at additional post office. POSTMASTER: Send ad¬ 0015-7279.

2 FOREIGN SERVICE JOURNAL ASSOCIATION VIEWS

AMERICAN FOREIGN SERVICE ASSOCIATION W. Averell Harriman Governing Board

President: GERALD LAMBERTY State Vice President: ANTHEA S. DE ROUVILLE AID Vice President: WILLIAM ACKERMAN USIA Vice President: A. STEPHEN TELKINS it seems safe to reaffirm President Kennedy’s declaration Secretary: HARTFORD T. JENNINGS Treasurer: SAMUEL MOK made more than twenty years ago that W. Averell Harri¬ AID Representative: JEAN DU RETTE FRANK YOUNG man will be remembered as the premier American diplo¬ State Representatives: SCOTT DANAHER SANDRA DEMBSKI mat of the twentieth century; indeed, his contributions JAMES A. DERRICK since that statement alone nearly qualify him for that BARBARA HUGHES USIA Representative: JOHN QUINTAS honor. From Yalta to Washington to to Paris to Retired Representatives: WILLIAM CALDERHEAD ROGER PROVENCHER London, serving under presidents from Roosevelt to John¬ JOHN THOMAS son, Mr. Harriman represented the ultimate pinnacle of Staff Director for the American ideal of public service. He was at all but one Administration: SUE B. SCHUMACHER General Counsel: SUSAN Z. HOUK of the post-war conferences, ambassador to the Soviet Director of Union, under secretary of state, ambassador at large, and Member Services: SABINE SISK Member Services special envoy to several negotiations, and all besides a Representative: GERALD M. KUNCIO Comptroller: ALICIA BREHM career that included service as secretary of commerce and Membership Coordinator: MYRIAM DUNCAN Executive Assistant: DENISE BYERS governor of New York. Like few before him or since, he Legal Assistant: CHRIS BAZAR seemed destined to carry the mantle of statesman. Law Clerk: JILL E. BROWN Executive Secretary: SHARON Y. MORGAN We at AFSA owe to him, and to his wife, Pamela, a Secretary: BONITA CARROLL special debt, for they adopted us and the professional Congressional Liaison ROBERT M. BEERS Foreign Service as special beneficiaries not only of their RICK WEISS philanthropy but of their philosophy of principled public Scholarship Programs DAWN CUTHELL service. It was Averell Harriman who conceived the con¬ Face-to-Face Program cept of rewarding responsible, creative dissent, for which STEVEN PHILIP KRAMER The American Foreign Service Association, founded in we annually present three awards, one in his name. And it 1924, is the professional association of the Foreign Service and the official employee representative of all was his wife, of course, who remembered the often unher¬ Foreign Service employees in the Department of State and the Agency for International Development under alded contributions of spouses to American diplomacy and the terms of the Foreign Service Act of 1980. Active membership in AFSA is open to all current or retired saw that they too were honored. professionals in foreign affairs overseas or in the Unit¬ ed States. Associate membership is open to persons “This nation has a proud tradition of citizen-diplomats having an active interest in or close association with who have contributed enormously to the security and well¬ foreign affairs who are not employees or retirees of the foreign affairs agencies. Annual dues: Active Mem¬ being of the ,” AFSA observed in conferring bers—552-117; Retired Active Members—$40 for members with incomes over $20,000, $25 for under; on Mr. Harriman an honorary life membership in 1985. Associate Members—$35. All dues include $9.50 al¬ location for JOURNAL and ASSOCIATION NEWS sub¬ “At this calibre, we’ll take all we can get.” scription under AFSA Bylaws. All AFSA members are members of the Foreign Service Club, owned and op¬ When Mr. Harriman died last summer at the age of 94, erated by AFSA.

AMERICAN FOREIGN SERVICE ASSOCIATION it was a loss not only to AFSA, to the Foreign Service, and 2101 E Street NW, Washington, D.C. 20037 to the United States, but a loss of one of the great men of Membership inquiries, comptroller, scholarship programs, insurance programs, the world. JOURNAL offices: (202) 338-4045 Governing Board, general counsel, labor-management relations: (202) 647-8160 member services, grievances: (202) 647-2548 Foreign Service Club: (202) 338-5730

OCTOBER 1986 3 People Moving Abroad Ask DISTRICT MOVING & STORAGE LETTERS How Can We Stop The Confusion Of What Goes Where?

Dear District Moving and Storage, tomer, with labels for separating Ratings & Careers and identifying materials.” Chaos. That’s what it is every “We hired them to press our trousers; now Another thought: time we move. This is unaccompa¬ they’re wearing them.’’ However unkind, “Place numbered signs on bed¬ nied baggage (air freight) —that this comment—spoken by an old school room doors and on other upstairs goes to post—this is stored —these elitist of administrators generally—evokes rooms (studies, etc.) for your ease are to accompany us. There must a certain sympathy among substantive of¬ in directing the packers, e.g. “pack be a way to stop the confusion and ficers in today’s Foreign Service. The tech¬ articles in room #1 first, then #4, make the move easier on all of us. nical advances that came to the State leave #3 to the last.” What are we to do. Department have, unfortunately, been ac¬ That’s just two ideas out of more companied by administrative gimmickry Signed Confused and than 60 “tips” from our free “New designed to “manage” every aspect of the Not Amused Assignment Abroad Checklist.” We Service, including the substantive. Yet believe you will find it “exceedingly management has failed in its primary re¬ helpful” as one correspondent wrote. sponsibility: monitoring the size and We are convinced that the check¬ shape of the staffing pyramid. To trim the list is one of the reasons foreign bulge at the senior level, management service people choose us over all made contract workers of all senior FSOs the others. and limited the service of FSO-ls. Reduc¬ Moving Roland Kates tions were achieved not through selection SjSdsr* Vice President out, but through contract expiration: the absence of action rather than action itself. District Moving and Storage The normal career as now projected by serves the foreign service com¬ management is a 20-year period ending munity throughout the Greater abruptly at the threshold of the Senior For¬ Washington area. Call or use the eign Service. Nonetheless, FSOs are gener¬ coupon below to receive your free ally prepared to compete for a full career, Dear Confused and Not Amused, checklist. We have been making even against such odds. But for the veteran Here’s the solution—and it works foreign service moves easier for FSO, the unkindest cut is the realization every time: more than 20 years. When it is that to prosper, he or she had best not dally “Before the packer arrives, seg¬ time for you to move let us put with the substantive skills of reporting, regate and identify materials accord¬ our experience to work for you. analysis, and negotiation, but move along ing to their ultimate disposition, smartly with the new one: housekeeping. i.e. (1) Unaccompanied Air Bag¬ The soldier-diplomat and the scholar-dip¬ gage (“air freight”), (2) HHE to be lomat have given way to the manager-dip¬ shipped to Post, (3) Effects and lomat. articles to be stored, and (4) Arti¬ ''DISTRICT The conduit to these newly coveted cles and items to accompany you MOVING &= STORAGE , INC. housekeeping assignments is the perform¬ in your own travel (“accompanied 3850 Penn Belt Place ance evaluation. Yet, as any selection baggage”). District Moving and Forestville, Maryland 20747 board member will tell you, the employee Storage will provide you, as a cus- 301•420»3300 evaluation report is fatally flawed. It has become the medium in which the Service’s more imaginative writers achieve some of If you're interested in receiving District Moving & their finest flights of fancy. EER prose is so Storage's FREE “New Assignment Abroad Check¬ list” Please call (301) 420-3300 or fill out this coupon debased that it is little more than nonsense and send to: District Moving & Storage Name to those faced with the deadly serious task 3850 Penn Belt Place Forestville. MD 20747 of rank-ordering their peers. To cope, the We're right on the beltway! Address selection boards became adept at drawing □ Yes. please send me the free “Checklist” de¬ scribed above. I will be moving soon, and am guidance from the tacit signals conveyed anxious to make my next move as easy ns City State Zip. through strategic omissions. But this possible. method, too, lost its effectiveness. Man¬ O Send me labels I can use to assist me in my move. Phone (D) _ agement attempted to restore a note of □ I am interested in more information about reality by requiring the raters to identify District Moving & Storage Please have your two areas in which rated employees might representative call me at the number below The best time to contact me is: improve their performance, but in practice

4 FOREIGN SERVICE JOURNAL A world class design makes Taurus a very diplomatic solution to your transportation needs.

As you pull into the driveways of various consulates, By designing each individual component and feature to you’ll have them wondering where, exactly, did your new be easier and better for you to use, the result is a better- Ford Taurus come from. Some may even insist it’s a product designed vehicle overall. of their country—that is, until they see the familiar blue The result is a new line of front-wheel-drive sedans oval on the back. and wagons that combine advanced technology with human Taurus: A new American design philosophy. need. Even its aerodynamic shape is part of its dedication to Even as the first engineers began work, over 400 function. Which means you can judge Taurus not only by specific objectives were being established for Taurus. how good it looks, but how well it works. So if your aim is to please just about everyone, and still The list was based on how you drive an automobile... please yourself, consider the new Ford Taurus. A very what you want from it...what you need from it. The list diplomatic solution to your transportation needs. included: How comfortable the seat belts are to wear; die effort required to open and close the doors; the DIRECT MARKET OPERATIONS convenience of checking the oil.

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WRITE TO: DIPLOMATIC SALES NAME FORD MOTOR COMPANY 815 Connecticut Avenue, N.W ADDRESS Washington, D.C. 20006 CITY STATE Tel: (202) 785-6047 COUNTRY ZIP those areas are of no real consequence. Thus, the EER remains an exceedingly blunt instrument when surgical precision is urgently needed. Having lost employee confidence in a time of heightened competition, the pres¬ ent evaluation system is in hopeless disre¬ pair. Unless it can be made to serve its Comfort Inn intended purpose, the EER should be Enterprise Square abandoned. The Service should look to the 1-66 and N. Glebe Road, Arlington, VA 22201 military, which not only has an equivalent 703-247-3399 or Toll Free 800-228-5150 of the EER, but also has after-action re¬ porting. All significant military engage¬ ments and events are reviewed, and the assessments produce recommendations CONVENIENCE: and assign credit or blame. There is a sense of reality and accountability that the For¬ Downtown — 5 minutes from eign Service might well emulate. In a Service that sees itself as an elite, Airports — Washington National (4.5 miles) positive performance should be regarded as Dulles International (17 miles) the norm—scarcely worthy of note—and poor performance should be the major stuff Metro — V2 mile from Ballston Metrorail Station with direct access to downtown Washington, Rosslyn and Crystal City of evaluations. If management can adapt this approach, it will have restored some Beltway — 1-66 and N. Glebe Road exit respect for the performance evaluation process and taken a significant step toward Attractions — Foreign Service Institute (3 miles), Pentagon (3.5 miles), a more responsible Foreign Service. Lincoln/Vietnam Memorial (3.6 miles), White House (4.5 miles), Department of State (4 miles), JOHN GRIMES U.S. Capitol (6.5 miles), Washington Monument (4.5 Foreign Service Officer miles), Jefferson Memorial (4.5 miles) Washington, D.C.

GREAT GOVERNMENT RATES: In recent years, notably since 1983, I have noticed an upturn in inflated efficiency re¬ 1 person $45.00 ports. This has reduced the value of such 2 persons 55.00 reports, forcing the promotion boards to COTS 5.00 Extra Person 5.00* make judgments largely on the basis of job content; promotion lists tend to confirm the assignment process. SPECIAL SERVICES: This inflation almost certainly reflects the slowdown in mid-level promotions • Complimentary continental breakfast for government employees • All charges may be billed through Diners Club that began when the new Foreign Service • Reservations may be confirmed automatically through any SATO office Act went into effect in 1981. The rate of • Conference space available for 6-10 people promotion from FS-1 to the Senior Foreign • Family plans available Service, for example, was cut in half from • Restaurant and lounge on premises (opening Summer ’86) 1981-84, and the effect has cascaded down • Complimentary cable w/HBO the line. The effects of the promotion • FREE Parking slowdown, as well as the shortage of limit¬ ed career extensions, are obvious. Uncer¬ tainty is rampant; AFSA estimates that roughly half of higher mid-level and senior officers are within three years of a thresh¬ old that could end their careers; the Service has divided into separate interest groups based on competition for assignments; the *10 commissionable to expression of independent thought is en¬ SATO offices and dangered; selfish and sometimes unethical Travel Agencies behavior is encouraged; and it becomes Offer expires 12/31/86 difficult to say with a straight face that we are a profession. This has damaging consequences not just for individuals but for the Service as a whole. The pressure to stay in the geo¬ graphic mainstream of embassy and coun¬ try desk is eroding the skills base of the

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The JOURNAL welcomes letters to the editor, but reserves the right to edit for clarity and space considerations. Send letters to 2101 E St., NW, Washington, D.C. 20037.

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OCTOBER 1986 9 You Can Put All Of Your Eggs BOOKS Into One Basket

With Interstate! Reviews Idealism and Imperialism: American We are the only carrier in the industry Diplomats in China, 1861—1898. By David that trains every packer and every L. Anderson. University of Indiana Press, mover . . .every day! This is why Interstate’s 1986. $24.95. service standards have become the benchmark for quality in interstate and international moving. This discussion of the eight ministers You may also store your valuable possessions in plenipotentiary sent to China during the temperature-controlled secured facilities while you are abroad. last half of the 19th century evokes a You have the choice! You have the right and you deserve it! simpler time, when communications be¬ Next time make the right move with the knowledge that you are in tween Peking and Washington could take the best trained hands in the business. three to six months, and when the diplo¬ mat on the spot had great latitude in de¬ In A Class By Itself. . . America’s Favorite Mover! ciding what his government’s policy was on a particular issue. But Idealism and Impe¬ rialism concentrates so heavily on personal¬ INTERSTATE ities that Anderson provides only a narrow view of U.S. policy. Moreover, little is Van oCintt Jnc. said about the internal events shaking Chi¬ 5801 Rolling Road. Springfield, VA 22152-1041 • (703) 569-2121 na during the period or about events occur- ing in other parts of the world. As a result, the book gives the impression that U.S. policy was more a product of individuals’ idiosyncrasies than of the larger sweep of FREE SQUASH* events. Anderson’s thesis—that U.S. China policy was pulled by the conflicting inter¬ MEMBERSHIPS FOR ests of idealism and imperialism—has oth¬ er problems. A fuller discussion of exactly AFSA MEMBERS how U.S. interests coincided with and dif¬ fered from the European nations’ interests would have been welcomed. “Imperial¬ ism” deserves to be better defined, but if one equates it with self-interest, or with feelings of technological or cultural superi¬ ority, as Anderson does, then the case that U.S. imperialism existed in China is not difficult to make. But is this saying very much? A more interesting question, but one AFSA members can now play squash at the Capitol Hill less fully explored, is the source of the idealism that keeps intruding on U.S. Squash Club without paying any membership or initiation policy in China—the idea that with hard fee. By simply showing your AFSA membership card, you will work, we could make Shanghai (in the pay only the court fees at Capitol Hill's most luxurious fitness words of one 20th century U.S. politician) facility. Located only a block from the Capitol South Metro “just like Kansas City." Whether self-serv¬ stop, the Club also offers free use of changing rooms, showers, ing or just plain naive, this idealism is a persistent feature of the way that we have and saunas before and after playing squash. *There is a $20 viewed China and continues, many would annual processing fee; some restrictions apply. argue, to the present. Although the author uses the opening chapter to discuss this Capitol Hill Squash & Nautilus Club idealism briefly in relation to the United 214 D Street, S.E. • (202) 547-2255 States’ frontier past, he so closely identifies it with individual personalities that, like

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Corns spend a few days with us. You will see our Name beautiful campus with its ranch style apartments, charming dining room, heated swimming pool, Address hobby and game room, and complete housekeeping City State _ Zip and linen service. Telephone ( □ Descriptive brochure Life is rich and full when you live at Visitation information GREY GABLES. □ Grey Gables of Ojai is not sponsored by, affiliated with or in any way related to the American Association of Retired Persons or the National Retired Teachers Association. U.S. policy itself, one feels it to be more an of NATO’s Harmel Report and the twin pil¬ individual characteristic than a national lars concept. The United States would still trait. Still, the current “opening” in China bear the global security burden, especially will make the book interesting to those in the Pacific. Schmidt asserts that “none who wonder what it was like to be in China of us will take major steps in the external when the territory was new and expecta¬ security sector without previously consult¬ tions were high. —RICHARD W. STITES ing our allies”—a disingenuous commit¬ ment rather easier for West or Japan to make than for the United States, A Grand Strategy for the West: The France, or Britain. Schmidt fails to see that Anachronism of National Strategies in an In¬ his focus on the equality of the pillars is terdependent World. By Helmut Schmidt. Yale misplaced. The disparity in power is man¬ "There was the University Press, 1985. ageable; it is the lack of agreement on what global edifice the pillars should support door to which I The 1985 Stimson lectures by the former that has always been the principal problem found no key—” West German chancellor are revised and of the allies. Edward Fitzgerald somewhat expanded in A Grand Strategy for Some of Schmidt’s proposals, including the West. Like most Europeans, Schmidt a U.S.—European Marshall Plan for Cen¬ places too much emphasis on the U.S. role tral America, are interesting, although ATTENTION... in the drafting of the North Atlantic Trea¬ never fully developed. Schmidt is at his ty. This tendency distorts understanding best in brief moments of reflection on the PEOPLE on the of what Canadian diplomat John Holmes as Germany’s neighbor and has rightly called one of the major preoccu¬ on the common interests of Eastern and MOVE... pations of the postwar period—the effort Western Europeans. Had he been more to keep the United States from withdraw¬ explicit in describing West German am¬ ing, as it did after World War I, from a bivalence to western integration, and had We specialize in sales political and military commitment to the he offered suggestions to the United States and property new international order. and its allies on how to contribute to a management in the The book’s major problems, however, peaceful overhaul of the postwar status occur with its handling of current issues. quo, that would have been A Grand Strate¬ Metropolitan Schmidt discusses Europe; then Latin gy for the West worthy of the name. Washington area. America, the Middle East, and the Far —EDWINA S. CAMPBELL East—“three regions outside NATO”; and finally economic issues, including the Cathie Gill has the key U.S. debt. The book thus falls victim to The Last Two Years of Salvador Al- to care-free services for Eurocentrism, of which Schmidt himself is lende. By Nathaniel Davis. Cornell Univer¬ all your real estate a critic. The most glaring example of this sity Press, 1985. $24.95. attitude is the author’s assertion that not needs. until after World War II did the United “Was the United States directly involved, States recognize its strategic interests in covertly, in the 1973 coup in ? The the Pacific and the Caribbean. Apparent¬ committee has found no evidence that it ly, American Atlanticists have done such a was.” Thus concluded the 1974 report of Personal attention good job of convincing Europeans that the the Senate Select Committee on Intelli¬ gets results. United States is committed to “Europe gence (the Church committee) after an ex¬ first” that even leaders like Schmidt fail to amination of hundreds of top secret docu¬ understand that the exact opposite has ments from the State Department, the Call characterized all but 20 years (1946—66) of CIA, and the Pentagon. Later, the com¬ U.S. history. mittee chairman, in a letter to Secretary of Unfortunately, the chancellor does no State Vance, absolved former Ambassador CatftieCMmc. more than hint at his disappointment with to Chile Nathaniel Davis of any covert ef¬ R E-A LTORS the United States. He comes closest when fort to subvert the elected government of describing himself as a “francophile Ger¬ Chile and, in fact, found that he had op¬ 4801 Massachusetts man political leader,” but this actually posed such a conspiracy and had sought to outlines his disenchantment with the Brit¬ retain correct relationships with the host Ave., N.W. ish more clearly than his disillusionment government at all times. Some skeptics Suite 400 with Washington. And he recommends were not entirely convinced by the com¬ only aged panaceas—greater consultation, mittee’s findings, especially since the same Washington, D.C. firm leadership, press-free summits— report revealed the unsettling story of how 20016 rather than tackling the growing percep¬ the CIA had tried to organize a coup to tion of both Europeans (particularly those prevent President Salvador Allende from (202) 364-3066 on the left) and Americans (particularly on taking office in 1970. the right) that NATO may no longer be rel¬ Now, Davis gives his own account of evant. these historic events and of the role he Schmidt offers 19 proposals in his played. He lays to rest (for this reader any¬ “grand strategy,” including reaffirmation way) any lingering doubts about U.S. gov-

12 FOREIGN SERVICE JOURNAL ernment activities in Chile at that time. the controversy over the ethnic Chinese Written a dozen years after the events, and the war in Kampuchea. The territorial Davis’s rendition is calm, dispassionate, dispute centers on the border separating and unexpectedly sympathetic to the Al- northern Vietnam from China's Guang- lende who dreamed of a “Chilean way”—a don, Guangxi, and Yunnan provinces; the peaceful road to socialism without vio¬ Gulf of Tonkin; and the Spratlies and Para¬ lence, coercion, or the dictatorship of the cels islands in the South China Sea. The proletariat. In contrast, Davis is a sharp dispute, according to the author, is a critic of the other Allende, whose high¬ symptom of Hanoi’s move away from alli¬ handed and short-sighted methods con¬ ance with China. Hanoi, however, prob¬ tributed to his final downfall. In addition ably did not expect the dispute to erupt to its historical interest and its fascinating into war as it did in 1979. Yet the stance of portrayal of the ill-fated president, the both countries has toughened since that book reveals a good deal about the author, time, with compromise unlikely, and the who emerges as a dedicated, seasoned pro¬ possibility of war erupting once again like¬ fessional, a diplomat who under difficult ly indeed. circumstances never neglected his mission to protect the interests of the United States nor lost his admiration and alfection for Chile and its people. —JOHNJ. CROWLEY rab a new lease From the Think Tanks on life-style. Hard Bargaining Ahead: U.S. Trade Policy and Developing Countries. Edited by Ernest H. Preeg. Overseas Development Coun¬ cil. U.S.-Third World Policy Perspectives The St. James offers the finest zations, who frequently entertain #4, 1985. 224 pp. This volume of essays in furnished accommodations out-of-town guests and executives. by trade experts from both government and services, with the ameni¬ Overlooking Washington Circle, just (the editor is a career FSO) and academia ties of a premiere Washington one half block from Metro Rail. analyzes the current North-South trade di¬ residence. Now leasing: long- and lemma: developing countries seek to solve Located in the quiet residential short-terms at extremely at¬ problems of debt and unemployment by neighborhood of Foggy Bottom, the tractive and flexible rates. For expanding exports, but at the same time, St. James, at the corner of 24th & K more information, and a tour of our industrial countries are limiting imports. Streets, offers a totally new concept model units, call our sales office at The authors consider whether an export- in long- and short-term residential 223-2202. oriented strategy is necessarily appropriate for all developing countries, the degree of leasing. This elegant all-suite resi¬ competition presented by the rapid indus¬ dence provides daily maid service, trialization of developing countries, the Concierge service and travel plan¬ bleak trade prospects for the poorest coun¬ ning assistance. tries, the erosion of the most-favored-na- The St. James is ideal tion principle, and the weakening of the for individuals General Agreement on Tariffs and Trade. and organi- These problems should be addressed, say the authors, through such measures as re¬ storing most-favored-nation treatment as the overriding principle for international trade, broadening the scope of the GATT, establishing mutual access to markets, working together to improve the condi¬ tions of the poorest nations, curtailing the stop-gap measures for economic adjust¬ ments that have recently become the norm, and adjusting internal policy to world economic changes.

The Sino-Vietnamese Territorial Dis¬ pute. By Pao-min Chang. Washington Pa¬ pers #118. Center for Strategic and Interna¬ tional Studies, , 1986. 94pp. This monograph deals with only one element of Sino-Vietnamese tensions, al¬ though the author does touch briefly on

OCTOBER 1986 13 Cindee, and Vicki, etc., and noted ap¬ provingly that everyone seemed to be hav¬ AUTHORIZED EXPORTER ing fun.’ The Washington Post, GENERAL ELECTRIC August 2 -U.S.A.- CLIPPINGS Reliable Sources

“U.S. Information Agency chief Charles Z. Wick has ordered a formal investiga¬ GENERAL ELECTRONICS Government Leaks tion into the activities of Gregory Guroff, INC. the deputy coordinator of President Rea¬ “ [R.-North Carolina] has gan’s Soviet Exchanges Initiative, accord¬ been called the only senator with his own ing to a USIA spokesman. REFRIGERATORS • FREEZERS foreign policy, and periodically over the “The investigation apparently includes RANGES • MICROWAVE OVENS last five years, he has used the rules and an inquiry into why Mr. Guroff was al¬ AIR CONDITIONERS • DRYERS customs of the Senate to delay, and occa¬ lowed to live with Soviet relatives in Mos¬ WASHERS • SMALL APPLIANCES sionally derail, a series of diplomatic cow—a departure from U.S. security pro¬ AUDIO EQUIPMENT • TELEVISION nominations cedures—while he was assigned there DISHWASHERS • TRANSFORMERS “Mr. Helms’s running battle with the ‘Our security office broke every single State Department erupted on another front rule by allowing someone who has blood Available for All Electric in the last week, with the disclosure that relatives in an Iron Curtain country to be Currents/Cycles the Federal Bureau of Investigation is ex¬ assigned there, and to live with them,’ said amining allegations that the senator or one the source, who asked not to be identified. Immediate Shipping/Mailing of his aides had passed sensitive intelli¬ ‘It’s never been done before; it’s a breach of From our Local Warehouse gence information to the Chilean govern¬ our security and personnel rules.' ment. The investigation was requested by The Washington Times. July 30 We Can Also Furnish the Senate Select Committee on Intelli¬ Replacement Parts for gence after it received evidence from the “The Reagan administration yesterday de¬ Most Manufactures State Department that a leak had oc¬ nied that Gegory Guroff.. .lived with rela¬ curred.” tives in Moscow in violation of State De¬ SHOWROOM Steven V. Roberts in the partment security rules. Mr. Guroff... told General Electronics, Inc. New York Times, the Washington Times in a July 28 inter¬ 4513 Wisconsin Avenue, N.W. August 3 view that he resided with Soviet relatives Washington, D.C. 20016 while a USIA employee in Moscow from Tel. (202) 362-8300 “The leaks that infuriate the administra¬ 1982-85.” TWX 710-822-9450 tion often have nothing to do with national The Washington Times, August 8 GENELECINC WSH security, but only with political embar¬ rassment. The State Department fired a Resisting Reagan middle-level functionary because he leaked a telegram from the American ambassador “Ironically, the most damaging opposition in Argentina criticizing the behavior of a to [the Reagan Doctrine] has come from to T3 visiting congressional group led by the within Reagan’s own State Department. CD Q Speaker of the House himself... .The State Even congressional liberals have been more §§ Department leaker no doubt thought he cooperative: At least some liberal-Demo- O © would embarrass the congressmen. The cratic congressmen support each of the re¬ © ^ embarrassment ran all the other way.” sistance movements; the State Department tr o C0 Pat M. Holt in the at one point or another has effectively op¬ o> Christian Science Monitor, posed, or at least resisted aiding, all of u.

14 FOREIGN SERVICE JOURNAL matic Reagan loyalist. This fight, for in¬ stance, began over his disagreement with the White House over policy toward Chile. What means most to you means most to us. “But the North Carolinian’s counter¬ punches may be going beyond the pale. After alleging that the Central Intelli¬ gence Agency may be spying on him, Sen¬ ator Helms blocked Senate action on the intelligence spending bill. And he charges that the State Department is coordinating a plot to ‘get’ him.” The Wall Street Journal, August 13

Diplomatic Immunity

“ under the prevailing law of diplomat¬ ic immunity, the embassy is a sanctuary; there is no recourse against the so-called 'diplomat’ except expulsion. I think we should examine, very carefully, the whole idea of diplomatic privilege extending to support of terrorism. Surely, we can pre¬ serve the good purposes of the doctrines of sovereign and diplomatic immunity with¬ out cloaking terrorists in those privileges. ” Caspar W. Weinberger before

the American Bar Association, No matter where you’re headed Guardian Storage June 5 knows just what it takes to make sure all your personal possessions arrive intact, undamaged, and ready for “The yin and yang configuration should, use. ideally, provide a necessary component of If you’re leaving personal possessions here at home, views that allows all possibilities to receive you can be sure they will be carefully stored in proper consideration. When Weinberger Guardian’s protective containers. criticized the practice of diplomatic im¬ Guardian’s experience, thoroughness and care, munity, however, he was not pursuing a ensure the most delicate handling of your possessions policy quarrel with Shultz and the State because... Department; he was rashly calling into What means most to you means most to us question the convention that makes mod¬ ern diplomacy possible." The Boston Globe, July 21

Drug Testing “Secretary of State George P. Shultz, who GUARDIAN STORAGE, INCORPORATED late last year said he would quit if asked to OLD WASHINGTON ROAD, WALDORF, MARYLAND 20601 • TEL. (30H 645 4040 • (WASH. TOLL FREE) 843-6606 take a lie-detector test, is willing to sub¬ mit to drug testing, his spokesman said yesterday He will take it. The department sup¬ Coming home—Going overseas? ports the president’s initiative against drugs,’ said [State Department spokesman Buy from the Charles] Redman. In seeking mandatory Washington area’s largest drug tests for federal employees in sensi¬ tive posts, Reagan said he and the rest of AMC his cabinet might take the tests, which Jeep • Renault customarily consist of a laboratory analysis ■ Choose from our complete line of of a urine sample.” Dealer * 4-wheel drive Jeeps, AMC Eagles The Philadelphia Inquirer, August 6 I —plus the new Renault Encore n COURTESY | and Alliance. Local or overseas CLIPPINGS records statements in the media on the . delivery. Diplomatic corps dis- Foreign Service andforeign affairs. Readers are AMC • Jeep • Renault * counts. Daily and weekly rentals invited to submit contributions from their home¬ | available. Phone or write Dick 755 Rockville Pike, Rockville, Md. 20852 town newspapers. I Schmactenberg, (301) 424-1700

OCTOBER 1986 15 is ■ >000* ag that existing furniture and equipment be used wherever possible “and that this legal obligation be considered in the design of new facilities.” The call for the establishment of an Temporary Lodging CONGRESS independent inspector general by October in Washington, D.C. 1 is “due to the failure of the Department An alternative for the prudent spender. of State to fully organize the Office of In¬ spector General as called for in the Foreign Affairs Authorization Act” for fiscal years Security Finale 1986 and 1987. “It is the concern of the [conference committee] that the Depart¬

By LAWRENCE L. KNUTSON ment of State is being appropriated sub¬ stantial sums for building and security In August, Congress gave final approval to programs and that no full justification for legislation authorizing a $2.4-biliion, continued funding can be made without five-year program to bolster security at the presence of an aggressive, competent If your stay in Washington is U.S. diplomatic posts around the world. inspector general to inspect the terms and a month or longer, spread That amount represents a compromise be¬ conditions under which these sums are be¬ out in a spacious apartment tween the House, which had voted to au¬ ing obligated,” the committee's report and enjoy all the comforts of thorize the entire $4.4 billion the State said. Members of the Foreign Service are home. Walk to the Rosslyn Metro or to Georgetown. Department originally had requested, and specifically excluded from serving in that TLC is a full-service real the Senate, which—citing the severe bud¬ position. estate company. Sales * get limitations caused by the Emergency The legislation also has these other fea¬ rentals * property Deficit Reduction Act (or Gramm-Rud- tures: management man-Hollings)—voted to limit total ■ Provides compensation of $50 a day ni spending to $1.1 billion. The legislation for the hostages held at the embassy in Development Corporation also orders the installation of an inde¬ Tehran. The $50 figure is the result of a 1700 North Moore Street pendent State Department inspector gen¬ compromise between the Senate version of Suite 714 Arlington, Virginia 22209 eral to ensure that the security money is the bill, which had no such compensation (703)527-4441 spent in the most effective and cost-con¬ plan, and the House bill, which contained scious manner. At the same time, a House a higher figure. Representative Patricia committee severely questioned the depart¬ Schroeder (D.-Colorado) said the provi¬ ment’s ability to spend the money effi¬ sion’s approval ends “a scandalous delay”; ciently, declaring in a report that many ■ Provides health and education bene¬ recent diplomatic construction projects fits for future hostages and their families. aswftfti have been "plagued by substandard de¬ Representative Olympia Snowe (R.- sign, poor contracting procedures, shoddy Maine) told the House that during their workmanship, inadequate management, captivity the Tehran hostages often were SSlk MERCEDES™ lengthy delays, and major cost overruns.” most concerned for the well-being of their The legislation implements the princi¬ families. "The benefits.. .will not only as¬ Sli. MERCEDES pal recommendations of the Inman panel, sist the family members who receive them, FREE! NEW CAR CATALOG setting up a Bureau of Diplomatic Security but will also provide future hostages with BUY DIRECT and a Diplomatic Security Service and spe¬ the peace of mind necessary to cope better The comprehensive NAI Master Catalog contains 32 pages, over 150 illustrations. DIPLOMATIC and FACTORY cifically directs the department to install with their perilous situation,” she said; tax-free prices, equipment, options, colors, and all the de¬ tails on how to order your car at these special savings metal detectors at the entrances of all over¬ ■ Provides short-term fellowships at The Nemet Organization has been meeting the needs of Americans throughout the world since 1916 You will have seas missions. It directs the secretary to U.S. diplomatic missions in the Soviet your car. waiting where you want it. STATESIDE OR IN EUROPE—when you want it, all serviced and ready to go at establish an Office of Policy and Program Union and Eastern Europe to U.S. citizens special factory prices Review to, in the words of the conference with academic or other expertise in the Buy your new car from Nemet because we'll be here when you get home. report on the legislation, “review activities culture and languages of the region. In and operations under authority of chiefs of return for “first-hand exposure” to the mission to ascertain their consonance with country, these individuals would help re¬ Please send me a FREE copy of your FSJ-1281 32 page Master Catalog. U.S. foreign policy and their consistency move an espionage threat said to be posed I am interested in: Stateside Delivery with the responsibilities of the secretary of by Foreign Service nationals; European Delivery AUDI MG RENAULT state and the chief of mission.” Many ■ Authorizes $62.5 million during fis¬ BMW MERCEDES TRIUMPH DATSUN PEUGEOT VOLKSWAGEN members of both the House and Senate cal years 1987—91 to improve security at FIAT PORSCHE VOLVO JAGUAR foreign affairs committees had expressed U.S. and foreign seaports; Name _ Rank _ concern that the department was includ¬ ■ Authorizes $ 130 million for the Peace Social Security No . Date of Birth _ ing in its requests for security funding mil¬ Corps in fiscal 1986 and $137.2 million in Address lions of dollars for new furniture. The fiscal 1987; Date of Rotation . Forbids using any of the funds to con¬ Delivery Place - House-Senate conference committee stated ■ Nemet Auto International that it is the “strong presumption of law” struct diplomatic facilities in Israel. This World s Largest Distributor of Tax-Free Cars provision, drafted by Senator Jesse Helms ^ : ^.153-03 Hillside Avenue, Jamaica, New York 11432 NEMET y Telephone (212) 523-5858/Cable NEMETAUTO Lawrence L. Knutson covers Capitol Hill for (R.-North Carolina), is intended to force IV y Toll Free 800-221-0177 the Associated Press. the relocation of the U.S. embassy from

16 FOREIGN SERVICE JOURNAL Tel Aviv to Jerusalem, a step opposed by the State Department and the Reagan ad¬ ministration as likely to enflame the Arab The Intelligent Alternative world, which does not recognize Jerusalem as the capital of Israel; ■ Establishes U.S. legal jurisdiction to Overpriced Hotels. over terrorist crimes against all U.S. citi¬ zens, expanding the present law, which Now you can enjoy more than twice the living space of an ordinary hotel only covers murder and assault against room at less than one-half the cost.* And still have all the services and high-ranking U.S. officials; luxuries you need: 24-hour switchboard, maids and linens; outdoor swim¬ ■ Lays down ground rules encouraging ming pool and whirlpool; indoor Health Club with sauna; Computer Room the award of construction contracts in the and Conference Room with catering kitchen. There’s a complimentary security-enhancement program to U.S. Continental breakfast. Children and extra guests are welcomed and there contractors. is no charge for parking. All located off Washington Boulevard opposite The House Government Operations Fort Myer and minutes from the District, the Pentagon, Crystal City and Committee, meanwhile, issued a report National Airport. harshly criticizing the performance of If you are transferring into the Washington area or are here temporar¬ State’s Office of Foreign Buildings. It bore ily on company or government business, call The Executive Club today. You can take advantage of our reduced Grand Opening rates while you the title, “Serious and Longstanding Defi¬ enjoy a full sized apartment suite. ciencies Plague the State Department’s Overseas Construction Operations.” The report looked in detail at two construction projects in Cairo: the ambassador’s resi¬ The Executive Club dence and a new chancery. It said that the Arlington residence originally was to have been com¬ pleted in two years at a cost of about $2 million. ‘‘Plagued from the start by design 108 South Courthouse Road deficiencies and lax contract management, Arlington, Virginia 22204 the residence was still incomplete after nearly five years despite the expenditure of (703) 522-C L U B (800) 535-C L U B $3.6 million — The workmanship was so shoddy an estimated additional $930,000 Brokers Welcomed *Based on minimum 30 day lease. would have been needed just to make the residence habitable.” Instead, it said FBO abandoned the project, selling the land and the partially completed building. “Among the most blatant cases of shoddy WANTED work was a bathtub drain pipe that emp¬ Information leading to Foreign Service Officers tied directly onto a bedroom balcony.” As known to be owners of condominium units and single for the Cairo chancery, the report said that family homes held for purposes of investment, tax it was to have cost $27.6 million and to have been finished by January 1986. “By shelter and other means leading to independence and March, the project was only one-third self-reliance. complete despite the expenditure of some $16 million, and the total estimated cost for completion has now exceeded $45 mil¬ “THE CLARKE LOOP” lion.” Organized by and for the investor, and others who According to the report, the alleged de¬ ficiencies in the Cairo project are not iso¬ prefer the boutique to the warehouse. The “Clarke lated incidents. It said projects in Khar¬ Loop” has it all: a “market-within-a-market”, a net¬ toum, New Delhi, and Hong Kong “also work of the likeminded buyers and sellers, short-term, have been plagued with problems.” The (while you’re overseas), long term. A professional, committee strongly recommended that State draw on the management resources of one-on-one relationship with the broker who also the Army Corps of Engineers as the con¬ owns investment property! Better than MLS, better struction program begins in earnest, and than 12 offices, better than 400 agents. What you get said that for the program to succeed, a is Good Faith ... Good Will... and Real People. “tremendous improvement in FBO’s per¬ formance” is required. Said Chairman Jack Brooks (D.-Texas): “The Office of Foreign Buildings is not just wasting money, it is ($6/6 cfP/Kcorm// ^ _ 4 ?((6 jeopardizing efforts to provide the in¬ creased security needed for U.S. diplomat¬ WasAwgtofi/, 06(6200/6 ic personnel serving their country over¬ f202j S6'4 S/zf seas. My concern is that continued

OCTOBER 1986 17 mismanagement of construction projects by FBO may cost lives.”

Angry Accusations: A long-smoldering hostility broke into flames in August when Senator Jesse Helms angrily accused a sen¬ ior departmental official—a Reagan ap¬ pointee—of carrying false tales about him to the Senate Intelligence Committee, thereby triggering an FBI investigation. The controversy has its roots in a trip Helms took to Chile, where he said Am¬ bassador Harry Barnes should be sent home for having allegedly “planted the American flag in the midst of a communist rally,” by attending the funeral of Wash¬ ington resident , 19, who—according to his mother, a po¬ FOREIGN litical exile—was set on fire by Chilean soldiers when he attended an anti-govern¬ SHOPPERS ment protest while visiting his homeland. The Ultimate Service The department backed the ambassador’s From Argyles to Zippers action, saying that Barnes’s attendance at the funeral had been cleared in Washing¬ or whatever you’re missing or wanting, we will buy, pack, and ship to ton and that he had the complete confi¬ you. We’re the biggest “catalog” in the United States; because we’ll find dence of the president {See DESPATCH]. anything you want and send it to you, properly packed and promptly! On August 3, the New York Times Send for an order form. And ask about our Flower Power Plan. quoted unnamed sources as saying the Sen¬ ate Intelligence Committee had asked the FOREIGN SHOPPERS Justice Department to investigate allega¬ Suite 703, 1510 N. 12th St. tions that Helms or an assistant had leaked Arlington, VA 22209 information related to U.S. intelligence¬ gathering operations in Chile to that coun¬ try’s government. Other publications later quoted U.S. government sources as saying WASHINGTON, D.C. BOUND? that Christopher Manion, a Helms aide on the staif of the Senate Foreign Relations Committee, had told a Chilean official DRIVE A BARGAIN that the United States had obtained a copy RENT-A-USED CAR RENT-A-NEW CAR of a secret Chilean report on Rojas’s death from $12.95* per day from $15.00* per day that confirmed accusations that he had Ideal When Shipping POV or on Home Leave been burned by Chilean soldiers. ’Restrictions apply, call for details On August 7, Helms released a 20-page document attacking State Department FREE PICK UP AT NATIONAL AIRPORT & METROS policies toward Chile, declaring that “a coalition of the media, the Marxists, and 683-6400 the State Department is seeking to desta¬ 2850 Jefferson Davis Hwy., Arlington, VA 22202 bilize the transition to a full-fledged de¬ mocracy in Chile.” He accused Elliot Abrams, the assistant secretary of state for Inter-American Affairs, of coming to the committee “in the dead of night” to spread “a deliberate falsehood.” Helms told re¬ AFSA ANNUAL porters, “They are trying to intimidate me, and it’s not going to work They are MEETING trying to silence me.” Helms said depart¬ ment officials were angry with him for de¬ laying a number of nominations over the last several years. He said that of the 622 AFSA's annual membership meeting will be nominations considered by the Foreign held on Tuesday, November 18, at 12:00 noon Relations Committee during the Reagan in Room 1408 of the Department of State. administration thus far, he has held up only 19, or three percent. “Is that unrea¬ All members are cordially invited to attend. sonable?” Helms asked. “Maybe I should increase that percentage.”

18 FOREIGN SERVICE JOURNAL \ EXECUTIVE APARTMENTS, INC. THE HOTEL ALTERNATIVE BUY • Crystal City 10-25-50 • Complete relaxing work and living environment SELL • Fully furnished suites, phone, 24-hour security, maid service, parking Foreign Service Journal, October 1976: “Our building had another interesting INVEST SHORT TERM RENTAL IS OUR SPECIALTY tenant. Directly above USIS were the of¬ (703) 486-0825 fices of the Greek intelligence organiza¬ Suite 525,2341 Jefferson Davis Hwy., Arlington 22202 tion. I expected to be warned about tele¬ Ed Joyce phone tapping or wires in the walls or Retired FSIO something, since they were separated from LICENSED IN D.C. us only by the concrete ceiling, but no one and VIRGINIA 00 S V13HVUI Table ever mentioned any security problem. 6 Premium Select USIS had few secrets anyhow, and if the / ? €jaliftfcnia local media asked questions we responded 7 quite volubly. If they did not ask, we OMOUNT U i thrust information upon them. We were IRAHETA & CO. WORLD WIDE DELIVERY givers, not takers.” ^VERRONJ Edward Devol Assorted Shipments Our Specialty CREALTY m Foreign Service Journal, October 1961: V-'NO ^ Wines • Champagnes • Wine Cooler • Mineral Water • Natural Juices “[September] was a month when: 6257 Old Dominion Dr.

Write to: ■“Even long-suffering wives were McLean, Va. 22101 Carlos A. iraheta 2409 Ensenada Way (415) 570-6545 objecting strenuously to the regularity of Off: 821-8300 San Mateo. CA 94403 Telex 287316 the eight-day week many husbands were Res: 821-2109 working at New State; ■“Decision-making too often took on the appearance of government by seminar; The Journal needs ■"FSOs returning from brief holidays SHOP IN AN AMERICAN book reviewers. were unable to find their desks for the litter of paper that had accumulated in DRUG STORE BY MAIL! If you are overseas their absence; An ice cream soda is one of the or stateside; active ■"Fallout and chances of survival in the few items we cannot mail. Drugs, event of attack were much discussed and a or retired; in AID, cosmetics, sundries variety of do-it-yourself shelters were be¬ State, or USLA; etc. mailed to every coun¬ All are welcome. ing sold, ranging in price from $200 and up.” try in the world. We Call 338-4045 or Gwen Barrows maintain permanent Write Books, FSJ, in Washington Letter family prescription 2101 E St., NW records. SEND NO Washington, DC 20037 Foreign Service Journal, October 1936: MONEY — pay only after satis¬ “Before the week is out American authori¬ factory receipt of order. ties in Spain will have completed the ex¬ tremely difficult and nerve-racking task of Riverside Liquors evacuating American refugees from that Serving the Foreign Service tor over 55 years war-torn land. Those who insist on re¬ maining will do so at their own risk 2123 E Street, NW at Virginia Ave. “With courage, resourcefulness, and (across from the State Department on F Street, skill, members of the American embassy at next to Peoples Drug Store and State Plaza) Madrid, and American consular officials 5% off on regular low prices on liquor and wines upon presentation of government ID throughout the country, set about round¬ ing up the stranded, providing shelter for No discount on sale items them until means of egress from Spain had been made available, and seeing that they Wide variety of domestic and imported got away safely. As a group, they have BEERS * WINES * CHAMPAGNE Morgan Pharmacy™ Complete selection of whiskeys and liqueurs lived up to the highest standards of our Foreign Service and have performed a task 3001 P Street, N.W. 338-4882 of which all Americans may be proud.” Washington, D.C. 20007 The Washington Post

OCTOBER 1986 19 Iowa, where the speech was given. He said the Foreign Service because of anonymous the article had been read to him by a mem¬ criticism of him by former collea¬ ber of the magazine’s staff. But the editor gues ‘There is life after diplomacy,’ he of the magazine denied that any member of said. 'I am screwed but happy.’” the two-person staff had talked with any DESPATCH reporter from the Times. The story in ques¬ Drug-testing Flashback tion does say that Guroff “has lived in the Soviet Union,” and a transcript of the President Reagan was speaking to a recep¬ speech supplied by USIA contains an anec¬ tive audience last summer when he called dote about living with his relatives there, for a six-sided approach to the national Diplomats in Trouble but Struck apparently made the false con¬ drug-abuse problem, but one aspect of clusion that the living arrangement was Reagan’s solution caused some consterna¬ Four diplomats have come under fire in during Guroffs embassy tour in 1982—85, tion in Washington: his call for mandatory recent months for independent reasons. though in fact it had occurred before he drug testing for all federal employees in Three found at least some official support entered government service and was there¬ safety or security-related occupations. from within the Foreign Service, the other fore perfectly legal. When asked about Probably the entire Foreign Service would was removed from his post by his agency. Simpson’s denial, Struck said that he is not be included in this group of more than one Ambassador to Chile Harry Barnes Jr. sure whom he talked to at the college. In million workers. The president urged vo¬ was accused of “planting the American flag addition, Guroff denied that he told luntary tests for all other government em¬ in the midst of communist activity” by Struck that he had lived with his relatives ployees, and 78 members of the White Senator Jesse Helms (R.-North Carolina) while posted to Moscow, and the depart¬ House from Reagan on down voluntarily for attending the funeral of a Washington- ment also denied that it had confirmed the submitted to urine tests. A White House area political exile who died after Chilean living arrangements with Struck. As for spokesman told reporters that supervisors soldiers allegedly poured inflammable liq¬ USIA’s long delay in exonerating Guroff, a would be notified if employees refused to uid on him and set him on fire. Several spokesman blamed it on bureaucratic red take the “voluntary” tests. witnesses confirmed the act, which took tape. Reagan’s call dusted off the moribund place at an anti-government demonstra¬ Christopher Paddack, a Foreign Service recommendation made in a report by his tion on July 2. officer in USIA, was ordered by a federal Commission on Organized Crime last The State Department said that Barnes's district court to repay his agency March [DESPATCH, December], which had attendance at the funeral "was cleared in $11,178.30, the difference between the appeared headed for oblivion. In fact, the Washington” and that the diplomat “is cost of a cruise on a Mississippi River luxu¬ author of the report later backtracked and one of the most experienced and ablest of ry steamboat between New Orleans and said testing would not be mandatory and U.S. ambassadors." Assistant Secretary for his home in Iowa for him and his family himself refused to take a test because there Inter-American Affairs Elliott Abrams and the equivalent trip by rail. The trip was no “probable cause” that he was using said he also had personally cleared Barnes’s was “an unprecedented use of a ship for drugs. action. The White House said that the intracontinental travel,” said U.S. Attor¬ Four federal-employee unions, includ¬ ambassador had engaged in “a humanitar¬ ney John Bates. Paddack had argued that ing AFSA, supported Reagan’s call for a ian gesture” and that Barnes retained "the Foreign Service regulations—since drug-free workplace but panned the test¬ full confidence of the president.” As for amended—permitted ship travel; he had ing program. Such testing would indeed Helms, he said from , “If Presi¬ in fact received explicit permission to take appear to be a violation of the Fourth dent Reagan were here, I believe he would the cruise and his embassy in Uruguay Amendment, which prohibits the govern¬ send this ambassador home.” even purchased the tickets. The Foreign ment from conducting searches and sei¬ Gregory Guroff, deputy coordinator of Service Grievance Board had earlier agreed zures without probable cause of criminal the U.S.-Soviet Exchanges Initiative in with Paddack, overruling the comptroller activity. Critics also pointed to possible USIA, came under heavy fire from the general and the agency on the case [DES¬ violations of the Fifth Amendment stric¬ Washington Times for supposedly giving a PATCH, May]. The district court decision ture on self-incrimination as well as the pro-Soviet speech and for living with his supersedes those decisions. Constitution’s assumption of innocence. Russian relatives while posted to the em¬ John Ferch was removed from his job as Federal courts have ruled that mandatory bassy in Moscow. The Times printed three ambassador to Honduras, and administra¬ testing without probable cause, even stories and an editorial charging that he tion officials told reporter Roy Gutman of where safety is at issue, is unconstitutional lived with his relatives while a government Newsday that the firing was a result of “sig¬ in the case of government employees, and employee, including supposed confirma¬ nificant” morale problems in the embassy two unions are suing their agencies on tion by both Guroff and an anonymous that were the result of his management. those grounds. State Department official. It also printed a “He was also faulted for strained relations Although Reagan may decide to imple¬ derogatory editorial cartoon. Ten days with the Honduran military and with the ment a testing program through an execu¬ after the first article appeared, however, large CIA station in Tegucigalpa,” Gut¬ tive order, he would have a difficult time the Times printed a report that the State man wrote. The same officials lauded his getting one through Congress. Represen¬ Department and USIA had denied that political skills. For his part, Ferch said tative Patricia Schroeder (D.-Colorado), Guroff had ever lived with his relatives that the United States was not really inter¬ chair of the House Subcommittee on the during his embassy posting. ested in a negotiated settlement to the Civil Service, is vehemently opposed to Reporter Myron Struck told the JOUR¬ Nicaraguan problem and that it would testing, believing the money would be NAL that his sources for the allegation seemingly prefer a “proconsul” who will better spent on law enforcement and edu¬ about the living arrangements were Guroff placate the Honduran military and give cation. A report from her office says that as himself and an article that appeared in the orders to the civilian government there. many as half a million employees could be alumni magazine at Simpson College in Ferch told Gutman he is “ ‘fed up’ with falsely implicated by inaccurate tests.

20 FOREIGN SERVICE JOURNAL PLUNDERERS & PILFERERS

The United States has had trouble with its authoritarian allies, who frequently make off with millions

GEORGE GEDDA

THE DEMISE LAST FEBRUARY of the Duvalier allies. A decade ago, the French found themselves in and Marcos regimes once again calls atten¬ this position when President Jean-Bedel Bokassa of tion to the phenomenon of the political pil¬ the Central African Republic—a former French colo¬ ferer, that historically ubiquitous figure ny—felt unfulfilled despite his nine wives, 30 chil¬ guided by the twin passions of power and plunder. dren, and exalted political status. He decided to be¬ Such persons do not recognize the words “prudence” come an emperor, and, undeterred by the widespread or “moderation,” and the greediest of them often pre¬ suffering beyond the palace gates, spent $20 million side over the neediest countries. In the case of Jean- on his coronation, including $145,000 for a robe Claude “Baby Doc” Duvalier, it is said that he fled adorned with two million pearls and crystal beads. Haiti with $400 million, a tidy sum in a country Although Bokassa has long since been deposed, his where the per capita income is only $300. Western southern neighbor, Zaire’s Mobutu Sese Seko, rules diplomats said that just two months before Duvalier’s on, running what a Belgian newspaper once called a fall, his wife, Michele, and a score of friends flew to “kleptocracy.” Mobutu, who has built 11 palaces, is Paris on a shopping spree that cost $1.5 million. Next one of the world’s richest men with a reported $3 to President Ferdinand Marcos of the Philippines, billion in assets. however, Duvalier was a penny-ante pilferer. The The Caribbean also was once fertile ground for most conservative estimates put Marcos’s wealth at $5 showy strongmen. Cuba’s Fulgencio Batista was billion, more than the gross national products of known for his ostentatious living. When Venezuela’s scores of nations, and more than twice the total mili¬ Marcos Perez Jiminez fled Caracas in 1958, a year tary and economic aid the United States sent to the before Batista’s downfall, he took suitcases filled with Philippines between 1962 and 1984. Imelda Marcos cash, inadvertently leaving behind one with $ 13 mil¬ left behind enough shoes to change each day for nine lion. The late Nicaraguan President Anastasio So- years without wearing the same pair twice. She had moza and his family were worth about $ 100 million, 500 black brassieres. A bill she left behind from the the fruits of more than 40 years of dynastic plunder, designer Valentino for an evening gown and six silk according to historian Walter LaFeber. He claims dresses came to $ 107,000, roughly 19 times Marcos’s that Somoza and his friends in the National Guard presidential salary of $5700 a year. monopolized high-profit industries such as prostitu¬ Many Filipinos objected to the close U.S. ties with tion, gambling, and construction. Marcos, much as broad sectors of Iranian society Another notable figure was the Dominican Repub¬ turned against the United States because of its back¬ lic’s Rafael Trujillo who, according to biographer ing of Shah Mohammed Reza Pahlavi. Although less Robert Crassweller, was worth about $500 million venal than some of the others, the shah had no qualms when killed by an assassin’s bullet in 1961. He pos¬ about using his office to save up for a rainy day. The sessed 1.5 million acres of improved land and vast New York Times once estimated his total wealth at well tracts of idle property. He controlled 111 companies, over $ 1 billion. The centerpiece of his wealth was the according to Crassweller, and his factories employed Pahlavi Foundation, nominally a charitable enterprise 60,000 workers. Trujillo once spent $80,000 on a but in fact a vehicle for accumulating riches for the gown for his daughter, Angelita; the dress had a 75- monarch and his relatives. Its investments included a foot long train. In the mid-1950s, the income of the tire factory, a publishing venture, sugar factories, Trujillo family was approximately equal to the com¬ hotels, and casinos. The shah inherited 2000 villages bined national expenditures for education, public in Iran’s richest farm country that had been seized by health, labor, social security, and public works. his father; when eventually he turned the land back to High living is not limited to those on the right side its cultivators, it was not for free: they were required of the political spectrum. The late Soviet President to pay 25 annual installments to a bank owned by the Leonid Brezhnev accumulated a fleet of luxury cars. royal family. Romania’s Nicolae Ceaucescu, who heads one of East¬ Of course, the United States is not the only country ern Europe’s most repressive police states, was en¬ faced with the dilemma of coping with plundering gaged in secret negotiations last year to purchase the yacht Christina, formerly owned by the late Aristotle George Gedda is the diplomatic correspondent of the Associ¬ Onassis and boasting such trappings as a canary-yel¬ ated Press. low amphibious airplane. Meanwhile, the Romanian

OCTOBER 1986 21 A Rogues Gallery of Pilferers

/ Jean-CIaude Duvalier Ferdinand Marcos

government decreed that all public buildings be heat¬ time, many people believed that the United States ed only to 40 degrees fahrenheit as a fuel conservation had supported this particular plundering autocrat for too long. LaFeber said the United States should have withdrawn its backing from Somoza years earlier, claiming that he and his family ran Nicaragua as FOR MUCH OF the postwar era, the United though it were their own private fiefdom. But former States has had problems dealing with these Secretary of State Kissinger accused Carter of acting profligate dictators. Their undemocratic incautiously by “actively working to overthrow So¬ ways, coupled with their ostentatious displays moza without having any idea of what to replace him of wealth in some of the poorest countries in the with. We should have been prepared to put in his world, created political instability and much resent¬ place a moderate alternative.” The Reagan adminis¬ ment of those—such as Washington—seen as their tration obviously shares that assessment, but it is not supporters. But their countries often seem to be locat¬ clear what it would have done to avert a Sandinista ed in politically strategic regions, places where the takeover. Even among conservatives, there were few United States wants a friendly government and per¬ in the summer of 1979 who warned that the ouster of haps even a military base. Often there seems to be a Somoza would result in a security headache for the direct conflict between the values of democracy and United States. fairness and the need for national geopolitical securi¬ Traditionally, Republican presidents have been ty- less inclined than Democrats to push recalcitrant dic¬ By last February, it was obvious that time was tators toward moderation. Richard M. Nixon used to running out on both Duvalier and Marcos, but the say the United States “should accept governments as United States, by declining to offer support, may they are, not as we would like them to be.” Kissinger have hastened their demise. In Duvalier’s case, the once remarked that U.S. cooperation with rightist United States made no effort to keep him in power. strongmen is based on shared interests, not “personal Five days before his departure, Secretary of State affection” for them. The Reagan administration also Shultz told a television interviewer that the United is reluctant to endanger strategic interests by pressur¬ States advocated democracy for Haiti. After learning ing governments to improve their domestic behavior. of Shultz’s remarks, Duvalier asked for a transcript, In particular, it is keen on distinguishing between and his reading of it seemed to convince him that authoritarian and totalitarian regimes. The Reagan Washington would do nothing to preserve his posi¬ administration shares this view, contending that both tion. U.S. pressure also influenced Marcos’s decision security and human rights considerations are set back to leave, although it may not have been the determin¬ if the United States withdraws support from rightist ing factor. Faced with defections among the military strongmen in countries where Marxists—and not and masses of citizens demonstrating for his removal, democrats—are likely to take charge of a successor Marcos called Washington. “Should I step down?" he government. asked Senator Paul Laxalt (R.-Nevada), a confidante The United States has had to confront what appears of President Reagan. "1 think the time has come,” to be a distinct trend: anti-communist authoritarian Laxalt replied. A day later, Marcos departed for Ha¬ regimes are temporary while totalitarian Marxist re¬ waii with the help of U.S. military transport. The gimes are permanent. Communist systems have administration, of course, had the unusual luxury of shown themselves to be more durable than rightist withdrawing its support from Marcos while knowing governments. The mechanisms they have developed there was a moderate alternative with a legitimate for retaining control have proved remarkably effec¬ claim to be his successor. tive, even though they often conceal their true inten¬ But just because the Haitian and Philippine crises tions upon taking power. In Cuba and Nicaragua, for were resolved with apparent success does not mean example, the ousted authoritarians were replaced by future cases will have happy endings for the United self-described “democrats” who revealed their Marxist States as well. Each incident is clearly different, with tendencies only after they had built successor military distinct causes and unpredictable outcomes. In 1979, establishments from scratch and were certain of their for example, the Carter administration called for the loyalty to the new system. Since 1917, only one resignation of Nicaragua’s Anastasio Somoza. At the Marxist country has experienced a transition to a

22 FOREIGN SERVICE JOURNAL phah Mohammed Reza Pahlavi Rafael Trujillo Anastasio Somoza

western-style democracy: Grenada, and that historical have not. Batista and Somoza may have been more quirk was helped along by 6000 U.S. troops. profligate than their successors but they at least never On the other hand, the list of rightist military caused the United States strategic headaches. governments that have made the transition to democ¬ Happily for the United States, with the departures racy in recent years is long: Venezuela, the Dominican of Duvalier and Marcos, the ranks of authoritarian Republic, Spain, Portugal, Greece, Brazil, Argenti¬ strongmen in areas of vital importance to Washington na, Uruguay, Peru, Colombia, and several Central have been thinning. The problem now for the United American countries. But, at least in Central America, States is to help make democracy take hold in those there are some disquieting aspects about the success of countries where, because of their authoritarian past, this transition to democracy. A senior U.S. diplomat there is little pluralistic tradition. who recently served in the area said that some of the But there are a few countries left where the United most prominent non-Marxist political figures in Cen¬ States may again face the dilemma of whether to tral America have accumulated incredible wealth continue its support for an autocrat. Indonesia, for through drug smuggling to the United States. Mexi¬ example, in some ways now parallels Nicaragua dur¬ co, another country with democratic trappings, also ing the Somoza era. A strategically located country, suffers from rampant corruption that on occasion has its autocratic President Suharto is staunchly anti¬ reached to the highest levels of government. communist. But his family and associates have A common thread to the U.S. experience in dealing amassed highly lucrative and extensive business hold¬ with high-living authoritarians is that all were in tune ings, and the country has a reputation as one of the with U.S. security interests but were incompatible most corrupt societies anywhere. Under Suharto, with American values. Somoza once proclaimed that Indonesia has had an impressive record of develop¬ he was “totally aligned with the United States and the ment and stability, but the country’s future is now western world.” These autocrats enjoyed varying de¬ imperiled by the sharp drop in the price of oil, Indo¬ grees of support from the United States but at times nesia’s main export. The administration believes there received the cold shoulder. Both Batista and Somoza are compelling reasons for continuing to back Suharto received U.S. military aid for years, but when the despite his flaws. Most obviously, any withdrawal of United States suspended that assistance a few months support would hasten his departure, and there is no before their ouster, it contributed to the erosion of guarantee that his successors would be more demo¬ their authority. cratic, more honest, and at least equally anti-commu¬ nist. “It is better to have a strong regime in power than a IN THESE AND other cases, the United States tried liberal government if it is indulgent and relaxed and to encourage a democratic transition but did so penetrated by communists,” wrote Soviet affairs ex¬ prudently, worried that pushing too hard might pert George Kennan in 1950. Kennan’s views may be cause instability and a power vacuum that could obsolete in terms of most Third World areas of strate¬ benefit the far left. Abruptly abandoning these rulers gic importance, but not all. No African leader is more could raise questions in other pro-western countries closely identified with the United States than Zaire’s about U.S. reliability and induce them to seek the Mobutu, a peerless plunderer whose concerns are dis¬ favor of the Soviets. As a result, only when the situa¬ tinctly self-centered. At his command, his people tion appears hopeless does the United States withdraw turn out by the tens of thousands to worship him. But its support and begin the scramble for a suitable suc¬ someday—like Marcos, Duvalier, Perez, Jiminez, cessor. Many factors, not the least of which is luck, Batista, and Somoza—Mobutu will be faced with determine whether the outcome protects U.S. interests. popular unrest and suddenly have to flee into exile, The demise of these authoritarians has brought taking with him whatever loot he has time to pack. mixed results for the United States. The prospects for And when that day comes, journalist David Lamb the Philippines and Haiti are still uncertain, but the predicts, his people “will tear down his statues, burn administration is cautiously optimistic about demo¬ his pictures, curse his name, and pay allegiance to a cratic outcomes in the two countries. Venezuela and new chief.” The only question is whether they will the Dominican Republic have turned out well for the keep Zaire in the pro-western camp. Washington will United States but, of course, Cuba and Nicaragua be holding its breath. D

OCTOBER 1986 Counterpoint

LEADERS AND EXPERTS: THE PROFESSIONAL SOLUTION

LEON B. POULLADA

-OHN MARESCA AND DAVID NEWSOM touched a president and the political leaders appointed by him, Jhighly sensitive nerve in their essays on “Lead¬ principally the secretary of state, achieve their for¬ ers and Experts” in the March and June issues. eign-policy goals. It was not intended to supplant the The Foreign Service has for many years suffered political foreign policy decision-makers. Such a pro¬ from a schizophrenic identity crisis, and both fessional relationship between a career Service and the attempt the difficult task of defining the Service’s political leadership has been the established practice essence. The matter is still unresolved. What is the in major European countries. primary and quintessential nature of the Service? Are In the United States these important distinctions its members first and foremost diplomats? Or are they have become obscured over the years. As senior career makers of foreign policy? And just what is a profes¬ diplomats have become more expert in foreign affairs, sional diplomat anyway? If FSOs are primarily diplo¬ they have tended to encroach on the decision-making mats, how do they relate to political leaders as new function of our political leaders who, admittedly, of¬ administrations come and go? I submit that most ten knew much less about the outside world. The FSOs do not know the answer to these questions. tendency for the diplomat to intrude into the world of They have only a vague understanding of the constitu¬ policymaking has increased as senior diplomats have tional relationship between the political leadership been appointed to policymaking positions and be¬ and a career Service; they cannot accurately define come assistant secretaries and even under secretaries of professional diplomacy; they do not understand the state. The Foreign Service has begun to consider such difference between foreign policy and diplomacy; and assignments a matter of right and to begrudge them they have fuzzy perceptions regarding the origin and to the political appointees of the president. As youn¬ purpose of the Foreign Service as an institution. ger officers were socialized into the Service, they be¬ Foreign policy is the sum of national goals that a gan to anticipate such appointments on achieving country seeks to achieve in its relations with the out¬ senior rank; the mythology grew up that FSOs are side world. It also encompasses the political decision¬ supposed to be the architects of foreign policy. Dur¬ making that goes into designing an overall strategy ing my term on the Board of Examiners I often ques¬ for their realization. These goals are expressions of the tioned Foreign Service applicants as to why they popular will as manifested through the domestic po¬ wanted to enter the Service. Almost always they re¬ litical process. In our constitutional system of govern¬ plied that they wanted to make foreign policy. ment, the responsibility for formulating these goals This confusion of the proper role of the professional and making policy decisions is entrusted to the politi¬ diplomat has created tensions between the career Ser¬ cal leadership elected by the people. Diplomacy is the vice and the political officials who are selected by the art of achieving these goals through subordinate strat¬ president to formulate his foreign policy. It has led to egies and tactics, as well as service as expert advisers attacks on the Foreign Service by such political ap¬ during the formative stages of the policies them¬ pointees as ex-ambassadors David Funderburk, selves. For example, political leaders may set as a Charles Lichenstein, and Curtin Winsor Jr. [DES¬ general goal the containment of Soviet expansion to¬ PATCH, September 1985], who accused career officers ward the Persian Gulf. A subordinate, specific policy of substituting their own foreign-policy views for goal would be the decision to arm the Afghan resis¬ those of the president. There is also the contention, tance that is holding the Soviets back. Diplomacy made by former ambassador to Laurence would be the way these goals are achieved through H. Silberman, and popular among certain White persuasion and maneuver in Pakistan and other Isla¬ House aides, that political ambassadors are superior mic countries in order to get the arms to the Afghans. to career appointees because they more loyally and The Foreign Service thus was created to provide a vigorously carry out the president’s foreign policy career corps of professional diplomats to help the [ASSOCIATION NEWS, February 1985]. Conversely, political decision-makers have gradually intruded Leon Poullada is a retired Foreign Service officer. He served into the field of professional diplomacy, often result¬ as ambassador to Togo and as a professor of political science ing in clumsy attempts by amateurs to execute policy. at Northern Arizona University. If this controversy over roles is allowed to continue,

FOREIGN SERVICE JOURNAL sooner or later an ardently ideological administration FOREIGN SERVICE URN In this second will come along that will no longer tolerate the en¬ $2.00 March 1986 response to croachment by career officers upon its foreign policy turf and will move to abolish or seriously curtail the our March very existence of the Foreign Service. Career diplo¬ cover story, a mats must abandon the erroneous notion that they are former an elite endowed with the right to make foreign poli¬ ambassador cy. They are, in fact, a non-elected professional corps sees the whose mission, though it may include an advisory role in policy formulation, is to execute the foreign Foreign policy of the elected administration. Service as It is therefore essential not to politicize the career unnecessarily Service, as John Maresca seems to suggest, but on the schizophrenic contrary to professionalize it, as David Newsom im¬ plies. This does not mean that diplomats should not be politically aware and sophisticated about domestic matters and bureaucratic institutions. Nor does it mean that diplomats should not have strong foreign- policy views. We can all agree that they should. It does mean, however, that, as professionals, FSOs can put forward their foreign policy views to the political leadership but must subordinate their personal feel¬ ings to the decisions of the political decision-makers. They must scrupulously refrain from invading the extreme case, to resign. politicians’ prerogative to be the ultimate formulators What about the career diplomat who is elevated to of foreign policy. What then is the proper function of a policymaking position such as assistant or under professional diplomats? Their role must be limited to secretary? I would not go quite so far as to recommend service as expert advisers to the political decision¬ that this never be done, but I believe that when it makers while policies are in their formative stages. happens career officers should be permitted either to They should accurately and dispassionately explain resign or be suspended from the Foreign Service dur¬ the implications of a given policy and its alterna¬ ing the duration of their tenure as a policymaker. tives—especially the diplomatic strategy and tactics Officers then should have the option of being reinstat¬ of implementing it. To ensure success of the policy, ed to the career position when their assignment is diplomats should use their special skills and expert completed. If career officers accept such assignments, knowledge—not in deciding what the policy should they are really accepting political appointments from be, but in carrying it out once the political leadership the president and should stand ready to take the con¬ has made the decision. sequences of their policy decisions like any other po¬ litical appointee. If their policy decisions make them unacceptable to a later administration, they must gra¬ WHAT ARE THE special skills of diplo¬ ciously accept the risk. This may seem harsh, but after macy? They are negotiation, analytic all the State Department is one of the few (if not the and accurate reporting (to provide the only) agencies in the government in which career political leadership with the informa¬ officers are routinely assigned to sub-cabinet posi¬ tion for wise decisions), political maneuver and per¬ tions. The position of an ambassador is admittedly a suasion, program management, and above all the core difficult one to categorize. Is the chief of mission skill unique to experienced diplomats: cross-cultural primarily a maker or an implementer of foreign poli¬ operations. In addition (and here I am entirely in cy? Well, he or she is often a bit of both. But I submit accord with Mr. Maresca) good diplomats should have that the primary function of an ambassador is to carry one or more fields of specialized expert knowledge of out, and secondarily to advise on policy, but not to such caliber as to earn them recognition outside the decide as to its content. In this sense an ambassador is Service. The good professional diplomat acquires and and should be first and foremost a diplomat. For this develops a fine balance of these core skills and expert reason the career Service can justifiably lay claim to knowledge. The present tendency is to overemphasize preference in chief of mission appointments. only one of these elements—management skills—and One can easily argue that I have oversimplified; to make the diplomat into a glorified MBA [DIPLO¬ that policymaking and implementation are inter¬ MACY, December 1985]. It is a serious error and proof twined; that policy is made in the cables, etc. There is that the true nature of diplomacy is not widely under¬ practical truth in all this but the important conceptu¬ stood in the Foreign Service. If FSOs concentrate their al difference between the responsibility for making activities on providing professional, loyal, and expert policy decisions and for carrying them out remains. It diplomatic support, as defined above, to political su¬ is not only a constitutional but a pragmatic distinc¬ periors, both groups will work together harmoniously tion, and the Foreign Service must disentangle itself for the national interest. If for reasons of conscience or from the confusion that has arisen if it is to preserve its conviction diplomats cannot provide their service to identity and indeed its very existence. Professionalism the political leadership, their only honest recourse is is the Ariadne’s thread that will guide us out of the to withdraw from a particular assignment or, in the labyrinth. Q

OCTOBER 1986 25 WHY HAS THE WEST SLEPT?

The free world largely ignored the 1956 Hungarian revolt and the Soviet invasion that crushed it; today, it is only slowly beginning to pay attention to events there

ENDRE MARTON

WO DAYS after U.S. planes attacked Libya During the few weeks the revolution lasted, it T caused many western intellectuals, such as Jean Paul last April, Georgi Arbatov, director of Mos¬ cow’s Institute for USA and Canada Studies, Sartre, to reexamine their sympathy toward commu¬ lectured a small group of prominent New nism. It led Milovan Djilas, the maverick Yugoslav, York journalists about the “hypocrisy” of the Reagan to write that “the Hungarian uprising... is a new phe¬ administration’s foreign policy. He told the audience nomenon, perhaps no less meaningful than were the that the bombing of Tripoli has probably eliminated French and Russian revolutions—[It] blazed the any chance for a second Reagan-Gorbachev summit. path which sooner or later other communist countries After all, in 1968 President Johnson had canceled his must follow. The wound which the Hungarian revo¬ plans to visit Moscow after the U.S.S.R. conducted lution inflicted on communism can never be healed.” its “friendly intervention” in Czechoslovakia. Seeking Despite Djilas’s enthusiasm, however, communism another example, he compared the dozens who had and the Soviet bloc survived 1956. Since then, there died in Tripoli with the “one man [who had] died have been considerable changes in Eastern Europe, when our army marched into Prague; he immolated especially Hungary, but the basic condition of Soviet himself. ” control has remained. His audience listened politely, but then a woman It is not my intention now to recall what happened rose from her chair. “Wait a minute, Mr. Arbatov,” in those tragic weeks in Hungary. The demonstra- she said. “Let’s go back to 1956. Thousands died in Hungary when your army crushed the Hungarian rev¬ olution. Young children were among them, not much older than I was at the time. I saw it with my own eyes. How, then, can you lecture about ‘proper behav¬ ior’?” Arbatov huffed and puffed. He cited the Brezhnev doctrine, recalled that Hungary was on the wrong side in World War II, and insisted that by now every¬ thing was forgotten, that Soviets and Hungarians are “best friends.” But suddenly he added: “Look, I’ll admit that sometimes we also make mistakes.” Arbatov was not the first one to use the word “mis¬ take” as an excuse in connection with the brutal crush¬ ing of the Hungarian revolution. Janos Kadar, gener¬ al secretary of the Hungarian Communist Party, used it when he addressed the U.N. General Assembly in October I960. His speech was for the most part a tiresome exercise in whitewash. But then, in conclud¬ ing, he became almost apologetic: “Man can make mistakes and be in error. I did what I had to do.” What happened in Hungary 30 years ago is histo¬ ry. It has been reviewed many times—by historians, writers and journalists. It was in many respects unique: the first armed national uprising against communism. It was essentially leaderless and un¬ planned. It started peacefully with demonstrations, in a few hours became a revolt and, in another 24 hours, a war in which some 13,000 Hungarians died and over 200,000 fled their country. According to at least one cautious observer—India's Jawaharlal Nehru— • 25,000 Hungarians and 7,000 Soviets were killed in the fighting. tions and revolt; the disintegration of the Hungarian disillusioned communist intellectuals, writers, and Communist Party; and the fate of Prime Minister journalists played a dominant role in the questioning Imre Nagy, the reformist leader who inspired his of the status quo that reached its peak in the October country, withdrew from the Warsaw Pact, and pro¬ revolt. Most of the non-communist intellectuals claimed neutrality, then was executed despite having watched the events of this feverish period from the been given a safe-conduct pass—all this has been re¬ sidelines, suspecting that little more was involved ported and analyzed before. Instead, my purpose is to than a struggle between communist factions. consider whether the West could have done some¬ It was, however, much more than that. For the thing to avoid, or at least lessen, this tragedy. The Hungarian communist intellectual, Stalin had be¬ answer is both yes and no: yes, there were steps that come a failed god. Before Khrushchev’s speech, they were not taken and mistakes that were made, but no, had blindly accepted whatever Stalin said or did, but they were unlikely to have prevented the Soviet inva¬ after the new pope in Moscow voiced his criticism, sion and the crushing of the revolt. One of the lessons they became disenchanted with the religion itself. to be drawn from the experience is precisely how little Their disillusionment settled particularly on their influence the West, even the United States, has on own leaders, Matyos Rakosi and his clique, who had such matters. There were symbolic gestures that been trained in the Soviet Union. could have been made and that would have been valu¬ During these formative months of the revolution, able in clearly placing the West on the side of those however, the U.S. legation in Budapest (it became an fighting for freedom. But in truth, these gestures embassy in 1967) was left without an effective head. were unlikely to have affected the actual outcome. As Minister Christian Ravndal was recalled from Buda¬ to the related question of what the West can do now pest in the summer, and the legation was then headed to aid reform in Hungary, the answer is largely the by a charge d’affaires, a scholarly man who flooded same. Washington with incisive dispatches describing what was happening in that country. He was, however, a timid, introverted individual, a first-class deputy but - UST AS THE end of the Hungarian revolution certainly not the type to lead a diplomatic mission in Jwas largely the responsibility of the East, so was troubled times, especially not when violence was be¬ Hungarian military the beginning. The ferment in Hungary started coming a possibility. academy cadets join in the spring of 1956, after Soviet First Secre¬ Ravndal’s designated successor, Edward T. the insurgency, tary denounced the late Jo¬ Wailes, was a seasoned diplomat, but arrived from his eventually fighting seph Stalin in his not-so-secret speech at the Soviet post as ambassador to Pretoria on November 1—the Soviets on the Union’s 20th party congress. It is undeniable that day Moscow decided to use force to end the rebellion. streets of Budapest.

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A white flag crossed On his way to Hungary, Wailes stopped in Vienna to Nagy government would have had symbolic value. in red blood flies visit with , the U.S. envoy to Later, after the uprising had been suppressed, Wailes above a truck filled . As one of the few outstanding experts on was instructed by Washington not to present his cre¬ with Hungarian communist affairs, Thompson had watched and com¬ dentials to the newly installed and Soviet-sanctioned youths speeding mented on events in Hungary from his close vantage. regime of Janos Kadar. Finally, in February 1957, he through the On October 31, in a long cable to Washington, he was asked either to present his credentials or leave— Hungarian capital. warned against what he called the risks of Wailes’s he left soon afterward. For 11 years after that the U.S. presenting his credentials to Imre Nagy's revolution¬ legation in Budapest was headed by a charge d’af¬ ary government, since such action “may be exploited faires. But these two errors—leaving the legation as endorsement by the United States of the present without a head for months, and being so cautious that [Nagy] government.” Wailes was unable to present his credentials to the Nine years after the revolution, however, Thomp¬ revolutionary government—were minor compared to son provided a somewhat different version, one that a third one. Why did the United States seek to punish demonstrates how Washington was hopelessly limp¬ Hungary, rather than the Soviet Union, which was, ing behind the daily, if not hourly, changes in Hun¬ after all, the aggressor? Why did the West in general gary. When Wailes passed through Vienna en route and the United States in particular do nothing? to Budapest, Thompson asked him “what his instruc¬ The U.S. delegate to the United Nations, Henry tions were about presenting his credentials. He Cabot Lodge, believed that the only action that might [Wailes] was told just to go to Budapest and wait, not have helped was a military response that could have to present them till he was told to do so. I felt very triggered World War III. But there was one other, strongly that if he didn’t get in the next day or two very slim possibility. Washington might have in¬ and present them immediately, he would never have structed Charles Bohlen, the ambassador in Moscow, an opportunity,” Thompson said in the interview. to call on the Soviet foreign ministry, preferably with The two diplomats agreed that they should consult his British and French colleagues, and declare in un¬ Washington. But, reported Thompson, "We didn’t mistakable terms that the Big Three had accepted reach anyone very high up...so he [Wailes] went in, Nagy’s declaration of neutrality and advise the Soviet and then they instructed him to present them, but by Union to do likewise. Would it have worked? It that time it was too late.” might, or it might not, but certainly there was little It would, of course, be naive to believe that such an risk in such a diplomatic move. But Bohlen received “endorsement,” to use Thompson’s word, would have no such instructions from Washington. impressed the Soviets and that they would have Admittedly, there were extenuating circumstances dropped their plans to use force. Nonetheless, the that preoccupied the U.S. administration and hin¬ presentation of the U.S. minister’s credentials to the dered its ability to take any effective measures toward

FOREIGN SERVICE JOURNAL HAD THE United States been less preoccu¬ pied, would it have made Moscow think twice or perhaps even prevented the Sovi¬ ets from doing what they did? To answer in the affirmative would be attractive, but it would be wrong. Suez in particular helped prevent effective criticism of the Soviet action, for it bitterly divided the West and preoccupied the United Nations, in¬ cluding Secretary General Dag Hammarskjold. Yet it is clear that the Soviet Union would have invaded in any case. The 1968 military intervention in Czecho¬ slovakia occurred when the West was not preoccupied with internal quarrels and when U.S. foreign policy was in the capable hands of , not someone lying incapacitated in a hospital bed. In neither case—1956 nor 1968—were the Soviets bothered with the possibility of western military countermeas¬ ures, since they were convinced that both Hungary and Czechoslovakia belonged to their sphere of inter¬ est. However strongly people like Rusk protested that there never had been a pact establishing spheres of influence and that Yalta had endorsed the right of self-determination for every nation freed from Hitler’s rule, the Soviets knew that every country they “liber¬ ated' —whether allied Poland or enemy Hungary— would become part of their empire. Of course, the fault for the West’s inaction cannot be placed solely on the United States. When the United Nations met to debate the issue, the result was neither timely nor effective. Premier Nagy’s appeal to the world organization, proclaiming his country’s neutrality and asking that “the defense of this neutral¬ Hungary. First, 1956 was an election year in the ity by the Four Powers...be put on the agenda” United States. The revolt broke out just two weeks reached the United Nations two and a half days before before Eisenhower faced Adlai Stevenson for the sec¬ the Soviet army struck at dawn on November 4. Yet ond time. Although he had little trouble defeating his during that crucial period the world body could not opponent, it is safe to assume that the president’s extricate itself from the Suez debate. Finally, on the attention was focused on getting the votes. afternoon of November 3, the Security Council met Second, whatever attention span Eisenhower had "to discuss” Nagy’s appeal. But there was to be no left was taken up with the Suez crisis, the joint Brit- discussion. The Yugoslav delegate moved for an ad¬ ish-French-Israeli adventure to regain control of the journment, claiming that Hungary and the Soviet Suez Canal and, if possible, oust the bothersome re¬ Union were already negotiating the withdrawal of gime of Gamal Abdel Nasser in Egypt. The United Soviet troops from Hungary. By then, of course, States was caught flatfooted by its allies’ actions, and Khrushchev had already informed Marshal Tito that Secretary of State Dulles was outraged that the three the die was cast, and that Soviet troops were again on had dared to act without consulting Washington. As the move. for its effect on Hungary, it was, as an old industrial Lodge, the U.S. delegate, quickly endorsed the worker so eloquently told western journalists in Bu¬ Yugoslav proposal. “We believe,” he said, “that ad¬ dapest, “a stab in the back of our revolution.” journment for a day or two would give a real opportu¬ And finally, Dulles, the man who shaped U.S. nity to the Hungarian government to carry out its foreign policy, had cancer and underwent an oper¬ announced desire to arrange for an orderly and imme¬ ation on November 3, only 24 hours before the second diate evacuation of all the Soviet troops.” A few hours and final Soviet onslaught on Budapest. Nothing later, at three o’clock on the morning of the fourth, shows more clearly the importance of Dulles’s illness the State Department received a secret cable from than the transcript of the State Department press Bohlen in Moscow, that said among other things that briefing the next day. The briefing was held by Lin¬ “indications.. .seem to point to basic decision to use of coln White, then the department’s spokesman, in the force if necessary to keep Hungary in the Soviet afternoon at Walter Reed hospital, after evening had camp.” already fallen in Budapest and ended a tragic day for In I960, the British foreign secretary of the time, that city. Yet according to the five-page long tran¬ Anthony Eden, gave a devastating assessment of the script there was not one question asked about what United Nations’ behavior in his book, Full Circle: happened in Hungary that day, and White had noth¬ “Five days passed without any {Security] Council ing to volunteer to the journalists covering state. It meeting on Hungary, despite repeated attempts by was a Sunday and thus no press briefing was held at ourselves and others to bring one about. The U.S. the White House. representative was reluctant and voiced his suspicion

OCTOBER 1986 that we were urging the Hungarian situation to divert attention from Suez. The U.S. government appeared in no hurry to move.” Though Eden was hardly an unbiased observer—his political career was ruined by the Suez debacle—his facts are correct. Many years later Lodge conceded that the West left Hungary in the lurch. “The United Nations failed on Hungary,” he said. “So did the United States, inci¬ dentally, and so did everybody else.” Explaining his role in what went on at the United Nations, Lodge concluded in an almost pathetic outburst: “It was dreadful, a dreadful thing ”

IF THE WEST could do little to avert the tragic events of November 1956, it had even less influ¬ ence in the years following the failed revolution. Bloody oppression characterized the last years of the 1950s. The exact number of those sent to the gallows is unknown, but many thousands were jailed. The Soviet Union was in complete charge, and Mos¬ cow’s orders were blindly carried out by those whom the Soviets put in power. But then slowly, gradually, the change came: Janos Kadar, the new first secretary, without fanfare com¬ mitted himself to political and economic liberaliza¬ tion. As a result, today there is more freedom and a fuller plate—what Khrushchev once called “goulash socialism”—and less evidence of police rule than in any other bloc country. Many who watched the change believe it started in November 1962, when Kadar boldly rephrased the old Stalinist dogma: “Whoever is not for us is against us.” His new definition was instead: “Whoever is not against us is with us,” and this subtle change made a ous debates between candidates during the 1985 elec¬ difference for millions of Hungarians who, for what¬ tions, followed by the equally unprecedented defeat ever reasons, did not join the Communist Party. in the Hungarian parliament of some government- But despite the many glowing reports on the “new proposed bills, although ones of little importance. Hungary" that have appeared in the western media But of course there is a limit to everything. It took recently, a caveat is necessary. Soviet domination of some skillful maneuvering by the authorities to pre¬ the bloc countries, Hungary included, has remained vent Laszlo Rajk Jr., perhaps Hungary’s best-known essentially the same, and although Kadar is popular in dissident, from standing as a candidate in the 1985 his country, the proverbial man in the street rejects elections. He is the son of Laszlo Rajk, a "nationalist” the communist dogma more than ever. The liberaliza¬ communist who served as interior and later foreign tion of Hungary has firm limits, with the perimeters minister after the war, and who was executed in 1949 decided in Moscow. The individual who visits Hun¬ after a show trial. Interestingly, Rajk Jr. is a godson gary should keep in mind that terms such as “modern¬ of Kadar; the same Kadar who persuaded his father to ization” and “democratization” do not necessarily confess while in the hands of the secret police. Perhaps mean reforms, political and otherwise, as we under¬ Kadar cannot forget his double role in the life of the stand it in the West. In particular, any deviation from two Rajks and, for that reason, has allowed his godson the one-party system remains a pipedream. In 1956, to remain free and able to travel abroad, even though Khrushchev asked a group of visiting French commu¬ Rajk Jr.’s apartment has been searched repeatedly by nists, “Why do we need another party?” and then the police and his underground paper suppressed. answered himself in his typical folksy way: “To allow Western reporters who have visited Hungary in another party is the same as to permit of one’s own free recent years were more-or-less unanimous in declaring will a flea into one’s shirt.” This Khrushchevian thesis that the Kadar regime is more liberal than any other is as valid today as it was 30 years ago. in the bloc. There is, for example, not a trace of the Yet in Hungary there are signs of procedural personality cult so ridiculed and hated by Hungarians change, even if the fundamental rules remain. There before 1956. No pictures of Kadar are displayed, is, for instance, a requirement that there be at least unlike in Romania, where portraits of President Ni- two candidates for any elected office, even though all colae Ceausescu are numerous. The Hungarian hymn, must declare their loyalty to the program of the Patri¬ “God bless the Magyars,” is played, and not, as earli¬ otic People’s Front, an ill-concealed front organiza¬ er, the “Internationale"; modern art is freely displayed tion of the party. The surprising result—probably in public parks, rather than socialist-realist paintings unprecedented in a communist country—was vigor¬ and statues in the “boy-loves-tractor” genre; political

FOREIGN SERVICE JOURNAL cabarets poke mild fun at some political figures albeit supportive attitude. The Soviets have always been The bodies of four while keeping hands off the Soviet Union and com¬ suspicious of the NEM, regarding it as a clumsy bal¬ Hungarians killed munism in general; and dissident writers and philos¬ ancing act between socialism and capitalism. Kadar, by Russian tank fire ophers live relatively freely, traveling abroad and be¬ in an interview last August in Time, admitted with lie outside the ing allowed to return, even if their works are not unusual candor that even General Secretary Mikhail Ministry of always published in Hungarian. Gorbachev has misgivings: "I think that many things Agriculture building opposite Earlier this year, when the international PEN Club we do in this country Gorbachev cannot accept, which the Parliament in met in New York, the two official Hungarian dele¬ is quite understandable. The conditions and possibili¬ Budapest. gates were the writers George Konrad and Sandor ties of the Soviet Union are quite different from ours Csoori, both of whom could be called dissidents. Both — Our system of economic management... [is a] so¬ made cautious, yet surprisingly candid, speeches at cialist planned economy that pays attention to the the club congress—and then returned to their coun¬ market.” Nevertheless, the Hungarian example has try. A recent essay by Konrad on Censorship and State- been adopted by a number of bloc countries, which Owned. Citizens begins: “Hungary has lost her indepen¬ have added their own modifications and limitations. dence four and a half centuries ago and has not East Germany, by far the most industrial country of regained it since. There was always a great power the bloc, has reorganized and decentralized its econo¬ nearby that kept occupying troops on our soil in my, although central planning remains paramount. peacetime and held our people under its sway with the Hungary’s foreign debt is estimated to be between surefire arguments of superior force.” $9-11 billion (that of Poland is close to $29 billion), but its economic future is viewed with guarded opti¬ mism by the World Bank and the International Mon¬ etary Fund—Hungary is a member of both—and by private bankers in the West. First, Hungary, togeth¬ ■ nism, established in 1968, gives greater er with otherwise backward Bulgaria is the only bloc ™ *-scope to competition and other market country producing more farm products than it con¬ forces and has been responsible for the gradual relax¬ sumes. Second, the low prices of consumer goods and ation of the rigid system of centralized control and utilities are being raised, now that public opinion has planning. Hungary, a country poor in natural re¬ been carefully prepared. Third, the technocrats re¬ sources, now faces significant economic difficulties, sponsible for the NEM are not ideologues and are but the Kadar regime seems committed to pressing on often highly regarded in the West. with economic reforms, despite Moscow’s less than For the last few years, however, Hungary has had

OCTOBER 1986 one of the lowest growth rates in Eastern Europe. thinly veiled intention to increase trade with the While the economy grew at a robust 4.5 percent West and its openness to western tourism, demand¬ annually during the 1970s, it is now slumping. This ing that the Hungarian leaders make clear their “un¬ has forced Hungary to attempt to develop a trade compromisingly socialist stance.” Officials in the surplus, largely at the expense of imports and internal U.S. administration overwhelmingly considered this consumption. Real wages and living standards are a slap at Hungarian policies. But two days later the declining and Hungary, like all others in the bloc, is same newspaper printed a shorter article praising under pressure to export more to the Soviet Union, Hungarian economic and agricultural achievements. even while accepting a virtual freeze in Soviet energy Confusing? “I guess it must be for you. It definitely supplies and raw materials. The result is growing was for us,” a Hungarian newsman working in Wash¬ dissatisfaction and even unrest among both the young ington acknowledged. intellectuals and the industrial workers who envy the farmers (the latter being the new “capitalist” class). The situation is alleviated somewhat by the Hun¬ THIS SOMETIMES SHAKY liberalization has its garian tolerance for moonlighting. This private sector roots in Hungary itself and in its relation¬ accounts for no more than five percent of the total ship with the Soviet Union. The West, in¬ work force but generates an estimated 15—20 percent cluding the United States, has played little of the country’s GNP. Yet the nuclear accident at if any role in the process. Given that, just as in 1956, Chernobyl and the resulting prohibition on Hungar¬ the United States has little real ability to influence ian agricultural exports to the West had disasterous events in Hungary, what steps can Washington take consequences: in the first half of 1986, the Hungarian to encourage this trend? trade deficit rose to $300 million. This did not pre¬ After the failure of the 1956 uprising, relations vent an outbreak of typical Hungarian jokes: “How do between Washington and Budapest were frozen. But you measure the intensity of the Hungarian-Soviet as the domestic situation in Hungary improved, the friendship?” “With a Geiger counter.” United States gradually began to relax its opposition. In Hungary today there are signs of a reawakening The departure of Jozsef Cardinal Mindszenty for the of the nationalism that has been submerged since West helped considerably; he had spent 16 years in 1956. As before the revolution, the Writers Union the U.S. legation, where he had taken refuge during has become the gathering place for those intellectuals the revolution. In 1978, the United States returned who criticize the regime, albeit not to the extent that the historic crown of St. Stephen, Hungary’s first they are forced underground. Writers are now press¬ king, to that country. Secretary of State Vance per¬ ing for open discussion of such long-censored topics as sonally returned the crown and other coronation rega¬ the 1956 revolt and the plight of Hungarian minor¬ lia that had been safeguarded across the Atlantic since ities in Romania and Czechoslovakia. In 1982, for the World War II. first time since 1956, a non-communist, Miklos Hu- Other than such symbolic gestures, however, there bay, was elected president of the union, and the com¬ is little the United States can do to encourage Hunga¬ munists ended up with only three of the seven posts ry in its liberal path except to applaud discreetly what they have previously dominated. has already been achieved. Too much praise too loudly There are several signs indicating that the Kadar would make Moscow even more suspicious than it is, regime takes notice of this growing nationalism. Be¬ and the Soviets would demand that Hungary tie itself ginning with the current academic year, for example, even more closely to Comecon, the bloc’s economic the compulsory course on the history of the Hungar¬ club, than it is today. Indeed, many western journal¬ ian communist movement was replaced by one called ists, impressed by their visits to Hungary in recent “History of Hungary, 1918—1975.” In the new book years, have been told by Hungarians: “For God’s sake, for this course, Admiral Miklos Horthy, who ruled as don’t praise us too much and don’t emphasize that life regent between the two world wars, is no longer is so much more pleasant and free here than in other described as a fascist, merely as a reactionary. The text bloc countries.” also acknowledges that he tolerated trade unions and There is, however, one measure the United States non-communist, including socialist, opposition in could take which would help the Hungarian economy the parliament. and thus provide a more stable environment for the The picture is less rosy in the trade unions, howev¬ liberalization process: to extend Hungary’s most-fa- er. Sandor Gaspar, chairman of the Trade Union vored-nation status so that it does not have to be Council since before the revolution, was eased out of reviewed and reaffirmed every year. As long as the this post in 1983 to clear the way for reforms. But he procedure continues on a year-by-year basis, as re¬ made a surprise comeback in 1985. He is known to be quired by U.S. law, the Hungarians will find long¬ one of the Kremlin’s men in Budapest, and Hungar¬ term export planning extremely difficult, since there ian industrial workers, as they told western reporters is no guarantee that the country’s export goods will during the 1956 uprising, still detest this profes¬ continue to enjoy the low tariffs that result from sional bureaucrat, who is also president of the Mos¬ MFN. cow-controlled World Federation of Trade Unions. When Secretary of State Shultz visited Budapest In the chanceries of the West, the experts on East¬ last December, he was sympathetic to the idea, saying ern Europe are watching Hungary with sympathy, that it would be “propitious” at some point “to deal but also some confusion. Last January, for instance, with the question because it is quite understandable Pravda published a long article that strongly criti¬ that it helps to have the certainty that the conditions cized Hungarian policies, along with that country’s that are in effect, let us say today, are going to be in

FOREIGN SERVICE JOURNAL effect a year or two years from now.” Shultz also Kadar himself claims not to be interested in the assured his hosts that no one in Washington was question of succession. In the interview with Time he giving any thought to revoking Hungary’s trade pref¬ said, I am not too concerned about succession. In a erence. sense there is always a successor. Even in 1956 there Before arriving in Budapest, Shultz had been in was one— That year, he added, “was a difficult Bucharest and, according to news reports, he made period...in which I felt I had to take a strong stand. clear that he understood the difference between the There were others who could have done the job but it two bloc countries. Romania has also been granted fell to me. I did not seek it." MFN status, but in recognition of its relatively inde¬ pendent foreign policy, not Ceausescu's rather Stalin¬ ist domestic policies. As Bernard Gwertzman put it in EAL CHANGE, real “democratization” in East¬ the Neu- York Times: “The difference in mood between R ern Europe, including Hungary, remains Mr. Shultz’s meeting Sunday with Mr. Ceausescu and a daydream. The influence of the West with Mr. Kadar today was striking.” When Shultz ^is limited at best, and in the unlikely concluded his talks with the Romanian leader, event that there is a repeat performance of 1956, the Gwertzman continued, “Mr. Ceausescu seemed feisty West will again sit on its hands, doing less than and accused the press of writing ‘unrealistic’ reports nothing. about his country. And Mr. Shultz said later that they Nor is the situation likely to change with the arri¬ had frank and candid’ talks about human rights prob¬ val of Gorbachev on the scene. Permitting change in lems in Romania—Today Mr. Shultz seemed defer¬ Eastern Europe does not seem to rank high on his list ential to Mr. Kadar and praised what he had seen in of priorities. Surely he realizes that Eastern European Budapest.” nationalism is mainly directed against the Soviet Shultz himself remarked, “I did a lot of listening Union. He also knows that the need to survive and the and felt he [Kadar] had a great deal of wisdom. I'm in frightening memories of Hungary in 1956 and the position to say to everyone in Washington that Czechoslovakia in 1968 continue to keep the aging Mr. Kadar is a very interesting interlocutor and well leaders of the bloc countries in line. worth listening to.” This was unusual praise from Some in the West believe that the time bomb of Shultz, especially when one considers that he was East European nationalism will present Moscow with speaking of a man who had been a communist for four choices: decolonization; allowing more national most of his adult life. initiative: direct repression; or conservative muddling Kadar joined the party between the two world through. The last appears the most likely course, wars, and after 1945 was regarded as someone be¬ provided that Moscow does not feel its domination tween the two extremes of the hard-core, Moscow- suddenly and radically challenged by either the East trained operatives and the nationalist communists Europeans or their western supporters. As a conse¬ who spent the war either underground in Hungary or quence, the West finds itself in a situation demand¬ in exile in the West. He was trusted and used by both ing that it not be seen to be openly encouraging a groups—after all, who would suspect a simple lock¬ trend that it undoubtedly does support. smith who did not speak Russian and had never read Such a policy can succeed only through the precise Marx? Eventually, however, he was jailed and tor¬ exercise of diplomacy. This in turn requires the pres¬ tured, only being freed during the relatively liberal, ence of highly professional and skilled diplomats in pre-revolutionary period of the mid-1950s. the western chanceries throughout Eastern Europe. After the revolution, many Hungarians considered Yet today, the U.S. ambassador in Budapest is Nico¬ Kadar a traitor. Today, however, many would agree las Salgo. Though born in Hungary, his previous with Shultz’s praise. He is probably even more popu¬ experience was as a top official in the company that lar among the non-communists than among some owns the Watergate Hotel complex in Washington. party veterans. But one concern is becoming more Last spring it was reported that Salgo was to be re¬ prominent: What will happen when Kadar dies or placed by Mark Palmer, an outstanding Foreign Serv¬ retires? For the first time, the March 1985 party ice officer who is now deputy assistant secretary of congress named a deputy to the now 73-year-old Ka¬ state for European affairs, and an authority on the dar: Karoly Nemeth, a 63-year-old party hack. But communist world. Apparently, however, Salgo was Hungarian diplomats in Washington privately cau¬ able to extend his tour at least into the autumn. tion against assuming that Nemeth is automatically Such disarray is hardly conducive to the delicate the heir apparent. There are other candidates: Ferenc diplomatic tightrope the United States needs to walk Havasi, a 57-year-old economist; arch-conservative in this situation. As we look back over the three Karoly Grosz, a member of the Politburo and party decades since the Hungarian revolution, we need to boss in Budapest; party foreign affairs specialist Ma- remember the tragedy of that time. But we also need tyas Szuros; and the propaganda chief Janos Berecz. to reflect on the value of a policy that is aware of its The last, considered the choice of the party’s more limitations, but seeks to do all that it can within enlightened wing, argued earlier this year in the theo¬ them. Q retical journal Tarsadalmi Szemle that the failures of the Hungarian Communist Party that led to the 1956 Endre Marton was bom in Budapest and was an Associated uprising should be acknowledged. He also admitted Press correspondent there during the Hungarian revolution. that some of those who fought in 1956 were “honest He later was a diplomatic correspondent for the AP’s Wash¬ young men,” adding of course that they were exploit¬ ington bureau. He is an adjunct professor emeritus at ed by “sinister forces.” Georgetown University’s School of Foreign Service.

OCTOBER 1986 33 Million-Dollar Business

astonished to find that he had booked HE PLAN BEGAN with a letter to An import deal T her into a small inn, of which I had nev¬ the U.S. consulate in Rangoon, Burma, from the Heavenly Tid¬ turns sour er heard, in Paradise Valley on the out¬ ings Mission, a religious organ¬ skirts of the city. Miss Whitberry was ization in California. It was signed by when the seller the only guest, but the Chinese room Priscilla Whitberry, director, and stated clerk, who was sleeping behind his desk that in the interest of helping the poor turns dealer when we arrived, assured us that the people of Burma, and also to generate room was first class. There was no dining funds to further the mission's good room, but meals and tea would be served works, the mission was prepared to im¬ in the room. We wished Miss Whitberry FRED GODSEY port a considerable quantity of Burmese a pleasant night and agreed to return for handicrafts. In addition to wholesaling her early the next morning. the merchandise to souvenir shops that my Burmese assistant, U Saw U Saw was just finishing his first throughout the United States, the mis¬ Myint, and I would receive Miss Whit¬ hourly bowl of malodorous rice when sion would offer them for sale at its tem¬ berry upon her arrival at Mingaladon air¬ Miss Whitberry arrived at our office the ples in California. Miss Whitberry was port and take her to her hotel. After a next morning. Her face was drawn, with particularly interested in woodcarvings, night’s rest, we would show her around dark rings under her eyes, and the floppy gilded lacquerware sewing boxes, and Rangoon and Kemmendine, where Bur¬ hat was askew. She was carrying her can¬ bon-bon containers made in the form of mese parasols and textiles are made. We vas handbag and Bible. She was visibly ducks. She was quite enthusiastic and es¬ would then travel with her to a principal upset. timated that she could sell a million dol¬ lacquerware and woodcarving village “We were just about to leave for your lars worth of Burmese handicrafts per near Pagan, an ancient Buddhist-temple hotei,” I assured her, though it was quite year. She ended her letter with the notice town on the Irrawaddy river. Miss Whit¬ early. “Have you had your breakfast?” that she would soon arrive in Rangoon to berry could view the items and later Miss Whitberry stared at us out of inspect potential purchases and to place place her order with an export firm in bloodshot eyes as U Saw gulped the last firm orders with exporters recommended Rangoon. stinking bite from his rice bowl. “No, I by the consulate. My assistant U Saw was a young man can’t eat. I have a taxi waiting with my The letter was forwarded by the con¬ whose main interests in life were eating luggage,” she said wearily. “I’ve asked sulate to the Burmese Ministry of Indus¬ and cockfighting, in that order. Every him to take me to another hotel. Perhaps try and Commerce, where I was serving hour in the office he ate a bowl of rice you can come and give him directions. I temporarily as an adviser on trade pro¬ mixed with evil-smelling fish sauce. He didn’t sleep a wink last night! The room motion. The minister summoned me to spent the rest of his time on the tele¬ itself was quite nice. The bed was extra his office. phone buying or selling fighting cocks. large and comfortable and even had a “This is a million-dollar business,” he He had been assigned to me because of pink silk cover. I was especially im¬ said, indicating Miss Whitberry’s letter. his supposed knowledge of English, but pressed with the mirrors—why there was “This would be an excellent opportunity in fact he spoke very little of it. even a beautiful, large mirror on the ceil¬ to persuade some of the villages around We met Miss Whitberry at the airport ing right above the bed. And there were Pagan and Mandalay to stop making opi¬ on schedule. She was a stout maiden the most extraordinary gadgets in the um pipes and selling drugs for those lady, well beyond middle age, of stern bathroom; I wondered what on earth Golden Triangle gangsters. We must visage and military mien. Her grey hair, they were for.” convince them that they can earn more which she wore in a bun, was covered by I looked at U Saw, who quickly bus¬ by making these things for sale in the a wide-brimmed, floppy straw hat. She ied himself with some papers. United States. It will be not be easy. came off the plane carrying a huge canvas “But there was some sort of party in They have been making opium pipes up handbag in one hand and a Bible in the the hotel,” she continued. “I’ve never there for centuries.” other. One sensed immediately that Miss heard such noises in my life. Men shout¬ The result of this conversation was Whitberry was a no-nonsense person. ing. Women laughing and screaming. It I had left the hotel arrangements to U went on the whole night. Of course, I Fred Godsey, a regular contributor to THE Saw, assuming that he would make a res¬ couldn’t understand what they were say¬ JOURNAL, is a retired Foreign Service ervation for Miss Whitberry at the ing. I wanted to get the manager, but I officer. Strand, Rangoon’s tourist hotel. I was was afraid to leave my room.”

34 FOREIGN SERVICE JOURNAL MAGDA FRENCH OCTOBER 1986 gave usaHalloween-pumpkin smile,re¬ visit hadbeensent,andweweremetby gan, aBurmesearmyofficerprovidedus service ontheMississippiRiver.InPa¬ Saw, andIsailedtoPaganonanancient she wouldbebetterrested.1thenre¬ vealing stained, stubbyteeth. four similarlycladassistants, Mr. Nouk semi-automatic pistol.Flanked byhis belt aroundhiswaisthelda.45-caliber shirt. Acheckedlongyiwrap-around skirt cloth, long-sleevedjacketoverhiswhite he worethetraditionalblackcotton- his rightear.Despitethehotweather, kerchief, apartofwhichdangledover mous headwasswathedwithapinksilk bling afatBuddha.Thetopofhisenor¬ of indeterminateagewithabellyresem¬ Mr. Nouk,andfourofhisassistants. the headman,introducedbyUSawas wheel, wearrivedjustbeforenoonatthe wracking, dustydrivewithUSawatthe with atoplessjeep,and,afternerve- paddlewheel steamerthathadonceseen it wasownedbyhiscousin. Saw, whosworeontheheadofBuddha turned totheofficefindarepentantU Rangoon touruntilthefollowingday,so Hotel, whereweagreedtopostponethe reached hissandal-cladfeet.A cartridge lacquerware village.Officialnoticeofour Valley Innwasabordello,eventhough that hehadn’tknowntheParadise A fewdayslater,MissWhitberry,U Mr. Noukwasashort,swarthyman I tookMissWhitberrytotheStrand of thevillage.Mr.Noukandhisfouras¬ come tovillage.Hesaywesleeptonight and oldladyfromAmericamostwel¬ dling animaginary machineguninhis Wayne.” gan theconversationwithaquestionto a servantbroughtherglassofbrown The beveragewasscotchwhiskeyand lacquerware andwoodcarving.” lunch ourhonor.After,heshowoldlady in guesthouse,andhehavemadespecial shouted, jumping tohisfeetandcra¬ lady comefromAmerica.She know John words “America”and“JohnWayne.” Miss Whitberry,Idistinctlyheardthe She optedfortea.WhenMr.Noukbe¬ liquid, whichIadvisedhernottodrink. tea. MissWhitberryaskedforwater,and ily spicedboiledmeatservedwithrice. ing thethreeofus.Thefoodwasaheav¬ sistants satononesideofthetablefac¬ THE LUNCHwasservedinthe was followedbyalongstatementinBur¬ peared tobetheextentofhisEnglish.It ny chickensandnakedchildren. I stoodsurroundedbyaclusterofscraw¬ mese whileMissWhitberry,USaw,and “He say,”USawtranslated,“you,me, “John Wayne!Goodboy!”Mr. Nouk “He say,"USawinterpreted, “old “How doyou?”hesaid,whichap¬ en houseonstiltsinthemiddle which wasatypicallargewood¬ dining halloftheguesthouse, John Wayne—halfpoundbestgrade-A- plained theprocess,withoutmentioning cused herselfandwenttothetoilet.I answer, however,broughtapuzzledex¬ Nouk, whobeamedwithpleasure.His meat itis.” eaten. Askhim,please,whatkindof on herplate.“TellMr.Nouk,”shesaid, finished theextralargeportionoffood Miss WhitberrywasanAmerican. and inquiredofUSawifhewassure at all.Opiumisadrug,isn’tit?Good¬ him pleasethatIdon’tknowMr.Wayne Old ladytakewithandgiveJohnWayne one opiumandbeautifulpipe. we wereabouttoleavethetable,Mr. on watchingthecookopencans.As querware itemsandwoodcarvingstoadd specting otherworkshops,andMiss of tobaccotobeasin.” consider anythingthatwouldpromote in theUnitedStates. tain thatthesewouldsellextremelywell the opium,andaddedthathewascer¬ making opiumpipes.Mr.Noukex¬ lunch containedfiveworkmenbusily took anextralargeswallowofscotch. your honor.”MissWhitberryquicklyex¬ meat ofthemole.Hecookitspeciallyin what youcallinEnglishthemole.It mese-English dictionaryandthumbed a moment,thentookouthissmallBur- pression toUSaw’sface.Hethoughtfor “this isthemostdeliciousmealI’veever Whitberry recoveredhercomposureand ness, no!Icouldneverdothat!” berry's face.“Oh!Goodheavens,no!Tell Nouk.” Mandalay. Hesayhepreparenicegiftfor See himfivetimeinmoviehouse lowed byastreamofBurmese. arms. “Rat-ta-ta-ta-ta-tat!”Thiswasfol¬ for histhoughtfulness, butithasbeena night?” rected aquestiontome. Nouk flashedhispumpkinsmile anddi¬ salmon andrice.MissWhitberryinsisted for theeveningmeal,whichwascanned his assistantsjoinedusintheguesthouse to herimportlist.Mr.Noukandtwoof Whitberry waspleasedtofindsomelac¬ the useoftobacco.Weconsider “Tell himthatourmissionwouldnever through thepages.“Aha!Yes.Hesayit in America—fromgoodfriend,U long day.Weare rathertired,andwe The firsthutthatwevisitedafter Mr. Noukwasextremelydisappointed The colordrainedfromMissWhit- The restoftheafternoonwasspentin¬ U SawdulycommunicatedthistoMr. “Tell him,”Isaid,“thatthank him “He sayhowmanygirlyouwant to¬ “Heavens, no!”MissWhitberrysaid. “He saylikeJohnWayneverymuch. 35 must get up early to catch the steamer in speech thanking us for the visit, he di¬ ware, parasols, and woodcarvings. At the Pagan. Perhaps another time.” rected a question to me. Again, I caught airport, I had the impression that she A frown and another stream of rapid the words "John Wayne” and “America.” was happy to be leaving. Burmese from Mr. Nouk. “He say maybe you give him John “He say he supply many nice girl to Wayne address in America." brave English soldier during war. ” U Not wishing to be considered un- Saw added an aside, “he also supply American by Mr. Nouk, I said that I many nice girl to brave Japanese soldier was sorry but that I had left Mr. during war.” Wayne’s address in my office in Ran¬ My attempt at a second refusal was in¬ goon. He seemed satisfied with this ex¬ terrupted by another burst from Mr. planation. As the jeep took off in a cloud Nouk. of dust, I looked back and saw Mr. “He say ho kay. You want sleep with Nouk again waving his imaginary ma¬ old American lady, that your business.” chine gun and heard him shouting, Miss Whitberry fled to her room with John Wayne! Good boy! Rat-ta-ta-ta-ta- her hands cupped over her ears. tat!” The next morning, as we prepared to Miss Whitberry placed a firm order depart for Pagan, Mr. Nouk and two of with a Chinese exporter in Rangoon for his aides came to see us off. After a long several hundred dollars worth of lacquer-

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36 FOREIGN SERVICE JOURNAL my desk. "Look at this! You trying to the customs people here opened some of million-dollar business. A few days later, create an international scandal or some¬ the crates, they found only those little the telephone rang. It was the U.S. con¬ thing? You guys ought to be put in pipes that they say are for smoking drugs. sul’s secretary. “We were wondering,” jail!” But worst of all, the rest of the boxes con¬ she said, “if you by any chance have the tained the most horrible woodcarvings, The letter, addressed to the U.S. am¬ address of John Wayne, the movie star? which they say are pornographic material! bassador, Rangoon, was on the stationery We have this funny little man here at The men from Washington think that of the Heavenly Tidings Mission. our only salvation would be an official let¬ the consulate. He’s a big fan of John ter from the ministry and one from the Wayne movies and has brought along Dear Sir: consulate stating that I did not order any this gift package that he wants to mail of these horrid things. Please do send to Mr. Wayne. He says you have Mr. 1 am writing you about a most dreadful these letters immediately. Wayne’s address.” situation. There are some men here from In a tremulous voice I asked her if she Washington, D.C., who want to send Yours, knew what was in the package. Reverend McPhearson, our president, and “Oh, yes. It’s the cutest little Burmese me to prison. Miss Priscilla Whitberry pipe, decorated with ribbons, and a half- You will recall that some time ago the Director mission ordered a quantity of Burmese pound of very expensive, very special handicraft items from an exporter recom¬ Burmese tobacco. We think it will be a mended by the Ministry of Industry and We sent the letters, wished Miss Whit¬ very nice gesture from a Burmese citi¬ Commerce in Rangoon. Imagine, when berry good luck, and said goodbye to the zen.”

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OCTOBER 1986 37 ply for Financial Aid grants or Merit Cypress College Awards by writing to the AFSA Scholar¬ James M. Farrell, Hope Rogers Bastek ship Programs administrator for informa¬ Memorial Scholarship, Keene State tion and applications. Forms will be College mailed in early November for both the John M. Farrell, AAFSW Scholarship, PEOPLE Merit Award program (limited to high Lyndon State College school students graduating in 1987) and Matthew German, Selden Chapin Me¬ the Financial Aid grants for full-time un¬ morial Scholarship, University of dergraduate study in U.S. colleges and Maryland universities. Elena A. Gravelle, AAFSW Scholarship, The AFSA Committee on Education Seton Hall University Foreign Service Juniors members include Claude G. Ross, chair¬ Ruth A. Hirsch, AAFSW Scholarship in Awarded AFSA/AAFSW man; Sheila W. Austrian, USIA; Philip C. honor of Marlen Neumann, Philadel¬ Scholarships Blanchard, State; William R. Ford, AID; phia College of the Performing Arts David T. Jones, State; Lisa C. Keller, Christopher J. Holguin, Howard Fyfe THE AFSA COMMITTEE ON EDUCATION has AAFSW. Dawn H. Cuthell is the Scholar¬ Memorial Scholarship, New Mexico announced the list of Financial Aid schol¬ ship Programs administrator. Inquiries State University arship awards for academic year 1986—87. may be addressed to AFSA at 2101 E Rudolph Holguin, Charles C. and Jane This year 70 Financial Aid scholarships Street NW, Washington, D.C. 20037. K. Stelle Memorial Scholarship, New have been awarded for full-time under¬ Mexico State University graduate education. Once again, the com¬ Financial Aid Grants Bruce F. Hoof III, Mark G. Mattran Me¬ mittee expresses deep appreciation to all 1986-1987 morial Scholarship, Portland State those who have supported the scholarship University programs with their generous contribu¬ Alexandra Aber, AAFSW Scholarship, Allan Kassebaum, Clarke W. Slade Me¬ tions, and in particular AAFSW for their University of Rhode Island morial Scholarship, Old Dominion continued interest and efforts on behalf of Klaus J. Aber, John Foster Dulles Schol¬ University Foreign Service juniors with funds raised arship, University of Southern Califor¬ James L. Kassebaum, Vietnam Memori¬ at their annual AAFSW Bookfair. nia al Scholarship, Radford University This year, two special scholarships are Frank N. Allegro, Beirut Memorial David B. Kelly, Arthur B. Emmons Me¬ given in honor of Betty Haselton and Mar- Scholarship, University of Florida morial Scholarship, University of Colo¬ len Neumann in recognition of their out¬ John A. Allegro, AAFSW Scholarship, rado, Boulder standing work in support of these educa¬ University of Florida Terri L. Kelly, AAFSW Scholarship, tional programs. Their citations from Allison J. Aschman, AAFSW Scholar¬ University of Maine at Machias AAFSW read as follows: ship, Bloomsburg University Linda Leung, Julius C. Holmes Memori¬ Marguerite Bellamy, AAFSW Scholar¬ al Scholarship, University of Rochester Betty Haselton has been a mainstay of the ship, College of Notre Dame Dennis C. Lincoln, Wilbur J. Carr Me¬ Bookfair for many years and is known for Consuelo Barrett, Marcia Martin Moore morial Scholarship, Worcester Poly¬ her good humor, her generosity of spirit, Memorial Scholarship, University of technic Institute and her unbelievable energy. She has been Lowell Patrick W. Loomer, Theodore A. tireless in her efforts to enlist the very best Ian Barrett, Neil Tardio Scholarship, Xanthaky Memorial Scholarship, Sarah talent for the Bookfair. Betty works Massachusetts College of Art throughout the year collecting books and Lawrence College art work from homes in Washington, and Sean Barrett, Gertrude Stewart Memorial Karen M. Lowe, AAFSW Scholarship, has been in charge of all cashiers during Scholarship, University of Iowa Asbury College Bookfair for the past two decades. Louise Brogley, AAFSW Scholarship, Pamela J. MacDonald, AAFSW Scholar¬ Marlen Neumann has spent many years George Mason University ship, St. Mary’s College working for the Bookfair. She has been the Colette V. Cabral, AAFSW Scholarship, Sara-Jean Manapol, Elizabeth Winn Me¬ Bookroom manager, volunteer coordinator, New York University morial Scholarship, University of Cali¬ and chairman. Her wise counsel is often Lucy A. Conley, Jefferson Patterson fornia at Davis sought, and she has helped to resolve many Scholarship, Grinnell College Teressa-Anne Manapol, AAFSW Schol¬ thorny issues. She has used her skill and Eric Dandridge, Landreth M. Harrison arship, Trinity University - Texas knowledge to make major contributions to Memorial Scholarship, Harvard Uni¬ Vivynne L. Martindale, David K. B. the work of the Collectors’ Corner and the foreign-language section. versity Bruce Scholarship, The Johns Hopkins Bookfair would not be the successful in¬ Frank Ian Darlington, AAFSW Scholar¬ University stitution it is today without the valuable ship, University of Washington Edward M. Milburn, Charles B. Hosmer work of these volunteers extraordinaires, Jefferson Dolan, John Campbell White Memorial Scholarship, Maryland Insti¬ and we are proud to honor them. Memorial Scholarship, University of tute, College of Art California - Berkeley Robin M. Nelson, Gertrude Stewart Me¬ The names of the recipients of the Finan¬ Naomi Durham, AAFSW Scholarship, morial Scholarship, University of Utah cial Aid Awards, the scholarships they University of Notre Dame Claudia G. Nenno, Jacq Bachman Sira¬ have received, and the colleges and univer¬ Bernadette A. Failla, The American cusa Scholarship, Brown University sities they will attend are listed below. Women’s Group-Bonn, University of Nancy P. Nenno, Timberlake Scholar¬ Dependent children of career Foreign Connecticut ship, Brown University Service personnel of State, AID, USIA, the Stephen Fallin, AAFSW Scholarship, Se¬ Nicole Neuser, Wilbur J. Carr Memorial Foreign Agricultural Service, and the For¬ attle Pacific University Scholarship, Salem College eign Commercial Service are eligible to ap¬ Anthony Farago, AAFSW Scholarship, Deborah S. Nugent, Robert E. and Flor-

38 FOREIGN SERVICE JOURNAL ence L. Macaulay Memorial Scholar¬ Gregory J. Taylor, AAFSW Scholarship, town University Hospital from cancer. He ship, University of New Hampshire University of Rhode Island was 44. Scott T. Nugent, Wilbur J. Carr Memo¬ Ann L. Thompson, William Benton Mr. Chanda, who was born in India, rial Scholarship, Averett College Scholarship, University of Oregon earned a bachelor’s degree from Punjab James W. O’Brien, Mary Catherine Ken¬ Tamara K. Thompson, G. Montagu and University in Chandigarh, India, as well as nedy Healy Memorial Scholarship, Frances M. Pigott Memorial Scholar¬ masters’ in economic development from Brown University ship, University of Oregon Brown University and in city planning Carlos L. Olivo, Gertrude Stewart Me¬ Diego Vazquez, Memorial from Massachusetts Institute of Technol¬ morial Scholarship, University of Texas Scholarship, Providence College ogy. He became an American citizen in at El Paso Edward F. Vazquez, Ernest V. Siracusa 1974 and worked as a private planning Frederick M. Olivo, Betty Carp Scholar¬ Scholarship, Boston College consultant in Washington before joining ship, University of Texas at El Paso Juan L. Vazquez, Neil Tardio Scholar¬ AID in 1979. He served as deputy director Richard A. Olivo, Gertrude Stewart Me¬ ship, University of Southern California of the Regional Housing and Urban De¬ morial Scholarship, University of Texas Jeffrey T. Villinski, Gertrude Stewart velopment Office for East and Southern at El Paso Memorial Scholarship, MacAlister Col¬ Africa in Nairobi. At the time of his death Anne E. Oppel, Wilbur J. Carr Memorial lege he was the housing and urban develop¬ Scholarship, University of Richmond Michele T. Villinski, Edward T. Wailes ment officer in charge of housing finance Kathryn L. Oppel, AAFSW Scholarship, Scholarship, Carleton College and economics for the Office of Housing Virginia Commonwealth University Deana Webb, AAFSW Scholarship, and Urban Programs and its worldwide Nancy C. Quinones, Suzanne Marie Col¬ Grand Canyon College housing guaranty program in the Bureau lins Memorial Scholarship, Sweet Briar Karen D. Womack, Gertrude Stewart for Private Enterprise in Washington. He College Memorial Scholarship, Northwood In¬ received an AID Superior Honor Award in Lora Lee Rhoades, Robert Woods Bliss stitute 1983 for his work in the development of an Scholarship, Auburn University Michael Womack, AAFSW Scholarship, innovative low-cost housing project in Roger M. Rhoades, AAFSW Scholarship Central Michigan University Zimbabwe. in honor of Betty Haselton, Auburn Norman Yarvin, Oliver Bishop Harri- He is survived by his wife, Jaspreet, and University man Memorial Scholarship, The Johns two children, Amit and Dev. Condolences Henry P. Sieloff, AAFSW Scholarship, Hopkins University may be sent to 1621 Golden Court, Old Dominion University McLean, Virginia 22101. Contributions April E. Skinner, AAFSW Scholarship, in Mr. Chanda’s memory may be sent to Kentucky State University Deaths the Community for Creative Non-Vio¬ Nicholas Tarnoff, Harry A. Havens Me¬ RAJINDER N. CHANDA, a Foreign Service lence, 1345 Euclid Street, N.W., Wash¬ morial Scholarship, Virginia Tech officer in AID, died May 17 at George¬ ington, D.C. 20009.

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40 FOREIGN SERVICE JOURNAL Annual Report of the Governing Board, 1985—86

Overview have continued to prime the pump through our vital and thriving Scholarship Programs. We have provided a vital, independent forum for our members through our magazine. And we have continually The last year has been a difficult one for the Foreign Service and, brought our concerns before a national audience through interviews thus, for AFSA, both as a professional association and a labor union. with the media and in the excellent press coverage given articles in Every day we are engaged in a protracted struggle to maintain the the JOURNAL. essential nature of the Service against attacks from several sources Our mission in the coming year will be to convince all concerned— within Washington. Added to the traditional list this year has been the both inside and outside the Beltway—that America's investment in a deficit-reduction exercise known as Gramm-Rudman-Hollings. strong, professional Foreign Service is an economical and sensible Meanwhile, the increasingly difficult hazards of overseas service— one. It is one that pays off in the long run both in reduced global from terrorism to family separation to disease to unique threats like tensions and increased trading opportunities, in the wars that are not "spy dust”—-require new approaches if the Service is to remain a fought and the disasters that do not occur. Our victories may often be healthy and viable career. silent ones, but it is time for us to start trumpeting them. It has become clear that the combination of these factors has already changed the nature of the Foreign Service. As a recent survey conducted by the JOURNAL has revealed, most people entered the Service with a lifetime commitment; today, only 28 percent view it State Standing Committee as one. This change in perceptions has been caused by some fac¬ During the past year, the State Standing Committee has been heavily tors that are affecting the whole of American society, but it has also involved in negotiating joint regulations, and to a lesser extent nego¬ been caused by factors within the control of the Congress, the White tiating agency-specific agreements. Much of our efforts have been House, and the foreign affairs agencies. The social changes are spent holding on to previous gains that have been threatened in the outside our purview, but the Association can report some successes Gramm-Rudman environment. One specific victory was our suc¬ in dealing with the political fabric within which we find ourselves. In cessful effort to get management to overturn its proposal concerning some cases we can report clear victories, in others, that we pre¬ personnel currently assigned to Washington who are paneled for served what we had. university training. Despite information provided in the open assign¬ Our most important battles continue to involve protecting the es¬ ments packets, management wanted to limit these individuals to sential nature of the personnel system. Because of Gramm-Rudman, training in the Washington area. Individuals who are currently as¬ efforts are already underway to eliminate or tax some of the benefits signed overseas would not have been affected by this. One of the that make overseas service possible in the first place. Related to this arguments we used was FSI's own data showing that Washington has been the four-year-old struggle to preserve the retirement sys¬ training is less effective. tem. We can report some limited successes in this area. Although Much time and effort was spent negotiating the new multifunctional retirees had their cost-of-living adjustment eliminated this year be¬ promotion program, which takes effect this year for FS-2s and 3s, cause of the new deficit-reduction law, we and the other federal- and takes effect in 1988 for FS-1s. This program is expected to employee unions have succeeded in getting passed legislation that significantly increase the promotion opportunities for officers as¬ guarantees the COLAS through the end of the decade. And although signed to out-of-cone jobs, as well as those assigned to jobs in new hires have been cut off from the traditional retirement system, functional bureaus such as Refugee Programs and International Nar¬ the one that replaces it preserves its essential features. In addition, cotics Matters. when some members of Congress tried to allow the appointment of a We made two significant advances in the area of performance director general from outside the Service and to sever the endan¬ evaluations. We successfully negotiated a new and shorter EER gered Senior Foreign Service from our bargaining unit, we were able form, which eliminated many poorly thought out proposals that man¬ to convince the conference committee working on the bill that these agement had made. Also, for the first time ever, we negotiated selec¬ measures would not be in the national interest. The membership tion board precepts that are valid for this year as well as 1987. Only played a vital role in these victories through contributions to the the multifunctional sections of the precepts will be open to negotia¬ Legislative Action Fund. As a result, our major initiative to develop tion next year, and that is done only because it is a new program. and maintain a dialogue on the Hill has been a successful one. This year's precepts also gave instructions for promotion of secre¬ At the bargaining table, our progress has been slow but sure. taries to FP-3, a rank comparable to that of career ambassador. We Unfortunately, in some areas our victories end up being temporary finally convinced management that prior sainthood should not be ones for, as soon as we have established a benefit such as danger necessary, pointing out that the restrictions and requirements must pay, management seems to find a reason to restrict it. Nonetheless, not be more severe than those for career ambassdor. the vast majority of the new benefits envisaged by the Foreign Serv¬ Monitoring danger pay has been a constant preoccupation, par¬ ice Act have been implemented, and the Foreign Service is stronger ticularly battling attempts to link the pay to presence of dependents, for it. Both our Legal Department and Member Services Department especially if that presence is unauthorized. This battle seems unend¬ have provided essential help in numerous areas to ensure that the ing—just when we think we’ve won our point, it resurfaces. personnel system is administered both soundly and fairly. The consumables allowance agreement is another one that has In our functions as a professional association, we have continued required careful monitoring. So far we have only one case that is still to bring important leaders in the Foreign Service, Congress, and the pending—the others have been successfully concluded. We are, administration before our members through our lecture series. We however, keeping our eyes open and fingers crossed.

OCTOBER 1986 41 State Vice President Thea de Rouvllle and Staffer Sabine Sisk dis¬ Congressional Liaison Robert Beers (right) talks with Senate cuss reciprocity with then OFM director Douglas Langen. Foreign Relations Committee member Claiborne Pell.

We signed a ground rules agreement with management providing each level, and to extend the retention period for FS-1s from 7 years for schedules and procedures for proposing and negotiating to 10 years. After considerable discussion by the Standing Commit¬ changes in joint regulations (those affecting the five foreign affairs tee and consideration of 17 post as well as varied AID/W responses, agencies). We also negotiated an extremely favorable housekeep¬ AFSA oposed both measures. Opposition was based on the belief ing agreement granting us expanded services and facilities, includ¬ that these extensions could cause blockage to promotions and mo¬ ing placing telephone calls overseas and authorizing 100-percent bility, that it would present a potentially dangerous change in per¬ official time for the president and state vice-president. ception by the Congress regarding the Foreign Service as meriting Management has insisted that regulations concerning tours-of- special benefits and conditions because of the necessity of main¬ duty are non-negotiable, a stance we continue to challenge. taining an up-or-out system, and that it appeared to be yet another in In the legislative arena, the Association had a significant success a long line (e.g., reductions in force, promotion freezes, suspending last year, when it beat back a midnight effort by Congress to sever international development intern classes, etc.) of 11th-hour bad the embattled Senior Foreign Service from the bargaining unit and to management practices that tend to postpone problems rather than allow a political appointee to serve as director general. AFSA Con¬ solve them. gressional Liaison Officer Rick Weiss led a last-minute lobbying ef¬ We appreciate the post support and response received, and ask fort that was able to persuade the conference committee that senior that each post keep us apprised of current concerns and the identity officers faced the same threats as their younger counterparts and of its AFSA representative. that professionalism is an important qualification for the official who —WILLIAM ACKERMAN, AID Vice President acts as director of all Foreign Service personnel. We would like to take this opportunity to ask all members to attend USIA Standing Committee the State Standing Committee meetings at 12:30 every Monday in Room 3644. Help us to negotiate these regulations and improve our This year, AFSA in USIA continued to grow and actively support working and living conditions. issues of professional concern, under the leadership of its standing —ANTHEA s. DEROUVILLE, State Vice President committee. Efforts centered around luncheons for new officers, our “Dialogues on Public Diplomacy” series, and editorial work for the AID Standing Committee JOURNAL. In our recruitment efforts, we hosted luncheons at the Foreign The AID Standing Committee has monitored and negotiated several Service Club to welcome four separate classes of FSOs entering the issues of great concern over this past year, including: agency, and to explain AFSA to them. A number of these new officers ■ A new open-assignment agreement joined the Association as a result. Our overall agency membership in ■ A proposal for a new format for the Employee Evaluation Report; AFSA now exceeds 220. ■ A proposal to extend time-in-class for the Senior Foreign Service Our dialogues, begun two years ago, continued. One session and the retention period for FS-1s. focused on the impact of the Inman Report on the security of USIS Open assignments: This area continues to be an area where missions overseas, with remarks by State's director of diplomatic AFSA receives the most complaints from constituents. The Standing security, Robert Lamb, and USIA's former public affairs counselor in Committee tried to tighten language where we believed manage¬ Bonn, Tom Tuck. A second program, devoted to the importance of ment could exercise excessive flexibility in interpretation that would preparing the Officer Evaluation Reports, reflected the experiences disadvantage employees Nevertheless, we recognize the system of former selection board panel members who are senior FSOs. Both will always leave something to be desired and will bear continued sessions were well attended, and both elicited lively questions and close monitoring. This year we will focus on positions filled without discussion. advertising, and we ask employees who become aware of such We worked to ensure that USIA interests were reflected in the occurrences to inform AFSA, identifying the position by title, position JOURNAL. Two agency officers contributed substantively to the work of number, and past and current incumbent the magazine as members of its Editorial Board, one of them continu¬ Employee Evaluation Reports: Management also proposed a ing as its chairman. new format for the Employee Evaluation Report, intended to cut Our Standing Committee was led this past year by Charles Lover- down on narrative and facilitate a more continuous EER process idge and Kathleen Brion, and we acknowledge with gratitude their between the rater and the rated employee. Response from all eche¬ leadership as well as their work as members of AFSA's Governing lons and areas of responsibility was overwhelmingly negative, and Board. Brion's membership on the Board doubled USIA's represen¬ AFSA successfully opposed its introduction. However, management tation there, and reflected membership approval of a welcome has since forwarded a new EER proposal to AFSA, which is currently change in AFSA's bylaws. Loveridge and Brion moved on to new under review. We expect to involve employees in the response to this assignments, however, and the committee asked the USIA member¬ latest version as well. ship to informally ratify its choice of successors: myself as chair and Senior Foreign Service time-in-class: We also negotiated a John Quintus as vice chair. Both John and I will serve on the Govern¬ management proposal to extend TICs for the SFS by one year at ing Board as well.

42 FOREIGN SERVICE JOURNAL Managing USIA's AFSA constituency with any degree of continuity eign Service retirement system will retain its separate status, its own remains a challenge for us, largely because of the short tours of most Retirement and Disability Trust Fund, and independent administra¬ agency officers in Washington. Our continued achievement, as well tion by the State Department. as progress in other areas, will depend on more participation from As with every previous budget submitted to Congress by this Washington-based FSOs. administration, that for fiscal year 1986 contained numerous cost- Our gains in the past year have been modest. We have increased reduction proposals aimed at present and future federal retirees. our membership, but we need to double the figure before we can Among other measures, it woutel penalize those who retired before speak with greater authority. There are many other professional is¬ age 65, tighten up the formula for calculating retirement annuities, sues worthy of Dialogue programs. In short, there is more to do, and and impose caps on future cost-of-living adjustments. AFSA, work¬ we need more active support to make a real difference, ing in coalition with other federal-employee and retiree organiza¬ —STEVE TELKINS, USIA Vice President tions, played a major role in turning back all of these initiatives. Despite the cancellation of the 1986 COLA as proposed in the ad¬ Treasurer’s Report ministration's budget, a COLA for Foreign Service retirees was trig¬ gered on December 1, 1985, payable beginning in January 1986. The last fiscal year was a pivotal one for the Finance Committee and Following a precipitous response by the Congress to a routine pro¬ the treasureship of the Association. The committee was led by War¬ posal to increase the federal debt ceiling, which resulted in rapid ren Gardner until nearly the end of the fiscal year in June. Warren enactment of the so-called Gramm-Rudman-Hollings bill, the COLA moved on to his new assignment overseas and I succeeded him in was canceled after it had become effective. July as treasurer and chairman of the Finance Committee. AFSA immediately began to seek re-establishment of the COLA in During the year, Warren was able to introduce many innovations in 1987. Both the Flouse and the Senate passed legislation to accom¬ the Association's financial and internal accounting process. Primar¬ plish this, and provision has been made in the 1987 budget resolu¬ ily as a result of his foresight and leadership, the Association is now tions to fund a COLA. in a position to formulate strategic plans and annualized budgets. Again working as part of the coalition of federal-employee and Perhaps the most important legacy Warren left the Finance Commit¬ retiree organizations, AFSA sought to preserve the three-year-recov¬ tee is a sense of purpose. It is with this sense of purpose that I shall ery rule that protected federal retiree annuities from being taxed until go forward for the remainder of his term. retirees were repaid their after-tax contributions to the retirement As part of the ongoing enhancement of our overall financial-man¬ trust fund. The chances of postponing any change in this procedure agement process, we have engaged the services of the international until after the tax bill was enacted appeared promising until the final accounting firm of Coopers & Lybrand as our auditors. C&L's Wash¬ hours of the Flouse-Senate conference. Virtually at the last minute ington office has one of the largest client bases in associations and prior to adjourning for a late summer recess, the conference agreed not-for-profit organizations. It is now auditing the Association's FY to accept the House language fixing the effective date of the change 1986 financial records. I shall provide you with a detailed report upon at July 1, 1986. completion of the audit. During this period of Gramm-Rudman inspired fiscal stringencies The Foreign Service Club has undergone some management per¬ and uncertainties, AFSA must continue its role as a vigorous advo¬ sonnel changes and is targeted toward a lessened dependency on cate whenever issues affecting the Foreign Service come before the the Association. Again, I will provide you with a full report when all the Congress. We intend to pursue this course during the year ahead. details are available. I am reviewing the cost-effectiveness of up¬ —ROBERT BEERS, Congressional Liaison Officer grading our data-processing capabilities and other computer needs of the Association. AFSA Administration The JOURNAL enjoyed a very good year in advertising page sales despite an overall soft market. I intend to do everything possible to The director for administration's primary responsibilities are oversee¬ assist its staff in maintaining that momentum. ing the Association’s daily operations and orchestrating special —SAMUEL MOK, Treasurer events throughout the year. Events this year included AFSA’s annual Christmas party, which was attended by Association members, Retirement Interests members of Congress and their staffs, federal agency personnel, journalists, State Department management, and others involved with A veritable barrage of proposals aimed at the federal retirement foreign affairs issues; the commemoration of the Memorial Plaque system generated considerable activity in the legislative action are¬ listing those Americans who have lost their lives under heroic or other na over the past year. inspirational circumstances while serving the government abroad in Topping the list was the enactment of the Federal Employees' foreign affairs; the post-Foreign Service Day Brunch; and the Janet Retirement System Act of 1986, which was signed into law on June 6. Ruben Lecture/Luncheon, which is part of a recently revived series This measure is the culmination of more than six years’ involvement of events relating to the status of women in the Foreign Service. on AFSA's part in representing the interests of the Foreign Service —SUE B. SCHUMACHER, Director for Administration during countless meetings and conferences bringing together mem¬ bers of Congress and their staffs, technical experts from the private Legal Department sector, and representatives of other federal employee and retiree organizations. The new act establishes a retirement system for all In the last year AFSA continued its important battle to preserve the post-1983 federal employees, who are subject to mandatory Social rights and benefits of Foreign Service employees in addition to work¬ Security coverage. It also provides the opportunity for pre-1984 em¬ ing closely with Congress on a number of issues affecting our per¬ ployees to transfer to the new system if it proves advantageous for sonnel abroad. them to do so. Shipping Allowances: The Association won an institutional griev¬ Last year's ANNUAL REPORT made reference to the fact that a new ance that increased shipping and storage weight allowances by 50 retirement system was being developed and it stated that AFSA was percent. AFSA had charged the State Department with breaching an seeking to ensure that the new plan "would at least maintain pre¬ agreement negotiated in May 1984 that would have increased the retirement income replacement at present levels for Foreign Service weight allowances for shipping and storage of household effects personnel and that provision [would] continue to be made for option¬ from 12,000 to 18,000 pounds. In addition to forcing implementation al retirement from the Foreign Service at age 50 with 20 years' ser¬ of the new weight allowance, AFSA received assurances from the vice." Both of these objectives were achieved. In addition, the For¬ department that employees will be reimbursed for all finance

OCTOBER 1986 43 The deputy secretary and an honor guard listen as President Nearly 400 employees attend this AFSA open meeting with senior Gerald Lamberty dedicates the Memorial Plaque. management officials to discuss personnel Issues.

charges and late fees incurred due to its delay in complying. Security Overtime: Several Diplomatic Security Service employ¬ Another institutional grievance regarding weight allowances is still ees were not being properly compensated for overtime spent in in progress. This one charges AID with improper implementation of travel status. The Legal Department has been involved on two fronts the 1985 agreement granting an allowance for shipment of consum¬ to rectify the situation. First, letters have been sent to management ables, AFSA contends that AID has been arbitrarily denying the demanding appropriate compensation for DSS employees. Second, consumables allowance to employees who began their second tours a detailed memo responding to several specific questions was sent or extensions of more than six months after the effective date of the directly to the concerned officials of the Diplomatic Security division. agreement (July 12, 1985) but whose travel orders were dated be¬ The Legal Department will continue to pursue this problem until all fore then. As a remedy for the agency's violation of the negotiated DSS employees are fully compensated. agreement on the allowance for additional consumables, AFSA has Insurance and Mortgages: The general counsel has also inter¬ requested that AID do the following: immediately give the allowance vened on behalf of individual employees whose cases will affect the to employees whose orders were issued prior to July 12, 1985, but benefits of many Foreign Service employees. In one case where an who arrived at post after that date; notify all employees of proper employee was struggling to retain insurance coverage for in-house eligibility requirements and procedural guidelines to apply for the medical care for his spouse, AFSA wrote to the Office of Personnel allowance; and provide employees with the allowance to which they Management voicing concern over the Government Employee are entitled, calculated retroactively from the start of their tour of duty Health Association's attempt to discontinue coverage of medically or extension. authorized skilled nursing care by arbitrarily and unilaterally altering Senior Foreign Service Back Pay: The Association secured an the terms and definitions of its coverage. OPM agreed with AFSA’s agreement from the State Department and AID that they will make contention that GEHA could not arbitrarily alter its definition of "cus¬ back payments to Senior Foreign Service employees who were af¬ todial care” to exclude payment for skilled medical attention required fected by pay caps between October 1980 and December 1981. to keep a patient alive. More recently, AFSA contacted the Veterans The legal staff argued that the back pay was due Foreign Service Administration and members of Congress regarding the refinancing employees as a result of the decision of the Seventh Circuit Court of of VA mortgages by Foreign Service employees stationed overseas Appeals in Squillacote v. United States, which awarded the pay to who are unable to meet the required residency regulations. AFSA members of the Senior Executive Service. Repayments in the area of hopes to reach a legislative remedy to this inequity. $2,000 per person are expected before December 1986. Since Legal Rights: In areas affecting the legal rights of employees, AFSA took action on behalf of affected members, SFS employees did AFSA has increasingly been providing counsel for employees under not have to pay legal fees, which for SES employees totaled $1.26 investigation by the Bureau of Diplomatic Security. AFSA has at¬ million. tempted to ensure that employees are fully informed of their rights Payroll Problems: The Legal Department has been playing an during every stage of an investigation. AFSA has protested manage¬ increasing role as a trouble shooter for employees who run afoul of ment's position that employees are not entitled to elect union repre¬ the bureaucracy. In the case of the foreign affairs agencies' transi¬ sentation during a polygraph examination conducted in the course of tion to the new Consolidated American Payroll Processing System, the investigation. for instance, AFSA answered numerous frantic calls for help from In other areas that concern legal rights, the general counsel is still employees whose paychecks were in error. AFSA worked with the engaged in litigation in federal court to ensure that when an agency Office of the Comptroller to resolve most individual problems result¬ commits administrative error that prejudices an employee's promo¬ ing from the transition to the new system, which handles the central tion opportunities, the agency is required to remedy its error. And the processing for more than 21,000 government employees. The Asso¬ general counsel appeared before the Foreign Service Grievance ciation won assurances from the department that employees who Board to voice AFSA's support for prescriptive relief, which is com¬ suffered overdraft penalties or had their credit ratings affected would ing under serious attack from AID. AFSA maintains that an employee receive assistance in resolving their difficulties. who has filed a substantive grievance or requested a hearing before Secretarial Pay: AFSA has been battling management over the the Special Review Board should not be terminated before the Griev¬ issue of secretarial pay at hire ever since the February secretarial ance Board or SRB has been able to comment on the issues involved class was denied compensation at the level they were promised in the employee's case. when recruited. The new hires had been told throughout the recruit¬ State Tax Inequities: The Association is concerned that a number ment process that those whose salaries were higher than the en¬ of states grant tax deductions to retired Civil Service employees, but trance level for FS-9 or FS-8 would be started at a salary that most not retired Foreign Service personnel. AFSA will continue to work for closely approximated their previous earnings. Only upon arriving in legislative remedies to these inequities in Alabama, Oklahoma, New Washington in May did the secretaries learn that their salaries were Mexico, Iowa, Idaho, and Kansas. The legal staff is currently re¬ to be cut substantially. AFSA is insisting that the salaries be retroac¬ searching the tax laws of all 50 states and the District of Columbia to tively adjusted to represent the commitments made to them by the see whether other inequities exist. department and is demanding that future classes be adequately Antiterrorism Legislation: The Association has worked with con¬ notified of what pay levels they will receive. gressional staff members to produce a comprehensive antiterrorist

44 FOREIGN SERVICE JOURNAL bill that provides upgraded protection in a manner that is compatible Legislation is currently before Congress to extend the scope of with the requirements of Foreign Service work. The Omnibus Diplo¬ benefits to all victims of hostile actions directed against the United matic Security and Antiterrorist Act of 1986 was generally supported States either in this country or abroad. AFSA is following its progress, by AFSA, but we registered great concern over the section of the and will publish an update as needed. original draft dealing with performance and accountability. AFSA Shipping and Storage Losses: Over the years, we have heard presented alternative language that granted the right of agency or countless horror stories experienced by employees involving ship¬ judicial appeal to employees suspected of wrong-doing that resulted ping and storage of household effects, including pilferage and in serious injury, loss of life, or significant destruction of property at or losses during storage with State Department contractors. More than related to a United States mission abroad. AFSA emphasized the the usual amount of complaints involved Fidelity Storage, and AFSA need for legislation that provides for the security of U.S. personnel, had pressured the department for years to sever its ties with them. A facilities and operations before terrorists strike, rather than attempt¬ few months ago the company was permanently dropped, and both ing to find a scapegoat after the fact. AFSA also suggested an AID and State are in the process of transferring stored HHEs to other amendment to the Foreign Service Act that would grant retirement companies. AFSA stands ready to provide assistance with potential benefits to all Foreign Service employees injured or killed in a terror¬ claims resulting from the transfer. ist attack, or their survivors. Currently, only tenured employees re¬ Insurance Coverage: Member Services frequently advises on the ceive retirement benefits. Association's different insurance programs and assists with resolv¬ —SUSAN HOLIK, General Counsel ing overdue claims when it is difficult for the employee to follow-up from an isolated post. Many members saw their health insurance Member Services Department costs skyrocket over the last few years, and AFSA was concerned that employees were paying through the nose for a benefit sup¬ This year the Grievance/Members' Interests Department underwent posedly available to them under the act. It became clear that con¬ a name change to more accurately reflect the wide range of activities gressional action would be required to clarify the language and and services it provides. The new Member Services department intent of the legislation. AFSA provided testimony and we are comprises grievance counseling and representation as well as a pleased that as the result of an amendment to the act, members host of support services members need because of the Foreign serving abroad may now enroll in the American Foreign Service Service lifestyle, including advice on regulations, laws, benefits and Protective Association's low-priced overseas option. allowances, and taxes. AFSA is still working with the Protective Association, the depart¬ There was also a personnel change: Brandy Wilson LeGrande left ment, and the Office of Personnel Management to correct a glitch in to work for a Bethesda law firm. Gerry Kuncio joined the Association the plan's provisions that requires that family members of the insured last October, and his name has become familiar to many posts and reside at the same post of assignment, which makes enrollment for individuals seeking AFSA assistance. tandems serving at different posts virtually impossible since, under The Member Services Department took action on a number of the the law, married Federal employees may not take out separate health bread & butter issues affecting members of the Service, including insurance policies. compensation, per diem, medical benefits, leave provisions, differ¬ Pouch Services: AFSA continues to monitor the operation of the entials, travel and transportation, and allowances. diplomatic pouch service. Last year we undertook an extensive sur¬ Rest and Recreation: Many posts contacted us to protest new vey of the operation and made our findings known to the member¬

requirements for mandatory use of excursion fares for R&R travel. ship through the ASSOCIATION NEWS and to management. Since then, We met with management to voice our objections. It appears that the department has reorganized the pouch operation and increased while there is no new policy, the existing regulations are-—in the light its staff We have noticed a decrease in complaints, but we will of Gramm-Rudman—being adhered to strictly. We ascertained, reserve final judgment until after the next holiday season. however, that no one can be forced to curtail or extend R&R travel Non-smoking Areas: Earlier this year, AFSA participated in a plans to meet excursion-tour eligibility, unless travel plans fall within survey of Washington-based employees using the State Department the time frame or routing where special fares apply. Cafeteria to find out how the designation of smoking and non-smok¬ After AFSA negotiated optional R&R to the United States last year, ing areas was working. We insisted that the poll had to be conducted many members suggested that we push for use of accumulated impartially. Response was terrific from smokers and non-smokers home leave during such travel, especially since many employees alike, and some adjustments in the seating areas were made to have had to curtail home leave to accommodate departmental emer¬ address health concerns of non-smokers without inconveniencing gencies, staffing shortages, or other stated needs of the Service. We smokers. agree with that idea, and reviewed statutes and legislative intent to Child-care: Because of complaints by single parents and tandem see if it could be implemented. Unfortunately, an amendment to the couples who have experienced considerable difficulty and expense Foreign Service Act and the U.S. Code is required, since currently in finding competent day care for their children while on temporary the use of home leave is prohibited for any other purpose. We will be duty in Washington, we surveyed posts to find out how widespread raising the issue with our friends on the Hill. the problem is. More than one hundred posts responded to our Antiterrorism measures: In the wake of repeated terrorist attacks survey, and a summary of the results appears in this month's issue of on U.S. airlines and at certain particularly vulnerable airports, AFSA the ASSOCIATION NEWS. requested redesignation of R&R points for employees assigned in Reciprocity: Last year AFSA conducted two interviews with the those areas. AFSA was also instrumental in assuring that posts have Office of Foreign Missions to gauge the effectiveness of reciprocity in flexibility in scheduling travel on foreign carriers outside the Fly remedying inequities between treatment of our members overseas America Act restrictions when the safety of employees and their and that accorded foreign missions here. AFSA was pleased to note families might be at risk. that major programs such as motor vehicle registration and licens¬ The reality of terrorist attacks prompted members to ask AFSA, ing, third-party liability insurance for foreign diplomats, and a new "What happens to me and my family if I get injured or killed?" While tax-exempt system for foreign diplomats based on the taxes our compensation is available under both the Foreign Service Act and employees pay overseas have either helped improve life overseas, Workers Compensation to employees who become victims of terror¬ or subjected foreign missions to the same restrictions forced upon ist actions overseas, no comprehensive summary had been com¬ our members at post. piled until Gerry Kuncio researched applicable statutes and regula¬ Tax Questions: Because of the unique nature of the Foreign Ser¬ tions and published the results in the February issue of the vice career, our members have unique difficulties in dealing with the ASSOCIATION NEWS. Internal Revenue system or, because of their distance from Washing-

OCTOBER 1986 45 President Lamberty talks with an NBC-TV reporter about the presi¬ Former Ambassador Evan Galbraith discusses a JOURNAL article on dent's plan to polygraph government officials. William F. Buckley's PBS television show Firing Line. ton, unique difficulties in keeping up with the volatile changes in tax serves as authority to amend the original travel orders under the laws. Accordingly, every year we publish an authoritative tax guide regulations, and that fairness and equity require the granting of a written specifically for Foreign Service employees and answer nu¬ consumables allowance in this case. merous tax questions from the field. The guide has also become Many grievances result from the department's negligence in en¬ increasingly popular with realtors, accountants, and tax attorneys suring that performance files contain all evaluations, commenda¬ and is included in the Foreign Service Institute's orientation packet. tions, and awards the employee has received. This can and has cost We are closely following the pending tax legislation and are planning employees a well deserved promotion and appears to be a common to advise you on major changes affecting the Service in time for year- occurrence at State. We can only recall one case against AID, sever¬ end tax planning strategies. al years back, when the agency submitted an incomplete file to a One persistent problem for employees is state income tax liability promotion board. We urge that members periodically review their while residing in the Washington area or during periods of service files when in Washington. abroad. Earlier this year, Gerry Kuncio contacted all 50 states to A large number of grievances in which AFSA represents are re¬ make sure we have the latest information available to our members. solved through settlement agreements. While not suitable in all This issue of the ASSOCIATION NEWS features a state-by-state chart cases, the process usually works well in time-sensitive cases, cutting prepared by Gerry. the average time for resolution from 3-12 months to a few weeks or Due to prolonged service abroad, many members have problems even days. in meeting the residency requirements for deferral or exclusion from —SABINE SISK, Director of Member Services capital gains after sale of their home. There is a special exclusion from the residency requirements for the military, and we believe the Communications Department same argument applies to the Foreign Service. While we are not too hopeful for action this year, we have not stopped lobbying for a Foreign Service Journal: The two-year expansion of the JOURNAL special exemption for our constituents through either the IRS or legis¬ having been completed last summer, this year has seen the maga¬ lative action. zine settle into a pattern of steady but less obvious growth and Grievances: Grievances account for about 50 percent of the improvement. It is now healthy both financially and editorially and, to workload of the Member Services staff. The process is a complicated judge by the comments the editors receive and its frequent citations and sometimes highly emotional one, and we spend considerable in the press, is generally respected by its readers and the media. time on counseling, editing grievance submissions, reviewing docu¬ The JOURNAL published 3-5 major features in each issue as well as ments, and representation at the agency and Grievance Board lev¬ the following departments: CLIPPINGS, PERIODICALS, BOOKS, CONGRESS, els. AFSA achieved some major successes this past year: this is DIPLOMACY, 10-25-50, PEOPLE, and DESPATCH. We published several important to note since one individual victory can set a precedent for theme issues on topics including Women in the Foreign Service, similar cases in the future. Terrorism, Negotiating, the Foreign Service Institute, and Teens Recently AFSA represented a Foreign Service spouse who was Overseas. Media coverage continued to be fairly frequent, including employed as a community liaison officer at a post abroad. When the the reprinting of Gil Donahue's "Diplomacy in the Schools" [Decem¬ CLO grieved the denial of a travel benefit, the department alleged ber] in the Kansas City Star, of Tom Maertens' "KAL 007: Tragedy of that the grievance process was not available to her since she was not Errors" [September] in the Seattle Times, and John Maresca's “Lead¬ a regular member of the Service. On appeal, the Grievance Board ers & Experts" [March] in the Baltimore Sun. The New York Times agreed with AFSA's position that temporary employees, including called the Maertens piece “required reading" and did stories on the family members holding intermittent jobs at overseas posts, are in¬ Maresca article, William Sommers's “Diplomatic Retreat" [May], and deed members of the Service with the right to file a grievance under Carol Madison's “Coping with Violence Abroad" [July/August]. CBS the applicable provisions of the Foreign Service Act. News also did a segment based on the Madison article, which con¬ In another case currently pending before the Grievance Board, tinues to be cited whenever anti-terrorism training is discussed. An AFSA is assisting a secretary who was denied a consumables entire edition of William F. Buckley's Firing Line was based on several allowance despite service in a 25-percent hardship post for more JOURNAL articles and broadcast on the PBS network last September. than five years. The employee was originally not eligible under then Our November 1985 issue devoted to negotiating, published on the prevailing regulations that mandated shipment within 12 months of eve of the first summit, was included in the secretary's summit brief¬ arrival at a post. After AFSA negotiated the new consumables ing materials. We were also recognized by Senator Lawton , allowance regulations in 1985, she applied and lost again, on the who distributed Jeffrey Barrett's “Dependency Syndrome” [October] basis that she had begun her third tour prior to the effective date of article to all 99 of his colleagues. The Post later reprinted an excerpt the negotiated agreement, which would require allegedly illegal of the Barrett article in its “For the Record" section on the editorial amendment of her travel orders. AFSA contends that a second (or page. In the past year, we initiated a series of staff-written articles third) tour at the same post qualifies an employee for a full consum¬ Senior Editor Frances G. Burwell's series of questionnaires has been ables allowance, that her request for an extension automatically well-received, as was her special issue on the future of FSI.

46 FOREIGN SERVICE JOURNAL Press Relations: Association citations in the press, both print and effective communication with the membership. This is augmented by broadcast, were both frequent and widespread. When news such as our important global network of AFSA post representatives, who work the "spy dust" scandal or the polygraph proposal breaks, we have on the front lines to serve our members at more than 270 posts been able to formulate a position and react to media inquiries within around the world. Smaller promotional projects involving personal hours, generating tremendous coverage. In the last year, we re¬ contact between Governing Board members (supported by the ceived television coverage of our positions on spy dust, polygraphs, Membership Department) and prospective members have also and the secretary of defense's call to limit diplomatic immunity, played an important role in membership retention. The Membership which also was favorably cited in an editorial in the Boston Globe. Department has had great successes with events sponsored for A- Our position on the polygraph issue generated widespread cover¬ 100 classes, international development interns, and incoming USIA age, going to more than three million readers through an opinion officer groups. The events also help AFSA recruit mid- and lower- piece we did for Gannett News Service and winning favorable men¬ level grades, where we have been under-represented in the past. tions by Jeane Kirkpatrick in the Washington Post, and in the New The Membership Department has initiated a new procedure in York Times. We challenged a front-page feature in the Wall Street which an informative letter is included with membership dues bill¬ Journal that ridiculed the Foreign Service benefit and allowance ings. This practice has proven itself to be another effective means of system with a letter to the editor that showed why the unique nature of keeping our members up to date about important issues. the work that members of the Service perform—not to mention their Membership retention is also due to the streamlining of our admin¬ often-hazardous working conditions—requires special consider¬ istrative functions to better serve our members. In a recent combined ations. The Association's efforts on behalf of senior officers who face effort by State and AFSA, the dues allotment system was reviewed severe cutbacks in their ranks has been covered frequently and and revised. During this project, over 50 individuals' allotments re¬ favorably in the prestige press. Journalists know to turn to AFSA for cords were corrected, and a new accounting system was imple¬ authoritative views on the Foreign Service. mented. The Membership Department has also added another dis¬ —STEPHEN R. DUJACK, Director of Communications count to our benefits package. Export Services International, Ltd., has joined the ranks of businesses that offer discounts to AFSA Scholarship Programs members. For a complete list of Association benefits, see this month’s issue of the ASSOCIATION NEWS. AFSA scholarship news is always good news, and academic year —MYRIAM DUNCAN, Membership Coordinator 1985-86 was no exception. In our two programs—Financial Aid and Merit Awards—a total of 95 dependent students of career Foreign Insurance Programs Service personnel received scholarships totaling $101,000. This im¬ pressive sum was due to increased AAFSW Bookfair receipts, contri¬ Oversight of our group insurance programs has been the responsi¬ butions from members, bequests, current memorial donations, per¬ bility of a board of trustees established for that purpose in 1981. The petual scholarships established as named memorials for Foreign trustees determine the scope and nature of the program, negotiate Service people, and income from the AFSA Scholarship Fund. As and contract with insurance companies, administrators, and others educational costs rise, our grants are keeping pace. Foreign Service as necessary to modify or terminate old contracts, and develop new Juniors benefit from this continued and generous support. elements of the program. By its charter, the seven-member board The Financial Aid scholarships are for full-time undergraduate includes the AFSA treasurer and one other member of the Governing study in U.S. colleges and universities, and are determined solely on Board. need. In academic year 1985-86, approximately $90,000 was Over the last five years, the trustees have made significant im¬ awarded to 73 students. These grants range from $200-2000 de¬ provements in two of the programs: the Hospital Income Plan and the pending on need and allowability by the individual schools. The bulk coverage against Accidental Death and Dismemberment Both of the AFSA Scholarship Fund is used for these aid grants. plans now have features that cannot be matched elsewhere, to our The Merit Awards, which are co-sponsored by AFSA and AAFSW, knowledge, and are competitively priced. Last year the transfer of are limited to graduating high school seniors and are given for out¬ these two contracts to a new carrier, the Life Insurance Company of standing academic achievement. The $500 awards to approximately North America, was accomplished smoothly and with little attrition. 22 winners each year are determined by volunteer review panelists The change of the AD&D policy took effect September 1, 1985, and from State, AAFSW, AID, USIA, and the retired Foreign Service com¬ that of the Hospital Income Plan on January 1,1986. A subsequent munity. In 1986, the AFSA/AAFSW Merit Awards were named in promotional mailing on the AD&D program brought in more than 100 honor of the hundreds of volunteers who have worked on the AAFSW new subscribers, and we hope to do as well or better with a Septem¬ Bookfair over the past 25 years. Fifty percent of the receipts from the ber mailing on the Hospital Income Plan. fair are now used for the scholarships provided by the Financial Aid The AFSA Personal insurance Plan covering personal effects of and Merit programs. Of the 22 winners, who received a total of members overseas continued to be the most popular program again $11,000, some 17 graduated from high schools in the United States last year. Members appreciate the absence of hassles in the filing of and five from schools overseas. Conversely, last year 16 winners claims and the honor system to be a very attractive alternative to attended overseas schools and nine graduated from U.S. schools at other types of coverage, especially the State Department’s own home. claims procedures. The AFSA Committee on Education is chaired by Claude G. Ross. In response to repeated inquiries, the trustees began last year to Members include Sheila W. Austrian, USIA; Philip C. Blanchard, explore the possibility of providing group automobile insurance to State; William R. Ford, AID; David T. Jones, State; Lisa C. Keller, members serving overseas. A plan was developed by the American AAFSW. Dawn H. Cuthell is the Scholarship Programs administrator. International Underwriters with the assistance of Marsh and McLen¬ —DAWN H. CUTHELL, Scholarships Administrator nan, a large insurance agency with representatives in more than 70 countries. The proposed plan was transmitted to all AFSA chapters Membership Department abroad on November 27. Unfortunately, the response indicated in¬ sufficient interest among members for this type of coverage. AFSA is midway through a membership drive and working toward an For the immediate future, the trustees are looking into the possibil¬ unprecedented high of 10,000 members. ity of professional liability coverage on a group basis that may be of During fiscal year 1986, Association membership sustained its interest to members. Any additional suggestions and comments record high of 8700 members, even without the benefit of a member¬ from AFSA members would, of course, be most welcome. ship drive. Our membership retention comes predominantly through —HUGH WOLFF, Chairman, Insurance Board of Trustees

OCTOBER 1986 47 ASSOCIATION NEWS

AFSA reacts to Weinberger by supporting diplomatic immunity

AFSA protested a call by Secre¬ tering it “would be endangering tary of Defense Weinberger that the well-being and perhaps the diplomatic immunity be re¬ lives of our own diplomats, many viewed so as not to give terror¬ of whom work in countries where ists embassy covers, by noting there is no due process, and that immunity is essential to the where the authorities would find conduct of diplomacy. it easy to frame them for imagi¬ "As America’s representa¬ nary crimes." tives overseas, we are on the While noting that abuse of im¬ front lines every day. Almost all munity is reprehensible and call¬ AFSA President Gerald Lamberty talks with a reporter from Cable News Network about Secretary of Defense Weinberger’s call for of us have lost friends to terrorist ing for expulsion of terrorists or revamping diplomatic Immunity to help stop terrorism. attacks, and we often live under other measures, the Association constant threat," the Association concluded that “tampering with said in a press release. “But it is immunity will threaten U.S. in¬ AFSA lauds call for drug-free essential that the practice of dip¬ terests—and diplomats—more lomatic immunity be preserved. than those of terrorist nations." workplace, pans mandatory tests The world should not slip back to The Boston Globe agreed with the time when the diplomatic AFSA's position, and CNN inter¬ The Association has issued a test results be provided rehabili¬ messenger who delivered an viewed AFSA President Gerald press release praising President tation. "Believing that enlight¬ unacceptable proposal to a rival Lamberty in response to the Reagan for his call in August for ened employers recognize that government had his head sent secretary's remarks, made be¬ a drug-free workplace and rehabilitation at no cost to the af¬ back home on a plate to indicate fore the American Bar Associ¬ "stands ready to assist the sec¬ fected employee protects their a negative reply." ation. "The appropriate re¬ retary of state in implementing investment in their personnel, The Association took note of sponse is to expel terrorists programs toward that end. AFSA supports a guaranteed the United States’ legal respon¬ disguised in striped pants, or to Since the work of the Foreign opportunity for any employee af¬ sibility to follow the Vienna Con¬ break relations with regimes that Service frequently involves con¬ fected to participate in a cost- vention on Diplomatic Relations use their diplomats as assas¬ siderations of national security, free rehabilitation effort.” and claimed that unilaterally al- sins," the Globe said. the government must take steps to ensure that those who hold important public trusts are capa¬ Department stalls on serving abroad may enroll in ble of competently discharging AFSPA’s low-priced, low-option them." health care benefits health plan to supplement the AFSA insisted, however, that benefits provided by the act. "the government has the right to The 1985 authorization act for tory references and make ap¬ This is an issue AFSA had vi¬ take such action only if there is the State Department contained propriate revisions to cover for¬ gorously pursued over the last probable cause to suspect an a little-noticed amendment that mer spouses. The department few years. In 1979, the depart¬ employee of abuse... Manda¬ strengthened the health care would not entertain AFSA’s pro¬ ment imposed expensive reim¬ tory drug testing without prob¬ provisions of the Foreign Service posal to expand the medical bursement provisions on the able cause has been chal¬ Act. Congress neglected to pro¬ program beyond its current cov¬ benefits plan, which in turn lenged successfully in U.S. vide any funds for the measures, erage, writing that "the union’s passed these costs on to its en- courts.” The Association said it however, and because of bud¬ proposal is not within the current rollees. The department was was recognizing “the damaging getary constraints the depart¬ scope of bargaining because it concerned about possible and effects of substance abuse on ment has been reluctant to im¬ would determine the extent of an illegal double payment of bene¬ American society" and broad¬ plement the regulations, which agency's budget.” AFSA has re¬ fits overseas. AFSA was con¬ ened the president's program to mandate certain health care quested that negotiations con¬ cerned that members of the Ser¬ include abuse of prescription provisions that previously had tinue. vice were paying through the drugs and alcohol. been discretionary. In one area members are nose for a benefit already avail¬ Noting that drug testing can In January, AFSA proposed benefiting from the 1985 amend¬ able to them under the Foreign be inaccurate if not done prop¬ new medical regulations to incor¬ ment, which places into law an Service Act. Five years later, the erly. AFSA called for “the most porate the legislative changes, agreement reached earlier be¬ Association and the department accurate results possible, han¬ which broaden the department’s tween the American Foreign agreed that AFSPA would offer dled competently. Clearly the authority to provide medical Service Protective Association low-priced health insurance to reputations of non-users must treatment and other preventive and the department. It would Foreign Service personnel to fill be safeguarded." The Associ¬ and remedial care and services. make State the primary and in the gaps in the benefits pro¬ ation also supported the presi¬ As of this writing, the depart¬ AFSPA's Foreign Service Benefit vided by the act. The 1985 legis¬ dent’s position that federal em¬ ment has only agreed to revise Plan the secondary insurer of lation was meant to place that ployees with confirmed positive the regulations to update statu- members. As a result, members agreement into law.

48 FOREIGN SERVICE JOURNAL £ Letter from the President Why We Need Your Help on Capitol Hill

By Gerald P. Lamberty, AFSA President

Anyone who has served over¬ tack. These include such well- write their representative and tivities. More than one-fifth of seas recently knows of the deserved allowances as hard¬ senators. Participating in coali¬ you have already contributed in threats that face our diplomats ship differentials and danger tions of federal-employee orga¬ the past—more than $120,000 in working in our missions abroad. pay, and could also include nizations. Testifying when key is¬ two campaigns. But the coffers But when the 100th Congress housing allowances and other sues come before the Congress. have run dry and we need to re¬ convenes in January, the For¬ basics. The threats to these And employing two lobbyists to fuel for the new battles ahead. eign Service, more than any oth¬ range from taxing the benefits work with key members and The LAF is not a PAC, and we do er sector of the federal work¬ to, in some cases, eliminating committees on the Hill to make not use these monies for parti¬ force, is likely to come under them; them aware of our concerns and san purposes but, rather, to en¬ attack on Capitol Hill. These at¬ ■ Each year will see a fight to of the valuable and cost-effec¬ sure that the professional For¬ tacks will be both economic and ensure cost-of-living adjust¬ tive contribution the Foreign eign Service is treated equitably political. They have the potential ments both for retirees and cur¬ Service makes to our national and fairly on Capitol Hill, It is a of affecting both your pocket- rent employees. Each year will security. task in which each of you has a book and your career itself! And see proposals to balance the But these activities cost mon¬ stake. We hope you will see fit to we will need your help in fending budget on the backs of federal ey And that is where we need contribute. them off. employees. your help. (If you don't receive our mail¬ To be sure, the Foreign Serv¬ Fortunately, there is some¬ You will shortly be receiving in ing, you may send a check ice receives tremendous re¬ thing we can do. It is something the mail a request for your contri¬ made payable to the LAF to spect on Capitol Hill from the we have been doing all along. bution to the Legislative Action 2101 E Street NW, Washington, vast majority of the members. Encouraging our members to Fund, which supports these ac- D.C. 20037. Tax deductible.) They remember our sacrifices in places like Beirut and Tehran, and they have met us while visit¬ fer process—not a long time for employee files a claim only to ing with foreign peoples and Household employees stationed overseas have the two storage companies leaders. Except perhaps in one effects to to inspect their effects them¬ blame each other and refuse to or two cases, the cutbacks that selves and make sure the inven¬ make payment. So, while we are we and the rest of the federal leave Fidelity tories are correct. Employees glad that employees will not workforce may face are not in¬ will also have two years after tak¬ have to worry about keeping tended personally. But make no AID has recently agreed to an ing possession of their belong¬ their effects at Fidelity, we would mistake that the cutbacks are in¬ AFSA request that the agency ings to file claims on any items like to remind everyone to pay tended: remove employees' household that can be identified as having careful attention to their inven¬ The chairman of the House ■ effects from the care of Fidelity been damaged while in Fidel¬ tory when they receive it and in¬ Committee on Foreign Affairs Storage. Many of our AID mem¬ ity’s care. But it is all too easy to spect their effects as soon as has said that the Gramm-Rud- bers overseas have expressed imagine a situation in which an possible. man deficit-reduction legislation concern about Fidelity's con¬ may result next year in the firing tinuing to store their belongings through RIFs of 3000 State De¬ after both the State Department partment employees and the fur¬ and AID had canceled their con¬ AFSA Appreciates. loughing of the remainder for tracts with the company last two weeks, followed by the clos¬ year. State management decid¬ ing of 25 embassies and consul¬ ed earlier this summer to remove ates. The international-assis¬ its employees' effects from Fi¬ tance budget has already been delity. AID is now selecting com¬ drastically curtailed, and cer¬ panies from the current State tainly fewer programs could Department contractor list to re¬ mean fewer AID personnel: ceive the transferred shipments. ■ The secretary has testified Once the belongings have been before Congress that the deficit- moved, each employee will be reduction goals may necessitate informed of the new location and closing or curtailing 40 embas¬ storage-lot number and will re¬ sies and consulates, firing a fifth ceive a new inventory. of the Washington staff, and Although it sounds easy, em¬ eliminating 600 positions in larg¬ ployees should be aware that er embassies, to be followed by there are risks involved in trans¬ $95 million in more cuts; ferring their effects. It is unclear ...Warren Gardner, who resigned as Governing Board treasurer and ■ The benefits and allowances who will do the new inventory, chairman of the AFSA Finance Committee In June to take up his new that allow you as an employee of and employees will have only responsibilities In Taiwan. In the photograph, AFSA President Gerald sfhe Foreign Service to carry out Lamberty (right) presents Gardner with a certificate of appreciation two years in which to file a claim for his work on revamping the Association's financial system to en¬ your job are already under at¬ on an item lost during the trans¬ sure greater cost control.

OCTOBER 1986 49 A primer on state tax treatment of Foreign Service employees Many Foreign Service employ¬ on all sources of income. Nevada: No state income tax. all income derived from Pennsyl¬ ees posted overseas run into Connecticut: No personal in¬ New Hampshire: No person¬ vania sources. trouble with the Internal Rev¬ come tax but tax liability on prof¬ al income tax, but tax liability on Rhode Island: State income enue Service over the question its from in-state sources includ¬ profits from in-state sources, in¬ tax on all sources of income. of whether they still have to pay ing sale of property and bonds. cluding sale of property and South Carolina: State in¬ state income taxes. With few Delaware: State income tax bonds. come tax on all sources of in¬ exceptions, the answer is yes. on all sources of income. New Jersey: No tax liability come. California is the only state that District of Columbia: Per¬ for out-of-state income if the in¬ South Dakota: No state in¬ specifically exempts career sonal income tax on all sources dividual has no permanent resi¬ come tax. members of the Foreign Service of income. Excludes career For¬ dence in New Jersey, has a per¬ Tennessee: No personal in¬ from state income tax while they eign Service personnel with manent residence elsewhere, come tax, but tax liability on are residing outside the state. Senate confirmation who have a and is not physically present in profits from in-state sources, Seven states—Alaska, Florida, different U.S. domicile. (Employ¬ the state for more than 30 days including sale of property and Nevada, South Dakota, Texas, ees eligible for the exclusion during the tax year. Not required bonds. Washington, and Wyoming— should cite 22 U.S.C. 3942 if to file a return, but recommend¬ Texas: No state income tax. have no income tax and three challenged by D.C. tax authori¬ ed to preserve domicile status. Utah: State income tax on all states—Connecticut, New ties). Filing is required on Form NJ- sources of income. Hampshire, and Tennessee— Florida: No state income tax. 1040 NR for revenue derived Vermont: State income tax on tax profits from sale of bonds Georgia: State income tax on from New Jersey sources all sources of income. and property but not personal all sources of income. New Mexico: State income Virginia: State income tax on income. Six states do not tax in¬ Hawaii: State income tax on tax on all sources of income. all sources of income. dividuals for income earned out¬ all sources of income. New York: No tax liability for Washington: No state in¬ side the state—Missouri, New Idaho: State income tax on all out-of-state income if the individ¬ come tax. Jersey, New York, Oregon, sources of income. ual has no permanent residence West Virginia: No tax liability Pennsylvania, Rhode Island, : State income tax on in New York, has a permanent for out-of-state income if the in¬ and West Virginia—but never¬ all sources of income. residence elsewhere, and is not dividual has no permanent resi¬ theless require filing of non-resi¬ Indiana: State income tax on physically present in the state dence in West Virginia, has a dent returns for all income all sources of income. for more than 30 days during the permanent residence else¬ earned from in-state sources. Iowa: State income tax on all tax year. Not required to file a where, and spends no more In addition to paying tax to sources of income. return, but recommended to than 30 days of the tax year in their state of domicile, Foreign Kansas: State income tax on preserve domicile status. Filing West Virginia. Not required to file Service members residing in the all sources of income. is required on Forms IT-203-I or a return but recommended to Washington suburbs must also Kentucky: State income tax IT-203-P for revenue derived preserve domicile. Filing is re¬ pay Virginia or Maryland state on all sources of income. from New York sources. quired on Form IT-140 NR for all income tax. The rate of the state Louisiana: State income tax North Carolina: State income income derived from West Vir¬ with the higher tax is applied, on all sources of income. tax on all sources of income ginia sources. and each of the two states gets a Maine: State income tax on all North Dakota: State income Wisconsin: State income tax share. The same applies for the sources of income. tax on all sources of income. on all sources of income. District of Columbia, unless the Maryland: State income tax Ohio: State income tax on all Wyoming: No state income employee is a presidential ap¬ on all sources of income. sources of income. tax pointee with Senate confirma¬ Massachusetts: State in¬ Oklahoma: State income tax —GERRY KUNCIO tion and therefore exempt from come tax on all sources of in¬ on all sources of income. D.C. taxes. come. Oregon: No tax liability for The following list gives an Michigan: State income tax out-of-state income if the individ¬ USIA members easy overview of the latest infor¬ on all sources of income. ual has no permanent residence mation available on tax liability. Minnesota: State income tax in Oregon, has a permanent get new For more specific information re¬ on all sources of income. residence elsewhere, and is not representatives quest AFSA's State and D C. tax Mississippi: State income tax physically present in Oregon for article or contact the Member on all sources of income. more than 31 days during the tax Services Department. Missouri: No tax liability for year. Not required to file a return A. Stephen Teikins has been out of state income if the individ¬ but recommended to preserve named AFSA’s USIA Vice Presi¬ Alabama: State income tax on ual has no permanent residence domicile status. Filing is re¬ dent and John Allen Quintus all sources of income. in Missouri, has a permanent quired on Form 40 NR for in¬ USIA Representative, to replace Alaska: No state income tax. residence elsewhere, and is not come derived from Oregon Charles Loveridge and Kathleen Arizona: State income tax on physically present in the state sources. Brion, who have received new all sources of income. for more than 30 days during the Pennsylvania: No tax liability assignments. Arkansas: State income tax tax year. Must file return yearly for out-of-state income if the in¬ Teikins, chief of the Africa on all sources of income. and attach an affidavit of non¬ dividual has no permanent resi¬ Wireless File, was previously an California: Exempts career residency. Filing also required dence in Pennsylvania, has a AFSA chapter president in San¬ Foreign Service members living on Form 40, Schedule NRI for in¬ permanent residence else¬ tiago. He chairs AFSA’s USIA outside California from taxes on come of $600 or more from Mis¬ where, and spends no more Standing Committee and the out-of-state income. No filing is souri sources than 30 days in the state during JOURNAL Editorial Board. required. Personnel with Califor- Montana: State income tax on the tax year. Not required to file a Quintus is program planning nia-source income must file all sources of income. return but recommended to pre¬ and policy officer in the agency Form 540 NR. Nebraska: State income tax serve domicile status. Filing is and joined the Foreign Service Colorado: State income tax on all sources of income. required on Form PA-40 NR for in 1980.

50 FOREIGN SERVICE JOURNAL your original real estate com¬ Managing Your Money pany. If you are in the United Tis the Season to Refinance—or Move Up States, you can see how the var¬ ious mortgage companies’ rates compare in a chart printed every Saturday in the Real Estate sec¬ By Nicholas Kuhn, Realtor tion of the Washington Post. By using your existing lender, how¬ ever, you should be able to re¬ The sharp drop in mortgage in¬ ment charges, funds to establish you will have to compute how duce some of the fees. In fact, terest rates has made refinanc¬ escrow accounts for taxes and long it will take for the monthly some lenders have offered blan¬ ing the hottest financial topic of insurance, mortgage insurance savings to recoup your costs. ket refinancing programs to their 1986. Depending on the lender premiums if you refinance more And, when making these calcu¬ borrowers. This is a terrific op¬ and whether you may qualify for than 80 percent of the appraised lations, don’t forget that lower portunity for homeowners. Some subsidized VA or FHA loans, value, as well as state and local monthly payments means lower credit unions also make mort¬ current rates average between fees. As with points, most of interest payments and, there¬ gage loans and offer them at 9-V2 and 10-V2 percent, and the these costs can be financed—- fore, less money recovered very competitive rates. Federal Reserve’s recent lower¬ added to the amount of the mort¬ through tax deductibility. You The FFiA program is especial¬ ing of the discount rate may gage. One other part of your re¬ must also weigh the “opportunity ly attractive to borrowers, and it cause mortgage rates this fall to search into costs is to check cost” of the money spent on refi¬ is usually the best choice for in¬ go lower still. Whether you whether your existing mortgage nancing. One thing you will want vestors, but there are limitations. should take advantage of this fa¬ has a prepayment charge, to be sure of is that you will still The maximum loan amount is vorable financial climate, how¬ which may amount to 1-2 per¬ be owning the property after the $90,000—not very much in the ever, depends on several fac¬ cent of the outstanding principal break-even point. Washington market. Also, not all tors and is certainly going to be balance. Assuming you decide to refi¬ condominiums are approved for more complicated for those of When the closing costs are to¬ nance, you need to know the FHA financing. Last, there is the you living overseas, particularly taled and added to the points, steps involved. The best course possibility that Congress may if your property is occupied by refinancing becomes an expen¬ is first to contact your current abolish the program. renters. But if your current mort¬ sive proposition. Your ultimate lender As you probably have Whether or not your home is gage is at 12 percent or above, decision, therefore, will have to found out, this may or may not occupied by renters, refinanc¬ you will want to take a close look balance these expenses against be the same organization from ing is going to be complicated if at the financial consequences of the savings realized as a result which you originally obtained you are living overseas. The en¬ refinancing. of your new, reduced monthly your loan. This is because most tire process will probably have Anyone whose present mort¬ payments. If you have financed loans are packaged together to be done by mail, which would gage was written in the last sev¬ your closing costs and points, shortly after closing and sold to include the selection of a person en years, particularly those with for instance, your remaining another investor; in fact, this to act as your power of attorney. escalating adjustable rates or principal will actually increase. process may happen several [See the article on power of at¬ with a balloon payment coming Flow long will it take to reduce it times over the life of the loan. torney in the December 1985 is¬ due, should evaluate the pros to where it would have been had The company that is currently sue of the ASSOCIATION NEWS.] The and cons of a refinance. The sit¬ you not refinanced? Does this servicing your loan will have other alternative is to try to ac¬ uation is complex. For instance, justify the monthly savings? In your credit history as well as complish this while on home while the nominal rates may go most cases where the nominal specifics on your property and leave. Unfortunately, the refi¬ as low as 9-V2 percent for VA interest rate drops by two or the loan itself. If you can’t get nancing process normally takes loans (as of August), you will more points, it should. You will help from this lender, contact a minimum of 60 days and could have to pay all the points when have to calculate this for your¬ the bank where you have sav¬ be double that time. Even those you refinance, either in cash or self. The same applies if you pay ings or checking accounts, your of you living in your homes will by adding them to the mort¬ the costs up front, in which case original mortgage company, or find refinancing an ordeal. Mort¬ gage. (A point is equal to one gage companies are simply percent of the loan amount.) swamped with applications, as This increases the yield or rate of ation, AFSA has contacted the are appraisal firms, surveyors, return to the investor who is Regulations Veterans Administration and and termite inspectors. lending you the money and in ef¬ hurt Foreign various members of Congress, The next step is to select an fect raises the true interest rate arguing that a benefit meant to attorney or escrow company to of the mortgage. Depending on Service vets reward service to our country is, handle the closing of your new the interest rate and the type of in effect, being lost through con¬ loan. Again, you may wish to em¬ loan you obtain, the points vary, Current regulations governing tinued service. ploy the same organization you with the lower rates requiring Veterans Administration refi¬ If you are affected, please used when you purchased the higher points. Unlike points paid nancing require a veteran to be send a letter to: property. Be sure to ask for a re¬ at the time of purchase, the de¬ both owner and occupant of the issue rate on your title insurance ductibility of refinancing points dwelling being refinanced. A Senator Frank Murkowski policy and an update of your Chairman, Committee on Veterans' Affairs is questionable; ask your tax ad¬ number of Foreign Service em¬ Room 414 survey and title search. Sticking viser. ployees who are armed forces Russell Building with the same company may Washington, D.C. 20510 There are other costs involved veterans, however, are unable to make a new title search and sur¬ in refinancing, commonly known meet the residency requirement and vey easier, provided your origi¬ nal lender still has the docu¬ as closing costs. These fees in¬ because they are stationed Representative G. V. Montgomery clude title insurance, a new sur¬ overseas for the majority of their Committee on Veterans' Affairs ments and you purchased the Room 335 house in the last five years. vey, termite inspection, lender’s careers. Cannon Building inspection fee, attorney’s settle¬ In an effort to remedy this situ- Washington, D.C. 20515 Once you’ve made your loan ap-

OCTOBER 1986 51 plication, your property has loan, either 15 or 30-year, from Tax reform bill hits been appraised, and the credit year one. Another choice non- report and income and account FHA borrowers can make is to prospective retirees verifications are obtained, you reduce the amount of the loan to are ready to settle on your new below 80 percent of the ap¬ Contrary to all prognostications tirement. loan. praised value. If your property and expectations, the Senate- The effective date of this As either an owner-occupant has appreciated, as shown by House conferees on the tax-re- change goes back to July 1, or investor, you have a choice of the new appraisal, this will save form legislation included in their which means that those retiring loan terms, 15 or 30 years. In you $20 or more a month in pri¬ final bill a provision that would subsequent to that date will some cases, you may be able to vate mortage insurance. impose—retroactively—an ex¬ have the tax-free return of their refinance a fixed-rate 30-year Though the process may be pensive tax change on all feder¬ retirement contributions pro-rat¬ loan into a 15-year loan and still daunting, savings can be sub¬ al employees who have retired ed in accordance with their life see your monthly payments stantial, and interest rates may since last July 1 or who plan to expectancy, rather than the drop. The 15-year rate is usually never be lower. On the other retire anytime in the future. amount that is repaid up front only a few hundred dollars high¬ hand, the low rates mean higher The new bill eliminates the so- being free of taxes as before. er than the 30-year rate, and you selling prices, an attractive in¬ called three-year-recovery rule Example: an employee with a life don't pay anything at all, of centive to investors who may under which retiring federal em¬ expectancy of 20 years at the course, for what would be the fi¬ wish to dispose of the property ployees receive as their initial time of retirement could deduct 1 nal 15 years of the latter loan. and perhaps step up to a more annuity payments the refund of /20th, or five percent, of his or The monthly principal and inter¬ attractive dwelling or one in a their after-tax contributions to her retirement contribution from est payment on $100,000 bor¬ better location. If you plan to the retirement trust fund. This taxable income each year over rowed at 10 percent, for in¬ stay in your home for a few has afforded federal retirees the the life of the annuity. stance, would be $1,075 a years, however, and you can opportunity of receiving tax-free As we go to press, Congress month at the 15-year rate and drop your rate by two points and retirement income until the time has not yet voted on the confer¬ $878 for a 30-year loan. This is have a two to three-year pay¬ that the amount of their retire¬ ees' tax reform bill. But given its sort of a forced savings plan that back, refinancing may be just ment contribution has been liq¬ legislative history, the fact that a will build equity a lot faster, but the ticket. uidated, usually within 12-18 bill coming from a Senate-House of course the tax incentives di¬ months. For most retirees, there¬ conference may not be amend¬ minish at the same rate. But Nicholas Kuhn, MB.A., is a real¬ fore, the three-year-recovery ed on the floor, plus strong sup¬ don’t forget that when you refi¬ tor with Town and Country Real rule has been a crucial element port from the administration, its nance, you are starting your new Estate Company. in their financial planning for re¬ passage seems assured.

Life & Love in the Foreign Service

Winners of the monthly LIFE & Send entries to:

LOVE contest receive a certificate for a free lunch for two at the For¬ eign Service Club. Honorable LIFE & LOVE # 34 AFSA mentions receive a free carafe of 2101 E Street NW wine with a meal. Washington, D.C. 20037

Competition #34

“Look, Mac, you wanna be an ambassador, you gotta join the union.” —lohn Quintus, Washington, D.C.

52 FOREIGN SERVICE JOURNAL 1. War, expropriation, nuclear reaction. 2. Wear, tear and mechanical breakdown. 3. Under certain conditions, breakage of fragile articles.

These are the basic perils the AFSA Personal Property Floater doesn’t cover. We don’t exclude marring, denting, chipping, unexplained or mysterious disappearance, theft, breakage of non-fragile articles, contamination, flood or earthquake. Sorry. You have to be a member of the American Foreign Service Association in order to qualify. Read the policy, of course, for all terms and conditions. Write or call for our easy-to-read brochure.

r i AFSA Desk The Hirshorn Company i 14 East Highland Avenue i Philadelphia, PA 19118 i Telephone: 215 -242-8200* i Please send me yourfree brochure (with a built-in application form) that answers i my questions about overseas insurance. Name. The AFSA Plan is underwritten i by the International Department, Federal Insurance Company, one of the i Address. Chubb Group of Insurance Companies. i This advertisement is descriptive, only. The precise coverage afforded i is subject to the terms, conditions and exclusions of the policy as issued. i i i ‘In the Washington, D.C. area, call202-457-0250. L J Dodge Caravan proved to be the people's choice last year, selling almost as quickly as we could build them. And why not? This versatile front-wheel drive wagon has car-like handling, 125 cubic feet of carrying space and, with an optional 2.6-liter engine and automatic transmis¬ sion, available room for up to eight adults.

Chrysler LeBaron GTS. America was looking for a hero and now she's got one. GTS combines all the luxurious elements of a fine touring sedan with the responsive handling and per- | formance of a sports car. The result rivals some of Europe's best performance sedans.

No matter where you are, you can take advantage of special diplomatic prices on all our 1986 Chrysler, Plymouth and Dodge cars and trucks. The Chrysler commitment to quality and pride of workman¬ ship is evident throughout our entire 1986 line. And as an active member of the diplomatic corps, you're entitled to special pricing through Chrysler's 1986 Diplomatic Purchase Program. Every one of our Chrysler-built vehicles is eligible, including luxury cars, convertibles, sports cars, trucks and more.

For full details on the Diplomatic | Purchase Program, Foreign Service Personnel in the U.S. should contact: Diplomatic Sales Office, Chrysler Corporation, RO. Box 1688, Detroit, Ml 48288. Those stationed overseas: | Telex 961320 MCSNEWCAR WDBY. Attn: Diplomatic Sales. Or mail the postage-paid reply card enclosed in this magazine. rotporat'00 rvnrvs'er ^u?the^e TV^e V>*^%ant 11 N3Ued°ot