Background Briefing by Senior State Department Officials on the FY 2012 State Department Budget

Special Briefing
Via Teleconference
Washington, DC
February 15, 2011

OPERATOR: Welcome and thank you for standing by for today’s conference call. At this time, I need to remind all participants that you are in a listen-only mode. However, we will be doing questions and answers today, at which time parties will be asked to press *1 to ask a question or make a comment. At this time, I need to remind participants today’s conference – it is being recorded. If you have any objections to this recording, you can disconnect now.

We’re going to go ahead and get today’s conference call started. I’m turning it over to Ms. Heide Bronke Fulton. Ma’am, you can begin.

MS. FULTON: All right. Thank you very much. Greetings everybody, and thanks for joining us this afternoon as we continue this discussion about the Department of State’s 2012 budget request that was submitted yesterday. With us today we have three senior State Department officials, who I’m happy to identify for you, but I’d like to clarify that this discussion will take place on background, and so any attribution for these remarks should be to senior State Department officials.

Our speakers are [Senior State Department Official One] from the Foreign Assistance Bureau, [Senior State Department Official Two] from Resource Management, and [Senior State Department Official Three] from USAID. And you can refer to them as Senior State Department Officials One, Two, or Three or – I mean, in your attribution to senior – in your writings, please, to a Senior State Department Official. I’d like to go ahead and turn it over to [Senior State Department Official One] who is going to tee things off. And with that, over to you. Thank you.

SENIOR STATE DEPARTMENT OFFICIAL ONE: Thank you, and thanks everyone for joining. I think before we get started on Qs and As, I just want to make a few clarifying points. Yesterday, in our background Q&A session, I was asked about our assistance to Mexico, and I just want to make a few points with respect to that. I want to point out that the Merida Initiative is an unprecedented partnership between the United States and Mexico to fight organized criminal groups and associated violence while respecting human rights and the rule of law.

And based on these successes, we’re now shifting the focus of the program towards capacity building at the state and local level. Now, as we shift our focus on Mexico away from the big-ticket equipment purchases, U.S. Government funding increasingly focuses on rule of law, justice, and other joint capacity-building programs, especially at the state and local level. These programs are fundamental to the sustainability of the Mexican Government’s efforts to combat criminal organizations and reinforce the rule of law.

And so reflecting our continued partnership and the high priority we place on assisting Mexico, we will continue to provide assistant through the Beyond Merida Initiative. Our request for the 2012 budget Beyond Merida funding is consistent with previous year’s commitments and demonstrates our continued desire to work with our Mexican partners to address ongoing challenges that impact the region. We will continue to refine and adjust plans for U.S. assistance in full coordination with our Mexican partners.

Now, you may be asking why it is the 2012 request reflected a 250 million drop in assistance. While the 2012 request may appear to be a significant decrease from the 2010 enacted total of $582 million, this is largely because the Fiscal Year ’10 figure includes 260 million in one-time boosts in military assistance. This $260 million is providing much needed aircraft to the Mexican military, which is involved in the fight against cartels in areas where civilian law enforcement need support. We have since moved away from providing aircraft and other expensive equipment and toward a focus on strengthening justice sector institutions. And so that is the main reason why our budget for Mexico goes down from 2010 to 2012 is to reflect the end of these one-time equipment purchases.

And so with that, I will take other questions, or we will all take other questions.

MS. FULTON: Okay. Operator, we can open up the lines, please.

OPERATOR: At this time, all parties who’s wishing to ask a question can go ahead and press *1. Go ahead and press *1 to ask a question. Make sure you un-mute your phone and state your name loudly and clearly at the prompting. Your name is required to introduce your question. Once again, to ask a question, it is *1. Thank you.

And this is the operator. I do apologize. If you pressed *1, please press *1 again. Press *1 again. Thank you. Please stand by for the first party. One moment.

Andy Medici, your line is open. Go ahead, sir.

QUESTION: All right, thanks. Thanks for having this call. I just had two quick questions. On table S-11 for funding levels for discretionary programs by agency, the State Department’s at 52.7 billion, but you guys have been using a 47 billion top line number. Could you explain what the difference is in calculation for those two?

SENIOR STATE DEPARTMENT OFFICIAL ONE: Sure. The 52.7 billion is the 2012 request for our core programs, but includes all of Function 150, which is not only the State and USAID, but other international affairs agencies like the Peace Corps, Millennium Challenge Corporation, the Treasury Department’s international programs, the Broadcasting Board of Governors, and a bunch of other agencies. Our portion of the 52.7 billion is 47 billion, so the 47 billion is the State/USAID portion of the 52.7 in the core programs.

QUESTION: Thank you. And could you – you mentioned in your briefing sheet that there will be 1.8 billion requested for security-related construction and major facility rehabilitation and maintenance at embassies worldwide.


QUESTION: Do you have a 2010 actual for what you guys did for that?

SENIOR STATE DEPARTMENT OFFICIAL ONE: Okay, we’re bringing in the guy who does these accounts. Go ahead, [Senior State Department Official Two].

SENIOR STATE DEPARTMENT OFFICIAL TWO: Is this a question on how much is spent on embassy maintenance last year?


SENIOR STATE DEPARTMENT OFFICIAL TWO: Yeah. It’s roughly $170 million. It’s not an exact number, but it’s in that ballpark. So you can see, by building the program up to $225 million above that, it would be an additional – a considerable increase and what we need to address a serious problem.

OPERATOR: Are you ready for the next question?


OPERATOR: Jesus Esquivel, go ahead, sir.

QUESTION: Hey, Jesus Edquivel from Proceso Magazine in Mexico. Thank you for this conference. With regard to Merida Initiative, I just wonder why – Secretary Clinton, when she was in Mexico on January 26, announced that the package for help Mexico on the war on our cartels will be $500 million. So my question is: Why she say that? She wasn’t aware of the budget process with you guys? Or what was the reason that she mentioned that amount of money, but in reality it’s less than $500 million besides what is the official request in cooperation with 2010 fiscal year?

SENIOR STATE DEPARTMENT OFFICIAL ONE: I’ll have to go back and look at the Secretary’s statement, but what I guess is that the Secretary was talking about the current level of – the current program level in 2010. In January of this year, the Secretary wouldn’t be talking about our 2012 budget, which was just released yesterday. So we’ll have to go back and look at her statement and get you a more specific answer.

QUESTION: And if you allow me, since you guys gave the numbers yesterday, the U.S. Embassy in Mexico started sending a press release calling to the journalists that it was false, that this is a reduction of 250 millions with regard to 2010. So my question is: What was wrong? The U.S. Embassy in Mexico wasn’t aware of what you told reporters yesterday at the State Department briefing room, or they don’t know anything, or they’re just trying to give the impression to the Mexicans that the U.S. is still committed with the same amount of money to the Merida Initiative?

SENIOR STATE DEPARTMENT OFFICIAL ONE: I think what’s going on here is the number for 2012 is the number for 2012, and I think the issue is that the reason for the big – for the decrease is this one-time $260 million cost for the equipment that we received in 2010 but for which we no longer need. So again, I haven’t seen the press release that the Embassy sent out, but where – we should all be talking about the same numbers. And I think the reason for the 2012 number being different from the 2010 number is for that one-time set of equipment purchases that are no longer part of our budget.

OPERATOR: Are you ready for the next question?

Next up is Mina. Go ahead, ma’am.

QUESTION: Hi, this is Mina Al-Oraibi from Asharq Alawsat, Arabic language paper. My question is regarding Iraq. I just want to be clear. The overseas contingency operations segment has 5.2 billion for Iraq for 2012, but for 2011 it was 2.5. Is that because they’re taking on more from the Defense Department drawing down there? Could you give us a little explanation how that is broken down?

SENIOR STATE DEPARTMENT OFFICIAL ONE: Yes. The reason why the Iraq number goes up in 2012 is because the Department and USAID as a whole are taking over missions that DOD formerly ran, and we’re also having to run a diplomatic presence with all of the security costs as DOD prepares to withdraw. So for example, the 2012 budget reflects increase costs of our operations for our diplomatic presence, increased costs for our security. It also reflects the full-year operation of a new police training program that we are taking over from DOD, and it reflects a security assistance program to the Iraqi security forces that we’re also taking over from DOD. So the program in Iraq in 2012 is different because it is a – this is the military-to-civilian transition where we are taking on more responsibilities, and thus our costs are growing.

QUESTION: Could I just ask you: In terms of the security costs, the operational costs and the security (inaudible) having the mission there, how much is that estimated to be?

SENIOR STATE DEPARTMENT OFFICIAL TWO: The security cost is significantly – is a large portion of what it is. The exact amount is – I’m not prepared to give you, but it’s significant. We’re looking at a large number of personnel that we are requested to secure, so --

QUESTION: Right. Okay, so let me try this: How about, could you give me a number on – in terms of actual assistance to Iraq, whether it’s the security assistance or the police training? How much is that?

SENIOR STATE DEPARTMENT OFFICIAL ONE: Sure. So in Iraq, in our OCO budget, we have $2 billion for assistance. A billion of that is for the police training program and a billion of that is for the foreign military financing program, the security assistance program I referred to. We also have in our enduring part of our budget $436 million for our economic assistance program. So the total assistance, if you put the two together, is $2.4 billion, but the OCO piece is the extraordinary cost associated with the transition from military to civilian.

QUESTION: Thank you very much.


OPERATOR: Are you ready for the next question?


OPERATOR: I have Emily Cadei. Go ahead.

QUESTION: Hi. This is sort of a follow-up on the Iraq question that was just asked, but I was curious. There seems to be, as she mentioned, a big jump between the two years that they – but the transition is already underway. I mean, we have a pretty small number of combat troops that are there. So it would seem you would need some of the security money this year. Do you feel like you are going to be able to get the money from Congress to fund all these sorts of transitions? And do you have any indications from the CR that the House Republicans recently proposed that you will be getting the money you need for the security transition to take over from DOD?

SENIOR STATE DEPARTMENT OFFICIAL ONE: As you know, the situation in Congress is pretty fluid. The Department’s been engaged. As you probably know, the Secretary met with the Speaker yesterday in discussing our requirements and our national security issues. Our security costs are going to go up significantly as we carry that – the requirements that are going to be – State’s going to be responsible for not only State Department personnel but the whole U.S. Government presence. And that’s going to be a priority that we’re going to be discussing with Congress throughout the finalization of the ’11 appropriation. But the money that we are requesting in ’12 is indicative of the costs that we will incur – are projected to incur – for security, which will be an ongoing requirement for the foreseeable future, as long as the State Department has the lead in Iraq.

OPERATOR: Are you ready for the next question?


OPERATOR: Jung Noh, your line’s open. Go ahead, Jung Noh.

QUESTION: Yeah, hi. This is Jung from the Radio Free Asia. Thank you so much for this conference call. I’d like to ask one question regarding the North Korea and the East Asia Pacific. There is nothing on amount of – in the USAID budget for the North Korea. So do you have any just plan or the possibility to support the North Korea in food or assistance or the democracy society?

SENIOR ADMINISTRATION OFFICIAL ONE: Right. So what we did in – with the North Korea budget in 2012 is – as part of our issue in terms of making tough tradeoffs, we took the bilateral money that we normally request for North Korea, which was normally for democracy assistance programs – we’ve taken that out of the bilateral program, and what we’re doing is we’re allowing our centrally managed programs, especially through the Democracy, Human Rights, and Labor Bureau, to use its money in 2012 to fund the requirements if the – in North Korea.

So we didn’t make the reduction in 2012 with prejudice to the programs there, but because we had a very tight budget, we are – we’re simply asking that our centrally managed programs work with those programs. And we don’t have a dedicated bilateral line to it anymore. We are not providing, as best I know, food aid to North Korea at this time.

QUESTION: Thank you.

OPERATOR: And I have no further questions.


MS. FULTON: All right.


MS. FULTON: Thank you to our speakers and for our participants for phoning in. We appreciate everyone’s time and thank you very much. Have a great day.

OPERATOR: At this time, all parties can go ahead and disconnect from today’s conference. At this time, all parties can go ahead and disconnect. Thank you so much for joining and have a great day.

PRN: 2011/220