scare stories in mind. there is that sense of deja vu. i would say with the synthetic drugs they appear to be more dangerous and more volatile than most of the natural psychoactive drugs so it's good to monitor this. education, definitely encourage people to stay away from these but that ought to be part of a larger package to create a legal drug structure and one that eliminates prohibition so that there are safe, legal alternatives for people who want to use psychoactive substances and we can continue this crusade of trying to prevent drug use. i'm one of these people who if we've tried a policy for four

decades or more and the policy has failed. we ought to try something else not just continue applying that same model to new substances. that's just me. >> mr. wooldridge. in talking about alcohol in the period of alcohol prohibition, bootleg dhol was adulterated with methyl alcohol and other compounds and drinkers were blinded and people were paralyzed and there was a term called jake leg which was a kind of paralysis in which people were perm nentsly injured from their use of alcohol and that, of course, we know is the function of prohibition and not of the legal control. are these drugs harmful? the evidence is of people who present themselves to the police and so on yes, these seem to be quite harmful. they are harmful as a

consequence of the market distortions that law enforcement creates for the drugs that people want to get and there was an article in "the new york times" magazine this sunday, i didn't want to use these drugs, but they're easier to get and they're being represented as being legal and until the drugs that people want to use that can be produced safely with better warnings are available, we will see this kind of tragedy happen again and again and again. >> right down here in the front and then we'll get this gentleman in the middle over there. yes, sir. good afternoon. my name is mark walton, former libertarian d.c. candidate. i am trying to read your book, the fire next door mr. carpenter and it is, like, the worst horror story ever. i watched the movie "down the

street" cartel land which is just full of guns and violence. how much does all of these scare tactics and the war on drugs just benefit the gun industry arm of the military industrial complex because everyone has to have a gun in this war. the police have to have more guns. the drug dealers have to have more guns and they all try to outpace each other. >> good question. >> i think that's a subset. it probably does certainly creating incentives to have greater and greater armaments but i think you have a drug war industry that has a vested interest in creating as many horror stories as humanly possible. and it's often difficult to tell whether those who are putting out those stories are simply

doing this to further their own career and institutional interests or whether they believe their own propaganda and i think there's a bit of both but you're talking about a multi, multibillion-dollar a year industry that is locked up with current drug policy at the local, state and national level and they are not going to go quietly into that good night of legalization. they're going to use every tactic imaginable to try to preserve the prohibition system and scare stories certainly serve that agenda and they're tremendously effective and i think the lynn bias case with regard to cocaine use in the mid-1980s was one factor and there are others, certainly that really stopped the momentum toward a harm reduction strategy

if not decriminalization, if not full legalization of drugs and reverse that, the whole thing changed and it's been a good many years to switch that back to a more rational discussion. i don't think the drug war industry likes to have a discussion about having synthetic drugs within a legal framework. they want the prohibition model and this is a job enhancement process at a minimum and they're going to keep pushing these stories whenever humanly possible. >> chris this warning about the drug war industry is actually a warning in the final report of the national commission on marijuana drug abuse in 1973. the schaefer commission. they observed that this is a

real danger that the current approach was bringing about. i think that part of what we are missing and even jacob described the penitentiaries as the biggest business in america. obviously, making a rhetorical point, but the reality is as long as this industry is, it's infinitesimal and it's probably bigger than that now, and the point that i want to make is that the collateral consequences of our drug enforcement policies undermine the entire economy that, you know, jacob didn't fully talk about the impact of the tens of millions of people who have drug convictions which means that their employment prospects are reduced and for an economy then that depends upon consumption means those folks are out of the economy. tens of millions of people are out of the economy. if you have a drug conviction

you're not able to get a job with a paycheck so you don't get a car loan so you don't get a car made in detroit. so you see the war on drugs kicks off in the 1970s and american car sales start going down relatively, and there were other factors, but think of any particular party of the economy in which you are invested in. if you simply have a pension plan, a 401(k), however you're invested. all of your assets in american industries are less valuable because those industries are selling less than they could otherwise sell if they didn't have a war on drugs cutting the economic power on the american power day after day. >> and our message needs to be to the u.s. chamber of commerce and the national federation of independent businesses. your membership are being hurt by drug prohibition. you have an obligation to speak

on behalf of the american economy to point out this is hurting the bottom line of every american investor and other than the private prison industry other than this -- the gun industry and the small little pieces that supply. those are tiny when you think about the implications for the rest of us. >> sir, right there. you've been very patient. >> bernard rico, i'm an independent drug policy researcher. i've lived in central america and mexico for over ten years. i'm just curious for all of the panelists what you believe are the realistic approximately see objectives for the u.s. government and perhaps for other latin american governments that are thinking about drug policy reform and they're completely separate or distinct and the reason i ask that is because quite honestly, i think coming at it from a complete either

prohibitionist drug war regime which is really something of the past. if you talk to most kind of current, up-to-date drug policy folks, they realize the drug war is over but at the same time, quite honestly gentlemen, you talk about the unfettered access to all kinds of drugs, ultimately. you can hold out that as an ultimate. >> no one proposed unfettered access, i don't believe. >> regulated drugs to me ultimately is unfettered access and the reason why i say that is we have -- and just to say one example in actually proposing something else because you know there are in between policies. i don't look at it as a false dichotomy between prohibition and complete regulation and there are places like portugal that have the decriminalization of all drugs and it's messy because you cannot technically import drugs and you can not sell them, but there are people

that aren't penalized for actually consuming drugs all of the way to heroin and you guys put out a pretty good report a little bit biassed in my opinion, but you put it out four or five years ago that the conclusion was that it addressed the policy concern of the paranoid government and that's a growing problem in this country. it's small, but it's there and the last point they make and so you guys can answer the questions is the following even in the earlier 20th century there was no prohibition, per se and we were beginning to prohibit quote unquote companies at the time, and doctors were not all necessarily prescribing drugs necessarily and today, when we invented a more kind of let's just say easier, more accessible way to use morphine through prescription opiates in the early 2000s and you had pharmaceutical companies marketing those drugs quite strongly to doctors and

hospitals and if anyone who goes into a hospital today what's the first thing they ask you? is how much or whatever opiate that you want to alleviate your pain. i'm not saying that's a bad thing, per se but that has contributed to an increase in opiate addiction which has led to an increase in heroin addiction and the heroin addiction and the heroin problem, quote unquote has been a result of purer cheaper heroin and not from heroin that's actually gives you kind of a -- some type of side effect. >> to discern a question in that? go ahead, eric. the problem you put your finger on which is misprescribing doctors with legal opiates i think in many cases is correct. the fact that we have prohibition is those folks who

become medically addicted are stigmatized. they don't have access on the drugs and sedenly their prescription gets cut off and heroin is a lot cheaper, but stays off dope sickness. my sense is that you need -- you do need better regulation of physicians. you need to change the culture of prescribing when i had -- i had some oral surgery recently and i was given 20 vicodin. there's never a follow-up like what happened to that? did you use it? it turned out i didn't need any of it so now it's sitting around. you know it's inconvenient to dispose of these excess narcotics. i paid good money for those. repeatedly, i had shoulder surgery, similar kind of thing. i got a bunch of narcotics are prescribed and no follow-up. so there really are ways in which we could do a better job

culturally in controlling how legal open yoediods are made available. people are going to be able to not go to criminal markets but people are going to be able to say, you know, now i'm addicted. what do i do about it? and you can then wean people off. you don't have people that say oh, i'm addicted and i'll have to try to find another doctor to scam. i've got to scam the e.r. all of this flows out of the prohibition approach and the still still liezation that it is not immoral to be addicted and it should never be a crime to be an addict and prohibition keeps driving that. >> go ahead. a couple of things. first of all, no one, i think has ever argued that

legalization is a panacea, that everything is going to work beautifully in a legalized system, but i would defy the advocates of prohibition who have identified the various problems associated with drug abuse to show how those problems are made better through prohibition and that simply isn't the case and there are lots of unintended side effects which prohibitionists almost never talk about. with the international environment, i think we've certainly seen a change in attitude and the portugal experiment was a key development and as you note we put out a study five years ago on that experiment and one of the things they -- i think that was most important about the portugal experiment is that it blew up a lot of the prohibitionist myths

that you were going to see soaring drug use rates. no, we didn't. we were going to see soaring crime rates associated with a legalized system or a decriminalized system. no, they didn't. in fact the trend has been in the other direction. and the stranglehold of the prohibitionist paradigm on international policy, i think if it hasn't been broken it's in the process of breaking. you are certainly seeing other countries that may have thought for many, many years that the u.s.-led policy was pure ied yosi, but for a variety of reasons, basic prudence you don't tell that to the world's super power. now govern ams are willing to deviate from it. the reforms in uruguay being the

latest, clear example of that where you have legalized commerce in marijuana despite washington's continuing objections. so i think we're at least in a period of ferment in term of policy now and we'll see how that goes. i'm a strong believer in that sage philosopher yogi berra's observation. it ain't over until it's over. even though i see favorable trends away from prohibition and toward a legalized system, i'm not going to pop the champagne cork assuming that's legal at the time until we see better results. >> okay. in the back, the gentleman is very patient. thank you. it appears that human beings have been using substances to help cope with daily life

whether they be stimulants or something to relax them and that has continued throughout history. so therefore do you think that this supply of drugs is only catering and providing humans now today with something that they have been desired for centuries that is inherent in human nature that cannot be legislated against? >> it's an excellent question. it certainly would seem that way given the long long history that cuts across different cultures and so on. i think there is at least a percentage of the population that feels it needs that kind of artificial boost. i've never entirely understood that, but i think it's enough of a phenomenon that it's clear you

can't pass laws against it. that's the one lesson that is indisputable at this point. you can try to prevent it as much as possible but you're going to have a significant percentage of the population that will continue to use those substances regardless of the laws. that simply is not going to deter them from doing what they want to do whether that's good for them, bad for them, they're simply going do it. >> jacob, go ahead. >> i think that's a very deep and profound question especially in the context of american society because, you know we obviously live in a very controlled society and every kid is forced into a public school system or private school system that's licensed by the state. he spends 12 years there receiving this message, drugs are bad and yet over 40 years,

the problem has only gotten bigger and why is that? and of course drug addiction is rooted in family of origin issues, but i think there's wider societal implications here. why is there so much more alcoholism in the soviet union? i think there might well be a correlation that the more controlled your society is the more paternalistic your government is, the more despair there is in that society and the less economic activity the dynamism that comes from a truly free market society is absent, and i think the plight to the american people is significantly worse than say, people in cuba or north korea and that's because of the words of johan guttera that none are more hopelessly enslaved than those that believe that they are free, and i think when you combine that controlled society with the concept that this is all freedom that that might be a cause of why there's so much widespread

drug abuse and mind-altering use in american society. >> i see a dissertation topic. the correlation between drug use and levels of freedom. sir, in the back. right next to the man holding the microphone very wisely. >> casey harper the daily caller news foundation. i'm very interesting in the three three-necked round bottom. >> three-necked round bottom. get it right. >> i'm no bureaucrat. >> can you go back through a brief history of that regulation particularly and where it is now and then i guess all of you give more details or examples about how you mentioned that there are 430 variations of these synthetic drugs. examples of the whack a mole effect where things were changed and then the government tried to address it and then tweaked more in trying to address it? thanks.

>> sure. in 1987 and 1988 as congress was developing the anti-drug abuse act of 1988 which included amendments to the antidrug abuse act of 1986. the dea said that this particular piece of equipment was a major part of the problem in the production of methamphetamine and proposed that it be banned and therefore, by act of congress as one of the little features of the anti-drug abuse act of 1986 -- or 1988 which was a pretty fat bill, this was enacted and remains part of the controlled substances act. >> and if they change it, we're all going to get rich because we're going to start buying this and it will be made legal. >> go ahead ted. there are a couple of examples in the paper. >> yeah. you have most of the laws that

were passed before about 2011 and 2012 were specific bans. they went after specific chemical substances and again what lawmakers are finding is that the ink was barely dry on that law, and some enterprising chemist in shanghai or wherever would change the composition of one molecule and suddenly the law didn't apply to that substance anymore. so the move since 2011 and 2012 both at the national level and at the state level has been toward very broadbands attempting to outlaw entire families of substances if you will, and try to deal with the problem in that fashion that anything that faintly resembles an outlaw drug will be considered in that same category

and is therefore outlawed. as i mentioned earlier, that deals with one problem and that creates another in that you inherently have laws that are vague and overly broad and i'm not sure that's a particular pattern we want to encourage in this country. we've seen abuses in other areas with such laws and that is something we always have to be cognizant of. >> we always have an instantce of at least one of an expoeft post facto facto, where someone was not convicted, but charge with violating the sale of a substance that at the time that she was selling it was not illegal. it was made illegal after it was charged. >> that was the oops factor, the texas case where, yes, the woman was charged with marketing an

illicit substance and the charge was filed three months before the texas legislature had outlawed that substance. >> go ahead, eric. >> i just wanted to comment on something that ted said about the question of prohibitions which are specific, versus narrow because the drug enforcement act of 1986 was essentially very, very broad. it says that controlled substance analogs should be treated like schedule one substances and it said controlled substance analog means a substance the chemical structure of which is substantially similar to the chemical structure of a controlled substance in schedule 1 and 2 and which has a stimulant. or, you know, it has a stimulant or an effect similar to that. so that's pretty broad and that's 1986 so that the early --

the approach at least at that point was sort of very broad laws being enacted and that's still on the books. >> that was true at the federal level and the state laws that were enacted. >> important distinctions between feds and states. >> one last question right here and this was very patient and then last one, make it quick. >> my name is miriam. thank you for your presentation. i was wondering if you could give more information about prohibition and the black market, how the price is going down and how much people had to pay for their real necessities or whatever the doctor advice. that would be very helpful. second if marijuana or something, it's not really a probable cause under the law,

but saw people and law enforcement abused the power and authorities and increased the prison population and reduced their opportunity for employment and so on. how much loss economically for a household and for people who suffer and for the society as a whole? >> the cost of the prohibition strategy is more generally? >> excellent question. something i've pointed out that so many lives have been blighted by prohibition and one, i guarantee you there is a gentleman who is sitting in the oval office today who wouldn't be had he run afoul of the drug laws. barack obama admitted that he used illegal drugs, that he was one of the lucky ones. he didn't get caught, but how many others have had their lives and their careers blighted because of that.

i think as eric points out the cost of that would be measured probably in the hundreds of billions of dollars a year. so this is -- this is a massive effect, adverse effect on our society and -- this is something that we're going to see more common with regard with synthetic drugs if they become more. lar in popular in terms of total use and people will have their lives disrupted because of questionable judgment on their part, but i think we have to make a distinction between activities that are not good for you you, tiffs that result from questionable judgment on the one hand and crimes on the other and we tend to blur that distinction

in our society to our great societal detriment. >> all right. on that note, thank you all very much for attending today. now if you will join us on the second floor in the georgia conference center for a luncheon. our conference folks will show you the way. thank you all very much. [ applause ] and a reminder if you missed any of this discussion you can find it online at the video library at c-span.org. more live coverage still to come today on the c-span networks in about 15 minutes. live coverage first state department where secretary of state john kerrie and the foreign minister of cuba are holding a press conference in the embassy openings in havana

and washington, d.c. live at 1:45 p.m. eastern on c-span and then at 2:30, treasury secretary jack lew on regulating the financial industry. he'll be talking with the authors of the dodd frank law and the fifth anniversary being signed by president obama and former senator chris dodd of connecticut and barney frank of massachusetts at the newseum live at 2:30 on c-span2. tonights on the communicators. we'll speak with the wall street journal's information age columnist and why he thinks washington is a danger zone for innovation. >> i think if you go back to earlier technologies like railroads and the ma bell telephone monopoly, those were regulated as common carriers, regulators set prices and they set terms and they set rules and

we all know what happened. there was very little innovation and in telephones until they were all deregulated and all of these common carrier statutes essentially undone by congress when it was so clear that innovation was being suppressed and that the u.s. is falling behind in its competitiveness. that was the backdrop for the bipartisan consensus in the 1990s that the internet was going to be different. this was during the clinton administration. a clear consensus, democrats and republicans that unlike those earlier tobacco techs, the internet was going to be largely unregulated. >> tonight at 8:00 eastern on the communicators on c-span2. when congress is in session c-span3 brings you more of the best access to congress with live coverage of hearings, news conferences and key public

affairs events and every weekend it's american history tv traveling to historic sites discussions with authors and historians and eyewitness accounts that define the nation. c-span3, coverage of congress and american history tv. >> next, a hearing on the costs and security issues of opening the u.s. embassy in kabul. witnesses included the state department's overseas operations director and the gao and senior inspector general. the state department has invested more than $2 million in its facilities in kabul. >> committee on oversight and government reform will come to order. i appreciate you being here as we have a hearing regarding the construction costs and delays that the united states embassy in kabul, afghanistan. without objection the chair is authorized to declare a recess at any time. i appreciate being here. this is an important topic.

we have so many americans that have given their lives in afghanistan who have sacrificed away from their families to serve the united states of america and our interests there. we have a duty and obligation to make sure that they are well housed and that they are safe and secure, and that they're able to do their jobs and their duty and yet, after more than a decade of fighting and great work by the united states military we are deeply concerned about what the state department is doing or hasn't done in kabul to make sure that our embassy facility there is in proper order. the state department has invested or plans to invest more than $2.17 billion in facilities. it probably makes it the single most expensive facility that we have around the globe and if not, the most expensive certainly one of the most expensive. is there a threat? yes, there is a threat there.

it is a very dangerous place. is it safe? no, it is not safe there. did we hire the right contractors to put in place to make this happen? >> evidently not. we've had to dismiss some people along the way. the budget that was projected has now gone up 27%. is this project and is this buildout in kabul on time? now it looks like it's 2017 and three years behind schedule. is there a strategic plan. no according to the gao it was not. are there standards in place? no according to the gao. is there a security in plan for temporary facilities in place? no there is not. and so after more than a decade, there seems to be a fiasco. it is a mess and one of the core questions is did we learn what we were supposed to learn when we were in iraq? evidently not. keeping americans safe who work in the foreign service in kabul

afghanistan is a constant challenge. just last week taliban militants attacked a nato convoy just 500 yards from the united states embassy in kabul. there is an article in the washington post dated july 7th saying a suicide bomber rammed a car into an armored vehicle that was part of a nato convoy in the afghan capital on tuesday. the second such attack against coalition troops in a week. the attacks come a week after militants targeted a coalition convoy near the united states embassy killing two afghan civilians and wounding nearly 30. the week before militants stormed the afghan parliament in kabul in broad daylight in what appears to be a coordinated attack. these incidents made clear we have to ensure our brave men and women are safe. and one of the best ways to ensure safety is to provide facilities to secure diplomaticition ins and after the investigation by the gao,

are they safe? no, they're not and that's not acceptable. >> due to the misknowledge inment by the state department, however, it's not happening in kabul. as a result, american dip the maic staff are being exposed to unnecessary danger. last july, the government accounts ability office reviewed the construction of the kabul embassy facility and found the state department failed to properly acknowledge known risks. these risks include the award of a contract for work before the contract site was even acquired. an unrealistic schedule for it to be completed under and changes in the design of security and requirements and temporary facilities don't have a security plan at this point. as a result, these failures, construction would take more time, cost more money leaving embassy staff more secure in temporary facilities. we would lay these out in even greates specificity but we would not want to give the enemy an attack plan but there are

vulnerabilities we have to address those. in may the gao once again reviewed the construction of the new embassy complex in kabul and once again it identified a number of significant but preventable problems. the lack of planning by the state department resulted in overruns and delays. construction is projected to come in 27% over budget and more than three years behind schedule. part of the project was originally expected to cost $625 million. it is now estimated the cost is at least $792 million because the state department fail toed properly plan for the project is continuing to negotiate with its contractor so the current cost overruns could become even larger. one of the factors causing these delays and cost overruns is the department's failure to follow its own directive to have strategic facilities planned. >> as its name implies the strategic facilities plan outlines how a particular facility will be developed and used.

and he's especially critical for facilities like kabul where there is a high turnover in personnel and one of the things highlighted in the gao report is that they're constantly with the personnel. the state department rescinded their requirements for any facility which was a requirement that had been in place since 1990. because the state department's poor planning and the use of temporary facilities where americans must live and work they will continue indefinitely on kabul, in kabul. and amazingly the state department requested an additional $124 million for temporary facilities. >> it is unclear why state didn't do a better job planning for permanent and secure buildings which resulted in the waste of taxpayer dollars and it appears at least to me that the effort to move towards temporary facilities is the way to get around some of the requirements that need to go into good and

better planning. not only does state not properly plan for permanent facilityiesfacilities. it has no standards for temporary facilities and the state department's own actions in kabul make it clear how critical such standards are. in its fiscal year 2008 budget request, the state expressed concerns to the kabul facility imposed by weapons fire. however, as the gao pointed out, the only secure protection measure specified in the 2009 contract for temporary housing was shatter-resistant window film. end quote. that's it. a little film on the windows. i'm no expert, but i don't think shatter-resistant windows can stop a bullet a grenade and rpg and what not. yet we ask for americans to live there in this high-threaten viernment and in contrast, the state contractor contracted for the offices to have more security than the temporary housing that it built which meant employees were safer

working 24 hours a day rather than returning to their housing where they should be able to relax and be safe. the results are inconsistent and americans are unsafe. we have to do a better job of getting folks into safer, new facilities as soon as possible without incurring additional costs. $2 billion and you're still requesting temporary facilities with no standards and no protection and we did not learn the lessons in iraq and that is a crying shame. we look forward to having this hearing and hearing had the answers and responses to that, but i would like to recognize the ranking member mr. cummings? >> as i listened to your statement, i sat here and said to myself we're better than that. we're better than this. and listening to your answers to the questions that you presented because there's a lot to be discussed here this morning.

i'm glad that you're holding this very important hearing on u.s. embassy in afghanistan. i'd like to add three main points that i think we all can agree on. first and foremost the safety of the united states personnel serving overseas is a top, national security priority and it's critical to our countries' interests throughout the entire world. second, we recognize that the urgency of rapidly securing u.s. facilities abroad may cost more for faster results. however, cutting corners may have the opposite effect and careful, very careful stewardship of taxpayer funds and max miegz the protection of u.s. personnel because any dollar wasted is a dollar that can't be used to protect our personnel abroad. kabul is one of the most

dangerous places on the face of the earth. the state department ranks it as one of the most high-threat, high-risk locations for the united states personnel. the men and women who serve our country in afghanistan recognize these risks and it is our job to honor their service by taking all appropriate steps to provide secure facilities for their work. in 2008 and 2009 the united states rapidly increased a number of personnel in afghanistan to meet our nation's military and foreign policy goals. first, under the bush administration and then under the obama administration. this, and i quote, surge, and i quote as it was called required facilities for united states troops and civilian personnel including those working side by

side in construction governance and stability efforts. >> both republicans and democrats supported the surge. >> for example senate arms services committee chairman john mccain argued that the surge was, and i quote, vitally needed and the quote in afghanistan and the delays that would put american lives at risk and this dramatic increase in personnel and created a difficult challenge for state department officials planning for facility and security requirements. on one hand they've had to increase the united states footprint. on the ground, in the safe and secure way, on the other hand, they did not want to repeat the same mistakes that were made in iraq and where the united states compound became a massive, expensive fortress even as u.s. presence subsided. and according to the government

accountability office which had an official testifying here today, and i quote, the dynamic and unpredictable operating environment of afghanistan has produced changing facility needs that have continually outpaced existing capabilities and i quote -- gao also cited a senior state department management official explained the effects of this rush to accommodate the surge. state did not fully follow its costs and risk policies in part of the urgencies of the embassy's facility needs and the security environment and challenges supporting the surge in embassy staffing that was occurring. despite this urgency, however gao also found that the state department could have and should have planned better. could have and should have, but didn't. according to gao, the state department contributed to

construction delays and cost increases by failing to follow its own risk assessment and planning policies. there's something awfully wrong with that picture. the gao found that the department's original contracts did not include adequate security measures for temporary facilities. this led to inconsistent security measures and more contract modifications and increased costs and further delays according to gao. finally, mr. chairman, i want to thank you for agreeing to my request for my request to invite each of us here today, and the people we hire, and train to protect our facilities are just as important to our security as the walls we build and this company provides security of our facilities in afghanistan, under a contract that is scheduled to

run through 2017 at a projected cost of $723 million. in october 2014 the state department's office of inspector general issued a report with some very troubling findings. it found that it lacked required documentation showing that its personnel underwent mandated security investigations and training and that's the same company getting $723 million. the i.g. also found that aegis billed the government for more than $8 million in questionable costs including through the use of prohibited invoices. i am curious to earn what has aegis learned about billing and what personnel they have in place considering they're

getting $723 million of hard-earned taxpayer dollars. the i.g. also found that aegis held the passports and this is particularly troubling, of third-country nationals longer than necessary raising concerns about the company's compliance with regulations about trafficking in persons. that is of great concern to me. in the past our committee has investigated the actions of private security contractors in iraq where we witnessed shocking fraud and abuse. the current i.g. report does not include findings of nearly the same magnitude but these are important areas that we will let aegis to explain and explain thoroughly. >> we understand that some of these issues may have been addressed and we thank mr. galino for being here today. our goal is to make sure we

carry forward our past oversights to ensure that those lessons have in fact, been learned and anything that needed to be corrected was correctioned or is being corrected and with that, mr. chairman i thank you again for this hearing and i yield back. >> i thank the gentleman and i hold the record open for five legislative days for any member that would like to submit a written statement. we are pleased to welcome mr. michael quartz director of international affairs and trade of the united states accountability office. i appreciate the work you and your staff do and appreciate your participation here. and miss lidia nunez, the director of overseas building operation at the united states department of state and we appreciate you coming before the committee again and the honorable gregory star, and from the diplomatic security at the united states department of state. a longtime servant of the date department and we appreciate your participation here today. >> principal deputy

representative for pakistan at the united states department of state. the honorable donald hayes senior inspector of the office of inspector general at the united states department of state and mr. michael galino president and chief executive officer of aegis llc. again, welcome all, pursuant to committee rules witnesses are to be sworn before they testify, so if you will please rise and raise your right hands. do you solemnly swear or affirm that the testimony that you will give will be the truth the whole truth and nothing, but the truth? >> thank you. >> please be seated and let the record reflect that all witnesses answered in the affirmative. in order to allow time for discussion, we would appreciate if you limit your testimony to five minutes and your entire written record will be made part of the record. with that we would like to begin with mr. quartz. you are now recognized for five

minutes. ranking member cummings and members of the committee and i am pleased to be here to discuss the challenges related to the construction efforts at the u.s. embassy in kabul, afghanistan. this testimony is based on a gao report dealing with the subject that we issued in may of this year. this work is part of a series of gao engagements to manage construction and the efficiency and effectiveness of other aspects of its operations overseas. gao was asked to testify under which construction costs and schedules have changed and the temporary facilities on the compound and states planning for projected facility needs in the future. the primary message of my testimony this morning is that costs have risen and schedules have been extended significantly for two construction contracts that state awarded in 2009 and 2010. and further cost increases are likely. the state has built numerous temporary facilities in kabul and will continue to use them for the foreseeable future but

it lacks specific security standards for them. further, state's lack of strategic planning could lead to further problems as the state makes additional investments to meet investments to meet future facility needs in kabul. my first point is that costs for the two construction contracts have increased by about 27% from about 625 to almost $793 million. the projected completion of these projects has been delayed by over three years and is now slated for the fall of 2015. state didn't follow its own policies. resulting in lost opportunities to mitigate risks. when these risks, such as delays in the sequencing of the two contracts, materialized, it led to increased costs and extended schedules. as of march 2015 state and one of its contractors were still negotiating the value of several potential contract changes that will likely result in further increased costs. my second point is that state has billed over $100 million in

temporary buildings, that it has no security standards that are specifically tailored to these type of facilities. lacking specific standards or other guidance to guide such construction, state applied alternative security measures that resulted in insufficient and differing levels of security for temporary offices and housing. the state took corrective action that increased cost and extended schedules. state likely paid more than it would have had the security requirements been included in the original contract. my final point is state plans additional capital investments to discuss interim and future facility needs in kabul. and it needs to improve its planning for these efforts. the post current facility needs include changes in the security situation and new capabilities that will be required as a result of the draw down of the u.s. military there.

while stake holders within state are working to identify and prioritize facility needs, their efforts lack a facilities plans approach. this has inhibited coordination and undermine the continuity necessary to address the embassy's urgent needs. in summary, pursuing multiyear construction on a multioperational facility compound in a dangerous environment such as afghanistan presents distinct challenges and considerable risk. addressing the challenges gao has identified should be a high priority. mr. chairman and ranking member cummings, this concludes my prepared remarks. >> thank you. ms. muniz. am i pronouncing that right? >> yes. >> close enough. >> close enough. >> you're now recognized kpaktsly how i should say it?

>> muniz. >> i will improve. thank you. you're now recognized for five minutes. >> chairman chaffetz ranking member cummings and members of the community, i appreciate the opportunity to appear before you today to discuss the u.s. department of state's construction projects in kabul, afghanistan. from the beginning the goal has been to deliver secure facilities in those working in afghanistan. the united states reopened its embassy in afghanistan in december of 2001. in 2005, obo completed a new office buildings, three new residential buildings, and support facilities to support the needs of the facility. obo awarded two contracts to provide additional capacity. the projects included additional classified and unclassified office buildings, residential and support facilities, as well as security and infrastructure upgrades. they provided nonpermanent

facilities to meet mission needs during construction and provide capacity for surge requirements. the total project budget was $881 million. in spite of fluid conditions in managing a construction project, i'm pleased to report that the unclassified annex will be completed this month. this november the first residential facility will be delivered with 226 residential units. in october 2016 the classified annex will be completed and the following october will see the delivery of the final two residential facilities with 432 units. when completed, the embassy compound will have the capacity for nearly 1500 desks and over 800 residential units. these accomplishments will

continue to be achieved. these include the termination of the fiscal year 2009 contract and the fiscal 2010 contract. an increase in scope. additional security requirements as the security situation in afghanistan deteriorated. modifications to the old chancery building to make it more functional for posts in the short term. the elimination of scope planned for property adjacent to the compound occupied by the afghanistan ministry of public health. and the closure of the pakistani border from november 2011 to july 2012 temporarily eliminating the project's most direct ground shipping route. the cumulative impact of these changes is the addition of over two years ot project's schedule and over $250 million.

the gao report on afghanistan suggested that the costs and schedule that the project increased. while these are important tools, i reject the notion that more thorough assessments would have an impact on the kabul project. the material changes and challenges to the projects were not known and could not have been anticipated at the time of development and award of the projects. cost increases and delays were unavoidable. the gao report also suggests that the kabul project was not appropriately planned for the mission's needs. i also reject this notion. the kabul project was planned, designed, and awarded to provide the office and residential facilities as well as all necessary support and infrastructure required at that time. afghanistan is a fluid environment and differs markedly from normal operations. periodic reviews during and

after the project are essential to ensure that the mission's evolving needs are addressed. afghanistan construction is critical to the state department's mission. with every day and with every decision, we do our best to deliver a platform that enables staff to perform their duties safely and securely and we'll continue this effort until our work in kabul is complete. i look forward to answering your questions. >> mr. starr, you're now recognized for five minutes. >> good morning. thank you for your invitation to appear today to discuss security and construction developments of the u.s. embassy in kabul, afghanistan. our efforts in afghanistan and our determination to support the

afghan government are the highest importance to the department and to the administration. i, along with my colleagues at the department of state, look forward to working with you to examine the issues. our national interests sometimes require us to operate in very dangerous places. we identify the risks. we take deliberate and prudent steps to mitigate them. the department has made important strides in that regard. i personally discussed, plan, and strategize with my counterpart on at least a weekly basis, usually more than that. we plan with a wide array of department interlocktures at the mission in kabul. however, we can never foresee and mitigate all the potential pitfalls in an environment like afghanistan. insurgents have employed a wide

variety and range of attacks including suicide bombings, assassination attempts, kidnappings, and complex attacks. just last week there was an attack near our compound and like past attacks, our security facilities and measures performed as they should and continue to protect our people. in addition to operating in a challenging security environment, we have our supply route impeded and closed for extended period of times without notice. it slowed our ability to get materials to the site, but we ultimately found alternate routes and our mission never ceased. embassy kabul is not just a construction site. it is one of the largest functions embassy in the world with a large number of director

and high contractor personnel, which requires a significant amount of support. although we have experienced periods of elevated an targeted violence, which has halted all movements, we have resumed movements and we continue to build. when my colleague at the office of the inspector general has brought issues to our attention, we have made changes in short order to ensure mistakes are not prolonged or duplicated. we have learned lessons due to the thorough inspection of the gao and the oig reports. our facilities have proven time and time again they can withstand the most complex attacks. building facilities in this environment is not easy, and it is certainly not without risks,

delays, and unforeseen circumstances and costs. due to a fluid and evolving security environment, we must evolve and adapt to the conditions and circumstances that are presented to us. we work constantly to improve our practices and protect our people. we continue to reevaluate and at times, despite the inherent setbacks it may cause, we must chart new courses in order to advance the bigger picture of completing the mission to secure our people. as i will close, i will say that i am confident and pleased that despite the unforeseen challenges and setbacks, department personnel in kabul are better prepared and better secured today. i want to thank congress for the resources that you have provided over the years to strengthen and reenforce this vitally important diplomatic platform.

as the assistant secretary for diplomatic security, i work every day with my colleagues in the department of state to ensure a safe environment for the people. with your continuous support we are doing that. thank you. i will glad to answer any of the questions that you may have. >> mr. blanc, you're recognized for five minutes. >> thank you for the opportunity to appear before you today to discuss the future of mission afghanistan with my colleagues lydia muniz and greg starr. please allow me to begin once again by thanking the members of the committee for your continued support for our mission. i would like to particularly honor the dedication of thousands of american military personnel, diplomats, and assistance professionals who have served and continue to serve in afghanistan. we began our mission in late 2001 to ensure that the country

would never be used by al qaeda or extremists as a haven to launch attacks against the united states. since 2001, our goal has been to foster the development of an afghanistan that is sovereign, unified, democratic, and self-sufficient. in short, the development of afghanistan as -- we cannot achieve this without smart diplomacy. afghanistan is undeniably a dangerous place. when we ask our people to go into harm's way, we do so because their work is vital to our national security and we are all of us obligated to provide them with the resources they need to do their job safely and

well. we will continue to make improvements to adapt to a political, security, and planning environment. ongoing security upgrades will create an embassy compound that is designed to minimize threats and sustain u.s. diplomacy. in keeping with president obama's plan for a phase drawn down of u.s. military forces to an embassy-based presence, we'll have life support services that will increase our flexibility and self-sufficiency. we're bringing satellite

locations closer to the main compound. installing advanced early warning technologies. we continue to work with our afghan partners to assess emerging threats and develop effective prevention strategies. of course, none of these measures is perfect. while we constantly examine our security methods, i want -- we will continue to scrutinize the environment in afghanistan to seize opportunities to improve security where possible. we have demonstrated an ability to be flexible as diplomats. surging our civilian staff to support the military footprint and now drawing down to a smaller and more sustainable level. to be effective, the business diplomacy must be conducted in person.

the reporting they provide is vital to an agency that determines long-term u.s. strategy. they build relationships with afghanistan's current and future leaders make sure u.s. policymakers are informed and positions are heard. they oversee one of the united states largest -- this work is critical to our efforts to fight al qaeda assist the afghan state. since september 11, 2001, we have made significant progress. u.s. diplomacy has helped the afghan government build an national army and police forces to provide opportunity for millions of afghans. we have seen the country make great strides. accommodating recently in the first democratic transfer of power in history. but many challenges remain.

institutions must be further strengthening to give the government further legitimacy. afghanistan's ability to provide a security apparatus must be bolstered in the face of persistent threats in order to remain a partner. fostering afghanistan's development is the only sustainable way to address u.s. security concerns in the region and it will require continuing assistance. and intensetive day-to-day engagement. at the same time, we will continue to find ways to address the real risks our team in afghanis thank you very much, and i'm happy to answer questions. >> thank you. mr. hays, you're now recognized for five minutes. >> chairman chaffetz, ranking member cummings, members of the committee, thank you for inviting me to testify on behalf of the office of the inspector general for the department of state. my testimony will focus on the construction projects and related security issues of the embassy in kabul.

the embassy is a fortified compound composed of two adjacent campuses near the city. these two campuses total 36 acres and are a mix of completed structures, temporary offices, temporary housing facilities and a construction site. the department leases several residences outside the embassy walls to provide adequate setback for enhanced security for those sections of the wall. at the time of our inspection, over 1,000 employees were stationed in afghanistan. approximately 4,500 contractors were working in support of the embassy throughout the country. due to the massive construction underway, the embassy compound employees were forced to weave their way to get to work. a number of agencies were still in temporary facilities awaiting completion of their new offices. we had 21 inspectors conducting

over 600 interviews and reviewing hundreds of documents and 70 oversight reviews. when we arrived, the security situation was deteriorating in and around kabul, necessitating additional security projects. the team found the bureau of diplomatic security was engaged in constructing a number of building projects both in and off embassy compound. during our inspection, it spent $1.35 billion between fiscal years 2002 and 2013. these projects include the expansion of warehouse marine security guard quarters, construction to housing facilities, and other projects in kabul outside the embassy, including the completion of contract guard sleeping quarters

and other warehouse facilities. the need for security enhancement to the exterior wall was first identified and funded by ds in 2009. ds considered these enhancements urgent given the embassy's location, the middle of kabul. large buildings adjacent to the compound were a growing security threat. the team made classified recommendations with regard to security enhancements. necessary security enhancements, temporary housing were similarly characterized as urgent and founded by ds in 2011. approximately 70% of the 800 u.s. government employees and contract workers living on the u.s. compound were housed in temporary containerized housing units called shoes at the time of the inspection. most of these lacked adequate overhead and side protection.

this issue also a subject of recommendations in the classified annex of our report. during the course of the on site inspection, both embassy senior management team expressed concern over lack of progress to the exterior wall and temporary housing. they were not initiated despite serious implication of not completing them. based on interviews, this issue caused considerable friction between ds and obo at the time. specifically ds wishing they'd expeditiously complete these projects while obo wanted to continue projects finish after it met design and construction standards. in response, oboe's project manager explained there was a lack of progress due to a number of factors, including the number

of projects underway and equipment on the compound. as a result the contractor stated it was required to phase in projects to work efficiently and safely. the project manager stated that despite the desire to enhance security involving the compound wall and temporary housing there was no way to carry out these enhancements until current construction projects were completed. upon our return to washington the inspection team raised its concerns about the apparent inability of ds and obo to work together to find immediate to work together in kabul. the team met with obo and the assistant secretary on several occasions. they stated they would work together to address these situations. obo would work with ds to address urgent security projects.

on following the meeting, the undersecretary assured the team that high-level meetings would be conducted to eliminate outstanding issues and to proceed with the recommendations on security enhancements. in our classified report, we recommend obo coordinate with ds in the embassy to develop and execute a master plan of all ongoing projects. including those funded by ds. to date that remains seriously maim. thank you. >> could you repeat that last -- the last two sentences there that you said. >> in our classified report, under the section titled "construction project management" we recommended that obo coordinate with ds and the embassy to execute a master plan for all ongoing and planned projects, including those funded by ds and to date their recommendation remains open and

is a serious concern. >> i didn't hear that last part and i appreciate you repeating it. >> gulino you're now recognized. >> thank you for the invitation and opportunity to present testimony before this committee today. i am pleased to represent egis and all of our employees worldwide on this matter. as a brief introduction, egis is a u.s. company based in mcclain virginia. we provide security and risk management whose focus is to support necessary for our clients so they can undertake their missions in a complex and high threat operational environments. we handle everything from protective security to the facilities that house, feed and train our canines. we employ some 1,400 people as well as 73 canines, most of whom are performing critical missions

in afghanistan. our team of dedicated professionals include employees from 47 of the 50 united states as well as four national employees from nepal and afghanistan. beginning in 2012 under task order 10 to our worldwide protective services program, which i'll refer to as wps, agents works in close concert with the department of state to meet all operational and contractual requirements. the department of state office of inspector general initiated an audit. the audit covered the start-up period of the contract. mr. chairman, ranking member cummings, we fully acknowledge there was some administrative and logistic issues in the early part of that contract.

since that time and well before the issuance of the report, we have worked in concert with the department of state to address and correct these administrative and logistical issues. this includes thorough documentation for recordkeeping, stringent employee vetting as well as accurate time card and billing administration. the oig report also raised concerns that egis retain third-country national passports during visa processing and did not post trafficking in persons notices in native languages. i want to ensure the committee that egis maintains vigilant human rights and tips compliance programs. we have refined our programs to make sure employees are aware at all times where their passport is and the status of it.

egis also ensured that t.i.p.s. posters are displayed in english and nepali in prominent locations throughout the embassy site where they work. egis has worked closely with the department of state and the dod and the international private security committee to establish private security contractor standards. it's what i called a super charged quality management system that ensures compliance and professional management of security contractors with an emphasis on vigilant protection of human rights. i'm proud to report that egis was the first u.s. security company to earn its security certification. this is obtained through a vigorous external and complete independent audit of our system in mcclain as well as on the ground in afghanistan.

our employees and representatives abide by the egis code of conduct, which is based upon our cornerstone core value of integrity and further ensures a workforce culture and commitment to respect, responsibility diversity and inclusion. we also maintain stringent anti-corruption and whistle-blowing policies as well as a policy of zero tolerance for retaliation. in conclusion, i'd like to thank the committee for the opportunity to participate in this discussion and to thank the department of state for the opportunity to support its critical operations in afghanistan. mr. chairman, i'm proud of all the egis men and women. for their continued bravery, professionalism, high standards and exceptional work ethic. be pleased to answer any questions you may have. i'll now recognize myself for five minutes. ms. muniz, you joined obo in 2009, correct?

>> yes, that's right. >> and then you became the director in 2011? >> i believe that's right. >> my understanding is you went to the ribbon-cutting there in kabul in 2010. >> i believe it was a ground breaking. >> ground breaking. since you've been the director, have you been back to afghanistan? >> no, not since i've been director. >> this is our biggest project in the world, correct? >> one of our biggest. >> what's bigger than this, cost wise? >> i would say there are several that are on this scale, including islamabad? >> have you been to islamabad? >> yes. >> you think that's going to be in excess of $2 billion? >> no. that won't be in excess of $2 billion. >> is there embassy complex that's going to be bigger than this? this is 2.17 billion.

>> i guess i would look at it this way. we have a number of high level and critical projects in the department. kabul, baghdad islamabad, the security improvements that we're making at our consulates in pesh war. we cover the world. i have been to all of those places. >> we'll have you come back to talk about mexico. i would like you to spend more time. you were the in mexico city but some of the consulates in tomalipes. we'll come back to that. is there a strategic facilities plan for the kabul em ba si construction? >> i'm very glad you asked about the strategic facilities plan. it's important to note that the policy that the gao referred to which had been suspended applied not at all to the type of

project that is kabul effectively. i would like to highlight the fact that you mentioned this was adopted in the '90s and was just recently suspended. it was repealed because the process had been superceded by an improved process. but in the time in which it was in place, only 16 of these facilities master plans have been done. letmpe go first to quote what they do and explain why kabul wasn't an appropriate place in which to do this sort of facilities plan. then i can talk about the type of plans we did do. the long range facilities program will be directed at posts not covered in the regular capital or security capital programs. the long range facility program is intended to provide a clear definition to post requirements such that stakeholders and decision makers have the

relevant data prior to making decisions to fund and execute projects. the decision based on the growth and staff and growing needs in kabul, we had already made the decision to invest in growth in kabul. the long-range facilities plan was a tool developed to address those posts with nagging infrastructure and deferred maintenance needs that were never making it to our program list. back to the question of whether planning was conducted which is a valid question. at the time we developed the scope for the embassy kabul compound, a comprehensive plan was done for that compound as a stand alone facility. assuming a continued d.o.d. presence until modifications or draw-downs were made to that presence. so it was master planned. that plan was designed and currently being executed. that said things do get messy

when you're working on an occupied compound around hundreds of temporary facilities where you are squeezing the construction project in amongst those. but, yes, a master plan was conducted. it was developed. it was designed. it's being built. there are ongoing reviews of what needs be done in that environment. because in the six years since the abort of that project we have had to do continue relooks with the post, with the bureau, with ds about what are our new needs, what are our evolving needs in a situation that's continually evolving. we started with a master plan and we'll make modifications until we have the right combination of facilities and security features in place in kabul. >> i appreciate that lengthy answer. i beg indulgence from my colleagues as we start to ask questions. is that master plan something you can provide to this

committee? >> yes. the reason i pause is that this aster plan is made up of many documents which sort of look at all -- >> no doubt there are many documents. all i'm asking for is the original plan and the updated plan. because to hear you say it, there is no problems. to hear mr. courts and mr. hayes you are spending hundred of millions of dollars in addition to what was originally planned. you are three years behind schedule. we have people living this temporary facilities that aren't secure. let me read part of this page 16 of this gaoer report. between 2009 and 2010 contracts states should have conducted four cost containment studies and six rain/snow mix risk assessments. for the 2009 contract -- didn't conduct either type of assessment. in your written statement you

wrote i reject the notion that more thorough cost of risk assessments would have had a material impact on the cost or schedule of the project. i would argue there would have been further delaying of permanent facilities. you said cost increases and project delays were not avoidable. you said the gao has suggested that the kabul project wasn't appropriate planned to take into account the mission needs and the maximum account possible. we are left begging. who should we believe? they don't have an agenda, gao. you have an inspector general, they both come in and look at this and cite a host of problems. look at how mr. hayes concluded his assessment. you can't get the d.s. people if the same room with the obo folks. i will go to page 17.

diplomatic security is interested office. this relates to the cost containment studies. according to the attendee list, no one participated in the meetings related and officials we speak with indicated they were not aware of the study and the security recommendations. we can't even get diplomatic security to be part of the discussion in one of the most dangerous places on the face of the planet makes no sense to us. in isolation you're saying we don't need to do better planning. we have a great facilities plan. i have two independent groups that looked as this over the course of a year saying you're wrong, that there is a problem. we in congress are look at funding this to the tune of more than $2 billion. you're coming in late. we have people that aren't secure. we have always known afg is

dangerous are. there is no doubt that it has been dangerous and will continue to be dangerous. i have been there. it is a fortress of cement. it's a very difficult thing. we have people sacrificing for their lives and families and sacrificing for this country. they are living in a hooch that's substandard and not secure. i have gone past my time. i struggle to figurer out since you became the deputy director why you think things are going better. every metric i'm looking at is worse in this particular case. every one. name one thing that's going better in afg since you began. >> i guess what i would say is the way you have constructed the sentence is complicated. let me be very clear about this. kabul and afghanistan are are complex, involving environments.

the security situation is deteriorated. the numbers of desks have gone up. the movement and post needs in and around an ongoing construction project have continued to evolve. those projects were awarded since i have been there. i have watched the team work tirelessly with colleagues if diplomatic security to do the best they can. >> the report says diplomatic security is not even in the meetings. >> let me finish. and keep the project moving forward. with respect to your comments on the value engineering study which i think is a valid point. diplomatic security was invited to that meeting. there were no diplomatic security items added to the value engineering list. had there been we would have gone back -- >> they can't add them to the

list if they are not even in the meeting. that's the point of having them in the meeting is to get their perspective in a high risk assessment. i have blown past my time. i want to give mr. courts and mr. hayes an opportunity to offer perspective. then i need to allow others to answer questions. mr. courts. >> i would first acknowledge that kabul is a challenging environment. there's no way to completely eliminate all risk especially in a place like afghanistan. that's why adequate cost containment and risk assessment is so important in a place like that where the impact of the cost and schedule is greater when problems are encountered. if state followed its own policies earlier. for example, part of the 2009 contract it probably could have better managed risk. it may not have eliminated all of the risk, but it may have better managed some of it. it would have given a chance to develop mitigation strategies prior to soliciting the 2010 contract.

i would note when they did do a risk assessment and cost containment study for the 2010 contract, they did identify a number of risks some of which did indeed come to pass. one was a problem with the sequencing of the two contracts. another was potential loss of the afghan ministry of public health site that my colleague mentioned. there were a number of things that were not unpredictable. state did predict the problems. >> thank you. mr. hayes. >> both findings of the report and gao mirror each other. we were concerned about the lack of the plan that projected into the future. we are concerned about the security of our people and the compound. when we came back we raised the issues. there was tension in the field. we addressed those to director

munoz and greg starr. today agreed at the meeting to improve coordination and collaboration. at a later date in a meeting with director muniz, she developed colleagues to work with senior colleagues in d.s. we believe the coordination is improving, certainly in washington. we are not able to speak to the relationship in the field. >> thank you. recognize mr. cummings for an exceptionally long period of time. >> i want to see if i can put this in context a little bit. ambassador hayes, i would like to ask questions from the view of the inspector general's office. i understand staffing attica bull increased since 2002.

is that right? >> that's correct. >> in 2009 there was bipartisan support for a drastic increase in troops and civilian personnel in afghanistan and they commonly call that the surge. i.g. report cite the surge as directly impacting planning for the embassy compound and its construction contracts. i would like to understand how the staffing fluctuations have impacted the kabul embassy and also how state plans to adapt to such changes? last august inspector general's office issued a report explaining that the total number of american personnel working for the state department in afghanistan grew. and i quote from 340 americans in fiscal year 2008 to a peak of

more than 1340 in fiscal year 2012, end of quote. is that all correct? is that right? >> i believe that's correct. >> these numbers reflect an in crease of almost four times in the state department versus afghanistan within four years. >> that's right. >> do you know approximately what percentage of those people worked in the kabul embassy? >> as of the time we visited, about 800 americans were housed on the compound. >> all right. >> i can't talk about how many there are now because they were talking about a downsizing over the next year. >> now from what i understand the number of nonamericans also work at the embassy as do employees from other agencies, for example fbi, dea, department of homeland security have employees there who conduct important work at the embassy at

kabul. mr. blanc from the department's perspective, the united states government working in afghanistan requires a larger interagency presence at the em bs say that fluctuates depending on a variety of factors, is that right? >> yes, sir. >> these fluctuating staff levels must have exacerbated the space challenges experienced by the kabul embassy. is that correct? >> sir, that's absolutely correct. as we noted the department has tried to be flexible to surge our number of both state and other agency colleagues when the pill tear surge took place and now to draw down to a sustainable level. we have been looking at environments in afghanistan we have tried to find the best diplomatic. >> now director muniz what about your perspective of the

bureau of overseas building operations. how did the surge impact the planning of the kabul embassy? i have the same concerns as the chairman has and i'm just curious as to your answer on that. >> i would say it impacted the -- >> can you put your mic up? >> i would say it impacted the project pretty dramatically. with that said we knew we were operating in an environment where we would be trying to adjust to these changes. so given the constraints given the time that we had we moved forward with awarding the project as quickly as we could and incorporating those changes as quickly as you could. in a perfecter world you know the final number of desks years before you develop a project you develop a design and award it and nothing changes. that's not the reality in kabul. i think it would have been a waste of time to wish that it was and not continue to react to changes in the best way we

could. >> it's sort of like flying a plane into a building at the same time? >> a little bit. >> this past may the gao issued a report including, and i quote since the embassy reopened in 2002, the dynamic and unpredictable environment in afghanistan has produced changing facility needs that have been outpaced existing capabilities. do you agree with the statement, ms. muniz? >> i do agree. >> can you provide examples? >> again, i think shifting numbers, the fact that the numbers would delay the removal of temporary facilities in the footprint or the path of building permanent facilities these things can complement the execution of the projects. >> that's correct. >> do you agree with that? >> i don't agree.

>> why not? >> i simply don't. let me give you an example. the recommendation, risk assessment and cost evaluation done to the 2010 project ares that have been referred to, the cost savings generated from the value engineering study were a million dollars and well over a billion dollars. the risks that were known at that time -- so in an ideal situation you don't award a project to two different contractors. you award to one beginning to end. there was a decision that there was an opportunity to gain time and get hardened facilities and

made the decision to move forward with the approach. is it ideal in an ideal scenario? absolutely not. that point is valid. but i think we understood the risks. we understood the value of doing more assessment, but we also weighed it against the primary need of moving the construction project forward as quickly as we possibly could. >> ambassador hayes, you are from the inspector general's office. this in october you offered a report are with troubling findings about egis and it work in afghanistan. i understand you were not the individual who worked on the report are. >> let me direct that. you are the ceo of egis? >> yes, sir. there were questions about how passports from third country nationals you hired to come to afghanistan. your company held the passports

from third country nationals that you hire to come to afghanistan, specifically the i.g. found that your company held these passports for much longer than would have been necessary for visa purposes raising the prospects of violations of the standards against trafficking in persons. that's a very, very serious thing. would you agree? >> that's a serious -- >> trafficking in persons. >> absolutely. >> let me read. egis held third party nationals passports for periods longer than necessary. had inadequate traffic in persons awareness training for tcns and lack posters of tcn native language requiring reporting of all tip violations all of which increase the risk of inappropriate practices that could lead to potential t.i.p. violations.

i know i heard you say that now you've got the posters up. you should have had the posters up from the very beginning. you're getting $723.5 million seems like you could put a poster up. would you agree? hello? >> yes. >> why did your company do that? why were you holding people's passports? >> let me address them separately. >> please do. >> the passports weren't held longer than they were required to be held. it's a difficult situation in afghanistan submitting passports and the documentation to ministry of the interior and they don't turn them around as quickly as we'd like. we failed to keep the employees up to date on the status of passports. i can assure you and the committee that we don't hold them any longer than we need to and we do keep them advised of the status. with regard to the posters, we didn't have posters published in nepali and we should have done

that. there is no excuse for it. it's been corrected. >> we shouldn't be hearing about any of these kind of problems in the future is that right? >> sir? >> we should not hear about these problems in the future. >> that's correct. >> that is holding people's passports longer than they are suppose ed to. a company we're paying $723 million placing people in a possiblin dentured servant type situation. not in 2015. >> that's correct. >> in fact, the inspector general reported many workers complained, and i quote, it took three to four months to obtain a new passport resulting in a contractor hold ing passports for approximately four months for every six-month visa. >> again, that's a function of the afghanistan ministry of interior. we weren't holding them longer than we needed to.

we worked with the administrative interior to try to turn multiple entries around as quickly as we can. it has improved. we don't the hold passports unnecessarily. it's just the period of time we need to obtain. its work permits and multiple entry visas. >> you are in a position where you are informing these people as to the status and what's happening to the passport. how does that work? do they have to come to you and say what's happening with my passport? or do you go to them? how does that work? >> our program managers and assistant managers work with the nepali captains of the various groups. and they advise and they give them data. and it is published in the break rooms also. >> it's interesting. i want to make sure you correct this which was also found. your company had , and i quote,

an absence of detailed records in the contractors passport control log. it's hard to give information when you don't have the appropriate detailed records. what's happening with that? have you improved that? >> yes. we have accurate records. we know exactly where everybody's passport is on the entire project. >> mr. gulino, our committee has covered operating in iraq including the way they treated third country nationals they brought in under circumstances almost resembling as i said a little bit earlier, enindentured servants. i think we all agree this goes against our most basic values as americans. and a key part of our oversight responsibility is to ensure that lessons have been learned from past mistakes. we must be diligent in reviewing

the performance of the contractors hired. i know we were not the one who worked on the report but we would like to follow up. can we schedule a briefing for our staff to get an update on the inspector general's findings in october? >> i'm sure we can find the appropriate time to do so. >> very well. thauk thank you, mr. chairman. >> mr. hayes, following up, can the state department inspector genre view the documentation that is going on with egis around the world? >> i will bring this back to the attention of the auditors who conducted this and see what they can do. >> if you could confirm with us you're actually going to do that we would appreciate it. >> absolutely. >> thank you. now recognize the gentleman from florida for five minutes. >> thank you mr. chairman. my first question is to the director of the bureau of overseas building operations.

i think i heard you say that we were -- that they're going to -- you spoke about opening more desks or something being available. the chairman had asked about what had you achieve. but in your testimony you said like the next few days we're going to open facility with more desks. what was that? >> this month and in the -- >> i i can't hear you. >> in the coming weeks we are opening an unclassified facility with 917 desks. >> okay. well, i was, you know looking back at your testimony. and some of which you've told us today it sounds like the desk report. we've gone from just a hundreds of desks to you said we'll have 900 desks.

and then when complete the project will have 1,237 desks but we could actually grow to 1,7 -- well, go to 1,487. and then the plan is to go to 1,771. >> so let me clarify. what that does is break out the scope provided in the current project and then the nine and ten projects. so that's the 1200 and 600. if you combine those with existing facilities. when we started the project there was a building -- >> well. >> -- completed in 2009. >> again i appreciate the desk report. people don't understand that i guess the revenue in the entire country that they get in is about $2.5 billion. and their entire budget is $7.2 billion. most of the rest is given money isn't that correct? approximately, for afghanistan?

>> i don't have the exact -- >> well, i do. okay. that's the exact figures. the scope of this project is $2.2 billion. the emphasis seems to be on desks. by the end of the year isn't the administration supposed to have almost all the troops out? mr. blanc, do you know? >> yes. >> by the end of next year -- so we will have probably one of the best arrays of desks that you have ever seen in any post. how many people could there be in the entire bureaucracy? i was over there and i met some of the foreign ministry folks. are we going to be buddy like three-to-one? >> sir if i may, this refers back to the point i made that we have tried to remain flexible in response of terms of staffing.

>> i know. but again, a desk would suppose a person is sitting there. vacant desks are another matter. this is a $2.2 billion project. probably the biggest infrastructure project in the history of afghanistan. in a country that has revenue of about $2.5 billion coming in. we are going to have this massive complex of desks. this will be the taj mahal of desks. and the taj mahal complex that the taxpayers are getting ripped off for. >> if i may sir -- >> i don't have enough time. i want to go to -- again, your company, sir egis is british-based? >> and we have a u.s. subsidiary. >> okay. one of the things that disturbed me. now, who's your partner in afghanistan?

your major construction partner? afghani partner? >> no, sir. >> no one in afghanistan. >> we have a subcontractor, contract international headquartered in mcclain. >> are half your employees from afghanistan and half from where the u.s. or other countries? >> of the approximate -- >> of the project. >> of 1,400 300 are from afghanistan. >> the rest are brought in? >> yes, sir. it's a little over 600 nepalese and about 400 u.s. >> the thing that bothers me is i was out in helmand province with some of our troops and they were looking at a school building they showed me. they said this is the joke of the province. the americans paid three four times what it would cost for this. we appreciated that, the school, but it was the joke of the province. what would you estimate the premium you're paying for building in afghanistan to be?

three, four times what it would normally cost? >> well there's a -- >> again. i just give i give an anecdoteal incident. not oath the troops but the locals told me that we're getting -- the american taxpayer is getting ripped off on these projects. >> we're not doing that kind of work -- >> i do have a letter, mr. chairman, i visited one of our posts recently in western europe. we had gone to post benghazi visits to some of our complexes and trying to avoid another benghazi, one of the simple things we found. that's a huge project, it's a money pit. one of the simple things we found issed lack of surveillance cameras and their ability to also have high definition when i

visited in the last two weeks, i found that one of the facilities did not have those surveillance cameras. was it money? supply or something they said, no, it was the bureaucratic acquisition process i sent secretary kerry this record, i would like this made part of the record, i would like to make a big difference in security. >> i recognize the gentleman -- i will answer that question for you in writing if you would like we'll recognize the gentleman from massachusetts who's travelled extensively.

he's recognized for five minutes. >> a lot of members of this committee have been in and out of kabul one of the most troubling aspects of the people working there is not so much the security embassy which is important. but from my experience going in and out has been a real challenge. going from bagram or kabul and getting to the embassy. it's a start. maybe mr. hayes and mr. gordon is there any plan to have a helo pad or some way we're going to have 1500 deaths. 4500 contractors. i'm concerned about something going sideways there where the embassy may be overrun or something like that. we have to get our people out.

we've had incidents where going through the circle. there's another rotary coming in from the airport, where my security staff had to get out of the car and take people away from the suburban i was in. they were upset about something i couldn't figure that out. there's some real danger there going in and out of our embassy from the airport to the embassy. we just had a convoy a nato convoy, a vehicle born ied recently. we've had -- i've given up how many attacks on the kabul airport by the taliban. they're focusing on that corridor. i'm wondering if we're taking any precautions at all. again, do we have an evacuation plan if things get bad and we

have to get our people out. >> congressman, thank you for the question. part of our job and we make sure we have evacuation plans for every part of the world. we could do short draw downs of certain personnel, we could lower our presence. or they go all the way to evacuation. >> let's talk about kabul. >> we work closely with the department of defense. >> okay. >> we are in the midst of upgrading, because of the surge and the number of people that are going to be left behind in the military, leaving in large part, we're in the midst of another revision of the evacuation plan the neo-plan we call it, we will ensure that we have the ability to get our people out of that country. given the size it won't be overnight, this is not like evaluating a 200 person embassy, we will work closely with dod.

we're exceptionally aware of the danger of the routes that, particularly route white goes between the embassy and airport. we're using a mixture of air movements and ground movements as appropriate. the embassy every single day reviews how they're going to move people back and forth and what's the safest way to do it. we have i think because of our efforts not suffered the same types of attacks yet. i can't guarantee that we won't ever have them. but we absolutely do our best and we use a mix of air and ground movements. >> well, i'd say given the history here we should expect further attacks on the embassy and the airport as well. we are spread out. camp alvarado and camp sullivan. kabul airport. we have some properties there where we're spread out and i

think the distance it's about 2 1/2 miles i think at least 2 1/2 miles, probably longer from u.s. embassy to the kabul airport. that's a long ride. those roads aren't good. i'm concerned about getting our people out of there, practical stuff. and i -- i'm going to -- i don't have enough time to go over the contract issue, i think that we need to get back on the ground in kabul and go over all the documents and figure out what the cost increase. what that delta is between what we expected to see and what we're seeing now in terms of costs. and i'm not at all assured by the statements that the quality of the work is good and we're on schedule and under budget i think that's just bogus. we heard the same thing from miss muniz' predecessors, one of the generals, that the quality of the work was good and we're

under budget and on schedule. and then when he was gone, the budget went from 500 million to close to a billion i was in baghdad, i'm glad it's done, but in the meantime we lost some good americans electrocuted because of faulty code violations and electrical systems that weren't grounded, things like that. i'm concerned that we are having a repeat performance here. and we did let the contractor know that this was in afghanistan. so the added costs should have been baked in. afghanistan has never been a peaceful place in my lifetime. we shouldn't be shocked that a war broke out. there's been a war going on there for 10 or 12 years, and beyond that.

with the soviets. so it's always been a tough environment. so i don't like hearing that over and over again, that that's the reason for the cost increase. when we get a bid, we expect that to be baked into the cost this is a construction project in a difficult environment. i do appreciate you trying to help the committee with this work and i'll yield back. thank you. >> i recognize the gentleman from michigan mr. walberg for five minutes. >> thank you, mr. chairman. thanks to the panel. in afghanistan and kabul several times, i think the most recent one was late 2010 i was there. at that time, some of the temporary facilities used shipping containers. i remember staying in trailers and having meetings in shipping containers and temporary facilities. i assume these are still at the embassy and in use.

i'm correct? >> yes, that is the case. >> how secure are they? >> sir, would i tell you that they certainly don't come to the same level of security as a permanently built building, we have taken steps to surround them with either concrete barriers to limit shrapnel, we have sandbags on many of them, most of them. we have predetonation shields over the top of them so the mortar predetonates them with sandbags we have over 100 feet of set back from any of our perimeter walls. we have high perimeter walls around them. they have bunkers on the compound. to the extent we have to use these temporary issues we're aware of the vulnerabilities they come with and do everything we can to mitigate them until we can bring the permanent buildings online.

>> i understand the gao recommended the temporary securities. they did not accept these recommendations, is that correct? >> the state department partially concurred with that. >> what were the problems with fully accepting it? >> the state department would argue that there are offices, policy security board standards. including permanent and temporary facilities those are the standards they hold themselves to, i think they would tell you the only buildings that meet those standards are permanent structures. as we noted they contracted for buildings that have had had differing levels of security. if 2008