Secretary of State Rex Tillerson is resisting the pleas of State Department officials to spend nearly $80 million allocated by Congress for fighting terrorist propaganda and Russian disinformation.

It is highly unusual for a Cabinet secretary to turn down money for his department. But more than five months into his tenure, Tillerson has not issued a simple request for the money earmarked for the State Department’s Global Engagement Center, $60 million of which is now parked at the Pentagon. Another $19.8 million sits untouched at the State Department as Tillerson’s aides reject calls from career diplomats and members of Congress to put the money to work against America’s adversaries.


The $60 million will expire on Sept. 30 if not transferred to State by then, current and former State Department officials told POLITICO.

The struggle over the money is a case study in Tillerson’s approach to managing the State Department and the frustration it is engendering among American diplomats. Current and former U.S. officials call it the latest example of a severe slowdown in department decision-making; of Tillerson’s reliance on a coterie of political aides who distrust State’s career staffers; and a casualty of President Donald Trump’s intention to slash State's budget, which has Tillerson looking for ways to reshape the department and spend less money, not more.

Sources cited another sensitive factor at play: Russia. At one point during the discussions, Tillerson aide R.C. Hammond suggested the money is unwelcome because any extra funding for programs to counter Russian media influence would anger Moscow, according to a former senior State Department official.



"This is an extraordinary example of the dysfunction that is ripping through the State Department," said Brett Bruen, a former U.S. diplomat in contact with State employees involved in the funding fight. "What we're seeing is a small group of people with very thin knowledge making all the decisions in a very centralized and isolated process. It causes unnecessary delays and confusion."

Hammond said the funding issue is receiving prompt attention and that officials seeking the money had not presented a clear plan for how to spend it—an assertion denied by the former senior State Department official.

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The Global Engagement Center is an interagency unit based at the State Department that was created in spring 2016. It replaced the Center for Strategic Counterterrorism Communications, and its staff of about 80 is responsible for coordinating governmentwide efforts to counter the online messages of terrorist groups such as the Islamic State.

A Pentagon spending bill signed into law by former President Barack Obama in December broadened the center's mandate to include battling state-sponsored disinformation campaigns by countries such as China, North Korea and Russia. U.S. intelligence officials say Moscow used fake news reports and malicious Twitter accounts to influence the 2016 election, and lawmakers in both parties have called for a more robust U.S. response.

Aside from its governmental coordinating work, the center also partners with the private sector to test novel ways to defeat false information spread by U.S. adversaries. One project has employed guerrilla marketing tactics to place anti-terrorism videos in the Facebook feeds of young people showing an interest in jihadi media. To help pay for such efforts, the legislation in December authorized the Defense Department to send the State Department $60 million in fiscal year 2017 and $60 million in fiscal year 2018, but the secretary of state needs to request the money from the Pentagon.

"Over the last five to 10 years, there's been a tsunami of disinformation and anti-American propaganda around the world," said Rick Stengel, who, as a former undersecretary of state for public diplomacy, oversaw the center. "The Global Engagement Center is one of the few, if only, areas in the U.S. government that could be tasked with countering and rebutting disinformation against America."

State Department officials began urging Tillerson to seek the first $60 million from the Defense Department soon after he took office in February, according to the former senior State Department official.

But they quickly found themselves mired in a new, confusing and bottlenecked decision-making process imposed by Tillerson's top aides. For example, officials involved with the center first put in their request in an "action memo," the standard document sent to the secretary of state when a decision is required. Tillerson's aides retorted that he "didn't like being told what to do," the former senior State official said, and ordered that the request be refashioned as an "information memo."

Further stalling the request were staffing shifts among Tillerson's top aides. Eventually, the officials' request reached Hammond, a former public relations professional who served as a spokesman for Newt Gingrich’s 2012 presidential campaign. At the State Department, Hammond serves as a spokesman for Tillerson—but is also a member of the department’s policy planning staff, making decisions on substantive issues.

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Hammond threw up objections to the request on multiple fronts, the former senior State official said. Hammond indicated to officials involved with the Global Engagement Center that with the department facing potential budget and staffing cuts, it didn't make sense to take an infusion of new funds, the former senior State official said. Hammond also questioned why the U.S. doesn’t ask other governments, particularly in Muslim countries, to play a larger role in the information battle.

Hammond further expressed hesitation about needling the Russians at a time when Tillerson was trying to find common ground with the Kremlin on sensitive matters such as the war in Syria. The Kremlin-backed news outlet Sputnik has compared the Global Engagement Center to George Orwell’s Ministry of Truth.

"Hammond said the secretary is in the process of working through disagreements with Russia, and this is not consistent with what we're trying to do," the former senior State official said.

Most of the people interviewed for this story requested anonymity, either to protect their own jobs or to safeguard others they are in touch with at the State Department and the White House. And few issues are as sensitive as Trump’s relationship with Russia. The president has questioned the intelligence community's belief that Russia interfered in the 2016 election to help him, while Tillerson, a former ExxonMobil CEO who has long known Russian President Vladimir Putin, has sought to improve relations with Moscow.

Despite speculation that Tillerson may wish to overhaul or eliminate the Global Engagement Center, Hammond told POLITICO that there are “no plans” to do so.

"Regarding Russia," he added, "we have not sought to reduce efforts to spotlight and combat Moscow’s 'active measures' or information activities."

Hammond said Tillerson hadn't sought the $60 million because Global Engagement Center officials hadn't offered a vision for how to spend it. "They put in a request in for additional funding. We asked them to map out a plan of how they would spend the money," Hammond said.

But the former senior State official denied that was the case. He said the center's leaders had crafted a spending plan after consulting with experts at the National Security Council, the Defense Department and those working in the regional bureaus of the State Department. Hammond and other Tillerson aides dismissed that effort, according to the former senior State official, saying that any such plan needed to be approved by the State Department's policy planning office.

Hammond and other sources said Tillerson is aware of the funding requests. But some officials involved said it's not clear if the secretary understands all the details or is aware of his aides' machinations.

Current and former State Department officials are particularly mystified as to why, aside from the $60 million at the Pentagon, the Global Engagement Center has also been denied access to $19.8 million dedicated to fighting the messaging of the Islamic State and other terrorist groups. That $19.8 million is in the State Department's coffers but has yet to be directed to the Global Engagement Center.

Observers say the dispute over the various funds reflects a confused decision-making process fueled by Tillerson aides who distrust the State Department’s foreign service and civil service employees, believing them hostile to Trump's agenda.

"There’s paranoia and inertia — decisions are not being made," said one State Department official familiar with funding squabble.

Whether to fund the Global Engagement Center is one of numerous decisions on hold at State. Current and former officials told POLITICO that up to 200 “action memos” have piled up in the executive suites at Foggy Bottom. The backlog is unusually large; in one instance, according to a former State Department official briefed on the matter, a bureau asked months in advance for approval of talking points for use at an international conference. The response came too late, leaving U.S. officials unable to make meaningful remarks at the event.

Tillerson is said to be a methodical thinker whose step-by-step decision-making reflects his training as an engineer. His CEO experience seemed a potential asset when Trump tapped him to lead the 75,000-employee State Department. But critics say Tillerson hasn't fully grasped that the U.S. diplomatic apparatus has many moving parts that need simultaneous attention, so decisions can stack up fast.

Tillerson's inability to fill the vast majority of leadership slots at State, including undersecretaries and assistant secretaries also means more decisions land in his office. At the same time, Tillerson is trying to get a sense of how State uses its resources, and he's hinted that he's reluctant to make major decisions on hiring or new programming until he's developed a plan for reorganizing the department.

"They use the reorganization as an excuse to not act on anything,” one former State official complained. "That’s why people doubt the motivations of the reorganization. They think it's all about starving the beast."

Hammond insisted that major decisions are made quickly and that Tillerson needed to prioritize urgent threats.

"Issues are given diligent attention and are processed as fast as possible," Hammond said.

"I feel bad for the guy working on the Bermuda desk,” he added, “but unless the island is sinking into the ocean … I think I’ve made my point.”

Supporters of the Global Engagement Center say it should be a high priority given the enmity between Washington and Moscow, not to mention the ongoing worries over terrorist recruiting online.

Multiple sources said their read of the law suggests that if the first $60 million chunk at the Pentagon is not transferred to State by Sept. 30, it will no longer be available for use. What's less clear is whether the money, if transferred, would have to be spent before Sept. 30 or if it can also be spent in the following fiscal year. At that point, the second $60 million also can be transferred to the State Department, if Tillerson requests it.

Last month, Republican Sen. Rob Portman of Ohio pressed Deputy Secretary of State John Sullivan on whether Tillerson considers the Global Engagement Center a priority and urged that hiring caps be lifted so the center can expand.

Sullivan called the center “a priority” for Tillerson, saying it is “an important part of our mission."

After Tillerson testified at a June 13 Senate Foreign Relations Committee hearing, Portman submitted written questions asking about the fate of the $60 million. He has yet to receive an answer.