He's talking about the opulent and heavily staffed American embassy in Baghdad.
"I defy anyone to tell me how you can use that many people. It is nuts . . . it's insane and it's counterproductive . . . and it won't work," says the Republican former secretary of state and member of the Iraq Study Group. "I've been around the State Department long enough to know you can't run an outfit like that."
The nerve center of Iraq reconstruction efforts, housed in an ornate former Saddam Hussein palace with soaring ceilings and its own espresso bar, the embassy in Baghdad is one of the largest foreign missions ever operated by the State Department. Its complexity and expense, some say, hampers reconstruction efforts and drains cash from diplomatic efforts worldwide.
According to a State Department count, about 1,000 federal employees report to the U.S. Embassy in Iraq, not including hundreds of private contractors......At $923 million for the 2006 fiscal year, the budget was 20 times that of the Beijing embassy's that year, according to the State Department. More than two-thirds of the money pays for security.....It is possible for senior employees to earn more than the secretary of state, who makes $186,600 a year.
http://www.washingtonpost.com/wp-dyn/content/article/2007/03/01/AR2007030101497.html