Foreign policy's loose cannon: the National Endowment for Democracy.

• Author: Conry, Barbara
• Position: NED

THE BUZZWORDS of budget consideration have been "cut spending first." Perhaps this could begin with the National Endowment for Democracy. Its past is rife with scandals, financial and otherwise. Since it has absolutely no "hometown" constituency, not one member of Congress would face angry voters demanding to know why "their" program had been slashed. Very few voters even have heard of it. Moreover, NED is emblematic of inside-the-beltway political logrolling, the type of enterprise that Washington-weary and government-wary voters--including the Perot constituency--would love to see abolished. Such a victimless cut would appear the perfect candidate for the budgetary ax. Yet, many members of Congress seem to think that the program should get yet another hefty funding boost.

NED is a little-known foreign aid program intended to promote democracy abroad. It is a nominally private organization, but all of its funds come from the Federal Treasury. Although small in comparison with other Federal programs, NED has been controversial throughout its history, engendering intense Congressional debate that transcends party lines. Moreover, although it is a child of the Cold War, NED continues to be a strong point of contention in the post-Cold War era. In 1994, for instance, NED represented $35,000,000 of a $23,000,000,000 Senate appropriations bill, yet attracted more speakers to the floor than any other item.

During deliberations on the Fiscal Year 1994 budget in the summer of 1993, the Senate approved an appropriation of $35,000,000, a decrease from the $50,000,000 recommended by the Foreign Relations Committee and included in the foreign aid authorization bill. NED fared worse in the House appropriations bill. Its entire budget was deleted, even though $17,500,000 previously had been allocated in the House authorization bill. Even the Senate figures represent a sharp rebuff to Pres. Clinton's proposal to increase NED's budget by 66% from FY93, which would have brought the NED budget to $50,000,000.

The debate over NED is not about democracy; no one is disputing that democracy and liberty are worthwhile goals. Rather, the controversy surrounding NED questions the wisdom of giving a quasi-private organization the fiat to pursue what effectively is an independent foreign policy under the guise of "promoting democracy." Proponents of NED maintain that a private organization is necessary to overcome the restraints that limit the activities of a government agency, yet they insist that the American taxpayer provide full funding for this initiative. NED's detractors point to the inherent contradiction of a publicly funded organization that is charged with executing foreign policy--a power expressly given to the Federal government in the Constitution--yet exempt from nearly all political and administrative controls. Still another aspect of the debate is whether NED is a relic. During the Cold War, the Soviet Union led a powerful ideological campaign against democracy, but there no longer is any such pervasive, systemic threat to freedom. Critics contend, therefore, that even if there was once a national security rationale for funding NED, it no longer exists.

Founded in 1983 following an impassioned call by Pres. Ronald Reagan for renewed efforts to promote global democracy, NED was designed to assist democratic movements abroad in ways that were beyond the reach of established Federal programs. Its founders were concerned that traditional democracy-building organizations such as the Agency for International Development (AID) and the U.S. Information Agency (USIA), as official government programs, faced legal and political restrictions that limited their activities.

Proponents contended that a private aid agency would be able to operate more freely and, at the same time, escape the stigma attached to U.S. foreign aid in many parts of the world. With that in mind, Congress created NED as a private, nonprofit corporation, although its funding came directly from the Federal government as an ear-marked item in the USIA budget. From NED, approximately 70% of available grant money goes to four "core" grantees: the National Democratic Institute for International Affairs, International Republican Institute, Free Trade Union Institute of the AFL-CIO (FTUI), and Center for International Private Enterprise of the U.S. Chamber of Commerce. Those organizations--deliberately chosen to convey a sense of balance between left and right, labor and big business--then determine just which groups abroad receive grants for their activities to further democracy. The remaining 30% of available grant money is disignated "discretionary" funding to be distributed directly by NED.

That convoluted organizational structure seems to be based on the premise that government money, if filtered through enough layers of bureaucracy, becomes "private" funding, an illogical and dangerously misleading assumption. In effect, the NED structure allows private organizations (in this case, groups with distinct and disparate interests) to pursue their own foreign policy agendas without regard to official policy. The vague public-private status of NED...