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[Senate Prints 109-73]
[From the U.S. Government Publishing Office]

109th Congress                                                  S. Prt.
                            COMMITTEE PRINT                     
 2d Session                                                      109-73
_______________________________________________________________________

                                     

 
                     NONGOVERNMENTAL ORGANIZATIONS

                        AND DEMOCRACY PROMOTION

                     ``GIVING VOICE TO THE PEOPLE''

                               __________

                          A Report to Members

                                 OF THE

                     COMMITTEE ON FOREIGN RELATIONS

                          UNITED STATES SENATE

                       Richard G. Lugar, Chairman

                       One Hundred Ninth Congress

                             Second Session

                           December 22, 2006

                                     

                    U.S. GOVERNMENT PRINTING OFFICE
31-506                      WASHINGTON : 2006
_____________________________________________________________________________
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                     COMMITTEE ON FOREIGN RELATIONS

                  RICHARD G. LUGAR, Indiana, Chairman

CHUCK HAGEL, Nebraska                JOSEPH R. BIDEN, Jr., Delaware
LINCOLN CHAFEE, Rhode Island         PAUL S. SARBANES, Maryland
GEORGE ALLEN, Virginia               CHRISTOPHER J. DODD, Connecticut
NORM COLEMAN, Minnesota              JOHN F. KERRY, Massachusetts
GEORGE V. VOINOVICH, Ohio            RUSSELL D. FEINGOLD, Wisconsin
LAMAR ALEXANDER, Tennessee           BARBARA BOXER, California
JOHN E. SUNUNU, New Hampshire        BILL NELSON, Florida
LISA MURKOWSKI, Alaska               BARACK OBAMA, Illinois
MEL MARTINEZ, Florida
                 Kenneth A. Myers, Jr., Staff Director
              Antony J. Blinken, Democratic Staff Director

                                  (ii)

                            C O N T E N T S

                              ----------                              
                                                                   Page
Letter of Transmittal............................................     v

The Problem......................................................     1

Guiding Principles...............................................     2

Regional Overviews and Recommendations...........................     3
    Africa.......................................................     3
    Asia.........................................................     4
    Central Europe...............................................     5
    Latin America................................................     6

                               Appendixes

Appendix I. Complete List of Meetings............................     9

Appendix II. Democracy Survey....................................    19

Appendix III. Regional Notes.....................................    25

Appendix IV. National Endowment for Democracy (NED) Report 
  Entitled ``The Backlash Against Democracy Assistance''.........    45

Appendix V. Idea to Reality: A Brief History of the National 
  Endowment for Democracy (NED)..................................   110

                                 (iii)
  

                         LETTER OF TRANSMITTAL

                              ----------                              

                              United States Senate,
                            Committee on Foreign Relations,
                                 Washington, DC, December 22, 2006.
    Dear Colleagues: The Senate Foreign Relations Committee 
recently sent Carl Meacham, Keith Luse, Jay Branegan, Paul 
Foldi, and Michael Phelan of the professional staff to selected 
countries in Africa, Asia, Central Europe, and Latin America to 
examine the state of democracy, with particular emphasis on 
programs supported with United States Government (USG) funding, 
either directly through the National Endowment for Democracy 
(NED), or other nongovernmental organizations (NGOs).
    Increasingly, governments around the world have tightened 
their controls on foreign NGOs by passing laws to restrict 
their ability to work independently from government approval. 
In extreme cases, democracy promoters are being harassed by 
authorities. In some nations governments have been able to 
persuade their citizens that the work of NGOs and the financial 
assistance provided to them by the USG, is a form of American 
interventionism. Thus, in some countries opposition to 
prodemocracy NGOs is cast as a reaffirmation of sovereignty.
    I am pleased to share with you this very timely report. I 
believe it provides significant insight and a number of 
important recommendations on how NGOs can operate effectively 
abroad--while respecting the laws and customs of the host 
countries--to strengthen civil society and promote democracy 
under challenging conditions.
    I hope you find this helpful as the Committee on Foreign 
Relations considers its continued support for democracy 
promotion programs funded by the U.S. Congress. We look forward 
to working with you on these issues and welcome any comments 
you may have on this report.
            Sincerely,
                                          Richard G. Lugar,
                                                          Chairman.
                     NONGOVERNMENTAL ORGANIZATIONS

                        AND DEMOCRACY PROMOTION

                     ``GIVING VOICE TO THE PEOPLE''

    Between October and November, 2006, members of the 
professional staff of the United States Senate's Committee on 
Foreign Relations traveled to 16\1\ countries on four 
continents to assess the state of democracy promotion as 
practiced by American-supported NGOs. During these trips staff 
visited with government officials of host countries, relevant 
U.S. Embassy officials and United States Agency for 
International Development (USAID) officials, members of civil 
society \2\, as well as other independent, voluntary, nonprofit 
actors (See Appendix I for complete list of meetings). In 
addition to many organizations, Human Rights Watch (HRW) lent 
invaluable assistance through their thorough in-country contact 
base in suggesting and coordinating various meetings. In some 
of the countries visited, staff used a survey provided mostly 
to host country NGOs, which was developed with the assistance 
of the International Republican Institute (IRI), to assess the 
environment in which NGOs operate (See Appendix II for 
``Democracy Survey'').
---------------------------------------------------------------------------
    \1\ Chad, Ethiopia, Kenya, Nigeria, Cambodia, Thailand, Sri Lanka, 
Indonesia, Poland, Czech Republic, Slovakia, Hungary, Moldova, Chile, 
Peru, and Venezuela.
    \2\ Civil society can be defined as the area of legally protected, 
nongovernmental, self-organizing associative activities, institutions, 
and groups outside the realms of family, private for-profit sector, and 
the state in modern societies. Thus the concept civil society itself 
lies in the intersection of several spheres including the social, 
historical, legal, political, economic, ideological, and cultural.
---------------------------------------------------------------------------
     At the request of the Chairman, the purpose of the trip 
was to examine:

   The challenges that U.S.-funded NGOs face in 
        implementing democracy promotion projects;
   The effectiveness of indirect USG support for 
        democracy promotion projects; and
   The degree to which host governments allow for the 
        development of independent civil society organizations.

    From these findings, staff has developed a series of 
principles and recommendations for Congress, executive branch 
policymakers, and NGOs to guide the design, funding, and 
implementation of America's democracy-promotion programs.

                              The Problem

    Support for democratic, grassroots organizations has become 
a centerpiece of America's international outreach. The American 
people see this most clearly in USG efforts to lay the 
foundation for democracy in Iraq and Afghanistan. Less well-
known is our nation's broader push for democracy around the 
globe. Within the past 3 years, the so-called Rose Revolution 
in Georgia, the Orange Revolution in Ukraine, and the Tulip 
Revolution in Kyrgyzstan have opened new space for democracy in 
those nations, thanks primarily to the efforts of civil society 
members and organizations.
    Unfortunately, the success of these generally peaceful 
``color revolutions'' has prompted a counteroffensive by some 
governments against prodemocracy groups. A June 8, 2006, report 
by the NED [see appendix V for the history of the NED], 
commissioned by Chairman Lugar, notes: ``Representatives of 
democracy assistance NGOs have been harassed, offices closed, 
and staff expelled. Even more vulnerable are local grantees and 
project partners who have been threatened, assaulted, 
prosecuted, imprisoned, and even killed.'' (See Appendix IV for 
NED report entitled ``The Backlash against Democracy 
Assistance.'') The implications of the report were examined in 
a June 8, 2006, hearing chaired by Senator Lugar to examine the 
role of NGOs in the promotion of democracy.
    A number of governments are passing laws to constrain 
democracy assistance. In January 2006, Russian President 
Vladimir Putin signed a controversial new law imposing 
heightened controls on local and foreign NGOs operating in 
Russia. Outside the former Soviet states, USG-funded NGOs 
operating in Thailand reported instances of harassment, 
including surveillance by authorities, during the tenure of 
former Prime Minister Thaksin Shinawatara, who was ousted in a 
military coup in September. In Latin America, the Congress in 
Peru passed, and its counterpart in Venezuela proposed, laws 
imposing heavy restrictions on the work of NGOs. And in Africa, 
the work of NGOs is severely limited by a series of factors, 
chiefly the lack of resources.
    Staff set out to develop guiding principles for relevant 
USG agencies that fund NGOs implementing democracy promotion 
projects, recognizing that situations vary considerably from 
region to region and country to country. These general 
recommendations are aimed at protecting and improving the NGOs' 
effectiveness. In devising these principles, the staff was 
guided by information gathered from visits abroad and counsel 
from groups that focus on democracy issues, particularly the 
staff of the American Center for International Labor 
Solidarity. These recommendations are based on the principle 
that United States policy should encourage legitimate 
activities that improve the ability of citizens to exercise 
their will over their communities and the actions of their 
Government.

                           Guiding Principles

    Democracy backsliding anywhere is a threat to democracy 
promotion everywhere: Failure to check democracy backsliding in 
any given country harms democracy promotion efforts worldwide. 
Because democracy underpins global political stability, 
economic growth and international security, lack of will to 
challenge instances of the erosion of democracy sends mixed 
signals to our partners abroad who share our goals. In 
repressive and backsliding systems, the importance of democracy 
programs is magnified. They serve as a needed counterweight to 
forces of repression, corruption, and disenfranchisement.
    Democracy promotion is a long-term process: Because 
democratic transitions are rooted in people and movements, 
sustainable democracy programs cannot be delivered in a top-
down, one-off, short-term manner. To achieve sustainable 
change, democracy promotion must be a long-range exercise. Rule 
of law programs are a prime example; it takes years for legal 
precedents to take root and legal systems to change in a 
sustainable way.
    Democracy promotion must be seen in a regional, cross-
border context: Because no country or political development or 
movement takes place in isolation, democracy promotion must be 
pursued in a cross-border, regional, and even cross-regional 
context.
    Economic factors affect democracy promotion: Globalization 
and its economic effects impact significantly the ability of 
civil society and government institutions to respond to the 
needs of citizens. The impact of macroeconomic policy and 
global trade, particularly where they lead to increased 
inequality, can impede the success of democracy promotion and 
impair society's ability to address corruption, rule of law, 
and accountability. The economic marginalization or exclusion 
of vast segments of populations provides political space for 
authoritarian and nondemocratic forces to capture the public 
dialogue and weaken democratic development.
    Democracy promotion is as much about what happens before 
and after elections, as the elections themselves: Without the 
creation of at least the beginnings of independent civil 
society prior to an election, the elections themselves may 
bring about no real or lasting change. If a vibrant civil 
society is to help establish the foundation for any future 
political change, it needs to be fostered and promoted after 
and between election cycles. Civic education, informed citizen 
participation, transparency, and accountability are key 
determinants as to whether an elected government will actually 
survive and govern justly in response to its constituents.
    Democracy promotion is about aiming for high standards, but 
having realistic expectations: The combination of corruption, 
disregard for human rights, suppression of media freedoms, and 
regulation of independent civil society, along with a weak or 
nonexistent rule of law, unenforceable labor standards, and the 
absence of corporate accountability can all hamper democracy 
promotion efforts and create an unstable environment in which 
to implement projects. These factors must be considered when 
setting expectations and benchmarks for success.

                 Regional Overviews and Recommendations

             (See Appendix III for region specific notes.)

                                 africa

    Staff visited Chad, Ethiopia, Kenya, and Nigeria. Although 
each country is labeled a democracy, they differ regarding the 
level and strength of democratic institutions, and the quality 
of electoral processes. The ability of nongovernmental 
organizations in each country to work on democracy and 
governance issues is determined by a number of factors:

   Restrictions and regulations on such programs in 
        each country
   Institutional capacity and willingness to enable 
        such development
   Resources available within each country, including 
        effective media and organizations or structures to 
        disseminate information
   Willingness of bilateral donors and international 
        organizations to provide resources for such programs 
        (including the World Bank, United Nations, African 
        Development Bank, African Union, European Union)

    In reality, a free, liberal democracy remains a distant 
goal for all the countries visited, but more effective 
governance is both achievable and important to their 
populations. The violence, political instability, and poverty 
endemic to much of the continent hobble each country's 
individual efforts at democratic development or reform. In 
Chad, for instance, the government can conveniently ignore 
internal and international calls for reform while it 
``confronts'' the internal battles of its own political actors 
and the external threat of its neighbor, Sudan. In Kenya, 
counterterrorism measures encouraged by the international 
community have been criticized for encroaching upon civil 
liberties and democratic rights. In Ethiopia, the government 
cites the crisis in neighboring Somalia, as well as the 
standing tensions with Eritrea, as a rationale to delay 
progress toward pluralism. In Nigeria, corruption, crime and 
political violence imperil the Presidential elections scheduled 
for 2007. Nonetheless, each of these countries, if not the 
specific governing administrations, could well weather such 
internal and external crises more capably with well established 
and functioning democratic institutions.
Africa region recommendations
    1. U.S.-funded NGOs must ensure that their presence is 
legal prior to their deployment. Such NGOs' ties to local 
actors must also be independent and transparent.
    2. To the greatest extent possible, foreign NGOs should 
work with organizations across the political spectrum and 
ensure primarily local control.
    3. Because poverty and corruption are often the over-riding 
facts of political life in most African countries, democracy 
promotion programs in Africa should place special emphasis in 
building local capacity to scrutinize government spending and 
programs.
    4. USG funding for democracy promotion must be steady and 
long term. A fickle commitment will lead to missed 
opportunities and disappointment.
    5. USG efforts in democracy promotion must be politically 
and culturally sensitive to host country complexities. 
Democratization will succeed only if it reflects the 
expectations of the society in which it develops.
    6. Democracy exchanges should be increased. Exchanges and 
visits of parliamentarians and other government officials to 
the United States provide an incomparable education on the 
nature of democratic institutions.
    7. The professionalization of police forces rather than 
military forces should be made a priority in order to minimize 
human rights abuses and corruption that is at the root of 
popular discontent with the government.

                                  ASIA

    Staff visited Cambodia, Thailand, Sri Lanka and Indonesia.
    In Thailand, conditions in which NGOs operate have improved 
since the ouster of the Thaksin Shinawatara government by the 
Thai military in September, 2006. However, the full limits of 
freedom in operation will not be fully known until martial law 
is lifted.
    In Cambodia, still in the early stages of nominal democracy 
carefully guided by Prime Minister Hun Sen, NGOs are positioned 
to assist in building important foundations which will lead to 
a more democratic and responsive government. While Cambodia has 
the benefit of a large number of NGOs operating on a wide range 
of prodemocracy and good governance issues, there are questions 
about the degree of coordination among the NGOs and whether the 
full scope and effectiveness of the massive NGO presence in 
Cambodia has been evaluated.
    Although Sri Lanka weathers an ongoing insurgency by the 
Tamil Tigers, or LTTE, the country has managed to maintain 
democratic institutions and an environment conducive to free 
and open political activity. However, as the country may be 
edging closer to outright civil war, it is not possible to 
determine if NGOs promoting democracy and good governance will 
continue to be provided space to operate by the Sri Lankan 
civilian and military leaders.
    The people of Indonesia embrace democracy and an open 
electoral process. Given the relatively young Indonesian 
democracy, and the diversity of the 17,000 island archipelago, 
construction of democratic institutions is proceeding with 
remarkable speed. While the Government of Indonesia often 
embraces the presence of U.S.-funded NGOs promoting good 
governance issues, there are occasional pockets of resistance. 
However, overall receptivity to NGO activity is good.
Asia region recommendations
    1. U.S.-funded NGOs in Thailand should work with 
prodemocracy leaders across party lines to assess how 
democratic institutions may be strengthened to ensure stronger 
checks and balances within the Thai government and political 
system.
    2. In Indonesia, the U.S. Government should increase 
funding levels for NGOs working on building political parties 
and election preparation issues.
    3. U.S.-funded democracy promotion efforts should continue 
to focus on building democratic institutions and avoid the 
occasional perception of targeting or promoting political 
personalities.
    4. The United States Ambassador to Cambodia has been 
encouraged to conduct a historical and current review of the 
scope and effectiveness of U.S.-funded NGO work, pertaining to 
democracy and good governance issues.
    5. USG officials should recognize that effective promotion 
of democracy and good governance in Asia requires 
acknowledgement of cultural and national sensitivities. 
Definitions of democracy may vary.

                             CENTRAL EUROPE

    In order to gain an appreciation of past U.S. efforts at 
democracy promotion, staff visited the so-call ``Visegrad 
Four'' countries of Poland, the Czech Republic, Slovakia and 
Hungary, and also visited Moldova. Each of the V4 is a member 
of NATO and well on its way to cementing democratic and 
pluralistic governmental traditions in spite of recent internal 
political difficulties. While staff met with no one who 
expected or could even contemplate these polities sliding back 
to Soviet-style single party rule, genuine concern abounds 
regarding the pace and scope of their democratization. But, as 
one interlocutor told staff regarding the current political 
turmoil in his country, ``Having just held our breaths while we 
completed a marathon [by suppressing interparty squabbling in 
order to join the EU in 2004], we need a little time to 
exhale.'' Now is indeed the time for consolidation of the 
democratic reforms made since the fall of the Berlin Wall, and 
the administration must keep a vigilant eye on each of the four 
to prevent any backsliding and ensure forward movement.
    To gain a different perspective, staff had intended to 
visit Belarus, labeled by Secretary of State Rice in 2005 as 
the ``last dictatorship in the center of Europe.'' And so it 
remains in 2006. Apparently afraid of outside attention to its 
affairs, Belarus denied staff a visa--the only visa denied in 
the entire scope of the committee's project. Such actions only 
reinforce the conclusions that have been drawn regarding 
Alexander Lukashenko's iron-fisted regime. Much more fruitful 
was a trip to Moldova, where a Communist Party candidate, 
freely elected in 2001, won re-election in 2005.
Central Europe region recommendations
    1. The USG should work with Central European NGOs to 
provide technical assistance regarding alternative funding 
sources readily available. As one example, few of the NGOs were 
aware of, or had thought to apply to the $43 million United 
Nations Democracy Fund, to which the United States has donated 
some $18 million to date.
    2. The USG should promote more productive working 
relationships between NGOs and Central European governments by 
facilitating greater interactions between the two, whether at 
official embassy functions or, better yet, through the State 
Department's excellent International Visitor Program. Such 
programs, geared toward interactions with our own NGOs and 
government, will aid in cementing this critical relationship in 
these countries.
    3. Lawmakers and the administration need to recognize that 
the ``War of Ideas'' was not won with the fall of the Berlin 
Wall. Rather, only one chapter was closed as the world still 
confronts dangerous ideologies antagonistic to free, democratic 
and open societies and economies. In order to foster the growth 
of these ideas, we must revisit the concept of U.S. government-
staffed libraries and centers. In the view of staff, the 
current American Corners and Information Resource Centers fail 
to assist sufficiently in this effort.

                             LATIN AMERICA

    Staff visited Chile, Peru, and Venezuela. These three 
countries vary considerably regarding the strength of 
democratic institutions, separation of powers between branches 
of government and the approach taken by their governments to 
encourage or discourage the independent development of an 
active civil society.
    Since the return to democratic rule in 1990, Chile has made 
significant progress toward rebuilding the institutions of 
democratic government, but more is possible. In particular, 
Chile's legislature lacks the capacity and resources to 
represent fully the interests of its people. Currently, elected 
officials rely heavily on think tanks and foundations for 
technical and political advice. Development of civil society 
and independent organizations is hampered by a law which 
requires that 30 percent of a private donation go to a 
government common fund, and not the intended recipient. This 
law has had the effect of discouraging private donations to 
nonprofit organizations.
    In Peru, civil society is threatened through a law passed 
in December, 2006, to strengthen government regulation of civil 
society groups. Despite public statements by President Alan 
Garcia that the NGO law would be ``improved,'' Garcia approved 
the law without significant changes only two days after 
congressional passage. The passage of this law could damage 
perceptions of Garcia's commitment to democratic progress in 
Peru. In the U.S. Congress, it could affect the fate of the 
pending Free Trade Agreement (FTA).
    But most disturbing are problems in Venezuela, which has 
taken a turn for the worse under the leadership of President 
Hugo Chavez, particularly regarding the separation of powers 
between the legislative, judicial, and executive branches. 
Pending legislation by the Venezuelan National Assembly to 
regulate and control the ability and work of NGOs is worrisome. 
Under Chavez, who was re-elected December 3, 2006, Venezuela 
has demonstrated a blatant disregard for independent civil 
society actors, any form of political dissent, and frowns on 
even the limited participation of civil society groups through 
organizations like the Organization of American States (OAS).
    In all three countries to varying degrees, political 
parties are somewhat distant from the people they represent. 
Throughout Latin America, the executive dominates over all 
other branches of government. In this regard, especially, NGOs 
would benefit from working together across borders on 
strengthening the ability of citizens to influence local 
governments and the legislative branch. This inability to 
adequately convert constituents' concerns into responsive laws 
and policies is one important factor driving the poor and the 
politically marginalized toward leaders who promise popular but 
often shortsighted solutions.
    While stronger and more active NGOs will not replace the 
need for purposeful and concerned political parties, it is 
important to encourage a climate of strong independent civic 
activism, which could force party activists toward more 
effective objectives and practices.
Latin America region recommendations
    1. The OAS should establish a separate channel for 
accredited civil society organizations to present issues of 
grave concern directly to the Permanent Council. A simple 
majority should be required to approve introduction by those 
accredited NGOs of any topic into the agenda of the Permanent 
Council.
    2. USAID and the NED should give greater emphasis to 
working in partnership with Latin American NGOs, European 
governments, and international organizations, especially as it 
relates to developing cross-border agreements and coordination 
between Latin American NGOs.
    3. Staff strongly encourages the Department of State and 
USAID to develop a mechanism for periodically evaluating 
democracy promotion projects in key Latin countries. Given the 
very real efforts by some governments in the region to persuade 
their citizens that the assistance provided to them by USG-
funded NGOS is a form of American interventionism, policies 
toward these countries must be continually evaluated.

                               APPENDIX I

                              ----------                              

                       Complete List of Meetings

                                 AFRICA

CHAD
U.S. Embassy:
Ambassador Marc Wall
John O'Neil--Political Officer
USAID Les McBride, Contractor

Chad Officials and Opposition:
Saindidi Mahamat, Secretary General of the National Assembly 
        and ruling MPS party Nassingar Rimtebaye--Permanent 
        Petroleum Committee
Yoronjar N'Njarlugy Kodji, Action Front for the Republic, 
        Opposition Leader

Journalist and other Chadians:
Nguemadji Djimasngar, Reporter and Editor, Notre Temps
Delphine Djiraibe, National Coordinator, Committee for Peace 
        and National Reconciliation

U.S. NGOs:
    No presence due to lack of NGO interest rather than U.S. 
Government emphasis which is focused on education and 
grassroots efforts as well as support for international 
community efforts in political and institutional capacity 
building.

World Bank:
Marie Francoise Marie-Nelly, Sr. Program Manager, Chad-Cameroon 
        Pipeline Cluster, DC
Mamadou Deme, Sr. Public Sector Specialist, Governance Unit, 
        Chad

ETHIOPIA
U.S. Embassy:
Charge d'Affaires--Amb. Vicki Huddleston
Kevin Sullivan--Pol-Econ Officer
Anthony Fisher--Public Affairs
USAID Kevin Rushing, Deputy Mission Director
USAID John Graham, Senior Policy Advisor
USAID Mike McCord, Project Development Officer

Ethiopian Executive Branch:
Prime Minister Meles
Ato Bereket Simon--Senior Advisor to President Meles with rank 
        of Minister
Ambassador to the U.S. Samuel Asseffa

Ethiopian opposition political officials included:
Merera Gudina, MP, UEDF Vice-Chairperson
Temesgen Zewdie, MP, CUD Whip
Ayele Chamisso, Addis Ababa City Council, CUDP
Bulcha Demeska, MP, OFDM Chairperson
Lidetu Ayalew, MP UEDP Secretary General

Journalists and other Ethiopians:
Three Ethiopian journalists
A University professor
A World Bank representative

US NGOs:
    NDI and IRI and IFES were expelled from the country last 
year, thus unavailable and environment very dangerous for such 
work.
KENYA

U.S. Embassy:
Ambassador Michael Ranneberger
Deputy Political Counselor Craig White
USAID Stephen Haykin, Mission Director
USAID Jaidev ``Jay'' Singh, Sr. Regional Conflict, Democracy 
        and Governance Advisor

Kenyan Officials and Opposition:
Unavailable

Journalists:
2 locally based foreign correspondents

Kenyan Community Leaders:
Mohamed ``D'' and Juma Khamis, Mombasa youth leaders
Hussein Khalid Muhuri, Muslims For Human Rights (MuHuRi)
Mary Kavoo, MuHuRi, Finance and Administration Officer
Murad Saad and Taib Abdul Rahman, Drug Rehabilitation Reach Out 
        Trust
Khalid Shapi, Managing Director, Muslim Education Welfare 
        Association
Fr. Wilbert Lagho, Islamic Scholar (Vatican trained)
Kaari Murungi, Director, Urgent Action Fund for Women's Human 
        Rights

U.S. NGOs:
Peter Meechem, Director, IRI
Sioghan Guiney, Resident Program Officer, IRI, Parliamentary 
        Strengthening and Reform
Moses Owuor, IFES, Program Officer--Capacity building programs 
        with the Electoral Commission
Fred Matiangi, Country Director, State University of New York, 
        Parliamentary Strengthening and Reform

NIGERIA
U.S. Embassy:
Russell Hanks--Political Counselor

NGOs:
Two U.S.-based democracy promotion groups

                                  ASIA

    Following are U.S. officials interviewed, and 
nongovernmental organizations whose representatives were either 
interviewed, or received a survey for this project.
CAMBODIA
U.S. Embassy:
Ambassador Joseph Mussomeli
Margaret McKean, First Secretary,
USAID Reed J. Aeschliman, Director, Office of General 
        Development

NGOs:
American Center for International Labor Solidarity
American Institute for Research/World Education
Development Alternatives, Inc.
Documentation Center of Cambodia
East West Management Institute
International Justice Mission
International Republican Institute
International Labor Organization
NATHAN--MSI Group
National Democratic Institute
PACT Cambodia
Research Triangle Institute
The Asia Foundation
WildAid
Economic Institute of Cambodia
AMARA
Village Support Group
Community Economic Development
Community Legal Education Center
Women and Children's Rights Action Committee
Cambodia Human Rights and Development Association
Cambodian League for the Promotion and Defense of Human Rights
Human Rights Organization for Transparency and Peace
Legal Aid of Cambodia
Legal Support for Children and Women
Cambodia Center for Human Rights
Cambodian Women's Crisis Center
Major General Chap Pheakday, 911 Brigade Commander

SRI LANKA
U.S. Embassy:
Deputy Chief of Mission James Moore
Michael R. DeTar, First Secretary, Political Section
Helaena W. Rathore, Political Officer

Sri Lankan Government Officials:
Chrishanthe de Silva, Brigadier
Geeta DeSilva, Ministry of Foreign Affairs official

NGOs:
Amnesty International
Foundation for Co-Existence
Human Rights Watch
The Asia Foundation
The Halo Trust
RONCO Consulting Corporation
Academy for Educational Development
National Peace Council
National Anti War Front
Bandaranaike Center for International Studies
Associates in Rural Development
Transparency International
Lawyers for Human Rights and Development
Free Media Movement
Institute of Policy Studies

INDONESIA
U.S. Embassy:
Ambassador Lynn Pascoe
Deputy Chief of Mission John A. Heffern
Eric Kneedler, Political Officer,
USAID William M. Frej, Mission Director
USAID Larry Meserve, Director, Office of Democratic and 
        Decentralized Governance
USAID Kelley Strickland, Deputy Director, Office of Democratic 
        and Decentralized Governance

Indonesian Government Officials:
Dino Djalal, Spokesperson to the President of Indonesia

NGOs:
American Center for International Labor Solidarity
International Republican Institute
National Democratic Institute Human Rights Watch
The Asia Foundation
Triangle Institute
PERUDEM
Pusat Studi Hukum & Kebijakan Indonesia
The Indonesian Institute Center for Public Policy Research
Yappika--Civil Society and Ethnic Relations
Bandung Institute of Governance Studies
Lembaga Studi Advokasi Masyarakat--Criminal Code/Human Rights
Indonesia Corruption Watch
Institute for Rural Empowerment
Yayasan Visi Anak Bangsa--Media/Press Freedom

Thailand
    For the purpose of protection from possible reprisal, no 
names of persons/organizations contacted in Thailand will be 
provided.

                             CENTRAL EUROPE

POLAND
U.S. Embassy:
Ambassador Victor Ashe

Polish Government Officials:
Krzysztof Wieckiewicz, Director of the Department of Public 
        Gain in the Ministry of Social Policy

NGOs:
Justyna Janiszewska, Program Coordinator, Education for 
        Democracy Foundation
Maciej Tanski, Director, Partners Poland
Tomasz Schimanek, Director, Polish Charity Organization
Krzysztof Filcek, Deputy Director, Polish-Ukrainian Cooperation 
        Foundations (PAUCI)
Jakub Michalowski, Jan Kecik and Ignacy Niemczycki, Members 
        Free Belarus
Eugeniusz Smolar, President of the Center for International 
        Relations

CZECH REPUBLIC
U.S Embassy:
Ambassador Richard Graber
Deputy Chief of Mission Cameron Munter
Jim Davison--former Peace Corps official
Political, Public Affairs and Consular Officers

Czech Officials:
Vaclav Bartuska, Czech Ambassador on Energy Security
Gabriela Dlouha, Director of MFA's Transition Cooperation Unit 
        (TRANS)
Petr Fleischmann, staffer of Senate Foreign Relations Committee

NGOs:
Tomas Kraus, Executive Director Federation of Jewish 
        Communities
Tomas Habart, Program Manager of PartnersCzech
Jan Marian, Consultant, Prague Security Studies Institute
Jiri Kozak, Project Manager of CEVRO-Liberal Conservative 
        Academy
Assistant Professor Lubomir Lizal, Director of CERGE-EI
Assistant Professor Libor Dusek, Deputy Director for 
        Development and Public Relations
Beth Portale, Chief of Staff of RFE/RL
David Stulnik, Senior Program Director for Eastern Europe, 
        People in Need (PIN)
Nikola Horejs, Program Director for Cuba, PIN
Megan King, Senior Program Director for Middle East, PIN

SLOVAKIA
U.S. Embassy:
Deputy Chief of Mission Lawrence R. Silverman
Economic, Political, and Public Diplomacy Officers
Public Affairs and Consular Officers

U.S. NGOs:
Jan Surotchak, Resident Director, International Republican 
        Institute
Patrick Egan, Director Regional Program for Central and Eastern 
        Europe

NGOs:
Boris Strecansky, Ekopolis
Lota Pufflerova, Citizens and Democracy
Dusan Ondrusek, Partners for Democratic Change
Alena Panikova, Open Society Foundation

Journalists and other Slovaks:
Pavol Demes, German Marshall Fund
Ms. Emilia Beblava, President, Transparency International 
        Slovakia

HUNGARY
U.S. Embassy:
Ambassador April Foley
Deputy Chief Phil Reeker
USAID Regional Director Ray Kirkland
Political, Public Affairs and Consular Officers

NGOs:
Anita Orban, International Center for Democratic Transition
Peter Akos Bod, Hungarian-American Enterprise Fund
Annamaria Kekesi, Executive Director, Foundation for 
        Development of Democratic Rights
Katerina Hadzi-Miceva, Legal Advisor at European Center for Not 
        for Profit Law
Kristie Evenson, Director, Freedom House Europe
Balazs Kovacs, Program Director of Freedom House

MOLDOVA
U.S. Embassy:
Ambassador Michael Kirby
Deputy Chief of Mission Kelly Keiderling
USAID, Peace Corps, PAO, CONS, ECON, RLA, POL, Officers

U.S. NGOs:
Michael Getto, Country Project Manager, International 
        Republican Institute
Alex Grigorievs, Country Project Manager, National Democracy 
        Initiative

NGOs:
Roman Purici, Information Resource Center Director
Viorel Margineanu, Director, IMPACT
Ala Mindicanu, Professor of Journalism, ULIM
Olga Manole, Promo-Lex
Vitalie Nagacevschi, Lawyers for Human Rights
Igor Botan, Director, Association for Participatory Democracy 
        (ADEPT)
Paul Strutescu, Executive Director, League for Defense of Human 
        Rights in Moldova (LADOM)
Stefan Uritu, Helsinki Committee for Human Rights
Sorin Mereacre, Country Director, Eurasia Foundation
Ludmila Bilevschi, Director, Alumni Resource Center USG

Journalists and other Moldavians:
Petru Macovei, Executive Director, Independent Newspaper 
        Association (API)
Petru Macovei, Executive Director, Independent Newspaper 
        Association
Dumitru Ciorici, Director, Young Journalist Center
Corina Cepoi, Executive Director, Independent Journalism Center 
        (IJC)
Nicole Negru, Media Analyst, Independent Journalism Center
Cornelia Cozonac, Director, Investigative Journalism Center
Alexandru Dorogan, Director, Association of Electronic Media

                             LATIN AMERICA

CHILE
U.S. Embassy:
Ambassador Craig A. Kelly
Deputy Chief of Mission Emi Yamauchi
Juan Alsace--Econ-Pol Counselor
Harry Kamian--Econ-Pol Officer
Vince Campos--Consular Officer
Jeremiah Knight--Consular Officer
Tim Strater--Information Officer
Michael Orlansky, Cultural Affairs Officer
Monica Alcalde
Jessica Patterson

Chilean Officials:
Minister Alejandro Foxley, Minister of Foreign Affairs
Marcos Robledo, International Affairs Advisor to President 
        Michelle Bachelet
Francisco Estevez, Director, Division of Social Organizations, 
        Ministry Secretary General of the Government
Diputado Marcelo Forni Union Democrata Independiente (UDI), 
        Member of the House of Representatives, Foreign 
        Relations Committee
Sergio Bitar, President of Partido Por La democracia (PPD) 
        Party
Carlos Larrain, President, Renovacion Nacional (RN) Party
Sebastian Pinera, Renovacion Nacional (RN) Party
Carlos Tudela, Christian Democrat International Relations 
        Committee (DC)
Esteban Tomic, Christian Democrat International Relations 
        Committee (DC)
Fancisco Cruz, Christian Democrat International Relations 
        Committee (DC)

NGOs:
Jose Antonio Viera Gallo, President, Corporacion Proyectamerica
Ricardo Brodsky, Executive Secretary, Corporacion 
        Proyectamerica
Claudio Store, Head of Program, ``Joevenes al Servicio de 
        Chile,'' Fundacion Jaime Guzman
Batrice Corbo, Public Policy Advisor, ``Joevenes al Servicio de 
        Chile,'' Fundacion Jaime Guzman
Nicolas Figari, Legislative Advisor, ``Joevenes al Servicio de 
        Chile,'' Fundacion Jaime Guzman
Martita Fresno Mackenna, Public Relations, ``Joevenes al 
        Servicio de Chile,'' Fundacion Jaime Guzman
Maria de los Angeles Fernandez, Acting Director, Fundacion 21
Gonzalo Vargas, General Manager, Fundacion Paz Ciudadana
Andrea Sanhueza, Executive Director, Participa
Silavana Lauzan, Project Coordinator
Acting Director of the Center of Strategic Leadership, 
        University
Juan Enrique Vargas, Center for Justice Studies of the Americas 
        (CEJA)

Other Chileans:
Lecture to 30-40 young leaders, who were identified as the 100 
        Top Young Leaders in Chile. Adolfo Ibanez University
Fifteen Facultad Latinoamericana de Ciencias Sociales (FLASCO)-
        affiliated analysts; political scientists; and two 
        congressional staffers.
Jorge Schaulson
General Juan Emilio Cheyre (Retired)
Raul Sohr
Felipe Edwards
Christian Maquiera

PERU
U.S. Embassy:
Ambassador J. Curtis Struble
Deputy Chief of Mission Phyllis Powers
Alexis Ludwig--Political Officer
David Boyle--Political Officer
Kenny Jackman, Political Officer
Adam Shub--Economic Officer
Dan Martinez--Public Affairs
Garace Reynard--Narcotics Affairs Section
Commander Dominic Dixon--Military Assistance and Advisory 
        Mission
USAID Paul Weisenfeld, Director
USAID Susan Brems, Deputy Director
USAID Larry Sacks, Control Officer
Catie Lott
Claudia Rohrhirsh
Sobeida Gonzales

Peruvian Officials:
Luis Giampietri, First Vice-President
Ambassador Nestor Popolizio, Under Secretary of the Americas, 
        Ministry of Foreign Affairs
Maria Euguenia Chiozza, Director General, North America 
        Affairs, Ministry of Foreign Affairs
Carols Briceno, First Secretary, Ministry of Foreign Affairs
Dr. Beatriz Merino
Juan Carlos Eguren
Jorge Avendano
Rosa Urbina
Juan Manuel Chau

NGOs:
Ambassador Jorge Valdez, Institute for Liberty and Democracy
Dr. Jose Miguel Morales, President, Confederacion Nacional de 
        Instituciones Empresariales Privadas (CONFIEP)
Ricardo Vega Llona, former President, CONFIEP
Wilson Gomez Barrios, Securities Expert
Pepi Patron, President, Asociacion Civil Transparencia
Hans Landolt, Director, Instituto de Defensa Legal (IDL)
Ernesto de la Jara, Director, Justicia Viva
David Lovaton, Project Director, IDL
Sofia Macher, Responsible for Governance and Human Rights area, 
        IDL
Alfredo Villavicencio, Coordinator, Justicia Viva
Ana Maria Tamayo, Responsible for Defense and Military Reform 
        area
Thomas K. Reilly, Chief of Project, Pro-Decentralization 
        Program (PRODES)
Elena Conterno, Institutional Strengthening Expert, PRODES
Pablo Valdez, PRODES
Percy Medina, General Secretariat, Asociacion Civil 
        Transparencia
Kristen Simple, Program Officer for the Andean Region, IDEA 
        International
Diego Garcia Sayan, General Director, Comision Andina de 
        Juristas (CAJ)
Enrique Bernales, Executive Director, CAJ

Journalists and other Peruvians:
Enrique Zileri, Director, Carteras magazine
Bernardo Roca Rey, Director, El Comercio
Bruno Rivas, Internacional Reporter, El Comercio
Dr. Lourdes Flores Nano, Dr. Lourdes Flores Nano (Law firm
Dianne Vazquez)

VENEZUELA
U.S. Embassy:
Ambassador William Brownfield
Deputy Chief of Mission Kevin Whitaker
Ben Ziff--Public Affairs
Brian Penn--Public Affairs
Robert Downes--Political Officer
Dan Lawton--Political Officer
Adam Center--Political Officer
Melissa Rhodes--Political Officer
Andy Bowen--Economic Officer
Colonel Passmore--U.S. Military Group
Colonel Bauer--Defense Attache Officer
USAID Miguel Reabold

Venezuelan Officials:
Jorge Valero, Vice Foreign Minister for North America
Saul Ortega, Deputy of the National Assembly (meeting requested 
        and confirmed)

NGOs:
Humberto Prado, Observatorio Venezolano de Prisiones
Carlos Correa, Espacio Publico
Ewald Sharfenerg, Instituto Prensa y Sociedad
Maria Corina Machado, SUMATE
Marino Alvarado, El Programa Venezolano de Educacion-Accion en 
        Derechos Humanos (PROVEA)
Liliana Ortega, COFAVIC

Journalist and other Venezuelans
Pedro Pablo Penaloza, El Universal
Maria Gabriela Ponce, Universidad Catolica Andres Bello

                              APPENDIX II

                              ----------                              

                            Democracy Survey

                              APPENDIX III

                              ----------                              

                             Regional Notes

                                 AFRICA

    The Republic of Chad: Chad gained its independence from 
France in 1960 but then suffered three decades of civil warfare 
as well as invasions by Libya before finally achieving a 
measure of peace in 1990. Following the drafting of a 
democratic constitution, Chad held flawed Presidential 
elections in 1996 and 2001, both won by Lieutenant General 
Idriss Deby. In 1998, a rebellion broke out in northern Chad, 
which sporadically flares up despite several peace agreements 
between the government and the rebels. But a more serious 
threat to the governing regime now emanates from the east. 
Following Chadian support for Sudanese rebels in the Darfur 
region of Sudan, new rebel groups emerged to threaten President 
Deby in 2005 and continue to threaten his tenure. For instance, 
rebels launched an assault on the capital, N'djamena, in the 
weeks prior to the May 2006 Presidential election. France, as a 
former colonial power, exerts considerable influence and is 
reported to sustain the Deby regime with the rationale that 
there is no better alternative available.
    The President was elected to serve a 5-year term in an 
election held May 3, 2006, after getting term limits removed 
from the constitution. Deby was reelected President with 64.7 
percent of the vote against no true opposition due to a boycott 
by most major opposition parties. The opposition rejects the 
result, raising the prospect of future instability. A largely 
powerless legislature is only partially constituted: The 
National Assembly, whose 155 members are elected by popular 
vote to serve 4-year terms, most recently held an election in 
2002, with another scheduled for 2007, but the Senate has yet 
to be created.
    There are more than 200 ethnic groups among Chad's 9 
million people, with those in the north and east being 
primarily Muslim, and southerners comprising the majority of 
animist and Christians. There has been a long religious and 
commercial relationship with Chad's northern and eastern 
neighbors bringing an Arabized culture to Chad's eastern and 
central regions where Arabic is spoken and the people engage in 
many other Arab cultural practices. The French colonial 
influence is felt most in the south and continues to ebb.
    Beyond the rebellions and wars, refugees and poverty, Chad 
suffers from the common malaise of resource-rich African 
countries: Incredible potential without optimism. Chad is 
manipulated by its own repressive leadership, which is in full 
control of its vast mineral wealth. The international community 
is not, in Chad's case, a bystander. The World Bank supervised 
the financing of the Chad-Cameroon pipeline, which carries oil 
from Chad's land-locked fields to the sea, to try to ensure 
that the economic gain would flow toward development. Instead, 
once the oil began to flow, President Deby began to dismantle 
the international revenue agreement. Civil society 
representatives expressed great frustration with the lack of 
development in Chad--slipping from 8th to 3rd to last in 
poverty--despite the proceeds from oil since 2003.
    Such a problematic landscape makes it difficult to pursue 
genuine civil society capacity-building and democratic reforms. 
Since USAID departed the country in 1995, the United States has 
limited development assistance. Most U.S. assistance today is 
humanitarian and goes to assist over 200,000 refugees of the 
Darfur crisis in eastern Chad. Additional U.S. assistance is 
being directed toward counterterrorism efforts through training 
and equipping Chadian forces. The only USAID effort now 
consists of an individual contractor, well informed and 
experienced, working to harmonize limited resources in a very 
unsettled situation.
    U.S. NGOs concentrating on democracy building overseas have 
not prioritized Chad nor pursued US government resources to 
support programming there. Nonetheless, the Embassy country 
team has tried to sustain what small efforts are possible given 
available resources. The emphasis has been on democracy skills 
at the village level and human rights. For example, the passage 
of legislation critical of female genital mutilation was an 
instructive exercise in the democratic process. Education is 
also considered an effective arena. Funding is available for 
textbooks, which enables training and builds some measure of 
trust at the grass roots.
    Embassy personnel report that there is limited civil 
society and parliamentary training due to the limited 
resources, but, that the government of Chad does not appear 
averse to greater democracy capacity-building. The French are 
perceived as ambivalent to reform in Chad; in fact, they have 
publicly scolded independent media, which has further alienated 
the local population. The United States continues to seek 
opportunities but has not devoted the resources to effect much 
positive change. There is a risk, however, that the emphasis 
now being placed on military training and an increased U.S. 
military presence will gradually diminish current popular 
support for the United States in Chad.

    Federal Democratic Republic of Ethiopia: In 1991, the Derg 
military junta, ruling Ethiopia as a socialist state, was 
toppled by a coalition of rebel forces, the Ethiopian People's 
Revolutionary Democratic Front (EPRDF). A constitution was 
adopted in 1994, and Ethiopia's first multiparty elections were 
held in 1995. A border war with Eritrea late in the 1990's 
ended with a peace treaty in December 2000, though final 
demarcation of the boundary is currently on hold due to 
Ethiopian objections to an international commission's finding 
requiring it to surrender sensitive territory and Eritrea's 
refusal to negotiate further.
    Following the adoption of its constitution in 1994, 
Ethiopia is ostensibly a democracy. It is ruled by a Prime 
Minister, Meles Zenawi, who is selected by the party in power 
following legislative elections. The most recent elections 
occurred in May 2005 and were marked by an encouraging early 
phase, only to devolve into violent protest during which 
security forces used excessive force to quell demonstrations. 
Further, Prime Minister Meles has influenced the 
``independent'' commission looking into the violence, and has 
imprisoned many of the opposition without due process and with 
little concern over international discontent.
    The bicameral Parliament consists of the House of 
Federation (Upper Chamber) with 108 seats whose members are 
chosen by state assemblies to 5-year terms and the House of 
People's Representatives (lower chamber) with 547 seats and 
whose members are directly elected by popular vote to 5-year 
terms. The next election is to be held in 2010. In the most 
recent election, the ruling EPRDF won 327 seats to the CUD with 
109. This was a dramatic increase for the opposition from the 
previous election. Nonetheless, irregularities and subsequent 
violent assaults by security forces and arrests by the 
government have tainted the outcome.
    Opposition parties had been split on whether to contest the 
election and subsequently those that did win seats in the 
National Assembly rejected taking their seats to protest the 
alleged massive fraud by Meles' government. This was compounded 
by the violent response taken by security forces against 
protesters supporting the opposition. Many opposition 
candidates wound up in jail amidst reports of abuse and one 
elected member was killed in the violence. Violence erupted in 
June and again in November 2005. A supposedly independent 
Commission of Inquiry looking into the election violence 
identified triple the number of fatalities originally reported 
to have been inflicted by police and military forces.
    U.S. democracy programs in Ethiopia are rather new thanks 
to a shift in focus from emergency humanitarian relief to root 
causes and strategic interests. The needs are daunting: Free 
media, political party finance which is nonexistent, 
parliamentary law which is very slow to develop, as well as 
electoral board reform and strengthening. It is also seen as 
essential that some points of mediation are settled upon so 
that the recent confrontation does not lead to civil war. The 
Meles government also has its own internal enemies to contend 
with, some due to the marginalization of segments of the 
population by the ruling minority Tigray ethnic group. The 
northern border tension with Eritrea has political overtones 
and ethnic undertones as well.
    Prior to the May, 2005, election, three U.S. NGOs working 
on democracy and governance were ordered out of the country and 
have not been allowed back. This expulsion was apparently 
legally based. Although the NGOs were tolerated and permitted 
to operate for several months, none had received appropriate 
registration to work in Ethiopia, due to a reported lack of 
responsiveness by the Ethiopian bureaucracy. Nonetheless the 
expulsions were suspect, coming immediately prior to the 
elections. According to one group, this was the first-ever 
expulsion of these organizations under such circumstances. 
Though not saying so explicitly, the government has implied 
that one of the three was working too closely with an 
opposition party. When the Meles regime felt that particular 
group had gone too far, all three organizations were expelled. 
The incident places a more difficult burden on the USAID 
mission in Addis Ababa to work with others in a constrained 
environment.
    Ethiopia presents a typical set of diplomatic difficulties. 
It has proven to be a reliable partner in the Global War on 
Terror, yet the last election cycle showed that the country 
does not appear prepared to continue moving toward democracy. 
U.S. foreign policy must grapple with this apparent 
contradiction.

    The Republic of Kenya: The President is elected by popular 
vote for a 5-year term and is eligible for a second term. The 
Presidential candidate must win 25 percent or more of the vote 
in at least five of Kenya's seven provinces and one area to 
avoid a runoff as well as receiving the largest number of votes 
in absolute terms. The Vice President is appointed by the 
President. The last election was held December 2002. President 
Mwai Kibaki was elected in 2002 with 63 percent of the vote 
while his prime challenger Uhuru Kenyatta received 30 percent.
    The legislative branch consists of a unicameral National 
Assembly or Bunge with 224 seats--210 members are elected by 
popular vote to serve 5-year terms, while 12 ``nominated'' 
members are appointed by the President (but selected by the 
parties in proportion to their parliamentary vote totals), and 
2 ex-officio members. The last elections were held in December 
2002.
    Kenya is one of the most democratically developed countries 
in Africa and certainly the most democratic of the four African 
countries discussed here. It has shown the ability to establish 
institutions run by civilians and conduct national elections 
that are considered relatively free and fair by the 
international community. A recent poll initiated by the 
International Republican Institute (IRI) indicated that the 
majority of Kenyans (67 percent) polled expressed approval of 
their government's performance. On the other hand when queried 
about their confidence in the Parliament they were split at 49 
percent approving \3\. Democracy NGOs are prevalent and are not 
hampered significantly by government regulation or 
restrictions. Local and national media is apparently open and 
free, and has proved an effective tool in exposing graft.
---------------------------------------------------------------------------
    \3\ International Republican Institute poll conducted on behalf of 
IRI by Strategic Public Relations and Research, a survey firm based in 
Nairobi, Kenya. From November 3-7, 2006, 3,008 people were interviewed 
in all regions of Kenya. The margin of error does not exceed +/- 2 
percent.
---------------------------------------------------------------------------
    The real measure of Kenya's continued success in democratic 
reform and good governance will be its ability to curtail 
rampant corruption, both in government ministries and in day-
to-day interactions of the police and other civil servants. A 
Kenyan reported that ``the most feared and loathed threat to 
civilians is the police force, whose harassment and extortion 
abuses the people at every opportunity.'' The same November 
IRI-sponsored poll showed ``a majority of respondents (56.8 
percent) believed that corruption had increased or remained the 
same since the 2002 elections, yet a slight majority, 52.1 
percent, believes that the government is committed to the fight 
against corruption.'' \4\
---------------------------------------------------------------------------
    \4\ Ibid.
---------------------------------------------------------------------------
    The President, Mwai Kibake, sets the tone in Kenya, given 
the very strong position granted by the constitution. Kibake 
won election over the hand-picked successor to former 
President, Daniel Arap Moi, in 2002, to a great extent by 
promising reform of systemic corrupt practices. With his 
election in 2002, the expectations for reform were significant 
but President Kibake has proven unable or unwilling to sustain 
sufficient pressure to build anticorruption momentum.
    The majority of U.S.-funded democracy efforts are 
coordinated through the USAID office in Nairobi. They are 
considered by local media and other observers to be part of a 
coherent overall program that has shown more success than those 
of other donors. USAID ensures their partners work with 
multiple organizations and is consistent across them. They are 
also well coordinated with the many other international 
efforts. U.S. programs partner with local organizations, which 
also lends a positive perception of independence. Political 
regression or back-sliding has been avoided by democracy 
advocates by ensuring clear and practical association with 
Kenyans in control of the programs.
    Civil society in Kenya appears to be a viable, if still 
underdeveloped, means by which the people can identify and hold 
accountable their government officials. Although Kenya appears 
to be in transition, the advance toward sustainable democracy 
could go either way. Each election, Kenyans are more inclined 
to ``throw the bums out,'' all of them.\5\ Thus, efforts at 
reform must be sustained with each new crop of parliamentarians 
who have not yet realized their responsibility to the 
constituencies from which they hail. Exchanges of officials and 
visits to the United States have been of considerable value in 
the effort to educate and build a broader institutional 
understanding. Broadening exchanges to include parliamentary 
staff and political party representatives was thought to be of 
value by those interviewed.
---------------------------------------------------------------------------
    \5\ Upward of 60 percent of all incumbents are replaced each 
election according to local reports.
---------------------------------------------------------------------------
    U.S. democracy promotion programs work to a great degree in 
building political party capacity. Within the political party 
realm, ethnic coalitions rather than ideological conviction 
appear to dominate. Rather than highlighting and competing 
between ethnic groups, the embassy team tries to build 
confidence in broader platforms and then to translate such 
policy positions into effective communication to the 
constituency. There is a notable lack of legislative activity 
to support such platforms, however: There are only three or 
four bills introduced per session of Parliament.
    Embassy efforts are focused on capacity building in the 
capital, Nairobi. Limited efforts to ensure that democracy and 
governance programs reach populations further a field are now 
being pursued. Such programming appears essential for the coast 
region of Kenya, a primarily Muslim area. Coast region believes 
itself marginalized despite its important economic role as the 
location of the key East Africa trading port of Mombasa. This 
small city has also been the target of terror attacks in recent 
years and is just down the coast from Somalia's chaotic 
southern regions. Several NGOs in Mombasa complained that ``MPs 
do not work with local communities, they consider the state 
money as their own to use as they see fit.'' In fact, they 
point out that in one study, fully 95 percent of coast funds 
that were monitored did not end up being used as originally 
intended. Efforts to effectively engage all Kenyan groups in 
U.S. Government democracy-building will better ensure 
sustainability and support for U.S. efforts in Kenya and the 
region.

    Nigeria: Nigeria is the most populous country in Africa 
(with a population of about 140 million, one in five Africans 
is Nigerian), about evenly split between Muslim and non-Muslim, 
giving it the largest Muslim population of any country outside 
Asia. It is a major oil producer and one of the most important 
oil suppliers to the United States. Despite its oil wealth, 
Nigeria has a per capita GDP of less than $2 a day, and the 
country has suffered the classic ``resource curse''--per capita 
income today is a quarter what it was 30 years ago, 
infrastructure and social services have collapsed since the 
1980s, and corruption and crime are rampant. Much of the 
economic collapse can be laid at the feet of the authoritarian, 
usually military, governments that have run the country for 
much of its post-independence history. The most notorious 
recent example was Gen. Sani Abacha, who after his ill-
explained death in 1998, reportedly by heart attack, was 
accused of looting some $4 billion from government coffers.
    Since 1999, the country has been led by Olusegun Obasanjo, 
a former general and one-time coup leader who became a reformer 
and the first democratically elected President in 16 years. He 
was re-elected in 2003, in an election marred by violence and 
numerous irregularities, and this year he was blocked in an 
attempt to change the constitution so he could run for a third 
term. Although he is viewed by many outsiders as a leading 
African statesman, thanks to his efforts at promoting democracy 
and peacekeeping through the African Union and economic 
progress through ECOWAS (Economic Community of West African 
States), within Nigeria he has come to be regarded as 
ineffectual and unable to combat corruption, and his popularity 
is low. While Obasanjo has improved human rights and democratic 
institutions, democracy's roots are considered shallow, and in 
light of persistent ethnic, communal and political violence in 
various regions of the country, few observers are convinced 
that elections will take place as scheduled next spring.
    Representatives of two U.S.-based NGOs who have been 
operating in the country since the restoration of democracy 
agreed that in general the country has a relatively free press, 
relatively open political debate, and that their work is openly 
embraced and encouraged by the elected members of the 
legislative branch, the National Assembly. They could point to 
examples of where legislative hearings have been held as a 
result of NGO efforts, where NGO representatives have been 
invited to attend important political, cultural and social 
events, and where NGOs have received awards from the National 
Assembly. At the same time, both said their relationship with 
the bureaucracy is more strained, and while neither feels they 
are being targeted specifically, both are being harassed by the 
government for infractions of regulations, which in one case 
could result in the bank account of the organization being 
closed. Details below.
    Nigeria is a generally pro-American country, and the 
representatives said work of the NGOs is welcomed by the public 
and by civil society organizations. ``We're not seen as an 
irritant,'' one said. ``The National Assembly seeks our 
imprimatur.'' The other added, ``Being American is not a 
problem, often it's a positive. Most Nigerians look at the 
United States with admiration.'' Both groups work to build the 
capacity of all the political parties, including Obasanjo's 
People's Democratic Party, and unlike in some countries, are 
not seen as working with opposition groups against the ruling 
party. ``The ruling party has always been part and parcel of 
our program,'' one said. At the same time, they do feel the 
scrutiny of the Independent National Electoral Commission, 
which runs the elections (and not always well, according to 
outside observers) and does not have a good relationship with 
the political parties. Despite its name, INEC has been accused 
of being too close to the executive branch. One group 
characterized INEC's hostility as typical of ``a part of the 
government that has something to hide.'' They also said that 
they've been the subject of disparaging comments from the 
Nigerian diasporas in the States, members of which have written 
letters to the INEC. Both representatives said that many of 
their training sessions are monitored by agents of the State 
Security Service (SSS). But they've faced no direct 
interference from the security forces, and the greatest 
obstacle to doing their work is simply the widespread crime 
that makes it dangerous to travel anywhere in the country, and 
the frequent roadblocks that are used to harass everyone in 
Nigeria.
    Both said their organizations generally work well with 
local civil society groups. The United States NGOs have been 
criticized, however, for taking money away from indigenous 
prodemocracy groups. This is especially true in some of the 
northern Muslim areas. ``They say, `Why is the U.S. Government 
funding these U.S. groups if you're trying to build Nigerian 
democracy?' '' one said. By the same token, they have found 
that they cannot push an aggressive branding strategy as some 
in the U.S. aid community would like. ``In some of our work in 
democracy promotion, it just doesn't work to advertise, `This 
law brought to you by the United States.' We don't want to 
claim U.S. ownership; we want to promote Nigerian ownership.' 
''
    Ultimately, the two groups' effectiveness, and their 
ability to operate freely, turns on whether Nigeria is truly a 
nascent democracy, or instead an essentially authoritarian 
regime seeking to gain legitimacy through a democratic facade, 
what the recent NED report prepared for Chairman Lugar called a 
``hybrid regime.'' One of the representatives who had read the 
report said, ``I don't think Nigeria is a hybrid regime.'' The 
other representative was slightly more skeptical: ``I'd say it 
is more a democracy with an asterisk.''
    However, in sharp contrast to this generally rosy picture 
of a relatively benign working environment, both 
representatives said their organizations are currently in some 
kind of trouble with the government. In the more serious case, 
the organization is in danger of having its bank account closed 
down because it is in violation of the registration laws. The 
case is complex, but in a nutshell, as it was understood by 
staff, thanks to a bank consolidation and a tightening of laws 
for antimoney-laundering purposes, the organization is in 
danger of losing the resident permit it needs to maintain a 
bank account because it does not have an independent local 
board, as the law requires. Apparently, this organization's 
policy is not to have independent local boards. The 
representative reluctantly agreed that technically speaking, 
they were therefore in violation of the law. (Later, the 
Embassy political counselor said that he expected that this 
problem would quietly go away in a few months, as things often 
do in Nigeria, and that it appeared to be an instance of low-
level harassment). When asked whether he felt this was simply 
the bureaucratic machinery at work, or whether his organization 
was being specifically targeted, he said he did not feel that 
the registration law was being misused to block the work of the 
NGO, nor did he say that he felt they were being specifically 
targeted because of their prodemocracy work. (SFRC staff is 
skeptical). The other organization had a more arcane--and more 
easily fixed--problem: Some words in its name are not permitted 
for general use in Nigeria because they have specific meanings 
in public life for which they are not appropriate in this 
context. He expects the solution will be simply to use the 
group's acronym as the official name, and call themselves XXXX-
Nigeria. He believes they are not being targeted.

                                  ASIA

    Thailand: Thailand is a constitutional monarchy with a 
parliamentary form of government. The King is Chief of State, 
and the Prime Minister serves as head of government. King 
Bhumipol commands enormous respect and loyalty from the Thai 
people, and continues to influence Thai politics.
    Now that the democratically elected government of Thaksin 
Shinawatara has been overthrown by the September 2006, Thai 
military coup, (with the reported acquiescence of the King), 
U.S.-funded NGOs promoting democracy are once again able to 
operate freely and without intimidation or harassment. However, 
the full limits of freedom in operation may not be fully 
actualized until martial law is lifted. Challenges to the work 
of NGOs are bureaucratic, as opposed to the interim (military-
installed) government seeking to subvert or impede their work.
    One U.S.-funded NGO representative informed staff that his 
colleagues' phones were tapped, and that they were ``under 
constant surveillance by Thai police authorities,'' under the 
Thaksin regime. Another NGO official stated that his staff was 
followed by police, and phones tapped as well during the 
Thaksin administration.
    As the Congressional Research Service (CRS) reported, the 
coup followed 8 months of political turmoil. Widespread 
protests against Thaksin, (mostly focused on the tax-free sale 
of his family's telecommunications firm to a Singaporean 
government holding company), led the Prime Minister to call for 
a new round of parliamentary elections in April of this year. 
After a less-than-convincing victory by his Thai Rak Thai 
party, Thaksin resigned; however he quickly assumed the 
position of ``caretaker'' Prime Minister. (The opposition 
boycotted the election). After King Bhumipol asked that the 
courts resolve the crisis, the Constitutional Court ruled the 
elections invalid. New elections were set for this November. In 
the months leading up to the coup, the uncertainty of the 
future of Thai politics impacted the confidence of foreign 
investors and raised doubts about the durability of Thailand's 
democratic institutions. Military leaders took special notice 
as the Prime Minister reportedly considered intervening with 
the selection of persons for key military positions.
    According to Human Rights Watch, a ``steady erosion of 
respect for human rights . . . characterized the administration 
. . .'' of the former Prime Minister. In a letter to Mr. 
Thaksin, which summarizes some of the key concerns on the part 
of many human rights advocates and organizations, Human Rights 
Watch Executive Director Brad Adams wrote,

          Since your government assumed power, Thai security 
        forces have increasingly used excessive force and 
        operated with impunity, particularly in southern 
        Thailand. There has been no accountability for over two 
        thousand extrajudicial executions carried out by 
        security forces in the ``war on drugs'' launched by 
        your government; there has been no accountability for 
        the unnecessary use of lethal force by security forces 
        who killed some 110 militants armed only with machetes, 
        most aged between 15 and 20, in Kruesi Mosque in 
        southern Thailand; and there has been no accountability 
        for the March 18 ``disappearance'' of Somchai 
        Neelapajit, a prominent human rights lawyer 
        representing two Thai Muslims facing terrorism charges, 
        who is strongly suspected of having been abducted and 
        killed by security forces.

    Amnesty International reports that ``almost 20 (human 
rights defenders), were killed or disappeared,'' during the 
Thaksin administration, and ``the authorities have not properly 
investigated these abuses.''
    According to the CRS, ``During Thaksin's rule, detractors 
consistently voiced concern that his strongman style threatened 
Thailand's democratic institutions. Charges of cronyism and 
creeping authoritarianism grew increasingly louder as his 
political power strengthened. Previously independent watchdog 
agencies reportedly weakened under his watch, and some 
commentators alleged that Thaksin undermined anticorruption 
agencies by installing political loyalists to protect the 
business interests of his family and members of his cabinet--
sometimes one and the same, as Thaksin has a record of 
appointing relatives and friends to prominent posts.''
    The military coup and suspension of U.S. military aid may 
impact the traditionally strong bilateral relationship with 
Thailand. During staff's visit with Lieutenant General Naraset 
Israngkura, Deputy Director General for the Office of Planning 
and Development, Ministry of Defense, in Bangkok, staff 
questioned the General as to the timetable for lifting martial 
law, and stressed that members of the Foreign Relations 
Committee were looking for positive benchmarks from the 
military, toward restoration of democracy in Thailand.
    Thai military officials have committed to a process that 
will produce a new constitution for the country. There is 
concern that the final product may be drafted with intent to 
exclude certain persons or parties from being eligible or 
qualified to participate in the future political process in 
Thailand.
    U.S. officials in Bangkok report that the political party 
processes continue to be reasonably strong in Thailand. One 
official stated, ``When the coup leaders took over, they issued 
a proclamation that the law on political parties remains in 
effect, although political party activities were also 
restricted by martial law and associated measures. There is 
widespread expectation that political parties will be able to 
resume regular activities soon. There's also a definite 
expectation that parties will play the leading role when the 
next round of elections are held.''
    The interim government is allowing for the development and 
preservation of independent civil society actors.

    Cambodia: A constitutional monarchy, Cambodia's 
Constitution provides for a multiparty democracy. The executive 
branch includes the King, as head of state, an appointed Prime 
Minister, dozens of Deputy Prime Ministers, senior Ministers 
and Ministers, as well as numerous ``Secretaries of State and 
Under Secretaries of State.''
    Political parties remain very weak, despite years of effort 
by IRI and NDI toward capacity-building
    Political activists and parties work in an environment 
permeated by corruption at various levels of government and 
society. However, as one NGO leader commented, ``. . . as the 
middle class is developed; people will expect more from their 
government.'' The good news is that U.S.-funded NGOs are 
working a variety of projects to empower Cambodian citizens at 
the grassroots level. From utilization of radio broadcasts, to 
developing women's multiparty leadership caucus, to encouraging 
citizen participation at the village level, a comprehensive 
approach of promoting democracy and good governance is clearly 
underway.
    NGO survey responses are mixed on the points as to whether 
the government allows NGOs to participate freely in society and 
whether NGOs face many bureaucratic obstacles that deliberately 
prevent NGOs from functioning. Government officials have been 
discussing the possibility of legislation to regulate NGOs. 
While NGOs do not object to registering with the government, 
the possibility of a law has raised concerns.
    The majority of survey respondents agreed that corruption 
is not taken seriously as an issue in government, and that 
citizens are afraid to report corrupt businessmen, government 
officials and politicians.
    The sustainability of the present level of U.S. funding for 
NGOs in Cambodia is unknown. It is also unclear that other 
donors would match U.S. contributions in the event the U.S. 
funding level is diminished in the future. One U.S. official 
stated that in the event the U.S. Government withdrew a large 
share of its funding, a ``consolidation of NGOs'' and 
``shrinking of civil society'' might occur.

    Indonesia: Containing the world's largest Muslim 
population, Indonesia continues down the relatively new road to 
democracy. The President and Vice President were elected by 
popular vote for the first time in 2004.
    The U.S. funds a wide array of democracy promotion and 
democracy support/good governance projects, including 
antitrafficking in persons; justice sector reforms; legislative 
strengthening; mitigation of conflict and support for peace; 
local reform and good governance support; and media 
development.
    U.S.-funded NGOs promoting democracy report they face few 
or no obstacles with their work, and often operate with full 
support of the Indonesian Government. One U.S. official noted, 
however, ``When we've worked on some sensitive issues, such as 
human rights or special autonomy for Aceh or Papua, some parts 
of the Government of Indonesia always seem to have suspicions, 
but such work has usually been done through local NGOs.''
    Others report that, ``the government has clearly indicated 
particular areas which it considers to be `out of bounds,' for 
attention by international NGOs. The frequent use of libel 
suits reduces options available for many organizations 
conducting anticorruption campaigns in both the public and 
private sectors.'' There is also ``occasional harassment by 
local police who continue to enforce old regulations no longer 
on the books, which until eight years ago required obtaining 
local police permission for all organizational meetings.''
    IRI and NDI are able to register under the USAID umbrella 
rather than filing individually, which would subject the NGOs 
to financial disclosure requirements, including salary levels 
of all domestic/foreign staff.
    The Government of Indonesia takes an active role in 
soliciting assistance and facilitating some NGO programs. As 
one example, an NGO official reports that the National Chief of 
Police recently hosted a dinner, to which he gathered all main 
international donors to police reform efforts, thanked the 
donors for their assistance, and presented an outline of what 
all the police needed and how they can further integrate 
international development assistance into the police reform 
program.
    It is often more effective for the U.S. Government to work 
indirectly in Indonesia. As one NGO official stated, ``. . . 
unfortunately in the current environment, direct U.S. 
assistance is sometimes viewed through a lens of concern 
related to a range of international affairs issues of immense 
concern to Indonesians. Indonesian recipients are pragmatic in 
that they know and acknowledge the source of funding, for 
example, but prefer the intense programmatic interaction, 
planning and implementation, to be with familiar and 
nonpolitical organizations and NGOs. Then there is the question 
of aid effectiveness, and from my perspective, it appears much 
easier for the USG to administer programs via U.S.-funded NGO 
partners, as opposed to their own bureaucracy.''
    Increased anti-American sentiment is now being realized in 
Indonesia. As one U.S. official noted, ``. . . more recently, 
one almost gets the sense that the amount of anti-American 
sentiment among some Indonesian officials has increased, which 
seems related to Middle East issues. Local civil society 
partners, political parties and government institutions, do not 
want to openly acknowledge U.S. Government assistance.''
    In addition to U.S. funding of NGOs promoting democracy/
good governance, it should be noted that the U.S. Government 
provides approximately $3 million in assistance to the DPR. The 
United States is also working with the DPR to identify future 
opportunities for further assistance. For example, DPR Members 
insist they need more staff and research assistance.

    Sri Lanka: Sri Lanka's multiparty democracy has been 
largely stable despite high levels of violence; however, the 
ongoing conflict between the Liberation Tigers of Tamil Eelam 
(LTTE) and the Sri Lankan Government is now a situation on the 
verge of civil war.
    As the State Department reports, Sri Lanka's two major 
political parties--the UNP and the SFLP--``embrace democratic 
values, international nonalignment, and encouragement of 
Sinhalese culture. Past differences between the two on foreign 
and economic policy have narrowed.''
    A U.S. official working in Sri Lanka noted, ``Political 
parties are well-entrenched, have adequate bureaucratic 
capacity, and engage in a variety of activities without undue 
obstacles. There is strong awareness of the role of a robust 
opposition party in parliament. Most major elections in Sri 
Lanka have been broadly free and fair, with wide participation 
by political parties with freedom to campaign. Parliament 
encompasses a broad spectrum of opinions, from Sinhalese 
nationalists and Muslim parties, to Tamil Tiger sympathizers.''
    The LTTE continues to engage in terrorist activity, 
intended to destabilize Sri Lanka. While staff was meeting with 
a U.S.-funded NGO representative, a Tamil Member of Parliament 
was assassinated a few miles from the meeting location. Weeks 
earlier, he had met with the President to express concern about 
abductions and extrajudicial killings, some of which fall under 
the category of political assassinations. Some insist that the 
Government of Sri Lanka, through elements of the military, is 
engaging in acts of state terrorism against Tamil and other 
representatives of the population; and that the government is 
sponsoring paramilitary operations. Abductions of persons are 
increasing. Some are killed.
    If the overall human rights situation continues to 
deteriorate, and pressure mounts on media freedom, ``these 
trends . . . will eventually have an impact on political 
parties' ability to organize and express themselves freely.'' 
according to a U.S. official.
    NGOs surveyed were not in agreement that the Sri Lankan 
Government provides ample space in which they can operate 
within the country. In addition, there was not shared consensus 
that ``Watchdog organizations fear being coerced politically, 
economically, or physically.'' There was agreement that the 
government does not take corruption seriously as an issue.

                             Central Europe

    Visegrad Four: Most of the USG funding for democracy 
promotion in the countries of Poland, the Czech Republic, 
Slovakia, and Hungary (the ``Visegrad Four''--V4) has, rightly 
and understandably, been shifted to more pressing U.S. 
priorities in the Caucuses, Central Asia, and the Middle East. 
However, while there has not been the same backlash against 
civil society NGOs as is currently ongoing in Russia, it is 
clear that the governments of Central Europe remain skeptical 
regarding the positive role such NGOs provide democracies. This 
tradition, long since deeply rooted in our political 
consciousness, has yet to take hold in ``new Europe.'' NGOs are 
viewed either, at best, as nuisances to be tolerated because of 
current or past U.S./EU support or, at worst, as single-issue 
campaigns conducted by disgruntled and marginalized 
malcontents.
    In addition to trying to solidify their role in society, 
NGOs in Central Europe must also expend tremendous energy and 
hours on funding. Having graduated from USAID assistance [Czech 
Republic (1997), Hungary (1999), Poland (2000) and Slovakia 
(2000)], self-sustainability is now one of their most pressing 
concerns. While the European Union has filled in somewhat on 
this issue, NGOs reported to staff that EU funding regulations, 
restrictions and effectiveness are such that most NGO staff 
encountered longed for the ``good old days'' of USAID 
assistance. EU funding is generally only provided for the first 
25 percent of any grant, with the remaining 75 percent to be 
remitted once costs have been vouchered back by the NGO to EU 
headquarters. Thus many NGOs now find themselves having to 
borrow to cover costs until repaid by the European Union, 
turning NGOs, in essence though not fact, into for-profit 
operations in order to cover these borrowing and interest 
costs. While financial transparency must remain one of the 
cornerstones of any NGO-donor relationship, these EU funding 
mechanisms are burdensome and time-consuming, sucking resources 
away from core operations and objectives.
    It is in our own interest to assist many of these NGOs in 
their quests for funding as they not only seek to promote like-
minded civil society goals in their own countries, but often do 
so in third countries as well. Staff met with numerous 
dedicated V4 NGOs who conduct significant work in countries 
where we are neither welcome nor often able to conduct much 
activity beyond our Embassy compounds. Such countries include 
Belarus, Burma, and Cuba. Activities vary from raising money 
for dissidents forcibly dismissed by governments for their 
prodemocracy activities to providing activists with 
organizational and information dissemination advice and 
equipment.
    V4 NGOs not only help move those societies closer to 
joining the world's democracies, they provide perspectives that 
U.S.-based NGOs cannot. Having survived themselves for years 
under repressive and undemocratic rule and then been integral 
to the transformation of their governments to democracy, they 
have a historical perspective and moral voice that gives them 
added credibility. As one V4 NGO representative told staff, 
``When we bring people from these dictatorships to our country, 
they can't believe the transformation, especially those who 
visited Central Europe during the 1980s. Mind you, because they 
have been fed so many lies by their leaders, they still think 
of us in those terms--that our societies and our economies 
haven't progressed since the end of the cold war. Then, when 
they get here, they can't believe the changes, and I'm not just 
talking about the types of cars we can now drive, but the 
political and press freedoms that we enjoy, as well.''
    The passion for freedom and democracy these dedicated NGOs 
bring to democracy promotion deserve greater USG support. 
Clearly, such support must be calculated so as not to draw too 
much attention as in some circumstances this would greatly 
decrease their effectiveness. Nonetheless, the additional 
leverage they provide to our own foreign policy efforts in 
these countries should be recognized, particularly in their 
home countries. Such appreciation, recognition, thanks and 
respect for their efforts would provide easy public diplomacy 
opportunities in countries that have traditionally been 
supportive of the United States, but who in recent times have 
begun to gravitate more and more to the European Union.

    Moldova: Moldova remains on the front line of Russian 
attempts to return to the days of the Soviet Empire, of which 
Moldova was once a part, particularly through its meddling in 
the eastern region of Transnestria where a vocal Russian 
minority has cowed and coerced the rest of the Romanian and 
Moldovan population into adopting a resolution calling for 
independence and union with Russia. Given this and Moldova's 
status as the poorest nation in Europe, the decision to cut 
U.S. assistance this year by some 10 percent from the previous 
year (FY06 $17.82M; FY07 $16) is troubling. Any reduction in 
assistance will only likely contribute to the worsening of her 
economic situation.
    Moldova's high poverty rate is the single biggest 
contributing factor to the country's human trafficking crisis. 
Staff heard from trafficking officials that many villages are 
over-run with children whose grandparents attempt to provide a 
stable home environment when their fathers leave for 
construction jobs in Western Europe and whose mothers are lured 
away by bogus offers of domestic employment overseas. These 
victims are trafficked throughout Europe and the Middle East, 
increasingly to Turkey, Israel, the U.A.E., and Russia.
    Additionally, this reduction in U.S. aid sends the signal 
that we are abandoning Moldova to Russia and its desire to 
recreate its spheres of influence through outright aggression 
and intimidation via its agents in Transnestria, or through its 
economic embargoing of Moldovan wine (the country's single 
largest export) and other agricultural products.
    Some argue the Millennium Challenge Corporation's (MCC) 
recent award of some $25M to Moldova will more than make up for 
this shortfall. However, this funding is targeted at supporting 
anticorruption activities in order to make Moldova fully 
eligible for inclusion in the Millennium Challenge Account 
Compact, not to improve the economic situation. While possible 
future funding offered by the MCC would provide long-term 
benefits to the country, there is a more immediate need for 
economic assistance through USAID.
    Likewise, the announcement of the anticorruption funding 
award was met with much skepticism inside the country and must 
be carefully monitored in order to ensure it is transparently 
apportioned. The administration would clearly gain easy public 
diplomacy credits for maximizing the exposure involved in the 
auditing and overseeing of the expenditure of these funds, and 
would demonstrate to the average citizen that the United States 
remains committed to Moldova's future and to her eventual full 
integration into Europe.
    That said, Moldova and the rest of the GUAM nations 
(Georgia, Ukraine, Armenia, and Moldova) are clearly eager for 
EU membership and the concomitant economic and political 
benefits. However, recent statements by the European Union that 
further expansion is ``on hold'' sends a dangerous message to 
these fledgling democracies and will only slow the pace of 
further democratic and economic reform in them. Without the 
hope of EU accession, GUAM governments will be under little 
pressure both from within their own societies and from Western 
democracies to continue down the democratic road. The 
administration needs to pressure EU member states to reverse 
this ``closed door'' policy.

                             Latin America

    Chile: NGOs agree that progress has been made regarding 
developing stronger institutions of democracy since the return 
to democracy (1990). While the Government of Chile (GOC) is 
seeking to broaden citizen input, NGO leaders feel the effort 
is too top-down, without sufficient dialogue with civil 
society. Many argue that the Chilean Congress's over-reliance 
on party-affiliated foundations and think tanks limits Members' 
ability to respond to constituent wishes (Congressmen and 
Senators have few advisors and personal staff). Moreover, 
donations to nonprofit organizations have been on the decline 
since a new law that increased government's role in 
distributing charitable contributions (30 percent of a tax 
deductible donation goes to a government-controlled common fund 
that is distributed to other charities.)
    A former Senator from Chile's center left government 
coalition (Concertacion\6\) who now heads an NGO said that NGOs 
function freely in Chile. While there are some conflicts 
between the government and environmental NGOs, there is no 
persecution of NGOs that hold views different from those of the 
government. The former Senator acknowledged that many think 
tanks and foundations have ties to political parties, but this 
support is not automatic and that such NGOs do criticize the 
government. It was also noted that NGOs can register as 
nonprofit ``foundations'' or ``corporations'' and receive tax 
exempt status. The most pressing issue for many NGOs is 
financing, in part because there is no culture of philanthropy 
in Chile.
---------------------------------------------------------------------------
    \6\ The Concertacion de Partidos por la Democracia (Spanish 
``Coalition of Parties for Democracy'') is an alliance of center-left 
political parties in Chile. The coalition (in various forms) has held 
the Chilean Presidency since military rule ended in 1990; the elected 
Presidents have been Patricio Aylwin, Eduardo Frei, and Ricardo Lagos. 
Michelle Bachelet from the PS/PPD was the candidate for the 2005 
Presidential election.
---------------------------------------------------------------------------
    Many NGOs depend on foreign funding or private 
contributions. Following the end of the government of Augusto 
Pinochet, millions of dollars in funding from the United States 
and Europe dried up. The former Senator explained that many 
NGOs also rely on government contracts to provide products or 
services.
    This former Senator argued that despite broad participation 
in civic organizations and volunteer groups, civil society is 
weak because of the excessive reliance on a strong executive 
branch, the Catholic Church and private companies. ``NGOs are 
an Anglo-Saxon phenomenon,'' he said.
    Representatives from a think tank on the right expressed 
concerns about the independence of NGOs affiliated with the 
ruling Concertacion government. The two representatives stated 
that NGOs on the left are well organized and receive financing 
from Europe, notably France and Belgium, and to a lesser extent 
Mexico. They noted that Members of the Chilean Congress have 
limited staff, which has increased their reliance on party-
affiliated think tanks and foundations for information and 
analyses. They claim that while Concertacion-affiliated NGOs 
are often invited to comment on the GOC's legislation at 
Congressional hearings, think tanks and foundations from the 
right are not.
    While there is more transparency than 10 years ago, 
representatives cautioned that there is a perception of 
widespread corruption, as demonstrated by the recent government 
scandals in which administrators allegedly funneled funds to 
Concertacion electoral campaigns. They likewise expressed 
disappointment over the new Donations Law, with its 30-percent 
cut for the government, which has hurt private giving and in 
their view affects more NGOs on the right than the left.
    Government officials noted that President Bachelet wants to 
expand the participation of civil society in decisionmaking--
one of her top campaign promises. As part of this effort, 
officials highlighted a $1.8 million fund for strengthening 
social development organizations. The GOC assigns sums of money 
to NGOs involved in development projects based on a competitive 
bid process.
    Government officials cautioned that reforms aimed at 
increasing citizen participation take time and are difficult to 
implement and stated that Chile has a strong executive with a 
top-down framework emanating from Pinochet's 1980 Constitution. 
Compared to other countries, Chile is behind in revising its 
Constitution, the official said. The official said Chileans do 
not have the right to hold plebiscites or referendums, and 
there is no ombudsman, but this could change under the Bachelet 
administration.
    With regard to declining donations to nonprofit 
organizations, Concertacion officials defended the government's 
new law on donations. They argued that it is not fair, for 
example, that a company makes a tax-deduction donation that 
benefits only one entity when there are more needy recipients. 
The 30-percent allocation to a common fund and distribution by 
the government is more beneficial to society, they claimed. The 
majority of think tanks and foundations, on both the left and 
the right, criticized the new Donation Law, arguing it hurts 
well-known organizations such as Chile's Municipal Theatre and 
the Catholic Church-affiliated NGO ``Hogar de Cristo'' \7\. 
Most NGO representatives supported the idea that donors should 
be able to provide full funding to the NGO of their choice 
without government direction.
---------------------------------------------------------------------------
    \7\ Hogar de Cristo is the largest nongovernmental, nonprofit 
social organization, working with over 4,000 volunteers to serve 70,000 
people throughout Chile. They are dedicated to serving and caring for 
``the poorest of the poor'' with dignity and compassion. They have many 
sites throughout Santiago (and the rest of the country) with numerous 
programs. Possibilities for projects are endless. It is easiest to 
imagine students integrating themselves into the direct services of the 
sites and complementing the services with educational workshops and 
activities. Other alternatives, including needs assessment and program 
planning or evaluation, tend to be developed when the possibility of 
carrying them out becomes a reality.

    Peru: Peru is a multiparty republic that recently emerged 
from more than a decade of authoritarian rule and is undergoing 
a process of economic and democratic transformation.
    Over the last decade, the Government transformed a heavily 
regulated economy into a market-oriented one. The country's 
population was approximately 27 million. Gross domestic product 
grew 4.8 percent during the year, compared with only 0.2 
percent growth in 2001. Inflation, which was 0.1 percent in 
2001, stayed under 1.5 percent during the year. Major exports 
include copper, gold, and other minerals, fishmeal, textiles, 
and agricultural products. Close to 54 percent of the 
population lives in poverty, earning less than $1.25 per day; 
about 15 percent of the population lives in extreme poverty, 
unable to meet the most basic food, shelter, and clothing 
requirements.
    The government of President Alan Garcia is perceived as 
respectful of the human rights of its citizens; however, in the 
past there were serious problems in some areas, particularly 
regarding allegations of unlawful or unwarranted killings by 
police.
    Staff's visit was heavily focused on proposed legislation 
that would give the Government of Peru (GOP) authority to 
control NGO activity, particularly those working on human 
rights issues and receiving international assistance.
    The law would force nongovernmental organizations and their 
international donors to register with Peru's Agency for 
International Cooperation (known for its acronym in Spanish, 
APCI \8\), the state watchdog, and give details of their 
funding and activities. APCI would also have responsibility for 
``harmonizing'' the groups' activities ``in line with national 
development policy and the public interest.''
---------------------------------------------------------------------------
    \8\ Agencia Peruana de Corporacion Internacional.
---------------------------------------------------------------------------
    More than 3,000 NGOs operate in Peru, with a total annual 
income estimated at $500m for the sector.
    APCI--whose board of directors is presided over by the 
Prime Minister and includes the Foreign and Finance Ministers--
would be able to punish groups it judges to have acted not in 
the national interest.
    The proposed NGO law has generated an enormous amount of 
controversy, with front-page articles and a host of almost 
unanimously critical editorials. Peruvian NGOs have threatened 
to take the matter to the Constitutional Tribunal. Peru's 
Ombudsman called into question the law's constitutionality. The 
overwhelming response highlights the strength of Peru's 
democracy, particularly the civil society sector.
    In a late October 2006 vote, the Peruvian Congress voted in 
favor of the legislation, which needs to be approved in a 
second congressional vote before being sent to the President 
for consideration (which had not occurred at the time of staff 
travel to Peru). In many of the meetings NGO representatives 
focused on proposed legislation which would give the government 
authority to, in effect, direct foreign assistance. NGO 
representatives worried that the government was attempting to 
exert greater control over civil society and to curtail freedom 
of expression.
    There was widespread speculation as to hidden motives 
behind the proposed legislation. Some suspected an alliance of 
expediency between the APRA (the government party) and 
Fujimorista parties, arguing that the law sought to curtail 
NGOs that were seeking the extradition of former President 
Alberto Fujimori from Chile and that also hounded President 
Garcia for alleged human rights violations during his first 
term. Others saw an effort to limit the activities of groups 
that are critical of the operations of Peru's powerful mining 
and gas interests and to target environmental NGOs suspected of 
deliberately exacerbating mining conflicts.
    The GOP defended the proposed law. In addition to assuring 
transparency, officials argued, the proposed legislation 
targets illicit groups, such as narco-traffickers and terrorist 
organizations. One official claimed the bill was not put 
forward by the government party (APRA), but said it sought to 
ensure the activities of NGOs in Peru did not harm national 
interests.

    Venezuela: Venezuela has between 4,000 and 5,000 NGOs, 
including President Chavez' own partisan support groups. All 
foreign donations are disclosed on annual tax statements to the 
Government of Venezuela (GOV). Though aware of all activities, 
personnel and funding sources, the GOV claims that NGOs which 
receive American financial assistance have a clandestine 
purpose to advance the interests of the USG. Government efforts 
to interfere with NGO donations or limit their freedom to 
communicate or receive funding hurts the NGOs' ability to 
educate voters, promote balanced, nonpartisan institutions and 
services, conduct advocacy for special-interest groups, and 
enrich public discourse.
    In today's Venezuela, media outlets self-censor to keep 
their licenses from being revoked. Meanwhile, a rubber-stamp 
National Assembly bows to Chavez's wishes.
    Staff visit was heavily focused on deep concern regarding 
the proposed International Cooperation Law and harassment 
facing certain NGOs.
    The proposed law could increase existing regulation of 
NGOs, both local and international. Civil society would be 
subject to considerable restrictions, with government allowed 
to interfere in their activities and funding sources.
    While the GOV has the right to regulate institutions 
operating within its country, the text of the proposed bill is 
ambiguous, leaving ample room for further restrictions at the 
government's discretion.
    An alarming aspect of the bill is the proposal for a Fund 
for International Cooperation and Assistance. It is unclear 
whether funds received by civil society would end up being 
managed by the government through this fund. The bill also 
requires all organizations to register with the government, and 
its scope would be defined directly by the Presidency under a 
regulation outside of legislative procedure.
    In meetings with human rights NGOs, staff primarily 
discussed the obstacles the proposed International Cooperation 
Law would present to the NGOs' continued operation. The 
proposed international cooperation agency, whose ostensible 
purpose would be to catalog foreign investment in NGO 
operations, would, in fact, be able to regulate and exercise 
decisionmaking authority, staff was told. One NGO 
representative said that most NGOs would not be opposed in 
principle to some sort of government clearinghouse requiring 
disclosure of finances. What was objectionable was the concept 
of having to reregister with the GOV as a civil society entity 
and be subjected to programmatic scrutiny. Efforts to force 
NGOs to ``reregister'' their existence would likely lead to GOV 
stalling tactics, forcing extant NGOs to operate underground. 
This eventuality would provide the GOV a pretext to say certain 
NGOs are operating illegally, since they were not properly 
registered.
    Regarding foreign assistance, NGO representatives stated 
that the current regime has made receiving any assistance very 
difficult. ``They either physically harass you or accuse you of 
treason.'' Representatives agreed that the best form of 
assistance would be to help push other diplomatic missions to 
become more involved. One representative emphasized that a 
regional (Latin America wide) effort was needed.
    In meetings with an academic who is in the spotlight due to 
opposition to many government policy initiatives, notably 
changes to the law on higher education, staff learned that the 
original impetus for the NGO law was the elimination of 
electoral NGO Sumate, the election watchdog which led an 
unsuccessful recall drive against Chavez. He has called the 
group's leaders ``conspirators, coup plotters and lackeys of 
the U.S. Government.'' The professor said, ``With Chavez, if 
one NGO is bad, all are bad. There is no gray, everything is 
black or white.'' When staff asked NGO representatives to 
describe their current standing in front of the Chavez 
administration, one representative answered, ``endangered''; 
another replied, ``threatened.''
    Another prominent human rights NGO representative told 
staff about the ongoing personal harassment members of his 
organization face at the hands of the GOV, including threats of 
bodily harm. He explained that the GOV is accusing them of 
fabricating the threats and is trying to get Venezuelan courts 
to overturn the Inter-American Commission on Human Rights 
(IACHR) ruling that the GOV must provide protective detail for 
them.
    Staff was scheduled to meet with the Movimiento Quinta 
Revolucion (MVR) \9\ National Assembly Deputy Saul Ortega, 
Chair of the Assembly's Foreign Relations Committee, to discuss 
the proposed ``international cooperation'' law. Ortega arrived 
late for the meeting due to traffic issues, just as staff and 
Ambassador were departing. In the interim, staff had a 
productive discussion with senior National Assembly staffers 
involved in the drafting and floor management of the draft law. 
The Assembly staffers indicated that the bill would not be 
passed until after the December 3 Presidential elections.
---------------------------------------------------------------------------
    \9\ Movimiento Quinta Republica (MVR--Fifth Republic Movement) is 
the political party founded by President Chavez.
---------------------------------------------------------------------------
    Ortega's staff said that the government was concerned that 
it did not know what NGOs were doing and emphasized the need 
for the government to ``control and monitor'' NGO activities. 
They indicated the law was modeled after a Spanish NGO law and 
was intended to improve international cooperation, not to 
attack NGOs.
    The Ortega staffer claimed that elements of the bill had 
been misinterpreted. One of the bill's articles (article 10), 
creating a government fund to aid cooperation that 
organizations could contribute to, would not, as the press had 
reported, require all funds to pass through it, he said. Ortega 
staff again emphasized the importance of having a registry so 
that NGOs can be tracked and monitored. The government would 
not control the transfers of money to registered NGOs, he said, 
but the process of moving money would be transparent and 
reported.

                              APPENDIX IV

                              ----------                              

                               APPENDIX V

                              ----------                              

    Idea to Reality: A Brief History of the National Endowment for 
                            Democracy (NED)

                           BY DAVID LOWE (1)

    The National Endowment for Democracy (NED) was launched in 
the early 1980s, premised on the idea that American assistance 
on behalf of democracy efforts abroad would be good both for 
the U.S. and for those struggling around the world for freedom 
and self-government. This paper offers a brief history of the 
Endowment, including the events and circumstances that led to 
its creation, its early legislative battles, more recent 
legislative success, institutional growth and innovation, and 
its efforts to help bring democracy foundations into existence 
in other countries. Although the U.S. experience is undoubtedly 
unique, the model of a non-governmental organization that 
receives public funding to carry out democracy initiatives 
should be considered by other countries that appreciate the 
benefits of participating in this significant worldwide 
movement.
    The desire of Americans to share with other countries the 
ideas that helped bring about their own successful democratic 
transition dates almost as far back as the country's founding 
over two centuries ago. As Seymour Martin Lipset has pointed 
out, throughout American history democratic activists abroad as 
diverse as Lafayette, Kossuth, Garibaldi and Sun Yat Sen have 
looked to the U.S. as a source of both ideological and material 
assistance. (2) Much of the pioneering work in the area of 
political assistance has been carried out by the American labor 
movement, which was active in international affairs before the 
turn of the 20th century.
Origins
    In the aftermath of World War II, faced with threats to our 
democratic allies and without any mechanism to channel 
political assistance, U.S. policy makers resorted to covert 
means, secretly sending advisers, equipment, and funds to 
support newspapers and parties under siege in Europe. When it 
was revealed in the late 1960's that some American PVO's were 
receiving covert funding from the CIA to wage the battle of 
ideas at international forums, the Johnson Administration 
concluded that such funding should cease, recommending 
establishment of ``a public-private mechanism'' to fund 
overseas activities openly.
    On Capitol Hill, Congressman Dante Fascell (D, FL) 
introduced a bill in April, 1967 to create an Institute of 
International Affairs, an initiative that would authorize overt 
funding for programs to promote democratic values. Although the 
bill did not succeed, it helped lead to discussions within the 
Administration and on Capitol Hill concerning how to develop 
new approaches to the ideological competition then taking place 
between the U.S. and the Soviet Union.
    Interest in American involvement in the promotion of human 
rights was intensified during the Administration of President 
Jimmy Carter, who made it a central component of American 
foreign policy. In the late 1970's America became committed to 
the process of monitoring the Helsinki accords, especially that 
``basket'' dealing with human rights. In 1978 Congressmen 
Fascell and Donald Fraser (D, MN) proposed a ``QUANGO'' (i.e, 
quasi-autonomous non-governmental organization) whose mission 
would be the advancement of human rights. The bill they 
introduced would have created an Institute for Human Rights and 
Freedom to furnish technical and financial assistance to 
nongovernmental organizations that promote human rights abroad.
    By the late 70's, there was an important model for 
democracy assistance: the German Federal Republic's party 
foundations, created after World War II to help rebuild 
Germany's democratic institutions destroyed a generation 
earlier by the Nazis. These foundations (known as 
``Stiftungen''), each aligned with one of the four German 
political parties, received funding from the West German 
treasury. In the 1960's they began assisting their ideological 
counterparts abroad, and by the mid-70's were playing an 
important role in both of the democratic transitions taking 
place on the Iberian Peninsula.
    Late in 1977, Washington political consultant George Agree, 
citing the important work being carried out by the Stiftungen, 
proposed creation of a foundation to promote communication and 
understanding between the two major U.S. political parties and 
other parties around the world. Headed by U.S. Trade 
Representative William Brock, a former Republican National 
Committee Chairman, and Charles Manatt, then serving as 
Democratic National Committee Chairman, by 1980 the American 
Political Foundation had established an office in Washington, 
D.C. from which it provided briefings, appointments, and other 
assistance to foreign party, parliamentary, and academic 
visitors to the U.S.
    Two years later, in one of his major foreign policy 
addresses, President Reagan proposed an initiative ``to foster 
the infrastructure of democracy--the system of a free press, 
unions, political parties, universities--which allows a people 
to choose their own way, to develop their own culture, to 
reconcile their own differences through peaceful means.'' He 
noted that the American Political Foundation would soon begin a 
study ``to determine how the U.S. can best contribute--as a 
nation--to the global campaign for democracy now gathering 
force.'' Delivered to a packed Parliamentary chamber in 
Britain's Westminster Palace, the Reagan speech would prove to 
be one of the central contributions to the establishment of a 
U.S. democracy foundation.
    The American Political Foundation's study was funded by a 
$300,000 grant from the Agency for International 
Development(AID) and it became known as ``The Democracy 
Program.'' Its executive board consisted of a broad cross-
section of participants in American politics and foreign policy 
making. The Democracy Program recommended establishment of a 
bipartisan, private, non-profit corporation to be known as the 
National Endowment for Democracy (NED). The Endowment, though 
non-governmental, would be funded primarily through annual 
appropriations and subject to congressional oversight. NED, in 
turn, would act as a grant-making foundation, distributing 
funds to private organizations for the purpose of promoting 
democracy abroad. These private organizations would include 
those created by the two political parties and the business 
community, which would join the regional international 
institutes of the labor movement already in existence.
Legislative Action
    The House Foreign Affairs Committee included a two-year 
authorization for the proposed National Endowment for Democracy 
at an annual level of $31.3 million as part of the FY 84/85 
State Department Authorization Act (H.R. 2915). The Reagan 
Administration had originally proposed a larger ($65 million) 
democracy promotion initiative to be known as ``Project 
Democracy'' and coordinated directly by the United States 
Information Agency (USIA). When the Foreign Affairs Committee 
reported out H.R. 2915, it did not include funding for 
``Project Democracy,'' making clear its preference for the non-
governmental Endowment concept. The Administration then voiced 
support for the creation of NED.
    The legislation, which was included in the authorization 
bill for the State Department and USIA, spelled out the 
following six purposes of the proposed Endowment: encouraging 
democratic institutions through private sector initiatives; 
facilitating exchanges between private sector groups 
(particularly the four proposed Institutes) and democratic 
groups abroad; promoting nongovernmental participation in 
democratic training programs; strengthening democratic 
electoral processes abroad in cooperation with indigenous 
democratic forces; fostering cooperation between American 
private sector groups and those abroad ``dedicated to the 
cultural values, institutions, and organizations of democratic 
pluralism''; and encouraging democratic development consistent 
with the interests of both the U.S. and the groups receiving 
assistance. The bill spelled out the procedures by which the 
funding would flow from USIA to NED and the mechanisms for 
insuring financial accountability. (3)
    Included in the legislation were earmarks of $13.8 million 
for the Free Trade Union Institute, an affiliate of the AFL-CIO 
incorporated in 1978 that would serve as an umbrella for 
labor's regional bodies operating in Africa, Asia, Latin 
America, and Eastern Europe; $2.5 million for the proposed 
affiliate of the National U.S. Chamber Foundation; and $5 
million for each of the two proposed party institutes.
    When the authorizing legislation for the Endowment reached 
the floor of the House, an effort to eliminate all of its 
funding as proposed by the Foreign Affairs Committee failed by 
a small margin. Nonetheless, the idea of providing funding for 
party entities remained a concern for many members. Congressman 
Hank Brown (R, CO), who had sponsored the earlier amendment, 
was able to exploit those concerns by proposing that the 
section of Title VI providing earmarked funding for these party 
institutes be eliminated. This amendment was passed by a vote 
of 267-136.
    Describing the proposed Endowment as ``an idea whose time 
has come,'' the Chairman of the Senate Foreign Relations 
Committee, Charles Percy (R,IL), introduced NED's authorization 
on the floor of the Senate three months after the House vote. 
Percy, who had participated in some of the discussions of the 
``Democracy Program,'' expressed his conviction that the 
legislation was ``arguably the most important single U.S. 
foreign policy initiative of this generation.'' On September 
22, 1983, the Senate rejected by a vote of 42-49 an amendment 
by Senators Zorinsky (D, NE) and Helms (R, NC) to strike the 
authorization for the Endowment. (4)
    The conference report on H.R. 2915 was adopted by the House 
on November 17, 1983 and the Senate the following day. On the 
one major substantive issue on which the two Houses differed, 
the conferees agreed to maintain the House's deletion of the 
earmarks for the party institutes, but pointed out that this 
was ``without prejudice to their receipt of funds from the 
Endowment.''
Getting Organized
    On the day the Senate approved the conference report, 
articles of incorporation were filed in the District of 
Columbia on behalf of the National Endowment for Democracy. The 
Endowment was established as a nonprofit organization under 
section 501c (3) of the Internal Revenue Service Code.
    NED's original Board of Directors, limited to three three-
year terms of service, included party activists, 
representatives of the U.S. labor, business and education 
communities, foreign policy specialists, and two members of 
Congress. Following a brief stint by Congressman Fascell as 
acting chairman, the Endowment appointed as its first permanent 
Chairman John Richardson, a former Assistant Secretary of State 
with many years of involvement in private organizations 
involved in international affairs. For President, the Board 
chose Carl Gershman, previously the Senior Counselor to the 
U.S. Representative to the United Nations.
    NED's creation was soon followed by establishment of the 
Center for International Private Enterprise (CIPE), the 
National Democratic Institute for International Affairs (NDI), 
and the National Republican Institute for International Affairs 
(later renamed the International Republican Institute or 
``IRI''), which joined the Free Trade Union Institute (FTUI) as 
the four affiliated institutions of the Endowment. (FTUI was 
later reorganized as the American Center for International 
Labor Solidarity, also known as the ``Solidarity Center.'') 
This structure had been recommended by the Democracy Program 
for three basic reasons: first, because of the wide recognition 
of the parent bodies of these new entities as national 
institutions with a public character, an important asset for 
this non-governmental foundation; second, because they 
represent sectors of political life fundamental to any strong 
democracy; and third, to insure political balance. The 
Endowment would serve as the umbrella organization through 
which these four groups and an expanding number of other 
private sector groups would receive funding to carry out 
programs abroad.
    Although the original authorized level for NED was $31.3 
million, its appropriation was later set well below this level 
at $18 million, reflecting in part the fact that the new 
institution would not be fully organized until well into the 
year. As President Gershman would later point out in 
congressional testimony, the Endowment devoted considerable 
attention in its early months to the task of putting into place 
``sound administrative, financial, and reporting procedures.'' 
A procedures manual that included grant guidelines and 
selection criteria for grants was approved, and a Statement of 
Principles and Objectives adopted. Because the Endowment had 
been funded at less than 60 percent of the authorized level, 
the Board decided to allocate less than the full earmarked 
amounts to the labor and business Institutes. This would enable 
it to fulfill that part of the NED Act mandating that grants be 
made to other private sector groups as well. (5)
    During the consideration of the appropriation for NED's 
second year held in May, 1984, the Endowment's opponents went 
on the offensive and persuaded the House to eliminate all 
funding for it. (6) A similar effort failed in the Senate, 
which then voted to reduce the proposed $31.3 million level by 
$10 million and to explicitly prohibit the party Institutes 
from receiving any of this amount. The conference committee 
agreed to a funding level of $18.5 million and maintained the 
ban on funding the party Institutes. NED's appropriation was 
not to reach the original authorized level for another 10 
years.
Reauthorization
    The second NED authorization for FY 86 and 87 set a ceiling 
of $18.4 million and the final version contained neither 
earmarks nor prohibition on funding the party Institutes. 
Additional language was added to the NED Act that: 1) codified 
the Board's prohibition on the use of funds for partisan 
political purposes, including funding for national party 
operations; 2) mandated that NED grantees consult with the 
State Department (which would continue to have no veto over 
grants) prior to commencement of program activities; 3) moved 
the required date of reporting to the Congress on all grants 
from December 31 to February 1; 4) required that the Endowment, 
despite its nongovernmental status, comply fully with the 
requirements of the Freedom of Information Act; and 5) made all 
financial transactions of the Endowment for each fiscal year 
subject to a possible USIA audit. (This section was amended in 
a subsequent authorization to require such audits.)
    Since the issuing of the conference report for the second 
reauthorization covering FY 86 and 87, Congress has not 
included earmarks in any NED-related legislation. A provision 
in the Foreign Relations Act of 1995 recommended equal funding 
of the four institutes and a capping of the total amount 
reserved for them at 55% of the appropriated amount. (7)
    At several points in NED's budget process, legislative 
report language has recognized the importance of the 
Endowment's discretionary program of grants to indigenous 
groups working in such areas as human rights, independent 
media, civic education, and strengthening democratic culture 
and values. For example, the FY87 conference report on NED's 
appropriation directed that not less than 25% of the program 
dollars (i.e., the total appropriation less the amount spent on 
administration) be used for discretionary grants. And when 
Congress appropriated a $5 million increase in FY 94, 
conference report language instructed the Board to use the 
increment to enhance the discretionary program. (8)
    From time to time Congress has provided special 
appropriations to the Endowment to carry out specific 
democratic initiatives in countries of special interest, 
including Poland (through the trade union Solidarity), Chile, 
Nicaragua, Eastern Europe (to aid in the democratic transition 
following the demise of the Soviet bloc), South Africa, Burma, 
China, Tibet, North Korea and the Balkans. With the latter, NED 
supported a number of civic groups, including those that played 
a key role in Serbia's electoral breakthrough in the fall of 
2000. More recently, following 9/11 and the NED Board's 
adoption of its third strategic document, special funding has 
been provided for countries with substantial Muslim populations 
in the Middle East, Africa, and Asia.
    Although the Foreign Relations Act of 1992 declared it to 
be the sense of the Congress that the Endowment supplement its 
congressional appropriation with funding from the private 
sector, Congress has rejected any requirement that NED's 
grantees raise matching funds. It did, in the FY 93/94 
authorization, ask the Administration to study the desirability 
of such a requirement, a notion that was strongly rejected. The 
argument made by Hank Brown (who had moved from the House to 
the Senate) that NED's founders intended for its original 
funding to serve as ``seed money'' that would enable it to 
become fully privatized was researched by the Congressional 
Research Service and found to be without any foundation. (9) In 
FY93, the Endowment began compiling an annual report of cash 
and in-kind contributions raised by all of its grantees to 
supplement their NED funding. The report for FY 99 indicated 
that for every program dollar spent from NED's congressional 
appropriation, its grantees raised over $.65 in ``counterpart 
resources.''
Congressional Support
    NED's congressional support has grown steadily during its 
first twenty years. From the early days of close and frequent 
votes on its authorizing and appropriating legislation, it has 
moved beyond survival to widespread bipartisan endorsement on 
the Hill. In fact, identical Senate and House resolutions (S. 
Con Res 66; H. Con Res 274) commending the National Endowment 
for Democracy ``for its major contributions to the 
strengthening of democracy around the world on the occasion of 
the 20th anniversary'' of its establishment, and endeavoring 
``to continue to support [its] vital work'' were passed in 
October, 2003. The Senate resolution was passed by unanimous 
voice vote; the House resolution sailed through on a roll call 
vote of 391-1. Both resolutions had strong, bipartisan co-
sponsorship. (10) These votes were a reflection of how far the 
Endowment had come over the years in establishing not only its 
legitimacy but also the widespread bipartisan approval of its 
work. But the road had not always been a smooth one.
    Apart from the tenuous situation the Endowment faced 
following the successful floor amendment by its House opponents 
in 1984, its closest call came in the summer of 1993. 
Responding to a recommendation of the new (Clinton) 
Administration, the House Foreign Affairs Committee approved an 
increase in NED's authorized level from $30 to $48 million. But 
the relatively large percentage increase, combined with the 
infusion of large numbers of freshmen in both parties committed 
to deficit reduction, put the Endowment's supporters on the 
defensive.
    On June 20, 1993, an amendment to kill the authorization 
sponsored by Congressman Paul Kanjorski (D, PA) succeeded by a 
vote of 243-181. However, the following month the Senate voted 
by a solid 74-23 margin for a somewhat scaled down increase (to 
$35 million), a vote that was later affirmed by the House (259-
172), thereby reversing its earlier position.
    The most recent vote on the Endowment's appropriation in 
the House came in June, 1994 after the Appropriations Committee 
had recommended--for budgetary reasons--a slight decrease in 
NED's budget to $33 million. An amendment by Congressman Joel 
Hefly (R, CO) to eliminate all funding was defeated by a vote 
of 89-317. (11)
    In July, 1997, the Senate overwhelmingly repudiated the 
recommendation of its Appropriations Committee that NED not be 
funded in FY 98. The Appropriations Committee was following the 
lead of Senator Judd Gregg (R, NH), one of the early critics of 
NED when he was in the House, who had ascended to the 
chairmanship of the subcommittee with jurisdiction over the 
Endowment at the end of 1995. On a vote of 72-27, NED 
supporters overcame a number of procedural obstacles that face 
any effort by supporters on the Senate floor to restore a 
funding cut in committee.
    Two years later, when the subcommittee tried again to 
eliminate NED's funding, the action was reversed on a voice 
vote on the Senate floor. This followed a spirited defense of 
the Endowment's work by Senator Richard Lugar (R, IN), a member 
of the NED Board, who appealed to his colleagues ``to stand up 
and be counted on whether they feel passionately, as I do, and 
I think many of us do, about democracy and human rights and 
what can be done about it effectively.'' Prior to the vote, a 
``Dear Colleague'' letter calling for a restoration of funding 
had been signed by nearly half the Senate.
    The vote in 1999 marked the last time the Endowment's 
appropriation was debated on the Senate floor. Since 9/11, 
previous critics, including Senator Gregg, have come to 
understand the Endowment's work in the context of critical 
national security issues, a topic that forms the basis of the 
Board's third strategic plan adopted at the end of 2001. In 
2003, the core appropriation exceeded $40 million for the first 
time. In addition, special funding for congressionally mandated 
countries and regions (see above) totaled over $10 million.
    The early opposition to the Endowment on the Hill tended to 
focus on four basic factors: 1) its structure; 2) its 
independence; 3) its purported redundancy, and 4) its mission. 
(12)
Structure
    From the original congressional consideration of NED, the 
Endowment's relationship with the four core groups that played 
a role in its founding became a central focus of the funding 
debate. Even some who favored the Endowment's program 
questioned why--contrary to American political tradition--
organizations affiliated with America's two political parties 
should receive federal funding. And ideological opponents of 
labor and business also weighed in against the funding 
arrangement. (13)
    Some of the debate over NED's structure in the beginning 
related to the composition of the Endowment's Board of 
Directors, which originally included representatives of the 
four Institutes. But this argument became moot by the beginning 
of 1993, at which time an entirely new set of directors had 
replaced the original Board as the result of the term limits 
provision written into the Endowment's by-laws. (Because the 
turnover was staggered, new Board members began taking their 
seats in FY 1990.) The new group of Board members was carefully 
balanced in terms of party and ideology, but they were not 
representing the Institutes and, except in a few cases, were 
not closely linked to any of them. Indeed, by the time Congress 
amended the NED Act in 1992 to preclude anyone from serving on 
the NED Board who was in the leadership of any organization 
receiving more than five percent of the Endowment's program 
funds, the provision no longer had any particular relevance.
    Two other arguments related to the Institutes have been 
advanced: first, that these are ``special interests'' that can 
and should be funded privately, and second, that they receive 
Endowment funding on a ``non-competitive'' basis. The first 
argument tends to ignore the independence of these groups from 
their better known parent organizations and the fact that, like 
the Endowment itself, their work serves America's national 
interest.
    The charge about the lack of competitiveness is based upon 
a fundamental misunderstanding about how the Endowment 
operates. It is true that the Institutes are given target 
allocations to help them plan a worldwide program on an annual 
basis. But the criticism often overlooks the fact that the 
Endowment's independent Board has to review and vote on all 
Institute projects, which are subject to the same oversight 
procedures as those that affect all other grantees. In fact, 
the entire concept of ``competitiveness,'' as applied to NED's 
relationship with the Institutes, is misguided. The Endowment 
does not operate by deciding what democracy projects should be 
funded and then sending out requests for proposals. Rather, it 
responds to the needs of democratic groups abroad and funds 
those requests that fit into its program priorities. Surely it 
is difficult to quarrel with the strong track record 
established by Institute programs in countries as diverse as 
Poland, Peru, Bulgaria, the Philippines, Chile, South Africa, 
Mexico, and the former Yugoslavia.
Independence
    NED's authorizing legislation spells out its non-
governmental status, namely that ``Nothing in this title shall 
be construed to make the Endowment an agency or establishment 
of the United States Government.'' (14) Board members are not 
selected by the President and those who are appointed to serve 
in the Executive Branch relinquish their Board membership.
    It is sometimes contended that without this official 
status, the Endowment lacks accountability. This charge 
overlooks the fact that NED is answerable to a wide array of 
overseers in both the Executive and Legislative Branches. As 
Senator Percy remarked when introducing the original NED 
legislation in the Senate, ``The Endowment will come under 
continuous and extensive scrutiny in the appropriate committees 
of both Houses of Congress. The additional provisions for GAO 
oversight, as well as the terms of the USIA grant agreement 
under which it will function, assure a convergence of oversight 
procedures virtually unique among grantees of federal funds.'' 
(15)
    NED's non-governmental status has a number of advantages 
(see below) that are recognized by those institutions that 
really do carry out American foreign policy. As pointed out in 
a letter signed by seven former Secretaries of State in 1995, 
``We consider the non-governmental character of the NED even 
more relevant than it was at NED's founding twelve years ago.'' 
(16)
    NED frequently consults with relevant policy makers about 
its work, going well beyond the level of contact required by 
its authorizing legislation.
Redundancy
    The charge that NED is no longer needed since the American 
government has its own democracy promoting capability through 
AID and other agencies ignores the reality that its work is of 
a vastly different character from these official institutions. 
Much of this difference stems from NED's independence, which 
gives it an ability to work in situations that official bodies 
(justifiably) avoid, but also its non-bureaucratic character, 
which enables it to move quickly in rapidly changing 
situations. A good example is the West Bank, where both 
Institute and discretionary programs were on the ground shortly 
following the signing of the Middle East peace accords in 
Washington in 1993.
    A number of studies have shown the redundancy argument to 
be without merit. One was commissioned by Congress in the FY 
94/95 State/USIA authorization, which requested the 
Administration to conduct an inventory of democracy funded 
programs and to identify areas of duplication. The resulting 
report to the Foreign Relations Committee and the House Foreign 
Affairs Committee submitted by the State Department highlighted 
the comparative advantages to the different approaches and 
orientations of those agencies and organizations receiving 
federal funding. (17)
    A similar request to GAO by members of the House Foreign 
Affairs Committee in April 1992 led to a long review process 
that ended in June, 1996, when the leadership of GAO concluded 
that it was not necessary to make any recommendations to the 
Hill vis-a-vis the current structure of democracy-funded 
programs. GAO's conclusion was based in part on the results of 
a study by AID and NED staff of every democracy-related grant 
awarded by each institution in FY 1994. The review indicated 
that the programs of NED and AID are not duplicative but 
complementary, and spelled out various procedures that have 
been implemented to insure that the two organizations continue 
to share information about their projects. (18)
Left/Right Opposition
    NED's very mission, particularly in its early days, was 
challenged on ideological grounds. Opponents on the far left 
believed that promoting democracy was tantamount to interfering 
in the internal affairs of other countries in the service of 
U.S. foreign policy interests. Although a few antagonists 
continue on occasion to voice opposition, their numbers have 
dwindled, particularly with changes after the Cold War in 
attitudes on the left toward U.S. internationalism.
    More significant opposition to the Endowment was voiced in 
the early years by some elements of the human rights community, 
who occasionally mischaracterized NED's natural interest in 
free and fair elections as its sole focus, while arguing that 
such elections do not necessarily guarantee the protection of 
basic rights. NED's programmatic emphasis on long-term 
democratic development, the building of civil society, and 
funding indigenous human rights groups has won over many of 
these early critics, and in fact has led to a substantial 
coalescence of interest between NED and the human rights 
community.
    Within certain elements of the right, there have been 
allegations from time to time that the Endowment is promoting a 
``social democratic'' agenda. These are based largely upon the 
prominent role played by the labor movement, as well as the 
social democratic background of NED's President. (19) 
Nonetheless, over the years mainstream conservative activists 
and thinkers have been among the most outspoken advocates on 
behalf of the Endowment. Endorsements of NED have been offered 
by the leadership of such stalwart conservative organizations 
as the Heritage Foundation and Empower America, and favorable 
editorials have appeared in the Wall Street Journal, the 
Washington Times and National Review.
Strategic Planning
    A 1991 GAO report recommended that the Endowment adopt a 
more systematic approach to planning program objectives and 
assessing program results by identifying more specific and 
measurable goals and priorities. In response, the Endowment's 
Board adopted a number of new procedures, including the 
development of target funding goals for each country in its 
annual planning document; the hiring of an evaluation 
specialist to work with grantees in drawing up evaluation plans 
for each project and to commission independent evaluations by 
outside experts; and the drafting of strategic plans to focus 
on long range goals and objectives.
    The first strategic plan, drafted by the Board in 1992, was 
designed as a blueprint for program activity over the next five 
years. In it the Board sought to address two key issues: first, 
what role the Endowment should play in a post-Cold War world, 
and second, how to address the fact that the U.S. Government, 
primarily through AID, had entered the field of democracy 
promotion.
    The Board recommended that the Endowment play to its 
strengths, i.e. take advantage of those institutional features 
that set it apart from others moving into the democracy field: 
its status as a non-governmental organization, its ``multi-
sectoral'' character; and its role as an organization whose 
sole mission is to promote democracy. As a non-governmental 
organization, it could provide political assistance to 
democratic forces in repressive or other sensitive political 
situations where U.S. Government support, even where channeled 
through intermediary institutions that were non-governmental, 
would be diplomatically or politically unfeasible. With its 
special relationship with the four Institutes and its 
discretionary grants, it could provide a ``full package'' 
response to the complex needs of emerging democracies. And as 
an institution whose sole mission is to promote democracy, the 
Endowment could serve as a center of democratic activity, 
bridging the gap between activists and students of democracy. 
(20)
    The latter role had been served by a biennial global 
conference of democratic activists, many of them Endowment 
grantees, which was begun in 1987. It was also highlighted by 
publication of the quarterly Journal of Democracy, whose first 
issue appeared in January 1990. The Journal's editorial Board 
consisted of the leading thinkers on democracy in the world, 
and it quickly established itself as the major publication for 
examining the central issues related to democratic ideas and 
institutions. From the outset, the Journal's funding came 
primarily from private sources.
    In implementing the third pillar of the strategy document, 
a subcommittee of the Board (which included both NED and 
Journal Board members) proposed establishment of a forum for 
bringing together scholars and practitioners on a regular basis 
and for developing a data base for democratic projects around 
the world. The plan received a strong endorsement from USIA as 
well as approval from GAO, which noted in a ruling that the 
forum idea was fully consistent with the Endowment's 
authorizing legislation inasmuch as it would serve not as a 
``program'' but rather an important function that would 
ultimately strengthen the grants program. (21)
    Since its creation in 1994, the International Forum for 
Democratic Studies has become an important center for analysis 
of the theory and practice of democratic development worldwide. 
Although it is part of the Endowment structure and receives 
some funding from the NED appropriation, most of its budget has 
been provided by private foundations, which have helped fund 
the Democracy Resource Center, a variety of research 
conferences on democratic themes, and a small fellowship 
program. The Forum also encompasses the Journal of Democracy, 
now published by Johns Hopkins University Press, and has 
produced a diverse array of democracy-related books based upon 
Journal articles and the papers presented at the Forum's 
research conferences. In 2001, the Endowment, with funds 
authorized by Congress and provided by the State Department's 
Bureau of Democracy, Human Rights and Labor, established the 
Reagan-Fascell Democracy Fellows Program, which provides 
support annually for a dozen or so democracy activists, 
practitioners, scholars and journalists from around the world 
to deepen their understanding of democracy and to enhance their 
ability to promote democratic change.
    The Endowment's Board of Directors adopted a second 
strategic plan at the beginning of 1997. With its federally 
funded budget dropping in FY 96 to $30 million and frozen for 
the foreseeable future, the Board chose to emphasize how the 
Endowment could maximize its impact during a time of fiscal 
austerity: first, by expanding programs that promote cross-
border and intra-regional activity among grantees (such as the 
highly successful NED-funded ``East to East'' programs in the 
former Soviet Bloc); second, by integrating networks of 
grantees to maximize their impact within countries such as 
China and Burma, and third, by encouraging the growth of new 
counterpart organizations. (22)
Counterpart Institutions
    Five years after the creation of NED, the Canadian 
Parliament established the International Centre for Human 
Rights and Democratic Development, which became operational two 
years later from its headquarters in Montreal. During the 
planning phase for the new Centre, members of a Parliamentary 
task force consulted with the leadership of NED.
    In 1992, the Westminster Foundation was established in 
Great Britain. More than the Canadian Centre, it used NED as a 
model, with a portion of its grants set aside for programs 
administered by party affiliated organizations. (23) But there 
are differences with NED as well, since the Foundation does not 
fund programs that have a business orientation (such as those 
operated by the Center for International Enterprise) and has 
more of a quasi-governmental character through its relationship 
with the Foreign and Commonwealth Office. The Foundation's 
grants have been heavily concentrated in Eastern Europe (where 
Canada's Centre does not operate) and former Commonwealth 
countries.
    In report language accompanying the Endowment's FY 93 
appropriation, the Appropriations Committee recognized the 
existence of democracy promotion foundations in Germany, 
Canada, and Great Britain and recommended that NED consider 
convening a ``democracy summit'' to review issues of mutual 
concern. The Endowment took up the suggestion, convening a 
group of foundation representatives in February, 1993 at Airlie 
House outside of Washington, D.C. The group has expanded since 
that time to include foundations in other European countries 
(several related to political parties) and Australia. Since the 
initial meeting convened by NED, the group has met subsequently 
in Germany, England, Canada, and, most recently (2003), in 
France.
    Working with Taiwan's Institute for National Policy 
Research, with whom the International Forum co-sponsored a 
research conference in 1995 on ``Consolidating the Third Wave 
Democracies,'' NED convened a meeting in Taipei in October, 
1997 to promote the concept of establishing new democracy 
foundations. Some twenty countries were represented at the 
meeting.
    In November, 2002, the Endowment was invited by a 
consortium of three Japanese organizations, the Committee to 
Aid Democracy for Peacebuilding (ADP), the Diet League to Aid 
Democracy for Peacebuilding, and the Ozaki Yukio Memorial 
Foundation to participate with other democracy foundations and 
local NGOs in a two-day conference seminar in the Diet on 
establishing a Japanese foundation. And, in June, 2003, 
following a period of consultation with NED, Taiwan launched 
the Taiwan Democracy Foundation, which has the strong 
endorsement of President Chen Shui Bien.
    A related development that emerged from NED's efforts to 
stimulate international cooperation in the promotion of 
democracy has been the creation of the World Movement for 
Democracy. The Movement is a ``network of networks'' that 
connects and unites people and organizations around the world 
who are working on a daily basis to promote democratic values 
and build and strengthen democratic institutions in their 
respective countries. The Movement, for which NED serves as the 
secretariat, is directed by an international Steering Committee 
of distinguished democratic activists and thinkers. It has held 
four World Assemblies funded largely outside of NED's 
congressional appropriation: New Delhi, India in 1999; Sao 
Paulo, Brazil in 2000; Durban, South Africa in 2004; and 
Istanbul, Turkey in April, 2006.
Conclusion
    To commemorate the twentieth anniversary of NED's 
establishment, the Board of Directors issued an invitation to 
President George W. Bush to make a major statement about 
democracy. In his address, one of the most significant of his 
Presidency, he articulated his vision of a more democratic 
Middle East, the one region of the world where democracy has 
failed to take hold. Much of his speech echoed one of the major 
themes of the Endowment's third strategy document, which calls 
for promoting democratic institutions and values in the Muslim 
World, while maintaining NED's global grants program.
    The National Endowment for Democracy has grown from a 
simple but powerful idea into a multi-faceted institution with 
a wide-ranging program, solid bipartisan support, and an 
ambitious agenda. In the President's 20th anniversary address, 
he paused to pay tribute to the Endowment, its staff, 
directors, and global program:

          By spending for and standing for freedom, you've 
        lifted the hopes of people around the world, and you've 
        brought great credit to America.

                                 Notes

 1. Vice President, Government and External Relations, National 
        Endowment for Democracy

 2. Seymour Martin Lipset, ``Democratic Linkage and American Aid,'' The 
        Washington Times, June 11, 1995.

 3. The question of whether NED was financially accountable to USIA was 
        not resolved until 1985, when the GAO ruled that the agency did 
        have financial (but not programmatic) oversight over the 
        Endowment.

 4. Congressional Record, September 22, 1983, pp. 12703-22. 
        Interestingly, a number of those Senators voting for the 
        amendment would eventually become strong supporters: Biden, 
        Domenici, Kassebaum, Murkowski, Roth, Rudman, Simpson and 
        Wallop.

 5. The General Accounting Office, while finding this action 
        ``understandable,'' subsequently ruled that the earmarks should 
        nonetheless have been followed. It recommended no retroactive 
        corrective measures.

 6. The vote was influenced by a New York Times article published three 
        days before the vote reporting that some funding from the labor 
        institute had been used in the Presidential election in Panama. 
        NED's Statement of Principles and Objectives, adopted later 
        that year, asserts that ``No Endowment funds may be used to 
        finance the campaigns of candidates for public office.''

 7. Although the bill was vetoed by President Clinton (for reasons 
        unrelated to NED) and did not become law, the Board decided to 
        follow its provision regarding equalization of the target 
        figures for the four Institutes. This policy has been 
        maintained since then.The proportion of funding reserved for 
        Institute projects is currently at the 55% maximum contained in 
        both the 1995 and 1997 State Department authorization bills.

 8. In doing so, the committee cited the fact that some of the 
        Institutes had begun to receive substantial amounts of funding 
        from AID. See Conference Report to accompany H.R. 2519, October 
        14, 1996, p. 105.

 9. ``National Endowment for Democracy: Policy and Funding Issues,'' 
        Congressional Research Service, August 2, 1996, p. 5.

10. In the Senate: Frist, Daschle, Lugar, Biden, Graham, Bayh, Kyl, 
        Hatch, Leahy, Hagel, Levin, McCain, McConnell, and Sarbanes; In 
        the House: Hyde, Lantos, Cox, Payne, Berman, Bereuter, Cardin, 
        Chabot, Crowley, Diaz-Balart, Dreier, Engel, Gallegly, (Mark) 
        Green, Houghton, (Patrick) Kennedy, Kingston, Kirk, Lowey, 
        Meeks, Menendez, Napolitano, Pitts, Rohrabacher, Ros-Lehtinen, 
        Royce, (Christopher) Smith, and Ackerman.

11. A conference committee restored $1 million of the $2 million cut 
        from the appropriation.

12. A fifth issue that is often raised when the Endowment is debated is 
        the cost to the U.S. treasury. Given the modest size of the NED 
        budget, it is clear that this ``issue'' is used tactically by 
        critics to increase support among so-called ``deficit hawks'' 
        and is not what stimulates them to take up the cause.

13. This has been mitigated somewhat on the right by the AFL-CIO's 
        strong anti-Communist orientation in its international work. 
        The other aspect of the early criticism of the Endowment's 
        funding of the labor institute was its disproportionate 
        allocation vis-a-vis the other core grantees prior to 1995. 
        Many of those making this criticism were unaware of the fact 
        that it was a congressional earmark that created the original 
        imbalance.

14. 22 USC 4412, Sec. 503 (c).

15. Congressional Record, September 22, 1983. P. 12714.

16. The seven were James Baker, Laurence Eagleburger, George Shultz, 
        Alexander Haig, Henry Kissenger, Edmund Muskie and Cyrus Vance.

17. See ``Democracy Promotion Programs Funded by the U.S. Government,'' 
        A Report to the Senate Foreign Relations Committee and the 
        House Foreign Affairs Committee of the U.S. Congress, as 
        requested in P.L. 103-236, Section 534.

18. See ``A Review of Democracy Programs Funded by the U.S. Agency for 
        International Development and the National Endowment for 
        Democracy,'' March 1, 1996.

19.   See ``Paying Big Labor to Export its Agenda,'' Insight, July 12, 
        1992.

20. National Endowment for Democracy, ``Strategy Document,'' January 
        1992, pp.6-12.

21. General Accounting Office, Decision B-248111, September 9, 1992.

22. National Endowment for Democracy, ``Promoting Democracy in a Time 
        of Austerity: NED's Strategy for 1997 and Beyond.''

23. Before the Foundation became fully operational, NED hosted a series 
        of meetings for its acting Executive Director and a founding 
        Board member in Washington, where they were familiarized with 
        the Endowment's structure and procedures. The two organizations 
        have maintained a close relationship since that time.

                                 
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