29–010

Calendar No. 459

108TH CONGRESS REPORT

2nd Session " ! SENATE 108–246

INTERNATIONAL FREE PRESS AND OPEN MEDIA ACT

OF 2004

MARCH 18, 2004.—Ordered to be printed

Filed under authority of the order of the Senate of March 12, 2004.

Mr. LUGAR, from the Committee on Foreign Relations,

submitted the following

REPORT

[To accompany S. 2096]

The Committee on Foreign Relations, having had under consideration a bill (S. 2096) to promote a free press and open media

through the National Endowment for Democracy and for other purposes, reports favorably thereon and recommends that the bill do

pass.

CONTENTS

Page

I. Purpose ........................................................................................................... 1

II. Committee Actions ......................................................................................... 2

III. Section-by-Section Analysis .......................................................................... 3

IV. Cost Estimate ................................................................................................. 4

V. Evaluation of Regulatory Impact .................................................................. 5

VI. Changes in Existing Law .............................................................................. 5

I. PURPOSE

The legislation seeks to provide greater focus on, and more coordination of, U.S. Government programs to develop free, fair, legally protected, and self-sustaining press and media in the world.

It directs the Secretary of State to provide the necessary funding

to the National Endowment for Democracy for the work of a free

press institute.

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II. COMMITTEE ACTIONS

Based on expert testimony presented to the committee on February 26, 2004 and following studies by the Congressional Research Service and General Accounting Office (GAO), as well as numerous interviews by the committee staff, the committee makes the

following findings: a free press is essential for a truly open and pluralistic democracy; a free press must be guaranteed by constitutional or basic law protections; it must be protected from political

intimidation; it must be practiced under rules governing open access, libel, and defamation; it must be financially sustainable; U.S.

Government efforts to help support the development of free press

and open media in transitional societies have been successful, but

require greater coordination; these programs must be long-term in

scope, and clearly separated from public diplomacy initiatives;

greater coordination is also required among the private media sector, foundations, and international non-governmental organizations; the National Endowment for Democracy provides the best

funding mechanism and leadership for a better organized publicprivate initiative to support the development of an international

free press and open media.

The committee recognizes that for many years the United States

Government has engaged in promotion of independent media

abroad through several foreign policy agencies, including the

United States Information Agency (USIA) (which was merged into

the Department of State in 1999), the Department of State, and the

Agency for International Development. Additionally, in the late

1980s, Secretary of State James Baker endorsed the International

Media Fund, a private sector charitable organization which received funding from the Agency of International Development

(USAID); however, in the mid-1990s, USAID ended support of the

Media Fund, and it ceased operations. USAID has continued to

fund various media training and development programs, but they

are not a central objective of the Agency.

The committee notes that our nation’s strong and vibrant private

media sector should be encouraged to participate in American efforts to help develop indigenous free press and media throughout

the world.

Indigenous free media not only ensures that governments are

held accountable to the people that they represent, but also provides those not in power with a peaceful outlet for political expression. A free media, in other words, is an important element in any

open and democratic society. Additionally, the committee believes

that expanding the presence of free media will go far to ensure that

we are able to disseminate more successfully the issues and stories

that promote American values and ideas.

The committee notes that the National Endowment for Democracy (NED), a non-governmental organization, has been providing

excellent work in the field of human rights and democratic institution building. The NED was founded in 1983 and recognized by

Congress in the National Endowment of Democracy Act (P.L. 98– 164) to ‘‘. . . support the participation of the two major American

political parties, labor, business and other United State private sector groups in fostering cooperation with those abroad dedicated to

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the cultural values, institutions and organizations of democratic

pluralism...’’

In the intervening 21 years, bipartisan congressional support has

sustained the NED and its institutes. A major reason has been the

degree to which GAO and Department of State oversight and auditing of the NED and its institutes have ensured fiscal discipline and

responsibility.

The NED currently provides much of its support via four ‘‘core’’

grantees: the International Republican Institute (IRI), the National

Democratic Institute (NDI), the Center for International Private

Enterprise (CIPE), and the Free Trade Union Institute (FTUI).

At the time of the creation of the first four grantees, a fifth institute dedicated to the promotion of free media was also envisioned.

It was, however, never created due to questions over its function

and independence and uncertainty as to the longevity of the NED.

Now, long-ago doubts about the merit or the integrity of the NED

and its institutes have been laid to rest. The committee believes it

is crucial that the NED promote greater free media throughout the

world.

As such, and in conjunction with the administration’s decision to

seek a doubling of the NED budget to $80 million in fiscal year

2005, the committee intends to ensure that at least 10% of that

funding is directed toward free media programs. One of the prime

reasons for directing this money through the NED is not only the

NED’s proven track record of excellence and government oversight,

but also its status as a 501(c)(3) organization, which enables private sector entities to participate, partner or donate money, time

and materiel. In fact, the committee has heard unofficially from

several major U.S. news organizations, media companies and film

studios that they are already donating staff time, equipment, programs and funds to fledging media throughout the world but would

be able to do so on a more sustained and generous basis if afforded

the tax advantages that come with working with 501(c)(3) organizations.

The committee intends that the NED should create a new, fifth

institute that coordinates future programs directed at free media,

evaluates free media projects and leverages resources from both the

public and private sector to ensure the viability of both the institute and the programs it facilitates.

At a business meeting on March 4, 2004, the committee considered S. 2096. No amendments were offered. The committee ordered

the bill reported by a vote of 19 to 0. Ayes: Senators Lugar, Hagel,

Chafee, Allen, Brownback, Enzi, Voinovich, Alexander, Coleman,

Sununu, Biden, Sarbanes, Dodd, Kerry, Feingold, Boxer, Nelson,

Rockefeller, and Corzine.

III. SECTION-BY-SECTION ANALYSIS

Section 1. Short title.

This section designates the title of the bill.

Section 2. Findings

This section lists findings that explain the need for the legislation and its purpose.

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Section 3. Amendments to the National Endowment for Democracy

Act

This section amends the National Endowment for Democracy Act

to include free media as one of the major objectives of the NED.

The Secretary of State is requested to ensure that 10 percent of the

funding for the NED be directed to programs to promote freedom

of the press and other media.

IV. COST ESTIMATE

In accordance with rule XXVI, paragraph 11(a) of the Standing

Rules of the Senate, the committee provides the following estimate

of the cost of this legislation prepared by the Congressional Budget

Office.

UNITED STATES CONGRESS,

CONGRESSIONAL BUDGET OFFICE,

Washington, DC, March 12,2004.

Honorable RICHARD G. LUGAR, Chairman

Committee on Foreign Relations,

United States Senate,

Washington, DC.

DEAR MR. CHAIRMAN:

The Congressional Budget Office has prepared the enclosed cost

estimate for S. 2096, the International Free Press and Open Media

Act of 2004.

If you wish further details on this estimate, we will be pleased

to provide them. The CBO staff contact is Sunita D’Monte.

Sincerely,

DOUGLAS HOLTZ-EAKIN, Director

Enclosure.

S. 2096—INTERNATIONAL FREE PRESS AND OPEN MEDIA ACT OF

2004

S. 2096 would authorize the National Endowment for Democracy

(NED) to promote freedom of the press and other media around the

world, and would earmark not less than 10 percent of funds made

available to the NED for 2005 for this purpose. The NED is a private, nonprofit corporation that makes grants to private-sector and

nonprofit entities to undertake activities to encourage free and

democratic institutions throughout the world.

The NED received an appropriation of $40 million for 2004, and

CBO’s baseline projection for 2005 is also about $40 million. In

order to maintain its existing activities and earmark 10 percent of

its budget for programs authorized by this bill, the NED would

need an additional $4 million in 2005.

The President has requested an appropriation of $80 million for

2005; under S. 2096, $8 million of that amount would be allocated

to promote freedom of the press and other media. S. 2144, the Foreign Affairs Authorization Act, Fiscal Year 2005, as ordered reported by the Senate Committee on Foreign Relations on March 4,

2004, would also authorize $80 million for the NED in 2005.

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S. 2096 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would

not affect the budgets of state, local, or tribal governments.

The CBO staff contact is Sunita D’Monte. This estimate was approved by Robert A. Sunshine, Assistant Director for Budget Analysis.

V. EVALUATION OF REGULATORY IMPACT

In accordance with rule XXVI, paragraph 11(b) of the Standing

Rules of the Senate, the committee has concluded that there is no

regulatory impact from this legislation.

VI. CHANGES IN EXISTING LAW

In compliance with paragraph 12 of Rule XXVI of the Standing

Rules of the Senate, changes in existing law made by the bill, as

reported, are shown as follows (existing law proposed to be omitted

is enclosed in black brackets, new matter is printed in italic, existing law in which no change is proposed is shown in roman).

TITLE V—NATIONAL ENDOWMENT FOR DEMOCRACY

SHORT TITLE

SEC. 501. This title may be cited as the ‘‘National Endowment for

Democracy Act’’.

NATIONAL ENDOWMENT FOR DEMOCRACY

SEC. 502. (a) The Congress finds that there has been established

in the District of Columbia a private, nonprofit corporation known

as the National Endowment for Democracy (hereafter in this title

referred to as the ‘‘Endowment’’) which is not an agency or establishment of the United States Government.

(b) The purposes of the Endowment, as set forth in its articles

of incorporation, are— (1) to encourage free and democratic institutions throughout

the world through private sector initiatives, including activities

which promote the individual rights and freedoms (including

internationally recognized human ørights)¿ rights and freedom

of the press and other media) which are essential to the functioning of democratic institutions;

(2) to facilitate exchanges between United States private sector groups (especially the two major American political parties,

labor, øand business)¿ business, and media; and democratic

groups abroad;

(3) to promote United States nongovernmental participation

(especially through the two major American political parties,

labor, business, media, and other private sector groups) in

democratic training programs and democratic institution-building abroad;

(4) to strengthen democratic electoral processes abroad

through timely measures in cooperation with indigenous democratic forces;

(5) to support the participation of the two major American

political parties, labor, business, media, and other United

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States private sector groups in fostering cooperation with those

abroad dedicated to the cultural values, institutions, and organizations of democratic pluralism; and

(6) to encourage the establishment and growth of democratic

development in a manner consistent both with the broad concerns of United States national interests and with the specific

requirements of the democratic groups in other countries which

are aided by programs funded by the Endowment.

GRANTS TO THE ENDOWMENT

SEC. 503. (a) * * *

* * * * * * *

ø(e) Of the amounts made available to the Endowment for each

of the fiscal years 1984 and 1985 to carry out programs in furtherance of the purposes of this Act—

ø(1) not less than $13,800,000 shall be for the Free Trade

Union Institute; and

ø(2) not less than $2,500,000 shall be to support private enterprise development programs of the National Chamber Foundation.¿

(e) Not less than 10 percent of the amounts made available to the

Endowment for fiscal year 2005 should be made available for programs to promote freedom of the press and other media.

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