    [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
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    _____________________________________________________________________________
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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.