[Congressional Record Volume 140, Number 3 (Thursday, January 27, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: January 27, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                  FOREIGN RELATIONS AUTHORIZATION ACT

  The Senate continued with the consideration of the bill.
  Mr. KERRY. Mr. President, I would like to come back to the subject we 
are on, and that is the question of NED.
  I respect enormously the Senator from Colorado, and we have worked 
together on a lot of things. I really believe that the approach on this 
in terms of matching grants is well intended but will have a very 
serious negative consequence on NED.
  My colleague who just came here from North Dakota made it clear, and 
I hope my colleagues heard it. He said he would rather get rid of NED. 
But the next best thing is to do what the Senator from Colorado is 
doing. That tells it all. He would like to get rid of NED, which we 
overwhelmingly voted not to do here, but the next best thing is to do 
what the Senator from Colorado is doing.
  Why is the next best thing to do what the Senator from Colorado is 
doing? It is very simple because, if NED gives out grants as it does to 
the four core groups, and one of those core groups let us say the NDI 
or the IRI gets $8 million under the plan of the Senator from Colorado 
they are going to have to raise $1.2 million against that $8 million in 
order to give out a grant, and if they cannot raise the $1.2 million 
they will have to reduce the amount that they give out and give it 
back. In other words, if they only raise $750,000, they have to give 
back the difference. They cannot use it. This is a cut.
  I do not believe that Senators who voted a moment ago on the 
amendment to cut the addition want to vote to cut from the level that 
we have today. We must hold on to the $35 million level.
  Let me go further. This will not only create a problem for these 
entities, but I ask my colleague: Do you really want now to turn 
democracy building into a competitive fundraising process where you tie 
up extra administrative costs in the effort to raise money? You cannot 
raise money for nothing. Someone is now going to have to be designated 
to go out and raise money. Are we going to hire new people to do it? If 
you hire new people, that is an additional cost. If you are not going 
to hire new people, you are diminishing the staff they already have in 
terms of tasks.
  What does it mean to go raise money? We all know what it means. I 
respect the fact that the Republican Institute is able to do it. The 
Republicans outraise the Democrats every year by millions of dollars. 
They are not going to have much of a problem I am sure finding an 
entity that will give some money. But for the labor union entity for 
the National Democratic Institute it is a lot harder to ask them to go 
out and raise matching grants.
  Third, do you now want these entitles to have to go out hat in hand 
against all the other competitive fundraising that takes place in this 
country, against AIDS research, against muscular dystrophy, against 
cancer, against homelessness, against every kind of fundraising that 
takes place?
  This Nation that is interested in democracy is now going to ask our 
democracy-building institutions to go out and take the money from 
muscular dystrophy, take the money from AIDS research, compete in the 
marketplace to raise money to do what is in the interest of the 
Government of the United States and the people of the world, which is 
try to help people to be democratic.
  I do not know how many institutions are prepared to ante up for that, 
but I can tell you who might do it. You know who might do it. Oh, 
people who want to do business in that particular country, or people 
who want to get a leg up on a contract perhaps, or people who want to 
have some kind of influence. I do not know. But you open yourselves up 
to the potential of a whole lot of influence peddling in the process of 
making this process dependent on the raising of private money. I do not 
think that is what we want to do. Mr. President, it just does not make 
sense.
  Fourth, one of the great virtues of NED which has been underscored by 
leaders in other countries as well as our own practitioners here in 
this country--practitioners--the people who take part in NED, the folks 
who devote their time or commit time of the private sector to help this 
democracy-building process, one of the great virtues is that it can 
respond quickly, that you can plan exactly how much money you are going 
to have, and you can then set out an organized methodology for spending 
it.
  My colleague from Colorado and the Senator from Arkansas have 
criticized NED for being disorganized, for not being able to coordinate 
their programs, and here they come with an amendment that is going to 
make it even more difficult to coordinate and to plan, because you are 
not going to know how much money you have because you have to go out 
and fund raise; do not know how much you are able to get. You certainly 
will not be able to respond with speed to many of the international 
situations. For instance, a democracy-building group in a dictatorship 
that is struggling all of sudden that has punitive measures being taken 
against it that needs an immediate response in order to help them to 
heighten the visibility of their cause to bring the international media 
in a way that might even save lives. You are going to have NED sitting 
there scratching its head saying, gee, do you think we can persuade 
Gillette or Seagram or someone to contribute some money to this? And 
you are going through the fundraising process before you can even 
respond. That does not make sense.
  Nobody has made a compelling case why we should cut from the $35 
million that we have. A case was made for why we should not increase to 
$50 million, and so we did not, and the Senate in its wisdom decided to 
reduce from the $50 million to the $35 million.
  But we keep hearing about how bad NED is. Let me try to straighten 
colleagues out for a minute on the reality and what has happened in 
addressing some of the concerns we had about NED. We keep hearing about 
the first-class tickets, about the disorganization.
  The report from which those criticisms are drawn is a report of an 
inspection that is now 6 and 4 years old. It is a 1988-90 period of 
time. Indeed, the inspector general's report during that time, the 1993 
inspector general's report, was a report that came out in 1993 covering 
the period of inspection of 1988 to 1990. But the fact is that those 
concerns have been addressed and are being addressed at this point in 
time.
  Mr. President, there are new financial controls, there are new 
management controls, and let me quote the GAO. The GAO in 1992 said:

       It is too early to evaluate the impact of all the changes 
     on the management of grants at this time. However, we believe 
     that if the endowment effectively carries out the actions it 
     has begun and plans to begin, endowment planning, evaluation 
     monitoring, and financial control capabilities should be 
     improved.

  Mr. President, since that time NED has added audit staff. It has 
lowered the threshold grant to be audited to $25,000 as issued by OMB. 
It has revised its grant agreement so grantees and subgrantees 
understand more clearly what the requirements are. It has recognized 
that its core grantees used grant funds inappropriately in the past, 
and it has taken steps to correct this. I believe that we should not 
now penalize NED for missteps by the grantees themselves which NED has 
now taken steps to cure.
  Let me just quote the inspector general's report:

       The Office of the Inspector General confirms that grant 
     agreements with NED for 1991 and subsequent fiscal years 
     incorporated the provisions of the OMB circular which is 
     intended to ensure more competitive audit coverage of 
     nonprofit institutions. In addition, NED's new procedures, if 
     effectively implemented, should improve NED's capabilities 
     for financial oversight.

  Mr. President, the inspector general is saying that NED's procedures, 
if implemented effectively, will cure the problems that have been 
cited. No one has suggested there is a whole new Pandora's box of 
problems.
  I suggest respectfully if you measure what NED has accomplished and 
you measure the extraordinarily strong statements of support from 
various international leaders and frankly, far more important than some 
of the leaders, if you measure it from some of the folks on the front 
line of democracy fighting and democracy building, they will tell you 
that NED has made a difference and is making a difference.
  Let me give you an example, Mr. President, of the reason that speed 
is very important. In April 1993 the Republican Institute sponsored an 
observer mission to the Russian referendum. IRI recommended changes in 
the processes which were then adopted for the December 1993 
parliamentary elections.
  IRI also produced some 30,000 Russian-language poll watcher kits, and 
NDI conducted training seminars for the election.
  If you had to go out and raise private grants in an effort to try to 
do this, that might never have taken place. It might have, but it might 
not have. And if it might have, it could well have been at the expense 
of other efforts because of the time and effort taken to try to go out 
and find the private source.
  I respectfully suggest there are a lot of other compelling reasons. 
The Senator from Connecticut is here, and he wants to speak on this. I 
know he will cite them. There are other critical reasons in terms of 
the efficiency and the types of programs that NED is involved in that 
would be negatively impacted by this.
  As I said at the outset, the Senator from North Dakota made it clear 
that if you cannot knock NED out altogether, the next best thing is cut 
it, strip its ability to work through this kind of hampering mechanism.
  I hope the Senate, in its wisdom, will stick with the $35 million, 
will stick with the process of reform that is being put in place now, 
will stick with the opinion of the Office of the Inspector General, and 
will stick with the commitment of the interagency task force, which has 
made recommendations to the President, and let NED engage in the 
process of rapid response that it needs for many of these problems 
around the globe.
  Mr. DODD addressed the Chair.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. DODD. Mr. President, first of all, let me commend our colleague 
from Massachusetts for very eloquently and exhaustively laying out the 
argument why I think the Brown amendment is flawed.
  Let me begin by saying that I supported the last amendment. I 
supported the amendment to cut back the level of funding, not because I 
think the amount overall is necessarily huge, but it was simply a 
matter of perception. At a time when almost everyone else is being 
asked to restrain themselves, it seems to me NED could do so as well. I 
recommended that earlier this year when they raised the issue, that 
they made a mistake seeking those additional funds. I think we sent a 
message with that vote. I commend both Senator Brown and Senator 
Bumpers for offering it.
  Having said that, I think the message has been more than loudly 
heard. I think now we need to make sure that, in the process here, we 
do not destroy what anyone who has watched this process work in the 
last 10 years has concluded is a very worthwhile effort. There are some 
75 or 80 different countries that have benefited from this program. 
Every President--Ronald Reagan strongly endorsed this program; George 
Bush; President Clinton--all have felt that this has been worthwhile.
  Some of the reasons that it has enjoyed such bipartisan support over 
the years at the executive branch have been enumerated in the previous 
debate. Some reference has been made already by the Senator from 
Massachusetts. But if the words of the Senator from Massachusetts or 
myself or others are not pointed enough, then listen to the words of 
Lech Walesa and Solidarity and what NED meant to that fledgling 
organization at a time they were trying to survive.
  I wish, as we stood here with the collapse of the Berlin Wall and the 
end of the cold war, that we could say, as the first generation of 
Americans in this century said, that we had finished, democracy was 
secure forever, we had fought the war to end all wars, in a sense.
  But my concern is that if we sort of retreat, which is really what is 
being offered here--I think the Senator from Massachusetts is very 
accurate; this is basically an effort to sort of cripple this 
organization one way or the other--if, through this process, we begin 
to retreat back from the role of leadership in the world, then we might 
very well anticipate the same result that occurred when similar 
approaches were taken at the end of the First World War and we saw the 
world change because the United States did not continue to exert its 
leadership. Arguably, that occurred immediately at the end of World War 
II, as well. There are many historians who would argue that, because of 
the appearance of retreat, Korea occurred in the Pacific.
  So I hope that our colleagues who joined me in voting for the last 
amendment--that is, not to table the Bumpers-Brown amendment--would 
respectfully reject this amendment being offered. I think we have sent 
that message, that the matching funds approach, as the Senator from 
Massachusetts has pointed out, creates far more problems.
  I mean, this is not some organization out here that is of marginal 
importance. To engage them in a fundraising game and practice--I mean 
you do not need to be a brain surgeon to figure out who is going to 
contribute to this. You want to have influence in Latin America. You 
got a good bank down there. You are going to raise a lot of money from 
the bank. We are going to be holding hearings on this issue. There will 
be one scandal after another. We will have special prosecutors named, 
you name it. This will be a disaster, because we will have more people 
involved in this thing who should not be.
  So, for God's sake, let us not invite the very people who are going 
to see some particular and special need be served by getting a leg up, 
as the Senator from Massachusetts said, to have a special relationship 
in Chile or Argentina or Mexico or some other nation.
  Mr. KERRY. Will the Senator yield?
  Mr. DODD. I am glad to yield to my colleague.
  Mr. KERRY. Would the Senator not agree that, as a consequence of that 
fundraising relationship, you suddenly have brought in entities that 
are contributing but you have no oversight of the private entities from 
Congress?
  Mr. DODD. My colleague is correct. It is very difficult to oversee 
that.
  But I presume what will happen is there will be a headline story in 
the Dallas Morning News, or the Hartford Courant or the Boston Globe or 
the Washington Post that XYZ corporation got caught funding on the 
side, contributing to the program, and we end up destroying the whole 
thing.
  Now, there is a gimmick that appeared to be some budgetary device 
here, which is really more of an invitation for chaos. So I urge my 
colleagues, those who believe this is worthwhile--look, if you think 
NED is a bad idea, if you think it is a stupid idea, you never agreed 
with it, then vote for the Brown amendment. You should. But if you 
think NED has merit, if you think it has done some things that are 
worthwhile, if you think it makes some sense for our two major parties 
in this country to be supporting democratic efforts in these nations, 
then this amendment ought to be flatly rejected. It is not good 
government. From the budgetary standpoint, it is an invitation, in my 
view, to a lot more problems than any of us would like to see.
  So I join my colleague from Massachusetts and others on both sides of 
the aisle and respectfully urge this amendment be tabled or outright 
defeated and allow NED, now with a message sent by the last amendment, 
to go about its business and to support these worthwhile efforts around 
the globe.
  Mr. President, I yield the floor.
  Mr. GRAMM addressed the Chair.
  The PRESIDING OFFICER. The Senator from Texas [Mr. Gramm].

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