[Senate Report 108-246]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 459
108th Congress                                                   Report
 2nd Session                                                    108-246

                                OF 2004


                 March 18, 2004.--Ordered to be printed

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


          Mr. Lugar, from the Committee on Foreign Relations,
                        submitted the following

                              R E P O R T

                         [To accompany S. 2096]

    The Committee on Foreign Relations, having had under 
consideration a bill (S. 2096) to promote a free press and open 
media through the National Endowment for Democracy and for 
other purposes, reports favorably thereon and recommends that 
the bill do pass.


  I. Purpose..........................................................1
 II. Committee Actions................................................2
III. Section-by-Section Analysis......................................3
 IV. Cost Estimate....................................................4
  V. Evaluation of Regulatory Impact..................................5
 VI. Changes in Existing Law..........................................5

                               I. Purpose

    The legislation seeks to provide greater focus on, and more 
coordination of, U.S. Government programs to develop free, 
fair, legally protected, and self-sustaining press and media in 
the world. It directs the Secretary of State to provide the 
necessary funding to the National Endowment for Democracy for 
the work of a free press institute.

                         II. Committee Actions

    Based on expert testimony presented to the committee on 
February 26, 2004 and following studies by the Congressional 
Research Service and General Accounting Office (GAO), as well 
as numerous interviews by the committee staff, the committee 
makes the following findings: a free press is essential for a 
truly open and pluralistic democracy; a free press must be 
guaranteed by constitutional or basic law protections; it must 
be protected from political intimidation; it must be practiced 
under rules governing open access, libel, and defamation; it 
must be financially sustainable; U.S. Government efforts to 
help support the development of free press and open media in 
transitional societies have been successful, but require 
greater coordination; these programs must be long-term in 
scope, and clearly separated from public diplomacy initiatives; 
greater coordination is also required among the private media 
sector, foundations, and international non-governmental 
organizations; the National Endowment for Democracy provides 
the best funding mechanism and leadership for a better 
organized public-private initiative to support the development 
of an international free press and open media.
    The committee recognizes that for many years the United 
States Government has engaged in promotion of independent media 
abroad through several foreign policy agencies, including the 
United States Information Agency (USIA) (which was merged into 
the Department of State in 1999), the Department of State, and 
the Agency for International Development. Additionally, in the 
late 1980s, Secretary of State James Baker endorsed the 
International Media Fund, a private sector charitable 
organization which received funding from the Agency of 
International Development (USAID); however, in the mid-1990s, 
USAID ended support of the Media Fund, and it ceased 
operations. USAID has continued to fund various media training 
and development programs, but they are not a central objective 
of the Agency.
    The committee notes that our nation's strong and vibrant 
private media sector should be encouraged to participate in 
American efforts to help develop indigenous free press and 
media throughout the world.
    Indigenous free media not only ensures that governments are 
held accountable to the people that they represent, but also 
provides those not in power with a peaceful outlet for 
political expression. A free media, in other words, is an 
important element in any open and democratic society. 
Additionally, the committee believes that expanding the 
presence of free media will go far to ensure that we are able 
to disseminate more successfully the issues and stories that 
promote American values and ideas.
    The committee notes that the National Endowment for 
Democracy (NED), a non-governmental organization, has been 
providing excellent work in the field of human rights and 
democratic institution building. The NED was founded in 1983 
and recognized by Congress in the National Endowment of 
Democracy Act (P.L. 98-164) to ``. . . support the 
participation of the two major American political parties, 
labor, business and other United State private sector groups in 
fostering cooperation with those abroad dedicated to the 
cultural values, institutions and organizations of democratic 
pluralism . . .''
    In the intervening 21 years, bipartisan congressional 
support has sustained the NED and its institutes. A major 
reason has been the degree to which GAO and Department of State 
oversight and auditing of the NED and its institutes have 
ensured fiscal discipline and responsibility.
    The NED currently provides much of its support via four 
``core'' grantees: the International Republican Institute 
(IRI), the National Democratic Institute (NDI), the Center for 
International Private Enterprise (CIPE), and the Free Trade 
Union Institute (FTUI).
    At the time of the creation of the first four grantees, a 
fifth institute dedicated to the promotion of free media was 
also envisioned. It was, however, never created due to 
questions over its function and independence and uncertainty as 
to the longevity of the NED. Now, long-ago doubts about the 
merit or the integrity of the NED and its institutes have been 
laid to rest. The committee believes it is crucial that the NED 
promote greater free media throughout the world.
    As such, and in conjunction with the administration's 
decision to seek a doubling of the NED budget to $80 million in 
fiscal year 2005, the committee intends to ensure that at least 
10% of that funding is directed toward free media programs. One 
of the prime reasons for directing this money through the NED 
is not only the NED's proven track record of excellence and 
government oversight, but also its status as a 501(c)(3) 
organization, which enables private sector entities to 
participate, partner or donate money, time and materiel. In 
fact, the committee has heard unofficially from several major 
U.S. news organizations, media companies and film studios that 
they are already donating staff time, equipment, programs and 
funds to fledging media throughout the world but would be able 
to do so on a more sustained and generous basis if afforded the 
tax advantages that come with working with 501(c)(3) 
    The committee intends that the NED should create a new, 
fifth institute that coordinates future programs directed at 
free media, evaluates free media projects and leverages 
resources from both the public and private sector to ensure the 
viability of both the institute and the programs it 
    At a business meeting on March 4, 2004, the committee 
considered S. 2096. No amendments were offered. The committee 
ordered the bill reported by a vote of 19 to 0. Ayes: Senators 
Lugar, Hagel, Chafee, Allen, Brownback, Enzi, Voinovich, 
Alexander, Coleman, Sununu, Biden, Sarbanes, Dodd, Kerry, 
Feingold, Boxer, Nelson, Rockefeller, and Corzine.

                    III. Section-by-Section Analysis

Section 1. Short title.

    This section designates the title of the bill.

Section 2. Findings

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

Section 3. Amendments to the National Endowment for Democracy Act

    This section amends the National Endowment for Democracy 
Act to include free media as one of the major objectives of the 
NED. The Secretary of State is requested to ensure that 10 
percent of the funding for the NED be directed to programs to 
promote freedom of the press and other media.

                           IV. Cost Estimate

    In accordance with rule XXVI, paragraph 11(a) of the 
Standing Rules of the Senate, the committee provides the 
following estimate of the cost of this legislation prepared by 
the Congressional Budget Office.

                            United States Congress,
                               Congressional Budget Office,
                                     Washington, DC, March 12,2004.

Honorable Richard G. Lugar, Chairman
Committee on Foreign Relations,
United States Senate,
Washington, DC.

    Dear Mr. Chairman:

    The Congressional Budget Office has prepared the enclosed 
cost estimate for S. 2096, the International Free Press and 
Open Media Act of 2004.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Sunita 

                              Douglas Holtz-Eakin, Director


      S. 2096--International Free Press and Open Media Act of 2004

    S. 2096 would authorize the National Endowment for 
Democracy (NED) to promote freedom of the press and other media 
around the world, and would earmark not less than 10 percent of 
funds made available to the NED for 2005 for this purpose. The 
NED is a private, nonprofit corporation that makes grants to 
private-sector and nonprofit entities to undertake activities 
to encourage free and democratic institutions throughout the 
    The NED received an appropriation of $40 million for 2004, 
and CBO's baseline projection for 2005 is also about $40 
million. In order to maintain its existing activities and 
earmark 10 percent of its budget for programs authorized by 
this bill, the NED would need an additional $4 million in 2005.
    The President has requested an appropriation of $80 million 
for 2005; under S. 2096, $8 million of that amount would be 
allocated to promote freedom of the press and other media. S. 
2144, the Foreign Affairs Authorization Act, Fiscal Year 2005, 
as ordered reported by the Senate Committee on Foreign 
Relations on March 4, 2004, would also authorize $80 million 
for the NED in 2005.
    S. 2096 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
    The CBO staff contact is Sunita D'Monte. This estimate was 
approved by Robert A. Sunshine, Assistant Director for Budget 

                   V. Evaluation of Regulatory Impact

    In accordance with rule XXVI, paragraph 11(b) of the 
Standing Rules of the Senate, the committee has concluded that 
there is no regulatory impact from this legislation.

                      VI. Changes in Existing Law

    In compliance with paragraph 12 of Rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman).


                              SHORT TITLE

  Sec. 501. This title may be cited as the ``National Endowment 
for Democracy Act''.


  Sec. 502. (a) The Congress finds that there has been 
established in the District of Columbia a private, nonprofit 
corporation known as the National Endowment for Democracy 
(hereafter in this title referred to as the ``Endowment'') 
which is not an agency or establishment of the United States 
  (b) The purposes of the Endowment, as set forth in its 
articles of incorporation, are--
          (1) to encourage free and democratic institutions 
        throughout the world through private sector 
        initiatives, including activities which promote the 
        individual rights and freedoms (including 
        internationally recognized human [rights)] rights and 
        freedom of the press and other media) which are 
        essential to the functioning of democratic 
          (2) to facilitate exchanges between United States 
        private sector groups (especially the two major 
        American political parties, labor, [and business)] 
        business, and media; and democratic groups abroad;
          (3) to promote United States nongovernmental 
        participation (especially through the two major 
        American political parties, labor, business, media, and 
        other private sector groups) in democratic training 
        programs and democratic institution-building abroad;
          (4) to strengthen democratic electoral processes 
        abroad through timely measures in cooperation with 
        indigenous democratic forces;
          (5) to support the participation of the two major 
        American political parties, labor, business, media, and 
        other United States private sector groups in fostering 
        cooperation with those abroad dedicated to the cultural 
        values, institutions, and organizations of democratic 
        pluralism; and
          (6) to encourage the establishment and growth of 
        democratic development in a manner consistent both with 
        the broad concerns of United States national interests 
        and with the specific requirements of the democratic 
        groups in other countries which are aided by programs 
        funded by the Endowment.

                        GRANTS TO THE ENDOWMENT

  Sec. 503. (a) * * *

           *       *       *       *       *       *       *

  [(e) Of the amounts made available to the Endowment for each 
of the fiscal years 1984 and 1985 to carry out programs in 
furtherance of the purposes of this Act--
          [(1) not less than $13,800,000 shall be for the Free 
        Trade Union Institute; and
          [(2) not less than $2,500,000 shall be to support 
        private enterprise development programs of the National 
        Chamber Foundation.]
  (e) Not less than 10 percent of the amounts made available to 
the Endowment for fiscal year 2005 should be made available for 
programs to promote freedom of the press and other media.