    Promoting Democracy: Progress Report on U.S. Democratic Development
    Assistance to Russia (Letter Report, 02/29/96, GAO/NSIAD-96-40).

    Pursuant to a congressional request, GAO reviewed U.S.-funded democracy
    programs in Russia, focusing on whether these projects met their
    developmental goals and contributed to political reform during fiscal
    years 1990 through 1994.

    GAO found that: (1) U.S.-funded democracy projects have increased the
    quality and self-sufficiency of Russia's democracy movement by assisting
    prodemocracy political activists and parties, proreform trade unions,
    court systems, legal academies, government officials, and media
    organizations, but the results of Russian democracy projects have been
    mixed; (2) although U.S.-funded projects contributed to improvements in
    the Russian news media, trade unions, and electoral system projects
    designed to improve political party development, the rule of law, and
    civil-military relations have fallen short of desired goals; (3) the
    most important factor in project success has been the conduciveness of
    the Russian environment to reform; (4) the Department of State and
    Agency for International Development believe that Russian pro-democratic
    reforms will take longer than previously anticipated; and (5)
    U.S.-funded projects have not had a significant impact on reformist
    national political party organizations, membership, or electoral
    performance, since reformist parties have been unwilling or unable to
    form coalitions, build national organizations, or convince the Russian
    public to support their political message.

    --------------------------- Indexing Terms -----------------------------

     REPORTNUM:  NSIAD-96-40
         TITLE:  Promoting Democracy: Progress Report on U.S. Democratic
                 Development Assistance to Russia
          DATE:  02/29/96
       SUBJECT:  International relations
                 International cooperation
                 Elections
                 Federal aid to foreign countries
                 Political activities
                 Foreign policies
                 News media
                 Labor unions
                 Judicial reform
                 Foreign governments
    IDENTIFIER:  Russia
                 AID Atlantic Council Project
                 AID Internews Project
                 International Military Education and Training Program
                 AID Democratic Pluralism Initiative

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    Cover
    ================================================================ COVER

    Report to the Chairman and Ranking Minority Member, Committee on
    International Relations, House of Representatives

    February 1996

    PROMOTING DEMOCRACY - PROGRESS
    REPORT ON U.S.  DEMOCRATIC
    DEVELOPMENT ASSISTANCE TO RUSSIA

    GAO/NSIAD-96-40

    Promoting Democracy

    (711129)

    Abbreviations
    =============================================================== ABBREV

      CEC - Central Election Commission
      DOD - Department of Defense
      FTUI - Free Trade Union Institute
      IFES - International Foundation for Electoral Systems
      IMET - International Military Education and Training
      IRI - International Republican Institute
      NDI - National Democratic Institute for International Affairs
      NED - National Endowment for Democracy
      RAPIC - Russian-American Press Information Center
      USAID - U.S.  Agency for International Development
      USIA - U.S.  Information Agency

    Letter
    =============================================================== LETTER

    B-270026

    February 29, 1996

    The Honorable Benjamin A.  Gilman
    Chairman
    The Honorable Lee H.  Hamilton
    Ranking Minority Member
    Committee on International Relations
    House of Representatives

    As requested, we reviewed U.S.-funded democracy programs of the U.S.
    Agency for International Development (USAID); the U.S.  Information
    Agency (USIA), including projects funded by USIA's annual grant to
    the National Endowment for Democracy (NED); the Department of State;
    and the Department of Defense (DOD).  This report focuses on
    democracy projects in Russia and addresses whether such projects were
    meeting their developmental goals and contributing to political
    reform from fiscal years 1990 through 1994.  To make this assessment,
    we examined projects in six areas:  independent media, trade union
    development, political party development, rule of law development,
    electoral support, and civil-military relations.  We also inquired
    into State and USAID views on the future of the U.S.-funded democracy
    program in Russia.

       BACKGROUND
    ------------------------------------------------------------ Letter :1

    The United States has for many years funded various USIA
    broadcasting, educational, and visitor programs in the former Soviet
    Union to promote democratic ideas.  Beginning in the mid-1980s, NED,
    a U.S.-funded nongovernmental organization, provided small grants to
    dissident groups throughout the former Soviet Union and funds for
    journals, videos, and other materials that were distributed in Russia
    and elsewhere.  In 1990, NED began funding political organizing and
    trade union development work by three of its core institutes.\1 In
    fiscal years 1990 and 1991, NED, in part through these core
    institutes, spent about $3 million for activities in or directed
    toward Russia.  Democratic development assistance to Russia increased
    during fiscal year 1992, after the Soviet Union dissolved.  From
    fiscal years 1992 to 1994, the U.S.  government, excluding USIA,
    provided over $64.2 million in democratic development assistance to
    Russia, of which $57.3 million was provided by USAID, $5.8 million by
    NED, and $1.1 million by the State Department for a DOD program.
    USIA was unable to provide specific funding information for its
    activities in Russia because they were funded under a regional
    project.  Appendix I provides detailed information about U.S.
    democratic development assistance to Russia from 1990 to 1994.

    The democracy assistance program in Russia seeks to capitalize on the
    historic opportunity to build democracy in place of a centralized
    Communist system.  The U.S.  program is meant not only to demonstrate
    U.S.  political support for democratic reform in Russia but also to
    help create and nurture the full range of democratic institutions,
    processes, and values.  U.S.  efforts seek to increase the
    responsiveness and effectiveness of the Russian government, as well
    as the ability of Russian citizens to influence decisions affecting
    their lives.  Toward that end, U.S.  assistance provides support to
    independent media, democratic trade unions, reformist political
    parties, and other nongovernmental organizations.  It also supports
    the Russian government's efforts to enhance election administration
    and election laws, strengthen the courts and other legal
    institutions, promote civilian control of the military, and improve
    the quality of public administration.

    --------------------
    \1 NED provides grants to four core institutes:  the Free Trade Union
    Institute, The International Republic Institute, the National
    Democratic Institute, and the Center for International Private
    Enterprise.  NED also has a discretionary grant program through which
    it provides small grants to other prodemocracy and human rights
    organizations.

       RESULTS IN BRIEF
    ------------------------------------------------------------ Letter :2

    U.S.-funded democracy projects have demonstrated support for and
    contributed to Russia's democracy movement.  Organizations and
    institutions at the center of the democratic reform process have been
    identified and supported, as have thousands of Russian activists
    working at these organizations at the national, regional, and local
    levels.  Those assisted include prodemocracy political activists and
    political parties, proreform trade unions, court systems, legal
    academies, officials throughout the government, and members of the
    media.

    The democracy projects that we reviewed, however, had mixed results
    in meeting their stated developmental objectives.  Russian reformers
    and others saw U.S.  democracy assistance as generally valuable, but
    in only three of the six areas we reviewed did projects contribute to
    significant changes in Russia's political, legal, or social system.
    USAID and USIA media projects largely met their objective of
    increasing the quality and self-sufficiency of nongovernment or
    independent media organizations, although the weak economy continues
    to threaten the sustainability of an independent media.  U.S.
    efforts to help develop a democratic trade union movement and improve
    Russia's electoral system also contributed to systemic changes,
    although more needs to be done.  However, projects in the areas of
    political party development, rule of law, and civil-military
    relations have had limited impact.  Our analysis indicated that the
    most important factors determining project impact were Russian
    economic and political conditions.  Project implementation problems
    contributed to the limited results achieved from the rule of law
    project.

    State and USAID officials acknowledged that democratic reforms in
    Russia may take longer to achieve than they initially anticipated.

       DEMOCRACY PROJECTS HAVE HAD
       MIXED RESULTS
    ------------------------------------------------------------ Letter :3

          INDEPENDENT MEDIA
    ---------------------------------------------------------- Letter :3.1

    The U.S.-funded independent media program in Russia has helped raise
    the quality of print and broadcast journalism and contributed to
    Russia's movement toward an independent, self-sustaining local
    television network.  USAID's Internews project, USIA's grant to the
    Russian-American Press Information Center (RAPIC), and a number of
    small grants awarded to Russian nongovernmental media organizations
    by NED and the Eurasia Foundation have strengthened independent media
    by donating equipment and broadcast materials to hundreds of local
    television stations, teaching reporting skills to print and broadcast
    journalists, and providing training in business and marketing to
    media managers.

    According to the State Department, the growth of independent media in
    Russia began in 1990 during the Soviet era with the official
    abolition of press censorship.  The new openness created a conducive
    environment for independent news reporting, as print and broadcast
    media, both still largely state-owned at the time, frequently aired
    views highly critical of the Communist government.  Currently, print
    and broadcast media in Russia represent a wide range of opinions.
    Most operate unhindered from the Russian government and many are
    privately owned.

    Russian and U.S.  officials said that the principal threat to media
    independence in Russia today is the weak economy.  For many media
    organizations, advertising revenues are insufficient for continued
    survival, forcing them into bankruptcy or joining larger affiliates,
    thereby curtailing their independence and capacity to produce their
    own programs.  According to U.S.  and other observers, many print and
    broadcast outlets also face pressure from local political authorities
    or from organized crime, in large part due to their dire financial
    situations.

    Internews Network has developed an active working relationship with
    200 of the approximately 500 over-the-air broadcasters that currently
    operate in the countries of the former Soviet Union,\2 the majority
    in Russia.  The technical assistance, training, and programming that
    Internews provided enabled some local stations to become commercially
    viable, according to U.S.  officials and Russian participants.  These
    officials and participants also said that Internews has helped many
    stations that have not achieved full commercial viability by
    providing enough support to forestall bankruptcy, signing into
    sponsorship arrangements, or becoming affiliates of larger networks.
    (See app.  II.)

    --------------------
    \2 Internews officials initially estimated that 3,000 local
    television stations operate in the former Soviet Union, but many of
    these stations broadcast to no more than a few apartment buildings
    united by a cable.  They later told us that 500 over-the-air
    broadcasting stations are currently operating in the former Soviet
    Union.

          ELECTORAL SUPPORT
    ---------------------------------------------------------- Letter :3.2

    The USAID-funded election administration project, implemented by the
    International Foundation for Electoral Systems (IFES),\3 has made
    important contributions to addressing the legal, institutional, and
    procedural shortcomings evident during Russia's December 1993
    national elections.  For example, it assisted in the development of
    Russia's Voting Rights Act--which was enacted into law during
    November 1994--and other legislation governing elections for the
    State Duma (the lower house of the Russian Parliament).  Russia now
    has a permanent and more independent election commission, voting
    rights, and Duma election procedures that are based in law.  This
    improved the situation prevalent in December 1993, when national
    elections were held by presidential decree, the Central Election
    Commission (CEC) chairman was appointed by the President, and the
    electoral process and administrative apparatus were holdovers from
    the Communist era.  IFES has also worked with the CEC to develop
    electoral training and voter education programs to help ensure that
    electoral procedures are properly carried out and to increase the
    public's knowledge and participation in elections.

    Nonetheless, IFES officials believe that more progress can be made in
    electoral reform; for example, legislation governing elections for
    the upper chamber of

    U.S.-funded political party development programs in Russia,
    implemented through NED and USAID grants to the National Democratic
    Institute (NDI) and the International Republican Institute (IRI),
    have not significantly strengthened reformist national political
    parties, either organizationally or in terms of increased membership
    or performance in elections.  From 1990 through 1992, NDI and IRI
    used about $956,000 in NED funds to help the anti-Communist
    Democratic Russia Movement establish a printing facility and
    disseminate literature.  They also conducted civic education and
    grassroots organizing programs for Russians at the national and local
    level.  Since 1992, USAID has awarded NDI and IRI a series of grants
    with a combined value of $17.4 million to conduct programs in Russia
    through 1997.  USAID documents state that the overall purpose of
    these grants is to assist reformist political parties strengthen
    their organizations and their role in elections, Parliament, and
    local government.

    NDI and IRI have developed relationships with many party officials
    and provided extensive training and assistance.  However, because of
    the inhospitable environment in Russia for political party
    development, the institutes have had only minimal success in helping
    to strengthen reformist national political parties, either in their
    organization or in their election performance.  Reformist parties--as
    demonstrated by their showing in the December 1993 and 1995 elections
    and by their difficulties in local elections--have been unwilling or
    unable to form coalitions, build national organizations, or convince
    large segments of the Russian public to support their political
    message.  In the spring of 1995, USAID, anticipating the poor showing
    by reformist parties in the December 1995 parliamentary election and
    additional problems for reformists in the June 1996 presidential
    election, counseled NDI and IRI to direct more of their resources to
    working with grassroots nongovernmental organizations.  (See app.
    V.)

          RULE OF LAW
    ---------------------------------------------------------- Letter :3.5

    U.S.-funded rule of law activities conducted under the Democratic
    Pluralism Initiative\5 have contributed to incremental improvements
    in reforming Russia's legal and judicial institutions, and they are
    beginning to help build a grassroots constituency for legal reform.
    Through an interagency transfer to the State Department and a grant
    to the American Bar Association, USAID supported Russia's limited
    reintroduction of jury trials and its first steps toward establishing
    an independent judiciary, as well as commercial law training for the
    Russian high arbitration court.

    By the end of 1994, jury trials were operating in 9 of 89 regions in
    Russia, and the government had enacted legislation intended to
    increase the independence of the judiciary and to make many other
    reforms in the criminal justice system.  However, the widespread
    reintroduction of adversarial jury trials was often not occurring as
    scheduled because the Russian Federation and the regional governments
    did not fund their implementation adequately, citing budgetary
    constraints.  By the end of 1994, Russian judges were only beginning
    to assert their independence from other branches of government.

    In late September 1993, USAID awarded a $12.2 million, comprehensive
    rule of law project to ARD/Checchi to continue support for these
    reform efforts over a 3-year period, expand them to develop other
    Russian legal institutions, and encourage grassroots constituencies
    for legal reform.  The project aimed to assist in the development of
    Russian legal institutions by supporting curriculum changes in
    Russian law schools, including the addition of commercial law courses
    and new substantive and procedural code reforms into the curriculum,
    establishing continuing education for bar associations, providing
    training to all judges of commercial law courts, and strengthening
    the new Constitutional Court and the role of the defense counsel in
    criminal cases.  The contractor began to provide assistance in these
    areas in late 1994 and early 1995.

    As part of its contract, ARD/Checchi also awarded a $500,000
    subcontract to FTUI to support efforts to address workers' rights
    issues through Russia's court system, and it is managing a $2-million
    small grants program to support U.S.  and Russian nongovernmental
    organizations' activities to promote the rule of law.  As of May
    1995, five grants had been awarded under this program.\6

    ARD/Checchi was slow to initiate its core project activities.
    According to USAID officials, the approximately 1-year delay in
    starting the project was due partly to the inability of U.S.  embassy
    and USAID officials to respond to the contractor's proposed action
    plan and to clearly articulate what they expected of the contractor.
    In addition, it took some time for the contractor to (1) establish
    contacts and design projects with Russia's historically closed legal
    institutions and establish an office in Moscow, (2) become familiar
    with USAID's administrative procedures, (3) and negotiate and award
    contracts and grants to other nongovernmental organizations.  It is
    too soon to evaluate the effectiveness of the contractor's efforts to
    support reform of the core legal institutions; however, officials
    from USAID, the State Department, and the Russian government said
    that systemic changes in Russia's legal institutions will be a
    long-term process, given that the needs in this area are vast and
    complex.  (See app.  VI.)

    --------------------
    \5 USAID's rule of law project dealing with commercial law reform
    (the International Reform and the Informal Sector project) was not
    included in our review because it was part of USAID's economic
    restructuring and financial project and not part of the Democratic
    Pluralism Initiative, and the Department of Justice's rule of law
    program was not included because it had not begun at the time of our
    fieldwork.

    \6 NED and the Eurasia Foundation also provide small grants to U.S.
    and Russian organizations that aim to promote the rule of law in
    Russia.

          CIVIL-MILITARY RELATIONS
    ---------------------------------------------------------- Letter :3.6

    U.S.  assistance projects intended to strengthen civilian control of
    the Russian military, including the International Military Education
    and Training (IMET) program and a USAID-funded Atlantic Council
    project, had not made much progress in addressing their goals,
    primarily due to a lack of interest by the Russian government.\7 U.S.
    embassy data shows that from 1992 through 1994 the IMET program
    brought 37 civilian and military officials,\8 primarily from the
    Ministries of Foreign Affairs and Defense, to the United States for
    training.  However, according to the U.S.  official responsible for
    managing the program, civilian candidates have been chiefly mid-level
    bureaucrats from the Ministry of Foreign Affairs who are not likely
    to advance to positions of authority.  He indicated that the Ministry
    of Defense is leery of the program and has limited the participation
    of Russian military officers.  The Atlantic Council's 2-year,
    $626,500 grant from USAID, started in 1992, was hindered by the
    Council's inability to identify and select Russians to participate in
    its training programs.

    According to DOD, the IMET program is primarily a long-term effort to
    influence the younger, promising officers of foreign militaries who
    will rise to positions of prominence during their careers.  However,
    evidence indicates that little progress had been made in identifying
    and selecting promising officers who are likely to rise to positions
    of prominence, apparently because the Russian government was
    unwilling to fully use the IMET program.

    U.S.  embassy officials told us that the Russian military retains
    firm control of its sphere of operation and that few in-roads have
    been made to exert greater civilian control.  According to one
    embassy official, even the Russian Parliament has limited detailed
    knowledge of the military budget.  Uniformed officials are also
    predominant at the Russian Ministry of Defense.  U.S.  embassy
    officials said that political circumstances in Russia make the
    implementation of a U.S.  civil-military program in Russia very
    difficult.  There is general antagonism to Western assistance from
    some quarters of the government and some suspect that civil-military
    assistance is designed to further weaken Russia militarily.  Also,
    deep cuts in defense spending have made the process of greater
    civilian control in the Ministry of Defense more complex, as
    significant hiring of civilian employees is unlikely, especially with
    the large numbers of currently unemployed military officials.  (See
    app.  VII.)

    --------------------
    \7 Program management for the IMET program is divided between the
    State Department and DOD.  The Secretary of State is responsible for
    the program's general direction, and he also recommends funding
    levels for congressional approval and allocates approved funds to
    each country.  The Secretary of Defense is responsible for planning
    and implementing the program, including administration and
    monitoring, within established funding levels.

    \8 DOD said that the number of participants published in its annual
    Congressional Presentation Document is gathered indirectly and may
    vary somewhat from the number provided by the U.S.  embassy, but that
    the embassy count is more accurate.

       STATE AND USAID VIEWS ON THE
       FUTURE OF U.S.  DEMOCRACY
       ASSISTANCE IN RUSSIA
    ------------------------------------------------------------ Letter :4

    When USAID began providing democratic development assistance in
    Russia, it did so without conducting needs assessments or developing
    a country strategy, as it was under considerable pressure to
    implement projects quickly.  Instead, USAID relied on unsolicited
    proposals that largely replicated democracy assistance programs
    underway in Central and Eastern Europe, using many of the same
    contractors and grantees.

    State and USAID officials now believe that democratic reforms in
    Russia may not be as easily or quickly consolidated as they had
    originally hoped.  They are now focusing less on assisting national
    institutions and short-term political events, such as elections, and
    are emphasizing more long-term development of local, grassroots
    organizations capable of building a popular consensus for democratic
    reform.  According to these officials, this means that it may be
    desirable for the United States to continue democratic development
    activities in Russia after assistance in the economic reform arena
    has ended.

       AGENCY COMMENTS
    ------------------------------------------------------------ Letter :5

    USAID, USIA, and DOD generally agreed with our report, but they
    suggested minor changes that were incorporated where appropriate.
    State said that we should have discussed how the Department of
    Justice's rule of law program and DOD's exchange program conducted
    under the Cooperative Threat Reduction program contribute to
    democratic development.  We agree that law enforcement assistance can
    contribute to democratic development; however, the Department of
    Justice's project had not begun at the time of our fieldwork in
    Russia.  (We are currently evaluating this project as part a review
    of U.S.  anticrime assistance to the former Soviet Union.) According
    to DOD, the Cooperative Threat Reduction program is not
    democracy-related, although it does occasionally fund some
    democracy-related activities.\9

    NED agreed with our general conclusions but said we should have
    included projects by the Center for International Private Enterprises
    in our review because the Center's projects also helped build a
    constituency for free market democratic reforms.  Although the
    Center's projects may have contributed to democratic reforms, the
    primary focus of the Center's projects was to promote privatization
    and promarket reforms, two areas outside the scope of our review.

    NED also provided us with written comments of NDI and IRI, two of
    NED's core institutes that have operated in Russia primarily as USAID
    grantees.  Both NDI and IRI indicated that the development of
    reformist political parties in Russia may take many years.  NDI said
    that its programs have produced positive results and that by their
    nature, these programs are often long-term investments in
    individuals, institutions, and processes.  IRI said its approach has
    been to help those Russians dedicated to democracy begin to build
    democratic parties up from the grass roots.  However, evidence
    indicates that little progress had been made toward the development
    of reformist political parties despite NDI and IRI's efforts.

    Comments from State, DOD, USAID, USIA, NED, IRI, and NDI are
    reprinted in appendixes VIII through XIV, respectively.

    --------------------
    \9 Promoting Democracy:  Foreign Affairs and Defense Agencies Funds
    and Activities--1991 to 1993 (GAO/NSIAD-94-83).

       SCOPE AND METHODOLOGY
    ------------------------------------------------------------ Letter :6

    We used the State Department's definitions to determine which
    assistance programs were democracy-related.  These programs included
    civic education and organization, civil-military relations, human
    rights training, election reform, media training and development, and
    legislative, rule of law, political party, trade union, and public
    administration development.  Our scope was limited to an evaluation
    of projects in the areas of independent media, rule of law, political
    party development, trade union development, electoral assistance, and
    civil-military relations.

    We interviewed numerous U.S.  government officials in Washington,
    D.C., who manage and coordinate their agencies' democracy assistance
    to Russia, specifically, officials from the State Department, USAID,
    DOD, and USIA.  We also met with NED officials and officials from
    NDI, IRI, FTUI, IFES, Internews, ARD/Checchi, the American Bar
    Association, and the Eurasia Foundation.  We reviewed (1) agencies'
    strategy papers, program documents, project evaluations, and budget
    data and (2) grantees' internal documents, such as trip reports, and
    their official reporting to the U.S.  government on the status and
    impact of their projects.  We also verified the scope of work of some
    nongovernmental organizations--both Russian and American--that
    received selected small grants from the Eurasia Foundation and NED.

    We visited five Russian cities, in addition to Moscow and
    St.  Petersburg--one north of St.  Petersburg, two in the Black Sea
    region, and two in southwest Siberia.  While in these cities, we met
    with U.S.  embassy and agency officials who manage and coordinate
    democracy projects, as well as in-country staff of USAID and USIA
    contractors and grantees who implement the projects.  In addition, we
    interviewed Russian government officials in the presidential
    administration, government ministries, and the State Duma to obtain
    their assessment of U.S.-sponsored democracy projects.  We also
    interviewed numerous Russians who received U.S.  training, technical
    assistance, and financial or material donations, including judges,
    legal administrators and practitioners, political party organizers,
    activists and candidates for local elections, union leaders and
    members, station managers, broadcast technicians, print journalists,
    election officials, and representatives from women and youth groups.
    Also, we attended a number of meetings, seminars, and training
    sessions held or organized by the U.S.  contractors or grantees to
    observe their activities.

    We did not evaluate USAID's public administration and nongovernmental
    organization support projects.  We also did not evaluate the
    University of Maryland's and the Harvard Institute for International
    Development's legal reform activities because they are sponsored
    under USAID's Economic Restructuring Project rather than its
    democracy initiative, although we recognize the link between these
    programs.  We did not review the effectiveness of democracy-related
    USIA and USAID exchange and visitor programs due to the difficult and
    time-consuming task of locating individual program participants.

    We conducted our review between March 1994 and September 1995 in
    accordance with generally accepted government auditing standards.

    ---------------------------------------------------------- Letter :6.1

    We are sending copies of this report to the Secretaries of State and
    Defense, the Administrator of USAID, the Director of USIA, the
    President of NED, and the Chairmen and Ranking Minority Members of
    the appropriate congressional committees.  We will also make copies
    available to others upon request.

    Please call me at (202) 512-4128 if you or your staff have any
    questions concerning this report.  The major contributors to this
    report are listed in appendix XV.

    Harold J.  Johnson, Associate Director
    International Relations and Trade Issues

    U.S.  DEMOCRATIC DEVELOPMENT
    ASSISTANCE TO RUSSIA (FISCAL YEARS
    1990 TO 1994)
    =========================================================== Appendix I

    U.S.  democracy assistance to Russia includes projects funded or
    implemented by a number of agencies, including the U.S.  Agency for
    International Development (USAID); the Department of Defense (DOD);
    and the U.S.  Information Agency (USIA) through its annual grants to
    the National Endowment for Democracy (NED).  Table I.1 summarizes
    these programs.

                                        Table I.1

                          Estimated Obligations for U.S.-Funded
                           Democratic Development Assistance in
                              Russia,\a Fiscal Years 1990-94

                                  (Dollars in Thousands)

    Agency       FY 1990     FY 1991     FY 1992     FY 1993     FY 1994       Total
    --------  ----------  ----------  ----------  ----------  ----------  ==========
    USAID
    --------------------------------------------------------------------------------
    Democrat                              $3,376     $13,268     $35,368   $52,013\b
     ic
     Plurali
     sm
     Initiat
     ive
    Eurasia                                              300       2,300       2,600
     Foundat
     ion\c
    Exchange                                                       2,681       2,681
     s and
     trainin
     g\d
    ================================================================================
    Subtotal                               3,376      13,568      40,349    57,294\b

    DOD
    --------------------------------------------------------------------------------
    Internat                                 153         471         471       1,095
     ional
     Militar
     y
     Educati
     on and
     Trainin
     g

    USIA/NED
    --------------------------------------------------------------------------------
    National       165\e       238\e         100          32                     535
     Democra
     tic
     Institu
     te
    Internat        50\e       326\e        77\f          84                     537
     ional
     Republi
     can
     Institu
     te
    Free           350\g     1,000\g     1,420\g       1,482       1,046       5,298
     Trade
     Union
     Institu
     te
    Discreti         382         512         280         483         808       2,465
     onary
     grants
    ================================================================================
    Subtotal         947       2,076       1,877       2,081       1,854       8,835
    ================================================================================
    Total           $947      $2,076      $5,406     $16,120     $42,674   $67,224\b
    --------------------------------------------------------------------------------
    \a Funding is reported as obligations, except for Eurasia grants, the
    International Military Education and Training (IMET) program, and NED
    grants, which constitute grant totals for the fiscal year.
    Activities funded by all organizations may extend into subsequent
    fiscal years.

    \b Figures do not add due to rounding.

    \c Only includes democracy-related Eurasia grants, such as those
    related to media, the nonprofit sector, and governmental reform.

    \d This figure is the portion of USAID's exchanges project used to
    support democracy projects.

    \e Although these funds were primarily for activities in Russia, a
    portion was used for activities in other former Soviet republics.

    \f Estimated amount from a regional grant that covered three
    republics of the former Soviet Union.

    \g For fiscal years 1990 through 1992, the Free Trade Union Institute
    figures include funds for all programs throughout the former Soviet
    Union.  Its fiscal year 1990 figure also includes funds for
    activities in the Baltic States.

    Source:  USAID, DOD, and NED.

    As indicated in table I.1, the majority of USAID democracy-related
    funding in Russia involved grants awarded under its Democratic
    Pluralism Initiative for the New Independent States.  Major
    activities funded by USAID in Russia under this initiative include
    efforts to develop and strengthen independent media, new democratic
    trade unions, reformist political parties, laws and legal
    institutions, election processes, local government, nongovernmental
    organizations, and civilian control of the military.  Some activities
    under this initiative are implemented through transfers from USAID to
    other agencies, such as to USIA for journalist training and to State
    for rule of law activities.  Other USAID democracy-related activities
    in Russia not part of the initiative include funding for the Eurasia
    Foundation, which awards small grants for media, public
    administration, and other projects, and an exchange program USAID
    uses to support all its assistance projects.

    DOD shares program management for the IMET program with the State
    Department.  The Secretary of State is responsible for the program's
    general direction, and he also recommends funding levels for
    congressional approval and allocates approved funds to each country.
    The Secretary of Defense is responsible for planning and implementing
    the program, including administration and monitoring, within
    established funding levels.

    NED provided about $8.8 million from its annual USIA grants for
    democracy-related activities in Russia from fiscal years 1990 through
    1994.  Of that amount, about $6.4 million was spent on activities
    implemented by three of NED's four core institutes--the National
    Democratic Institute, the International Republican Institute, and the
    Free Trade Union Institute--which have also received significant
    USAID funding.  This figure is somewhat overstated because the Free
    Trade Union Institute's figures for fiscal years 1990 through 1992
    include funds for all of its activities in the former Soviet Union;
    based on the data available, we could not estimate the amount of
    funds that were spent on activities in Russia.

    The remaining NED funds were for its small grants program, which from
    fiscal years 1990 through 1994 included 64 grants ranging between
    $10,000 and $100,000 in support of human rights, civic education,
    public advocacy, and media projects.  NED's fourth core institute,
    the Center for International Private Enterprise, spent about $572,000
    in Russia from fiscal years 1992 through 1994, primarily for grants
    to governmental and nongovernmental organizations that seek to
    promote privatization and promarket reform.

    Other USIA programs in Russia currently involve a wide variety of
    exchange programs and educational and cultural activities, many of
    which are intended to directly support Russia's transition to
    democracy.  USIA told us it does not maintain specific country
    funding information because its activities were funded under regional
    projects.

    INDEPENDENT MEDIA
    ========================================================== Appendix II

    The purpose of the U.S.-funded independent media program in Russia is
    to ensure the quality and self-sufficiency of nongovernment or
    independent media organizations so that the Russian people have
    access to truthful information and a forum for open expression.  U.S.
    media projects seek to raise the reporting skills of journalists,
    provide training in business and marketing to media managers, donate
    equipment and broadcast material, and facilitate sharing of news
    information.  We reviewed USAID's 3-year, $4.9 million grant to
    Internews Network; USIA's 3-year, $600,000 grant to the
    Russian-American Press Information Center (RAPIC); and a number of
    small grants awarded to Russian nongovernmental media organizations
    by NED and the Eurasia Foundation.  Overall, we found that the
    independent media program has helped expand and raise the quality of
    news reporting throughout the Russia Federation.  Nonetheless,
    independent media in Russia remains insecure, as the difficult
    economic environment limits advertising revenue while political
    intimidation against the media continues to be exercised by some
    regional and local authorities.

    The growth of independent media in Russia began in 1990 during the
    Soviet era with the official abolition of press censorship.\1 The new
    openness created a conducive environment for independent news
    reporting, as print and broadcast media organizations, still largely
    state-owned at the time, frequently aired views highly critical of
    the Communist government.\2 Currently, most media organizations
    operate unhindered by the Russian government and many are privately
    owned.  The principal threat to media independence in Russia today is
    the weak economy,\3 according to U.S.  and Russian officials and
    State Department reporting.  For many organizations, advertising
    revenues are insufficient for continued survival, forcing them into
    bankruptcy or into joining larger affiliates, thereby curtailing
    their independence and capacity to produce their own programs.  Print
    and broadcast organizations also face pressure from local political
    authorities or from organized crime.  Media organizations are
    susceptible to such pressure because of their dire financial
    situations and because many occupy city-owned premises, receive
    subsidies, or depend on government-owned enterprises for supplies.

    Media coverage of the conflict in Chechnya was remarkably open, as
    views highly critical of the government were aired by both state and
    privately-owned television stations and newspapers.  Nonetheless,
    according to the State Department's 1994 Human Rights Report, the
    Russian government limited access by journalists to some areas of the
    conflict, claiming the need to protect military secrets and ensure
    journalists' safety.

    --------------------
    \1 This information is drawn from the State Department's human rights
    reports on Russia from 1990 to 1994.

    \2 Freedom of speech was briefly curtailed during the failed
    pro-Communist coup in August 1991, and again in late 1993 during the
    standoff between President Yeltsin and the Parliament of the Russian
    Federation.

    \3 The U.S.  government supports Russia's macroeconomic policy
    reforms through USAID's Economic Restructuring Project.  This project
    was outside the scope of our review.

       INTERNEWS HELPS STRENGTHEN
       LOCAL INDEPENDENT TELEVISION
    -------------------------------------------------------- Appendix II:1

    The purpose of the Internews project is to aid in the establishment
    of an independent, self-sustaining television news network to
    facilitate alternatives to state-owned television.  The project is
    part of a regional grant that also includes activities in Armenia,
    Azerbaijan, Belarus, Georgia, Kazakhstan, and Ukraine.  Project
    components include (1) journalist and management training programs;
    (2) equipment procurement; (3) production and distribution of a
    weekly news program utilizing news reports from local stations; (4)
    production of public affairs documentaries; and (5) acquisition and
    distribution of low cost, quality programming to participating
    stations to raise viewership and advertising revenue.

    Our review of the Internews project indicates that it has made a
    significant contribution toward achieving its purpose.  Internews is
    the only organization of its kind operating in the former Soviet
    Union to assist fledgling local independent television stations.  The
    technical assistance, training, and programming that Internews
    provides have helped some local stations to become commercially
    viable, according to U.S.  officials and Russian participants.
    According to Internews officials, Internews has also helped many
    stations that have not achieved full commercial viability by
    providing enough support to forestall them from entering bankruptcy,
    signing into sponsorship arrangements, or becoming affiliates of
    larger networks.

    Of the 500 over-the-air broadcasters that currently operate in the
    former Soviet Union,\4

    200, the majority in the Russian Federation, have an active working
    relationship with Internews.  At the national level in Russia,
    privately owned broadcast companies, such as NTV and TV6, have
    emerged and challenged the dominance of the state-owned national
    broadcasting companies.  While the state-owned companies are only
    minimally supervised by the government, the privately owned broadcast
    companies nonetheless provide competition and diversity to state
    broadcasting, particularly in Moscow and other large urban centers.
    According to State Department and Internews officials, television
    stations at the regional level, some of which were once part of the
    central broadcasting system of the Soviet-era, now operate more or
    less independently.  They can choose affiliation to one of the state
    or private national networks and can use material from these networks
    or produce their own local programming.  The ability of these
    stations to produce their own local programming provides diversity to
    news and information, which traditionally has been Moscow-centric.
    According to Internews, the greatest hindrance to the development of
    independent local television is the unstable economic situation.
    Additionally, all local stations depend to some extent on local
    political authorities.\5

    The Internews project has helped strengthen local independent
    television stations through the following activities.

      Conducting over 60 training programs in journalism, station
         management, advertising, and other commercial survival skills to
         over 2,000 station personnel and journalists.  Russian
         participants told us the training sessions were very beneficial
         and were state-of-the-art.  They said the training was hands-on
         and relevant to running a modern, commercially viable television
         station.

      Providing grants of video equipment to stations that either lack or
         have outdated video technology and making available production
         equipment free of charge to support Russia's indigenous
         documentary film industry.

      Organizing a network of over 110 independent television stations
         throughout Russia and neighboring countries, which helps pool
         limited programming resources.

      Coordinating production of Local Time--a weekly half hour news
         program.  This program is distributed to any interested local
         station and is estimated to reach an audience of 100 million
         people in five countries.  As of April 1995, Internews had
         produced over 110 episodes, with over 40 local stations in
         Russia alone contributing stories from their regions.

      Producing several docudramas--What If--on topical legal and
         political issues, including commercial law, civil law, privacy
         rights, and private property rights.

      Acquiring and distributing quality Western and domestic documentary
         programming to over 170 Russian stations free of charge to
         attract viewers and advertisers--thereby increasing the economic
         viability of these stations during this transition period.

      Linking more than 20 regional independent stations in a
         computer-based electronic mail network for purposes of editorial
         coordination and information exchange.

    As the Internews project was about to end at the time of our
    fieldwork, USAID awarded a new $10 million, 3-year consortium grant
    to Internews and RAPIC to implement a media partnership program.  The
    program will place U.S.  media organizations in association with
    Russian counterparts to facilitate the transfer of U.S.  management
    expertise, training, equipment, and other resources.  However, it was
    too soon to determine the effectiveness of this project.

    --------------------
    \4 Internews officials initially estimated that 3,000 local
    television stations operate in the former Soviet Union, but many of
    these stations broadcast to no more than a few apartment buildings
    united by a cable.  They later told us that 500 over-the-air
    broadcasting stations are currently operating in the former Soviet
    Union.

    \5 According to Internews officials, broadcasting is also potentially
    susceptible to national government control due to the government's
    monopoly of transmission facilities.

       RAPIC'S SUPPORT FOR PRINT MEDIA
    -------------------------------------------------------- Appendix II:2

    The objective of the RAPIC grant, which is funded by USIA, is to
    develop a stable, profitable press in Russia.  Elements of RAPIC's
    program include (1) management training workshops, (2) journalist
    training seminars, (3) establishment of regional centers to serve as
    information clearinghouses, and (4) sponsorship of press conferences
    to provide a forum for an exchange of ideas.  Our review of this
    grant indicates that RAPIC's regional centers have helped strengthen
    the print media in the regions they serve.  The centers provide
    training to Russian journalists, access to wire services and on-line
    data bases, and serve as a meeting place for print and broadcast
    journalists and a forum for press conferences on a variety of topics,
    including politics, economics, science, and the arts.  According to
    U.S.  officials and Russian journalists we met with at RAPIC centers
    in Moscow, St.  Petersburg, and Novosibirsk, the quality of
    journalistic reporting has increased notably, especially among the
    small, regional newspapers.  These officials credited the training
    journalists received and the access to new sources of information by
    RAPIC for the improved reporting.  They told us that while the
    quality of journalism in Russia is still in need of improvement,
    newspapers are reporting news in a more objective fashion.

       SMALL GRANTS TO MEDIA
       ORGANIZATIONS
    -------------------------------------------------------- Appendix II:3

    The Eurasia Foundation and NED provided small grants, ranging from
    $10,000 to $110,000, to Russian and U.S.  nongovernmental
    organizations for institutional training and budgetary support to
    Russia's grassroots media organizations.  They also financed specific
    media projects that provide a prodemocracy angle to Russia's economic
    and political reform process.  Some of the grants funded by the
    Eurasia Foundation were made to

      Freedom Channel, for a three-part television series on the dangers
         and remedies of hyperinflation;

      Duke University, for several projects of the Commission on Radio
         and Television Policy, including production of a media policy
         guidebook and an exchange program;

      Freedom Channel, in conjunction with Persona, an independent
         Russian television production company, for the development and
         broadcast of programming related to economic reform and
         prodemocracy topics such as conflict resolution and freedom of
         speech;

      Globe Independent Press Syndicate, for the "Freedom Link Computer
         Network" that provides international sources of information to
         regional newspapers in Russia by electronic mail; and

      KSKA Anchorage, for a training program on radio and television
         production, basic journalism and communication, and business
         practices for managers and reporters from radio and television
         in the Russian Far East.

    Some of the grants funded by NED went to

      New Times, for a series of articles exposing the threat of Russian
         nationalists, fascists, and other extremist organizations and
         increasing the appeal of democratic solutions to Russia's
         problems;

      Panorama, for the research, publication, and the maintenance of a
         database on political organizations and political personalities
         throughout the former Soviet Union;

      Express Chronicle, an independent Russian-language weekly newspaper
         published in Moscow that specialized in human rights reporting;

      Globe Press Syndicate, for a syndication service that provided
         small regional newspapers with prodemocracy news and more varied
         and detailed information about political, economic, and social
         changes taking place in Russia; and

      Freedom Channel/Persona, a joint American and Russian television
         project, for the production of prodemocracy documentaries on
         such topics as conflict resolution and freedom of speech.

    ELECTORAL ASSISTANCE
    ========================================================= Appendix III

    The United States helped Russia improve its election administration
    through a USAID grant to the International Foundation for Electoral
    Systems (IFES).\1 This 3-year, $10.7 million regional grant enabled
    IFES to work in any country of the former Soviet Union, provided it
    has U.S.  and host country approval.  In Russia, the IFES project
    objectives were to help make elections free and fair and increase
    public participation.  IFES conducted a pre-election technical
    assessment in Russia in June 1993.  It subsequently served as a key
    advisor to Russia's Central Election Commission (CEC) prior to the
    December 1993 elections.  Since then, IFES has been working to help
    Russian organizations rectify many of the legal, institutional, and
    administrative shortcomings made evident during the elections.

    IFES has made several important contributions to improve Russia's
    electoral administration structure, including contributing to passage
    of Russia's Voting Rights Act in November 1994 and more recently
    legislation governing elections for the State Duma (the lower house
    of the Russian Parliament).  These laws establish a permanent and
    more independent election commission, as well as voting rights and
    Duma election procedures based in law.  This situation compares
    favorably to the situation in December 1993, when elections were held
    by presidential decree, CEC members were appointed by the President,
    and the electoral process and administrative apparatus were holdovers
    from the Communist era.  IFES has also worked with the CEC in
    developing electoral training and voter education programs to ensure
    that electoral procedures are properly carried out and to increase
    the public's knowledge and participation in elections.

    Nonetheless, despite these efforts, IFES officials believe that more
    needs to be done to ensure that future elections in Russia will be
    free and fair.  As of our review, legislation governing elections for
    the upper chamber of Parliament or for regional and local political
    bodies still had to be passed.  Moreover, newly passed laws and
    procedures still had to be applied and tested in practice.
    Countrywide local elections held in 1994 raised concerns about future
    national elections, as these elections were marked by many
    irregularities and low voter participation.

    --------------------
    \1 In late summer 1995, IFES changed its name to the International
    Foundation for Election Systems.

       NUMEROUS PROBLEMS EVIDENT
       DURING DECEMBER 1993 ELECTIONS
    ------------------------------------------------------- Appendix III:1

    IFES provided advice and equipment and coordinated international
    observers for the CEC prior to the 1993 elections but did not have
    much of an impact on how the elections were administered.  According
    to U.S.  officials and IFES reporting, the elections displayed
    several shortcomings.\2 For example, the CEC lacked independence,
    particularly from the presidential administration.  Presidential
    decrees continually undermined CEC decisions, and after the election
    it was the presidential administration, rather than the CEC, that
    controlled the ballots and first announced the election results.\3
    There were also problems stemming from ballot security, incomplete
    and inconsistent election regulations, insufficient election
    commodities and technology, and inadequate oversight of campaign
    finances.

    IFES's limited impact was due to the difficult political
    circumstances in which the elections were held and the short period
    of time available to address shortcomings in the electoral system.
    The December 1993 elections were called in September 1993, in the
    midst of a violent standoff between the executive and legislative
    branches.  No legally established, independent apparatus existed in
    Russia to administer national elections, as President Yeltsin simply
    appointed the CEC by decree, while leaving intact 88 regional,
    district, and local commissions that were holdovers from the Soviet
    era.  Such commissions remained closely tied to local political and
    administrative bodies, themselves little changed since the Soviet
    era.\4 As IFES pointed out in its technical assessment published in
    November 1993,\5 Russia's election administration system suffered
    from numerous problems on the eve of the December 1993 elections,
    including weak mechanisms to protect against ballot and electoral
    fraud and a Russian populace with no experience in multiparty voting.

    --------------------
    \2 The elections were selection of a new Parliament and approval of a
    proposed constitution.

    \3 Many observers believe that the Constitutional referendum was
    invalid due to insufficient voter turnout.  According to U.S.
    officials, complete protocols for all local polling sites were never
    made available to the CEC and may have been destroyed.

    \4 The electoral apparatus that was used to supervise the mostly one
    candidate, one party elections that were held during the Soviet era
    remained mostly intact after the collapse of communism, as no
    national elections were held in Russia after the breakup of the
    Soviet Union until December 1993, with the exception of the April
    1993 national referendum.  As a result, the election system had no
    grounding in Russia's new legal system and strong ties remained
    between officials in local electoral commissions and in other
    political or administrative bodies.

    \5 "Elections in Russia:  A Technical Assessment," International
    Foundation for Electoral Systems,
    Nov.  10, 1993

       IFES HAS CONTRIBUTED TO SOME
       IMPROVEMENTS
    ------------------------------------------------------- Appendix III:2

    Since the 1993 elections, IFES has worked to ensure the CEC's
    independence and strengthen Russia's election administrative
    processes.  Examples of IFES project activities follow:

      Providing advice and written commentaries on electoral legislation
         and other election-related initiatives.  In November 1994,
         Russia passed a Voting Rights Act, which established the CEC and
         the regional commissions as permanent, legal bodies and ensured
         political balance in the appointment of commissioners.  Since
         the passage of the act, a new CEC has been appointed.  The act
         reflected IFES's recommendations and included provisions on
         ballot security, publication of election results, regulations on
         campaign financing, and mechanisms to improve oversight of local
         commissions.  Its advice and comment were also reflected in
         recently passed legislation governing elections to the State
         Duma and to draft laws on presidential elections, public
         referenda, and local elections.

      Helping design and institute a training program for election
         officials and poll workers to ensure the application and
         enforcement of new legislation.

      Organizing conferences with CEC, State Duma members, presidential
         administration officials, and political party leaders to discuss
         the role of the CEC and the rights and responsibilities of
         political parties under the new election laws.

      Holding roundtable discussions on such topics as ballot security,
         polling procedures, grievance adjudication, and reporting
         election results.

      Assisting in the establishment of an electoral archive in order to
         create an institutional memory of elections in Russia.

      Designing and implementing a national voter education program in
         conjunction with the CEC, Ministry of Education, and the media,
         to provide voters with nonpartisan election information.

    CEC officials indicated they value their collaboration with IFES and
    hope it continues.  Although they believe they have made progress in
    improving Russia's electoral administration system, they said it
    would take the experience of holding many elections before elections
    would run smoothly.  U.S.  and IFES officials also agree that more
    work is needed to improve electoral administration, including the
    passage of additional electoral legislation and assurances that such
    legislation will be appropriately applied.  For example, despite the
    activities and accomplishments of the CEC and IFES, local elections
    held throughout Russia over the past 18 months have not fared well.
    According to IFES officials, the winners of these elections regularly
    included the heads of local administrations--who were often
    responsible for the organization of the elections.

    TRADE UNION DEVELOPMENT AND
    WORKERS' RIGHTS
    ========================================================== Appendix IV

    U.S.  financial support for the development of democratic trade
    unions and support for workers' rights in Russia was provided through
    NED and USAID grants to the Free Trade Union Institute (FTUI) of $5.3
    million for activities from 1990 through 1995 and $7.7 million for
    activities from 1992 through 1997, respectively.  The purpose of U.S.
    support of democratic trade unions is to give workers a means of
    participating in the new political and economic environment.
    According to program documents and U.S.  and Russian officials, if
    workers are not given a voice during this transitional period and
    believe that free markets and democracy only work to their
    disadvantage, then they could pose a threat to social peace and
    political and economic development.

    Trade union development assistance in Russia has helped increase the
    size and effectiveness of democratic trade unions.  FTUI provided
    important support for democratic trade unions early in their
    existence, at a time when unions were challenging the Soviet system.
    The first independent, noncommunist unions in the former Soviet Union
    arose in the mining regions of Siberia in the late 1980s.  These
    unions backed Boris Yeltsin and Democratic Russia and other reformist
    groups and played a key role in the breakup of the Soviet Union.
    FTUI supported these unions by providing them with equipment and
    training in Russia and the United States.  FTUI's support for
    democratic unions since the breakup of the Soviet Union has helped
    increase the quality of Russian unions through an extensive education
    program.  It has achieved some success in increasing the size of some
    unions, assisting in the formation of regional and national union
    confederations, and increasing the public's and government's
    knowledge of worker and union issues.  It also financially supports
    increasingly effective efforts to address workers' rights issues
    through Russia's court system.

    FTUI's efforts to help form or strengthen new democratic unions,
    nonetheless, have been hampered by the continued control the
    successors to the official Communist trade unions have over workers,
    as well as by the inexperience and isolation of democratic unions,
    the apathy of Russian citizens, and the weakness of the economy.  The
    old official unions remain the largest unions in Russia.  During the
    Soviet era, they were inseparable from the oppressive party and state
    apparatus and until the final years were the only unions allowed.
    They retain many of their assets, and so are less dependent than the
    democratic unions on collecting dues.  They also still exert control
    over many workers through their continued ability to dispense social
    welfare benefits in some locations.  The old official unions have
    been less receptive to reform; for example, they supported the
    leaders of Parliament in their efforts during the fall of 1993 to
    overthrow President Yeltsin.

       EARLY SUPPORT FOR INDEPENDENT
       TRADE UNIONS
    -------------------------------------------------------- Appendix IV:1

    The independent Soviet workers' movement began as a mass movement in
    the summer of 1989.  With NED funding from 1990 through 1992, FTUI
    established relationships with and provided financial and other
    support for the most important independent or democratic unions in
    Russia, including the Independent Miner's Union, the Seafarer's
    Union, and Sotsprof.  Initially, mine workers were the largest source
    of independent trade union activity in the Soviet Union, with
    independent miners' unions generally aligning themselves with the new
    government of the Russian Republic, led by Boris Yeltsin.  During the
    miners' strike in the spring of 1991, miners repeated demands first
    raised in 1990 for radical changes in Soviet political and economic
    life, including the resignation of top Soviet leaders, and forced the
    government to cede power from Moscow to republic-level coal
    ministries.

    Following the 1989 strikes, FTUI provided the Independent Miners'
    Union and other independent unions with equipment, training, and
    technical advice and brought independent union leaders to the United
    States for training.  Officials we met with representing some of
    Russia's first independent or democratic unions, which today comprise
    the largest democratic unions, told us they greatly appreciated and
    benefited from FTUI's support during the early days of their unions'
    existence.  At the time of our review, many of the early union
    leaders who were supported by FTUI were working in the government,
    where, according to union officials, they were attempting to get the
    government to address labor issues.

    According to State Department reporting, the growth in independent
    trade unions occurred as the Soviet Union's Supreme Soviet and later
    the Russian government passed laws that formally established the
    right to strike, improved the legal conditions for independent trade
    unions, and provided for the right of workers to form or join trade
    unions.  However, increases in the size and number of independent
    trade unions were slowed by an economy in crisis; legal harassment
    and physical violence related to union organizing activities,
    including threats and intimidation from enterprise management, who,
    according to free union officials, had the passive support of
    nonindependent union officials and local politicians; and official
    trade unions maintaining effective, day-to-day control over the
    social insurance fund, from which it dispersed benefits such as
    workers' vacations and sick pay.  Independent union leaders
    considered the continued control of the insurance fund by official
    trade unions the biggest obstacle to establishing independent unions.

       FTUI'S CONTRIBUTION TO
       INDEPENDENT TRADE UNIONS
    -------------------------------------------------------- Appendix IV:2

    Beginning in 1992, FTUI's direct support for unions, education,
    outreach and information dissemination, and legal assistance programs
    have made varying contributions to the development of new, democratic
    labor unions.  However, two of FTUI's activities--specifically the
    research activities of the Russian American Foundation for Free Trade
    Union Research and a grant to a human rights organization for a media
    project--did not make significant contributions to either trade union
    development or workers' rights.

          DIRECT SUPPORT FOR UNIONS
    ------------------------------------------------------ Appendix IV:2.1

    FTUI's NED-funded direct support for unions includes training union
    organizers, subsidizing the salaries of staff and organizers, and
    providing equipment.  After early successes with the Independent
    Miners' Union from 1990 through 1992, FTUI's assistance for union
    organizing slowed during 1993, as FTUI staffers were focused on
    starting their USAID-funded program and the Russian director of the
    organizing activities became ill.  However, during the first quarter
    of fiscal year 1994, FTUI-assisted organizers participated in 40
    registration campaigns, helping organize over 3,000 new members for
    various unions in five different regions.  Currently, these
    organizers are focused on training a cadre of Russian organizers to
    work directly with unions.  In addition to providing training for
    union organizers, FTUI directly supports unions by paying the
    salaries of Russian staffers or interns at several national trade
    union structures who have, among other things, helped organize unions
    in several regions, advised unions on draft legislation, and devised
    wage provisions for tariff agreements.  According to FTUI, the
    efforts of one intern to revise the charter of the Independent
    Miners' Union directly led to the doubling of that union.  In
    addition, FTUI has spent up to $20,000 per quarter since 1991 on
    donations of computers, fax machines, and other office equipment for
    the Independent Miners' Union and other unions.  We observed
    FTUI-donated equipment at the headquarters of a regional affiliate of
    the miners' union in Siberia and found that it was in good working
    condition; officials described it as essential to their operations.

    FTUI has directly supported the largest of the independent labor
    unions, including Sotsprof (about 300,000 members), the Confederation
    of Maritime Workers (about 86,000 workers), and a regional affiliate
    of the Independent Miners' Union of Russia (about 95,000 members).
    According to FTUI and U.S.  officials, the independent labor movement
    grew to between 3 million and 5 million workers by late 1994, out of
    a total workforce of 60 million to 75 million, the large majority of
    which belonged to unions.  About 2.2 million members of the
    independent labor unions are part of the Mining and Metallurgy Union,
    which broke away from the old official trade union in 1993; this
    union has received FTUI's help in its reform efforts since then.

    According to State Department human rights reports, growth in the
    democratic workers' movement during 1991 and 1992 resulted in several
    hundred union-like organizations forming across Russia; however, most
    were small and served more as workers' associations and did not
    appear to carry out traditional labor activities.  A FTUI official
    told us that many of the unions that FTUI helped register over the
    past few years were not true trade unions because of their small
    size.  Under Russian law, organizations can register as unions with
    membership as small as 15 people.\1 At the time of our visit, FTUI
    was beginning to explore ways of helping these small organizations
    become larger, viable unions.

    In 1994, the majority of Russian workers still belonged to the old
    official union, the successor to the Soviet-era Communist union
    center, even as the membership declined from 65 million to 50
    million.  Despite the loss of members, the old official union
    retained its historical influence with the government and enterprise
    management, as well as many of the privileges and control mechanisms
    that existed in the Soviet era.

    The decision of the Mining and Metallurgy Union to split from the old
    official union raises an issue of whether FTUI should work with this
    union to facilitate additional splits.  FTUI generally opposes
    working with the former Communist party unions because it believes
    these unions are not reformable and any relationship could undermine
    its work with proreform unions.  FTUI believes it is more effective
    to build new union structures rather than attempt to reform the old
    official unions, as these unions are led by enterprise managers and
    former Communist party functionaries.  Additionally, FTUI officials
    said that the Mining and Metallurgy Union is unique in supporting
    reform and still has a long way to go in changing the way it
    operates.  A U.S.  embassy official we spoke with was sympathetic to
    FTUI's position; however, this official believed there may be some
    opportunity for FTUI to facilitate splits within the old official
    Communist union.

    Despite FTUI's position against working with the old official union,
    since 1992 FTUI has provided the American Federation of Teachers with
    $160,000 to, among other activities, help members of the old official
    union democratize their affiliated unions or to form or join
    independent trade unions.  However, FTUI officials recognized many
    obstacles to getting more unions to break away from the official
    trade union.  In commenting on this report, USAID said that it fully
    supported FTUI's opposition to working with the official trade union.
    USAID believes that FTUI's strategy of building new union structures
    is the appropriate course of action.

    --------------------
    \1 We asked this official to provide us with data on the number and
    membership of trade unions that FTUI helped register.  The official
    was unable to do so because its Moscow office had been destroyed by
    fire.

          EDUCATION
    ------------------------------------------------------ Appendix IV:2.2

    FTUI helped independent trade unions to improve their operations
    through an extensive education program for union leaders and members.
    This program was implemented by FTUI in 1991 and 1992 with NED
    funding.  Since 1993, the education department of the
    Russian-American Foundation for Trade Union Research and Education,
    an organization FTUI created with USAID funding, has managed this
    project.  From 1992 through 1994, about 15 seminars and conferences
    were held in about 8 cities, covering issues such as collective
    bargaining, protecting workers' rights in the courts, and union
    organizing.  Union members we met praised FTUI educational seminars
    and conferences, particularly those focusing on legal issues such as
    how to favorably resolve employer-employee disputes.

          OUTREACH AND INFORMATION
          DISSEMINATION
    ------------------------------------------------------ Appendix IV:2.3

    FTUI's outreach activities--funded by USAID and NED--entail frequent
    trips by FTUI staff to various parts of Russia to meet union leaders,
    introduce them to FTUI programs, and provide informal consultations.
    According to project documents and independent union officials, these
    activities resulted in the formation of cooperative relationships
    between Russian unions and international confederations and in
    independent unions forming regional and national confederations.  For
    example, FTUI staff facilitated the formation of the Confederation of
    Maritime Workers, which includes the dock workers, seafarers, and
    port workers unions.  The confederation has a combined membership of
    about 86,000.

    FTUI also provides information to the public and government on union
    and labor issues.  For example, a labor newspaper is published by the
    Prologue Society with funding from FTUI through its NED grant that
    has reached a circulation of 60,000 and is distributed throughout
    most of the country.  Its readership includes members of the
    Parliament and the Kremlin, where, according to an FTUI official,
    articles from the newspaper are included in President Yeltsin's daily
    news clippings.  While union members we met were divided on the
    usefulness of the paper's coverage, the leader of the Independent
    Miners' Union said the newspaper plays a key role in his union's
    media campaign.

    Using USAID funds, FTUI also provides public information through the
    Russian-American Foundation for Trade Union Research and Education.
    The foundation has press correspondents in about 36 locations who
    write articles for local papers.  The foundation distributes press
    releases to two Russian news agencies and reports and press clippings
    on trade union activities to trade unions throughout the country.  It
    also uses its material on a popular radio program and a television
    program.

    With funding from USAID, FTUI supports the Glasnost Defense Fund in
    its production of a twice weekly radio program on workers' rights and
    free trade unions.  The Glasnost Defense Fund is a major human rights
    organization in Moscow that focuses on press freedom.  The Fund
    selected five large industrial cities--four in Russia and one in
    Kazakhstan--to tie into a electronic mail network.  However, the Fund
    director told us that only a minor portion of the half hour show is
    spent on worker and union issues because listeners are more
    interested in other issues of local concern.  He said the activity
    contributes more to an independent media than to union development
    because it attempts to make local broadcast stations less reliant on
    central authority for material and more responsible for their own
    operations.

          RESEARCH
    ------------------------------------------------------ Appendix IV:2.4

    The Russian-American Foundation for Trade Union Research and
    Education initially had problems managing its research component,
    though some improvements were evident by late 1994.  Foundation
    research is supposed to inform unions of the economic, social, and
    legal aspects of the workers' movement to help unions better
    represent their interests at the national and local levels.  However,
    FTUI officials told us that during 1993, the foundation's first year,
    little research was actually done because many of the researchers
    assisted the foundation's former director in trying to form a
    political party, not in doing research.  Moreover, FTUI officials
    told us that what little research had been completed had to be edited
    extensively because it was too theoretical.  Nonetheless, after the
    foundation's director was replaced and more of the research and
    writing were done on a contract basis, a number of practical
    brochures on union organizing and management were finally published.
    One brochure, entitled "Legal Bases for Negotiating and Collective
    Bargaining", went through two printings due to high demand.  FTUI
    funded these brochures and the foundation's other research activities
    from its USAID grant.

          LEGAL ASSISTANCE
    ------------------------------------------------------ Appendix IV:2.5

    Using NED and USAID funds, FTUI supported two labor law centers that
    have helped improve access to the legal system for trade unions and
    their members.  USAID's rule of law project first identified the
    potential for these centers through a USAID-funded needs assessment.
    In early 1994, FTUI began establishing the centers using $195,000
    received from NED.  In August 1994, FTUI provided about $465,000
    (USAID rule of law funds) in grants to the centers to cover their
    operational costs.  One of the centers is part of the
    Russian-American Foundation for Trade Union Research and Education in
    Moscow and the other is based in Yekaterinberg.

    The two centers, which together have 8 full-time lawyers,
    supplemented by volunteer work from law students, successfully
    litigated about half of the 50 cases they had brought to court at the
    time of our review.  Most of the cases involved violations of
    workers' rights, such as illegal firings or breach of bargaining
    agreements.

    In addition to providing pro bono litigation services, the centers
    support unions by participating in collective bargaining negotiations
    and in the foundation's educational programs and by providing unions
    with materials on legal issues.  According to the State Department,
    independent trade union officials were increasingly aggressive in
    pressing their cases in the Russian courts during 1994, with
    increasing rates of success.  Union officials told us that the legal
    aspects of union organizing and management was especially important,
    and they praised the services provided by the FTUI-supported law
    centers.

    POLITICAL PARTY DEVELOPMENT
    =========================================================== Appendix V

    U.S.-funded political party development programs in Russia had not
    significantly strengthened reformist national political parties,
    either organizationally or in terms of increased membership or
    performance in elections.  The U.S.  government has supported the
    development of political parties in Russia through NED and USAID
    grants to the National Democratic Institute (NDI) and the
    International Republican Institute (IRI).  From 1990 through 1992,
    NED provided $956,000 to NDI and IRI to help the anti-Communist
    Democratic Russia Movement establish a printing facility and
    disseminate literature.  NED's funding also enabled NDI and IRI to
    conduct civic education and grassroots organizing programs for
    Russians at the national and local levels.  In addition, NED provided
    NDI and IRI $200,000 to monitor the April 1993 national referendum
    and to send Russian party leaders to the United States for training.

    Beginning in 1992, USAID awarded NDI and IRI a series of grants that
    totaled about $17.4 million to conduct political party development
    programs in Russia through 1997.  According to USAID documents, the
    overall objective of these grants was to help reformist political
    parties strengthen their organizational structures and their role in
    elections, Parliament, and local government.  The grants were also
    intended to strengthen reformist parties indirectly by providing
    support to civic organizations and encouraging them to work with
    parties and by monitoring elections and promoting public
    participation in politics.  NDI and IRI held numerous seminars and
    training activities for party leaders in Moscow and for activists in
    over 20 cities and regions, prior to the April 1993 referendum and
    the December 1993 national elections.  Nonetheless, reformist
    political parties performed poorly in the December 1993 elections.

    In Russia's inhospitable environment for political party development,
    NDI and IRI were able to develop extensive relationships with party
    officials and provide training and assistance.  However, despite the
    institutes' work, reformist parties have been either unwilling or
    unable to form broad-based coalitions or build national organizations
    and large segments of the Russian public have not been receptive to
    their political message.

    NDI and IRI officials acknowledge that the Russian environment is
    difficult for political party development; however, they believe that
    their programs are important for furthering Russia's democratic
    development.  NDI and IRI noted that the development of a strong
    multiparty system has been made more difficult by Russia's lack of
    democratic traditions, the Communist party's 70-year hold on Russia
    (a far longer span than in Eastern Europe), and the public's general
    aversion to any organization characterized as a "party." While NDI
    and IRI officials agreed that the environment is less than conducive
    to reform, they do not see this as a reason not to pursue political
    party development.

    In commenting on this report, USAID agreed that strengthening Russian
    political parties has been difficult.  It said that consequently,
    since 1994 it has attempted to focus NDI's and IRI's programs by
    exclusively targeting them on six cities each.\1

    USAID believes that these targeted programs are having greater impact
    than earlier national efforts.

    USAID officials cautioned that expectations should not be too high
    and that its assistance would likely have only a minimal impact on
    the performance of the democratic parties during the December 1995
    parliamentary election and the June 1996 presidential election.  In
    early 1995, USAID foresaw a poor electoral showing by the reformist
    parties in Russia in the upcoming parliamentary and presidential
    elections and counseled NDI and IRI to direct more of their resources
    to working with grassroots nongovernmental organizations, thereby
    supporting the overall shift of the U.S.  democracy program to
    developing a democratic civil society.

    --------------------
    \1 In its response to our draft report, IRI said that its programs
    are targeting nine cities.

       REFORMIST PARTIES DID POORLY IN
       DECEMBER 1993 ELECTIONS
    --------------------------------------------------------- Appendix V:1

    From 1991 through 1993, NDI and IRI held multiparty seminars and
    single-party consultations throughout Russia.  These seminars
    provided information on party organization and campaign techniques,
    and participants were given training videos and reference materials
    on U.S.  parties and campaigns.  For example, from late 1991 (with
    NED funding) and through 1992 and 1993 (with AID funding), IRI
    conducted party training in 19 cities from northern and western
    Russia to eastern Siberia.  NDI provided training for the day-to-day
    organizers and managers of democratic political parties in Moscow and
    the regions.

    Despite these efforts, the December 1993 parliamentary elections,
    called just months after a violent standoff between President Yeltsin
    and Parliament, proved to be a disappointment for democratic and
    reformist parties.\2 In the State Duma, the lower house of the
    Parliament, the Liberal Democratic Party of Vladimir Zhironovsky
    (which is neither liberal nor democratic) did best with 23 percent of
    the popular vote, and Russia's Choice, the liberal reformist bloc
    headed by former prime minister Yegor Gaidar and nominally allied
    with President Yeltsin, was second with only 16 percent.  In total,
    nationalist and Communist blocs won a plurality and outpolled
    proreformist blocs by 9 percent.  Although Russia's Choice gained the
    most seats of any party\3 (66 party list and single mandate seats),
    reformist parties as a group won only 112 seats, not enough to
    control the 450-seat State Duma.

    Election observers cite a variety of reasons for the poor showing of
    the reformist parties.  These parties had been declining in cohesion
    since the breakup of the Soviet Union in August 1991, principally
    because President Yeltsin postponed calling elections for a new
    Russian Parliament, leaving intact the Parliament that had been
    elected in 1990 during the Soviet-era.  Without elections to focus
    their activities, Democratic Russia and other groups that had played
    such a large role in the collapse of communism failed to take the
    steps necessary for transitioning from opposition movements into
    political parties that could succeed at the ballot box.  Democratic
    groups also declined in popularity from 1991 through 1993, as they
    were associated with the economic hardship being experienced.
    Consequently, the successors to the Communist party of the Soviet
    Union, the Communist and Agrarian Parties of Russia, staged somewhat
    of a resurgence.  Numerous far-right, nationalist movements, such as
    the Liberal Democratic Party, also increased their organizational and
    popular strength during this difficult period of economic and social
    transition.

    According to numerous observers, the reformist parties made many
    strategic and tactical errors during the December 1993 elections,
    thereby compounding their weaknesses.  For example, although Russia's
    Choice ran with the Democratic Russia Movement, the reformists still
    ran as four separate parties or blocs, thereby splitting their votes.
    Also, notwithstanding NDI's and IRI's efforts, these parties pursued
    a Moscow-focused campaign strategy.  They failed to reach out to or
    build regional organizations and to present clear, convincing
    campaign messages.

    --------------------
    \2 This conclusion and the following discussion are derived from (1)
    our discussions with U.S.  and Russian officials and political
    activists; (2) "Russian Politics:  The Calm Before the Storm,"
    Michael McFaul, Current History, October 1994; and (3) "Background
    Memo on Russian Politics," prepared by the International Republican
    Institute, June 1994.

    \3 The largest group of candidates elected were not affiliated with
    any political party.  Independent candidates won 127 seats in the
    State Duma.

       REFORMIST PARTIES REMAIN WEAK
    --------------------------------------------------------- Appendix V:2

    Since the 1993 national elections, NDI and IRI have continued working
    with party activists throughout the country, encouraging the
    formation of coalitions and teaching organizational and campaign
    techniques.  However, the situation for reformist parties since the
    December 1993 elections has only marginally improved.  Some of
    them--such as Russia's Choice, Yabloko, and the Party of Russian
    Unity and Accord (PRES), all participants in NDI and IRI
    programs--now recognize the need and have taken some steps to build
    national organizations.  However, according to U.S.  and Russian
    officials, these reformist parties' organizational presence outside
    of Moscow remains weak, and they did not made significant gains in
    local elections that took place across Russia over the last 18
    months.  They remain Moscow-centered, highly fractionalized, and
    separated more by personal ambition than ideology.

    NDI and IRI officials acknowledged that reformist parties have
    remained weak, but they said that the institutes' training programs
    since 1993 have increased the organizational capacity of some
    parties.  An IRI official said that during 1994 and 1995 it trained
    about 3,000 party activists, many of whom returned for advanced
    training.  This official told us that IRI's approach has been to help
    those Russians begin to build democratic parties up from the grass
    roots, the necessary ingredient for a strong national organization.
    He said that Russia's reformist parties have persisted in their
    efforts to build their organizations and field candidates despite the
    unpopularity of their free market message and historical negative
    view of "party" (a harsh memory from the days of Communist party
    control).

    According to an NDI official, in 1995 NDI observed markedly different
    behavior among parties with which it was working.  NDI observed that
    the parties were targeting communication to voters based on
    demographic and geographic information from the previous elections;
    conducting research on voter attitudes through focus groups and
    polling; contacting voters through small meetings, coalitions with
    civic groups, door knocking, and leaflets; and relying on party
    activists who considered party organizing their full-time job.  NDI
    also said that although a formal democratic coalition had not emerged
    for the December 1995 elections, there had been considerable
    coordination of candidates in single-member districts.  NDI
    attributed this coalition building to its round table discussions on
    cooperation held in December 1994 and April 1995.  NDI noted that
    coalition members in one city pledged to nominate one joint candidate
    in each single-member district for the December 1995 parliamentary
    elections.

    Evidence, however, suggests that successful coalition building has
    not taken place at the national level.  For example, due to
    personality conflicts, the two large pro-reform election blocs of
    1993, Yabloko and Russia's Choice, had split into 11 different
    parties and movements by the December 1995 parliamentary elections.

       RUSSIAN AND U.S.  VIEWS ON
       POLITICAL PARTY ASSISTANCE
    --------------------------------------------------------- Appendix V:3

    According to many Russian political activists and some U.S.
    officials, political party training will ultimately affect the
    development of Russia's political parties only at the margins.  The
    Russian political activists said that viable reformist political
    parties may only emerge after more than a decade, and their
    development will depend mostly on efforts to build a democratic civil
    society.  That is, even if NDI and IRI can teach reformist parties
    how to campaign and organize effectively, they will only win
    elections when the Russian people are receptive to a reformist,
    democratic political message.  U.S.  officials said that the program
    can have an impact, although the impact will be narrow in scope due
    to the size and complexity of Russia and its politics.  According to
    these officials, IRI and NDI projects are not expected to
    significantly influence the development of national political parties
    in Russia.

    According to NDI and IRI, although their party development programs
    are likely to affect Russia only at the margins, their services are
    in high demand and they do have a visible impact on numerous
    individual party officials or candidates who use their advice.
    Despite the difficult environment for political party development,
    NDI and IRI have developed contacts with thousands of democratic
    activists throughout Russia, regularly holding seminars and
    consultations and providing information and other materials.
    Numerous Russian officials and activists in several cities who had
    participated in NDI and IRI programs praised NDI and IRI training for
    increasing their knowledge of campaign techniques, bringing reformist
    parties together, and encouraging people who had never participated
    in politics to become political activists and candidates.  They also
    said that NDI and IRI written materials were an effective means of
    communicating practical experience and that they wanted more, rather
    than less, assistance.  Among these officials and activists were
    leaders of Russia's Choice and the Social Democratic party, State
    Duma deputies from reformist parties, and an official at the Kremlin
    responsible for parliamentary affairs.

    Nonetheless, NDI and IRI have had mixed results in getting Russians
    to use their campaign techniques.  Some Russian political activists
    cited examples of how they could adapt certain techniques to their
    campaigns; for example, one candidate told us that he followed NDI's
    suggestion and developed a political map to target his campaign
    literature to people most likely to vote for him.  Senior IRI and NDI
    officials stressed that their techniques are being used in Russia.
    They cited as examples reformists who won elections using local phone
    banks and door-to-door canvassing, despite initial reluctance by
    some.

    Many Russian political activists, however, told us that the training
    was not always applicable to Russia.  For example, they said that
    some U.S.  political or campaign practices such as phone banks and
    door-to-door canvassing cannot be fully used or were unsuccessful in
    Russia because of technological and cultural factors.  An IRI
    official in Russia told us that he realized some U.S.-style campaign
    techniques would not work in Russia and that he was working to make
    IRI activities more relevant to the Russian context.

          CIVIC EDUCATION
    ------------------------------------------------------- Appendix V:3.1

    A number of participants in NDI's and IRI's political party and civic
    advocacy programs indicated that to better promote democracy in
    Russia, the United States should support more civic education
    activities.  The political party participants spoke favorably of U.S.
    support for sending Russians to the United States for training but
    said that NDI, IRI, or other U.S.  nongovernmental organizations
    could work at schools or other Russian institutions to teach Russians
    the principals of self-government, the responsibilities of
    citizenship, and the benefits of democracy in general.  Such efforts
    may convince Russians to support reformist parties' message,
    complementing ongoing NDI and IRI efforts to improve organization and
    campaign techniques of these parties.

    Further, many participants told us that NDI's and IRI's civic
    advocacy seminars provided them with information on creating
    coalitions of civic organizations and attracting people, particularly
    women, to social movements that could influence government.  However,
    they also told us that the United States could better support civic
    groups by helping them address issues of broader social concern such
    as crime, drugs in school, and women's unemployment.

    According to IRI officials, the goal of IRI's civic advocacy program
    is to help these groups see the importance of being involved in the
    political process.  However, while IRI sponsors political events such
    as candidate debates or women-in-politics seminars, it does not
    sponsor events on local civic issues such as crime or drugs in
    school.  According to IRI, an indicator of its success in the civic
    advocacy area is that many of its trainees become candidates for
    national and local offices.  For example, following a February 1994
    women-in-politics seminar, four women decided to run for the City
    Duma in their home town--three won.

    NDI officials told us that their civic advocacy programs have
    promoted coalitions among civic groups and enhanced communication
    between these groups and political parties and local governments.
    For example, in preparation for the December 1995 parliamentary
    elections, NDI conducted programs in Moscow, St.  Petersburg,
    Yekaterinberg, and Nizhnii Novgorod on ways that civic groups could
    voice their interests, such as through sponsoring candidate forums
    and debates, distributing candidate questionnaires, and providing
    volunteers and resources to campaigns.  For purposes of our review,
    however, we included these activities as political party development.
    We were told by Russian political activists that many organizations
    participating in these civic advocacy programs served as political
    bases/organizations for local politicians who were running for
    office, not as traditional civic organizations.  According to one of
    these activists, he decided to use civic organizations as a political
    base when he saw that the Russian public has an "allergy" to any
    organization characterized as a "party."\4

    According to USAID officials in Moscow, civic education in schools is
    the one area where the USAID democracy portfolio is lacking but such
    a program would be very costly or too diffuse in a country as large
    as Russia and could offend Russian nationalist sensitivities.
    Instead, USAID is funding informal civic education activities through
    nongovernmental organizations.  For example, from June 1993 through
    July 1995 the Eurasia Foundation, a USAID grantee, provided about 100
    small grants to U.S.  and Russian nongovernmental organizations in
    the areas of legal reform, conflict resolution, democratic
    institution building/civic education, and nongovernmental
    organization development.  In addition, USAID is encouraging NDI and
    IRI to place less emphasis on their party training programs and more
    on their work with civic organizations.  USAID has also started a
    $5.5 million project that provides funds for the institutional
    development of Russian nongovernmental organizations.

    NED and one of its core institutes, the Center for International
    Private Enterprise, are also funding informal, and to a lesser extent
    formal, civic education activities.  From fiscal years 1990 through
    1994, almost all of NED's discretionary grants funded nongovernmental
    organizations in the areas of human rights, civic education, public
    advocacy, and independent media.  For example, in 1994, NED sponsored
    an international conference in Russia on civic education and
    financially supported the publication of weekly articles for civics
    instructors in a leading Russian teachers' newspaper.  The Center for
    International Private Enterprise also gave a small grant that was
    used to develop a civic textbook on economic and democratic reform.

    --------------------
    \4 NDI officials told us that their civic advocacy program included
    many types of civic organizations, ranging from those that serve
    primarily as a political base for politicians to those that are
    traditional civic organizations.  However, they could not identify
    how much of their resources go toward supporting traditional civic
    organizations.

    RULE OF LAW
    ========================================================== Appendix VI

    U.S.-funded rule of law activities conducted under the Democratic
    Pluralism Initiative\1

    thus far have had a limited impact on reforming Russia's legal and
    judicial institutions and are only beginning to help build a
    grassroots constituency for legal reform.  Through grants to the
    State Department and the American Bar Association, USAID supported
    Russia's limited reintroduction of jury trials and its first steps
    toward establishing an independent judiciary.

    In September 1993, USAID awarded a $12.2 million, comprehensive rule
    of law contract to ARD/Checchi.  This contract was designed to
    continue these efforts in Russia over a 3-year period,\2 and expand
    them to strengthen the laws, legal structures, and civic
    organizations that provide the necessary operating framework for
    democratic, market-oriented societies.  Specifically, ARD/Checchi
    provided funds for an assessment of Russian legal needs and used this
    information to develop an action plan for USAID's rule of law
    project.  ARD/Checchi also designed and started to implement
    activities that would support the development of Russia's legal
    institutions, and it awarded subcontracts and subgrants to
    nongovernmental organizations for voter education prior to the
    December 1993 elections, legal assistance for trade unions, and the
    development of civic organizations.  This project's core program was
    not implemented for about a year due to problems related to the
    process of designing the program and poor contractor performance.

    --------------------
    \1 USAID's project dealing with commercial law reform, the IRIS
    project, was not included in our review.

    \2 This contract includes an option for extending the contract for 2
    more years at an additional cost of $9.945 million.

       SUPPORT FOR JURY TRIALS AND AN
       INDEPENDENT JUDICIARY
    -------------------------------------------------------- Appendix VI:1

    Two USAID funded projects contributed to incremental changes in the
    Russian criminal justice system and judicial institutions from 1992
    through 1994.  With USAID funding, the State Department and the
    American Bar Association implemented two small projects that were
    designed to help increase the independence of the judiciary and
    support Russia's reintroduction of jury trials.  The reintroduction
    of jury trials in Russia is a major reform initiative, both
    substantively and symbolically.  Russian legal reformers hoped that
    the reintroduction of jury trials would lead to a more open and fair
    adversarial courtroom procedure.  Jury trials would replace the
    Soviet-style system in which, according to State Department human
    rights reports, criminal procedures are still weighted heavily in
    favor of the prosecution, and defendants are expected to prove their
    innocence rather than the prosecutors prove their guilt.

    Beginning in May 1992, the U.S.  embassy's political office used
    USAID funds to support a Russian-sponsored jury trial initiative and
    establish contacts with Russian legal reformers.  Under two
    agreements with USAID, the State Department received $200,000 for
    rule-of-law activities in Russia.  Using these funds, the U.S.
    embassy's political office provided funds for seminars, including one
    held in 1994 at which U.S.  and Russian experts evaluated the
    preliminary results of the jury trial initiative and discussed future
    steps in U.S.-Russian cooperation.  The office also provided travel
    funds for experts who would design publicity materials associated
    with jury trials and the new Russian constitution.

    According to USAID officials, the State Department's small project
    was not designed to be long running or sustainable.  Instead, it was
    designed to act as a bridge and establish contacts for a larger USAID
    project.  USAID officials told us that the early years of State's
    project were very successful but that the activity was no longer
    needed.  USAID stopped funding this activity in March 1995.

    Beginning in mid-1992, the American Bar Association provided
    technical assistance for Russia's judicial restructuring and
    reintroduction of jury trials.  The American Bar Association operated
    under a 2-year regional grant that totaled about $3.2 million, of
    which about $950,000 was used for assistance to Russia.  Activities
    included holding three training workshops, held in Russia and
    Washington, D.C., that covered judicial restructuring, constitutional
    reform, and jury trial advocacy for criminal defense attorneys;
    providing immediate assistance in circulating and commenting on 12
    draft laws within the United States, including the draft labor code,
    draft constitution, and draft law on state support of small business;
    giving equipment to Russian legal institutions; hosting exchange
    visits between Russian and American judges; and developing a bench
    book to guide judges during jury trials.

    By the end of 1994, jury trials were operating in 9 of 89 regions in
    Russia,\3 and the government had enacted legislation intended to
    increase the independence of the judiciary.  However, although the
    former Supreme Soviet and the present Parliament, with the active
    encouragement of the President's staff, enacted many legal reforms
    through 1994, both the Russian and regional governments did not
    adequately fund their implementation.  As a result, the widespread
    reintroduction of adversarial trials with juries was not occurring as
    scheduled because many court rooms had not been renovated, many
    judges had not received necessary training, and funds were not
    available to pay for jurors' stipends.  Despite the government's
    long-term efforts to reform the judiciary, at the end of 1994 judges
    were just beginning to assert their independence from other branches
    of government.

    By September 1995, expansion of the jury trial initiative or further
    improvements in the criminal justice system appeared to have minimal
    support from the Russian government.  According to the State
    Department's human rights report, the limited progress that Russia
    had made was undercut by two decrees issued by the President of the
    Russian Federation in June 1994.  In his desire to combat increasing
    crime, President Yeltsin signed two decrees that contradicted
    constitutional rights to protection against arbitrary arrest and
    illegal search, seizure, and detention.\4 Further, according to a
    USAID official, the Russian government did not fund the expansion of
    jury trials to the planned five additional regions.  Moreover, the
    Russian government official that was pushing reforms in the criminal
    justice system left the government in late summer of 1995.

    --------------------
    \3 In the 80 regions without jury trials, criminal cases at the
    district and regional court levels were tried by a panel consisting
    of 1 judge and 2 lay assessors.  In these 80 regions, criminal
    procedures were those under the Soviet-style system.

    \4 The decrees gave law enforcement authorities power to detain
    suspects without charge and without access to a lawyer for 30 days,
    and to conduct warrantless searches and seizures.

       LIMITED SUPPORT THUS FAR FOR
       OTHER RUSSIAN LEGAL
       INSTITUTIONS
    -------------------------------------------------------- Appendix VI:2

    Although the ARD/Checchi contract funded many projects, its primary
    focus was to strengthen core Russian legal institutions.  The
    contract was to include judicial training programs; law school
    support, including adding commercial law courses and new substantive
    and procedural code reforms into the curriculum; legal information
    programs; public and professional legal education; support for the
    Constitutional Court; and training for the procuracy, which in Russia
    includes the functions of prosecutor, investigator, attorney general,
    ombudsman, and consumer affairs.  ARD/Checchi was also to have
    assumed primary responsibility for supporting the reintroduction of
    jury trials.

    Our review showed that the contractor's efforts in these core areas
    had little impact during the first year because of problems related
    to the interagency approval process for the contractor's work plan,
    the complexity and enormity of the contractor's tasks, and poor
    contractor performance.  ARD/Checchi took about a year to start
    implementing its core legal reform activities as finally approved by
    the USAID mission.  ARD/Checchi required several attempts to draft an
    action plan that was acceptable to USAID and the U.S.  embassy
    interagency working group on the rule of law.  According to a USAID
    official, the interagency working group contributed to the delay as
    it did not have a clear idea of what it expected from ARD/Checchi.

    ARD/Checchi's progress was further slowed by its organizational and
    personnel problems and unfamiliarity with USAID's contract,
    procurement, and program requirements.  According to USAID officials,
    ARD/Checchi's assessment team did an excellent job analyzing Russia's
    legal situation and identifying key institutions and officials;
    however, the contractor was ineffective in translating that
    information into deliverable assistance during the first year.

    The ARD/Checchi project was also hampered by limited support from the
    USAID mission in Moscow, which was struggling to implement the entire
    Russian assistance program and was preoccupied with the December 1993
    parliamentary elections.  According to USAID officials, the mission
    was understaffed during the initial program phase and had little
    technical expertise to manage such a complex contract.  Thus,
    ARD/Checchi, as well as other contractors, was largely left to its
    own devices to implement its projects.  USAID officials told us that
    during the first year, USAID was preoccupied with assisting the
    Russian State Duma on commercial law activities and trying to manage
    the approximately 200 contractors and grantees starting work on USAID
    programs.  As a result, USAID was unable to provide effective
    oversight and assistance to the contractors at the start of the
    projects.

    A complicating factor for the rule of law program in general, and
    ARD/Checchi in particular, was the need to forge working
    relationships with Russia's historically closed legal institutions.
    Although the U.S.  embassy's political office had established
    contacts within the presidential administration, ARD/Checchi spent
    most of its time during its first year establishing contacts with
    other legal institutions such as the Academy of Jurisprudence, the
    Supreme Commercial Court, the Procuracy Training Institute, state law
    academies, leading Russian law schools, and the Constitutional Court.
    ARD/Checchi officials told us that identifying the key administrators
    and reformers and establishing effective working relationships within
    institutions was a complex and time-consuming task.  Further,
    according to a USAID official, ARD/Checchi spent a good deal of time
    negotiating subcontracts with organizations unfamiliar with having a
    subcontractor relationship with USAID.

    The USAID mission in Moscow attributed the delay in developing an
    action plan to (1) the preoccupation of government counterparts
    during the government crisis during the fall of 1993, (2) the
    difficulty in designing programs for nonreformed Russian government
    institutions, and (3) the lack of experience of ARD/Checchi's first
    chief of party in project management.  The USAID mission believes
    that the interagency approval process did not contribute to delays in
    the project.

    We noted a significant increase in activity under ARD/Checchi's work
    plan starting in the last quarter of 1994 through the first half of
    1995.  After a change in the management of ARD/Checchi's Moscow
    office management in late 1994, ARD/Checchi began to provide training
    programs, equipment, and reference materials to Russia's core legal
    institutions.  For example, it provided

      training to Supreme Commercial Court senior faculty by faculty of
         the National Judicial College in Nevada;

      case management and computer training, reference materials, and
         equipment to the Commercial Court to meet its expanding
         caseload;

      training programs on bench trials and judicial ethics;

      curriculum expansion, information system modernization, and trial
         advocacy workshops at Russia's first rank law schools;

      training and computer hardware and software to the St.  Petersburg
         State University Law Faculty in the use of legal database and
         electronic mail to promote the flow of legal information to the
         legal community;

      educational films for judges, jurors, and the public on jury trials
         and the construction of a mock court room for the training of
         judges from general jurisdiction courts; and

      training programs for senior level trainers and teaching equipment
         upgrades at the Procuracy Training Institute.

    In August 1994, USAID awarded the American Bar Association a $2.5
    million, 2-year grant, of which $700,000 is budgeted for its project
    in Russia.  Under this grant, the bar association is assisting
    Russian lawyers' associations in strengthening their institutions,
    establishing new associations, and developing continuing legal
    education programs.

    It is too soon to evaluate the effectiveness of ARD/Checchi's core
    legal reform efforts and the latest American Bar Association project
    since they had only started in late 1994 and early 1995.  However,
    USAID, State Department, and Russian government officials told us
    that systemic changes in Russia's legal institutions will be a
    long-term process.

       ASSISTANCE TO CIVIC
       ORGANIZATIONS
    -------------------------------------------------------- Appendix VI:3

    ARD/Checchi's contract also included a component designed to
    encourage grassroots efforts to promote the rule of law.  In early
    1995, ARD/Checchi started a $2-million small grants program, which
    will provide small grants to Russian organizations and their U.S.
    partner organizations that are pursuing legal reform or providing
    legal services.  ARD/Checchi had not awarded any small grants at the
    time of our fieldwork in Russia, but in March 1995, ARD/Checchi
    awarded five grants (totaling $475,000) in the areas of environmental
    law, community legal assistance and legal education, tax law reform,
    women's rights, and freedom of information.

    Further, as part of its USAID-funded needs assessment for the rule of
    law area, ARD/Checchi identified the potential and recommended the
    funding for a legal assistance/workers' rights project.  In August
    1994, ARD/Checchi awarded a subcontract of about $465,000 to the Free
    Trade Union Institute for this project.\5

    Through this subcontract, USAID's rule of law project has financially
    supported increasingly effective efforts to address workers' rights
    issues through Russia's court system.  (See app.  IV for more
    information on this project.)

    USAID, through the Eurasia Foundation and a nongovernmental
    development project, and NED have also provided grants to human
    rights and other nongovernmental organizations.  These grants
    directly and indirectly contribute to the rule of law program by
    developing long term relationships with Russian grassroots
    organizations that are working to increase transparency and
    accountability in government and influence the reform process by
    safeguarding human rights and the right to political dissent.

    --------------------
    \5 FTUI used NED funding for limited project activities before
    signing the USAID subcontract.

    CIVIL-MILITARY RELATIONS
    ========================================================= Appendix VII

    U.S.  assistance to strengthen civilian control of the Russian
    military has included the International Military Education and
    Training (IMET) program and a USAID grant to the Atlantic Council.
    Neither program has had much impact, primarily because they have not
    affected significant numbers of Russian decisionmakers due to a lack
    of interest by the Russian government.

    U.S.  embassy officials told us that the Russian military, rather
    than civilians, has retained firm control of its sphere of
    operations.  One official said that the Russian Parliament has
    limited detailed knowledge of the military budget and has to rely on
    the intelligence services to learn information of military
    activities.  Similarly, uniformed officials are predominant at the
    Russian Ministry of Defense.  The U.S.  embassy officials said that
    political circumstances in Russia make the implementation of a U.S.
    civil-military program in Russia very difficult.  Some quarters of
    the government are generally reluctant to accept Western assistance
    and suspect that civil-military assistance is designed to further
    weaken Russia militarily.  Additionally, the need for deep cuts in
    defense spending renders the process of greater civilian control in
    the Ministry of Defense more complex, as significant hiring of
    civilian employees is unlikely, especially in light of large numbers
    of unemployed military personnel.

       IMET PROGRAM
    ------------------------------------------------------- Appendix VII:1

    In June 1992, the Department of Defense (DOD) began implementing an
    IMET program in Russia, a program which is jointly managed by the
    State Department and DOD.\1 The IMET program is a world wide grant
    training program that, among other objectives, seeks to promote
    military rapport between the United States and foreign countries and
    promote better understanding of the United States, including its
    people, political system, and institutions.  In Russia, the program
    aims to foster a stable, cooperative relationship between U.S.  and
    Russian armed forces and provide expertise to guide the military's
    transition under a democratically elected government.  Under the
    Expanded-IMET component, the program also seeks to promote civilian
    control of the military and democratic orientation of the military
    along Western lines.\2

    Funding for the IMET program in Russia has grown from $153,000 in
    fiscal year 1992 to $471,000 in fiscal year 1994.  According to a DOD
    official, about one-third of the total for these years was spent on
    Expanded IMET courses.  From 1992 through 1994, according to
    information provided by the U.S.  embassy, the IMET program for
    Russia brought 18 mid- and senior-level military officers from the
    Ministry of Defense and 19 civilian officials, primarily from the
    Ministry of Foreign Affairs, to the United States for education,
    training, and observation tours.\3 The military officers generally
    attended mid- and senior-level military colleges or participated in
    observation tours, and all but one civilian official attended defense
    resource management courses in Monterey, California.

    According to U.S.  embassy and DOD officials, Russia's Ministry of
    Defense has not fully used the IMET program since 1993, sending few
    military officers to the United States for training in 1994.  The
    ministry generally will not allow any Russian officer to study at a
    given location alone, which limits Russia's participation at U.S.
    military colleges.  According to a DOD official, the Secretary of
    Defense recently encouraged the Russian Minister of Defense to
    increase Russia's military participation in the IMET program, but the
    Russian government has not responded to this encouragement.

    According to an IMET program document, the Ministry of Foreign
    Affairs has shown much greater support for the IMET program.
    However, according to a U.S.  embassy official who manages the
    program, the ministry thus far appears to have nominated civilian
    candidates who are chiefly mid-level bureaucrats and not likely to
    advance to positions of authority.

    An embassy official told us that it is too early to determine whether
    the IMET program is successful and that the embassy views the program
    as a long-term effort that may not yield results for 10 to 20 years.
    In commenting on this report, the State Department stated that there
    has not been enough time to track the careers of civilians who
    participated in the expanded IMET program, and DOD also emphasized
    that the IMET program is a long-term effort.  DOD said that the IMET
    program has not had sufficient time to make an impact.  We agree with
    DOD that the IMET program is a long-term effort; however, we assessed
    the progress that had been made in identifying and selecting
    promising officers who are likely to rise to positions of prominence.
    We found that the major factor inhibiting this process was the
    unwillingness of the Russian government to fully use the IMET
    program.

    --------------------
    \1 The Secretary of State is responsible for the program's general
    direction, recommends funding levels for congressional approval, and
    allocates approved funds to each country.  The Secretary of Defense
    is responsible for planning and implementing the program, including
    administration and monitoring, within established funding levels.

    \2 The IMET program provides instruction and training in military
    skills and U.S.  military doctrine to foreign military and related
    civilian personnel on a grant basis.  The Expanded-IMET component
    offers courses in such areas as defense resource management, military
    justice, civil-military cooperation, and human rights.

    \3 According to DOD, the numbers of IMET participants provided by the
    Defense Security Assistance Agency and published in the annual
    Congressional Presentation Document are gathered indirectly and may
    vary somewhat from the numbers provided by the embassy.  DOD said
    that the embassy provides the more accurate participant count.

       ATLANTIC COUNCIL PROGRAM
       LIMITED
    ------------------------------------------------------- Appendix VII:2

    The Atlantic Council received a 2-year $626,500 grant from USAID in
    1992 for a civil-military relations project.\4 The project's goal was
    to encourage the integration of the Russian military establishment
    into society, opening it up to greater supervision from, and closer
    working relationships with, democratically elected civilian
    leadership of the executive and legislative branches and with the
    press and public at large.  The council intended to conduct a series
    of training seminars in both Russia and the United States.  According
    to a USAID-funded evaluation, the program suffered delays from the
    outset and failed to fulfill its planned activities due to poor
    planning, lack of in-country staff to process potential participants,
    tight timelines, and an underestimation of Russian political
    sensitivities.

    During the first year of the grant, the council conducted a 2-day
    seminar in Russia on the U.S.  defense budget process.  In the second
    year, the council sponsored or cosponsored four seminars in Russia,
    including (1) a journalism seminar on covering defense issues in a
    democratic society, which was cosponsored with the Russian-American
    Press and Information Center and attended by journalists from Russia,
    Ukraine, and Belarus and (2) seminars on national security
    decision-making, civil-military relations, and the Partnership for
    Peace program for Russian government officials.

    (See figure in printed edition.)Appendix VIII

    --------------------
    \4 This project covered Russia and the Ukraine.

    COMMENTS FROM THE DEPARTMENT OF
    STATE
    ========================================================= Appendix VII

    (See figure in printed edition.)

    (See figure in printed edition.)Appendix IX
    COMMENTS FROM THE DEFENSE SECURITY
    ASSISTANCE AGENCY
    ========================================================= Appendix VII

    (See figure in printed edition.)

    (See figure in printed edition.)Appendix X
    COMMENTS FROM THE U.S.  AGENCY FOR
    INTERNATIONAL DEVELOPMENT
    ========================================================= Appendix VII

    The following are GAO's comments on USAID's letter dated December 7,
    1995.

    GAO'S COMMENT

    1.  The agency's suggested technical corrections have been
    incorporated in the report where appropriate.

    (See figure in printed edition.)Appendix XI
    COMMENTS FROM THE UNITED STATES
    INFORMATION AGENCY
    ========================================================= Appendix VII

    (See figure in printed edition.)

    The following are GAO's comments on USIA's letter dated December 6,
    1995.

    GAO'S COMMENTS

    1.  The agency had not provided these figures as of February 14,
    1996.

    2.  As stated in our draft report, we did not review the
    effectiveness of democracy-related USIA and USAID exchange and
    visitor programs due to the difficult and time-consuming task of
    locating individual program participants.

    3.  Our report presents the cost and results of this project.

    4.  USIA's Bureau of Broadcasting was outside the scope of our
    review.

    (See figure in printed edition.)Appendix XII
    COMMENTS FROM THE NATIONAL
    ENDOWMENT FOR DEMOCRACY
    ========================================================= Appendix VII

    (See figure in printed edition.)

    The following are GAO's comments on NED's letter dated November 28,
    1995.

    GAO'S COMMENTS

    1.  The primary focus of the center's projects was to promote
    privatization and market reform, two areas outside the scope of our
    review.

    2.  Technical corrections and wording changes offered by NED were
    incorporated in the report text where appropriate.

    (See figure in printed edition.)Appendix XIII
    COMMENTS FROM THE INTERNATIONAL
    REPUBLICAN INSTITUTE
    ========================================================= Appendix VII

    (See figure in printed edition.)

    (See figure in printed edition.)

    (See figure in printed edition.)

    The following are GAO's comments on IRI's letter dated November 22,
    1995.

    GAO'S COMMENTS

    1.  We visited seven cities in Russia, including two of IRI's target
    cities
    (St.  Petersburg and Novosibirsk).  In Moscow and other cities, we
    met with political activists who had attended programs in other IRI
    target cities as well.

    2.  IRI examples have been incorporated into the report.  However,
    while IRI's efforts may have helped some candidates win in local
    elections, its project thus far has been unsuccessful at its primary
    objective of developing reformist political parties.  In contesting
    the 1995 parliamentary elections, the reformist parties again failed
    to form either a national coalition or national party structures.

    3.  IRI examples have been incorporated into the report.  At best,
    however, IRI has had mixed results in getting Russians to use its
    campaign techniques.

    4.  We have deleted from our report the discussion on IRI's efforts
    to make its program sustainable.

    5.  During our discussion with CEC officials, including the Vice
    Chairman, they did not mention IRI's observer report as making a
    significant contribution to improving Russia's election law.

    6.  We have modified the report to reflect IRI's interpretation that
    its program will have an impact at the margins.

    (See figure in printed edition.)Appendix XIV
    COMMENTS FROM THE NATIONAL
    DEMOCRATIC INSTITUTE FOR
    INTERNATIONAL AFFAIRS
    ========================================================= Appendix VII

    (See figure in printed edition.)

    (See figure in printed edition.)

    (See figure in printed edition.)

    (See figure in printed edition.)

    (See figure in printed edition.)

    (See figure in printed edition.)

    (See figure in printed edition.)

    (See figure in printed edition.)

    (See figure in printed edition.)

    The following are GAO's comments on NDI's letter dated November 27,
    1995.

    GAO'S COMMENTS

    1.  The report has been modified based on updated USAID financial
    information.

    2.  The draft report stated that the $200,000 was for election
    monitoring and sending Russian party leaders to the United States for
    training.

    3.  NDI examples have been incorporated into the report.  At best,
    however, NDI has had mixed results in getting Russians to use its
    campaign techniques.

    4.  Despite these coordination efforts, the evidence obtained during
    our review suggests that successful coalition building had not taken
    place at the national level.  For example, due to personality
    conflicts, two of the largest proreform political parties, Yabloko
    and Russia's Choice, had split into 11 different parties and
    movements by the December 1995 parliamentary elections.

    5.  The result of this training, when measured against performance of
    democratic reformist parties during the 1995 parliamentary elections,
    must be considered a major disappointment.  Reformist political
    parties neither formed a national coalition or a national party
    structure.  In addition, reformist parties apparently did not benefit
    from NDI's training.  For example, the Democratic Choice of
    Russia--the leading proreform party in the 1993 election and an NDI
    client--failed to reach the 5 percent threshold for gaining party
    representation in the Parliament and the 1993 election in the State
    Duma.

    6.  Many organizations participating in the civic advocacy programs
    actually serve as a political base/organization for local politicians
    who are running for office, rather than as traditional civic
    organizations.  Thus, we continue to view these programs as political
    party development.

    7.  While interest in political party training continues to exist,
    the effectiveness of such training in the current political
    environment is questionable.  Many Russian political activists took
    the longer term view that civic education would make a more important
    contribution to promoting democracy in Russia.

    8.  Although the outcome of elections should not be held as the sole
    indicator, it is one indicator to assess the impact of political
    party development assistance.  Unless parties are successful at
    increasing political representation, they are unlikely to attract the
    necessary financial and public support to grow and prosper.

    9.  In measuring party development, we believe it is appropriate to
    emphasize party performance over individual candidate performance.
    Moreover, in the December 1995 parliamentary elections, the
    performance of reformist parties at both the party and individual
    level was again disappointing.

    10.  We have modified the report to reflect NDI's interpretation that
    its program will have an impact "on the margins."

    11.  We have deleted from our report the discussion on NDI's efforts
    to make its program sustainable.

    MAJOR CONTRIBUTORS TO THIS REPORT
    ========================================================== Appendix XV

    NATIONAL SECURITY AND
    INTERNATIONAL AFFAIRS DIVISION,
    WASHINGTON, D.C.

    Louis H.  Zanardi
    Judith A.  McCloskey
    Patrick A.  Dickriede
    Todd M.  Appel
    Jose M.  Pena, III
    *** End of document. ***