Center for International Policy

July 16, 2006

'Democracy builders' drawing ire
Some U.S. groups are blamed for weakening foreign regimes

Billy House
Republic Washington Bureau
The Arizona Republic

WASHINGTON - Few Americans have ever heard of them.

Yet these private non-profit groups receive millions of U.S. taxpayer dollars each year to promote "democratic" values in some of the most repressive places in the world.

They help to monitor elections for fairness, educate citizens about their rights, build trade unions and fledgling political parties, train new judges and underwrite free media. Supporters praise the groups for advancing freedom and promoting American ideals abroad.

But a growing number of foreign governments complain that these democracy-building groups maneuver behind the scenes to help destabilize and topple their governments, including in countries where the official U.S. policy has been to work through diplomatic channels with those same governments.

Elected leaders in Venezuela, Belarus, Haiti, Cuba, Kazakhstan and Russia are among those who say the groups and their affiliates try to incite and finance riots and work stoppages in their countries, and even encourage coups d'etat.

International watchdog groups and think tanks, such as the left-leaning Center for International Policy and the libertarian Cato Institute, also ask whether the groups' activities in other countries sometimes go too far.

Most of the funding for the flagship of these private organizations, the National Endowment for Democracy, comes from the federal government. But the endowment is just one patch in a crazy quilt of governmental and non-governmental democracy-building programs and organizations. Even international-relations experts find it difficult to keep track of all the players and money.

The endowment, as well as other groups, such as the International Republican Institute and the National Democratic Institute for International Affairs, also receives donations from large corporations. And they maintain close ties to powerful politicians, including Sen. John McCain, R-Ariz.

More checks, balances

"Building democracy is not really what these groups are about. They are about regime change, and bringing about regimes we (the United States) like, and that goes entirely beyond all diplomatic bounds," said Wayne Smith, chief U.S. diplomat in Cuba from 1979 to 1982 and now an expert on Latin America at the Center for International Policy and Johns Hopkins University.

Smith and others argue that Congress and federal auditors should provide better oversight over how the groups operate. Too often, Smith and the critics say, the groups risk hindering what the United States might be trying to accomplish through regular foreign-policy channels.

McCain, who is chairman of the International Republican Institute, does not dispute that more coordination is needed in all facets of U.S. democratization efforts abroad, including the role played by non-governmental groups. Legislation he introduced last year to strengthen and expand the State Department's democratization programs would require a comprehensive study of the effectiveness of all U.S. democracy assistance.

But McCain and others, including the politicians and foreign-policy luminaries who serve on the boards of some of the organizations, defend the privately incorporated, not-for-profit organizations. They say the groups have been important players for more than 25 years in efforts to advance human rights and democracy abroad.

Indeed, McCain said in a written response for this article that the organizations "help level the playing field in countries where authoritarians have repressed all but the ruling elite."

Follow the money . . .

U.S. democracy today is promoted via an array of government agencies, multinational bodies, private organizations and overlapping budgets.

Thomas O. Melia, deputy executive director of Freedom House, one of the oldest democracy-promoting organizations in the United States, estimates that, all together, the federal government spends as much as $2 billion a year on democracy promotion abroad. The decentralized nature of the efforts makes it difficult to determine a precise figure, he said.

The money goes to activities ranging from programs run by the Department of State and the United States Agency for International Development, to international broadcasting such as the Voice of America, Radio Free Europe and Radio Marti, to exchanges and scholarship programs between the United States and foreign universities.

Roughly 10 percent, or $200 million, is filtered through private democracy-building groups, Melia said.

This private, non-governmental component emerged from the embarrassing post-Watergate revelations during the 1970s that the United States secretly was channeling political aid through the Central Intelligence Agency to political parties, student associations and academic institutions in several countries.

After Congress decided to move support for democracy abroad out of the arena of covert intelligence, the Reagan administration devised an idea patterned on a German program to provide the same type of aid, but with greater use of private organizations. The idea was that private groups would be able to operate more freely and swiftly without government red tape.

At the center of much of this activity is the National Endowment for Democracy, set up in 1983 as a bipartisan umbrella organization through which federal grant money would flow to a myriad of other organizations.

Congress created the Washington, D.C.-based endowment as a private non-profit group, and most of its funding is part of the U.S. Department of State budget. For fiscal year 2006, the budgeted total is nearly $75 million. The endowment also receives other government funds approved by Congress for specific programs, such as democracy building tagged for Iraq.

About half of the endowment's annual federal funding is spread to four core affiliates: the International Republican Institute, the National Democratic Institute for International Affairs, the Center for International Private Enterprise and the American Center for International Labor Solidarity. Congress selected these organizations to reflect a balance between the political left and right, and between business interests and labor.

These four groups then distribute their endowment money in the form of grants to political groups, labor unions, dissident movements, student groups, writers and media outlets in more than 60 countries. They are required under their own bylaws to work with groups across the political spectrum in democracies.

With its remaining federal money, the National Endowment for Democracy provides its own similar discretionary grants. The endowment and its affiliates also receive smaller amounts of private and corporate donations.

The boards of directors of the National Endowment for Democracy and its core affiliates are packed with well-connected, big-name politicians and foreign-policy experts.

For instance, GOP lobbyist and former congressman Vin Weber of Minnesota is chair of the endowment, while Senate Majority Leader Bill Frist, R-Tenn.; former Army Gen. Wesley Clark; and, until recently, Arizona GOP Sen. Jon Kyl, are among board members. Madeleine Albright, secretary of State under President Clinton, is chair of the National Democratic Institute. McCain is joined on the GOP-dominated Republican Institute board by Lawrence Eagleburger and Brent Scowcroft, secretary of State and national security adviser, respectively, under President George H.W. Bush.

Success, then backlash

Using taxpayer dollars, the National Endowment for Democracy and its partners have claimed roles in some of the biggest breakthroughs toward democratic freedoms overseas since the 1980s.

For instance, the endowment boasts that it began giving assistance, through an affiliate, to the independent Solidarity trade union in Poland as early as 1984, along with other Polish activists. By 1989, Communist party candidates were defeated by Solidarity in parliamentary elections.

More recently, the National Endowment, the International Republican Institute and their affiliates assisted some of the civic and political groups behind the so-called Rose Revolution in Georgia, the Orange Revolution in Ukraine, and the Tulip Revolution in Kyrgyzstan in 2003-2005. Each was marked by street demonstrations after disputed elections, leading to the resignations or defeats in new elections of leaders seen by opponents as authoritarian.

But some foreign government leaders, including elected officials, have started to push back, denouncing such activity as outside interference by the United States.

This counteroffensive has included recent crackdowns on U.S. and other Western democracy organizations, as a number of governments tighten the legal constraints against democracy assistance.

In January, Russian President Vladimir Putin signed a controversial new law imposing heightened controls on local and foreign non-governmental organizations, and there has been harassment, prosecution and deportation of democratic activists in Russia.

Governments in Kazakhstan, Tajikistan, Uzbekistan and Belarus have followed Russia's lead in cracking down on foreign democracy assistance. Actions include taxing of such grant assistance in Belarus and the requirement in Uzbekistan that such funds be channeled through designated accounts where the bank can refuse to release the money.

Outside the former Soviet states, China has tightened controls against foreign non-governmental organizations. Some countries, such as Egypt, require that groups must receive government permission before accepting a foreign grant.

Senate Foreign Relations Committee Chairman Richard Lugar, R-Ind., said during a hearing last month that the crackdowns were brought to his attention last October when he met with Maria Corina Machado, the founder of Sumate, an independent democratic civil society group in Venezuela that monitors electoral activities.

"She has been charged with treason simply for receiving a grant from our own NED (National Endowment for Democracy)," Lugar said.

In imposing such restrictions, Lugar said, authorities in Russia, Venezuela and other nations have been able to persuade many of their citizens that the work of these democracy organizations "is a form of American interventionism and that opposition to the groups is a reaffirmation of sovereignty."

President Bush also has contributed to a general unease about the programs, because his use of the term "democracy promotion" - especially after the U.S. invasion of Iraq - is associated in some parts of the world with the replacement of governments by military force.

"Throughout the Middle East, as in Cuba and Venezuela, democracy-building is getting a bad name since it is so closely associated with U.S. 'regime change' efforts by undemocratic means," said Tom Barry, policy director for the International Relations Center, a foreign-policy think tank in Silver City, N.M.

Going too far?

Justin Logan, foreign-policy analyst at Cato, said pro-democracy groups are subjects of "a lot of conspiracy theories. The problem is, there's a kernel of truth out there."

Venezuela is one country where their activities have been questioned.

The National Endowment for Democracy and the International Republican Institute have come under scrutiny for connections to groups that oppose Venezuelan President Hugo Chavez, a populist who was democratically elected, but whose leftist policies make him no friend of the U.S.

According to the New York Times, the endowment sent as much as $877,000 to Venezuelan groups in the months before an attempted April 2002 military coup against Chavez's government, including the labor group whose protests sparked the uprising.

Meanwhile, the International Republican Institute, which saw its grants geared to Venezuela swell in 2000 and 2001, was cultivating its own ties to some of these anti-Chavez groups. That included bringing a group of his opponents to Washington a month before the uprising in a trip that included meetings with members of Congress and the Bush administration.

Officials of both organizations deny any involvement or pre-knowledge of the attempted coup. They describe their funding of Venezuelan groups as promoting more grass-roots participation in the democratic process, youth participation and political-party development.

But Larry Birns, director of the liberal Council on Hemispheric Affairs, says suspicions about the Republican Institute's complicity in the coup, especially, were compounded when its then-president, George Folsom, issued a news release rejoicing in the removal of Chavez - only to see the coup reversed hours later.

Folsom's jubilation came even though it would have represented removal of a democratically elected leader by unconstitutional means. The institute later retracted the statement, and National Endowment for Democracy President Carl Gershman issued him a letter of rebuke.

A McCain Senate office spokeswoman said that it was wrong for the institute to have praised what occurred in Venezuela at that time and that corrective actions were taken to ensure against anything similar happening again.

Chavez has seized on such events to charge that National Endowment for Democracy-financed groups conspired with the Bush administration to oust him.

"It's perfectly legitimate for the United States to take the position that we, of course, are a democratic country and favor democracy, and there are things we can correctly do to encourage societies in that direction," said Smith, the former diplomat to Cuba. "But so often, unfortunately, these efforts do get to be something bordering on efforts to push regime change.

"I think it's counterproductive. It's exactly the wrong way to go about spreading democracy."

But there has been little movement within Congress to rein in their activities. And, as President Bush has said, democracy building is "a growth industry."