NED and the Empire's New Clothes
by James Ciment and Immanuel Ness
International Endowment for Democracy,
Since the first Reagan administration,
the U.S. taxpayer has been enlisted in the export of "American-style
democracy" through a hybrid organization called the National
Endowment for Democracy (NED). The component parts of the NED-the
two major political parties, big business, and big labor-represent
the acceptable boundaries of American politics. The NED, in effect,
represents the American system. And by giving it its missionary
role, the U.S. government could not be sending a clearer message
abroad: that this is how politics must be.
The modern promotion of U.S.-style democracy
abroad stems from an earlier form of American ethnocentrism, one
which posited that the rest of the world, not being like us, was
dangerous, probably evil. Foreign policy consisted of promoting
our sons of bitches on the grounds that theirs posed a threat
to world peace.
However, according to NED president, Carl
Gershman, the NED has moved beyond the old sterile argument that
the U.S. should favor authoritarian regimes over totalitarian
ones, "a debate which was based upon the assumption that
the best we could hope for was the lesser evil."
Gershman-who has headed the program virtually
since its inception-knows whereof he speaks. Before taking up
his NED post, he served as aide to Reagan's U.N. Ambassador Jeane
Kirkpatrick, whose sole claim to geopolitical fame is the now
wholly discredited theory that America should support authoritarian
regimes over totalitarian ones because the former were more prone
to reform. Before that, he was chairman of Social Democrats-USA
and an intellectual gofer for AFL-CIO president Lane Kirkland.
Indeed, consistent with an SD-USA line,
so-called totalitarian states were targeted by the NED. For example,
groups connected to the reactionary Polish Catholic Church were
offered grants during the 1980s. But other money went to countries
that might strike the uninitiated as not especially in need of
American-sponsored tutelage in democracy-that is, "dictatorships"
like Costa Rica and France, where right-wing opponents of Nobel
Peace Prize winner Oscar Arias and Socialist President François
Mitterand received grants. In effect, NED's program could have
been written by Kirkland and some of his neoconservative allies.
Overall, in its first ten years of operations,
the NED-whose funding comes from Congress but whose grants are
dispersed largely by four private foundations (the Republican
Party-controlled International Republican Institute, the Democratic
Party's National Democratic Institute, the quasi-independent and
politically correctly named American Center for International
Labor Solidarity [formerly the Free Trade Union Institute], and
the U.S. Chamber of Commerce-headed Center for International Private
Enterprise)-spent roughly $200 million dollars on some 1,500 grants.
Although backing pro-American political forces abroad has always
been the main weave of the program, the promotion of American-style
business unionism represents a critical accessory.
A History of Cooperation
Of course, the history of American union-government
overseas cooperation goes back decades. Long before the NED was
a glint in the Reagan administration's eye, conservative AFL-CIO
presidents George Meany, and later Kirkland, actively collaborated
with the Central Intelligence Agency in identifying militant labor
leaders and infiltrating popular, mass-based labor movements (see
the articles by Anthony Carew and Douglas Valentine in this issue).
Moreover, the AFL-CIO participated in the formation of rump, or
"kept," labor organizations and sought to promote new
leaders, usually through patronage, who opposed any fundamental
change and favored the U.S. model of trade unionism that sees
labor as just another interest group-not the basis of class struggle.
Then, in its first decade, the NED worked
with the AFL-CIO to undermine militant labor movements, while
fostering "democratic and independent trade unions,"
a thinly veiled euphemism for American-inspired labor organizations
devoid of worker participation. Before the collapse of the Soviet
Union, Washington recognized that working-class organizations
were bound to form throughout the world. Thus, the NED/AFL-CIO's
major goal was undermining any movement that displayed pro-Soviet
tendencies. The two encouraged the formation of relatively weak
and feeble trade unions that opposed state control over national
economies, such as the Force Ouvriere in France, the Federation
of Korean Trade Unions in South Korea, and the Free China Labor
League in the People's Republic of China. The NED used the AFL-CIO
as an extension of American Cold War policy to promote toothless
labor organizations-usually in the form of labor federations with
leadership over national labor movements-as a foil for genuine
labor movements. In Poland, however, the grantee of choice was
Solidarity, which did, in effect, undermine the regime.
The NED's operations were carried out
through the AFL-CIO's foreign labor organizations, the American
Institute for Free Labor Development (AIFLD); the Asian-American
Free Labor Institute (AAFLI), and the African-American Labor Center
(AALC). Operations were concentrated in regions where significant
labor movements-such as those in South Africa and South Korea-posed
a special threat to the interests of transnational corporations
and U.S. foreign policy.
Since the fall of communist and authoritarian
regimes around the world in the early 1990s, the program has promoted
"the globalization of democracy" because, a recent NED
annual report has stated, "it works," though neither
"work" nor "democracy" seem to have much to
do with the program; indeed, it is unclear that there is a single
example of political reform, democratic or otherwise, anywhere
in the world that can be attributed to an NED program.
Rather, the NED serves two functions.
First, it exists as a junket-sponsoring cash cow for "conventional-wisdom"-spouting
political experts, right-wing ideologues, rabidly anticommunist
and frequently corrupt trade unionists, and businesspeople hot
on the trail of emerging market opportunities. Much of the money
lavished by the program is spent sponsoring conferences in exotic
lands, where the participants get no closer to the democracy-deprived
persons they claim to serve than the maids at the four-star hotels
where they hole up.
Harper's magazine editor David Samuels,
who reported on a 1995 NED-sponsored conference at the elegant
Esplanade Hotel in Zagreb, Croatia, summed up the absurdity of
the event-the theme of which was "Strengthening Democracy."
"All the [Eastern European] participants now understand...the
Americans have come to talk not to them but to each other,"
Samuels noted. "For the next two days, [the Americans] will
eat all they can at the breakfast buffet...order coffee from room
service, and watch CNN and MTV, all the while feeling guilty about
the great and unnecessary expenses they have incurred in order
to come here."
Waste and Corruption
But extravagant waste is just part of
the problem. Over the years, the NED has also faced numerous corruption
charges of its own. Irving Brown, a Gershman mentor, was accused
of funneling NED funds to right-wing groups in France, such as
the Union Nationale Inter-universitaire, in the mid-1980s for
overt political activities. In February, an appeals court overturned
a suit the right-wing Cuban American National Foundation (CANF)
had brought against the former chief of the U.S. Interests Section
in Havana, Wayne Smith. Smith had charged-truthfully, the court's
decision implied-that the NED gave nearly $400,000 to CANF between
1984 and 1988 at the same time the foundation was setting up a
political action committee that donated an equal amount to the
campaigns of pro-CANF congressmen in Washington. Federal law prohibits
the use of government funds for campaign purposes.
In a 1993 report, Barbara Conry of the
libertarian Cato Institute-an outspoken foe of U.S. foreign aid-noted
that General Accounting Office audits "have repeatedly revealed
financial mismanagement at the program," including personal
credit card payments made from NED accounts and grantees filing
rent receipts and staff payments for non-existent offices.
Yet the NED has survived numerous attempts
to kill it. Most recently, after Clinton proposed upping its budget
by half in 1994, freshmen Republicans in the House voted to cut
off all funding, as an anti-foreign aid gesture. But the effort
was reversed by the Senate after appearances from Andrei Sakharov's
widow, Elena Bonner, and no less than three ex-presidents: Ford,
Carter, and Bush. Still, some of the organization's $31 million
annual budget does get through to recipients. And when it does,
the agenda is an insidious one.
Again, labor unions offer a useful example.
In South Africa, the NED and AFL-CIO sought to undermine the growth
of the Congress of South African Trade Unions, a Black federation
that had close ties to the South African Communist Party. On the
other side of the globe, in South Korea, the NED supported and
funded the development of the FKTU, the government-dominated labor
federation, in opposition to the more militant KCTU independent
labor federation, which has advocated greater workers rights and
democracy and waged damaging strikes against leading corporations,
even after Washington went on record praising the establishment
of the KCTU as a sign of growing civic pluralism in South Korea.
Conversely, the NED has refused to support
the Federation of Independent Trade Unions of Russia-despite the
fact that it represents the vast majority of Russian workers and
has displayed a remarkable degree of independence and militancy
since the fall of the Soviet Union-because it was originally a
creation of the Soviet government. Thus, the NED continues to
evince its roots in Kirkpatrick-inspired political theory, supporting
the Korean federation organized by a formerly authoritarian regime
but refusing to work with a Russian one, because it was set up
by a communist government.
None of this surprises veteran NED watchers,
as they note how the program was founded both to replace and augment
traditional covert funding to pro-American political groups around
the world. Hoping to diminish the impact of the 1970's congressional
exposés of CIA covert action, the NED was intended as a
respectable, overt means to the same ends. As Allen Weinstein,
founding and then acting president of the NED told the Washington
Post in 1991, "a lot of what we do today was done covertly
25 years ago by the CIA."
Weinstein was not being entirely fair;
the NED-though its funding remains a fraction of that still devoted
to covert action by the CIA-offers a more subtle, sophisticated,
and politically acceptable method for furthering U.S. foreign
policy interests. Where the Cold War-era CIA once crushed genuinely
democratic movements and organizations in countries allied with
the U.S., the NED attempts to coopt them-by making them dependent
on U.S. funding or by recruiting their leaders-or exclude them
altogether from a political consensus shaped in America's own
In his pathbreaking book on America's
newly revised role as civics teacher to the world, William Robinson
points out the connection between the promotion of globalized
markets and polyarchy, a kind of "low intensity" democracy
in which multiple voices and institutions broaden civic participation-or,
at least, the appearance of same-while at the same time excluding
more "excessive," high intensity forms like the original
lavalas movement in Haiti, radical free trade unionism in South
Korea and South Africa, or anti-free market parties in Russia.
Saluting the efforts of NED and its partners-the
Agency for International Development (AID), the U.S. Information
Agency (USIA), Voice of America and others-Deputy Secretary of
State Strobe Talbott formulated the equation more crudely. "It's
an issue not just of moral politik, but of realpolitik,"
he told a Carnegie Endowment for International Peace audience
in 1996. "Democracies are more likely to be reliable partners
in trade and diplomacy and more likely to pursue foreign and defense
policies that are compatible with American interests."
This, of course, is nothing new. Washington
has mouthed banal paeans to democracy. Even Henry Kissinger's
overwrought memoir-Years of Renewal-makes the argument
that the Nixon State Department's role in the overthrow and murder
of Salvador Allende-Chile's popularly elected president-was yet
another milestone in America's ongoing crusade to further democracy
around the world.
Still, to fully understand the NED's mission,
it is necessary to think in terms of supply as well as demand.
Clearly, the demand side of promoting democracy has changed with
the fall of communism; pro-American forces abroad, NED supporters
recognize, should be finessed rather than coerced. At the same
time, the NED is a more pluralistic institution than was the CIA.
The NED's political durability is guaranteed
through bipartisan support, says analyst Elizabeth Cohn, author
of a forthcoming report on the American democracy-promoting institutions.
But to maintain this support, it must give a piece of the action
to each of the elements that comprise what Cohn calls "Democracy,
Inc.": the Democratic and Republican parties, mainstream
unionism, and the business community. This diversity, of course,
is no broader than the ruling institutions of America, and, as
there, the right remains in the ascendance.
Yet, says Cohn, to understand what the
NED does, "we have to move beyond the Cold War framework
of thinking. Some of what it promotes we [progressives] would
all support," just as, presumably, there are things about
the American form of democracy that we agree with. The NED "was
clearly set up to create a world in the image of U.S.-style democracy."
This, of course, begs two important questions: Is American-style
democracy a good thing for the world? And what happens when forces
abroad seek another form of democracy? The first question is left
to the reader to answer. The second can best be understood by
looking at the record.
In locations as far afield as Serbia,
Mongolia, and Peru, the NED plays a zero-sum game. The money and
perks it dispenses-measly by American standards but enticing to
half-starved democracy advocates in the developing and former
communist worlds-lures the best and the brightest overseas, ensconcing
them in organizations approved by NED and, since all NED grants
must ultimately receive State Department approval, by Washington.
There, the locals get caught up in a process where the rules and
boundaries of permissible ideological content and political activism
are laid down by NED-approved American political experts and ideologues.
At the same time, more radical, "excessive" democratic
movements and institutions dry up.
And just as the NED's board of directors
ranges from the liberal (former New York University President
John Brademas) to the moderate (former New Jersey Governor Tom
Kean) to the extreme right (Reagan's Undersecretary of Defense
Fred Iklé), so NED-sponsored projects vary from the worthy
(funding anti-dictatorship newspapers among Burmese exiles) to
the ridiculous (distributing tens of thousands of copies of Newt
Gingrich's "Contract with America," retitled as "Contract
with the Mongolian Voter") to the vicious (supporting former
Front for the Advancement and Progress of Haiti-FRAPH-members).
Yet, during the 1990s, the political consensus
that gave the NED its pluralistic cover and assured it bipartisan
support in Washington has frayed somewhat. Congressional Republicans
have opposed the NED or any organization that favors even watered-down
labor rights, while it has attempted to promote labor unions that
embrace neo-liberal capitalist principles. In the former Soviet
Union, the NED and the AFL-CIO have sponsored independent unions
representing the approximately five percent of all workers in
Russia who were supporting privatization against the former communist
Federation of Independent Trade Unions of Russia (FNPR). As the
45 million-member FNPR opposed privatization, the NED-inspired
federation defended government neoliberal reforms.
At the same time, the election in 1995
of John Sweeney as president of the AFL-CIO significantly changed
the orientation of the American labor movement in the international
arena. In the post-World War II era, the AFL-CIO has been one
of the great labor failures worldwide as membership has declined
from 35 percent of the labor force in 1955 to about 15 percent
in 1995. Any foreign labor movement looking to the AFL-CIO could
see that it was an utter failure and a poor model for building
worker power. Indeed, by 1995, even American workers were aware
of this failure. Though old cold warriors within the AFL-CIO continued
to support the international policy of promoting weak unions worldwide,
the new leadership sees neoliberal capitalism as the greater threat
Shortly after Sweeney became president,
the four international institutes of the AFL-CIO were closed and
folded into the American Center for International Labor Solidarity
(ACILS), an NED front organization in Washington known colloquially
as the "Solidarity Center" and founded by AFL-CIO, AID,
and the NED. Asked if the AFL-CIO continues to work with the U.S.
government in undermining progressive labor unions abroad, San
Francisco-based labor activist Michael Eisenscher noted, "most
of the spooks from the CIA that were on the Federation's payroll
have been mothballed." At the same time, the AFL-CIO
has supported progressive labor activists that the U.S. government
considers suspect. The AFL-CIO's delegate to a hemispheric labor
conference held in San Francisco last year intervened with the
State Department to get visas for communist labor leaders from
Chile to attend.
Nevertheless, the AFL-CIO continues to
take NED funding and use it for purposes that remain in sync with
the program's overall agenda. In Russia, for example, an AFL-CIO
backed-campaign against the non-payment of wages by Russian industry
leans toward amelioration of the symptoms, rather than a militant
attack on the cause: the Yeltsin government's wholehearted embrace
of free market ideology.
Meanwhile, the AFL-CIO's partial defection-though
denying the NED an important domestic constituency and a union
cover for its pro-free market activities abroad-has not stopped
the program's work in this field. ACILS has taken over the AFL-CIO's
regional field offices throughout the world and has reinforced
the federation's contacts, in order to promote the faddish principles
of neoliberal capitalism and the development of "free democratic
and independent trade unions." Although the AFL-CIO is not
actively involved in the operations of ACILS, some of its international
unions, particularly the once staunchly anticommunist American
Federation of Teachers, are actively involved in its educational
and institution-building affairs, particularly in the former communist
bloc. And, of course, NED's political wing has actively supported
Russian president Yeltsin and his allies, offering funds to 41
parliamentarians in the 1996 elections (despite NED rules that
funding not go directly to politicians abroad) and even providing
make-over artists so that Yeltsin could go on television without
looking like a walking corpse.
With or without the AFL-CIO, the NED continues
to serve American foreign policy, funding organizations that promote
economic restructuring, undermine workers' rights, and increase
layoffs, while paying lip service to labor rights. In China, it
funds organizations that encourage privatization and train employers
in anti-labor strategies. Moreover, in 1997, while the NED offered
extensive funding for an American-inspired free labor development
in Burma, it provided no support for a grassroots labor movement
in American ally Indonesia under Suharto, the recently deposed
dictator of 33 years, where workers have actively sought to organize
independent trade unions and whose leader languished in jail.
Ultimately, with the NED, Washington sets
a double standard for itself and everybody else. In 1997, congressional
opponents of the Clinton administration expressed outrage over
foreign-specifically, Chinese-interference in U.S. elections,
a story picked up and played repeatedly by the media. Eventually,
the investigation was dropped for fear it would gore too many
bulls on both sides of the aisle. But imagine if the Chinese had
gone further: openly funding congressional candidates, researching
low-voter turnout and America's antiquated voter registration
system, infiltrating trade unions, sponsoring conferences in Washington
supporting groups critical of the U.S. government and actively
promoting the efficacy of Chinese-style state-run enterprises.
Imagine the NED.
James Ciment is the author of the recently
published Encyclopedia of Conflicts Since World War II
(Armonk, N.Y.: M.E. Sharpe, 1999). Immanuel Ness is assistant
professor of labor politics at Brooklyn College.
0. Mike Feinsilber, "One Expert's
Views on How Democracy Triumphed," Associated Press, Feb.
0. Gershman, when executive director of the conservative Social
Democrats-U.S.A, once praised Jonas Savimbi-longtime leader of
the CIA-sponsored mercenary force in Angola-as "one of the
most impressive political figures I have ever met." CovertAction
Information Bulletin, No. 7, Dec. 1979-Jan. 1980, p. 25.
0. "$200 Million!: Sponging Up Grants for Democracy,"
Columbus Dispatch, Oct. 15, 1993, p. 8A.
0. David Samuels, "At Play in the Fields of Oppression,"
Harper's, May 1995, p. 50.
0. "Florida Libel Verdict Reversed; Ex-Diplomat Had Accused
Exile Group of Misuse of Funds," Washington Post,
Feb. 4, 1999, p. A9.
0. Barbara Conry, "The NED Is No Friend of the Taxpayer,"
Chicago Tribune, Dec. 13, 1993.
0. David Ignatius, "Innocence Abroad: The New World of Spyless
Coups," Washington Post, Sept. 22, 1991. This view
was reiterated by former CIA Chief William Colby. Discussing NED
programs, he opined, "it is not necessary to turn to the
covert approach. Many of the programs which...were conducted as
covert operations [can now be] conducted quite openly, and consequentially,
without controversy." "Political Action-In the Open,"
Washington Post, Mar. 14, 1982, p. D8.
0. William I. Robinson, Promoting Polyarchy: Globalization,
U.S. Intervention, and Hegemony (New York: Cambridge University
0. Strobe Talbott, "Support for Democracy and the U.S. National
Interest," State Department Dispatch, Mar. 18, 1996, p. 121.
0. Henry Kissinger, Years of Renewal (New York: Simon and
0. To be published by the Albuquerque-based Interhemispheric Research
0. Elizabeth Cohn, interview with authors, Mar. 19, 1999.
0. In its most recent reported annual spending (for FY 1997),
NED's four components made grants totaling $26.4 million out of
a total budget of $31.6 million. Annual Report, National Endowment
for Democracy, 1997 (Washington, D.C.: NED, 1998).
0. Michael Eisenscher, interview with authors, Mar. 21, 1999.
0. Saul Landau, "U.S. Spends $30 Million a Year to Meddle
in Foreign Elections," Sacramento Bee, Apr. 19, 1997,
U.S. Dollars to Serbian Opposition
U.S. funds have been flowing for several
years to the Serbian opposition, both within Kosovo and throughout
Yugoslavia, much of it from taxpayers.
According to the U.S. Institute of Peace
in Washington (an organization with a long record of anti-Serbia
involvement), the Agency for International Development sent nearly
$10 million to Yugoslavia in 1998 through two programs, Support
for East European Democracy and the Office of Transition Initiatives.
The U.S. Information Agency granted more than $1 million that
year, and the National Endowment for Democracy nearly a million.
But by far the largest amount has been
given to anti-government organizations by the Fund for an Open
Society-Yugoslavia, a branch of the Soros Foundation based in
Belgrade, until recently in Pristina, and in Montenegro. In fiscal
year 1998, it bestowed some $14.8 million in grants for a wide
range of activities, mostly for "information," "arts
and culture," "education," and "youth"
It is likely that the 1999 figures are
much greater, and the overall totals are undoubtedly increasing
exponentially every day.
National Endowment for Democracy (NED)