WASHINGTON — In 1982, when President Reagan proposed a new program to export democracy, the idea seemed irresistible. With more than 200 years of national experience to draw on, American citizens would help people around the world develop the free institutions that form the foundation of representative government.
It may yet work out that way. But so far the National Endowment for Democracy, the quasi-private foundation established in 1983 to funnel government money overseas, has generated a string of controversies that have overshadowed its modest successes. Its critics wonder why the endowment has found it necessary, for example, to promote democracy in France and to back a candidate in the 1984 Panamanian election.
"This thing is not the National Endowment for Democracy but the National Endowment for Embarrassment," said Sen. Ernest F. Hollings (D-S.C.).
Variety of Programs
Although the endowment is by law a private organization, it receives virtually all of its annual $18-million budget from the federal Treasury. It uses the funds to support a variety of programs abroad, ranging from anti-communist labor unions to a magazine published by Soviet emigres.
The endowment's bipartisan board of directors, which parcels out those funds, is a virtual "Who's Who" of U.S. business, labor and politics. It spans the political spectrum from former Vice President Walter F. Mondale to Sen. Orrin G. Hatch (R-Utah). The AFL-CIO, the U.S. Chamber of Commerce and the Republican and Democratic national committees have at least two high-level representatives each on the 17-member board, a situation that assures the organization of enormous political influence. New board members are chosen by vote of existing members.
To date, the endowment has channeled most of its funds through organizations sponsored by the AFL-CIO, the Chamber of Commerce and the Republican and Democratic national committees. Conflict-of-interest charges have inevitably followed.
Credibility Issue Seen
"Approximately 90% of NED funds go to groups represented on the board," Rep. Hank Brown (R-Colo.) said in congressional testimony. "The potential conflict of interest weakens the credibility of the post-project evaluation and accountability of projects, as well as the initial awarding of grants."
Endowment President Carl Gershman responded that board members are not allowed to vote on the projects of their own organizations. "The original idea of the endowment was that these major interests in American life would come together to try to strengthen their counterparts abroad," he said. "The board was not originally seen as an oversight body but one through which these organizations would coordinate their programs."
One observer--an early supporter of establishing an endowment but a severe critic of the organization that evolved--traced the endowment's structure to a study committee composed of representatives of the same groups heavily represented on the board--the AFL-CIO, Chamber of Commerce and the political parties.
"It wasn't a study, it was a deal cutting," said the former backer, who asked not to be identified by name. "Not surprisingly, what they came out with was a proposal to establish something grandiloquently titled National Endowment for Democracy whose purpose would be to give money to the Republican Party, the Democratic Party, the Chamber of Commerce and the AFL-CIO."
So far, about 60% of the money has gone to the AFL-CIO's Free Trade Union Institute, which has been supporting non-communist labor organizations since just after World War II.
The Chamber of Commerce's Center for International Private Enterprise and the international institutes of the Democratic and Republican parties, which were created especially as conduits for endowment money, have each received about 10% of the endowment's grants.
For all the charges of conflict of interest, there is no doubt that the endowment has made itself felt in many corners of the globe.
"We are talking about $18 million being used to spread democratic principles around the world to offset the $3- to $4-billion expenditure being used by the Soviets to work against democracy all over the world," Hatch said. "The National Endowment for Democracy is making a tremendous impact for the forces of freedom worldwide."
Supporters say the endowment has provided funds to help keep alive the Solidarity movement in Poland. They cite support for independent labor organizations in Nicaragua, Chile, the Philippines and South Africa; a get-out-the vote drive before Grenada's first free election last year; financial support for La Prensa, Nicaragua's only opposition newspaper; publication of political books in Central America, and financial support for Afghan rebels.
Close Links to Marcos