Overview

The National Endowment for Democracy (NED) was created in 1983 by the Reagan administration as a new instrument of Cold War U.S. foreign policy that aimed to roll back the Soviet Union and extend U.S. influence. It was to achieve this by promoting “free market democracies” allied with the United States, which would be driven by what Ronald Reagan called “the magic of the marketplace” and managed by political systems similar to that of the United States and where the dominant political parties were all U.S. aligned.

NED’s stated purpose is the “strengthening [of] democratic institutions around the world through nongovernmental efforts.” All but three percent of NED’s annual budget comes from the U.S. government, mostly the State Department.

According to NED, the organization’s “early investment in the democratic struggles in Central Europe and the Soviet Union, and many countries in Latin America, Asia, and Africa, has contributed to significant democratic breakthroughs.” Today, “NED continues to focus many of its resources on the remaining communist and authoritarian countries such as China, North Korea, Cuba, Serbia, Sudan, and Burma. NED maintains a long-term, flexible approach that takes advantage of any realistic opportunity to advance democratic ideals, defend human rights, and encourage the development of civil society.” Most of NED’s funding goes to organizations within targeted countries, but since its founding it also had a strategy of working with “democrats in exile,” notably Cubans and Tibetans.

NED’s “unique multisectoral approach is characterized by its four core institutes,” namely the National Democratic Institute for International Affairs, the International Republican Institute, the American Center for International Labor Solidarity, and the Center for International Private Enterprise—representing, respectively, the country’s two major political parties, organized labor, and the business community. “The relationship between NED and the institutes also provides institutional balance, built-in bipartisanship, and reassurance to the Congress and others that the Endowment will be even-handed in its judgments and receptive to diverse approaches to democratic development.” ¹

The purpose of NED’s work is “to create a community of democrats, drawn from the most developed democracies and the most repressive autocracies as well as everything in between, and united by the belief that the common interest is served by the gradual expansion of systems based on freedom, self government, and the rule of law.” ²

NED Board Officers in 2005: Vin Weber, chairman; Thomas Donahue, vice-chair; Julie Finley, treasurer; Jean Bethke Elshtain, secretary; and Carl Gershman, president. NED Board Members: Morton Abramowitz, Evan Bayh, Rita DiMartino, Rep. Christopher Cox, Gen. Wesley Clark (ret.), Ester Dyson, Sen. Richard Gephardt, Sen. William Frist, Francis Fukuyama, Suzanne Garment, Lee Hamilton, Richard Holbrooke, Emmanuel Kampouris, Sen. Jon Kyl, Larry Liebanow, Rep. Gregory Meeks, Robert Miller, Michael Novak, Sen. Paul Sarbanes, Terrence Todman, and Howard Wolple.

In 1983 President Reagan announced the creation of the National Endowment for Democracy to support political groups in target countries that would contest left-of-center organizations and political parties. NED would do this, according to Reagan, by supporting “the infrastructure of democracy—the system of a free press, unions, political parties, and universities—which allows a people to choose their own way, to develop their own culture, to reconcile their own differences through peaceful means.” ³

Allen Weinstein, who was a member of the USAID-working group known as the Democracy Group that proposed the formation of a quasi-governmental group to channel U.S. political aid, served as NED’s acting president during its first year. Talking about the role of NED, Weinstein told the Washington Post in 1991 that “a lot of what we do today was done covertly 25 years ago by the CIA.”

Under NED’s elaborate structure designed to veil U.S. government funding, USIA and USAID funding did not flow directly to foreign political parties, unions, business associations, and civic groups but was routed through the AFL-CIO, the International Chamber of Commerce, and the newly organized international institutes of the Democratic and Republican parties. NED’s origins go back to a bipartisan commission called the American Political Foundation established by the State Department that began to address the problem of having U.S.-funded “soft-side” operations overseas perceived as CIA fronts.

The working model for a new type of foreign operations program was the AFL-CIO’s Free Trade Union Institute, which was funded by USAID and a tripartite directorship of labor, business, and government officials. In turn, the American Political Foundation called for a feasibility project called the Democracy Program, which formulated the objectives and structures for NED. Although the Democracy Program included business and USIA officials, its key movers were the neoconservatives: Eugenia Kemble (sister of PNAC-associated Penn Kemble), George Weigel (later with the Ethics and Public Policy Center and a signatory of PNAC’s founding statement), Raymond Gastil of Freedom House, and Allen Weinstein (member of neocon-led Coalition for a Democratic Majority and later president of the NED-funded Center for Democracy).

Carl Gershman, the founding and current president of NED, was an organizer with the Socialist Party. As a member of a right-wing faction of the party known as Shachtmanites (followers of Trotskyist leader Max Shachtman), Gershman challenged Michael Harrington’s leadership of the Socialist Party in 1972. While Harrington was a vociferous opponent of the Vietnam War, the Shachtmanites supported the war and favored Republican Richard Nixon over Democrat George McGovern in the presidential election campaign that year.

After the Socialist Party split, Gershman—together with Rachelle Horowitz and Tom Kahn (both of whom worked with the CIA-funded International Affairs Department of the AFL-CIO)—founded the Social Democrats/USA (SD/USA). For many neoconservatives with Trotskyist backgrounds, SD/USA became their main point of entry into the struggles to break the control of the progressive “New Politics” faction of the Democratic Party. Although having only a few dozen members and associates, SD/USA exercised major influence in the AFL-CIO and in shaping foreign policy operations in the Reagan administration. ⁴

In the late 1970s a bipartisan group of foreign policy hawks, led by neoconservatives, concluded that a new system was needed to channel “political aid” to an international network of “free” trade unions, anti-leftist political parties, publishing houses, and civic groups that would promote U.S. foreign and military policies. A faction of neoconservatives associated with the Social Democrats/USA and the AFL-CIO’s International Affairs took the lead in working with right-wing corporations and the U.S. government to address this need through the American Political Foundation, which received State Department funding to explore new avenues to offer U.S. government support for “domestic pluralistic forces in totalitarian countries.” ⁵

Instead of clandestine financing for political and cultural organizations, the neoconservatives and their labor partners advocated that Reagan establish a quasi-governmental organization that would redirect funds from the U.S. Information Agency (USIA) and U.S. Agency for International Development (USAID) to substitute for clandestine CIA funding, which had recently been prohibited by Congress after revelations that the CIA had been funding domestic academic and cultural organizations.

Not only did NED give neoconservatives a government-funded institute over which they exercised effective control, but it also facilitated close links with the U.S. government-funded international operations of the AFL-CIO while building new ties with business. NED supported the creation of a series of neoconservative-controlled front groups that sought bipartisan and U.S. public support for an interventionist policy in Central America, which was part of the larger rollback, containment policy advocated by groups such as the Committee on the Present Danger and the Coalition for Peace through Strength. One of the most prominent of these NED-financed front groups was the Project for Democracy in Central America (PRODEMCA), which merged the hard (military) and soft (political aid and public diplomacy) sides of the neoconservative agenda in Central America. On the one hand, it received clandestine support from the unofficial “Project Democracy” of the National Security Council, operated by Oliver North and supervised by Elliott Abrams. On the other hand, it received AID and USAID funding through NED for public diplomacy efforts.⁶

Neoconservatives have held tight control over NED’s agenda and its institutional structure since its founding. Cold War paranoia and nationalism explain in part the bizarre and intricate networks that brought U.S. government agencies together with the AFL-CIO, corporate America, and former Trotskyists. But the partnerships did not end with the Cold War. Carl Gershman, who has kept his position as NED’s president, is an enthusiast of Middle East and North Korea democratization as part of the Bush administration’s regional restructuring agendas. ⁷

NED’s chairman is Vin Weber, who along with current NED board member Francis Fukuyama and former board members Paula Dobriansky and Paul Wolfowitz (both of whom joined the Bush II administration in 2001), signed the founding statement of the Project for the New American Century. ⁸

Weber was swept into Congress as representative of his Minnesota district by the New Right tide that put Ronald Reagan in the White House. Along with Newt Gingrich and several other right-wing congressional members, Weber founded the Conservative Opportunity Society that succeeded in ousting the moderate GOP leadership, setting the stage for the so-called “conservative revolution” led by Newt Gingrich in the 1994 elections. ⁹

Vin Weber cofounded, along with William Bennett and Jack Kemp (who both served as cabinet members during the Reagan administration), the neoconservative Empower America institute. Another Empower America director, Michael Novak, also sits on NED’s board. ¹⁰ Weber’s election as NED chairman in 2001 together with Julie Finley as vice-chair signaled that NED would closely follow Bush’s foreign policy agenda in its democracy-building efforts. Finley also has connections with various neocon-driven groups, including the Committee for the Liberation of Iraq and the American Enterprise Institute’s Project on Transitional Democracies.

U.S.-Sponsored Transition in Cuba


Since its founding NED has served as an instrument of U.S. policy to support the Cuban-American efforts to oust Cuba’s longtime leader Fidel Castro. Although many experts and advocates in democracy building and in fostering democratic transitions believe that a constructive engagement—economically and diplomatically—encourages internal processes of democratization, NED has long supported U.S. groups that are strident proponents of continuing the U.S. embargo and diplomatic isolation of Cuba. In the 1980s and through the Bush senior administration, two of the favored instruments of NED democratization funding in Cuba were the Cuban American National Foundation (CANF) and the AFL-CIO’s American Institute for Free Labor Development (AIFLD), which managed the Labor Committee for a Free Cuba. ¹¹

Of the 21 organizations that receive NED funding in Latin America and the Caribbean, six are Cuban-American groups based in the United States: Center for a Free Cuba, Cuban Committee for Human Rights, Encuentro, Federation of Electrical Plan Workers and Gas in Exile, and Grupo de Apoyo a las Cooperativas Independientes de Cuba. Other Cuban-American groups that receive NED funding include: CubaNet, Disidente Universal de Puerto Rico (which publishes anti-Castro regime articles), National Democratic Institute, Revista Encuentro de la Cultura Cubana, and Cuban-American Military Council. ^{12 13}

IRI’s Dubious Commitment to
Democracy in Haiti and Venezuela

The International Republican Institute (IRI) has been NED’s favored core grantee since the beginning of the Bush administration. ¹⁴ In Latin America, for example, NED’s five largest grants to country-specific programs in 2002 (latest available annual grant listing) went to IRI for programs in Cuba ($350,000 to support the Cuban Democratic Directorate), Guatemala ($300,000 for technical assistance to political parties), Venezuela ($300,000 for training and coalition-building for opposition political parties), Peru ($300,000 to strengthen political parties), and Nicaragua ($200,000 to empower IRI’s local counterpart Hagamos Democracia).

According to Robert Maguire, director of the Haiti Program at Trinity College in Washington, DC, “NED and USAID are important, but actually the main actor is the International Republican Institute, which has been very active in Haiti for many years but particularly in the last three years. IRI has been working with the opposition groups. IRI insisted, through the administration, that USAID give it funding for its work in Haiti. And USAID has done so but kicking and screaming all the way. IRI has worked exclusively with the Democratic Convergence groups in its party-building exercises and support. The IRI point person is Stanley Lucas who historically has had close ties with the Haitian military. All of the IRI sponsored meetings with the opposition have occurred outside Haiti, either in the DR or in the United States. The IRI ran afoul with Aristide right from the beginning since it has only worked with opposition groups that have challenged legitimacy of the Aristide government. Mr. Lucas is a lightning rod of the IRI in Haiti. The United States could not have chosen a more problematic character through which to channel its aid.” ¹⁵

After the April 1992 aborted coup against Venezuela’s President Hugo Chávez, many observers accused Washington of having been behind the attempted ouster. The Bush administration denied any U.S. involvement in the affair. However, one relatively clear connection has emerged between the U.S. government and the anti-Chávez movement: millions of dollars in U.S. taxpayer money channeled through the IRI and other U.S. organizations, including CIPE and ACLIS, that funded groups opposed to Chávez during the years preceding the April coup.

Mike Cesar, an analyst for the IRC’s Americas Program, reported that in an April 12 facsimile sent to news media, IRI President George A. Folsom rejoiced over Chávez’ removal from power. “The Venezuelan people rose up to defend democracy in their country,” he wrote. “Venezuelans were provoked into action as a result of systematic repression by the government of Hugo Chávez.” ¹⁶ With NED funding, IRI had been sponsoring political party-building workshops and other anti-Chávez activities in Venezuela. “IRI evidently began opposing Chávez even before his 1998 election,” wrote Cesar. “Prior to that year’s congressional and presidential elections, the IRI worked with Venezuelan organizations critical of Chávez to run newspaper ads, TV, and radio spots that several observers characterize as anti-Chávez.”

Further, writes Cesar, “The IRI has ... flown groups of Chávez opponents to Washington to meet with U.S. officials. In March 2002, a month before Chávez’s brief ouster, one such group of politicians, union leaders, and activists traveled to DC to meet with U.S. officials, including members of Congress and State Department staff. The trip came at the time that several military officers were calling for Chávez’ resignation and talk of a possible coup was widespread.” One opposition figure to benefit from IRI support said that bringing varied government opponents together in Washington accelerated the unification of the opposition. “The democratic opposition began to become cohesive,” he said. “We began to become a team.” ^{17 18}

In Latin America, the largest single NED grant in 2002 went to the American Center for International Labor Solidarity. NED gave this USAID-supported branch of the AFL-CIO $775,000 “to implement a program to reinforce the capacity of labor unions to promote economic and political reform and build alliance with civil society at community and national levels.” That’s exactly what ACILS has done in Venezuela, where it worked with anti-Chávez worker groups that formed an alliance with business, civil society, and political parties that engineered the attempted coup in April 2002.

The same year ACILS also received $116,000 to “support the Venezuelan trade movement, represented by the Confederation of Venezuelan Workers, in developing a program to extend organization, training, and representation to the informal sector.” The AFL-CIO under John Sweeney has proclaimed a “new internationalism” that is committed to the improvement of worker wages and conditions around the world, but many of ACILS programs have little or nothing to do with fortifying unions but rather have broader political objectives that often run parallel to U.S. foreign policy initiatives. Coincidently, NED in 2002 also provided two grants totaling $207,000 to the Center for International Private Enterprise for civil society programs that mirrored those sponsored by ACILS. NED granted CIPE some $106,000 “to support the Confederation of Venezuelan Workers and the Citizens Assembly” for educational and mobilizing initiatives that also focused on the “organization of the informal sector.”

Another NED grant in 2002 to this affiliate of the U.S. Chamber of Commerce was programmed to work with “several Venezuelan NGOs and the business sector to develop a broad-based consensus in Venezuela” and to address “the growing problem of the informal sector” together with several civil society groups. The close partner of CIPE in Venezuela is the business-oriented Center for the Dissemination of Economic Information (CEDICE). In 2002, NED also greatly boosted its Venezuela-focused funding to the International Republican Institute, which received $300,000 “to train national and local branches of existing and newly created political parties in Venezuela,” with a special emphasis on “coalition-building.”

Network of Networks

By the late 1990s NED concluded that it needed to revamp its methodology of democratization. In the age of globalized communication and transnational cyber-networking, as exemplified by the anti-free trade movement, NED decided to start its own global citizens' movement. Rather than just channeling U.S.-government funds to disparate groups, Gershman in 1999 established his office as the “secretariat” for a World Movement for Democracy. ¹⁹

The “movement’s” objective is to “offer new ways to give practical help to democrats who are struggling to liberalize authoritarian systems and to consolidated emerging democracies.” ²⁰ According to NED, “The World Movement helps to fulfill one of the objectives of NED’s most recent strategic plan, namely ‘to create a community of democrats, drawn from the most developed democracies and the most repressive autocracies as well as everything in between, and united by the belief that the common interest is served by the gradual expansion of systems based on freedom, self-government, and the rule of law’.”

Just as the citizens’ global anti-globalization movement often described itself as a “movement of movements,” NED describes the World Movement for Democracy as a “network of networks” that functions as an umbrella organization for an array of affiliated international networks of citizen groups, parliamentarians, research institutions, business groups, and foundations. What distinguishes this movement from citizens’ networks is that it was created as a U.S. government initiative.

U.S. taxpayer revenues cover the cost of having NED function as the logistical and infrastructural secretariat for this multifaceted democracy movement. Annual State Department allocations cover the four NED staff members who oversee the network from their positions in Gershman’s office.

But most of the funding for NED’s WMD comes from right-wing foundations in the United States, led by the Bradley Foundation, which has provided the start-up and general support funding for an array of other neoconservative foreign policy projects, including the Project for the New American Century.

Although the World Movement for Democracy states that it “does not advocate positions on particular political issues,” the network’s website and publications, such as its ezine DemocracyNews, largely reflect the U.S. government’s foreign policy positions toward countries like Venezuela and Cuba.

NED has created regional portals for participants in the network. For example, for Latin America and the Caribbean there is the “Portal de la democracia de las Américas,” which opens to the webpage of the Red Ciudadana por la Democracia en las Américas (Citizens’ Network for Democracy in the Americas). ²¹

In addition to its regional portals to “citizen networks,” NED through the World Movement for Democracy has established regional forums with more restricted participation, such as the Democracy Forum in East Asia and the Africa Democracy Forum.

Also under the umbrella of the World Movement for Democracy are several other global “pro-democracy” networks that NED has been developing over the past decade, including International Movement of Parliamentarians for Democracy, Network of Young Democracy Activists, Democracy Information and Communications Technology Group, and the Network of Democracy Research Institutes. The latter, which includes as members think tanks and policy institutes throughout the world, receives research and technical assistance from NED’s Democracy Resource Center.

As part of its effort to function as a nexus for a “network of networks,” NED in 1995 convened a meeting in Taipei in conjunction with Taiwan’s Institute for National Policy Research that aimed to spark the creation of “democracy foundations” around the world. In 2003, Taiwan, “following a period of consultation with NED, created the Taiwan Democracy Foundation.” ²²

The Institute for National Policy Research is a think tank that is closely associated not only with NED but with the American Enterprise Institute, the premier neoconservative think tank. Today, there are three dozen foundations that participate in the NED-initiated World Conference of Democracy-Support Foundations.

One of the most recent movement-building exercises of NED is the Movement of Parliamentarians for Democracy, founded in Washington in February 2003. Among the main congressional supporters of this NED network were Christopher Cox (R-CA) and Eliot Engel (D-NY), both closely associated with numerous neoconservative organizations.

NED’s “network of networks” represents a new breed of internationalism that merges three ideological and strategic thrusts of neoconservative thinking. The World Movement for Democracy is a 21st century mutation of the Trotskyist Fourth International, and is led by neoconservatives like Carl Gershman, who was a leading figure in the right-wing Trotskyist Social Democrats/USA. The neoconservatives are committed to leading a Trotskyist “permanent revolution” against totalitarianism and in favor of free markets and U.S. hegemony over capitalist democracies.

NED and the democracy movement also constitute an attempt to revive the post-WWII international networks of congresses, publications, and intellectuals funded by the CIA, such as the Congress on Cultural Freedom, in which many neoconservative forerunners like Irving Kristol and Melvin Lasky were leading figures.

Complementing these two traditional thrusts of neoconservatism, NED’s new democracy initiatives aim to foster transnational citizens’ networks funded and guided by the U.S. government and right-wing foundations that will counter the anti-free trade and anti-imperialist citizens’ networks that have emerged in this age of globalized communications.

NED does not inform the participants in the World Movement for Democracy that this global citizens’ network is a line item in the U.S. State Department’s allocation to the purportedly independent National Endowment for Democracy while also closely coordinated with the democratization program of the U.S. Agency for International Development (USAID). In many instances, like in Venezuela, USAID’s “democracy-building” program works closely with NED-funded organizations and pours more money into what the U.S. government regards as key democratic battlegrounds.

There are signs of backlash to this U.S.-led democracy movement. 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.

Funding

Initially, NED was funded mostly through the United States Information Agency with project-dedicated State Department funding flowing through the U.S. Agency for International Development. Since 1999, when the USIA was folded into the State Department, NED has received its government funding exclusively, according to NED’s public financial statements, from the State Department. Less than three percent of the funding for NED and its programs come from private sources.

In 2002 NED received funding from the following: the Bradley Foundation, the Ford Motor Foundation, the Smith Richardson Foundation, the U.S. Japan Foundation, the Whitehead Foundation, the Hurford Foundation, the Goals for Americas Foundation, the Hewlett Foundation, and the Mott Foundation. Among the private groups and industries supporting NED were the AFL-CIO, American Federation of Teachers, Guardian Industries, the Gereman Marshall Fund, Kissinger MacLarty Associates, and the Taipei Economic and Cultural Representative Office.

Individual contributors included Morton Abramowitz, Frank Carlucci, Thomas Donahue, Julie Finley, Nancy Greenspan, Fred Iklé, Irena Kirkland, and Emmanuel Kampouris. Most of the private funding supports NED’s subprojects such as its influential Journal of Democracy. In the 1987-2002 period NED received $1.6 million from the following right-wing foundations: Lynde and Harry Bradley Foundation, Smith Richardson Foundation, Earhart Foundation, John M. Olin Foundation, and Sarah Scaife Foundation. Most of this funding was channeled to NED’s Journal of Democracy, while smaller amounts went to the World Movement for Democracy, Democracy Resource Center, and the International Forum for Democratic Studies. ²³

Financial support for the first assembly of the World Democracy Movement in 1999, which took place in New Delhi, was provided by the Starr Foundation, the Ford Foundation, CIVITAS, Freedom House, Godrej & Boyce Mfg. Co. Ltd., the Holdeen India Fund, the Industrial Development Bank of India, RPG Enterprises, Tata Steel, and the U.S. Department of State’s Bureau of Democracy, Human Rights, and Labor. ²⁴