The End of the "Democracy Promotion" Racket? A Look Back at NED in the 1980s

In recent weeks President Trump has been showing signs that he really was intent on overthrowing the neoliberal, interventionist order of the last fifty years. He introduced import tariffs on steel and aluminum, and this week establishment Washington was alarmed to notice that the State Department is requesting large cuts to “democracy promotion” programs that have been in place since the 1970s. These moves indicate that Trump is serious about leading the U.S. into economic and political isolationism, and the establishment is starting to panic that he is demolishing America’s role as “leader of the free world.” Russia Today reported the story as Trump threatening “to gut the US ‘democracy promotion’ racket”:

The foreign policy establishment in Washington is crying foul after the Trump administration proposed to cut funding for organizations responsible for “promoting democracy abroad,” often in the guise of color revolutions. The 2019 State Department budget request cuts the National Endowment for Democracy (NED) budget and separates it from the National Democratic Institute (NDI) and the International Republican Institute (IRI). Funding for the institutes would be moved to the State Department, where NDI and IRI would have to compete with private contractors.

A raging debate broke out on twitter between journalists about whether these cuts would really be such a tragedy. Some bemoaned this deliberate destruction of America’s proud role in promoting democracy. Others pointed out that these programs always had the same role as covert operations to advance American interests and interfere in the internal affairs of other countries. The American public has little idea what these democracy promotion agencies have been doing in recent decades. To learn more, it’s instructive to look back at some studies that were done in the late 1980s and early 1990s when some journalists assessed the effects of the programs that came into full force during the Reagan presidency. Previously, I posted Trump Era Russophobia vs. Western Intervention in the U.S.S.R 1970-1991 which included Sean Gervasi’s 1992 essay “’Spyless Coup’ or Democratic Breakthrough? Western Intervention in the U.S.S.R.” originally published in the defunct Covert Action Information Bulletin. In this post I reprint an article from the same edition of the Bulletin entitled “NED, CIA, and the Orwellian Democracy Project.“ Readers can find the original at the link below as a scanned document, but the version posted here is much more web friendly and readable. The article lends support to view that “democracy promotion” was simply overt interference in other nations. As the writers point out, the funds were often not even used for their legally sanctioned purpose of promoting neutral democratic values and institutions. Quite often the funds went directly to the individual leaders and political parties that Washington wanted to prevail.

Another harmful effect of democracy promotion, one that gets little attention, is how much these American programs did to create resentment and suspicion of foreign governments. The affected countries were slow to respond in the early decades of these programs, but in the 21st century they have been pushing back. Foreign governments are now accused of harsh repression of international non-government organizations because the U.S. government has poisoned the good will that used to exist for citizens trying to work together across borders. U.S. Congress set up the National Endowment for Democracy as a “non-government” organization, even though it received its funding from government. NED and other U.S. programs began funding NGOs all over the world, which turned all NGOs into suspected foreign meddlers, even those who were truly non-government and determined to work across borders without government influence. Now we regularly hear news about Russia “cracking down on NGOs” but the reasons for the harsh measures are seldom mentioned.

The following report covers the early days of NED in the 1980s. This link goes to an article on NED's activities in recent years.

NED, CIA, and the Orwellian Democracy Project
originally published in Covert Action Information Bulletin (CAIB)
Volume 3 Number 39 (Winter 1991-92)
by Holly Sklar and Chip Berlet

About the authors:

Holly Sklar and Chip Berlet have written several articles and books related to the topic of this report. Sklar is the author of Washington’s War on Nicaragua (South End Press, 1988, 1999). In 1991, Berlet was an analyst with Political Research Associates in Cambridge, Mass. His articles have appeared in numerous publications, including the Boston Globe, Chicago Sun-Times, the Des Moines Register, and CAIB. In 2000, his book Right-Wing Populism in America: Too Close for Comfort, was published by Guilford Press.

The National Endowment for Democracy (NED) was first funded in fiscal 1984, an appropriate year for an Orwellian agency making the world safe for hypocrisy. The quasi-private NED does publicly what the CIA has long done and continues to do secretly. Despite successive scandals, U.S. meddling in the internal affairs of other nations—including their “democratic” elections—has not only thrived, it has become respectable.

We supervised elections in Haiti and wherever we supervised them our candidate always won.
-General Smedley Butler, U. S. Marine Corps, 1935

U.S. manipulation of foreign elections was standard operating procedure well before the CIA’s creation. In 1912, for example, the highly-decorated Marine Corps General Smedley Butler wrote his wife Ethel, “Today, Nicaragua has enjoyed a fine ‘free election’ with only one candidate being allowed to run...In order that this happy event might be pulled off without hitch and to the entire satisfaction of our State Department, we patrolled all the towns to prevent disorders...” In 1935, reporter John Spivak interviewed the then-retired Butler, who became a vocal anti-interventionist after being approached to assist a now-forgotten domestic coup attempt against President Franklin D. Roosevelt: “Butler spilled over with anger at the hypocrisy that had marked American interference in the internal affairs of other governments, behind a smokescreen of pious expressions of high-sounding purpose. “We supervised elections in Haiti,” he said wryly, “and wherever we supervised them our candidate always won.” (1) Butler would recognize the old policy of interference behind the new NED smoke screen.

Contemporary covert and overt operatives, working for or with the U.S. presidency, also intervene in the American political process—from manipulating media and public opinion to working to unseat administration critics in Congress.

Constitutional checks and balances are voided as Congress exercises its oversight responsibility largely by overlooking wrongdoing, and the courts defer to Congress and the Executive in “national security” matters.

Fronts and More Fronts

The covert side of foreign intervention was officially institutionalized in June 1948, when President Truman signed a National Security Directive (NSD10/2). “The overt foreign activities of the U.S. Government must be supplemented by covert operations,” it read, “[including] any covert activities related to: propaganda, economic warfare, preventative direct action, including sabotage, anti-sabotage, demolition and evacuation measures; subversion against hostile states, including assistance to underground resistance movements, guerrillas and refugee liberation groups, and support of indigenous anti-communist elements in threatened countries of the free world.”

The Orwellian democracy machine grew quickly in the warm shadow of the Cold War. The CIA provided a home for the “Gehlen network” of former German Nazi spies with experience in the Soviet Union and Eastern Europe. Under the guise of “liberationism,” CIA fronts such as the Crusade for Freedom promoted these émigré fascist leaders and collaborators to the U.S. public as democratic freedom fighters in the war against communism. (2) Some became leaders in the Republican Party’s Ethnic Heritage Groups Council. (3) Others assisted Radio Free Europe and the various propaganda instruments known collectively as the “mighty Wurlitzer” by its proud conductors. The CIA also influenced U.S. and foreign labor organizations through such bodies as the International Confederation of Free Trade Unions and AFL-CIO affiliates.

With the help of front groups espousing anti-communism and democracy, the U.S. interfered in elections and destabilized governments in many countries, among them Italy, Greece, Iran, the Philippines, Guatemala, Brazil, Indonesia, Chile, Portugal, Jamaica, and El Salvador. As then National Security Adviser Henry Kissinger said on June 27, 1970, speaking in support of secret efforts to block Salvador Allende’s election in Chile, “I don’t see why we need to stand by and watch a country go communist due to the irresponsibility of its own people.” (4)

In 1967, there was a public outcry when Ramparts magazine exposed secret CIA funding of the National Student Association’s international activities. Follow-up stories and congressional hearings exposed a network of ostensibly private labor, student, cultural, media and other organizations that were funded by the CIA, using conduit foundations, under its Psychological, Political and Paramilitary Division.

Faced with mounting criticism, President Johnson appointed the three-member Katzenbach Commission which included CIA Director Richard Helms. This commission laid the groundwork for a new funding technique. It recommended that “The government should promptly develop and establish a public-private mechanism to provide public funds openly for overseas activities of organizations which are adjudged deserving, in the national interest, of public support.” (5) A bill was introduced in Congress in 1967 to create an “Institute of International Affairs,” but it was not approved, and the matter of CIA funding of front groups faded from public scrutiny until Watergate.

I don’t see why we need to stand by and watch a country go communist due to the irresponsibility of its own people.
-Henry Kissinger

The CIA quietly continued covert operations involving front groups and more scandals erupted in the Nixon administration. The congressional Church (Senate) and Pike (House) committees investigated CIA and FBI operations in Watergate’s wake and exposed a wide variety of illicit and anti-democratic programs. Domestic operations included CIA propaganda activities and Operation CHAOS, and the FBI’s COINTELPRO. Foreign operations ranged from CIA programs to manipulate elections and overthrow governments, to plots to assassinate foreign leaders. Amid calls for placing limitations on the CIA or even abolishing it, George Bush was appointed CIA director, serving from 1976 to 1977. His mandate was to mollify his former colleagues in Congress while actually limiting CIA reform.

“Project Democracy”

In the 1980s, with former CIA Director Bush in the vice presidency, the Reagan administration legalized through Executive Order many of the covert activities previously condemned as illegal, immoral and antidemocratic.

The Katzenbach recommendation of a “public-private mechanism” finally bore fruit in the National Endowment for Democracy.

NED was the public arm of the Reagan administration’s “Project Democracy,” an overt-covert intervention and “public diplomacy” operation coordinated by the National Security Council (NSC). In a speech to the British Parliament on June 8, 1982, President Reagan announced that the U.S. would launch Project Democracy to “foster the infrastructure of democracy, the system of free press, unions, political parties, universities, which allows a people to choose their own way.”

According to a secret White House memo setting the agenda for a Cabinet-level planning meeting on Project Democracy, officials decided in August, “We need to examine how law and Executive Order can be made more liberal to permit covert action on a broader scale, as well as what we can do through substantially increased overt political action. (6)

On January 14, 1983, Reagan signed NSDD 77, a secret National Security Decision Directive instructing the NSC to coordinate interagency efforts for “Public diplomacy,” it stated, “is comprised of those actions of the U.S. Government designed to generate support for our national security objectives.” (7)

When legislation was introduced to authorize “Project Democracy” in February 1983, administration officials promised Congress that the CIA would not be involved. A separate bill authorizing funding for NED was introduced in April. The public NED record generally traces its origins to a government-funded feasibility study by the bipartisan American Political Foundation (APF) headed by Allen Weinstein. He served as NED’s first acting president until February 1984 and is currently president of the Center for Democracy, an NED grantee. (8)

“A lot of what we do today was done covertly 25 years ago by the CIA,” Weinstein told Washington Post foreign editor David Ignatius.” (9) Calling NED “the sugar daddy of overt operations,” Ignatius writes enthusiastically of the “network of covert operatives who during the last ten years have quietly been changing the rules of international politics… doing in public what the CIA used to do in private.”

A lot of what we do today was done covertly 25 years ago by the CIA.
-Allen Weinstein, Founding President, NED

Actually, CIA footprints are all over Project Democracy, from NED to the Iran-Contra operations. The CIA-NED connection is personified by Walter Raymond Jr. who supervised NED under Reagan. A propaganda expert and senior officer in the CIA Directorate of Operations, Raymond was first detailed by the CIA to the NSC in 1982 as Senior Director of Intelligence Programs. He resigned from the CIA in April 1983 in order to become a special assistant to the President as director of International Communications and Public Diplomacy at the NSC. In mid-1987, he became deputy director of the U.S. Information Agency (USIA), where he now heads the Eastern European Initiatives Office.

John Richardson, the current and past (1984-88) chair of the NED board of directors, is an old hand in the CIA’s front group network. He was president of the CIA-sponsored Radio Free Europe from 1961 to 1968. From 1963 to 1984, he was variously president and director of Freedom House, a conservative/neoconservative research, publishing, networking, and selective human rights organization. Freedom House is now heavily endowed with NED grants. Richardson later became counselor of the congressionally-funded U.S. Institute of Peace (USIP) which is governed by a presidentially-appointed board of directors dominated by past and present government officials, including Defense and CIA, and members of right-wing organizations such as the Hoover Institution on War, Revolution, and Peace. (10)

Bipartisan Support, Partisan Intervention

The National Endowment for Democracy has already been involved in 77 countries—from Afghanistan to New Zealand, Northern Ireland to South Africa-with most funding going to Eastern Europe and Latin America. NED’s major priority for 1991 is the Soviet Union.

As described by a 1991 General Accounting Office (GAO) report, NED:

plans and administers a worldwide grants program that is generally aimed at fostering a nongovernmental approach to
(a) strengthening pluralism through institutions such as trade unions and business associations,
(b) developing political parties and electoral processes, and
(c) advancing democratic political institutions through civic education and the media. (11)

NED is a bipartisan growth industry for partisan intervention. NED President Carl Gershman was formerly senior counselor to U.N. Ambassador Jeane Kirkpatrick; past resident scholar, Freedom House; executive director of the cold warrior Social Democrats USA (1974-80); former research director for the AFL-CIO and board member of the CIA-linked International Rescue Committee. NED Vice Chair Charles Manatt, of the Washington law firm Manatt Phelps, and Phillips, is former chair of the Democratic National Committee and on the board of the Center for Democracy.

NED Treasurer Jay Van Andel is a major funder of the Heritage Foundation and the co-founder and chair of the Amway Corporation, which is tied to the evangelical right.

Although registered as a private nonprofit organization, NED is funded by Congress with tax dollars largely channeled through the U.S. Information Agency (USIA) and the Agency for International Development (AID). From 1984 to 1990, NED received about $152 million in congressionally approved funds, including $38.6 million in fiscal year 1990. By law, NED does not carry out grant programs itself, but makes grants to U.S. “private sector” organizations which in turn fund projects by foreign recipients. According to a 1991GAO report, “The Endowment monitoring procedures have not been effective. Grantee noncompliance with the Endowment’s key financial and internal controls has resulted in instances of funds being misused, mismanaged, or not effectively accounted for.” (12)

In one controversial NED grant to the University of South Carolina, the university was used essentially as a money laundry. It was allowed to skim ten percent of the NED funds for administrative expenses and simply pass on the remaining money to vaguely described Chilean projects. Some of the funds for these projects were deposited into the personal account of a director of one of three Chilean groups authorized to receive the grant money. Beyond that point there is no documentation of how the funds were spent. According to one newspaper account, some faculty members suspected the process was being used for secret foreign policy initiatives or covert operations. (13)

Destabilization campaigns can culminate in invasions, military coups, or electoral coups.

NED’s Core Four

Most NED funds are distributed through four core grantee organizations, profiled below. All but the Free Trade Union Institute (FTUI) were specifically created to serve as NED conduits.

FTUI was established in 1977 by the AFL-CIO’s Department of International Affairs. It continued the work of its predecessor—the CIA-connected Free Trade Union Committee—which was founded in 1944 to combat left wing trade unionism in Europe. The late Irving Brown, who served on FTU’s board and was director of the AFL-CIO International Affairs Department until 1986 and then senior adviser to Lane Kirkland for international affairs, was identified by several former CIA officers as a CIA agent. (14) FTUI executive director Eugenia Kemble is a former assistant to American Federation of Teachers president Albert Shanker. Her brother Penn Kemble, now with Freedom House, was president of PRODEMCA. This “private” bipartisan group supported Reagan’s Central America policy and channeled NED grants to the Nicaraguan opposition and the anti-Sandinista newspaper La Prensa until 1986.

In addition to providing NED funds to Soviet and European unions and media, FTUI channels NED grants to the AFL-CIO’s three established regional organizations. The Latin American program is under the American Institute for Free Labor Development (AIFLD) which was launched in 1962 by Kennedy’s Labor Advisory Committee on Foreign Policy. AIFLD’s first executive director was Serafino Romualdi, whom former CIA officer Philip Agee called the “principal CIA agent for labor operations in Latin America.” (15) William Doherty, Jr., AIFLD executive director since 1965, has also been identified as a CIA agent by Agee and other former CIA officers.

The African-American Labor Center (AALC) was begun in 1964 and first directed by Irving Brown. It supported such “unions” as Holden Roberto’s National Front for the Liberation of Angola, which the CIA backed in the 1970s, along with Jonas Savimbi’s UNITA. In 1968, Brown transferred to the newly-formed Asian-American Free Labor Institute (AAFLI) which was created to organize Vietnamese labor unions and land reform as part of the multi-faceted U.S. counter-insurgency program.

The Trade Union Congress of the Philippines (TUCP) is a key recipient of FTUI grants, via AAFLI. Following the assassination of opposition leader Benigno Aquino in 1983, funding for the pro-Marcos TUCP jumped. “If people hadn’t had assistance then,” said Bud Philipps, the AAFLI administrator in the Philippines, “the success of the political left in the [Filipino] trade unions would have been phenomenal. Nationally and internationally it would have been a Waterloo.” The money to promote the U.S. policy in the Philippines was spread around CIA-style. “Imagine if you have US $100,000 to give out to families in US $500 chunks,” said Philipps. “Your stock goes way up, faster than the stock of any of the militant labor groups.” (16)

U.S. support for TUCP continues under Aquino. In September 1991, a scandal erupted in the Philippines over U.S. attempts to buy support for the military bases treaty, implicating among others Senator Ernesto Herrera, the general secretary of the TUCP. On July 19, Herrera, then a critic of the bases treaty, had written President Aquino, saying, “It will be extremely difficult to vote for an agreement which reflects an almost contemptuous disregard of Filipino workers’ interest.” Herrera reportedly switched his vote in favor of the losing treaty after AAFLI promised $3.7 million in additional TUCP support. (17)

Nor was this the first scandal over FTUI grants. In 1984, FTUI awarded grants to Panamanian union activists promoting the candidacy of Nicolas Barletta, who was backed by the U.S.-supported Panamanian military. That same year, FTUI gave secret grants to two French groups opposed to the policies of President Francois Mitterand. One was a student activist group described by a 1982 French Parliamentary Inquiry as a “satellite movement” of the right-wing paramilitary Service d’Action Civique. The other grantee was Force Ouvriere, a trade union organization which used violence when working with the CIA after World War II to oppose left-wing unions. (18) Through FTUI, NED continues funding regional affiliates of Force Ouvriere in Africa and the Caribbean.

The Center for International Private Enterprise (CIPB), another core NED grantee organization, is the U.S. Chamber of Commerce counterpart to FTUI. Established in June 1983, it supports “free market” policies and business organizations, pro-business media, training of business leaders and mobilization of business in the political process. In Eastern Europe, for example, OPE has programs to support business organizations, analyze business enterprises and provide policy recommendations and assist legislative actions in Hungary, Romania, the Czech and Slovak Federal Republic, and Poland. In Poland it also funds the Krakow Industrial Society’s efforts to publish a daily national newspaper “that will cultivate understanding of the role of private enterprise in economic and democratic development.” (19)

The National Democratic Institute for International Affairs (NDI), the Democratic Party’s vehicle for NED funding, is chaired by former Vice President Walter Mondale. The Institute’s president, J. Brian Atwood, assistant secretary for congressional relations in the Carter administration, declared: “Our philosophy is that we should be operating on a non-partisan basis. We do not care who wins an election; all we care about is the democratic system. Our conferences [have been attended] by people across the spectrum, from Social Democrats to conservatives. I think there is a danger we could pervert an election process by getting into a campaign on one side or another. (20)

As shall be seen later, that’s just what NDI did in Nicaragua.

The Republican Party also has its own conduit for NED funding—the National Republican Institute for International Affairs (NRI). J. William Middendorf, its secretary-treasurer, was head of the 1980 CIA transition team, former Secretary of the Navy, and ambassador to the Organization of American States under Reagan. Until mid-1991, Jorge Mas Canosa, chair of the Cuban American National Foundation and of the Radio Marti advisory board, served on the NRI board of directors. Oliver North’s diaries refer to Mas Canosa and the contra support network, for example, in this February 4, 1985 entry: “Felix Rodriguez, still have not gotten dollars from Jorge Mas.” The Cuban American National Foundation has received NED grants to support the work of the Madrid-based International Coalition for Human Rights in Cuba and to support the U.S. counterpart to the Havana-based Cuban Committee for Human Rights.

Another brief NED mini-scandal erupted in 1989, when NRI was accused of interfering in Costa Rica’s elections. NRI supported the successful presidential candidacy of the Social Christian United Party’s Rafael Calderon by financing the organization he directed, the conservative Association for the Defense of Costa Rican Liberty and Democracy. NRI grants were used in part for nearly $50,000 in salary paid to Calderon, who in 1986 had lost the presidential race to Oscar Arias of the National Liberation Party (PLN). In its annual reports, Calderon’s association said it used some $434,000 in “NED grants beginning in 1986 for seminars and conferences, to fund research for opposition members of the national legislature, to run public opinion polls and to train 200 instructors for a nationwide ‘political education program.’“ NED grants were also used to fund a magazine, which ran a column by Calderon condemning the Arias peace plan for Central America as “a deformation of masculine values and the defense of our national sovereignty. (21)

“Victory” in Nicaragua

Postage stampt issued in the 1980s in Nicaragua by
Frente Sandinista de Liberación Nacional

Destabilization campaigns can culminate in invasions such as Grenada in 1983 and Panama in 1989, or military coups such as Guatemala in 1954 and Chile in 1973, or “electoral coups” such as Jamaica in 1980 and Nicaragua, where economic embargo, re-escalating contra war and increased internal opposition to the Sandinistas prevailed in 1990. (22) Angola may be next.

At the March 1990 NED board meeting, President Carl Gershman called the “victory of the democratic opposition in Nicaragua...a tremendous victory for the Endowment as well.” The board minutes continued:

Those who head the party and labor institutes, whose tireless efforts helped make these victories possible, are well known to Board members. Still, there are others who made a “sterling contribution” and Mr. Gershman took the opportunity to pay tribute to them as well: from NDI, Ken Wollack, Donna Huffman, and on-site project manager Mark Feierstein; from NRI, Janine Perfit and project manager Martin Krauze; from AIFLD, Gordon Ellison and Dave Jessup; from the International Foundation for Electoral Systems, Richard Soudriette and Hank Quintero; and from Delphi International, Paul von Ward and Lee Zahnow. (23)

The Washington-based Delphi International Group, which plays a key role for NED in Nicaragua, has offices in San Francisco, Moscow, Beijing, Paris and Dublin. It is headed by Paul von Ward, a former naval officer, NATO adviser, State Department official and U.S. embassy officer. Delphi took over NED’s La Prensa grants in 1986 after PRODEMCA too openly supported military aid for the contras. These Delphi grants were first directed by Henry Quintero, former executive director of the Institute for North-South Issues (INSI), which was used by Oliver North to launder money to the contras. (24) Quintero, a former intelligence research specialist for the Department of the Army, State Department and USIA, is now with the International Foundation for Electoral Systems, described below. Delphi also administers NED grants for the right-wing Radio Corporation and other radio stations, training and “civic education” projects for women and youth, and other assistance to anti-Sandinista groups in Nicaragua.

NDI sent an election survey mission to Managua in September 1988. According to an internal draft report, a purpose of the mission was to see “what program(s) could be developed by NDI to assist the democratic opposition in presenting a unified, effective challenge to Sandinista rule.” The NDI group was worried about prospects for defeating the Sandinistas. It described the opposition as “centrifugal in dynamic, fratricidal in outlook” and, in the words of an NDI consultant, “bureaucratic, static, atomized, with low credibility in the population.” NDI found that “unification is the single most important ingredient for success by the opposition.” NED, the U.S. Embassy, and the CIA successfully forged that campaign unity in the UNO political alliance and its labor and civic affiliates—making UNO the viable choice not just for its political adherents but for disenchanted Sandinista supporters and people worn down by war and economic destabilization. (25)

Although the NED charter prohibits direct funding of political candidacies, it poured $12.5 million into 1989-90 election-related funding. NED supported UNO (insisting this wasn’t direct support for UNO candidates) and supposedly nonpartisan UNO front groups such as Via Civica (Civic Way) and the Institute for Electoral Promotion and Training (IPCE). In a meeting attended by one of the authors before the election, U.S. Embassy Charge d Affaires John Leonard referred to IPCE as a “UNO foundation.”

NED groups often play good cop to the CIA’s bad cop.

NED support for Via Civica was provided by Henry Quintero and the Washington-based International Foundation for Electoral Systems (IFES), founded in 1989. The chair of the IFES board of directors is F. Clifton White, director of the conservative John M. Ashbrook Center for Public Affairs and member of the boards of the Center for Democracy and NRI. Since he helped win the Republican presidential nomination for Barry Goldwater in 1964, White has been regarded as a leading conservative political strategist. His involvement in the Reagan administration’s overt-covert pro-Contra propaganda campaign is evident in a November 10, 1986 memo, written not long before the Iran-contra scandal broke. The memo, from Walter Raymond to then National Security Adviser John Poindexter discusses progress on a bipartisan group to promote U.S. policy in Central America, especially Nicaragua: “Although Pete Dailey [CIA counselor], Bill Casey and Clif White have all been involved in general discussion of what needs to be done, we are going to have to be sure that Pete and Bill are not involved...Hence, Clif is now taking the lead.” (26)

In Nicaragua FTUI funds the AIFLD-backed Council of Trade Union Unification (CUS) regarded as pro-Somoza until even the elite turned against the dictatorship in 1978. In 1990, FTUI provided a $73,000 grant to assist CUS “in organizing workers and in strengthening their ability to support workers’ rights” and a $493,013 grant to assist CUS “in mobilizing workers and their families to participate in and monitor the electoral process.” (27)

Good Cop-Bad Cop

NED groups often play good cop to the CIA’s bad cop while policymakers pretend that the bad cop CIA is out of the election meddling business. In reality, covert political aid also flows. The CIA reportedly spent $6 million during the election period on the Nicaraguan opposition for housekeeping costs, election-related contra support, political training for UNO operatives in Costa Rica, radio broadcasts from Costa Rica into Nicaragua, and providing travel funds and stories to European journalists.” In addition, President Bush, his son Jeb, Special Assistant to the President for Latin American Affairs William Pryce, White House Chief of Staff John Sununu and other officials worked with the Carmen Group to organize UNO campaign public relations, strategy and “private” fundraising under the guise of the “Committee for Free Elections and Democracy in Nicaragua.” (28)

An October 1991 Newsweek article titled “The CIA on the Stump” described a secret $600,000 CIA program to pay Miami-based contras to return to Nicaragua and work for UNO in the months before the election. About $100,000 was directed to Alfredo Cesar, a member of IPCE’s small governing board and now president of the Nicaraguan national assembly. “[Congress] explicitly banned covert CIA financial support for UNO,” the magazine reported, “precisely because it feared the political impact if the payments were discovered. ‘Having this election jeopardized by so little money and so few people, one U.S. intelligence official said of the $600,000 operation, “It’s so stupid.” The article, illustrating the good cop-bad cop routine, fails to mention the CIA’s multimillion dollar election-related support program which Newsweek had previously reported but dumped down the memory hole. (29)

Old Nazis and New European Democracies

NED core groups and grantees are heavily involved in shaping the political, social and economic destinies of Eastern Europe and the Soviet Union. NDI, for example, has programs for party-building, election-related assistance including seminars in grassroots organizing and civic education, election administration, election monitoring, public opinion polls and electoral law reform. In the Czech and Slovak Federal Republic, it is also convening international experts to help draft a new election law. In Hungary, it is consulting with newly-elected parliamentarians “to enhance their ability to carry out their official duties.” And in Poland, NDI is also sponsoring a U.S. training visit for senior staff administrators of the Polish Parliament. Programs are also in place in Bulgaria, Romania, the Soviet Republics, and Yugoslavia.

Some of the U.S.-supported East European parties and groups define democracy as available only to those who have specific racial, ethnic, or religious attributes—an echo of the racial nationalism that underpinned the fascist movements in post-World War I Europe. (30) In fact, some supposed democracy-builders are reviving Nazi-collaborationist parties, in some cases with the help of aging pro-Nazi forces forced to emigrate to Canada and the U.S. after World War II. (31)

Margaret Quigley of Political Research Associates documented the problem in the Russian Republic. The Free Congress Foundation not only acts as a conduit for NED funds to Yeltsin’s Inter-Regional Deputies Group, but has trained Yeltsin’s staff, including his campaign manager Arkady Murashev. According to Quigley, Yeltsin’s ties to ultra-nationalist and anti-Semitic groups are much deeper than most people realize. (32)

Yeltsin himself spoke to Pamyat officials at a time when members of the Russian nationalist anti-Jewish organization were distributing copies of the virulently anti-Jewish hoax, The Protocols of the Learned Elders of Zion. “It’s clear,” he said, that a sense of patriotism motivates you, patriotism about our motherland.” Yeltsin’s vice president, Alexander Rutskoi, is also the deputy chair of Otechestvo (Fatherland), an anti-Semitic, Russian nationalist organization. (33)

That the Free Congress Foundation is a conduit for NED funds should itself be controversial. FCF leader Paul Weyrich is a political reactionary condemned even by some conservative Catholics for his support of the Society for the Protection of Tradition, Family and Property. This renegade neo-fascist Catholic sect is closer to the ideas of the Spanish Inquisition than current Vatican teaching.

Former Nazi collaborator Laszlo Pasztor (34) is a Hungarian emigre who was founding chair of the Republican Heritage Groups Council into which he recruited individuals of anti-democratic political heritage, such as the Fascist Bulgarian National Front and Romanian Iron Guard and Ukrainian nationalist Nazi collaborators. He works with a project sponsored by Weyrich and housed at the Free Congress Foundation building. Pasztor says that when he visited Hungary, he “unofficially” met with leaders of several new political parties, including the Hungarian Democratic Forum, MDF, a group where anti-Semitism still resonates. MDF has participated in NED-funded projects in Hungary. Pasztor is assisting NED grantees by translating and evaluating proposals by Hungarian and Czechoslovakia groups. In July 1989, Pasztor informed Weyrich of his involvement in obtaining “assistance for the anti-communist democratic opposition behind the Iron Curtain” from NED. (35)

Democracy Doublethink

Imagine the leaders of the Soviet Endowment for Perestroika or even the Swedish Endowment for Social Democracy claiming victory in U.S. elections as NED did in Nicaragua. It’s not easy to imagine because public knowledge of such support would likely cause a scandal over violations of our sovereignty. U.S. law rightly prohibits foreign funding of U.S. candidates, and receiving such support, if discovered, would be political suicide.

Imagine more. Imagine a foreign endowment funding the New York Times, Washington Post, ABC, NPR, etc.; funding major think tanks, the Republican and Democratic Parties, the AFL-CIO, the Chamber of Commerce, and an assortment of women’s, student and cultural groups.

On May 15, 1991, Rep. Paul Kanjorski (D-Penn.) took to the House floor in an unsuccessful attempt to reduce NED funding. He accused NED of unaccountable and anti-democratic behavior in its foreign programs and heavy-handed tactics against congressional critics. “[I have] an internal [NED] memo,” Kanjorski charged, “which indicates that staff members have identified my district, myself, and the makeup of my district. They then attempted to set a portion of my constituency against me because of my opposition to their N.E.D. position in prior congressional hearings.” In 1986, for example, the Polish American Congress, an NED grantee, organized opposition to Kanjorski’s anti-NED stance in his heavily Polish-American district. (36)

NED cannot be understood in ahistorical isolation. It is an increasingly important player in the longtime overt and covert project to make sure the leaders of other nations conform to U.S. critical standards, and to make democracy safe for the New World Order at home and abroad.


1. Jules Archer, The Plot to Seize the White House (New York: Hawthorn Books, 1973), pp. 57-58and p. 207, citing John L. Spivak’s interview with Butler.

2. See: Christopher Simpson, Blowback (New York: Weidenfeld and Nicolson, 1988).

3. Russ Bellant, Old Nazis, the New Right, and the Republican Party (Boston: South End Press/Political Research Associates, 1991).

4. Newsweek, September 23, 1974, pp. 51-52; and Seymour Hersh, The Price of Power 
(New York: Summit Books, 1983), p. 265.

5. White House press release, March 29,1967.

6 Joel Brinkley, New York Times, February 15,1987, and John Kelly, “National Endowment for Reagan’s Democracies,” The National Reporter, Summer 1986, pp. 23-24.

7. Ibid.

8. Diane Weinstein, Allen’s spouse, was legal counsel to Vice President Dan Quayle.

9. David Ignatius, “Innocence Abroad: The New World of Spyless Coups,” Washington Post, September 22,1991.

10. Sara Diamond and Richard Hatch, “Operation Peace Institute,” Z Magazine, July-August 1990, pp. 110-112.

11. U.S. General Accounting Office, Report to Congressional Committees, Promoting Democracy: National Endowment for Democracy’s Grants Needs Management of Grants Needs Improvement, March 1991, p. 8.

12. ibid., p. 3.

13. “Government grants stopped at USC on way to Third World,” Charles Pope, Dave Moniz, The State (Columbia, S.C), May 12,1991, p. 1.

14. See: e.g., Jonathan Kwitny, Endless Enemies (New York: Penguin Books, 1984), pp. 339-48; Philip Agee, Inside the Company: CIA Diary (New York, Bantam Books), 1975, pp. 69, 624.

15. Philip Agee, op. cit., p. 64; Kwitny, op. cfc., pp. 34M3, 346-54.

16. International Labor Reports, No. 33, May/June 1989, p. 11.

17. Peacenet Report, October 17, 1991, citing mainstream Manila newspapers.

18. Mark Schapiro and Annette Levi, “NED to the Rescue,” The New Republic, December 23,1985; Alfred W. McCoy, The Politics of Heroin (New York: Lawrence Hill Books, 1991), p. 58.

19. NED 1990 Annual Report, p. 27.

20. Interview, Campaigns and Elections, May/June 1989, p. 34.

21. Doyle McManus, Los Angeles Times, October 14, 1989. See also: Boston Globe and Wall Street Journal, October 13, 1989.

22. Holly Sklar, Washington’s War on Nicaragua (South End Press,1988, 1999), p. 390-92.

23. Minutes of March 29, 1990 NED Board of Directors.

24. See for example: Report of the Congressional Committees Investigating the Iron-Contra Affair, November 1987, p. 97.

25. See Holly Sklar, “Washington Wants to Buy Nicaragua’s Elections Again,” ZMagazine, December 1989, and “Many Nicaraguan Voters Cry Uncle,” ZMagazine, April 1990 and William Robinson and David Mac Michael, “NED Overt Action: Intervention in the Nicaraguan Election,” CAW, Number 33 (Winter 1990), pp. 33-34.

26. That memo was cited in a September 1988 report of the House Committee on Foreign Affairs (whose subcommittee on International Organizations oversees NED), which condemned the domestic propaganda network. Unfortunately, the report had little impact House Foreign Affairs Committee Chair Dante Fascell (D-Fla.), a past member of the NED board of directors, personifies continued congressional support for the overt-covert “Project Democracy.”

27. NED Annual Report 1990, p. 43. GAO, Aid to Nicaragua, May 1991, Report pp. 30-31.

28. Peter Eisner and Knut Royce, Newsday, March 1,1990. On the Carmen Group, see: William I. Robinson, “US. Overt Intervention: Nicaraguan ‘Electoral Coup,’“ CAIB, Number 34 (Summer 1990), pp. 32-35.

29. Newsweek, October 21,1991; March 12,1990; September 25 and October 9,1989.

30. Chip Berlet and Holly Sklar, “The NED’s Ex-Nazi Advisor,” The Nation, April 2,1990, pp. 450-52.

31. CAIB, Number 35, (Fall 1990), pp. 17-32.

32. Margaret Quigley, “Uncritical Coverage,” FAIR Extra, December 1991, pp. 6-9.

33. Ibid.

34. Pasztor has misrepresented his past for years, but leading Holocaust historian Randolph L. Braham fully documented Pasztor’s collaboration and conviction in the June/July 1989 issue of Midstream, pp. 25-28.

35. Berlet and Sklar, “NED’s Ex-Nazi Advisor,” op. cit.

36. Polish American Congress, Washington office news release, 1986.

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