The Government Funded National Endowment for Democracy

The National Endowment for Democracy (NED) is frequently described as a ‘private, not-for-profit foundation.’  At least, at its website, NED acknowledges funding from the US Congress.  In NED’s latest IRS Form 990 filing, over $135 million of their $136 million in revenue is identified as coming from government sources.

NED was founded in 1983.  It was founded not by private action, but by an Act of Congress.  Yet its authorizing legislation seems a bit ambiguous, stating in part that “Nothing in this title shall be construed to make the Endowment an agency or establishment of the United States government.” 

At its website, NED couches its goals in noble terms:  “NED is dedicated to fostering the growth of a wide range of democratic institutions abroad, including political parties, trade unions, free markets and business organizations, as well as the many elements of a vibrant civil society that ensure human rights, an independent media, and the rule of law.”

Following heated debate in its early years, and charges that it was dominated by Republican interests, NED has worked to involve labor unions in its support, and tries to communicate a broader, encompassing set of stated goals.   At its website today, NED emphasizes that “From its beginning, NED has remained steadfastedly bipartisan.  Created jointly be Republicans and Democrats, NED is governed by a board balanced between both parties and enjoys Congressional support across the political spectrum.”

Whether or not a ‘steadfastedly bipartisan’ organization is necessarily independent or unbiased remains a good question, however, in light of the proved ability of both our major parties to be captured by special interest groups. 

The current Chairman of the Board of NED is Richard Gephardt, formerly Majority as well as Minority Leader in the US Senate, and Senator from Missouri.  In 2005, after his final term in the Senate, Gephardt became a consultant and lobbyist.  One of his clients has been the Republic of Turkey.  Norm Coleman, formerly a Senator from Minnesota whose service included a role as Chairman of the Senate Permanent Subcommittee on Investigations, is another board member.  The entire roster of board members for NED can be seen here.

NED has been open in its expression of concern about recent developments in Russia; for example, see its Eurasia overview here, and a listing of its grants for projects in Russia here.   Whether taxpayers should be funding these efforts, however noble they may appear, remains a matter of debate.   Noble-sounding goals can become a form of advertising for more intense, concentrated special interests.  And the energy-rich Central Asia region certainly has its share of attention from Americans who care primarily about their own wallets, and are happy to try to have taxpayer resources applied in ways that may make their own wallets fatter, at general expense.

Bill Bergman has 10 years of experience as a stock market analyst sandwiched around 13 years as an economist and financial markets policy analyst at the Federal Reserve Bank of Chicago. He earned an M.B.A. as well as an M.A. in Public Policy from the University of Chicago in 1990. Mr. Bergman is currently working with Social Movement Sciences LLC, a new enterprise developing evaluation and funding services for not-for-profit organizations.

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