Muzzling a watchdog. soft-pedals probe of National Endowment for Democracy - General Accounting Office GAO - NED

Washington Monthly, Jan-Feb, 1997 by David Corn

THE INDEPENDENT WATCHDOG OF Congress. That's the impressive-sounding catch phrase often used to describe the General Accounting Office (GAO), the nonpartisan government outfit that conducts hundreds of investigations a year for the legislators of Capitol Hill. Its 2,500 evaluators investigate subjects ranging from acquisition problems at the Pentagon to the efficiency of penny manufacturing at the U.S. Mint, and they often do a good job. Readers of The Washington Monthly are well aware of the GAO's importance and of the need for an objective evaluator of government programs that is immune to political pressures and bureaucratic power plays.

Yet the independence of the GAO was challenged recently when it dared to question the existence of a small, obscure, government-financed foundation that happens to be a personal favorite of major players across Washington. What happened doesn't constitute a major scandal. But if the GAO softpedaled a report for political reasons, that ought to worry any citizen concerned about government accountability.

Several years ago, the House Foreign Affairs Committee asked the GAO to look into the proliferation of pro-democracy programs run by federal agencies. With the end of the Cold War, the State Department, the US. Agency for International Development (AID), the U.S. Information Agency, the Pentagon, and others were each grabbing for a piece of this growth industry. One small but significant participant in the pro-democracy field has been the National Endowment for Democracy (NED), which receives up to $50 million a year from Congress and disburses these federal funds to organizations supposedly promoting democracy in foreign lands. Most of its money is funneled to four "core grantees"-the international arms of the Democratic and Republican parties, the AFL-CIO, and the U.S. Chamber of Commerce.

With this quartet of politically wired organizations as the prime beneficiaries of the NED, influential people throughout the capitol have a vital stake in the foundation. To say the NED is well connected is an understatement. Its board members and supporters include such political luminaries as Richard Lugar, Zbigniew Brzezinski, Walter Mondale, John McCain, and Jeanne Kirkpatrick.

Using NED dollars, the core grantees and other recipients conduct assorted activities, from worthy projects like how-to-register-voters seminars in newly democratic nations, to more questionable exercises like flying operatives and consultants to fancy overseas hotels for conferences. Managed since its creation by a small band of neoconservatives who use government funds to wage their own foreign policy, the foundation bears a troublesome past. It has assisted groups with agendas other than the promotion of democracy, such as a thuggish far-right outfit in France and a Costa Rican policy institute that schemed to unseat an elected president. Past government audits have found lax financial management. In other words, the foundation could use a little outside inspection.

In 1993, a team of General Accounting Office evaluators began studying the crazy quilt of federal democracy programs, and subsequently they divided up the project into portions. One was to be a review of the NED. "The GAO was so appalled by the lack of oversight at NED and other matters that it wanted to issue a separate report on NED," says a former foundation official. "This made people at NED very nervous. They were praying it wouldn't be too negative."

Their prayers were answered. And although the way it happened is a matter of contention, the episode prompts questions about the independence of GAO and suspicion about potential, if not actual, conflicts of interest within the investigative arm of Congress. It also shows how a government program can be rigged so it becomes a political sacred cow.

Over the course of two years, several GAO employees toiled on the NED study, examining grants in several countries, interviewing past and present staff members, and preparing statistical analyses that compared NED and AID programs. Then in the spring of 1995, a slightly odd event occurred. The GAO evaluators were told to speak to John Brademas, the former Democratic congressman who chairs the NED. The investigators were well aware of Brademas's position with the foundation. But, according to Joe Kelley, the GAO manager supervising the project, they were surprised to learn that Brademas also sat on the Comptroller General's Consultant Panel, a collection of prominent people who advised Charles Bowsher, then the head of the GAO. Thus the GAO evaluators were probing an organization overseen by an adviser to their boss. This situation, Kelley remarked, "troubled me and other people"

Several GAO people, including Kelley, traveled to New York to see Brademas, now president emeritus at New York University. At that meeting, according to Kelley, Brademas expressed disappointment that the investigators had not contacted him earlier. "He tried to put pressure on the evaluators," another former GAO official says. "He was upset he had not been notified of the investigation and that he did not know about it until we were about halfway through. Our position was that we don't notify everybody on the board of organizations we evaluate" Brademas denies ever applying pressure.