5. National Endowment for Democracy Act

Partial text of Public Law 98-164 [H.R. 2915], 97 Stat. 1017 at 1039, approved November 22, 1983; as amended by Public Law 99-93 [Foreign Relations Authorization Act, Fiscal Years 1986 and 1987; H.R. 2068], 99 Stat. 405, approved August 16, 1985; Public Law 100-204 [Foreign Relations Authorization Act, Fiscal Years 1988 and 1989; H.R. 1777], 101 Stat. 1331, approved December 22, 1987; and by Public Law 102-138 [Foreign Relations Authorization Act, Fiscal Years 1992 and 1993; H.R. 1415], 105 Stat. 647, approved October 28, 1991

AN ACT To authorize appropriations for fiscal years 1984 and 1985 for the Department of State, the United States Information Agency, the Board for International Broadcasting, the Inter-American_Foundation, and the Asia Foundation, to establish the National Endowment for Democracy, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

TITLE V-NATIONAL ENDOWMENT FOR DEMOCRACY

SHORT TITLE

SEC. 501. This title may be cited as the "National Endowment for Democracy Act".

NATIONAL ENDOWMENT FOR DEMOCRACY 1

SEC. 502.2 (a) The Congress finds that there has been established in the District of Columbia a private, nonprofit corporation known

Sec. 212 of the Foreign Relations Authorization Act, Fiscal Years 1990 and 1991 (Public Law 101-246; 104 Stat. 54) provided the following:

"SEC. 212. GENERAL ACCOUNTING OFFICE STUDY OF THE NATIONAL Endowment For Democra

CY.

"(a) STUDY OF NED-The Comptroller General of the United States shall conduct a study of the operations of the National Endowment for Democracy. Such study shall evaluate

"(1) the programs and operations of the National Endowment for Democracy;

"(2) the effectiveness of the National Endowment for Democracy in fulfilling its goals; and "(3) the management structure of the National Endowment for Democracy, including

"(A) an assessment of the present composition of the board of directors; and

"(B) the capability and effectiveness of the board in providing objective oversight of the programs and operations of the National Endowment for Democracy. "(b) REPORT TO CONGRESS.-Not later than one year after the date of the enactment of this Act, the Comptroller General of the United States shall prepare and submit a report of the findings of such study to the Committee on Foreign Affairs of the House of Representatives and the Committee on Foreign Relations of the Senate.".

222 U.S.C. 4411. Sec. 201(a)(3) of the Foreign Relations Authorization Act, Fiscal Years 1992 and 1993 (Public Law 102-138; 105 Stat. 692) authorized to be appropriated to National Endowment for Democracy for fiscal year 1992: $25,000,000 and an additional $5,000,000 authorized by sec. 211, pending the completion of a report (see below), and for fiscal year 1993: $31,250,000. Previous authorizations: fiscal year 1984-$31,300,000; fiscal year 1985-$31,300,000; fiscal year 1986 $18,400,000; fiscal year 1987-$18,400,000; fiscal year 1988 $17,500,000; fiscal year 1989$18,100,000; fiscal year 1990-$25,000,000; fiscal year 1991-$25,000,000.

Sec. 211 of Public Law 102-138 provided the following:

"SEC. 211. PROGRAM REVIEW OF NED.

Continued

as the National Endowment for Democracy (hereafter in this title referred to as the "Endowment") which is not an agency or establishment of the United States Government.

(b) The purposes of the Endowment, as set forth in its articles of incorporation, are—

(1) to encourage free and democratic institutions throughout the world through private sector initiatives, including activities which promote the individual rights and freedoms (including internationally recognized human rights) which are essential to the functioning of democratic institutions;

(2) to facilitate exchanges between United States private sector groups (especially the two major American political parties, labor, and business) and democratic groups abroad;

(3) to promote United States nongovernmental participation (especially through the two major American political parties, labor, business, and other private sector groups) in democratic training programs and democratic institution-building abroad; (4) to strengthen democratic electoral processes abroad through timely measures in cooperation with indigenous democratic forces;

(5) to support the participation of the two major American political parties, labor, business, and other United States private sector groups in fostering cooperation with those abroad dedicated to the cultural values, institutions, and organizations of democratic pluralism; and

(6) to encourage the establishment and growth of democratic development in a manner consistent both with the broad concerns of United States national interests and with the specific requirements of the democratic groups in other countries which are aided by programs funded by the Endowment.

"(a) ADDITIONAL AUTHORization of APPROPRIATIONS.-In addition to amounts authorized to be appropriated under section 201(3), after the submission of the report under subsection (b), there are authorized to be appropriated for the National Endowment for Democracy $5,000,000 for fiscal year 1992.

"(b) Reporting RequiremenT.-The National Endowment for Democracy shall submit to the Chairman of the Committee on Foreign Relations and the Speaker of the House of Representatives a comprehensive report concerning the actions of the National Endowment for Democracy and certain grantees (the Free Trade Union Institute, the Center for International Private Enterprise, the National Republican Institute for International Affairs, and the National Democratic Institute for International Affairs) to comply with the recommendations of the General Accounting Office report of March 1991, entitled 'Promoting Democracy: National Endowment for Democracy's Management of Grants Needs Improvement'.

"(c) GENERAL ACCOUNTING OFFICE REPORT.-Not more than 90 days after the date of the enactment of this Act, the Comptroller General of the United States shall prepare and submit to the Committee on Foreign Relations of the Senate and the Speaker of the House of Representatives an evaluation of the actions taken by the National Endowment for Democracy and certain grantees to comply with the General Accounting Office report of March 1991.

"(d)

"(e) SENSE OF Congress on Private DonatiONS.-It is the sense of the Congress that the National Endowment for Democracy should make every effort to solicit private contributions to realize the purposes of the Endowment as set forth in section 502(b) of the National Endowment for Democracy Act."

Title V of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993 (Public Law 102-395; 106 Stat. 1872), provided $30,000,000 for fiscal year 1993. Previous appropriations include: fiscal year 1984-$18,000,000; fiscal year 1985 $18,500,000; fiscal year 1986 $18,000,000; fiscal year 1987-$15,000,000; fiscal year 1988$16,875,000; fiscal year 1989 $15,800,000; fiscal year 1990-$17,000,000; fiscal year 1991$25,000,000; fiscal year 1992 $27,500,000.

GRANTS TO THE ENDOWMENT

SEC. 503. (a) The Director of the United States Information Agency shall make an annual grant to the Endowment to enable the Endowment to carry out its purposes as specified in section 502(b). Such grants shall be made with funds specifically appropriated for grants to the Endowment or with funds appropriated to the Agency for the "Salaries and Expenses" account. Such grants shall be made pursuant to a grant agreement between the Director and the Endowment which requires that grant funds will only be used for activities which the Board of Directors of the Endowment determines are consistent with the purposes described in section 502(b), that the Endowment will allocate funds in accordance with subsection (e) of this section, and that the Endowment will otherwise comply with the requirements of this title. The grant agreement may not require the Endowment to comply with requirements other than those specified in this title.

(b) Funds so granted may be used by the Endowment to carry out the purposes described in section 502(b), and otherwise applicable limitations on the purposes for which funds appropriated to the United States Information Agency may be used shall not apply to funds granted to the Endowment.

(c) Nothing in this title shall be construed to make the Endowment an agency or establishment of the United States Government or to make the members of the Board of Directors of the Endowment, or the officers or employees of the Endowment, officers or employees of the United States.

(d) The Endowment and its grantees shall be subject to the appropriate oversight procedures of the Congress.

(e) of the amounts made available to the Endowment for each of the fiscal years 1984 and 1985 to carry out programs in furtherance of the purposes of this Act

(1) not less than $13,800,000 shall be for the Free Trade Union Institute; and

(2) not less than $2,500,000 shall be to support private enterprise development programs of the National Chamber Foundation.

(f) Nothing in this title shall preclude the Endowment from making grants to independent labor unions.

ELIGIBILITY OF THE ENDOWMENT FOR GRANTS

SEC. 504.5 (a) Grants may be made to the Endowment under this title only if the Endowment agrees to comply with the requirements specified in this section and elsewhere in this title.

(b) (1) The Endowment may only provide funding for programs of private sector groups and may not carry out programs directly.

(2) The Endowment may provide funding only for programs which are consistent with the purposes set forth in section 502(b).

322 U.S.C. 4412.

Subsec. (f) was added by sec. 212 of the Foreign Relations Authorization Act, Fiscal Years 1988 and 1989 (Public Law 100-204; 101 Stat. 1376).

22 U.S.C. 4413.

(c)(1) Officers of the Endowment may not receive any salary or other compensation from any source, other than the Endowment, for services rendered during the period of their employment by the Endowment.

(2) If an individual who is an officer or employee of the United States Government serves as a member of the Board of Directors or as an officer or employee of the Endowment, that individual may not receive any compensation or travel expenses in connection with services performed for the Endowment.

(d)(1) The Endowment shall not issue any shares of stock or declare or pay any dividends.

(2) No part of the assets of the Endowment shall inure to the benefit of any member of the Board, any officer or employee of the Endowment, or any other individual, except as salary or reasonable compensation for services.

(e)(1) The accounts of the Endowment shall be audited annually in accordance with generally accepted auditing standards by independent certified public accountants or independent licensed public accountants certified or licensed by a regulatory authority of a State or other political subdivision of the United States. The audits shall be conducted at the place or places where the accounts of the Endowment are normally kept. All books, accounts, financial records, reports, files, and all other papers, things, or property belonging to or in use by the Endowment and necessary to facilitate the audits shall be made available to the person or persons conducting the audits; and full facilities for verifying transactions with any assets held by depositories, fiscal agents, and custodians shall be afforded to such person or persons.

(2) The report of each such independent audit shall be included in the annual report required by subsection (h). The audit report shall set forth the scope of the audit and include such statements as are necessary to present fairly the Endowment's assets and liabilities, surplus or deficit, with an analysis of the changes therein during the year, supplemented in reasonable detail by a statement of the Endowment's income and expenses during the year, and a statement of the application of funds, together with the independent auditor's opinion of those statements.

(f)(1) The financial transactions of the Endowment for each fiscal year may be audited by the General Accounting Office in accordance with such principles and procedures and under such rules and regulations as may be prescribed by the Comptroller General of the United States. Any such audit shall be conducted at the place or places where accounts of the Endowment are normally kept. The representatives of the General Accounting Office shall have access to all books, accounts, records, reports, files, and all other papers, things, or property belonging to or in use by the Endowment pertaining to its financial transactions and necessary to facilitate the audit; and they shall be afforded full facilities for verifying transactions with any assets held by depositories, fiscal agents, and custodians. All such books, accounts, records, reports, files, papers, and property of the Endowment shall remain in the possession and custody of the Endowment.

(2) A report of each such audit shall be made by the Comptroller General to the Congress. The report to the Congress shall contain such comments and information as the Comptroller General may deem necessary to inform the Congress of the financial operations and condition of the Endowment, together with such recommendations with respect thereto as he may deem advisable. The report shall also show specifically any program, expenditure, or other financial transaction or undertaking observed in the course of the audit, which, in the opinion of the Comptroller General, has been carried on or made contrary to the requirements of this title. A copy of each report shall be furnished to the President and to the Endowment at the time submitted to the Congress.

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(g) The financial transactions of the Endowment for each fiscal year shall be audited by the United States Information Agency under the conditions set forth in subsection (f)(1).

(h)(1) The Endowment shall ensure that each recipient of assistance provided through the Endowment under this title keeps separate accounts with respect to such assistance and such records as may be reasonably necessary to fully disclose the amount and the disposition by such recipient of the proceeds of such assistance, the total cost of the project or undertaking in connection with which such assistance is given or used, and the amount and nature of that portion of the cost of the project or undertaking supplied by other sources, and such other records as will facilitate an effective audit.9

(2) The Endowment shall ensure that it, or any of its duly authorized representatives, shall have access for the purpose of audit and examination to any books, documents, papers, and records of the recipient that are pertinent to assistance provided through the Endowment under this title. The Comptroller General of the United States or any of his duly authorized representatives shall also have access thereto for such purpose.

(i) Not later than February 110 of each year, the Endowment shall submit an annual report for the preceding fiscal year to the President for transmittal to the Congress. The report shall include a comprehensive and detailed report of the Endowment's operations, activities, financial condition, and accomplishments under this title and may include such recommendations as the Endowment deems appropriate. The Board members and officers of the Endowment shall be available to testify before appropriate committees of the Congress with respect to such report, the report of any audit made by the Comptroller General pursuant to subsection (f), or any other matter which any such committee may determine.

Subsec. (g) was added by subsec. (bx2) of sec. 210 of the Foreign Relations Authorization Act, Fiscal Years 1986 and 1987 (Public Law 99-93; 99 Stat. 405.)

Sec. 211(d) of the Foreign Relations Authorization Act, Fiscal Years 1992 and 1993 (Public Law 102-138; 105 Stat. 695), struck out "may also" and inserted in lieu thereof "shall".

Subsec. (b)(1) of sec. 210 of Public Law 99-93 (99 Stat. 405 at 432), redesignated subsecs. (g and (h) as subsecs. (h) and (i), respectively.

The phrase "separate accounts with respect to such assistance" was added by sec. 211 of the Foreign Relations Authorization Act, Fiscal Years 1988 and 1989 (Public Law 100-204; 101 Stat 1376).

10 Subsec. (d) of sec. 210 of Public Law 99-93 (99 Stat. 405 at 432), substituted "February 1" in lieu of "December 31".