THE National Endowment for Democracy is a tiny, yet surprisingly controversial part of the United States foreign policy apparatus.
Its off-beat projects include securing old ``Star Wars'' computers from the Pentagon to train journalists in South Africa and advising groups on how to publish pocket-sized copies of George Orwell's novel, ``Animal Farm,'' for Cuba.
Supporters say the NED is a cost-effective way to promote democracy oversees. But critics who see the endowment as a cold-war relic and a slush fund nearly succeeded in killing the 10-year-old agency this year.
The agency's survival - guaranteed by House and Senate votes late last week - is a tribute to an usual lobbying campaign that brought together Eastern European leaders, prominent columnists such as George Will, and three former presidents. A similar campaign earlier saved Radio Liberty/Radio Free Europe from extinction.
The NED was created in 1983 by President Reagan as private organization funded largely by the federal government. The agency uses 70 percent of its funding to pay four US public-policy organizations affiliated with the Republican and Democratic Parties, the AFL-CIO, and the Chamber of Commerce to teach political techniques to democratic groups abroad. During the past 10 years, the NED has distributed 1,500 grants worth $200 million.
Within the larger scope of US foreign assistance, that amount is relatively small. But, says NED president Carl Gershman, ``Sometimes you can find a small and very focused operation that can be a good symbolic target.''
That's what happened to the NED in this year of budget-cutting. Deficit hawks on Capitol Hill attacked the agency because nearly three-quarters of its funds are awarded without competitive bidding. Critics charge that the NED discourages well-planned and cost-effective foreign policy initiatives, and that grantees receive money without having to follow all of the federal government's pricing principles.
``That is why the NED was set up: to avoid competition for funds,'' says Sen. Hank Brown (R) of Colorado. ``To talk about this as a debate of democracy is absurd. This is special treatment for the big boys.''
OPPONENTS also argue that the NED duplicates a number of services already provided by other government organizations, such as the US Information Agency and the Agency for International Development - but without the accountability of those agencies.
``If we are going to make fools of ourselves around the world ... with our involvement in the internal political affairs of foreign nations, let our State Department and our president make that mistake, but not a private entity funded by the money of the taxpayers,'' says Rep. Paul Kanjorski (D) of Pennsylvania, a leading critic of the NED.
On the other side of the issue, President Clinton has called the NED ``one of our most important and effective instruments form supporting democracy abroad.'' Mr. Gershman argues that his agency plays a unique role on such issues as human-rights.
``The endowment was breaking new ground in the 1980s by being active in Poland [with Solidarity] before the communist regimes fell. We are increasingly active in areas where new challenges face the endowment, particularly the Middle East,'' he says.
Gershman denies the suggestion of some critics that, while the NED may be a great idea, it should not receive federal funds in a time of belt-tightening.
``We're a grantmaking institution, and you're not going to raise private money to make grants,'' he says. ``I think that we serve a very important public purpose, and if such a public purpose is being served, it's appropriate to receive public funding.''
Congress eventually agreed. At first, the House, led by budget-cutting freshmen, voted to delete all funding for the NED. But the Senate approved $35 million for the program.
And last week House and Senate negotiators settled on the $35 million figure, which was then approved by both houses. Although it's considerably less than what Clinton wanted (he proposed a $50 million budget), it is more than the NED's 1992-93 budget ($27.5 million).