WASHINGTON - With less than two weeks to go before scheduled elections, $9-million in American aid has only recently begun to flow to Nicaragua to contest with ballots instead of bullets the leftist Sandinistas' decade-old hold on power. Most of the money for the Feb. 25 vote is being dispensed by the National Endowment for Democracy (NED), an unusual organization that is ostensibly private but subsists almost entirely on U.S. taxpayers' money.
Created just over six years ago during the heyday of Reagan administration anti-communism, the endowment has, after a bumpy start, built a fairly balanced record as a promoter of democracy in rightist as well as leftist dictatorships.
Working mainly through four groups representing the Democratic and Republican parties, the U.S. labor movement and business, NED has distributed more than $100-million in 40 nations from Peru to Papua New Guinea.
Its observer teams exposed fraud in the 1986 Philippines elections and helped eject dictator Ferdinand Marcos. During the dark days before the current explosion of freedom in Eastern Europe, NED money helped keep Poland's Solidarity labor movement alive.
But the size of the special Nicaragua appropriation - equal to more than half NED's regular annual budget of $15.8-million - and the fact that it was largely intended to benefit the candidacy of opposition leader Violeta Chamorro, have given rise to concern that the endowment is both wasting money and compromising its charter's commitment to support the democratic process, not specific candidates.
Noting the much smaller amounts NED spent to support free voting in more populous Chile and the Philippines ($1.5-million in Chile, population 13-million, and $900,000 in the Philippines, a nation of 65-million compared to Nicaragua's 3.5-million), Sen. Tom Harkin, D-Iowa, asked in Congress last fall, "Do we really want Mrs. Chamorro to be known as the best candidate the United States can buy?"
In the House, Rep. Sylvio Conte, D-Mass., dubbed the Nicaragua bill the "Stealth bamba."
"No wonder this bamba is flying by night," Conte said, in a pun on the Pentagon's Stealth bomber. "It is one thing to support the vital cause of democracy. It is another to be taken for a ride."
When the money was approved in October, concern was expressed that the amount - equal to $5 for every Nicaraguan voter - would prove indigestible. In fact, U.S. and Nicaraguan bureaucracy have combined to stall distribution of the appropriation, more than one third of which was earmarked for the opposition coalition.
The coalition, known as UNO, started to receive money only in mid-January. Disorganized and politically inexperienced in comparison with the Sandinistas, UNO's presidential candidate lagged far behind in a recent poll: 24 percent for Chamorro compared to 51 percent for President Daniel Ortega.
In an interview, NED president Carl Gershman defended the program.
"The fact of the matter is that there was strong support for this in Congress and the administration and the funds were made available," he said. "Congress and the administration are turning to the endowment to address an issue that is central and important. It shows that we have achieved a new level of credibility and respect."
Achieving credibility has not been easy.
When NED was created, many liberals feared it would be a surrogate for the CIA, backing foreign groups that were pro-American but not necessarily pro-democratic. There was also concern that the endowment would act as a tool of the Reagan administration, despite its pledge to reflect bipartisan American goals.
Early NED projects, such as smuggling into the Soviet Union 10,000 copies of Animal House, George Orwell's satire on communism, heightened those concerns. So did activities by some groups created to distribute NED money.
The Free Trade Union Institute, the NED affiliate of the AFL-CIO, got into hot water in 1984 for funding a candidate in Panama who had the support of the military. The following year, it was disclosed that the institute had given a half million dollars to a French student group with links to extreme rightists and organized crime.
NED itself was criticized for initially funding the Nicaraguan opposition newspaper, La Prensa, through a U.S. group, PRODEMCA, that later came out in support of the Contra rebels.
Such controversies have become fewer but have not disappeared.
Last year, the National Republican Institute for International Affairs, another NED "core group," was criticized for giving $434,000 to a conservative association tied to the main party opposing Costa Rican President Oscar Arias.
Rafael Angel Calderon of the opposition Social Christian Party defeated Carlos Manuel Castillo of the governing National Liberation Party in last Sunday's presidential election. Arias himself was barred by the constitution from seeking a second term in office.
Many in Congress questioned what business NED had putting any of its limited funds into a country with a 100-year history of democracy, to oppose a president who had won the Nobel prize for his Central American peace plan.
Keith Schuette, president of the Republican institute, vehemently denied charges by some Arias supporters that there was any link between the aid, which began in 1986, and Costa Rica's decision to shut down an airstrip used by Nicaraguan Contras.
"Anyone who says this was part of some Ollie North-Ronald Reagan plot to stick it in Arias' eye is lying," Schuette said, referring to the Reagan administration's covert campaign, run by White House aide Oliver North, to continue military backing for the contras despite Congressional prohibition.
Nevertheless, NED support for the domestic activities of the Association for the Defense of Costa Rican Liberty and Democracy was "terminated" last summer, Schuette said, although the conservative group used the remainder of its NED grant for activities in Panama and Nicaragua.
NED President Gershman conceded that the Costa Rica program was "one we could have done without."
"We give them (the four NED core groups) as much autonomy as possible," he said, explaining how such cases come about. "We review their programs but the tendency has been not to question their priorities."
Profiting from this freedom, NED affiliates have developed strikingly different approaches to their democratic mission.
The Republicans, following the model of many European parties, seek out politically like-minded groups, while the Democrats have focused on educating activists across the political spectrum in the basics of democratic practice.
"Generally, the Democratic institute has done a reasonably good job doing almost a League of Women Voters sort of thing," said Robert J. Kurz, a Latin America specialist at the Brookings Institution. "The Republican entity has been engaged in shenanigans."
"The Republicans support conservative groups while the Democrats support the democratic process," said a NED source who asked to remain anonymous. "Virtually every country in Central America and the Caribbean has complained about this. In small societies, a little bit of money can seriously unbalance the political process. It's the single biggest problem we face."
In response, Schuette said his institute was instilling democratic principles in key rightist sectors.
"Most conservative elements in these societies have been more comfortable with dictatorships because they tend to equate democracy with socialism and nationalization," he said. "We try to provide them with skills to participate in the democratic process."
J. Brian Atwood, Schuette's counterpart at the National Democratic Institute for International Affairs, conceded that the Republican approach had worked in Chile.
The Republicans funded a party that favored continuation of that country's military dictatorship. But when it appeared that Gen. Augusto Pinochet would falsify the results of the 1988 plebiscite against his rule, the leader of the pro-Pinochet National Renovation Party threatened to release the results of a poll indicating that Pinochet would lose.
In its short lifetime, NED has concentrated its funds in this hemisphere. Less than $1-million has gone to China, the world's most populous nation. Almost no money has been allocated to Islamic countries, many of them also in the clutches of authoritarian regimes.
More money has gone to anti-Communist parties and labor unions in Portugal, which overthrew a military dictatorship 16 years ago, than to support the ongoing struggle against South Africa's minority white regime.
Apart from aid to Poland's Solidarity movement, NED has also given short shrift to Eastern Europe. That focus is changing now that independent institutions are springing up throughout once-monolithic states.
"We would like to do the same thing in the Soviet Union, promoting free trade unions, as we've done in Poland," said Adrian Karatnycky, director of the Free Trade Union Institute's Eastern European division.
Schuette said he expected to devote between a quarter and a third of the Republican institute's next budget to Eastern Europe compared to only five percent at present.
The Democratic institute has already held workshops on party building in Hungary, which is to hold its first free elections this spring, and is teaching members of Poland's new democratically elected parliament how to organize a legislature.
Although NED's self-styled missionaries for democracy are increasingly preaching to the converted and the rusty iron curtain seems to be disintegrating of its own accord, Gershman said he didn't feel a diminished sense of purpose.
"As these countries open up, it becomes possible to support parties, newspapers, unions," he said. "In many respects, we have a larger job to do."