A Shadow US Foreign Policy

Exclusive: A shadow foreign policy apparatus built by Ronald Reagan for the Cold War survives to this day as a slush fund that keeps American neocons well fed and still destabilizes target nations, now including Ukraine, creating a crisis that undercuts President Obama, reports Robert Parry.

By Robert Parry

The National Endowment for Democracy, a central part of Ronald Reagan’s propaganda war against the Soviet Union three decades ago, has evolved into a $100 million U.S. government-financed slush fund that generally supports a neocon agenda often at cross-purposes with the Obama administration’s foreign policy.

NED is one reason why there is so much confusion about the administration’s policies toward attempted ousters of democratically elected leaders in Ukraine and Venezuela. Some of the non-government organizations (or NGOs) supporting these rebellions trace back to NED and its U.S. government money, even as Secretary of State John Kerry and other senior officials insist the U.S. is not behind these insurrections.

Carl Gershman, president of the National Endowment for Democracy.

Carl Gershman, president of the National Endowment for Democracy.

So, while President Barack Obama has sought to nurture a constructive relationship with Russia’s President Vladimir Putin especially in hotspots like Iran and Syria, NED has invested in projects in Russia’s close neighbor, Ukraine, that fueled violent protests ousting President Viktor Yanukovych, who won election in 2010 in balloting that was viewed by international observers as fair and reflecting the choice of most Ukrainian citizens.

Thus, a U.S.-sponsored organization that claims to promote “democracy” has sided with forces that violently overthrew a democratically elected leader rather than wait for the next scheduled election in 2015 to vote him out of office.

For NED and American neocons, Yanukovych’s electoral legitimacy lasted only as long as he accepted European demands for new “trade agreements” and stern economic “reforms” required by the International Monetary Fund. When Yanukovych was negotiating those pacts, he won praise, but when he judged the price too high for Ukraine and opted for a more generous deal from Russia, he immediately became a target for “regime change.”

Last September, NED’s longtime president, Carl Gershman, took to the op-ed page of the neocon-flagship Washington Post to urge the U.S. government to push European “free trade” agreements on Ukraine and other former Soviet states and thus counter Moscow’s efforts to maintain close relations with those countries. The ultimate goal, according to Gershman, was isolating and possibly toppling Putin in Russia with Ukraine the key piece on this global chessboard.

“Ukraine is the biggest prize,” Gershman wrote. “The opportunities are considerable, and there are important ways Washington could help. The United States needs to engage with the governments and with civil society in Ukraine, Georgia and Moldova to ensure that the reform process underway not only promotes greater trade and development but also produces governments that are less corrupt and more accountable to their societies. An association agreement with the European Union should be seen not as an end in itself but as a starting point that makes possible deeper reforms and more genuine democracy.

“Russian democracy also can benefit from this process. Ukraine’s choice to join Europe will accelerate the demise of the ideology of Russian imperialism that Putin represents.   Russians, too, face a choice, and Putin may find himself on the losing end not just in the near abroad but within Russia itself.”

Shadow Structure

In furtherance of these goals, NED funded a staggering 65 projects in Ukraine, according to its latest report.  The funding for these NGOs range from tens of thousands of dollars to hundreds of thousands of dollars and created for NED what amounted to a shadow political structure of media and activist groups that could be deployed to stir up unrest when the Ukrainian government didn’t act as desired.

This NED shadow structure, when working in concert with domestic opposition forces, had the capability to challenge the decisions of Yanukovych’s elected government, including the recent coup spearheaded by violent neo-Nazis that overthrew him. Presumably, NED wanted the “regime change” without the neo-Nazi element. But that armed force was necessary for the coup to oust Yanukovych and open the path for those IMF-demanded economic “reforms.”

Beyond the scores of direct NED projects in Ukraine, other major NED recipients, such as Freedom House, have thrown their own considerable weight behind the Ukraine rebellion. A recent Freedom House fundraising appeal read: “More support, including yours, is urgently needed to ensure that Ukrainian citizens struggling for their freedom are protected and supported.” Freedom House meant the “citizens struggling” against their elected government.

So, over this past week, a policy dispute about whether Ukraine should accept the European Union’s trade demands or go with a more generous $15 billion loan from Moscow escalated into violent street clashes and finally a putsch spearheaded by neo-Nazi storm troopers who took control of government buildings in Kiev.

With Yanukovych and his top aides forced to flee for their lives, the opposition-controlled parliament then passed a series of draconian laws often unanimously, while U.S. neocons cheered and virtually no one in the U.S. press corps noted the undemocratic nature of what had just happened. [See Consortiumnews.com’s “Cheering a ‘Democratic’ Coup in Ukraine.”]

An Incipient Civil War

On Wednesday, Yanukovych insisted that he was still the rightful president and his supporters seized government buildings in the eastern, ethnically Russian part of the country, setting the stage for what has the look of an incipient civil war.

Meanwhile, the U.S. government appears nearly as divided as the Ukrainian people. While neocon holdovers in the State Department, particularly Assistant Secretary of State for European Affairs Victoria Nuland, helped instigate the crisis, President Obama has seen his collaboration with Putin to tamp down crises in Syria and Iran put at risk. That cooperation was already under attack from influential neocons at the Washington Post and other media outlets.

Then, last December, Nuland, the wife of prominent neocon Robert Kagan, reminded Ukrainian business leaders that, to help Ukraine achieve “its European aspirations, we have invested more than $5 billion.” She said the U.S. goal was to take “Ukraine into the future that it deserves,” meaning out of the Russian orbit and into a Western one.

On Jan. 28, Nuland spoke by phone to U.S. Ambassador to Ukraine Geoffrey Pyatt about how to manipulate Ukraine’s tensions and who to elevate into the country’s leadership. According to the conversation, which was intercepted and made public, Nuland ruled out one opposition figure, Vitali Klitschko, a popular former boxer, because he lacked experience.

Nuland also favored the UN as mediator instead of the European Union, at which point in the conversation she exclaimed, “Fuck the E.U.” to which Pyatt responded, “Oh, exactly ”  [See Consortiumnews.com’s “Neocons and the Ukraine Coup.”]

Yet, the larger question for Americans may be whether NED and its slush fund have helped create not only shadow political structures in countries around the world but whether one now exists in the United States. Though NED has always justified its budget by focusing on what it will do in other countries, it spends much of its money in Washington D.C., funding NGOs that pay salaries of political operatives who, in turn, write American op-eds often from a neocon, interventionist perspective.

Indeed, it would be hard to comprehend why the American neocon power structure didn’t capsize after the disastrous Iraq War without factoring in the financial ballast provided by NED and other neocon funding sources. That steady flow of NED funding, topping $100 million, gave the neocon movement the staying power that other foreign policy viewpoints lacked.

Cold War Relic

NED was founded in 1983 at the initiative of Cold War hardliners in the Reagan administration, including then-CIA Director William J. Casey. Essentially, NED took over what had been the domain of the CIA, i.e. funneling money to support foreign political movements that would take the U.S. side against the Soviet Union.

Though the Reagan administration’s defenders insist that this “democracy” project didn’t “report” to Casey, documents that have been declassified from the Reagan years show Casey as a principal instigator of this operation, which also sought to harness funding from right-wing billionaires and foundations to augment these activities.

In one note to then-White House counselor Edwin Meese, Casey endorsed plans “for the appointment of a small Working Group to refine the proposal and make recommendations to the President on the merit of creating an Institute, Council or National Endowment in support of free institutions throughout the world.”

Casey’s note, written on CIA stationery, added, “Obviously we here should not get out front in the development of such an organization, nor do we wish to appear to be a sponsor or advocate. We would be pleased to make suggestions on the composition of the Working Group and Commission.”

To organize this effort, Casey dispatched one of the CIA’s top propaganda specialists, Walter Raymond Jr., to the National Security Council. Putting Raymond at the NSC insulated the CIA from accusations that it institutionally was using the new structure to subvert foreign governments while also helping fund American opinion leaders who would influence U.S. policy debates, a violation of the CIA’s charter. Instead, that responsibility was shifted to NED, which began doing precisely what Casey had envisioned.

Many of the documents on this “public diplomacy” operation, which also encompassed “psychological operations,” remain classified for national security reasons to this day, more than three decades later. But the scattered documents that have been released by archivists at the Reagan Presidential Library in Simi Valley, California, reveal a whirlwind of activity, with Raymond in the middle of a global network.

Who Is Walt Raymond?

Reagan’s White House was so nervous that the press corps might zero in on Raymond’s CIA propaganda background that it prepared guidance in case anyone should ask, according to a document recently released by the Reagan library. If a reporter questioned White House claims that “there is no CIA involvement in the Public Diplomacy Program” by asking, “isn’t Walt Raymond, a CIA employee, involved heavily?” the scripted answer was to acknowledge that Raymond had worked for the CIA but no longer.

“It is true that in the formative stages of the effort, Walt Raymond contributed many useful ideas. It is ironic that he was one of those who was most insistent that there be no CIA involvement in this program in any way.”

As for the role of CIA officials, the guidance asserted, “they do not want to be involved in managing these programs and will not be. We have nothing to hide here.” But if a reporter then “pressed about where [Raymond] last worked,” the answer was “he retired from CIA. If pressed about what his duties were: His duties there were classified.” Indeed, sources say Raymond was the CIA’s top expert on propaganda and psychological operations.

As NED took shape, Gershman was in frequent contact with Raymond, who oversaw a network of inter-agency task forces that implemented a global propaganda and psy-op strategy. Documents also make clear that Raymond kept CIA Director Casey periodically informed about the project’s developments.

In effect, NED took over many CIA responsibilities but did them more openly. The U.S. government also took steps to insulate NED from the resistance of targeted countries. Governments that objected to NED’s presence were deemed anti-democratic and thus subjected to other pressures.

But governments that permitted NED to function often found themselves facing internal political pressures from NED-funded NGOs to shift those countries’ policies to the right by eliminating social programs deemed “socialistic” and hewing to “reform” demands from international bankers, which usually meant ceding some sovereignty to the IMF or other global institutions. [For more details on Raymond’s operation, see Robert Parry’s Lost History.]

A Hand Out

Documents released by the Reagan library also reveal that one of the first organizations to put a hand out for U.S. government largesse was Freedom House, which describes itself as a human rights organization.

For instance, on Aug. 9, 1982, Freedom House executive director Leonard R. Sussman complained to Raymond that money problems had caused Freedom House to consolidate two of its publications, stating: “We would, of course, want to expand the project once again when and if the funds become available. Offshoots of that project appear in newspapers, magazines, books and on broadcast services here and abroad. It’s a significant, unique channel of communication.”

Once NED was up and running in 1983 and beyond, Freedom House became a major recipient of grants as it frequently echoed U.S. propaganda themes, though the public had little knowledge about the behind-the-scenes relationships.

But the network that Casey and Raymond built has outlived both of them and has outlived the Cold War, too. Nevertheless, NED and its funding recipients have pressed on, trying to implement the strategies of hardliners such as former Vice President Dick Cheney, who wanted not just the dismantling of the Soviet Union but the elimination of Russia as any kind of counterweight to U.S. hegemony.

Indeed, the momentum that this three-decade-old “public diplomacy” campaign has achieved both from NED and various neocons holding down key positions in Official Washington now pits this shadow foreign policy establishment against the President of the United States. Barack Obama may see cooperation with Vladimir Putin as crucial to resolving crises in Iran and Syria, but elements of Obama’s own administration and U.S.-financed outfits like NED are doing all they can to create crises for Putin on his own border.

Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s. You can buy his new book, America’s Stolen Narrative, either in print here or as an e-book (from Amazon and barnesandnoble.com). For a limited time, you also can order Robert Parry’s trilogy on the Bush Family and its connections to various right-wing operatives for only $34. The trilogy includes America’s Stolen Narrative. For details on this offer, click here.

8 comments for “A Shadow US Foreign Policy

  1. Swopa
    March 4, 2014 at 01:03

    Without arguing for or against anything in the rest of the piece, the claim that Nuland and Pyatt were secretly plotting about “who to elevate into the country’s leadership” is false (even though it’s been accepted as gospel by many on the left).

    On January 25th, Yanukovich made a public offer to include opposition leaders in the government as a compromise solution.

    Nuland and Pyatt were clearly discussing the pros and cons of this offer, specifically referring to “the announcement of [Klitschko] as deputy prime minister.” And in fact, in the event a successful deal was made, they appear to be planning to have Joe Biden call Yanukovich to congratulate him (which is a far cry from ousting him).

  2. Roch
    March 1, 2014 at 16:26

    What do the Ukrain protesters want: their country tobe under the thumb of the IMF and the EU’s Protuga, Ireland, Greece? Have they really not given thought to this or are a few leaders just promised a big personal payoff in power and money? Ukraine needs to stick with their Russian cousins –are they the best, no, but they are a lot closer in mind and in geography that the others Ukraine: do not be fooled.

  3. ben chifley
    February 28, 2014 at 23:33


    The next thing consortium news will write about is SOROS and his RONALD REAGAN media outlets

  4. John
    February 28, 2014 at 19:42

    Excellent article and excellent comments.
    Obama would certainly have dumped Nuland/Pyatt before or after the Ukraine takeover if he objected, and would not be warning Russia if he had not known the plan. It seems unlikely that he could front very well for any power structure that merely coerced him. He had two years with enough power to make major reforms if he had considered any, and never voiced the need. It appears to be a dream that he is anything other than a neocon product for the Dems.

  5. Jonny James
    February 28, 2014 at 17:08

    This article is back to the old good cop, bad cop routine of the kabuki theatre that is two-party dictatroship in the world’s most expensive public relations democracy.
    This article’s main claim is specious at best. While I don’t disagree with the facts presented, the conclusions are not based on the complete set of facts.

    After poor old Obama hired Penny Pritzker for dept. of commercce, , andHolder as AG (former Wall St. lawyer who let his cronies the banksters off the hook in what Prof. Bill Black called the largest financial fraud in world history)
    He appointed Uncle Bob Gates then Chuck Hagel, signed the NDAA destroying the Magna Carta, habeas corpus, 4th and 5th amendment etc. After Obama personally signs off on drone murders ( a war crime). After Obama calls the US an indispensible and exceptional nation, after… He approved of war crimes in Libya, supports regime change of democratically elected govts. in Venezuala, Honduras (where a military coup took place, yet everyone forgot), Syria, Iran etc. etc. In short Obama is a war criminal who, if he came from a poor African nation would be languishing in the Hague.

    The fact that Parry can defed Obama with a straight face at this point in time destroys his credibility. He is doing a great service to further the two-party illusion of choice.
    Poor old Obama, he is powerless and is held hostage by the “deep state” eh? Why then did he agree to accept all that money for his billion dolllar campaigns? Why did he agree to become the puppet emperor? Did they make him an offer he couldn’t refuse? I really don’t believe that Mr. Parry is that naive (judging from some of his excellent work) The financial sector (the banksters) is tickled pink with Obama, despite the BS rhetoric. Judge folks by actions not empty words.

    As the late great Howard Zinn outlined in his magnum opus (People’s History of the USA) that BOTH parties are in consensus on the big issues. NOTHING changes between D and R regimes. And the only way to affect change is by organized civil disobedience. I suggest that Mr. Parry read this important work., or publish something to refute Zinn’s astute claims.

    As Glenn Ford at the Black Agenda Report said years a few years ago “Obama is not the lesser of two evils, he is the MORE EFFECTIVE evil. If Bush Jr. would have done this, the bourgeois liberal crowd would have been up in arms. The hyporcisy and arrogance is astonishing and outright unbelievable at this point in time
    We live in interesting, post-Orwellian times

  6. F. G. Sanford
    February 28, 2014 at 09:05

    Yes, indeed. It pays to keep an eye on the outcomes rather than the expressed motives, which are contrived for the purpose of legitimizing Neocon denials when the grand scheme is exposed. The idea that Pyatt and Nuland had no idea they were fomenting violence perpetrated by a Nazi mob is, quite frankly, naive. Kruschev ceded Crimea to Ukraine in 1954 because without it, Ukraine was a miserable peasant serfdom with no industry, no agricultural technology, no resources, no competent managerial bureaucracy, no infrastructure, and virtually no skilled workers or an education system that could even produce a reliably literate population. It was from this malleable and dysfunctional population that recruits were willingly, and from a survival standpoint, perhaps understandably inducted into the Roland, Nightingale and Galicia divisions of the Waffen SS. It is almost an oxymoron to call these ideological descendants of Hitlerism “neo-Nazis”, because many of them are the genuine originals.

    Now that Ukraine is a geopolitical crossroads and a key to energy and resource exploitation, Kruschev’s plan has backfired. But in order to get in and reap (rape?) those fortunes, destabilization is key. There are almost certainly other clandestine agendas which the Neocons envision covetously. Ukraine currently owes $73 billion. It needs $12 billion to avoid default. Its GDP is nowhere near that. IMF imposed debt relief would lend it money to avoid default, then rack it mercilessly for years by imposing austerity and privatization to squeeze every drop of blood and treasure this resource rich but corruptly managed social disaster could produce. The population will suffer the ravages of interminable poverty while western bankers reap the benefits. Meanwhile, Crimea, which was actually upgraded to the status of an Autonomous Soviet Socialist Republic on February 12, 1991 by the Supreme Soviet of the Ukrainian SSR, and has an ethnically Russian majority population, is expected to play along with this delusional fantasy.

    My guess is, based on some other commentator’s astute observation, Occam’s Razor mitigates for the idea that Nuland and Pyatt acted with The President’s approval. The ensuing destabilization, if it doesn’t lead to war, provides a perfect distraction from other Neocon ‘pet projects’. Let’s see where things go from here!

  7. Larry
    February 28, 2014 at 08:32

    “Ukraine’s choice to join Europe will accelerate the demise of the ideology of Russian imperialism that Putin represents.”

    Western (American) Economic Imperialism can be succinct and transparent, as the above quote shows. W(A)EI embodies an obsessive therefore corrupt bureaucratic machinery that never knows when it has reached its own point of maximum success and efficiency, beyond which its activities embed seeds that germinate and sprout into conflicts that either fail and force W(A)EI to recede or succeed and force changes that eventually if not immediately put all of its work and goals into jeopardy.

    While NED, a spearhead of W(A)EI activity, succeeds in having stripped Putin Russia of key allies like Ukraine, or any of them, Georgia, Moldava, and the Baltic States, it stokes the natural resentment of the Russian Establishment and Russian people. This resentment can and could easily lead to either Putin or a much more hostile and bellicose Russian leadership implementing the drastic steps of sanctions and outright war, leading to figurative and literal immolaton of the W(A)EI business interests that have by then will have taken conscienceless advantage of inroads into the subverted Russian allies that NED and others have helped build.

    Without actual Cold War structure still in the place, with its hedging inducements toward surrogate conflicts, what’s left instead is a structure more closely resembling the primitive and violent European and later European/Russian dynamic chessboards that began coalescing after the Middle Ages and lasted through the devastating wars of 1914-1917 and 1939-1945.

    NED and W(A)Ei subversion, therefore, can be boxing in its own strategic economic advantages into a corner and creating an opportunity environment that is much more volatile than it intends. What happens hence is either a self-limiting economic stalemate or full-on war that stymies economic growth for years.

    It’s true as well that war creates its own set of opportunities, a large-scale disaster capitalism both during war and especially after war when the victor vacuums up the spoils. However, with war, W(A)EI takes the risk of defeat and dismantling of gains made previously to the brink of war, or a military draw, standoff, or limited surrender of the kind that after 1917 directly created the conditions for 1939.

    To be clear, the temptation to unleash current technology’s destructive potential is not something we ever should allow. Drastic policy changes and actions need to be made and taken to avoid this possibility at all costs. W(A)EI, which never will fade away, unfortunately, needs leadership with the vision to rein in its own worst enemy, itself. We do not seem to have that at the moment, if ever, or, if it exists, it lacks a will or power of its own.

    W(A)EI never knows when it’s gotten too much of a good thing. For us in the rotund belly of that beast, that translates into permanent instability and volatility, with the hardships and suffering that are built into those conditions. Certain economic actors will always profit well enough to suit themselves, but those of us in the United States would be wise to forge our own ‘Ukraine’ moment, preferably without American neo-nazi help, which in our case would be the now incipient violent impulses of its Tea Party/militia natural alliances.

    In other words, I wish these economic subversives high in our government would cut it out already. They go too far, and whether their efforts implode or succeed, they still end up flush while most of the rest of us suffer grievously, financially and in blood due to the wars that inevitably occur. This is also how terrorism is stoked against us.

    We can’t do like Israel did, in answer to its own bloody colonialism, and build a Safe Wall. Nor can we live in a world of good faith, when we have bad actors such as NED and AID and the whole alphabet soup of shameful monstrous perfidy hard at work creating enmity and destruction, which is what the results inevitably are despite perhaps its intents. I say ‘perhaps’, because what seems to lurk within this obsession to shape the world into the image of our own corruption is not idealism or the desire for economic opportunity, but instead a beating heart of bullying and the sadism and fear that powers it.

    Nuland should have been fired immediately after her taped remarks became public, and Obama should have taken advantage of that gift to clean the house of neocons of every specialty and construct.* However, our president is almost every bit the neocon as they are, one with, yes, a strain of self-restraint and self-awareness, but without clear enough foresight of how humans should behave on a thriving planet for its inhabitants’ highest good, and likely without the courage necessary to try to change the dysfunction and self-sabotage into one of mutual comity.

    Like you say, Iran seems to be a good sign, and perhaps success in tamping down the tensions there could lead to a similar ethos beginning elsewhere, but, as you seem to imply, the neocon cross-purposes insane hydra mentality is hard at work trying to undo what Obama may be trying to do there.

    * I wonder if firing Nuland, part of the inner circle of the supreme political neocon Kagan family, would be akin to the demoting of the Dulles family by Kennedy. Interestingly, it seems the ghosts of the Dulles family are alive and well spooking out the world through its natural heirs, the current bunch of heedless arrogant SOBs that are our bastard inheritance.

  8. incontinent reader
    February 28, 2014 at 01:01

    Bob- I wonder if you are not giving Obama too much credit. My sense is that from the very beginning he opted for the clandestine approach of ‘pick their pocket- stick a shiv in their back- then blame it on the victim’, in order to destabilize and bring about the type of regime change we’ve seen in Libya and he’s been trying for three years in Syria (and now in Venezuela and Ukraine), rather than the ‘in your face, bomb you into the stone age’ policy of Cheney, Dubya and Bolton. That is, he’s used a second or third generation version of COIN and a high tech theatrical staging that Ed Lansdale turned into an art, and has coordinated it with the media here (NY Times, Washington Post). in Britain (BBC, Reuters, etc.) and in France (Le Monde), in a well planned, carefully rehearsed propaganda war. Obama’s policies seem to have gone through some recent changes with Iran- and that is cause for hope- but it may also reflect a split in the thinking of the multinationals who are salivating for business in Iran. Even with that, the Administration is still showing signs of schizophrenia, e.g., when you look at the Treasury Department’s imposition and prosecution of occasional new sanctions in violation of the spirit if not the letter of the interim agreement with Iran.

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