Document Type: 
Document Number (FOIA) /ESDN (CREST): 
Release Decision: 
Original Classification: 
Document Page Count: 
Document Creation Date: 
December 20, 2016
Document Release Date: 
October 19, 2006
Sequence Number: 
Case Number: 
Publication Date: 
November 25, 1981
Content Type: 
PDF icon CIA-RDP84B00049R001303260026-4.pdf404.17 KB
ic3iJ^,b:g VAL'i S S-S B :?to COMP D. Approved For Release 2007/02/08 : CIA-RDP84B00049R001303260026-4 UNCLASSIFIED THROUGH: FROM: EA - Joh A t`+ v f SUBJECT: DEPARTMENT OF STATE 81333i2 XR--8134747 ACTION MEMORANDUM 5/S ,,lye The Deputy Secretary November 3~, 1381 Foldrloge ~, l2 NEA - Nicholas A. Velio es f. HA - Stephen E. Palmer, Acting _$-, The Future.of The Asia Foundation(TAF) Department Position ISSUE FOR DECISION: To survive, TAF requires Government funding for general operating expenses. You are asked to decide whether the Department should advocate such funding: - - through the Department - as at present - but under special authority for a separate, earmarked appropriation for grant to TAF; via a newly created "Joint Commission for The Asia Foundation"; or from USICA, AID or a and other Goyer.n:rent new "umbr e(agency for TAF funded organations. Your decision will determine the basis for a Zo;nt Departm }t, TAF recommendation to be presented to the Conare s by Dec'~mber 1. This rt?onrt 11 n- a,. ---- , - crezar Drot necessar t ' y o obtain OMB acquiescence to it. ESSENTIAL. FACTORS: TAF's Trustees, EA, HA, NEA, AID and USICA consider TAF an asset warranting continued Government support. It is a v tai auxiliar to official foreign policy programs and activities not a substitute for them. TAF's established rep:5tation, solid expertise and extensive network of active contacts throughout the region are irreplaceable. Its nationally-prominent, civic-spiriteTrustees lend distinguished private sector support to U. S. policy objectives in Asia. Virtually all-of TAF's activities broad _y_ u port U. S. human ri hts oals in Asia. Its commitment to strengthening indigenous institutions which promote stable political deved.op,,ent, constructive social change, equitable economic State Dept. revi(ftpm dtedRelease 2007/02/08 : CIA-RDP84B00049R001303260026-4 - Richard T. Kennedy Approved For Release 2007/02/08 : CIA-RDP84B00049R001303260026-4 growth and cooperative international relationships is consistent with U. S. policy on human rights. In Taiwan, TAF has become an essential instrument for conduct of our cultural exchange program and for projects of high po- litical sensitivity. TAF's programs in Pakistan impart con- sistency and visible continuity to American influence follow- ing the Ford Foundation's shutdown there. TAF spearheads fol- low-on projects the new intensive English program for entering university freshmen which it generated in Sri Lanka. Elsewhere in Asia, TAF is an important carrier of American ideas on democratic institution-building to politically and socially influential groups not approachable officially. TAF's mid-career training programs for Chinese and Pakistani diplomats and its well-established Congressional fellows prog- ram in several countries connect the U.S. to the next genera- tion of policy-shpers. currently' urrently pro ent Asians first brought to the U. S. as unknowns by TAF include Tony Tam, Sin- gapore's Minister of Trade and Industry; Mochtar, Indonesia's Foreign Minister; Mahathir bin Mohamad, Prime Minister of Ma- laysia; and Famal Hossai, Awami League candiate for President of Bangladesh. TAF's private, less-than-official nature suits perfectly the Asian proclivity for dealing in delicate matters through os- tensibly independent agents, nevertheless of proven reliabil- ity. For example, TAF currently has an invitation to help the Islamic Conference organize high-level, scholarly seminars in this country. TAF's rationale since its inception has been to serve the Gov- ernment as an instrument of U. S. foreign policy. To discon- tinue general fund support and require TAFto rely entirely on private resources would officially renounce this rationale and be tantamount to terminatins the Foundation. Even though the Government - - not a family, church, organization or issue-related interest group - - is TAF's sole constituent, it has raised substantial orivate donations. Trustees' personal donations over the last twelve years total $1,230,000. An end- gent established in 1968 has produced $2,500,000 and now amounts to $2,900,000. TAF is beneficiary of bequests valued at $2,500,000. Thirty, five corporate donors hap given $2,153,000, and TAF has ob-' tained foundation grants totalling $2,615,000. Recent examples include $150,000 from the Hewlett Foundation for family health planning projects in several As ~n/Pacific countries; $100,000 Approved For Release 2007/02/08 : CIA-RDP84B00049R001303260026-4 Approved For Release 2007/02/08 : CIA-RDP84B00049R001303260026-4 ? - 3 - from Mobil Corporation to fund U. S. study opportunities for faculty of Siyah Kuala University in north Sumatra; and current negotiations with the Luce Foundation for a $500,000 grant to promote private regional organizations among ASEAN countries. With in-kind donations, TAF has to date solicited, shipped and placed 16.6 million books and.2.l million professional jour- nals in Asia - more than the combined holdings of the Harvard, Yale, Columbia and University of California - Berkeley librar- ies. Official and private Asian sources have also donated matching funds and in-kind support for TAF programs. if *tangible value alone is considered, TAF's demise would des- troy an asset built up over thirty years at a cumulative cost to the Government of $200 million. Private American and Asian official and private donations to TAF would also be lost. The approximately $4 million annual saving in U. S. expenditures would conserve no more than two cents on every dollar of a Government investment that the foreign policy agencies strong- ly believe should be preserved and that the Congress has twice rescued from extinction. Impending drastic reductions in USICA's exchange program make survival of TAF even more essen- tial to effective US relations with Asian countries. ~'In 1980, The Long sub-committee of the House Approprations \ Committee e determined that general grant support for TAP could no longer properly be provided from AID funds. Provision of such funding became the responsibility of the Department, as the prime agency favoring continuation of Government support for TAF. The Department at that time requested an increase in its own budget ceiling equivalent to the reduction in AID's resulting from the transfer. This was not done, and OMB has since then insisted that the Department rank support for TAF among its requests for all requirements. The Department has resolutely maintained that TAF's_pro rams are not a substitute for other essential activities and that funding of them must not be at the expense of our operating requirements. The $4.1 million for TAF support approved by the Senate in the FY 198.2 Department Appropriation Bill would be less than one quarter of resources TAF expects from all sources for this Fiscal Year. Despite the recent uncertainty of such support, its availability has been key to TAF's success in private fund raising. Stabilizing this support i,,ill release TAF's energies to solicit private funding more extensively and with greater credibility. Approved For Release 2007/02/08 : CIA-RDP84B00049R001303260026-4 Approved For Release 2007/02/08 : CIA-RDP84B00049R001303260026-4 ANALYSIS OF OPTIONS: The principal ways to assure continued funding for TAF are: A.) Separate Appropriation to the Department: Administration policy advocating public-private sec- tor cooperation, economical management practice, and proven success of an established relationship all commend this option. We would need a clear Congres- sional mandate for an annual earmarked appropriation for TAF, premised on a definitive understanding with OMB and the Congress that such funding would continue to be additional to Department resources in this and future years. rThis could take the form of a specific /' authorization in the Foreign Affairs Authorization ;Act providing for. annual appropriation of funds to 'the Secretary of State for grant to TAF for general operating support. Such authorization for FY 1982 is contained in the Senate approved version of the Foreign Affairs Authorization Bill for the current fiscal year. Moreover, appropriation for such a :grant has already been approved by the House ($2.1 million) and unanimously__by the Senate ($4.1 million) in the FY 1982 State, Justice, Commerce Appropriation bill. Determination of amounts for FY 1983 and sub- sequent fiscal years await the outcome of this policy decision.' The Department would be committed to support and defend the appropriation request annu- ally. TAF's Trustees favor this option and USICA and AID agree that this option represents the best ar- rangement for continued support of TAF. B.) Set Up A Joint Commission for TAF or Make It A Public Corporation: This option would transform TAF into an external competitor with the Department for resources within the international affairs section of the budget. Oita would probably opnose this option because of Adminis- tration policy against setting up new Government agencies. The joint commission variant of this op- tion, suggested by TAF's Trustees as a fallback to funding through the Department- has been found a recipe for stalemate at the Board for International Broadcasting, which operates under two, layered boards. The public corporation variant of this op- Approved For Release 2007/02/08 : CIA-RDP84B00049R001303260026-4 Approved For Release 2007/02/08 : CIA-RDP84B00049R001303260026-4 tion is unsuited to TAF, which does not meet the revenue-producing intent of the public corporation statute, and was previously rejected by OMB. While a separate, earmarked appropriation is our clear pre- ference by far, this joint commission. option would be- better than dissolution of TAF. Your approval of this option would require a request* to the Congress for establishment of a permanent new, independent, special purpose Government agency to operate TAF. Such agency would require its own di- rectorate and its own secretariat. In addition to the funds required for grant support to TAF, the new secretariat would require overhead funding of its own. The overall cost of TAF operations, which has- declined for the last several years under practices of determined thrift, would escalate. Addition of another administrative and policy layer into the of TAF to the Government would present relationship retard program ap rp oval and execution without perce - tible benefit to the attainment of foreign policy objectives. C.) Fund TAF through appropriation to USICA, AID or an "Umbrella" Agency: USICA and AID very likel}, would_92pose this option. Although pressure on Department resources would be externalized,?our policy interests in TA. would be subject to program priorities of other agencies. Persistent Department intervention would be required to resist distortion of TAF goals and to preserve the integrity of its budget. TAF's effectiveness would suffer. Setting up a new "umbrella " agency would con'-rave, administration policy, and probably would encounter dr.B disapproval on such grounds. CONCLUSIONS: Over its 30 year history, TAF has rc received Gconsistent support from foreign affairs agencies of the TAF enjoys solid backing in Congress, which at its own initiative has provided appropriations in FY 81 and FY 82. Active personal intervention by the Secretary and senior De- of#ici.als to insert requests for implementing par tm~. nt policy legislation and concomitant appropriation of funds into the President's FY 1983 .budget request ofu any of the Congress will ily eventuate from app UNCLASSIFIED Approved For Release 2007/02/08 : CIA-RDP84B00049R001303260026-4 Approved For Release 2007/02/08 : CIA-RDP84B00049R001303260026-4 - 6 - this memorandum. TAF's influential trustees, however, are certain to argue its case with OMB (which will oppose), the White House and Congress. We must, nevertheless, recognize that success will in the first instance require Departmental initiative. RECOMMENDATIONS: TAF's Trustees have been in close contact with us and have expressed the hope that they may have the opportunity to meet with you before you reach a final decision. We believe that you should, after making your decision, call in the Trustees Special Committee to convey to them personally the Depart- ment's position and afford them an opportunity to discuss it. A.) That you approve Option A, favored by EA, HA and NEA: DEC d 1 1981 Approve 6~~/_ Disapprove B.) Should you disapprove Option A, we recommend that you approve Option B, which would permit continuation of TAF, though under circumstances EA, HA and.NEA strongly believe much less acceptable. Approve: Clearance: H - Will. EA/RA - William J. Cu NS - 4207, Ext. 21200 November 17, 1981 Disapprove V DEC OI f~.::t Approved For Release 2007/02/08 : CIA-RDP84B00049R001303260026-4