THE FUTURE OF THE ASIA FOUNDATION (TAF) - - DEPARTMENT POSITION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84B00049R001303260026-4
• Release Decision: RIFPUB
• Original Classification: U
• Document Page Count: 6
• Document Creation Date: December 20, 2016
• Document Release Date: October 19, 2006
• Sequence Number: 26
• Publication Date: November 25, 1981
• Content Type: MEMO

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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
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- Richard T. Kennedy
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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, alu.mini
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
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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.
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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-
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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
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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
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