RADIO FREE EUROPE AND RADIO LIBERTY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP73B00296R000500050010-0
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 26
• Document Creation Date: December 20, 2016
• Document Release Date: November 14, 2005
• Sequence Number: 10
• Publication Date: July 30, 1971
• Content Type: OPEN

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92D CONGRESS
1st Session
Fill copy Calendar No. 313
SENATE REPORT
No. 92-319
RADIO FREE EUROPE AND RADIO LIBERTY
JULY 30, 1971.?Orelered to be printed
Mr. F 01,13RIGHT, from the Committee on Foreign Relations, submitted
the following
REPORT
[To accompany S. 18]
The Committee on Foreign Relations to which was referred the
bill (S. 18) to amend the United States Information and Educational
Exchange Act of 1948 to provide assistance to Radio Free Europe and
Radio Liberty, having considered the same, reports favorably thereon
with an amendment and recommends that the bill as amended do pass.
WHAT THE BILL DOES
As reported by the Committee on Foreign Relations, Senate bill 18
amends the United States Information and Educational Exchange
Act of 1948 to authorize for fiscal year 1972 a $35 million appropria-
tion to the Department of State for grants to Radio Free Europe and
Radio Liberty. The Secretary of State is given the authority to de-
termine the terms and conditions of the grants. The, bill prohibits any
other appropriated funds from being used to finance these radio opera-
tions.
BACKGROUND
Senator Case introduced S. 18 on January 25, 1971. In his intro-
ductory remarks, he stated the bill's principal objective was " * * *
to bring Radio Free Europe and Radio Liberty under the authoriza-
tion and appropriation process of the Congress."
By way of background, Senator Case pointed out,
During the last 20 years, several hundred million dollars in
U.S. Government funds have been expended from secret CIA
budgets to pay almost totally for the costs of these two radio
stations' broadcasting to Eastern Europe. In the last fiscal
65-010
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year alone, over $30 million was provided by CIA as a direct
Government subsidy; yet at no time was Congress asked or
permitted to carry out its traditional constitutional role of
approving the expenditure.
The full text of Senator Case's statement is contained in the ap-
pendix to this report.
Radio Free Europe (RFE) was established in 1950 and Radio
Liberty (RL) in 1951. The former operates under the auspices of the
Free Europe Committee, Inc., and the latter under the auspices of the
American Committee for Freedom for the Peoples of the U.S.S.R.,
Inc. RFE broadcasts to five Soviet Bloc countries: Bulgaria, Czecho-
slovakia, Hungary, Poland and Rumania. RL's broadcasts are limited
to the Soviet Union.
The Department of State describes the two Radios as "private broad-
casters" which "report and comment extensively on internal develop-
ments in their target areas and do so in an objective fashion."
The cost of doing this, according to the State Department, is "ap-
proximately" $36.2 million annually. Of this amount, the Department
says, less than $2 million comes from private contributions, almost
entirely U.S. corporations. (See appendix.)
The gap between private contributions and actual budget expendi-
tures--some $34 million in this instance?has been filled by funds
from the 'Central Intelligence Agency, although Executive Branch
officials refuse publicly to acknowledge the Agency's participation or
role in maintaining and operating the two Radios. Following this
policy, the Department declined to supply additional financial
data for this report on Government funding of RFE and RL.
From the current budget of $36.2 million, the two Radios employ
a staff of 2,614 with RFE employing 1,652 and RL, 962. (See. appendix
for further breakdown.)
Both Radios maintain separate broadcast headquarters and research
facilities in Munich, Germany. In addition, Radio Free Europe has
offices, studios, or other facilities in the following cities: New York,
Athens Berlin, Bonn, Brussels, Geneva, London, Paris, Rome, Stock-
holm, Vienna and Lisbon. In a similar fashion, Radio Liberty is
located in New York, Barcelona, Lampertheim, London, Madrid,
Paris, Playa del Pals and Taipei.
RFE's and RL's combined budget of $36.2 million may be compared
to the Voice of America's budget of $41 million for its worldwide
operations during FY 1971. For further comparison, an estimated
$37 million was spent in FY 1971 on official educational and cultural
exchange programs. By way of comparison with domestic programs,
the FY 1972 budget request for educational T.V. and radio was
$31 million.
On July 1, 1971, Congress approved H.J. Res. 742 providing con-
tinuing appropriations for Federal agencies and programs through
August 6, 1971. As a result of action taken by the Senate Appropria-
tions Committee, which was approved by the Congress as a whole the
authority to fund Radio Free Europe and Radio Liberty was shifted
and restricted to the United States Information and Educational
Exchange Act of 1948.
In its report (No. 92-240) on H.J. Res. 742 the Senate Appropria-
tions Committee stated,
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The Committee recommends the inclusion of a provision
to provide interim funding for the support of Radio Free
Europe and Radio Liberty pending the enactment of legis-
lation to provide for open funding of these organizations.
COMMITTEE ACTION
On February 1, 1971, the Committee forwarded copies of S. 18 to
the Department of State and requested "coordinated Executive Branch
comments * * * at an early date." On March 12, the Committe wrote
again to the Department stating tentative hearings on the bill had
been scheduled for April 28. The State Department responded on
April 22 requesting a delay in the hearings until the "latter part of
May."
In an effort to accommodate the Department, the Committee agreed
to change the hearing date from Aril 28 to May 21. A public hear-
ing was held at that time and the Committee heard from three wit-
nesses: the Honorable Congressman Ogden R. Reid, who introduced
a similar bill in the House of Representatives; the Honorable Martin
J. Hillenbrand, Assistant Secretary of State for European Affairs;
and Mr. Paul C. Bartlett, former President of Radio New York
Worldwide, Inc.
In place of commenting on S. 18, Assistant Secretary Hillenbrand
presented the Administration's views on a substitute bill, S. 1936.
Senator Case introduced this bill on the day of the hearing. (See
appendix.)
This alternative legislation would establish an American Council
for Private International Communications, Inc. -Although publicly
funded, the Council would be a "non-governmental, private, non-profit
corporation" with headquarters in the District of Columbia. While the
primary purpose of the corporation would be to channel Government
funds to Radio Free Europe and Radio Liberty, the Administration's
bill would also make eligible for financing any "private American
organizations with established programs of broadcasting to other
countries, or other . . . selected activities in the international mass
media field * * *"
S. 1936 contained an open-ended authorization and provided that
sums appropriated shall remain available until expended. In addition
to this funding flexibility, the bill did not specify an agency or depart-
ment to which the funds would be appropriated.
The Committee first considered both of these proposals in Executive
Session on June 8, at which time it decided that, before making any
definitive, long-term decisions on future funding of the Radios, the
Committee should have available some in-depth, background studies
on them. Following this decision, the Chairman of the Committee
wrote to the Library of Congress and the General Accounting Office
requesting separate studies from each of them on the two Radios.
Senator Fulbright's letters are included in the appendix to this report.
The Committee considered these bills again in Executive Session
on July 21, at which time it rejected, by voice vote, a slightly modified
version of S. 1936 (see appendix) and then adopted S. 18 with an
amendment increasing the authorization level from $30 to $35 million
for fiscal year 1972.
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COMMITTEE COMMENTS
The Committee on Foreign Relations views Senate bill 18 as stop-
gap legislation?designed primarily to bring into the open the Gov-
ernment's role in financing both Radio Free Europe and Radio
Liberty.
The Committee deplores the fact that this financing?covering some
20 years has been kept secret from the American people and their
elected representatives. It is indeed regrettable that the Executive
Branch of Government under five administrations deceived the
taxpayers with respect to the expenditure of these public funds.
Indeed, as one of the witnesses who testified during the Committee's
hearing of May 24 reminded the Members, we " * had been led
to believe that Radio Free Europe was fina.nced by dimes from school
children and voluntary gifts from concerned citizens anxious to keep
truth alive behind the Iron Curtain."
The connivance of both public and private officials to lead the Amer-
ican public to believe this fantasy is to be regretted. Not only did the
government officials and others involved in these radio stations mis-
lead the American public but they also deceived those who listened to
the Radios and relied on them as the products of private enterprise.
How ironical and tragic it is that such practices have been used in
the name of getting "the truth through to the peoples behind the Iron
Curtain !" And, even at this late date, Executive Branch officials refuse
to discuss this matter openly or to disclose to the American public
how many of its tax dollars have been used in this highly questionable
activity.
Senate bill 18 is intended to terminate this deception; it is intended
to let the people know what they are paying for and how much.
?This assumes, of course that 'both Radio Free Europe and Radio
Liberty perform useful broadcast services and, although the Com-
mittee is divided in its thinking on this point, a majority of the Mem-
bers believe that the Radios should be given the benefit of the doubt?
a serious doubt indeed in view of the public's repeated reluctance to
provide through private contributions the amount of financial support
the Radios say they need. But, in adopting S. 18, the Committee indi-
cated its unwillingness to give the Radios the benefit of the doubt
beyond the current fiscal year or to give them the kind of organiza-
tional and financial flexibility contained in S. 1936, the Administra-
tion-approved bill.
The background studies on Radio Free Europe and Radio Liberty
being prepared by the Library of Congress and the General Account-
ing Office will be available to the Committee some time this Fall.
Hopefully, these studies will provide the kind of analysis that will
permit the Committee to make a more informed judgment as to
whether or not these radio stations are in the public interest.
Estimated program costs
The following information is provided pursuant to section 252 of
the Legislative Reorganization Act of 1946, as amended: For the cur-
rent fiscal year, the executive branch estimates the Radio Free Europe
and Radio Liberty programs will cost $36.2 million. Over the next 5
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fiscal years, the executive branch estimates the total cost of these pro-
grams to be $200?$210 million. For the reasons which are obvious in
this report, the committee is unable to evaluate these estimates. In the
final analysis, of course, the Congress could fund these programs in
accordance with the executive branch estimates or it could, at any
point, terminate them.
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ADDITIONAL VIEWS OF SENATOR CLAIBORNE PELL
One of the most important elements missing in a closed society is
news concerning the adverse facets, political stresses and unpublished
literature of that society. Yet such news is necessary in order that a
civilized people may arrive at sensible decisions with regard to mould-
ing their future.
Radio Free Europe has committed errors in the past, not so much
by the news content of its programs, as by its stridency. I personally
recall that many of the 1956 Hungarian Freedom Fighters had their
hopes cruelly raised and whetted at the time of their abortive revolu-
tion by Radio Free Europe broadcasts.
However, I believe Radio Free Europe has much improved. It has
learned to be more objective and, most important, to plug directly
into the present thought processes of its radio audiences. There is now
less dependence upon the pre-World War II ruling groups. And it
does an excellent job in keeping all of the European nations between
the Soviet Union and the West, nations presumably imder the diktat
of the Soviet Union, conscious of their heritage and anticipating their
eventual freedom.
There is a difference, though, when it comes to Radio Liberty. This
is a program that I believe is more questionable as its basic objective
is the removal of an indigenous, stabile and apparently fairly perma-
nent regime. I think we would have done better to concentrate in this
legislation only on Radio Free Europe. Nevertheless, if the two pro-
grams must be treated together, I would prefer to see them both re-
main than to see Radio Free Europe dropped.
Finally, I would hope that the funding and administration of Ra-
dio Free Europe and Radio Liberty programs would not become en-
tangled with the operation of the entirely. separate Voice of America
program in the United States Information .Agency.
With these reservations, I support adoption of this legislation.
CHANGES IN EXISTING LAW
In accordance with clause l of rule XXIX of the Standing Rules of
the Senate, changes in existing law made by the bill, as reported, are
shown as follows (existing law proposed to be omitted is enclosed in
black brackets, new matter is printed in italic, existing law in which no
change is proposed is shown in roman) :
United States Information and Educational Exchange Act of
1948, as amended
(6)
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TITLE VII?APPROPRIATIONS
GENERAL AUTHORIZATIONS
SEC. 701. Appropriations to carry out the purposes of this Act are
hereby authorized.
TRANSFER OF FUNDS
SEC. 702. The Secretary shall authorize the transfer to other Gov-
ernment agencies for expenditure in the United States and in other
countries, in order to carry out the purposes of this Act, any part of
any appropriations available to the Department for carrying out the
purposes of this Act, for direct expenditure or as a working fund,
and any such expenditures may be made under the specific authority
contained in this Act or under the authority governing the activities
of the Government agency to which a part of any such appropriation
is transferred, provided the activities come within the scope of this
Act.
AUTHORIZATION FOR GRANTS TO RADIO FREE EUROPE AND RADIO LIBERTY
SEC. 703. There are authorized to be appropriated to the department
$35,000,000 for fiscal year 1972 to provide grants, under such terms and
conditions as the Secretary considers appropriate, to Radio Free
Europe and Radio Liberty. Except for tunas appropriated under this
section, no funds appropriated after the date of enactment of this sec-
tion for any fiscal year, under this or any other provision of law, may
be made available to or for the 2186 of Radio Free Europe or Raw
Liberty.
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APPENDIX
S. 18?INTRODUCTION OF A BILL TO BRING RADIO FREE EUROPE AND
RADIO LIBERTY UNDER CONGRESSIONAL SCRUTINY
Mr. CASE. Mr. President, I introduce a bill to bring Radio Free
Europe and Radio Liberty under the authorization and appropriation
process of the Congress.
During the last 20 years, several hundred million dollars in U.S.
Government funds have been expended from secret CIA budgets to
pay almost totally for the costs of these two radio stations broadcast-
ing to Eastern Europe. In the last fiscal year alone, over $30 million
was provided by CIA as a direct Government subsidy; yet at no time
was Congress asked or permitted to carry out its traditional constitu-
tional role of approving the expenditure.
My bill would amend the U.S. Information and Educational
Exchange Act of 1948 to authorize funds to Radio Free Europe and
Radio Liberty in fiscal 1972. It would also provide that no other U.S.
Government funds could be made available to either radio station,
except under the provisions of the Information and Educational
Exchange Act.
I plan to ask that those administration officials concerned with
overseas information policies be called to testify before Congress on
the financial needs of Radio Free Europe and Radio Liberty. With-
out committing myself to a particular level of funding, my proposal
tentatively calls for an authorization of $30 million. This figure would,
of course, be subject to change as more information becomes available.
Radio Free Europe and Radio Liberty both claim to be nongovern-
mental organizations sponsored by private contributions, but available
sources indicate direct CIA subsidies pay nearly all their costs.
According to returns filed with Internal Revenue?form 990?A?their
combined operating costs for fiscal 1969 were almost $34 million?
$21,109,935 for Radio Free Europe and $12,887,401 for Radio Liberty.
Under the auspices of the Advertising Council, Radio Free Europe
conducts a yearly, multimedia "advertising" campaign.
I have been advised that between $12 million and $20 million in
free media space is donated annually to this campaign while the return
from the public is apparently less than $100,000. Additionally, both
Radio Free Europe and Radio Liberty attempt to raise money from
corporations and foundations but contributions from these sources
reportedly pay only a small part of their total budgets.
The bulk of Radio Free Europe's and Radio Liberty's budgets, or
more than $30 million annually, comes from direct ,OIA subsidies.
Congress has never participated in authorization or appropriations
of funds to Radio Free Europe or Radio Liberty, although hundreds
(9)
S. Rept. 92-319-71-2
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of millions of dollars in Government funds have been spent during
the last 20 years.
I can understand why covert funds might have been used for a year
or two in an emergency situation when extreme secrecy was necessary
and when no other Government funds were available. But the justi-
fication for covert funding has lessened over the years as international
tension has eased, as the secrecy surrounding these radio stations has
melted away, and as more open means of funding could have been
developed. In other words, the extraordinary circumstances that might
have been thought to justify circumvention of constitutional proc-
esses and congressional approval no longer exist.
In fact, after disclosure in 1967 of CIA funding of the National
Student Association, a Presidential committee made up of John Gard-
ner, then Secretary of Health, Education and Welfare, Richard
Helms, then and now Director of CIA and Nicholas Katzenbach, then
Under Secretary of State, recommended that "no Federal agency
shall provide covert financial assistance or support direct or indirect,
to any of the Nation's educational or voluntary organizations"?and
that no programs currently would justify any exception to this pol-
icy." On March 29, 1967, President Johnson accepted the committee's
recommendations and directed they be implemented by all Federal
agencies.
Legislation similar to my proposal will shortly be introduced in the
House of Representatives by Congressman Ogden R. Reid of New
York.
I ask unanimous consent to have the bill printed at this point in the
Record.
The PRESIDENT pro tempore. The bill will be received and
appropriately referred; and, without objection, the bill will be printed
in the Record.
The bill (S. 18) to amend the U.S. Information and Education
Exchange Act of 1948 to provide assistance to Radio Free Europe
and Radio Liberty, introduced by Mr. Case was received, read twice
by its title, referred to the Committee on Foreign Relations and or-
dered to be printed in the Record, as follows:
S. 18
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That the United
States Information and Educational Exchange Act of 1948 is amended
by inserting after section 702 the following new section:
"AUTHORIZATION FOR GRANTS TO RADIO FREE EUROPE AND RADIO LIBERTY
"SEC. 703. There are authorized to be appropriated to the Depart-
ment $30,000,000 for fiscal year 1972 to provide grants, under such
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terms and conditions as the Secretary considers appropriate, to Radio
Free Europe and Radio Liberty. Except for funds appropriated under
this section, no funds appropriated after the date of enactment of this
section for any fiscal year, under this or any other provision of law,
may be made available to or for the use of Radio Free Europe or Radio
Liberty."
The following information on private contributions was supplied on
June 16, 1971 by the Department of State:
Radio Free Europe fund collections *
1967
$1,
582,
249
1968
1,
713,
603
1969
1,
991,
554
1970
1,
810,
820
1971 (through June
11)
914,
719
*Corporate funding; funds not solicited from the public.
RFE only ; Radio Liberty has no comparable program.
FREE EUROPE, INC.,
New York, July 16,1971.
Hon. J. WILLIAM FULBRIGHT,
Chairman, Committee on Foreign Relations,
U.S. Senate, Washington, D .0 .
DEAR Mn. CHAIRMAN: The Department of State informed me that
you wished a list of corporate contributors to Radio Free Europe.
As you will no doubt appreciate, we have not made public the names
of contributors, as is the common practice of those who solicit and
receive private contributions.
As I can, however, appreciate and understand your interest, I can
tell you that contributions to Radio Free Europe have amounted to
$47,007,383 from FY 1951 through FY 1971 so far. In FY 1970 there
were 8,279 corporate contributors, and in FY 1971 there have been
4,462 corporate contributors as of now.
While I hope the above information satisfies your request, I am
prepared to show you on a confidential basis the actual list of corporate
contributors for FY 1970 and so far in FY 1971.
Yours sincerely,
WILLIAM P. DURKEE.
Information on RFE and RL employees supplied on June 16, 1971
by the Department of State.
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POSITION ALLOCATIONS
1970
1971
1972
RADIO FREE EUROPE
RFE operations:
President office (New York)
29
27
19
Director's office (Munich)
8
8
8
Programing/production:
Policy and research department
146
147
149
News department
180
180
180
Broadcast department
379
375
375
Audience and public opinion research
12
12
12
New York office
79
73
68
Subtotal, programing/production
796
787
784
Operations/transmission:
Munich studios
152
154
154
Biblis transmission station
38
38
38
Holzkirchen transmission station
36
36
36
Schleissheim monitoring station
28
28
28
New York office
11
10
10
Maxoqueira receiving station
34
34
34
Gloria transmission station
208
,
200
197
Subtotal, operations/transmission
507
500
497
Support services:
Munich
188
189
189
New York
30
29
21
RARET (Portugal)
124
112
110
Subtotal, support services
342
330
320
Total, RFE operations
1,682
1,652
1,628
RADIO LIBERTY
Radio operations:
General management
42
42
42
RL management
134
134
134
RL programming:
Program policy division
49
49
49
Programs operations division
222
235
240
U.S. division
65
66
66
London bureau
5
5
5
Paris bureau
7
7
7
Audience research division
13
13
13
Subtotal RL programming
361
375
380
RL network:
New York office
12
12
12
Munich office
57
57
57
Lampertheim transmitting station
70
70
70
Pals transmitting station
197
197
197
Pa-Li transmitting station
19
19
19
Subtotal RL network
355
355
355
Total radio operations
992
906
911
Nonradio operations institute
61
56
56
Total Radio Liberty
953
962
967
[S. 1936, 92d Cong., first Sess.]
A BILL to provide for the establishment of an American Council for Private
International Communications, Incorporated, to grant support to the activi-
?ties of private American organizations engaged in the field of communication
with foreign peoples
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That this Act may
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be cited as the "American Council for Private International Com-
munications, Incorporated Act of 1971".
CONGRESSIONAL DECLARATION OF POLICY
SECTION 1. The Congress hereby finds and declares?
(a) that the existence of open communication among the
peoples of the world is a matter of continuing concern to the
American people and a positive contribution to international
stability;
(b) that a free flow of information and ideas will encourage
other peoples to enhance their social, political, and material well-
being and will increase their awareness of the heritage they share
with other peoples, including the American people;
(c) that establiShed private organizations in the communica-
tions field have demonstrated their effectiveness in furthering
the foregoing objectives; and
(d) that in the interest of implementing the above objectives,
it is desirable to establish an American Council for Private Inter-
national Communications, Incorporated, which, by assistance to
American private organizations, will enable the private sector of
American life to participate in and contribute its skills to a con-
structive dialog with peoples of other lands.
ESTABLISHMENT OF A CORPORATION
SEC. 2. There is hereby authorized to be established in the District
of Columbia a nonmembership, nonprofit corporation to be known as
the American Council for Private International Communications, In-
corporated (hereinafter referred to as the "corporation"), which will
not be an agency or establishment of the United States Government.
Members of the board, officers, and employees of the corporation shall
not be deemed to be employees of the United States Government. To
the extent consistent with the provisions of this Act, the corporation
shall be subject to the District of Columbia Nonprofit Corporation
Act.
ORGANIZATION AND MANAGEIVLENT
SEC. 3. (acl STRUCILRE OF THE CORPORATION.?The corporation shall
have a boar of directors, a president, and such other officers and staff
as the board of directors may determine. The corporation shall main-
tain its principal office in the District of Columbia and shall, at all
times, maintain therein a designated agent to accept service of process
for the corporation. Notice to or service upon the agent shall be
deemed notice of service upon the corporation.
(b) BOARD OF DIRECTORS.? (1) The corporation shall have aboard
of directors (hereinafter referred to as the "board"), consisting of
eleven members, including a chairman and a vice chairman, all of
whom shall be appointed by the President of the United States by and
with the advice and consent of the Senate. Not more than six members
of the board shall be members of the same political party. The Presi-
dent shall designate one of the members first appointed to the board
as chairman. After the expiration of his term or conclusion of his
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service as chairman prior thereto, the members of the board shall an-
nually elect one of their members as chairman. The members of the
board shall also annually elect one of their members as vice chair-
man.
(2) SELECTION.?All members of the board shall be citizens of the
United States who are not regular full-time employees of the United
States Government, and shall be selected from areas of professional,
business, and cultural life relevant to the objectives of the corporation.
(3) INCORPORATION.?The members of the initial board shall serve
as incorporators and shall take whatever actions are necessary to es-
tablish the corporation under the District of Columbia Nonprofit Cor-
poration Act.
(4) TERM OF OFFICE.?In appointing the initial membership of the
board the President shall designate six members, including the chair-
man, to serve from the date of incorporation for four years and five
members to serve from the date of incorporation for two years. There-
after the term of office of each member of the board, including the
chairman, shall be four years, renewable at the discretion of the Presi-
dent of the United States by and with the advice and consent of the
Senate. Notwithstanding the foregoing provisions of this paragraph:
(A) the President of the United States shall appoint members to fill
vacancies occurring prior to the expiration of a term, in which case the
member so appointed shall serve for the remainder of such term; (B)
any member whose term has expired may serve until his successor has
qualified.
(5) COMPENSATION.?Members of the board shall while attending
meetings of the board or while engaged in duties related to such meet-
ings or in other activities of the board pursuant to this section, includ-
ing traveltime, be entitled to receive compensation equal to the daily
equivalent of the compensation at the rate prescribed for level IV of
the Executive Schedule under section 5315 of title 5, United States
Code. While away from their homes or regular places of business they
may be allowed travel expenses, including per diem in lieu of sub-
sistence, equal to that authorized by law (5 U.S.C. 5703) for persons in
the Government service employed intermittently.
(c) OFFICERS AND Emmo yEns.?(1) The board shall appoint the
president of the corporation and such other officers as may be necessary.
All officers shall be citizens of the United States and shall serve at the
pleasure of the board. No political test or qualification shall be used by
the board in selecting, appointing, promoting, or taking other person-
nel actions with respect to officers, agents, and employees of the
corporation.
(2) COMPENSATION.?The president of the corporation shall receive
compensation at a rate not exceeding that prescribed for level V of
the Executive Schedule under section 5316 of title 5, United States
Code. Other officers appointed by the board or employees appointed
by the president of the corporation shall receive compensation at rates
as set by the board but such rates shall not exceed the maximum rate,
prescribed for GS-18 in the General Schedule of section 5332 (a) of
title 5, United States Code.
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NONPROFIT NATURE OF TIM CORPORATION
SEC. 4. (a) The corporation shall have no power to issue any shares
of stock, or to declare or pay any dividends.
(b) No part of the income or assets of the corporation shall inure
to the benefit of any director, officer, employee, or any other individual
except as salary or reasonable compensation for services.
(c) The corporation may not contribute to or otherwise support any
political party or candidate for elective public office. The corporation,
including its property and income, shall be exempt from taxation
now or hereafter imposed by the United States or any territory or
possession thereof.
POWERS AND DUTIES OF THE CORPORATION
SEC. 5. In addition to the powers conferred upon the corporation by
the District of Columbia Nonprofit Corporation Act, the corporation
is authorized to?
(a) contract with, or render financial assistance, including
grants, under such terms and conditions as the board may approve
to those private American organizations with established pro-
grams of broadcasting to other countries, or with other selected
activities in the international mass media field, which organiza-
tions receive no other appropriated funds of the United States
Government and which demonstrate their effectiveness in pro-
motincr'' the free movement of information and ideas across na-
tionalfrontiers, thereby strengthening channels of communica-
tion among the peoples of the world.
(b) to develop and apply procedures, including audits, as may
be necessary to insure that funds so granted are applied in ac-
cordance with the purposes for which each such grant is made.
(c) to give particular encouragement and assistance to those
American private organizations which?
(1) are in turn qualified to enlist financial and other sup-
port from American private organizations, industry, and
individuals;
(2) enjoy or are capable of enlisting cooperation or finan-
cial support from international or foreign organizations
which share these objectives;
(d) to prescribe such regulations as it deems necessary govern-
ing the manner in which its functions shall be carried out;
(e) to make and perform contracts when deemed necessary to
carry out its objectives;
(f) to receive money and other property donated, bequeathed,
or devised, without condition or restriction other than it be used
for the purposes of the corporation, and to use, sell, or otherwise
dispose of such property for the carrying out of its functions.
(For the purposes of section 170 of the Internal Revenue Code:of
1954 as amended (26 U.S.C. 170), the corporation shall be deemed
to be a corporation described in section 170(c) (2) thereof.)
?
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(g) to obtain from time to time as appropriate, the services of
experts and consultants to aid the corporation in accordance with
the carrying out of the purposes of this Act;
(h) to accept and utilize on behalf of the corporation the serv-
ices of voluntary and uncompensated personnel from private life
and to reimburse 'them for travel expenses, including per diem,
as appropriate;
(i) to rent office space in the District of Columbia and else-
where as necessary to its purposes ;
(j) to make all other expenditures as are necessary to carry out
the purposes of this Act.
ANNUAL REPORT
SEC. 6. The corporation shall on or before the 30th day of September
of each year submit an annual report, with financial appendices as
appropriate, on its activities under this Act during the year ending
the preceding June 30 to the President of the United States and to
the Congress. Such report shall include a list of the grants made by
the corporation during the preceding year and a statement of the use
to which such grants were put.
AUDIT
SEC. 7. (a) The accounts of the corporation shall be audited annually
in accordance with generally accepted auditing standards by inde-
pendent certified public accountants or independent licensed public
accountants licensed on or before December 31, 1970; who are certified
or licensed by a regulatory authority of a State or other political
subdivision of the United States; except that an independent public
accountant licensed to practice by such regulatory authority after
December 31, 1970, may perform such audits until December 31, 1975.
(b) In addition to the annual audit, the financial transactions of
the corporation for any 'fiscal year during which Federal funds are
available to finance any portion of its operations may be audited by the
General Accounting Office in accordance with such rules and regula-
tions as may be prescribed by the Comptroller General of the United
States. Any such audit shall be conducted at the place or places where
accounts of the corporation are normally kept. The representative of
the General Accounting Office shall have access to all books, accounts,
records, reports, files, and all other papers, things, or property belong-
ing to or in use by the corporation pertaining to its financial transac-
tions and necessary to facilitate the audit, and they shall be afforded
full 'facilities for verifying transactions with the balances or securities
held by depositories, fiscal agents, and custodians. All such books, ac-
counts, records, reports, files, papers, and property of the corporation
shall remain in the possession and custody of the corporation. A report
of any such audit shall be made by the 'Comptroller General to the
Congress and to the President, together with such recommendations
with respect thereto as he shall deem advisable.
FINANCING
SEC. 8. There are authorized to be appropriated such sums as may be
necessary to carry out the activities of the corporation, which sums
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shall remain available until expended. Except for funds appropriated
pursuant to this Act, no funds appropriated after the date of the first
appropriation pursuant to this _Act may be made available to or for
the use of the corporation.
By Mr. CASE:
S. 1936. A bill to provide for the establishment of an American
Council for Private International Communications, Incorporated, to
grant support to the activities of private American organizations en-
gaged in the field of communication with foreign peoples. Referred to
the Committee on Foreign Relations.
AMERICAN COUNCIL FOR PRIVATE INTERNATIONAL COMMUNICATIONS,
INCORPORATED, ACT OF 1971
Mr. CASE. * Mr. President, I am pleased to announce that the Nixon
administration has accepted my proposal for open Government fund-
ing of Radio Free Europe and Radio Liberty.
The administration has made a wise decision in deciding to elimi-
nate the CIA from the operation of these two stations. 'Our national
interest is best served when activities which should be in the open are
removed from the clandestine arena.
I am today introducing an administration proposed bill which will
provide for 'congressional financing of the stations.
I had earlier introduced a bill on January 25, 1971, which called for
congressional scrutiny of Radio Free Europe and Radio Liberty. I said
at that time:
"That during the last 20 years, several hundred million dollars of
U.S. Government funds have been expended from secret CIA budgets
to pay almost totally for these two radio stations broadcasting to East-
ern Europe; yet at no time was Congress asked or permitted. to carry
out its traditional Constitutional role of approving the expenditure.
I can understand why covert funds might have been used for a year
or two in an emergency situation when extreme secrecy was necessary
and when no other Government funds were available. But the justifi-
cation has lessened over the years as international tension has eased, as
the secrecy surrounding these radio stations has melted away, and as
more open means of funding could have been developed. In other
words, the extraordinary circumstances that might have been thought
to justify circumvention of constitutional processes and congressional
approval no longer exist.
My original proposal on January 25 provided for direct congres-
sional appropriations to Radio Free Europe and Radio Liberty. But in
subsequent conversations with high administration officials, I made
clear that my purpose was to find any suitable mechanism 'which would
bring the stations out from under CIA. To this end, I sent a draft bill
to the State Department in March whieh would have set up a public
corporation to run the two stations.
The administration has responded with its own proposal for funding
Radio Free Europe and Radio Liberty through 'a nonprofit corpora-
* Senator Javits wishes to associate himself with these remarks in support of S. 1936.
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tion to be known as the American Council for Private International
Communications, Inc. The purpose of this Council would be to pro-
mote a free flow of informatiion to the peoples of the world through
established private organizations.
Nowhere in the legislation is Radio Free Europe or Radio Liberty
mentioned but these two stations would be the beneficiaries of about
$40 million dollars in congressional appropriations which would be
distributed to the two stations through the American Council for Pri-
vate International Communications. "
The Council would be managed by a board of 11 directors chosen
from private life by the President of the United States with the ad-
vice and consent of the Senate.
While 1 approve of the basic premise in the administration pro-
posal of removing Radio Free Europe and Radio Liberty from CIA
funding, there are several specific matters to which the Foreign Re-
lations Committee and the Senate as a whole will have to give the
closest scrutiny.
Among other things we should give careful consideration to whether
it is appropriate for the President to appoint all the Council's directors
and to whether the Council should not come annually to Congress for
an authorization of its funds rather than only being required to re-
quest appropriations as the administration bill proposes.
We shall need firm assurances that CIA participation in the stations
will be terminated. And, of course, we shall have to establish that
money appropriated for the Council is not to be passed on to any orga-
nization except Radio Free Europe and Radio Liberty without con-
gressional authorization. The Council should not be used as a means
of expanding Government participation in the dissemination of infor-
mation overseas.
Congressman Ogden Reid, Republican, of New York, who intro-
duced the original Radio Free Europe-Radio Liberty bill in the House
of Representatives, will also introduce the administration proposal in
that body.
STATEMENT BY THE ASSISTANT SECRETARY OF STATE FOR EUROPEAN
AFFAIRS, MARTIN J. HILLENBRAND
I appreciate the opportunity to testify on this Bill to provide for
the establishment of a corporation to be called the American Council
for Private International Communications, Incorporated, which will
support private American organizations active in the field of communi-
cations with foreign peoples. This proposal has the full support of
Secretary Rogers.
The Council as it is conceived would make grants to eligible media
from funds appropriated by the Congress. The private nature of the
Council is designed to enable the media which it supports to fulfill
their role as objective reporters and independent commentators, not as
spokesmen for the US Government.
The Chairman of the Board of the Council would be appointed by
the President, as would the Vice Chairman and the other nine members.
All would be selected for their ability to ensure the disbursement of
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grants in the national interest. The Board would be responsible for
assuring that the officers of the Council established adequate liaison
with the Department of State.
The Council would annually account to the 'Congress and its re-
sponsible committees for the proper use of grants the Council makes.
Through the involvement and interest of the Council's Board mem-
bers, all of whom would be appointed from private life, the Council
would be able to determine that activities of the grantees were ex-
clusively those appropriate to mass-media operations for which they
were funded, including news gathering and analysis.
It is foreseen that the Council would use its appropriation pri-
marily to grant funds to two existing private broadcasting corpora-
tions, Radio Free Europe and Radio Liberty, which are incorporated
respectively in the States of New York and Delaware and which have
obtained licenses abroad to transmit programs in their capacity as
private organizations.
I would like to review briefly with the Committee the importance of
these two radios to the peoples to whom they broadcast and their value
to other peoples, including our own, who share the view ? that an in-
formed public is a safeguard of peace. I would like especially to under-
line how important it is that these radios retain their private character.
In regard to the significance of these radios, a principal source for
my remarks are my personal observations and those of my colleagues
who have served in the Soviet Union and Eastern Europe. I know of
few matters related to this geographic area on which there is such a
degree of agreement among us who have served in that area as on the
beneficial and constructive roles of Radio Liberty and Radio Free
Europe. The service of each radio is in essence the same. Radio Liberty
provides to the Soviet Union and Radio Free Europe to most of East-
ern Europe a large volume of information and commentary winch the
peoples of those countries do not receive from other sources, but which
they need in order to make informed judgments on public issues. Do-
mestic media in the USSR and Eastern Europe speak with a single
voice, commonly omitting or distorting coverage of events about which
the public has every need to know. In place of full news accounts,
questioning editorials, and independent commentary, the daily fare
never challenges policies or goals set by the governments nor asks bow
wisely the public's money is being spent. A public so deprived of es-
sential information has difficulty finding ways to promote its own
interests with respect either to domestic or to -foreign issues.
It is true that international radio services which -function as agen-
cies of various governments?the Voice of America, BBC, Deutsche
Welle, Radio-transmission et diffusion Francaise, and others?fill a
part of this information void. However, out of well-founded diplo-
matic considerations, such official Government radios must take care to
avoid the charge of interference in the internal affairs of other nations.
In my view, there are no fundamental conflicts of interest between the
American people, and the peoples of the Soviet Union and Eastern
Europe. In many respects,: the interests of all these people can be seen
to converge. For them as well as for us, large resources which could be
allocated to meet human needs are siphoned off for the purposes of
other policies. It seems a reasonable assumption that under any system
an informed public can better alter this situation in the interest of its
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own welfare than can an uninformed public. I am convinced, as are
many of my colleagues, that the input of information by the radios
into the Soviet Union and Eastern Europe strengthens the ability of
these peoples to promote their own general welfare. If these peoples do
improve their OWIt welfare, it will be possible for us further to reorder
our own priorities to the benefit of the American public.
Further, let me stress that the sole purpose of the radios is to dissemi-
nate information and to present analyses of that information which are
thoughtful and responsible. Those of us who have lived in the recep-
tion areas credit the radios with a large measure of success in fulfilling
their purpose. This success is borne out by the large listenerships which
the radios have attracted. RFE broadcasts in the appropriate language
18 hours a day to Poland, 19 to Czechoslovakia, 18 to Hungary, 12 to
Romania and 'T1/2 to Bulgaria. The results of thousands of interviews
conducted by professional, independent polling organizations with vis-
itors from Eastern Europe in the recent past indicate that the RFE
audience in the five countries named above is at least 80 million per-
sons. This is about one-half of the total adult population. In certain
countries during periods of crises the percentage of listeners has shot
up dramatically to 80 or 90 percent of the population over the age of
11. I should add that these large audiences have been developed not-
6
not-
withstanding extensive efforts to jam broadcasts. A significant propor-
tion of the broadcasts gets through even where efforts are made to jam
them because the effectiveness of the jamming varies with the time and
place, and because of the tenacity of the listeners.
Radio Liberty broadcasts 21 hours a day in Russian, 10 in Byelo-
russian, 13 in Ukrainian, 4 in Armenian, 4 in Azerbaijani, 4 in Geor-
ian, 4 in North-Caucasian languages, 4 in Tatar-Bashkir, and 4 in
rkestani languages. While it is more difficult to arrive at an ac-
curate estimate of the actual size of Radio Liberty's listenership, an
indication of its effectiveness is the effort made by the Soviet govern-
ment since 1953 to jam around-the-clock all Radio Liberty frequen-
cies. It is estimated that the jamming network costs the Soviets over
six times as much annually to operate as the annual budget of Radio
Liberty itself.
While estimates of the number of Radio Liberty listeners are of
necessity less precise than those for Radio Free Europe, there is exten-
sive corroborative evidence which shows that, like Radio Free Europe,
it has a large and tenacious audience. The costly effort of jamming it-
self is a clear indicator as are the thousands of references to the pro-
grams of Radio Liberty and Radio Free Europe in the Soviet and
Eastern European press. Also, each year, several thousands of letters
addressed to Radio Liberty and Radio Free Europe get past?or
around?the censor or are sent to them by listeners travelling in the
West. In these, there is an oft-repeated refrain : "Everybody around
here listens to your program. . . . ' This may be an exaggeration, but
it gives some idea of how widely the broadcasts of these radios are
listened to. Further evidence comes from foreigners living and work-
ing in these countries, who confirm that these peoples depend on the
radios and that a significant proportion of the broadcasts penetrate the
jamming. One of my colleagues' fluent in Russian, who recently spent
a two-year tour in the Soviet Union, has said that in all his wide
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travels in that country he seldom met an individual who did not admit
to listening to Radio Liberty.
The final point I wish to emphasize is the importance of the radios'
preservation of their private character. I mentioned that, in contrast
to international radios which are identified as government agencies,
Radio Liberty and Radio Free Europe are able to report and comment
on the domestic affairs of other nations much as would any commercial
medium operating in a democracy. This is the unique character of
Radio Free Europe and Radio Liberty and is the key to their continu-
ing value, for the reasons I have given. Additionally, these radios are,
in order to prolong their present transmitting licenses, obligated to
their host governments to maintain their private character. In recent
months. Soviet and Eastern European medm have increased their at-
tacks on the radios in an effort to dislodge them or at least seriously
curtail their services. In reaction, considerable public and media sup-
port for the radios and the principles for which they stand has been
evoked in Europe. That good-will can best be preserved by enactment
of the proposed legislation which will enable the radios to continue to
function effectively with their private character unimpaired.
Mr. Chairman, we are at a point in the evolution of events in Europe
at which we have, perhaps, significant opportunities -for meaningful
negotiation. This is a welcome situation. But we must bear in mind
that our quadriparite negotiations -for improvement of the state of
affairs in and around Berlin have no yet been successful after many
months of discussion. We do not intend., however, to stop trying. Our
SALT talks in Vienna have advanced to the point at which, as the
President has said, we have agreed with the Soviet government "to
concentrate on working out an agreement for the limitation of deploy-
ment of anti-ballistic missile systems" and, together with that, "to
agree on certain measures with respect to the limitation of offensive
strategic weapons". It is our hope that we can agree with the Soviet
Union on how to relate these issues and how to deal with them to mu-
tual advantage. We now have the prospect of exploring another major
issue?mutual balanced force reductions. Mr. Brezhnev has told us,
however, that we must drink from that bottle before we find out what
wine is in it.
Much more than an atmosphere of negotiations is at stake in these
opportunities. At stake is not only the accommodation of divergent
Western and Soviet governmental interests, but the basis on which that
accommodation is to be reached. Will it be achieved on the basis of a
recognized Soviet sphere of influence confronting the NATO alliance?
Or will it be achieved on the basis of new and more secure relation-
ships in Europe permitting individual countries to develop natural
and normal economic, cultural, and informational links with each
other? If the second alternative is realized?if a free and open ex-
change of information develops within and between the individual
countries of Europe?the valuable private international media of
which I have spoken will no longer have a valid function. This is the
goal for which these radios are working. Until that goal is achieved,
there is every reason to encourage Radio Free Europe and Radio
Liberty to continue in their present role.
It is for this reason that I wish to stress, in conclusion, that the
establishment of the American Council for Private International Com-
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munications will be an act fully compatible with the objectives which
I believe you, Mr. Chairman, and the members of your Committee
share with those of us who are engaged in implementing the President's
desire to move from confrontation to negotiation.
JUNE 8, 1971.
Mr. CHARLES R. GELLNER,
Chief, Foreign Affairs Division, Congressional Research Service,
Library of Congress, Washington, D.0 .
DEAR MR. GELLNER : The Committee on Foreign Relations is pres-
ently considering legislation that would authorize public funds for
Radio Free Europe and Radio Liberty.
During its consideration of these proposals, the Committee came
to the conclusion that it needed additional information on these two
radio operations. The purpose, therefore, of this letter is to request
that members of your staff prepare, for the Committee an in-depth,
background study on Radio Free Europe and Radio Liberty. I should
hope that such a study would lead to some conclusions as to the effec-
tiveness of these radio stations and whether or not it is in the public
interest to support them with tax dollars.
I should appreciate this project receiving your earliest considera-
tion. If you have any questions about this matter, please contact Mr.
Robert Dockery of the Committee staff.
Sincerely yours,
J. W. FULBRIGHT, Chairman.
JUNE 8, 1971.
Hon. ELMER B. STAATS,
Comptroller General of the United States,
Washington, D.0 .
DEAR MR. STAATS The Committee on Foreign Relations is presently
considering legislation that would authorize public funds for Radio
Free Europe and Radio Liberty.
During its consideration of these proposals, the Committee came to
the conclusion that it needed additional information on these two
radio operations. The purpose, therefore_, of this letter is to request
that members of your staff prepare for the Committee an analysis of
the public monies which have already been spent on these radio opera-
tions and/or the corporations to which they belong.
I should hope that your analysis would lead to some conclusions
as to how effectively the public funds involved have been spent and,
from this standpoint, whether or not it is in the public interest to pro-
vide additional tax dollars for the two radios.
I should appreciate this nrojeet, receiving your earliest considera-
tion. If you have any questions about this matter, please contact Mr.
Robert Dockery of the Committee staff.
Sincerely yours,
Enclosures.
.T. W. Funinuotrr, Chairman.
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The following is the Administration's slightly modified version of
?S. 1936.
DRAFT BILL to provide for the establishment of an American Council for Inter-
national Communications, Incorporated, to grant support to the activities of
private American organizations engaged in the field of communications with
foreign peoples
Be it enacted by the Senate and House of Representati,ves of the
United States of America in Congress assembled, That this Act may
be cited as the "American Council for International Communications,
Incorporated Act of 1971."
CONGRESSIONAL DECLARATION OF POLICY
SECTION 1. The Congress hereby finds and declares?
( a) That the existence of open communication among the peoples
.of the world is a matter of continuing concern to the American people
and a positive contribution to international stability;
(b) That a free flow of information and ideas will encourage other
peoples to enhance their social, political, and material well-being and
will increase their awareness of the heritage they share with other
peoples, including the American people;
(c) That established private organizations in the communications
field have demonstrated their effectiveness in furthering the foregoing
objectives; and
(d) That in the interest of implementing the above objectives, it is
desirable to establish an American Council for International Com-
munications, Incorporated, which, by assistance to American private
organizations, will enable the private sector of American life to par-
ticipate in and contribute its skills to a constructive dialogue with
peoples of other lands.
ESTABLISIIME,NT OF A CORPORATION
SEC. 2. There is hereby authorized to be established in the District
of Columbia a non-membership, nonprofit corporation to be known as
the American Council for International Communications, Incorpo-
rated (hereinafter referred to as the "corporation"), which will not
be an agency or establishment of the United States Government. Mem-
bers of the Board, officers, and employees of the corporation shall not
be deemed to be employees of the United States Government. To the
extent consistent with the provisions of this Act, the corporation shall
be subject to the District of Columbia Nonprofit Corporation Act.
ORGANIZATION AND MANAGEMENT
SEC. 3. ( a) STRUCTURE OF THE CORPORATION?The corporation shall
have a Board of Directors, a President, and such other officers and staff
as the Board of Directors may determine. The corporation shall main-
tain its principal office in the District of Columbia and shall, at all
times, maintain therein a designated agent to accept service of process
for the corporation. Notice to or service upon the agent shall be deemed
.notice of service upon the corporation.
(b) BOARD or DIRECTORS.? (1) The corporation shall have a Board
of Directors (hereinafter referred to as the "Board"), consisting of
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eleven members, including a Chairman and Vice Chairman, seven
members of which shall be appointed by the President by and with the
advice and consent of the Senate, two members of which shall be ap-
pointed by the Speaker of the House and two members of which shall
be appointed by the President pro tempore of the Senate. Not more
than six members of the Board shall be members of the same political
party. The President shall designate one of the members first ap-
pointed to the Board as Chairman. After the expiration of his term or
conclusion of his service as Chairman prior thereto, the members of
the Board shall annually elect one of their members as chairman. The
members of the Board shall also annually elect one of their members as
Vice Chairman.
(2) SELECTION.?The members of the Board (A) shall be selected
from among citizens of the United States (not regular fulltime em-
ployees of the United States) who are eminent in such fields as educa-
tion, cultural and civil affairs, or the arts, including radio and tele-
vision; (B) shall be selected so as to provide as nearly as practicable a
broad representation of various regions of the country, various pro-
fessions and occupations. and various kinds of talent and experience
appropriate to the functions and responsibilities of the corporation.
(3) INCORPORATION.?The members of the initial Board shall serve
as incorporators and shall take whatever actions are necessary to estab-
lish the corporation under the District of Columbia Nonprofit Corpo-
ration Act.
(4) TERM OF OFFICE.?The President shall designate six members
of the initial Board, including the Chairman and an appointee of the
Speaker of the House and of the President pro tempore of the Senate,
to serve from the date of incorporation for four years, and five mem-
bers to serve from the date of incorporation for two years. Thereafter
each member of the Board shall serve for four years. The President
shall have discretion to renew, by and with the advice and consent of
the Senate, the term of office of any member of the Board which he
appointed, and the Speaker and President pro tempore shall have dis-
cretion to renew the term of any of their respective appointees to the
Board. Notwithstanding the foregoing provisions of this paragraph;
(A) the President of the United States shall appoint members to fill
vacancies occurring prior to the expiration of a term, in which case the
member so appointed shall serve for the remainder of such term; (B)
any member whose term has expired may serve until his successor has
qualified.
(5) 'COMPENSATION.?Members of the Board shall while attending
meetings of the Board or while engaged in duties related to such meet-
ings or in other activities of the Board pursuant to this section, includ-
ing travel time, be entitled to receive compensation equal to the daily
equivalent of the compensation at the rate prescribed for level IV of
the Executive Schedule under Section 5315 of title 5, United States
Code. While away from their homes or regular places of business they
may be allowed travel expenses, including per diem in lieu of sub-
sistence, equal to that authorized by law (5. U.S.C. 5703) for persons in
the Government service employed intermittently.
e) OFFICERS AND EMPLOYEES.?(1) The Board shall appoint the
President of the corporation and such other officers as may be ne,ces-
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sary. All officers shall be citizens of the United ,States and shall serve
at the pleasure of the Board. No political test or qualification shall be
used by the Board in selecting, appointing, promoting, or taking other
personnel actions with respect to officers, agents, and employees of the
corporation.
2) Compensation.?The President of the corporation shall receive
compensation at a rate not exceeding that prescribed for level V of the
Executive Schedule under section 5316 of title 5, United States Code.
Other officers appointed by the Board or employees appointed by the
President of the corporation shall receive compensation at rates as set
by the Board but such rates shall not exceed the maximum rate pre-
scribed for GS-18 in the General Schedule of section 5332(a) of title
5, United States Code.
NONPROFIT NATURE OF TIIE CORPORATION
SEC. 4. (a) The corporation shall have no power to issue any shares
of stock or to declare or pay any dividends.
(b) stock,
part of the income or assets of the corporation shall inure
to the benefit of any director, officer, employee, or any other individual
except as salary or reasonable compensation for services.
(c) The corporation may not contribute to or otherwise support any
political party or candidate for elective public office. The corporation,
including its property and income, shall be exempt from taxation now
or hereafter imposed by the United States or any territory or pos-
session thereof.
POWERS AND DUTIES OF THE CORPORATION
SEC. 5. In addition to the powers conferred upon the corporation
by the District of Columbia Nonprofit Corporation Act, the corpora-
tion is authorized to (a) contract with, or render financial assistance,
including grants, under such terms and conditions as the Board may
approve to those private American organizations with established
programs of broadcasting to other countries, or with other selected
activities in the international mass media field, which organizations
receive no other appropriated funds of the United States Government
and which demonstrate their effectiveness in promoting the free move-
ment of information and ideas across national frontiers thereby
strengthening channels of communication among the peoples of the
world.
(b) to develop and apply procedures including 'audits, as may be
necessary to ensure that funds so granted are applied in accordance
with the purposes for which each such grant is made and to make such
grants under such terms and conditions as may be necessary to allow
audits of the financial transactions of recipients of such grants by
the General Accounting 'Office in accordance with the provisions of
section 7(b) of this Act.
(c) to give particular encouragement and assistance to those Amer-
ican private organizations which (1) are in turn qualified to enlist
financial and other support from American private organizations, in-
dustry and individuals;
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(2) enjoy or are capable of enlisting cooperation or financial sup-
port from international or foreign organizations which share these
objectives;
(d) to prescribe such regulations as it deems necessary governing
the manner in which its functions shall be carried out;
(e) to make and perform contracts when deemed necessary to carry
out its objectives;
(f) to receive money and other property donated, bequeathed or
devised, without condition or restriction other than it be used for the
purposes of the corporation, and to use,
sell or otherwise dispose of
such property for the carrying out of its functions; (For the purposes
of Section 170 of the Internal Revenue Code of 1954 as amended (26.
U.S.C. 170) the corporation shall be deemed to be a corporation de-
scribed in gection 170(c) (2) thereof.)
(g) to obtain from time to time as appropriate, the services of ex-
perts and consultants to aid the corporation in accordance with the
carrying out of the purposes of this Act;
(h) -Co accept and utilize on behalf of the corporation the services
-
of voluntary and uncompensated personnel from private life and to
reimburse them for travel expenses, including per diem, as appro-
priate;
(i) to rent office space in the District of Columbia and elsewhere as
necessary to its purposes;
(j) to make all other expenditures as are necessary to carry out the
purposes of this Act.
ANNUAL REPORT
SEC. 6. The corporation shall on or before the 30th day of September
of each year submit an annual report, with financial appendices as
appropriate, on its activities under this Act during the year ending
the preceding June 30 to the President of the United States and to
the Congress. Such report shall include a list of all property donated,
bequeathed or devised to the corporation, and all grants made by the
corporation during the preceding year together with a statement of
the use to which such grants were put.
AUDIT
SEC. 7. (a) The accounts of the corporation shall be audited annually
in accordance with generally accepted auditing standards by inde-
pendent certified public accountants or independent licensed publie
accountants licensed on or before December 31, 1970 who are certified
or licensed by a regulatory authority of a State or other political sub-
division of the United States; except that an independent public ac-
countant licensed to practice by such regulatory authority after De-
cember 31, 1970 may perform such audits until December 31, 1975.
(b) In addition to the annual audit, the financial transactions of
the corporation for any fiscal year during which Federal funds are
available to finance any portion of its operations may be audited by
the General Accounting Office in accordance with such rules and regu-
lations as may be prescribed by the Comptroller General of the United
States. Any such audit shall be conducted at the place or places where
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accounts of the corporation are normally kept. The representative of
the General Accounting Office shall have access to all books, accounts,
records, reports, files, and all other papers, things or property belong-
ing to or in use by the corporation pertaining to its financial trans-
actions and necessary to facilitate the audit, and they shall be afforded
full facilities for verifying transactions with the balances or securities
held by depositories, fiscal agents, and custodians. All such books, ac-
counts, records, reports, files, papers and property of the corporation
shall remain in the possession and custody of the corporation. A re-
port of any such audit shall be made by the Comptroller General to
the Congress and to the President, together with such recommenda-
tions with respect thereto as he shall deem advisable.
FINANCING
SEC. 8. There are authorized to be appropriated such sums as may
be necessary to carry out the activities of the corporation during fiscal
year 1972, which sums shall remain available until expended. Except
for funds appropriated pursuant to this Act, no funds appropriated
after the date of the first appropriation pursuant to this Act may be
made available to or for the use of the corporation.
0
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