The Corner

Did NIAC Scam NED?

Did the National Iranian American Council (NIAC) scam and possibly defraud National Endowment for Democracy (NED)? It’s an issue I raised in the Corner a couple years ago. Despite promises of transparency, NIAC was silent. However, after NIAC launched a lawsuit against a prominent critic, many of its internal emails were released in discovery. I guess that’s what comes from harassment suits. At any rate, that critic has now compiled a report based entirely on NIAC’s internal emails which suggest that money was misappropriated.

NIAC’s strategy is to impugn the author. I do not know Hassan Daioleslam well enough to judge him, having only met him once and having kept my distance from Iranian activist groups, but I see NIAC’s strategy to smear the author as disingenuous; the report is based on NIAC’s own emails, the authenticity of which they do not deny.

The report makes interesting reading and should raise eyebrows. At the very least, it appears auditing at the National Endowment for Democracy was lax and that groups like NIAC treated democracy promotion as a cash cow. 

The episode is especially relevant as the congressional conference on Iran sanctions considers proposals to allow NGOs to use U.S. funding inside the Islamic Republic. Such proposals at this point in time are misguided. Sending non-emergency humanitarian grants helps the Iranian government build houses, schools, and health clinics, absenting the regime of responsibility for basic governance while Iranian policymakers use finite funds to dabble in nuclear technology and ballistic missiles. And, of course, as this report shows, auditing standards are not up to par, and are made more difficult when the U.S. government or NED makes their standard just taking a group’s word for it.

Michael Rubin is a resident scholar at the American Enterprise Institute, senior lecturer at the Naval Postgraduate School’s Center for Civil-Military Relations, and a senior editor of the Middle East Quarterly.

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