freedom. He launched “Project Democracy,” a program designed to place freedom on the offensive, particularly in Eastern Europe, and convened a cabinet-level meeting to discuss how to carry out the project overtly and covertly. Among other things, this led to the creation of the National Endowment for Democracy.44
Meanwhile Reagan’s team—once again, led by Clark’s NSC—continued to put together a string of NSDDs committed to undermining the Soviet empire. A series of critical directives surfaced beginning in late June, expanding the economic war to different fronts. Eventually these would prove to be instrumental in the implementation of his antipipeline agenda.
Approved by Reagan on June 22, 1982, NSDD-41 expanded the sanctions on oil and gas exports to the USSR that had been imposed the previous December after martial law was declared in Poland. With the expansion in NSDD-41, the sanctions would now include “equipment produced by subsidiaries of U.S. companies abroad as well as equipment produced abroad under license issued by U.S. companies.” This language was a direct reference to the pipeline, stating a desire to advance the Reagan administration’s objective of “reconciliation in Poland.” Predictably, NSDD-41 would face major obstacles from Western Europe, creating, in the words of the new secretary of state, George Shultz, a “monstrous problem” in cross-Atlantic relations, which would hamstring the directive’s efficacy from the outset.45
In the same spirit but with greater success, on July 23, Reagan authorized NSDD-48. Symbolic of the economic warfare campaign, it was written in vague language and carried out silently. Inconspicuously titled, “International Economic Policy,” NSDD-48 did one simple thing: it created the Senior Interdepartmental Group– International Economic Policy (SIG-IEP). The purpose of the group, said the single-page NSDD-48, was, “To advise and assist the NSC in exercising its authority and discharging its responsibilities for international economic policy as it relates to our foreign policy.”46
This sounded innocent enough, like it could have been referring to exporting fluffy pillows to New Zealand, but in reality, it was far from benign. As scholar Christopher Simpson stated, the directive related “to the administration’s de facto economic warfare against the USSR.” Established by Bill Clark under Reagan’s direction, SIG-IEP created a formal NSC mechanism for linking economic and foreign policy.47 The chief author of NSDD-48 was Roger Robinson, who rightly describes the directive as an “essential but unrecognized” tool in the Reagan arsenal.48
According to Cold War historian Derek Leebaert, SIG-IEP was monumental in that it provided the only occasion during the Cold War in which the heads of the CIA, NSC, and DOD belonged to a “top policy-formulating organization” under a mandate of integrating economic and financial affairs with national security. Though the cabinet-level group was chaired (in name) by the treasury secretary and vice chaired by the secretary of state, the executive secretary tended to run the body. The first executive secretary was Norman Bailey, followed by Roger Robinson.49 The body reported through Bill Clark to the president, enabling Clark to personally ensure that all government agencies executed their policies in a way that was consistent with Reagan’s priorities.50 This meant that SIG-IEP ensured that national security would trump commercial interests and profits, when it came to economic policy related to the USSR and Soviet bloc.51
As executive secretary of SIG-IEP, it was now clearer than ever to Norm Bailey that things were changing quickly, and Reagan was playing to win. Bailey stated: “The fact is that the first Reagan administration adopted, designed, and successfully implemented an integrated set of policies, strategies, and tactics specifically directed toward the eventual destruction (without war) of the Soviet empire and the successful ending of the Cold War with victory for the West.”52 This was not just an understanding by the man who ran SIG-IEP but also a mandate. Under Reagan, stated Bailey, “the policy of containment was changed from maintenance of the status quo to the goal of eventually ending the war through victory. Thus the strategic posture changed from defense to rollback.” “In other words,” continued the SIG-IEP executive secretary, “the Reagan administration designed and carried out a radical paradigm shift in the way the United States pursued the Cold War, from the war aims themselves to the strategies and tactics used to implement the new objectives.”53
In SIG-IEP, with Bailey and Robinson and Clark, the Reagan team now had an actual vehicle for identifying and marshalling economic means of destruction. SIG-IEP could carry the water, making it especially difficult for other departments and agencies, like State, to set up roadblocks to try to stop Reagan’s economic war.
GOING AFTER EASTERN EUROPE
Two months later, in September 1982, Ronald Reagan pondered: “How long can the Russians keep on being so belligerent and spending so much on arms when they can’t even feed their own people?”54 With each passing month, it seemed that he came to realize the acuity of the Soviet crisis more keenly, exciting him more than ever. This excitement in early fall led to the release of another major directive by Reagan’s team. Titled “United States Policy Toward Eastern Europe” and issued September 2, 1982, NSDD-54 remains one of the most classified Reagan NSDDs. Still heavily redacted, there are roughly thirty-plus lines of text that continue to be blackened out of the directive.
Seeking the seemingly unattainable, the second line of NSDD-54 states: “I [Reagan] have determined that the primary long-term U.S. goal in Eastern Europe is to… facilitate its eventual reintegration into the European community of nations.” Within this quote, the “…” unfortunately substitutes for almost a full line of text that remains secret to this day. “The United States,” the NSDD insists, “can have an important impact on the region.” While one of the administration’s goals for NSDD-54 remains classified, there were five that have been subsequently released:
• “Encouraging more liberal trends in the region.”
• “Furthering human and civil rights in East European countries.”
• “Reinforcing the pro-Western orientation of their peoples.” • “Lessening their economic and political dependence on the USSR and facilitating their association with the free nations of Western Europe.”
• “Encouraging more private market-oriented development of their economies, free trade union activity, etc.”55
Ambitious by any standard, in 1982 these goals were downright implausible as they sought a shift by the Communist bloc away from the USSR and toward the free-market democracies of the West. Anyone reading these objectives at the time, outside the Reagan administration, would have judged them utter fantasy. Their significance is self-evident, though the directive itself was short on elaboration—not that much else needed to be said.
Finally, NSDD-54 stated that the administration “will employ commercial, financial, exchange, informational, and diplomatic instruments in implementing its policy toward Eastern Europe.” The directive listed ten such instruments, five of which—probably the most important—remain partly or fully redacted.56
Though much of the directive’s contents remain unclear at best, the language clearly set out broad goals for eliciting dramatic change in Eastern Europe. Fittingly, it was at this time that some members of the mainstream media began catching on to this plan for Eastern Europe. On September 23, 1982, the New York Times ran an extraordinary article under the selfexplanatory headline, “After Detente, the Goal is to Prevail.” In this giant wake- up call to its readership, the Times noted that from President Truman to President Johnson, the watchword on policy toward the USSR was “containment.” From President Nixon through President Carter, it was “detente.” Now under Reagan, the watchword was “to prevail.” The article quoted Tom Reed: “We believe the free world can prevail.” Speaking for Reagan, Reed said that “not since John Kennedy left the world stage have we dared to dream such dreams.” At the same time, Reed tried to reassure the typical Times reader: “there’s nothing wrong with winning.”57
