As 1995 drew to a close, Senate Democrats and Republicans were still debating Foreign Relations Committee Chairman Jesse Helms’ legislation to restructure the State Department and its ancillary agencies. Helms wanted to jettison the United States Agency for International Development, the Arms Control and Disarmament Agency, and the United States Information Agency, fold their functions into the State Department, and then chop 30 percent of foreign policy funds from the Clinton administration’s fiscal 1996 budget request. USAID complained the loudest, unwittingly revealing that more than 80 percent of foreign aid from AID never crosses Atlantic or Pacific shores. It stays right here in the United States. AID is, to use the latest cliche, a corporate welfare agency.

AID bureaucrats are strangely proud of this fact and distributed an inch-thick paper documenting the billions of dollars it spends in each of the 50 states. Using individual headings with the verbiage, “Foreign Aid for [fill in your favorite state],” AID made a strong case to every pork barreler in Congress.

The big winners among the 50 states, as you’d expect, are those in proximity to River City and those boasting a large congressional delegation. The Old Dominion collected $936.1 million in AID contracts. After New York, with contracts worth $889.6 million, Maryland came in third with $686.4 million. Thus does $1.6 billion flow directly into the Potomac Basin. Most of these firms are the “Beltway bandits” whose only job seems to be securing new government contracts when the old ones expire. And with the exception of Booz Allen & Hamilton, which holds a $29 million contract for privatization efforts in the former Soviet Union, they are unknown to most Americans.

Across the country, however, the story is different. AID’s list could well be mistaken for the Fortune 500. GM, Ford, and even individual dealerships receive money from AID. A dealer in New Jersey sold AID a four-wheel drive Chevy Suburban. In fiscal 1994, the Land O’Lakes company of Minnesota held $24 million in AID contracts. Among other things, it was promoting “cooperation among agricultural and food producers and [enhancing] the governance of cooperatives in the free world,” as well as providing “support for in-country training programs for artificial insemination of dairy cattle.” In its survey of AID contracts, the Heritage Foundation uncovered a contract for Romanian architects to study American architecture; another one awarded $1.3 million to supply street lamps to Moscow “at the same time the Russian government is planning to spend more than $1 billion to make war on the people of Chechnya.”

Naturally, AID’s money doesn’t always travel directly from the Treasury Department to corporate bank accounts. Sometimes, it even reaches the target country, which in most cases seems to be Egypt, Jordan, or another nation in the Middle East, which then uses the cash to buy American products. Beneficiaries of this “round-tripped” money include corporate titans such as Xerox, Clorox, Otis Elevator Corporation, IBM, Westinghouse, General Tire, Philco, and Dow Chemical. With this kind of money floating around, it is small wonder that AID has corporate support. As Brian Johnson of the Heritage Foundation said, “I laugh when I hear [AID director] Brian Atwood talking about starving babies. The only people that will be starving [if Congress cuts foreign aid] are the [American] contractors who benefit from it.”

It has long been known that American aid to the Third World has done little more than subsidize oppressive governments. If you don’t believe it, you might ask why, after 30 years of AID programs, television viewers are still treated to nightly scenes of starving, bloated children on the evening news. That truth begs the question of why American academics who study these matters don’t call for an end to AID’s charitable ministrations. The answer may lie in the millions of dollars AID packs off to American universities, money that pays for exotic and far-flung research projects and lines the pockets of professors at Yale, Rutgers, and Harvard, and at the universities of Alabama, Alaska, Arizona, Arkansas, California, Connecticut, Delaware, Florida, Rhode Island, and South Carolina. Indeed, if there’s a university that isn’t on AID’s payroll, the board of trustees should fire the dean.

Oddly, speaking with corporate executives about the possibility of losing AID’s largesse ruffled no feathers. They didn’t believe they would get kicked off the gravy train, no matter what happened to AID. As the communications director of one huge firm told me, “Regardless of what [the agency is called] the U.S. government’s aid to certain foreign countries will continue because it is of strategic importance.” Referring to the proposal to roll AID into the State Department, she said, “[We] don’t feel there will be a material impact because these kinds of programs are going to have to continue whether [AID] exists as a stand alone agency or not.”

The truth is, democracy is only a side benefit of AID’s foreign policy bureaucracy. The real purpose, as Representative Jim Moran explained, is commercial, or to use the impolite term again, corporate welfare. Moran, a Democrat representing Virginia’s eighth district, a big beneficiary of AID’s money, strongly opposes cutting AID’S budget or handing its functions to the State Department. “AID creates markets for our products. That is its mission,” he said. “What AID does, and it may be a well-kept secret, is promote business opportunities for American firms. They are in the business of selling expertise. That’s why northern Virginia is such a major beneficiary. We are selling our expertise in terms of health reform and medical consulting, democracy building, good government expertise and then we help them create infrastructure.” Moran concedes that AID’s mission may have been philanthropic at the time when President Kennedy came up with the idea. But not anymore. AID’s mission, he said, “is an economic mission, a well justified one.”

Even when AID talks about the salubrious effects of its programs, which address everything from Third World overpopulation to AIDS, an American beneficiary lurks in the shadows to pick up the booty. Along with the directory listing American companies that benefit from AID contracts, AID released a report documenting the global harm that would follow a cut in its budget. “A 30 percent budget cut would result in an estimated 600,000 more unintended pregnancies . . . 420,000 additional births, 180,000 more unsafe abortions, and 4,000 maternal deaths,” AID fretted, as well as “180 million fewer condoms distributed by USAID, and thus more than two million new HIV infections.”

The condoms are supplied by a manufacturer in Dothan, Alabama, that was receiving 80 percent of its revenue from its $55.3 million contract with AID.