Spitfire List Web site and blog of anti-fascist researcher and radio personality Dave Emory.

For The Record  

FTR #763 The Adventures of Eddie The Friendly Spook, Part 9: Citizen Greenwald’s Financial Angel

Dave Emory’s entire life­time of work is avail­able on a flash drive that can be obtained here. (The flash drive includes the anti-fascist books avail­able on this site.)

Lis­ten: MP3

Side 1  Side 2

Note: In an update, we learn that Greenwald’s Finan­cial Angel–Pierre Omidyar–has helped to finance the coup that led to the cri­sis in the Ukraine.

David Koch

Intro­duc­tion: This pro­gram high­lights the finan­cial angel behind the new media out­let being launched by “Eddie the Friendly Spook” Snowden’s leak­ing jour­nal­ist of choice, that res­olute cham­pion of human lib­erty Glenn “Give me a Nazi and I will defend him pro-bono” Green­wald.

The founder of EBay (which bought Pay­Pal from Peter Thiel), Pierre Omid­yar has been hailed as a ver­i­ta­ble saint by the media. In fact, he is a crea­ture in the mold of the Koch Broth­ers and the Lud­wig von Mises Insti­tute.

In his auto­bi­og­ra­phy and polit­i­cal man­i­festo “Mein Kampf,” Hitler observe that: “Most peo­ple tell lit­tle lies. They would be ashamed to tell big ones. They would never credit oth­ers with such great impu­dence as the com­plete rever­sal of fact. . . .” That is the case with Omid­yar and the Olmid­yar Net­work that he oper­ates as a vehi­cle for using “busi­ness as a vehi­cle for good.”

Behind the facade of Omidyar’s pro­nounce­ments of good intent and the media’s lav­ish praise of him, one finds the Olmid­yar Network’s fund­ing of laissez-faire eco­nomic poli­cies that have resulted in lethal, bru­tal real­ity in the Third World.

Among the most grotesque of the projects funded by the Omid­yar Net­work are micro-finance pro­grams in Third World coun­tries such as India. Omid­yar Net­work funded Uni­tus, a micro­fi­nance equity fund that sup­ported SKS Microfinance.

SKS insti­tuted preda­tory lend­ing prac­tices that led to mass sui­cides among the pop­u­la­tion of Andhra Pradesh in India while gen­er­at­ing hand­some prof­its for Uni­tus. Other Omid­yar Network-backed micro­fi­nance enti­ties yielded sim­i­lar results.

In addi­tion to micro­fi­nance projects, the Omidyar-Network has invested in edu­ca­tion pri­va­ti­za­tion projects in both the U.S. and the Third World.

Matthew Hale, Glenn Greenwald’s pro-bono client, con­victed of solic­i­ta­tion of murder.

ON-backed education-privatization projects are asso­ci­ated with Tea Party-backed ele­ments and prop­ganda. ON-backed education-privatization pro­grams in Africa have exac­er­bated the poverty of those they pro­fessed to help.

Exem­pli­fy­ing the nature of the Omid­yar Network’s efforts is Her­nando de Soto. Dubbed “the Friedrich von Hayek” of Latin Amer­ica, de Soto has been lauded by the Koch broth­ers and is a crea­ture of the same stripe as Augusto Pinochet of Chile.

A backer of the Peru­vian dic­ta­tor­ship of Alberto Fuji­mori (now in prison for crimes com­mit­ted dur­ing his tenure as head of state), de Soto imple­mented many of the pro­grams that bru­tal­ized and impov­er­ished the cit­i­zenry of the country.

In addi­tion, de Soto’s pro­grams have resulted in cat­a­stro­phe in coun­tries such as Cambodia.

Con­clud­ing with some of Cit­i­zen Greenwald’s recent exploits, the pro­gram notes his appear­ance on Ron Paul’s new inter­net tv project, as well as his keynote address to a Los Ange­les meet­ing of CAIR, a Mus­lim Broth­er­hood front organization.

Do note the won­der­ful arti­cle upon which this pri­mar­ily broad­cast relies. It is avail­able at: https://www.nsfwcorp.com/

Pro­gram High­lights Include: Review of Peter Thiel’s bankrolling of Ron Paul’s can­di­dacy; review of the pro­found links between “the Paulis­tin­ian Lib­er­tar­ian Orga­ni­za­tion” and Snow­den; links between the Omid­yar Network’s education-privatization projects and the Pear­son edu­ca­tion giant (which is involved with joint projects with Ber­tels­mann); review of Friedrich von Hayek’s links to the Lud­wig von Mises milieu; the Omid­yar Network’s involve­ment with a pro­gram to influ­ence mem­bers of India’s par­lia­ment in direc­tions favor­able to the ON’s projects; Her­nando de Soto’s role as Peru’s “druz czar;” de Soto’s efforts on behalf of Fumori’s daughter’s can­di­dacy; de Soto’s appar­ent role in the Fuji­mori coup in Peru; the hand­some profit earned by ON-backed Uni­tus fund on the SKS project (which dev­as­tated those to whom it lent money); links between the ON-backed de Soto and the milieu of Chilean dic­ta­tor Augusto Pinochet; Pierre Olmidyar’s lav­ish praise for Her­nando de Soto, tweeted after din­ing with him.

1.  Most of the pro­gram con­sists of the read­ing of long excerpts of the NSFW Corp story on Omidyar.

“The Extra­or­di­nary Pierre Omid­yar” by Mark Ames and Yasha Levine; NSFW­Corp; 11/15/2013.

The world knows very lit­tle about the polit­i­cal moti­va­tions of Pierre Omid­yar, the eBay bil­lion­aire who is found­ing (and fund­ing) a quarter-billion-dollar jour­nal­ism ven­ture with Glenn Green­wald, Laura Poitras and Jeremy Scahill. What we do know is this: Pierre Omid­yar is a very spe­cial kind of tech­nol­ogy billionaire.

We know this because America’s sharpest jour­nal­ism crit­ics have told us.

In a piece head­lined “The Extra­or­di­nary Promise of the New Greenwald-Omidyar Ven­ture”, The Colum­bia Jour­nal­ism Review gushed over the announce­ment of Omidyar’s project. And just in case their point wasn’t clear, they added the amaz­ing sub­head, “Adver­sar­ial muck­rak­ers + civic-minded bil­lion­aire = a whole new world.”

Ah yes, the fabled “civic-minded billionaire”—you’ll find him two doors down from the tooth fairy.

But seri­ously folks, CJR really, really wants you to know that Omid­yar is a breed apart: noth­ing like the Ran­dian Sil­i­con Val­ley lib­er­tar­ian we’ve become used to seeing.

“...bil­lion­aires don’t tend to like the kind of authority-questioning jour­nal­ism that upsets the sta­tus quo. Bil­lion­aires tend to have a fin­ger in every pie: pow­er­ful friends they don’t want annoyed and busi­ness inter­ests they don’t want looked at.

“By hir­ing Green­wald & Co., Omid­yar is mak­ing a clear state­ment that he’s the bil­lion­aire exception....It’s like Izzy Stone run­ning into a civic-minded plas­tics bil­lion­aire deter­mined to take I.F. Stone’s Weekly large back in the day.”

Later, the CJR “UPDATED” the piece with this miss­ing bit of “oops”:

“(UPDATE: I should dis­close that the Omid­yar Net­work helps fund CJR, some­thing I didn’t know until shortly after I pub­lished this post.)”

No big­gie. Hon­est mis­take. And any­way, plenty of oth­ers rushed to agree with CJR’s assess­ment. Media critic Jack Shafer at Reuters describedOmidyar’s pol­i­tics and ide­ol­ogy as “close to being a clean slate,” repeat­edly prais­ing the jour­nal­ism venture’s and Omidyar’s “ide­al­ism.” The “NewCo” ven­ture with Green­wald “harkens back to the techno-idealism of the 1980s and 1990s, when the first impulse of com­puter sci­en­tists, pro­gram­mers, and other techies was to change the world, not make more money,” Shafer wrote, end­ing his piece:

“As wel­come as Omidyar’s money is, his com­mit­ment to the inves­tiga­tive form and an open soci­ety is what I’m grate­ful for this after­noon. You can never uphold the cor­rect ver­dict too often.”

What all of these orgas­mic accounts of Omidyar’s “ide­al­ism” have in com­mon is a total absence of skep­ti­cism. America’s smartest media minds sim­ply assume that Omid­yar is an “excep­tional” bil­lion­aire, a “civic-minded bil­lion­aire” dri­ven by “ide­al­ism” rather than by prof­its. The evi­dence for this view is Pierre Omidyar’s mas­sive non­profit ven­ture, Omid­yar Net­work, which has dis­trib­uted hun­dreds of mil­lions of dol­lars to causes all across the world.

And yet what no one seems able to spec­ify is exactly what ide­ol­ogy Omid­yar Net­work pro­motes. What does Omidyar’s “ide­al­ism” mean in prac­tice, and is it really so dif­fer­ent from the non-idealism of other, pre­sum­ably bad, bil­lion­aires? It’s almost as if jour­nal­ists can’t answer those ques­tions because they haven’t both­ered asking them.

So let’s go ahead and do that now.

Since its found­ing in 2004, Omid­yar Net­work has com­mit­ted nearly $300 mil­lion to a range of non­profit and for-profit “char­ity” out­fits. An exam­i­na­tion of the ideas behind the Omid­yar Net­work and of the invest­ments it has made sug­gests that its founder is any­thing but a “dif­fer­ent” sort of bil­lion­aire. Instead, what emerges is almost a car­i­ca­ture of neolib­eral ide­ol­ogy, com­plete with the trail of destruc­tion that ensues when that ide­ol­ogy is put into prac­tice. The gen­er­ous sup­port of the Omid­yar Net­work goes toward “fight­ing poverty” through micro-lending, reduc­ing third-world illit­er­acy rates by pri­va­tiz­ing edu­ca­tion and pro­tect­ing human rights by expand­ing prop­erty titles (“pri­vate prop­erty rights”) into slums and vil­lages across the developing world.

In short, Omid­yar Network’s phil­an­thropy reveals Omid­yar as a free-market zealot with an almost mys­ti­cal faith in the power of “mar­kets” to trans­form the world, end poverty, and improve lives—one micro-individual at a time.

All the neolib­eral guru cant about solv­ing the world’s poverty prob­lems by unlock­ing the hid­den “micro-entrepreneurial” spirit of every starv­ing Third Worlder is put into prac­tice by Omid­yar Network’s invest­ments. Char­ity with­out profit motive is con­sid­ered sus­pect at best, sub­ject to the laws of unin­tended con­se­quences; good can only come from mar­kets unleashed, and that trans­lates into an ide­ol­ogy inher­ently hos­tile to gov­ern­ment, democ­racy, pub­lic pol­i­tics, redis­tri­b­u­tion of land and wealth, and any­thing smack­ing of social wel­fare or social justice.

In lit­er­a­ture pub­lished by Omid­yar Net­work, the assump­tion is that tech­nol­ogy is an end in itself, that it nat­u­rally cre­ates ben­e­fi­cial progress, and that the world’s prob­lems can be solved most effec­tively with for-profit busi­ness solutions.

The most char­i­ta­ble thing one can say about Omidyar’s non­profit net­work is that it reflects all the worst clichés of con­tem­po­rary neolib­eral faith. In real­ity, it’s much worse than that. In many regions, Omid­yar Net­work invest­ments have helped fund pro­grams that cre­ate wors­en­ing con­di­tions for the world’s under­class, widen­ing inequal­i­ties, enhanc­ing exploita­tion, push­ing mil­lions of peo­ple into crip­pling debt and sup­port­ing anti-poverty pro­grams that, in some cases, resulted in mass-suicide by the rural poor.

*

Pierre Omid­yar was one of the biggest early back­ers of the for-profit micro-lending indus­try. Through Omid­yar Net­work, as well as per­sonal gifts and invest­ments, he has fun­nelled around $200 mil­lion into var­i­ous micro-lending com­pa­nies and projects over the past decade, with the goal of estab­lish­ing an investment-grade micro­fi­nance sec­tor that would be plugged into Wall Street and global finance. The neolib­eral the­ory promised to unleash bil­lions of new micro-entrepreneurs; the stark real­ity is that it sad­dled untold num­bers with crush­ing debt and despair.

One of his first major invest­ments into micro-lending came in 2005, when Pierre Omid­yar and his wife Pam gave Tufts Uni­ver­sity, their alma mater, $100 mil­lion to cre­ate the “Omidyar-Tufts Micro­fi­nance Fund,” a man­aged for-profit fund ded­i­cated to jump-starting the growth of the micro-finance indus­try. At the time, Tufts announced that Omidyar’s gift was the “largest pri­vate allo­ca­tion of cap­i­tal to micro­fi­nance by an indi­vid­ual or family.”

With the Tufts fund, Omid­yar wanted to go beyond mere char­i­ta­ble dona­tions to spe­cific micro-lending orga­ni­za­tions that tar­geted the devel­op­ing world’s poor­est. At the same time, he wanted to cre­ate a whole new envi­ron­ment in which for-profit micro-lending com­pa­nies could be self-sustaining and gen­er­ate big enough prof­its to attract seri­ous global investors.

This idea was at the core of Omidyar’s vision of phil­an­thropy: he believed that micro­fi­nance would erad­i­cate poverty faster and bet­ter if it was run on a for-profit basis, and not like a charity.

“If you want to reach global scale — and we’re talk­ing about hun­dreds of mil­lions of peo­ple who need this — you can’t do it with phil­an­thropy cap­i­tal. There’s not enough char­ity cap­i­tal out there. By con­nect­ing with an insti­tu­tional investor like a uni­ver­sity, we would like to increase the level of pro­fes­sional investor involve­ment in this sec­tor to try to stim­u­late more com­mer­cially viable invest­ment prod­ucts,” Pierre Omid­yar said in an inter­view at the time. “We ought to be look­ing at busi­ness as a force for good.”

The idea behind micro-loans is very sim­ple and seduc­tive. It goes some­thing like this: the only thing that pre­vents the hun­dreds of mil­lions of peo­ple liv­ing in extreme poverty from achiev­ing finan­cial suc­cess is their lack of access to credit. Give them access to micro-loans—referred to in Sil­i­con Val­ley as “seed capital”—and these would-be suc­cess­ful business-peasants and illit­er­ate shan­ty­town entre­pre­neurs would pluck them­selves out of the muck by their own home­made san­dal straps. Just think of it: hun­dreds of mil­lions of peas­ants work­ing as micro-individuals, tak­ing out micro-loans, mak­ing micro-rational invest­ments into their micro-businesses, duti­fully pay­ing their micro-loan pay­ments on time and work­ing in con­cert to har­ness the dereg­u­lated power of the mar­kets to col­lec­tively lift soci­ety out of poverty. It’s a grand neolib­eral vision.

To that end, Omid­yar has directed about a third of the Omid­yar Net­work invest­ment fund—or about $100 million—to sup­port the micro-lending indus­try. The foun­da­tion calls this ini­tia­tive “finan­cial inclusion.”

Shock­ingly, micro-loans aren’t all that they’ve cracked up to be. After years of obser­va­tion and mul­ti­ple stud­ies, it turns out that the peo­ple ben­e­fit­ing most from micro-loans are the big global finan­cial play­ers: hedge funds, banks and the usual Wall Street huck­sters. Mean­while, the major­ity of the world’s micro-debtors are either no bet­ter off or have been sucked into a morass of crip­pling debt and even deeper poverty, which offers no escape but death.

Take SKS Micro­fi­nance, an Omidyar-backed Indian micro-lender whose preda­tory lend­ing prac­tices and aggres­sive col­lec­tion tac­tics have caused a rash of sui­cides across India.

Omid­yar funded SKS through Uni­tus, a micro­fi­nance pri­vate equity fund bankrolled by the Omid­yar Net­work to the tune of at least $11.7 mil­lion. ON boosted SKS in its pro­mo­tional mate­ri­als as a micro-lender that’s “serv­ing the rural poor in India” and that exem­pli­fies a com­pany that’s pro­vid­ing “peo­ple with the means to address their needs and improve their lives.”

In 2010, SKS made head­lines and stirred up bit­ter con­tro­versy about the role that prof­its should play in anti-poverty ini­tia­tives when the com­pany went pub­lic with an IPO that gen­er­ated about $358 mil­lion, giv­ing SKS a mar­ket val­u­a­tion of more than $1.6 bil­lion. The IPO made mil­lions for its wealthy investors, includ­ing the Omidyar-backed Uni­tus fund, which earned a cool $5 mil­lion profit from the SKS IPO, accord­ing to the Puget Sound Busi­ness Jour­nal.

Some were both­ered, but oth­ers saw it as proof that the power of the mar­kets could be har­nessed to suc­ceed where tra­di­tional char­ity pro­grams sup­pos­edly hadn’t. The New York Times reported:

“An Indian com­pany with rich Amer­i­can back­ers is about to raise up to $350 mil­lion in a stock offer­ing closely watched by phil­an­thropists around the world, show­ing that big prof­its can be made from small helping-hand loans to poor cowherds and bas­ket weavers.”

Con­tro­versy or not, SKS embod­ied Omidyar’s vision of phil­an­thropy: it was a for-profit cor­po­ra­tion that fought poverty while gen­er­at­ing lucra­tive returns for its investors. Here would be proof-positive that the profit motive makes every­one a winner.

And then real­ity set in.

In 2012, it emerged that while the SKS IPO was mak­ing mil­lions for its wealthy investors, hun­dreds of heav­ily indebted res­i­dents of India’s Andhra Pradesh state were dri­ven to despair and sui­cide by the company’s cruel and aggres­sive debt-collection prac­tices. The rash of sui­cides soared right at the peak of a large micro-lending bub­ble in Andhra Pradesh, in which many of the poor were tak­ing out mul­ti­ple micro-loans to cover pre­vi­ous loans that they could no longer pay. It was sub­prime lend­ing fraud taken to the poor­est regions of the world, strip­ping them of what lit­tle they had to live on. It got to the point where the Chief Min­is­ter of Andrah Pradesh pub­licly appealed to the state’s youth and young women not to com­mit sui­cide, telling them, “Your lives are valuable.”

The AP con­ducted a stun­ning in-depth inves­ti­ga­tion of the SKS sui­cides, and their report­ing needs to be quoted at length to under­stand just how evil this pro­gram is. The arti­cle begins:

“First they were stripped of their uten­sils, fur­ni­ture, mobile phones, tele­vi­sions, ration cards and heir­loom gold jew­elry. Then, some of them drank pes­ti­cide. One woman threw her­self in a pond. Another jumped into a well with her chil­dren. 

“Some­times, the debt col­lec­tors watched nearby.”

What prompted the AP inves­ti­ga­tion was the gulf between the reported rash of sui­cides linked to SKS debt col­lec­tors, and SKS’s pub­lic state­ments deny­ing it had knowl­edge of or any role in the preda­tory lend­ing abuses. How­ever, the AP got a hold of inter­nal SKS doc­u­ments that con­tra­dicted their pub­lic denials:

“More than 200 poor, debt-ridden res­i­dents of Andhra Pradesh killed them­selves in late 2010, accord­ing to media reports com­piled by the gov­ern­ment of the south Indian state. The state blamed micro­fi­nance com­pa­nies — which give small loans intended to lift up the very poor — for fuel­ing a frenzy of overindebt­ed­ness and then pres­sur­ing bor­row­ers so relent­lessly that some took their own lives. 

“The com­pa­nies, includ­ing mar­ket leader SKS Micro­fi­nance, denied it.

“How­ever, inter­nal doc­u­ments obtained by The Asso­ci­ated Press, as well as inter­views with more than a dozen cur­rent and for­mer employ­ees, inde­pen­dent researchers and video­taped tes­ti­mony from the fam­i­lies of the dead, show top SKS offi­cials had infor­ma­tion impli­cat­ing com­pany employ­ees in some of the suicides.”

The AP inves­ti­ga­tion and inter­nal reports showed just how bru­tal the SKS micro­fi­nanc­ing pro­gram was, how women were par­tic­u­larly tar­geted because of their height­ened sense of shame and com­mu­nity responsibility—here is the bru­tal real­ity of finan­cial cap­i­tal­ism com­pared to the utopian blather mouthed at Davos con­fer­ences, or in the slick pam­phlets issued by the Omid­yar Network:

“Both reports said SKS employ­ees had ver­bally harassed over-indebted bor­row­ers, forced them to pawn valu­able items, incited other bor­row­ers to humil­i­ate them and orches­trated sit-ins out­side their homes to pub­licly shame them. In some cases, the SKS staff phys­i­cally harassed default­ers, accord­ing to the report com­mis­sioned by the com­pany. Only in death would the debts be for­given. 

“The videos and reports tell stark sto­ries: 

“One woman drank pes­ti­cide and died a day after an SKS loan agent told her to pros­ti­tute her daugh­ters to pay off her debt. She had been given 150,000 rupees ($3,000) in loans but only made 600 rupees ($12) a week. 

“Another SKS debt col­lec­tor told a delin­quent bor­rower to drown her­self in a pond if she wanted her loan waived. The next day, she did. She left behind four children.

“One agent blocked a woman from bring­ing her young son, weak with diar­rhea, to the hos­pi­tal, demand­ing pay­ment first. Other bor­row­ers, who could not get any new loans until she paid, told her that if she wanted to die, they would bring her pes­ti­cide. An SKS staff mem­ber was there when she drank the poi­son. She sur­vived. 

“An 18-year-old girl, pres­sured until she handed over 150 rupees ($3)—meant for a school exam­i­na­tion fee—also drank pes­ti­cide. She left a sui­cide note: ‘Work hard and earn money. Do not take loans.’”

As a result of the bad press this scan­dal caused, the Omid­yar Net­work deleted its Uni­tus invest­ment from its website—nor does Omid­yar boast of its invest­ments in SKS Micro­fi­nance any longer. Mean­while, Uni­tus mys­te­ri­ously dis­solved itself and laid off all of its employ­ees right around the time of the IPO, under a cloud of sus­pi­cion that Uni­tus insid­ers made huge per­sonal prof­its from the ven­ture, prof­its that in the­ory were sup­posed to be rein­vested into expand­ing micro-lending for the poor.

Thus spoke the profit motive.

Curi­ously, in the after­math of the SKS micro-lending scan­dal, Omid­yar Net­work was dragged into another polit­i­cal scan­dal in India when it was revealed that Omid­yar and the Ford Foun­da­tion were plac­ing their own paid researchers onto the staffs of India’s MPs. The pro­gram, called Leg­isla­tive Assis­tants to MPs (LAMPs), was funded with $1 mil­lion from Omid­yar Net­work and $855,000 from the Ford Foun­da­tion. It was shut down last year after India’s Min­istry of Home Affairs com­plained about for­eign lob­by­ing influ­enc­ing Indian MPs, and promised to inves­ti­gate how Omidyar-funded research for India’s par­lia­ment may have been “col­ored” by an agenda.

But SKS is not the only micro­fi­nanc­ing invest­ment gone bad. The biggest and most rep­utable micro-lenders, includ­ing those funded by the Omid­yar Net­work, have come under seri­ous and sus­tained crit­i­cism for preda­tory inter­est rates and their aggres­sive debt-collection techniques.

Take BRAC, another big ben­e­fi­ciary of Omidyar’s efforts to boost “finan­cial inclusion.”

Started in the early 1970s as a war relief orga­ni­za­tion, BRAC has grown into the largest non-governmental orga­ni­za­tion in the world. It employs over 100,000 peo­ple in coun­tries across the globe. While BRAC is known mostly for its micro-lending oper­a­tion activ­i­ties, the out­fit is a diver­si­fied non­profit busi­ness oper­a­tion. It is involved in edu­ca­tion, health­care and even devel­ops its own hybrid seed vari­eties. Much of BRAC’s oper­a­tions are financed by its micro-lending activities.

Omid­yar Net­work praises BRAC for its work to “empower the poor to improve their own lives,” and has given at least $8 mil­lion to help BRAC set up micro-lending bank­ing infra­struc­ture in Liberia and Sierra Leone.

But BRAC seems to worry more about its own bot­tom line than it does about the well-being of its impov­er­ished bor­row­ers, the major­ity of whom are women and who pay an aver­age annual inter­est rate of 40 percent.

This twisted sense of pri­or­ity could be seen after one of the worst cyclones in the his­tory of Bangladesh left thou­sands dead in 2007, destroy­ing entire vil­lages and towns in its path. In the cyclone’s wake, the Omidyar-funded BRAC micro-lending debt col­lec­tors showed up at the dis­as­ter zone along with other micro-lenders, and went to work aggres­sively shak­ing down bor­row­ers, forc­ing some vic­tims (mostly women) to go so far as to sell their relief/aid mate­ri­als, or to take out sec­ondary loans to pay off the first loans.

Accord­ing to a study about micro-lenders in the after­math of Cyclone Sidr:

“Sidr vic­tims who lost almost every­thing in the cyclone, expe­ri­enced pres­sure and harass­ment from non­governmental organ­i­sa­tions (NGOs) for repay­ment of micro­cre­dit instal­ments. Such intense pres­sure led some of the Sidr ­affected bor­row­ers to sell out the relief mate­ri­als they received from dif­fer­ent sources. Such pres­sure for loan recov­ery came from large organ­i­sa­tions such as BRAC, ASA and even the Nobel Prize win­ning organ­i­sa­tion Grameen Bank. 

“Even the most severely affected peo­ple are expected to pay back in a weekly basis, with the pre­vail­ing inter­est rate. No sys­tem of ‘break’ or ‘hol­i­day’ period is avail­able in the banks’ cur­rent char­ter. No excep­tions are made dur­ing a time of nat­ural calamity. The harsh rules prac­tised by the micro­cre­dit lender organ­i­sa­tions led the dis­as­ter affected peo­ple even sell­ing their relief assis­tance. Some even had to sell their left­over belong­ings to pay back their weekly instalments.”

These tac­tics may be harsh, but they pay off for micro-lenders. And it’s a lucra­tive oper­a­tion: BRAC pri­mar­ily tar­gets women, offers loans with preda­tory inter­est rates and uses tra­di­tional val­ues and close vil­lage rela­tion­ships to shame and pres­sure bor­row­ers into sell­ing and doing what­ever they can to make their weekly pay­ments. It works. Loan recov­ery rates for the indus­try aver­age between 95 and 98 per­cent. For BRAC, that rate was a comfy 99.3 percent.

So do preda­tory micro-loans really help lift the world’s poor­est peo­ple out of poverty? Neolib­eral ide­ol­ogy says they do — and the Omid­yar Net­work rep­re­sents one of the purest dis­til­la­tions of that ide­ol­ogy put into prac­tice in the poor­est and most vul­ner­a­ble parts of the world.

As Cam­bridge Uni­ver­sity eco­nom­ics pro­fes­sor Ha-Joon Chang argued, say­ing of micro-lending:

“[It] con­sti­tutes a pow­er­ful insti­tu­tional and polit­i­cal bar­rier to sus­tain­able eco­nomic and social devel­op­ment, and so also to poverty reduc­tion. Finally, we sug­gest that con­tin­ued sup­port for micro­fi­nance in inter­na­tional devel­op­ment pol­icy cir­cles can­not be divorced from its supreme ser­vice­abil­ity to the neoliberal/globalization agenda.”

Omid­yar Net­work has fol­lowed the same dis­as­trous neolib­eral script in other areas of invest­ment, par­tic­u­larly its invest­ments into pri­va­tiz­ing pub­lic schools in the US and in poor regions of Africa.

One of the ear­li­est Omid­yar invest­ments went to an online pri­vate char­ity web­site for needy pub­lic schools here in the US. As David Sirota wrote, huge bil­lion­aire foun­da­tions and cor­po­ra­tions have been hold­ing chil­dren hostage by starv­ing public-school fund­ing and replac­ing it with “char­ity” money from the likes of the Wal-Mart Foun­da­tion, Bill and Melinda Gates Foun­da­tion and Broad Foun­da­tion. We can add the Omid­yar Net­work to this list as well.

Omidyar’s foun­da­tion invested in the same idea, but with a web 2.0 crowd-source twist: DonorsChoose.org allows indi­vid­u­als to pledge amounts as small as $10, and allows school teach­ers to get online ask­ing for small sums to help their class­rooms. The end result, of course, is that it nor­mal­izes the con­tin­ued stran­gling of pub­lic schools and the sense that only pri­vate fund­ing can save education.

Omid­yar poured mil­lions into DonorsChoose and orga­nized dona­tions from other Sil­i­con Val­ley donors. At first, most pub­lic school teach­ers didn’t see the angle; many used the resource to raise funds for their own classrooms.

It wasn’t until DonorsChoose announced its part­ner­ship with the anti-public-education film “Wait­ing For Super­man” that teach­ers real­ized they’d beenduped. The movie pro­moted the myth that edu­ca­tion could only be saved by the likes of Tea Party-backed school “reform” advo­cate Michelle Rhee. Teach­ers orga­nized a boy­cott of DonorsChoose after the Omidyar-funded group announced it was essen­tially brib­ing its mem­bers with a $15 gift cer­tifi­cate to any­one who bought tick­ets for “Wait­ing for Superman.”

Two years later, DonorsChoose part­nered and pro­moted yet another right-wing teacher-bashing pro­pa­ganda film, “Won’t Back Down.”

Over­seas, the Omid­yar Net­work is embark­ing on a school pri­va­ti­za­tion pro­gram that will make DonorsChoose look like Mother Theresa’s hand­i­work. Omid­yar pro­vided seed cap­i­tal for a new Africa-based for-profit pri­vate school enter­prise for the poor called Bridge Inter­na­tional. In 2009, ON gave Bridge a total of $1.8 mil­lion; Matt Ban­nick, the top fig­ure (man­ag­ing part­ner) in the Omid­yar Net­work, sits on Bridge International’s board of directors.

Bridge International’s first schools are being built in Kenya, and are slated to expand across the sub-Sahara, hop­ing to rope mil­lions of poor African kids into its schools. Bridge’s strate­gic part­ner is the for-profit edu­ca­tion giant, Pear­son. Diane Rav­itch, for­mer US Assis­tant Sec­re­tary of Edu­ca­tion and critic of school “reform” efforts, has warned about Pearson’s near-monopolistic power influ­enc­ing the pri­va­ti­za­tion of Amer­i­can edu­ca­tion (see Ravitch’s arti­cle“The Pear­son­iza­tion of the Amer­i­can Mind.”)

The idea behind Bridge Inter­na­tional is to pro­vide a fran­chised “school in a box” model under which each school teaches the exact same cur­ricu­lum at the exact same time to every stu­dent. Teach­ers are given min­i­mal training—they’re merely required to teach accord­ing to the script given to them and read out to their stu­dents, scripts deliv­ered through Nook tablets. Stu­dents pay $5 a month—a lot for each stu­dent in areas as poor as sub-Saharan Africa. Cur­rently one new Bridge Inter­na­tional school is open­ing every 2.5 days around Kenya, over­tak­ing pub­lic education—with plans to expand further.

It sounds like a good idea, but the prob­lem is that Bridge’s busi­ness model has a very nar­row set of sup­port­ers, namely: free-market think-tanks, the global for-profit edu­ca­tion indus­try and pro­po­nents of a neolib­eral utopia who want to defund pub­lic edu­ca­tion and replace it with pri­vate school­ing. Bridge is only a few years old, but crit­i­cism of its edu­ca­tional model is already pil­ing up—even from cen­trist pro-business think­tanks like the Brook­ings Insti­tu­tion. Even at $4 or $5 a month, Bridge’s “low cost” edu­ca­tion is too expen­sive for many in the devel­op­ing world, forc­ing chil­dren to go to work and mak­ing fam­i­lies choose between buy­ing food and pay­ing for edu­ca­tion. Nat­u­rally, food wins out. And that sim­ply means that many chil­dren can’t afford to go school, which only increases and rein­forces strat­i­fi­ca­tion and inequality.

The fight against illit­er­acy requires free, qual­ity edu­ca­tion that’s avail­able to all chil­dren. What it doesn’t need is a bunch of neolib­eral techno-disruptors who want to turn edu­ca­tion into a for-profit indus­try that pro­vides school­ing only to those who can afford it. And any­way, the very notion that you can squeeze enough profit from mil­lions of the poor­est chil­dren in the world to attract mega ven­ture cap­i­tal, while pro­vid­ing qual­ity edu­ca­tion is absurd. That profit money is extracted from the very peo­ple Bridge is sup­pos­edly try­ing to help.

Still think that Pierre Omid­yar is a “dif­fer­ent” type of bil­lion­aire? Still con­vinced he’s a one-of-a-kind “civic-minded” idealist?

Then you might want to ask your­self why Omid­yar is so smit­ten by the ideas of an econ­o­mist known as “The Friedrich Hayek of Latin Amer­ica.” His name is Her­nando de Soto and he’s been adored by every­one from Mil­ton Fried­man to Mar­garet Thatcher to the Koch broth­ers. Omid­yar Net­work poured mil­lions of non­profit dol­lars into sub­si­diz­ing his ideas, help­ing put them into prac­tice in poor slums around the developing world.

In Feb­ru­ary 2011, the Omid­yar Net­work announced a hefty $4.96 mil­liongrant to a Peru-based free-market think tank, the Insti­tute for Lib­erty & Democracy (ILD).

Per­haps no sin­gle invest­ment by Omid­yar more clearly reveals his ortho­dox neolib­eral vision for the world—and what con­sti­tutes “civic-mindedness”—than his sup­port for the ILD and its founder and pres­i­dent, Her­nando De Soto, whom the ON has tapped to par­tic­i­pate in other Omidyar-sponsored events.

De Soto is a celebrity in the world of neoliberal/libertarian gurus. He and his Insti­tute for Lib­erty & Democ­racy are cred­ited with pop­u­lar­iz­ing a free-market ver­sion of Third World land reform and turn­ing it into pol­icy in city slums all across the devel­op­ing world. Whereas “land reform” in coun­tries like Peru—dominated by a tiny hand­ful of landown­ing families—used to mean land redis­tri­b­u­tion, Her­nando De Soto came up with a counter-idea more amenable to the Haves: give prop­erty title to the country’s poor masses, so that they’d have a secure and legal title to their shanties, shacks, and what­ever land they might claim to live on or own.

De Soto’s pitch essen­tially comes down to this: Give the poor masses a legal “stake” in what­ever mea­ger prop­erty they live in, and that will “unleash” their inner entre­pre­neur­ial spirit and all the national “hid­den cap­i­tal” lying dor­mant beneath their shanty floors. De Soto claimed that if the poor liv­ing in Lima’s vast shan­ty­towns were given legal title own­er­ship over their shacks, they could then use that legal title as col­lat­eral to take out micro­fi­nance loans, which would then be used to launch their micro-entrepreneurial careers. Newly-created prop­erty hold­ers would also have a “stake” in the rul­ing polit­i­cal and eco­nomic sys­tem. It’s the sort of cant that makes per­fect sense to the Davos set (where De Soto is a star) but that has absolutely zero rel­e­vance to prob­lems of entrenched poverty around the world.

Since the Omid­yar Net­work names “prop­erty rights” as one of the five areas of focus, it’s no sur­prise that Omid­yar money would even­tu­ally find its way into Her­nando De Soto’s free-market ideas mill. In 2011, Omid­yar not only gave De Soto $5 mil­lion to advance his ideas—he also tapped De Soto to serve as a judge in an Omidyar-sponsored com­pe­ti­tion for projects focused on improv­ing prop­erty rights for the poor. The more you know about Her­nando De Soto, the harder it is to see Omidyar’s finan­cial back­ing as “ide­al­is­tic” or “civic-minded.”

For one thing, De Soto is the favorite of the very same bil­lion­aire broth­ers who play vil­lains to Omidyar’s sup­posed hero—yes, the reviled Koch broth­ers. In 2004, the lib­er­tar­ian Cato Insti­tute (neé “The Charles Koch Foun­da­tion”) awarded Her­nando De Soto its bian­nual “Mil­ton Fried­man Prize”—which comes with a hefty $500,000 check—for “empow­er­ing the poor” and “advanc­ing the cause of lib­erty.” De Soto was cho­sen by a prize jury con­sist­ing of such notable human­i­tar­i­ans as for­mer Pinochet labor min­is­terJose Piñera, Vladimir Putin’s eco­nomic advi­sor Andrei Illar­i­onov, Wash­ing­ton Post neo­con­ser­v­a­tive colum­nist Anne Apple­baum, FedEx CEO Fred Smith, and Mil­ton Friedman’s wife Rosie. Mil­ton was in the audi­ence dur­ing the awards cer­e­mony; he heartily approved.

Indeed, Her­nando De Soto is de facto roy­alty in the world of neoliberal-libertarian gurus—he’s been called “The Friedrich von Hayek of Latin Amer­ica,” not least because Hayek launched De Soto’s career as a guru more than three decades ago.

So who is Her­nando De Soto, where do his ideas come from, and why might Pierre Omid­yar think him deserv­ing of five mil­lion dol­lars — ten times the amount the Koch Broth­ers awarded him?

De Soto was born into an elite “white Euro­pean” fam­ily in Peru, who fled into exile in the West fol­low­ing Peru’s 1948 coup—his father was the sec­re­tary to the deposed pres­i­dent. Her­nando spent most of the next 30 years in Switzer­land, get­ting his edu­ca­tion at elite schools, work­ing his way up var­i­ous inter­na­tional insti­tu­tions based in Geneva, serv­ing as the pres­i­dent of a Geneva-based cop­per car­tel out­fit, the Inter­na­tional Coun­cil of Cop­per Export­ing Coun­tries, and work­ing as an offi­cial in GATT (Gen­eral Agree­ment on Trade and Tariffs).

De Soto didn’t return to live in Peru until the end of the 1970s, to over­see a new gold placer min­ing com­pany he’d formed with a group of for­eign investors. The min­ing company’s prof­its suf­fered due to Peru’s weak prop­erty laws and almost non-existent cul­tural appre­ci­a­tion of prop­erty title, espe­cially among the country’s poor masses—De Soto’s investors pulled out of the min­ing ven­ture after vis­it­ing the company’s gold mines and see­ing hun­dreds of peas­ants pan­ning on the company’s con­ces­sions. That expe­ri­ence inspired De Soto to change Peru­vians’ polit­i­cal assump­tions regard­ing prop­erty rights. Rather than start off by try­ing to con­vince them that for­eign min­ing firms should have exclu­sive rights to gold from tra­di­tion­ally com­mu­nal Peru­vian lands, De Soto came up with a clever end-around idea: giv­ing prop­erty title to the masses of Peru’s poor liv­ing in the vast shanties and shacks in the slums of Lima and cities beyond. It was a long-term strat­egy to alter cul­tural expec­ta­tions about prop­erty and own­er­ship, thereby improv­ing the invest­ment cli­mate for min­ing com­pa­nies and other investors. The point was to align the masses’ assump­tions about prop­erty own­er­ship with those of the banana republic’s hand­ful of rich landown­ing families.

In 1979, De Soto orga­nized a con­fer­ence in Peru’s cap­i­tal Lima, fea­tur­ing Mil­ton Fried­man and Friedrich von Hayek as speak­ers and guests. At the time, both Fried­man and Hayek were serv­ing as key advi­sors to Gen­eral Augusto Pinochet’s “shock ther­apy” pro­gram in nearby Chile, an eco­nomic exper­i­ment that com­bined lib­er­tar­ian mar­ket poli­cies with con­cen­tra­tion camp terror.

Two years after De Soto’s suc­cess­ful con­fer­ence in Lima, in 1981, Hayek helped De Soto set up his own free-market think tank in Lima, the “Insti­tute for Lib­erty and Democ­racy” (ILD). The ILD became the first of a large inter­na­tional net­work of right-wing neolib­eral think tanks con­nected to the Mother Ships—Cato Insti­tute, Her­itage Foun­da­tion, and Britain’s Insti­tute for Eco­nomic AffairsMar­garet Thatcher’s go-to think tank. By 1983, De Soto’s Insti­tute was also receiv­ing heavy fund­ing from Reagan’s Cold War front group, the National Endow­ment for Democ­racy, which pro­moted free-market think tanks and pro­grams around the world, and by the end of Rea­gan decade, De Soto pro­duced his first man­i­festo, “The Other Path”—a play on the name of Peru’s Maoist guer­rilla group, Shin­ing Path, then fight­ing a bloody war for power. But whereas the Shin­ing Path’s polit­i­cal pro­gram called for nation­al­iz­ing and redis­trib­ut­ing prop­erty, most of which was in the hands of a few rich fam­i­lies, De Soto’s “Other Path” called for main­tain­ing prop­erty dis­tri­b­u­tion as it was, and legal­iz­ing its cur­rent struc­ture by democ­ra­tiz­ing prop­erty titles, the pieces of paper with the stamps. Every­one would become a micro-oligarch and micro-landowner under this scheme...

With help and fund­ing from US and inter­na­tional insti­tu­tions, De Soto quickly became a pow­er­ful polit­i­cal force behind the scenes. In 1990, De Soto insin­u­ated him­self into the inner cir­cle of newly-elected pres­i­dent Alberto Fuji­mori, who quickly turned into a bru­tal dic­ta­tor, and is cur­rently serv­ing a 25-year prison sen­tence for crimes against human­ity, mur­der, kid­nap­ping, and ille­gal wiretapping.

Under De Soto’s influ­ence, Fujimori’s pol­i­tics sud­denly changed; almost overnight, the pop­ulist Keyn­sian can­di­date became the free-market author­i­tar­ian “Chinochet” he gov­erned as. As Fujimori’s top advi­sor, Her­nando De Soto was the archi­tect of so-called “Fujishock” ther­apy applied to Peru’s econ­omy. Offi­cially, De Soto served as Fujimori’s drug czar from 1990–1992, an unusual role for an econ­o­mist given the fact that Peru’s army was fight­ing a bru­tal war with Peru’s pow­er­ful cocaine drug lords. At the time Peru was the world’s largest cocaine pro­ducer; as drug czar, Her­nando De Soto there­fore posi­tioned him­self as the point-man between Peru’s mil­i­tary and secu­rity ser­vices, America’s DEA and drug czar under the first Pres­i­dent Bush, and Peru’s pres­i­dent Alberto Fuji­mori. It’s the sort of posi­tion that you’d want to have if you wanted “deep state” power rather than mere ministerial power.

Dur­ing those first two years when De Soto served under Fuji­mori, human rights abuses were ram­pant. Fuji­mori death squads—with names like the “Grupo Colina”—targeted labor unions and gov­ern­ment crit­ics and their fam­i­lies. Two of the worst mas­sacres com­mit­ted under Fujimori’s reign, and for which he was later jailed, took place while De Soto served as his advi­sor and drug czar.

The harsh free-market shock-therapy pro­gram that De Soto con­vinced Fuji­mori to imple­ment resulted in mass mis­ery for Peru. Dur­ing the two years De Soto served as Fujimori’s advi­sor, real wages plunged 40%, the poverty rate rose to over 54% of the pop­u­la­tion, and the per­cent­age of the work­force that was either unem­ployed or under­em­ployed soared to 87.3%.

But while the coun­try suf­fered, De Soto’s Insti­tute for Lib­erty and Democracy—the out­fit that Omid­yar gave $5 mil­lion to in 2011—thrived: its staff grew to over 100 as funds poured in. A World Bank staffer who worked with the ILD described it as,

“a kind of school for the coun­try. Most of the impor­tant min­is­ters, lawyers, jour­nal­ists, and econ­o­mists in Peru are ILD alumni.”

In 1992, Fuji­mori orches­trated a con­sti­tu­tional coup, dis­band­ing Peru’s Con­gress and its courts, and impos­ing emer­gency rule-by-decree. It was another vari­a­tion of the same Pinochet blueprint.

Just before Fujimori’s coup, De Soto indem­ni­fied him­self by offi­cially resign­ing from the cab­i­net. How­ever in the weeks and months after the coup, De Soto pro­vided cru­cial PR cover, down­play­ing the coup to the for­eign press. For instance, De Soto told the Los Ange­les Times that the pub­lic should tem­per their judg­ment of Fujimori’s coup:

“You’ve got to see this as the trial and error of a pres­i­dent who’s try­ing to find his way.”

In the New York Times, De Soto spun the coup as willed by the peo­ple, the ulti­mate demo­c­ra­tic politics:

“Peo­ple are fed up, fed up...[Fujimori] has attacked two hated insti­tu­tions at just the right time. There is an enor­mous need to believe in him.”

Years later, Fujimori’s noto­ri­ous spy chief Vladimiro Mon­tesinos tes­ti­fied to Peru’s Con­gress that De Soto helped mas­ter­mind the 1992 coup. De Soto denied involve­ment; but in 2011, two years after Fuji­mori was jailed forcrimes against human­ity, De Soto joined the pres­i­den­tial cam­paign for Keiko Fuji­mori, the jailed dictator’s daugh­ter and leader of Fujimori’s right-wing party. Keiko Fuji­mori ran on a plat­form promis­ing to free her father from prison if she won; De Soto spent much of the cam­paign red-baiting her oppo­nent as a Com­mu­nist. That led Peru’s Nobel Prize-winning author Mario Var­gas Llosa to denounce De Soto as a “fuji­mon­te­senista” with “few demo­c­ra­tic credentials.”

So in the same year that De Soto was try­ing to put the daugh­ter of Peru’s Pinochet in power and to spring the dic­ta­tor from prison, Omid­yar Net­work awarded him $5 million.

It was dur­ing Fujimori’s dic­ta­to­r­ial emer­gency rule, from 1992–94, that De Soto rolled out a property-title pilot pro­gram in Lima, in which 200,000 house­holds were given for­mal title. In 1996, Fuji­mori imple­mented De Soto’s property-titling pro­gram on a national scale, with help from the World Bank and a new gov­ern­ment prop­erty agency staffed by peo­ple from De Soto’s Insti­tute for Lib­erty and Democ­racy. By 2000, the mag­i­cal promise of an explo­sion in bank cred­its to all the new micro-property own­ers never mate­ri­al­ized; in fact, there was no notice­able dif­fer­ence in bank lend­ing to the poor what­so­ever, whether they had prop­erty title or not.

The World Bank and the project’s neolib­eral sup­port­ers led by Her­nando De Soto were not happy with data show­ing no uptick in lend­ing, which threat­ened to unravel the entire happy the­ory behind prop­erty titling as the answer to Third World poverty. De Soto was in the process of ped­dling the same property-titling pro­gram to coun­tries around the world; data was needed to jus­tify the pro­gram. So the World Bank funded a new study in Peru in the early 2000s, and dis­cov­ered some­thing star­tling: In homes that had for­mal prop­erty titles, the par­ents in those homes spent up to 40% more time out­side of their homes than they did before they were given title. De Soto took that sta­tis­tic and argued that it was a good thing because it proved giv­ing prop­erty title to home­own­ers made them feel secure enough to leave their shanties and shacks. The assump­tion was that in the dark days before shanty dwellers had legal titles, they were too scared to leave their shacks lest some other sav­age steal it from them while they were out shopping.

No one ever con­clu­sively explained why shanty par­ents were spend­ing so much more time out­side of their homes, but the impor­tant thing was that it made every­one for­get the utter fail­ure of the prop­erty title program’s core promise—that prop­erty titles would ignite micro-lending thanks to the col­lat­eral of the micro-entrepreneur’s micro-shack as col­lat­eral. Thanks to De Soto’s sales­man­ship and the back­ing of the world’s neolib­eral nomen­klatura — Bill Clin­ton called De Soto “the world’s great­est liv­ing econ­o­mist” and he was praised by every­one from Mil­ton Fried­man to Vladimir Putin to Mar­garet Thatcher. The dis­ap­point­ing results in Peru were ignored, and De Soto’s pro­gram was extended to devel­op­ing coun­tries around the world includ­ing Egypt, Cam­bo­dia, the Philip­pines, Indone­sia and else­where. And in nearly every case, De Soto’s Insti­tute for Lib­erty and Democ­racy has taken the lead in advis­ing gov­ern­ments and sell­ing the dream of turn­ing titled slum-dwellers into micro-entrepreneurs.

The real change brought by De Soto’s property-titling pro­gram has ranged from nil to night­mar­ish.

In Cam­bo­dia, where the World Bank imple­mented De Soto’s land-titling pro­gram in 2001, poor and vul­ner­a­ble peo­ple in the cap­i­tal Phnom Penh have suf­fered at the hands of land devel­op­ers and spec­u­la­tors who’ve used arson, police cor­rup­tion and vio­lence to forcibly evict roughly 10% of the city’s pop­u­la­tion from their homes in more valu­able dis­tricts, relo­cat­ing them to the city outskirts.

An arti­cle in Slate titled “The De Soto Delu­sion” described what hap­pened in Cam­bo­dia when the land-titling pro­gram was first implemented:

“In the nine months or so lead­ing up to the project kick­off, a dev­as­tat­ing series of slum fires and forced evic­tions purged 23,000 squat­ters from tracts of unti­tled land in the heart of Phnom Penh. These squat­ters were then plopped onto dusty relo­ca­tion sites sev­eral miles out­side of the city, where there were no jobs and where the price of com­mut­ing to and from cen­tral Phnom Penh (about $2 per day) sur­passed what­ever daily wage they had been earn­ing in town before the fires. Mean­while, the burned-out inner city land passed imme­di­ately to some of the wealth­i­est prop­erty devel­op­ers in the country.”

De Soto and his Insti­tute for Lib­erty and Democ­racy have advised property-title pro­grams else­where too—Haiti, Domini­can Repub­lic, Panama, Russia—again with results rang­ing from nil to bad. Even where it doesn’t lead to mass evic­tions and vio­lence, it has the effect of shift­ing a greater tax bur­den onto the poor, who end up pay­ing more in prop­erty taxes, and of forc­ing them to pony up for costly fil­ing fees to gain title, fees that they often can­not afford. Prop­erty title in and of itself—without a whole range of reforms in gov­er­nance, cor­rup­tion, edu­ca­tion, income, wealth dis­tri­b­u­tion and so on—is clearly no panacea. But it does pro­vide an alter­na­tive to pro­grams that give money to the poor and redis­trib­ute wealth, and that alone is a good thing, if you’re the type smit­ten by Her­nando De Soto—as Omid­yar clearly is.

Stud­ies of property-titling pro­grams in the slums of Brazil and Manila revealed that it cre­ated a new bit­terly com­pet­i­tive cul­ture and bifur­ca­tion, in which a small hand­ful of titled slum dwellers quickly learn to ben­e­fit by turn­ing into micro-slumlords rent­ing out dwellings to lesser slum dwellers, who sub­se­quently find them­selves forced to pay monthly fees for their shanty rooms—creating an under­class within the under­class. De Soto has described these slums as “acres of diamonds”—wealth wait­ing to be unlocked by prop­erty titling—and his acolytes even coined a new acronym for slums: “Strate­gic Low-income Urban Man­age­ment Systems.”

All of which begs the obvi­ous ques­tion: If De Soto’s property-title pro­gram is such a proven fail­ure in case after case, why is it so pop­u­lar among the world’s polit­i­cal and busi­ness elites?

The answer is rather obvi­ous: It offers a sim­ple, low-cost, tech­no­cratic mar­ket solu­tion to the prob­lem of global poverty—a com­plex and costly prob­lem that can only be alle­vi­ated by ded­i­cat­ing huge amounts of resources and a very dif­fer­ent pol­i­tics from the one that tells us that mar­kets are god, mar­kets can solve every­thing. Even before Omid­yar com­mit­ted $5 mil­lion to the dark plu­to­cratic “ide­al­ism” De Soto rep­re­sents, he was Tweet­ing his admi­ra­tion for De Soto:

“Bril­liant din­ner with Her­nando de Soto. Prop­erty rights under­lie and enable everything.”

Indeed, prop­erty rights under­lie and enable every­thing Omid­yar wants to hear—but dis­tract and divert from what the tar­gets of those pro­grams might actu­ally need or be asking for.

Which brings us back to the won­der­ful words writ­ten about Pierre Omid­yar last month: Where is the proof that he’s a “civic-minded” bil­lion­aire, a “dif­fer­ent” bil­lion­aire, an “ide­al­is­tic” bil­lion­aire who’s in it for ideals and not for profit? How is Omid­yar any dif­fer­ent from any other billionaire—when he is fund­ing the same pro­grams and push­ing the same vision for the world backed by the Kochs, Soros, Gates, and every other neolib­eral billionaire?

When you scratch the sur­face of his invest­ments and get a sense of what sort of ideal world he’d like to make, it becomes clear that Omid­yar is no dif­fer­ent from his peers.

And the rea­son that mat­ters, of course, is because Pierre Omidyar’s dystopian vision is merg­ing with Glenn Greenwald’s and Laura Poitras’ monop­oly on the crown jew­els of the National Secu­rity Agency — the world’s secrets, our secrets — and using the value of those secrets as the cap­i­tal for what’s being billed as an entirely new, ide­al­is­tic media project, an ide­al­ism that the CJR and oth­ers promise will not shy away from tak­ing on power.

The ques­tion, how­ever, is what defines power to a neolib­eral mind? We’re going to take a wild guess here and say: The State.

So brace your­self, you’re about to get some­thing you’ve never seen before: billionaire-backed jour­nal­ism tak­ing on the power of the state. How rad­i­cal is that? To quote “60 Min­utes” pro­ducer Low­ell Bergman:

“What has been adju­di­cated and estab­lished in the wake of Viet­nam and the Civil Rights move­ment is the abil­ity of the press to basi­cally write or broad­cast almost any­thing about the government.There’s very few restric­tions in that way. It’s not true when we’re talk­ing about pri­vate power, espe­cially major For­tune 500 cor­po­ra­tions, or peo­ple worth more than, say, a bil­lion dollars.”

In other words: look out Gov­ern­ment, you’re about to be pum­meled by a cru­sad­ing, right­eous bil­lion­aire! And cor­po­rate Amer­ica? Ah, don’t worry. Your dirty secrets—freshly trans­ferred from the nasty non-profit hands of the Guardian to the aggres­sively for-profit hands of Pierre Omidyar—are safe with us.

2. Green­wald was Ron Paul’s first guest on the latter’s new inter­net tele­vi­sion show.

“Ron Paul Launches New Inter­net Chan­nel” by Court­ney Coren; News­Max; 8/14/2013.

EXCERPT: Former Repub­li­can pres­i­den­tial can­di­date Ron Paul is back with a vengeance, using his new online TV chan­nel to attack the poli­cies of the Obama admin­is­tra­tion and any­thing else he sees as a chal­lenge to his libertarian views.

The for­mer Texas con­gress­man launched The Ron Paul Chan­nel Mon­day with an exclu­sive inter­view with Glenn Green­wald, one of two jour­nal­ists who first dis­closed the secret National Secu­rity Agency tele­phone and inter­net data col­lec­tion pro­gram, based on leaks from for­mer NSA con­trac­tor Edward Snowden. . . .

3. Cit­i­zen Green­wald also was selected by CAIR to give the keynote speech at their Los Ange­les din­ner. Mis­rep­re­sented as a Mus­lim civil rights orga­ni­za­tion, the Coun­cil on American-Islamic Rela­tions is a Mus­lim Broth­er­hood front group.

“Con­tro­ver­sial Jour­nal­ist to Keynote CAIR-LA Ban­quet” by gmb watch; Global Mus­lim Broth­er­hood Daily Watch; 11/4/2013.

EXCERPT: US media has reported that con­tro­ver­sial jour­nal­ist Glenn Green­wald will be the keynote speaker for a din­ner event put on this week by the  Los Ange­les chap­ter of the Coun­cil on American-Islamic Relations (CAIR). . . .

. . . . CAIR was founded in 1994 by three offi­cers of the Islamic Asso­ci­a­tion of Pales­tine, part of the U.S. Hamas infra­struc­ture at that time.  Documents dis­cov­ered in the course of the the ter­ror­ism trial of the Holy Land Foun­da­tion con­firmed that the founders and cur­rent lead­ers of CAIR were part of the Pales­tine Com­mit­tee of the Mus­lim Broth­er­hood and that CAIR itself is part of the US. Mus­lim Brotherhood. . . .

Discussion

2 comments for “FTR #763 The Adventures of Eddie The Friendly Spook, Part 9: Citizen Greenwald’s Financial Angel”

  1. Note that NSFWF­Corp, lack­ing a Lib­er­tar­ian bil­lion­aire sugar-daddy, was just force to lay off three of their employ­ees. It’s some­thing to keep in mind this hol­i­day sea­son.

    And for that spe­cial some­one that’s impos­si­ble to buy gifts for, there’s still a condo left in the NSFW­Corp Con­flict Tower. Just think of them as super scarce untrad­able Bit­coins that pay div­i­dends in the form of NSFW­Corp stories.

    Posted by Pterrafractyl | November 20, 2013, 8:11 pm
  2. Mark Ames has a fol­lowup piece on Pierre Omidyar’s new inves­tiga­tive jour­nal­ism out­fit. It explores the poten­tial con­flicts of inter­est with hav­ing an uber-Libertarian tech-billionaire becom­ing the sole founder and CEO an inves­tiga­tive jour­nal­ism out­fit focused on report­ing on the Snow­den files. The tim­ing of the piece was appro­pri­ate since NSFW­Corp just got gob­bled up by Pan­do­Me­dia, prompt­ing Gleen Green­wald to tweet about the irony and hypocrisy since one of Pando’s orig­i­nal investors is Peter Thiel (a $200k invest­ment out of the orig­i­nal $2.8 mil­lion invest­ment). The NSFW­Corp team’s response, along with pledges of no-kid-gloves-for-Thiel and chal­lenges to Green­wald to respond in kind, are at the bot­tom of the arti­cle:

    Pan­do­Daily
    Keep­ing Secrets: Pierre Omid­yar, Glenn Green­wald and the pri­va­ti­za­tion of Snowden’s leaks

    By Mark Ames
    On Novem­ber 27, 2013

    Who “owns” the NSA secrets leaked by Edward Snow­den to reporters Glenn Green­wald and Laura Poitras?

    Given that eBay founder Pierre Omid­yar just invested a quar­ter of a bil­lion dol­lars to per­son­ally hire Green­wald and Poitras for his new for-profit media ven­ture, it’s a ques­tion worth asking.

    It’s espe­cially worth ask­ing since it became clear that Green­wald and Poitras are now the only two peo­ple with full access to the com­plete cache of NSA files, which are said to num­ber any­where from 50,000 to as many as 200,000 files. That’s right: Snow­den doesn’t have the files any more, the Guardian doesn’t have them, the Wash­ing­ton Post doesn’t have them… just Glenn and Laura at the for-profit jour­nal­ism com­pany cre­ated by the founder of eBay.

    Edward Snow­den has pop­u­larly been com­pared to major whistle­blow­ers such as Daniel Ells­berg, Chelsea Man­ning and Jef­frey Wigand. How­ever, there is an impor­tant dif­fer­ence in the Snow­den files that has so far gone largely unno­ticed. Whistle­blow­ing has tra­di­tion­ally served the pub­lic inter­est. In this case, it is about to serve the inter­ests of a bil­lion­aire start­ing a for-profit media busi­ness ven­ture. This is truly unprece­dented. Never before has such a vast trove of pub­lic secrets been sold whole­sale to a sin­gle bil­lion­aire as the foun­da­tion of a for-profit company.

    ...

    He jus­ti­fied this purely on grounds of self-interest, call­ing Omidyar’s offer “a once-in-a-career dream jour­nal­is­tic oppor­tu­nity.” Speak­ing to the Wash­ing­ton Post, Green­wald used crude careerist ter­mi­nol­ogy to jus­tify his deci­sion to pri­va­tize the Snow­den secrets:

    “It would be impos­si­ble for any jour­nal­ist, let alone me, to decline this opportunity.”

    Let alone me.

    News about Greenwald-Poitras’ deci­sion to pri­va­tize the NSA cache came just days after the New York Times reported on Greenwald’s nego­ti­a­tions with major movie stu­dios to sell a Snow­den film. This past sum­mer, Green­wald sold a book to Met­ro­pol­i­tan Books for a report­edly hefty sum, promis­ing that some of the most sen­sa­tional rev­e­la­tions from Snowden’s leaks would be saved for the book.

    Indeed what makes the NSA secrets so valu­able to Green­wald and Poitras is that the two of them have exclu­sive access to the entire cache. Essen­tially they have a monop­oly over secrets that belong to the pub­lic. For a time, it was assumed that Snow­den had kept copies of the leaked doc­u­ments, pos­si­bly on a num­ber of lap­tops he was cart­ing around the world. Green­wald and Poitras were sim­ply con­duits between Snowden’s cache and the pub­lic. In late August, Green­wald dis­closed for the first time in a state­ment to BuzzFeed:

    “Only Laura and I have access to the full set of doc­u­ments which Snow­den pro­vided to journalists.”

    Later, from his hide­out in Rus­sia, Snow­den released a state­ment claim­ing he had left all the NSA files behind in Hong Kong for Green­wald and Poitras to take. A third Guardian jour­nal­ist in Hong Kong at the time, Ewen MacAskill, con­firmed to me on Twit­ter that only Green­wald and Poitras took with them the full cache. Even the Guardian was not allowed access to the motherlode.

    Clearly, in a story as sen­sa­tional and global and allur­ing as Snowden’s Secrets™, exclu­sive access equals value. And for the first time in whistle­blower his­tory, that value has been extracted in full through privatization.

    It is one thing for Green­wald to main­tain that exclu­siv­ity — or monop­oly — while work­ing with the Guardian, a non­profit with insti­tu­tional expe­ri­ence in inves­tiga­tive jour­nal­ism. It is quite another for him to sell them to a guy with a his­tory of putting prof­its before pub­lic inter­est. As Yasha Levine and I wrote at NSFWCORP, Omid­yar invested in a third-world micro-loans com­pany whose sav­age bul­ly­ing of debtors resulted in mass sui­cides. Rather than acknowl­edge this tragedy, Omid­yar Net­work sim­ply deleted ref­er­ence to the com­pany from his web­site when the shit hit the fan.

    This — this? — is the guy we’re sup­posed to trust with the as-yet unpub­lished NSA files? He’s the one we’re rely­ing on to reveal any dark secrets about the tech industry’s col­lu­sion with the NSA? Let’s hope there’s noth­ing in there about eBay. Whoops! Deleted!

    Since we first raised our con­cerns, Yasha and I have been swamped with responses from Greenwald’s fol­low­ers. The weird thing is, not all of those responses have been neg­a­tive: even Wik­ileaks — Wik­ileaks!responded that, “We have not [fallen out with Green­wald] but @Pierre is seri­ously com­pro­mised by Paypal’s attacks on our organ­i­sa­tion and supporters.”

    Greenwald’s left­ist and anar­chist fans have always had an almost cult-like faith in his judg­ment, see­ing him as lit­tle less than a digital-age Noam Chom­sky. But now they’re reel­ing from cog­ni­tive dis­so­nance, try­ing to under­stand why their hero would pri­va­tize the most impor­tant secrets of our gen­er­a­tion to a bil­lion­aire free-marketeer like Omid­yar, whose mil­lions have, in some cases, brought market-based mis­ery into some of the poor­est and most des­per­ate cor­ners of the planet.

    A Greenwald-Omidyar part­ner­ship is as hard to swal­low as if Chom­sky proudly announced a new major ven­ture with Shel­don Adel­son, on grounds that it’s a “once-in-a-career dream aca­d­e­mic opportunity.”

    Wik­iLeaks’ con­cern about Omid­yar can be traced back to PayPal’s deci­sion in Decem­ber 2010 to block­ade users from send­ing money to Wik­iLeaks. Pay­Pal (founded by Pando investor, Peter Thiel — more on that below) is owned by eBay, where Omid­yar has served as the chair­man of the board since 2002. Before the block­ade, Pay­Pal was the prin­ci­pal medium for Wik­iLeaks dona­tions, accord­ing to the Wash­ing­ton Post.

    More trou­bling for fans is that Green­wald has repeat­edly pro­vided cover for Omid­yar, claim­ing that he “had noth­ing to do with [the block­ade]” despite his board sta­tus. Whether or not eBay’s chair­man really was igno­rant of his company’s most con­tro­ver­sial deci­sion in years, there’s no deny­ing that Omid­yar is also eBay’s largest share­holder. At nearly 10%, his stake is worth bil­lions and is more than twice as large as that of the next largest shareholder.

    By Greenwald’s rea­son­ing, even though Omid­yar is the founder, largest share­holder, and chair­man of the body respon­si­ble for eBay/PayPal man­age­ment over­sight, he had “noth­ing to do with” its pol­icy towards Wik­ileaks. Zero. None. He was as help­less as you, me, Batkid, or Grumpy Cat.

    For­tu­nately, as the sin­gle investor, founder and CEO of “NewCo”, Omidyar’s self-professed help­less­ness at eBay doesn’t extend to his new jour­nal­is­tic ven­ture. With that level of auton­omy, no one — not even Glenn Green­wald, who has admit­ted that Omidyar’s money is irre­sistibly per­sua­sive — can tell him which secrets to pub­lish on his new site, and which should remain hid­den forever.

    We can all rest easy in our beds, then, know­ing that Omid­yar is in charge of our secrets. Infor­ma­tion of national impor­tance, such as which major tech com­pa­nies col­luded with the US gov­ern­ment to spy on pri­vate cit­i­zens, will be pub­lished at the dis­cre­tion of the founder and largest share­holder of one of those companies.

    Rob­bing Peter to Pay Paul (and Mark). An impor­tant foot­note about Peter Thiel and Pando, by Paul Carr

    When NSFWCORP’s acqui­si­tion by Pando was announced, Green­wald raced to Twit­ter to accuse us of hypocrisy because Peter Thiel (another bil­lion­aire whose pre­vi­ous busi­ness deal­ings could fill a book, and who sold Pay­Pal to eBay in the first place) once invested $200,000 in Pan­do­Daily, through his Founders Fund.

    That’s absolutely true. Founders Fund’s invest­ment is dis­closed here on Pando’s main about page, along with the names of the other investors who col­lec­tively invested the remain­ing $2.8m raised by Pando.

    The dif­fer­ence between us sell­ing our com­pany to a media out­let that once received a minor­ity invest­ment from Founders Fund and Green­wald being per­son­ally hired by Omid­yar should be obvi­ous to any­one with a brain. But at the risk that cat­e­gory excludes Glenn’s most ardent sup­port­ers, we’re happy to spell out the dif­fer­ence (apart from the mon­e­tary dif­fer­ence of $249,800,000 between Thiel’s $200k and Omidyar’s $250 mil­lion, of course):

    Peter Thiel has no involve­ment with the run­ning of Pando. Zero. He doesn’t make hir­ing or fir­ing or any other kind of deci­sions (nor do any other investors), Founders Fund isn’t Pando’s only (or even clos­est largest) investor and no one from Founders Fund has a board seat, vot­ing rights or any other input in busi­ness or edi­to­r­ial pol­icy. In other words, Thiel has less abil­ity to dic­tate edi­to­r­ial pol­icy here, in fact, than the guy who cleans the cof­fee cups (at least that guy has a key to the office).

    Pierre Omid­yar is per­son­ally hir­ing the jour­nal­ists for his new project, start­ing with Green­wald him­self. He is the venture’s sole backer. But, you know what? All of that would still be OK if Green­wald would make a sim­ple, unequiv­o­cal, pub­lic pledge: to cover any bad behav­ior by Pierre Omid­yar in the same way that he would cover some­one who wasn’t back­ing him with mil­lions of dollars.

    Should be a sim­ple thing to promise, right?

    Here’s our absolute, unequiv­o­cal pledge: we will cover Peter Thiel and Pando’s other investors just as fiercely as we cover Pierre Omid­yar or any­one else. In fact, it’s likely due to prox­im­ity that we will cover Pando’s investors even more fiercely. That’s how we always worked at NSFWCORP — and it’s how we’ll work here. Our past cov­er­age of Thiel can be found all over the web, includ­ing here, here and even right here on Pando. Or see how we’ve cov­ered NSFWCORP/Pando investors Crunch­Fund and Vegas Tech Fund.

    When we asked Glenn to make that same pledge about his sin­gle investor, in light of our cov­er­age of Omid­yar, he responded sim­ply: “I can’t speak for Omid­yar Net­work,” adding he had “no idea” about Omidyar’s involve­ment in micro loans.

    We con­tacted Omid­yar Net­work for com­ment on this story but nei­ther had responded at press time. We’ll update here if they do.

    While it was sad to hear about the sub­sump­tion of NSFW­Corp into Pan­do­Me­dia, one of the nice things that could emerge from hav­ing Peter Thiel indi­rectly employ some­one Glenn Green­wald pre­sum­ably really dis­likes (Mark Ames) is that we could end up see­ing a lot more report­ing about the NSA’s work with Palan­tir. Green­wald was a key tar­get of the HBGary/Palantir oper­a­tions against Wik­ileaks so one might expect some pretty aggres­sive report­ing by Green­wald if there was any­thing on Palan­tir in those files (despite Alex Karp’s apolo­gies to Green­wald after get­ting caught). But other than the PRISM-mystery, there has been vir­tu­ally no cov­er­age of Palantir’s activ­i­ties with the intel­li­gence com­mu­nity from the Snow­den reports. Maybe there’s just not very much about Palan­tir in the Snow­den files? It’s pos­si­ble but it would also be kind of amaz­ing all things con­sid­ered.

    Posted by Pterrafractyl | November 29, 2013, 12:23 am

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