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FTR #889 Intercept This! Compendium on Citizen Omidyar

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Introduction: We have covered Citizen Greenwald’s journalistic/financial angel Pierre Omidyar in numerous programs and posts. Since those entries were spread over a period of time, some listeners have voiced frustration that it is difficult and time consuming to go back and access all of that material. For that reason, we offer a compendium of the unsavory reality of Pierre Omidyar’s activities.

Far from being the altruist he is said to be, Omidyar is a doctrinaire corporatist, many of whose activities have involved him with the promotion into leadership positions abroad of fascists of various stripes. Omidyar’s activities serve to highlight the role of intelligence matters in transnational corporate and macroeconomic environments.

Fusing his “philanthropic” investments with neo-liberal corporate entities and, in turn, helping to bankroll covert operations that complement his corporatist views, Omidyar’s career is deeply involved with the transnational corporate/Underground Reich faction of U.S. intelligence.

Our analysis of Pierre Omidyar begins with his much ballyhooed, though badly under-reported, forays into the philanthropic field. His philanthropic endeavors have centered largely on highly dubious micro-finance arrangements that have borne lethally-tragic results in India and elsewhere in the Third World:

. . . . 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 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. . . . . . . . In 2012, it emerged that while the SKS IPO [An Omidyar vehicle–D.E.] 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. . . .

Pierre Omidyar

Omidyar’s economic guidance comes largely from Hernando De Soto, the neo-liberal, Austrian school theoretician dubbed “The Friedrich Hayek of Latin America.” De Soto was mentored by Hayek. Among the salient items on his CV is a long tenure working with Peruvian dictator Alberto Fujimori.

. . . . 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. . . . 

Not surprisingly, Omidyar has established a behind-the-scenes presence in the governments of the countries in which he operates. In India, his “philanthropic” networks were accused of working alongside the Ford Foundation to independently establish the staffs of India’s MPs.

. . . . 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. . . . 

Jayant Sinha, the director of Omidyar’s philanthropic efforts in India stepped down to help elect Hindu nationalist/fascist Narendra Modi in India. Eventually, the overlapping political and “philanthropic” endeavors of Omidyar helped install Modi in office. Modi’s BJP is a political cat’s paw for the RSS, a Hindu nationalist/fascist organization, one of whose alumni (Nathurm Godse) assassinated Gandhi, an act lauded over the years by RSS personnel. Three fourths of Modi’s cabinet  were selected from the RSS.

. . . . This week, India’s newly-elected ultranationalist leader Narendra Modi unveiled his cabinet, three-quarters of whom come from a fascist paramilitary outfit, the RSS (Rashtriya Swayamsevak Sangh) — including one minister accused by police last year of inciting deadly Hindu-Muslim violence that left over 50 dead. The RSS was founded in 1925 by open admirers of Mussolini and Hitler; in 1948, an RSS member assassinated pacifist Mahatma Gandhi.

In 1992, it was the RSS that organized the destruction of the Ayodha Mosque, leaving 2000 dead, mostly Muslims; and in 2002, the RSS played a key role in the mass-murders of minority Muslims in Gujarat, according to Human Rights Watch, when the state of Gujarat was ruled by Narendra Modi — himself a product of the RSS.

Earlier this week, Pando reported that Modi’s election received help from unlikely sources in Silicon Valley including Google, and to a much more serious extent, Omidyar Network, the philanthropy fund of eBay billionaire and First Look publisher Pierre Omidyar.

From 2009 through February of this year, Omidyar Network India Advisers was headed by Jayant Sinha, a longtime Modi adviser and newly-elected MP in Modi’s ultranationalist BJP party ticket. The Omidyar Network partner and managing director played a double role, investing funds in Indian nonprofits and for-profits, some with distinctly political agendas; while privately, the Omidyar man “worked in Modi’s team” in 2012-13, and served as director in the ultranationalist BJP party’s main think tank on security and economic policy, the India Foundation. This week, Modi appointed the head of the India Foundation, former intelligence chief Ajit Doval, as his National Security Advisor. . . .

Further clouding the distinction between Omidyar’s political and philanthropic undertakings is the vehicle used for much of his “philanthropic” work in the Third World. The Rural Development Institute was founded by Roy Prosterman and became a key vehicle for the Phoenix Program in Vietnam.

. . . . India, like many developing countries around the world, has what Anglo-Americans consider a weak legal structure on property rights. In particular, local indigenous peoples lay ancient claims to lands they live on, and have resisted state attempts to forcibly evict them to make way for industry, mining, and other powerful interests. The Naxal Maoist insurgencies raging in parts of India are fueled in part by displaced, landless peoples. Since Modi’s election landslide, global investors have been hopeful that India’s land will now be made easier to buy and sell.

Omidyar Network’s longtime top man in India, Jayant Sinha—now an MP in Modi’s far-right ruling party — told CNBC that Modi’s first job should be making land acquisition easier: We have to start with land acquisition. We have to make land acquisition a lot better in terms of both the people that are acquiring the land from the farmer’s and so on as well as for industry. So perhaps it’s little surprise that Omidyar’s first major India grant, in 2008, went to the Rural Development Institute’s (renamed “Landesa”) program “to help secure land rights for the rural poor” in India’s Andhra Pradesh state. By 2009, Omidyar Network had committed $9 million to the RDI land rights program, the largest grant in the outfit’s history.

And what a history: The Rural Development Institute was founded in 1967 by Roy Prosterman, whose land reform programs were a key element in the Vietnam War counterinsurgency strategy, the “Phoenix” assassination program. The Phoenix program became the template for modern American counterinsurgency — violent terror, combined with soft-power land “reforms” cooked up by Prosterman’s Institute. During the Vietnam War, Prosterman teamed up with USAID to implement his “land-to-the-tillers” reforms, granting land to peasants as the carrot, while at the same time CIA death squads assassinated tens of thousands of Vietnamese village leaders and terrorized restive regions into submission. The result, Prosterman later boasted, was that Viet Cong recruitment dropped 80 percent.

A decade later, Prosterman sold the same land reform program to El Salvador’s junta, just as the junta was ramping up its deadly attacks on rural civilians that left 75,000 killed by US-backed government forces. Prosterman also served as “land reform” advisor to Philippines dictator Ferdinand Marcos. And in the 1990s, Prosterman was contracted by Booz Allen to advise land reforms in Moldova, according to journalist Tim Shorrock. . . . . .

A few years ago, Prosterman’s Rural Development Institute changed its name to Landesa. But Prosterman’s Cold War outfit hasn’t changed its close cooperation with USAID, or its core strategic mission, tying land ownership to security (and counterinsurgency) — neatly summed by Landesa’s India director’s article: “Connecting the Dots Between Security and Land Rights in India.” Leaving aside the alleged benefits to India’s poor of giving them land title to the commons — 400,000,000 Indians live on less than $1.25 a day — for the more powerful interests funding land titling programs, there are endless advantages.

It helps create a mass tax base for governments that want to shift more taxes onto the masses; it formalizes and legalizes transfer of property from the commons to the strongest and richest; it makes foreign investors happy; it helps the government and businesses track and keep data on its citizens; and, to quote Omidyar Network managing partner Matt Bannick — recently appointed by the Obama White House to a special task force — Prosterman’s land reforms made Omidyar “excited about how micro-land ownership can empower women and help them to pull themselves out of poverty.” . . . .

Oleh Tihanybok, leader of the OUN/B successor organization Svoboda

Stephan Bandera, head of the OUN/B

Turning to a different part of the Earth Island, we see Omidyar was deeply involved with AID and the NED to help engineer the Maidan coup of 2014. One of his first political proteges was Oleh Rybachuk, who was working to integrate Ukraine with NATO under Viktor Yuschenko. Rybachuk held a ministry under Viktor Yuschenko, whose regime might be termed “Maidan I.”

 . . . . In 1992, after the col­lapse of the Soviet Union, Rybachuk moved to the newly-formed Ukraine Cen­tral Bank, head­ing the for­eign rela­tions depart­ment under Cen­tral Bank chief and future Orange Rev­o­lu­tion leader Vik­tor Yushchenko. In his cen­tral bank post, Rybachuk estab­lished close friendly ties with west­ern gov­ern­ment and finan­cial aid insti­tu­tions, as well as proto-Omidyar fig­ures like George Soros, who funded many of the NGOs involved in “color rev­o­lu­tions” includ­ing small dona­tions to the same Ukraine NGOs that Omid­yar backed.

(Like Omid­yar Net­work does today, Soros’ char­ity arms—Open Soci­ety and Renais­sance Foundation—publicly preached trans­parency and good gov­ern­ment in places like Rus­sia dur­ing the Yeltsin years, while Soros’ finan­cial arm spec­u­lated on Russ­ian debt and par­tic­i­pated in scandal-plagued auc­tions of state assets.)

 In early 2005, Orange Rev­o­lu­tion leader Yushchenko became Ukraine’s pres­i­dent, and he appointed Rybachuk deputy prime min­is­ter in charge of inte­grat­ing Ukraine into the EU, NATO, and other west­ern insti­tu­tions. Rybachuk also pushed for the mass-privatization of Ukraine’s remain­ing state hold­ings. Over the next sev­eral years, Rybachuk was shifted around Pres­i­dent Yushchenko’s embat­tled admin­is­tra­tion, torn by inter­nal divi­sions.

In 2010, Yushchenko lost the pres­i­dency to recently-overthrown Vik­tor Yanukovych, and a year later, Rybachuk was on Omidyar’s and USAID’s pay­roll, prepar­ing for the next Orange Rev­o­lu­tion. As Rybachuk told the Finan­cial Times two years ago: “We want to do [the Orange Rev­o­lu­tion] again and we think we will.”  . . . . 

Omidyar protege Svitlana Zalischuk is handling a function similar to the functions of Oleh Rybachuk under Yuschenko. Zalischuk was mentored by Rybachuk, also an Omidyar protege! Working to integrate Ukraine into NATO and other Western structures, she has been a driving force behind the “lustration laws,” widely viewed as totalitarian in nature. Omidyar protege Zalischuk was also instrumental in coordinating discussions between some of the Nazi associations in Ukraine and the more “moderate” parties.

. . . . Zal­ishchuk was given a choice spot on the president’s party list, at num­ber 18, ensur­ing her a seat in the new Rada. And she owes her rise to power to another oli­garch besides Ukraine’s pres­i­dent — Pierre Omid­yar, whose fund­ing with USAID helped top­ple the pre­vi­ous gov­ern­ment. Zalishchuk’s pro-Maidan rev­o­lu­tion out­fits were directly funded by Omidyar.

Ear­lier this year, Pando exposed how eBay bil­lion­aire and Inter­cept pub­lisher Pierre Omid­yar co-funded with USAID Zalishchuk’s web of non­govern­men­tal orga­ni­za­tions — New Cit­i­zenChesnoCen­ter UA. Accord­ing to the Finan­cial Times, New Cit­i­zen, which received hun­dreds of thou­sands of dol­lars from Omid­yar, “played a big role in get­ting the [Maidan] protest up and run­ning” in Novem­ber 2013.

Omid­yar Network’s web­site fea­tures Zalishchuk’s pho­to­graph on its page describ­ing its invest­ment in New Cit­i­zen. Zal­ishchuk was brought into the NGOs by her long­time men­tor, Oleh Rybachuk, a for­mer deputy prime min­ster who led the last failed effort to inte­grate Ukraine into the EU and NATO. . . .

. . . . The president’s party tasked Zalushchik with pub­licly sell­ing the highly con­tro­ver­sial new “lus­tra­tion law” — essen­tially a legal­ized witch-hunt law first pro­posed by the neo-fascist Svo­boda Party ear­lier this year, and sub­se­quently denounced by Ukraine’s pros­e­cu­tor gen­eral and by Human Rights Watch, which described a draft of the law as “arbi­trary and overly broad and fail(s) to respect human rights prin­ci­ples,” warn­ing it “may set the stage for unlaw­ful mass arbi­trary polit­i­cal exclusion.”

The lus­tra­tion law was passed under a wave of neo-Nazi vio­lence, in which mem­bers of par­lia­ment and oth­ers set to be tar­geted for purges were forcibly thrown into trash dumps.Zal­ishchuk, how­ever, praised the lus­tra­tion law, claim­ing that the legal­ized purges would “give Ukraine a chance at a new life.”Shortly before the elec­tions, on Octo­ber 17, Zal­ishchuk used her Omidyar-funded out­fit, “Chesno,”  to orga­nize a round­table with lead­ers of pro-EU and neo-fascist par­ties.

It was called “Par­lia­ment for Reform” and it brought together lead­ers from eight par­ties,includ­ing Zalishchuk’s “Poroshenko Bloc” (she served as both NGO orga­nizer and as pro-Poroshenko party can­di­date), the prime minister’s “People’s Party” and lead­ers from two unabashedly neo-Nazi par­ties: Svo­boda, and the Rad­i­cal Party of Oleh Lyashko . . . .

His most recent endeavors find Omidyar partnering with the NED to launch a fact-checking service. “Fact checking” is deemed a fundamental effort of “information warfare”  against Russia. Omidyar’s partnering with  U.S. intelligence cutout like NED appears to be a fundamental element of that “information warfare.”

The Guardian reported on Tues­day that the National Endow­ment for Democ­racy has just been banned from Rus­sia, under strict new laws reg­u­lat­ing NGOs act­ing as for­eign agents.In that story, the Guardian cited the fact that Inter­cept pub­lisher Pierre Omid­yar co-funded Ukraine rev­o­lu­tion groups with USAID and the National Endow­ment for Democ­racy (NED).If the Omid­yar con­nec­tion sounds famil­iar, that’s because it was Pando that first broke the story in Feb­ru­ary 2014 (the Guardian linked to our orig­i­nal scoop in its coverage.)

In the 18 months since we broke the story, Ukraine has col­lapsed into war and despair, with up to 10,000 peo­ple killed and one and a half mil­lion internally-displaced refugees — and top US brass talk openly of a new Cold War with nuclear-armed Rus­sia, while US mil­i­tary advi­sors train and arm Ukraini­ans to wage war on Russian-backed separatists.Svit­lana Zal­ishchuk, one of the lead­ers of the Omidyar-funded NGO that helped orga­nize last year’s rev­o­lu­tion in Kiev, is now in power as an MP in Ukraine’s par­lia­ment, a mem­ber of the new, pro-NATO president’s party bloc.

She’s gone from plucky Omidyar-funded adver­sar­ial activist, to head­ing a par­lia­men­tary sub­com­mit­tee tasked with inte­grat­ing Ukraine into NATO. I can’t think of another media tycoon who co-funded a pro-US regime change with Amer­i­can intel­li­gence cutouts like USAID and the National Endow­ment for Democ­racy.

That Putin tar­geted the NED does not mean it’s either heroic or evil—the NED’s story speaks for itself: The brain­child of Reagan’s CIA direc­tor Bill Casey, the National Endow­ment for Democ­racy was set up as an intel­li­gence cutout to sup­port US geopo­lit­i­cal power and under­mine unfriendly regimes. One of the NED co-founders, Allen Wein­stein, explained its pur­pose to the Wash­ing­ton Post:

“A lot of what we do today was done covertly 25 years ago by the CIA.” . . .

. . . .This week, Omid­yar Net­work announced yet another part­ner­ship with the National Endow­ment for Democ­racy and the Poyn­ter Insti­tute to cre­ate an inter­na­tional online fact-checking hub. Given the power that a monop­oly on “objec­tive” fact-checking offers, the tie-up with the NED takes the Omid­yar alliance with the US empire and media to newer, creepier lev­els.

 In yet another Omidyar-as-private-arm invest­ment, Omid­yar invested in the slick new Ukrain­ian media, Hromadske.tv, which was set up on the eve of the Maidan rev­o­lu­tion with ini­tial seed fund­ing com­ing from the US Embassy in Kiev. Omidyar’s involve­ment in Ukraine media and “fact-checking” is all the more seri­ous given that now Wash­ing­ton and NATO talk about “coun­ter­ing” Russia’s over­hyped “infor­ma­tion war” on the West and on Ukraine—this “infor­ma­tion war” which I cov­ered a bit in my piece on Peter Pomer­ant­sev, is con­sid­ered a top and urgent geostrate­gic pri­or­ity for NATO and the West. . . . .

(It is impossible within the scope of this post to cover our voluminous coverage of the Ukraine crisis. Previous programs on the subject are: FTR #‘s 777778779780781782783784794, 800803804, 808811817

818824826829832833837849850853857860872875876877Listeners/readers are encouraged to examine these programs and/or their descriptions in detail, in order to flesh out their understanding.)

Program Highlights Include:

1.Our analysis of Pierre Omidyar begins with his much ballhooed, though badly under-reported, forays into the philanthropic field. His philanthropic endeavors have centered largely on highly dubious micro-finance arrangements that have borne lethally-tragic results in India and elsewhere in the Third World.

“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 mul­ti­plestud­ies, 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 been duped. 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 min­is­ter Jose 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 for crimes 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.

2a. Modi’s election was aided by the head of Pierre Omidyar’s “charitable” organization Omidyar Networks. In FTR #763, we noted that Omidyar is the financial angel backing Nazi fellow-traveler Glenn Greenwald’s new journalistic venture. Omidyar has also backed some grindingly oppressive, cruel projects in the Third World. His Indian micro-finance ventures were particularly horrible. Omidyar also helped to finance the covert operation that brought the OUN/B successors to power in Ukraine.

“REVEALED: The Head of Omidyar Networks in India Had a Secret Second Job… Helping Elect Narendra Modi” by Mark Ames; Pando Daily; 5/26/2014.

Last weekend, India’s elections swept into power a hardline Hindu supremacist named Narendra Modi. And with that White House spokesman Jay Carney said the Obama administration “look[s] forward to working closely” with a man who has been on a US State Dept “visa blacklist” since 2005 for his role in the gruesome mass-killings and persecution of minority Muslims (and minority Christians). Modi leads India’s ultranationalist BJP party, which won a landslide majority of seats (though only 31% of the votes), meaning Modi will have the luxury of leading India’s first one-party government in 30 years.

This is making a lot of people nervous: The last time the BJP party was in power, in 1998, they launched series of nuclear bomb test explosions, sparking a nuclear crisis with Pakistan and fears of all-out nuclear war. And that was when the BJP was led by a “moderate” ultranationalist — and tied down with meddling coalition partners.

Modi is different. Not only will he rule alone, he’s promised to run India the way he ran the western state of Gujarat since 2001, which Booker Prize-winning author Arandhuti Roy described as “the petri dish in which Hindu fascism has been fomenting an elaborate political experiment.”

Under Modi’s watch, an orgy of anti-Muslim violence led to up to 2000 killed and 250,000 internally displaced, and a lingering climate of fear, ghettoization, and extrajudicial executions by Gujarat death squads operating under Modi’s watch. . . . . . . Omidyar Network, as Pando readers know, is the philanthropy arm of eBay billionaire Pierre Omidyar.

Since 2009, Omidyar Network has made more investments in India than in any other country in its portfolio. These investments were largely thanks to Jayant Sinha, a former McKinsey partner and Harvard MBA, who was hired in October 2009 to establish and run Omidyar Network India Advisors. During Sinha’s tenure, Omidyar Network steered a large portion of its investments into India, so that by 2013, India investments made up 18% of Omidyar Network’s committed funds of well over $600 million, and 36% of the total number of companies in its portfolio.

In February of this year, Sinha stepped down from Omidyar Network in order to advise Modi’s election campaign, and to run for a BJP parliamentary seat of his own. Sinha’s father, Yashwant Sinha, served as finance minister in the last BJP government from 1998 (when his government set off the nukes) through 2002. This year, Sinha’s father gave up his seat in parliament to allow Jayant Sinha to take his place.

During the campaign, Sinha’s father publicly backed Modi’s refusal to apologize over the deadly riots under his watch: “Modi is right…why should he apologize?” His ex-Omidyar staffer son, Jayant, boasted a few weeks ago that his father’s BJP government ignored international outrage in 1998 when detonating its nukes, known as “Pokhran” . . . .

2b. In the long FTR series on L’Affaire Snowden,  we noted that all of the players were outright fascists and/or exponents of corporatist economic theory. That includes Pierre Omidyar, Nazi fellow-traveler Glenn Greenwald’s financial angel and backer of First Look media.

Touting the laissez-faire economics of the GOP and other corporatist elements around the world, Omidyar has also helped to finance the rise of fascist elements abroad, including assisting in the ascent of the OUN/B successor forces in the Ukraine, as well as Narendra Modi, heir to the RSS Hindu fascists that spawned his BJP.

Omidyar’s “philanthropy” is cast in the laissez-faire economics to which he is wed. Building on the lethal record of his SKS microfinance project in Andhra Pradesh state in India, Omidyar Networks has utilized the Rural Development Institute, the child of Roy Prosterman, a counterinsurgency veteran of the Phoenix Program in Vietnam and similar projects in places like El Salvador. Omidyar and his then-CEO Meg Whitman (of EBAy) also were  under investigation:

“. . . .  in return for giving Goldman Sachs the lucrative eBay IPO, the “vampire squid” bank set up private secret accounts for Omidyar and CEO Meg Whitman letting them spin dozens of tech IPOs before they went to market — ripping off both retail investors and startup investors. Omidyar settled a shareholder fraud lawsuit in 2005 without admitting wrongdoing, ironic for a visionary who believes so deeply in accountability.”

Omidyar and other EBay executives are currently being investigated for another alleged scam: “Omidyar was subpoenaed by a federal grand jury criminal investigation into his and other eBay executives’ alleged roles in stealing Craigslist’s “secret sauce” for eBay’s profit.”

What a swell guy Omidyar is. Read the article below for details on his (and other corporatists’) vision for the mutating of micro-finance into a profit-making vehicle, often at the lethal expense of the poor who are supposed to benefit from those programs.

“EBay Shrugged: Pierre Omidyar Believes there Should Be No Philanthropy Without Profit” by Mark Ames; Pando Daily; 5/31/2014.

This week, India’s newly-elected ultranationalist leader Narendra Modi unveiled his cabinet, three-quarters of whom come from a fascist paramilitary outfit, the RSS (Rashtriya Swayamsevak Sangh) — including one minister accused by police last year of inciting deadly Hindu-Muslim violence that left over 50 dead. The RSS was founded in 1925 by open admirers of Mussolini and Hitler; in 1948, an RSS member assassinated pacifist Mahatma Gandhi.

In 1992, it was the RSS that organized the destruction of the Ayodha Mosque, leaving 2000 dead, mostly Muslims; and in 2002, the RSS played a key role in the mass-murders of minority Muslims in Gujarat, according to Human Rights Watch, when the state of Gujarat was ruled by Narendra Modi — himself a product of the RSS.

Earlier this week, Pando reported that Modi’s election received help from unlikely sources in Silicon Valley including Google, and to a much more serious extent, Omidyar Network, the philanthropy fund of eBay billionaire and First Look publisher Pierre Omidyar. From 2009 through February of this year, Omidyar Network India Advisers was headed by Jayant Sinha, a longtime Modi adviser and newly-elected MP in Modi’s ultranationalist BJP party ticket.

 The Omidyar Network partner and managing director played a double role, investing funds in Indian nonprofits and for-profits, some with distinctly political agendas; while privately, the Omidyar man “worked in Modi’s team” in 2012-13, and served as director in the ultranationalist BJP party’s main think tank on security and economic policy, the India Foundation. This week, Modi appointed the head of the India Foundation, former intelligence chief Ajit Doval, as his National Security Advisor.

Modi was the “hi-tech populist” candidate: London techies managed Modi’s 3-D hologram campaign, beaming 10-feet-tall Modi holograms to rallies across India. And India’s techies played a key role both in campaigning for Modi and voting for Modi. Despite the sunny progressive Silicon Valley gloss we’ve been fed these past few decades, Modi’s appeal shows that the tech industry is as prone to far-right authoritarian politics as any other industry. And that is what makes the Omidyar Network story so revealing: Perhaps no other figure embodies the disconnect between his progressive anti-state image, and his factual collaboration with the American national security state and the global neoliberal agenda, than Pierre Omidyar.

The role of Omidyar Network in so many major events of the past week — helping elect India’s ultranationalist leader Narendra Modico-funding Ukraine regime-change NGOs with USAID, resulting in a deadly civil war and Monday’s election of Ukrainian billionaire oligarch Petro Poroshenko; and now, this week’s first-ever sit-down TV interview with Edward Snowden, through an arrangement between NBC News and Pierre Omidyar’s First Look Media — shows how these contradictions are coming to the fore, and shaping our world.

Omidyar’s central role in the US national security state’s global agenda may still come as a shock to outsiders and fans of First Look media’s roster of once-independent journalists. But to White House foreign policy hawks, Pierre Omidyar represents the new face of an old imperial tradition. . . . . . . . . By taking a closer look at Omidyar Network’s investments in India, we gain insight into where the common interests between Big Tech, the US national security state, and neoliberalism align — and Omidyar’s strategic thinking aligning eBay/PayPal with Omidyar Network and First Look media.

Let’s start with Omidyar Network’s investments in the Rural Development Institute, founded by one of the godfathers of American counterinsurgency strategy: Roy Prosterman. “Property Rights”: Omidyar and “Phoenix Program” guru Roy Prosterman Omidyar Network identifies “property rights” (or “property titling”) as one of its five areas of focus. One of Omidyar’s personal heroes and largest grant recipients is neoliberal economist Hernando de Soto, the former right-hand man to jailed dictator Alberto Fujimori. De Soto is the world’s leading peddler of “property titling” as the answer to global poverty: rather than giving aid, De Soto says we should give the world’s poor private property titles, which slum dwellers can presumably collateralize into microloans for their slum-based startups.

The results have often been catastrophic — but that hasn’t stopped De Soto from being admired by the world’s ruling elite, ranging from Bill Clinton, to the Koch brothers — to Pierre Omidyar, who gave $5 million to De Soto’s neoliberal think tank . . . . . . . India, like many developing countries around the world, has what Anglo-Americans consider a weak legal structure on property rights. In particular, local indigenous peoples lay ancient claims to lands they live on, and have resisted state attempts to forcibly evict them to make way for industry, mining, and other powerful interests. The Naxal Maoist insurgencies raging in parts of India are fueled in part by displaced, landless peoples. Since Modi’s election landslide, global investors have been hopeful that India’s land will now be made easier to buy and sell.

Omidyar Network’s longtime top man in India, Jayant Sinha—now an MP in Modi’s far-right ruling party — told CNBC that Modi’s first job should be making land acquisition easier: We have to start with land acquisition. We have to make land acquisition a lot better in terms of both the people that are acquiring the land from the farmer’s and so on as well as for industry.

So perhaps it’s little surprise that Omidyar’s first major India grant, in 2008, went to the Rural Development Institute’s (renamed “Landesa”) program “to help secure land rights for the rural poor” in India’s Andhra Pradesh state. By 2009, Omidyar Network had committed $9 million to the RDI land rights program, the largest grant in the outfit’s history.

And what a history: The Rural Development Institute was founded in 1967 by Roy Prosterman, whose land reform programs were a key element in the Vietnam War counterinsurgency strategy, the “Phoenix” assassination program. The Phoenix program became the template for modern American counterinsurgency — violent terror, combined with soft-power land “reforms” cooked up by Prosterman’s Institute.

During the Vietnam War, Prosterman teamed up with USAID to implement his “land-to-the-tillers” reforms, granting land to peasants as the carrot, while at the same time CIA death squads assassinated tens of thousands of Vietnamese village leaders and terrorized restive regions into submission. The result, Prosterman later boasted, was that Viet Cong recruitment dropped 80 percent.

A decade later, Prosterman sold the same land reform program to El Salvador’s junta, just as the junta was ramping up its deadly attacks on rural civilians that left 75,000 killed by US-backed government forces. Prosterman also served as “land reform” advisor to Philippines dictator Ferdinand Marcos. And in the 1990s, Prosterman was contracted by Booz Allen to advise land reforms in Moldova, according to journalist Tim Shorrock. . . . .

. . . . A few years ago, Prosterman’s Rural Development Institute changed its name to Landesa. But Prosterman’s Cold War outfit hasn’t changed its close cooperation with USAID, or its core strategic mission, tying land ownership to security (and counterinsurgency) — neatly summed by Landesa’s India director’s article: “Connecting the Dots Between Security and Land Rights in India.” Leaving aside the alleged benefits to India’s poor of giving them land title to the commons — 400,000,000 Indians live on less than $1.25 a day — for the more powerful interests funding land titling programs, there are endless advantages.

It helps create a mass tax base for governments that want to shift more taxes onto the masses; it formalizes and legalizes transfer of property from the commons to the strongest and richest; it makes foreign investors happy; it helps the government and businesses track and keep data on its citizens; and, to quote Omidyar Network managing partner Matt Bannick — recently appointed by the Obama White House to a special task force — Prosterman’s land reforms made Omidyar “excited about how micro-land ownership can empower women and help them to pull themselves out of poverty.”

That’s because micro-land ownership helps create the real focus of Omidyar Network investments in India: Microfinance. “Financial Inclusion”: Omidyar, Microfinance & Suicide-By-Pesticide Omidyar Network’s ugliest disaster — besides co-funding Ukraine regime-change groups with USAID — was its role in funding SKS Microfinance, whose predatory lending and debt collecting practices led to a rash of gruesome suicides in rural Andhra Pradesh.

First, a quick word on the theory and practice of microlending. In theory, the original microfinance concept — a nonprofit extending micro-loans to the poor, under favorable terms, below market rates — could be beneficial, and under the right circumstances, it often was. But to the neoliberals, the original microfinance concept smacked of do-gooder state socialism — so microfinance floundered in the margins of the development community until 1992.

That year, USAID commercialized a Bolivian microfinance nonprofit called Prodem, creating a new for-profit micro-lender, BancoSol in its place. BancoSol ballooned overnight — both in loans and in profits, making millionaires of the former nonprofit directors before BancoSol nearly collapsed at the end of the decade.

USAID liked the for-profit neoliberal model for microfinance, and it persuaded the World Bank and other global financial institutions to load in and sing its praises. That brought microfinance to the attention of Wall Street funds, eventually pushing out “old” “unsustainable” nonprofit microfinance institutions, and seducing the likes of Nobel Peace Prize winner and microfinance industry guru Muhammad Yunus into the for-profit sector as well.

As we now know, it ended in disaster — particularly in India’s Andhra Pradesh state, where Omidyar-funded land title programs had been busy creating legions of rural poor “micro-land owners” now ready to load up on Omidyar-funded microfinance loans. The result would be scores of women driven to grisly suicides, forced prostitution, and despair.

It’s hard to overstate just how central the for-profit microfinance model is to Pierre Omidyar’s “vision.” In a 2006 New Yorker article detailing Omidyar’s near-religious zeal for commercializing microfinance, we learn that the eBay billionaire not only rejected the Nobel Peace Prize winner’s appeals to soften his monomaniac focus on profiting off the world’s poor — we also learn that Omidyar was committed to wiping out whatever remained of charitable non-profit microlending, so as not to “distort the market.”

Omidyar rejected on principle entreaties from his fellow billionaires to invest in a nonprofit microfinance fund. Because on principle, Omidyar refused to believe that good could come from anything but the self-interested profit motive. Here’s the New Yorker: [Omidyar] often cites Adam Smith’s doctrine that unrestrained market forces and self-interest drive the most efficient—and socially beneficial—use of resources. Omidyar sees Smith’s principles at work in eBay; he believes that eBay’s commercial success was linked to a profound social good.

Omidyar’s faith in the eBay model is so great that he is convinced that it can be applied to solving humanity’s problems, including poverty — and that is why Omidyar singled out for-profit microfinance as his life’s mission. After rejecting Yunus as an “old thinker” wedded to old do-gooderism non-profit thinking, Omidyar announced a $100 million donation to Tufts University, the largest in school history, with the stipulation that the Omidyar-Tufts Microfinance Fund went “specifically” into “investments that would promote microfinance’s commercialization.”

To manage the fund, Omidyar hired a Senior Credit Officer from USAID — the agency that originally commercialized microfinance in 1992 — who channeled Joseph Schumpeter to the New Yorker: “One of the things we need and we will get is a cycle of creative destruction,” said Tryfan Evans, the director of investments at the Omidyar-Tufts fund, who previously worked at U.S.A.I.D. “If you’re inefficient, you will get overtaken by competitors.” What is rather shocking in hindsight is how fanatical Omidyar’s faith is in the free market, to the point that he’s willing to risk exploiting the most vulnerable poor on earth to prove that Adam Smith is right.

The dangers of for-profit microfinance lending to India’s poor were no secret: the New Yorker article references a string of microfinance related suicides in Andhra Pradesh back in 2006, before Omidyar’s millions poured oil on that fire. . . . . . . . And so Omidyar tested his theory: plowing millions into India’s SKS Microfinance via  investments into murky microfinance outfit Unitus. In 2010, SKS Microfinance listed a $350 million IPO that netted insiders and early investors like Unitus obscene profits. The murky, interlocking nonprofit/for-profit structures ensured that only those on the inside knew whether Omidyar made money on his investment.

The only sure thing was that the explosion of microfinance lending in the state of Andrah Pradesh, led by SKS Microfinance, wound up saddling the world’s poorest and most vulnerable village women with debts they could not pay, causing a wave of suicides. An AP investigation directly implicated Omidyar-funded SKS Microfinance agents in several suicides: 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.” In all these cases, the report commissioned by SKS concluded that the company’s staff was either directly or indirectly responsible. After the report, Omidyar Network scrubbed SKS Microfinance from its website.

An old cached webpage shows Omidyar hailing SKS Microfinance for “serving the rural poor in India” and claiming that the murky Unitus private equity fund’s IPO “exit strategy” will “attract more capital to the market.” Instead, Unitus dissolved its microfinance NGO, a wave of resignations and murky millions moved hands, SKS Microfinance became a pariah, and Andhra Pradesh passed laws regulating microfinance institutions.

A tiny handful of insiders and investors pocketed obscene millions, over 200 killed themselves, and entire Indian rural communities were devastated. Self-interest and profit motive did not create the greatest social good that Omidyar believed in; and yet, Omidyar Network continues to expand its portfolio of microfinance — or “financial inclusion” — investments.

eBay Shrugged  “Omidyar stopped talking about microfinance as a way to end world poverty, and instead described its mission in a way congruent with the eBay experience.” —New Yorker The key to understanding the enigmatic eBay billionaire and his many contradictions — an active participant in Washington’s global empire on a scale unrivaled in publishing, while also founder of a quarter-billion dollar “adversarial journalism” startup and privatizer of the Snowden NSA files, the largest cache of leaked national security secrets in US history — is understanding Omidyar’s eBay-centric vision.

Omidyar is a vision man, as his star employee Jeremy Scahill constantly reminds us. And his vision was shaped, for understandable reasons, by his experience making ten billion dollars overnight off of eBay, which Omidyar believes is proof of a larger philosophical and moral structure at work, rather than a combination of smarts, luck, privilege… and other less savory factors. In 2000, Omidyar confided to his New York Times biographer, Adam Cohen, that he founded eBay to create a “perfect market” after feeling cheated by the way tech IPOs in the early 1990s let insiders “spin” IPOs for a quick profits before dumping them onto the market to regular investors — like the pre-eBay Omidyar. Cohen writes: When 3DO announced plans to go public in May 1993, Omidyar placed an order for stock through his Charles Schwab brokerage account…. 3DO went public at $15 a share, but when Omidyar checked his account, he learned that the stock had soared 50 percent before his order had been filled…. it struck him that this was not how a free market was supposed to operate—favored buyers paying one price, and ordinary people getting the same stock moments later at a sizeable markup.

Omidyar’s solution was an online auction. Cohen, a member of the New York Times editorial board, found Omidyar’s story convincing.

There was only one problem: At the very time Omidyar spun this yarn to Cohen, Omidyar was under investigation in the largest IPO stock spinning scandal in history. According to a House investigation, in return for giving Goldman Sachs the lucrative eBay IPO, the “vampire squid” bank set up private secret accounts for Omidyar and CEO Meg Whitman letting them spin dozens of tech IPOs before they went to market — ripping off both retail investors and startup investors.

 Omidyar settled a shareholder fraud lawsuit in 2005 without admitting wrongdoing, ironic for a visionary who believes so deeply in accountability. More recently, Omidyar was subpoenaed by a federal grand jury criminal investigation into his and other eBay executives’ alleged roles in stealing Craigslist’s “secret sauce” for eBay’s profit. . . .

3. Omidyar’s “overt covert operation” participation in India has paid off, with his successful candidate of choice Narendra Modi opening up that huge county to e-commerce. That figures to benefit Omidyar enormously.

“Just as We Pre­dicted, India’s New Leader Is about to Make Pierre Omid­yar a Lot Richer” by Mark Ames; Pando Daily; 6/4/2014.

Well that was fast. Two weeks ago, we reported that eBay founder Pierre Omidyar’s top man in India had secretly helped elect con­tro­ver­sial ultra­na­tion­al­ist Naren­dra Modi, impli­cated by Human Rights Watch and oth­ers in the grue­some mass killings and cleans­ing of minor­ity Mus­lims. As we also revealed, shortly after Omidyar’s man pub­licly joined the Modi cam­paign in Feb­ru­ary, Modi sud­denly began warming up to the idea of let­ting global e-commerce com­pa­nies into the world’s third largest econ­omy. Omidyar’s eBay, which draws the major­ityof its rev­enues from over­seas oper­a­tions, has been champ­ing at the bit to get into India. Now, just weeks after Modi’s elec­tion, it seems their prayers have been answered. Today, Reuters is report­ing that Modi is plan­ning to open India up to global e-commerce firms like eBay next month, and that Modi’s indus­try min­is­ter has been draw­ing up the new guide­lines with input from top eBay offi­cials, along with their e-commerce coun­ter­parts from Google, Ama­zon, Wal-Mart and others.

Call­ing the move to allow for­eign e-commerce into India “one of the first tan­gi­ble signs of eco­nomic reform by the business-friendly gov­ern­ment of Prime Min­is­ter Naren­dra Modi,” Reuters reports that the sec­tor is expected to quadru­ple its share of the over­all econ­omy by 2020. India’s e-commerce indus­try is grow­ing at 40–50% annu­ally. Those num­bers, and Modi’s accom­mo­dat­ing behav­ior, is mak­ing Pierre Omidyar’s under­lings salivate:

“Deepa Thomas, spokes­woman for eBay in India, said it was excited about the oppor­tu­nity and believed in the need for a care­fully cal­i­brated approach to open­ing up the sector. “The indus­try min­istry that drafts FDI rules recently met offi­cials from com­pa­nies includ­ing Ama­zon, Google, eBay Inc, Wal-Mart and Indian e-tailer Flip­kart to finalise the invest­ment guide­lines, the peo­ple said. “Global online retail­ers like Ama­zon and eBay are cur­rently banned from sell­ing prod­ucts they have sourced them­selves, and must rely on third-party sup­pli­ers. Their plat­forms, which they own fully, are mar­ket­places for these out­side suppliers. “The gov­ern­ment is likely to end this ban, paving the way for global retail­ers to bring their for­mi­da­ble sup­ply chain, and cheaper goods, into India, poten­tially boost­ing con­sump­tion and ben­e­fit­ing small man­u­fac­tur­ers and traders.”

As we reported, the long­time man­ag­ing director and part­ner for Omid­yar Net­work India Advi­sors, Jayant Sinha, began work­ing to help elect Modi since at least 2012, while pub­licly dol­ing out tens of mil­lionsof Omidyar’s money to for-profits and to non-profits, at least one of which was involved in an anti-corruption campaign cam­paign that undermined the center-left rul­ing gov­ern­ment, and ben­e­fited Modi’s far-right BJP party.

Omidyar’s top India man also con­cur­rently served as a director in a pow­er­ful BJP think tank, the India Foun­da­tion, chaired by Modi’s hard­line National Secu­rity Advi­sor, Ajit Doval— accord­ing to the Hin­dus­tan Times. After step­ping down from Omid­yar Net­work in Feb­ru­ary of this year, Sinha worked full-time for Modi, the India Foun­da­tion, and for his own suc­cess­ful run as a BJP can­di­date for par­lia­ment. Another NGO that Omid­yar invested in, the Insti­tute for Pol­icy Research Stud­ies (IPRS), was accused of ille­gally try­ing to lobby India’s par­lia­men­tar­i­ans to vote for open­ing up India’s e-commerce mar­ket in late 2012. The IPRS non­profit ran a pro­gram in which their staffers pro­vided India MP staffers with “non­par­ti­san” research. In 2012, India’s intel­li­gence bureau accused the IPRS of ““com­pro­mis­ing national secu­rity”” and described it as “shrouded in mystery.”

Omid­yar Net­work had pledged $1 mil­lion to the IPRS, and the Ford Foun­da­tion pledged half a mil­lion more — but the Indian gov­ern­ment rejected the IPRS’s appli­ca­tion to reg­is­ter as a foreign-funded NGO, deem­ing it a threat to India’s par­lia­men­tary integrity, and its national secu­rity. Google’s cor­po­rate phil­an­thropic arm, Google.org, had pre­vi­ously given $880,000to the same NGO pro­gram, under Sheryl Sandberg’s watch. The co-founder of this con­tro­ver­sial never-registered NGO, CV Mud­hakar, is now, you might not be shocked to learn, Omid­yar Net­work India’s direc­tor of investments in “gov­ern­ment trans­parency.” . . . .

4. In FTR #795, we noted that Narendra Modi was politically evolved from the Hindu nationalist/fascist milieu of the RSS. (An “alumnus” of that political environment murdered Gandhi.) In addition, we have seen that Modi’s election was heavily buttressed by Ebay’s Pierre Omidyar, who has underwritten Glenn Greenwald’s recent journalistic ventures and partially bankrolled the 2014 Ukraine coup that brought the heirs of the OUN/B to power. Modi is implementing the laissez-faire agenda favored by Omidyar, a cynical “corporatist” agenda that is poised to restore child labor in India.

The laissez-faire/corporatist agenda championed by Omidyar and Morsi is at one with the “austerity” doctrine promulgated by the GOP, Germany, the IMF and the Underground Reich. “Get to work, kids! And be sure to bring your wages home to your [unemployed] mom and dad.”

“The Modi Gov­ern­ment Is Send­ing Mil­lions of Kids Back into Exploita­tive Labour” by Rashme Seh­gal; Quartz; 5/4/2015.

An amend­ment to the Child Labour Pro­hi­bi­tion Act pro­posed by the Naren­dra Modi-led gov­ern­ment is about to undo years of hard-won progress in the area of child labour—and con­demn mil­lions of kids to exploita­tive employment. The amend­ment will allow chil­dren below the age of 14 to work in “fam­ily enter­prises”—a euphemism for indus­tries such as carpet-weaving, beedi–rolling, gem-polishing, lock-making and matchbox-making. The new norms will also apply to the enter­tain­ment indus­try and sports.

The amend­ment flies in the face of the Right to Edu­ca­tion Act (RTE), 2009, which guar­an­tees edu­ca­tion to every child. After the RTE came in, child labour dropped from 12.6 mil­lion in 2001 to 4.3 mil­lion in 2014. The amend­ment will undo much of that progress. It will also be a seri­ous set­back to all the work done by activists, such as Swami Agnivesh and Nobel lau­re­ate Kailash Sat­yarthi, to res­cue chil­dren from bonded labour and exploitation. Mirzapur-based Shamshad Khan, pres­i­dent of the Cen­tre for Rural Edu­ca­tion and Devel­op­ment Action, calls the move “retrogressive.”

“All our cam­paigns to end bonded child labour, start­ing from the eight­ies, will go up in smoke,” Khan said. “Schools will be emp­tied out, and poor chil­dren in states like Bihar, Jhark­hand and Uttar Pradesh will be back to work­ing in sheds and makeshift fac­to­ries that will all go by the nomen­cla­ture of ‘fam­ily enter­prises.’ The worst-hit will be the chil­dren of Dal­its, Mus­lims, tribal fam­i­lies and those belong­ing to mar­gin­alised communities.”

The amend­ment can also be used to deny edu­ca­tion to the girl child, who will be sucked into all forms of house­work. Accord­ing to gov­ern­ment sta­tis­tics, male lit­er­acy lev­els in 2014 stood at about 82%, while female lit­er­acy lev­els were as low as 64%. The school drop-out rate for girls is almost dou­ble the rate for boys.

An uncon­sti­tu­tional change Ban­daru Dat­ta­treya, India’s min­is­ter of labour and employ­ment, announced in early April that the gov­ern­ment planned to intro­duce amend­ments to the Child Labour Pro­hi­bi­tion Act in the cur­rent ses­sion of Parliament. His min­istry, while seek­ing the amend­ments, said the Act will not apply to chil­dren help­ing fam­i­lies in home-based work, and espe­cially fam­i­lies work­ing in agri­cul­ture and animal-rearing.

 The objec­tive of these amend­ments, accord­ing to min­istry offi­cials, is to help chil­dren nur­ture a spirit of entre­pre­neur­ship. They will par­tic­u­larly help chil­dren of fam­i­lies cur­rently liv­ing at sub­sis­tence lev­els, the min­istry claims. Child rights activists say the move will ben­e­fit fac­tory own­ers in India’s cow belt. Their prof­its will esca­late four­fold as chil­dren could be made to work longer hours and paid less than adults.

Enakshi Gan­guly Thukral of HAQ Cen­tre for Child Rights believes this is an attempt by the Modi gov­ern­ment to ensure a size­able chunk of the pop­u­la­tion remains in the infor­mal sec­tor, deprived of min­i­mum wages and social security. “The gov­ern­ment is not in a posi­tion to pro­vide jobs for mil­lions of young peo­ple,” said Thukral. “Such a ret­ro­grade step will help ensure mil­lions of kids remain illit­er­ate and, there­fore, unemployable.”

Bad old days again

Major cut­backs in the 2015 bud­get in the areas of health, women and chil­dren, and edu­ca­tion will fur­ther com­pound this prob­lem. Thukral said labour offi­cials are already guilty of under-reporting child labour. “But once child labour is per­mit­ted under one guise or the other, then even a min­i­mum [level] of account­abil­ity will cease to exist,” she said. Labour offi­cials at the dis­trict level are empow­ered to file cases against employ­ers hir­ing chil­dren but few employ­ers are ever con­victed.

Sta­tis­tics from the labour min­istry for 2004–2014 show that there have been 1,168 con­vic­tions for chil­dren employed in haz­ardous indus­tries with about Rs83 lakh col­lected in fines. This money has been des­ig­nated for the reha­bil­i­ta­tion and wel­fare of child labour. How­ever, in this period, only Rs5 lakh was dis­bursed from this fund. Khan recalls the period before the RTE Act, when dalals (touts) openly knocked on the doors of rich seths (mer­chants or busi­ness­men) to sell traf­ficked children.

“In the eight­ies, kids were being paid a daily wage of as lit­tle as Rs4 per day,” he said. “We kept up pres­sure on the gov­ern­ment, insist­ing that all out-of-school kids be cat­e­gorised as child labour. This open traf­fick­ing of kids declined sharply with the RTE Act. If the BJP (Bharatiya Janata Party) suc­ceeds in intro­duc­ing such a dan­ger­ous amend­ment, we will be back to those old days.” . . . .

5. In FTR #866, we examined Silicon Valley’s extravagant, almost erotic celebration of Indian Prime Minister Narendra Modi, whose political career and BJP Party are inextricably linked with the RSS, a Hindu nationalist/fascist party. Underscoring the hypocrisy of the “libertarians” who fawned over Modi and the moral, philosophical bankruptcy of their orientation, we note what Modi is actually dong in India.

In Modi’s India, anyone taking issue with the Hindu nationalist/fascist dogma of the RSS, BJP and Modi himself faces potential lethal censorship. We note that, just as political dissidents and civil libertarians are being murdered in India by the political forces empowered in party by EBay’s Pierre Omidyar, Ukraine is being beset by political murder as well. (Omidyar helped finance the Maidan coup in Ukraine, as well as the political ascent of Modi and his BJP.)

“India’s Attack on Free Speech” by Sonia Faleiro; The New York Times; 10/02/2015.

In today’s India, secular liberals face a challenge: how to stay alive. In August, 77-year-old scholar M. M. Kalburgi, an outspoken critic of Hindu idol worship, was gunned down on his own doorstep. In February, the communist leader Govind Pansare was killed near Mumbai.

And in 2013, the activist Narendra Dabholkar was murdered for campaigning against religious superstitions. These killings should be seen as the canary in the coal mine: Secular voices are being censored and others will follow. While there have always been episodic attacks on free speech in India, this time feels different.

The harassment is front-page news, but the government refuses to acknowledge it. Indeed, Prime Minister Narendra Modi’s silence is being interpreted by many people as tacit approval, given that the attacks have gained momentum since he took office in 2014 and are linked to Hindutva groups whose far-right ideology he shares. Earlier this month, a leader of the Sri Ram Sene, a Hindu extremist group with a history of violence including raiding pubs and beating women they find inside, ratcheted up the tensions. He warned that writers who insulted Hindu gods were in danger of having their tongues sliced off. For those who don’t support the ultimate goal of these extremists — a Hindu nation — Mr. Modi’s silence is ominous.

This is a turning point for India, a country that has taken pride in being a liberal democracy and that often adopts a high-minded tone when neighbors fall short of the same standards. When the liberal Pakistani politician Salman Taseer was assassinated in 2011, the Indian journalist M. J. Akbar, now the national spokesman for the Bharatiya Janata Party, or B.J.P., chided, “If Salman Taseer had been an Indian Muslim, he would still have been alive.”

In the run-up to the 2014 general elections in Bangladesh, India expressed concern over the future of the country’s democratic institutions. We should be worrying instead about what’s happening in India, and recognize that it could go the way of the very neighbors it criticizes. As Nikhil Wagle, a prominent liberal journalist based in Mumbai, told me, “Without secularism, India is a Hindu Pakistan.”

The murders in India share striking similarities with the killings of four Bangladeshi bloggers this year. But while there was a global outcry over what happened in Bangladesh, India is hiding behind its patina of legitimacy granted by being the world’s largest democracy. Like the murdered bloggers, the Indian victims held liberal views but were not famous or powerful.

Mr. Kalburgi had publicly expressed skepticism toward idol worship in Hinduism, but he didn’t pose a threat to anyone. While the authorities are pursuing the culprits on a case-by-case basis, the overarching attack on free speech has not been addressed. The threats and killings have created an atmosphere of self-censorship and fear. Some of the killers are still on the loose, and while in one hand they wield a gun, in the other they wave a list. On Sept. 20, Mr. Wagle, the journalist, learned from a source that intercepted phone calls had revealed that members of yet another right-wing Hindu group, Sanatan Sanstha, had marked him as their next victim.

The extremists who celebrated the August murder of Mr. Kalburgi were more direct: They used Twitter to warn K. S. Bhagwan, a retired university professor who is critical of the Hindu caste system, that he would be next. The goal of transforming India from a secular state to a Hindu nation, which seems to be behind the murders, is abetted not just by the silence of politicians, but also by the Hindu nationalist policies of the ruling B.J.P. Over the past few months, the government has purged secular voices from high-profile institutions including the National Book Trust and the independent board of Nalanda University. The government is not replacing mediocre individuals: The chancellor of Nalanda was the Nobel laureate Amartya Sen.

It is replacing luminaries with people whose greatest qualification is faith in Hindutva ideology. The new appointees are rejecting scientific thought in favor of religious ideas that have no place in secular institutions. One of the government’s chief targets is the legacy of India’s first prime minister, Jawaharlal Nehru, who laid the foundation for a secular nation.

Last month, having nudged out the director of the Nehru Museum and Library in New Delhi, the government announced plans to rename the museum and change its focus to highlight the achievements of Mr. Modi. This is akin to repurposing the Washington Monument as an Obama museum.

In addition to erasing the contributions of long-dead liberals, B.J.P. leaders are busy promoting violent Hindu nationalists. Sakshi Maharaj, a B.J.P. member of Parliament, described Nathuram Godse, the man who assassinated Mahatma Gandhi, as a “patriot.” Although Mr. Maharaj later retracted his statement, his opinion is shared by many of his party colleagues. Gandhi’s assassin was a former member of the Rashtriya Swayamsevak Sangh, an armed Hindu group, with which Mr. Modi has been associated since he was 8 years old.

The B.J.P.’s efforts to reshape institutions that embody secular values — values they dismiss as “Western” — was certainly anticipated. It came as no surprise when the culture and tourism minister, Mahesh Sharma, recently promised to “cleanse every area of public discourse that had been westernized.” Mr. Sharma is well aware of the connotations of the word he used.

It’s also not surprising that Hindu fundamentalists would feel empowered in the shadow of a Hindu nationalist government. Still, few expected that freedom of speech would become a contestable commodity and that some who exercised it would lose their lives. The realization has made for decisions that were once unthinkable. Last December, the acclaimed author Perumal Murugan informed the police that he’d received threats from Hindu groups angered by a novel he wrote in 2010. Extremists staged burnings of his book and demanded a public apology from him. The police suggested he go into exile. Realizing he was on his own, in January Mr. Murugan announced the withdrawal of his entire literary canon. On Facebook, he swore to give up writing, in essence apologizing for his life’s work out of fear for his family’s safety. It’s hard to accept what is happening in India. It is easier to ignore or dismiss the attacks and the threats as a liberal persecution complex or a phase that will last only as long as the B.J.P. is in power. But the country is undergoing a tectonic shift that will have long-term repercussions.

The attacks in India should not be seen as a problem limited to secular writers or liberal thinkers. They should be recognized as an attack on the heart of what constitutes a democracy — and that concerns everyone who values the idea of India as it was conceived and as it is beloved, rather than an India imagined through the eyes of religious zealots. Indians must protest these attacks and demand accountability from people in power. We must call for all voices to be protected, before we lose our own.

6. Further evidence of the nature of Modi’s governance:

“India Politics Are Backdrop In Mob Attack” by David Barstow and Suhasini Raj; The New York Times; 10/05/2015; p. A4.

The vigilantes from Save the Cow sprang into action the moment they heard a rumor that a cow’s slaughtered remains had been found near an electrical transformer looming over the heart of this village. They quickly raised the alarm through text messages and phone calls. A local Hindu priest was asked to alert villagers from his temple loudspeaker. Soon, about 1,000 men had gathered by the transformer. There was no sign that a cow, a holy symbol for Hindus, had been slaughtered. Nonetheless, the men proceeded through zigzagging alleys to the home of the suspected cow killer, Mohammed Ikhlaq, one of the few Muslims living in this village about 30 miles east of New Delhi.

Mr. Ikhlaq and his wife, Ikraman, were on their second-floor patio, dozing after dinner and prayers. Suddenly their home was swarming with men. Mrs. Ikhlaq heard someone shout, “Kill them.” She, her husband and their son Danish, 20, retreated inside, behind a thick wooden door. The mob shattered the door. “What’s the matter?” Mrs. Ikhlaq cried out. An incredulous voice replied from the dark, “After slaughtering a cow, you are asking us what’s the matter?”

Men began to paw at Mrs. Ikhlaq, so she bit hard into a sweaty hand, broke free and fled downstairs, “too scared to even breathe,” she said in an interview. Upstairs, the mob bludgeoned her husband with her sewing machine and smashed her son’s head with a brick. Then they dragged Mr. Ikhlaq down 14 cement steps and out to the main road by the transformer, where he was left for all to see.

Mr. Ikhlaq was declared dead early Tuesday morning, hours after the attack; his son remains in critical condition. But in interviews last week, more than a half-dozen members of Save the Cow expressed little remorse for what happened at the Ikhlaqs’ home. Instead, they blamed Mr. Ikhlaq for inciting the mob’s fury by slaughtering and eating a cow — an allegation dismissed by the Ikhlaq family and the police, who have filed murder charges against 10 men. . . . .

. . . . Many leaders of Save the Cow here are also prominent local organizers in Prime Minister Narendra Modi’s Hindu nationalist Bharatiya Janata Party, or B.J.P., which is vying to oust the socialist party that leads Uttar Pradesh, a vast northern state with more than 200 million residents, including the 20,000 in this village. Mr. Tomar, 24, for example, is the general secretary of the local B.J.P. youth wing. Mr. Nagar, 33, is the state secretary of the B.J.P. youth wing. By week’s end, they and many other B.J.P. leaders were blaming the governing party in Uttar Pradesh for the attack in Bisada. . . .

. . . . Save the Cow and B.J.P. leaders here have also roundly condemned the decision by the police to bring murder charges. In their view, the death of Mr. Ikhlaq was at most the unintended byproduct of a chaotic, highly charged situation of his own making. “He slipped and his head hit the road and he died,” Mr. Tomar said, adding: “These things happen. It’s a mob.”

Mr. Modi’s culture minister, Mahesh Sharma, who represents this area in the Indian Parliament, went so far as to tell The Indian Express that Mr. Ikhlaq’s death “should be considered as an accident.”

7. Pierre Omid­yar–Glenn Greenwald’s finan­cial angel–helped finance the Ukrain­ian coup, along with AID. The lat­ter is a fre­quent cover for U.S. intel­li­gence activities.

We note that Oleh Rybachuk, the recip­i­ent of Omidyar’s funds, was the right-hand man for Vik­tor Yuschenko in the Orange Rev­o­lu­tion.

 “Pierre Omid­yar Co-funded Ukraine Rev­o­lu­tion Groups with US gov­ern­ment, Doc­u­ments Show” by Mark Ames;Pando Daily; 2/28/2014.

. . . . Pando has con­firmed that the Amer­i­can gov­ern­ment – in the form of the US Agency for Inter­na­tional Devel­op­ment (USAID) – played a major role in fund­ing oppo­si­tion groups prior to the rev­o­lu­tion. More­over, a large per­cent­age of the rest of the fund­ing to those same groups came from a US bil­lion­aire who has pre­vi­ously worked closely with US gov­ern­ment agen­cies to fur­ther his own busi­ness inter­ests. This was by no means a US-backed “coup,” but clear evi­dence shows that US invest­ment was a force mul­ti­plier for many of the groups involved in over­throw­ing Yanukovych. But that’s not the shock­ing part. What’s shock­ing is the name of the bil­lion­aire who co-invested with the US gov­ern­ment (or as Wheeler put it: the “dark force” act­ing on behalf of “Pax Amer­i­cana”). Step out of the shad­ows….

Wheeler’s boss, Pierre Omid­yar. Yes, in the annals of inde­pen­dent media, this might be the strangest twist ever: Accord­ing to finan­cial dis­clo­sures and reports seen by Pando, the founder and pub­lisher of Glenn Greenwald’s government-bashing blog,“The Inter­cept,” co-invested with the US gov­ern­ment to help fund regime change in Ukraine. * * * * When the rev­o­lu­tion came to Ukraine, neo-fascists played a front-center role in over­throw­ing the country’s pres­i­dent. But the real polit­i­cal power rests with Ukraine’s pro-western neolib­er­als.

Polit­i­cal fig­ures like Oleh Rybachuk, long a favorite of the State Depart­mentDC neo­consEU, and NATO—and the right-hand man to Orange Rev­o­lu­tion leader Vik­tor Yushchenko. Last Decem­ber, the Finan­cial Times wrote that Rybachuk’s “New Cit­i­zen” NGO cam­paign “played a big role in get­ting the protest up and run­ning.”

New Cit­i­zen, along with the rest of Rybachuk’s inter­lock­ing net­work of western-backed NGOs and cam­paigns— “Cen­ter UA” (also spelled “Cen­tre UA”), “Chesno,” and “Stop Cen­sor­ship” to name a few — grew their power by tar­get­ing pro-Yanukovych politi­cians with a well-coordinated anti-corruption cam­paign that built its strength in Ukraine’s regions, before mass­ing in Kiev last autumn. The efforts of the NGOs were so suc­cess­ful that the Ukraine gov­ern­ment was accused of employ­ing dirty tricks to shut them down.

In early Feb­ru­ary, the groups were the sub­ject of a mas­sive money laun­der­ing inves­ti­ga­tion by the eco­nom­ics divi­sion of Ukraine’s Inte­rior Min­istry in what many denounced as a polit­i­cally moti­vated move. For­tu­nately the groups had the strength – which is to say, money – to sur­vive those attacks and con­tinue push­ing for regime change in Ukraine. The source of that money? Accord­ing to the Kyiv Post, Pier­rie Omidyar’s Omid­yar Net­work (part of the Omid­yar Group which owns First Look Media and the Inter­cept) pro­vided 36% of “Cen­ter UA”’s $500,000 bud­get in 2012— nearly $200,000. USAID pro­vided 54% of “Cen­ter UA”’s bud­get for 2012. Other fun­ders included the US government-backed National Endow­ment for Democ­racy. . . . . . . . In 1992, after the col­lapse of the Soviet Union, Rybachuk moved to the newly-formed Ukraine Cen­tral Bank, head­ing the for­eign rela­tions depart­ment under Cen­tral Bank chief and future Orange Rev­o­lu­tion leader Vik­tor Yushchenko. In his cen­tral bank post, Rybachuk estab­lished close friendly ties with west­ern gov­ern­ment and finan­cial aid insti­tu­tions, as well as proto-Omidyar fig­ures like George Soros, who funded many of the NGOs involved in “color rev­o­lu­tions” includ­ing small dona­tions to the same Ukraine NGOs that Omid­yar backed. (Like Omid­yar Net­work does today, Soros’ char­ity arms—Open Soci­ety and Renais­sance Foundation—publicly preached trans­parency and good gov­ern­ment in places like Rus­sia dur­ing the Yeltsin years, while Soros’ finan­cial arm spec­u­lated on Russ­ian debt and par­tic­i­pated in scandal-plagued auc­tions of state assets.)

 In early 2005, Orange Rev­o­lu­tion leader Yushchenko became Ukraine’s pres­i­dent, and he appointed Rybachuk deputy prime min­is­ter in charge of inte­grat­ing Ukraine into the EU, NATO, and other west­ern insti­tu­tions. Rybachuk also pushed for the mass-privatization of Ukraine’s remain­ing state hold­ings. Over the next sev­eral years, Rybachuk was shifted around Pres­i­dent Yushchenko’s embat­tled admin­is­tra­tion, torn by inter­nal divi­sions. In 2010, Yushchenko lost the pres­i­dency to recently-overthrown Vik­tor Yanukovych, and a year later, Rybachuk was on Omidyar’s and USAID’s pay­roll, prepar­ing for the next Orange Rev­o­lu­tion.

As Rybachuk told the Finan­cial Times two years ago: “We want to do [the Orange Rev­o­lu­tion] again and we think we will.”

Some of Omidyar’s funds were specif­i­cally ear­marked for cov­er­ing the costs of set­ting up Rybachuk’s “clean up par­lia­ment” NGOs in Ukraine’s regional cen­ters. Shortly after the Euro­maidan demon­stra­tions erupted last Novem­ber, Ukraine’s Inte­rior Min­istry opened up a money laun­der­ing inves­ti­ga­tion into Rybachuk’s NGOs, drag­ging Omidyar’s name into the high-stakes polit­i­cal strug­gle. Accord­ing to a Kyiv Post arti­cle on Feb­ru­ary 10 titled, “Rybachuk: Democracy-promoting non­govern­men­tal orga­ni­za­tion faces ‘ridicu­lous’ investigation”: “Police are inves­ti­gat­ing Cen­ter UA, a public-sector watch­dog funded by West­ern donors, on sus­pi­cion of money laun­der­ing, the group said. The group’s leader, Oleh Rybachuk, said it appears that author­i­ties, with the probe, are try­ing to warn other non­govern­men­tal orga­ni­za­tions that seek to pro­mote democ­racy, trans­parency, free speech and human rights in Ukraine.

“Accord­ing to Cen­ter UA, the Kyiv eco­nomic crimes unit of the Inte­rior Min­istry started the inves­ti­ga­tion on Dec. 11. Recently, how­ever, inves­ti­ga­tors stepped up their efforts, ques­tion­ing some 200 wit­nesses. “… Cen­ter UA received more than $500,000 in 2012, accord­ing to its annual report for that year, 54 per­cent of which came from Pact Inc., a project funded by the U.S. Agency for Inter­na­tional Devel­op­ment. Nearly 36 per­cent came from Omid­yar Net­work, a foun­da­tion estab­lished by eBay founder Pierre Omid­yar and his wife.

Other donors include the Inter­na­tional Renais­sance Foun­da­tion, whose key fun­der is bil­lion­aire George Soros, and National Endow­ment for Democ­racy, funded largely by the U.S. Congress.”

8. It turns out one of the key fig­ures in the Poroshenko admin­is­tra­tion, who was also heav­ily backed by Pierre Omidyar’s pro-Maidan out­fits, was the per­son in charge of push­ing the lus­tra­tion laws. Of particular significance is the fact that Svitlana Zalischuk, the recipient of Omidyar’s funding, was a key player in coordinating the activities of the so-called “respectable,” “moderate” pro-EU political cadre with the overtly fascist parties such as Svoboda and the Radical Party.

“Omidyar-Funded Can­di­date Takes Seat in New Ukraine Parliament” by Mark AmesPando Daily; 10/30/2014.

Ukraine just held its first post-revolution par­lia­men­tary elec­tions, and amid all of the oli­garchs, EU enthu­si­asts, neo-Nazisnepo­tism babies, and death squad com­man­ders, there is one newly-elected parliamentarian’s name that stands out for her con­nec­tion to Sil­i­con Val­ley: Svit­lana Zal­ishchuk, from the bil­lion­aire president’s Poroshenko Bloc party. Zal­ishchuk was given a choice spot on the president’s party list, at num­ber 18, ensur­ing her a seat in the new Rada. And she owes her rise to power to another oli­garch besides Ukraine’s pres­i­dent — Pierre Omid­yar, whose fund­ing with USAID helped top­ple the pre­vi­ous gov­ern­ment. Zalishchuk’s pro-Maidan rev­o­lu­tion out­fits were directly funded by Omidyar. Ear­lier this year, Pando exposed how eBay bil­lion­aire and Inter­cept pub­lisher Pierre Omid­yar co-funded with USAID Zalishchuk’s web of non­govern­men­tal orga­ni­za­tions — New Cit­i­zenChesnoCen­ter UA.

 Accord­ing to the Finan­cial Times, New Cit­i­zen, which received hun­dreds of thou­sands of dol­lars from Omid­yar, “played a big role in get­ting the [Maidan] protest up and run­ning” in Novem­ber 2013. Omid­yar Network’s web­site fea­tures Zalishchuk’s pho­to­graph on its page describ­ing its invest­ment in New Cit­i­zen. Zal­ishchuk was brought into the NGOs by her long­time men­tor, Oleh Rybachuk, a for­mer deputy prime min­ster who led the last failed effort to inte­grate Ukraine into the EU and NATO. Zalishchuk’s pho­tos also grace the Poroshenko Bloc’s web­site and twit­ter feed, as she emerged as one of the pres­i­den­tial party’s lead­ing spokesper­sons.

The Poroshenko Bloc is named after Ukraine’s pro-Western pres­i­dent, Petro Poroshenko, a bil­lion­aire with a lock on Ukraine’s con­fec­tionary indus­try, as well as own­ing a national TV sta­tion and other prized assets. He came to power this year thanks to the rev­o­lu­tion orig­i­nally orga­nized by Zalishchuk’s Omidyar-funded NGOs, and has rewarded her with a seat in the Rada. The president’s party tasked Zalushchik with pub­licly sell­ing the highly con­tro­ver­sial new “lus­tra­tion law” — essen­tially a legal­ized witch-hunt law first pro­posed by the neo-fascist Svo­boda Party ear­lier this year, and sub­se­quently denounced by Ukraine’s pros­e­cu­tor gen­eral and by Human Rights Watch, which described a draft of the law as “arbi­trary and overly broad and fail(s) to respect human rights prin­ci­ples,” warn­ing it “may set the stage for unlaw­ful mass arbi­trary polit­i­cal exclusion.”

The lus­tra­tion law was passed under a wave of neo-Nazi vio­lence, in which mem­bers of par­lia­ment and oth­ers set to be tar­geted for purges were forcibly thrown into trash dumps. Zal­ishchuk, how­ever, praised the lus­tra­tion law, claim­ing that the legal­ized purges would “give Ukraine a chance at a new life.” Shortly before the elec­tions, on Octo­ber 17, Zal­ishchuk used her Omidyar-funded out­fit, “Chesno,”to orga­nize a round­table with lead­ers of pro-EU and neo-fascist par­ties. It was called “Par­lia­ment for Reform”and it brought together lead­ers from eight par­ties,includ­ing Zalishchuk’s “Poroshenko Bloc” (she served as both NGO orga­nizer and as pro-Poroshenko party can­di­date), the prime minister’s “People’s Party” and lead­ers from two unabashedly neo-Nazi par­ties: Svo­boda, and the Rad­i­cal Party of Oleh Lyashko, who was denounced by Amnesty Inter­na­tional for post­ing YouTube videos of him­self inter­ro­gat­ing naked and hooded pro-Russian sep­a­ratist pris­on­ers. Lyashko’s cam­paign posters fea­tured him impal­ing a car­i­ca­tured Jew­ish oli­garch on a Ukrain­ian trident.

Mean­while, Zalishchuk’s boss, Pres­i­dent Petro Poroshenko, has led a bloody war against pro-Russian sep­a­ratists in the east of the coun­try that left at least 3700 dead in a half year of fight­ing. Human Rights Watch recently accused Poroshenko’s forces of “indis­crim­i­nate” use of clus­ter bombs in heav­ily pop­u­lated areas, that “may amount to war crimes.” Poroshenko’s forces include neo-Nazi death squads like the noto­ri­ous Azov battalion.

Last month, Poroshenko fur­ther cemented his ties to the extreme right by hail­ing Ukraine’s wartime Nazi col­lab­o­ra­tors, the vio­lently anti-Semitic UPA, as “heroes.” The fas­cist UPA par­tic­i­pated in the Holo­caust, and were respon­si­ble for killing tens of thou­sands of Jews and eth­nic Poles in their bid to cre­ate an eth­ni­cally pure Ukraine. Many UPA mem­bers filled the ranks of the Nazi SS “Gali­cia” Divi­sion.

The neo-Nazi Right Sek­tor, which spear­headed the vio­lent later stages of the Maidan rev­o­lu­tion, sees itself as the UPA’s con­tem­po­rary suc­ces­sors; Right Sektor’s leader, Dmitry Yarosh, believes that any “eth­nic minor­ity that pre­vents us from being mas­ters in our own land” is an “enemy.” Yarosh was just elected to the new parliament. This week, Omidyar Network’s “investment lead” for Ukraine, Stephen King, accepted an award for Omidyar Network’s role in a major new USAID-backed project, Global Impact Investing Network. . . .

9. Mark Ames has a new update on the ever evolv­ing nature of Pierre Omidyar’s new media empire: First is now invest­ing in a new inter­na­tional “fact check­ing” ser­vice with the National Endow­ment for Democ­racy, which is inextricably linked with U.S. intelligence and frequently functions as a front for covert operations. He also invested in a Ukrain­ian news ser­vice set up on the eve of the Maidan rev­o­lu­tion.

And it looks like there could be many more invest­ments in media orga­ni­za­tions yet to come because it now looks like the whole model for First Look Media has changed: instead of set­ting up a con­stel­la­tion of sep­a­rate inves­tiga­tive jour­nal­is­tic out­lets, First Look is just going to start invest­ing in exist­ing media enter­prises. Note that one of the founders of NED was the late Allen Weinstein, who served as George W. Bush’s head of the National Archives.

“What Pierre Did Next” by Mark Ames; Pando Daily; 7/31/2015.

The Guardian reported on Tues­day that the National Endow­ment for Democ­racy has just been banned from Rus­sia, under strict new laws reg­u­lat­ing NGOs act­ing as for­eign agents. In that story, the Guardian cited the fact that Inter­cept pub­lisher Pierre Omid­yar co-funded Ukraine rev­o­lu­tion groups with USAID and the National Endow­ment for Democ­racy (NED). If the Omid­yar con­nec­tion sounds famil­iar, that’s because it was Pando that first broke the story in Feb­ru­ary 2014 (the Guardian linked to our orig­i­nal scoop in its coverage.)

In the 18 months since we broke the story, Ukraine has col­lapsed into war and despair, with up to 10,000 peo­ple killed and one and a half mil­lion internally-displaced refugees — and top US brass talk openly of a new Cold War with nuclear-armed Rus­sia, while US mil­i­tary advi­sors train and arm Ukraini­ans to wage war on Russian-backed separatists. Svit­lana Zal­ishchuk, one of the lead­ers of the Omidyar-funded NGO that helped orga­nize last year’s rev­o­lu­tion in Kiev, is now in power as an MP in Ukraine’s par­lia­ment, a mem­ber of the new, pro-NATO president’s party bloc.

She’s gone from plucky Omidyar-funded adver­sar­ial activist, to head­ing a par­lia­men­tary sub­com­mit­tee tasked with inte­grat­ing Ukraine into NATO. I can’t think of another media tycoon who co-funded a pro-US regime change with Amer­i­can intel­li­gence cutouts like USAID and the National Endow­ment for Democ­racy.

That Putin tar­geted the NED does not mean it’s either heroic or evil—the NED’s story speaks for itself: The brain­child of Reagan’s CIA direc­tor Bill Casey, the National Endow­ment for Democ­racy was set up as an intel­li­gence cutout to sup­port US geopo­lit­i­cal power and under­mine unfriendly regimes. One of the NED co-founders, Allen Wein­stein, explained its pur­pose to the Wash­ing­ton Post:

“A lot of what we do today was done covertly 25 years ago by the CIA.”

Through­out its 30-year his­tory it’s been mired in very typ­i­cal CIA con­tro­ver­sies: In the 80s, the NED was caught fund­ing an out­lawed extreme-right French para­mil­i­tary gang dur­ing Social­ist pres­i­dent Mitterand’s rule; fund­ing a mil­i­tary leader’s vic­to­ri­ous elec­tion in Panama against a more mod­er­ate civil­ian can­di­date; and financ­ing rightwing oppo­nents of Costa Rica’s democratically-elected Nobel Peace Prize-winning pres­i­dent, whose sin was oppos­ing Reagan’s deadly, dirty war in Nicaragua.

More recently, the NED was caught fund­ing groups that orga­nized the 2002 coup against Venezuela’s democratically-elected pres­i­dent Hugo Chavez; plant­ing a “free-lance jour­nal­ist”    in the AP and New York Times to report on Haiti while the NED was simul­ta­ne­ously fund­ing rightwing groups to under­mine Haiti’s rul­ing party; and co-funding Ukraine regime-change groups with Pierre Omidyar.

This week, Omid­yar Net­work announced yet another part­ner­ship with the National Endow­ment for Democ­racy and the Poyn­ter Insti­tute to cre­ate an inter­na­tional online fact-checking hub. Given the power that a monop­oly on “objec­tive” fact-checking offers, the tie-up with the NED takes the Omid­yar alliance with the US empire and media to newer, creepier lev­els.

 In yet another Omidyar-as-private-arm invest­ment, Omid­yar invested in the slick new Ukrain­ian media, Hromadske.tv, which was set up on the eve of the Maidan rev­o­lu­tion with ini­tial seed fund­ing com­ing from the US Embassy in Kiev. Omidyar’s involve­ment in Ukraine media and “fact-checking” is all the more seri­ous given that now Wash­ing­ton and NATO talk about “coun­ter­ing” Russia’s over­hyped “infor­ma­tion war” on the West and on Ukraine—this “infor­ma­tion war” which I cov­ered a bit in my piece on Peter Pomer­ant­sev, is con­sid­ered a top and urgent geostrate­gic pri­or­ity for NATO and the West.

And now in the last week, the lat­est twist to the far­ci­cal “jour­nal­ism par­adise” shit­show: Omid­yar is report­edly in talks with the king of online tabloid-sleaze, Nick Den­ton, to invest in the latter’s perma-sued orga­ni­za­tion. As Pando’s Paul Carr wrote ear­lier this week, the ground seems to be being pre­pared for a full-on merger of the Inter­cept and Gawker, backed by Omidyar’s cash.

As of yes­ter­day, Nick Den­ton appointed John Cook — for­merly edi­tor of the Inter­cept — to be the “tem­po­rary” exec­u­tive edi­tor of Gawker. When Cook departed the Inter­cept, he wrote that “Work­ing with my Inter­cept col­leagues has been one of the most ful­fill­ing things I’ve done in my career, and my deci­sion to leave was a painful one to make.” At the same time, IBT reported that Chief Rev­enue Offi­cer, Michael Rosen, had resigned from First Look Media. Rosen’s depar­ture comes just a week after John Tem­ple, First Look’s “Pres­i­dent, Audi­ence and Prod­ucts,” stepped down from his job say­ing “There clearly is much excite­ment ahead for First Look, but I feel my con­tri­bu­tion is largely complete.”

Per­haps it’s a coin­ci­dence that both the guy who is in charge of build­ing an audi­ence for the Inter­cept and the guy tasked with mak­ing it prof­itable have left. Or per­haps not: IBT quotes a source explain­ing that “First Look would soon be mov­ing away from try­ing to cre­ate a con­stel­la­tion of mag­a­zines and begin to focus on empow­er­ing ‘con­tent cre­ators.’ That is, Omid­yar will be invest­ing cash in sites like Gawker, along­side his invest­ments in fact-checking sites and Ukraine rev­o­lu­tion­ary groups.

How will the Intercept’s audi­ence, which accepted Greenwald’s deci­sion to pri­va­tize the Snow­den secrets to Omid­yar, react if Omid­yar then sells jour­nal­ism par­adise to jour­nal­ism sleaze and the Snow­den secrets — our secrets, the public’s secrets — wind up as cap­i­tal assets in First Gawker Media? Snow­den revealed that NSA spooks were spy­ing on their lovers online habits — how will that be mon­e­tized in First Gawker Media? Where will Denton’s 20% sleaze dis­count be applied?

 

Discussion

2 comments for “FTR #889 Intercept This! Compendium on Citizen Omidyar”

  1. The school privatization movement just scored a big win in Africa. Pierre Omidyar too: Bridge International Academies, part of the Omidyar Network, won the contract to privately operate Liberia’s entire pre-primary and primary education system

    Mail & Globe Africa

    An Africa first! Liberia outsources entire education system to a private American firm. Why all should pay attention

    It could possibly be the largest and most ambitious privatisation attempt in Africa’s recent history

    31 Mar 2016 17:02 Christine Mungai

    IN January, Liberia’s minister of education made a far-reaching announcement, which nevertheless has largely flown under the radar – until now, when a top UN official has come out strongly in opposition to it.

    Liberian education Minister George Werner announced that the entire pre-primary and primary education system would be outsourced to Bridge International Academies to manage. The deal will see the government of Liberia pay over $65 million over a five-year period; public funding for education will support services subcontracted to the private, for-profit, US-based company.

    Under the public-private arrangement, the company will design curriculum materials from April to September 2017, while phase two will have the company rollout mass implementation over 5 years, “with government exit possible each year dependent on provided performance from September 2017 onwards,” the report from Liberia’s FrontPage Newspaper said.

    “Eventually the Ministry of Education is aiming to contract out all primary and early childhood education schools to private providers who meet the required standards over 5 year period,” the article states.

    It would possibly be the largest, and most ambitious privatisation attempt in Africa’s recent history, and the move has elicited mixed reactions, for good reason.

    The UN’s Special Rapporteur on the right to education, Kishore Singh, last week described it as “unprecedented at the scale currently being proposed and violates Liberia’s legal and moral obligations.”

    The UN official and human rights expert noted that provision of public education of good quality is a core function of the State.

    “Abandoning this to the commercial benefit of a private company constitutes a gross violation of the right to education,” said Singh.

    Mail & Guardian Africa breaks down the issue, and its wide-reaching implications, and why Africa should sit up and pay attention to this “education innovation” company that has roots in Silicon Valley.

    What is Bridge International Academies?

    By their own description, Bridge is the world’s largest education innovation company, with 100,000 students in its 400+ networked schools so far, mostly in Kenya and Uganda; it plans to educate 10 million children across a dozen countries in Africa and Asia by 2025, specifically targeting low-income families.

    What is the Bridge model of delivery?

    Bridge’s model is “school in a box” – a highly structured, technology-driven model that relies on teachers reading standardised lessons from hand-held tablet computers. Bridge hires education experts to script the lessons, but the teacher’s role is to deliver that content to the class. This allows Bridge to hold down costs  because it can hire teachers who don’t have college degrees – a teacher is only required to go through a five-week training programme on how to read and deliver the script.

    To keep tuition costs low – about $6 a term – Bridge depends on large class sizes. An ideal class size is 40 to 50 pupils, but the classes can get upward of 70 students. The physical infrastructure is modest too – often just simple building made of sheet metal and timber, which can be constructed in a few days.

    But the back-end – the technology running it all – is sophisticated indeed, relying on Big Data, algorithms, and automation of most school administrative tasks. Bridge says that this model gives poor families an option to get “quality education for their children for a modest fee”, in an environment where free government schools are often overcrowded, understaffed and ineffective.

    The company says its students have better grades, gaining an additional .34 standard deviation on core reading skills and an additional .51 standard deviation on maths compared to their peers in neighboring schools, “based on USAID-designed exams administered by an independent monitoring and evaluation company – translating into over 250 additional days of learning.”

    What are the objections to Bridge, and why do they matter?

    1. Teachers are robots that just read scripts off hand-held tablets, and that’s not the best way for children to learn – it discourages student interaction both with the teacher and with each other, suppresses critical thinking, and encourages rote learning. Teacher unions in the region have come out hard against the company, arguing that it will discourage the employment of qualified teachers.

    Bridge says that given the alternatives – which include government schools staffed by unmotivated teachers and other non-formal schools offering little in-house teacher training – the private school chain offers an education that’s more accountable, and subject to rigorous testing and review.

    In any case, under the traditional model, what a child is able to learn is “always limited by what the teacher knows, so you can never have the child leap-frog previous problems within that town, city or country,” according to Bridge co-founder Shannon May.

    3. Bridge’s claim that its students do better than their comparable peers at government schools seems to be from a study commissioned by the company itself, the joint civil society statement said that it was “not aware of any independent academic study available on Bridge Academies.”

    5. Mass privatisation of the education system, as Liberia is attempting, is an anathema and just wrong – no matter the positive outcomes in better grades. Provision of public education of good quality is a core function of the State, and an essential public service. Outsourcing this to the commercial benefit of a private company is a gross violation of the right to education, and a country’s international obligations, as the UN special rapporteur on education described it.

    Best testing ground

    In any case, Liberia might be the best country in Africa to “test” this model. The education system is still in shambles following a prolonged and brutally destructive 14-year civil war, which also resulted in the flight, or death, of a large chunk of trained workforce; physical infrastructure was destroyed. The Ebola outbreak of 2014-2015 just set everything back again, and Liberia is significantly behind most other countries in the African region in nearly all education statistics.

    In that case, an education system, which is modelled on accountability, standardisation, analytical rigour, and policy changes that can be backed with rich data sets – albeit private – is far better than what Liberia has at the moment.

    Still, it sets the teeth of many on edge. And the claim that Bridge gives parents a choice ceases to hold water in Liberia, where every public school may soon become a Bridge International Academy.

    “The UN’s Special Rapporteur on the right to education, Kishore Singh, last week described it as “unprecedented at the scale currently being proposed and violates Liberia’s legal and moral obligations.””
    That wasn’t exactly a ringing endorsement. But it’s happening anyway, so get ready to watch the profit motive work its magic:


    Bridge’s model is “school in a box” – a highly structured, technology-driven model that relies on teachers reading standardised lessons from hand-held tablet computers. Bridge hires education experts to script the lessons, but the teacher’s role is to deliver that content to the class. This allows Bridge to hold down costs  because it can hire teachers who don’t have college degrees – a teacher is only required to go through a five-week training programme on how to read and deliver the script.

    To keep tuition costs low – about $6 a term – Bridge depends on large class sizes. An ideal class size is 40 to 50 pupils, but the classes can get upward of 70 students. The physical infrastructure is modest too – often just simple building made of sheet metal and timber, which can be constructed in a few days.

    Remember, it’s for the children.

    Posted by Pterrafractyl | April 3, 2016, 6:20 pm
  2. Here’s an update on Bridge International Academies – the Hernando de Soto-inspired network of for-profit private schools for poor countries backed by the Omidyar Network, Bill and Melinda Gates, and the Zuckerbergs that relies on poorly educated teachers teaching from prepared scripts: A coalition of 174 civil society organizations is calling on international donors to stop supporting it because it’s prohibitively expensive for the poorest students, uses poorly paid teachers teaching from inflexible scripts, and intimidates its critics:

    The Guardian

    UK urged to stop funding ‘ineffective and unsustainable’ Bridge schools

    Civil society groups call on foreign donors not to fund Bridge International Academies, citing high fees, low pay and poor teaching methods

    Rebecca Ratcliffe and Afua Hirsch

    Thursday 3 August 2017 07.00 EDT

    A coalition of 174 civil society organisations has called on international donors, including the UK government, to drop support for a private school company operating in Africa.

    Bridge International Academies (BIA) provides technology-driven education in more than 500 primary and nursery schools in Kenya, Nigeria, Uganda, Liberia and India. Bill Gates and Mark Zuckerberg are among the high-profile philanthropists from whom the American startup has received funding.

    In a statement, campaign groups said the firm charges prohibitively high fees and that teachers are poorly paid, receive little training, and are given inflexible, scripted lessons to read from tablets. The organisations also accused BIA of intimidating its critics, a claim the company has denied.

    The statement, signed by organisations from 50 different countries including Global Justice Now and Amnesty International, cited research suggesting that the poorest students cannot afford to attend Bridge schools.

    “BIA’s model is neither effective for the poorest children nor sustainable against the educational challenges found in developing countries,” said the campaigners, who alluded to “mounting institutional and independent evidence that raises serious concerns about BIA” and warned of “significant legal and ethical risks associated with investments” in the company.

    In Kenya, sending three children to a Bridge school is estimated to represent almost a third of the monthly income of families living on $1.25 (94p) a day, according to a joint study by Kenya National Union of Teachers and Education International, a federation representing 32 million teachers and support staff. The researchers noted that teachers are required to work between 59 and 65 hours a week for a monthly salary of $100.

    Uganda’s high court ordered the closure of 63 Bridge schools last year, ruling that they provided unsanitary learning conditions, used unqualified teachers and were not properly licensed. No schools have been closed and Bridge is in dialogue with the government.

    In April, following an inquiry into UK aid spending on education, the chairman of the UK parliament’s international development committee questioned whether grant funding should have been provided to Bridge. “The evidence received during this inquiry raises serious questions about Bridge’s relationships with governments, transparency and sustainability,” Stephen Twigg wrote in a letter to the international development secretary, Priti Patel.

    Bridge’s model, under which teachers are given electronic tablets containing lesson plans, is seen by some as an answer to improving access to education in low-income countries. In Liberia, BIA is the main partner in a government pilot scheme, Partnership Schools for Liberia (PSL), that involves state-funded private operators running state primary schools. Students at the schools are not charged fees.

    The scheme was set up to address the country’s dire education outcomes. “For the sake of these kids, we had to do something,” said Liberia’s deputy minister for education, Romelle Horton. “Quality has to improve.”

    One-third of the country’s 15- to 24-year-olds are illiterate and, in 2013, none of Liberia’s 25,000 school-leavers passed the university entrance exam.

    Franklin C Jah, the vice-principal for instruction at Martha Tubman public school in Nimba county, one of the Liberian schools that has partnered with BIA, said standards have risen. “Last year, at this school, the students would just copy from the board,” he said. “The teachers would not even explain the notes. But now a computer tells us what to do.”

    Initial government assessments suggest Bridge schools in Liberia are generally outperforming their state counterparts. The percentage of pupils scoring zero in reading comprehension in Bridge schools fell by 14% among year 1 pupils, while it increased 2% in government schools. However, pupil attendance was higher in government-run schools: 70%, compared with 60% in Bridge schools by the fourth school term.

    But Mary Mulbah, president of the National Teachers’ Association of Liberia, has criticised the government for pushing ahead with plans to expand the scheme before receiving results from a larger study. “We don’t agree that student test scores alone should be used to decide whether to dismantle our public education system,” she wrote in a public letter.

    Responding to the criticism from civil society groups, BIA said it provides high-quality education to marginalised and remote communities across Africa. The company pointed out that it costs an average of just under $7 (£5) a month to send a child to Bridge, and that 10% of students are on scholarships. BIA added that teachers work about 54 hours a week and are given high-quality training before and during their careers, with salaries – between $95 and $116 a month in Kenya – higher than in other non-formal schools.

    “Our pupils are outperforming their peers in national exams over consecutive years. Our model means that we’re able to attract new investment towards solving one of the world’s most pressing problems: hundreds of millions of children who are not learning,” the Bridge statement said.

    “Public schools and Bridge schools can and do operate side by side to serve communities in countries where there are major shortages of nurseries and primary schools. We help governments quickly address the gap between how many schools they have and how many they need.”

    ———-

    “UK urged to stop funding ‘ineffective and unsustainable’ Bridge schools” by Rebecca Ratcliffe and Afua Hirsch; The Guardian; 08/03/2017

    In Kenya, sending three children to a Bridge school is estimated to represent almost a third of the monthly income of families living on $1.25 (94p) a day, according to a joint study by Kenya National Union of Teachers and Education International, a federation representing 32 million teachers and support staff. The researchers noted that teachers are required to work between 59 and 65 hours a week for a monthly salary of $100.

    The billionaire-backed for-profit education paradigm for the poorest people in the world gobbles up a third of household incomes for the poorest people by hiring underpaid, undereducated people to become teachers who are “teachers” in name only since they simply read from a script. Behold, the miracle of the for-profit marketplace! Is there anything it can’t do?

    So does Bridge International have a plan for addressing the lack of affordability and stilted approach to teaching that turns instructors into classroom automatons? Well, based on the following article that goes into greater detail on the various problems with the program, no there is no plan for addressing the automaton-instructor issue. But at the very end of the article it does hint at an approach Bridge International is considering for addressing the affordability issue: micro-loans to the poorest families

    The New York Times

    Can a Tech Start-Up Successfully Educate Children in the Developing World?

    Bridge International Academies — a chain of inexpensive private schools — has ambitious plans to revolutionize education for poor children. But can its for-profit model work in some of the most impoverished places on Earth?

    By PEG TYRE
    JUNE 27, 2017

    Last fall, when I visited Kawangware, a densely populated slum outside Nairobi, Kenya, the morning was bright, and a breeze provided a welcome respite from the smell of the open sewers that run like septic capillaries through the back streets and alleys. Extreme poverty makes life difficult here, and H.I.V. and waterborne illness are rife. Most homes are one-room corrugated-metal shacks that lack electricity, running water or indoor plumbing. It was an unlikely place to open a for-profit private school. But there, along a pitted road, stood an outpost of Bridge International Academies, an ambitious experiment in bringing market-based education to communities like this around the world.

    Stepping inside the green-painted metal fencing, I ducked into one of two low, rectangular school buildings, which had been constructed from rough-hewed wood and sheets of bright green metal. From the hallway, one of Bridge’s founders, Shannon May, urged me to look through the chicken-wire windows. The dim, spare, well-swept classrooms had uneven concrete floors and no electric lights. Inside, a third-grade teacher was reading from a computer tablet, reciting a lesson script that had been transmitted from the Bridge headquarters in central Nairobi, a 45-minute drive away. The instructor quietly spoke the lesson as he wrote on the chalkboard, explaining the math symbols that indicate ‘‘greater than’’ or ‘‘less than.’’ Twenty-three third-grade students, all dressed in bright green Bridge uniforms, were doing their best to follow along. Because Bridge schools are standardized, May pointed out that the teachers were working from the same synchronized lesson guide that was being delivered in hundreds of Bridge’s schools in Kenya, allowing the company to ensure that students everywhere were receiving a uniform curriculum.

    Bridge operates 405 schools in Kenya, educating children from preschool through eighth grade, for a fee of between $54 and $126 per year, depending on the location of the school. It was founded in 2007 by May and her husband, Jay Kimmelman, along with a friend, Phil Frei. From early on, the founders’ plans for the world’s poor were audacious. ‘‘An aggressive start-up company that could figure out how to profitably deliver education at a high quality for less than $5 a month could radically disrupt the status quo in education for these 700 million children and ultimately create what could be a billion-dollar new global education company,’’ Kimmelman said in 2014. Just as titans in Silicon Valley were remaking communication and commerce, Bridge founders promised to revolutionize primary-school education. ‘‘It’s the Tesla of education companies,’’ says Whitney Tilson, a Bridge investor and hedge-fund manager in New York who helped found Teach for America and is a vocal supporter of charter schools.

    The Bridge concept — low-cost private schools for the world’s poorest children — has galvanized many of the Western investors and Silicon Valley moguls who learn about the project. Bill Gates, the Omidyar Network, the Chan Zuckerberg Initiative and the World Bank have all invested in the company; Pearson, the multinational textbook-and-assessment company, has done so through a venture-capital fund. Tilson talked about the company to Bill Ackman, the hedge-fund manager of Pershing Square, which ultimately invested $5.8 million through its foundation. By early 2015, Bridge had secured more than $100 million, according to The Wall Street Journal.

    The fact that Bridge was a for-profit company gave pause to some NGOs that work in developing countries. But others reasoned that in the last decade, for-profit companies backed by what are called social-impact investors — people and institutions that make money by doing good — had successfully brought about important innovations, like solar-power initiatives and low-cost health clinics, in poor countries. Bridge’s model relied on similar investors but was even more ambitious in its dreams of scale. ‘‘There is a great demand for this,’’ May said in an M.I.T. video from 2016. Some of the company’s backers, she said, were ‘‘not social-impact investors,’’ continuing that ‘‘it was straight commercial capital who saw, ‘Wow, there are a couple billion people who don’t have anyone selling them what they want.’?’’ For a 2010 case study on the company, Kimmelman told the Harvard Business School that return on investment could be 20 percent annually.

    By 2015, Bridge was educating 100,000 students, and the founders claimed that they were providing a ‘‘world-class education’’ at ‘‘less than 30 percent’’ of what ‘‘the average developing country spends per child on primary education.’’ This would represent a remarkable achievement. None of the founders had traditional teaching experience. May had been an unpaid teacher at a school in China; Kimmelman worked with teachers and administrators developing an ed-tech company. How had they pulled it off? In interviews and speeches, they credited cutting-edge education technology and business strategies — the company monitors and stores a wide range of data on subjects including teacher absenteeism, student payment history and academic achievement — along with their concern for the well-being of the world’s poorest children. That potent mixture, they said, had allowed them to begin solving a complex and intractable problem: how to provide cheap, scalable, high-quality schooling for the most vulnerable, disadvantaged children on earth. Their achievement, they believed, could change the world — the subject line of a 2014 Bridge company email read, ‘‘What do Bill Gates, Steve Jobs, Jay Kimmelman and Shannon May have in common?’’ The next year, the venture capitalist Greg Mauro, who is a Bridge board member, told The Wall Street Journal that if all went as planned, the company would seek an initial public stock offering in 2017.

    By 2016, in addition to the hundreds of Bridge schools open in Kenya, 63 were up and running in Uganda and 23 in Nigeria. (They would later open four schools in India.) In March of that year, the Liberian government decided that Bridge might be the key to overhauling the nation’s barely functioning education system, and officials there struck a deal with the company that handed over the operation of 50 primary schools, with the potential for letting them run many more in the future.

    At the same time, Bridge was facing difficulties in the countries where it had been teaching the longest. In Kenya, enrollment was growing more slowly than the founders anticipated. A teachers’ union was mounting a vocal opposition. Some parts of the Kenyan government were cracking down, too. While Uber and Airbnb exploded in the gray areas in regulations that governed taxis and hotels, Bridge had trouble operating within the thicket of complicated, restrictive Kenyan education regulations. ‘‘Technically, we’re breaking the law,’’ May said in a 2013 article in TES, an education publication, ‘‘but so are thousands of other schools who are operating like this.’’ In February 2017, a high court in the Kenyan county Busia upheld a decision to close 10 of 12 Bridge schools; Bridge appealed, and the schools remained open. In Uganda, a similar dynamic was at play. A few months earlier, the high court issued an order for Bridge schools to be closed because government inspectors said that children were being taught in substandard facilities and unsanitary conditions. Bridge successfully appealed, and the schools remain open.

    Rather than approaching profitability, the company was operating at a loss of $1 million a month. In March of this year, May went to London to provide testimony to Parliament as part of a series of hearings about the British government’s international-development efforts in education, including $4.4 million of British government funding for Bridge that had allowed them to expand to Nigeria. In April, the committee chairman issued an open letter to Britain’s secretary of state for international development saying no further investments should be made until there has been ‘‘clear, independent evidence that the schools produce positive learning outcomes for pupils’’ and that there were ‘‘serious questions about Bridge’s relationships with governments, transparency and sustainability.’’ Those questions were echoes, perhaps, of the same question that Bridge skeptics had asked from the beginning: Even if its big dream made sense in theory, could it actually work amid the complicated political forces and brutal poverty of the nations whose children were most in need?

    The first inklings of the idea behind Bridge came to May and Kimmelman in 2005. They were in their late 20s and living in Huangbaiyu, a village in northeast China where May was doing her doctoral work in anthropology, and they began to do research on the profound effects of educational failure in poor communities. ‘‘Heads of households who didn’t graduate from primary school literally had houses made of shoddier materials than those who did,’’ Kimmelman recalled in a phone interview late last fall about one example that struck him, a hint of his Long Island childhood in his accent. ‘‘You could see the effect that education has on human potential in front of your eyes.’’ May, who is an Arizona native, and Kimmelman graduated from Harvard and met at their five-year reunion in 2004. By then, Kimmelman, who favors open-collared shirts and thick black glasses, had founded a software company that he said generated revenue of $20 million the year he sold it to the educational publisher Houghton Mifflin. At the time, there was increasing interest in investments in educational technology, and he soon began to wonder if he might figure out a start-up idea that could provide an educational solution that could transform lives, not just in the village of Huangbaiyu but for a generation of poor children all over the world.

    May and Kimmelman married, and in 2007 they went on an extended honeymoon in Africa, where they met up with Frei, Kimmelman’s former roommate, who previously worked at the Bay Area design and consulting firm IDEO and was working for an agricultural nonprofit in Malawi. Together the three of them came up with a plan, which eventually evolved into an idea for a vast chain of replicable schools, their growth powered by small tuition payments from working parents — fruit sellers, night watchmen and washerwomen. They’d keep costs affordable by training instructors (many of them uncertified) to deliver a scripted curriculum and by using inexpensive building materials in the construction of their schools.

    The upfront costs of developing Bridge’s software and data-collection system were daunting. Acquiring land was costly, too. Raising enough money early on was vital. ‘‘Jay’s success as an ed-tech entrepreneur opened doors’’ in Silicon Valley, says Frei, who left the company in 2013. According to an unpublished 2014 Stanford Graduate School of Business case study that Bridge provided, profitability would depend on achieving scale very quickly. By 2016, they planned to enroll more than 750,000 students, at which point they would be breaking even. By 2022, they estimated that they would educate 4.1 million students and generate $470 million in revenue.

    The company’s pitch was tailor-made for the new generation of tech-industry philanthropists, who are impatient to solve the world’s problems and who see unleashing the free market as the best way to create enduring social change. Investors were impressed by Kimmelman and the audacity of their plan. The idea of doing ‘‘high quality at low cost was really interesting,’’ says Kevin Starr, managing director of the Mulago Foundation, which eventually provided Bridge with $1 million in grant money and introduced a handful of tech moguls to Bridge. ‘‘We knew he had a track record as an entrepreneur. He could execute.’’

    The founders decided to build their headquarters in Nairobi, and they opened their first school there in 2009. Long known as the Green City in the Sun, Kenya’s capital had begun to reimagine itself as the tech capital of East Africa; newly formed telecommunications companies were placing cheap mobile phones in the hands of millions of farmers, merchants and low-wage workers, and mobile banking quickly followed. The public-education system, though, was not keeping pace. In 2003, the Kenyan government officially abolished fees for public primary education but afterward found itself unable to construct enough schools for the poor children who tried to enroll. Public schools, which receive money from the government for teachers’ salaries and building maintenance, still charge parents small amounts to cover costs like classroom supplies and firewood. The schools’ quality varies, but in some, reading materials, textbooks and even chalk can be in short supply. All public-school teachers are certified. Teacher absenteeism is widespread. According to a 2007 World Bank report, 30 percent of teachers in one region in Kenya fail to show up on any given school day. Learning levels for children are low: 70 percent of third graders cannot do second-grade work. And while some catch up, many don’t.

    Wealthy Kenyans and foreigners send their children to private schools, which are taught in English and enjoy lavish resources. The working poor often opt to send their children to parochial or local private schools, known as informal schools, that take no money from the government but charge fees that are slightly higher than public schools’. Some provide a basic education, but many do not. Sixteen percent of Kenya’s poor school-age children do not attend any school because their parents can’t afford even the smallest school payments. All Kenyan schools are required to teach the precisely prescribed national curriculum, which is taught in Kiswahili and English and mastery of which is measured by an eighth-grade test called the K.C.P.E. Obtaining a high grade on the K.C.P.E., which is seen as a sign of a child’s industriousness, intelligence and moral rectitude, means a student may continue on to high school.

    At the start, the Bridge founders quickly learned that Kenyan parents did not necessarily see Bridge schools as a better option. ‘‘When the first academies opened, our mentality was a bit like, ‘If we build it, they will come,’?’’ said Marie Leznicki, then Bridge’s vice president of brand strategy, in the Stanford case study. The case study authors explain that one challenge for the company was that parents were largely illiterate and therefore saw little difference among schools. But some academics who have studied the for-profit, low-fee chain say that some poor Kenyan parents were wary of the model. Sending a child to Bridge was more expensive than the village public school, though less expensive than some informal schools. The poorest families simply couldn’t afford the tuition and additional payments that Bridge required. ‘‘They have to pay enrollment fees, they have to pay for uniforms, they have to pay for lunch,’’ says Christopher Kirchgasler, a former charter-school teacher in the United States who spent 10 months studying Bridge schools in Nairobi and Nyeri County, north of Nairobi, for his doctoral dissertation. ‘‘For us, a matter of a few dollars is nothing, but for these very poor families, it can be a monumental obstacle.’’

    For many who did enroll, Bridge’s strict payment system quickly became onerous. Bridge’s business in Kenya depends on most parents making routine electronic payments by mobile phone. But slum-dwelling parents in Kenya are mostly occasional workers who rarely have a predictable income. In informal settlements around Nairobi, I visited 10 or so parents in their homes who explained the fragile finances of their lives. A sick child, an uptick in the price of corn meal or even a prolonged rainstorm can throw a family on the margins into an economic crisis. In most informal and public schools, payment terms are flexible, and the subject of protracted negotiation. Bridge says that it works with families to meet their needs. But many people told me that the school sends children home if fees are not paid.

    ‘‘They tell you, ‘Sit at home with your child until you get the money,’?’’ says one parent, a vegetable seller married to an unemployed welder who has two children enrolled at a Bridge school in Nairobi’s Mathare slum. Another mother with a 9-year-old child says she found it difficult to make Bridge payments: ‘‘At times I’ve gone without eating so I can pay school fees.’’

    Bridge executives say their schools depend on paying customers. ‘‘We get criticized for being bloodless capitalists,’’ Michael Conway, Bridge’s East Africa director of operations, told me when I met him in Nairobi last September, ‘‘but we know families make choices about who gets paid first. We don’t want to be the last vendor paid. If we become that, then our financial model would be difficult to sustain.’’

    Bridge does not comment on the details of its financial performance, so neither May nor Kimmelman would say how many of Bridge’s Kenyan schools maintain enough enrollment to sustain their model. May says that Bridge currently has 80,000 students enrolled, down 10,000 from last year. ‘‘Before the campaign to attack Bridge began, the academies across Kenya were financially sustainable,’’ she says. Conway acknowledged that the situation on the ground made things complicated. ‘‘It is difficult to keep up enrollment and make the schools break even,’’ Conway said, ‘‘because the churn is so high.’’ He explained that in 2017, thousands of enrolled children were not paid up.

    Some education experts say that Bridge’s plans for an international chain of low-fee, for-profit private schools rests on a flawed assumption. While such schools can work well for the relatively small number of families in poor communities who have salaries, says Keith Lewin, a professor emeritus of development and international education at the University of Sussex in Britain who has opposed the model, it is unrealistic to expect the most impoverished families to be able to pay. ‘‘People who engage in a discourse around making a vast number of the poorest people in Africa pay $6 every month for school tuition are people who have no idea what the lives of people living at or below the poverty line are actually like.’’

    Inside the Bridge school in Kiserian, an hour’s drive from central Nairobi, students wore the same green uniforms and sat at attention behind the same rough wooden desks I saw in Kawan­gware. In front of a blackboard, a preschool teacher, Gladys Ngugi Nyambara, a thin woman also dressed in bright green, held a Bridge ‘‘teacher computer’’ that contained a recently downloaded lesson script on recognizing the ‘‘F’’ sound in common English words. Nyambara held up a picture of a fish and saw these words on the e-reader’s screen: What is this? (signal) Fish.

    She gestured toward the class with the picture and delivered the line as precisely as she could. ‘‘What is this?’’ She snapped her fingers. ‘‘FEESSH.’’ She surveyed the 26 expectant faces in front of her. Her eyes went back to the script on the gray rectangular tablet. Listen. Say it the slow way. FISH. She followed the prompt. ‘‘Listen, class. This is a FEESSH.’’

    There was a pause, and the teacher leaned over the e-reader. Our turn. Pupils say it the slow way. (signal) Fish. ‘‘Class, your turn.’’ She snapped her fingers again. ‘‘What is this? ’’

    After some uncertainty over whether to use ‘‘this’’ or ‘‘that,’’ the children began to dutifully respond. ‘‘This is a FEEEESH.’’

    Nyambara pressed on, repeating the call-and-response five more times. ‘‘This is a FEESH. Now class?’’ Snap. ‘‘This is a FEESH,’’ responded the children, their voices moving from uncertainty to singsong, pleased to be catching on.

    The curriculum transmitted into classrooms is one of the company’s main selling points to investors, many of whom see the establishment of a standard curriculum delivered through technology as a solution to struggling schools. In 2013 the company began hiring United States charter-school teachers in Cambridge, Mass., to write Bridge lessons that were then loaded onto the e-reader in East African classrooms each day.

    The challenge for the American writers was to meet the curriculum set by the Kenyan government while also trying to improve the outcomes. ‘‘We found that teachers in Kenya were used to lecturing at the front of the classroom, and children were passive — they weren’t asking or even formulating questions,’’ says Michael Goldstein, a charter-school founder who worked as chief academic officer at Bridge from 2013 to 2016. ‘‘So in our lesson scripts, we tried to get away from long periods of teachers talking. In a typical Bridge lesson, the teacher reads the explanation for about 10 minutes, he cold-calls a student to check for understanding, he gets students to talk among themselves or work in groups for 20 minutes as the teacher moved between desks. What we are going for is active classrooms — and this is something really different for the children we serve.’’ During 2016, Bridge’s curriculum team pushed to learn from their results so far, poring over 10,000 photographs of lesson books in Kenya to see evidence of what teaching techniques are working best.

    The e-reader all but guarantees that every instructor, despite his or her education or preparation level, has a lesson script ready for every class — an important tool in regions where teachers have few resources. But scripts can be confining, some teachers told me. And in some of the 20 or so Bridge classrooms I observed, pupils occasionally asked questions, but Bridge instructors ignored them. Teachers say that they are required to read the day’s script as written or risk a reprimand or eventual termination, and they do not have time to entertain questions. Bridge says that ‘‘teachers are required to reference the day’s teachers’ guide and to diligently work to ensure all material is covered in each lesson.’’ Still, an alert teacher at the head of a class is its own victory. Although I saw a range of public-school classrooms, in one, the teacher was sound asleep, head on desk, in front of a classroom of 60 fidgeting fourth graders.

    Bridge has writers in Nairobi who create the lessons that are in Kiswahili, but many lessons, to be delivered in English, are written in America. And it is challenging to develop lesson plans for teachers and children from a different culture. Misunderstandings can occur. Geordie Brackin, the company’s energetic director of innovation, guided me to a Bridge classroom where students were using flashcards and told me that when he goes to government schools he ‘‘doesn’t see flashcards, and our teachers don’t report using flashcards.’’

    Brackin’s observation, though, was greeted with embarrassed smiles at local public and private schools a short walk away. ‘‘Of course, people who are trained teachers, we know about flashcards,’’ said Lilian Odhiambo, who runs a small private school in the Mathare slum. She steered me by the elbow into a classroom where a string hung with paper rectangles bisected the room. I watched as students reviewed English vocabulary words by looking up at one side of the rectangles, responding to them aloud, then stepping under the string to check their answer on the other side of the card. ‘‘We are a poor school, and paper is expensive,’’ Odhiambo explained. ‘‘In this way, we make flashcards work for all the children, not just one.’’

    After eight years of operation, the impact of the Bridge curriculum on learning is uncertain. In 2015, Bridge publicly issued a working paper titled ‘‘The Bridge Effect,’’ its most recent evaluation. The study tracked 2,737 kindergarten, first- and second-grade students for the 2013-14 school year: one set enrolled in Bridge, and another, similar set of students enrolled at local public schools. The students were assessed at the beginning and end of the school year. There was a 43 percent increase in the number of Bridge kindergarten students who reached the ‘‘emergent’’ benchmark in English and a 40 percent increase in learning subtraction in math, compared with 22 percent and 15 percent increases for their public-school counterparts. The percentage increase of Bridge students who reached the ‘‘fluent’’ benchmark in English was high — among Bridge first graders it was 40 percent, compared with a 17 percent increase among first graders in public schools. Increases in the percentage of students who reached the ‘‘fluent’’ benchmark in addition and subtraction were smaller. The percentage increase of second graders who scored ‘‘fluent’’ in math skills was actually the same or higher in public schools than at Bridge.

    I asked two experts in statistics — Nat Malkus, from the American Enterprise Institute, and Bryan Graham, from the University of California, Berkeley — to help me evaluate the findings. “This is good evidence of positive effects,” says Malkus. Both pointed out that the study’s results are complicated by Bridge’s high dropout rate: While a third of public-school students dropped out, nearly half of Bridge students left during the study and were unable to take the final assessment. ‘‘The high attrition rate should give one pause,’’ Malkus says, ‘‘when considering the full effect of the program.’’ Graham, co-editor of The Review of Economics and Statistics, says that ‘‘organizations are under a lot of pressure to do these studies and ‘prove’ their program works. Reasonable and informed people could look at the information in that report and come to widely different conclusions about the effect of Bridge on academic achievement as they measure it. It’s information, just not especially actionable information.”

    Another area of achievement that Bridge trumpets is the success of its students on the eighth-grade K.C.P.E. test. In 2015, according to Bridge, 63 percent of Bridge students who had been there for at least two years passed, compared with 49 percent of Kenyan students nationwide. But it’s unclear whether Bridge’s approach will be sustainable as the company grows. Former Bridge employees told me that in preparation for the 2015 exam, those on track to get a lower score were asked to repeat a year. The rest were taken to a residential cram school and prepped for the test by teachers who flew in from the United States.

    To keep their classrooms filled, Bridge has always relied heavily on marketing. Bridge has advertised its bright green logo with its ‘‘Knowledge for All’’ tag line on posters, fliers, billboards and branded vests worn by motorcycle-taxi drivers. Confronted with lagging enrollment, Kimmelman and May brought on a data-analytics researcher, Josh Weinstein, who worked on an experiment in 2011 to find out how to attract more families to the schools. For one set of schools, Bridge did the usual marketing before opening. For the second set of school openings, Bridge did the marketing but also added an elaborate opening ceremony, complete with bouncy castle. The third set had the marketing and waived a month of school fees for every family. The fourth had the marketing, the opening ceremony and the waived fees. The impact of the bouncy castle and the waived fees, Weinstein wrote on his blog, was ‘‘amazing. Not only was initial enrollment nearly three times what we had experienced in the past,’’ but once the free month was over, ‘‘the conversion rate — the most important factor in measuring the efficacy of a marketing promotion in retail — was 85 percent. This is practically unheard-of in retail.’’ (Bridge says initial enrollment was two times what they had experienced with similar schools, and the conversion rate was 75 percent.)

    The Bridge founders, Weinstein wrote, decided that every school opening thereafter would as soon as possible feature a ceremony and that every new student would be given a free month of school. Kirchgasler, who studied Bridge for his dissertation, pointed out that this often ended up putting parents in what could become a difficult situation. If a family found that they couldn’t make payments, say, in the middle of the term, it was often difficult to transfer a child to a new school. ‘‘Among the families I studied, moving a child to a new school was a gamble,’’ he said. ‘‘Public and informal schools were reluctant to take students back if their new school didn’t work out’’ — potentially leaving a child out of school and making it difficult for a parent to work.

    A former Bridge employee told me that the company’s own marketing could sometimes create bad feelings among the people they wanted to serve. ‘‘Many times, they would open a school and invite a local official to a grand-opening ceremony, and the local official took offense,’’ the former employee, who asked that her name not be used, says. The local officials ‘‘wanted to be engaged.’’ Another former employee told me that the free tuition was confusing to many of the poorest parents. ‘‘I believe the word ‘international,’ combined with foreign founders, led parents to expect higher quality than in other schools,’’ she says. ‘‘I believe they did become disillusioned. I believe many of them became disempowered when they wanted changes in their schools — like electricity, permanent structures — but that didn’t happen. They definitely missed the connectedness and mutually beneficial relationships that they would find in other schools.’’

    Similar concerns were voiced by Salima Namusobya, executive director of the Initiative for Social and Economic Rights, a civil rights group in Kampala, Uganda, that, along with the union there, has campaigned against Bridge and other private-school operators. Far from educating poor children, she says, Bridge uses aggressive marketing to enroll children who are already in public schools. ‘‘The fact that they have the word ‘international’ in the school name, they think they’re getting an international curriculum.’’

    May flatly rejects the notion that Bridge’s marketing could be misunderstood. ‘‘We try very hard to communicate clearly and transparently and if we knew about anything that led to confusion, we’d want to correct that,’’ she says.

    In 2015, teachers’ unions stepped up their agitation against Bridge. The company, May says, was the victim of a smear campaign mounted by the union, and the company has faced hurdles because some government officials run their own schools. ‘‘They see Bridge as a threat,’’ she says. ‘‘They want to maintain the status quo.’’

    While I was in Kenya, May introduced me to a group of parents who told me that they thought the school was providing their children with the best start in life. Livingston Kagasi, a lanky day laborer who donned a suit, a pressed shirt and a tie for the group interview, said that the local public school was an unappealing option for his son Rivival. Kagasi said that leaving a child in a dirty classroom with 80 others and a teacher who may show up late, or not at all, feels like ‘‘dumping your child’’ and ‘‘not preparing them for life.’’ Not long before, Kagasi’s wife got a job as a clerk in the government that came with a steady salary and transferred their son to Bridge. Elizabeth Mumo, another parent, told me she had high hopes for her two sons, Joshua and Samuel, who attend the Bridge school. In her tidy two-room cinder-block home, Mumo explained to me that when she wakes up in the morning, she offers a prayer of thanksgiving that God has allowed her husband, a livery-car conductor, to make enough money to pay for the cooking gas she needs to make the morning tea. She told me that sometimes money is tight but that she wants her children to go to Bridge. She likes the fact that the teachers and students speak in English. She pointed out that a handful of Bridge students have gone to private schools in the United States — an almost-unimaginable break for a slum-dweller, and a success story that Bridge markets to Kenyan parents. Mumo imagines her oldest son going to a university: ‘‘I can see Oxford.’’

    Kenya has many high-school-educated, unskilled workers who are looking for jobs, and initially, Bridge’s low-cost model depended on that labor pool for staffing schools. Instructors receive three to six weeks of training on pedagogy, classroom management and education technology. They are paid between $95 and $116 a month, less than what public-school teachers make in Kenya but more than what teachers can often make in informal schools. Under pressure from the Kenyan government, Bridge began to employ more certified teachers, and the company now says that more than 50 percent of its instructors are certified. All instructors work from 7:10 a.m. to 5:20 p.m., with a shorter day on Saturday — longer hours than most Kenyan public-school teachers. Bridge teachers are encouraged to market Bridge to parents in the community.

    Early on, the company found it difficult to retain instructors. The Stanford case study cited high teacher turnover in 2010. Bridge began requiring instructors to sign a two-year contract; if they broke it, they had to pay back the cost of their training. Teacher turnover slowed.

    Bridge teachers are discouraged from talking to the press, and their contracts remind them that they may not speak on behalf of Bridge, but some agreed to talk to me provided they were not identified. A few said they were grateful for the job and happy to have a lesson script. Others expressed frustration about hoped-for bonuses that they never were able to achieve. Teachers can receive extra money if they maintain enrollment of at least 25 pupils per class. A middle-aged teacher who provides science instruction at a Bridge school told me she was encouraged to go to the market and try to enroll the children of the fruit sellers when her teaching day was done. But it was hard to recruit new students.

    All the teachers I spoke to appreciated the regular paycheck. But they chafed at how they were managed, often by unseen bosses communicating with them via text or robocall. Some Bridge staff members described what they saw as a stark contrast between their hopes for Bridge and a grittier reality. One school administrator, an academy manager, described how the pressure to ensure that parents made their payments on time was disheartening. ‘‘I didn’t realize how hard it would be to talk to parents,’’ he said. ‘‘They’re ill, they’re out of work, they had a fire. No one is in the house who’s making any money. How can they pay when they have no money for food?’’ And working at Bridge, teachers said, can disrupt a career: Instructors are required to sign an employment agreement that includes a noncompete clause that prevents them from working at other nearby schools for a year after they leave.

    In the public and informal Kenyan schools I visited, school administrators welcomed my impromptu drop-ins warmly, showed me their classrooms and introduced me to their teachers, who spoke frankly about their challenges. Bridge teachers and managers say that sort of openness is not allowed. At some Bridge schools I visited unescorted, staff members said that they would need to contact superiors if I didn’t leave.

    One of these schools was Bridge Diamond in Mukuru, a slum of 600,000, just east of central Nairobi. The schoolyard fence was made of patched, bent gray metal and barbed wire. The school building itself was shabby and neglected. In the schoolyard, about 30 feet away from where children enter their classrooms, was a deep trench of fetid garbage and rotting bags of feces; when residents can’t use the communal latrines they use ‘‘flying toilets’’ — defecating in a plastic bag and throwing it as far as they can. The chicken-wire windows were rusted and ripped. Some classrooms were empty. One had 15 students sitting at desks but no teacher.

    Staff members at Diamond were eager to show the poor conditions in their school but also urged me to leave quickly. Last summer, a University of Alberta doctoral candidate, Curtis Riep, was gathering enrollment information in Uganda for an international organization of teachers’ unions, which later put out a report on the number of children enrolled in Bridge in that country and the number of untrained teachers at the head of Bridge’s classrooms. He made unescorted visits to three of its schools near Kampala. The academy managers contacted company executives, and Riep was arrested by the Ugandan police, though the charges, criminal trespass and falsely identifying himself, were quickly dropped. Riep calls it ‘‘pure intimidation.’’ May says Bridge acted responsibly because a stranger was at the school.

    Last year, when the Liberian government began working with Bridge to operate 50 of its schools, it represented a new model for the company — running government-funded schools instead of competing with them. Under the plan, Liberian parents would not have to pay tuition to attend Bridge-run schools. Instead, the Liberian government would pay the salaries of Liberian-certified teachers, one of the biggest expenses associated with schooling, and provide Bridge with schoolhouses in which to hold classes. Bridge would use money raised for the project to pay the cost of running those schools. ‘‘Because parents don’t have to pay, it removes the morally troubling’’ process of removing children from class when their parents can’t come up with the money, says Tilson, the Bridge board observer, who acknowledges that he has never been in a Bridge school while it was in session.

    The new model of working with governments may allow the company to continue to expand, but it’s still an open question whether it can realize its dream of Silicon Valley-style growth, given the messy realities that are part of life in the poorest parts of the world. Greg Mauro, the Bridge board member, says that an I.P.O. is still two to four years away. May says the company may consider selling learning materials. They’ve been collecting data on schoolchildren and their families and might partner with microfinancing institutions to help Bridge parents get loans, as well as working as an intermediary for health-insurance plans. ‘‘While we are very focused on education, it’s hard to say where it might go,’’ she says. ‘‘We are looking for opportunities to help our families.’’

    ———-

    “Can a Tech Start-Up Successfully Educate Children in the Developing World?” by PEG TYRE; The New York Times; 06/27/2017

    “The new model of working with governments may allow the company to continue to expand, but it’s still an open question whether it can realize its dream of Silicon Valley-style growth, given the messy realities that are part of life in the poorest parts of the world. Greg Mauro, the Bridge board member, says that an I.P.O. is still two to four years away. May says the company may consider selling learning materials. They’ve been collecting data on schoolchildren and their families and might partner with microfinancing institutions to help Bridge parents get loans, as well as working as an intermediary for health-insurance plans. ‘‘While we are very focused on education, it’s hard to say where it might go,’’ she says. ‘‘We are looking for opportunities to help our families.’’”

    Micro-loans. That’s the solution their looking at. For people in this kind of situation:


    At the start, the Bridge founders quickly learned that Kenyan parents did not necessarily see Bridge schools as a better option. ‘‘When the first academies opened, our mentality was a bit like, ‘If we build it, they will come,’?’’ said Marie Leznicki, then Bridge’s vice president of brand strategy, in the Stanford case study. The case study authors explain that one challenge for the company was that parents were largely illiterate and therefore saw little difference among schools. But some academics who have studied the for-profit, low-fee chain say that some poor Kenyan parents were wary of the model. Sending a child to Bridge was more expensive than the village public school, though less expensive than some informal schools. The poorest families simply couldn’t afford the tuition and additional payments that Bridge required. ‘‘They have to pay enrollment fees, they have to pay for uniforms, they have to pay for lunch,’’ says Christopher Kirchgasler, a former charter-school teacher in the United States who spent 10 months studying Bridge schools in Nairobi and Nyeri County, north of Nairobi, for his doctoral dissertation. ‘‘For us, a matter of a few dollars is nothing, but for these very poor families, it can be a monumental obstacle.’’

    For many who did enroll, Bridge’s strict payment system quickly became onerous. Bridge’s business in Kenya depends on most parents making routine electronic payments by mobile phone. But slum-dwelling parents in Kenya are mostly occasional workers who rarely have a predictable income. In informal settlements around Nairobi, I visited 10 or so parents in their homes who explained the fragile finances of their lives. A sick child, an uptick in the price of corn meal or even a prolonged rainstorm can throw a family on the margins into an economic crisis. In most informal and public schools, payment terms are flexible, and the subject of protracted negotiation. Bridge says that it works with families to meet their needs. But many people told me that the school sends children home if fees are not paid.

    ‘‘They tell you, ‘Sit at home with your child until you get the money,’?’’ says one parent, a vegetable seller married to an unemployed welder who has two children enrolled at a Bridge school in Nairobi’s Mathare slum. Another mother with a 9-year-old child says she found it difficult to make Bridge payments: ‘‘At times I’ve gone without eating so I can pay school fees.’’

    “‘‘They tell you, ‘Sit at home with your child until you get the money,’?’’ says one parent, a vegetable seller married to an unemployed welder who has two children enrolled at a Bridge school in Nairobi’s Mathare slum. Another mother with a 9-year-old child says she found it difficult to make Bridge payments: ‘‘At times I’ve gone without eating so I can pay school fees.’’”

    Well that’s one way to afford tuition: don’t eat. After all, No one said running a for-profit education network for the poor wouldn’t require sacrifices. Someone has to sacrifice in order to ensure the 20 percent annual returns Jay Kimmelman, one of the three founders, was promising when they were selling investors on the business model:


    The Bridge concept — low-cost private schools for the world’s poorest children — has galvanized many of the Western investors and Silicon Valley moguls who learn about the project. Bill Gates, the Omidyar Network, the Chan Zuckerberg Initiative and the World Bank have all invested in the company; Pearson, the multinational textbook-and-assessment company, has done so through a venture-capital fund. Tilson talked about the company to Bill Ackman, the hedge-fund manager of Pershing Square, which ultimately invested $5.8 million through its foundation. By early 2015, Bridge had secured more than $100 million, according to The Wall Street Journal.

    The fact that Bridge was a for-profit company gave pause to some NGOs that work in developing countries. But others reasoned that in the last decade, for-profit companies backed by what are called social-impact investors — people and institutions that make money by doing good — had successfully brought about important innovations, like solar-power initiatives and low-cost health clinics, in poor countries. Bridge’s model relied on similar investors but was even more ambitious in its dreams of scale. ‘‘There is a great demand for this,’’ May said in an M.I.T. video from 2016. Some of the company’s backers, she said, were ‘‘not social-impact investors,’’ continuing that ‘‘it was straight commercial capital who saw, ‘Wow, there are a couple billion people who don’t have anyone selling them what they want.’?’’ For a 2010 case study on the company, Kimmelman told the Harvard Business School that return on investment could be 20 percent annually.

    “For a 2010 case study on the company, Kimmelman told the Harvard Business School that return on investment could be 20 percent annually

    With micro-lending that 20 percent annual return is going to be a lot easier to achieve. And don’t forget that micro-lending isn’t just a means of helping Bridge International achieve its profit goals. Assuming the micro-lending it done under the Omidyar Network model of micro-lending, all those small loans will be for-profit too. Deadly for-profit loans that drive parents to suicide.

    Because sacrifices need to be made. For the children, of course.

    Posted by Pterrafractyl | August 4, 2017, 1:31 pm

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