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Pierre Omidyar: It Is Better to Receive than to Give

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COMMENT: 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.

EXCERPT: 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 Modi; co-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. . . .


4 comments for “Pierre Omidyar: It Is Better to Receive than to Give”

  1. Well that was fast…

    Pando Daily
    Just as we predicted, India’s new leader is about to make Pierre Omidyar a lot richer

    By Mark Ames
    On June 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 majority of 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 millions of 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 — “a” 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.

    Note that Ajit Doval was just appointed the head of India’s NSA.


    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 $880,000 to 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.”

    Posted by Pterrafractyl | June 5, 2014, 8:06 am
  2. It looks like Stanford, a Silicon Valley institution, is giving First Look’s management style a second look. It’s not an approving second look:

    The Washington Post
    Stanford University working with First Look Media on management

    By Erik Wemple November 3 at 7:41 PM

    The management philosophy at First Look Media, the publisher behind the digital magazine The Intercept, is worthy of extensive consideration (by the Erik Wemple Blog, among others). Last week, that management came under scrutiny after star First Look hire Matt Taibbi quit and four other marquee employees wrote a remarkable post at The Intercept about the dysfunction within the operation — particularly between journalists based in New York and company executives with ties to Silicon Valley, where First Look funder and eBay founder Pierre Omidyar made his fortune.

    One of those taking a hard look at First Look, it turns out, is First Look itself. The fledgling news outlet is working with a Silicon Valley institution — Stanford University — to examine management strategies at the start-up, several sources tell the Erik Wemple Blog.

    Neither First Look nor Stanford is eager to talk about their collaboration. An inquiry to Justin Ferrell, fellowships director at Stanford’s Hasso Plattner Institute of Design (known as the “d.school”), who is reportedly involved in the study, fetched this reply from PR operative Debbe Stern: “Thanks for reaching out to both me and Justin at the Stanford d.school. We don’t really feel we have anything helpful to add to your story. I am sorry we can’t be more helpful.”

    And John Temple, a top editorial official at First Look, declined to provide any information: “Sorry Erik. Not now.” Before joining First Look as president of audience and products, Temple was a senior fellow at Stanford’s John S. Knight Journalism Fellowships program, “focusing on design thinking as applied to journalism challenges.” (Temple is also a former managing editor of The Post). Sources with knowledge of the situation confirmed that Stanford is doing a study of First Look but didn’t provide details.

    First Look has had trouble getting its journalism into circulation, and if there were any questions that the company has management issues, The Intercept destroyed them last week with its eye-opening account of Taibbi’s departure. It detailed his clashes with management and cited a “collision between the First Look executives, who by and large come from a highly structured Silicon Valley corporate environment, and the fiercely independent journalists who view corporate cultures and management-speak with disdain. That divide is a regular feature in many newsrooms, but it was exacerbated by First Look’s avowed strategy of hiring exactly those journalists who had cultivated reputations as anti-authoritarian iconoclasts.”

    In other words, there’s plenty of material here to study.

    It just so happens that the Stanford d.school has a class, “Designing Creative Organizations,” that would have a blast examining First Look. According to a description, the course will teach participants — professional fellows — about “how design thinking applies to leading creative organizations. They will learn and apply organizational design models that they can rely on in making their own leadership decisions. The project-based approach will allow them to experiment as they learn in a real-world environment, without the risk associated within their own organizations.”

    Posted by Pterrafractyl | November 4, 2014, 6:47 pm
  3. Oh no…

    Here's Omidyar salivating over "virtually untapped $14.5bn African education market" which he's busy privatizing: https://t.co/ugxHVXCUhX— Mark Ames (@MarkAmesExiled) December 18, 2014

    Yes, the Omidyar Network and like-minded philanthropists have a gift for some of the poorest children in the world. A for-profit gift

    Financial Times
    For-profit school chains educate Africa’s poor
    Tosin Sulaiman | Dec 17 06:37

    It’s a few minutes into Marion Akinyi Onginjo’s social studies lesson at Bridge International Academy Gicagi in Nairobi and the class 4 teacher is being drowned out by loud cheers next door.

    Class 4 finally gets its chance to make some noise when one student, Margaret, correctly answers a question about subsistence crops. After Onginjo tells the class, “let’s give Margaret the cowboy cheer,” they stand up, spin imaginary lassoes in the girl’s direction and yell, “One, two, three, four, five, yee-hah.”

    Like the rollercoaster cheer, the parapanda cheer (from the Swahili word for trumpet) and the carrot and grater cheer, it’s one of the ways teachers at Bridge, Africa’s largest chain of low-cost private schools, keep students engaged, innovation manager George Brackin explains. “The kids love that,” he says.

    Since opening its first school in Nairobi in 2009, Bridge has enrolled over 100,000 students in Kenya and, if it succeeds in taking its brand of affordable private education to some of the world’s poorest countries, millions of schoolchildren in Africa and Asia could soon be imitating cowboys.

    The for-profit company, whose schools charge tuition fees averaging $6 a month, will open its first academies in Nigeria and Uganda next year and plans to enter India by 2016. Its goal is to educate 1m nursery and primary-age children by 2017 and 10m by 2025.

    While private schools are growing exponentially in the slums of many African cities as families living on $2 a day or less opt out of government schools, the emergence of chains like Bridge, which can drive down costs through economies of scale, has encouraged investors to enter the low-cost education sector. Low-fee private schools in sub-Saharan Africa make up a virtually untapped $14.5bn market, according to Bridge co-founder Shannon May, an estimate based on what poor parents are already paying for nursery or primary education without branded providers.

    Bridge’s backers include Bill Gates, JP Morgan, Omidyar Network, CDC of the UK and the IFC, the World Bank’s private sector arm. The company has also attracted venture capital firms New Enterprise Associates (NEA), Khosla Ventures and Learn Capital, in which Pearson, owner of the Financial Times, is a limited partner. Pearson’s $15m Affordable Learning Fund is also an investor in Omega Schools, a low-cost chain in Ghana with 38 schools and over 20,000 students.

    The investors believe low-fee private providers, along with government schools, can help increase access to and improve the quality of education in developing countries, where an estimated 130m children are in school but not learning the basics. In African countries like Nigeria, Niger and Ghana, around 75 per cent of children who leave school after five or six years are unable to read a sentence, according to Unesco’s latest Education for All report.

    “The addressable market for this company is almost infinite,” says Harry Weller, who led NEA’s investment into Bridge. “If you’re able to deliver education of a high quality at this cost it’s a big market.”

    But even if successful, Bridge will still be out of reach to the very poor, some argue. Chris Khaemba, who is in charge of education at Nairobi City County, said the majority of residents in Nairobi’s informal settlements cannot afford Bridge’s fees. “It targets the high end of the slum dwellers, but there’s a significant socio-economic group that they will not get,” he says. “They are a for-profit company. There are shareholders who expect a return. You don’t do that for slum-dwellers in Africa.”

    There could also be obstacles to Bridge’s ambitions to operate in what has traditionally been the domain of governments. School chains may be viewed as a threat to public school systems once they reach a certain size, says Karan Khemka, head of international education at the Parthenon Group, adding that one chain in Bangladesh came under greater government scrutiny once it hit 300,000 students and was unable to grow further.

    “The reality is that once you get very big the political interest becomes too great,” he says. “You can’t predict these things with certainty but nobody has hit 1m in the past and the reason is, it usually becomes too political having those many kids in one system.”

    Bridge’s founders say they always planned for scale. The company needs a large customer base to enable it to amortise the cost of its investments in technology, curriculum development and teacher training, allowing it to keep fees low, says May, who founded Bridge with her husband Jay Kimmelman. “The plan was always that we would have to be educating hundreds of thousands of children – eventually more than a million – or else the business model doesn’t work.”

    As in other low-cost schools, Bridge’s teachers are high school graduates who live in the local community, making them cheaper than government-trained teachers. They are given tablets that contain scripted lessons written by its curriculum specialists to be read word for word. That way, Bridge says, teachers can deliver lessons they would never have been able to come up with by themselves.

    The chain, which plans to double the number of its schools within a year, charges a daily fee of around $0.65 that includes tuition, lunch and uniforms, which parents pay through vouchers sold in their neighbourhoods, a concept borrowed from telecoms companies.

    “We like to say it’s a pay-as-you-learn model,” says Donkoh, who started Omega with his wife, Lisa, and James Tooley, a professor of education policy at Newcastle University. “It’s more convenient to the poor because they plan on a daily basis. The poor don’t want a monthly contract. They want to pay for the service as they enjoy it.”

    When you read things like:

    “The addressable market for this company is almost infinite,” says Harry Weller, who led NEA’s investment into Bridge. “If you’re able to deliver education of a high quality at this cost it’s a big market.”

    But even if successful, Bridge will still be out of reach to the very poor, some argue. Chris Khaemba, who is in charge of education at Nairobi City County, said the majority of residents in Nairobi’s informal settlements cannot afford Bridge’s fees. “It targets the high end of the slum dwellers, but there’s a significant socio-economic group that they will not get,” he says. “They are a for-profit company. There are shareholders who expect a return. You don’t do that for slum-dwellers in Africa.”

    it raises a rather fundamental question about the idea of using the for-profit model to deliver services to the poor: what’s given a higher priority in this model? Service delivery (a quality education) or profits for the shareholders who expect a return on their investments?

    And when you read things like:

    As in other low-cost schools, Bridge’s teachers are high school graduates who live in the local community, making them cheaper than government-trained teachers. They are given tablets that contain scripted lessons written by its curriculum specialists to be read word for word. That way, Bridge says, teachers can deliver lessons they would never have been able to come up with by themselves.

    you basically get your answer. Or you could read this.

    Posted by Pterrafractyl | December 18, 2014, 3:50 pm
  4. Check out the latest Omidyar Fellow:

    Pando Daily
    What the hell? Pierre Omidyar selects one of Edward Snowden’s former Booz Allen bosses to be an Omidyar Fellow

    By Mark Ames
    , written on
    October 16, 2015

    Edward Snowden was a Booz Allen Hamilton employee in Hawaii when he worked as a subcontractor for the National Security Agency and made off with hundreds of thousands of the spy agency’s files.

    Booz Allen, “the world’s most profitable spy organization,” is one of the NSA’s leading private contractors; the director of US intelligence, James Clapper, was a Booz Allen executive, and former NSA director Michael McConnell is now a Booz Allen VP.

    In other words, if you consider yourself an Edward Snowden supporter in any way, Booz Allen is the enemy.

    So it may come as a surprise that billionaire Pierre Omidyar — publisher of The Intercept, which owns the only complete cache of Snowden’s NSA secrets; financier of the Freedom of The Press Foundation, where Snowden serves on the board of directorshas just selected one of Snowden’s former bosses at Booz Allen’s Hawaii branch to join the Omidyar Fellows program.

    His name is Robert Lietzke, and he’s a “principal” at Booz Allen’s Hawaii branch, where he’s worked for over 15 years. In 2008, Lietzke was reported in the local Hawaiian press as one of “three principals [running] day to day operations” at Booz Allen’s Hawaii branch. Lietzke’s specialty at Booz is information systems and technology, Snowden’s field. Before he joined Booz Allen, Lietzke was a computer systems officer in the US Air Force from 1989 through 1999.

    After joining Booz’s Hawaii branch, Lietzke worked “support” for the US Pacific Command, headquartered outside of Honolulu, on protecting critical infrastructure and network operations.

    Ironically—as if there isn’t already an entire asteroid belt of irony in this story—Lietzke was featured in a 2009 story on how different Hawaii companies learned to successfully manage their employees and build corporate camaraderie. Under the sub-header “Employee Feedback,” Hawaii Business Magazine reported:

    “In a firm that employs 18,000 people worldwide, it’s easy to feel like a small voice that will never be heard by ‘The Man.’ But at Booz Allen Hamilton, a technology consulting firm that mainly services the U.S. military, employees feel that higher-ups are listening.

    “One way employees provide feedback is through a ‘people strategy’ survey every two years. ‘One of the things I’ve noticed is that the response rate is very, very high for that survey,’ says Bob Lietzke, principal at BAH’s Honolulu office. ‘It certainly takes in internal communications within the firm, folks talking from the top all the way down, and this is really your chance to be heard. I think it’s important that leadership stresses it and, more importantly, people are seeing that there’s action taken after it.’”

    Speaking of “The Man”: Lietzke’s description of his cyber-intelligence expertise on his LinkedIn page gives a pretty good indication of just how close his and Snowden’s paths would’ve crossed when Snowden worked for Booz Allen in 2013:

    “At Booz Allen Bob is applying his knowledge of telecommunications systems and joint military operations to emerging national efforts in Mission Assurance. He provides strategic planning and development guidance to a variety of clients in the areas of Critical Infrastructure Protection (CIP), NetOps, and Information Assurance (IA). In addition, he currently manages a wide variety of client support projects in the areas of Information Assurance (IA), CIP, Anti-Terrorism/Force Protection (AT/FP), Homeland Defense (HLD), and Continuity of Operation Planning (COOP). In support of these engagements he is helping clients develop an enterprise wide approach to risk management. Bob currently holds a Top Secret (TS/SCI) Security clearance.Specialties:Information Assurance, NetOps, Critical Infrastructure Protection, Cyber Security.”

    In other words, every two-three-and-four-letter cyber-military acronym in the book… except for the three-letter agency that starts with “N”.

    Omidyar Fellows: “Once a Fellow, Always a Fellow”

    Every year since 2012, Hawaii’s richest resident, Pierre Omidyar, selects around a dozen people from Hawaii’s business, nonprofit, and government sectors to become Omidyar Fellows and form a kind of unofficial club of Hawaii’s future leaders.

    In a local Hawaii TV news segment on Omidyar Fellows, the program’s director described how each Fellow must conduct a “gruelling” interview with Pierre Omidyar himself:

    “Yeah, the interviews are pretty tough. In-person interviews with the board of five directors.”

    “With Pierre?”

    “With Pierre, yeah. It was great, yeah. I think the Fellows themselves learned a lot—about themselves.”

    “They were a little overwhelmed?”

    “Yeah, a bit. A bit. It was great, ha-ha!”

    The application process for the Omidyar Fellows’ 15-month program is designed to be rigorous. Your company must sponsor your application, which requires personal testimonies and letters from your company CEO.

    According to the website,

    Omidyar Fellows need the full endorsement of their current employers and must be able to participate in all the activities of the program. The sponsor will recognize the benefit to the organization of a Fellow’s leadership development and be willing to hold the Fellow accountable for putting his/her learning to work.

    This includes a “letter of support from your chief executive” that explains “why you are a current and future leader in your organization and how your growth might continue beyond the program.” Meaning, presumably, that Booz Allen CEO Horacio Rozanski wrote to Omidyar’s people pushing for them to select his top Hawaii executive as an Omidyar Fellow.

    [Pando reached out to Booz Allen’s Hawaii office and to Omidyar Fellows for this story, but received no comment.]

    Snowden’s former Booz Allen boss, Lietzke, was also required to submit, among other things, a 1500 word essay addressing themes such as,

    * What does it mean to be a leader in 21st-century Hawaii?

    * How will the Omidyar Fellows program help you to achieve your professional aspirations?

    * How will the Omidyar Fellows program help you to achieve your aspirations for the larger community and the people of Hawaii?

    Those lucky few selected to join the Omidyar Fellows program spend the next 15 months in a leadership training program that combines some of Omidyar’s own New Age fetishes – as skewered by Ken Silverstein and in Vanity Fair — with more traditional power-networking and relationship-building events. When they complete the program, they join what is called the “Forum of Fellows”:

    Once a Fellow, always a Fellow… The formal program is just the beginning of a lifelong commitment by Omidyar Fellows to make a positive difference with the knowledge and network gained and to help subsequent generations of emerging leaders.

    In other words, Omidyar is building a kind of local Hawaiian cadre of leaders and networked executives under his brand name and sponsorship—a kind of elite Chamber of Commerce loyal to Omidyar and imbued with his New Age libertarian faith.

    Hired Spies: More Omidyar-Booz Allen

    I asked national security investigative reporter Tim Shorrock, the foremost expert on private contractors and the NSA and author of “Spies For Hire” for his take on Omidyar cozying up with one of the heads of the Booz Allen branch where Snowden worked.

    Shorrock pointed me to Omidyar’s Ulupono Initiative in Hawaii, a multifaceted venture capital fund that operates in Omidyar’s home state much the way his Omidyar Network operates in countries around the world, seeking both profits and political influence. Kyle Datta, who serves as General Partner at Omidyar’s Ulupono Initiative, is a former Booz Allen vice president.

    Shorrock also pointed me to a major Pentagon contractor expo in Hawaii that Omidyar has been co-sponsoring his Ulupono Initiative for the past few years with the likes of Lockheed Martin, Honeywell, and NSTXL (National Security Technology Accelerator) — the Defense Department’s version of the CIA’s In-Q-Tel.

    Says Shorrock:

    “Omidyar’s relationship with Booz Allen Hamilton would be perfect for the link-analysis style of reporting on politicians and public figures we see in his pet journalistic project, The Intercept.

    “This is the second senior Booz executive he’s taken under his wing….Kyle Datta, who has directed Ulupono’s investment strategies since 2009, once did the same for Booz, where he ran the contractor’s energy practice.

    “Under Datta, Ulupono was a lead sponsor in 2014 for a big ‘energy summit,’ where its partners included the Pentagon, Lockheed Martin and Honeywell. That makes sense, because as a major player in Hawaii’s energy markets, Ulupono maintains close ties with the state’s enormous military industrial complex.”

    “Part of its 2014 summit included a DoD ‘industry day’ co-sponsored by Ulupono, its partners, and the United States Pacific Command, which is based on Hawaii but controls all US military forces throughout the Asia-Pacific area. It included presentations on ‘the mechanical, electrical and control system design for cyber-secure microgrids and will address the costs and benefits including the cost of cybersecurity.’

    “Now Omidyar has brought in Robert Lietzke, another Booz exec and a former Air Force officer, into his operations. These relationships with Booz raise questions about Omidyar’s decision to invest in the Snowden documents and create The Intercept. Did he ‘vet’ Snowden — who formerly worked for Booz in Hawaii — with Datta or Lietzke before he plopped down that $250 million for the Snowden depository at First Look? Did either executive know or work with Snowden when he was employed by Booz in Hawaii?”

    Strictly Business?

    Shorrock’s question is the one we’re all trying to make sense of: Why would Omidyar both court and develop Edward Snowden’s former boss and employer at Booz Allen, and also set up an “adversarial” media company based on the NSA leaks taken by Booz Allen Hawaii’s former employee, Edward Snowden? Is the eBay billionaire just trolling us? Is his Kitto Mandala character taking over Omidyar’s vessel and playing tricks on the rest of us?

    This is one of those cases where you probably should start with the simplest answer, and the simplest answer here is: It’s strictly business.

    For one thing, as Shorrock notes, Hawaii is one of the most highly militarized patches of real estate in the U.S. A RAND study estimated that up to one-fifth of Hawaii’s economy is tied to the Department of Defense. Beyond the big new NSA center, there are 10 major military installations, research centers, weapons stores, private contractors, and a local citizenry over-represented by veterans, former officers, and spooks.

    A couple of years ago, after Snowden’s name was first revealed as the NSA leaker, a local Hawaiian military studies professor, Carlos Juarez, explained why so many intelligence contractors work in the tourist paradise:

    “This is a place that has long had a large intelligence community. The military is of course, headquartered here, the U.S. Pacific Command, and part of that includes a larger intelligence community.”

    In other words, Omidyar is the richest man in a state where the military-intelligence complex is the biggest business in town. And since Booz Allen is a big name in Hawaii’s military-intelligence contracting, when it comes to strict business interests, it’s natural that Omidyar and Booz Allen would want to seal their relationships in one of Omidyar’s local leadership cults.

    We’re also left nervously wondering why, out of the hundreds of thousands of NSA files in The Intercept’s possession, not one leaked thus far has mentioned Booz Allen or other private contractors. How is that possible, when we know that 70 percent of the NSA’s operations are run by private contractors (thanks to Shorrock’s reporting)?

    After Pando exposed Omidyar’s co-financing role with USAID in funding Ukraine regime-change groups in 2014, Greenwald gave a giant middle finger to everyone who ever fell for his righteous indignation schtick, admitting:

    “[P]rior to creating The Intercept with Laura Poitras and Jeremy Scahill, I did not research Omidyar’s political views or donations. That’s because his political views and donations are of no special interest to me…”

    Chances are, even Snowden won’t criticize Omidyar for courting his Booz Allen adversaries. Hell, he probably doesn’t even care anymore. They’ve all got valuable personal brands to tend to. Like Pacino said — it’s strictly business, Sonny.

    “We’re also left nervously wondering why, out of the hundreds of thousands of NSA files in The Intercept’s possession, not one leaked thus far has mentioned Booz Allen or other private contractors. How is that possible, when we know that 70 percent of the NSA’s operations are run by private contractors (thanks to Shorrock’s reporting)?”

    Posted by Pterrafractyl | October 16, 2015, 3:20 pm

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