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This program was recorded in one, 60-minute segment.
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. . . .
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.” . . . .
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.”
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 Citizen, Chesno, Center 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 777, 778, 779, 780, 781, 782, 783, 784, 794, 800, 803, 804, 808, 811, 817,
818, 824, 826, 829, 832, 833, 837, 849, 850, 853, 857, 860, 872, 875, 876, 877. Listeners/readers are encouraged to examine these programs and/or their descriptions in detail, in order to flesh out their understanding.)
Program Highlights Include:
- The open intimidation of writers, artists and political speakers who disagree with the Modi-government’s line.
- The mob vigilantism being unleashed on Muslims in India on Modi’s watch.
- The Modi government’s move to subvert India’s child labor laws.
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 Affairs, Margaret 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.
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.
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. . . .
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:
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.
. . . . 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 Department, DC neocons, EU, 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.
Ukraine just held its first post-revolution parliamentary elections, and amid all of the oligarchs, EU enthusiasts, neo-Nazis, nepotism 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 Citizen, Chesno, Center 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?
Fascism and the Dangers of Economic Concentration
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
“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:
Remember, it’s for the children.
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:
“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 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:
“‘‘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:
“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.
There’s an interesting new development over at The Intercept: veteran national security reporter Bill Arkin was recently let go, just months after his hiring as an interim editor. Arkin’s firing precipitating the resignation of reporter Ken Klippenstein, who has gone on to launch his own Substack site with the goal of exploring at kind of reader-supported “Journalism 2.0” model of reporting. And as part of his Substack launch, Klippenstein has a very interesting story about just what went down in the firing of Arkin and what this says about the state of affairs not just at The Intercept but the US media in general.
As Klippenstein describes, during his time at The Intercept, he’s witnessed how the newsroom has been increasingly dominated by management and a growing number of bureaucrats at the same time the number of actual reporters shriveled. For example, there’s now just a single copy editor for the entire Intercept website. That’s compared to two staff attorneys, a legal fellow, a chief strategy officer, a chief digital officer, a business coordinator, a senior director of development and an associate director of development, a product manager, a senior director of operations, a chief of staff, and a chief operating officer. And for the first time, the new editor-in-chief answers to the CEO.
But the issue isn’t just a bloated bureaucracy at the cost of reporters and editors. It’s the priorities of that bureaucracy. As Klippenstein recounts, he was ready to leave back in February following a round of layoffs after finding that the newsroom was so hollowed out he couldn’t get his stories published. The Intercept hired Arkin as interim editor, at Klippenstein’s insistence.
Then they tried to get a story published that suddenly made management queasy. The story was a critical look at Jeff Bezos’s charitable giving in the context of the aggressive cost-cutting taking place at the Bezos-owned Washington Post, which lost $100 million last year. That happens to be the same amount Bezos donated to two charities as part of his “Courage and Civility Award”, with actress Eva Longoria’s charity receiving $50 million and the other $50 million to Admiral William McRaven who runs a charity for fallen soldiers.
The story was eventually published, but not without a fight that drew in both The Intercept’s general counsel David Bralow and the CEO Annie Chabel. Bralow’s concern wasn’t legal. Instead, he was worried that the article, which criticized Bezos for his waning support for the journalism of the Washington Post at the same time he was making large charitable contributions in part to a charity that deals with the fallout of the US’s foreign policy (fallen soldiers), might end up annoying Intercept’s billionaire owner Pierre Omidyar during a time when Omidyar was also keeping The Intercept afloat. Chabel was also reportedly worried about how the story might affect The Intercept’s donors.
It’s a grimly fascinating look at the state of the US media ecosystem: a story critical of one of the wealthiest people on the planet over their relative lack of support for the media outlet they own was almost spiked over concerns about a different billionaire who is financing their own money-losing media operation. In other words, the US media is beholden to billionaires and would really rather not talk about it.
But that story was just one example of the kind of fights Klippenstein and Arkin were experiencing. A story about the leaked membership list of the Bohemian Grove was successfully killed on the grounds that the publication might risk the source. As Arkin kept trying to point out, it’s not like they’re publishing classified CIA documents that puts the source at legal risk. But nonetheless, the story died. A story about one of the US elites’ favorite clubs filled with billionaire members.
In the end, it was a report based on diplomatic cables revealing the Biden administration’s private attempts to pressure other countries to vote against a Palestinian statehood resolution at the UN that got Arkin fired, triggering Klippenstein’s resignation. Arkin forced the publication of the article over the opposition of the lawyers and was fired days later.
This is a good time to recall how Klippenstein was one of the journalists banned from Twitter by Elon Musk back in January. He also happened to have authored an article last year about the errors with Tesla’s self-driving features. And then there was that piece Klippenstein authored in The Intercept last year about the Influence and Perception Management Office (IPMO) created by the Pentagon’s creation of a “counter disinformation”. Klippenstein’s reporting has undoubtedly been ruffling feathers.
Similarly, recall the that 2021 report by Bill Arkin in Newsweek describing a vast secret army of tens of thousands of undercover military and intelligence personnel operating under the ‘Signature Reduction’ program designed to give cover stories for their national-security related jobs. Arkin is a veteran feather-ruffler for the national security state.
Finally, it’s worth keeping in mind that plenty of reporting about sensitive national security topics show up in the Washington Post, which is part of the reason these apparent conflicts of interest are such a big deal. For example, there was that September 2022, Washington post review of the Pentagon’s online ‘persuasion’ activities that described a situation where large numbers of fake online personas are being extensively created by the Pentagon, but then caught and deleted by platforms like Facebook. The US relies on these institutions, as imperfect as they may be.
It’s a story about a bad situation getting worse but a situation that nonetheless needs to be fixed one way or another. And in many respects this is exactly the end game scenario observers warned about when The Intercept was set up as a kind of Omidyar-subsidized project. Omidyar is extremely friendly with US national security interests, after all. Which is also why a barrier between management and the editors was so vital. A barrier that’s no longer there.
And that’s all part of what makes Klippenstein’s “Journalism 2.0” experiment in reader-supported journalism a very interesting story to watch. Especially since it looks like Bill Arkin is going to continue playing an editorial role for Klippenstein’s new endeavor (Arkin at least edited the piece below). So we’ll see if Klippenstein can manage to enlist the 5,000 subscribers he’s shooting for and create a sustainable Journalism 2.0 business model. But in the mean time, don’t be shocked if the number of Intercept articles that piss off the powerful turns into a tragic trickle:
“The reason so much of the news media sucks is they aren’t writing for you. They’re writing for their sources in Washington, for the industries they cover, for rich people, and for fancy awards committees. Just take a look at the ads they run: for investment banks, defense contractors, oil companies. Unless you’re in the market for any of these products, they aren’t writing for you.”
As Ken Klippenstein bluntly puts it, the target audience of most of the media isn’t the readership. The target audience is powerful interests on whose behalf the media narratives are being written. That’s the journalism model he’s trying to divorce himself from with the launch of his new independent reader/financed Substack platform. An experiment with “Journalism 2.0”. But it wasn’t just disgust with the status quo that drove Klippenstein to go down this path. It was witnessing the corporatization of The Intercept, including new policies that make the publication’s chief editor answerable to the CEO. As Klippenstein describes, The Intercept has a new overhead of lawyers and managers and it appears their chief jobs are to kill stories that piss off the powerful:
Klippenstein then goes into the institutional turmoil he experienced at the Intercept over the last few months, starting with layoffs in February that left the outlet hollowed out enough that Klippenstein threatened to leave after finding he couldn’t get his stories approved. So they hired veteran national security reporter Bill Arkin as interim editor, at Klippenstein’s insistence. And then they tried to do a story about Jeff Bezos and his $100 million in donations to a pair of charities, the same amount the Washington Post lost the prior year resulting cutbacks. The pushback over the story came from the Intercept’s general counsel David Bralow. But the concern wasn’t legal. Bralow’s concern was that attacking Bezos might annoy The Intercept’s billionaire owner, Pierre Omidyar, during a time when he was keeping The Intercept afloat. It’s an interesting peak at the kind of priorities one can expect from a media outlet that exists due to the largess of a billionaire:
But Omidyar wasn’t the only target audience The Intercept’s management had in mind when attempting to spike this story. The Intercept’s CEP, Anni Chabel, was concerned the donors might be annoyed too:
And then we get to this story that was successfully spiked by the management: a leaked list of the Bohemian Grove’s membership. They were ready to move with the story while protecting the source. And then the management inundated them with a slew of concerns about protecting the source. It was like managerial trolling. So we have to ask: who were the wealthy and powerful people the management didn’t want to piss off this time? Is Pierre Omidyar a Bohemian Grove member? How about Bezos? How many wealthy donors would have been annoyed by the publication of that story? We’ll never know since the story was killed:
Finally, we get to the editorial meddling that resulting in Arkin’s firing and Lippenstein’s resignation: Klippenstein obtained a diplomatic cable revealing the Biden administration’s private attempts to pressure other countries to vote against a Palestinian statehood resolution at the UN. Again, they were facing pushback over concerns about protecting the source. But Arkin forced the publication of the story. Days later, he was let go, with Klippenstein resigning in response:
So best of luck to Klippenstein (and Arkin) on this new journalistic adventure. Its’ going to be a challenge. The kind of challenge we had better hope someone figures out how to overcome. Because as Klippenstein makes clear, billionaire-financed journalism isn’t a charity. There’s a cost paid in the form of what stories get told or not told. Or a benefit accrued. It depends on how billionaire-aligned your interests happen to be.
We got an update of sorts on that disturbing story by former Intercept journalist Ken Klippenstein about the remarkable media bias towards the whim of the rich and powerful. Recall how Klippenstein described an environment at The Intercept where corporate lawyers spiked, or attempted to spike, stories based on concerns that they might upset their billionaire owner, Pierre Omidyar. In particular, it was a story criticizing fellow billionaire, Jeff Bezos, for his aggressive cost-cutting at the Washington Post that the lawyers felt might upset Omidyar.
Well, there’s a new Bezos-related story of media censorship. This time, it’s Politico reporting on the puzzling lack of support for The Sixth, a newly released documentary about the January 6 Capitol insurrection. The documentary is made by award winning duo Sean Fine and Andrea Nix Fine and produced by A24, the studio behind the recent hits Civil War, The Zone of Interest and Everything Everywhere All At Once.
The documentary was released on May 3 and all expectations were that it would have the kind of rollout that one would expect for a big budget documentary from an award winning studio. And that would include making it available to stream for free on Amazon Prime for the Prime subscribers. And then we got to the release date only to discover that not only was the free Prime release pulled but there is no promotion of the film at all. Not even on A24’s social media.
So what’s the explanation? They aren’t saying. A24 steered questions to an outside publicist who refused to answer questions about the marketing. And Amazon just gave a vague non-answer answer that didn’t really address the question. It’s the kind of response one expects when the real answer would be worse than silence and deflection.
Keep in mind that A24’s big hit right now is literally about a modern American civil war. It’s not like the studio is shy about addressing touchy political topics. And yet something caused the studio, and Amazon, to suddenly pull virtually all of the support for this documentary about an event that could have actually precipitated a civil war. What’s the explanation?
Has the neck-and-neck status of the presidential race put the fear of Trump in the hearts of A24’s ownership? Is Jeff Bezos preparing for a second round of Trump and fearing presidential retribution? Keep in mind that Trump’s “Project 2025”/Schedule F platform of retribution and purging his political enemies isn’t necessarily limited to government roles. Plans for broader society-wide purges are already being formulated. Are we seeing an elite conclusion that Trump is probably going to win and preemptive organizational ass-covering as a result by these media giants? We don’t know. But something suddenly cause them to pull this support and they aren’t saying what
“People who were interviewed for the film were also told that it would be streaming on its release day as part of Amazon’s Prime Video service. But now that’s not happening either, and may not happen until after the election. An Amazon Prime spokesperson told me that no date had ever been scheduled, and the issue would be determined in due course by A24 and Amazon. You’ll still be able to rent it as of May 3 on Apple, Amazon and a variety of other platforms, but the lack of a distribution channel like Prime tends to severely constrict the attention to a movie.”
It was a big budget documentary by award winning filmmakers Sean Fine and Andrea Nix Fines, produced at A24, an award-winning studio, and everyone involved was expecting the kind of high profile rollout that such films typically get. It was supposed to be available to stream for free on Amazon for Prime members. Everyone was expecting all this in part because that’s literally what they were told. And then the film got made and the studio is acting like it doesn’t exist. A24 apparently can’t even bring itself to tweet about its own film. It’s more than a little odd:
So what’s the explanation? Well, A24 simply didn’t answer the question at all for the article. And Amazon Prime gave a non-answer answer that didn’t really address the question. Which is an indirect way for both A24 and Amazon of sharing that they would really rather not publicly share the real reason:
Also note the somewhat confusing explanation given by Alexandra Pelosi, a documentary filmmaker who also happens to be the daughter of Nancy Pelosi. Pelosi seemed to somehow attribute the blame to a lack of ‘nuanced’ writing on the topic of January 6 by political writers which has apparently polarized the issue to such an extent that there’s a limited audience for a nuanced look at the issue. It’s an odd explanation, in part because it’s an explanation for why such a documentary might not be made in the first place. But this documentary is made and ready for viewing. Why not at least promote it?
It’s that lack of any readily available plausible innocent explanations for the complete lack of promotion brings us to the many people involved with the project who at this point can’t help but speculate that the answer is political. Someone with the power to block the promotion of this film doesn’t want the film promoted:
And that brings us to the profoundly disturbing possibility hinted at with the acknowledgment that polls suggest Donald Trump has an excellent change of winning the election. Are we seeing a kind of preemptive pulling of punches against Trump-related crimes in anticipation that Donald Trump is going to return to office on a mandate of political retribution?
Are we looking at A24 trying to thread the needle here in anticipation of another potential Trump presidency? They already made the documentary, but maybe if they don’t promote it Trump will spare them from his presidential wrath after returning to office...is that the reasoning here?
It’s all very odd. Someone got very cold feet. Why this happened is still a mystery. What isn’t a mystery is the fact that all indications are Trump could easily return to office and is currently running on a platform of retribution and mass purges of his enemies. Enemies that presumably include figures like Jeff Bezos. But who knows, maybe after this high-profile spiking of this documentary, they won’t be such big enemies anymore. Mission accomplished?