The Lost Omidyar Chapter: Part I
How eBay, a libertarian hobby auction site, grew into an arm of the U.S. National Security State.
A few months ago, I promised to reprint the unfinished chapter on Pierre Omidyar that I ended up cutting from Surveillance Valley, my book about the forgotten counterinsurgency history of the Internet.
I’ve mentioned Pierre on here recently. These days, he’s best known as the “good” billionaire who set up and funded The Intercept. He been a darling of the progressive world and he’s still praised by the biggest, most adversarial names in media as an honorable and trustworthy man. And as I recently found out, Pierre’s influence on progressive and left-leaning politics continues to expand. Turns out the Omidyar Network, Pierre’s massive investment apparatus, has been bankrolling things like tech worker organizing and tech anti-trust initiatives. (I’ll write more on that later).
So it’s important not to let this guy out of our sight. I’d say he’s one of the scariest tech billionaires out there, and yet few people know much about him.
When I was writing Surveillance Valley, I wanted to include Pierre’s story because it fit so perfectly into the larger thesis of my book. But for some reason I couldn’t make it work, and I abandoned the chapter half-written back in 2017. But the story is still interesting and important enough to publish, even if the chapter is not fully complete.
Below I’m publishing part one of what will probably be three or four segments.
—Yasha Levine
PS: Mark Ames did the best — and pretty much the only — reporting on Pierre Omidyar. Some of my own work is inspired and informed by his reporting, which I think everyone should read. Here are some of his most important stories:
“eBay Shrugged: Pierre Omidyar believes there should be no philanthropy without profit”
“Keeping Secrets: Pierre Omidyar, Glenn Greenwald and the privatization of Snowden's leaks”
“Pierre Omidyar co-funded Ukraine revolution groups with US government.”
Part I: The Beginning
It was November 7, 2013 in New York. United Nations Ambassador Samantha Power took the stage at the Waldorf Astoria Hotel in midtown Manhattan. Tall and skinny with a gaunt face, she addressed a high-value crowd.
President Bill Clinton was there, as was Madeleine Albright, the former U.S. Secretary of State — infamous for her cynical death calculus. But the star of the night was oligarch investor George Soros. He was there to accept his second Freedom Award, one of the top honors given by in America’s foreign policy establishment. It was the first time in history that the same person was honored with two Freedom Awards. Winston Churchill only got a single award, while Presidents George H. W. Bush and Bill Clinton were embarrassingly forced to split one between then.
Samantha explained to the A-listers eating their dinners, the reason why George Soros was being honored like this was his Open Society Institute and the role it played in pioneering a new privatized way of doing foreign policy.
“After the Cold War ended, beginning in Central Europe, his Open Society Institute assisted countries in making the difficult transition from authoritarian to democratic rule. Today, the Foundations are active on every continent, striving to promote vibrant and tolerant democracies with strong civic institutions and justice and health systems that work. It is rare that a week goes by, in my new incarnation — and I mean this — where I don’t meet an ambassador to the United Nations, a head of state or minister, a journalist or civil society advocate who didn’t either graduate from the Central European University, receive an Open Society grant, or once run an Open Society office. That’s how much George has populated the planet with his dedication to human rights and human dignity,” Samantha explained to the crowd. She added that she owned George Soros a personal career debt. “I myself would not have been able to spend years working on a long book on genocide if not for George Soros and the Open Society Foundation’s generous support.”
George had indeed made a global impact. More than a decade earlier, he had built and perfected a hybrid private-public foreign policy model that melded corporate foundations and private investment initiatives — backed up government power — to project American imperial interests abroad. It was a method perfectly suited for America’s neoliberal age.
On stage, Samantha gushed about George’s Open Society Foundation and his pioneering work in melding corporate power and private investments with American public diplomacy, and she pointed out that all sorts of private foundations that were were emulating the Open Society model. These were the heirs of George Soros philanthropic vision, she said. Among them: eBay founder Pierre Omidyar and his wife Pam.
"The new philanthropists—the Soros-modeled philanthropists—donate money, but they do so while they’re still in the prime of their lives. And alongside money, they contribute knowledge, entrepreneurial savvy, technological knowledge,” she said. “All the skills that they’ve brought to bear in the private sector, they’re able to apply to a world that really needs it. And through his example, George has given definition to what it means to be a modern philanthropist, to be a doer, paving the way for Bill and Melinda Gates, Warren Buffet, Pam and Pierre Omidyar, and others. George was first.”
Samantha Power was right. George Soros’s tenure was indeed impressive.
George — who in his prime looked like a less attractive, off-Hollywood version of Michael Douglas — was born in Hungary, survived the Holocaust, immigrated to England after the war, and rose up to be one of the most powerful and cutthroat financiers in the world — a man who could shake down entire countries and extract billions from risky speculation. At the same time, he built one of the most influential private foundations of the world. In the United States, where he lived, he and his fund cultivated a progressive image. He funded news outlets like The Nation magazine and DemocracyNow. He sunk millions into criminal justice reform and bankrolled a failed effort to oust Republican President George Bush from the White House. The Republican right painted him as some sort of crypto-communist extremist whose goal was to enslave America with “Cultural Marxism” aka Judeo-Bolshevism. Abroad, his philanthropy showed its true colors. Put simply: it was neoliberal.
Set up in the early 1990s to promote “democracy” in the former Soviet Union, the Open Society Institute built a powerful influence-peddling network all across the former empire. It cultivated future politicians and trained budding businessmen and post-Soviet oligarchs. It bankrolled opposition activists and political parties and had programs for journalists and academics and all sorts of scholarships and education programs for a generation of ambitious young people growing up in the rubble of the communist world. His philanthropic machine churned out a diverse range of types — from Prime Minister Viktor Orban in Hungary to Evgeny Morozov, the public intellectual who got plucked out of Belarus to promote cyber democracy and Internet Freedom.
At its heart, the foundation worked towards unified ideological goal: making neoliberalism the religion of the land and making sure that the former Soviet Union transitioned to a privatized, deregulated economy as quickly as possible — and stayed that way. This was in line with George’s personal beliefs. But it also fit with his investment priorities. He was one of the first and biggest investors in the former Soviet Union, and had swooped up to buy up Russia’s newly-privatized state assets for kopeks. So it was in his interest to keep this market — rich with public and natural wealth — as privatized and open to international capital as possible.
Talking to reporters, George was frequently candid about his interventionist ambitions to shape the politics in the former Soviet Union, including a big push to elect a crop of pro-western leaders in Ukraine. “If this isn’t meddling in the affairs of a foreign nation, I don’t know what is!”
But the Open Society wasn’t just the private initiative of a single ambitious oligarch speculator. The organization was tightly integrated into an overlapping network of imperial American government agencies: the State Department, World Bank, National Endowment for Democracy, and USAID. In that sense, Open Society functioned as a privatized arm of the American Empire. And as a private initiative, it had a big advantage over its government peers: a lot more freedom to work abroad without requiring tricky diplomacy or political wrangling. Best of all, it was free of any public oversight or scrutiny — and couldn’t be directly died to the U.S. government.
That’s why United Nations Ambassador Samantha Power was praising George that night. It was also why she named Pierre Omidyar, the founder of eBay, as one of George’s heirs. She saw Pierre as continuing his successful Open Society model — but with a new Silicon Valley cybernetic-utopian twist.
So who was this Pierre?
The Perfect Market
Pierre Omidyar — a young programmer with a small round head and a neat black ponytail and who had an uncanny resemblance to Goofy — was born in France to Iranian parents. He moved to the United States as a kid and grew up in Hawaii, where he attended the same elite private school as future president Barack Obama. After studying computer science at Tufts University, he moved to Silicon Valley and went to work at General Magic, a company started by several founding engineers of Apple Computer who were trying to develop an early version of a tablet they called a “personal communicator.”
Pierre was in Silicon Valley at the start of the dot-com boom, so it was only natural that he try his hand at investing and playing the IPO investment game. But he ran into something that all small-time investors had to deal with: a rigged Wall Street system. When firms like Goldman Sachs or Lehman Brothers took a company public, they structured the deal in a way that allowed privileged insiders — usually other investment banks and high-worth individuals — to buy shares at an exclusive low sale price unavailable to regular investors. The practice was called “spinning” and took all the risk out of investing, guaranteeing huge profits to a small clique of insiders. And it made Pierre very upset.