How the Snowden Leaks Gave Pierre Omidyar a Cause and an Enemy
by Andrew Rice, New York Magazine, November 2, 2014 (excerpts)
...Omidyar was an admirer of Obama’s right up to the moment the Snowden story broke, and many people who know him well, the types you might meet at CGI, struggle to explain his sudden turn toward confrontation. “He’s a very serious and public-spirited person,” says General Wesley Clark, who has been friendly with Omidyar since he raised money for his 2004 presidential campaign. Clark has publicly dismissed concerns about NSA surveillance and told me he couldn’t really explain why Omidyar was so agitated. Omidyar is mellow by nature; he lives in Hawaii and is a devotee of Buddhism. “He’s not this hard-core, radical maverick,” Greenwald says. “Back before this all happened, he just seemed like the normal, average, amicable billionaire.” Omidyar has communicated little about his motivations beyond a handful of abstruse public statements. He remains a remote and somewhat mysterious figure, even to his collaborators.
Many in the philanthropy world were aghast when Omidyar began mingling altruism and capitalism, but he dismissed the objections as “old thinking.” He found an area that promised to unite both instincts: microfinance. Omidyar loved the idea that giving out tiny loans in developing countries could unleash entrepreneurialism. He endowed a $100 million fund, administered by Tufts, that invests in microfinance institutions, and donated to numerous nonprofits in the sector. In 2008, Omidyar took a trip to India, where he visited a village near Hyderabad with the founder of a lender called SKS, in which Omidyar Network was an indirect shareholder, via a 22 percent investment in a Cayman Islands–based private-equity fund. He watched as cross-legged women in saris borrowed cash. But when SKS mounted an IPO, the microfinance venture turned into a philanthropic debacle. Unitus, Inc., the Omidyar-supported nonprofit that ran the private-equity vehicle, had a convoluted structure rife with potential boardroom conflicts of interest. (“We have managed to stay out of jail, so we must not be violating any ethics,” one Unitus board member assured a consultant paid by Omidyar.) As it prepared to reap millions from the stock sale, Unitus disbanded its charitable microfinance operations, declaring the concept “validated.” But SKS’s stock later crashed in the midst of political uproar in India over harsh collection tactics, which were tied by opponents to a number of suicides.
Omidyar seems to take such setbacks in stride; he sees traditional philanthropy as overly risk-averse. “In Silicon Valley,” he said at a 2011 nonprofit conference, “we say if you haven’t tried something and failed, and actually learned something from that failure, then why would I want to work with you?” But Omidyar’s habit of investing heavily in big ideas, and sometimes dropping them abruptly, made him appear fickle and inscrutable to many in the philanthropy world. “He got this reputation of being an arrogant know-it-all,” says one nonprofit-sector consultant, echoing Omidyar’s earlier self-assessment. “But they all kissed the ring because they wanted his money.”
When Omidyar moved away from microfinance, he returned his attention to another desperate population: journalists. Fixing the problem of news appealed both to his apocalyptic side — in 2007, he proposed creating a peer-to-peer text-messaging service that would help people to “survive a flu pandemic or other widespread disaster” — and to his belief in the responsibilities of citizenship. In 2008, he started a company called Peer News, working with a small team of programmers in an office in Honolulu. At first it developed a system called Ginx, which was supposed to track the information coursing through Twitter. But it wasn’t able to break into the crowded market, so Peer News pivoted: It would create an ad-free subscription website covering Hawaiian government.
Omidyar conceived of the Honolulu Civil Beat, launched in 2010, as what he called “a new civic square,” and he hoped to reproduce the model around the country. He recruited a staff of six “reporter-hosts” led by a newspaper refugee, John Temple, whose last editing job had terminated with the closure of the Rocky Mountain News. After a difficult start — half the initial reporting staff left within months — the Civil Beat found its niche in weighty investigations. Omidyar was a constant presence in the newsroom. When Pam learned of a remote beach that was despoiled by washed-up plastic, they flew there on his private jet with a reporter. Omidyar took the website’s photos himself.
As a business, however, the Civil Beat never thrived. Omidyar was tight-lipped about audience numbers, even requiring his reporters to sign confidentiality agreements, but the subscription model clearly didn’t work. On Twitter, he pleaded to know how much a reader was willing to pay for his journalism: “No amount, no matter how small? Or a fair price?” Ultimately, he formed a partnership with Arianna Huffington to collaborate on an advertising-supported sister site. While the Civil Beat still covers politics and pension funds, HuffPost Hawaii promotes clickable content like yoga articles and photo galleries of cute seals.
The compromise solution assured the Civil Beat’s survival, but it was far from Omidyar’s original vision. For all his good intentions, he was still searching for that galvanizing cause. Little did he know it had been hidden there all along, in an underground bunker 25 miles outside Honolulu that served as an NSA signals operation center. On June 1, 2013 — three days after the HuffPost Hawaii partnership was announced — a technician who worked at the facility, Edward Snowden, made his rendezvous with reporters at a hotel in Hong Kong.
The radicalization of Pierre Omidyar happened with jarring swiftness. In 2012, he advertised his proximity to Obama — he served on a presidential commission — by tweeting out a photo of Marine One hovering above the White House lawn. That same year, he responded to campaign-season viciousness by tweeting out a list hashtagged #RepublicansIRespect, citing figures like Robert Gates (a former CIA director) and Condoleezza Rice. He started the Democracy Fund, a foundation intended to promote moderation. “I’ve heard him use the term anti-partisan to describe himself,” says Joe Goldman, the fund’s president. “He believes it’s dangerous to get caught up on one side or the other.”
But on June 5, 2013, Omidyar’s Twitter account posted a link to a Greenwald story in the Guardian: “Revealed: NSA collecting phone records of millions of Americans daily.” The issue touched a nerve in him — if ever there were a power that needed watching, it was the NSA. As further stories described the extent of the surveillance and Snowden identified himself, Omidyar vented his outrage. “Mr. President, look in the mirror,” he tweeted on June 23, “when did America become a country to seek asylum from? Whistleblowers are not spies.” On July 4, Omidyar tweeted the text of the Fourth Amendment. At this juncture, there were many ways Omidyar could have gone about influencing policy. He could have sought a meeting at the White House — Pam’s human-rights organization collaborates closely with the national-security staff — or he could have funded a super-PAC. He could have rallied his fellow Silicon Valley billionaires to flex their lobbying might. Instead he decided to build a machine for confrontation and, as he puts it, “to convert mainstream readers into engaged citizens.”
As First Look raced to launch the Intercept, its vehicle for advancing the Snowden disclosures, an Omidyar Network headhunter was dispatched to harvest talent, promising journalists the creative freedom that comes with a $250 million budget. Omidyar probably expected that the potential beneficiaries would be grateful. Instead, there was much gossip and trepidation. Within the ecosystem of journalism and transparency nonprofits, there is hardly an organization that doesn’t take Omidyar’s money, or hope for it, but many are wary of his influence. “If you’re answering to Omidyar,” says the director of one, “then you’re really not independent.” And Greenwald himself, who had declared war on U.S. intelligence and rejects journalistic pieties about objectivity, is a polarizing force. “I think the concept of adversarial journalism is a limited and flawed one,” says Steven Aftergood, the author of Secrecy News, a respected blog that has received past Omidyar Network funding. “It is not an impartial search for truth as much as it is a combative attempt to defeat a perceived adversary.”
To take on the intelligence agencies, First Look has adopted some elements of spycraft. It is seeking out moles, and one of its first hires was a cryptography expert, who fortified its systems against penetration. To protect journalists from government retaliation, Omidyar established the Press Freedom Litigation Fund. But despite his aggressive approach, Omidyar ran into immediate criticism from the conspiratorial extremes of the left. Julian Assange attacked the “big power” of First Look, calling Omidyar an “extreme liberal centrist” and questioning his suspicious visits to the White House. The tech-news site PandoDaily published a series of scathing articles. “Never before has such a vast trove of public secrets,” journalist Mark Ames wrote last November, “been sold wholesale to a single billionaire as the foundation of a for-profit company.”
Earlier this year, Omidyar convened a staff retreat at his Las Vegas mansion, which produced a declaration of editorial independence, promising that First Look would be incorporated as a nonprofit and that he would have “no involvement in the newsroom’s day-to-day operations.” In reality, though, he was deeply involved, demanding personal approval of even trivial expenses, and intent on finding a way to make the venture financially self-sustaining. But his staff was determined to hold him to his promise of “independence.” Many are vociferous personalities, not known for playing well with others. When one prominent editor was approached about a management role, he told Omidyar’s headhunter, “You don’t need an HR department, you need a psychotherapist.” ....
read ... November 3, 2014 issue of New York Magazine.
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