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nettime:*The Soros Network, Horvath

The Soros Network

by John Horvath

When trying to navigate through the myriad foundations and organizations
supported by Soros, it's quite easy to get lost. At present, the keyword
which all of them have in common is open society. Accessing the Soros
homepage on the  Web , you immediately come across the conceptual framework
by which Soros operates his open society activities: "The concept of [the]
open society is based on the recognition that people act on imperfect
knowledge and nobody is in possession of the ultimate truth."
(see also George Soros The Open Society Reconsidered )

Sounds quite impressive. What is equally impressive are all the reports
from the different parts of the world about what the various Soros
foundations are doing. They all contain the same components, though worded
differently and presented according to the political environment they
operate in. The bulk of Soros' activities are centered around education,
publishing, and media. Various scholarships are offered to students in
order to give them, in theory, access to resources. Similarly, Soros sponsors
various cultural activities in order to bring resources to people.
In Albania, for example, the Soros Foundation organized an exhibition of
paintings four years ago which, according to Eduard Muka, an artist and
assistant-professor in the visual arts department of the academy of visual
arts in Tirana, "was the only known medium at the time".

Yet exhibitions haven't only been organized for the remote and
disadvantaged areas of Central/Eastern Europe and the former Soviet
Union. In Budapest recently there was an exhibition at the Ludwig Museum
called "Beyond Art". After Budapest, this exhibition moved on to Graz. The
presentation of this exhibition in Hungary was done in collaboration
with one of the Soros Foundation's newly established organizations in the
country, called C3.

C3 stands for the Center for Culture and Communication. The purpose of
the center is to feature courses and workshops on the Internet,
communications and new media. At the center's inauguration over the summer,
Soros remarked that the Internet is vital to help build an open society.
is an ironic statement coming from a man who is not a direct user of the
Internet himself.

As C3 demonstrates, Soros' activities haven't been limited to supporting
educational mobility and exhibitions, but has also been involved in the
creation of educational and media facilities. Perhaps the most well-known
of these is the Central European University (CEU), an accredited,
degree-granting educational institution that is "dedicated to educating
students from the region and to researching the transition underway

Yet not all of Soros' activities are on such a big scale or funded
solely by him and/or his foundations. For example, a photo lab established
five years ago in the Academy of Fine Arts in Budapest was done so not only
with the help of the Soros Foundation, but that of the British Council as well.

Although Soros activities are similar in many respects, they are also
unique to the region in which they are undertaken. One of the biggest
projects launched by the International Soros Foundation (ISF) was the
development of the backbone in Moscow, which would link commercial and
academic providers and institutions to the city's telephone switching
centers. As Gordon Cook, author and compiler of the  COOK report
(email:cook@cookreport.com), a monthly review of computer and net-related
issues, explained in a report of December 8-11 1994, "the purpose of the
backbone was to link the city's commercial and research sites to each other
and to an international channel that [would bring] Russia 'live' onto the
Internet for the first time."

In Russia, Soros hasn't limited himself to just Moscow or the "European"
side of the Urals. Recently, some 12,000 students and teachers at the Far
East State University in Vladivostok were hooked up to the Internet. This is
all in accordance with a special five year program signed between him and Prime
Minister Viktor Chernomyrdin in the spring of 1996 which will see 32
Russian provincial universities all hooked up to the Internet. Already, as
part of this program, like projects have been completed in the Central
Siberian city of Novosibirsk and, closer to Moscow, the industrial center
of Yaroslavl.

Meanwhile, in other places of the former Soviet Union, a plan for
development that mirrors the Russian one is underway. In Belarus, work has
begun to to set up a powerful IP backbone network in Minsk that would make
Internet access possible for a large number of organisations throughout the
country. In addition to such technical assistance, the Soros Foundation in
Belarus has set for itself the task of introducing and spreading "Internet
culture and ideology" as a means of "bringing together large groups of
different users". The purpose for this is quite clear. According to
Igor Tavgen, Program Coordinator for the Soros Foundation in Belarus, the
"Internet is developing now and will keep on developing. The president
can't close it down, and nor can a minister or anyone else."

These are brave words, especially taking into account the political
situation in Belarus. This is one of the unique aspects of Soros'
activities. Unlike other non-UN funded agencies, such as the British
Council, the Soros Foundation can be found in the most politically volatile areas of Central/Eastern Europe and the former Soviet Union - including Bosnia and Serbia. In Moldova, for instance, the Soros Foundation has been involved in
a computerization program for secondary schools as well as teacher training
programs and other related activities.

Activities in these politically volatile areas are usually in support of
independent media, namely independent radio stations. Linked with this
is the issue of human rights and the environment. In 1995 a meeting of NGOs
from Moldova, Romania, and Ukraine to discuss environmental issues and
policies was organized and funded by Soros, along with funds from the European
Commission's TACIS (Technical Assistance for the Commonwealth of
Independent States) Programme.


                         Philanthropic Problems

Despite its good intentions, there has been some serious criticism in
the way in which the Soros foundations operate - internally and externally.
Moreover, the problems appear to be prevalent throughout Soros' network of
foundations and organizations. Subsequently, questions and doubts have
been raised as to what the true nature of Soros' philanthropic
enterprise really is.

Internally, there is a feeling among many that the way in which the
Soros organizations are run is merely an application of old style methods and
concepts to situations, when it is these same old style methods and concepts
that are the problem in the first place. In addition to this, innovative
processes are far too often being obstructed and paralyzed by traditional
views and hierarchies. For instance, in a controversy that broke out over the
completion of the Moscow backbone, Cook noted with dismay that "no one is
interested in cooperating with anyone else and everyone is out to build his
own empire."

When talking about Soros' "open society", it is often this openness that
appears to be missing. A lot of what has been done is mere words. Good
intentions have not always translated themselves to successful change.
Some professing to be committed to an open society appear to be merely
jumping on the bandwagon, hoping to extract what is available in terms of
grant money. In many cases, those working for Soros organizations are economic
migrants from western countries, mostly the US. Because the entry level
for white collar jobs are almost non-existent in America, many have decided
to gain experience first or work abroad and wait until the situation improves
back home. Very few Soros employees share their top boss' philanthropy.
Indeed, when you hear them talk about their love for humanity, they expect to
be paid for it.

Furthermore, in order to work for Soros it appears that you have to be
part of a clique. People within the Soros network seem to drift from
organization to organization, not only within the same country but
internationally as well. Jobs are handed out on the basis of who you know,
not what you know. Although most organizations follow transparency
procedures for hiring, such as advertising for posts and conducting
interviews, such procedures are mere formalities. Jobs are already decided in advance. Many people working within Soros organizations got their jobs by already knowing about openings months prior to them being made public.

In conjunction with this, there are people employed within the
foundations and other organizations who are clearly underqualified - or not
qualified at all. For example, at CEU in Budapest, computer science courses
are frequently taught by someone who is neither a professional teacher nor
fully computer literate. At another location in Budapest, a translator who
clearly can't translate from Hungarian into English has her mistakes
repeatedlycovered by her colleagues. Thus, personal connections takes 
precedence over ability.

Ironically, for those living within Central/Eastern Europe and the
former Soviet Union, such corruption and incompetence is an "open secret"
of sorts. It's widely known that huge amounts of Soros money is wasted. At
the opening meeting of C3 over the summer Janos Sugar, an artist and member
of the Media Research Foundation, blasted C3 openly about the way in which
money was being wasted. C3 had subsequently spent all their money on the
latest in hardware, only realizing afterwards that they had not enough
money to buy the software they needed.

Perhaps the best example of Soros money being callously thrown away is
in Sarajevo. In a posting entitled "Beserkistan: Internet Link to Sarajevo
University Goes Unused", (BosNet July 16, 1996, via  Nettime ), it was
revealed that a high speed Internet connection between Amsterdam and
Sarajevo University was idle because, according to one project
participant, "we've got some old Stalinists on the board who seem paralyzed."
As a result, both Soros and the Dutch university that participated in the
project (Vrije Universiteit) are paying $5,000 a week for a satellite
transponder that is not being used.

There are a host of other examples. But not all the problems with Soros
has to do with the internal organization of his foundations. There are equally
as many problems with the way in which Soros has been dealing with the
governments and administrations it has to work with. The case of the
Moscow backbone is an example of how a Soros foundation can turn something that
was much needed and welcome into something highly controversial.

The Moscow backbone is a broken backbone. And as anyone who's had a
dislocated spinal vertebrae can tell you, it's no laughing matter.
Messages sent from one side of the city to the other had to go through the US
first rather than directly across the city. The situation since 1994 has
apparently improved somewhat. The backbone is still broken, but a way has
been found to send messages more directly than rerouting them through the US.

Still, the fact remains that the backbone is broken, for the ISF has
refused to help finish it. The reason for this is because it would entail
the ISF to share control of it with a major commercial provider, Relcom.
According to the ISF, since the Soros foundation is a non-profit
organization and uses public funds, any infrastructure that it develops
can't be commercial for it would be a conflict of interest and against
taxation laws.

However, such an excuse appears to be a lame one at best. There should
be no problem with a non-profit organization sharing the use of the same
infrastructure with a commercial provider as long as both pay for it
separately. As Cook summarizes: "Again and again there was an emphasis that
commercial and academic networking could not be allowed to mix. Again
and again academic and commercial groups were building separate infrastructure
in a country with capital hardly sufficient to adequately support either."
Thus, what appears to have happened in Moscow was the backbone became
a victim of power politics. As Cook succinctly put it: "You are either a
friend or an enemy of [the] ISF and are treated accordingly."

                           Foundation Focus

More important than how the Soros foundations work internally and
externally is the focus they have. The main focus of the "open society"
appears to be the media, especially visual media and media art. This is a
very narrow range in the world of telematics. Indeed, in regions where a
small minority of the population has access to the new media - not to
mention basic telecommunication facilities (i.e. a telephone) - the "open society" concept is questionable: exactly which "society" does it refer to, 
and in what way is it "open"?

Admittedly, most foundations consider it part of their task to help more
people get online. Still, the focus of foundations seem to be based on the
assumption that under the previous regimes in Central/Eastern Europe and
the former Soviet Union the media was nothing more than a perpetrator of
lies, a weapon of the Cold War used indiscriminately by the communists. 
Yet many westerners who lived in the former communist states during the 
Cold War years were usually surprised to find that those on the "other side" 
of the Iron Curtain were at times better informed than those in the west.

During the sixties and seventies, most communist regimes had undertaken
programs to "liberalize" their regimes. The Stalinist ideology of
maintaining power through brute force was being replaced by a more benign
form of dictatorship that sought to legitimize the status quo which, as a
result, paved the way for political detente with the west.Hungary's
communist leader, Janos Kadar, best expressed this new thinking through his
statement that "he who is not against us is for us."

Subsequently, the way in which the media - and intellectuals in particular -
were treated during this period changed. Although they could never be
fully independent, the media was given, nonetheless, a quasi-independent
status, in where little was expected of them in return for a limited amount of
freedom to pursue their interests and concerns through themes related to
national and sociological issues. While the media still served as a form of
social control for the government, it also served as an outlet that enabled
the intelligentsia to criticize the government in a tacit sort of way. By
allowing the intelligentsia and media together to deal with their favorite
subjects (such as suicide in Hungary and alcoholism in Russia)
semi-independently, the various communist governments throughout the region
were able to elicit their passive support.

As for those on the receiving end, people eventually perfected the art
of "reading between the lines", a skill that is still absent in the west
since everybody is under the illusion of a "free press". Because people were
aware of inconsistencies and inaccurate information they received from the
media, accentuated by their increasing contacts with foreigners, people tended
to be more skeptical and were less likely to take what they read, saw, or
heard at face value. Knowing that their governments not always told the
truth, or at least hid it from view, it can be said that many people within
eastern Europe were more free than in the west since they knew they were not "free" and were subsequently not under any illusions of a "free media".

Since the political changes of this decade, this skill has now become a
dying art. Furthermore, the Internet merely reinforces the illusion that a
free and independent mass media can exist. Thus, it seems that the premises of
the "open society" is actually leading the societies in question to become
further closed.

To make matters worse, what the Soros foundations have not addressed is
the flood of new ideas and methods that potentially contradict one
another. The "free market", democracy, environmentalism, etc. are all
accepted as a complete package from the west, without addressing the
weights and balances between them. Many do not see the potential conflict, 
for example, between consumerism and environmental protection, in where a
substantial part of the global environmental problem is conspicuous
consumption, a by-product of free-market capitalism.

What is even more damaging to the societies in which the Soros
foundations operate is the way in which the "open society" mentality has been
driving a wedge between the rural and urban sectors of society. Activities are,
for the most part, centered on urban, industrial, and western values which
neglects the needs and values of rural areas. Hence, though "culture" and
"society" cover a very broad range, the foundations which use these terms have
narrowed their interests at the expense of a substantial part of the

The Soros foundations are in need to establish more objective
guidelines. Moreover, in addition to their support of independent media and
infrastructure development projects, they need to increase awareness about
technological change to more rural and remote areas. This should be done not
by just giving handouts, but by having experts show what an open society
really is.

Ultimately, this is where the difficulty lies, for western countries
cannot be regarded as truly open societies themselves. Unfortunately,
people have come to equate material goods and conspicuous consumption with
openness, when in fact material goods and conspicuous consumption is a means 
by which the public is placated; in other words, it's a way of "buying off"
the masses.

                            A Closed Secret

At this stage, the question naturally arises as to the role of George
Soros himself in the activities of the foundations. There have been some
suggestions that Soros doesn't seem to really care how his foundations
are run at the local level. Such views suggest that Soros is motivated more
by guilt of having made so much money or simple eccentricity than genuine

Most, however, would argue that, given the size of the area in which he
is involved, it is impossible for Soros to keep an eye on everything at
once. Like all huge empires, political and economic, the person on the very top
rarely has total control over the day-to-day administration of the lower strata
of the hierarchy. Therefore, excesses are only to be expected given the scope
of Soros' philanthropic effort.

Furthermore, the problems experienced appear to be isolated events. For
instance, the controversy over the Moscow backbone was not evident in
Minsk, or elsewhere for that matter. According to Igor Tavgen, "the
Internet program works very closely with other Belorussian Soros Foundation
programs and has good relations with other organisations and foundations
operating in the Republic of Belarus." This includes Relcom, the same
organization that the ISF in Moscow refused to share the backbone with.

To this extent, it can be argued that Soros is simply naive or even
ignorant of the activities of what goes on in his foundations. As proof of this,
despite the rhetoric of how instrumental the Internet is in an "open
society", and the amount of money that is being invested to this extent,
neither Soros nor some of his top executives, such as Alexander Goldfarb, Director of Foreign Operations for the ISF, have any real understanding of the Internet since neither of them are direct users.

But the situation looks to be far more complex than this. Rather than
promote an "open society", Soros seems to have recreated the status quo on a
different scale. The same type of bureaucracy that had existed under
communism appears to be in control of foundation activities. Ironically,
this is the very antithesis of the "open society" concept. As one "netizen"
observed: "they just want to get their toys back and they skillfully use [the]
market now to do the job. Electronic media are just one of the most obvious
example - this is a clear attempt to establish a monopoly on information."

Likewise, from an economic perspective, the "open society" closes more
doors than it opens. As Geert Lovik of XS4ALL, an access provider based
in the Netherlands, once remarked, "Soros is interested in connecting slow
and official NGO bureaucracies, leaving the rest of the population to the
market." Hence, there seems to be a contradiction between Soros' desire to
establish a socially-oriented telecommunications infrastructure and Internet
culture on the one hand, and commercial interests on the other.

As a result, negative views toward the activities of Soros and the "open
society" have emerged. And it is not just a question of economics. There
have been instances of Soros having a political influence in the region. In
an article by Connie Bruck in the New Yorker two years ago, the Soros
Foundation was shown to be instrumental in the election of the president of
the Ukraine.

The most likely use of the ISF, however, would seem to be as a means for
shrewd market penetration in an economically prostrate region. By
concentrating on the media and telecommunications infrastructure
development, to what extent is the ISF building a Soros-controlled
telecommunications empire that spans from the Pacific to Central Europe?
Cook poses the question more elaborately:

"[what would happen] if, as part of the next stage, [the] ISF puts
similar backbones in Russia's 10 or 15 largest cities and connects each city
together by satellite or terrestrial links? If Soros under the rubric of
telecommunications infrastructure for scientists creates such a network he
will have effectively created an alternative [not] only to Relcom, but will
operate and control what may be the best telecommunications infrastructure
in the entire Russian nation. Is his goal then to create and control a Russian
equivalent of AT&T?"

In conjunction with this, are the media based cultural activities that
the ISF organizes merely a way for educating a new generation of users and,
hence, consumers? According to one source cited by Cook, "Soros disclosed that,
apart from his philanthropies, the investment funds which he 'advises'
may take positions in telecommunications ventures in Eastern Europe and the
FSU [Former Soviet Union]. So, don't be surprised to see the Soros
funds' investing in telecommunications companies that service that part of the

While Soros may publicly reject the idea of working with commercial
entities, as exemplified in the Moscow backbone dispute, reality appears
otherwise. In the creation of C3, for instance, the Soros Foundation had no
qualms about co-operating with MATAV (Hungary's monopolistic state
telecommunications company) and Silicon Graphics, despite the fact that the
latter two partners are clearly commercial. One wonders whether Soros'
philanthropic activities are really nothing more but mere covers for an
elaborate form of market penetration and exploitation.

Indeed, the use of philanthropic organizations as a cover for economic
and, ultimately, political and social exploitation already has a precedent.
In their exhaustively researched book, "Thy Will be Done - The Conquest of
the Amazon: Nelson Rockefeller and Evangelism in the Age of Oil" (Harper
Collins), authors Gerard Colby and Chalotte Dennett documented the process
by which Nelson Rockefeller was able to conquer the Amazon and other
South American regions for US corporations with the help of religion and
philanthropy. This was done by encroaching into coveted territory by
selling American agricultural products to South American farmers through
supposedly philanthropic organizations. Eventually, the farmers were
forcefully removed from their land. A comparison with Soros is
frighteningly similar: the difference between them is Rockefeller went
south, Soros east; Rockefeller's objective was oil, Soros

At this point, one begins to wonder if Soros' activities aren't part of
some larger plan. Mark Stahlman of New Media Associates, who studies and
enquires into the nature of, and relationship between, social
engineering and technology - utilizing the theories and works of various
people like H.G. Wells, Alvin Toffler, and John Perry Barlow - finds the
larger dimension of the ISF interesting. Although he doesn't see Soros
deliberately trying to conquer the world, the philosophical basis of his
philanthropy is open to debate. This is especially so for the concept of the "open society". When combined with the Rockefeller's tactics in the Amazon, such
philanthropy turns out to be an even more clever control mechanism than the
authoritarianism it seeks to displace.

Actually, the idea of the "open society" is not Soros' to begin with,
but belongs to a revered mentor of his: Karl Popper. Popper and his
Viennese Circle at the London School of Economics always had a
control-through-empowerment concept as their main focus. Given such a
paradigm, which sees social engineering and population control as its main
task, the question naturally arises: how do you regulate an "open society"?

One possible solution to this problem can be found in Bernard de
Mandeville's 1714 essay, "The Fable of the Bees: Private Vice, Publick
Virtue." Accordingly, the purpose of an "open society" is to "liberate"
daily life by making it an endless stream of satisfactions of infantile desire,
while the overall "environment" (i.e. all the important issues facing society)
would be rigidly controlled from the top down. This mirrors what Stahlman
describes as the "English Ideology", that is, libertarianism in the form of an
"anything-goes" small-scale private life combined with rigidly defined,
large-scale constraints that are controlled by a technocratic elite.

While such a scenario may seem "fantastic", the Internet has actually
brought it that much closer to reality. Individuals are escaping into virtual
worlds by "surfing the net" and the use of interactive games (and other
programs). Meanwhile, political leaders are planning and praising the rapid
steps that are being taken toward the establishment of a global economy.

Applying this pattern of development to the work of the Soros
foundations, it can be surmised that the LSE's "open society" ideology is
being planted in Central/Eastern Europe and the former Soviet Union by
taking advantage of the sociopolitical and economic collapse that followed
the "end" of the Cold War. Consequently, the "open society" has become a
very sophisticated imperial approach that is using people against themselves. 
In many ways, it reflects the way in which communism had maintained its influence in the region for a major part of this century. It shouldn't come as 
a surprise, therefore, that the nomenklatura, which seems to have a hold on the way the ISF is run, is working in symbiosis with Soros and his "open society".

Whether such a relationship is indeed the case or whether the Soros
foundations are merely beset with difficulties due to nativity,
ignorance, a bloated bureaucracy, guilt or, on the more negative side,
predatory capitalism, only George Soros knows. Yet, in spite of all this,
the fact remains that there is a lot of money and resources floating around
Central/Eastern Europe and the former Soviet Union that can be of benefit
to the people of the region. In the end, if the various foundations run by
George Soros are truly part of a philanthropic effort, then he must make
his intentions clearer and reform them in the way they are run. Otherwise,
the open society is clearly something that exists in name only.


              Copyright © 1996 All Rights Reserved. Alle Rechte
                          Verlag Heinz Heise, Hannover
                            last modified: 31.1.97

Posted with the kind permission of Teleopolis (www.heise.de/tp)

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