How the CIA profits from legal loan shark Wonga

The Guardian recently ran a story, which was part of a series, on Wonga. Although the legalized loan shark has received buckets of flying mud from many quarters, the Guardian missed a spot. While the public dialogue has noted Wonga’s capital backers, a detail that had been missed is that Wonga is backed by a trio of companies with a history of investment in intelligence community projects.

Money borrowed from Wonga gets repaid with outrageous interest. That interest flows to private equity firms. Those firms re-invest that profit into the very technologies that are directly used to monitor and suppress dissent. Thus a pound spent in London becomes profit in San Jose. That profit in San Jose is re-invested in computing services that run the disposition matrix (intelligence community speak for ‘kill list’) that President Obama uses every Tuesday morning to decide who dies, who is imprisoned, and who is suppressed in other ways. 21st century efficiency now has the most vulnerable in our society working double time to finance their own oppression.

Wonga is backed by Accel Capital Partners, Balderton Capital (The UK Spinoff of Benchmark Capital) and Greylock Capital partners. All have a history of investment in intelligence community projects.

Accel invested in Cloudera, which is a cloud computing platform company. In and of itself this seems little more than a solid tech sector investment decision. A look at Cloudera’s other investors shows us that some of their money came from In-Q-Tel, a non-profit venture capital firm owned and run by the CIA. It was founded by George Tenet when he was CIA director and it’s board serves at the pleasure of the agency.

One member of In-Q-Tel’s board is Howard Cox, who also is chairman of the board of Greylock Capital partners. Greylock has invested in with both Accel Capital partners and In-Q-Tel in Cloudera. Greylock also made a substantial investment in Wonga. Profits from payday loans thus directly lines the pockets of a man who was selected by the CIA to invest their money in promising technologies and he directly invested part of his cut of Wonga’s blood money alongside theirs.

Greylock has been seen recently investing more or less directly in politics at a very local level in San Francisco. Financing a political career is not the only way to spend working people’s money on influencing elections. Sometimes owning a voting machine or two could be handy. Wonga investor Balderton has positioned itself in that business sector quite well by backing Scytl, which delivers votes online and via cellphone. Scytl has a strong market position in Norway and is gaining ground in the US.

The bulk collection of email traffic and other communications has long been the province of the special relationship between the NSA and GCHQ. Sometimes intelligence gathering needs to more granular communications need to be socially contextualized within a geographic community. Perhaps this is why both Greylock and Balderton’s American parent Benchmark capital invested together in which is a neighborhood based social networking platform that partners with police departments.

While no longer being at the helm of the CIA, George Tenet is still in the investment game. He is a deal maker for Allen and Company which is part of this pack of private equity investors that seems to find their way to intelligence community oriented start-ups. Allen and Company is no stranger to backing up Accel on a big deal. The special relationship between the US and UK intelligence and defense services extends to the intelligence investment sector as well. Tenet formerly worked at the UK defense and intelligence conglomerate QinetIQ.

The tools of repression are complex and their development needs finance. When these products are ready for market, they can be purchased with tax funds that are then realized as profits to the same agencies that financed their development along with their chosen private sector friends.

Consumer products serve as a cash cow, and the currency flows to a set of firms that are nearly all headquartered on the same street in the San Jose suburb of Menlo Park. The web of investments is complicated but in the end there are a few firms that seem to appear alongside In-Q-Tel and each other time and time again. Why reporters in mainstream publications’ business sections have not noticed this decades long pattern is unknown.

These monsters of Menlo Park re-invest the profits they gain from companies like Wonga and Etsy into the tools that will be used to contain the social rage which inevitably flows from the global austerity measures that force working people to borrow money at obscene interest rates in the first place. Engineers call this a self-licking ice cream cone. Perhaps digging one’s own grave is a better metaphor.

Date Originally Published: 
Friday, April 24, 2015
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