Iowa debacle fueled by anti-Bernie billionaires, Russiagate hucksters, failed DNC elites

Max Blumenthal breaks down the shadowy network of billionaires, Democratic elites, and Russiagate profiteers behind the Shadow app that ruined the Iowa caucuses, and a wider effort to stop Bernie Sanders’ progressive momentum.

Iowa’s voting debacle has renewed fears that the DNC is again working against Bernie Sanders and his grassroots campaign. Iowa Democrats slowly released the tallies from areas that favored Pete Buttigeg – allowing him to falsely claim an early victory. DNC chair Tom Perez called for a recanvassing of the vote amid widespread uncertainty about its accuracy. And the firm behind the Iowa Democrats’ faulty voting tabulation app, Shadow, is tied to veteran Clinton and Obama operatives, and a dark money operation funded by anti-Bernie Sanders billionaires.

Guest: Max Blumenthal, Editor of The Grayzone and author of The Management of Savagery.


AARON MATÉ: Welcome to Pushback. I’m Aaron Maté. Bernie Sanders has declared victory in the Iowa caucuses after days of confusion. The voting debacle has renewed fears that the DNC is once again working against Sanders and his grassroots movement. Iowa Democrats slowly released the tallies from areas that favored Pete Buttigieg, allowing Buttigieg to falsely claim an early victory. DNC chair Tom Perez called for a recanvassing of the vote amid widespread uncertainty about its accuracy.

My colleague Max Blumenthal has explored another angle of this story. The firm behind the Iowa Democrats’ faulty voting tabulation app, Shadow, is tied to veteran Clinton and Obama operatives and a dark money operation funded by anti-Bernie Sanders billionaires. Max Blumenthal is editor of The Grayzone and author of The Management of Savagery.

Max, before we get into your reporting at about the dark money forces behind this app that ruined the Iowa caucus, let me just ask you, first, your overall reaction to what has transpired in Iowa over these last few days.


MAX BLUMENTHAL: Why, I think what we saw was sort of unprecedented. We’ve seen the Iowa caucuses be completely delegitimized before our eyes, just absolutely destroyed. And, you know, there’s no way to talk about it without getting into the reporting that I’ve done, because what I’m doing is kind of connecting the dots and exposing the political network that’s at the heart of this catastrophe. And what we’ve been told is that this was all just a big mistake, that it boils down to an app that malfunctioned, there are some problems in the coding or maybe some people had trouble working the app who were more familiar with the kind of analog technology that insured fair results, or maybe the problem was just that the Iowa caucuses don’t really reflect America and that they’re archaic and they’re decided by coin tosses. But the more that this goes on, the longer this goes on ─ and you see that all of the results aren’t released, and the results that are released don’t show the areas of strength for Bernie Sanders in Des Moines or in the college towns, or that the Iowa caucus chair is sort of a Hillary Clinton apparatchik and that he was having dinner the night before with Tara McGowan, who’s behind the Shadow, Inc. app that destroyed everything, or that DNC chair Tom Perez, who was installed after this campaign was run against Keith Ellison to prevent Bernie Sanders from getting control over the DNC, is now calling for a recanvass at the same moment that Bernie Sanders declares victory ─ the whole thing starts to appear in a more sinister light.


There does appear to be some kind of deliberate campaign to deny Bernie Sanders an opening victory that would generate momentum heading into New Hampshire, Nevada, California, and make him, you know, these victories would make his campaign kind of an unstoppable juggernaut. And, so, we have to start, kind of…I started kind of connecting the dots and what, you know, I’ve been able to see by looking at the political network that brought Tara McGowan into being and her group Acronym, which spun out the Shadow, Inc. app, is, first of all, a political network that’s deeply connected to Pete Buttigieg and his campaign, that’s in the tank for Buttigieg, but also one that has been practicing techniques of disinformation in political campaigns across the country for the past several years.


AARON MATÉ: Right, so in terms of those connections to Buttigieg, you point out that McGowan, the head of Acronym, which is behind the Shadow app, is married to a senior adviser on the Pete Buttigieg campaign. And you also identify these dark money forces, including the founder of LinkedIn, Reid Hoffman. Talk about his role here.


MAX BLUMENTHAL: Yeah, well, first of all, let’s just kind of, like, put the building blocks together. So, Tara McGowan is a 33-year-old veteran of Obama’s two political campaigns. She’s getting tons and tons of positive PR in Silicon Valley publications like Ozy, which called her, you know, the most dangerous political weapon and, you know, the most important Democratic consultant, this kind of thing. And she, you know, was using this PR at the same time that, you know, to build up her name and to reap donations at the same time that her group Acronym was being funded and developed by the person you just named, the billionaire Reid Hoffman, who funded LinkedIn. He’s close friends with Peter Thiel at PayPal. He used to be at PayPal. He was a mentor to Mark Zuckerberg. He’s worth $2 billion.


And what Hoffman decided to do after Trump was elected was to kind of supplant the pre-existing Democratic apparatus by funding what he called “founders.” So, founders like Tara McGowan of online organizations, 30- and 40-something, tech-savvy, Ivy league-educated type people who know how to manipulate social media. And Hoffman hired this political strategist who has really walked the line between the corporate world and Democratic politics, participated in a lot of campaigns to privatize public schools with Michelle Rhee. He also is cashing in on the prison industry through this shady operation to give prisoners tablets to learn to code. His name is Dmitri Mehlhorn, and what they’ve aimed to do ─ besides and in addition to funding all of these various new groups that will move in and supplant the Democratic Party apparatus ─ is to bring in center-right voters in swing states into the Democratic Party, using techniques that can only be described as disinformation or manipulation.


In fact, Mehlhorn has explicitly said that one of his models for social media messaging is the Internet Research Agency, the online troll farm from Russia that was investigated by the Senate Intelligence Committee and figured heavily in The Mueller Report. We were told this was this gigantic attack on democracy, these $100,000 of ads, most of which came out after the 2016 campaign, but this is ─ and I’ll get more into detail ─ but this is what they’ve been doing through figures like McGowan. So, it’s not surprising to me that they’re at the center of this gigantic fiasco where a democratic process has been completely shredded, and at the center of it are them and Robbie Mook and all of these different hucksters of a certain generation who are promising to bring their high-tech solutions to protect elections.


AARON MATÉ: And you point out in your piece that one of the things that Reid Hoffman funded was this experiment, or what even internally was called a false flag operation, intervening in the Alabama Senate race in 2018. Can you explain what happened there?


MAX BLUMENTHAL: Yeah, Reid Hoffman has apologized and he said he knew nothing about it, but the organization that he uses to fund Tara McGowan and all of these other different newfangled Democratic social media operations is called Investing In US, and an Investing In US employee was directly involved in this operation. So, basically when the…in the special Senate election in 2017 between the far-right candidate Roy Moore and the moderate Republican running as a Democrat Doug Jones, which is this really dramatic race, it was seen as a referendum on Trump in 2017, Reid Hoffman dumped some money through an American enterprises technology [American Engagement Technologies (AET)], another one of these firms run by an Obama veteran, and then that firm gave money to New Knowledge, which was a collection of Obama administration veterans and national security state operators who took out fake…created fake Facebook pages ─ and this is their M.O. ─ and even tried to gin up media for a dark-horse write-in Republican candidate in order to take votes away from Roy Moore. They managed to actually get interviews for this candidate whose name was, like, Mack Jones, and he was a lawnmower salesman, in Mother Jones, in Alabama local media and, you know, they were trying to attract interest through Facebook for him in order to take away from Roy Moore. At the same time, it appears that they purchased Russian bots with Cyrillic language names to follow Roy Moore’s Twitter account, and Roy Moore was then accused in national media, through their PR operation, of being supported by the Kremlin.


So, they basically false-flagged Kremlin interference in Alabama’s election. And this was all unknown to the public and to Alabama voters. It was called Project Birmingham. Reid Hoffman funded it with $100,000, and in documents…internal documents that were later leaked that were kind of debriefing notes, called the Project Birmingham Debrief, New Knowledge’s black operations claimed credit for moving enough votes to ensure a Doug Jones victory.


So, this false flag operation may have proven decisive. It’s been written about in The New York Times, The Washington Post, but I think we covered it most thoroughly. And, you know, one of them…since you cover RussiaGate so much, Aaron, I mean, one of the most interesting parts of it is that the Senate Intelligence Committee report on, you know, Russian interference on Facebook through the Internet Research Agency was written by New Knowledge, the same Democratic cyber intelligence firm that was behind this sinister attack on democracy. They’re actually emulating what Internet Research Agency supposedly does, or what the Senate accused them of doing, to attack American democracy from within. I mean, I think this is a much bigger scandal than we even realized.


But when I heard that Tara McGowan was involved in Iowa, I started…I realized this is someone who Reid Hoffman’s supporting. We’ve been covering this for years, and I needed to put these pieces together. And when you do put the pieces together, the whole thing appears in a much more sinister light.


AARON MATÉ: It sure does, and it speaks to just that the extent of the RussiaGate racket is not fully appreciated. I mean, we know that it benefited failed Democratic elites who lost to Trump in 2016 and needed an excuse for their loss and needed an excuse for not becoming a real opposition party. We also know that it converged with the interests of the national security state officials who didn’t see Trump as a suitable steward of the U.S. Empire, and wanted to undermine his calls for better relations with Russia, however sincere that call actually was. But we also know that it’s been literally used as a cottage industry, and so the fear of the…the fear-mongering about Russian interference and Russian disinformation has led to all the same people who lost to Trump in 2016 ─ Obama and Clinton campaign veterans ─ profiting off of that and creating all these firms that then leveraged the panic about Russian interference to create apps like Shadow did, that ultimately undermine democracy in far more profound ways than anything that they accused Russia of.


MAX BLUMENTHAL: Yeah, I mean, anyone who covers domestic politics on a long-term basis, they’ll…you’ll just come into contact with not just, you know, the politicians but the political consultants. And the consultant class is just this parasitic collection of carpetbagging hucksters who are looking to gin up any possible scheme or any fear in order to cash in. And that’s what RussiaGate was for people like Robby Mook, for example. Robby Mook is one of the biggest failures in American politics. He’s this another 40-something, data-centric, Ivy-educated character who destroyed Hillary…helped destroy Hillary Clinton’s campaign against Donald Trump. He was her campaign manager. He was part of the decision, as you’ve reported to, you know, just hours after she lost, blame Russian hackers. And then what does Robby Mook do? He sets up a group at Harvard, of course, at the Belfer Center, funded by Facebook and Pierre Omidyar, to protect elections from Russian…the same Russian interference that he has, you know, warned about. You know, he stirred up this fear, then he cashed in.


And it was Robby Mook who was supposedly crash-testing all of the Democratic Party chairs ahead of the Iowa caucuses and preparing them for a quote “worst case scenario,” which of course meant, you know, Russian hacking. He was working with the chief of staff to Obama’s defense secretary Ash Carter to kind of put precinct captains and county chairs on a literal war footing, and it… whatever they told them to do completely either failed or it succeeded in that it denied Bernie Sanders a victory speech. But now Robby Mook is trying to claim he had nothing to do with any of the fiasco that occurred in Iowa and he’s laughing all the way to the bank.


AARON MATÉ: Right. And so, one other aspect of this is, you know, along with benefitting failed Democratic elites and helping to justify their losses, there’s ultimately, under the guise of fighting Russian interference and even fighting Donald Trump, that ultimately this serves a fundamentally right-wing agenda.


And one more face we can put on that, on top of Reid Hoffman, that we talked about before is Seth Klarman, who, as you also point out in your reporting at The Grayzone, is another major funder behind Acronym, the group behind…the group that funded the app, the group Shadow. So, can you talk to us more about who Seth Klarman is?


MAX BLUMENTHAL: Well, see, I’ve been talking about Reid Hoffman because he’s the person through Investing In US that really spun Acronym out and helped kind of cultivate Tara McGowan as a force in the party that he can work through. So that’s the seed money. But then once Acronym’s put into being ─ and they presented it as a media group; in fact it was a dark money nonprofit whose donors were kind of unknown ─ then McGowan starts up a super PAC called Pacronym and starts raking in money from people like Seth Klarman. Another top donor is George Soros. It’s like the conspiracies write themselves. Donald Sussman. I don’t know if you remember on MSNBC, there was a woman who worked for the Center for American Progress who was Sussman’s daughter, who said that if you vote, if you prefer Bernie Sanders over Elizabeth Warren, you’re a sexist because Elizabeth Warren has better plans.


EMILY TISCH SUSSMAN on MSNBC: “I actually heard, overheard someone saying that I thought was an interesting point, that basically at this point if you are still supporting Sanders as opposed to Warren, it’s kind of showing your sexism because she has more detailed plans and her plans have evolved. I thought it was an interesting point and I think there may be something to it.”


So, these are hedge funders. They move their money around through shell companies, they’re offshoring, they’re using all these, you know, dirty tactics to avoid paying taxes. And they are funding the future generation of the Democratic Party, and they’re also funding Pete Buttigieg.


And, you know, the reason that I wrote about Seth Klarman was, besides this, you know, scandal around Acronym and Pacronym that he’s their top donor, today Seth Klarman is also a top individual contributor to Pete Buttigieg. And Pete Buttigieg is really out there trying to distinguish himself from Bernie Sanders as the pro-Israel candidate. Seth Klarman has dedicated his life since his first visit to Israel to funding the Israel lobby. He is one of the most prolific funders of the Israel lobby. He owns The Times of Israel newspaper, he’s funded pro-settlement groups ─ groups that are expelling Palestinians from East Jerusalem. He’s also funded The David Project, which fought to prevent an Islamic community center from being built in Boston. So, these are Islamophobic groups, and Pete Buttigieg is clearly under the influence of one of the biggest funders of the Israel lobby in his wine cave. It’s like the AIPAC wine cave. So, I thought it was significant to show how donors are influencing Buttigieg, but also to show how this political network ─ this is a $75 million dollar operation, Acronym is, ─ it really is the future of the Democratic establishment and it’s in the tank for Buttigieg. Biden is really a spent force, and these are people who have personal relationships with the Buttigieg campaign. But they also come out of a similar cultural milieu.


So, let’s look at this person I mentioned before, Dmitri Mehlhorn, who’s Reid Hoffman’s, kind of like, henchman. He’s his political strategist. He graduated from Harvard Kennedy School of Government, he launched his career at McKinsey and Associates [McKinsey & Company] and then he moved into Democratic politics. It sounds exactly like Pete Buttigieg, who did the exact same things.


Also sounds like Deval Patrick, another kind of strange figure who’s been involved in Iowa. Somehow Deval Patrick, who was kind of like the prototype for Obama ─ former governor of Massachusetts, worked for Bain Capital, graduated from Harvard Kennedy School ─ he was getting votes in rural counties in Iowa. When I heard that Deval Patrick was getting votes in rural counties in Iowa, I remembered that Deval Patrick was running for president. Because I’d totally forgotten that he was even running. I mean, do you remember when he tried to launch his campaign at Morehouse? Nobody showed up and so he had to cancel his launch speech. But somehow he’s getting votes. And then a lot of those votes were reversed and given back to Bernie Sanders. It just…there’s just something very strange going on here and I don’t know what it is, but a lot of it goes back to Harvard.


AARON MATÉ: You know, Klarman, who you also put out in your piece, he also…the group he funded, one of the groups he funded, The Israel Project, was also a major opponent of the Iran deal. So, all these right-wing interests converging and all of them converging around Pete Buttigieg and around the dark money forces that sabotaged the Iowa caucus.


Speaking of right-wing, let’s talk about the overall state of the corporate Democrats right now. You had Nancy Pelosi tearing up a copy of Donald Trump’s speech after he finished the State of the Union, but during that speech she stood up to applaud as he welcomed the Venezuelan coup leader he’s trying to install in Venezuela, Juan Guaidó. You have the failure of the impeachment vote, which was predictable, or at least predicted by a small group, including us. And meanwhile you have Bernie Sanders supporters understandably still aggrieved from 2016, now seeing a repeat again, where once again the DNC appears at least to be working against him, working to undermine him. I’m wondering if you see perhaps some momentum for the Sanders campaign coming from just the utter disarray of the establishment Democrats right now and, again, this open hostility that they’re once again showing towards him?

MAX BLUMENTHAL: Yeah, I mean, I can imagine that if there were emails that were leaked or hacked from the DNC today, it would be ten times worse and more invidious than what we saw under Debbie Wasserman-Schultz’s watch in 2016, in the desire to do away with Bernie Sanders. And, I mean, you can just look at what Tom Perez is doing openly to understand how bad it would be in private, you know. Julian Assange is in prison right now, so it’s important to remember that. But the Democrats, what they’re showing in public is opposition to Trump through a campaign that nobody in Iowa cared about, nobody voted on the basis of impeachment, nobody thought about it when they were making their votes, no one that any reporter talked to mentioned UkraineGate or any quid pro quo or Russia. It’s not even in the top ten of issues that concern Democratic voters, particularly

in a place like Iowa. And when they appear at Donald Trump’s State of the Union, and Juan Guaidó, the Pete Buttigieg-like figure who’s been self-appointed president in Venezuela with US taxpayer money funding his salary and his white collar mafia to just basically hang around and pretend to be president, he’s not even the president of the National Assembly anymore, and you see consensus, almost every single Democrat stood and applauded Juan Guaidó. So, they’re showing consensus for empire, consensus for a project that necessitates trillions of dollars of American bases and waste around the globe that we could spend at home.


And that really clarifies where Bernie Sanders stands apart. He stands apart, at least his movement…then the movement behind him stands apart from that consensus, stands apart from the consensus on capitalism, where you have Elizabeth Warren declaring that she’s a capitalist to her bones. Nancy Pelosi was asked once about socialism and she ─ by a young person at a public forum ─ and she just shot it down. And that’s the threat Bernie Sanders poses. So, what we’re going to see moving forward is the consensus against Bernie Sanders. And whether it’s Pete Buttigieg, if Buttigieg fails, then we’ll see Mike Bloomberg enter the fray, and everyone who stands for the consensus will get behind Bloomberg. If Bloomberg fails, they will get behind Donald Trump because they ─ meaning the Democratic Party elites ─ actually have more in common with the interests Donald Trump represents than they do with those represented by Bernie Sanders.


AARON MATÉ: Finally, what do you think Bernie Sanders needs to do going forward, and what kind of attacks on him do you expect in the coming months as he continues to gather momentum?


MAX BLUMENTHAL: I mean, we’re seeing Bernie kind of ─ I don’t know, it may be a deliberate strategy, he’s made some really welcome comments about his willingness and desire to take on the oligarchy, that he welcomes their antagonism, kind of reminds me of FDR calling out the economic royalists and saying that he welcomes their hatred ─ but Sanders has been sort of unwilling to go head-to-head with his opponents. He hasn’t really used any language that suggests Iowa was rigged and he’s working through surrogates to do that. That might be the right approach right now, but when he is…I think Israel’s going to become an issue. They’re going to try to make it an issue.


The Democratic Majority for Israel, an Israel lobby group inside the Democratic Party, has taken out hundreds of thousands [of dollars] of ads to challenge his electability. Tom Perez has nominated a board member of that group to the DNC platform committee. And he’s obviously got to take a much stronger line than Jeremy Corbyn did in condemning these phony attacks that are inevitable. He can’t be throwing surrogates under the bus. I don’t think there was any point in distancing himself from Cenk Uygur, and beyond that, you know, if Iowa is somehow re-canvassed, it’s not worth moving on, you can’t move on, you can’t let this happen, doing that would be sort of be reminiscent of what Al Gore did in Florida in 2000, where he should have stayed there and called out the troops and brought people out into the streets until the vote was continued. Bernie Sanders is going to face a full-scale coup and he needs to mobilize his supporters and use the power that he has. The power that he has is this movement.


But beyond that I really don’t have any specific advice. I just am looking at a…I’m looking really closely at the same network that we’ve been covering at The Grayzone for the past few years, of these RussiaGate hucksters, and it’s pretty clear that they’re willing to use any disinformation tactic to get what they want, and we’re just going to keep covering it and keep exposing it. And hopefully, you know, people with bigger platforms than us will start calling it out.


AARON MATÉ: I’m not holding my breath on that one.


MAX BLUMENTHAL: No, no, and I honestly, uh, you know, what Bernie’s people should be doing is sharing Grayzone articles.


AARON MATÉ: Hear, hear! Hear, hear! Well…


MAX BLUMENTHAL: I mean, what’s the problem there?


AARON MATÉ: Max Blumenthal, editor of The Grayzone, author of The Management of Savagery, thanks very much.


MAX BLUMENTHAL: Thanks a lot, Aaron.