Playing with fire: Democrats may get Bern

Hello and welcome to The Intelligence on Economist Radio. I'm your host, Jason Palmer. Every weekday we provide a fresh perspective on the events shaping your world. Disguises, double agents, dead drops, diplomatic cover—much of spycraft is familiar from fiction. But spooks also run whole companies, fronts that yield seriously good intelligence. We find the spies in our corporate midst. And Mike Hoare was an accountant. Mad Mike Hoare was a soldier of fortune who wasn't all that concerned with the fortune. We look back on his mission to rid Congo of communists alongside a motley mix of mercenaries. But first— The next few days will be crucial to America's presidential race. Tomorrow, the fourth contest in the Democratic Party primaries will take place in South Carolina. And 3 days after that, there will be an important milestone, Super Tuesday, in which 14 states vote for their preferred candidate for the Democratic nomination. That might give one of them a lasting lead. At this stage, though, there's one candidate who's clearly on top, and it's got plenty of Democrats worried. Bernie! Bernie!

Ladies and gentlemen, Ladies and gentlemen, the next president of the United States, Senator Bernie Sanders! Bernie Sanders is really a political gadfly.

Jon Fassmann is our Washington correspondent.

He's been in Congress for decades. He doesn't have much of a legislative record. He hasn't sponsored many bills. And he's always preferred haranguing to legislating. We are bringing our people together around an agenda that works for the working people of this country, not the 1%. He is very far to the left of the average American, and he is sincere and consistent in his beliefs, you know, and he really does have a genuine concern for poor and middle-class Americans, but he's not great at persuasion. You saw in the last debate that Pete Buttigieg tried to start a discussion, I think it was healthcare, and Sanders just shouted him down. So he's got a bit of the same sort of tendency toward dominance politics Donald Trump has, but from the left.

So how did the socialist senator from Vermont become the front-runner to take on Donald Trump in this year's election?

One reason he's leading is that he's basically been running for president for 5 years. And he made that run in 2016 when he was a sort of protest candidate, and I think did a lot better than he expected. And the organization he's built today is built on that. So with that head start over his rivals, He almost won Iowa. He won New Hampshire. He won Nevada extremely handily. And so this Saturday is South Carolina's primary. And he is— it looks like a tight race between him, Joe Biden, and Tom Steyer. And if he does well there, he carries momentum into Super Tuesday on March 3rd when 14 states vote. So he is the undisputed front runner right now. Now, I don't know how stable that is, but he has a healthy lead right now.

Well, coming away from the horse race a bit, what sort of effect do you think it will have on the party if he maintains this evident lead?

Well, the party's getting pretty worried. You have to remember that the Democrats won the House majority in 2018 thanks to conservative to moderate Democrats running on kitchen table issues and winning in districts that Donald Trump won. Bernie Sanders puts all of those districts in play. It's going to be really hard for those sort of moderate to conservative Democrats in moderate to conservative districts to win with a socialist at the top of the ticket. And so the party's getting nervous. Those Democrats are getting nervous. They're going to have to decide whether to run away from their presidential nominee, which is always awkward, or yoke themselves to policies that really aren't that popular where they live.

And what about his prospects if he does get the nomination? The starkness of a Sanders versus Trump candidacy is almost hard to imagine.

It is. And two caveats before we start. Number one, obviously anything can happen. People thought that Trump couldn't win in 2016, and he did win. And number two, negative partisanship is really very powerful. So it is possible that Democrats will be motivated enough to get Donald Trump out of office that they will vote for anyone, that Bernie could win because this election is a referendum on Trump. I think the concern that some Democrats have is that putting him at the top of the ticket risks turning the election from a referendum on Trump into a socialism versus capitalism referendum, and that one is much, much harder to win. Now, Sanders supporters will show you polls that show him ahead in pivotal states like Michigan and Wisconsin. I don't know how predictive those polls are at this point. He's going to have $1 billion of negative ads dumped on him. And in the same way that negative partisanship will motivate Democrats, it will also motivate Republicans to come out and vote against Bernie. And one concern is that he doesn't do well among independents and wavers, that there are plenty of disaffected Republicans who might want to vote against Donald Trump but are nervous about pulling the lever for Sanders. Now, his response to that has always been, we can make up for that by bringing in an unprecedented grassroots movement. That means a heavy youth turnout. But there is a recent paper that came out that showed that for those promises to materialize, he would have to drive youth turnout 11 percentage points higher than it was in 2016. That's historically really, really unlikely. So is it possible? Sure. Does it look like the thing you'd want to put money on if you were betting? No.

But let's continue the hypothetical for a moment. Mr. Sanders is campaigning on this explicitly socialist agenda. What exactly would that entail?

Well, he's made a whole lot of promises. Universal free healthcare, which would entail the abolition of private insurance. He has promised free public university tuition, in-state public university tuition for everyone. A $15 minimum wage. An end to nuclear energy. All of these promises that are maximalist and that look very unlikely to find their way through Congress. And so when you ask someone from his campaign how they're going to approach divided Congress, he says, well, Bernie will just hold rallies in Republican states and shame Republicans Republicans into supporting his policies. That just strikes me as stunningly naive. It's not that Bernie focuses on the wrong problems. He focuses on the right problems. You know, it's reducing poverty, helping the uninsured, decarbonizing the economy. It's that he insists on the most extreme and unworkable solutions to all of these things.

So with all of this distance from realism, then, what does his current frontrunner status, his fact that he's even in the race, tell you about the American political divide? If we have a relatively right president, we have an extremely left presidential candidate here, the center left wide open. What's that tell you about America's politics?

I don't want to read too much into it. He's ahead. One reason he's ahead is that he has the biggest and most committed faction in a very large field. But his polling lead, I don't think, has ever been above around 30% nationally. This is not a candidate who the entire party has gotten behind. Now, it's possible once the elections are over that Democrats may unify behind him, but it's not as though there's this massive groundswell of support for socialism that has been untapped that Bernie is now feeding. It's that he's really popular among younger voters, and his rivals are sort of eating into each other's lead. And so he's cresting to the top just like Donald Trump did in 2016.

But what about the ideology he espouses? Perhaps he's not got the best set of policy proposals, but he does kind of represent a real change in America in a sort of unabashedly leftward turn. Do you think that might outlast him, or is he kind of a, you know, for this political climate one-off?

Well, I mean, he's already had a remarkable effect on his party, right? The entire Democratic primary debate of ideas has been framed on his whether you support policies that he initially got behind, whether that's the Green New Deal or a $15 minimum wage or Medicare for All. So it's not as though if he doesn't get the nomination or doesn't win the general election, he and his ideas will simply fade. He has already pushed the Democratic Party far to the left. I think the question is, if he gets the nomination and then loses, what does the Democratic Party do after that? Do they move back toward the center? Or do you see a split in the party where you have the left-wing faction and a center faction? That's the question I think we won't know until after it happens. Right.

Well, John, I know we need to let you go. You've got another podcast to do more squarely on all manner of American politics.

I do. It's called Checks and Balance. And this week we are looking at the failure of party machines and figuring out how Bernie Sanders has become such a big challenge to the Democratic establishment. We have an interview with Harry Reid, the former Nevada senator and Senate majority leader. I went to see him in Las Vegas a couple of weeks ago, and we talked about how to how to build a political machine. And we're also going to be digging into the history of the Democratic Party and drawing some comparisons with the challenges facing mainstream parties in Europe as well.

John, thank you very much for joining us. Always a pleasure, Jason. Have a listen to Checks and Balance in The Economist radio feed or wherever you find your podcasts. There's a new episode every Friday. Espionage and business have long been entangled. James Bond masqueraded as a businessman for Universal Exports.

James Bond, Universal Exports.

Which is really nothing more than a flimsy front for Britain's spy agency. The intermingling of the corporate and intelligence worlds is not only the stuff of fiction. The real-life history of spycraft is littered with front companies that prove themselves useful for intelligence collecting or outright skullduggery. Recent revelations have made that much clearer.

If you were a government in 1950 and you wanted to communicate secretly with one of your embassies abroad or someone else, you needed a cipher machine, something that could take your telegrams and could turn them into uninterpretable nonsense to be decoded at the other end.

Shashank Joshi is our defense editor.

You would probably buy such a machine from a Swiss company called Crypto AG. Switzerland was a neutral country, it was trusted, it was known for making very fine gizmos and gadgets, and so why not put your trust in them? By the 1990s, it became fairly clear that Crypto AG, this company that had sold these cipher machines all around the world to countries like Iran and Argentina and India and Pakistan, was in bed with the NSA, which is America's eavesdropping agency. And now what we've learned this month, thanks to some very good journalism by the Washington Post and German broadcasters, is that Crypto AG was owned entirely by the CIA and Germany's spy agency for decades until quite recently. It's an incredible operation that we're only really fully learning about now.

I mean, the scale and the scope of it geographically and temporally is astonishing, right? But it's not entirely a surprise that the spooks should be co-opting cooperation of companies?

No, I mean, if you're a spy, your job is pretending to be someone else. That can be academic, it can be a writer, or it can be a businessman. Some of the best examples of this are from the Cold War. If you look at the 1950s, the CIA ran an entire publishing house in Berlin that it used to pump out propaganda against the Soviet bloc, including women's magazines, a jazz magazine. If you go to the 1970s, The British Army in Northern Ireland, where they faced a nationalist insurgency, was running a laundrette. Why a laundrette? Because they could get the clothes of IRA suspects and check for explosive residue. And in the '80s, Mossad, which is Israel's renowned spy agency, they were running a beach resort in Sudan to smuggle out Ethiopian Jews.

But those are all examples of essentially front companies set up by the spooks, entirely sham companies. What about interaction between them and the preexisting corporate world?

Around the world. That's also been a longstanding practice. Think about businesses. These are big global entities. They've got a presence all around the world. They're trusted by people. So they're the perfect people to conduct spying through. If you go back to the postwar period, spy agencies like Britain's MI6, James Bond's employer, of course, and the CIA, America's spy agency, famously had deep ties to oil companies like BP and Aramco. They were the ideal companies if you wanted intelligence or juicy gossip on what was going on in the Middle East. Journalists were also a classic form of COVID The CIA is not allowed to use journalists as cover anymore, but if you look at the past, Kim Philby, who was a famous MI6 spy who defected to the Soviet Union, he worked for The Economist as our Middle East correspondent shortly before his defection. And as we know now, even in recent years, America's spy agencies were paying hundreds of millions of dollars a year to American telecoms companies in order to facilitate access to phone records, telecommunications data. Spies to this day rely on big corporations and on businesses, it's still a vital part of what they do.

So I guess with things like hundreds of millions of dollars on the table, that's what businesses will get their hands dirty in this stuff for. That's a sufficiently motivating factor.

Yeah, money's a big part of it. So Crypto AG, this company that was building cipher machines with backdoors, they were being paid huge sums of money not only for their cooperation, but also to make sure that their machines were going to get the edge over competing machines so that the Americans and the Germans could read the traffic of all these countries. But it isn't just money. You know, if you're the chairman of a big oil company, you might think, well, this is my patriotic duty to help Britain or America against the Soviet Union in a battle for global domination. And there may be other sorts of benefits. You know, we know that in the past, intelligence agencies would give favored firms secrets, perhaps intelligence about what their opposition or rivals were up to. We know from a recent report by Yahoo News that the CIA provides some of its corporate partners with these special customized briefings. And if you're running a business, what better source of business intelligence than the CIA?

What about in the other direction, though? The degree to which you think the spooks are dependent on the private companies today?

Perhaps more so than in the past, actually. First of all, if you're after data, big modern telecoms companies and tech companies like Google and Facebook have more information about potential suspects, potential foreign intelligence officers or terrorists, than big state-owned companies ever did. So you need the private sector for access to that data, which is why you see the NSA and other signals intelligence agencies rely so much on working with them. But more than that, if you think about how spies used to operate, you'd have a fake passport, you'd cross a border under a fake name, and you do your business. Well, if you have biometric body controls, if you have your fingerprints taken, your retina scanned, it's very hard to operate under a fake name because your fingerprints don't lie. So what What the CIA has to do increasingly is rely on placing employees or recruiting employees in legitimate companies.

But that's got to put the relevant businesses though also at risk, at reputational risk if nothing else.

It puts them at risk in a number of ways. It puts their employees at risk. If a company cooperates with a spy agency and its employees don't know, when they travel abroad, they can be collared. They can be under serious trouble. And that points to another kind of risk, which is the risk that your reputation for being trustworthy for not being in the pocket of an intelligence agency can also damage your brand. Crypto AG's reputation today is pretty much destroyed as a result of this cooperation, and some companies have been completely brought down by this. If you look at the case of Ferranti, which was a British engineering company, in 1987 it bought ISC, which was a promising-looking American arms firm which turned out to be a front for CIA illicit arms dealing. And when that came to light, its value collapsed and Ferranti itself went bankrupt. And it's really a cautionary tale, I think, in how if you get into bed with intelligence agencies, there are benefits. It may be patriotic, but it can also spell doom for your business.

Shashank, thank you very much for your time. You're welcome.

It always seems an extraordinary thing that an accountant sitting at one of the duller jobs in the world, can suddenly become a soldier of fortune. But Mike Hoare had always nurtured a longing to be in the army.

Anne Rowe is our obituaries editor.

He had hoped to go to Sandhurst, but his father died, and so he had to go out and find a job, and that was accountancy. Meanwhile, at the back of his mind, he was thinking of soldiering. And he said that when the Second World War broke out in 1939, that was the very best day of his life. He could immediately volunteer for the London Irish Rifles and go out and see service in Burma and India. But after the war ended, he again felt a bit of a loose end, not adventuring enough. In 1948, he decided he would emigrate from England and go to South Africa. He settled in Durban. There he was busy with his accountancy. And a business contact told him about an interesting proposition in Congo.

But in the Belgian Congo, freedom was followed by rioting and army mutiny, a reign of terror and disorder.

By then, which was 1960 when this invitation came through, it had become independent. There was a problem with communists overrunning particularly the east of the country. Mike Hoare was invited in by Moïse Tshombe, who was the prime minister of one of the parts of Congo. He was asked if he could recruit a whole body of men to fight alongside the Congolese National Army. He put small ads in the newspapers in Johannesburg and Cape Town. What he wanted, he said in the ads, was men who loved combat but also were tremendous romantics, who would join him in his sense of the romance of just fighting anywhere they were wanted. But the point for them and for him was not to go there to earn money. It was the glory of taking part in a fight, and particularly a fight against communism. They were a pretty strange bag of misfits. He admitted that himself. A lot of them veterans of the Second World War. They were all white. Some of them were out-and-out racists. He wanted them to look like a regular army troop. They all had to have regulation haircuts. They had to be clean-shaven. They had to shine their boots. And on Sunday, there was church parade. But if they stepped out of line with this discipline, he could be very severe. In Congo, they were only there, in fact, for 1964-1965. 1965, but they fought pretty fiercely and effectively. And first of all, they managed to stabilize a breakaway province called Katanga, which was very rich in minerals. There was a rebellion going on which was called the Simba Rebellion. These rebels had taken a huge number of hostages in Stanleyville, which is now called Kisangani. The hostages were largely clergy, priests and nuns, and they were all white Europeans. Mike and his men went off to rescue them, and they liberated Stanleyville and brought all these people out. And that was probably their greatest triumph. That really made Mike Hoare a household name in the rest of the world. And suddenly Fleet Street really caught on to him. He was Mad Mike. One thing that got him known perhaps more even than the triumph in Stanleyville, was that in 1978, there was a film made. The Wild Geese.

Fighting is their business. Killing is their trade.

Which was based somewhat on his mercenaries in Congo. It was called The Wild Geese, which was the name he'd given to his troop, which was otherwise known as 5 Commando. Mike himself was played by Richard Burton. He was the star of it in a sense, because Burton was the star, Mike Hoare was also the star. After Congo, he went back to retirement and to South Africa. He was always looking out for wherever he could be useful to dislodge leftists and socialists from power. And he was called in by the ex-president of the Seychelles, who had been ejected by a leftist. And asked if he would go and mount a coup against him. So in 1981, he gathered a group of men together. They were supposed to be former rugby players and going as a charitable venture to distribute toys to children in the Seychelles. So they all arrived at the airport with their kit bags supposedly full of toys, but underneath the false bottoms, there were AK-47s. In bits. And one of the men failed to get through customs, got into an argument. The AK-47 was discovered. After that, this is a great battle erupted at the airport, in the course of which a Boeing 707 passenger plane tried to land, and that gave Mike and his men the chance to hijack it and fly back to South Africa. It all turned out rather badly for them because they were put in prison both for for taking part in the gun battle and for the hijacking. So he was there for 33 months. He said, however, that the most hurtful thing of all was that he was expelled from the Institute of Chartered Accountants. When he was in jail, he was not allowed any book except the Bible and not allowed any writing paper, so he spent his time memorizing Shakespeare. He'd managed to smuggle in copy. And I like to think that he was in a way channeling the spirit of Sir Francis Drake with that, because he said that Sir Francis Drake was the person he would most have liked to be— someone who was a robber and a brigand, but on the other hand, once he got home, was made respectable and could kneel before the Queen and be made a knight.

Anne Rowe on Mad Mike Hoare, who's died age 100. That's all for this episode of The Intelligence. If you like us, give us a rating on Apple Podcasts, and you can subscribe to The Economist at economist.com/radiooffer. 12 issues for $12 or £12. See you back here on Monday.