The American political system has "broken down" as a result of the two major political parties becoming too conservative, billionaire philanthropist George Soros said in a 2013 memo that recently came to light, adding that the blame resided chiefly with "religious and market fundamentalists."

"The two-party system worked well when both parties competed for the middle ground in general elections," Soros wrote in a memo to the board of his Open Society Foundations. "It started breaking down when an unholy alliance of religious and market fundamentalists captured the Republican Party and the Democrats tried to recapture the middle ground by moving in the same direction."

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The memo came out in an August leak of documents purportedly obtained when hackers infiltrated the nonprofit OSF, though the documents inexplicably went offline over the weekend. The memo was included in a 295-page packet for the organization's December 2013 board meeting retained by the Washington Examiner before the trove went offline.

Soros said the problem became even worse due to the Republican Party's "unholy alliance" with so-called neoconservatives.

"After 9/11 the U.S. tried to use its military supremacy to impose its will on the world," Soros said. "These fundamentally anti-democratic forces were strong enough to survive both the debacle of the war on terror and the crash of 2008.

"The polarization of politics is now complete," Soros wrote. "The general elections in which two parties compete for the middle has become superseded by primaries which are dominated by party activists."

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Soros said the best way to reverse democracy's breakdown would be for Republicans to combat the Tea Party element in its ranks, and to make the party more hospitable for liberals. He added that he hoped OSF could play a role in helping the "establishment" combat conservatives.

"The main change has to occur in the Republican Party. Instead of the Tea Party challenging the establishment, the establishment has to challenge the Tea Party," Soros wrote. "We can help bring about a change of heart in the Republican Party only from the outside."

Soros closed by saying OSF should fund short-term advocacy efforts and more long-term educational programs, and that he would focus personally on advocacy. "How much I shall spend personally on political contributions will depend largely on the opportunities that present themselves."