Tag: Business

Not Enough

No jail time in a settlement with McKinsey and Company for actively aiding Perdue Pharma in maximizing addictions to its opioids.

If there is a case for a corporate death penalty, this is it.

What’s more there should be criminal prosecutions against its executives:

Consulting giant McKinsey & Co. has reached a $573 million settlement with states over its work advising OxyContin maker Purdue Pharma LP and other drug manufacturers to aggressively market opioid painkillers, according to people familiar with the matter.

The deal, reached with 47 states and the District of Columbia and expected to be publicly announced Thursday, would avert civil lawsuits that attorneys general could bring against McKinsey, the people said. The majority of the money will be paid upfront, with the rest dispensed in four yearly payments starting in 2022.

McKinsey said last week it is cooperating with government agencies on matters related to its past work with opioid manufacturers, as state and local governments sue companies up and down the opioid supply chain. At least 400,000 people have died in the U.S. from overdoses of legal and illegal opioids since 1999, according to federal data.

The consulting firm stopped doing opioid-related work in 2019 and said in December its work for Purdue was intended to support the legal use of opioids and help patients with legitimate medical needs.

That statement from McKinsey is a lie.  They literally suggested that druggists be paid a bonus for overdose deaths to, “Turbocharge sales.” 

Shut them down.

See the Democratic Party Establishment (There Is No Democratic Party Establishment) Run. Run Democratic Party Establishment (There Is No Democratic Party Establishment), Run. Run, Run, Run

Outgoing DCCC director joins firm founded by former DCCC director who is partnered with the DCCC’s super PAC. https://t.co/ltpjl1oEHj

— Ryan Grim (@ryangrim) January 25, 2021

When I talk about the consultancy racket among the Democratic Party establishment (There is no Democratic Party establishment), this is what I mean.

Antitrust Smoking Gun

It turns out that Google and Facebook colluded to keep Facebook out of the advertising market in exchange for preferential rates.

This is pretty much a slam dunk, and yes, both organizations should broken up in the long term (Other limits fail over time) and be prevented from acquiring any other companies in the short term:

In 2017, Facebook said it was testing a new way of selling online advertising that would threaten Google’s control of the digital ad market. But less than two years later, Facebook did an about-face and said it was joining an alliance of companies backing a similar effort by Google.

Facebook never said why it pulled back from its project, but evidence presented in an antitrust lawsuit filed by 10 state attorneys general last month indicates that Google had extended to Facebook, its closest rival for digital advertising dollars, a sweetheart deal to be a partner.

Details of the agreement, based on documents the Texas attorney general’s office said it had uncovered as part of the multistate suit, were redacted in the complaint filed in federal court in Texas last month. But they were not hidden in a draft version of the complaint reviewed by The New York Times.

Executives at six of the more than 20 partners in the alliance told The Times that their agreements with Google did not include many of the same generous terms that Facebook received and that the search giant had handed Facebook a significant advantage over the rest of them.

………

The disclosure of the deal between the tech giants has renewed concerns about how the biggest technology companies band together to close off competition. The deals are often consequential, defining the winners and losers in various markets for technology services and products. They are agreed upon in private with the crucial deal terms hidden through confidentiality clauses.

Google and Facebook said that such deals were common in the digital advertising industry and that they were not thwarting competition.

………

The Wall Street Journal had reported on aspects of the draft complaint earlier.

………

“This idea that the major tech platforms are robustly competing against each other is very much overstated,” said Sally Hubbard, a former assistant attorney general in New York’s antitrust bureau who now works at Open Markets Institute, a think tank. “In many ways, they reinforce each other’s monopoly power.”

Because maintaining a monopoly is more profitable than developing a superior product.

One need only look at the cost and speed of broadband in the US to know that this is true.
The agreement between Facebook and Google, code-named “Jedi Blue” inside Google, pertains to a growing segment of the online advertising market called programmatic advertising. Online advertising pulls in hundreds of billions of dollars in global revenue each year, and the automated buying and selling of ad space accounts for more than 60 percent of the total, according to researchers.

In the milliseconds between a user clicking on a link to a web page and the page’s ads loading, bids for available ad space are placed behind the scenes in marketplaces known as exchanges, with the winning bid passed to an ad server. Because Google’s ad exchange and ad server were both dominant, it often directed the business to its own exchange.

A method called header bidding emerged, in part as a workaround to reduce reliance on Google’s ad platforms. News outlets and other sites could solicit bids from multiple exchanges at once, helping to increase competition and leading to better prices for publishers. By 2016, more than 70 percent of publishers had adopted the technology, according to one estimate.

Seeing a potentially significant loss of business to header bidding, Google developed an alternative called Open Bidding, which supported an alliance of exchanges. While Open Bidding allows other exchanges to simultaneously compete alongside Google, the search company extracts a fee for every winning bid, and competitors say there is less transparency for publishers.

The threat of Facebook, one of the biggest ad buyers on the internet, supporting header bidding was a grave concern at Google. The draft of the complaint reviewed by The Times cited an email from a Google executive calling it an “existential threat” that required “an all hands on deck approach.”

………

Before Google and Facebook signed the deal in Sept. 2018, Facebook executives outlined the company’s options to Mark Zuckerberg, its chief executive, according to the draft of the complaint: hire hundreds more engineers and spend billions of dollars to compete against Google; exit the business; or do the deal.

………

Facebook disclosed that it had joined Google’s program in one line in a Dec. 2018 blog post. But it did not reveal that Google, according to the draft complaint, provided Facebook with special information and speed advantages to help the company succeed in the auctions that it did not offer to other partners — even including a guaranteed “win rate.”

In this market, where fractions of a second count, a speed advantage was decisive. Facebook had 300 milliseconds to bid for ads, according to court documents. But the executives at Google’s partner companies said they usually had just 160 milliseconds or less to bid.

Facebook had yet another advantage: Direct billing relationships with the sites where ads would appear, according to the court documents. For most other partners, Google controlled pricing information, effectively putting up a wall between Open Bidding participants and site owners and hiding how much of winning bids sites end up receiving, the executives at other companies said.

………

Facebook promised to bid on at least 90 percent of auctions when it could identify the end user and committed to spending a certain amount of money — as much as $500 million a year by the fourth year of the agreement, according to the draft of the complaint. Facebook also demanded that data about its bids not be used by Google to manipulate auctions in its own favor, a level playing field not explicitly promised to other Open Bidding partners.

Perhaps the most serious claim in the draft complaint was that the two companies had predetermined that Facebook would win a fixed percentage of auctions that it bid on.

“Unbeknown to other market participants, no matter how high others might bid, the parties have agreed that the gavel will come down in Facebook’s favor a set number of times,” the draft complaint said. A Google spokeswoman said Facebook must make the highest bid to win an auction, just like its other exchange and ad network partners.

While both companies said that the deal is not an antitrust matter, they included a clause in the agreement that requires the parties to “cooperate and assist” each other if they are investigated for competition concerns over the partnership.

“The word ‘antitrust’ is mentioned no less than 20 times” throughout the agreement, the draft complaint said.

Seriously, this is not just unlawful, this is an actual criminal offense.

Executives used to be jailed for this sort of crap, at least until the 1980s, when Reagan gutted antitrust enforcement.

I’d like to see Sundar Pichai, Sergey Brin, Larry Page, Mark Zuckerberg and Sheryl Sandberg frog marched out of the corporate offices in handcuffs.

Why I Don’t Think That Biden Will Reign in Big Tech


Notice How Many People Started in the Obama Admin

Year over year Google to Admin

The revolving door between big tech and the Obama administration spun so fast that it created a shock wave during the Obama administration, and Biden is heavily relying on old Obama hands.

The corruption and hypocrisy of the Obama administration is likely to be carried forward into a Biden administration.

Notice the important thing here, a shit load more people went to Google for the FIRST time after serving in the Obama administration, meaning that they received a delayed payoff for being friendly to the tech giant’s needs.

These people will not produce meaningful regulation.  

They will serve their real master:

The Google Transparency Project has so fari identified 258 instances of “revolving door” activity (involving 251 individuals) between Googleii or related firms, and the federal government, national political campaigns and Congress during President Obama’s time in office.

That included:

  • 53 revolving door moves between Google and the White House. Those involved 22 former White House officials who left the administration to work for Google, and 31 Google executives (or from Google’s main outside firms) who joined the White House, or were appointed to federal advisory boards.
  • 28 revolving door moves between Google and government positions involving national security, intelligence or the Department of Defense. Seven former national security and intelligence officials and 18 Pentagon officials moved to Google; while three Google executives moved to DoD.
  • 23 revolving door moves between Google and the State Department during the Obama administration. Eighteen former State Department officials joined Google, while five Google officials took up senior posts at the State Department.
  • 9 moves between Google and its outside lobbying firms and the Federal Communications Commission, which handles a growing number of regulatory matters with a major impact on the company’s bottom line.

The analysis included Google affiliates such as YouTube, related firms like Civis Analytics (whose sole investor is Eric Schmidt), as well as key law firms and lobbyists representing Google. [Click here for a detailed description of how we conducted our analysis]

Google has hired from throughout the top echelons of the policymaking world in Washington, including high-level White House officials. It also enjoys the benefit of having former executives moving into top positions in the administration that set policy on issues crucial to the company. Those include the Chief Technology Officer, a former Google executive, and key slots at the Office of Science and Technology Policy (OSTP). Former Googlers also occupy key positions at the National Economic Council and the U.S. Digital Service, a part of the Executive Office of the President.

The company has strategically hired from government agencies that have the greatest impact on its business, like the Federal Communications Commission and Federal Trade Commission. Google, or its main law firms, have hired several people from the Federal Trade Commission, an agency that has conducted investigations into the company’s conduct on privacy and antitrust grounds.

Specific cases can be found if you go to the link and scroll down.  It is a veritable rogues gallery of influence peddling. 

This does not indict the Obama administration specifically as much as it does business as usual in Washington, DC.

It is unsustainable.

Not a Good Look

It turns out that Theranos has systematically destroyed incriminating evidence.

This appears to be deliberate obstruction of the investigation:

Failed blood-testing unicorn Theranos trashed vital incriminating evidence of its fraud, prosecutors said on Monday.

The imploded startup’s extensive testing data over three years, including its accuracy and failure rate, was “stored on a specially-developed SQL database called the Laboratory Information System (LIS),” according to a filing [PDF] in the fraud case against Theranos’s one-time CEO Elizabeth Holmes and COO Sunny Balwani.

………

The reality, however, was that for one set of tests, the failure rate was 51.3 per cent. What does that mean? Prosecutors explain: “In other words, Theranos’s TT3 blood test results were so inaccurate, it was essentially a coin toss whether the patient was getting the right result. The data was devastating.”

………

From the filing: “On or about August 31, 2018 – three months after a federal grand jury issued a subpoena requesting a working copy of this database – the LIS was destroyed. The government has never been provided with the complete records contained in the LIS, nor been given the tools, which were available within the database, to search for such critical evidence as all Theranos blood tests with validation errors. The data disappeared.”

………

When a grand jury issued a subpoena for the database, Theranos’s lawyer came up with a strategy to supply the info without exposing the company’s appalling test results: hand over a backup of the database to the government and fail to provide the necessary materials to reconstruct it.

How do we know this? Because prosecutors said they have the internal emails showing staff discussing exactly that: how the backup wouldn’t come with the “layers of applications and data.” Its VP of Operations emailed an internal lawyer: “If we are just handing over a database, I’m not sure it will meet the needs.”

If that wasn’t enough, all three versions of the backup provided to the US government came with a password that was necessary to open it up. And no one was able to remember it, at least according to the various internal emails flying around. After some discussion, it was agreed that Theranos’s former head of IT, Antti Korhonen, was the only one with the password. But then Korhonen wasn’t able to find it either.

Unable to get at the database, Uncle Sam put an expert on the case: “The government retained a computer forensic expert to assist in retrieving this data, who found that the ‘key’ file on the hard drive, required to reconfigure the SQL database, is itself encrypted by a distinct password (not the one provided with the transmittal letter to open the hard drive), and cannot be opened.”

While all this was going on, Theranos decided to shut down the facility that housed the database in Newark, New Jersey. Execs were warned that if the hardware and servers were taken apart “it would be almost impossible to recreate the database” by Theranos IT contractor Michael Chung. But they shut it down anyway, and any access to the database from that point was lost – both for Theranos and government investigators.
Oops?

Uncle Sam’s legal eagles are not convinced this was an innocent mistake. Referring to the IncRev’s CEO, they note: “Even though Chandrasekaran knew the LIS hardware would be coming apart on Friday, August 31, 2018, and even though he was on an email chain in which the ‘all clear’ was given to take apart the hardware, he waited until two days later, September 2, 2018, to email a senior Theranos official with a list of items he would need from the database in order to reconstruct the LIS.

………

Its conclusion? “It does not appear from the timing of Chandrasekaran’s requests that he, in fact, intended to successfully copy the database before it shutdown.”

There is plenty of other evidence that, despite Theranos’s repeat claims, its machines were so inaccurate that they were fundamentally worthless. But the database would have provided clear proof that the company had to be aware that its entire testing system was fundamentally flawed, which itself supports the argument that the startup knowingly misled investors. While lying in press releases and interviews is reprehensible, it’s not necessarily a crime. However, lying in presentations to people in order to pull in investment is.

The failure to retain a working copy of a database that the company had paid millions to build and maintain, and which contained critically important information for the functioning of the business, is, let’s say, suspicious. Sufficiently suspicious that prosecutors wrote an entire filing about it.

………

Other filings reveal that Holmes would often personally handle complaints about how inaccurate its tests appeared to be, something that prosecutors says is evidence that the CEO knew that its testing machines didn’t work while at the same time continuing to claim the opposite in public. Holmes and Balwani face a dozen criminal wire fraud charges apiece, and up to 20 years in prison if found guilty.

Throw the book at them.

There are way too many unicorns out there who are little more than fraud, and we need to start throwing their founders in jail.

12 Hours: What You Get for Suggesting that Megan McCain Have Carnal Knowledge of a Cactus, or for Calling On Your Supporters to Storm the Capitol

As a result of the unprecedented and ongoing violent situation in Washington, D.C., we have required the removal of three @realDonaldTrump Tweets that were posted earlier today for repeated and severe violations of our Civic Integrity policy. https://t.co/k6OkjNG3bM

— Twitter Safety (@TwitterSafety) January 7, 2021

Future violations of the Twitter Rules, including our Civic Integrity or Violent Threats policies, will result in permanent suspension of the @realDonaldTrump account.

— Twitter Safety (@TwitterSafety) January 7, 2021

We’ll continue to evaluate the situation in real time, including examining activity on the ground and statements made off Twitter. We will keep the public informed, including if further escalation in our enforcement approach is necessary.

— Twitter Safety (@TwitterSafety) January 7, 2021

Following a particularly moronic statement in which Meghan McCain insisted that mockery of her by a Jewish cartoonist was antisemitic, my son replied to her on Twitter that she should, “Go F%$# yourself with a cactus.”

Twitter gave him a 12 hour time out.

It now appears that for calling for a violent insurrection to overthrow the government of the United States, Twitter will also give you a 12 hour time out.

Needless to say, Charlie is considering how best to use that rather perverse juxtaposition of Twitter’s enforcement of its, “Civil Integrity Policy,” as a bit for his standup.

On the bright side, with the pandemic, he’ll have plenty of time to polish the bit.

On the dark side, Covid-19 is why he’ll have plenty of time to polish the bit.

I’m actually a bit jealous about his getting the suspension, it’s been a goal of mine.

I have not managed to do this yet, I have a self-imposed rule that I can’t post something just to get banned.  I must post something that I would normally posts.

I even changed my Twitter handle to, “Jack Dorsey Is Objectively Pro-Nazi (M.G. Saroff),” in an attempt to get the elusive ban.

Much to my surprise, and to the surprise of those who know and love me, it appears that my normal behavior is not sufficient to get me banned from Twitter.

(Update)

Facebook gave the Trumpster Fire a time out as well.

Good Point

Matt Stoller makes a very good point, that the penetration of “premier” cybersecurity firm SolarWinds by hackers,* was a direct consequence of the private equity looting ethos.

They did not play close attention to security (Passwords from movies, seriously), our-sourced work into Eastern Europe, where the FSB could recruit operatives in a day trip.

Security, you see, is not profitable, even if you are a cyber security firm:

Roughly a month ago, the premier cybersecurity firm FireEye warned authorities that it had been penetrated by Russian hackers, who made off with critical tools it used to secure the facilities of corporations and governments around the world.

The victims are the most important institutional power centers in America, from the FBI to the Department of Treasury to the Department of Commerce, as well as private sector giants Cisco Systems, Intel, Nvidia, accounting giant Deloitte, California hospitals, and thousands of others. As more information comes out about what happened, the situation looks worse and worse. Russians got access to Microsoft’s source code and into the Federal agency overseeing America’s nuclear stockpile. They may have inserted code into the American electrical grid, or acquired sensitive tax information or important technical and political secrets.

………

And that makes this hack quite scary, even if we don’t see the effect right now. Mark Warner, one of the smarter Democratic Senators and the top Democrat on the Intelligence Committee, said “This is looking much, much worse than I first feared,” also noting “The size of it keeps expanding.” Political leaders are considering reprisals against Russia, though it’s likely they will not engage in much retaliation we can see on the surface. It’s the biggest hack since 2016, when an unidentified group stole the National Security Agency’s “crown jewels” spy tools. It is, as Wired put it, a “historic mess.”

……….

The most interesting part of the cybersecurity problem is that it isn’t purely about government capacity at all; private sector corporations maintain critical infrastructure that is in the “battle space.” Private firms like Microsoft are being heavily scrutinized; I had one guest-post from last January on why the firm doesn’t manage its security problems particularly well, and another on how it is using its market power to monopolize the cybersecurity market with subpar products. And yet these companies have no actual public obligations, or at least, nothing formal. They are for-profit entities with little liability for the choices they make that might impose costs onto others.

………

All of which brings me to what I think is the most compelling part of this story. The point of entry for this major hack was not Microsoft, but a private equity-owned IT software firm called SolarWinds. This company’s products are dominant in their niche; 425 out of the Fortune 500 use SolarWinds. As Reuters reported about the last investor call in October, the CEO told analysts that “there was not a database or an IT deployment model out there to which [they] did not provide some level of monitoring or management.” While there is competition in this market, SolarWinds does have market power. IT systems are hard to migrate from, and this lock-in effect means that customers will tolerate price hikes or quality degradation rather than change providers. And it does have a large market share; as the CEO put it, “We manage everyone’s network gear.”

SolarWinds sells a network management package called Orion, and it was through Orion that the Russians invaded these systems, putting malware into updates that the company sent to clients. Now, Russian hackers are extremely sophisticated sleuths, but it didn’t take a genius to hack this company. It’s not just that criminals traded information about how to hack SolarWinds systems; one security researcher alerted the company last year that “anyone could access SolarWinds’ update server by using the password “solarwinds123.’”

Using passwords ripped form the movie Spaceballs is one thing, but it appears that lax security practice at the company was common, systemic, and longstanding. The company puts its engineering in the hands of cheaper Eastern Europe coders, where it’s easier for Russian engineers to penetrate their product development. SolarWinds didn’t bother to hire a senior official to focus on security until 2017, and then only after it was forced to do so by European regulations. Even then, SolarWinds CEO, Kevin Thompson, ignored the risk. As the New York Times noted, one security “adviser at SolarWinds, said he warned management that year that unless it took a more proactive approach to its internal security, a cybersecurity episode would be “catastrophic.” The executive in charge of security quit in frustration. Even after the hack, the company continued screwing up; SolarWinds didn’t even stop offering compromised software for several days after it was discovered.

………

And yet, not every software firm operates like SolarWinds. Most seek to make money, but few do so with such a combination of malevolence, greed, and idiocy. What makes SolarWinds different? The answer is the specific financial model that has invaded the software industry over the last fifteen years, a particularly virulent strain of recklessness typically called private equity.

………

In October, the Wall Street Journal profiled the man who owns SolarWinds, a Puerto Rican-born billionaire named Orlando Bravo of Thoma Bravo partners. Bravo’s PR game is solid; he was photographed beautifully, a slightly greying fit man with a blue shirt and off-white rugged pants in front of modern art, a giant vase and fireplace in the background of what is obviously a fantastically expensive apartment. Though it was mostly a puff piece of a silver fox billionaire, the article did describe Bravo’s business model.

………

As I put it at the time, Bravo’s business model is to buy niche software companies, combine them with competitors, offshore work, cut any cost he can, and raise prices. The investment thesis is clear: power. Software companies have immense pricing power over their customers, which means they can raise prices to locked-in customers, or degrade quality (which is the same thing in terms of the economics of the firm). As Robert Smith, one of his competitors in the software PE game, put it, “Software contracts are better than first-lien debt. You realize a company will not pay the interest payment on their first lien until after they pay their software maintenance or subscription fee. We get paid our money first. Who has the better credit? He can’t run his business without our software.”

………

Did this acquisition spree and corporate strategy work? Well that depends on your point of view; it certainly increased accounting profits. From a different perspective, however, the answer is no. Accounting profits masked that the corporate strategy was shifting risk such that the firm enabled a hack of the FBI and U.S. nuclear facilities. And from the user and employee perspective, the strategy was also problematic. It’s a little hard to tell, but if you look at software feedback comment forums, you’ll find a good number of IT pros dislike SolarWinds, seeing the firm as a financial project based on cobbling together random products from an endless set of acquisitions. (If you are at SolarWinds or another Thoma Bravo company, or use their products, send me a note on your experiences.)

………

It’s not clear to me that Bravo is liable for any of the damage that he caused, but he did make one mistake. Bravo got caught engaging in what very much looks like insider trading surrounding the hack. Here’s the Financial Times on what happened:

Private equity investors sold a $315m stake in SolarWinds to one of their own longstanding financial backers shortly before the US issued an emergency warning over a “nation-state” hack of one of the software company’s products.

The transaction reduced the exposure of Silver Lake and Thoma Bravo to the stricken software company days before its share price fell as vulnerabilities were discovered in a product that is used by multiple federal agencies and almost all Fortune 500 companies.

But the trade could prove embarrassing for Menlo Park-based Silver Lake and its rival Thoma Bravo, which rank among the biggest technology-focused private equity firms in the world.

………

In this case, however, possible insider trading really isn’t the problem. Though I hate the phrase, the real scandal isn’t what’s illegal, it’s what is legal. Bravo degraded the quality of software, which usually just means that people have to deal with stuff that doesn’t work very well, but in this case enabled a weird increase in geopolitical tensions and an espionage victory for a foreign adversary. It’s yet another example of what national security specialist Lucas Kunce notes is the mass transformation of other people’s risk into profit, all to the detriment of American society.

………

There are many ways to see this massive hack. It’s a geopolitical problem, a question of cybersecurity policy, and a legally ambiguous aggressive act by a foreign power. But in some ways it’s not that complex; the problem isn’t that Russians are good at hacking and U.S. defenses are weak, it’s that financiers in America make more money by sabotaging key infrastructure than by building it.

And they are celebrated for it. If Western nations had coherent political systems, the men responsible for this mess would be dragged in front of legislative committees and grilled over the business practices putting all of us at risk. Instead, five days ago, Pitchbook just gave out their Private Equity Awards, and named their “dealmaker of the year.”

Yes, it was Orlando Bravo.

We need to change the laws to hold these guys accountable.

As it currently stands, they borrow money, and then loot the companies, and then retreat behind the bulwark of the bankruptcy courts to avoid any responsibility for what they have done.

*According to “Knowledgeable Sources”, Russia, but no one is willing to go on the record, so YMMV.
Again, no one is willing to go on the record as to whether this was the FSB, or the GRU, or maybe it was the fault of those damn Eskimos.
The line is from Judgement at Nuremberg. It’s a great movie. Spencer Tracy, Marlene Dietrich, Burt Lancaster, Richard Widmark, Maximilian Schell, Judy Garland, Montgomery Clift, and a very young William Shatner. (Widmark says the line about the Eskimos.)

Tweet of the Day

I may be wrong but I think there’s room at the Four Seasons.
Landscaping.

— The Palaeoanthropologist (@HamishAlexande6) December 29, 2020

The favorite hotel of the Proud Boys is shutting down for 3 days rather than deal with them, and their violent protests, and virus spreading behavior at the inauguration.

This is glorious, as is the Four Seasons Landscaping snark.

Ethics, Schmethics, Amazon Edition

Amason’s charity program supports hate groups.

Not a surprise.  It doesn’t matter if it’s the American Civil Liberties Union, or the America Nazi Party, Amazon gets its vig from purchases in either case:

AmazonSmile, which launched in 2013, would seem to be one of the mega-corporation’s less overtly awful functions: it’s a simple service that adds a surcharge to Amazon purchases and donates it to a participating charity of a shopper’s choice. However, UK-based media organization openDemocracy has found among those eligible charities were over 40 anti-LGBTQ+ and anti-choice groups.

I’ll put a bow on it, I’ll scream it, I’ll whisper it, but I am here to tell you that Amazon is a terrible company.

openDemocracy identified powerful anti-LGBTQ+ groups that are, at the time of this writing, live on AmazonSmile’s search portal. They list the Indiana chapter of the Southern Poverty Law Center-designated hate group the American Family Association, whose radio host and figurehead Bryan Fischer has said that the “Nazi party…was rooted in the homosexual movement.” There’s also Focus on the Family, which spawned the SPLC-designated hate group the Family Research Council. Of founder James Dobson, the SPLC writes that “no one has spread the anti-gay gospel as widely, or with as much political impact.”

We don’t know how much money these hate-mongering groups have raised directly via AmazonSmile, but this disturbing news has come to light at a time when Amazon’s revenue has gone through the roof thanks to a captive customer base stuck at home during a pandemic.

Indeed.

My old axiom, “If they treat their employees like sh%$, how do you think that they will treat you as a customer,” should be expanded from, “You as a customer,” to, “All of us as a society.” 

Amazon Ring Hacked to Abuse Homeowners

Given that Amazon’s model for its Ring security cameras is its ability to collect extensive data on its users, and their neighbors.

Their plan is to monetize your data, and to share your data with law enforcement to further additional sales.

This model, where there are hundreds, if not thousands, of individuals and organizations with access to the cameras, it should come as no surprise that their system was hacked, and the hackers used their control of the network to harass people:

Dozens of people who say they were subjected to death threats, racial slurs, and blackmail after their in-home Ring smart cameras were hacked are suing the company over “horrific” invasions of privacy.

A new class action lawsuit, which combines a number of cases filed in recent years, alleges that lax security measures at Ring, which is owned by Amazon, allowed hackers to take over their devices. Ring provides home security in the form of smart cameras that are often installed on doorbells or inside people’s homes.

The suit against Ring builds on previous cases, joining together complaints filed by more than 30 people in 15 families who say their devices were hacked and used to harass them. In response to these attacks, Ring “blamed the victims, and offered inadequate responses and spurious explanations”, the suit alleges. The plaintiffs also claim the company has also failed to adequately update its security measures in the aftermath of such hacks.

………

Ring has not said who is behind the hacks, and victims say they still do not know who accessed their homes through the devices.

Repeatedly, Ring blamed victims for not using sufficiently strong passwords, the suit claims. It says Ring should have required users to establish complicated passwords when setting up the devices and implement two-factor authentication, which adds a second layer of security using a second form of identification, such as a phone number.

However, as the lawsuit alleges, Ring was hacked in 2019 – meaning the stolen credentials from that breach may have been used to get into users’ cameras. That means the hacks that Ring has allegedly blamed on customers may have been caused by Ring itself. A spokesperson said the company did not comment on ongoing litigation.

The lawsuit also cites research from the Electronic Frontier Foundation and others that Ring violates user privacy by using a number of third-party trackers on its app.

My old axiom applies, “If they treat their employees like sh%$, how do you think that they will treat you as a customer?”  

Amazon is a pernicious and corrupt organization, and cannot be trusted with your privacy.

Remember When I Said that Facebook Engaged in Systematic Fraud?*

In advertising, there are two philosophies behind advertising, contextual advertising, where you base you ads on what the user is doing, or looking at, or looking for, when you serve the ad, and behavioral advertising, where the advertiser tracks the user across the internet by creating a dossier of everything that they do.

They are called tracking-based and contextual advertising respectively. 

The claim of the trackers has always been that they create more effective ads as versus contextual advertising, though the best evidence seems to show the exact opposite.

To me, the “advantage” of tracking based advertising is that it creates tremendously high barriers for new market entrants, because they have to replicate the massive databases of user information of the incumbents.

It appears that Facebook’s managers on their advertising side are similarly dubious of the claims of tracking-based ads, alleging that Facebook’s claims are fraudulent.

Get the cuffs, Ponch:

Facebook is currently waging a PR campaign purporting to show that Apple is seriously injuring American small businesses through its iOS privacy features. But at the same time, according to allegations in recently unsealed court documents, Facebook has been selling them ad targeting that is unreliable to the point of being fraudulent.

The documents feature internal Facebook communications in which managers appear to admit to major flaws in ad targeting capabilities, including that ads reached the intended audience less than half of the time and that data behind a targeting criterion was “all crap.” Facebook says the material is presented out of context.

………

The documents emerged from a suit currently seeking class-action certification in federal court. The suit was filed by the owner of Investor Village, a small business that operates a message board on financial topics. Investor Village said in court filings that it decided to buy narrowly targeted Facebook ads because it hoped to reach “highly compensated and educated investors” but “had limited resources to spend on advertising.” But nearly 40 percent of the people who saw Investor Village’s ad either lacked a college degree, did not make $250,000 per year, or both, the company claims. In fact, not a single Facebook user it surveyed met all the targeting criteria it had set for Facebook ads, it says.

………

The lawsuit goes on to quote unnamed “employees on Facebook’s ad team” discussing their targeting capabilities circa June 2016:

One engineer celebrated that detailed targeting accounted for “18% of total ads revenue,” and $14.8 million on June 17th alone. Using a smiley emoticon, an engineering manager responded, “Love this chart! Although if the most popular option is to combine interest and behavior, and we know for a fact our behavior is almost all crap, does this mean we are misleading advertiser [sic] a bit? :)” That manager proceeded to suggest further examination of top targeting criteria to “see if we are giving advertiser [sic] false hope.”

………

The complaint also cites unspecified internal communications in which “[p]rivately, Facebook managers described important targeting data as ‘crap’ and admitted accuracy was ‘abysmal.’”

I would argue that Facebook’s whole advertising model is fraudulent.

*See here for earlier posts.

Dope Dealing Through Negligence

That is why Department of Justice is suing Walmart over handing out opioids like Tic-Tacs.

Basically, the government is alleging that the pharmacists at the retail giant were so overworked that they were unable to perform due diligence of dodgy prescriptions.

I would love to see this level of scrutiny applied to Amazon:  

The Trump administration sued Walmart Inc. Tuesday, accusing the retail giant of helping to fuel the nation’s opioid crisis by inadequately screening for questionable prescriptions despite repeated warnings from its own pharmacists.

The Justice Department’s lawsuit claims Walmart sought to boost profits by understaffing its pharmacies and pressuring employees to fill prescriptions quickly. That made it difficult for pharmacists to reject invalid prescriptions, enabling widespread drug abuse nationwide, the suit alleges.

………

The country’s largest retailer by revenue, Walmart has been expecting this complaint and sued the federal government in October to fight the allegations pre-emptively. That suit accuses the Justice Department and DEA of attempting to scapegoat the company for what it says are the federal government’s own regulatory and enforcement shortcomings.

The Justice Department’s lawsuit alleges Walmart created a system that turned its network of 5,000 in-store U.S. pharmacies into a leading supplier of highly addictive painkillers. The allegations date to June 2013, according to the suit.

“Many of these prescription drugs would never have hit the streets if Walmart pharmacies had complied with their obligations,” said Maria Chapa Lopez, a U.S. attorney in Tampa, Fla., who is one of several prosecutors involved in the suit.

Walmart started with cut-rate prices on opioids that initially drove shoppers to its stores, the government alleges. Middle managers—under direction from executives at company headquarters—pressured pharmacists to work faster, the suit says, believing quick-fill prescriptions drew customers to stay and keep shopping.

Many of the alleged problems centered in Walmart’s compliance unit, which oversaw dispensing nationwide from the company’s main office in Bentonville, Ark., the suit says. Walmart allegedly ignored repeated warnings that the company had understaffed its pharmacies as pressure to sell quickly caused mistakes and put patients’ health at risk, according to the complaint.

Pharmacists allegedly got little help from compliance managers who for years didn’t share information between stores, and in many cases refused requests to give blanket rejections to suspect prescribers even after rival retailers had done so, the suit says.

“Rather than analyzing the refusal-to-fill reports, the compliance unit viewed ‘[d]riving sales and patient awareness’ as ‘a far better use of our Market Directors and Market Manager’s time,’” the Justice Department said, quoting a company compliance director. “Given the nationwide scale of those violations, Walmart’s failures to follow basic legal rules helped fuel a national crisis.”

Walmart’s defense appears to be, “I don’t want to deal drugs, but it would cost too much money to do the job right.”

My old axiom applies, “If they treat their employees like sh%$, how do you think that they will treat you as a customer?”

I’m Starting a Go Fund Me to Bid on This*

It appears that there is a charity auction for the rights to hit the button to initiate the controlled implosion of the Trump Plaza casino in Atlantic City on January 19. 

Bidding appears to be north of $50K right now, and I also want to raise money to commission Banksey to put a mural on the side before that date.

I think that he might appreciate the whole scene.

Proceeds go to charity.

This is a once in a lifetime opportunity to bid on the right to push the button to implode Trump Plaza, Atlantic City, NJ. As you may or may not know, the Trump Plaza has been scheduled demolition and leveled off the boardwalk of Atlantic City. For several years it has been sitting empty and now is the time to end an era and replace it with something new. We are selling the experience to push the button to implode Trump Plaza. This will be done remotely and can be done anywhere in the world as well as close to the Plaza as we can safely get you there! All Proceeds of this auction will benefit the Boys & Girls Club of Atlantic City, NJ. Ever since the start of this pandemic they have seen an increase of young children and adolescents benefit from the services of The Boys & Girl Club and are in need of all the assistance they can get for the community. This will be a live broadcasted sale so we hope to see you on sale day and start the year with a Bang!

So, should I go with Banksey, or a local street artist?

*No, I’m not actually going to open up a Go Fund Me for this. I like to blow sh%$ up, but I do not want to be associated with anything with the Trump name on it.

Busting the Union Still More Important Than Making Safe Aircraft

Once again, we find that Boeing’s aggressive move of manufacturing to South Carolina has resulted in poorly assembled airliners.

What can I say, the unions won’t rat-f%$# themselves:

Boeing engineers previously determined that when the defects involving skin smoothness and shim size both occur in the same location, the result can be tiny imperfections creating a potential hazard such as a cracking in the fuselage under extreme flying conditions. Boeing in August took the unusual step of voluntarily grounding eight aircraft in airlines’ fleets for immediate repairs.

Those earlier problems prompted the FAA to start reviewing quality-control lapses in Boeing’s 787 production stretching back almost a decade.

Boeing also previously identified a third quality-control lapse affecting the horizontal stabilizer, a movable, winglike panel in the tail.

Boeing moved to South Carolina to ditch their unions in Seattle.

In the process, they ditched a talented workforce, and treated the new workforce like crap, because ……… South Carolina, and so the workforce there is demoralized as well.

MBA thinking does not produce good aircraft.

A Good Start

Congress just passed a bill requiring that shell companies detail who their beneficiaries are.

This means that the shenanigans like Wyoming corporations will hopefully be a thing of the past:

The U.S Senate on Friday passed a bill overhauling anti-money laundering rules and banning anonymous shell companies, a victory for law enforcement and rights groups which have long sought changes to make it easier to police illicit money flows.

The bill requires most companies to report their true beneficial owners to the government, allows greater information sharing between law enforcement and regulators, and authorizes the use of new suspicious activity monitoring tools.

Unfortunately, it does not make this information available to the general public, which it should, but it is a marked improvement on the status quo.

Today in a Foreign Language, the Queen’s English

It appears that in the late 1980s, in attempt to expand their flagging market for dedicated word processing workstations, they launched a maintenance program called WangCare.

This was well received in the United States, but despite warnings from the UK office, the British release was greeted with protests and mockery, and the name was changed in less than 48 hours. 

Trying to sell a homophone for “Wanker”, a term which was then not well known in the US, did not go over well in Blighty.

That being said, I cannot imagine that there are not at least a few snarky comments about Microsoft’s OneCare internet security product in the early 2000s.

Some people never learn.

Privatizing Profits and Socializing Losses

The World Bank has now come out in favor of a program that would make taxpayers responsible for guaranteed profits of private business all around the world.

This is an obscenity:

The World Bank has been leading other multilateral development banks (MDBs) and international financial institutions to press developing country governments to ‘de-risk’ infrastructure and other private, especially foreign investments.

They promote public-private partnerships (PPPs) supposedly to mobilize more private finance to achieve the Sustainable Development Goals. PPP advocacy has been stepped up after developing countries’ pleas for better international tax cooperation were blocked at the third United Nations’ Financing for Development conference (FfD3) in Addis Ababa in mid-2015.

………

De-risking?

The World Bank’s latest Guidance on PPP Contractual Provisions measures progress in terms of “successfully procured PPP transactions”. The Bank explicitly recommends ‘de-risking’ PPPs, effectively involving ‘socializing’ risks and privatizing profits.

But the term ‘de-risking’ is misleading as some risk is inherent in all project investments. After all, projects may encounter problems due to planning mistakes, poor implementation or unexpected developments. Hence, Bank advice does not really seek to reduce, let alone eliminate risk, but simply to make governments bear and absorb it.

………

Off the books, out of sight

Both World Bank and International Monetary Fund (IMF) research has found many governments using PPPs and other similar arrangements to keep such projects ‘off the books’ of official central government accounts, effectively reducing transparency and accountability, while compromising governance.

Such project financing typically involves government-guaranteed – rather than direct government – liabilities. Not booked as government development or capital expenditure, it is also not counted as part of sovereign or government debt, e.g., for parliamentary reporting and accountability.

………

Shifting responsibility

PPP financing is typically booked as government-guaranteed liabilities, rather than as sovereign debt per se. Being ‘off the books’, governments face fewer constraints to taking on ever more debt and risk. With such commitments, they also become much more vulnerable to ‘unforeseen’ costs.

Such contractual arrangements, typically set by private partners in most PPPs, do little to improve governance and accountability. To be sure, normal government budgetary accounting and audit procedures for PPPs may not meaningfully improve transparency and accountability.

………

Moral hazard

World Bank guidance is clear that even a private partner who fails to deliver as contracted must be compensated for work done before a government can terminate a contract. Whether private partners actually deliver as promised does not seem to matter to the Bank which provides no guidance for addressing their failures to meet contractual obligations.

The Bank thus contributes to ‘moral hazard’ in PPPs: the less likely the private partner stands to lose from poor performance, the less incentive it has to meet contractual obligations. Guaranteeing cost recovery, revenue and profit erodes the motive to deliver as promised and to consider project risks.

Enthusiastic PPP promotion – by the Bank, other MDBs and donors urging developing country governments to bear more risk – is not only encouraging ‘moral hazard’, but also creating more opportunities for the corruption and abuse they profess to lament.

Instead, private partners have greater incentives to try gouging rents from government partners, e.g., by renegotiating existing contracts to their advantage. Conversely, governments have to choose between bearing the costs of failed projects, and paying even more to save problematic ones in the hope of cutting losses.

………

Ignoring evidence

Many governments can undertake large infrastructure projects themselves, or alternatively, make much better procurement arrangements. IMF research has also found, “In many countries, PPPs have not always performed better than public procurement”.

Ironically, Bank research has shown that “well-run public firms tend to match the performance of private firms in regulated sectors”, concluding, “There is no ‘killer’ rationale for public-private partnerships”.

Even the Bank’s Research Observer has published a summary of “some of the most compelling examples of this kind of emerging critique” of infrastructure PPPs in telecoms, transport, water and sanitation, waste management and electricity.

Yet, the Bank continues to promote PPPs as the preferred mode of infrastructure financing, trying to shift more risk to governments, ostensibly to attract more private investment. Meanwhile, Bank guidance typically fails to warn governments of the risks involved and their implications.

Prejudiced guidance

Bank and other PPP advocates dismiss criticisms as ‘ideological’ despite growing empirical evidence. Such damning findings have had little impact on their PPP advocacy. Instead, the new fad is for more ‘blended finance’ to PPPs, using official concessional finance to subsidise and attract more private investment.

………

Unsurprisingly, despite Bank, donor and other efforts, PPPs have only generated 15~20% of developing countries’ infrastructure investments, according to the Bank’s Independent Evaluation Group, while remaining negligible in the poorest countries.

PPPs, and related institutions are little more than looting by private actors.

Cuck Fomcast

After billions in public subsidies, Comcast has instituted data caps throughout its network.

The lesson here is that if you want to expend tax dollars for broader internet access, it is best that the networks receiving those subsidies should be owned by the taxpayer:

With millions of Americans trapped at home to protect themselves from a deadly pandemic during the holiday season, the Internet is one of the only conduits connecting them to friends, family and the outside world. Now, Comcast, one of the monopoly corporations that controls the conduit, is extending its fees on bandwidth usage to all 39 states where it operates — even as the company has received hundreds of millions of dollars of public subsidies and new tax breaks.

Whether or not those data caps remain permanent could hinge on whether president-elect Joe Biden and Democrats are willing to take action against a corporation that has been one of their major campaign donors.

At issue is Comcast’s move on Monday that caps home internet usage at 1.2TB of data per month for its customers in 12 additional states, and charging customers up to $100 per month if they exceed the cap. Comcast’s move was flagged by Stop The Cap, which discovered that the company had quietly updated language on its website.

The new limits, which will take effect in March, are being imposed in states that have given Comcast and its subsidiaries more than $738 million in tax subsidies in the last few decades. Those states include New York, Connecticut, and Pennsylvania, where state and local governments have given Comcast and its subsidiaries $484 million, $132 million, and $79 million in tax subsidies, respectively, according to data from Good Jobs First.

In all, Comcast and its subsidiaries — which include NBC and MSNBC — have received nearly $1 billion in state and local subsidies. Additionally, Comcast received $861 million in federal tax subsidies during the first year of the Trump tax cuts, according to the Institute for Taxation and Economic Policy.

“This is why monopolies are bad,” tweeted Public Citizen, a consumer advocacy organization. “Comcast can arbitrarily exploit us for profit during a pandemic just because it feels like it. Meanwhile, Comcast collects tons of tax breaks and government subsidies. Comcast should be broken up.”

No, Comcast should be expropriated and become a public agency operated for a public benefit. 

Creating 50 Comcasts where there was only 1 is not a fix.

Neither will happen though, they gave big bucks to the Biden campaign.

Amazon Again


We don’t care, we don’t have to ……… we’re Amazon.

The Monster from Seattle is engaging in a systematic program of spying on its workers and activists, because they don’t care, they don’t have to, they’re Amazon.

Seriously, this company is ineluctably evil:

A trove of more than two dozen internal Amazon reports reveal in stark detail the company’s obsessive monitoring of organized labor and social and environmental movements in Europe, particularly during Amazon’s “peak season” between Black Friday and Christmas. The reports, obtained by Motherboard, were written in 2019 by Amazon intelligence analysts who work for the Global Security Operations Center, the company’s security division tasked with protecting Amazon employees, vendors, and assets at Amazon facilities around the world.

The documents show Amazon analysts closely monitor the labor and union-organizing activity of their workers throughout Europe, as well as environmentalist and social justice groups on Facebook and Instagram. They also indicate, and an Amazon spokesperson confirmed, that Amazon has hired Pinkerton operatives—from the notorious spy agency known for its union-busting activities—to gather intelligence on warehouse workers.

Internal emails sent to Amazon’s Global Security Operations Center obtained by Motherboard reveal that all the division’s team members around the world receive updates on labor organizing activities at warehouses that include the exact date, time, location, the source who reported the action, the number of participants at an event (and in some cases a turnout rate of those expected to participate in a labor action), and a description of what happened, such as a “strike” or “the distribution of leaflets.” Other documents reveal that Amazon intelligence analysts keep close tabs on how many warehouse workers attend union meetings; specific worker dissatisfactions with warehouse conditions, such as excessive workloads; and cases of warehouse-worker theft, from a bottle of tequila to $15,000 worth of smart watches.

The documents offer an unprecedented look inside the internal security and surveillance apparatus of a company that has vigorously attempted to tamp down employee dissent and has previously been caught smearing employees who attempted to organize their colleagues. Amazon’s approach of dealing with its own workforce, labor unions, and social and environmental movements as a threat has grave implications for its workers’ privacy and ability to join labor unions and collectively bargain—and not only in Europe. It should also be concerning to both customers and workers in the United States and Canada, and around the world as the company expands into Turkey, Australia, Mexico, Brazil, and India.

Amazon intelligence analysts appear to gather information on labor organizing and social movements to prevent any disruptions to order fulfillment operations. The new intelligence reports obtained by Motherboard reveal in detail how Amazon uses social media to track environmental activism and social movements in Europe—including Greenpeace and Fridays For Future, environmental activist Greta Thunberg’s global climate strike movement—and perceives such groups as a threat to its operations. In 2019, Amazon monitored the Yellow Vests movement, also known as the gilet jaunes, a grassroots uprising for economic justice that spread across France—and solidarity movements in Vienna and protests against state repression in Iran.

………

“Like any other responsible business, we maintain a level of security within our operations to help keep our employees, buildings, and inventory safe,” Lisa Levandowski, a spokesperson for Amazon told Motherboard. “That includes having an internal investigations team who work with law enforcement agencies as appropriate, and everything we do is in line with local laws and conducted with the full knowledge and support of local authorities. Any attempt to sensationalize these activities or suggest we’re doing something unusual or wrong is irresponsible and incorrect.”

Levandowski denied that Amazon hired on-the-ground operatives, and said that any claim that Amazon performs the described activities across its operations worldwide was “N/A.”

In a report from November 2019, however, an analyst wrote that Amazon hired Pinkerton spies who were “inserted” into a warehouse in Wroclaw, Poland, to investigate an allegation that management coached job candidates on how to complete job interviews and possibly even conducted the process for them.

………

The report refers to the Pinkerton Detective Agency, which in the late 19th and early 20th centuries in the United States supplied detectives to infiltrate unions and hired violent goon squads to intimidate workers from engaging in union activity in steel mills. Today, Pinkerton is a subsidiary of the Swedish security company Securitas AB, and has supplied operatives to monitor strikes in West Virginia as recently as 2018.

………

“It’s not enough for Amazon to abuse its dominant market power and face antitrust charges by the EU; now they are exporting 19th century American union-busting tactics to Europe,” Christy Hoffman, general secretary of UNI Global Union, a global federation of trade unions that represents more than 20 million workers, told Motherboard. “This is a company that is ignoring the law, spying on workers, and using every page of the U.S. union-busting playbook to silence workers’ voices.”

………

Since Amazon posted job listings for two intelligence agents who could track “labor organizing threats,” journalists have obtained more documents that reveal some of the sophisticated technology and strategies the company has used to surveil its workforce and gain intelligence on worker organizing. In September, Motherboard obtained evidence that Amazon had been using a social media monitoring tool to spy on dozens of private Facebook groups for Amazon Flex drivers in the United States and Europe. Last month, a report in Recode revealed that Amazon has made significant investments in a new geospatial tool that tracks threats to the company. Out of 40 or so data points Amazon that tracks at least half are labor or employee-related, including “Whole Foods Market Activism/Unionization Efforts,” “union grant money flow patterns,” “and “Presence of Local Union Chapters and Alt Labor Groups.”

You know, it would be a good idea to put someone’s head on a pike at the beginning of the Biden administration, and Jeff Bezos would be a particularly good guy to make an example of.

If the Feds could take down Capone, they can take down Bezos.