President Donald Trump’s ban on the visa lottery was ruled to be illegal, but the government says it can’t help hundreds of Afghans who won it for at least another year.
Fakhruddin Akbari is allowing his full name to be published because he is certain he is going to die. Akbari, his wife and his 3-year-old daughter fled their home in Kabul, Afghanistan, two weeks ago. They’ve been hiding with friends in the city, living on bread and water.
He should be among the lucky ones.
Instead, Akbari fears the very thing he was hoping would be his salvation will now make him a target.
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Two years ago, Akbari won a rare spot in the United States’ “visa lottery.” He was chosen at random from a pool of 23 million to get the chance to apply for one of 55,000 visas to immigrate to the U.S. The U.S. was supposed to have finished his case by last fall. The instructions when he registered promised as much. Either he would be safely en route to the U.S., or he would lose his chance and move on.
But with the final U.S. evacuation from Afghanistan just days away — and as Thursday’s bombings have added even more chaos at Kabul’s airport — Akbari has almost certainly lost his chance to get out.
He has already burned the letters of commendation his relatives received for their work with American contractors or allied militaries. The Taliban already know, he says, that he’s part of a pro-American family. His neighbors have told him they’ve been visited by strangers asking about him.
A March 2020 ban signed by President Donald Trump, citing a need to protect the American economy, prevented Akbari and visa lottery winners from entering the U.S. In response to a lawsuit by immigration lawyers, a federal judge ruled earlier this month that the government has to move ahead on processing thousands of last year’s lottery winners. But the U.S. has told the judge it can’t even start until fall 2022 at the earliest.
Several hundred Afghans are in the group. They may be the unluckiest winners in the visa lottery’s 30-year history.
The State Department did not respond to a request for comment before publication.
The lottery isn’t open to everyone. Winners must come from a country that hasn’t had much recent immigration to the U.S. Applicants for the visas must also submit biometric information, pass an interview and medical screening, and complete several security checks.
Nouman, an Afghan lottery winner who asked that his full name not be used over fear of the Taliban, spent months tracking down police documents from the Chinese town where he’d worked for a few years, to prove he had a clean record.
Those requirements are still far less restrictive than other ways to legally immigrate to the U.S., which generally require being closely related to a citizen or green-card holder or having a job offer from an American company. In Afghanistan, interest in the lottery is so great that Nouman said it took him two days to successfully log onto the swamped website where lottery results were posted.
But unlike other visas, diversity visas — the type lottery winners become eligible to receive — are on a tight and unvarying schedule.
Lottery winners are notified in the early summer. After submitting their full application, they can only be interviewed at the nearest U.S. consulate once the federal fiscal year begins on Oct. 1. Then the whole process has to be completed within a year. Eligibility for the visa doesn’t roll over.
Usually, most of the annual 55,000 visas have been handed out by that time. But last year, two things happened. First, in mid-March, consulates around the world shut down because of the pandemic. Two weeks later, Trump declared that letting in immigrants would hamper the recovery of the economy, and he signed the order barring most types of immigrants — including diversity visa holders.
When U.S. embassies and consulates began to reopen last summer, a State Department cable disclosed as part of the lawsuit shows they were instructed to handle diversity visas last, even if they met the narrow exemptions to the ban.
Giving someone a visa is legally distinct from letting them enter the U.S., and critics of Trump’s actions — including a group of lawyers who filed lawsuits over the bans — argued that even if the ban were legal, consulates could still prepare visas so that recipients could come after the ban was rescinded, which President Joe Biden did this February.
In early September last year, Judge Amit Mehta of the U.S. District Court for the District of Columbia agreed with the argument and ordered the government to make up for lost time, prioritizing diversity visa applicants ahead of everyone else for the last 26 days of the fiscal year.
The State Department’s bureaucracy took a few days to get into gear. Then it began a process that turned out to be far from efficient.
Officials compiled a spreadsheet of applicants who had joined the now-consolidated suit and were supposed to be prioritized, but it was riddled with misspelled names and incorrect case numbers. In a court declaration, a State Department official from a different office said the spreadsheet took “many queries” from his team to fix.
Once consulates and embassies got the correct names, they rushed appointments, often giving applicants little notice. The Kabul embassy wasn’t participating at all, so any Afghan appointments were set up in different countries — or continents.
At least three Afghan immigrants, including Nouman, were scheduled for interviews in Cameroon. All three were given one day’s notice to get there. (Nouman, at least, was able to get a later appointment in Islamabad, Pakistan.)
Many more weren’t given interviews at all. According to court filings, some State Department employees told applicants who called the office handling the cases that if they hadn’t officially joined the lawsuit, “you lost your chance” — which wasn’t true. When a COVID-19 outbreak hit the office and workers went remote, the help line shut down entirely.
When the fiscal year ended on Sept. 30, 2020, more than 40,000 of the 55,000 diversity visas were still unused — and several hundred Afghans were still waiting. Less than 20% of the Afghan lottery winners had gotten visas by the deadline.
That day, Mehta had ordered the State Department to reserve 9,505 slots, based on his estimate of how many diversity visas could have been processed if COVID-19 had existed but the ban didn’t. When the case finally concluded this month, he declared that the government would indeed have to process those visas.
That opinion came down on Aug. 17, two days after Kabul fell.
In a response filed to Mehta on Thursday, the government offered to start processing last year’s visas in October 2022. One reason given for the proposed delay was that processing older visas is “an unprecedented computing demand that will require the Department to implement wide-ranging hardware and software modifications.” Another was that processing diversity visas would take resources away from dealing with the crisis in Afghanistan.
It went unmentioned that some people are affected by both.
Lawyers for the affected immigrants made an emergency filing this week, with testimony from several Afghans worried that they would be targeted by the Taliban precisely because they had sought to immigrate to the U.S. They’re hoping the court will order expedited consideration for Afghan lottery winners.
The lawyers are moving to appeal for the court to order that Afghans get priority in the visa process. The plaintiffs’ lawyers had asked the government to consent to their filing the request. The government’s response — after several days of silence, delaying the filing — was to call it an “unnecessary distraction.”
In a meeting by phone on Monday, according to two people on the call, another government attorney complained that he’d been getting emails from applicants “all over the world” and blamed their lawyers for posting his address online. One of those emails was a desperate cry for help from Akbari. “We are totally hopeless and every knock of the door seems like a call to death for us,” Akbari wrote. “Please help us.”
In the time since sending that email, Akbari and his family have made two attempts to get to Kabul’s Hamid Karzai International Airport. The first time, he says, they were beaten back by the Taliban. The second time he was stopped by the United States. The Marines guarding the airport said they couldn’t enter. The reason? They did not have visas.
Originally published on ProPublica by Dara Lind via Creative Commons
We do have socialism in this country—but it’s not Democrats’ policies. The real socialism is corporate welfare.
You may have heard Republicans in Congress rail about how the Democrats’ agenda is chock-full of scary “socialist” policies.
We do have socialism in this country—but it’s not Democrats’ policies. The real socialism is corporate welfare.
Thousands of big American corporations rake in billions each year in government subsidies, bailouts, and tax loopholes—all funded on the taxpayer dime, and all contributing to higher stock prices for the richest 1 percent who own half of the stock market, as well as CEOs and other top executives who are paid largely in shares of stock.
Big Tech, Big Oil, Big Pharma, defense contractors, and big banks are the biggest beneficiaries of corporate welfare.
How? Follow the money. These corporations and their trade groups spend hundreds of millions each year on lobbying and campaign contributions. Their influence-peddling pays off. The return on these political investments is huge. It’s institutionalized bribery.
An even more insidious example is corporations that don’t pay their workers a living wage. As a result, their workers have to rely on programs like Medicaid, public housing, food stamps and other safety nets. Which means you and I and other taxpayers indirectly subsidize these corporations, allowing them to enjoy even higher profits and share prices for their wealthy investors and executives.
Not only does corporate welfare take money away from us as taxpayers. It also harms smaller businesses that have a harder time competing with big businesses that get these subsidies. Everyone loses except those at the top.
It’s more socialism for the rich, harsh capitalism for the rest.
It should be ended.
I’m as sensitive as anyone to the sufferings of Afghans now, but I’ve had it with the sanctimony of journalists and pundits who haven’t thought about Afghanistan for 20 years—many of whom urged we get out—but who are now filling the August news hole with overwrought stories about Biden’s botched exit and Taliban atrocities.
Yes, the exit could have been better planned and executed. Yes, it’s all horribly sad. But can we get a grip? The sudden all-consuming focus on Afghanistan is distracting us from hugely important stuff that’s coming to a head at home:
(1) Republican politicians and right-wing media worsening the surging Delta variant of COVID by fighting masks and vaccinations, as cities and school systems struggle to decide what to do;
(2) wildfires and floods consuming much of America, as House Democrats absurdly threaten to oppose Biden’s $3.5 trillion budget blueprint containing important measures to slow climate change;
(3) Texas on the verge of passing the nation’s most anti-democracy voting restrictions, adding to voter suppression measures in 24 other states, at the same time the “For the People Act” and the “John Lewis Voting Rights Act”—which would remedy these horrendous laws—languish in the Senate because Joe Manchin and Krysten Sinema refuse to do anything about the filibuster.
Enough sanctimony over Afghanistan. Enough about Biden’s falling approval ratings. We’ve had enough wall-to-wall coverage of the Olympics and then Andrew Cuomo and now the airport in Kabul. Can we please focus on the biggest things that need and deserve our attention right now? The window of opportunity to do anything about them will close sooner than we expect.
If we don’t take action now on COVID and the critical importance of vaccinations and masks, on climate change and Biden’s $3.5 trillion package, and on voter suppression and the necessity of the For the People and the John Lewis Voting Rights Acts, we may never.
Chair of the Federal Trade Commission Lina Khan posted on her Twitter the official press release of its position against Facebook.
Pulling no punches the language of the filing leaves no doubt as to the direction of the FTC going forward in this case. Illegal, Bribery, “Buy-or-Bury Scheme” these are characterizations that go to the heart of anticompetitive and monopolistic behavior of the giant. FTC Bureau of Competition Acting Director, Holly Vedova, said ““This conduct is no less anticompetitive than if Facebook had bribed emerging app competitors not to compete. The antitrust laws were enacted to prevent precisely this type of illegal activity by monopolists.”
While The Federal Trade Commission’s mandate has traditionally been “to promote competition and protect and educate consumers” the attempt by big tech to appear “helpful” to consumers with hidden costs and deflated pricing is finally at issue with Kahn in the chair. Khan’s famous 2017 article; “Amazon’s Antitrust Paradox“ helped to re-define a new direction for antitrust law for the digital age, which appears to be in the early stages of fulfillment at the agency under her leadership.
FTC Alleges Facebook Resorted to Illegal Buy-or-Bury Scheme to Crush Competition After String of Failed Attempts to Innovatehttps://t.co/tR9yokuyFo
As described in the amended case, upon Facebook starting out as an open space for third party developers, the company quickly reversed (pulling a bait-and-switch) by requiring developers to terms that would have prevented successful applications from emerging as competitive threats to the company.
“The stench of corruption wafting up from Louis DeJoy’s office is so thick seagulls are flying in from the Jersey Shore and circling overhead.”
A leading government ethics watchdog on Wednesday cheered a federal judge’s ruling ordering the United States Postal Service to hand over documents concerning potential conflicts of interest involving embattled Postmaster General Louis DeJoy.
U.S. District Judge John D. Bates on Tuesday granted Citizens for Responsibility and Ethics in Washington (CREW) a full summary judgment (pdf) and orderedthe United States Postal Service (USPS) to give the advocacy group seven documents it requested under the Freedom of Information Act (FOIA).
USPS claimed the documents were FOIA-exempt. According toLaw & Crime, “Four of the documents concerned a request for a certificate of divestiture from DeJoy and the remaining three concern his recusal from matters where he may have a conflict of interest.”
Over the past seven years, the USPS has reportedly paid approximately $286 million to XPO Logistics, DeJoy’s ex-employer, and has “ramped up its business” with the company since DeJoy’s appointment as postmaster general. After his appointment, DeJoy continued to hold financial interests in XPO totaling between $30 and $75 million. DeJoy also held a significant amount of stock in Amazon, a major USPS competitor.
Earlier this month, Common Dreamsreported on growing calls to fire DeJoy following the revelation by The Washington Post that USPS will pay XPO Logistics $120 million over the next five years. Rep. Gerry Connolly (D-Va.) responded to the Post report by calling DeJoy a “walking conflict of interest.”
Last Friday, a Postreport that DeJoy had purchased hundreds of thousands of dollars worth of publicly traded bonds from Brookfield Asset Management—where USPS Board of Governors Chair Ron Bloom is a managing partner—fueled further calls for DeJoy’s termination, with Connolly calling Bloom and the postmaster general “bandits” whose “conflicts of interest do nothing but harm the Postal Service and the American people.”
CREW communications director Jordan Libowitz called Bates’ order “a big win not just for CREW, but for transparency advocates everywhere.”
“DeJoy’s decision-making as postmaster general has raised some serious ethical questions—now we should finally get some answers,” Libowitz added.
Rep. Bill Pascrell (D-N.J.) on Monday sent President Joe Biden a letter urging him to sack everyone former President Donald Trump appointed to the USPS board. Pascrell welcomed the Tuesday court order and reiterated his call for Biden to fire Trump appointees and “show DeJoy the door now before it’s too late.”
DeJoy and six of the nine USPS governors, including Bloom, were appointed by Trump; the rest are Biden appointees.
In addition to the alleged conflicts of interest in connection with XPO Logistics and Brookfield Asset Management, CREW, in advocating DeJoy’s ouster, notes that:
DeJoy and his wife, a former U.S. ambassador to Canada, got their jobs after contributing $2 million to Trump’s campaign coffers;
DeJoy is the first person in decades to lead the USPS without any previous experience in the agency;
DeJoy is under federal investigation for allegedly operating a scheme where he asked employees of his former company to make campaign contributions, then arranged for bonus payments to reimburse the employees; and
DeJoy apparently violated federal criminal laws by commanding the USPS to make policy changes at the agency that would depress or delay voting by mail in the 2020 election.
“Bottom line: Louis DeJoy has overseen an attack on the Postal Service and on American democracy itself,” CREW tweeted Wednesday. “The USPS Board of Governors must fire him before it’s too late.”
“The president made a promise to ban all new oil and gas leasing on public lands and waters,” said Greenpeace, “and the American people expect him to keep it.”
Climate groups are expressing deep concern following an Interior Department announcement Monday that the Biden administration will resume oil and gas drilling leases on public lands and waters—a practice President Joe Biden vowed to ban during his 2020 run for the White House—in response to a federal court ruling.
“The climate emergency reality we are facing demands immediate action, not acquiescence.”
—Nicole Ghio, Friends of the Earth
While the Biden administration confirmed in its announcement that an appeal has been filed with the 5th Circuit Court of Appeals in a legal battle with the state of Louisiana—which sued the federal government over the pause in the oil and gas leasing program ordered by Biden earlier this year—the Interior Department said leasing would resume while the process plays out.
“Federal onshore and offshore oil and gas leasing will continue as required by the district court while the government’s appeal is pending,” the DOI stated.
According to Bloomberg, the moves by the administration “mark the beginning of an open-ended analysis of the federal oil, gas and coal leasing programs that could span years—and lead to higher fees as well as new limits on development in sensitive areas.”
While environmental advocacy groups commended the administration for appealing the lower court ruling—handed down by a Trump-appointed U.S. district court judge in June—they also said the threat of resuming the leasing program on federal lands and for offshore drilling cannot be overstated.
“Our planet can’t afford any more new fossil fuel extraction,” said Taylor McKinnon, a senior campaigner with the Center for Biological Diversity, in a statement on Tuesday. “We’re out of time. The world’s existing oil and gas fields will already push warming past 1.5 degrees Celsius if they’re fully developed.”
Robert Weissman, president of Public Citizen, said in respsonse that with “the climate crisis smacking us in the face at every turn, it’s hard to imagine a worse idea than resuming oil and gas drilling on federal lands. As has been documented in long and excruciating detail, oil and gas drillers have trashed public lands and failed to clean up their mess—while siphoning public resources for a relative pittance.”
As the appeals process plays out, the Biden administration said it will perform a new analysis of the regulatory framework that governs leasing and extraction operations on federal lands as well as hold oil and gas companies to account under existing authorities and guidelines.
“We’re out of time. The world’s existing oil and gas fields will already push warming past 1.5 degrees Celsius if they’re fully developed.”
—Taylor McKinnon, Center for Biological Diversity
“It’s encouraging that the Biden administration is appealing this wrongful decision,” said Nicole Ghio, senior fossil fuels program manager at Friends of the Earth. “However, the president made a promise to ban all new oil and gas leasing on public lands and waters, and the American people expect him to keep it. The climate emergency reality we are facing demands immediate action, not acquiescence.”
Mary Greene, public lands attorney for the National Wildlife Federation, urged the Interior Department to act aggressively but also said that Congress must get off the sidelines on the issue.
“While the Biden administration responds to the court, we urge the Department of Interior to issue its reform initiatives so that the outdated leasing system is modernized for the benefit of our public lands, wildlife, and all Americans,” Greene said. “But administrative actions alone cannot solve this problem. Congress must also swiftly take action to update our hundred-year-old leasing law so that our nation can transition to the clean energy economy that we all need and deserve.”
Given the recent IPCC report which argues that global emissions must be urgently reduced, climate action advocates said the administration cannot be allowed to walk away from its commitment to end oil and gas development on federal lands.
“Last week’s IPCC report outlined the grisly risks that fossil fuels pose to people and the planet,” said Tim Donaghy, senior research specialist with Greenpeace USA. “The International Energy Agency (IEA) has clearly said there can be no new fossil fuel projects if we are to stand any chance at limiting the climate chaos.”
A complete and final end of drilling on U.S. public lands and in offshore waters, said Donaghy, “is an essential part of any effective climate plan.” Along with others in the climate just movement, he said there remain many avenues for Biden “to consider in reforming leasing and we urge him to do everything he can to keep fossil fuels in the ground.”
“We’ve spent billions on war. Now, let’s spend to bring Afghans to safety.”
As the Biden administration faces criticism for not doing enough to assist those fleeing Afghanistan, an analysis released Monday showed that the roughly $19 billion the Pentagon budgeted for the U.S. occupation of the country in 2020 alone could cover initial resettlement costs for 1.2 million refugees.
“We have a duty to save lives—and to do so, we must welcome many, many more refugees as quickly as possible.”
—Rep. Cori Bush
Lindsay Koshgarian of the National Priorities Project estimated that the $18.6 billion the Pentagon allocated for its 2020 operations in Afghanistan—where the Taliban is in the process of retaking powerafter two decades of deadly U.S. occupation—could pay up-front refugee relocation costs of $15,148 for the more than “250,000 Afghans displaced since the end of May (and growing)” and “a significant chunk of the 3.5 million Afghans who were internally displaced as of July.”
“Refugees typically receive some assistance after their arrival, but even if we expanded to cover an additional four years of the approximately $4,600 in annualized social service aid that refugees typically receive, we could still resettle more than half a million people, for just one year’s worth of the cost of fighting,” Koshgarian noted. “We’d face even lower costs to help resettle Afghans in countries closer to home—all the more reason after 20 years of war to step up with some serious resources and get it done.”
“After twenty years,” she added, “we owe the Afghan people at least that much.”
Resettling 1.2 million Afghan refugees in the U.S. would cost less than one year of war in Afghanistan.
We've spent billions on war. Now, let's spend to bring Afghans to safety.
The analysis came as progressive lawmakers in the U.S. and global humanitarian organizations implored the Biden administration to open the U.S. to vulnerable Afghans attempting to escape a growing humanitarian crisis and Taliban rule. According to the United Nations Refugee Agency, 80% of those currently trying to flee Afghanistan are women and children.
In a speech on Monday, U.S. President Joe Biden said that “in the coming days, the U.S. military will provide assistance to move more [Special Immigrant Visa]-eligible Afghans and their families out of Afghanistan.” The Pentagon confirmedMonday that it is planning to house up to 22,000 Afghans at two U.S. bases—Fort Bliss in Texas and Fort McCoy in Wisconsin.
“We’re also expanding refugee access to cover other vulnerable Afghans who worked for our embassy: U.S. non-governmental agencies—or the U.S. non-governmental organizations; and Afghans who otherwise are at great risk; and U.S. news agencies,” the president added.
Following his remarks, Biden directed the U.S. State Department to use up to $500 million from the nation’s Emergency Refugee and Migration Assistance Fund to meet “unexpected urgent refugee and migration needs of refugees, victims of conflict, and other persons at risk as a result of the situation in Afghanistan, including applicants for Special Immigrant Visas.”
But critics have accused the Biden administration of failing to adequately plan for the rapid collapse of the Afghan government that followed the ongoing withdrawal of U.S. forces from the country—a still-deteriorating situation that has left countless people in limbo as they seek safety for themselves and their families.
In his speech Monday, Biden claimed the administration didn’t begin evacuating at-risk civilians sooner “because the Afghan government and its supporters discouraged us from organizing a mass exodus to avoid triggering, as they said, ‘a crisis of confidence.'”
Earlier this month, the U.S. State Department expanded eligibility for the Special Immigrant Visa (SIV) program, opening it to tens of thousands of Afghans who worked for U.S. government contractors, U.S.-based media outlets, and U.S.-based non-governmental organizations. The families of eligible Afghans also have access to the program, whose application process consists of an arduous 14 steps.
And as the Wall Street Journalobserved on Monday, the program excludes the poorest Afghans by design. “To claim refugee status,” the Journal noted, “the Afghans must enter through a third country and cover the costs of travel and lodging on their own—a hurdle that is nearly impossible to surmount under the current, chaotic circumstances.”
In a letter to Biden on Monday, the advocacy organization Refugees International called on the administration to “express its willingness initially to resettle up to 200,000 Afghan refugees, as part of an international responsibility-sharing effort to rescue and resettle Afghans at risk.”
“While most would be resettled from countries of asylum,” the group wrote, “a program ultimately could involve direct resettlement from Afghanistan, akin to the Orderly Departure program that resulted in the resettlement of many hundreds of thousands of Vietnamese directly from their country of origin.”
Rep. Cori Bush (D-Mo.), part of a chorus of progressive lawmakers pushing Biden to do more to welcome refugees—in addition to ending the interventionist foreign policy approach that creates such humanitarian crises—noted in a tweetMonday that the U.S. “welcomed 120,000 refugees in a single year” in the aftermath of the Vietnam War.
“Yet the United States has only taken in ~2,000 Afghan refugees thus far,” Bush wrote. “We have a duty to save lives—and to do so, we must welcome many, many more refugees as quickly as possible.”
The social media giant’s powerful targeting tools appear to be part of Ben Shapiro’s success in growing his audience on the platform
Ben Shapiro, co-founder of The Daily Wire, a conservative media company, has mastered Facebook’s complex algorithms like no one else, posting links to stories from his publication that rank among the top 10 best performing posts on Facebook day after day after day.
What’s the key to his success?
As a recent NPR analysis shows, The Daily Wire’s sensationalist headlines garner a ton of engagement on a platform that rewards explosive content. But The Daily Wire is also a sophisticated user of Facebook’s advertising targeting tools to pinpoint users likely to be receptive to its outrage-driven brand of conservative content, The Markup has found.
Using data from our Citizen Browser project, we pulled targeting information from 241 Daily Wire ads that ran on Facebook between April 15 and July 15, 2021. We found that The Daily Wire largely chose to target people whom Facebook had pegged as interested in Fox News, Donald Trump, Rush Limbaugh, and other conservative mainstays, as well as individuals Facebook determined were characteristically or demographically similar to The Daily Wire’s existing audience members. (See our data here.)
Citizen Browser consists of a panel of roughly 1,800 Facebook users across the country who voluntarily share their Facebook news feed data with The Markup—providing a rare, albeit relatively small, window into what different people see on the platform.
By contrast, The New York Times—one of the largest legacy media publications in the U.S.—took a different tack in its Facebook advertising, targeting users according to the topics of the articles. So, for instance, an article about a band could be targeted to Facebook users with “music” listed in their ad interests. (Facebook says it determines users’ interests based on their past activities on the platform but has been somewhat cagey about how exactly this is done.)
Of the two publications, The Daily Wire used interest targeting more frequently than The New York Times did: 39.3 percent of Daily Wire ads versus 23.5 percent of ads from the Times were targeted in this way.
The table below shows the top 10 interests targeted in sponsored posts from both outlets:
While the Times mostly targets topical interests, of the top 20 interests targeted by The Daily Wire, only one (“American Football”) was not directly tied to conservative media or politics.
The Daily Wire also frequently made use of Facebook’s “lookalike audiences” feature to show content to new audiences of users who do not follow the page but share characteristics with those who do. In our dataset, 37.9 percent of Daily Wire posts used this type of targeting. The New York Times also used this targeting type, albeit rarely: Only 3.6 percent of its sponsored posts in our dataset targeted lookalike audiences.
“As you’re looking at this dataset, to me it shows that mainstream media outlets like The New York Times are still approaching the internet as a collective space in which you could potentially learn about anything, from ‘research’ or ‘science’ to ‘family and relationships,’ ” Francesca Tripodi, an assistant professor at UNC School of Information and Library Science at Chapel Hill, said. “But Daily Wire, if you’re saying, ‘We only want to target people who are interested in conservatism in America,’ that creates this bifurcated or dual internet, and that allows for information to circulate unchecked.”
Facebook advertising is designed to use personal data points about its users to guess what sorts of products they might like, she said, but there’s a fundamental difference between a food brand serving ads to people who like potato chips and a news brand serving information to people who like conservatism.
“[Daily Wire] is using the same tactics that these corporate entities are using but to create siloed interests around information,” Tripodi said.
Neither The Daily Wire nor Facebook responded to multiple requests for comment.
Beyond Facebook’s powerful data-gathering system, The Daily Wire amasses its own information on readers and potential readers.
The Markup also scanned Daily Wire ads in the Facebook ad library, which contains a broader range of ads than those seen by Citizen Browser panelists but does not disclose targeting information. Over a three-month period, from May through July, the ad library displayed 47 unique ads from The Daily Wire. Of these, 22 were survey-style ads prompting users to respond to emotive political questions.
Clicking the ad takes users away from Facebook and onto the dailywire.com domain, where they are asked to enter an email address in order to respond.
Over the same time period, no New York Times ads available in the ad library used this technique.
The Daily Wire’s website also contains an unusually high number of data-gathering trackers.
A scan from Blacklight, a website privacy inspector built by The Markup, on Aug. 4, 2021, turned up 41 ad trackers and 117 third-party cookies on the homepage. By contrast, The Markup’s scan of 100,000 of the most popular websites in September 2020 found an average of seven ad trackers and only three third-party cookies per site.
The site also uses Facebook’s bespoke Pixel tracking code to send data back to the social platform about users who have visited the site, which The Daily Wire can use to further tweak ad targeting and build new lookalike audiences.
“What you’ve shown here is clear evidence of the way in which the radicalization of our society is built on many facets of the algorithm, including the tools provided for ad targeting,” said Cameron Hickey, project director for algorithmic transparency at the National Conference on Citizenship.
Questions about the ethics of using data-driven profiling to target political messages are not new. Perhaps most famously, the British political consulting firm Cambridge Analytica purported to create detailed psychological profiles of Facebook users and shared those with the campaign of former president Donald Trump. While profiling has been a part of politics for decades to some extent, figures ranging from former Facebook insiders to Federal Election Commission officials have raised alarms over the kind of microtargeting that social media allows. (The European Commission is also considering including a ban on microtargeting in its landmark Digital Services Act package, which is making its way through the European Parliament and the Council of the European Union.)
That said, The Daily Wire’s targeting choices are widely accepted as routine, its success on Facebook more of a feature of the platform’s workings than a bug in the system, said Katie Joseff, a research fellow at the Center for Media Engagement at the University of Texas at Austin.
“These platforms, when you look at Facebook and YouTube in particular, they want people on there who are engaging their users because then there’s more users and user time overall,” Joseff said. “So [The Daily Wire] is definitely playing into the structure as it was created and doing it well.”
In November 2017, with the administration of President Donald Trump rushing to get a massive tax overhaul through Congress, Sen. Ron Johnson stunned his colleagues by announcing he would vote “no.”
Making the rounds on cable TV, the Wisconsin Republican became the first GOP senator to declare his opposition, spooking Senate leaders who were pushing to quickly pass the tax bill with their thin majority. “If they can pass it without me, let them,” Johnson declared.
Johnson’s demand was simple: In exchange for his vote, the bill must sweeten the tax break for a class of companies that are known as pass-throughs, since profits pass through to their owners. Johnson praised such companies as “engines of innovation.” Behind the scenes, the senator pressed top Treasury Department officials on the issue, emails and the officials’ calendars show.
Within two weeks, Johnson’s ultimatum produced results. Trump personally called the senator to beg for his support, and the bill’s authors fattened the tax cut for these businesses. Johnson flipped to a “yes” and claimed credit for the change. The bill passed.
The Trump administration championed the pass-through provision as tax relief for “small businesses.”
Confidential tax records, however, reveal that Johnson’s last-minute maneuver benefited two families more than almost any others in the country — both worth billions and both among the senator’s biggest donors.
Dick and Liz Uihlein of packaging giant Uline, along with roofing magnate Diane Hendricks, together had contributed around $20 million to groups backing Johnson’s 2016 reelection campaign.
The expanded tax break Johnson muscled through netted them $215 million in deductions in 2018 alone, drastically reducing the income they owed taxes on. At that rate, the cut could deliver more than half a billion in tax savings for Hendricks and the Uihleins over its eight-year life.
But the tax break did more than just give a lucrative, and legal, perk to Johnson’s donors. In the first year after Trump signed the legislation, just 82 ultrawealthy households collectively walked away with more than $1 billion in total savings, an analysis of confidential tax records shows. Republican and Democratic tycoons alike saw their tax bills chopped by tens of millions, among them: media magnate and former Democratic presidential candidate Michael Bloomberg; the Bechtel family, owners of the engineering firm that bears their name; and the heirs of the late Houston pipeline billionaire Dan Duncan.
Usually the scale of the riches doled out by opaque tax legislation — and the beneficiaries — remain shielded from the public. But ProPublica has obtained a trove of IRS records covering thousands of the wealthiest Americans. The records have enabled reporters this year to explore the diverse menu of options the tax code affords the ultrawealthy to avoid paying taxes.
The drafting of the Trump law offers a unique opportunity to examine how the billionaire class is able to shape the code to its advantage, building in new ways to sidestep taxes.
The Tax Cuts and Jobs Act was the biggest rewrite of the code in decades and arguably the most consequential legislative achievement of the one-term president. Crafted largely in secret by a handful of Trump administration officials and members of Congress, the bill was rushed through the legislative process.
As draft language of the bill made its way through Congress, lawmakers friendly to billionaires and their lobbyists were able to nip and tuck and stretch the bill to accommodate a variety of special groups. The flurry of midnight deals and last-minute insertions of language resulted in a vast redistribution of wealth into the pockets of a select set of families, siphoning away billions in tax revenue from the nation’s coffers. This story is based on lobbying and campaign finance disclosures, Treasury Department emails and calendars obtained through a Freedom of Information Act lawsuit, and confidential tax records.
For those who benefited from the bill’s modifications, the collective millions spent on campaign donations and lobbying were minuscule compared with locking in years of enormous tax savings.
A spokesperson for the Uihleins declined to comment. Representatives for Hendricks didn’t respond to questions. In response to emailed questions, Johnson did not address whether he had discussed the expanded tax break with Hendricks or the Uihleins. Instead, he wrote in a statement that his advocacy was driven by his belief that the tax code “needs to be simplified and rationalized.”
“My support for ‘pass-through’ entities — that represent over 90% of all businesses — was guided by the necessity to keep them competitive with C-corporations and had nothing to do with any donor or discussions with them,” he wrote.
By the summer of 2017, it was clear that Trump’s first major legislative initiative, to “repeal and replace” Obamacare, had gone up in flames, taking a marquee campaign promise with it. Looking for a win, the administration turned to tax reform.
“Getting closer and closer on the Tax Cut Bill. Shaping up even better than projected,” Trump tweeted. “House and Senate working very hard and smart. End result will be not only important, but SPECIAL!”
At the top of the Republican wishlist was a deep tax cut for corporations. There was little doubt that such a cut would make it into the final legislation. But because of the complexity of the tax code, slashing the corporate tax rate doesn’t actually affect most U.S. businesses.
Corporate taxes are paid by what are known in tax lingo as C corporations, which include large publicly traded firms like AT&T or Coca-Cola. Most businesses in the United States aren’t C corporations, they’re pass-throughs. The name comes from the fact that when one of these businesses makes money, the profits are not subject to corporate taxes. Instead, they “pass through” directly to the owners, who pay taxes on the profits on their personal returns. Unlike major shareholders in companies like Amazon, who can avoid taking income by not selling their stock, owners of successful pass-throughs typically can’t avoid it.
Pass-throughs include the full gamut of American business, from small barbershops to law firms to, in the case of Uline, a packaging distributor with thousands of employees.
So alongside the corporate rate cut for the AT&Ts of the world, the Trump tax bill included a separate tax break for pass-through companies. For budgetary reasons, the tax break is not permanent, sunsetting after eight years.
Proponents touted it as boosting “small business” and “Main Street,” and it’s true that many small businesses got a modest tax break. But a recent study by Treasury economists found that the top 1% of Americans by income have reaped nearly 60% of the billions in tax savings created by the provision. And most of that amount went to the top 0.1%. That’s because even though there are many small pass-through businesses, most of the pass-through profits in the country flow to the wealthy owners of a limited group of large companies.
Tax records show that in 2018, Bloomberg, whom Forbes ranks as the 20th wealthiest person in the world, got the largest known deduction from the new provision, slashing his tax bill by nearly $68 million. (When he briefly ran for president in 2020, Bloomberg’s tax plan proposed ending the deduction, though his plan was generally friendlier to the wealthy than those of his rivals.) A spokesperson for Bloomberg declined to comment.
Johnson’s intervention in November 2017 was designed to boost the bill’s already generous tax break for pass-through companies. The bill had allowed for business owners to deduct up to 17.4% of their profits. Thanks to Johnson holding out, that figure was ultimately boosted to 20%.
That might seem like a small increase, but even a few extra percentage points can translate into tens of millions of dollars in extra deductions in one year alone for an ultrawealthy family.
The mechanics are complicated but, for the rich, it generally means that a business owner gets to keep an extra 7 cents on every dollar of profit. To understand the windfall, take the case of the Uihlein family.
Dick, the great-grandson of a beer magnate, and his wife, Liz, own and operate packaging giant Uline. The logo of the Pleasant Prairie, Wisconsin, firm is stamped on the bottom of countless paper bags. Uline produced nearly $1 billion in profits in 2018, according to ProPublica’s analysis of tax records. Dick and Liz Uihlein, who own a majority of the company, reported more than $700 million in income that year. But they were able to slash what they owed the IRS with a $118 million deduction generated by the new tax break.
Liz Uihlein, who serves as president of Uline, has criticized high taxes in her company newsletter. The year before the tax overhaul, the couple gave generously to support Trump’s 2016 presidential campaign. That same year, when Johnson faced long odds in his reelection bid against former Sen. Russ Feingold, the Uihleins gave more than $8 million to a series of political committees that blanketed the state with pro-Johnson and anti-Feingold ads. That blitz led the Milwaukee Journal Sentinel to dub the Uihleins “the Koch brothers of Wisconsin politics.”
Johnson’s campaign also got a boost from Hendricks, Wisconsin’s richest woman and owner of roofing wholesaler ABC Supply Co. The Beloit-based billionaire has publicly pushed for tax breaks and said she wants to stop the U.S. from becoming “a socialistic ideological nation.”
Hendricks has said Johnson won her over after she grilled him at a brunch meeting six years earlier. She gave about $12 million to a pair of political committees, the Reform America Fund and the Freedom Partners Action Fund, that bought ads attacking Feingold.
In the first year of the pass-through tax break, Hendricks got a $97 million deduction on income of $502 million. By reducing the income she owed taxes on, that deduction saved her around $36 million.
Even after Johnson won the expansion of the pass-through break in late 2017, the final text of the tax overhaul wasn’t settled. A congressional conference committee had to iron out the differences between the Senate and House versions of the bill.
Sometime during this process, eight words that had been in neither the House nor the Senate bill were inserted: “applied without regard to the words ‘engineering, architecture.’”
With that wonky bit of legalese, Congress smiled on the Bechtel clan.
The Bechtels’ engineering and construction company is one of the largest and most politically connected private firms in the country. With surgical precision, the new language guaranteed the Bechtels a massive tax cut. In previous versions of the bill, construction would have been given a tax break, but engineering was one of the industries excluded from the pass-through deduction for reasons that remain murky.
When the bill, with its eight added words, took effect in 2018, three great-great-grandchildren of the company’s founder, CEO Brendan Bechtel and his siblings Darren and Katherine, together netted deductions of $111 million on $679 million in income, tax records show.
And that’s just one generation of Bechtels. The heirs’ father, Riley, also holds a piece of the firm, as does a group of nonfamily executives and board members. In all, Bechtel Corporation produced around $2.3 billion of profit in 2018 alone — the vast majority of which appears to be eligible for the 20% deduction.
Who wrote the phrase — and which lawmaker inserted it — has been a much-discussed mystery in the tax policy world. ProPublica found that a lobbyist who worked for both Bechtel and an industry trade group has claimed credit for the alteration.
In the months leading up to the bill’s passage in 2017, Bechtel had executed a full-court press in Washington, meeting with Trump administration officials and spending more than $1 million lobbying on tax issues.
Marc Gerson, of the Washington law firm Miller & Chevalier, was paid to lobby on the tax bill by both Bechtel and the American Council of Engineering Companies, of which Bechtel is a member. At a presentation for the trade group’s members a few weeks after Trump signed the bill into law, Gerson credited his efforts for the pass-through tax break, calling it a “major legislative victory for the engineering industry.” Gerson did not respond to a request for comment.
Bechtel’s push was part of a long history of lobbying for tax breaks by the company. Two decades ago, it even hired a former IRS commissioner as part of a successful bid to get “engineering and architectural services” included in one of President George W. Bush’s tax cuts.
The company’s lobbying on the Trump tax bill, and the tax break it received, highlight a paradox at the core of Bechtel: The family has for years showered money on anti-tax candidates even though, as The New Yorker’s Jane Mayer has written, Bechtel “owed almost its entire existence to government patronage.” Most famous for being one of the companies that built the Hoover Dam, in recent years it has bid on and won marquee federal projects. Among them: a healthy share of the billions spent by American taxpayers to rebuild Iraq after the war. The firm recently moved its longtime headquarters from San Francisco to Reston, Virginia, a hub for federal contractors just outside the Beltway.
A spokesperson for Bechtel Corporation didn’t respond to questions about the company’s lobbying. The spokesperson, as well as a representative of the family’s investment office, didn’t respond to requests to accept questions about the family’s tax records.
Brendan Bechtel has emerged this year as a vocal critic of President Joe Biden’s proposal to pay for new infrastructure with tax hikes.
“It’s unfair to ask business to shoulder or cover all the additional costs of this public infrastructure investment,” he said on a recent CNBC appearance.
As the landmark tax overhaul sped through the legislative process, other prosperous groups of business owners worried they would be left out. With the help of lobbyists, and sometimes after direct contact with lawmakers, they, too, were invited into what Trump dubbed his “big, beautiful tax cut.”
Among the biggest winners during the final push were real estate developers.
The Senate bill included a formula that restricted the size of the new deduction based on how much a pass-through business paid in wages. Congressional Republicans framed the provision as rewarding businesses that create jobs. In effect, it meant a highly profitable business with few employees — like a real estate developer — wouldn’t be able to benefit much from the break.
Developers weren’t happy. Several marshaled lobbyists and prodded friendly lawmakers to turn things around.
At least two of them turned to Johnson.
“Dear Ron,” Ted Kellner, a Wisconsin developer, and a colleague wrote in a letter to Johnson. “I’m concerned that the goal of a fair, efficient and growth oriented tax overhaul will not be achieved, especially for private real estate pass-through entities.”
Johnson forwarded the letter from Kellner, a political donor of his, to top Republicans in the House and Senate: “All, Yesterday, I received this letter from very smart and successful businessmen in Milwaukee,” adding that the legislation as it stood gave pass-throughs “widely disparate, grossly unfair” treatment.
House Ways and Means Committee Chairman Kevin Brady, R-Texas, responded with a promise to do more: “Senator — I strongly agree we should continue to improve the pass-through provisions at every step. You are a great champion for this.” Congress is not subject to the Freedom of Information Act, but Treasury officials were copied on the email exchange. ProPublica obtained the exchange after suing the Treasury Department.
Kellner got his wish. In the final days of the legislative process, real estate investors were given a side door to access the full deduction. Language was added to the final legislation that allowed them to qualify if they had a large portfolio of buildings, even if they had small payrolls.
With that, some of the richest real estate developers in the country were welcomed into the fold.
The tax records obtained by ProPublica show that one of the top real estate industry winners was Donald Bren, sole owner of the Southern California-based Irvine Company and one of the wealthiest developers in the United States.
In 2018 alone, Bren personally enjoyed a deduction of $22 million because of the tax break. Bren’s representatives did not respond to emails and calls from ProPublica.
His company had hired Wes Coulam, a prominent Washington lobbyist with Ernst & Young, to advocate for its interests as the bill was being hammered out. Before Coulam became a lobbyist, he worked on Capitol Hill as a tax policy adviser for Utah Sen. Orrin Hatch.
Hatch, then the Republican chair of the Senate Finance Committee, publicly took credit for the final draft of the new deduction, amid questions about the real estate carveout. Hatch’s representatives did not respond to questions from ProPublica about how the carveout was added.
ProPublica’s records show that other big real estate winners include Adam Portnoy, head of commercial real estate giant the RMR Group, who got a $14 million deduction in 2018. Donald Sterling, the real estate developer and disgraced former owner of the Los Angeles Clippers, won an $11 million deduction. Representatives for Portnoy and Sterling did not respond to questions from ProPublica.
Another gift to the real estate industry in the bill was a tax deduction of up to 20% on dividends from real estate investment trusts, more commonly known as REITs. These companies are essentially bundles of various real estate assets, which investors can buy chunks of. REITs make money by collecting rent from tenants and interest from loans used to finance real estate deals.
The tax cut for these investment vehicles was pushed by both the Real Estate Roundtable, a trade group for the entire industry, and the National Association of Real Estate Investment Trusts. The latter, a trade group specifically for REITs, spent more than $5 million lobbying in Washington the year the tax bill was drafted, more than it had in any year in its history.
Steven Roth, the founder of Vornado Realty Trust, a prominent REIT, is a regular donor to both groups’ political committees.
Roth had close ties to the Trump administration, including advising on infrastructure and doing business with Jared Kushner’s family. He became one of the biggest winners from the REIT provision in the Trump tax law.
Roth earned more than $27 million in REIT dividends in the two years after the bill passed, potentially allowing him a tax deduction of about $5 million, tax records show. Roth did not respond to requests for comment, and his representatives did not accept questions from ProPublica on his behalf.
Another carveout benefited investors of publicly traded pipeline businesses. Sen. John Cornyn, a Texas Republican, added an amendment for them to the Senate version of the bill just before it was voted on.
Without his amendment, investors who made under a certain income would have received the deduction anyway, experts told ProPublica. But for higher-income investors, a slate of restrictions kicked in. In order to qualify, they would have needed the businesses they’re invested in to pay out significant wages, and these oil and gas businesses, like real estate developers, typically do not.
Cornyn’s amendment cleared the way.
The trade group for these companies and one of its top members, Enterprise Products Partners, a Houston-based natural gas and crude oil pipeline company, had both lobbied on the bill. Enterprise was founded by Dan Duncan, who died in 2010.
The Trump tax bill delivered a win to Duncan’s heirs. ProPublica’s data shows his four children, who own stakes in the company, together claimed more than $150 million in deductions in 2018 alone. The tax provision for “small businesses” had delivered a windfall to the family Forbes ranked as the 11th richest in the country.
In a statement, an Enterprise spokesperson wrote: “The Duncan family abides by all applicable tax laws and will not comment on individual tax returns, which are a private matter.” Cornyn’s office did not respond to questions about the senator’s amendment.
The tax break is due to expire after 2025, and a gulf has opened in Congress about the future of the provision.
In July, Senate Finance Chair Ron Wyden, D-Ore., proposed legislation that would end the tax cut early for the ultrawealthy. In fact, anyone making over $500,000 per year would no longer get the deduction. But it would be extended to the business owners below that threshold who are currently excluded because of their industry. The bill would “make the policy more fair and less complex for middle-class business owners, while also raising billions for priorities like child care, education, and health care,” Wyden said in a statement.
Meanwhile, dozens of trade groups, including the Chamber of Commerce, are pushing to make the pass-through tax cut permanent. This year, a bipartisan bill called the Main Street Tax Certainty Act was introduced in both houses of Congress to do just that.
One of the bill’s sponsors, Rep. Henry Cuellar, D-Texas, pitched the legislation this way: “I am committed to delivering critical relief for our nation’s small businesses and the communities they serve.”
Originally published on ProPublica by Justin Elliott and Robert Faturechi
“Scientists say we cannot allow this to happen. People in power stand in our way.”
Originally published on Common Dreams via Creative Commons
While heatwaves, fires, and floods produce warnings that “we are living in a climate emergency, here and now,” a scientific study suggested Thursday that a crucial Atlantic Ocean current system could collapse, which “would have severe impacts on the global climate system.”
“The likelihood of this extremely high-impact event happening increases with every gram of CO2 that we put into the atmosphere.” —Niklas Boers, PIK
The study, published in the journal Nature Climate Change, focuses on the Atlantic Meridional Overturning Circulation (AMOC), which includes the Gulf Stream. As the United Kingdom’s Met Office explains, it is “a large system of ocean currents that carry warm water from the tropics northwards into the North Atlantic,” like a conveyor belt.
Previous research has shown AMOC weakening in recent centuries. The author of the new study, Niklas Boers of the Potsdam Institute of Climate Impact Research (PIK), found that this is likely related to a loss of stability.
“The Atlantic Meridional Overturning is one of our planet’s key circulation systems,” Boers, who is also affiliated with universities in the U.K. and Germany, said in a statement.
“We already know from some computer simulations and from data from Earth’s past, so-called paleoclimate proxy records, that the AMOC can exhibit—in addition to the currently attained strong mode—an alternative, substantially weaker mode of operation,” he continued. “This bi-stability implies that abrupt transitions between the two circulation modes are in principle possible.”
In the absence of long-term data on the current system’s strength, Boers looked at its “fingerprints,” sea-surface temperature and salinity patterns. He said that “a detailed analysis of these fingerprints in eight independent indices now suggests that the AMOC weakening during the last century is indeed likely to be associated with a loss of stability.”
“The findings support the assessment that the AMOC decline is not just a fluctuation or a linear response to increasing temperatures,” he continued, “but likely means the approaching of a critical threshold beyond which the circulation system could collapse.”
As The Guardian‘s Damian Carrington reports, the collapse of “one of the planet’s main potential tipping points” would be devastating on a global scale:
Such an event would have catastrophic consequences around the world, severely disrupting the rains that billions of people depend on for food in India, South America, and West Africa; increasing storms and lowering temperatures in Europe; and pushing up the sea level in the eastern U.S. It would also further endanger the Amazon rainforest and Antarctic ice sheets.
The complexity of the AMOC system and uncertainty over levels of future global heating make it impossible to forecast the date of any collapse for now. It could be within a decade or two, or several centuries away. But the colossal impact it would have means it must never be allowed to happen, the scientists said.
“The signs of destabilization being visible already is something that I wouldn’t have expected and that I find scary,” Boers told the newspaper. “It’s something you just can’t [allow to] happen.”
It is unclear what level of global heating would cause a collapse, “so the only thing to do is keep emissions as low as possible,” he added. “The likelihood of this extremely high-impact event happening increases with every gram of CO2 that we put into the atmosphere.”
Some climate action advocates responded to the study by highlighting a science fiction movie that, as famed film critic Roger Ebert wrote nearly two decades ago, “is ridiculous, yes, but sublimely ridiculous—and the special effects are stupendous.”
This is literally the exact plot of the 2004 film The Day After Tomorrowhttps://t.co/MQRHRTq9oP
“We all laughed at The Day After Tomorrow, back in 2004,” said Guy Shrubsole, policy and campaigns coordinator at Rewilding Britain. “Turned out it was a documentary.”
The environmental advocacy group 350 Tacoma responded to the findings with a call to action.
“There are warning signs that the Gulf Stream could collapse, an unimaginably catastrophic (and irreversible) impact of fossil fuel-caused climate breakdown,” the group tweeted. “Scientists say we cannot allow this to happen. People in power stand in our way.”
The study comes ahead of a United Nations climate summit in Glasgow set to begin October 31. Last month, U.N. Secretary-General António Guterres noted the upcoming event and reminded leaders of wealthy countries that “the world urgently needs a clear and unambiguous commitment to the 1.5-degree goal of the Paris agreement,” and “we are way off track.”
When the federal government enacted the CARES Act in March 2020, it boosted jobless aid and expanded the benefits to include people who weren’t typically covered, like gig workers. The legislation was designed to cushion workers against the massive blow of a partial economic shutdown during the pandemic.
Originally published byProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.
But if you haven’t already buried your memories of last year, you probably remember how difficult it was to get those unemployment benefits.
Horror stories circulated about people waiting on hold for weeks, trying to get the money they needed to stay afloat. Maybe you remember spending long hours on the phone or the computer yourself. Delays in unemployment benefits heightened feelings of uncertainty that characterized much of 2020, and made the experience of losing your job even more frightening.
But as Cezary Podkul reported for ProPublica this week, this expansion of benefits also attracted fraudsters from all over the world who sought to cash in on the CARES Act. In hindsight, the millions of phony unemployment insurance claims were a large part of what clogged states’ overtaxed computer systems, delaying payments to unemployed Americans filing legitimate claims.
We don’t have a full accounting yet of how much the fraud will end up costing taxpayers. The federal government says it will be at least tens of billions of dollars, but some experts fear it may end up in the hundreds of billions. And on the micro level, every stolen identity fraudsters use to cash in belongs to a real person. If that person tried to file for unemployment themselves, it could take months for them to convince state agencies they were a real person and receive necessary support.
We talked with Cezary about how he discovered the alternate universe of stolen identities and pseudonymous fraudsters selling how-to kits for scamming state unemployment agencies on the dark web. Here’s an inside look at a massive fraud wave.
I was really curious how you went about finding these online forums where scammers were swapping their trade secrets.
So I started off by reaching out to cybersecurity firms and asking them, “Hey, where are fraudsters trading tips and advice and talking about how to do this?” That pointed me to Telegram [an online messaging app]. I got the names of a few Telegram channels where this was happening, and I started looking at those. And then from there I did my own research and found lots and lots of additional ones; it certainly wasn’t hard, because there’s just so many of them.
Did you have a strategy worked out for how you would reach out to scammers?
To be honest, I didn’t know what to expect, because I have never been to any of these forums. I realized that they’re open, public forums. I’m sure there’s some that are private, or invitation-only. But the ones that we wrote about in our story, anyone who wants to view them or access them can enter them as if you were entering a public square in a city.
There was a big learning experience involved in this in the sense that there was a lot of unfamiliar language to me. It wasn’t as if you could just jump in and know exactly what’s being said. You had to see a lot of the traffic and read a lot of messages before you learned what certain acronyms were.
For example, what does it mean for a state to be “lit”? It’s paying out state claims.
At one point, I came across a message in one of the forums that actually had a dictionary, which was super helpful. That was kind of like the Rosetta Stone, and once I came across the dictionary I could translate a lot of this stuff into plain language.
You quote one scammer’s response in the article that’s just two eye roll emojis. I was so curious what question you asked that prompted that response.
Yeah, the eye roll emoji! So that was the user who we cite in the story named “VerifiedFraud.” He was the admin for one of these channels where there was something like 1,300 participants, and he posted what’s called a “sauce.” Sauce, in the language of these forums, is the secret sauce for filing fake unemployment insurance claims in a particular state. He gave away a free sauce to his channel participants. And I asked him about that: Hey, tell me about the sauce. I noticed that you put it on your forum for participants along with the “new month prayer” wishing them luck.
When I messaged him about that I got the eye roll.
And I guess you told him you were a journalist?
Oh, yeah, absolutely. With all the people that I was contacting, I made it abundantly clear: “Hey, I’m a reporter, I’m writing a story about this. I noticed you said this or that and I wanted to talk to you more about it.” You know, “Tell me more about your ‘Fraud Bible.’ Does it work?”
Did you ever try a sauce to see if it worked? Or send it to a state agency?
No. As a journalist, I wanted to make sure I wasn’t doing anything illegal.
I did send a bunch of these sauces — the ones that name specific states that were publicly available — to the states. I sent them to Pennsylvania, New York and California, and I asked them for comments. The states declined to comment on the specifics of whether they worked or anything like that. But they did say generally that they’re aware of them, that they’re monitoring these types of messages with their law enforcement partners.
You have this quote from a scammer in the article: “Virtually all these wealthy entrepreneurs you see around 90% of them started with something illegal to make enough money to run their business.” It seems like some of these people consider themselves businesspeople, and they put some work into this. How different is what they’re doing from working an actual job?
There’s probably some people for whom this has become a full-time endeavor, where this is the main way they’re trying to make money right now because of the opportunity that has been opened up.
But there’s certainly people for whom they might have a day job doing something else. For example, one case involved a Nigerian national who ran an online shoe store. He was also accused of participating in a scheme to defraud states of unemployment insurance funds. And I think the total in that case was something like $489,000 across 15 states. [He’s pleaded not guilty to charges in the case.]
So there’s certainly people who do other things, but there’s others who I’m sure have made this sort of their full-time path. I think it does kind of run the gamut.
Did you get a sense of what percentage of people were working from outside the United States?
There’s no way to tell what percentage. But in reading the messages in these Telegram channels, I definitely got the feel that this was a very international crowd, because you do see messages from people, for example, looking to meet up to do deals in Lagos, Nigeria.
The statistic that really put a period on this for me came from one of the cybersecurity firms that we talked with. They said that one state they work with saw unemployment insurance applications coming from nearly 170 countries around the world.
So these are supposedly state residents applying for unemployment insurance, but when you trace the internet traffic, you see this application is coming from … gosh, they had countries all over the world. It was like the United Nations.
Normal people trying to get unemployment checks in the middle of the pandemic were really struggling, waiting on the line for days at a time and getting disconnected when they were trying to get their unemployment checks. Did you get any sense of if and how fraudsters were better at getting unemployment checks than real humans?
One of the things that I think maybe hasn’t been talked about as much is the interplay between this huge wave of fraudulent claims that we saw and legitimate claimants. Because the information technology on which states are running their unemployment insurance systems is, in many cases, very dated.
Like with North Dakota, they had to actually bring in computer programmers from Latvia to help them run their unemployment insurance computer system last year, because it’s so hard to find anyone who can service the technology. It’s been around for decades.
When you’re dealing with very dated technology, it doesn’t scale well. It can’t handle such huge volumes that we were seeing there during the pandemic. So when you had this huge influx of fraudulent claims, I think it did a few things.
One is it definitely slowed down processing of legitimate claims, because you just end up with backlogs of applications that the states are still struggling to get through because there’s so many people who have applied. There are legitimate claimants mixed in with fraudulent claimants and you have to kind of triage those, and figure out which ones are high-risk, which ones look like they’re very likely to be fraudulent, versus which ones are medium-risk and which ones are low-risk — and you put those through.
The other thing that it spikes is the call volumes. When I asked [Texas officials], why was it so hard for an individual that we profiled in the story to get through to Texas, it was just because they had such a massive call volume. There’s so many people calling the fraud line reporting fraud, there’s so many people calling for help, so many people seeking states’ attention, they just become overwhelmed. That has an impact on legitimate claims.
And then finally, you have legitimate claimants who are collecting unemployment insurance payments, and those payments either stop or are frozen because of suspected fraud. So someone else just stole your identity and used it to file a claim in another state, and all of a sudden you might see your benefits stop, which is what happened to Philip Payton, the individual we profiled in our story.
By flooding the system with so many fake claims, not only did fraudsters, in some cases, get away with pocketing those fraudulent payments, it really caused a lot of hardship for legitimate claimants.
The fraudsters are also probably working with the advantage of being able to send out 40 applications to 40 different states, and if they only get paid by 18 and get stuck in backlogs in the others, it doesn’t cost them very much.
Exactly. It basically comes down to a game of numbers.
Let’s say you go onto a dark web forum and you purchase some stolen identities. You pay $50, $70 for a stolen profile of someone. If you’ve got it, then it makes sense for you to file in all the different states where you think it might pay off, to all the different programs, to all the different government benefits you think that individual might be entitled to. If you don’t, you might be leaving money on the table.
One of the most shocking statistics that I came across, just on a micro level, was in one of the Department of Labor’s Office of Inspector General reports. They mentioned that one person used a single Social Security number to file fake unemployment insurance claims in 40 states, and 29 states paid up. They got something like $222,000.
I think we’re now at that point where we’re starting to realize that this has been a huge problem. And to be fair, it wasn’t just unemployment insurance. You’ve seen our coverage of people creating fake farms in places that wouldn’t even have a farm, like farms on beaches or people claiming they had an orange farm in Minnesota, to apply for PPP loans.
I’ll be curious to see if cybersecurity surrounding these leaks that led to IDs and social security numbers getting out are wrapped up in reform bills too.
If I can put in a plug: If anyone knows where all of the leaked data came from, I would love to talk with anyone who’s got information on that.
One of the terms that you see being used on these telegram chat rooms is the word “fullz.” Fullz is slang for the full suite of personally identifiable information like someone’s name, address, Social Security, driver’s license, the whole thing.
If you’re going to be filling out an unemployment insurance claim form in someone’s name, if you just know their name and their address — okay, that’s one thing. But if you have a full suite of information on a person it just makes it so much easier for you to file a claim that has a significantly higher chance of getting through the system.
So one of the questions that I was asking is: Where did all the fullz come from? This is a question that I became obsessed with in the reporting of this project, and I just couldn’t get a good answer to it. So if anyone reading this has a good answer for that, or a good theory, reach out to me and I’ll be more than happy to talk to you.
by Brooke Stephenson for ProPublica and published via Creative Commons License
They said Google’s decision to block advertisers from seeing “Black Lives Matter” and other social justice YouTube videos was the last straw
By: Aaron Sankin
Following a recent Markup investigation revealing a secret Google Ads blocklist that hides Black Lives Matter YouTube videos from advertisers—but allowed them to find videos related to “White lives matter”—some small YouTube creators have pledged to leave the platform.
“I will not post any further content on the platform,” Carrie the One, a drag queen and YouTuber with a few dozen followers, said in an email. “I hope that by walking away from YouTube, we can inspire others to join us and put enough pressure on them to change course and do better for all of us.”
“I understand it’s one of the largest media sharing sites,” wrote another streamer who goes by the name Jambo and is mostly on Twitch, “but morals matter, and theirs are not for me.”
Both said that the decision was not hard for them because they hadn’t dedicated much time to YouTube content and didn’t depend on its ad revenue for their livelihood.
Google would not comment on the defections.
The Markup’s two-part investigative series, published earlier this month, dug into the Google Ads portal that allows advertisers to pick specific YouTube videos and channels for their ads. We found that Google’s blocklist missed most of the hate terms and slogans we checked but blocked equivalent social justice terms.
When we took our findings to Google, the company blocked all but three of the hate terms, but it also increased exponentially the number of social justice terms it blocked for ad searches, eliminating advertisers’ ability to search for 83 percent of the terms on our list, including “Black excellence,” “civil rights,” and “LGBTQ.”
The Markup also found discrepancies in how different religions were treated. When we first tested the portal last November, we found that terms like “Muslim parenting” and “Muslim fashion” were blocked for searches, whereas “Christian fashion” and “Christian parenting” were not—nor were the anti-Muslim hate terms “white sharia” and “civilization jihad.”
Rather than lift its ban on phrases containing “Muslim,” Google Ads now also blocks those and other innocuous words in combination with “Christian,” “Buddhist,” and “Jewish.”
As the investigation traveled on social media last week, with thousands of people sharing posts about it, dozens tweeted that they’d had enough and would quit the platform.
We spoke to eight YouTubers who said they were quitting, each with relatively small followings of less than 2,000 YouTube subscribers apiece. They said their decisions to leave the platform reflect a desire to push back at a powerful tech company they believe has done a poor job of listening to their concerns.
“I was pretty disgusted that a platform would use such thinly-veiled tactics and exhibit such overt disregard for the experiences and voices of marginalized folks,” Carrie the One said in an email.
“We know that racism, homophobia, transphobia, xenophobia, and islamophobia exist and thrive within the systems and structures that our society operates within, but to see those same forces INTENTIONALLY employed by a platform that claims to protect the same folks they are targeting was more than I felt like I could tolerate.”
Google would not respond to The Markup’s questions for the original investigation about why terms like “Black Lives Matter” were blocked—or why it expanded the block.
In response to questions for this story, Google spokesperson Christopher Lawton said in an email: “We know that many brands want to reach audiences who are interested in social justice causes and we want our creators who make videos about these topics to thrive on YouTube.”
He added that YouTube “videos about topics like Black Lives Matter, Black culture and Black excellence, can and do monetize on YouTube, along with topics related to a wide range of social justice issues,” meaning that if advertisers can find these videos despite the block, the videos themselves can run ads.
Graham Jenkins, a video game streamer who uploads on the channel 170Out, said the revelations in The Markup’s investigation pushed him over the edge.
“It’s been on my mind to move from YouTube for a little while now,” Jenkins said in an email. “This isn’t the first time that YouTube has blocked phrases like this but allowed right-wing content to stay unchallenged. I think there was an issue where they blocked LGBT content previously, but are quite happy to allow anti-LGBT videos to remain untouched.”
He was referring to research in 2019 by a group of YouTube creators that showed the platform was systematically demonetizing videos that contained LGBTQ content. YouTube was also criticized for knowingly leaving homophobic content accessible on its platform.
Jenkins said he would stop uploading new content to YouTube as soon as he found another platform that is free for videos of any length.
“Sadly, there are currently not any other strong distribution options out there to compete with YouTube…”
— streamer who goes by the handle Glam Shatterskull
That might not be so easy. Other YouTubers told The Markup that the platform’s massive reach and ease of use made the choice to stop posting there more difficult.
“Sadly, there are currently not any other strong distribution options out there to compete with YouTube,” said a streamer who goes by the handle Glam Shatterskull and previously posted video gaming content to the platform.
“I would love to see Twitch flesh out its video production offerings,” he said. “In the meantime I will most likely be building out my own website to host video content.”
These content creators weren’t the only ones with harsh words for Google following revelations about its advertising blocklist.
The method Google used to add previously unblocked terms to its blocklist in response to our investigation makes future similar watchdog reporting impossible.
The blocked terms are now indistinguishable in the code from the responses the portal gives for gibberish. Because we now cannot know for certain which terms are blocked, as opposed to the platform not finding any related videos, Google has shielded itself from future scrutiny of its keyword blocks on Google Ads.
This didn’t sit right with Sen. Ron Wyden (D–OR), who authored legislation in 2019 that sought to require tech companies to audit their algorithms for bias.
“Google clearly has a lot of work to do to block hateful videos from advertisers,” said Wyden, who said he plans to reintroduce the bill. “Hiding how it screens those videos is exactly the wrong way to respond to legitimate reporting.”
Lawton, the Google spokesperson, declined to comment on Wyden’s criticism.
The Markup found industry fingerprints on at least five bills around the country—weak laws, experts say, that are designed to preempt stronger protections
By: Todd Feathers
Concerned about growing momentum behind efforts to regulate the commercial use of personal data, Big Tech has begun seeding watered-down “privacy” legislation in states with the goal of preempting greater protections, experts say.
The swift passage in March of a consumer data privacy law in Virginia, which Protocol reported was originally authored by Amazon with input from Microsoft, is emblematic of an industry-driven, lobbying-fueled approach taking hold across the country. The Markup reviewed existing and proposed legislation, committee testimony, and lobbying records in more than 20 states and identified 14 states with privacy bills built upon the same industry-backed framework as Virginia’s, or with weaker models. The bills are backed by a who’s who of Big Tech–funded interest groups and are being shepherded through statehouses by waves of company lobbyists.
Meanwhile, the small handful of bills that have not adhered to two key industry demands—that companies can’t be sued for violations and consumers would have to opt out of rather than into tracking—have quickly died in committee or been rewritten.
Experts say Big Tech’s push to pass friendly state privacy bills ramped up after California enacted sweeping privacy bills in 2018 and 2020—and that the ultimate goal is to prompt federal legislation that would potentially override California’s privacy protections.
“The effort to push through weaker bills is to demonstrate to businesses and to Congress that there are weaker options,” said Ashkan Soltani, a former chief technologist for the Federal Trade Commission who helped author the California legislation. “Nobody saw Virginia coming. That was very much an industry-led effort by Microsoft and Amazon. At some point, if multiple states go the way of Virginia, you might not even get companies to honor California’s [rules].”
California’s laws, portions of which don’t go into effect until 2023, create what is known as a “global opt out.” Rather than every website requiring users to go through separate opt-out processes, residents can use internet browsers and extensions that automatically notify every website that a user wishes to opt out of the sale of their personal data or use of it for targeted advertising—and companies must comply. The laws also allow consumers to sue companies for violations of the laws’ security requirements and created the California Privacy Protection Agency to enforce the state’s rules.
“Setting up these weak foundations is really damaging and really puts us in a worse direction on privacy in the U.S.,” said Hayley Tsukayama, a legislative activist for the Electronic Frontier Foundation. “Every time that one of these bills passes, Virginia being a great example, people are saying ‘This is the model you should be looking at, not California.’ ”
Amazon did not respond to requests for comment, and Microsoft declined to answer specific questions on the record.
Industry groups, however, were not shy about their support for the Virginia law and copycats around the country.
The Virginia law is a “ business and consumer friendly approach” that other states considering privacy legislation should align with, The Internet Association, an industry group that represents Big Tech, wrote in a statement to The Markup.
Big Tech’s Fingerprints Are All Over State Privacy Fights
In testimony before lawmakers, tech lobbyists have criticized the state-by-state approach of making privacy legislation and said they would prefer a federal law. Tech companies offered similar statements to The Markup.
Google spokesperson José Castañeda declined to answer questions but emailed The Markup a statement: “As we make privacy and security advancements to protect consumers, we’ll continue to advocate for sensible data regulations around the world, including strong, comprehensive federal privacy legislation in the U.S.”
But at the same time, the tech and ad industries have taken a hands-on approach to shape state legislation. Mostly, industry has advocated for two provisions. The first is an opt-out approach to the sale of personal data or using it for targeted advertising, which means that tracking is on by default unless the customer finds a way to opt out of it. Consumer advocates prefer privacy to be the default setting, with users given the freedom to opt in to certain uses of their data. The second industry desire is preventing a private right of action, which would allow consumers to sue for violations of the laws.
The industry claims such privacy protections are too extreme.
“That may be a bonanza for the trial bar, but it will not be good for business,” said Dan Jaffe, group executive vice president for government relations for the Association of National Advertisers, which has lobbied heavily in states and helped write model federal legislation. TechNet, another Big Tech industry group that has been deeply engaged in lobbying state lawmakers, said that “enormous litigation costs for good faith mistakes could be fatal to businesses of all sizes.”
Through lobbying records, recordings of public testimony, and interviews with lawmakers, The Markup found direct links between industry lobbying efforts and the proliferation of these tech-friendly provisions in Connecticut, Florida, Oklahoma, and Washington. And in Texas, industry pressure has shaped an even weaker bill.
Additionally, The Markup found a handful of states—particularly North Dakota and Oklahoma—in which tech lobbyists have stepped in to thwart efforts to enact stricter laws.
Connecticut
The path of Connecticut’s bill is illustrative of how these battles have played out. There, state Senate majority leader Bob Duff introduced a privacy bill in 2020 that contained a private right of action. During the bill’s public hearing last February, Duff said he looked out on a room “literally filled with every single lobbyist I’ve ever known in Hartford, hired by companies to defeat the bill.”
The legislation failed. Duff introduced a new version of it in 2021, and it too died in committee following testimony from interest groups funded by Big Tech, including the Internet Association and The Software Alliance.
According to Duff and Sen. James Maroney, who co-chairs the Joint Committee on General Law, those groups are now pushing a separate privacy bill, written using the Virginia law as a template. Duff said lawmakers “had a Zoom one day with a lot of big tech companies” to go over the bill’s language.
“Our legislative commissioner took the Virginia language and applied Connecticut terminology,” Maroney said.
That industry-backed bill passed through committee unanimously on March 23.
“It’s an uphill battle because you’re fighting a lot of forces on many fronts,” Duff said. “They’re well funded, they’re well heeled, and they just hire a lot of lobbyists to defeat legislation for the simple reason that there’s a lot of money in online data.”
Google has spent $100,000 lobbying in Connecticut since 2019, when Duff first introduced a consumer data privacy bill. Apple and Microsoft have each spent $124,000, Amazon has spent $116,000, and Facebook has spent $155,000, according to the state’s lobbyist reporting database.
Microsoft declined to answer questions and instead emailed The Markup links to the testimony its company officials gave in Virginia and Washington.
The Virginia model “is a thoughtful approach to modernize United States privacy law, something which has become a very urgent need,” Ryan Harkins, the company’s senior director of public policy, said during one hearing.
Google declined to respond to The Markup’s questions about their lobbying. Apple and Amazon did not respond to requests for comment.
Oklahoma
In Oklahoma, Rep. Collin Walke, a Democrat, and Rep. Josh West, the Republican majority leader, co-sponsored a bill that would have banned businesses from selling consumers’ personal data unless the consumers specifically opted in and gave consumers the right to sue for violations. Walke told The Markup that the bipartisan team found themselves up against an army of lobbyists from companies including Facebook, Amazon, and leading the effort, AT&T.
AT&T lobbyists persuaded House leadership to delay the bill’s scheduled March 2 hearing, Walke said. “For the whole next 24-hour period, lobbyists were pulling members off the house floor and whipping them.”
Walke said to try to get the bill through the Senate, he agreed to meetings with Amazon, internet service providers, and local tech companies, eventually adopting a “Virginia-esque” bill. But certain companies remained resistant—Walke declined to specify which ones—and the bill died without receiving a hearing.
AT&T did not respond to questions about its actions in Oklahoma or other states where it has fought privacy legislation. Walke said he plans to reintroduce the modified version of the bill again next session.
Texas
In Texas, Rep. Giovanni Capriglione first introduced a privacy bill in 2019. He told The Markup he was swiftly confronted by lobbyists from Amazon, Facebook, Google, and industry groups representing tech companies. The state then created a committee to study data privacy, which was populated in large part by industry representatives.
Facebook declined to answer questions on the record for this story.
Capriglione introduced another privacy bill in 2021, but given “Texas’s conservative nature,” he said, and the previous pushback, it doesn’t include any opt-in or opt-out requirement or a private right of action. But he has still received pushback from industry over issues like how clear and understandable website privacy policies have to be.
“The ones that were most interested were primarily the big tech companies,” he said. “I received significant opposition to making any changes” to the status quo.
Washington
The privacy bill furthest along of all pending bills is in Washington, the home state of Microsoft and Amazon. The Washington Privacy Act was first introduced in 2019 and was the inspiration for Virginia’s law. Microsoft, Amazon, and more recently Google, have all testified in favor of the bill. It passed the state Senate 48–1 in March.
A House committee considering the bill has proposed an amendment that would create a private right of action, but it is unclear whether that will survive the rest of the legislative process.
Other States
Other states—Illinois, Kentucky, Alabama, Alaska, and Colorado—have Virgina-like bills under consideration. State representative Michelle Mussman, the sponsor of a privacy bill in Illinois, and state representative Lisa Willner, the sponsor of a bill in Kentucky, told The Markup that they had not consulted with industry or made privacy legislation their priority during 2021, but when working with legislative staff to author the bills they eventually put forward, they looked to other states for inspiration. The framework they settled on was significantly similar to Virginia’s on key points, according to The Markup’s analysis.
The sponsors of bills in Alabama, Alaska, and Colorado did not respond to interview requests, and public hearing testimony or lobbying records in those states were not yet available.
The Campaign Against Tougher Bills
In North Dakota, lawmakers in January introduced a consumer data privacy bill that a coalition of advertising organizations called “the most restrictive privacy law in the United States.” It would have included an opt-in framework, a private right of action, and broad definitions of the kind of data and practices subject to the law.
It failed 75–19 in the House shortly after a public hearing in which only AT&T, data broker RELX, and industry groups like The Internet Association, TechNet, and the State Privacy and Security Coalition showed up to testify—all in opposition. And while the big tech companies didn’t directly testify on the bill, lobbying records suggest they exerted influence in other ways.
The 2020–2021 lobbyist filing period in North Dakota, which coincided with the legislature’s study and hearing on the bill, marked the first time Amazon has registered a lobbyist in the state since 2018 and the first time Apple and Google have registered lobbyists since the state began publishing lobbying disclosures in 2016, according to state lobbying records.
A Mississippi bill containing a private right of action met a similar fate. The bill’s sponsor, Sen. Angela Turner-Ford, did not respond to an interview request.
While in Florida, a bill that was originally modeled after California’s laws has been the subject of intense industry lobbying both in public and behind the scenes. On April 6, a Florida Senate committee voted to remove the private right of action, leaving a bill substantially similar to Virginia’s. State senator Jennifer Bradley, the sponsor of Florida’s bill, did not respond to The Markup’s request for comment.
Several bills that include opt-in frameworks, private rights of action, and other provisions that experts say make for strong consumer protection legislation are beginning to make their way through statehouses in Massachusetts, New York, and New Jersey. It remains to be seen whether those bills’ current protections can survive the influence of an industry keen to set the precedent for expected debate over a federal privacy law.
If the model that passed in Virginia and is moving forward in other states continues to win out, it will “really hamstring federal lawmakers’ ability to do anything stronger, which is really concerning considering how weak [that model] is,” said Jennifer Lee, the technology and liberty project manager for the ACLU of Washington. “I think it really will entrench the status quo in allowing companies to operate under the guise of privacy protections that aren’t actually that protective.”
ProPublica drops a second monumental article based on treasure trove of IRS, SEC & court data
Excellent reporting of tax injustices among the obscenely rich continues with a huge and revelatory piece on Peter Thiel and his “little” Roth IRA scheme. Going well beyond the previous article that detailed how Bezos, Musk, Buffet and others all use loans secured with share holdings to avoid income, and thus avoid paying tax the “Lord of the Roths” is even more explosive.
While the emphasis of the article on Thiel’s Roth IRA takes on the task of trying to somehow compare an “average” investor’s potential gains with the unimaginable magnitude of Thiel’s windfall, this is something that makes sense as a valid perspective, but the obscenity is nearly lost in the opaque fog of numbers beyond comprehension.
For example: your Peter is basically gifted 1.7 million shares by the company he was one of the founders of (along with Elon Musk and the rest of the so called “PayPal Mafia). That “purchase” costing less than $2000 based on the ridiculous price of $0.001 per share was used to found a Roth IRA.
The engineered numbers were no accident: at the time, in 1999, a Roth IRA account had a maximum allowable contribution amount of $2,000. Since the shares were “below fair value”, the fact of which was admitted by PayPal in an SEC filing from the time just before the company went public, the value increased massively, by 227,490% in the first year. Which increased the value of the paltry $2k up to $3.8 million.
Though obviously not enforced, regulations at the time forbade this kind of “stuffing”. Meaning, the initial trade that launched this scheme was possibly illegitimate, if not unlawful. Or, as ProPublica more kindly phrased it: “Investors aren’t allowed to buy assets for less than their true value through an IRA. “
As a matter of fact, according to the article, the “stuffing” was so successful that no further contributions were ever made into the account after that initial 1999 sum.
Since a Roth IRA allows a person to trade stocks within the account tax free, as long as no withdrawals are made, this large but still comprehensible sum was the start of a 20 year use of the tax statutes to build a fortune of over $5 billion without paying a single penny in tax.
Hitting $870 million in value by 2008, by 2019 the tax free enterprise, built on the less than $2000 initial contribution (stock “purchase”), ultimately ballooned to 96 sub-accounts with holdings of $5 billion.
Ok, so that’s the short summary of the mind blowing numbers. For a more detailed account, by all means visit the original article.
The numbers are outrageous, but the entitlement and arrogance is on a whole other level
The part of the story that should spark outrage is not in the numbers but begins where the almost inhuman greed, hubris and hypocrisy at this good fortune grows apace with the size of the tax free bonanza. Because Peter Tiel is not just any run-of-the-mill untaxed billionaire.
The endlessly expanding windfall he received, tax free, did not engender a mindset of charity or gratefulness at his miraculous providence.
Above: Photo Collage / Lynxotic
Instead Thiel, once the wealth lent him a position of power, preached and pushed the idea that the US government, the same one that he was able to avoid paying taxes to, was guilty of over-taxing people like him (and poor people too).
He spent millions of dollars in an effort to influence Republican politicians and groups that have anti-tax agendas, to change the laws in ways that would add even more advantages to his already preposterously privileged position. Then this: as per ProPublica: “In 2016, he became the rare Silicon Valley titan to endorse Donald Trump.”
And, in an arrogance that is as incomprehensible as the size his effortlessly expanding fortune, he espouses the belief that people like him are entitled to these kind of spoils because, after all, without him we might have to live without PayPal and….wait for it…. Facebook.
Yes, you heard that right. In 2004, Thiel used his IRA to buy $500,000 worth of shares in a, then private, company called Facebook, which was the first big outside investment in Zuckerberg’s soon to be massive monstrosity.
By using his IRA funds to buy shares of the start-up he was able to avoid tax on all the future gains of those shares. (ProPublica, in excellent investigative reporting, uncovered this tidbit by combing though Facebook court documents).
So, again, ostensibly, based on his well known statements, we are not only to congratulate him on his clever method of avoiding any taxation whatsoever on the first gambit with the PayPal shares, but we ought to effusively thank him for helping Facebook to become the dangerous purveyor of surveillance and phantom tollbooth Ponzi empire that is it today?
In perhaps one of the greatest illustrations of how power corrupts, this idea that because he was able to amass a fortune on such a massive scale without the burden of any tax whatsoever, he is somehow a hero to be emulated, is the real reason for us to be outraged.
That an average person might be lucky to turn $2000 into $250,000 over two decades, as was illustrated in detail in the article, while Thiel easily turned it into $5 billion, is outrageous, yes.
But the real “crime” is that it was done with zero benefit to anyone except him and other Silicon Valley insiders at companies like PayPal and Facebook.
Could it be argued that Facebook is a gift to humanity? Well, in 2021 that would be a tough argument to put forth without being laughed out of the room. And PayPal? It’s doubtful that Satoshi Nakamoto has to fear competition from any of the PayPal Mafia (including Mr. Musk) when the crown for greatest financial innovator of the century is awarded.
In a revelation that could have received more page inches, the article also exposes a second, possibly more plausible reason, regarding why Thiel went to great lengths to bankrupt Gawker Media, which he blamed for outing him as Gay. That politically convenient motivation could very well have covered up the real reason:
Again, as per ProPublica:
“In a story headlined, “Give Me Liberty or Give Me Taxpayer Money,” Gawker Media, citing anonymous sources, revealed that Thiel held his Facebook investment in a tax-free Roth.”
Companies built on greed and hubris create nothing and, in the end, die
Thiel believes he will live to be 120 years old. Based on his comments and writings he appears to believe that the world would benefit from that eventuality.
But when looking at the companies he helped to build, and the obscene fortune he was rewarded with for binging them into being, it seems like most of us, after accessing his life’s works and “accomplishments”, would be more thankful for the improbability of that dream coming true.
2087? That will be the year that either Utopia or Oblivion will have arrived for humanity and the planet earth. If by a miracle an earthly Utopia comes to be, it is highly unlikely that PayPal, Facebook or Mr. Thiel will have had any hand in bringing it about.
Above: Jack Dorsey & Elon Musk – Photo – various / tesla / Twitter / collage Lyxotic
Possibly staged “Twitter feud over BitCoin” leads to portentous upcoming event: “THE talk”
Although both Jack Dorsey, head of both Twitter and Square, and Elon Musk are long standing and staunch BitCoin advocates, a lot of chatter around the internet has painted Musk as having gone soft on the crypto currency.
Th narrative that has been put forth pits his loyalty to Bitcoin as somehow incongruous with his support for DogeCoin, the somewhat less serious AltCoin variant he has openly championed.
Intermingled with this straw-man charade, is the also over-hyped idea that the energy used by BitCoin mining is a factor in global warming and therefore a stain on Musk’s otherwise high profile positive sustainable energy resumé.
While many article have shown this argument to be blown out of proportion at best, apparently the whole world (China, if you’re listening) has seized on this talking point as a way to damage BitCoin’s popularity and pedigree.
The attempt to use this argument to undermine BitCoin’s adoption progress and futuristic pedigree appears to have already backfired, however. For example, at the recent BitCoin conference in Miami, Jack Dorsey announced plans to invest in a sustainable energy powered BitCoin mining facility.
Elon Musk has also stated via his twitter account that Tesla would resume accepting BitCoin payments, as soon as more miners switch to renewable energy. This coming after he had announced, to great fanfare, that Tesla would accept the cryptocurrency and then, in May, reversed the decision after backlash from those who pounced on the issue to try to tarnish Tesla’s sterling reputation as a proponent of the transition to sustainable energy.
Though not yet confirmed 100%, the Twitter exchange between the two titans implied that the “talk” would take place in conjunction with the “The B Word” BitCoin conference, which kicks off on July 21, 2021. Sponsored by Ark Invest, Square and Paradigm, the big name speakers and hype already building, along with the timing, coming on the heels of a huge peak then “crash” in the crypto markets, looks to be a watershed event for Bitcoin and cryptocurrencies in general.
Details on whether the exchange between the two will be live on stage or via video conference have, as of yet, not been revealed.
Twitter and Square CEO Dorsey tweeted Thursday about an upcoming “The B Word” bitcoin event, and Musk responded to it. It’s unclear if the event, which kicks off on July 21, will be virtual or in-person.
The potential for drama as the two discuss a topic on which they, for the most part agree, is a smart way to hype the event, both the conference itself and the monumental meeting for “THE Talk”.
Regardless of any fireworks or revelations coming out of the event and the meeting between these two incredibly influential business leaders, the upshot is that all of the above is a net positive for BitCoins progress toward more widespread adoption and acceptance.
Critical mass may already been achieved for crypto in the US
The overly manic focus on price fluctuations notwithstanding, there is a rapidly growing sense that the #1 cryptocurrency as well as all related coins and activities are reaching the point, in the US, that it will be impossible to return the genie to the bottle.
Any attempt to block or outlaw, in totality, the emerging world of crypto-finance, is likely to fail. Realizing this there appears to be a faint whisper of capitulation on the part of both the government in the US and among the “old guard” establishment, namely Wall Street.
Dorsey’s take, as quoted from his appearance at the BitCoin conference in Miami:
“Governments are trying to block cryptocurrency use to avoid losing hold of power”
“It can’t, and it never will.” — musing on the likelihood of Wall Street controlling bitcoin.
“That’s why we don’t deal with any other currencies or coins — because we’re so focused on making bitcoin the native currency for the internet.” — when asked about payments provider Square’s ambitions for bitcoin.
Sci-fi sounding, inevitable upgrade for today’s online communications
You might have heard lately about the “metaverse” and yet that can mean a variety of different things to different people. Often, it’s a term that relates back to gaming and 3D augmented reality enhancements of networked communications.
There are even crypto and blockchain related projects using this term and concept. While all of these various factors are welcome, and potentially part of this next phase of convergence of communication via networked technology, there’s something else happening under the surface.
”The pandemic, with its requirements of physical distancing, has brought people into online digital environments for a growing range of shared human experiences.” — Wired UK from “The Metaverse is coming” by David Baszucki
The acceleration in AI application, machine learning, and converging use cases for all communications tech has created a situation where the entry-portal to the emerging metaverse is already here.
One often overlooked aspect of a transition to a more complete digital life is the need for humans to have adapted to the need and potential benefits of the idea. This is what is happening via many routes, including Apple and the constant synergistic upgrade cycles that have just gone into a new, bigger phase with the migration to a unified OS structure built around Apple Silicon.
The gradual increases in iOS functionality and user sophistication are changing how we interact
iOS15, previewed this week at the WWDC2021 is rolling out literally dozens of new features, many based on machine learning, neural networks and AI that propose a new level of highly sophisticated options to communicate with video, photos and text.
While this mixture of “basic” media has been the staple of our current modes of online communication, particularly via social media, the incredibly increased depth of new options and functionality of iOS15 and iPadOS15 and MacOS Monterey will make all modes of communication feel completely new.
In the evolution of online media and enriched communication (OMEC to coin an 80s sounding acronym) the slow and uneven progress is based on many factors. #1 is always user adoption and sophistication.
Second is the quality of the hardware devices and software upgrades each user around the world has access to. In the case of iOS (iPad, iPhone & macOS) the immediate adoption of upgrades is a large factor on the plus side, helping new innovation to arrive in general use more quickly.
The last factor, a huge one, is access to fast ubiquitous internet data connections, and, in the US at least, this is less consistent than ever (or our expectations are rising faster than the build out).
However, particularly in Asia, 5g is beginning to make a dent. Satellite broadband, like Starlink, should also start to be a factor as early as 2022. Government infrastructure build-out funding and subsidies in the US is on the way in 2021.
Augmented 3D features are still growing but will merge with 2D
The upshot of this topic is that “2D” factors and increasingly sophisticated manipulation and interactive features that are already coming in iOS15 will bring us all closer the entry-portal stone-age version of the metaverse.
We all depend more and more on communications and using our devices – work from home, personal, business and hybrid activities (such as the emerging content creator class). Often, as a result, we have fewer options to go offline for “organic” RL (real life) interactions.
The increasingly sophisticated capabilities available are beginning to make even face to face communications, particularly in work situations, feel “un-enhanced” as we become accustomed to and dependent on the digital enhancements and potential of a full media rich interaction.
This is an example, one could say, of the subtle encroachment of the emerging metaverse onto the “real world” and how the boundaries are blurring and even beginning to disappear.
Rather than a sudden “jump” into a metaverse, similar to the cliché sci-fi plots from films like “Ready Player 1”, what is happening is a nearly imperceptible transition to metaverse-like experiences that will become commonplace, initially in a primitive form, and then eventually become the norm. Similar to the proverbial Frog in pot, with warm water temperatures that increase so slowly that the Frog doesn’t even notice, until it finds that it is swimming in pot that is already boiling.
The misconception that a “killer app” or sudden shift into an online, virtual reality world, is the future, and that a big leap will happen nearly all at once, is harmlessly superimposed on the real transition that has already begun.
When Apple’s 2007 launch of the iPhone changed communication forever: the journey began
The new “Digital Legacy Program”, also announced at WWDC2021, is another hint that we are already living in an extremely primitive version of the metaverse. Our online identity, data, and even behaviors and experiences are so essential and all pervasive that it has become necessary to keep a digital key to access the huge trove of personal data we will leave behind to pass on to our living loved ones, after we are gone.
The metaverse, that means, is not only creating a parallel digital universe for us to live in, in an ever more complete and sophisticated way, but we are also already setting up the eternal storage of our virtual life experiences to be passed down to future generations.
Though nearly invisible while in such a relatively primitive iteration, the concept, an example of overlapping advancements in innovation, is a tiny step towards digital immortality.
The metaverse could help to save us all
It’s not just professional and work related communication that relates to the gradual increase in the depth of networked communication options, but, even more so, casual and leisure communication and interaction is key.
TikTok and other video communication trends are at the forefront of of user evolution and metaverse activity expansion. When people feel motivated to find new and better ways to communicate using richer media and augmented techniques for fun, and to gain more recognition in online societies, that advances digital sophistication.
This process of the evolution of user comfort and sophistication, while existing and interacting in the metaverse, is the fastest way for the augmentation to become more effective.
There’s a mostly unseen benefit and need for this, otherwise seemingly pointless, global development
The challenges that the world faces, encroaching, devastating fallout from global warming and excess carbon in the atmosphere, political corruption and inequality, disinformation and cybercrime, and so on.
Ultimately, unlike at any time in human history, we are facing a challenge. The survival of our species and even the planet are at stake.
In the years and decades to come it will become more and more obvious that there are only two paths possible. One path toward a kind of Utopia, or another one that will lead, inexorably to Oblivion.
Though the metaverse is scary in many ways, and does not always appear as a way to a better life, augmented and enhanced communication is one of the most desperately needed ways that solutions could eventually be discovered and implemented.
And that would put this progression and evolution of tech more in service of Utopia, and could be at the heart of a rescue plan to prevent Oblivion, before it’s too late.
The online giant bans products related to drugs, spying and weapons, but we found plenty for sale; one of the items bought on the site left a grim trail of overdoses
By: Annie Gilbertson and Jon Keegan
Eric Falkowski said he made an easy living working a few hours a week making counterfeit prescription opioids before some two-dozen people overdosed and the authorities caught up with him.
He mixed fentanyl with active ingredients from Xanax and Tylenol and pressed the compound into pills that looked like Percocet, he said, down to the exact color and markings.
Where did he get the equipment? According to federal court records and Falkowski himself: Amazon.com.
“I purchased two pill presses on there. I also purchased the pill press dies, which are the molds to shape the pills and imprint them with whatever number they need be,” Falkowski said in a phone interview from prison, where he is serving a 22-year sentence for crimes connected to his counterfeit drug business.
“You search under the code on the pill … and it’ll just come up,” he added. “It really wasn’t that complex.”
Two people died after taking Falkowski’s pills, and another woman was found dead from an overdose on the property where he kept his makeshift lab, according to officials, law enforcement documents, and autopsy reports. More than 20 others were sickened by the pills but survived.
“Someone could wipe out a whole town” with these “poisonous pills,” said Derrick Helton, a former sheriff’s deputy for Rutherford County, Tenn., where the mass overdose took place. One of the fatalities was his sister Tiffanie Scott, a 33-year-old mother of a young daughter.
Amazon bans pill presses used to make prescription drugs. They’re included among 38 pages of third-party seller rules and prohibitions for its U.S. marketplace.
Yet an investigation by The Markup found that Amazon fails to properly enforce that list, allowing third-party sellers to put up and sell banned items.
Alongside its third-party marketplace, Amazon sells products to consumers directly, and The Markup found it was also selling banned items itself, revealing cracks in the largely automated purchasing system that feeds its massive product catalog.
We found nearly 100 listings for products that the company bans under its categories of drugs, theft, spying, weapons and other dangerous items, a virtual back alley where mostly third-party sellers peddle prohibited goods, some of which are used for illicit and potentially criminal activities.
Amazon’s Choice?
The Markup filled a shopping cart with a bounty of banned items: marijuana bongs, “dab kits” used to inhale cannabis concentrates, “crackers” that can be used to get high on nitrous oxide, and compounds that reviews showed were used as injectable drugs.
We found two pill presses and a die used to shape tablets into a Transformers logo, which is among the characters that have been found imprinted on club drugs such as ecstasy. We found listings for prohibited tools for picking locks and jimmying open car doors. And we found AR-15 gun parts and accessories that Amazon specifically bans.
Almost three dozen listings for banned items were sold by third parties but available to ship from Amazon’s own warehouses. At least four were listed as “Amazon’s Choice.”
The phrase “ships from and sold by Amazon.com” appeared beneath the buy button of five of the banned items we found, which two former employees confirmed means those products are, in fact, sold by Amazon. In addition, one of the sellers we were able to reach also confirmed it sold the items to Amazon.
Many of the items we found had been up for sale for months, some with positive reviews showing they had been sold, including some of the items sold directly by Amazon.
And Amazon led us right to the prohibited listings. When we typed “bong” into the website’s search bar, autocomplete suggestions included “bongs for smoking weed.” When we typed “pill press,” autocomplete suggested “pill press for making pills xanax.”
In a written statement to The Markup, Amazon spokesperson Patrick Graham said the company has “proactive measures in place to prevent suspicious or prohibited products from being listed,” and that the company stopped more than six billion “suspected bad listings” from posting last year, repeating the company’s remarks to Congress earlier this year.
“If products that are against our policies are found on our site, we immediately remove the listing, take action on the bad actor, and further improve our systems,” he said.
Graham did not respond directly to many of our specific questions, including how many of the banned items that The Markup found had been sold, why the company had not noticed some of them for months, why some were listed as Amazon’s Choice, and why many were stored in Amazon’s warehouses for shipment.
He did not respond at all to questions about why Amazon itself had offered banned items for sale.
Most of the banned listings we reported to Amazon have been removed, although at least three have popped back up.
The company removed the six specific terms that we mentioned from autocomplete, according to Graham, who said that feature is informed by “similar searches by other customers.” He wouldn’t say whether the company also removed all other banned items from autocomplete.
Graham also declined to explain why the company chose to allow 13 listings for banned items that we reported to the company to remain for sale. These products were specifically named as banned in Amazon’s rules, met the U.S. Department of Justice’s definition of drug paraphernalia, or were confirmed by two weapons experts to be a gun part or tool. Two of them were items that Amazon sells itself.
In addition to the nearly 100 listings for banned items we found for sale in the U.S. marketplace, we found several pill presses for sale on Amazon’s Canadian marketplace that were available for shipment to the United States. Amazon took them down after we reported them to the company, including a $4,100 TDP 5 Desktop Tablet Press, one of the models Falkowski used.
“Almost dead”
Michael “Shane” Shipley, 39, a native of Rutherford County, Tenn., was one of the people who died after taking Falkowski’s fake pills. He’d worked his entire adult life operating machinery at a local factory.
“I couldn’t even tell you what my dad’s death has done to my family,” his daughter Brittany Conway said in an interview.
Within a day of her father’s death, Conway said, she woke up in a hospital bed herself. She didn’t realize her father had slipped the counterfeit pills into his prescription bottle of Percocet at home and, distraught with grief, she had taken what she thought was a safe medication to help her relax.
“I went from up, talking—to almost dead,” Conway said.
Graham said Amazon’s policies allowed pill press sales when Falkowski was making counterfeit drugs in 2016. He declined comment on the overdoses and said, speaking in general, that the company is not responsible for harm from third-party product sales.
“We are not liable for those products because we do not make, distribute, or sell those products,” he said. He said that also applies to third-party products that are fulfilled by Amazon, which charges sellers to store and ship their items.
The company has successfully shielded itself from legal liability for harm caused by third-party products sold on its website by invoking Section 230 of the federal Communications Decency Act, which states websites are not responsible for third-party content that appears on their sites.
Last year, one federal appeals court ruled that Amazon may shoulder liability for a customer’s injuries from a defective product sold on its site, in part because the company “enables third-party vendors to conceal themselves from the customer, leaving customers injured by defective products with no direct recourse to the third-party vendor.”
Three million third parties from across the globe are now selling on Amazon’s platforms, according to e-commerce intelligence firm Marketplace Pulse. And third-party sellers have fueled the company’s explosive growth for years, according to a 2019 report to shareholders. Last year, Amazon third-party sales reportedly topped $200 billion—a sum that rivals the annual GDP of New Zealand.
Will It “Kill Someone?”
Multiple current and former employees, most of whom asked not to be named for fear of retaliation, said the company struggles to oversee that army of independent sellers.
“Because sellers have the ability to upload items themselves to the website, it makes it very difficult to police all of that without hindering the ability to do business,” said a former member of the product safety team who left the company in 2018. “Amazon knows there’s tons and tons and tons of stuff that shouldn’t be on the website.
“We basically would categorize risks based on their severity,” the former employee added. “Will this product injure or kill someone? Is it high legal risk?”
An Amazon executive acknowledged in the statement to Congress earlier this year that “bad listings” get through but said the company is working to shore up the slippage of “counterfeits, unsafe products, and other types of abuse” by requiring sellers of certain items to be preapproved, partnering with brands to pull counterfeits, and enhancing “proactive” tools to spot problems.
Yet Amazon’s sellers’ tools sometimes help, rather than hinder, the listing of banned items, The Markup found.
When we opened a new seller account and started listing a bong for sale, Amazon suggested we list it as a vase in home decor. We never posted it.
Last month, we successfully listed two banned items for sale: an AR-15 10-round magazine and an AR-15 armorer’s wrench. We removed them within minutes of confirming they had posted. We were able to evade detection by Amazon’s automated filters by purchasing a universal product code for the magazine and by both avoiding specific keywords and miscategorizing the items.
The listings went up even though we had no seller history and had already twice been prohibited from listing the same items using more precise descriptions.
Graham declined to comment on why we were able to post these items but said Amazon’s sellers’ tools “suggest listing categories to help sellers easily categorize their products, but sellers are responsible for choosing the correct category, as they know their products best.” He also declined to comment on why the tools suggested an incorrect product category for listing bongs.
Other media have exposed Amazon’s lax product controls, including three reports just last year: a CNN investigation that documented dangerous child car seats, a CNBC report that revealed Amazon was shipping expired food and baby formula, and a Wall Street Journal investigation that found thousands of unsafe, banned, and deceptively labeled products on the site.
Graham said Amazon investigated these “with urgency” and sought to improve systems when needed but gave no specifics.
Consumer advocates say the company isn’t doing enough to protect the public, and regulators need to step in.
“It’s clear there’s not a major prioritization or investment in resources in policing the terms of service or ensuring that prohibited products are not sold,” said Lori Wallach, a director at the nonprofit organization Public Citizen. “It may be more profitable to have the ‘wild, wild west’ of sales, but it’s also much more dangerous for consumers.”
“We categorically disagree with this claim,” Graham replied.
Automating Enforcement
When Rachel Johnson Greer joined Amazon in 2010 as a product safety program manager, she said she found many problematic products for sale, from unapproved treatments of erectile dysfunction to illegal police radar jammers.
“They were up for sale and selling happily away on Amazon,” Greer said.
She said some troubling products were sold directly by Amazon itself, which she and others said relies on a mostly automated purchasing process.
“Ships and sold by Amazon is Amazon. This is how it all started,” said Greer, who worked for the company until 2017. “They built algorithms to figure out which books they needed to buy and then how much.”
It was Greer’s job to put an end to sketchy sales, she said. Her team wrote programs to flag undesirable products and amassed a universe of terms to feed an automated policing system. She said the tool eventually could scan billions of line items in the catalog in about five minutes.
But it proved flawed, she said. The system by its nature was confined to known threats—things it had seen before. Greer said new problems emerged all the time and slipped right through initial safeguards, only to be flagged by customers after something went wrong.
“The biggest problem with Amazon’s system to begin with is that nearly everything is reactive,” she said. “The reality is when you have a system that relies on finding defects per million, that means that there will always be defects.”
She said some third-party sellers devised “clever, tricky ways to list products. And these rules couldn’t catch it because they hadn’t been written by a human who was thinking in clever, tricky ways.”
One current employee of the restricted products team wearily put it like this: “No matter how much we remove, there’s always more.”
Graham did not directly respond to these descriptions of the company’s difficulties in keeping restricted items off the site. Instead, he said more generally that Amazon strives “to make sure that all products in our store are safe” and “we continuously monitor the products sold in our stores.”
Yet we found an unproven treatment to fight cancer with electromagnetic frequencies that is banned by Amazon’s policies—a rife machine—had been on the site for five years. The listing was removed after we contacted Amazon.
While most of the specific banned listings we brought to Amazon’s attention were removed, similar items that we did not report to the company remained live, including some listings by the same third-party sellers.
Many of the sellers of the banned items that we found continued to sell banned products, including Lead and Steel, which sold gun accessories, and another company, which sold a compound that reviewers said they used as injectable drugs. When we asked Amazon about this in follow-up questions, those storefronts disappeared from Amazon.com.
Graham denied that injectable drugs were sold on its platform, saying they were not sold for that purpose but rather marketed for “research” in the listing. Of the two compounds we found, the World Anti-Doping Agency designates one, TB-500, as a “prohibited substance,” and the U.S. Anti-Doping Agency warned athletes about the risks of the second one, BPC-157, as not approved for human use. Customer reviews on the listing showed people were injecting the product.
Graham said the company removed the listings and would add them to its banned product list “out of an abundance of caution.” But as of publication, both compounds could be found for sale by other sellers on Amazon.com.
Amazon isn’t the only online retailer that has had to grapple with policing the unruly world of third-party e-commerce, where just about anybody can sell just about anything. Falkowski said he bought some of his drug-making supplies on another site.
Some marketplaces are known for thoroughly reviewing products before they go up.
Apple, which offers mobile apps from third-parties, checks the code before any app or update appears in the App Store, for instance. According to its site, Apple uses a combination of automated systems and hundreds of human experts speaking a total of 81 languages to review them before posting.
“We take responsibility for ensuring that apps are held to a high standard for privacy, security, and content,” Apple’s website states, “because nothing is more important than maintaining the trust of our users.”
Amazon’s users appear to know exactly what they’re buying, even when banned products are lightly disguised.
Lead and Steel listed a gunsmithing tool for an AR-15 as a “paperweight desk organizer,” posting a photo of the vise block holding paper clips and erasers.
Customers joined in on the ruse in reviews. “Helps when you need to do a hands free clean up of your desktop,” wrote one. “Locks items solidly into place, will Load plenty of paper clips or tacks.”
Another customer retorted, “Sorry. I’m not playing along. I can buy AR-15 parts all day on Amazon.”
To go along with the vise block, Amazon’s “frequently bought together” tool suggested other gunsmithing tools, showing at least one of Amazon’s automated systems received signals that it was not an office product.
Graham, the Amazon spokesperson, declined to explain why the items were still for sale, even though the “frequently bought together” tool seemed to recognize they were related to firearms.
Lead and Steel, which declined to be interviewed for this story, had sold at least four dozen vise blocks from that posting since it went up in December, according to reviews, until we reported it to Amazon, which pulled the listing.
On the Hunt for Honey Oil Equipment
Vic Massenkoff, a retired fire investigator from Contra Costa County, Calif. said he tried years ago to get Amazon to take down dangerous equipment—but said he was frustrated by what he sees as the company’s inaction.
He said he’d seen too many fires caused by the process of extracting highly potent hash oil, or “honey oil,” from marijuana using butane and in 2013 decided to investigate where the equipment could be found for sale. He said he found it on Amazon.com.
“There it was lined up, everything from the extraction tubes, to the grams digital scales, to the silicone pads, the silicone containers, to the digital thermometers,” Massenkoff said. “Everything you would need to set up shop.”
When he clicked on a listing for the glass tubes, Amazon’s recommendation engine suggested he buy the other items needed to make and use hash oil. He kept screenshots of the suggestions.
“There is no safe way to make butane honey oil,” he said in an interview.
He said he emailed Amazon from his work email to alert the company to the danger. He still remembers the reply: “Thanks for bringing this to our attention. We have assigned it to someone on our staff to research this.”
He said he got one other email from Amazon and then heard nothing.
Graham, the Amazon spokesperson, declined to say how the company handled Massenkoff’s complaint, for which he said The Markup had provided no “evidence.”
Amazon’s current rules ban the sale of equipment to make hash oil; we were able to find it on the site.
In Netflix top 10 recently as the premonitions keep cropping up
First, to be clear, this series was produced by Crackle (Originally Sony Crackle) and in-all 3 seasons were produced between 2016 (first premiered on September 6, 2016) and 2018. It stars Adam Brody, Edi Gathegi, Otmara Marrero, Martin Freeman, Ron Perlman, Addison Timlin, and Mira Sorvino.
On November 15, 2017, the series was renewed for a third season which was released on November 1, 2018. On May 4, 2021, all three seasons were made available on Netflix and surged up into the top ten in spite of the age.
The correspondences are loose, as is the connection between the subject matter and the real world analogs. The series is dramatic and emotional more than technical and the title “StartUp” is a bit meh. It conjures up images of Silicon Valley nerds and other tech bros and lame plots with outdated “dot-com” plot twists.
“StartUp” could not be further from any of that. Set in Miami (great first choice) it has the reputation of that city for money laundering, drugs and financial crimes as a backdrop.
Ultimately it’s about life and loss, the life and death struggle to find the “American Dream” and at the same time has connections to Crypto, Alt Coins, Web 3.0, The Dark Net, the criminal underworld, specifically financial crimes, Silk Road and, of course, tech start ups and venture capital.
The intertwining of this trio from disparate backgrounds is awkward but at the core of the story
It begins with “Izzy” Isabella Morales, who is a genus code crunching hacker who’s struggling to try to launch a crypto coin, “GenCoin” that she has been working on for over five years, since her time on scholarship at Stanford.
There’s not a lot of detail about her code and I don’t recall the term “blockchain” being mentioned, but they do mention bitcoin throughout the show and, considering it was around 2016 during production it is interesting to see where much of the plot fits 2021 far more.
A kind a linking character in the show is FBI agent, Phil Rask played by Martin Freeman who serves, wonderfully, to give exposition and a factual tour of the Miami crime scene and how he, and the FBI are swimming in a virtual ocean of corruption. If you can’t beat ‘em, join ‘em appears to be his motto as he is actively soliciting bribes from the jump.
Nick’s father, who is both well connected in the upscale world of financial corruption that operates openly within the big banks and corporations of the established Miami elite, is put into a jam by Agent Rask, forcing him to search for a fast escape from Miami.
Reluctantly, Nick is pulled into his father’s criminal dealings, the last thing he ever wanted, and as a result crosses paths both with FBI Agent Rask and, ultimately, invests in Izzy’s GenCoin project using his Dad’s dirty money. Once Izzy connects to Nick Talman (Adam Brody), the plot takes off.
Ronald Dacey who is a Haitian “gang leader” has a special, unique and unexpected role to play in the series. He is the human embodiment of the way the system favors the white collar criminals at the top, including the FBI, in this case, while the poor minority populations, epitomized by the tough Haitian ghetto in Miami, are forced into drug dealing and violent turf wars just to survive.
It turns out that Izzy, Nick and Ronald are not really that far removed from one another as they soon find out that a big chunk of the money Nick got from his Father turns out to belong to Ronald and his “gang”. The money was supposed to be laundered and managed by the bank where Nick’s father worked.
In an intense climax of the initial establishing episodes, the unlikely three, like a crypto-criminal Mod-squad end up as partners in the start up that they create to launch Izzy’s Gencoin.
GenCoin comes across as a kind of mini-Ethereum or alt-coin ahead of its time, and at the same time there is a dramatic interaction where the anti-government and grey-market potential and meaning of crypto is, albeit simplistically, superimposed on a critique of the social structures of the status quo.
Once again epitomized first by Miami corruption and criminal financial history as a way to underscore the desperate need, and also from the point of view of the show’s heroes, who decide to fight for a massive world changing digital transformation.
Though disconcerting at times, personal struggles and pain are superimposed over the passionate striving of the main characters
So, while all of this and the show in general, is dramatic with endless plot twists and great long-form character portrayals by the stars, particularly Ronald played by Edi Gathegi and Isabelle Morales played by Otmara Marrero, the correspondences that jump out during the show seem to emerge in strange and sometimes eerie ways.
For example, at one point they attend a huge “crypto convention” in Miami (first time in Miami after previously being held in LA) and, while they are not particularly successful in that instance, the size and stature of the show mirrors the conference that is happening literally as this article is being written (June 4-5, 2021) also in Miami (!).
While the BitCoin conference has been around since 2019, that year the number of attendees was only 1900 and is expected to be far more this year. While it is a coincidence that Miami was chosen in 2021 for the first time, it is a bit uncanny when watching a 5 year old episode where the exact conference is held in the exact location…
Another interesting corresondence has to do with events that transpire in the second and third seasons (spoiler alert). Through wild, dramatic twists and turns Gencoin is no longer the focus and the trio re-unite to launch a second tech project “Araknet” which is portrayed in the film as a kind of “dark-web 3.0 network”.
Interestingly, there are several very current projects that, while not directly a mirror of Araknet, have many of the same qualities and goals, though with less dramatic and sinister details. The biggest is that Dfinity and Internet Computer are trying to “extend”the current public internet network rather than launch a separate “private” Web 3.0 that has decentralized privacy at its core.
The DFINITY Foundation is a not-for-profit scientific research organization based in Zurich, Switzerland, that oversees research centers in Palo Alto, San Francisco, and Zurich, as well as teams in Japan, Germany, the UK, and across the United States. The Foundation’s mission is to build, promote, and maintain the Internet Computer.
One example is “Internet Computer” which is being developed by Dfinity, a start up in Switzerland. They are developing, in simplified terms a kind of blockchain based “internet 3.0” hence the cute catchy name.
Araknet promotional marketing from “StartUp” sounds again, bizarrely considering the time frame, like what you can read on the Dfinity web site today.
A slightly less direct correspondence is Helium. A project to crate a separate iOT network using long-range wireless nodes to create a decentralized wireless infrastructure.
The show emphasizes heavily the human drama and struggles of three special individuals as they try to find a path through a world of financial corruption, explosive technology changes and a disire to fight for freedom more so than individual wealth or power exclusively.
The show deserves its popularity and the attention it has been given. I would recommend it with the warning that the prophetic foreshadowing of today, while remarkable, is not the primary through-line of the narrative.
ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.
“This story was originally published by ProPublica.”
The shoreline communities of Ocean County, New Jersey, are a summertime getaway for throngs of urbanites, lined with vacation homes and ice cream parlors. Not exactly pastoral — which is odd, considering dozens of Paycheck Protection Program loans to supposed farms that flowed into the beach towns last year.
As the first round of the federal government’s relief program for small businesses wound down last summer, “Ritter Wheat Club” and “Deely Nuts,” ostensibly a wheat farm and a tree nut farm, each got $20,833, the maximum amount available for sole proprietorships. “Tomato Cramber,” up the coast in Brielle, got $12,739, while “Seaweed Bleiman” in Manahawkin got $19,957.
None of these entities exist in New Jersey’s business records, and the owners of the homes at which they are purportedly located expressed surprise when contacted by ProPublica. One entity categorized as a cattle ranch, “Beefy King,” was registered in PPP records to the home address of Joe Mancini, the mayor of Long Beach Township.
“There’s no farming here: We’re a sandbar, for Christ’s sake,” said Mancini, reached by telephone. Mancini said that he had no cows at his home, just three dogs.
All of these loans to nonexistent businesses came through Kabbage, an online lending platform that processed nearly 300,000 PPP loans before the first round of funds ran out in August 2020, second only to Bank of America. In total, ProPublica found 378 small loans totaling $7 million to fake business entities, all of which were structured as single-person operations and received close to the largest loan for which such micro-businesses were eligible. The overwhelming majority of them are categorized as farms, even in the unlikeliest of locales, from potato fields in Palm Beach to orange groves in Minnesota.
The Kabbage pattern is only one slice of a sprawling fraud problem that has suffused the Paycheck Protection Program from its creation in March 2020 as an attempt to keep small businesses on life support while they were forced to shut down. With speed as its strongest imperative, the effort run by the federal Small Business Administration initially lacked even the most basic safeguards to prevent opportunists from submitting fabricated documentation, government watchdogs have said.
While that may have allowed millions of businesses to keep their doors open, it has also required a massive cleanup operation on the backend. The SBA’s inspector general estimated in January that the agency approved loans for 55,000 potentially ineligible businesses, and that 43,000 obtained more money than their reported payrolls would justify. The Department of Justice, relying on special agents from across the government to investigate, has brought charges against hundreds of individuals accused of gaming pandemic response programs.
Drawn by generous fees for each loan processed, Kabbage was among a band of online lenders that joined enthusiastically in originating loans through their automated platforms. That helped millions of borrowers who’d been turned down by traditional banks, but it also created more opportunities for cheating. ProPublica examined SBA loans processed by several of the most prolific online lenders and found that Kabbage appears to have originated the most loans to businesses that don’t appear to exist and the only concentration of loans to phantom farms.
In some cases, these problems would’ve been easy to spot with just a little more upfront diligence — which the program’s structure did not encourage.
“Pushing this through financial institutions created some pretty bad incentives,” said Naftali Harris, the CEO of Sentilink, which helps lenders detect potential identity theft. “This is definitely a case where companies that decided they wanted to be more careful in terms of giving out loans were penalized for doing so.”
Presented with ProPublica’s findings, SBA inspector general spokeswoman Farrah Saint-Surin said that her office had hundreds of investigations underway, but that she did “not have any information to share or available for public reporting at this time.” Reuters reported that federal investigators were probing whether Kabbage and other fintech lenders miscalculated PPP loan amounts, and the DOJ declined to confirm or deny the existence of any investigation to ProPublica.
Kabbage, which was acquired by American Express last fall, did not have an explanation for ProPublica’s specific findings, but it said it adhered to required fraud protocols. “At any point in the loan process, if fraudulent activity was suspected or confirmed, it was reported to FinCEN, the SBA’s Office of the Inspector General and other federal investigators, with Kabbage providing its full cooperation,” spokesman Paul Bernardini said in an emailed statement.
As soon as the pandemic swept across America, Kabbage was in trouble.
The online lending platform had launched in 2009 as part of a generation of financial technology companies known as “non-banks,” “alternative lenders” or simply “fintechs” that act as an intermediary between investors and small businesses that might not have relationships with traditional banks. Based in Atlanta, it had become a buzzy standout in the city’s tech scene, offering employees Silicon Valley perks like free catered lunches and beer on tap. It advertised its mission as helping small businesses “acquire funds they need for their big breaks,” as a recruiting video parody of Michael Jackson’s “Thriller” put it in 2016.
The basic innovation behind the burgeoning fintech industry is automating underwriting and incorporating more data sources into risk evaluation, using statistical models to determine whether an applicant will repay a loan. That lower barrier to credit comes with a price: Kabbage would lend to borrowers with thin or checkered credit histories, in exchange for steep fees. The original partner for most of its loans, Celtic Bank, is based in Utah, which has no cap on interest rate, allowing Kabbage to charge more in states with stricter regulations.
With backing from the powerhouse venture capital firm SoftBank, Kabbage had been planning an IPO. Its model foundered, however, when Kabbage’s largest customer base — small businesses like coffee shops, hair salons and yoga studios — was forced to shut down last March. Kabbage stopped writing loans, even for businesses that weren’t harmed by the pandemic. Days later, it furloughed more than half of its nearly 600-person staff and faced an uncertain future.
The Paycheck Protection Program, which was signed into law as part of the CARES Act on March 27, 2020, with an initial $349 billion in funding, was a lifeline not just to small businesses, but fintechs as well. Lenders would get a fee of 5% on loans worth less than $350,000, which would account for the vast majority of transactions. The loans were government guaranteed, and processors bore almost no liability, as long as they made sure that applications were complete.
At first, encouraged by the Treasury Department, traditional banks prioritized their own customers — an efficient way to process applications with little fraud risk, since the borrowers’ information was already on file. But that left millions of the smallest businesses, including independent contractors, out to dry. They turned instead to a collection of online lenders that have sprung up offering short-term loans to businesses: Kabbage, Lendio, Bluevine, FundBox, Square Capital and others would process applications automatically, with little human review required.
For the platforms, this was also easy money. In the first funding round that ran out last August, Kabbage completed 297,587 loans totaling $7 billion. It received 5% of each loan it made directly and an undisclosed cut of the proceeds for those it processed for banks; its total revenue was likely in the hundreds of millions of dollars. A lawsuit filed by a South Carolina accounting firm alleges that Kabbage was among several lenders that refused to pay fees to agents who helped put together applications, even though the CARES Act had said they could charge up to 1% of the smaller loans (a provision that was later reversed). For Kabbage, that revenue kept the company alive while it sought a buyer.
“For all of these guys, it was like shooting fish in a barrel. If you could do the minimum amount of due diligence required, you could fill up the pipeline with these applications,” said a former Kabbage executive, one of four former employees interviewed by ProPublica. They spoke on the condition of anonymity to avoid retaliation at their current jobs or from industry giant American Express.
To handle the volume, Kabbage brought back laid-off workers starting at $15 an hour. When that failed to attract enough people, they increased the hourly rate to $35, and then $40, and awarded gift cards for reaching certain benchmarks, according to a former employee with visibility into the loan processing. “At a certain point, they were like, ‘Yes, get more applications out and you’ll get this reward if you do,’” the former employee said. (Bernardini said the company did not offer incentive compensation.)
In a report on its PPP participation through last August, Kabbage boasted that 75% of all approved applications were processed without human review. For every 790 employees at major U.S. banks, the report said, Kabbage had one. That’s in part because traditional banks, which also take deposits, are much more heavily regulated than fintech institutions that just process loans. To participate in the PPP, fintechs had to quickly set up systems that could comply with anti-money laundering laws. The human review that did happen, according to two people involved in it, was perfunctory.
“They weren’t saying, ‘Is this legitimate?’ They were just saying, ‘Are all the fields filled out?’” said another former employee. As acquisition talks proceeded, the employee noted, Kabbage managers who held the most company stock had a built-in incentive to process as many loans as possible. “If there’s anything suspicious, you can pass it along to account review, but account review was full of people who stood to make a lot of money from the acquisition.”
One situation in which Kabbage approved a suspicious loan became public in a Florida lawsuit filed by a woman, Latoya Clark, who received more than $1 million in PPP loans to three businesses. When the funds were deposited into accounts at JPMorgan Chase, the bank discovered that Clark’s businesses hadn’t been incorporated before the PPP program’s cutoff and froze the accounts. Clark sued Chase, and Chase then filed a counterclaim against the borrower and Kabbage, which had originated the loan despite its questionable documentation. In its response, Kabbage said it had not yet completed its investigation of the incident.
Although the Justice Department rarely names lenders that processed fraudulent PPP applications, Kabbage has been named at least twice. One case involved two loans worth $1.8 million to businesses that submitted forged information, and the other involved a business that had inflated its payroll numbers and submitted a similar application to U.S. Bank, which flagged authorities. Kabbage had simply approved the $940,000 loan. American Express’ Bernardini declined to comment further on pending litigation.
Shortly after the application period for PPP’s first round closed on Aug. 8, American Express announced the Kabbage purchase. But the transaction included none of Kabbage’s loan portfolios, either from the PPP or its pre-pandemic conventional loans. The PPP loans had either been sold to SBA-approved banks or bought by the Federal Reserve. Bernardini wouldn’t say which banks now own the loans, however, and said that no potentially fraudulent loans had been pledged to the Fed.
In April, an Ocean County, New Jersey, resident contacted ProPublica after seeing his name attached to a Kabbage loan for a nonexistent “melon farm.” To see whether it was an isolated incident, ProPublica took basic information the government released after a Freedom of Information Act lawsuit by ProPublica and others and compared it with state business entity registries. Although registries don’t pick up all sole proprietorships and independent contractors, the absence of a name is an indication that the business might not exist.
As it turned out, Kabbage had made more than 60 loans in New Jersey to unlisted businesses. Fake farms also showed up repeatedly in the SBA’s Economic Injury Disaster Loan Program, according to reports from localnewsoutlets.
A common tie became apparent when the resident of the home to which one nonexistent business was registered said that he was a client of the certified public accountants at Ciccone, Koseff & Company. In March 2020, the firm notified its clients of what it called an “ultimately unsuccessful ransomware attack” that occurred the previous month. According to information filed with Maine’s attorney general, the attackers acquired Social Security numbers and financial information.
Several other clients of the accounting firm, including Mancini, the Long Beach mayor, also had loans registered to their addresses. Reached by phone, firm founder Ray Ciccone declined to comment.
But that CPA’s data breach didn’t account for all of the suspicious loans ProPublica found across the country. Searches for PPP applicants that didn’t show up in state registration records yielded hundreds in 28 more states, with dense clusters in Florida, Nebraska and Virginia. Other lenders had nonexistent businesses as well, but fake farms only showed up in Kabbage loans. Most followed a distinctive naming convention, with part of the name of a resident or former resident of the home to which the business is registered, plus a random agricultural term.
Some of the fake loans listed addresses of people who’d also legitimately applied for their businesses. Hartington, Nebraska, anesthesiologist Bruce Reifenrath received a PPP loan for his practice in nearby Yankton, South Dakota. That’s why the idea of one being approved for a “potato farm” was so strange. “We did a PPP loan last spring and it’s pretty extensive, the documentation,” Reifenrath said.
Reifenrath was part of a cluster of dubious Kabbage loans in Hartington that also included the home of J. Scott Schrempp, the president of the Bank of Hartington, who confirmed that he did not own a strawberry farm. Schrempp said he had noticed the fake loan, and reported it to the SBA.
The SBA data only reflects approved applications received from lenders, some of which are then caught and not funded. The SBA also periodically updates its dataset to remove loans canceled by lenders. But none of the suspicious loans pulled by ProPublica show undisbursed funds, and they all have remained in the dataset for more than eight months.
One possible mechanism for the invented businesses is a technique known as synthetic identity theft, in which a criminal obtains pieces of personally identifiable information — such as a home address, a Social Security number and a birthdate — and combines it with fake information to build a credit profile. The associated bank account then routes to the fraudster, not the owner of the original information.
None of the residents of the phony farms ProPublica contacted were getting notices that they needed to repay the loans they didn’t apply for, because they didn’t get any money. But that doesn’t mean they’re not at risk, according to James Lee, chief operating officer at the Identity Theft Resource Center.
“Just having an address linked to your name on a fraudulent loan can impact your credit,” Lee said. It can also pose problems for pre-employment background checks, insurance applications or new identification documents like passports and driver’s licenses.
Meanwhile, if not corrected, the fabricated identities will stay in circulation and become better at fooling other financial institutions. “Those records get built into the credit and authentication systems used by government and commercial entities,” Lee said. “Each next time they are used and authenticated, the more ‘real’ they become. That’s what makes synthetic identity fraud so insidious.”
This, however, is largely not Kabbage’s problem anymore.
After its huge blitz of PPP loans last summer, Kabbage had hundreds of thousands of borrowers whose loans would need to be serviced until they were closed out. The loans could either be forgiven, if the borrower demonstrated that they spent most of the money on payroll, or paid back with interest. But American Express didn’t acquire the part of Kabbage’s business that owned those loans. Instead, a separate entity called K Servicing would handle loan forgiveness and take applications for a second PPP draw that Congress funded in December. The servicer is led by former Kabbage employees and its website looks very similar to Kabbage’s, but American Express says it has no affiliation.
If Kabbage was understaffed for the volume of PPP loans it took on before the acquisition, the situation has apparently worsened since then. Reddit, Yelp, Consumer Affairs, Trustpilot, Facebook and Better Business Bureau threads are replete with complaints from customers whose applications were denied or who received no communication from the company. When the SBA changed the rules in February to make the program more generous to independent contractors, K Servicing couldn’t incorporate the new forms into its processing system. So it told all new applicants to apply through another company, SmartBiz, which had operated as a mostly online processor of SBA loans even before the pandemic.
K Servicing is run by Kabbage’s former head of program management, Laquisha Milner, who also runs her own consulting firm. “Due to extenuating circumstances beyond our control, currently, our processing function is delayed,” Milner emailed in response to detailed questions from ProPublica. “We are relentlessly exploring all available options to ensure our existing customers are able to maximize their loan forgiveness.”
Jennifer Dienst is a freelance travel and events writer who received her first-draw loan from Kabbage and wants to apply for forgiveness before her window for doing so closes in the fall, but she has been stymied by K Servicing’s failure to make the forms available. “Please be patient with us as we prepare for the new forms,” a message on the loan portal reads.
Meanwhile, Dienst’s account has started accruing interest, which Milner said will not be charged if the loan is forgiven. But it’s making Dienst nervous.
“It’s always the same response from K Servicing — we’re updating our forgiveness forms and they’ll be made available soon,” Dienst said. “They’ve been saying that for months.”
Although a hit ‘The Bomber Mafia’ is less known than previous Gladwell bestsellers
With “Blink” (2007) and “The Tipping Point” as well as “Outliers” Malcolm Gladwell burst onto the scene with a new kind of popular non-fiction. Rather than being another single minded academic focused on a particular specific niche, it was in choosing what phenomena to study, and then taking his now patented unique approach, that he was able to excite and inspire the minds of millions of readers.
Drilling down into the exact aspects of his chosen topics to focus on just what made him choose them in the first place, and doing so with an excited air of adventure and discovery, Gladwell continues to delight, and for some, his entire body of work consists of one page-turner after another. Even his titles, like outliers and the tipping point, though in usage before, after he nailed them into more expansively defined concepts, were brought into more popular use and the widespread level of understanding to a whole new level.
Below we feature a broad selection, including his latest, for fan and the curious alike.
To make it easier they are featured front and center, below, along with descriptions, provided courtesy of the Bookshop (and the various publishers), and with some links for a variety of options of where to purchase.
The Bomber Mafia: A Dream, a Temptation, and the Longest Night of the Second World War
In The Bomber Mafia, Malcolm Gladwell weaves together the stories of a Dutch genius and his homemade computer, a band of brothers in central Alabama, a British psychopath, and pyromaniacal chemists at Harvard to examine one of the greatest moral challenges in modern American history. Most military thinkers in the years leading up to World War II saw the airplane as an afterthought. But a small band of idealistic strategists, the “Bomber Mafia,” asked: What if precision bombing could cripple the enemy and make war far less lethal?
In contrast, the bombing of Tokyo on the deadliest night of the war was the brainchild of General Curtis LeMay, whose brutal pragmatism and scorched-earth tactics in Japan cost thousands of civilian lives, but may have spared even more by averting a planned US invasion. In The Bomber Mafia, Gladwell asks, “Was it worth it?” Things might have gone differently had LeMay’s predecessor, General Haywood Hansell, remained in charge.
Hansell believed in precision bombing, but when he and Curtis LeMay squared off for a leadership handover in the jungles of Guam, LeMay emerged victorious, leading to the darkest night of World War II. The Bomber Mafia is a riveting tale of persistence, innovation, and the incalculable wages of war.
Talking to Strangers: What We Should Know about the People We Don’t Know
How did Fidel Castro fool the CIA for a generation? Why did Neville Chamberlain think he could trust Adolf Hitler? Why are campus sexual assaults on the rise? Do television sitcoms teach us something about the way we relate to one another that isn’t true? Talking to Strangers is a classically Gladwellian intellectual adventure, a challenging and controversial excursion through history, psychology, and scandals taken straight from the news.
He revisits the deceptions of Bernie Madoff, the trial of Amanda Knox, the suicide of Sylvia Plath, the Jerry Sandusky pedophilia scandal at Penn State University, and the death of Sandra Bland–throwing our understanding of these and other stories into doubt. Something is very wrong, Gladwell argues, with the tools and strategies we use to make sense of people we don’t know.
And because we don’t know how to talk to strangers, we are inviting conflict and misunderstanding in ways that have a profound effect on our lives and our world. In his first book since his #1 bestseller David and Goliath, Malcolm Gladwell has written a gripping guidebook for troubled times.
David and Goliath: Underdogs, Misfits, and the Art of Battling Giants
Three thousand years ago on a battlefield in ancient Palestine, a shepherd boy felled a mighty warrior with nothing more than a stone and a sling, and ever since then the names of David and Goliath have stood for battles between underdogs and giants. David’s victory was improbable and miraculous. He shouldn’t have won.
Or should he have? In David and Goliath, Malcolm Gladwellchallenges how we think about obstacles and disadvantages, offering a new interpretation of what it means to be discriminated against, or cope with a disability, or lose a parent, or attend a mediocre school, or suffer from any number of other apparent setbacks.
Gladwell begins with the real story of what happened between the giant and the shepherd boy those many years ago. From there, David and Goliath examines Northern Ireland’s Troubles, the minds of cancer researchers and civil rights leaders, murder and the high costs of revenge, and the dynamics of successful and unsuccessful classrooms—all to demonstrate how much of what is beautiful and important in the world arises from what looks like suffering and adversity.
In this stunning book, Malcolm Gladwell takes us on an intellectual journey through the world of “outliers”–the best and the brightest, the most famous and the most successful. He asks the question: what makes high-achievers different?
His answer is that we pay too much attention to what successful people are like, and too little attention to where they are from: that is, their culture, their family, their generation, and the idiosyncratic experiences of their upbringing.
Along the way he explains the secrets of software billionaires, what it takes to be a great soccer player, why Asians are good at math, and what made the Beatles the greatest rock band. Brilliant and entertaining, Outliers is a landmark work that will simultaneously delight and illuminate.
The Tipping Point: How Little Things Can Make a Big Difference
The tipping point is that magic moment when an idea, trend, or social behavior crosses a threshold, tips, and spreads like wildfire.
Just as a single sick person can start an epidemic of the flu, so too can a small but precisely targeted push cause a fashion trend, the popularity of a new product, or a drop in the crime rate.
This widely acclaimed bestseller, in which Malcolm Gladwell explores and brilliantly illuminates the tipping point phenomenon, is already changing the way people throughout the world think about selling products and disseminating ideas.
There’s a joke somewhere in here but it’s hard to see it through the tears
Woody Allen’s onscreen counterpart, Alvy Singer, complaining about Hollywood Award Shows in “Annie Hall” remarked that a category of award for “Greatest Fascist Dictator” would not surprise him, and that Adolf Hitler would probably win.
Amazon, viewed from some neutral future date or by aliens from another planet would surely win the award for “Greatest Company to Amass Wealth & Power by Intentionally Losing Money” award. Or maybe just “World’s Biggest Ponzi Scheme”.
For now the fawning books and articles on the greatness of “Bezos’ Behmouth” continue to pile up.
An exception to the fawning fan fiction is “Monopolized: Life in the Age of Corporate Power” by David Dayen. The author also commented cogently on the current situation with Amazon and MGM. His thoughts shed much needed light on the simple and yet sadly overlooked truth about Amazon: its core mission is to monopolize not just online sales but all transactions that take place in the economy where a “cut” of those transactions can be extracted.
What’s with all these awards? They’re always giving out awards. Best Fascist Dictator: Adolf Hitler. — Alvy Singer
This viewpoint, it would seem, can be traced back to a rare case where Jeff Bezos let his guard down and accidentally explained a core concept of the Amazon business model.
He said, simply: “Your margin is my opportunity”.
With this seemingly innocuous and widely misinterpreted phrase he unleashed the dogs of hell on the world of commerce. The MGM deal, according to Dayen, who is also editor of The American Prospect, is yet another attempt to gut an industry with techniques designed to use predatory pricing strategies to crush all rivals.
The sub-head from his article states: “The company wants to control pricing on everything, and funnel as many transactions to itself as possible.”
Meanwhile, somehow, this statement is finally being generally understood in its real context.
Yet what is astounding is that this is not a supposition or an accusation, but rather is a stated fact, and how this company has behaved and operated for decades.
Putting 2+2 together, the common interpretation that there is an “innocent” pro-customer meaning possible, is finally being seen for the absurdity that it is.
Simple, Effective and Disgusting: Selling below cost or at a loss to harm competition
We’ve seen how that goes. In this case, since Amazon does not make any data available on the profitability of various business segments, using nearly $9 billion to enhance its “free with Prime” business creates yet another loss-leader opportunity to destroy the margins of all other streaming platforms, who, like other businesses actually have to make a profit or at least break even, unlike Amazon due to its cross-subsidization of products and services.
Amazon wants to control all economic activity in the United States and the world. It wants a cut of every transaction. — D. Dayen
Amazon as “cross-subsidized content devourer” is how Dayen described the inevitable outcome of the deal in his article.
He also succinctly argues that by using its virtually unlimited power and resources to devour an ever larger share of the market, ultimately the result will be to drive up costs for competitors (for I.P., production and star power) and achieve the goal of squeezing the already slim margins for those poor schmucks (or rich schmucks like Disney, HBO, Netflix, etc.) that don’t have an unlimited budget for intentional losses.
The playbook is so obvious and familiar that it’s almost laughable. That is, if not for the death and destruction that always follow in the next chapters of this plot schema.
They pick on an established industry where no one will have sympathy for the rich victims – did anyone feel sorry for Borders or other large book retailers? Does anyone cry over the loss of Diapers.com or Quidisi? When Birkenstock complains does anyone listen?
How can gutting the streaming industry or unassailable giants like Disney and HBO be bad? Isn’t it just capitalism at its finest? Should we start preparing the award now for “Greatest Consolidator of Content in History”?
But what about the “loss leader” system? What about the ultimate outcome of less competition and higher prices overall, an obvious harm to consumers, regardless of how stupid and convoluted the route is to get there?
By moving the market in a way that will make streaming a terrible business for any company that has to compete with this, “oughta be illegal” script, margins will, if the gambit succeeds, face a similar fate to the one that anyone who used to be in the retail book industry, or any of the other entire industries that Amazon has received kudos for destroying, knows all too well.
Dayen also makes the point that, once this thinly veiled ploy is seen for what it is, the harm, not only to Amazon’s competitors but to the general public, should be obvious and impossible to ignore.
Citing the similarities with the recently brought antitrust action by the Washington, DC attorney general, it is exactly this kind of pernicious practice, that Amazon has not only gotten away with for decades, but Bezos has been lionized for “inventing”.
That lawsuit, which deals with an Amazon clause in 3rd party marketplace terms and conditions (since altered to disguise its true intent) that 3rd party sellers must sell anywhere outside Amazon’s marketplace at the same or higher price that they have listed on Amazon, is a sign of a gradual shift toward seeing the real meaning of Amazon’s behavior.
Since there are massive, exorbitant fees added to every transaction for all 3rd party sellers, the only way for them to make any profit at all is to tack on the cost of those fees, meaning artificially higher prices.
Amazon has ways to retaliate through “dark patterns” of its own special stripe, by manipulating buyers behaviors on its web site, making sure that sellers that don’t toe the line will get, essentially, zero sales.
For Amazon this kind of bullying and blackmail is a “win-win-win”. They see and have tattooed into their DNA all pain, suffering and loss for anyone other than the company (AMZN) as a gain for them.
3rd party sellers caught in hell trying to survive while paying fees up to 43% or more without recourse to try and recoup by selling anywhere else at lower prices?
Amazon congratulates themselves. Sellers undercutting each other, in spite of those fees in an effort to behave like a “mini-Amazon” and getting into a race to the bottom death match with each other? Yippee! Great for Amazon, when they are dead, there are always new victims waiting in line to enter the cage.
How about sellers that obtain goods illegally, counterfeit, illegal imports, stolen products, remainders and aftermarket overstock? They are GREAT for Amazon because they put even more pressure on the individual, honest sellers to immolate themselves trying to survive (and eventually die via pricing suicide) while Amazon can claim to be offering lower prices!
Oh, and when they “do their best” to stop all those illegal sellers, albeit at a snails pace, they are bailed out by section 230 and can point to their “partners in crime”, the counterfeiters, the knockoffs from China, the illegal imports and the stolen and aftermarket goods and say: “We tried our best, these are just a few bad apples” laughing all the way through every board meeting.
“Your margin is my opportunity”, indeed.
Above: Photo Collage by Lynxotic
There are no mitigating factors here. There is no “good guy” or customer obsessed hero. Just evil and the dead or dying. Wake the fuck up, America.
The praise and adulation continues, even as the $400 million yacht is being prepared for its maiden voyage
It’s as if Bezos is given award after award for the “genius” of selling 1$ bills for .75 cents. Championed for using a strategy that masquerades short term margin destruction as “customer obsession”, pretending that the dumping levels of pricing won’t in the long run flip into price gouging and the destruction of competition.
Somehow the massive detriment to consumers and the society at large is overlooked amid all the parties celebrating the “genius”.
But have the chickens finally come home to roost? Is anyone seeing a pattern of systematic use of the same tactics over and over, applied to each and every sector that Amazon chooses to “disrupt”? They didn’t get the nickname “grim reaper” for nothing. The problem is that it was meant as a compliment.
It is a sea change in the antitrust orientation, a sea change that is desperately needed, and with Lina Kahn and Columbia Law School professor Tim Wu, it might be just over the horizon. Could even have a chance to come about.
That change, so long overdue, could finally begin the process of dismantling the damage wrought and and still to come, if there is no interdiction.
The worm will eventually turn. When? After decades of obvious abuse and criminal behavior, completely and willfully ignored (too complicated to see).
Will there eventually be so many victims that they will outnumber the duped and the sycophants? Stay tuned.
This is a world where four major banks control most of our money, four airlines shuttle most of us around the country, and four major cell phone providers connect most of our communications. If you are sick you can go to one of three main pharmacies to fill your prescription, and if you end up in a hospital almost every accessory to heal you comes from one of a handful of large medical suppliers.
Over the last forty years our choices have narrowed, our opportunities have shrunk, and our lives have become governed by a handful of very large and very powerful corporations.
Today, practically everything we buy, everywhere we shop, and every service we secure comes from a heavily concentrated market.
Dayen, the editor of the American Prospect and author of the acclaimed Chain of Title, provides a riveting account of what it means to live in this new age of monopoly and how we might resist this corporate hegemony.
Through vignettes and vivid case studies Dayen shows how these monopolies have transformed us, inverted us, and truly changed our lives, at the same time providing readers with the raw material to make monopoly a consequential issue in American life and revive a long-dormant antitrust movement.
Journalists have used scrapers to collect data that rooted out extremist cops, tracked lobbyists, and uncovered an underground market for adopted children
By: The Markup Staff
The fruits of web scraping—using code to harvest data and information from websites—are all around us.
Scrapers are also the tools of watchdogs and journalists, which is why The Markup filed an amicus brief in a case before the U.S. Supreme Court this week that threatens to make scraping illegal.
The case itself—Van Buren v. United States—is not about scraping but rather a legal question regarding the prosecution of a Georgia police officer, Nathan Van Buren, who was bribed to look up confidential information in a law enforcement database. Van Buren was prosecuted under the Computer Fraud and Abuse Act (CFAA), which prohibits unauthorized access to a computer network such as computer hacking, where someone breaks into a system to steal information (or, as dramatized in the 1980s classic movie “WarGames,” potentially start World War III).
In Van Buren’s case, since he was allowed to access the database for work, the question is whether the court will broadly define his troubling activities as “exceeding authorized access” to extract data, which is what would make it a crime under the CFAA. And it’s that definition that could affect journalists.
Or, as Justice Neil Gorsuch put it during Monday’s oral arguments, lead in the direction of “perhaps making a federal criminal of us all.”
Investigative journalists and other watchdogs often use scrapers to illuminate issues big and small, from tracking the influence of lobbyists in Peru by harvesting the digital visitor logs for government buildings to monitoring and collecting political ads on Facebook. In both of those instances, the pages and data scraped are publicly available on the internet—no hacking necessary—but sites involved could easily change the fine print on their terms of service to label the aggregation of that information “unauthorized.” And the U.S. Supreme Court, depending on how it rules, could decide that violating those terms of service is a crime under the CFAA.
“A statute that allows powerful forces like the government or wealthy corporate actors to unilaterally criminalize newsgathering activities by blocking these efforts through the terms of service for their websites would violate the First Amendment,” The Markup wrote in our brief.
What sort of work is at risk? Here’s a roundup of some recent journalism made possible by web scraping:
The COVID tracking project, from The Atlantic, collects and aggregates data from around the country on a daily basis, serving as a means of monitoring where testing is happening, where the pandemic is growing, and the racial disparities in who’s contracting and dying from the virus.
This project, from Reveal, scraped extremist Facebook groups and compared their membership rolls to those of law enforcement groups on Facebook—and found a lot of overlap.
The Markup’s recent investigation into Google’s search results found that it consistently favors its own products, leaving some websites from which the web giant itself scrapes information struggling for visitors and, therefore, ad revenue. The U.S. Department of Justice cited the issue in an antitrust lawsuit against the company.
In Copy, Paste, Legislate, USA Today found a pattern of cookie-cutter laws, pushed by special interest groups, circulating in legislatures around the country.
Above: Photo by Michael Krahn on Unsplash with elements added by Lynxotic
Coming after a frenzied run-up the hand wringing is no surprise
I many ways it seems as if Bitcoin and Cryptocurrencies appeared suddenly in 2021 out of the head of Zeus. Protean and fully formed, with billions and trillions in market caps, and all your sisters, brothers, cousins and even the Uber driver climbing aboard.
And the FOMO blog posts, where every hour an innocent reader is assaulted by a story, perhaps true, perhaps exaggerated and certainly foolhardy in retrospect, of an innocent putting their life savings into Dogecoin and suddenly having, theoretically, huge gains at their disposal.
Meanwhile, craggy faced, ancient stock market mavens would interject famous last words that now appear to be wise. However, all that notwithstanding, this week’s crash is nothing new or unexpected.
In reality, as can be seen from the graphic below, provided by Visual Capitalist, there have been so may crashes / corrections and doomsday prognostications since 2012 in Bitcoin that it seems like a miracle the there’s any thing such as Crypto at all.
There’s a reason it’s not dead and it’s in the DNA
The resiliency, far from a shock to those that have been around more than a fortnight, is kinda the point. When Satoshi Nakamoto built the system architecture of Bitcoin and since then inspired the over 8000 new crypto entities that have been developed, it was, just like the internet itself that was build to survive WWIII, supposed to be as indestructible as possible.
Like physical gold, which is considered have been adopted as a store of value partly due to its indestructibility and immutability (alchemy notwithstanding) the volatility and sometimes violent-seeming life story of Bitcoin is a necessary adjust to its role in finance, commerce and even individual monetary survival.
Not for the faint of heart, perhaps
While the mainstream and those forces opposed to the adoption or survival of Bitcoin and Crypto are out in force pointing to the “unsuitability” of Bitcoin and other cryptocurrencies for any “legitimate” use as a trade or savings vehicle, the progress so far, in spite of the obvious fact that volatility has always been baked in to the situation, is an obvious refutation of that viewpoint.
Will the current drop in dollar values relative to Bitcoin end it’s popularity and strip it of the respect it has thusfrar earned among many? In a word, no. In essence what is happening is, as many have foretold, what happens often and repeatedly, the excess attention and dollars that were pumped into crypto by you brother, sister, cousin and Uber driver are now getting blown out, since those were more speculation and psychosis than any kind of vote for viability or permanency.
And, why not? Where was to concern, shock and hesitation by the masses when the prices seemed to only rise for weeks and even months across so many products and coins it was impossible to keep count? Why was to feeding frenzy and the mania-like piling on not ignored as an anomaly?
The herd does as the herd will do. Diamond hands and Paper hands will ebb and flow as long as the rivers flow to the sea and humans herd like buffalo. And, in all likelihood, dollars and euros and yen will be long forgotten when the last bitcoin is transferred to the final wallet in the sky.
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Lynxotic does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
