Originally published at: Pluralistic: Big Business can’t stop its illegal, fantastically lucrative gossiping (16 Mar 2023) – Pluralistic: Daily links from Cory Doctorow
- Big Business can't stop its illegal, fantastically lucrative gossiping: Everybody knows that the dice are loaded.
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Big Business can't stop its illegal, fantastically lucrative gossiping (permalink)
Seven years ago, I called Leonard Cohen's Everybody Knows "the perfect anthem for our times."
Everybody knows the war is over
Everybody knows the good guys lost
Everybody knows the fight was fixed
The poor stay poor, the rich get rich
That’s how it goes
That was just after Cohen died, and while the world seems to want to settle on Hallelujah as his totemic song, Everybody Knows keeps inserting itself into the discourse, in the most toxic, hope-draining way possible. Whenever some awful scandal involving the great and the good breaches, we're told that "everybody knew" already, so let's move on.
This current has been running through our society for decades now. Remember when the Snowden leaks hit and a yawning chorus of nihilists told us that they knew already and so should anyone else with the smallest iota of sophistication? Back then Jay Rosen coined a rejoinder to this counsel of despair: "Don't savvy me":
Everybody knows. It's what we heard after the Panama Papers. Swissleaks. Luxleaks. The Paradise Papers. Everybody knows! It's what the nothing-to-see-here crowd said about Propublica's explosive IRSLeaks, back in 2021:
The leaks revealed the tax-dodges of the richest and most powerful people in America, which were jaw-dropping in their audacity and shamelessness. Sure, maybe you suspected that the 400 richest people in America paid less tax than you – but did you really guess that the means by which they did this was through taking massive deductions on their elite hobbies?
Maybe "everybody knows" that the game is rigged, but did you know how? Like, did you know that REITs – a tax shelter for mom-and-pop investors who buy an income property for their retirement – have become a primary vehicle for gutting unions at hotels, slashing wages and imposing brutal, dangerous working conditions?
The leaks are cumulative. By combining data from one leak with another, we can build out a far more detailed picture of the conspiracy – and it is a conspiracy – among the utlrawealthy and their Renfields in the law, real-estate and accounting trades to duck their responsibilities and mound ever-more treasure on their hoards.
Take the Jersey Offshore leaks (2020), comprising the internal memos of La Hougue, a fantastically crooked firm of fixers on the Isle of Jersey, one of the lawless tax-crime jurisdictions that the UK pretends it has no control over. La Hougue has a playbook, 11 tactics for lying about your taxes. The remarkable thing about these 11 tactics is how flimsy they are, how easy it is to penetrate their lies. When Parliament says it can't possibly do anything about the criminal havens in the Channel, remember the Jersey Offshore leaks and remind yourself that not even Parliament is that credulous. They know. Everybody knows:
Why do working people think the Democrats are just another party for the ultra-rich? Maybe it's Pelosi's relentless opposition to meaningful curbs on insider trading. Or maybe it's the kinds of politicians that the Democratic Machine likes to rally behind – like Tali Farhadian Weinstein, who raised millions in 2021, in large-money donations from Democratic finance-sector donors in her bid to become the DA of Manhattan. Farhadian Weinstein and her husband have more than $100m in annual income, and yet, paid no federal tax in 2013, 2015 and 2017. In 2014, they paid $6,584:
Propublica isn't done with the IRS Files. Today, they published a long investigation into ultra-rich corporate executives who buy and sell their competitors' stock for massive profits with suspiciously precise timing. The data comes from 1099-B filings, which brokerages file with the IRS with each trade, but which the IRS doesn't share with the SEC:
Here are some examples:
Ohio billionaire August Troendle, CEO of Medpace, repeatedly bought and sold shares of $Syneos – his company's archrival, timing the transactions with a management shakeup that dropped the stock by 16% in one day, and an SEC investigation that crushed Syneos's stock by 25%. His precision timing made him at least $2.3m in profit.
Isaac Larian, CEO of Bratz-maker MGA, made $28m trading shares in Mattel, MGA's nemesis and frequent litigant – during a period when Mattel stock crashed by 57% (!). Larian boasts that "I made a LOT more money shorting Mattel stock than they did running a $4.5 billion toy company."
Larian's trades also involved some very precise timing. Sometimes, he took positions just before his own company announced its upcoming products, and others positions immediately preceded major disclosures from Mattel. Larian's subordinates told Propublica that he is "is a boss with an endless appetite for information about his company and its competitors, constantly grilling subordinates on minutiae about the industry."
Larian couldn't explain the timing of these trades. His lawyer told Propublica that it was "false and defamatory" to suggest that he "possessed material, nonpublic information that Larian knew was obtained in breach of a duty."
Next up is Gerald Boelte, founder and chair of the massive oil company LLOG. LLOG partners with other companies for its oil drilling. Companies like Stone Energy. Boelte bought a huge position in Stone the day before the company's 2015 earnings report, in which they revealed an increase their reserves' value, pulling in a 65% one day profit. He'd never bought shares in Stone before.
Boetle told Propublica, "I do not and have never traded on any material, non-public information of competitors, business partners or others… Any implication that I was investing based upon advance knowledge is therefore clearly false."
Jim Sankey is CEO of Invue. He bought $3.2m worth of shares in his rival Checkpoint, while checkpoint was in secret negotiations to be acquired by CCL Industries. Sankey was already thoroughly connected to Checkpoint, having sold a $150m product line to them in 2007. There's no record that he'd ever traded Checkpoint before. He made $2.3m. Sankey says "he did not know Checkpoint was going to be acquired." He says that his company was not approached by Checkpoint as a potential acquirer.
Barry Wish was a board member of Ocwen, a company he co-founded. After the Great Financial Crisis, Ocwen bid unsuccessfully to buy $215b worth of Bank of America mortgages. The winning bidder was Nationstar. Three weeks before Nationstar's winning bid was announced, Wish bought $600k worth of Nationstar shares. After the bid was announced, he sold them for for a $157k profit.
Wish told Propublica that he never traded competitors' stock: "No, not at all." Propublica read him the details of the trade from his leaked 1099-B. He said "You might see it, but I don’t have any recollection" and hung up.
Steven Grossman is a cardboard heir – a nepobaby who inherited Southern Container Corp from his grandpa. After he sold the company to Rock-Tenn for $1b in 2013, he stayed on as a senior exec. Over the next 5 years, he traded large blocks of shares in Rock-Tenn's competitors, companies like Temple-Inland, a company that he made a 37% profit on after its acquisition was announced in 2011, one week after Grossman started buying its shares.
Grossman falsely told Propublica, "I haven’t traded stock since then." IRS records show that Grossman continued to trade. Grossman also told Propublica that he had no role with Rock-Tenn, despite being on their payroll for five years. When asked about his extremely lucky timing buying and selling Temple-Inland, he said "That was 10 years ago" and hung up.
As Propublica's Robert Faturechi and Ellis Simani write, Securities regulations have their origins in the crash of 1929, and the subsequent collapse in confidence in markets and capitalism, the sense that the system was rigged for the wealthy and political insiders. That is a pretty good summation of sentiment today:
It's not just that corporate executives are corrupt, it's that they're lavishly, shamelessly, endlessly, incorrigibly corrupt. Take Canadian Pacific and Kansas City Southern, the sixth- and seventh-largest Class I railroads in the USA, whose merger was just approved by the Surface Transportation Board.
There are plenty of good reasons for the STB to have blocked this merger. The rail industry is already excessively concentrated, and its top execs are so convinced that they're both too big to fail and too big to jail that they're rendering entire towns permanently uninhabitable in order to eke out a few more points in profit:
But there are specific reasons to have blocked this merger, starting with the whistleblower report about CP and KCS executives illegally coming together for a three-day "retreat" at The Breakers hotel in Palm Beach, a notorious site for Republican operatives to collude with the business lobby:
As Luke Goldstein writes for The American Prospect, both companies spent millions in 2020 and 2022 on campaign contributions to "grease the skids" for the merger – in particular, ensuring that the combined company could transport Alberta tar sands oil (the filthiest, most energy intensive oil in the world) to US refineries.
Though the STB was informed of the illegal meeting – in which the two companies behaved as though the merger had already been finalized – STB chair Martin Oberman told Goldstein that the Board did not write to the companies for an explanation before waving through their merger.
Instead, Oberman dismissed the complaint on the grounds that "Railroads have to be able to talk to one another to function." Typically this takes place over a free phone call, though – not on a three-day executive junket at a hotel where the rooms run $1,500/night.
Oberman knows what happened at that meeting.
It comes as no surprise to learn that before FTX imploded and destroyed the savings of its depositors, it paid out $3b to its top executives, including the criminal Sam Bankman-Fried:
It comes as no surprise that Silicon Valley Bank paid out bonuses to its execs and employees hours before it collapsed:
It's comforting to think that the tax code loopholes that the ultrawealthy exploit are an epiphenomenon of complexity, an unavoidable consequence of the technical requirements of a big regulation that spans 300m+ people. But the truth is, the loopholes in the US tax code were inserted by politicians who got massive campaign contributions from donors who directly benefited from those loopholes. Senator Ron Johnson got $20m from the owners of Uline (Dick and Liz Uihlein) and roofing magnate Diane Hendricks, then he blocked the Trump tax bill until his fellow lawmakers inserted a loophole that produced $215m for the Uihleins and Hendricks, in just the first year:
It's not even surprising that a sitting US Senator amended a bill to give hundreds of millions of dollars to billionaires who gave him tens of millions of dollars.
It's weirdly comforting to think that everyday people vote for demagogue wreckers because Facebook hired a legion of evil sorcerers to fashion a mind-control ray out of Big Data and AI, but Facebook lies about everything, and everyone who ever claimed to have a mind-control ray was a liar.
Maybe people vote for demagogue wreckers because they believe the system is rotten, and maybe they believe the system is rotten because the system is rotten. Maybe the self-described evil sorcerers of Big Tech aren't "hacking our dopamine loops" – maybe they're just helping opportunists target people who are justifiably angry:
The problem with this explanation is that it requires "progressive" parties to actually do stuff to demonstrate that they are on the side of people, not the side of paperclip-maximizing immortal colony organisms and the corporate executives who pretend to run them:
I try to have hope – that is, I try to believe that if we can only make changes to our material circumstances, however small they may seem, that we might attain a new vantagepoint that reveals more possible changes within our grasp:
Some days, it's hard to have hope. Some days, it's so obvious that everybody knows, all that I can muster is fury. Fury is not a full substitute for hope, but it'll do. It's a far superior alternative to the fatalism that "everybody knows" and thus nothing can be done.
Some fights you win, and other fights, you just fight, because surrender isn't an option. Everybody knows, right? If everybody knows, then everybody might just decide to do something about it.
Hey look at this (permalink)
- How 3 Democrats’ last-minute dealings killed Gigi Sohn’s FCC nomination for good https://www.dailydot.com/debug/gigi-sohn-fcc-nomination-collapse/
Bring the LED Zeppelin Art Car to Burning Man 2023 https://www.kickstarter.com/projects/ledzeppelinartcar/bring-the-led-zeppelin-art-car-to-burning-man-2023
The KDS1-VW https://chrisbathgate.blogspot.com/2023/03/the-s1vw.html
This day in history (permalink)
#20yrsago New Mexico bill upholds Constitution, spits in Feds’ eye https://web.archive.org/web/20030313063731/http://legis.state.nm.us/Sessions/03 Regular/memorials/house/HJM040.html
#20yrsago Scary first-person account of SARS https://web.archive.org/web/20030806075338/http://www.interesting-people.org/archives/interesting-people/200303/msg00228.html
#15yrsago Scotland Yard wants DNA samples from 5-year-olds in case they grow up to be criminals; Oyster card records to become part of “war on terror” https://www.theguardian.com/society/2008/mar/16/youthjustice.children
#10yrsago Maria Del Camino: an art-car that’s part tank, part El Camino https://www.wired.com/2013/03/maria-the-flying-car/
#10yrsago EFF explains yesterday’s National Security Letter ruling https://www.eff.org/press/releases/national-security-letters-are-unconstitutional-federal-judge-rules
#5yrsago Washington State lawmaker thinks the courts will uphold state Net Neutrality law because the FCC abdicated its duty https://arstechnica.com/tech-policy/2018/03/net-neutrality-supporting-lawmaker-tells-isps-were-ready-for-lawsuits/
#5yrsago Big Telco hates “regulation,” but they love their billions in government handouts https://www.wired.com/story/the-dangers-of-big-city-subsidies/
#5yrsago Austin bombings: literal American carnage meets with Trumpian indifference https://theintercept.com/2018/03/15/austin-package-bombs/
#5yrsago Bruce Sterling’s 2018 SXSW keynote: Disrupting Dystopia, or what the tech arts scene could and should be https://soundcloud.com/officialsxsw/disrupting-dystopia-the-bruce-sterling-talk-sxsw-2018
#5yrsago Clearchannel took over America’s local radio, Bain Capital took over Clearchannel, Clearchannel went bankrupt https://wolfstreet.com/2018/03/15/bain-capital-wins-again-iheartmedia-finally-files-for-bankruptcy/
#1yrago The role of prose quality in scholarship https://pluralistic.net/2022/03/16/mightier-than-the-sword/#eschew-obfuscation
- Picks and Shovels, a Martin Hench noir thriller about the heroic era of the PC. Yesterday's progress: 541 words (116407 words total)
The Bezzle, a Martin Hench noir thriller novel about the prison-tech industry. FIRST DRAFT COMPLETE, WAITING FOR EDITORIAL REVIEW
A Little Brother short story about DIY insulin PLANNING
Vigilant, Little Brother short story about remote invigilation. ON SUBMISSION
Moral Hazard, a short story for MIT Tech Review's 12 Tomorrows. FIRST DRAFT COMPLETE, ACCEPTED FOR PUBLICATION
Spill, a Little Brother short story about pipeline protests. ON SUBMISSION
Latest podcast: Twiddler https://craphound.com/news/2023/02/27/twiddler/
- Ostrom Workshop: Beyond the Web Speaker Series, Mar 20
IFTF Changing the Register, Mar 22
Antitrust and Competition Conference – Beyond the Consumer Welfare Standard (Chicago), Apr 20-21
Red Team Blues at Mysterious Galaxy (San Diego), Apr 25
Red Team Blues event with Tim Harford (Oxford), May 29
- Roskom Svoboda Privacy Day
Factually With Adam Conover:
Making Big Tech Better vs Making it Smaller (Brussels Antitrust Conference):
- "Chokepoint Capitalism: How to Beat Big Tech, Tame Big Content, and Get Artists Paid, with Rebecca Giblin", on how to unrig the markets for creative labor, Beacon Press/Scribe 2022 https://chokepointcapitalism.com
"Attack Surface": The third Little Brother novel, a standalone technothriller for adults. The Washington Post called it "a political cyberthriller, vigorous, bold and savvy about the limits of revolution and resistance." Order signed, personalized copies from Dark Delicacies https://www.darkdel.com/store/p1840/Available_Now%3A_Attack_Surface.html
"How to Destroy Surveillance Capitalism": an anti-monopoly pamphlet analyzing the true harms of surveillance capitalism and proposing a solution. https://onezero.medium.com/how-to-destroy-surveillance-capitalism-8135e6744d59 (print edition: https://bookshop.org/books/how-to-destroy-surveillance-capitalism/9781736205907) (signed copies: https://www.darkdel.com/store/p2024/Available_Now%3A__How_to_Destroy_Surveillance_Capitalism.html)
"Little Brother/Homeland": A reissue omnibus edition with a new introduction by Edward Snowden: https://us.macmillan.com/books/9781250774583; personalized/signed copies here: https://www.darkdel.com/store/p1750/July%3A__Little_Brother_%26_Homeland.html
"Poesy the Monster Slayer" a picture book about monsters, bedtime, gender, and kicking ass. Order here: https://us.macmillan.com/books/9781626723627. Get a personalized, signed copy here: https://www.darkdel.com/store/p2682/Corey_Doctorow%3A_Poesy_the_Monster_Slayer_HB.html#/.
- Red Team Blues: "A grabby, compulsive thriller that will leave you knowing more about how the world works than you did before." Tor Books, April 2023
The Internet Con: A nonfiction book about interoperability and Big Tech, Verso, September 2023
The Lost Cause: a post-Green New Deal eco-topian novel about truth and reconciliation with white nationalist militias, Tor Books, November 2023
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