Pluralistic: The largest campaign finance violation in US history (31 Jul 2024)

doctorow · 2024-07-31T17:54:33.002Z

Originally published at: Pluralistic: The largest campaign finance violation in US history (31 Jul 2024) – Pluralistic: Daily links from Cory Doctorow

Today's links

The largest campaign finance violation in US history: The "greater fools" election.
Hey look at this: Delights to delectate.
This day in history: 2004, 2009, 2014, 2019, 2023
Upcoming appearances: Where to find me.
Recent appearances: Where I've been.
Latest books: You keep readin' em, I'll keep writin' 'em.
Upcoming books: Like I said, I'll keep writin' 'em.
Colophon: All the rest.

A giant in a tailcoat. His head is a stylized, glittering Bitcoin, sporting a comically tiny tophat. He holds a magnifying glass and uses it to examine a tiny, swaybacked donkey in the livery of the Democratic Party mascota free . The background is a halftoned Maricopa County federal election ballot.

The largest campaign finance violation in US history (permalink)

Earlier this month, some of the richest men in Silicon Valley, led by Marc Andreesen and Ben Horowitz (the billionaire VCs behind Andreesen-Horowitz) announced that they would be backing Trump with endorsements and millions of dollars:

https://www.forbes.com/sites/dereksaul/2024/07/16/trump-lands-more-big-tech-backers-billionaire-venture-capitalist-andreessen-joins-wave-supporting-former-president/

Predictably, this drew a lot of ire, which Andreesen tried to diffuse by insisting that his support "doesn’t have anything to do with the big issues that people care about":

https://www.theverge.com/2024/7/24/24204706/marc-andreessen-ben-horowitz-a16z-trump-donations

In other words, the billionaires backing Trump weren't doing so because they supported the racism, the national abortion ban, the attacks on core human rights, etc. Those were merely tradeoffs that they were willing to make to get the parts of the Trump program they do support: more tax-cuts for the ultra-rich, and, of course, free rein to defraud normies with cryptocurrency Ponzi schemes.

Crypto isn't "money" – it is far too volatile to be a store of value, a unit of account, or a medium of exchange. You'd have to be nuts to get a crypto mortgage when all it takes is Elon Musk tweeting a couple emoji to make your monthly mortgage payment double.

A thing becomes moneylike when it can be used to pay off a bill for something you either must pay for, or strongly desire to pay for. The US dollar's moneylike property comes from the fact that hundreds of millions of people need dollars to pay off the IRS and their state tax bills, which means that they will trade labor and goods for dollars. Even people who don't pay US taxes will accept dollars, because they know they can use them to buy things from people who do have a nondiscretionary bill that can only be paid in dollars.

Dollars are also valuable because there are many important commodities that can only – or primarily – be purchased with them, like much of the world's oil supply. The fact that anyone who wants to buy oil has a strong need for dollars makes dollars valuable, because they will sell labor and goods to get dollars, not because they need dollars, but because they need oil.

There's almost nothing that can only be purchased with crypto. You can procure illegal goods and services in the mistaken belief that this transaction will be durably anonymous, and you can pay off ransomware creeps who have hijacked your personal files or all of your business's data:

https://locusmag.com/2022/09/cory-doctorow-moneylike/

Web3 was sold as a way to make the web more "decentralized," but it's best understood as an effort to make it impossible to use the web without paying crypto every time you click your mouse. If people need crypto to use the internet, then crypto whales will finally have a source of durable liquidity for the tokens they've hoarded:

https://pluralistic.net/2022/09/16/nondiscretionary-liabilities/#quatloos

The Web3 bubble was almost entirely down to the vast hype machine mobilized by Andreesen-Horowitz, who bet billions of dollars on the idea and almost single-handedly created the illusion of demand for crypto. For example, they arranged a $100m bribe to Kickstarter shareholders in exchange for Kickstarter pretending to integrate "blockchain" into its crowdfunding platform:

https://finance.yahoo.com/news/untold-story-kickstarter-crypto-hail-120000205.html

Kickstarter never ended up using the blockchain technology, because it was useless. Their shareholders just pocketed the $100m while the company weathered the waves of scorn from savvy tech users who understood that this was all a shuck.

Look hard enough at any crypto "success" and you'll discover a comparable scam. Remember NFTs, and the eye-popping sums that seemingly "everyone" was willing to pay for ugly JPEGs? That whole market was shot through with "wash-trading" – where you sell your asset to yourself and pretend that it was bought by a third party. It's a cheap – and illegal – way to convince people that something worthless is actually very valuable:

https://mailchi.mp/brianlivingston.com/034-2#free1

Even the books about crypto are scams. Chris Dixon's "bestseller" about the power of crypto, Read Write Own, got on the bestseller list through the publishing equivalent of wash-trading, where VCs with large investments in crypto bought up thousands of copies and shoved them on indifferent employees or just warehoused them:

https://pluralistic.net/2024/02/15/your-new-first-name/#that-dagger-tho

The fact that crypto trades were mostly the same bunch of grifters buying shitcoins from each other, while spending big on Superbowl ads, bribes to Kickstarter shareholders, and bulk-buys of mediocre business-books was bound to come out someday. In the meantime, though, the system worked: it convinced normies to gamble their life's savings on crypto, which they promptly lost (if you can't spot the sucker at the table, you're the sucker).

There's a name for this: it's called a "bezzle." John Kenneth Galbraith defined a "bezzle" as "the magic interval when a confidence trickster knows he has the money he has appropriated but the victim does not yet understand that he has lost it." All bezzles collapse eventually, but until they do, everyone feels better off. You think you're rich because you just bought a bunch of shitcoins after Matt Damon told you that "fortune favors the brave." Damon feels rich because he got a ton of cash to rope you into the con. Crypto.com feels rich because you took a bunch of your perfectly cromulent "fiat money" that can be used to buy anything and traded it in for shitcoins that can be used to buy nothing:

https://theintercept.com/2022/10/26/matt-damon-crypto-commercial/

Andreesen-Horowitz were masters of the bezzle. For them, the Web3 bet on an internet that you'd have to buy their shitcoins to use was always Plan B. Plan A was much more straightforward: they would back crypto companies and take part of their equity in huge quantities of shitcoins that they could sell to "unqualified investors" (normies) in an "initial coin offering." Normally, this would be illegal: a company can't offer stock to the general public until it's been through an SEC vetting process and "gone public" through an IPO. But (Andreesen-Horowitz argued) their companies' "initial coin offerings" existed in an unregulated grey zone where they could be traded for the life's savings of mom-and-pop investors who thought crypto was real because they heard that Kickstarter had adopted it, and there was a bestselling book about it, and Larry David and Matt Damon and Spike Lee told them it was the next big thing.

Crypto isn't so much a financial innovation as it is a financial obfuscation. "Fintech" is just a cynical synonym for "unregulated bank." Cryptocurrency enjoys a "byzantine premium" – that is, it's so larded with baffling technical nonsense that no one understands how it works, and they assume that anything they don't understand is probably incredibly sophisticated and great ("a pile of shit this big must have pony under it somewhere"):

https://pluralistic.net/2022/03/13/the-byzantine-premium/

There are two threats to the crypto bezzle: the first is that normies will wise up to the scam, and the second is that the government will put a stop to it. These are correlated risks: if the government treats crypto as a security (or worse, a scam), that will put severe limits on how shitcoins can be marketed to normies, which will staunch the influx of real money, so the sole liquidity will come from ransomware payments and transactions with tragically overconfident hitmen and drug dealers who think the blockchain is anonymous.

To keep the bezzle going, crypto scammers have spent the past two election cycles flooding both parties with cash. In the 2022 midterms, crypto money bankrolled primary challenges to Democrats by absolute cranks, like the "effective altruist" Carrick Flynn ("effective altruism" is a crypto-affiliated cult closely associated with the infamous scam-artist Sam Bankman-Fried). Sam Bankman-Fried's super PAC, "Protect Our Future," spent $10m on attack-ads against Flynn's primary opponent, the incumbent Andrea Salinas. Salinas trounced Flynn – who was an objectively very bad candidate who stood no chance of winning the general election – but only at the expense of most of the funds she raised from her grassroots, small-dollar donors.

Fighting off SBF's joke candidate meant that Salinas went into the general election with nearly empty coffers, and she barely squeaked out a win against a GOP nightmare candidate Mike Erickson – a millionaire Oxy trafficker, drunk driver, and philanderer who tricked his then-girlfriend by driving her to a fake abortion clinic and telling her that it was a real one:

https://pluralistic.net/2022/10/14/competitors-critics-customers/#billionaire-dilletantes

SBF is in prison, but there's no shortage of crypto millions for this election cycle. According to Molly White's "Follow the Crypto" tracker, crypto-affiliated PACs have raised $185m to influence the 2024 election – more than the entire energy sector:

https://www.followthecrypto.org/

As with everything "crypto," the cryptocurrency election corruption slushfund is a bezzle. The "Stand With Crypto PAC" claims to have the backing of 1.3 million "crypto advocates," and Reuters claims they have 440,000 backers. But 99% of the money claimed by Stand With Crypto was actually donated to "Fairshake" – a different PAC – and 90% of Fairshake's money comes from a handful of corporate donors:

https://www.citationneeded.news/issue-62/

Stand With Crypto – minus the Fairshake money it falsely claimed – has raised $13,690 since April. That money came from just seven donors, four of whom are employed by Coinbase, for whom Stand With Crypto is a stalking horse. Stand With Crypto has an affiliated group (also called "Stand With Crypto" because that is an extremely normal and forthright way to run a nonprofit!), which has raised millions – $1.49m. Of that $1.49m, 90% came from just four donors: three cryptocurrency companies, and the CEO of Coinbase.

There are plenty of crypto dollars for politicians to fight over, but there are virtually no crypto voters. 69-75% of Americans "view crypto negatively or distrust":

https://www.pewresearch.org/short-reads/2023/04/10/majority-of-americans-arent-confident-in-the-safety-and-reliability-of-cryptocurrency/

When Trump keynotes the Bitcoin 2024 conference and promises to use public funds to buy $1b worth of cryptocoins, he isn't wooing voters, he's wooing dollars:

https://www.wired.com/story/donald-trump-strategic-bitcoin-stockpile-bitcoin-2024/

Wooing dollars, not crypto. Politicians aren't raising funds in crypto, because you can't buy ads or pay campaign staff with shitcoins. Remember: unless Andreesen-Horowitz manages to install Web3 crypto tollbooths all over the internet, the industries that accept crypto are ransomware, and technologically overconfident hit-men and drug-dealers. To win elections, you need dollars, which crypto hustlers get by convincing normies to give them real money in exchange for shitcoins, and they are only funding politicians who will make it easier to do that.

As a political matter, "crypto" is a shorthand for "allowing scammers to steal from working people," which makes it a very Republican issue. As Hamilton Nolan writes, "If the Republicans want to position themselves as the Party of Crypto, let them. It is similar to how they position themselves as The Party of Racism and the Party of Religious Zealots and the Party of Telling Lies about Election Fraud. These things actually reflect poorly on them, the Republicans":

https://www.hamiltonnolan.com/p/crypto-as-a-political-characteristic

But the Democrats – who are riding high on the news that Kamala Harris will be their candidate this fall – have decided that they want some of that crypto money, too. Even as crypto-skeptical Dems like Jamaal Bowman, Cori Bush, Sherrod Brown and Jon Tester see millions from crypto PACs flooding in to support their primary challengers and GOP opponents, a group of Dem politicians are promising to give the crypto industry whatever it wants, if they will only bribe Democratic candidates as well:

https://subscriber.politicopro.com/f/?id=00000190-f475-d94b-a79f-fc77c9400000

Kamala Harris – a genuinely popular candidate who has raised record-shattering sums from small-dollar donors representing millions of Americans – herself has called for a "reset" of the relationship between the crypto sector and the Dems:

https://archive.is/iYd1C

As Luke Goldstein writes in The American Prospect, sucking up to crypto scammers so they stop giving your opponents millions of dollars to run attack ads against you is a strategy with no end – you have to keep sucking up to the scam, otherwise the attack ads come out:

https://prospect.org/politics/2024-07-31-crypto-cash-affecting-democratic-races/

There's a whole menagerie of crypto billionaires behind this year's attempt to buy the American government – Andreesen and Horowitz, of course, but also the Winklevoss twins, and this guy, who says we're in the midst of a "civil war" and "anyone that votes against Trump can die in a fucking fire":

https://twitter.com/molly0xFFF/status/1813952816840597712/photo/1

But the real whale that's backstopping the crypto campaign spending is Coinbase, through its Fairshake crypto PAC. Coinbase has donated $25,000,000 to Fairshake, which is a lot:

https://www.coinbase.com/blog/how-to-get-regulatory-clarity-for-crypto

But $25m isn't merely a large campaign contribution: it appears to be the largest illegal campaign contribution in history, "by far," a fact that was sleuthed out by Molly White:

https://www.citationneeded.news/coinbase-campaign-finance-violation/

At issue is the fact that Coinbase is bidding to be a US federal contractor: specifically, they want to manage the crypto wallets that US federal cops keep seizing from crime kingpins. Once Coinbase threw its hat into the federal contracting ring, it disqualified itself from donating to politicians or funding PACs:

Campaign finance law prohibits federal government contractors from making contributions, or promising to make contributions, to political entities including super PACs like Fairshake.

https://www.fec.gov/help-candidates-and-committees/federal-government-contractors/

Previous to this, the largest ever illegal campaign contribution appears to be Marathon Petroleum Company's 2022 bribe to GOP House and Senate super PACs, a mere $1m, only 4% of Coinbase's bribe.

I'm with Nolan on this one. Let the GOP chase millions from billionaires everyone hates who expect them to promote a scam that everyone mistrusts. The Dems have finally found a candidate that people are excited about, and they're awash in money thanks to small amounts contributed by everyday Americans. As AOC put it:

They've got money, but we've got people. Dollar bills don't vote. People vote.

https://www.popsugar.com/news/alexandria-ocasio-cortez-dnc-headquarters-climate-speech-47986992

Hey look at this (permalink)

US border agents must get warrant before cell phone searches, federal court rules https://techcrunch.com/2024/07/29/us-border-agents-must-get-warrant-before-cell-phone-searches-federal-court-rules/
How Does OpenAI Survive? https://www.wheresyoured.at/to-serve-altman/
It's Not Just UberEats: Why Is ALL Food Delivery Worse Now? https://www.youtube.com/watch?v=R4vZbt_6RD0

A Wayback Machine banner.

This day in history (permalink)

#20yrsago MSFT buys spam company, sues the competition, silences political activists https://web.archive.org/web/20040803201355/http://www.eff.org/deeplinks/archives/001774.php

#20yrsago Genome of human zit sequenced https://web.archive.org/web/20040803105000/http://www.newscientist.com/news/news.jsp?id=ns99996222

#15yrsago Annie Lennox gives her masters to mashup artist DJ Earworm https://web.archive.org/web/20090717083944/http://djearworm.com/annie-lennox-backwards-forwards.htm

#15yrsago High school student suing Amazon over book-deletions which rendered his study-notes useless

#15yrsago Six String Nation, the chronicle of Voyageur, a remarkable, unifying, synthesizing Canadian guitar https://memex.craphound.com/2009/07/30/six-string-nation-the-chronicle-of-voyageur-a-remarkable-unifying-synthesizing-canadian-guitar/

#15yrsago HOWTO make a prison soldering iron https://web.archive.org/web/20090803185647/http://prisonproxy.blogspot.com/2009/07/how-its-made-soldering-irons.html

#15yrsago Canadians vow mass-mooning of US spy-blimp https://web.archive.org/web/20090805142350/http://www.theobserver.ca/ArticleDisplay.aspx?e=1680060

#15yrsago Rich NY town tries to shut down children’s library because poor kids might use it <a "="" 2019="" cryptographic-attacks-a-guide-for-the-perplexed="" href="https://web.archive.org/web/20090803022816/http://www.schoollibraryjournal.com/article/CA6672927.html</a>

#5yrsago Fascinating, accessible guide to cryptographic attacks, from brute-force to POODLE and beyond <a href=" https:="" research.checkpoint.com="">https://research.checkpoint.com/2019/cryptographic-attacks-a-guide-for-the-perplexed/

#5yrsago Cop says Amazon told him they had “partnered” with 200 US police forces to sell and tap into Ring surveillance doorbells https://www.vice.com/en/article/j5wyjy/amazon-told-police-it-has-partnered-with-200-law-enforcement-agencies

#5yrsago Affluent parents surrender custody of their kids to “scam” their way into needs-based college scholarships https://www.propublica.org/article/university-of-illinois-financial-aid-fafsa-parents-guardianship-children-students

#5yrsago The darkest SEO: forging judges’ signatures on fake court orders to scrub negative Google results https://web.archive.org/web/20190726010633/https://www.cbsnews.com/news/online-reputation-management-cbs-news-investigation-finds-fraudulent-court-orders-used-to-change-google-search/

#5yrsago Zero Sum Game: action-packed sf thriller about a ninja hero whose superpower is her incredible math ability https://memex.craphound.com/2019/07/30/zero-sum-game-action-packed-sf-thriller-about-a-ninja-hero-whose-superpower-is-her-incredible-math-ability/

#1yrago When the app turns you into a robo-scab https://pluralistic.net/2023/07/30/computer-says-scab/#instawork

Upcoming appearances (permalink)

A photo of me onstage, giving a speech, holding a mic.

Launch for Adam Greenfield's Lifehouse at Page Against the Machine (Long Beach), Aug 3
https://www.facebook.com/events/837938428323731
EFF Charity Poker Tournament (Defcon, Las Vegas, Horseshoe Poker Room), Aug 9 12h
https://www.eff.org/deeplinks/2024/06/betting-your-digital-rights-eff-benefit-poker-tournament-def-con-32
Bricked & Abandoned: How To Keep The IoT From Becoming An Internet of Trash (Defcon, Las Vegas, Track 1), Aug 9 17h
https://info.defcon.org/event/?id=54844
Disenshittify or die! How hackers can seize the means of computation and build a new, good internet that is hardened against our asshole bosses' insatiable horniness for enshittification (Defcon, Las Vegas, Track 1), Aug 10 12h
https://info.defcon.org/event/?id=54861
Launch for Madeline Ashby's Glass Houses at Chevalier's Books (LA), Aug 16
https://www.eventbrite.com/e/book-talk-madeline-ashbys-glass-houses-tickets-965286486867
Disenshittify or die! (Burning Man, Palenque Norte, 7&E), Aug 27, 13h
Talking caterpillar Q&A (Burning Man, Liminal Labs, 830&C), Aug 28, 12h
Albacon (Albany/remote), Sep 13-15
https://albacon.org/2024/
TusCon (Tucson), Nov 8-10
https://tusconscificon.com/

Recent appearances (permalink)
The Paradigm Shift
https://paradigm-shift-on-4zzz.pinecast.co/episode/dbf12eaf/tech-criticism-with-cory-doctorow
How To Fix The Internet (EFF)
https://www.eff.org/deeplinks/2024/06/podcast-episode-fighting-enshittification
Big Tech and the News (Tech Policy Press)
https://www.techpolicy.press/big-tech-and-the-news/

A grid of my books with Will Stahle covers..

Latest books (permalink)

The Bezzle: a sequel to "Red Team Blues," about prison-tech and other grifts, Tor Books (US), Head of Zeus (UK), February 2024 (the-bezzle.org). Signed, personalized copies at Dark Delicacies (https://www.darkdel.com/store/p3062/Available_Feb_20th%3A_The_Bezzle_HB.html#/).
"The Lost Cause:" a solarpunk novel of hope in the climate emergency, Tor Books (US), Head of Zeus (UK), November 2023 (http://lost-cause.org). Signed, personalized copies at Dark Delicacies (https://www.darkdel.com/store/p3007/Pre-Order_Signed_Copies%3A_The_Lost_Cause_HB.html#/)
"The Internet Con": A nonfiction book about interoperability and Big Tech (Verso) September 2023 (http://seizethemeansofcomputation.org). Signed copies at Book Soup (https://www.booksoup.com/book/9781804291245).
"Red Team Blues": "A grabby, compulsive thriller that will leave you knowing more about how the world works than you did before." Tor Books http://redteamblues.com. Signed copies at Dark Delicacies (US): and Forbidden Planet (UK): https://forbiddenplanet.com/385004-red-team-blues-signed-edition-hardcover/.
"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?sk=f6cd10e54e20a07d4c6d0f3ac011af6b) (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#/.

A cardboard book box with the Macmillan logo.

Upcoming books (permalink)

Picks and Shovels: a sequel to "Red Team Blues," about the heroic era of the PC, Tor Books, February 2025
Unauthorized Bread: a middle-grades graphic novel adapted from my novella about refugees, toasters and DRM, FirstSecond, 2025

Colophon (permalink)

Today's top sources:

Currently writing:

Enshittification: a nonfiction book about platform decay. Today's progress: 778 words (29908 words total).
A Little Brother short story about DIY insulin PLANNING
Picks and Shovels, a Martin Hench noir thriller about the heroic era of the PC. FORTHCOMING TOR BOOKS JAN 2025
Vigilant, Little Brother short story about remote invigilation. FORTHCOMING ON TOR.COM
Spill, a Little Brother short story about pipeline protests. FORTHCOMING ON TOR.COM

Latest podcast: Unpersoned https://craphound.com/news/2024/07/29/unpersoned/

This work – excluding any serialized fiction – is licensed under a Creative Commons Attribution 4.0 license. That means you can use it any way you like, including commercially, provided that you attribute it to me, Cory Doctorow, and include a link to pluralistic.net.

https://creativecommons.org/licenses/by/4.0/

Quotations and images are not included in this license; they are included either under a limitation or exception to copyright, or on the basis of a separate license. Please exercise caution.

How to get Pluralistic:

Blog (no ads, tracking, or data-collection):

Pluralistic.net

Newsletter (no ads, tracking, or data-collection):

https://pluralistic.net/plura-list

Mastodon (no ads, tracking, or data-collection):

https://mamot.fr/@pluralistic

Medium (no ads, paywalled):

https://doctorow.medium.com/

Twitter (mass-scale, unrestricted, third-party surveillance and advertising):

https://twitter.com/doctorow

Tumblr (mass-scale, unrestricted, third-party surveillance and advertising):

https://mostlysignssomeportents.tumblr.com/tagged/pluralistic

"When life gives you SARS, you make sarsaparilla" -Joey "Accordion Guy" DeVilla

system · 2024-08-15T17:55:20.791Z

This topic was automatically closed after 15 days. New replies are no longer allowed.