- Bankruptcy and elite impunity: The Sacklers offer billions of reasons to overthrow the system.
- Stories from Black women's customer service hell: The women who answer the phone when you call Disney, Airbnb, Carnival and others.
- Tracking you with accelerometer signatures: Yet another latent unique identifier with horrifying consequences.
- Unauthorized cups: RFID-equipped disposable cups deny water to homeless people.
- This day in history: 2001, 2006, 2011, 2016, 2020
- Colophon: Recent publications, upcoming/recent appearances, current writing projects, current reading
Bankruptcy and elite impunity (permalink)
I've been writing about the Sackler crime-family for years, as a new generation turned the family's benzo empire into a opioid powerhouse, exceeding the Rockefeller family fortune by pushing Oxycontin and jumpstarting an epidemic that has claimed 800,000 American lives.
The Sacklers are canny: for years, they laundered their reputation through elite philanthropy, using blood money to paint their names on the world's great cultural institutions and spending comparable sums to threaten journalists and critics into silence about their crimes.
But no one can run across a river on the backs of alligators forever – eventually, even the fleetest grifter will lose a leg. The Sacklers eventually came into the crosshairs of district attorneys, federal enforcers, bereaved families and recovering addicts.
Outwardly, the family continued to maintain their innocence and assure us that they would prevail in court. Privately, they laundered billions into offshore financial secrecy havens.
Every big con needs a blow-off, a final trick that lets the crook wriggle out of the gator's jaws. For the Sacklers, that was a breathtaking capture of the bankruptcy system, in the person of Judge Robert Drain of the SDNY, the American judiciary's top billionaire enabler.
The gambit worked. Drain will unilaterally settle all the Sacklers' victims claims for $4b, leaving the Sacklers to keep $6.7b in blood money. No Sackler will go to jail. No Sackler will face financial hardship. Key documents will never be unsealed.
Judge Drain is embracing the monstrous ideology of Josef Stalin: "Great crimes require great forgiveness." The Sacklers cost America more lives than coronavirus – and their punishment is a $6.7b fortune.
This blow-off has attracted a lot of press attention to the way that the US bankruptcy system has been captured by the ultra-rich, who "judge-shop" for enablers like Bob Drain.
The best writing on the subject I've read so far is Maureen Tkacik's "How Do You Solve a Problem Like the Sacklers?" for The American Prospect.
Tkacik puts the Sacklers' gambit in context, showing how it is just the latest act of a longrunning shadow-play that has quietly demolished the country's economy and ruined countless lives.
Long before the Sacklers were calling upon Bob Drain to legitimize their murderous legacy, the good judge was servicing the financial criminals of the private equity world, allowing looters to steal from investors, workers and suppliers.
The private equity playbook often puzzles people who first hear about it. How can "investors" get away with buying a company, selling off all its vital assets, borrowing heavily against it, then declare bankruptcy and walk away from their creditors with billions?
The answer is the US bankruptcy system and the tiny number of judges who oversee large corporate bankruptcies, whose supervision can be had by any PE grifter merely by renting an empty office in their district and declaring it to be your headquarters.
If this sounds familiar, it's because it's a pathology in all areas of the judiciary. Think of the Eastern District of Texas, where judges and juries never met a patent troll they didn't find in favor of.
That's why Marshall, TX is full of empty buildings serving as nominal HQs to hundreds of companies – and why companies that make "things" as opposed to "lawsuits" (like Samsung) court locals by installing Texas's only outdoor, year-round ice-rink.
The total claims against the Sacklers add up to $2t, but they're only going to pay $4b. Though the sums are large, the pattern is an old one, and familiar to private equity watchers – after all, 3 in 10 US bankruptcies involve a PE firm flushing a company it ruined.
Tkacik reminds us of the last time the bankruptcy system breached public consciousness, when PE giant Apollo Global Management trashed Caesars Palace and asked a bankruptcy judge to let them keep the billions they embezzled.
Apollo and its partner David Sambur were named in a racketeering suit, which revealed Sambur's looting of billions from the company prior to the bankruptcy, a display of shameless larceny that included buying a $15m Manhattan home.
Like the Sacklers, Sambur put his evil plans in writing, emailing colleagues Powerpoint presentations detailing his scheme to "have our cake and eat it too" by taking on and then defaulting on vast debts.
Sambur might be forgiven for his brazenness, because he was only repeating a stunt that Judge Drain himself had previously greenlit, when Sambur bought, looted and destroyed Momentive, a silicone manufacturer.
Sambur borrowed 15 times Momentive's earnings and defaulted, laying off half the company's workers and using Drain's bankruptcy court to force a $300m loss on "secured" bondholders, shielding himself and the company from liability and retaining control of the firm.
As Tkacik writes, America's captured bankruptcy judges are "steeped in legal theory that casts the invention of the limited liability corporation alongside that of the steam engine as a paradigmatic development in the pursuit of said prosperity."
For these judges, impunity is a feature, not a bug – a way to embolden "risk takers." And while the economists who espouse this theory wring their hands about the "moral hazard" of public health care and housing, they're oddly sanguine about limited liability.
Small wonder that PE-owned companies are 10 times likelier than traditionally structured companies to declare bankruptcy – bankruptcies that free looters from both their financial and moral obligations to the rest of us.
Whether PE murdered your grandmother by buying her care-home and putting each worker in charge of 30 seniors:
or poisoned your kids by filling your neighborhood with carcinogens:
limited liability wipes the slate clean.
But while PE loves buying up and looting real businesses, they're even more fond of buying up criminal enterprises and looting them. Take Millennium Health, a con that stole millions from Medicare and Medicaid.
Millennium's founder, a former general contractor turned drug-testing kingpin named James Slattery, found kindred spirits in Voya Capital, who bought into the company and then helped it borrow $1.8b, $1.3b of which went straight into Voya's pockets.
The company paid $256m to settle its fraud lawsuits. It got a full release from any liability, as did Voya. Voya kept $1.3b. Slattery (whose LLC was called "Pissed Away") kept hundreds of millions, and his collection of 40 vintage airplanes.
Tkacik points out the lawyer who represented Millennium in its bankruptcy deal is now a federal bankruptcy judge himself – the honorable John T Dorsey, of the Delaware bankruptcy court. Lucky for us, Delaware is hardly known for its financial crimes.
Millennium's crime bosses all fared well. Millennium CEO Ronald A Rittenmeyer went on to take the helm at Tenet Healthcare, a company famous for kidnapping people from AA meetings, having them declared incompetent, and billing for their imprisonment.
Ironically, Tenet stands to lose big in the Sacklers' bankruptcy (don't worry, it still got a fortune in federal CARES dough and flipped two of its community hospitals to PE companies that debt-loaded them and took them through bankruptcy to shed that debt).
As the Sacklers planned their blowoff, they consulted with both PE companies (for tips on spinning off profitable units to put them out of creditors' reach, and advice on cashing in on the epidemic they started with addiction treatment businesses), and McKinsey.
All of this criming did not escape Elisabeth Warren's notice, who used it as occasion to launch one of her signature 2019 election campaign plans, the Stop Wall Street Looting Act (SWSLA), which drew outraged squeals from the PE industry.
For all its detail, the SWSLA would not have prevented the Sacklers' crimes – nor would it stop the copycats at blue chip firms like Johnson and Johnson and Apple, who have used their tactics to perfect what Tkacik calls "legalized embezzlement."
It really looks like the Sacklers will keep billions, and like Judge Drain will continue to hear cases like theirs. But Warren learned from 2019, and has introduced new, stronger legislation, the Nondebtor Release Prohibition Act, which would block deals like this for good.
Elite impunity is rotting America and threatening the planet itself.
There's nothing it doesn't touch.
Simone Biles is a survivor of Larry Nasser's abuse. The claims of Nasser's survivors were wiped out by a bankruptcy judge.
Stories from Black women's customer service hell (permalink)
The internet age has certainly transformed journalism; these days we mostly think about investigative journalism's decline, but there are digital investigative outlets that shine like diamonds.
I'm thinking here about Propublica.
Propublica's Justin Elliott and Paul Kiel wrote a series of blockbuster stories about the monopolist Intuit, a business organized as a cult around its then-CEO Brad Smith, engaged in decades' worth of dirty tricks to kill free, IRS tax-prep services.
Not only did they stay with this story for months on end, digging up incredible stories of corruption, they also shamed the IRS and spurred state AGs into investigating the company.
Then a funny thing happened: Intuit customer service whistleblower revealed another scandal, one that sprawled outside of Intuit and spilled over into the world's largest blue-chip companies from Disney to Airbnb to Comcast and more.
That was the story of Arise, yet another cult-like business that you have almost certainly interacted with, without knowing it.
On its surface, Arise is an outsource customer service company. Other businesses pay it to staff their phones and answer customer queries.
But Arise is many other things. For one thing, it's a pyramid scheme: the people who work for it – disproportionately Black women – are not classed as employees, but as "contractors." They are paid for recruiting their friends to work for it.
That might sound like a nice way to help a business staff its call-centers, but you need to understand that Arise has no call centers or staff – its workers take calls from their homes.
Those workers aren't employees – they're misclassified as "independent contractors."
If you want to work for Arise, you have to pay them for the privilege. Not only do you have to buy a computer and phone, you have to pay to get trained for each firm whose calls you'll be taking.
If you quit, you have to pay Arise for "early termination" of your contract.
Believe it or not, those are the best parts of working for Arise. When you are an Arise worker, you can be terminated without notice or cause – forfeiting the money and time you spent for training and equipment. You can get fired by Arise itself, or by any of its customers.
Reps from Arise and its customers listen in on your calls. If your children make noise in the background, you can lose everything. Same if your neighbor's dog starts barking. Forget about running a fan or air conditioner – the noise is "unprofessional."
The Arise story prompted outrage from the public – and it sent Propublica's investigators deeper into the story. They documented how the Department of Labor knew about Arise's illegal and abusive conduct, and let them get away with it for years.
And here's the most amazing part: Propublica never stopped reporting on this story. This month, Ariana Tobin, Ken Armstrong and Justin Elliott worked with Brooke Stephenson to tell Arise workers' stories in their own words.
These stories reveal Arise's lies about its working conditions, as workers describe how they were unequivocally ordered never to hang up on customers, even in the face of death and rape threats, racist abuse, and sexual harassment.
Arise may tell regulators and reporters that its workers are empowered to hang up the phone if the man on the other end is masturbating, but the women who endure this abuse tell a very different story:
The writers connect Arise's working conditions with the promises made by temp agencies for generations – companies like "Kelly Girl," who promised a disposable, attractive, pliable and hardworking woman whom a company could work like a government mule and then discard.
Arise preys on the economically precarious and traps their whole families into literal conspiracies of silence, as spouses and children tiptoe around their homes to spare their mothers the economic catastrophe of being summarily fired.
The powerful words of the women answering these calls are a reminder of the human cost of systemic racism and sexism, and the willingness of the world's largest companies to exploit it.
While this is a systemic problem, there are ways you can individually help the people you speak to, beyond being courteous and decent and understanding (this being the minimum we all owe one another).
I. Complete the end-of-call survey. Workers can get fired and lose their investment in equipment and training if the people they help don't do this.
II. After text-based service interactions, reply "No thank you," after the rep asks "is there anything else I can help you with?" Workers are punished if you close your browser without answering this question.
III. Be organized with all relevant information in hand before you call. Workers are penalized for calls that last too long – even if the reason for the delay is that the caller took forever looking up a key piece of information.
Yes, it's unfair that workers are penalized if you don't play along with Arise's idiotic customer service metrics, but the unfairness accrues disproportionately to workers, and you can shoulder some of that burden.
I'm grateful to Propublica for continuing to bring us this story – and doubly glad to be an annual donor to this charitable nonprofit.
Tracking you with accelerometer signatures (permalink)
Adding sensors to our computers revolutionized them. I remember buying my first computer paddles, my first mic, my first webcam, and the incredible new features unlocked by giving computers a way to sense and respond to the physical world.
Today, our devices are stuffed with sensors to beggar the imagination. My latest phone has four cameras, multiple mics, thermal sensors, and, of course, an accelerometer that lets the system measure how it's moving from moment to moment.
Device security and privacy models treat cameras and mics as sensitive and control how apps access them, but accelerometers are treated as utilities, the kind of thing that apps should be able to tap into at will without risk to the user.
That's a bad assumption.
In "Privacy Implications of Accelerometer Data: A Review of Possible Inferences," a trio of researchers from the Technical University of Berlin document the surprising ways in which acclerometer data can be used to infer sensitive facts about users.
Co-author Jacob Leon Kröger did a great job of breaking down the team's findings, and emphasizing the gap between device permission models and the kinds of wide-ranging inferences that accelerometers enable.
He cites "patents and literature of diverse disciplines" that reveal users' "daily routines, physical activities, social interactions, health condition, gender, age, and emotional state" just by analyzing accelerometer data.
The way you move has a sufficiently unique signature that accelerometers can identify you as the person carrying a device. The same techniques can infer your driving style, whether you are intoxicated, and, through dead reckoning, where you are – even without a GPS fix.
Alarmingly, accelerometers can be repurposed as crude mics, translating sound vibrations into speech and keyword detection.
Accelerometer analysis is imperfect and computationally intensive, but it's still worrying, especially in light of the lack of protection for accelerometer data in mobile OSes.
The authors are skeptical that an "informed consent" model will fix this, in part because accelerometer data has a lot of nonobvious uses (correcting photo jitter, say), but also because of the well-theorized flaws in digital consent:
Kröger refers us to Sec 7 of another paper he co-authored on consent and privacy, "The myth of individual control," for some theoretical ways of striking a balance between privacy and functionality.
This section rejects "self-management" of privacy settings as ineffective and proposes things like institutionally administered "social impact assessments" that evaluate "the consequences of information use and misuse."
Kröger admits "that most existing ideas in this area are still vague and hypothetical" and calls for "urgent" further research (that sounds right to me, too).
He concludes by pointing out that there are many other potentially compromising inference techniques latent in all sensor data, and suggests his paper, "Privacy Implications of Voice and Speech Analysis."
Unauthorized cups (permalink)
Back in 2019, visitors to the Universal Studios theme park in Florida started to post to social media about their experience with the RFID-chipped paper cups they got to use with the park's self-serve soda fountains:
Getting nickle-and-dimed in a themepark that charges whopping sums for admission is frustrating, sure, but as Daniel Danger wrote at the time, the noteworthy part was in the clumsy-yet-detailed way that this disciplinary technology was deployed.
Not only did it impose all kinds of rules about how your "unlimited" cup could be used (you had to wait 120 seconds before refilling it, etc), but if you violated those rules, a "robot voice" barked a denial at you.
It was Orwell-by-way-of-Gilliam – an absurd internet of shit dystopia moment at the fun park.
The technology came from "Validfill," who produced a spiffy and monumentally unself-aware video to boast about their system's use at Universal.
Corporate America never met a terrible idea it didn't love, which is how Validfill's creepy RFID-chipped cups have proliferated outside of the gates of Universal.
I've lost track of the number of people who've forwarded @AnemoneAndMe's viral tweet about their encounter with it in the wild.
They call it "anti homeless DRM," and not for nothing – one of the things these self-serve soda machines dispense is drinking water, often replacing public water fountains.
Chipped cups enable companies like McDonald's to prevent homeless people – and other marginalized people who still need to drink water because all humans need to drink water – from drinking their water.
Many of the people who've tagged me to tell me about this latest sensation cited my story Unauthorized Bread, an internet-of-shit technothriller that features heroic acts of appliance jailbreaking:
Unauthorized Bread is a parable about disciplinary technology and the shitty technology adoption curve, whereby the worst technological ideas are normalized by applying them to people whose complaints aren't taken seriously – refugees, homeless people, prisoners, students.
As these bad ideas are normalized, they travel up the privilege gradient, until they become ubiquitous – 20 years ago, if a CCTV observed your dinner hour, you were in a supermax prison. Today, it just means you bought home automation from Google, Apple or Amazon.
I'm both happy and sad about Unauthorized Bread. As a story, it's certainly given people a framework and vocabulary for talking about the proliferation of disciplinary technologies around them, and the unequal distribution of that terrible future.
But honestly, it's a little demoralizing to see how often Unauthorized Bread is applicable to another ghastly technological idea. Cyberpunk is a warning, not a suggestion.
This day in history (permalink)
#20yrsago How to help someone use a computer https://pages.gseis.ucla.edu/faculty/agre/how-to-help.html
#20yrsago Declines in advertising in major magazines in the first six months of 2001 https://web.archive.org/web/20010714104017/https://www.magazine.org/news/press_releases/01_June_pib_ytd.html
#15yrsago Cingular threatens Consumerist over “how to discriminate” docs https://consumerist.com/consumer/cd/cingular-wants-to-yank-docs-from-consumerist-190501.php
#10yrsago Batman logo in equation form https://www.reddit.com/r/pics/comments/j2qjc/do_you_like_batman_do_you_like_math_my_math/
#10yrsago Bill Nye explains to Fox News why lunar volcanoes don’t disprove anthropogenic global warming https://web.archive.org/web/20110924185725/https://www.mediamatters.org/mmtv/201107280007
#10yrsago House Committee passes bill requiring your ISP to spy on every click and keystroke you make online and retain for 12 months https://www.eff.org/deeplinks/2011/07/house-committee-approves-bill-mandating-internet
#10yrsago Vindictive WalMart erroneously accuses couple of shoplifting, has husband deported, wife fired, costs them house and car https://web.archive.org/web/20111002102637/https://www.courthousenews.com/2011/07/26/38455.htm
#10yrsago Man with camera in park who fled angry parent sought by police (turns out he was taking pix of his grandson) https://web.archive.org/web/20110829052009/www.pixiq.com/article/man-photographing-grandkid-in-park-deemed-suspicious
#10yrsgo Norwegian PM refuses to let terrorist attacks drive his country to intolerance and paranoid “security” https://www.nytimes.com/2011/07/28/world/europe/28norway.html
#10yrsago Copyright extortionist ripped off his competitor’s threatening material https://torrentfreak.com/anti-piracy-lawyers-rip-off-work-from-competitor-110727/
#10yrsago US ISP/copyright deal: a one-sided private law for corporations, without public interest https://www.eff.org/deeplinks/2011/07/graduated-response-deal-what-if-users-had-been
#10yrsago Why they call the Tories “the nasty party” https://www.theguardian.com/uk/2011/jul/28/tory-lib-dems-clash-on-policy
#5yrsago The Ice Bucket Challenge did not fund a breakthrough in ALS treatment http://www.healthnewsreview.org/2016/07/ice-bucket-challenge-breakthrough-experts-pour-cold-water-superficial-reporting/
#5yrsago Silicon Valley banks offer tech giants’ new hires 100% mortgages on 24 hours’ notice https://www.bloomberg.com/news/articles/2016-07-27/zero-down-on-a-2-million-house-is-no-problem-in-silicon-valley
#5yrsago RIP, MAD Magazines’s Jack Davis https://www.bbc.com/news/entertainment-arts-36912468
#5yrsago Laurie Penny at the DNC: “Dissent will not be tolerated. Protest will not be permitted.” https://medium.com/welcome-to-the-scream-room/bad-moon-rising-8cd348df50e9#.9lhcixjn1
#5yrsago North Carolina’s voter suppression law struck down as “racist” https://www.cnn.com/2016/07/29/politics/north-carolina-voter-id/index.html
#5yrsago Nobel-winning economist Joseph Stiglitz calls Apple’s tax strategy a “fraud” https://www.bloomberg.com/news/articles/2016-07-28/stiglitz-calls-apple-s-profit-reporting-in-ireland-a-fraud
#5yrsago Trump campaign frisks, then blocks ticketed Washington Post reporter at Pence rally https://www.washingtonpost.com/news/the-fix/wp/2016/07/28/a-washington-post-reporter-was-banned-from-a-trump-pence-rally-yesterday-that-should-frighten-you/
#5yrsago Pregnancy-tracking app was riddled with vulnerabilities, exposing extremely sensitive personal information https://www.consumerreports.org/mobile-security-software/glow-pregnancy-app-exposed-women-to-privacy-threats/
#1yrago Bitcoin is not a socialist's ally https://pluralistic.net/2020/07/29/break-em-up/#bitcoinism
#1yrago No consequences for police violence at BLM actions https://pluralistic.net/2020/07/29/break-em-up/#impunity
#1yrago Let's force Big Tech to interoperate https://pluralistic.net/2020/07/29/break-em-up/#beyond-breakups
#1yrago Break 'Em Up https://pluralistic.net/2020/07/29/break-em-up/#break-em-up
#1yrago Police "unions" are not unions https://pluralistic.net/2020/07/28/afterland/#selective-solidarity
#1yrago Snowden's Little Brother intro https://pluralistic.net/2020/07/28/afterland/#snowden
#1yrago Audible Exclusives https://pluralistic.net/2020/07/28/afterland/#acx
#1yrago Mexican copyright crushes free speech https://pluralistic.net/2020/07/28/afterland/#mexico-copyright
#1yrago Afterland https://pluralistic.net/2020/07/28/afterland/#XY
Today's top sources: Mike Blaney, Naked Capitalism (https://www.nakedcapitalism.com/), Glenn Fleishman (https://twitter.com/GlennF), Soph (https://twitter.com/sophspsych), TG Shenoy (https://twitter.com/theBekku), Seamus Bellamy (https://twitter.com/SeamusBellamy), Danny McClanahan (https://twitter.com/hipsterelectron) and Will Greenwald (https://twitter.com/AggroWill).
- Spill, a Little Brother short story about pipeline protests. Yesterday's progress: 266 words (11896 words total)
A Little Brother short story about remote invigilation. PLANNING
A nonfiction book about excessive buyer-power in the arts, co-written with Rebecca Giblin, "The Shakedown." FINAL EDITS
A post-GND utopian novel, "The Lost Cause." FINISHED
A cyberpunk noir thriller novel, "Red Team Blues." FINISHED
Currently reading: Analogia by George Dyson.
Latest podcast: Tech Monopolies and the Insufficient Necessity of Interoperability https://craphound.com/news/2021/07/12/tech-monopolies-and-the-insufficient-necessity-of-interoperability/
- Privacy Without Monopoly, Defcon 29, Aug 7
Keynote speaker, The Quills Conference, Aug 12-15
From Wayback to Way Forward: The Internet Archive turns 25, Oct 21
Reset the Internet? (Project Syndicate)
- Trustbusting (Nicole Sandler)
Launch for Neil Sharpson's When the Sparrow Falls (Mysterious Galaxy):
- "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/p1562/_Poesy_the_Monster_Slayer.html.
- The Shakedown, with Rebecca Giblin, nonfiction/business/politics, Beacon Press 2022
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