Let's start off with Wells Fargo. We already know that Wells targeted Social Security offices and non-English speaking customers in its fraudulent account opening scheme. That targeting also appears to include Native Americans. The Navajo Nation has sued Wells Fargo for predatory and unlawful banking practices. The suit alleges "since at least 2009 and continuing through 2016, Wells Fargo employees at branches on the Navajo Nation routinely opened unauthorized savings and credit accounts, misled customers into opening unnecessary accounts, obtained debit cards without customers' consent, and enrolled customers in online banking without proper consent." Wells Fargo salespeople targeted Navajo basketball games and flea markets in order to open "accounts for underage Navajo citizens, going so far as to falsify birthdates to avoid obtaining necessary parental consent." Just when you think they couldn't go lower, Wells manages to surprise by using minors to line their own pockets.
The latest story regarding Uber concerned the fact the company was apparently caught withholding evidence in its legal fight with Waymo over intellectual property allegedly stolen by Uber. The key piece of withheld evidence was a 37 page letter from Uber's head of security that outlined a whole litany of unethical and illegal behavior at Uber. That letter is now online (h/t to reader CDW) and the breadth of Uber's criminal activity is simply stunning. I will do my best to summarize what's in the letter but it is certainly worth reading in its entirety to see just how pervasive the criminal mentality was within the organization.
Uber had a department called Threat Operations (ThreatOps) that was broken down essentially along the lines of something resembling the CIA. ThreatOps had six different divisions - Global Intelligence (Intel), Strategic Services Group (SSG), Investigations, Law Enforcement Outreach, Marketplace Analytics (MA), and Counter Intelligence. The entire ThreatOps structure was specifically designed to evade federal law by ensuring its activities would not leave a paper trail. That entailed using the "almost exclusive use of ephemeral and encrypted communications software". Memos that were actually required to be written were titled "draft" and asked for some kind of legal opinion at the start which was totally unrelated to the contents of the memo, but the combination of a draft and a legal opinion allowed the document to be protected under attorney-client privilege. Members of the ThreatOps group were required to attend "legal training" which was specifically designed to show how the attorney-client privilege could be used to impede the legal discovery process.
The MA group was tasked with obtaining trade secrets from Uber's competitors on a global scale. To that end, it "fraudulently impersonated riders and drivers on competitor platforms, hacks into competitor networks, and conducts unlawful wiretapping". Using distributed hardware and software that was not traceable back to Uber, the group was able "to make millions of data calls against competitor and government servers without causing a signature that would alert competitors to the theft. For instance, a sophisticated competitor would set thresholds when they see devices attempting to request rides by the hundreds or thousands in a short period of time. However, if the data calls are diversified across what appear to be multiple devices and a broader time period, filters would not detect the anomaly." Using these methods, Uber was able to identify and recruit competitor drivers, disrupt competitor service, and obtains trade secrets from their competitors. Uber at one point managed to steal the identities of 35,000 drivers from a competitor in order to target and poach them for Uber.
The SSG group hired former CIA operatives in order to illegally impersonate people on social media, including joining groups that were protesting Uber's policies. Those operatives also illegally wiretapped conversations among competitor executives, by infiltrating that company's private events. That same group also developed "a 'new technical capability' to conduct collections of mobile-phone call records and mobile phone link analysis on opposition figures, politicians, and government regulators". The letter implies that Uber used information collected by phone hacking to further its business overseas, saying Uber engaged "in targeted business practices aimed at gaining the support of government officials in foreign countries. Many of these efforts involved similar surveillance conduct to that discussed above and likely involve violations of foreign government civil and criminal laws." This amounted to essentially spying on foreign politicians, individuals, and groups opposed to Uber's ride-sharing business. On one occasion, the group managed to bug the meeting of a foreign country's transport regulators. In addition, there are clear indications that Uber was paying bribes to foreign officials in order to expand its business overseas.
But perhaps the most remarkable thing about this letter is that all this illegal activity was observed by one person in the span of the short 11 months of his employment. I encourage you to read the whole document and ask yourself how and why this company is still in business.
What's even more distressing, however, is that Uber and Wells Fargo are probably not unique. They may have pushed things to the extreme but I have no doubt that every Wall Street firm has engaged in knowingly fleecing clients, that every tech firm engages in spying on their competitors and trying to obtain trade secrets, that all firms practice some kind of discovery avoidance processes. Sometimes it's legal, sometimes it's not. But, ever since the Arthur Andersen/Enron debacle, it has been clear that the government is not really interested in pursuing the illegal acts of companies. And that has led companies to become increasingly tolerant of illegal behavior over the last decade and a half, especially when the financial crisis put enormous pressure on the bottom line. We see it in the financial industry, we see it in the health care sector, and now in the tech business. Combine that with increasing monopoly power and you have a toxic combination.
One of the lawyers who is suing Wells Fargo described the evolution of the culture within that company, saying, "Anecdotally, the feeling is that everyone knew [the massive fraud that was being perpetrated]. The better they did at sales, the more they advanced, so it got spread across the company. An entire generation of managers thrived in the culture, got rewarded for it, and are now in positions of power." You see this kind of easy sense of entitlement, the feeling of being above the law, throughout the business community. I'm reading the New Yorker article about Jim Simons, the co-founder of Renaissance Technology along with Robert Mercer. He made billions building that business but most of that money has never been taxed, having been shipped offshore. He sat down for his interview and chain-smoked throughout, in violation of fire safety codes and rules about a smoke free environment. But, as the article notes, Simons was unconcerned because "he pointed out that, whatever the potential fine for doing so is, he can pay it." You look at him and think what kind of citizen is he? Sure he enjoyed the legal protections that this country provides in order to build a thriving business while at the same time engaging in massive tax avoidance and minor law-breaking, all with the knowledge he will never be called to account, and even if he was, he could buy his way out of it.
It is that type of arrogance that is truly exemplified by Donald Trump and his Republican colleagues in Congress. The blatant bribery that Republicans have used to not only buy votes but line their own pockets reflects the corruption and greed that permeates our business and political systems. As Matt Yglesias writes about the horrific tax bill, "Unchecked by norms or political prudence, it’s smash-and-grab time for the GOP...Across the board, it’s about letting whoever’s powerful now squeeze as much out as they can without worrying too much about the consequences."
Every day, with each new revelation, with each new outrage, it becomes more and more clear that our entire electoral and economic system needs to be reformed root and branch. And I'm pretty sure that even the Trump voters, who largely feel the same way, are disgusted by what they see.
No comments:
Post a Comment