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theculturedmarxist · 1 year

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In Costa Rica and Latvia today, the Atlantic Council is hosting its 360/OS Summit at RightsCon Costa Rica and NATO’s Riga StratCom. Among other things, the influential think tank will be previewing its “Task Force for a Trustworthy Future Web” report, which they hope will “lay the groundwork for stronger cross-sectoral ideation and action” and “facilitate collaboration now between the expanding community dedicated to understanding and protecting trust and safety.”

In human terms, conference attendees are discussing how best to stay on-brand by presenting the Censorship-Industrial Complex as a human rights initiative, and as #TwitterFiles documents show, they have the juice to pull it off.

EngageMedia (which I co-founded and was the long-time Executive Director) co-organized RightsCon in Manila in 2015, and I personally oversaw a lot of the preparations. That looks like a big mistake. I now believe RightsCon represents everything that has gone wrong in the digital rights field. Specifically, it represents the capture of a once-vibrant movement by corporate and government interests, and a broader shift towards anti-liberal and authoritarian solutions to online challenges. I left EngageMedia on good terms, but now have no formal relationship.

In honor of this week’s RightsCon and 360/OS Summit, we dug into the #TwitterFiles to revisit the integration of the Atlantic Council’s anti-disinformation arm, the Digital Forensic Research Labs (DFRLab), while also highlighting its relationship with weapons manufacturers, Big Oil, Big Tech, and others who fund the NATO-aligned think tank.

The Atlantic Council is unique among “non-governmental” organizations thanks to its lavish support from governments and the energy, finance, and weapons sectors. It’s been a key player in the development of the “anti-disinformation” sector from the beginning. It wasn’t an accident when its DFRLab was chosen in 2018 to help Facebook “monitor for misinformation and foreign interference,” after the platform came under intense congressional scrutiny as a supposed unwitting participant in a Russian influence campaign. Press uniformly described DFRLab as an independent actor that would merely “improve security,” and it was left to media watchdog FAIR to point out that the Council was and is “dead center in what former President Obama’s deputy national security advisor Ben Rhodes called ‘the blob.’”

What’s “the blob”? FAIR described it as “Washington’s bipartisan foreign-policy consensus,” but thanks to the Twitter Files, we can give a more comprehensive portrait. In the runup to the 360/OS event in that same year, 2018, Graham Brookie of the Atlantic Council boasted to Twitter executives that the attendees would include the crème de la crème of international influence, people he explained resided at the “no-kidding decision-maker level”:

Similar correspondence to and from DFRLab and Twitter outlined early efforts to bring together as partners groups that traditionally served as watchdogs of one another. Perhaps more even than the World Economic Forum meetings at Davos or gatherings of the Aspen Institute in the US, the Atlantic Council 360/OS confabs are as expansive a portrait of the Censorship-Industrial Complex as we’ve found collected in one place.

In October 2018, DFRLab was instrumental in helping Facebook identify accounts for what became known as “the purge,” a first set of deletions of sites accused of “coordinated inauthentic behavior.” Facebook in its announcement of these removals said it was taking steps against accounts created to “stir up political debate,” and the October 2018 “purge” indeed included the likes of Punk Rock Libertarians, Cop Block, and Right Wing News, among others. Even the progressive Reverb Press, founded by a relatively mainstream progressive named James Reader, found his site zapped after years of pouring thousands of dollars a month into Facebook marketing tools. “That’s what sticks in my craw. We tried to do everything they suggested,” Reader said then. “But now, everything I worked for all those years is dead.”

In the years since, DFRLab has become the central coordination node in the Censorship Industrial Complex as well as a key protagonist in the Election Integrity Partnership and the Virality Project. Its high-profile role at RightsCon, the biggest civil society digital rights event on the calendar, should concern human rights and free expression activists.

According to their London 2019 event “360/OS brings together journalists, activists, innovators, and leaders from around the world as part of our grassroots digital solidarity movement fighting for objective truth as a foundation of democracy.” Their Digital Sherlocks program aims to “identify, expose, and explain disinformation.” But DRFLabs are more Inspector Gadget (or double agents) than Sherlock Holmes. The Twitter Files reveal DFRLab labeled as “disinformation” content that often turned out to be correct, that they participated in disinformation campaigns and the suppression of “true” information, and that they lead the coordination of a host of actors who do the same.

Twitter Files #17 showed how DFRLab sent Twitter more than 40,000 names of alleged BJP (India’s ruling nationalist party) accounts that they suggested be taken down. DFRLab said it suspected these were “paid employees or possibly volunteers.” However as Racket’s Matt Taibbi noted, “the list was full of ordinary Americans, many with no connection to India and no clue about Indian politics.” Twitter recognized there was little illegitimate about them, resulting in DFRLab pulling the project and cutting ties with the researcher.

Twitter Files #19 further revealed DFRLab was a core partner in the Election Integrity Partnership (EIP), which “came together in June of 2020 at the encouragement of the U.S. Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency, or CISA” in order to “fill the gaps legally” that government couldn’t. As a result, there are serious questions as to whether the EIP violated the US First Amendment.

DFRLab was also a core partner on the Virality Project, which pushed its seven Big Tech partners to censor “stories of true vaccine side-effects.” The Stanford Internet Observatory, which led the project, is now being sued by the New Civil Liberties Alliance for its censorship of “online support groups catering to those injured by Covid vaccines.” Debate as to the frequency of serious adverse events is ongoing, however. The German health minister put it at 1 in 10,000, while others claim it is higher.

The Virality Project sought to suppress any public safety signals at all. The Stanford Internet Observatory is also at the moment reportedly resisting a House Judiciary Committee subpoena into its activities.

TwitterFiles #20 revealed some of the Digital Forensic Lab’s 2018 360/0S events, which brought together military leaders, human rights organizations, the Huffington Post, Facebook and Twitter, Edelman (the world’s biggest PR firm), the head of the Munich Security Conference, the head of the World Economic Forum (Borge Brende) a former President, Prime Minister and CIA head, intel front BellingCat and future Nobel Peace Prize winner Maria Ressa, all to combat “disinformation.” We can now reveal more.

Introducing the Atlantic Council

The Atlantic Council is a NATO-aligned think tank established in 1961. Its board of directors and advisory board are a Who’s Who of corporate, intelligence and military power, including:

James Clapper – former Director of National Intelligence whose tenure included overseeing the NSA during the time of the Snowden leaks. Asked whether intelligence officials collect data on Americans Clapper responded “No, sir,” and, “Not wittingly.” Clapper also coordinated intelligence community activity through the early stages of Russiagate, and his office authored a key January 2017 report concluding that Russians interfered in 2016 to help Donald Trump. Clapper has been a 360/OS attendee.

Stephen Hadley, United States National Security Advisor from 2005 to 2009 (also a 360/OS attendee)

Henry Kissinger, former US Secretary of State who oversaw the carpet bombing of Vietnam, among other crimes against humanity

Pfizer CEO Anthony Bourla

Stephen A. Schwarzman, Chairman, CEO, and Co-Founder, The Blackstone Group

Meta’s President for Global Affairs, Nick Clegg

Richard Edelman, CEO of the world’s largest PR firm (and 360/OS attendee)

The Rt. Hon. Lord Robertson of Port Ellen, Former Secretary General of NATO

Ambassador Robert B. Zoellick, Former President of the World Bank

Leon Panetta, former US Secretary of Defense & CIA Director. Panetta oversaw the US’s massive growth in drone strikes.

John F. W. Rogers. Goldman Sachs Secretary of the Board

Chuck Hagel, chairman of the Council, sits on the board of Chevron and is also a former US Secretary of Defence.

The Atlantic Council raised $70 million in 2022, $25 million of which came from corporate interests. Among the biggest donors were: the US Departments of Defense State, Goldman Sachs, the Rockefeller Foundation, Craigslist founder Craig Newmark, Google, Crescent Petroleum, Chevron, Lockheed Martin, General Atomics, Meta, Blackstone, Apple, BP, eBay founder Pierre Omidyar, Raytheon, ExxonMobil, Shell, Twitter, and many more. Ukraine’s scandal-ridden energy company, Burisma, whose links to Hunter Biden were suppressed by the August 2020 table-top exercise coordinated by the Aspen Institute, also made a contribution. You can view the full 2022 “honor roll” by clicking here.

The Atlantic Council is the Establishment, though many suffer from the delusion that in putting on a “Digital Sherlock” cape, they’re somehow with the rebel alliance. The opposite is true. The Atlantic Council and DFRLab don’t hide their militarist affiliations. This week’s OS/360 event at RightsCon Costa Rica runs together with a 360/OS at NATO’s Riga StratCom Dialogue, which DFRLab note they have “worked closely with” “since 2016.”

The Birth of the Digital Forensic Research Lab

DFRLab was founded in 2016, and has been a major catalyst in expanding the “anti-disinformation” industry. Among non-governmental entities, perhaps only the Aspen Institute comes close to matching the scope, scale and funding power of DFRLab. DFRLab claims to chart “the evolution of disinformation and other online and technological harms, especially as they relate to the DFRLab’s leadership role in establishing shared definitions, frameworks, and mitigation practices.”

Almost $7 million of the Atlantic Council’s $61 million spent last year went to the DRFLabs, according to their 2022 annual financial report. Through its fellowship program, it has incubated leading figures in the “disinformation” field. Richard Stengel, the first director of the Global Engagement Center (GEC), was a fellow. GEC is an interagency group “within” the State Department (also a funder of the Atlantic Council), whose initial partners included the FBI, DHS, NSA, CIA, DARPA, Special Operations Command (SOCOM), and others. GEC is now a major funder of DFRLab and a frequent partner:

In this video, Stengel says, “I’m not against propaganda. Every country does it, they have to do it to their own population, and I don’t think it’s that awful.”

Stengel was true to his word, and apart from DFRLab, the GEC funded the Global Disinformation Index, which set out to demonetize conservative media outlets it claimed were “disinformation.” (See 37. in the censorship list) He thought the now-disgraced Hamilton68 was “fantastic.” In total, GEC funded 39 organizations in 2017. Despite Freedom of Information requests, only 3 have been made public to date. Roughly $78 million of GEC’s initial $100 million budget outlay for fiscal year 2017 came from the Pentagon, though the budgetary burden has shifted more toward the State Department in the years since.

The Global Engagement Center was established in the last year of Barack Obama’s presidency, via a combination of an executive order and a bipartisan congressional appropriation, led by Ohio Republican Rob Portman and Connecticut Democrat Chris Murphy. The GEC was and remains virtually unknown, but reporting in the Twitter Files and by outlets like the Washington Examiner have revealed it to be a significant financial and logistical supporter of “anti-disinformation” causes.

Though tasked by Obama with countering “foreign state and non-state propaganda and disinformation efforts aimed at undermining United States national security interests,” its money has repeatedly worked its way back in the direction of policing domestic content, with Gabe Kaminsky’s Examiner reports on the GDI providing the most graphic example.

GEC frequently sent lists of “disinformation agents to Twitter.” Yoel Roth, former head of Trust and Safety referred to one list as a “total crock.” Roth is now a member of DFRLab’s Task Force for a Trustworthy Future Web. Let’s hope he brings more trust than Stengel. You can read more on GEC’s funding here.

Other DFRLab luminaries include Simon Clark, Chairman of the Center for Countering Digital Hate (a UK “anti-disinformation” outfit that aggressively deplatforms dissidents), Ben Nimmo (previously a NATO press officer, then of Graphika (EIP and the Virality Project partners) and now Facebook’s Global Threat Intelligence Lead), and Eliot Higgins of Bellingcat. Bellingcat has an ominous reputation, which it’s earned in numerous ways, including its funding by the National Endowment for Democracy (see Glenn Greenwald’s recent report and Aaron Maté’s here). Most recently, Bellingcat assisted in the arrest of the 21-year-old Pentagon leaker, further speeding up the abandonment of the Pentagon Papers Principal where the media protected, rather than persecuted, leakers. Bellingcat was part of 360/OS backroom meetings with former intel chiefs, the head of Davos and the Munich security conference among many others, as we will see soon.

As noted in the introduction, DFRLab itself has made several wrong calls on “disinformation.” In one report they highlighted “outright false narratives,” which focused mainly on the notion that Covid was an engineered bioweapon, but lumped in the “unverified” claim Covid was the “result of a lab accident.” A lab accident is now the preferred hypothesis of the US Department of Energy, the FBI, and many others. To the DFRLab it was “disinformation” and a “conspiracy theory.”

The Election Integrity Partnership and the Virality Project

DFRLab were core partners on two of the most influential “anti-disinformation” initiatives of recent times.

The Virality Project built on the EIP and had partnerships with Twitter, Facebook, Instagram, Youtube, Google, TikTok and more to combat vaccine “misinformation.” Stanford and DFRLab partnered with the University of Washington’s Center for an Informed Public, Graphika, NYU Tandon School of Engineering and Center for Social Media and Politics, and the National Congress on Citizenship. Through a shared Jira ticketing system they connected these Big Tech platforms together, with Graphika using sophisticated AI to surveil the online conversation at scale in order to catch “misinformation” troublemakers.

VP went far beyond any kind of misinformation remit, most infamously recommending to their Big Tech partners that they consider “true stories of vaccine side effects” as “standard misinformation on your platform.”

A Virality Project partner called the Algorithmic Transparency Initiative (a project of the National Congress on Citizenship) went further. Their Junkipedia initiative sought to address “problematic content” via the “automated collection of data” from “closed messaging apps,” and by building a Stasi-like “civic listening corps,” which in recent years has taken on a truly sinister-sounding mission. The current incarnation might as well be called “SnitchCorps,” as “volunteers have an opportunity to join a guided monitoring shift to actively participate in monitoring topics that disrupt communities”:

Garret Graff, who oversaw the Aspen Hunter Biden table-top exercise, was chairman of that same National Congress on Citizenship when they collaborated on the Virality Project. Both EIP and VP were led by Renee DiResta of the Stanford Internet Observatory, a former CIA fellow who engineered the now disgraced New Knowledge initiative, which developed fake Russian bots to discredit a 2016 Alabama senate race candidate, as acknowledged by the Washington Post. You can read Racket’s previous work on the Virality Project here.

DFRLab are the elite of the “anti-disinformation” elite. They work closely with a wide range of actors who have participated in actual disinformation initiatives. Here they’re invited to an elite Twitter group set up by Nick Pickles of “anti-disinformation” luminaries First Draft, also participants in the Hunter Biden laptop tabletop, and the Alliance for Security Democracy, part of the RussiaGate Hamilton68 disinformation operation.

360/OS

The 360/OS event marries this tarnished record with the financial, political, military, NGO, academic and intelligence elite. Some of this is visible through publicly available materials. Twitter Files however reveal the behind the scenes, including closed door, off-the-record meetings.

“I’ve just arrived in Kyiv” Brookie notes in 2017, as he seeks to line up a meeting with Public Policy Director Nick Pickles as they discuss Twitter providing a USD $150K contribution to OS/360 (seemingly secured), and to garner high level Twitter participation.

Pickles is visiting DC and Brookie suggests he also meet with the GEC and former FBI agent Clint Watts of Hamilton 68 renown. “Happy to make those connections,” he chimes.

360/OS events are elite and expensive — $1 million according to Brookie — so closer collaboration with Twitter, especially in the form of funding, is a high priority.

Twitter offers $150,000:

When Brookie mentions the attendees at the “no-kidding decision maker level” he isn’t kidding. Parallel to the 360/OS public program is the much more important off-the-record meeting of “decision makers ranging from the C-Suite to the Situation Room.” Here, he is explicit about a convening of military and financial power. Vanguard 25 is presented as a way to “create a discreet and honest way to close the information gap on challenges like disinformation between key decision makers from government, tech, and media.”

The document boasts of its high-level participants:

More are revealed in email exchanges, including Madeleine Albright and the head of the WEF:

They go on to list a bizarre mishmash of media leaders, intelligence officials, and current or former heads of state:

It appears Germany’s Angela Merkel was out of reach in the end, but many of the others attended this behind the scenes meeting on “disinformation.” Who are they?

Matthias Dopfner – CEO and 22% owner of German media empire Axel Springer SE, the biggest media publishing firm in Europe

Borge Brende – head of the World Economic Forum and former Norwegian foreign minister

Toomas Hendrick Ilves – former President of Estonia who co-chairs the World Economic Forum’s Global Futures Council on Blockchain Technology. Hendrick is also a fellow at the Freeman Spogli Institute for International Studies (where the Stanford Internet Observatory is housed) and is on the advisory council of the Alliance for Securing Democracy, of Hamilton 68 renown.

Chris Sacca – billionaire venture capitalist

Mounir Mahjoubi – previously Digital Manager for President Macron’s presidential campaign, and former Chairman of the French Digital Council

Reid Hoffman – billionaire and Linkedin co-founder

Ev Williams – Former CEO of Twitter and on the Twitter board at the time

Kara Swisher – New York Times opinion writer, who founded Vox Media Recode

Wolfgang Ischinger - Head of the Munich Security Conference

Aleksander Kwasniewski – Former President of Poland. Led Poland into NATO and the EU.

Richard Edelman – CEO of the largest PR company in the world

Elliot Shrage – previously Vice-President of Public Policy at Facebook (DFRLab had election integrity projects with Facebook)

Lydia Polgreen – Huffington Post Editor in Chief

Jim Clapper – former US Director of National Intelligence

Maria Ressa – co-founder of Rappler and soon to be winner of the Nobel Peace Prize

JK Rowling was also invited to give an award, though appears she didn’t make it in the end:

Why would such a group all gather specifically around the question of “disinformation”? Is disinformation truly at such a level that it requires bringing together the world’s most popular author with military and intelligence leaders, the world’s biggest PR company, journalists, billionaires, Big Tech and more? Or is this work to build the case that there is a disinformation crisis, to then justify the creation of a massive infrastructure for censorship? A glimpse of the agenda offers clues:

Here the head of the most important military and intelligence conference in the world (Munich) sits down in a closed door meeting with a former Secretary of State and the Executive Vice-Chair of the Atlantic Council.

Which is followed by a closed door session with the Editor-in Chief of the now-defunct Huffington Post and peace-maker Maria Ressa who presented to the same group of military, intelligence, corporate and other elites. Is the role of a journalist and Nobel laureate to work behind closed doors with militarists and billionaires, or to hold them to account?

At 2022’s OS/360 at RightsCon Ressa conducted a softball interview on disinformation with current US Secretary of State Anthony Blinken. In testimony last April 2023, former CIA deputy director Michael Morrell stated that Blinken “set in motion the events that led to the issuance of the public statement” by more than 50 former intelligence officials that the Hunter Biden laptop had “all the classic earmarks of a Russia information operation.”

The Twitter Files also revealed that in August 2020 the Aspen Institute organized a table-top exercise to practice how best to respond to a “hack and leak” of a Hunter Biden laptop. The laptop only came to light however two months later. In attendance was First Draft (now the Information Futures Lab), the New York Times, Washington Post, Rolling Stone, CNN, Yahoo! News, Facebook, Twitter and more. Here, DFRLab head Graham Brookie speaks with the Aspen Institute’s Garret Graff, who coordinated the Hunter Biden tabletop exercise.

After it turned out the Hunter Biden laptop was real, and the disinformation operation was more appropriately described as having been led by the likes of Blinken and the Aspen Institute. The appropriate response is apparently for RightsCon, DFRLab, Blinken and Ressa to put on a nice forum to promote these figures as “anti-disinformation” leaders.

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Former DFRLab fellow and intel front Bellingcat founder Eliot Higgins is also invited to the closed door sessions with a former head of the CIA, a former Prime Minister and a President. How do you keep power accountable when you are in the same cozy club? This theme runs throughout. Bellingcat is featured heavily at the public sessions also:

Higgins has a unique way of expressing himself online, given the DFRLab emphasis on striking out against divisiveness:

Would this pass RightsCon’s code of conduct? If not, he appears to be good enough for DFRLab to promote.

On the public side, we see Amnesty International participating to further collapse the distinction between those who are meant to hold power to account, and the powerful themselves. The Iraq war gave us embedded journalists, and the “anti-disinformation” field gives us embedded digital rights activists.

The Department of Homeland Security’s Chris Krebs also joined the closed door session. Krebs was Co-Chair of the Aspen Institute’s Commission on Information Disorder. Other members included Prince Harry, the Virality Project’s Alex Stamos (Stanford Internet Observatory) and Kate Starbird (University of Washington and previous 360/OS participant), Katie Couric, and more. Craig Newmark attended as an observer.

Meanwhile Renee DiResta, former CIA fellow and Stanford Internet Observatory Research Director, presented with the former Prime Minister of Sweden. This was years before she would launch the Virality Project, and take on the bugbear of “true stories of vaccine side effects.”

The President of the Atlantic Council participated in an “off-the-record, “ behind closed doors conversation on “trust” with the CEO of the world’s biggest PR firm, Edelman.

“Public relations” and “trust” may well be opposites, and trust is being destroyed not by the disinformation street crime that these groups claim to target, but by the disinformation corporate crime protected by, or in some cases created by these same people. Disinformation is real, but its biggest purveyors are governments and powerful corporate interests.

DFRLab and RightsCon show just how far the capture of civil society by elite interests has come. Again, I made a mistake helping to co-organize RightsCon in 2015. The jumping in bed with the government and Big Tech was arguably there in 2015, though to a much lesser degree. It now partners with militarists in the form of the Atlantic Council and is an enabler of the “disinformation” grift that is so deeply impacting freedom of speech and expression.

The air-gaps that should separate civil society, media, military, billionaires, intelligence and government have collapsed, and many of these actors have formed a new alliance to advance their shared interests. If weapons manufacturers funding human rights is considered legitimate then where is the red line? Effectively, there is none.

This collapse however has also been pushed by funders, who have been proactive in asking NGOs to collaborate more with Big Tech and government - something I successfully resisted for my almost 18 years at EngageMedia, critically RightsCon was the only time I let my guard down.

The RightsCon sponsor matrix wouldn’t be out of place at NASCAR:

This is the equivalent of hosting a Climate Change conference sponsored by Shell, BP, Chevron, and ExxonMobil. How do you keep power accountable when Big Tech pays your wage? The “let’s all work together” approach has failed. The weakest partner, civil society, got captured and we lost. Many more lost their way and have acquiesced to and often enabled much of the new censorship regime.

A renewed and much more independent digital rights movement, with a strong commitment to freedom of expression, is well overdue.

Note: A previous version of this article mistook Blackstone for Blackwater. This has been corrected.

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humanrightsconnected · 2 years

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Part 2 of our blog series on RightsCon is out! Be sure to check it out to learn about 10+ activist toolkits! Stay tuned for Part 3!

👉 https://bit.ly/3v3jppg

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mostlysignssomeportents · 1 year

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A business model for bankrupting the oil companies

Today (June 6), I’m on a Rightscon panel about interoperability.

Tomorrow (June 7), I’m keynoting the Re:publica conference in Berlin.

Thursday (June 8) at 8PM, I’m at Otherland Books in Berlin with my novel Red Team Blues.

When a giant company wrecks your life, what are you gonna do? They can afford more and better lawyers than you can, and they have people whose full time job is fighting off lawsuits — are you really gonna beat those people by pursuing your grievance as a side-hustle? Do you really wanna be a full-time, professional litigant?

For some people, the answer is yes: some people are angry enough, or sufficiently morally offended, to make suing a giant company their life’s mission. Sometimes, they succeed, and force companies to cough up gigantic sums of money. Obviously, this makes the plaintiff better off, but it can also make things better for the rest of us. Money talks and bullshit walks, and once it becomes clear that 300% of the profits from harming people will be sucked out of the company by a lawsuit, shareholders will revolt and force the company to clean up its act.

Shareholders don’t invest in companies that ruin our lives because they are committed to an ideology of cruelty. Ideology only gets you so far: the pursuit of profit incentivizes far worse conduct than mere sadism ever can:

https://pluralistic.net/2023/06/02/plunderers/#farbenizers

Incentives matter. Companies above a certain size become too big to fail and too big to jail. They capture their regulators and ensure that any damages the government extracts are less than their profits — a fine is a price.

Juries, on the other hand, can and do really whack a company for its bad conduct. They understand that incentives matter. They understand that a company that saves $1,000,001 by cutting back on workplace safety can’t be driven to improve its behavior by a fine of $1,000,000 after it kills a bunch of workers. If profit outstrips penalties, penalties aren’t effective.

A dirty $1m profit needs to be met with a $100m judgment. As the Untouchables MBA teaches us, this is just sound business: “They pull a knife, you pull a gun. He sends one of yours to the hospital, you send one of his to the morgue.”

https://www.youtube.com/watch?v=xPZ6eaL3S2E

But suing these giant companies is hard. They can tie you up in court for years — decades, even. They can outspend and outwait you. The more profits a company has racked up through its evil deeds, the more claims it can fend off. Incentives matter, so if you’re gonna commit corporate murder, you’d better do a lot of it to build up the cash needed to scare off your victims and their survivors.

However: the bigger a company is, the more cash it has, the more money there is to extract from it if you can prevail in court. If the company has genuinely injured you, and if you can mobilize the capital and resources to pursue it to final judgment, there’s a huge payoff at the end of the process — and a lesson for all the other companies contemplating their own course of action.

That’s the Voltaire MBA: “you have to execute an admiral from time to time, in order to encourage the others.”

For hundreds of years, rich, powerful people have observed their colleagues’ abuses and thought, “They only pull that shit on peasants — but if they did it to me, I could sue them for everything!”

This led to an obvious course of action: strike a bargain with the mutilated, ruined peasants to finance their suit against the toff that so abused them, in exchange for a (large) share of the proceeds. Medieval courts called this champerty; today, we call it litigation finance: investing in other peoples’ grievances against deep-pocketed monsters, in the expectation of reaping huge cash payouts.

On paper, litigation finance seems like a neat solution to a messy problem. The bigger a company is, the worse the abuses it commits — and the more it can be made to pay for its sins. The normal economics of litigation are turned upside-down: rather than avoiding the largest companies, you pursue them. This is the Willie Sutton MBA: “That’s where the money is.”

Litigation finance is a large and growing chunk of the finance sector. For about a decade, hedge funds and private equity have been bankrolling law-firms that represent people who’ve been mangled by corporations, keeping the money flowing through whatever delays and entanglements the target throws up:

https://www.nytimes.com/2015/10/25/magazine/should-you-be-allowed-to-invest-in-a-lawsuit.html?smid=tw-share

Litigation finance can be thought of as the no-win/no-fee “ambulance chaser” business on steroids. While a local lawyer can make a tidy living going after slip-and-falls and fender-benders, splitting the proceeds with their clients, a firm backed by a huge investment fund can do the same to companies with billions in the bank and hundreds of millions on the line.

Litigation finance is also closely related to impact litigation, which is when a nonprofit uses charitably raised funds to chase corporations and governments through the courts to establish precedents that overturn bad laws or pave the way for future judgments. Impact litigation can be thought of as the trailblazer for litigation finance: for-profit lawsuits are risk averse and stick to pursuing cases that have a high likelihood of eventually succeeding, while impact litigators are a kind of legal entrepreneur, advancing new, uncertain legal theories in the hopes of making new law. Once that law is created, litigation finance can drum up thousands of similarly situated plaintiffs and sue tons of companies on the same theory, citing the new precedent.

Litigation finance’s first big scores was going after med-tech and pharma companies. A lax regulatory environment allowed medical companies to market deadly products that maimed or killed people wholesale — think Vioxx, vaginal meshes or metal-on-metal hip replacements (a doc about this, The Bleeding Edge, will give you persistent nightmares):

https://en.wikipedia.org/wiki/The_Bleeding_Edge

Suing the companies that killed your family or permanently disabled you is a slow and ugly process, but it’s a lot more certain than asking Congress to patch the loopholes the company that hurt you exploited, or hoping that a future President will appoint an agency head who gives a shit, and that the Senate will confirm them. And since money talks and bullshit walks, corporations that can’t pay dividends or do stock buybacks because they owe all their cash to their victims will suffer in the stock market, and their rivals will clean house and tread carefully.

Which brings me to the latest turn in litigation finance: climate litigation. As more and more money has sloshed into ESG funds that are supposed to make money by investing in ethical, climate-friendly businesses, the idea of suing giant oil companies and other wreckers has grown more attractive. 18 months ago, Businessweek covered the nascent-but-growing phenomenon:

https://pluralistic.net/2022/02/09/grievance-factory/#champerty

That growth has only continued. With more and larger ESG funds chasing returns, there’s a lot more money available to represent, say, poisoned indigenous people in the global south whose ancestral lands have been rendered an uninhabitable hellscape by a mining or petrochemical company. The returns from these cases aren’t correlated with wider economic trends: whether the market is up down, it makes no difference to the size of the judgment or settlement that is extracted in the end.

A new piece in the Financial Times by Camilla Hodgson does an excellent job rounding up the state of play in litigation finance, starting with the oil giant PTTEP paying $102m to 15,000 Indonesian farmers to settle claims stemming from a massive, ocean-killing oil spill in 2019:

https://www.ft.com/content/055ef9f4-5fb7-4746-bebd-7bfa00b20c82

The firm that financed the suit is Harbour Litigation Funding, and they paid for a lot of shoe-leather lawyering, sending reps on off-road motorbikes to each of the farmers’ plots to sign them up. The case cost more than $21m, and Harbour creamed $53.5m off the top of the settlement from PTTEP — about 40% of the total.

Those numbers are pretty compelling investment story: there aren’t a lot of opportunities to make a >100% return on a $21m investment in 15 years — let alone investments that let you claim to be bringing justice to poor farmers who’ve been abused by rapacious corporate murderers.

Other cases are still ongoing: mining giant BHP is facing a £36b class action case over the 2015 collapse of Brazil’s Fundão dam, which released poisoned mine-tailings into waterways serving millions of people. 700,000 plaintiffs are in the class, and the investors, Prisma Capital (Brazil) and North Wall Capital (UK) have already fronted £70m pursuing the case.

There is a vast inventory of cases like these, just lying around, waiting for someone to stake a claim. One barrier is that most of the world’s large law firms are conflicted out of pursuing these cases — they represent these same companies in other actions. But a new sector of specialized, un-conflicted firms is growing up, and tackling more and more of these cases.

These firms are chasing relatively easy claims, but there’s an even bigger fish out there, waiting to be caught: class actions against carbon-intensive companies, especially coal and oil companies, for their knowing contributions to the global climate emergency. These corporations are sitting on hundreds of billions of dollars, and they have inflicted trillions in harms. There’s gold in them thar wildfires.

The FT cites experts who predict a massive wave of litigation finance climate suits in the next 2–3 years, and notes an increasing tempo of shareholder motions demanding that big oil and mining companies disclose their litigation risks in their investor reports. This is a very compelling idea, a kaiju boss-fight in which we recruit monsters to fight other monsters. It’s such a fun idea that I actually wrote a novel about it, 2009’s Makers, in which corporate misconduct that has not yet reached the statute of limitations becomes the new oil, prompting a huge investment bubble:

https://craphound.com/category/makers/

But is the answer to a bad guy with a law firm a good guy with a law firm? There are certainly some ways this can go very wrong (many of which end up in Makers). Back in 2015, Cathy O’Neil published an excellent critique of litigation finance in the context of vaginal mesh cases:

https://mathbabe.org/2015/09/01/litigation-finance-a-terrible-idea/

O’Neill’s point is that incentives matter. The incentive for a litigation finance fund is to extract settlements, not win justice. Time and again, we’ve seen how a financial tactic can be severed from a societal strategy — like how GDP can be goosed to spectacular heights without improving national prosperity.

There’s even a name for this phenomenon: Goodhart’s Law: “When a measure becomes a target, it ceases to be a good measure.” The finance sector is spookily good at decoupling positive societal outcomes from positive investor outcomes. The real answer to medical companies that mutilate women with vaginal meshes, or destroy the planet with CO2, is criminal sanctions and regulation, not private lawsuits.

That said, I think there’s a case for the one leading to the other. Right now, climate wreckers devote very large sums to preventing effective action on climate. Suborning regulators and politicians all over the world isn’t cheap. If we take away the money they’ve saved up for this project through stonking, eye-watering judgments, and if we convince the capital markets not to give them any more money lest it be immediately extracted to pay for more redress of a litany of grievances, then perhaps we can deprive them of the capacity of corrupt our political process.

One way to understand whether something is a genuine threat to a company’s power is to look at how viciously the company attacks it. If you doubt that unions could do good for workers, just take a peep at the all-out violent blitzes that Amazon and Starbucks mount in the face of union drives. I mean, imagine if the Democratic Party took unions half as seriously as the GOP!

The corporate lobby exhibits the same terror over plaintiff-side lawsuits as it does over unions. A massive, decades-long campaign to villify plaintiff-side lawyers has convinced many of us that corporations are the victims of the legal system, rather than its masters. The PR campaign is surprisingly effective, despite its reliance on lies about the “McDonald’s hot coffee lawsuit” and other urban legends:

https://pluralistic.net/2022/06/12/hot-coffee/#mcgeico

Corporate plunderers are terrified of being dragged into court by their victims, and devote titanic amounts of blood and treasure into making it harder and harder to do so. On the “the more scared the are, the better” metric, litigation finance is a slam dunk.

But winning a case isn’t the same as getting a judgment or disciplining a firm. When Steven Donziger won a landmark judgment against Chevron on behalf of indigenous people whose lands and bodies had been permanently poisoned, the company struck back:

https://pluralistic.net/2020/09/02/free-steven-donziger/#free-donziger

Chevron bribed a judge in Ecuador to claim that Donziger had rigged the case, then brought a case in the US against Donziger for racketeering, judge-shopping to get judge Lewis A Kaplan on their case. Kaplan is a former tobacco industry lawyer who never met a corporate criminal he didn’t love, and when the SDNY prosecutor declined to press charges against Donziger because the case was absurd, Kaplan appointed a private lawyer — whose firm also acted for Chevron! — to act as prosecutor. The case against Donziger was obviously trumped up — the Ecuadoran judge who accused him of corruption later recanted and multiple countries’ Supreme Courts upheld the judgment Donziger won against Chevron. Nevertheless, Kaplan got Donziger locked up under house arrest for years, and even got him banged up in Riker’s for a time. Donziger’s lost his law license and his clients are still awaiting judgment.

This is the best law that money can buy, and Chevron has a lot of money. The massive expenditures needed to railroad Donizer were a pittance compared to the $9.5b judgment Chevron owed its victims in Ecuador.

The lesson of Donziger is that these companies won’t go genrly to their graves. They are enormously, unimaginably wealthy and act with the ruthlessness born of greed, which makes mere sadism pale by comparison. Litigation finance is exciting and promising, but it’s only a tactic — and it’s a tactic that’s always in danger of being turned against the goal it nominally serves. The people funding litigation finance don’t want to save the world — they just want to get rich. They can and will change sides if someone can make the business case for doing so.

If you'd like an essay-formatted version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2023/06/06/thats-where-the-money-is/#champerty

[Image ID: A mirrored office tower bearing the Exxon logo. One face of the office tower is a graffiti-covered ATM. Before the tower is a giant pile of bricks of oversized US $100 bills in paper wrappers. The ATM screen depicts a smouldering Deep Water Horizon oil platform.]

Image:

Flying Logos (modified) https://commons.wikimedia.org/wiki/File:Over_$1,000,000_dollars_in_USD_$100_bill_stacks.png

CC BY 4.0 https://creativecommons.org/licenses/by-sa/4.0/deed.en

—

Joe Shlabotnik (modified) https://www.flickr.com/photos/joeshlabotnik/2299501806/

CC BY 2.0 https://creativecommons.org/licenses/by/2.0/

#pluralistic #incentives matter #Business #champerty #that’s where the money is #climate #litigation finance #kaiju fight #impact litigation #set a thief to catch a thief #goodhart's law

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naturalrights-retard · 1 year

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By Andrew Lowenthal Via Brownstone Institute

Why? Because the Board of Directors and the Board of Advisors are riddled with TC members like Henry Kissinger, Joseph Nye, Michael Chertoff, Paula Dobriansky, and others. The Atlantic Council has been dominated by the Trilateral Commission since its founding in 1973. ⁃ TN Editor

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lioncheck · 3 months

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Tech and Human Rights: Navigating Ethical Dilemmas

Technology is impacting human rights in numerous ways. From heightened social inequality through automation to mass data collection that can violate privacy, the rapid developments in AI and other new technologies raise critical questions about their impacts on the future of work, society, and humanity. As a result, rights activists need to explore efficient ways to utilize these technologies for their work while ensuring that these advancements do not exacerbate existing inequalities.

This year, the Business & Human Rights Resource Centre will host RightsCon, an international conference that brings together 2,000+ activists, technologists, researchers, policymakers, and others to discuss these topics and to work on solutions. RightsCon will feature 450 sessions categorized into 18 unique thematic tracks that allow participants to explore whatever issues they are working on, from diversity and digital inclusion to smart cities and civic tech.

The Covid-19 pandemic is a timely reminder of the importance of exploring the right to technology in all its dimensions. The right to technology was established by the Universal Declaration of Human Rights in 1948 and reflects one of the profound lessons that emerged from the massive destruction wrought by technologically advanced weapons in World War II: that advances in technology must benefit humanity rather than harm it.

The issue of the right to technology is not only a moral and political concern but also a fundamental pillar of human rights advocacy, which seeks to What is techogle? ensure that the enjoyment of all human rights can be achieved in practice. However, the current state of technology is characterized by accountability gaps that undermine our ability to hold duty bearers accountable for their actions. In particular, the use of technology can obscure and fragment authority, making it difficult to enforce rights in a way that is transparent and accessible to those who bear the greatest burden of its risks (Land 2020).

Tech and Human Rights: Navigating Ethical Dilemmas While much of the ethical debate around new technologies has focused on their potential applications, addressing these issues requires engagement with the development and design processes themselves. This can take many forms, from incorporating human rights concerns into the “Rights by Design” model where the views and needs of those who will be using a technology are considered during its development to using a framework such as ETHICS (“Ethical, Humane, Technical, Informatics-based Systems”) to assess and mitigate ethical risks.

Moreover, we must reconsider the notion of the public/private distinction in the context of technology innovation. Traditional distinctions are no longer relevant to the deeply enmeshed public and private action technology website in relation to new technological development, as demonstrated by instances where government-funded private companies create innovation systems that can be used by non-state actors to regulate speech, screen potential employees, or set bail. These questions also highlight the need to strengthen existing legal frameworks and create new ones that address the risks posed by emerging technologies. This includes a rethink of existing laws, including human rights law, to make it more responsive to this new reality.

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dimensiontotal · 1 year

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(vía Las tecnologías nuevas y emergentes necesitan una supervisión urgente y una transparencia sólida: expertos de la ONU - ¡LO QUE DEBES CONOCER!)

“Las tecnologías nuevas y emergentes, incluidos los sistemas de vigilancia biométrica basados en inteligencia artificial, se utilizan cada vez más en contextos sensibles, sin el conocimiento o el consentimiento de las personas”, señalaron los expertos antes de la cumbre RightsCon llevado en Costa Rica del 5 al 8 de junio de 2023.

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roizcriteriodigital · 1 year

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Denuncian que Costa Rica incumplió otorgar visas a personas que participarían en un evento de derechos humanos (LA PRENSA)

Las personas participarían en la XII edición de la Cumbre Líder Mundial de RightsCon del 5 al 8 de junio. Migración afirmó que no ha emitido ninguna resolución LEER MAS https://www.laprensani.com/2023/06/02/nacionales/3155566-denuncian-que-costa-rica-nego-visas-a-personas-que-participarian-en-un-evento-de-derechos-humanos

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garudabluffs · 2 years

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(Cop stands for Conference of the Parties, or signatories to the UN Framework Convention on Climate Change)

Alaa Abd El-Fattah in Cairo. https://www.goodreads.com/book/show/58496574-you-have-not-yet-been-defeated

“Alaa Abd El-Fattah has long been a symbol of Egypt’s violently extinguished revolution. But as the summit approaches, he is becoming symbolic of something else, too: the “sacrifice zone” mentality at the heart of the climate crisis. This is the idea that some places and some people can be unseen, discounted and written off – all in the name of progress. We’ve seen the mentality at work when communities are poisoned to extract and refine fossil fuels and minerals. We’ve seen it when those communities are sacrificed in the name of getting a climate bill passed that does not protect them. And now we are seeing it in the context of an international climate summit, with the rights of the people living in the host country sacrificed and unseen in the name of the mirage of “real progress” in the negotiations.

There is still time to make the case that climate justice is impossible without political freedoms.”

“Unlike me, you have not yet been defeated.” Alaa Abd El-Fattah wrote those words in 2017. He had been invited to deliver a speech to RightsCon, the annual confab about human rights in the digital age sponsored by all the big tech companies. The conference was taking place in the US, but because Abd El-Fattah was behind bars in the notorious Tora prison (it had been four years at that point), he sent a letter instead. It’s a brilliant text, about the imperative to protect the internet as a space of creativity, experimentation and freedom. And it is also a challenge to those who are not (yet) behind bars, who have the freedom to do things like travelling to conferences to talk about justice and democracy and human rights. In that freedom lies responsibility. A responsibility not just to be free, but also to act free, to use freedom to its full transformational potential, before it’s too late.”

“One of the teens who helped take over the square in 2011 was Abd El-Fattah’s extraordinary younger sister Sanaa Seif. Just 17 at the time, Sanaa co-founded a revolutionary newspaper, Al Gornal, which published tens of thousands of copies and became a kind of voice of Tahrir. She also was an editor and camera person on the Oscar-nominated 2013 documentary film The Square. She has herself been imprisoned multiple times for speaking out against human rights abuses and for demanding her brother’s release. In an interview, she told me that she has a message for the young activists headed for that pavilion: “We tried. We did speak truth to power.” Now, she says, many activists are spending their 20s in prison. “When you go, remember that you can be the voice of other young people … Please, let’s maintain that heritage. Please do actually speak truth to power. It will have impact … eyes are on you.”

‘But as the climate summit draws near, and Abd El-Fatah’s hunger strike wears on, Sanaa is losing patience with the large green groups that have so far been silent, seemingly out of fear of losing their badges or being stopped at the border. “Honestly I’m fed up with the hypocrisy of the climate movement,” she wrote on Twitter last week. “Outcries have been pouring from Egypt for months warning that this #COP27 will go far beyond greenwashing, that the ramifications on us will be horrible. Yet most are choosing to ignore the human rights situation.”This, she pointed out, is why climate activism is often seen as an elite exercise, disconnected from people with urgent daily concerns – such as getting their family members out of jail. “You’re guaranteeing that #ClimateAction remains an alien notion exclusive to the few who have the luxury to think beyond today,” she wrote. “Mitigating climate change and fighting for human rights are interlinked struggles, they shouldn’t be separated. Especially since we’re dealing with a regime that is propped up by companies like BP and Eni. And really, how hard is it to raise both issues? #FreeThemAll #FreeAlaa.”

This article first appeared in the Intercept

READ MORE https://www.theguardian.com/environment/2022/oct/18/greenwashing-police-state-egypt-cop27-masquerade-naomi-klein-climate-crisis

Egypt’s Carceral Climate Summit: Naomi Klein on the Crisis of COP27 Being Held in a Police State October 21, 2022

LISTEN READ MORE Transcript https://www.democracynow.org/2022/10/21/naomi_klein_cop27_un_egypt_greenwashing

#COP27 Egypt 2022

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klosterdorsey · 2 years

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Video Games are a new Frontier in Digital Rights

Article content By Avi Asher-Schapiro

NEW YORK, July 30 (Thomson the Reuters Foundation) - Critical digital rights battles over privacy as well as free speech and anonymity are increasingly being fought in video games, a growing market that is becoming an "new political arena," experts and insiders told the Reuters Foundation on Thursday.

Video games are seen as a new frontier in digital rights Back to video

Participants at RightsCon, a conference on digital rights, stated that the industry is predicted to double its annual revenues to $300 billion by 2025. This is why it is more important to inquire about how operators, designers and government agencies deal with sensitive issues.

Article content

Article content In the last few months, an Hong Kong activist staged a protest against Beijing's rule in the game of social simulation known as Animal Crossing, and a member of the U.S. Congress, Alexandria Ocasio-Cortez, campaigned in the game as well.

The game Minecraft has been used to circumvent censorship with groups using it to create digital libraries and to transport banned materials into oppressive countries. Games

Micaela Mantegna founder of GeekyLegal (an Argentinian group that is focused on technology policy) she said, "Video games are now this new arena of political discussion."

Game designers are also renowned for creating games that address sensitive issues, such as mental illness or refugees.

"Video games are a great tool to start talking about the most difficult issues in real life," Stephanie Zucarelli, a board member of Women in Games Argentina, a non profit group.

Article content User rights may be violated, according to Kurt Opsah (an attorney with the Electronic Frontier Foundation), an organization that protects digital rights.

He added that law enforcement authorities can ask game companies for their users' personal information, operating companies can restrict users' access to their games and governments can pressure game makers and operators to take down the content.

He gave an example of the U.S. military deleting critical comments that had been posted on recruitment channels hosted on Twitch, a popular streaming platform.

"They didn't want people to have an anti-military view on their recruiting channels," he said.

He also said that governments can apply pressure to videogame companies. This is evident in the case of Activision Blizzard Entertainment, which last year suspended one of its players from a contest because of political remarks about Hong Kong in an interview.

Tencent Holdings, a Chinese gaming giant, is a part-owner of Blizzard.

(Reporting by Avi Asher-Schapiro. Editing by Ellen Wulfhorst. Thomson Reuters Foundation, Thomson Reuters charity arm is to be credited. It examines the lives and struggles of those all over the world who are unable to live their lives free or in a fair way. Visit http://news.trust.org)

#Alusky's Blog #MINECRAFT #Games #Online servers #GAMING

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captainmorgasms · 6 years

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Serving up sass for my last day of #RightsCon - thank you @accessnow for having me, it's been alRIGHT 😜💓 #selfie (at Glen Park, Toronto)

#rightscon #selfie

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isik5 · 7 years

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A conferance with a view #rightscon (at Botanical Garden of Brussels)

#rightscon

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humanrightsconnected · 2 years

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🥳 New blog post 🎉 Follow our three-part blog series where we share resources and insights from RightsCon 2022! Part 1 is now available! Make sure to take a look to discover 15+ impactful organizations!

Stay tuned for Part 2!

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mostlysignssomeportents · 1 year

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Wall Street Journal goes to bat for the vultures who want to steal your house

Tonight (June 5) at 7:15PM, I’m in London at the British Library with my novel Red Team Blues, hosted by Baroness Martha Lane Fox.

Tomorrow (June 6), I’m on a Rightscon panel about interoperability.

The tacit social contract between the Wall Street Journal and its readers is this: the editorial page is for ideology, and the news section is for reality. Money talks and bullshit walks — and reality’s well-known anticapitalist bias means that hewing too closely to ideology will make you broke, and thus unable to push your ideology.

That’s why the editorial page will rail against “printing money” while the news section will confine itself to asking which kinds of federal spending competes with the private sector (creating a bidding war that drives up prices) and which kinds are not. If you want frothing takes about how covid relief checks will create “debt for our grandchildren,” seek it on the editorial page. For sober recognition that giving small amounts of money to working people will simply go to reducing consumer and student debt, look to the news.

But WSJ reporters haven’t had their corpus colossi severed: the brain-lobe that understands economic reality crosstalks with the lobe that worship the idea of a class hierarchy with capital on top and workers tugging their forelacks. When that happens, the coverage gets weird.

Take this weekend’s massive feature on “zombie mortgages,” long-written-off second mortgages that have been bought by pennies for vultures who are now trying to call them in:

https://www.wsj.com/articles/zombie-mortgages-could-force-some-homeowners-into-foreclosure-e615ab2a

These second mortgages — often in the form of home equity lines of credit (HELOCs) — date back to the subprime bubble of the early 2000s. As housing prices spiked to obscene levels and banks figured out how to issue risky mortgages and sell them off to suckers, everyday people were encouraged — and often tricked — into borrowing heavily against their houses, on complicated terms that could see their payments skyrocket down the road.

Once the bubble popped in 2008, the value of these houses crashed, and the mortgages fell “underwater” — meaning that market value of the homes was less than the amount outstanding on the mortgage. This triggered the foreclosure crisis, where banks that had received billions in public money forced their borrowers out of their homes. This was official policy: Obama’s Treasury Secretary Timothy Geithner boasted that forcing Americans out of their homes would “foam the runways” for the banks and give them a soft landing;

https://pluralistic.net/2023/03/06/personnel-are-policy/#janice-eberly

With so many homes underwater on their first mortgages, the holders of those second mortgages wrote them off. They had bought high-risk, high reward debt, the kind whose claims come after the other creditors have been paid off. As prices collapsed, it became clear that there wouldn’t be anything left over after those higher-priority loans were paid off.

The lenders (or the bag-holders the lenders sold the loans to) gave up. They stopped sending borrowers notices, stopped trying to collect. That’s the way markets work, after all — win some, lose some.

But then something funny happened: private equity firms, flush with cash from an increasingly wealthy caste of one percenters, went on a buying spree, snapping up every home they could lay hands on, becoming America’s foremost slumlords, presiding over an inventory of badly maintained homes whose tenants are drowned in junk fees before being evicted:

https://pluralistic.net/2022/02/08/wall-street-landlords/#the-new-slumlords

This drove a new real estate bubble, as PE companies engaged in bidding wars, confident that they could recoup high one-time payments by charging working people half their incomes in rent on homes they rented by the room. The “recovery” of real estate property brought those second mortgages back from the dead, creating the “zombie mortgages” the WSJ writes about.

These zombie mortgages were then sold at pennies on the dollar to vulture capitalists — finance firms who make a bet that they can convince the debtors to cough up on these old debts. This “distressed debt investing” is a scam that will be familiar to anyone who spends any time watching “finance influencers” — like forex trading and real estate flipping, it’s a favorite get-rich-quick scheme peddled to desperate people seeking “passive income.”

Like all get-rich-quick schemes, distressed debt investing is too good to be true. These ancient debts are generally past the statute of limitations and have been zeroed out by law. Even “good” debts generally lack any kind of paper-trail, having been traded from one aspiring arm-breaker to another so many times that the receipts are long gone.

Ultimately, distressed debt “investing” is a form of fraud, in which the “investor” has to master a social engineering patter in which they convince the putative debtor to pay debts they don’t actually owe, either by shading the truth or lying outright, generally salted with threats of civil and criminal penalties for a failure to pay.

That certainly goes for zombie mortgages. Writing about the WSJ’s coverage on Naked Capitalism, Yves Smith reminds readers not to “pay these extortionists a dime” without consulting a lawyer or a nonprofit debt counsellor, because any payment “vitiates” (revives) an otherwise dead loan:

https://www.nakedcapitalism.com/2023/06/wall-street-journal-aids-vulture-investors-threatening-second-mortgage-borrowers-with-foreclosure-on-nearly-always-legally-unenforceable-debt.html

But the WSJ’s 35-paragraph story somehow finds little room to advise readers on how to handle these shakedowns. Instead, it lionizes the arm-breakers who are chasing these debts as “investors…[who] make mortgage lending work.” The Journal even repeats — without commentary — the that these so-called investors’ “goal is to positively impact homeowners’ lives by helping them resolve past debt.”

This is where the Journal’s ideology bleeds off the editorial page into the news section. There is no credible theory that says that mortgage markets are improved by safeguarding the rights of vulture capitalists who buy old, forgotten second mortgages off reckless lenders who wrote them off a decade ago.

Doubtless there’s some version of the Hayek Mind-Virus that says that upholding the claims of lenders — even after those claims have been forgotten, revived and sold off — will give “capital allocators” the “confidence” they need to make loans in the future, which will improve the ability of everyday people to afford to buy houses, incentivizing developers to build houses, etc, etc.

But this is an ideological fairy-tale. As Michael Hudson describes in his brilliant histories of jubilee — debt cancellation — through history, societies that unfailingly prioritize the claims of lenders over borrowers eventually collapse:

https://pluralistic.net/2022/07/08/jubilant/#construire-des-passerelles

Foundationally, debts are amassed by producers who need to borrow capital to make the things that we all need. A farmer needs to borrow for seed and equipment and labor in order to sow and reap the harvest. If the harvest comes in, the farmer pays their debts. But not every harvest comes in — blight, storms, war or sickness — will eventually cause a failure and a default.

In those bad years, farmers don’t pay their debts, and then they add to them, borrowing for the next year. Even if that year’s harvest is good, some debt remains. Gradually, over time, farmers catch enough bad beats that they end up hopelessly mired in debt — debt that is passed on to their kids, just as the right to collect the debts are passed on to the lenders’ kids.

Left on its own, this splits society into hereditary creditors who get to dictate the conduct of hereditary debtors. Run things this way long enough and every farmer finds themselves obliged to grow ornamental flowers and dainties for their creditors’ dinner tables, while everyone else goes hungry — and society collapses.

The answer is jubilee: periodically zeroing out creditors’ claims by wiping all debts away. Jubilees were declared when a new king took the throne, or at set intervals, or whenever things got too lopsided. The point of capital allocation is efficiency and thus shared prosperity, not enriching capital allocators. That enrichment is merely an incentive, not the goal.

For generations, American policy has been to make housing asset appreciation the primary means by which families amass and pass on wealth; this is in contrast to, say, labor rights, which produce wealth by rewarding work with more pay and benefits. The American vision is that workers don’t need rights as workers, they need rights as owners — of homes, which will always increase in value.

There’s an obvious flaw in this logic: houses are necessities, as well as assets. You need a place to live in order to raise a family, do a job, found a business, get an education, recover from sickness or live out your retirement. Making houses monotonically more expensive benefits the people who get in early, but everyone else ends up crushed when their human necessity is treated as an asset:

https://gen.medium.com/the-rents-too-damned-high-520f958d5ec5

Worse: without a strong labor sector to provide countervailing force for capital, US politics has become increasingly friendly to rent-seekers of all kinds, who have increased the cost of health-care, education, and long-term care to eye-watering heights, forcing workers to remortgage, or sell off, the homes that were meant to be the source of their family’s long-term prosperity:

https://doctorow.medium.com/the-end-of-the-road-to-serfdom-bfad6f3b35a9

Today, reality’s leftist bias is getting harder and harder to ignore. The idea that people who buy debt at pennies on the dollar should be cheered on as they drain the bank-accounts — or seize the homes — of people who do productive work is pure ideology, the kind of thing you’d expect to see on the WSJ’s editorial page, but which sticks out like a sore thumb in the news pages.

Thankfully, the Consumer Finance Protection Bureau is on the case. Director Rohit Chopra has warned the arm-breakers chasing payments on zombie mortgages that it’s illegal for them to “threaten judicial actions, such as foreclosures, for debts that are past a state’s statute of limitations.”

But there’s still plenty of room for more action. As Smith notes, the 2012 National Mortgage Settlement — a “get out of jail for almost free” card for the big banks — enticed lots of banks to discharge those second mortgages. Per Smith: “if any servicer sold a second mortgage to a vulture lender that it had charged off and used for credit in the National Mortgage Settlement, it defrauded the Feds and applicable state.”

Maybe some hungry state attorney general could go after the banks pulling these fast ones and hit them for millions in fines — and then use the money to build public housing.

Catch me on tour with Red Team Blues in London and Berlin!

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2023/06/04/vulture-capitalism/#distressed-assets

[Image ID: A Georgian eviction scene in which a bobby oversees three thugs who are using a battering ram to knock down a rural cottage wall. The image has been crudely colorized. A vulture looks on from the right, wearing a top-hat. The battering ram bears the WSJ logo.]

#pluralistic #great financial crisis #vulture capitalism #debts that can’t be paid won’t be paid #zombie debts #jubilee #michael hudson #wall street journal #business press #house thieves #debt #statute of limitations

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innismode · 3 years

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Terrorism in the 21st century is all about the social media. It was by the wings of tweets, posts and likes that ISIL and its affiliates had been elevated to meteoric heights of brutal spectacle. And it was only natural that the tech community took umbrage on this gross misappropriation of their space and maleficent abuse of their implements. Thus did the Global Internet Forum to Counter Terrorism came about, established in 2017 as a response to address the terrorist use of the internet, and their roster of supporters include industry giants such as Facebook, Twitter, YouTube and Microsoft, to name a few.

One of the most interesting work they are currently working on is the hash database, a collection of AI facilitated “hash” identifiers that allows tech companies like social media providers to quickly identify violent extremist material among the deluge of content that pass through their platforms everyday. By sharing this information among the industry players, the voluminous extremist content that still make their way through multiple platforms can be taken down a peg or two. To date, they have more than 300,000 unique hashes that are put to work to keep the internet clean of extremist material and impressionable minds away from such influences.

But such efforts may not be free from some challenges. This is something I brought up when I went to the RightsCon Summit in Silicon Valley in 2014. I was actually there to give a terribly forgettable spiel on some equally forgettable attempt to counter the narratives of violent extremists, in a panel where nobody would have remembered I was there in the first place. But I was carrying a question from some friends in an NGO back home who were doing their own part in countering violent extremism who were experiencing a rather unique problem.

They were actually part of a humanitarian mission that regularly organized relief for victims of the Syrian civil war, but they sometimes came across individuals who were interested in going to the zones of conflict for all the wrong reasons. They decided to do something about it by putting up advisory videos on popular social media platforms to dissuade emotionally-charged young men and women from picking up arms, buying one-way plane tickets and going down that very dark road. I mean, it was great that these guys were doing this - they had tons of credibility owing to the fact that they regularly went down to the ground in conflict zones and can give it as it is, and they were going to speak out that joining violent extremist groups is not going to be what these wannabees think it would be, and would very well be best AVOIDED like the plague. Problem is that their videos were being taken down and their accounts were being suspended.

Now, they had their suspicions. They thought, whether rightly or wrongly, that their videos were being red flagged by the social media companies. Probably had something to do with the fact that, oh, they were talking about the Syrian Civil war and were talking about extremists and were talking about one-way tickets... well, you get the idea. Well, they were talking about this, but they were doing it to prevent people from joining with the terrorists. (TLDR: they thought their video speaking out against violent extremism was taken down because their videos were thought to be pro-violent extremism. I know, right?). Lord knows we need more of this efforts to engage people at the emotional and motivational level to prevent such radicalization, but even this fledgling effort was unceremoniously taken down and hit the proverbial brick wall.

So, as I was going to Silicon Valley to take part of this Summit where big name tech companies were going to touch about some of these issues, they were wondering whether I could ask representatives of a particular social media platform whether they could look into their problem, maybe consider releasing their accounts from suspension and allow their CVE material back online. Now, I met such a representative, whose company shall remain nameless, suffice to say it was a pretty big “F”-ing company, if you catch my drift. But of course I realized it was a fool’s errand. Of course to expect such a tech behemoth to look into the mishap the be-felled a two-bit CVE operation was like reaching for the stars. Of course the representative was charmingly polite and reassured that the matter would be looked into. Of course the social media accounts in question remained status quo the last time I heard about them. Of course.

But therein lies the conundrum. It is great that tech companies are taking the much needed steps to take down much of the violent extremism material that are churning out all these freedom-fighter wannabees. But the AI processes that handle such voluminous amounts of content on a daily basis may have difficulty identifying when such material are actually countering the propaganda of violent extremists. So, baby? Bathwater? That kindova thing. I believe equally important to taking down the material would be active efforts to speak out against extremism. To engage meaningfully with those that are already coming dangerously close to the fence and wondering when would be the best time to jump over. Because if we think that all the take-downs in the world is gonna prevent Johnny or Jemilah from seeing those darnedest videos if they REALLY want to, we’ve got another thing coming. Building what a good friend of mine likes to call “mental firewalls” to help impressionable individuals come to their own decisions not to support or participate in violent extremism is another important step in making sure that we win the long game. And it would help if the babies, no matter how small or ineffectual they might currently be, remain to fight another day when the bathwater has drained away.

#tech #terrorism #cve #pve #radicalization #hash #violent extremism #gifct #youtube #microsoft #facebook #twitter

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