Maybe You Heard: The System Is Rigged

 

 

 

You heard it here first.

 

Harry E. Walker/Getty Images

 

 

 

Maybe You Heard: The System Is Rigged

 

 

 

By Paula Dwyer For BLOOMBERG

 

Rigged. No word more appropriately describes the 2016 presidential election. I don’t mean that the election is being fixed by ballot-box stuffing, or that politicians are buying votes by handing out “walking-around money.”   

 

I’m talking about how the word “rigged” keeps popping up everywhere, as if speech writers had a lexicographic central casting. Politicians use it to make the case for their candidacies. Voters use it to explain why they’re hopping mad. Liberal movements use it as their raison d’etre. Conservatives use it to mock the liberal “elites” and government in Washington. Everything, it seems, is rigged — from banks to tax codes and criminal prosecutions.

 

Elizabeth Warren put the word into political play in 2012, in a passionate speech at the Democratic National Convention: “People feel like the system is rigged against them, and here is the painful part, they’re right. The system is rigged.” The worst offenders: oil subsidies, low tax rates paid by billionaires, and Wall Street CEOs who, after the 2008 financial crisis, “still strut around Congress, no shame, demanding favors.”

 

The Massachusetts senator hasn’t let up.  She put out a report last month called “Rigged Justice,” which cites all the times corporations have been in trouble yet ultimately escaped the long arm of the law.  Her mantra is aimed especially at banks that got bailed out after the housing collapse, when homeowners didn’t. In Warren’s world, it all happened according to some playbook cooked up by her sworn enemies — who included Treasury secretaries Hank Paulson and Tim Geithner and Federal Reserve Chairman Ben Bernanke — rather than as the result of decisions made on the fly as the global economy was headed off the cliff.

 

Now Warren is overshadowed by Bernie Sanders, who believes the entire economy is rigged, having been “designed by the wealthiest people in this country to benefit the wealthiest people in this country at the expense of everybody else.”

 

Congress, in Sanders’s eyes, is likewise rigged, because Big Money donors allow lawmakers to ignore the needs of constituents. And when the average person works long hours for low wages while 58 percent of all new income goes to the top 1 percent, the compensation system must be rigged.

 

Bernie Sanders himself is cast as a victim of this rigging, and it isn’t just the liberal blogosphere making the claim. MSNBC’s Joe “Morning Joe” Scarborough and co-host Mika Brzezinski in December took turns roasting the Democratic National Committee for rigging the debate calendar in Hillary Clinton’s favor.   

 

In his Jan. 13 State of the Union address, Obama climbed on the bandwagon. He lamented that, over seven years, he and congressional Republicans hadn’t been able to agree on “what role the government should play in making sure the system’s not rigged in favor of the wealthiest and big corporations.”  

 

Republicans, who are supposed to be the beneficiaries of all this rigging, also see themselves as victims. In presidential debates, New Jersey Governor Chris Christie has said the tax system is “rigged for the rich.”

 

Conservatives see evidence of rigging everywhere: in the Obama administration’s executive orders to circumvent Congress, for example, and more generally in the Washington cabal that aims to steal what is rightfully theirs. Famously comparing Congress to the World Wrestling Federation, Ted Cruz said: “the outcome is pre-rigged, the outcome is predetermined. They know who’s going to win and it’s all for show.”

 

And don’t forget the media. In the undercard debate on Jan. 28, Carly Fiorina urged Americans to reclaim power from the pundits and the press. “We were intended to be a citizen government, citizens. The game is rigged. You have the power. Take our country back.” 

 

The media can play the game too. The Des Moines Register/Bloomberg Politics poll taken before the Iowa caucuses asked respondents if they thought the “system works reasonably well for those who work hard to get ahead, or do you think the system is rigged against all but the very rich and powerful?”

 

The answers revealed a lot about the voters’ state of mind this year: 67 percent of Democrats said the system is rigged, and 38 percent of Republicans did.

 

Yes, voters in both parties have always expressed suspicions that the game is stacked against them in one way or another. But in 2016, it seems the party that owns the “R” word could own the election.

 

More than anything, that may explain why Hillary Clinton didn’t put Bernie Sanders away in Iowa’s Democratic caucuses on Monday night. She never uses the word.

 

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

 

To contact the author of this story:
Paula Dwyer at pdwyer11@bloomberg.net

 

To contact the editor responsible for this story:
Katy Roberts at kroberts29@bloomberg.net

 

 

———————————-

Anti-Trust Charges Filed Against the National Venture Capital Association “Crime Club”

 

 

 

By Carter Lee

 

 

The FBI, The SEC, The FTC, the U.S. Attorney General and the Civil Court system have been asked to investigate and prosecute a “Cartel organization” known as the National Venture Capital Association (NVCA), per documents filed this week.

 

 

This organization, created by CIA liaisons from a shady rogue group known as In-Q-Tel (funders of Google) James Breyer, Gilman Louie, as well as John Doerr, Eric Schmidt, Steve Jurvetson and other notorious Silicon Valley names, has been discovered to be operating a covert “boys club” which arranges collusion, price fixing, market rigging, political bribes, monopolies, black-lists, valuation rigging, stock pumps, and Flash Boy stock manipulations.

 

 

These billionaires use back-room meetings, secret databases, intelligence systems, coded Tweets, and private Google docs and DropBox boxes to rig the tech industry so that only their private club gets to decide which American tech companies get to live or die. Unless you were in their “elite family fraternity houses, you are simply grist for their mercenary mill…” say the charges.

 

 

This monopoly club began to get exposed in the notorious “AngelGate Scandal”. The spotlight focused even more tightly on them in the other twisted tech scandal known as “The Silicon Valley No-Poaching Conspiracy”, in which a lawsuit revealed how far their collusion could go.

 

 

Because these men fund political campaigns that go all the way up to The White House, law enforcement has been slow to the gate. In every enforcement agency, though, there are a mix of Democrat and Republican employees. You only need a couple good cops to keep a case going. In federal agencies with thousands of investigators, there will always be a handful of “Elliot Ness”-motivated good guy cops from each political party. At least one of those will eventually get their man, or men, in this case.

 

 

The NVCA cartel rigged trillions of dollars of taxpayer money for themselves in the Department of Energy Cleantech Crash, The TARPP funding and NASA contracts. Now the chickens have come home to roost.

 

 

 

Angelgate is a controversy[1] surrounding allegations of price fixing and collusion among a group of ten angel investors in the San Francisco Bay Area.[2]

 

Emergence

 

The issue

 

The scandal began in September 2010 after Michael Arrington, editor of the TechCrunch publication, wrote in his blog that he had been turned away from a secret meeting among so-called “super angels” he knew,[3] held at Bin38, a wine bar in San Francisco’s Marina District.[4] The participants at the meeting, among other things, discussed how they could compete with other angels, venture capitalists, and the Y Combinator business incubator for the limited pool of worthy investment opportunities.[5] Arrington said that after the meeting, he had been informed by two of the attendees that the investors had discussed how to fix low valuations for new start-up companies, and how to keep better-funded venture capitalists from investing.[6]

 

The blog became the subject of discussion among the Silicon Valley start-up community over the next several days.[7][8] Investor Ron Conway, whose business partner attended the meeting, wrote an email highly critical of the angels involved and called the event “despicable and embarrassing”.[9]Dave McClure, a well-known angel present at the event,[7] wrote in a blog that Arrington’s account was inaccurate, and a tweet (later deleted) complaining about Conway.[10]Chris Sacca wrote a lengthy email that defended the participants and was critical of Conway, which was also leaked to TechCrunch.[11]

 

Aftermath and critique

 

Reports arose that the United States Federal Bureau of Investigation began reviewing the incident.[12]

 

There was skepticism that there was actually any collusion or that price fixing could succeed if it was attempted.[1][13][14] The event also gave rise to various online cultural phenomena. Among other things there was a flash mob at the wine bar, a Hitler Downfall parody, a spike in the establishment’s Google rank, a number of Twitter jokes[4] (compiled on question-and-answer site Quora), and so-called “fakeplans” for super-angel meetups on the site plancast.com.[7] On Monday, September 27, 2010, Ron Conway, Dave McClure, Chris Sacca, and others appeared at a panel discussion hosted by Arrington at his “TechCrunch Disrupt” conference in San Francisco[15][16] where, despite Arrington’s prodding, they avoided a “Jerry Springer moment”.[17]

 

Other Articles on the AngelGate Scandal

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  1. Jessica Guynn (September 27, 2010). “‘AngelGate’ disrupts TechCrunch conference but no ‘Jerry Springer’ moment”. Los Angeles Times.

 

 

 

 

and the other conspiracy:

 

 

High-Tech Employee Antitrust Litigation is commonly called The Silicon Valley No-Poaching Conspiracy. It is a 2010 United States Department of Justice (DOJ) antitrust action and a 2013 civil class action against several Silicon Valley companies for alleged “no cold call” agreements which restrained the recruitment of high-tech employees. The defendants are Adobe, Apple Inc., Google, Intel, Intuit, Pixar, Lucasfilm and eBay, all high-technology companies with a principal place of business in the San Francisco–Silicon Valley area of California. The civil class action was filed by five plaintiffs, one of whom has died; additionally whistle-blowers Rajeev Motwani, Gary D. Conley, Ravi Kumar, and others, met deadly fates; it accused the tech companies of collusion between 2005 and 2009 to refrain from recruiting each other’s employees.

 

“No cold call” agreements

 

Cold calling is one of the main methods used by companies in the high-technology sector to recruit employees with advanced and specialised skills, such as software and hardware engineers, programmers, animators, digital artists, Web developers and other technical professionals.[1] Cold calling involves communicating directly in any manner with another firm’s employee who has not otherwise applied for a job opening. Cold calling may be done in person, by phone, letter, or email.[2] Cold calling is an effective method of recruiting for the high-technology sector because “employees of other [high-technology] companies are often unresponsive to other recruiting strategies… [and] current satisfied employees tend to be more qualified, harder working, and more stable than those who are actively looking for employment.”[3]

 

Amy Lambert, Google’s associate general counsel, noted in a blog post shortly after the DOJ’s actions, that Google’s definition of cold calling does not necessarily eliminate recruiting by letter or email, but only the process of calling on the telephone. By implication, recruiting through LinkedIn incurs recruiting by “InMail” – LinkedIn’s own mail contact system: “In order to maintain a good working relationship with these companies, in 2005 we decided not to “cold call” employees at a few of our partner companies. Our policy only impacted cold calling, and we continued to recruit from these companies through LinkedIn, job fairs, employee referrals, or when candidates approached Google directly. In fact, we hired hundreds of employees from the companies involved during this time period.”

 

The challenged “no cold call” agreements are alleged bilateral agreements between high technology companies not to cold call each other’s employees. The DOJ alleges that senior executives at each company negotiated to have their employees added to ‘no call’ lists maintained by human resources personnel or in company hiring manuals. The alleged agreements were not limited by geography, job function, product group, or time period. The alleged bilateral agreements were between: (1) Apple and Google, (2) Apple and Adobe, (3) Apple and Pixar, (4) Google and Intel, (5) Google and Intuit,[4] and (6) Lucasfilm and Pixar.[5]

 

The civil class action further alleges that agreements also existed to (1) “provide notification when making an offer to another [company]’s employee (without the knowledge or consent of the employee)” and (2) “agreements that, when offering a position to another company’s employee, neither company would counteroffer above the initial offer.”[3]

 

Department of Justice antitrust action

 

 

On September 24, 2010, the United States Department of Justice Antitrust Division filed a complaint in the US District Court for the District of Columbia alleging violations of Section 1 of the Sherman Act. In US v. Adobe Systems Inc., et al., the Department of Justice alleged that Adobe, Apple, Google, Intel, Intuit, and Pixar had violated Section 1 of the Sherman Act by entering into a series of bilateral “No Cold Call” Agreements to prevent the recruitment of their employees (a similar but separate suit was filed against Lucasfilm on December 21, 2010[6]). The DOJ alleged in their Complaint that the companies had reached “facially anticompetitive” agreements that “eliminated a significant form of competition…to the detriment of the affected employees who were likely deprived of competitively important information and access to better job opportunities.” The DOJ also alleged that the agreements “were not ancillary to any legitimate collaboration,” “were much broader than reasonably necessary for the formation or implementation of any collaborative effort,” and “disrupted the normal price-setting mechanisms that apply in the labor setting.”[4] The same day it filed the suit, the DOJ and the defendants proposed a settlement.[7]

 

A final judgment enforcing the settlement was entered by the court on March 17, 2011.[8] Although the DOJ Complaint only challenged the alleged “no cold call” agreements, in the settlement, the companies agreed to a more broad prohibition against “attempting to enter into, entering into, maintaining or enforcing any agreement with any other person to in any way refrain from, requesting that any person in any way refrain from, or pressuring any person in any way to refrain from soliciting, cold calling, recruiting, or otherwise competing for employees of the other person”, for a period of five years; the court can grant an extension.[8] The settlement agreement does not provide any compensation for company employees affected by the alleged agreements.[9] Lucasfilm entered into a similar settlement agreement in December 2010.[5]

 

Civil class action

 

In re: High-Tech Employee Antitrust Litigation (U.S. District Court, Northern District of California 11-cv-2509 [10]) is a class-action lawsuit on behalf of over 64,000 employees of Adobe, Apple Inc., Google, Intel, Intuit, Pixar and Lucasfilm (the last two are subsidiaries of Disney) against their employer alleging that their wages were repressed due to alleged agreements between their employers not to hire employees from their competitors.[11][12] The case was filed on May 4, 2011 by a former software engineer at Lucasfilm and alleges violations of California’s antitrust statute, Business and Professions Code sections 16720 et seq. (the “Cartwright Act”); Business and Professions Code section 16600; and California’s unfair competition law, Business and Professions Code sections 17200, et seq. Focusing on the network of connections around former Apple CEO Steve Jobs, the Complaint alleges “an interconnected web of express agreements, each with the active involvement and participation of a company under the control of Steve Jobs…and/or a company that shared at least one member of Apple’s board of directors.” The alleged intent of this conspiracy was “to reduce employee compensation and mobility through eliminating competition for skilled labor.”[13]

 

On October 24, 2013 the United States District Court for the Northern District of California granted class certification for all employees of Defendant companies from January 1, 2005 through January 1, 2010.[9]

 

As of October 31, 2013, Intuit, Pixar and Lucasfilm have reached a tentative settlement agreement. Pixar and Lucasfilm agreed to pay $9 million in damages, and Intuit agreed to pay $11 million in damages.[9] In May 2014, Judge Lucy Koh approved the $20 million settlement between Lucasfilm, Pixar, and Intuit and their employees. Class members in this settlement, which involved fewer than 8% of the 65,000 employees affected, will receive around $3,840 each.[14]

 

The trial of the class action for the remaining Defendant companies was scheduled to begin on May 27, 2014. The plaintiffs intended to ask the jury for $3 billion in compensation, a number which could in turn have tripled to $9 billion under antitrust law.[15] However, in late April 2014, the four remaining defendants, Apple Inc, Google, Intel and Adobe Systems, agreed to settle out of court. Any settlement must be approved by Judge Lucy Koh.[16][17]

 

On May 23, 2014, Apple, Google, Intel, Adobe agreed to settle for $324.5 million. Lawyers sought 25% in attorneys’ fees, plus expenses of as much as $1.2 million, according to the filing. Additional award payments of $80,000 would be sought for each named plaintiff who served as a class representative.[18] Payouts will average a few thousand dollars based on the salary of the employee at the time of the complaint.

 

In June 2014, Judge Lucy Koh expressed concern that the settlement may not be a good one for the plaintiffs. Michael Devine, one of the plaintiffs, said the settlement is unjust. In a letter he wrote to the judge he said the settlement represents only one-tenth of the $3 billion in compensation the 64,000 workers could have made if the defendants had not colluded.[19]

 

On August 8, 2014, Judge Koh rejected the settlement as insufficient on the basis of the evidence and exposure. Rejecting a settlement is unusual in such cases. This left the defendants with a choice between raising their settlement offer or facing a trial.[20]

 

On September 8, 2014, Judge Koh set April 9, 2015 as the actual trial date for the remaining defendants, with a pre-trial conference scheduled for December 19, 2014. Also, as of early September 2014, the defendants had re-entered mediation to determine whether a new settlement could be reached.[21]

 

A final approval hearing was held on July 9, 2015.[22] On Wednesday September 2, 2015, Judge Lucy H. Koh signed an order granting Motion for Final Approval of Class Action Settlement. The settlement website stated that Adobe, Apple, Google, and Intel has reached a settlement of $415 million and other companies settled for $20 million.

 

According to the settlement website, Gilardi & Co., LLC distributed the settlement to class members the week of December 21, 2015.

 

One of the More Notorious Players

 

Role in illegal non-recruiting agreements

 

While working at Google, Eric Schmidt was involved in activities[36] that later became the subject of the High-Tech Employee Antitrust Litigation case that resulted in a settlement of $415 million paid by Adobe, Apple, Google and Intel to employees. In one incident, after receiving a complaint from Steve Jobs of Apple, Schmidt sent an email to Google’s HR people saying; “I believe we have a policy of no recruiting from Apple and this is a direct inbound request. Can you get this stopped and let me know why this is happening? I will need to send a response back to Apple quickly so please let me know as soon as you can. Thanks Eric”. Schmidt’s email led to a recruiter for Google being “terminated within the hour” for not having adhered to the illegal scheme. Under Schmidt, there was a “Do Not Call list” of companies Google would avoid recruiting from.[37] According to a court filing, another email exchange shows Google’s human resources director asking Schmidt about sharing its no-cold call agreements with competitors. Schmidt responded that he preferred it be shared “verbally, since I don’t want to create a paper trail over which we can be sued later?”.[36]

 

Other Articles on the AngelGate Scandal

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  1. “Court preliminarily approves $415m settlement of high-tech no-poaching lawsuit”. Retrieved 2015-06-30.

 

 

 

HSBC “Swiss Leaks”, hacked documents, ex-employee testimony, surveillance records and the combined dockets of multiple past cases now reveal the true intentions, strategies, covert manipulations and illegal anti-trust actions of this Silicon Valley “Crime Club”.

 

 

Using database code signals on sites such as www.gust.com, a public venture funding blog, as well as secret DropBox accounts, this insiders club of “Venture Capitalists”, as they called themselves, were able to black-list, and run defamation “hit-jobs” on inventors, and entrepreneurs, who were too good at inventing technologies that put their existing holdings out of business. Criminal charges have been demanded from the FBI, FTC, SEC and Attorney General. Civil anti-trust lawsuits are underway.

 

 

Hopefully these actions will correct the sad state of affairs that Silicon Valley has fallen into at the hands of this mercenary, misogynistic old white frat house “boys club”.

 

 

 

TAGS: FBI, FTC, ANGELGATE, angel gate conspiracy, angelgate scandal, IN-Q-Tel, INQTEL, New America, no poaching scandal, high tech poaching, no poaching lawsuit, silicon valley cartel, eric schmidt, NVCA, national venture capital association, anti-trust, anti-trust charges