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Archive for the ‘Business’ Category

THE GOOD NEWS IN THE ASHLEY MADISON SCANDAL

In Bureaucracy, Social commentary, Law Enforcement, Business on August 26, 2015 at 9:50 am

It’s the nightmare-come-true for corporate America.

Name-brand companies, trusted by millions, hit with massive data breaches.

And with a series of keystrokes, the most sensitive financial and personal information of their employees and/or customers is compromised.

Among those companies:

  • Target
  • Kmart
  • Home Depot
  • JPMorgan/Chase
  • Staples
  • Dairy Queen
  • Anthem, Inc.
  • Sony Pictures
  • Primera Blue Cross
  • U.S. Postal Service

Click here: Data Breach Tracker: All the Major Companies That Have Been Hacked | Money.com

And as of July 15, Ashley Madison joined this list.

Ashley Madison is, of course, the notorious website for cheating wives and husbands.

Launched in 2001, its catchy slogan is: “Life is short.  Have an affair.”

One of its ads featured a photo of a woman apparently kneeling at the feet of a bare-chested man, her hand passionately clawing at his belt.  Next to her was the caption: “Join FREE & change your life today.  Guaranteed!”

Ashley Madison - Ashley Madison Agency

Ashley Madison claims to have more than 37 million members.  And now, untold numbers of them may find their lives changed forever.

Its hackers were enraged at the company’s refusal to fully delete users’ profiles unless it received a $19 fee.

Referring to themselves as “The Impact Team,” they stated in an online manifesto: “Full Delete netted [Avid Life Media, the parent company of Ashley Madison] $1.7 million in revenue in 2014.  It’s also a complete lie.

“Users almost always pay with credit card; their purchase details are not removed as promised, and include real names and address, which is of course the most important information the users want removed.”

On July 20, Avid Life Media defended the service, and said it would make it free.

Adultery-dating website Ashley Madison hacked

The hackers demanded: “AM [Ashley Madison] AND EM [Established Men] MUST SHUT DOWN IMMEDIATELY PERMANENTLY.

“We have taken over all systems in your entire office and production domains, all customer information databases, source code repositories, financial records, emails.

“Shutting down AM and EM will cost you, but non-compliance will cost you more.”

The hackers threatened to “release all customer records, including profiles with all the customers’ secret sexual fantasies and matching credit card transactions, real names and addresses, and employee documents and emails.”

Avid Life Media assured its customers that it had hired “one of the world’s top IT security teams” to work on the breach:

“At this time, we have been able to secure our sites, and close the unauthorized access points. We are working with law enforcement agencies, which are investigating this criminal act.”

This statement gives new meaning to the phrase, “Closing the barn door after the cow has gotten out.”

And it raises the question: Why wasn’t this “top IT security team” hired at the outset?

After all, its database is a blackmailer’s dream-come-true. Yet apparently its owners didn’t care enough about the privacy of their customers to provide adequate security.

On August 18, the hackers began releasing their pirated information.

As usual during a corporation’s data breach, Ashley Madison issued a reassuring statement: “We are working with law enforcement agencies, which are investigating this criminal act.

“Any and all parties responsible for this act of cyber-terrorism will be held responsible.”

Eight of those customers (so far) have decided to hold Ashley Madison responsible. They have filed lawsuits against the company in California, Georgia, Minnesota, Missouri, Tennessee and Texas.

They seek class-action status to represent Ashley Madison’s 37 million users.

The lawsuits claim negligence, breach of contract and privacy violations. They charge that Ashley Madison failed to take reasonable steps to protect the security of its users, including those who paid the $19 fee to have their information deleted.

If they win–and force the owners of Ashley Madison to pay up big-time–this could set a precedent for lawsuits by other victims of such data breaches.

An October 22, 2014 “commentary” published in Forbes magazine raised the highly disturbing question: “Cybersecurity: Does Corporate America Really Care?”

And the answer is clearly: No.

Its author is John Hering, co-founder and executive director of Lookout, which bills itself as “the world leader in mobile security for consumers and enterprises alike.”

Click here: Cybersecurity: Does corporate America really care?

“One thing is clear,” writes Hering. “CEOs need to put security on their strategic agendas alongside revenue growth and other issues given priority in boardrooms.”

Hering warns that “CEOs don’t seem to be making security a priority.”  And he offers several reasons for this:

  • The sheer number of data compromises;
  • Relatively little consumer outcry;
  • Almost no impact on the companies’ standing on Wall Street;
  • Executives may consider such breaches part of the cost of doing business.

“Sales figures and new products are top of mind,” writes Hering. “Shoring up IT systems aren’t.”

The key to sharply reducing data breaches lies in holding greed-obsessed CEOs financially accountable for their criminal negligence.

Only then will their  mindset of “We don’t care, we don’t have to” be replaced with: “We care, because our heads will roll if we don’t.”

DAVY CROCKETT VS. DONALD TRUMP

In Politics, Bureaucracy, History, Social commentary, Business on August 25, 2015 at 12:06 am

It’s a scene you couldn’t imagine seeing in John Wayne’s 1960 film, “The Alamo.”  Especially with The Duke playing a hard-drinking, two-fisted Davy Crockett.

John Wayne as Davy Crockett

But it occurs in the novel, Crockett of Tennessee, by Cameron Judd.  And it is no less affecting for its being–so far as we know–entirely fictional.

It’s the last night of life for the Alamo garrison–the night before the 2,000 men of the Mexican Army hurl themselves at the former mission and slaughter its 200 Texian defenders.

The fort’s commander, William Barret Travis, has drawn his “line in the sand” and invited the garrison to choose: To surrender, to try to escape, or to stay and fight to the death.

And the garrison–except for one man–chooses to stay and fight.  That man is Louis “Moses” Rose, a Frenchman who has served in Napoleon’s Grande Armee and survived the frightful retreat from Moscow.

He vaults a low wall of the improvised fort, flees into the moonless desert, and eventually makes his way to the home of a family who give him shelter.

But for the garrison, immortality lies only hours away.  Or does it?

An hour after deciding to stand and die in the Alamo, wrapped in the dark of night, Crockett is seized with paralyzing fear.

“We’re going to die here,” he chokes out to his longtime friend, Persius Tarr.  “You understand that, Persius?  We’re going to die!”

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“I know, Davy.  But there ain’t no news in that,” says Tarr.  “We’re born to die.  Every one of us.  Only difference between us and most everybody else is we know when and where it’s going to be.”

“But I can’t be afraid–not me.  I’m Crockett.  I’m Canebrake Davy.  I’m half-horse, half-alligator.”

“I know you are, Davy,” says Tarr. ”So do all these men here.  That’s why you’re going to get past this.

“You’re going to put that fear behind you and walk back out there and fight like the man you are.  The fear’s come and now it’s gone.  This is our time, Davy.”

“The glory-time,” says Crockett.

“That’s right, David.  The glory-time.”

And then Tarr delivers a sentiment wholly alien to money-obsessed men like Mitt Romney and Donald Trump–who comprise the richest and most privileged 1% of today’s Americans.

“There’s men out there with their eyes on you.  You’re the only thing keeping the fear away from them.  You’re joking and grinning and fiddling-–it gives them courage they wouldn’t have had without you.

Maybe that’s why you’re here, Davy–to make the little men and the scared men into big and brave men.  You’ve always cared about the little men, Davy.  Remember who you are.

“You’re Crockett of Tennessee, and your glory-time has come.  Don’t you miss a bit of it.”

The next morning, the Mexicans assault the Alamo.  Crockett embraces his glory-time-–and becomes a legend for all-time.

David Crockett (center) at the fall of the Alamo

David Crockett (1786-1836) lived–and died–a poor man.  But this did not prevent him from trying to better the lives of his family and fellow citizens–and even his former enemies.

David Crockett

During the War of 1812, he served as a scout under Andrew Jackson.  His foes were the Creek Indians, who had massacred 500 settlers at Fort Mims, Alabama–and threatened to do the same to Crockett’s neighbors in Tennessee.

As a Congressman from Tennessee, he championed the rights of poor whites.  And he opposed then-President Jackson’s efforts to force the same defeated Indians to depart the lands guaranteed them by treaty.

To Crockett, a promise was sacred–whether given by a single man or the United States Government.

And his presence during the 13-day siege of the Alamo did cheer the spirits of the vastly outnumbered defenders.

It’s a matter of historical record that he and a Scotsman named MacGregor often staged musical “duels” to see who could make the most noise.

It was MacGregor with his bagpipes against Crockett and his fiddle.

Contrast this devotion of Crockett to the rights of “the little men,” as Persius Tarr called them, with the attitude of Donald Trump, the currently-favored Republican candidate for President in 2016.

Donald Trump

On June 16, while announcing his candidacy, Trump said:

  • “…I don’t need anybody’s money. It’s nice. I don’t need anybody’s money. I’m using my own money. I’m not using lobbyists, I’m not using donors. I don’t care. I’m really rich.”
  • “I did a lot of great deals and I did them early and young, and now I’m building all over the world….”
  • “So I have a total net worth, and now with the increase, it’ll be well-over $10 billion.”
  • “But here, a total net worth of–net worth, not assets, not–a net worth, after all debt, after all expenses, the greatest assets–Trump Tower, 1290 Avenue of the Americas, Bank of America building in San Francisco, 40 Wall Street, sometimes referred to as the Trump building right opposite the New York–many other places all over the world. So the total is $8,737,540,000.”

Those who give their lives for others are rightly loved as heroes.  Those who dedicate their lives only to their wallets are rightly soon forgotten.

FIGHT AIRLINE ARROGANCE!

In Bureaucracy, Business, Self-Help on August 3, 2015 at 10:33 am

It’s the height of the summer vacation season.  A time when air travel–and airline arrogance–are at their annual height.

Consider the following real-life scenario:

  • You’re vacationing in Denver and must return to San Francisco for an urgent-care medical appointment
  • You’re disabled but nevertheless arrive at the airport on time.
  • The airport–in violation of the Americans With Disabilities Act–doesn’t have anyone assigned to help disabled passengers get onto departing planes.
  • As a result, you arrive at the gate–just as the plane takes off.
  • The airline informs you that if you want to board a plane, you’ll have to pay for another ticket.
  • You can’t afford to buy another ticket–and your urgent-care appointment is tomorrow.

What do you do?

In this case, the stranded passenger–a friend of mine–called me: Bureaucracybuster.

First, I instinctively called the airline company. And that meant starting at the top–the president’s office.

I punched the name of the airline–and the words, “Board of Directors”–into Google. This gave me several websites to click on to obtain the information I needed.

I started dialing–and quickly hung up: I had just remembered the day was a Sunday. Nobody but cleaning crews would be occupying the airline’s executive offices that day.

I had to start all over.

Next, I decided to call Denver Airport and find an official who would help Rachel onto another flight–without charging her for it.

I didn’t know where to start, so I decided that starting anywhere was just fine. As I was routed from one person to another, I would develop a sense of who I needed to reach.

Some of those I reached seemed genuinely concerned with Rachel’s plight. Others gave me the “that’s-life-in-the-big-city” attitude.

One of the latter felt I wasn’t deferential enough in my tone. He threatened to notify the chief of airport security.

“Go ahead,” I said. “I once worked for the United States Attorney’s Office. I’ll be glad to talk with him.”

He backed off–just as I had assumed he would.

Usually the best way to deal with threats is to directly confront the person making them.

(A friend of mine, Richard St. Germain, spent part of his 11 years with the U.S. Marshals Service protecting Mafia witnesses.

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Witness being protected by deputy U.S. marshals

(Many of them didn’t like the places where they were to be relocated under new identities. “I’m going to complain to the Attorney General,” some of them would threaten.

(St. Germain would reach for his office phone, plant it before the witness, and say, “Call him. I’ll give you his number.”  The witness always backed off.)

Eventually I reached the Chief of Airport Operations.

I outlined what had happened. He didn’t seem very sympathetic. So I decided to transfer the problem from Rachel to the airport.

Without raising my voice, I said: “It isn’t her fault that your airport was in non-compliance with the Americans With Disabilities Act and she missed her flight because there wasn’t anyone to assist her.”

Suddenly his tone changed–and I could tell I had definitely reached him.

No doubt visions of federal investigations, private lawsuits and truly bad publicity for his airport flashed across his mind. And all this had been achieved without my making an overt threat of any kind.

He said he would see to it that she got onto another flight without having to buy a second ticket.

I called Rachel to give her the good news. But a few minutes later she called me back, almost in tears.

The airline official at the departure gate was giving her a bad time: “If we have to choose between you and another passenger who has a ticket for this flight, he’ll go, not you.”

She laid out a series of other scenarios under which Rachel would remain stranded in Denver.

So once again I called the Chief of Airport Operations: “I just got a call from Rachel. She’s being hassled by an official at the gate. Can you please send someone over there and put a stop to this nonsense?”

A few minutes later, I got another call from Rachel–this one totally upbeat. She said that a man who identified himself only as an airport official–but wearing an expensive suit–had visited her at the gate.

When the ticket-taking airline official had protested, he had cut her off. The official had then walked Rachel and her baggage onto an otherwise fully-loaded 777 jet bound for San Francisco.

Soon she was en route to San Francisco for her urgent-care medical appointment the next day.

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So if you’re having troubles with an airline:

  • Start by calling the highest-ranking airline official you can reach.
  • You may be able to find this out by punching the name of the airline in Google
  • If the official isn’t available or sympathetic, call the airport.
  • Be persistent–but businesslike.
  • Don’t let yourself be bullied.
  • If you can cite a legal violation by the airline and/or airport, don’t hesitate to do so.
  • But don’t make overt threats: the official will get the message
  • Don’t hesitate to play for sympathy: “This is a woman has an urgent-care doctor’s appointment….”

Then cross your fingers and hope for the best.

HOW TO END THE GUN MASSACRES

In Bureaucracy, Business, History, Law, Law Enforcement, Politics, Social commentary on July 27, 2015 at 12:10 am

According to The Mass Shooting Tracker, a project of Guns Are Cool, there have been 204 mass shooting events in the United States so far in 2015.

There have been 204 mass shootings — and 204 days — in 2015 so far – The Washington Post

There were

  • 18 mass shootings in April;
  • 39 in May;
  • and 41 in June.

July has been a particularly busy month for those seeking the title of “NRA Poster Boy”: 34 mass shootings so far–and the month isn’t over yet.

So what should the surviving victims of these rampages do to seek redress?

And how can the relatives and friends of those who didn’t survive seek justice for those they loved?

Three things:

First, don’t count on politicians to support a ban on assault weapons.

Politicians–-with rare exceptions–-have only two goals:

  1. Get elected to office, and
  2. Stay in office.

And too many of them fear the economic and voting clout of the National Rifle Association (NRA) to risk its wrath.

Second, don’t expect the mental health profession to prevent such future tragedies.

There is simply no definitive way to predict who is likely to commit mass murder.

And even if such a method were developed, it would likely be ruled unconstitutional.  A person can’t be jailed or hospitalized for fear of what he might do.

Third, those who survived these rampages–-and the relatives and friends of those who didn’t–-should file wrongful death, class-action lawsuits against the NRA.

There is sound, legal precedent for this.

For decades, the American tobacco industry peddled death and disability to millions and reaped billions of dollars in profits.

  • The industry vigorously claimed there was no evidence that smoking caused cancer, heart disease, emphysema or any other ailment.
  • Tobacco companies spent billions on slick advertising campaigns to win new smokers and attack medical warnings about the dangers of smoking.
  • Tobacco companies spent millions to elect compliant politicians and block anti-smoking legislation.
  • From 1954 to 1994, over 800 private lawsuits were filed against tobacco companies in state courts. But only two plaintiffs prevailed, and both of those decisions were reversed on appeal.

  • In 1994, amidst great pessimism, Mississippi Attorney General Mike Moore filed a lawsuit against the tobacco industry.  But other states soon followed, ultimately growing to 46.
  • Their goal: To seek monetary, equitable and injunctive relief under various consumer-protection and anti-trust laws.
  • The theory underlying these lawsuits was: Cigarettes produced by the tobacco industry created health problems among the population, which badly strained the states’ public healthcare systems.
  • In 1998, the states settled their Medicaid lawsuits against the tobacco industry for recovery of their tobacco-related, health-care costs.  In return, they exempted the companies from private lawsuits for tobacco-related injuries.
  • The companies agreed to curtail or cease certain marketing practices. They also agreed to pay, forever, annual payments to the states to compensate some of the medical costs for patients with smoking-related illnesses.

The parallels with the NRA are obvious:

  • For decades, the NRA has peddled deadly weapons to millions, reaped billions of dollars in profits and refused to admit the carnage those weapons have produced: “Guns don’t kill people.  People kill people.”  With guns.
  • The NRA has steadfastly defended the right to own Teflon-coated “cop killer” bullets,” whose only purpose is to penetrate bullet-resistant vests worn by law enforcement officers.

  • The NRA has bitterly fought background checks on gun-buyers, in effect granting even criminals, terrorists and the mentally ill the right to own arsenals of death-dealing weaponry.
  • The NRA has spent millions on slick advertising campaigns to win new members and frighten them into buying guns.

  • The NRA has spent millions on political contributions to block gun-control legislation.
  • The NRA has spent millions attacking political candidates and elected officials who warned about the dangers of unrestricted access to assault and/or concealed weapons.

  • The NRA has spent millions pushing “Stand Your Ground” laws in more than half the states, which potentially give every citizen a “license to kill.”
  • The NRA receives millions of dollars from online sales of ammunition, high-capacity ammunition magazines, and other accessories through its point-of-sale Round-Up Program–thus directly profiting by selling a product that kills about 30,288 people a year.

  • Firearms made indiscriminately available through NRA lobbying have filled hospitals with casualties, and have thus badly strained the states’ public healthcare systems.

It will take a series of highly expensive and well-publicized lawsuits to significantly weaken the NRA, financially and politically.

The first ones will have to be brought by the surviving victims of gun violence–and by the friends and families of those who did not survive it.  Only they will have the courage and motivation to take such a risk.

As with the cases first brought against tobacco companies, there will be losses.  And the NRA will rejoice with each one.

But, in time, state Attorneys General will see the clear parallels between lawsuits filed against those who peddle death by cigarette and those who peddle death by armor-piercing bullet.

And then the NRA–-like the tobacco industry–-will face an adversary wealthy enough to stand up for the rights of the gun industry’s own victims.

Only then will those politicians supporting reasonable gun controls dare to stand up for the victims of slaughters that could have been prevented.

THE CASEY DOCTRINE: MINIMUM COMPLIANCE

In Bureaucracy, Business, History, Law, Law Enforcement, Politics, Social commentary on July 24, 2015 at 12:24 pm

When William J. Casey was a young attorney during the Great Depression, he learned an important lesson.

Jobs were hard to come by, so Casey thought himself lucky to land one at the Tax Research Institute of America in New York.

His task was to closely read New Deal legislation and write reports explaining it to corporate chieftains.

At first, he thought they wanted detailed legal commentary on the meaning of the new legislation.

But then he quickly learned a blunt truth: Businessmen neither understood nor welcomed Franklin D. Roosevelt’s efforts to reform American capitalism. And they didn’t want legal commentary.

Instead, they wanted to know: “What must we do to achieve minimum compliance with the law?”

In short: How do we get by FDR’s new programs?

Fifty years later, Casey would bring a similar mindset to his duties as director of the Central Intelligence Agency for President Ronald Reagan.

William J. Casey 

Congress had banned the Reagan administration from funding the “Contras,” the Right-wing death squads of Nicaragua.

Casey gave lip service to the demands of Congress. But privately, he and Marine Lieutenant Colonel Oliver North set up an “off-the-shelf” operation to overthrow the leftist government of Daniel Ortega.

For three years the operation stayed secret. Then it blew up in November, 1986, as the Iran-Contra scandal.

But the “Casey Doctrine” of minimum compliance didn’t die with Casey (who expired of a brain tumor in 1987).

It’s very much alive among the American business community as President Barack Obama seeks to give medical coverage to all Americans, and not simply the ultra-wealthy.

The single most important provision of the Affordable Care Act (ACA)–-better known as Obamacare–-requires large businesses to provide insurance to full-time employees who work more than 30 hours a week.

For part-time employees, who work fewer than 30 hours, a company isn’t penalized for failing to provide health insurance coverage.

Obama prides himself on being a tough-minded practitioner of “Chicago politics.”  So it’s easy to assume that he took the “Casey Doctrine” into account when he shepherded the ACA through Congress.

But he didn’t.

The result was predictable.  And its consequences are daily becoming more clear.

Employers feel motivated to move fulltime workers into part-time positions–-and thus avoid

  • providing their employees with medical insurance and 
  • a fine for non-compliance with the law.

Some employers have openly shown their contempt for President Obama–-and the idea that employers actually have an obligation to those who make their profits a reality.

The White Castle hamburger chain is considering hiring only part-time workers in the future to escape its obligations under Obamacare.

No less than Jamie Richardson, its vice president, admitted this in an interview.

“If we were to keep our health insurance program exactly like it is with no changes, every forecast we’ve looked at has indicated our costs will go up 24%.”

Richardson claimed the profit per employee in restaurants is only $750 per year. So, as he sees it, giving health insurance to all employees who work over 30 hours isn’t feasible.

Nor is Richardson the only corporate executive determined to shirk his responsibility to his employees.

John Schnatter, CEO of Papa John’s Pizza, has been quoted as saying:

  • The prices of his pizzas will go up–by 11 to 14 cents per pizza, or 15 to 20 cents per order; and
  • He will pass along these costs to his customers.

“If Obamacare is in fact not repealed,” Schnatter told Politico, “we will find tactics to shallow out any Obamacare costs and core strategies to pass that cost onto consumers in order to protect our shareholders’ best interests.”

Consider:

  • Papa John’s is the third-largest pizza takeout and delivery chain in the United States.
  • Its 2012 revenues were $318.6 million, an 8.5 percent increase from 2011 revenues of $293.5 million.
  • Its 2012 net income was $14.8 million, compared to its 2012 net income of $12.1 million.

Had Obama been the serious student of Realpolitick that he claims to be, he would have predicted that most businesses would seek to avoid compliance with his law.

To counter that, he need only have required all employers to provide insurance coverage for all of their employees—regardless of their fulltime or part-time status.

This, in turn, would have produced two substantial benefits:

  • All employees would have been able to obtain medical coverage; and
  • Employers would have been encouraged to provide fulltime positions rather than part-time ones; they would feel: “Since I’m paying for fulltime insurance coverage, I should be getting fulltime work in return.”

The “Casey Doctrine” needs to be kept constantly in mind when reformers try to protect Americans from predatory employers.

DATA SECURITY BREACHES: “WE DON’T CARE, WE DON’T HAVE TO”: PART TWO (END)

In Bureaucracy, History, Social commentary, Law Enforcement, Law, Business on July 21, 2015 at 9:35 am

It’s become as routine as the robbery of the corner liquor store.

Name-brand companies, trusted by millions, hit with massive data breaches that compromise their customers’ and/or employees’ most sensitive financial and personal information.

Among those companies:

  • Target
  • Kmart
  • Home Depot
  • JPMorgan/Chase
  • Staples
  • Dairy Queen
  • Anthem, Inc.
  • Sony Pictures
  • Primera Blue Cross
  • U.S. Postal Service

Click here: Data Breach Tracker: All the Major Companies That Have Been Hacked | Money.com

And as of July 15, Ashley Madison joined this list.

Ashley Madison is, of course, the notorious website for cheating wives and husbands.

Launched in 2001, its catchy slogan is: “Life is short.  Have an affair.”

One of its ads featured a photo of a woman apparently kneeling at the feet of a bare-chested man, her hand passionately clawing at his belt.  Next to her was the caption: “Join FREE & change your life today.  Guaranteed!”  

Ashley Madison - Ashley Madison Agency

Ashley Madison claims to have more than 37 million members.

Calling themselves “The Impact Team,” hackers appear to be enraged at the company’s “full delete” service, which promises to completely erase a user’s profile and all associated data for a $19 fee.

“Full Delete netted [Avid Life Media, the parent company of Ashley Madison] $1.7 million in revenue in 2014,” the hackers were quoted as saying in an online manifesto.  “It’s also a complete lie.

“Users almost always pay with credit card; their purchase details are not removed as promised, and include real names and address, which is of course the most important information the users want removed.”

On July 20, Avid Life Media defended the service, and said it would make it free.

Adultery-dating website Ashley Madison hacked

The hackers demanded: “AM [Ashley Madison] AND EM [Established Men] MUST SHUT DOWN IMMEDIATELY PERMANENTLY.

“We have taken over all systems in your entire office and production domains, all customer information databases, source code repositories, financial records, emails.

“Shutting down AM and EM will cost you, but non-compliance will cost you more.”

The hackers threatened to “release all customer records, including profiles with all the customers’ secret sexual fantasies and matching credit card transactions, real names and addresses, and employee documents and emails.”

Interestingly, the hackers did not target the company’s “CougarLife” website, which caters to female members seeking “a young stud.”

Avid Life Media assured its customers that it had hired “one of the world’s top IT security teams” to work on the breach:

“At this time, we have been able to secure our sites, and close the unauthorized access points. We are working with law enforcement agencies, which are investigating this criminal act.”

This statement gives new meaning to the phrase, “Closing the barn door after the cow has gotten out.”

It’s almost comical, except for the fact that the marriages of millions of people are likely to be threatened by the release of such information.

And it raises the question: Why wasn’t this “top IT security team” hired at the outset?

A website offering cheating services to those wealthy enough to afford high-priced fees is an obvious target for hackers. After all, its database is a blackmailer’s dream-come-true.

This latest breach comes about two months after a similar dating site, Adult FriendFinder–with an estimated 64 million members–was hit with a similar attack.

Again, it was clear that a site like this would be a prime target for those seeking information for blackmail. Yet apparently its owners didn’t care enough about the privacy of their customers to provide adequate security.

“Without question, this is incredibly valuable information,” said J.J. Thompson, founder and chief executive of Rook Security, an IT security firm.

“[Ashley Madison’s customers] are now vulnerable to a significant secret.”

As usual when a corporation’s data breach occurs, Ashley Madison issued a reassuring statement: “We are working with law enforcement agencies, which are investigating this criminal act.

“Any and all parties responsible for this act of cyber-terrorism will be held responsible.”

Brave-sounding words.  But if the hackers make good on their threat, many prominent men in business and politics may soon find themselves facing expensive divorces.

And if that happens, at least some of them may well decide to take out their anger and embarrassment on the websits that assured them that the highly private information they shared was “100% secure.”

That could set a precedent for lawsuits by other victims of such data breaches. Which, in turn, could force profit-obsessed corporations to responsibly protect the highly sensitive information entrusted to them.

There is an important lesson to be learned from this latest disaster.

“Stuff that’s online is pretty much not private, no matter what you might hope or think or wish for,” said Geoff Webb, senior director of solution strategy for security management firm NetIQ.

Old records, like transactions and account details, remain in company databases long after you’ve deleted an account, he said, because the company needs them for tax and other business purposes.

“There used to be an old saying that everybody ends up naked on the Internet at some point,” said Webb.

Although that was meant figuratively, patrons of websites like Ashley Madison could soon find it applying literally.

DATA SECURITY BREACHES: “WE DON’T CARE, WE DON’T HAVE TO”: PART ONE (OF TWO)

In Bureaucracy, Business, Law, Law Enforcement, Social commentary on July 20, 2015 at 12:20 pm

Comedian Lily Tomlin rose to fame on the 1960s comedy hit, Rowan & Martin’s Laugh-In, as Ernestine, the rude, sarcastic switchboard operator for Ma Bell.

She would tap into customers’ calls, interrupt them, make snide remarks about their personal lives.  And her victims included celebrities as much as run-of-the-mill customers.

Lily Tomlin as Ernestine

She introduced herself as working for “the phone company, serving everyone from presidents and kings to the scum of the earth.”

But perhaps the line for which her character is best remembered was: “We don’t care. We don’t have to. We’re the phone company.”

Watching Ernestine on Laugh-In was a blast for millions of TV viewers.  But facing such corporate arrogance in real-life is no laughing matter.

Clearly, too many companies take the same attitude as Ernestine: “We don’t care.  We don’t have to.”

This is especially true for companies that are supposed to safeguard their customers’ most sensitive information–such as their credit card numbers, addresses, emails and phone numbers.

An October 22, 2014 “commentary” published in Forbes magazine raised the highly disturbing question: “Cybersecurity: Does Corporate America Really Care?”

And the answer is clearly: No.

Its author is John Hering, co-founder and executive director of Lookout, which bills itself as “the world leader in mobile security for consumers and enterprises alike.”

Click here: Cybersecurity: Does corporate America really care?

October, 2014 proved a bad month for credit card-using customers of Kmart, Staples and Dairy Queen.

All these corporations reported data breeches involving the theft of credit card numbers of countless numbers of customers.

Earlier breaches had hit Target, Home Depot and JPMorgan/Chase.

And on February 5, 2015, health insurance giant Anthem Inc. announced that hackers had breached its computer system and accessed the medical records of tens of millions of its customers and employees.

Anthem, the nation’s second-largest health insurer, said the infiltrated database held records on up to 80 million people.

Among the customers’ information accessed:

  • Names
  • Birthdates
  • Social Security numbers
  • Member ID numbers
  • Addresses
  • Phone numbers
  • Email addresses and
  • Employment information.

Some of the customer data may also include details on their income.

Click here: Anthem hack exposes data on 80 million; experts warn of identity theft – LA Times

Bad as that news was, worse was to come.

A February 5 story by the Wall Street Journal revealed that Anthem stored the Social Security numbers of 80 million customers without encrypting them.

The company believes that hackers used a stolen employee password to access the database

Anthem’s alleged reason for refusing to encrypt such sensitive data: Doing so would have made it harder for the company’s employees to track health care trends or share data with state and Federal health providers.

Anthem spokeswoman Kristin Binns blamed the data breach on employers and government agencies who “require us to maintain a member’s Social Security number in our systems so that their systems can uniquely identify their members.”

She said that Anthem encrypts personal data when it moves in or out of its database–but not where it  is stored.

This is a commonplace practice in the healthcare industry.

The FBI is now investigating the hack.

According to an anonymous source, the hackers used malware that has been used almost exclusively by Chinese cyberspies.

Naturally, China has denied any wrongdoing.  With a completely straight face, Chinese Foreign Ministry spokesman Hong Lei said:

“We maintain a cooperative, open and secure cyberspace, and we hope that countries around the world will make concerted efforts to that end.”

He also said that the charge that the hackers were Chinese was “groundless.”

Click here: Health Insurer Anthem Didn’t Encrypt Stolen Data – WSJ

Meanwhile, John Hering’s complaints remain as valid today as they did last October.

“One thing is clear,” writes Hering. “CEOs need to put security on their strategic agendas alongside revenue growth and other issues given priority in boardrooms.”

Hering warns that “CEOs don’t seem to be making security a priority.”  And he offers several reasons for this:

  • The sheer number of data compromises;
  • Relatively little consumer outcry;
  • Almost no impact on the companies’ standing on Wall Street;
  • Executives may consider such breaches part of the cost of doing business.

“There’s a short-term mindset and denial of convenience in board rooms,” writes Hering.

“Top executives don’t realize their systems are vulnerable and don’t understand the risks. Sales figures and new products are top of mind; shoring up IT systems aren’t.”

There are three ways corporations can be forced to start behaving responsibly on this issue.

  1. Smart attorneys need to start filing class-action lawsuits against companies that refuse to take steps to protect their customers’ private information.  There is a name for such behavior: Criminal negligence.  And there are laws carrying serious penalties for it.
  2. There must be Federal legislation to ensure that multi-million-dollar fines are levied against such companies–and especially their CEOs–when such data breaches occur.
  3. Congress should enact legislation allowing for the prosecution of CEOs whose companies’ negligence leads to such massive data breaches. They should be considered as accessories to crime, and, if convicted, sentenced to lengthy prison terms.

Only then will the CEO mindset of “We don’t care, we don’t have to” be replaced with: “We care, because our heads will roll if we don’t.”

BENEDICT ARNOLD–CAPITALIST HERO: PART FOUR (END)

In Bureaucracy, Business, History, Politics, Social commentary on June 2, 2015 at 12:01 am

Niccolo Machiavelli, the father of modern politics, warns in his masterwork, The Discourses:

All those who have written upon civil institutions demonstrate…that whoever desires to found a state and give it laws, must start with assuming that all men are bad and ever ready to display their vicious nature, whenever they may find occasion for it.

If their evil disposition remains concealed for a time, it must be attributed to some unknown reason; and we must assume that it lacked occasion to show itself. But time, which has been said to be the father of all truth, does not fail to bring it to light.

Niccolo Machiavelli

Where the crimes of corporate employers are concerned, we do not have to wait for their evil disposition to reveal itself. It has been fully revealed for decades.

It’s time to recognize that a country can be betrayed for other than political reasons.  It can be sold out for economic ones, too.

Trea$on

The United States desperately needs a new definition of treason–one that takes the above-mentioned truth into account.

  • Employers who set up offshore accounts to claim their American companies are foreign-owned—and thus exempt from taxes—are traitors.
  • Employers who enrich themselves by weakening their country—by throwing millions of qualified workers into the street and moving their plants to other countries—are traitors.
  • Employers who systematically violate Federal immigration laws—to hire illegal aliens instead of willing-to-work Americans—are traitors.

And with a new definition of treason should go new penalties–heavy fines and/or prison terms–for those who sell out their country to enrich themselves.

A starting-point must be an all-out campaign to educate voters on the need for major reforms in corporate law.

One non-profit, non-partisan organization that’s already pursuing this is Public Campaign.

Its goal: Eliminating special interest money in American politics by securing publicly-funded elections at local, state and federal levels.

According to its website:

“Twenty-five profitable Fortune 500 companies, some with a history of tax dodging, spent more on lobbying than they paid in federal taxes between 2008 and 2012….

“Over the past five years, these 25 corporations generated nearly $170 billion in combined profits and received $8.7 billion in tax rebates while paying their lobbyists over half a billion ($543 million), an average of nearly $300,000 a day.

“Based on newly released data by Citizens for Tax Justice (CTJ), these 25 companies actually received tax refunds overall those five years.

“So most individual American families and small businesses have bigger tax bills than these corporate giants. Unfortunately, most American families and businesses do not have the lobbying operation and access these 25 companies enjoy.”

25 Companies That Spent More On Lobbyists Than Taxes | Public Campaign

Then comes the list:

Several companies on this list are well-known–and spend millions of dollars on self-glorifying ads every year to convince consumers how wonderful they are.

Among these:

  • General Electric
  • PG&E Corp.
  • Verizon Communications
  • Boeing
  • Consolidated Edison
  • MetroPCS Communications

But non-profit organizations alone can’t mount and sustain the sort of nationwide, bluntly-worded educational effort that’s long overdue.

The United States Government–through such agencies as the Justice Department–should start and maintain a nationwide advertising campaign of its own.  Its goal: To educate voters on the real-life greed and public irresponsibility of such corporations.

It should be modeled on the efforts of former Attorney General Robert F. Kennedy to  publicize the dangers of organized crime.

During that campaign, he issued the following warning:

“If we do not, on a national scale, attack organized criminals with weapons and techniques as effective as their own, they will destroy us.”

That warning applies equally to criminal corporations.

Robert F. Kennedy

Republicans–and some Democrats–have worked tirelessly to defend the greed of the richest and most privileged 1% of America.

For example, they ingeniously dubbed the estate tax–-which affects only a tiny, rich minority–-“the death tax.”  This makes it appear to affect everyone.

As a result, millions of poor and middle-class Americans who will never have to pay a cent in estate taxes vigorously oppose it.

By doing so, they unknowingly support the greed of the very richest Americans who despise the needs of those poorer than themselves.

Democrats should thus cast reform efforts in terms that will prove equally popular.  For example:

“Corporate Criminals: Giving You the Best Congress Money Can Buy.”

“De-regulation = Let Criminals Be Criminals.”

“[Name of corporation] Pays a Lower Percentage in Taxes than You.”

“Corporations Are Greedy People, Too” 

“Owning a Corporation Shuldn’t Be a License for Treason”

Such an advertising campaign could lay the groundwork for an all-out Federal effort to reign in that greed and irresponsibility thrugh appropriate reform legislation.

It was Stephen Decatur, the naval hero of the War of 1812, who famously said: “Our country, right or wrong.”

Stephen Decatur

Billionaire tax-cheats and their Right-wing allies have coined their own motto: “My wallet–first and always.”

BENEDICT ARNOLD–CAPITALIST HERO: PART THREE (OF FOUR)

In Bureaucracy, Business, History, Politics, Social commentary on June 1, 2015 at 12:54 am

The British offered Revolutionary War General Benedict Arnold £20,000 for betraying West Point to the Crown.

Benedict Arnold

But Arnold was a piker compared to companies that are raking in literally billions of untaxed dollars by betraying the United States in its time of economic trial.

To avoid paying their legitimate share of taxes, they move their headquarters overseas to countries with reduced tax rates. In tax parlance, this is called an “inversion.”

For almost 20 years, tax-avoiding corporations fled to Caribbean countries such as Bermuda and the Cayman Islands. But in 2004, Congress ruled that American companies could relocate overseas if foreign shareholders owned 20% of their stock.

But increased media attention to “income inequality” has led Democratic lawmakers to press for a long-overdue reform: Raising the stock threshold to 50%.

This would make it harder for firms to abandon their country.

These are the companies abandoning the U.S. to dodge taxes – The Washington Post

Yet a more comprehensive reform package would include:

  • American companies that move their headquarters out of the United States would be officially declared “agents of a foreign power engaged in treasonous activity against the United States.”
  • Under this designation, these “foreign-owned” companies would be forbidden to sell products within the United States.
  • As “agents of a foreign power,” their assets would be subject to confiscation by agents of the Internal Revenue Service.
  • The citizenship of those Americans engaged in such treasonous activity would be revoked and they would be ordered to leave the United States on pain of criminal prosecution for treason.

Below is a chart compiled by the Ways and Means Committee Democrats of the U.S. House of Representatives.  It compiles 47 corporate “inversions” within the last decade.

From the chart’s introduction:

“Forty-seven U.S. corporations have reincorporated overseas through corporate inversions in the last 10 years, far more than during the previous 20 years combined, according to new data compiled by the Congressional Research Service [CRS].

“In total, 75 U.S. corporations have inverted since 1994 – with one other inversion occurring in 1983. What’s more, there are a dozen prospective inversion deals involving U.S. corporations looking to reincorporate overseas, according to CRS

“The new data underscores the significant increase in the number of U.S. corporations that have or are seeking to lower their U.S. taxes by reincorporating overseas.

“It also adds urgency to a legislative solution. Ways and Means Committee Ranking Member Sander Levin in May introduced legislation that would tighten rules to limit inversions.

“The Joint Committee on Taxation estimates that the legislation would save $19.5 billion over 10 years. Companion legislation was introduced in the Senate by Sen. Carl Levin.

“‘Barely a week seems to pass without news that another corporation plans to move its address overseas simply to avoid paying its fair share of U.S. taxes,’” said Ranking Member Levin.

“These corporate inversions are costing the U.S. billions of dollars and undermining vital domestic interests.

“‘We can and should address this problem immediately through legislation to tighten rules to limit the ability of corporations to simply change their address and ship U.S. tax dollars overseas.’”

New CRS Data: 47 Corporate Inversions in Last Decade | Committee on Ways and Means

Among those companies that have chosen to betray their country in its time of economic need:

  • Medtronic Pharmaceuticals.  Revenues: $16.5 billion
  • Perrigo/Elan Pharmaceuticals.  Revenues: $3.5 billion
  • Chiquita Brands.  Revenues: $3 billion
  • Liberty Global PLC Cable Company.  Revenues: $17.3 billion
  • Eaton/Cooper Power Management.  Revenues: $22 billion
  • Pentair Water Filtration.  Revenues: $7.5 billion
  • AON Insurance.  Revenues: $11.8 billion
  • Global Indemnity Insurance.  Revenues: $319 billion
  • ENSCO International (oil and gas drilling).  Revenues: $4.9 billion
  • Coviden Healthcare.  Revenues: $10.2 billion
  • Herbalife International (nutrition).  Revenues:  $4.8 billion
  • Ingersoll-Rand (industrial manufacturer).  Revenues: $12.3 billion
  • Accenture Consulting.  Revenues: $28.6 billion
  • Seagate Technology.  Revenues: $14.4 billion
  • Tycho International (manufacturing).  Revenues: $10.6 billion
  • Chicago Bridge & Iron.  Revenues: $11.1 billion
  • Transocean (offshore oil drilling).  Revenues: $9.4 billion
  • White Mountain Insurance.  Revenues: $2.3 billion

The most popular countries for these “inversions” are:

  • The Cayman Islands
  • Bermuda
  • Canada
  • United Kingdom
  • Ireland
  • Switzerland
  • Netherlands

BENEDICT ARNOLD–CAPITALIST HERO: PART TWO (OF FOUR)

In Bureaucracy, Business, History, Politics, Social commentary on May 29, 2015 at 12:08 am

On May 13, 2012, Forbes magazine ran an Op-Ed piece under the headline: “For De-Friending The U.S., Facebook’s Eduardo Saverin Is an American Hero.”

Democratic Senator Chuck Schumer of New York angrily disagreed.

Chuck Shumer

“It is scary. It is a scary, absurd place where even a tax dodger who renounces America for his own 30 pieces of silver is celebrated as a patriot and an American hero.

“It is perverse. I am appalled by making heroic a man who renounces citizenship to escape a tax rate of capital gains of 15%.

“No one gets rich in America on their own,” Schumer said. “And when people do well in America, they should do well by America. I believe the vast majority of Americans believe this too.”

From that Op-Ed piece:

“Saverin’s flight from the U.S. is yet another reminder of the superiority of a national consumption tax that in a perfect world would be implemented in concert with the abolition of the I.R.S.”

It’s tempting to imagine a world without an agency to collect taxes. But it’s nightmarish to contemplate a world where there were no taxes to pay for

  • a powerful military to protect us;
  • an FBI to combat terrorism and organized crime;
  • an FAA to safely regulate airline traffic;
  • agencies to repair roads;
  • agencies to erect public buildings (such as schools, courts and libraries) and
  • agencies (such as the EPA and FDA) to protect us from predatory businessmen.

The Op-Ed piece further asserts that “you cannot limit the power of the Federal Government if its officials hold the power to tax incomes.”

Every nation in history–-whether a democracy or a dictatorship, whether capitalist, socialist or communist–-has understood the absolute necessity for collecting public revenues. And it has created means by which to do so.

“When individuals resist governmental hubris, we should exalt their actions.”

We should, in short, celebrate those who come to the United States to make fortunes they could not make anywhere else–-and then, when they do, turn their backs on their adopted country.

We should rejoice that they have stuffed billions of dollars more into their already-fat pockets and left their supposed fellow countrymen to shift for themselves.

“In an ideal world the Federal Government should implement a consumption tax.  And if, as a result, poor people suffer because they’re taxed at the same level as rich ones, fine. 

“Everyone should know how much it costs to run the government.”

Of course we should have a “regressive” tax that “hits low incomes at the same percentage as high ones.”  

Of course, those who are barely able to feed their families or can’t afford medical care should pay as much in taxes as a rich parasite who, like Mitt Romney, throws out $10,000 bets like so many dimes.

“If the Federal Government can’t fund all its programs because rich people like Saverin refuse to pay taxes, then U.S. taxpayers generally will have to make good for the missing taxes.  It’s the fault of Congress that ir cannot put an end to any program.”

For billionaires like Saverin and the well-heeled types who subscribe to Forbes, it doesn’t matter that “fewer government programs will achieve funding.”

Greed-obsessed “swells” like Saverin:

  • don’t depend on Medicare–they can easily afford the best doctors money can buy;
  • don’t have to depend on Social Security to see them through old age;
  • don’t have to worry about standing in food bank lines;
  • don’t need to rely on police departments–if they’re threatened, they can easily afford round-the-clock bodyguards;
  • don’t need consume protection agencies; if they’re victimized by unscrupulous businessmen, they can hire platoons of lawyers and private detectives.

A contemporary writer who warned of America’s abandonment by its privileged classes was Christopher Lasch.  In his posthumously published last book, The Revolt of the Elites and the Betrayal of Democracy [2005] he wrote:

The Revolt Of The Elites And The Betrayal Of Democracy

“There has always been a privileged class, even in America. But it has never been so dangerously isolated from its surroundings.

“George Bush’s [the president who served from 1989 to 1992] wonderment, when he saw for the first time an electronic scanning device at a supermarket checkout counter, revealed…the chasm that divides the privileged classes from the rest of the nation.”

Until recently, wrote Lasch, American cultural and economic elites willingly shouldered civic responsibilities.  But in post-modern capitalism, a professional elite defines itself as entirely separate from civic concerns.

The new elites flourish through enterprises that operate across international borders.  The rich in America have more in common with the fellows in Europe or Asia than with the vast majority of their fellow Americans who don’t share their comfortable surroundings.

Thus, the privileged class in America–-the top 1%–has separated itself from the crumbling public services and industrial cities that are used and lived in by the rest of the country’s citizens.

Even worse, our society has condoned their exalted status. The dust jacket blurb for James Patterson’s crime-thriller, NYPD Red, says it best:

“NYPD Red is a special task force charged with protecting the interests of Manhattan’s wealthiest and most powerful citizens.”

It’s time to protect the 99% of America’s citizens against the predations of its 1% wealthiest.

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