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Posts Tagged ‘BUSINESS’

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“A TEAM PLAYER”: PART ONE (OF TWO)

In Bureaucracy, Business, History, Law, Law Enforcement, Politics, Social commentary on April 8, 2016 at 12:41 am

Recruiters for corporate America routinely claim they’re looking for “a team player.”

This sounds great–as though the corporation is seeking people who will get along with their colleagues and work to achieve a worthwhile objective.

And, at times, that is precisely what is being sought in a potential employee.

But, altogether too often, what the corporation means by “a team player” is what the Mafia means by “a real standup guy.” 

That is: Someone willing to commit any crime for the organization–and take the fall for its leaders if anything goes wrong.

FBI Chart of Mafia Families during the 1960s

Consider this classic example from the files of America’s premier law enforcement agency, the Federal Bureau of Investigation (FBI).

On November 14, 1957, 70 top Mafia leaders from across the country gathered at the estate of a fellow gangster, Joseph Barbara, in Apalachin, a small village in upstate New York.

The presence of so many cars with out-of-state license plates converging on an isolated mansion caught the attention of Edgar Crosswell, a sergeant in the New York State Police.

Crosswell assembled as many troopers as he could find, set up roadblocks, and swooped down on the estate.

The mobsters, panicked, fled in all directions–many of them into the surrounding woods.  Even so, more than 60 underworld bosses were arrested and indicted following the raid.

Perhaps the most significant result of the raid was the effect it had on J. Edgar Hoover, the legendary director of the FBI.

J. Edgar Hoover

Up to that point, Hoover had vigorously and vocally denied the existence of a nationwide Mafia. He had been happy to leave pursuit of international narcotics traffickers to his hated rival, Harry Anslinger, director of the Federal Bureau of Narcotics (FBN).

But he had been careful to keep his own agency well out of the war on organized crime.

Several theories have been advanced as to why.

  1. Hoover feared that his agents–long renowned for their incorruptibility–would fall prey to the bribes of well-heeled mobsters.
  2. Hoover feared that his allegedly homosexual relationship with his longtime associate director, Clyde Tolson, would be exposed by the Mob. Rumors still persist that mobster Meyer Lansky came into possession of a compromising photo of Hoover and Tolson engaged in flagrante delicto. 
  3. Hoover knew of the ties between moneyed mobsters and their political allies in Congress. Hoover feared losing the goodwill of Congress for future–and ever-larger–appropriations for the FBI.
  4. Hoover preferred flashy, easily-solved cases to those requiring huge investments of manpower and money.

Whatever the reason, Hoover had, from the time he assumed directorship of the FBI in 1924, kept his agents far from the frontlines of the war against organized crime.

Suddenly, however, that was no longer possible.

The arrests of more than 60 known members of the underworld–in what the news media called “a conclave of crime”–deeply embarrassed Hoover.

It was all the more embarrassing that while the FBI had virtually nothing in its files on the leading lights of the Mafia, the Federal Bureau of Narcotics had opened its voluminous files to the Senate Labor Rackets Committee.

Heading that committee as chief legal counsel was Robert F. Kennedy–a fierce opponent of organized crime who, in 1961, would become Attorney General of the United States.

So Hoover created the Top Hoodlum Program (THP) to identify and target selected Mafiosi across the country.

Since the FBI had no networks of informants operating within the Mafia, Hoover fell back on a technique that had worked wonders against the Communist Party U.S.A.

He would wiretap the mobsters’ phones and plant electronic microphones (“bugs”) in their meeting places.

The information gained from these techniques would arm the Bureau with evidence that could be used to strongarm mobsters into “rolling over” on their colleagues in exchange for leniency.

Hoover believed he had authority to install wiretaps because more than one Attorney General had authorized their use.

But no Attorney General had given permission to install bugs–which involved breaking into the places where they were to be placed.  Such assignments were referred to within the Bureau as “black bag jobs.”

So, in making clear to his agent-force that he wanted an unprecedented war against organized crime, Hoover also made clear the following:

Before agents could install electronic surveillance (an ELSUR, in FBI-speak) devices in Mob hangouts, agents had to first request authority for a survey. This would have to establish:

  1. That this was truly a strategic location;
  2. That the agents had a plan of attack that the Bureau could see was logical and potentially successful; and, most importantly of all
  3. That it could be done without any “embarrassment to the Bureau.”

According to former FBI agent William E. Roemer, Jr., who carried out many of these “black bag” assignments:

“The [last requirement] was always Mr. Hoover’s greatest concern: ‘Do the job, by God, but don’t ever let anything happen that might embarrass the Bureau.”

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HELL IN THE RENTERS’ PARADISE: PART THREE (END)

In Bureaucracy, History, Law, Law Enforcement, Politics, Social commentary on January 1, 2016 at 12:57 am

Slumlords would have everyone believe that San Francisco is a “renters’ paradise.”  A place where hard-working landlords are routinely taken advantage of by rent-avoiding bums who want to be constantly pampered.

On the contrary: It’s not renters who hold “untouchable” status, but slumlords themselves.

If you doubt it, you need only review the case of slumlords Kip and Nicole Macy.  They waged a two-year war on their rent-paying tenants to force them out of their South of Market building.

The reason: The Macys wanted to get them out of their rent-controlled apartments so they could rent these out to tenants who could afford extortionate rents.

For two years, the police and district attorney’s office stood by while the Macys aimed threats, vandalism, illegal lockouts and violence at their law-abiding tenants.

The Macys have since been convicted and will be sentenced to four years and four months imprisonment.  But this case is a rarity for the San Francisco District Attorney’s Office.

Meanwhile, thousands of San Francisco tenants have lived with rotting floors, nonworking toilets, chipping lead-based paint and other outrages for not simply months but years.

But San Francisco tenants need not be put at the mercy of greedy, arrogant slumlords.  And the agencies that are supposed to protect them need not be reduced to impotent farces.

The San Francisco District Attorney’s Office should create a special unit to investigate and prosecute  slumlords.  Prosecutors should offer rewards to citizens who provide tips on major outrages by the city’s slumlords.

And the San Francisco Department of Building Inspection–which is charged with guaranteeing the habitability of apartment buildings–should immediately adopt a series of long-overdue refirms.

By doing so, it can:

  • Vastly enhance its own prestige and authority;
  • Improve living conditions  for thousands of San Francisco renters; and
  • Bring millions of desperately-needed dollars into the City’s cash-strapped coffers.

In Part 2 of this series I outlined 14 such reforms.  In this concluding column, I will outline the remaining eight:

  1. DBI should order landlords to post their Notices of Violation in public areas of their buildings–on pain of serious financial penalties for failing to do so. When DBI orders a slumlord to take corrective action, s/he is the only person who is notified.   Thus, if that slumlord refuses to comply with those directives, s/he is the only one who realizes it.  Given the pressing demands on DBI, weeks or months will pass before the agency learns about this violation of its orders.  Tenants have a right to know if their landlord is complying with the law.
  2. DBI should launch–and maintain–a city-wide advertising campaign to alert residents to its services.  Everyone knows the FBI pursues bank robbers, but too many San Franciscans do not even know that DBI exists, let alone what laws it enforces.  This should be an in-your-face campaign: “Do you have bedbugs in your apartment?  Has your stove stopped working?  Are you afraid to ride in  your building elevator because it keeps malfunctioning?  Have you complained to your landlord and gotten nowhere?  Then call DBI at —–.  Or drop us an email at ——.”
  3. Landlords should be legally required to give each tenant a list of the major city agencies (such as DBI, Department of Public Health and the Rent Board) that exist to help tenants resolve problems with their housing. 
  4. Landlords should be legally required to rehabilitate a unit every time a new tenant moves in, or at least have it examined by a DBI inspector every two years.  A tenant can occupy a unit for ten or more years, then die or move out, and the landlord immediately rents the unit to the first person who comes along, without making any repairs or upgrades whatsoever.
  5. Landlords should be required to bring all the units in a building up to existing building codes, and not just those in need of immediate repair.
  6. Landlords should be legally required to hire a certified-expert contractor to perform building repairs.  Many landlords insist on making such repairs despite their not being trained or experienced in doing so, thereby risking the lives of their tenants. 
  7. DBI should not view itself as a “mediation” agency between landlords and tenants.  Most landlords hate DBI and will always do so.  They believe they should be allowed to treat their tenants like serfs, raise extortionate rents anytime they desire, and maintain their buildings in whatever state  they wish.  And no efforts by DBI to persuade them of its good intentions will ever change their minds.
  8. Above all, DBI must stop viewing itself as a mere regulatory agency and start seeing itself as a law enforcement one.  The FBI doesn’t ask criminals to comply with the law; it applies whatever amount of force is needed to gain their compliance. Niccolo Machiavelli said it best: If you can’t be loved by your enemies, then at least make yourself respected by them.

As Robert F. Kennedy wrote: “Every society gets the kind of criminal it deserves.  What is equally true is that every community gets the kind of law enforcement it insists on.”

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HELL IN THE RENTERS’ PARADISE: PART TWO (OF THREE)

In Bureaucracy, History, Law, Law Enforcement, Politics, Social commentary on December 31, 2015 at 12:01 am

The “war on drugs” has some valuable lessons to teach the San Francisco Department of Building Inspection (DBI) which is charged with protecting tenants against predatory landlords.

Consider:

  • At least 400,000 rape kits containing critical DNA evidence that could convict rapists sit untested in labs around the country.
  • But illegal drug kits are automatically rushed to the had of the line.

Why?

It isn’t simply because local/state/Federal lawmen universally believe that illicit drugs pose a deadly threat to the Nation’s security.

It’s because:

  • Federal asset forfeiture laws allow the Justice Department to seize properties used to “facilitate” violations of Federal anti-drug laws.
  • Local and State law enforcement agencies are allowed to keep some of the proceeds once the property has been sold.
  • Thus, financially-strapped police agencies have found that pursuing drug-law crimes is a great way to fill their own coffers.
  • Prosecutors and lawmen view the seizing of drug-related properties as crucial to eliminating the financial clout of drug-dealing operations.

It’s long past time for DBI to apply the same attitude–and methods–toward slumlords.

DBI should become not merely a law-enforcing agency but a revenue-creating one.  And those revenues should come from predatory slumlords who routinely violate the City’s laws protecting tenants.

By doing so, DBI could vastly:

  • Enhance its own prestige and authority;
  • Improve living conditions for thousands of San Francisco renters; and
  • Bring millions of desperately-needed dollars into the City’s cash-strapped coffers

Among those reforms it should immediately enact:

  1. Hit slumlord violators up-front with a fine–payable immediately–for at least $2,000 to $5,000 for each health/safety-code violation.
  2. The slumlord would be told he could reclaim 75-80% of the money onlyif he fully corrected the violation within 30 days.  The remaining portion of the levied fine would go into the City coffers, to be shared among DBI and other City agencies.
  3. This would put the onus on the slumlord, not DBI. Appealing to his greed would ensure his willingness to comply with the ordered actions.  As matters now stand, it is DBI who must repeatedly check with the slumlord to find out if its orders have been complied with.
  4. If the landlord failed to comply with the actions ordered within 30 days, the entire fine would go into the City’s coffers–to be dividedamong DBI and other agencies charged with protecting San Francisco residents.
  5. In addition, he would be hit again with a fine that’s at least twice the amount of the first one.
  6. Inspectors for DBI should be allowed to cite landlords for violations that fall under the jurisdiction of the Department of Public Health.  They can then pass the information on to DPH for its own investigation.
  7. If the DBI Inspector later discovers that the landlord has not corrected the violation within a designated time-period, DBI should be allowed to levy its own fine for his failure to do so.
  8. If DPH objects to this, DBI should propose that DPH’s own Inspectorsbe armed with similar cross-jurisdictional authority.  Each agency would thus have increased motivation for spotting and correcting health/safety violations that threaten the lives of San Francisco residents.
  9. This would instantly turn DBI and DPH into allies, not competitors.  And it would mean that whether a citizen called DBI or DPH, s/he could be assured of getting necessary assistance.  As matters now stand, many residents are confused by the conflicting jurisdictions of both agencies.
  10. DBI should insist that its Inspectors Division be greatly expanded. DBI can attain this by arguing that reducing the number of Inspectors cuts (1) protection for San Francisco renters–and (2) monies that could go to the general City welfare.
  11. The Inspection Division should operate independently of DBI. Currently,  too many high-ranking DBI officials tilt toward landlords because they are landlords themselves.
  12. DBI should create a Special Research Unit that would compile records on the worst slumlord offenders.  Thus, a slumlord with a repeat history of defying DBI NOVs could be treated more harshly than a landlord who was a first-time offender.
  13. Turning DBI into a revenue-producing one would enable the City to raise desperately-needed revenues—in a highly popular way. Fining delinquent slumlords would be as unpopular as raising taxes on tobacco companies. Only slumlords and their hired lackey allies would object.
  14. Slumlords, unlike drug-dealers, can’t move their operations from one street or city to another.  Landlords aren’t going to demolish their buildings and move them somewhere else.

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HELL IN THE RENTERS’ PARADISE: PART ONE (OF THREE)

In Bureaucracy, History, Law, Law Enforcement, Politics, Social commentary on December 30, 2015 at 2:32 pm

To hear slumlords tell it, San Francisco is a “renters’ paradise,” where obnoxious, lazy, rent-evading tenants constantly take advantage of hard-working, put-upon landlords.

Don’t believe it.

And in case you’re inclined to anyway, consider the story of Kip and Nicole Macy, two San Francisco slumlords who recently pled guilty to felony charges of residential burglary, stalking and attempted grand theft.

Kip Macy

Nicole Macy

Determined to evict rent control-protected tenants from their apartment building in the South of Market district, they unleashed a reign of terror in 2006:

  • Cut holes in the floor of one tenant’s living room with a power saw–while he was inside his unit.
  • Cut out sections of the floor joists to make the building collapse.
  • Threatened to shoot Ricardo Cartagena, their property manager, after he refused to make the cuts himself.
  • Changed the locks to Cartagena’s apartment, removed all of his belongings and destroyed them.
  • Created fictitious email accounts to appear as a tenant who had filed a civil suit against the Macys–and used these to fire the tenant’s attorney.
  • Cut the tenants’ telephone lines and shut off their electricity, gas and water.
  • Changed the locks on all the apartments without warning.
  • Mailed death threats.
  • Kicked one of their tenants in the ribs.
  • Hired workers to board up a tenant’s windows from the outside while he still lived there.
  • Falsely reported trespassers in a tenant’s apartment, leading police to hold him and a friend at gunpoint.
  • Broke into the units of three tenants and removed all their belongings.
  • Again broke into the units of the same three victims and soaked their beds, clothes and electronics with amonia.

The Macys were arrested in April, 2008, posted a combined total of $500,000 bail and then fled the country after being indicted in early 2009.

In May, 2012, Italian police arrested them and deported them back to America a year later.

Having pled guilty, they were sentenced in September, 2013, to a prison term of four years and four months.

How could such a campaign of terror go on for two years against law-abiding San Francisco tenants?

Simple.

Even in the city misnamed as a “renter’s paradise,” slumlords are treated like gods by the very agencies that are supposed to protect tenants against their abuses.

The power of slumlords calls to mind the scene in 1987’s The Untouchables, where Sean Connery’s veteran cop tells Eliot Ness: “Everybody knows where the liquor is. It’s just a question of: Who wants to cross Capone?”

Many tenants have lived with rotting floors, bedbugs, nonworking toilets, mice/rats, chipping lead-based paint and other outrages for not simply months but years.

Consider the situation at the San Francisco Department of Building Inspection, which is supposed to ensure that apartment buildings are in habitable condition:

  • A landlord is automatically given 30 days to correct a health/safety violation. If he drags his feet on the matter, the tenant must live with that problem until it’s resolved.
  • If the landlord claims for any reason that he can’t fix the problem within one month, DBI doesn’t demand that he prove this.  Instead, it automatically gives him another month.
  • A slumlord has to work at being hit with a fine—by letting a problem go uncorrected for three to six months.
  • And even then, repeat slumlord offenders often avoid the fine by pleading for leniency.
  • That’s because many DBI officials are themselves landlords.

But the situation doesn’t have to remain this way.

DBI could:

  • Vastly enhance its own prestige and authority
  • Improve living conditions  for thousands of San Francisco renters, and
  • Bring millions of desperately-needed dollars into the City’s cash-strapped coffers.

How?

By learning some valuable lessons from the “war on drugs” and applying them to regulating slumlords.

Consider:

  • At least 400,000 rape kits containing critical DNA evidence that could convict rapists sit untested in labs around the country.
  • But illegal drug kits are automatically rushed to the had of the line.

Why?

It isn’t simply because local/state/Federal lawmen universally believe that illicit drugs pose a deadly threat to the Nation’s security.

It’s because:

  • Federal asset forfeiture laws allow the Justice Department to seize properties used to “facilitate” violations of Federal anti-drug laws.
  • Local and State law enforcement agencies are allowed to keep some of the proceeds once the property has been sold.
  • Thus, financially-strapped police agencies have found that pursuing drug-law crimes is a great way to fill their own coffers.
  • Prosecutors and lawmen view the seizing of drug-related properties as crucial to eliminating the financial clout of drug-dealing operations.

It’s long past time for San Francisco agencies to apply the same attitude–and methods–toward slumlords.

In my next column I will lay out how this can be done.

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THE GOOD NEWS IN THE ASHLEY MADISON SCANDAL

In Bureaucracy, Business, Law Enforcement, Social commentary 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.”

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

In Bureaucracy, Business, History, Law, Law Enforcement, Social commentary 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 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.

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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.”

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FEAR WORKS: PART TWO (END)

In Bureaucracy, Business, Law, Self-Help, Social commentary on April 21, 2015 at 12:43 am

Ralph bought a computer security program from SUX.  But then he found he couldn’t download it.

So he contacted the company—whose customer service representative told him: You’ll have to buy another of our products to make the first one you bought work properly.

At that point, Ralph had had enough.

He sent SUX an email via its own website, outlining his problem and asking that the $60 charge on his credit card be removed.

Six days later, Ralph called his credit card company, to see if SUX was still charging him for an item he hadn’t received.

It was.

It was time to play Machiavellian hardball.

Ralph once again dialed SUX to speak to one of its customer service reps.

Calmly–but firmly–Ralph identified himself, then quickly summarized the problem he was having with the company.

Then he said:

“I suggest you contact someone in management and tell them this: I want this charge off my credit card in 24 hours.  If it isn’t, here’s what’s going to happen:

“One: I’m going to file a criminal complaint with the local office of the United States Attorney [Federal prosecutor] for fraud against your company.

“When a company does business in more than one state, that brings it under Federal jurisdiction.  And there are Federal penalties for charging people for products they didn’t receive.

“Two, I’m going to make this situation very well known on social media sites.  That’s going to cost you bigtime on future customers.

“Again, I’ll wait 24 hours.  Pass this on to your management.”

Then he hung up.

Slightly more than 24 hours later, Ralph got this email from SUX:

“Thank you for ordering from SUX.  At your request a return has been initiated.”

In short: The charge would be removed from his credit card.

There are several important lessons to be learned here.

First, before you call to complain, make sure the product isn’t working.

Read the instructions carefully and follow them to the letter.

If you can’t understand the instructions, or if you feel you do and the product still isn’t doing what it’s supposed to do, call the company.

Second, when you reach the customer service rep, be patient and polite.

At best, getting angry and offensive wastes valuable time which could be better spent outlining the problem you’re having.

At worst, the tech might hang up on you, which means you’ll have to go through the whole telephone-tree exercise again.

Third, explain precisely what has gone wrong.  If the tech gives you instructions on how to resolve the problem, follow them to the letter.

Fourth, if you’re sure you want to return the product, say so.

Find out the company’s preferred way to do this.

Fifth, if you’ve paid for it by credit card, state that you want the charge removed from your bill.

You may have to wait until the company receives the product before they take the charge off your bill.  To make sure they get it, send it signed-receipt-requested.

Sixth, wait five to ten days to see if your credit card has been charged. 

Ralph waited six, which is a reasonable number.

Seventh, if the problem hasn’t been resolved, call the company again and ask to speak to someone on its corporate headquarters—the higher up, the better.

You can often find out the names of the top executives of a company by checking its website.  Or by going to a business-rating website, such as that of Standard and Poor’s.

Eighth, be polite but businesslike as you outline your problem.

If you can’t outline it in one or two minutes, ask for an email address where you can send a detailed email.

Ninth, state clearly what you want the company to do for you.

Often, people get so angry at the frustration they’ve endured that they forget to say what action they want the company to take.

Tenth, if the company rep makes it clear they won’t take back the product, give you a substitute, or refund your purchase, it’s time to play hardball.

Eleventh, if you believe the law has been broken, say so. 

And say which agencies you intend to contact—such as the local District Attorney’s Office, Federal Trade Commission, United States Attorney or Federal Communications Commission.

Twelth, have at least one or two consumer complaint websites ready to cite—and contact.

A

Among these:

Businesses fear bad consumer reviews–especially on Yelp! and Facebook.

When I once visited a local animal shelter, a receptionist told me: “If you have a problem with something, please see me.  Don’t go home and post it on Yelp!“

Thirteenth, tell the company official what action you intend to take unless your demands are met. 

Offer a deadline by when you expect that action to be taken.

Fourteenth, if that doesn’t prove enough, consider filing a private lawsuit.

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FEAR WORKS: PART ONE (OF TWO)

In Bureaucracy, Business, Law, Self-Help, Social commentary on April 20, 2015 at 12:13 am

So you’ve just bought something online, with a credit card–and the item never arrives–or proves defective.

Even worse, the online company insists on charging your credit card for the item.

What to do?

Here’s what a friend of mine–Ralph–recently did when he faced just that problem.

One night, while surfing the Internet, he saw an ad for a new computer security product.  For him, its biggest selling point was: “Make yourself invisible to the bad guys with just one click.”

An even stronger selling point for him: The product was being offered by SUX, the company whose anti-virus software he had subscribed to for the last three years.

And, so far, he had never had any trouble with the company.

SUX offered several options for subscription:

  • One month
  • One year
  • Two years

Ralph decided that one month was too short, and two years were too long.  He chose a one-year subscription, intending to renew at the end of the year if he liked it.

He typed in his credit card number and clicked on “Download.”

Soon afterward, he received an Order Confirmation email from the company, outlining the product he had just purchased and the amount he had just paid for it.

He then got into the anti-virus security item on his desk.  A few clicks later a new screen popped up–and the message: “Disconnected.”

Even worse, the screen warned: “Your license has expired.  Renew now.”

The product he had just paid $60 to download hadn’t downloaded.

So Ralph called SUX–and explained to a technician what had happened.

And the tech responded: “We don’t offer phone support for that product.”

Nothing Ralph said could elicit the help he needed.  Furious at the man’s arrogance, Ralph hung up.

To avoid accidentally reaching the same worthless technician, Ralph decided to wait several hours before again calling SUX.

When he did, he reached a technician who was willing to provide help.  The tech said that he would like to run a remote scan on Ralph’s computer to try to find out what was causing the problem.

Ralph agreed.

For the next five minutes he could see his cursor moving around his screen, as the tech checked first one file, then another.

Finally, the tech said that Ralph needed to “clean out” his computer before the SUX product he bought would work properly.

“OK, how do I do that?” asked Ralph.

“You need to buy our BS2U product,” said the tech.

Now Ralph was really steamed.

He had just spent $60 on a product he couldn’t download.  And the tech was telling him he had to spend even more money on a second product to make the first product work properly.

Ralph then said he wanted to contact someone in an executive positon at SUX.  But the rep said he would have to call outside the United States to do this.

Ralph hung up, then got back onto his computer and onto the SUX website.  He drafted a short but detailed message on the problems he was facing with one of the company’s products.

And it ended:

“Frankly:

(1) I am UNABLE to make use of the product I paid $60 for; and

(2) I am UNWILLING to pay MORE MONEY FOR ANOTHER PRODUCT in hopes that this will enable me to use the one I just purchased.

“Therefore, I am requesting that the credit card transaction I had with your company on —- be canceled.  If it is not, I will dispute this via my credit card company when I receive my next statement.

“To enable you to quickly locate this transaction in your files, I am enclosing the Order Confirmation Number:  #———-.

“I am making a copy of this email, so I can establish, if necessary, that I have notified your company that I am NOT receiving the product I paid for.

“I have already contacted my credit card company and informed them that I will contest this charge if your company does not make good on this refund.”

Six days later, Ralph called his credit card company, to see if SUX was still charging him for an item he hadn’t received.

It was.

Luckily for Ralph, he had been a longtime student of Niccolo Machiavelli, the father of political science.

Niccolo Mchiavelli

In The Prince, his treatise on how to gain and hold political power, Machiavelli raises the question: Is it better to be loved or feared?

And he answers as follows:

“The reply is, that one ought to be both feared and loved, but as it is difficult for the two to go together, it is much safer to be feared than loved….

“Men have less scruple in offending one who makes himself loved than one who makes himself feared.  

“For love is held by a chain of obligations which, men being selfish, is broken whenever it serves their purpose; but fear is maintained by a dread of punishment which never fails.”

It was time to invoke the spirit of St. Niccolo.

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HOW TO BE A SMARTER EXECUTIVE

In Bureaucracy, Business, History, Self-Help on March 13, 2015 at 12:08 am

“The man who builds a factory,” said President Calvin Coolidge, “builds a temple.  And the man who works there worships there.”

Many American corporate executives still feel about themselves–nd their employees.  But those heady days of knee-jerk worship of CEOs and their oversize salaries and egos are over–at least, temporarily.

Americans have reluctantly learned that the robber barons who rule Wall Street arenot God’s own elect.

Even Ayn Rand disciple Allen Greenspan, the former Federal Reserve chairman and a longtime champion of de-regulation, has admitted he totally underestimated the role greed plays in the making of financial decisions.

It’s thus time for Americans to demand wholesale reforms in the ways corporate executives are allowed to operate. And a good place to start is with the advice of Niccolo Machiavelli.

The Florentine statesman (1469-1527) wrote extensively about how bureaucracies truly work–as opposed to how people believe they do.

Niccolo Machiavelli

Consider the following from his book, The Prince, which offers instruction on how to attain and retain power:

  • IMITATE THOSE WHO HAVE ATTAINED GREATNESS: Not always being able to follow others exactly, nor attain to the excellence of those he imitates, a prudent man should always follow in the paths trodden by great men and imitate those who are most excellent….  If he does not attain to their greatness, at any rate he will get some tinge of it.
  • DON’T RELY ON LOVE:  …I conclude, therefore, with regard to being loved and feared, that men love at their own free will, but fear at the will of the prince, and that a wise prince must rely on what is in his power and not on what is in the power of others, and he must only contrive to avoid incurring hatred….
  • NEED TO BE PRACTICAL:  A man who wishes to make a profession of goodness in everything must inevitably come to grief among so many who are not good.  And therefore it is necessary for a prince, who wishes to maintain himself, to learn how not to be good, and to use this knowledge and not use it, according to the necessity of the case.
  • CAUTION AND BOLDNESS: A [leader]…must imitate the fox and the lion, for the lion cannot protect himself from traps, and the fox cannot defend himself from wolves.  One must therefore be a fox to avoid traps, and a lion to frighten wolves.  Those who wish to be only lions do not realize this.
  • SANCTIONS VS. FAVORS:  [Leaders] should let the carrying out of unfavorable duties devolve to others, and bestow favors themselves.
  • RISK AS A GIVEN: Let no [leader] believe that [he] can always follow a safe policy, rather let [he] think that all are doubtful.  This is found in the nature of things, that one never tries to avoid one difficulty without running into another, but prudence consists in being able to know the nature of the difficulties, and taking the least harmful as good.
  • A RULER’S SUBORDINATES: The first impression that one gets of a ruler and his brains is from seeing the men that he has about him.  When they are competent and loyal one can always consider him wise, as he has been able to recognize their ability and keep them faithful.
  • But when they are the reverse, one can always form an unfavorable opinion of him, because the first mistake that he makes is in making this choice.
  • EVALUATING COMPETENCE:  There are three different kinds of brains: the one understands things unassisted, the other understands things when shown by others, the third understands neither alone nor with the explanations of others.  The first kind is most excellent; the second is also excellent; but the third is useless.
  • OVERCOMING ONE’S OWN NATURE:  No man can be found so prudent as to be able to adopt himself to [time and circumstances], either because he cannot deviate from that to which his nature disposes him.
  • Or else because having always prospered by walking in one path, he cannot persuade himself that it is well to leave it; and therefore the cautious man, when it is time to act suddenly, does not know how to do so and is consequently ruined.  For if one could change one’s nature with time and circumstances, fortune would never change.
  • ENSURING LOYALTY:  A wise prince will seek means by which his subjects will always have need of his government, and then they will always be faithful to him.
  • CRUELTIES:  Well-committed may be called those…cruelties which are perpetrated once for the need of securing one’s self, and which afterward are not persisted in, but are exchanged for measures as useful to the subjects as possible.  Cruelties ill committed are those which, although at first few, increase rather than diminish with time.
  • FORTUNE: I think it may be true that fortune is the ruler of half our actions, but that she allows the other half or thereabouts to be governed by us.
  • I would compare her to an impetuous river that, when turbulent, inundates the plains, casts down trees and buildings, removes earth from this side and places it on the other; every one flees before it, and everything yields to its fury without being able to oppose it.  Still, when it is quiet, men can make provisions against it by dykes and banks, so that when it follows it will either go into a canal or its rush will not be so wild and dangerous.