Charges Declined
Justice
For over a year since his presidency, people have been speculating on when Donald Trump and his companies would be charged with crimes. Two parallel investigations in New York - the Attorney General and the Manhattan DA - have been in the news regularly. Criminal charges were expected any day. And then, last month, two of the prosecutors leading the investigation abruptly quit. Alvin Bragg, the newly elected DA, had sworn on the campaign trail he’d work to hold Trump accountable for his expansive empire of fraud. What happened?
Here is a letter from one of the prosecutors who resigned. He is frank in his assessment of the case:
As you know from our recent conversations and presentations, I believe that Donald Trump is guilty of numerous felony violations of the Penal Law in connection with the preparation and use of his annual Statements of Financial Condition. His financial statements were false, and he has a long history of fabricating information relating to his personal finances and lying about his assets to banks, the national media, counterparties, and many others, including the American people. The team that has been investigating Mr. Trump harbors no doubt about whether he committed crimes — he did.
Everyone from the New York Times to ProPublica has uncovered evidence Trump and his companies committed tax and bank fraud. It’s public knowledge Trump lied to banks and tax authorities about the value of his buildings to either borrow more than they were worth, or pay less taxes on the properties. So what gives?
This NY Times piece lays out some of the difficulties Bragg may feel he faces if he tries to bring criminal charges against Trump personally:
In the Manhattan investigation, the absence of damning emails or an insider willing to testify would make it harder to prove that any exaggerations were criminal. Mr. Trump, who has a history of making false statements, has in the past referred to boastful claims about his assets as “truthful hyperbole.”
This is obviously maddening to the average person, but it highlights an important distinction in our criminal justice system - with proper legal representation, it is can be difficult to secure a conviction in a court of law.
It often feels like there are two justice systems in America. We have a justice system for the poor and under-represented - one that results in a staggering 95% of cases ending in plea deals:
Criminal case dockets have become so bloated in the last fifty years as Americans have disastrously over-relied on the criminal legal system to solve all our problems. Pressure-packed, conveyor-belt plea bargaining has become the only release valve. The grossly divergent sentences offered to defendants who plead guilty versus those who don’t — often called the “trial penalty” — proves just how divorced from public safety, justice, or even rationality this system is.
Typically, defendants who take plea deals - even if they are innocent - either have a court-provided contract attorney or an overworked, underpaid public defender. Prosecutors have every reason to believe they will not have to take the case to trial, and can offer onerous plea deals. They don’t have to convince a judge or jury, they can simply strongarm a desperate defendant. Prosecutors can lie all they want during the plea process, and there is ample evidence they use unfair tactics to secure convictions.
So, what about a rich person? What about a former president who has infinite resources to hire lawyers to fight the minutiae of a case all the way to the Supreme Court? Prosecutors look at a poor or indigent person and see a likely plea deal - the odds are heavily in their favor. They might look at a decades-spanning tax fraud perpetrated by a guy who doesn’t use email and think wow, this is going to be a lot of work, and we might lose. In a perfect world, District Attorneys wouldn’t care about winning or losing, because they’d be bringing cases in the name of justice, et cetera. However, many DAs here are elected, and concerned it may hurt their political career if they lose a case. Even appointed DoJ officials are worried about this, which is one reason they rarely prosecute rich people. When you’re pitting good lawyers against good lawyers, outcomes are less certain.
When Bragg was considering the Trump case, he imagined how weaknesses could hurt him in court, rather than listening to his staff attorneys who rightly pointed to all the crimes. Cy Vance likely did the same thing when he let Trump’s children off the hook in a fraud case years ago.
It is easy to be outraged at this situation - especially given the stakes if Trump stays out of jail and runs for president again. A different question is - what if prosecutors treated poor defendants the same as rich ones? A fair justice system would ask the question - how good is our case, really? - rather than pushing plea deals for an easy win. Or, more cynically, when prosecutors are faced with the possibility they might lose, they think very differently about whether to charge a case.
Film Tax Credits
This week, California announced the latest round of tax credits for the film industry. It gave nearly $150 million to 30 projects. Variety hyped up the news, noting that Netflix was a “big winner” in the hunt for cost savings:
The streaming giant was awarded $60.3 million in state credits, far outpacing Disney ($27.2 million), Warner Bros. ($16.2 million) and Amazon ($16 million).
The state gave Jerry Seinfeld $14 million dollars to make a movie about the origins of the Pop Tart, which, sure, fine. California doles out hundreds of millions of dollars a year to the film and TV industry, ostensibly so production companies don’t go elsewhere:
California awards $330 million in credits per year, though that figure was increased by $90 million for each of two years due to the state’s pandemic-related budget surplus — with that increase earmarked for TV shows.
[…]
In a typical year, the state would allocate $132 million to film projects — both independent and studio films — with the remainder going to series TV. So far this fiscal year, however, the state has already awarded $288 million to film projects.
This seems like a lot of money for a state that is home to all the major studios and has robust infrastructure for filming movies and TV. Are these credits driving such incredible economic growth it’s worth diverting pandemic aid to the program? Haha, no, of course not:
Results mostly show no statistically significant effects. Results also indicate that domestic employment is unaffected by competing incentives offered outside the United States.
Fun fact - state economic development incentives date back to the Great Depression:
During that period, policy makers in southern states enacted bond programs that subsidized factories and other facilities, thereby lowering firms’ effective capital costs. That bond-supported infrastructure was publicly owned and exempt from property taxation yielded further cost advantages (LeRoy 2005). Many observers believed this tactic successfully enticed labor and capital from northern states, where policy makers responded with retaliatory incentives.
This race to the bottom continued, ramping up through the 1980s, and is on horse steroids these days, with governors creating slush funds to dole out grants to donors and friendly corporations.
Why do politicians continue to shower companies with cash from their dwindling coffers despite ample evidence it provides little to no economic benefit? Turns out, it’s popular with voters!
Offered a choice between a policy maker who offers incentives and one who does not, voters prefer the former even if both attract the same development.
We love corruption, don’t we folks? Here’s another interseting fact - taxes make up only a small percentage of the costs involved in making a film:
Furthermore, taxes for many industries are not a primary operating cost. Among manufacturers, for example, taxes compose around 1 percent of input costs compared to over 21 percent for labor
I do not think that Jerry Seinfeld’s Pop Tart movie is going to cost $1.4 billion dollars to make, so why does he need $14 million in tax credits? I found the answer in a how-to guide to making movies:
On average, shooting in Louisiana allows producers to count on about 20-25% of their budget coming back to them in the form of tax credits [that they could then sell back to the state at 85% face value, or better-yet, sell to a highly-taxed local company for closer to 90-95% face value]. The more diligent filmmakers can eek out closer to 25-30% in tax credits. The state became so dependable in regards to delivering on their promised tax credits, that many films started to partially finance their productions by having companies or individuals “cashflow” the projected tax incentives prior to filming, and with a built-in return to the lender.
Ah ha! So these are not credits to be used against a film’s tax burden, which is minimal - most is paid by the crew and contractors in the form of standard income tax. They’re credits film studios can sell to other companies who do owe a bunch of taxes, known as “transferrable” tax credits. The company who buys the tax credit from the film studio for 90 cents on the dollar has now saved 10% on their taxes, and the film studio is taking what is essentially free money from the state, and using it to subsidize the cost of making the film, or even return profits to financiers. Very cool!
So, California is giving movie and TV studios $330 million dollars a year, most of which they sell off so other companies can pay less state income tax, and they use that money to line their own coffers. Some governments have stopped offering film tax credits as of 2020, but 31 states and multiple US territories still do.
Vimeo
Patreon creators who host video content are encouraged to use Vimeo, a video hosting platform that offers more security features than YouTube. As of 2020, Vimeo is a publicly traded company focused on revenue growth, which may explain why it’s shaking down small content creators:
So the notice Vimeo sent [Lois] van Baarle on March 11th shocked her. Her bandwidth usage was within the top 1 percent of Vimeo users, the company said, and if she wanted to keep hosting her content on the site, she’d need to upgrade to a custom plan. Her quoted price: $3,500 a year. She was given a week to upgrade her content, decrease her bandwidth usage, or leave Vimeo.
This is a pretty shocking email for a company to send to a paying customer, especially one whose videos only garner a few hundred views each. A popular video producer wrote about the time Vimeo took down their videos and demanded 5-figure usage payment:
Hey guys -- so long story short, Vimeo is essentially holding our Patreon catalog hostage and unless we pay $16,200 to them, our account will be deactivated and the majority of the videos on this page will disappear.
[…]
My Vimeo contact told me that all of my videos had been removed from Patreon because I’d exceeded Vimeo’s ‘bandwidth limit’ (image 1). Bear in mind, we haven’t uploaded a single Channel 5 video directly to Vimeo, we've only uploaded through Patreon’s built-in video feature, so I was confused.
[…]
In addition to that, we actually purchased a ‘Vimeo Pro’ plan in advance, which costs $250/year and supposedly allows us 1 Terabyte of annual storage. So far, combining every channel 5 video, we have yet to exceed 250GB, even a quarter of the storage limit that we pay for.
The metrics Vimeo is using to rank a small Patreon creator in the top 1% are opaque at best. It’s deletion of popular videos with no warning makes no business sense. Or, maybe it does if Vimeo’s business strategy is to milk independent creators for exorbitant fees while focusing on large corporate clients:
Vimeo CEO Anjali Sud has talked at length about this strategy shift, telling The Verge last year that the goal is to be a software company for businesses of “all sizes.” But in Vimeo’s 2021 Q4 earnings report, the focus is on the corporate clients, with Sud highlighting that some of the largest companies in the world are buying Vimeo’s products.
In a letter to shareholders in February, Sud spells the shift out in black and white: “Today we are a technology platform, not a viewing destination. We are a B2B solution, not the indie version of YouTube.”
They are within their rights to do this, but sending warning notices giving users less than a week to decide whether to pay three to five times their previous rate or have their videos deleted is a pretty draconian way of treating the people who helped you build your video platform in the first place.
Fashion
Last week I wrote about how returned clothing is clogging up supply chains and creating excessive waste and pollution. Then, this week, I came across this article in Bloomberg I wish I’d seen last week:
Today, in fact, fashion accounts for up to 10% of global carbon dioxide output—more than international flights and shipping combined, according to the United Nations Environment Programme.
It also accounts for a fifth of the 300 million tons of plastic produced globally each year. Polyester, a ubiquitous form of plastic that’s derived from oil, has overtaken cotton as the backbone of textile production. Garments made from polyester and other synthetic fibers are a prime source of microplastic pollution, which is especially harmful to marine life.
Not great! As a wearer of mostly cotton-based garments, I had not considered the amount of plastic required to produce the polyester in fast fashion. And, more shockingly, the vast majority of polyester clothing is destroyed:
Eighty-seven percent of the total fiber input used for clothing is ultimately incinerated or sent to a landfill.
Eighty! Seven! Percent! That is an astonishing number in an article full of them. Textiles are the second-largest product group made from petrochemicals (oil), and polyester has overtaken cotton as the fabric of choice for the fashion industry. It’s versatile and easy to produce in Asia.
Shein, the fast fashion behemoth, churns out an almost unbelievable amount of polyester clothing each day:
Shein puts out an average of about 1,000 women’s new clothing styles a day based on our sample, 85% of which were made with polyester.
It is easy to pin the blame on fast fashion houses, but the fashion industry at large is obsessed with constantly putting out new styles - the big brand houses “innovate” and it trickles down to the fast houses which churn out cheap versions at breakneck speed.
So, what does all of this mean for the environment? Well:
In 2015, polyester production for clothing emitted 282 billion tons of carbon dioxide, triple that of cotton.
Additionally, synthetic textiles like polyester shed tiny pieces of plastic with every wash and wear. These plastic particles, called microplastics, pollute the oceans, freshwater and land and pose a danger to the animals that consume them, inhibiting their growth and reproduction.
Great. While CO2 emissions fell in 2020 as a result of the pandemic, humans are back at it, breaking records as supply chains grind back to life and people use savings and stimulus money to buy more stuff:
Global energy-related carbon dioxide emissions rose by 6 percent in 2021 to a record 36.3 billion metric tons, their highest ever level, the International Energy Agency said Tuesday.
"The increase in global CO2 emissions of over 2 billion metric tons was the largest in history in absolute terms, more than offsetting the previous year's pandemic-induced decline," it said.
If we want a habitable planet for future generations, human society - especially the wealthy West, as we’ve discussed - needs to reckon with its desire to buy lots of cheap clothing and packaged goods, and our societal failure to find ways to dispose of or reuse all the waste they create, which clogs our landfills, skies, and oceans.
Romance Scams
We have talked a bit about romance scams in the past. Here is a story in Task and Purpose about a real Army colonel whose name and photos have been used to dupe hundreds if not thousands of women online:
She and her mother would soon learn they were two of hundreds, if not thousands of people who were being scammed by people using Blackmon’s identity. Most of the profiles used Blackmon’s full name, and photos he’d shared previously on Twitter, though some used only his photos and a different name. His selfies were their profile photos; they’d rip off pictures he’d posted online in uniform and share them with women they spoke with.
Blackmon — the real one — estimates there are hundreds of fake accounts using his name and photos across various social media sites since he was alerted to the first fake account under his name in 2014. If there’s an online dating website in the world, he said, he probably has accounts on it.
This poor guy has become a favorite for romance scam gangs - many operate overseas - and is plastered all over the Internet. It turns out military leaders are a common target for romance scammers crafting fake identities:
The top U.S. general in Afghanistan once said officials had uncovered more than 700 fake profiles under his name. And others with high profiles, such as former Defense Secretary Jim Mattis and former Chairman of the Joint Chiefs Joseph Dunford, have reported similar impersonations.
It makes sense romance scammers would use photos of soldiers in fatigues as part of their ruse, but using a five-star general is pretty brazen. For mid-level officers like Blackmon, being associated with a romance scam and being contacted by upset victims is probably a headache they didn’t anticipate when they joined the service.
Tattoos
I am a fan of interesting lawsuits that don’t harm anyone. We talk a bit around here about lawsuits over the onion in an onion ring, for instance. But! Did you know that unique tattoos are IP and if you try to recreate one in a movie or TV show you can get sued?
The biggest hurdle of all when it comes to onscreen tattoos, though, has proved to be legal issues, ever since 2011, when S. Victor Whitmill — a tattoo artist who gave Mike Tyson his famous face tattoo — sued Warner Bros. for similar-looking ink on Ed Helms in The Hangover: Part II. The studio settled with Whitmill, and in the decade since, the industry has become extremely strict about signing off on every tattoo that will appear onscreen, whether real or fake. For a production to give clearance, makeup artists and effects studios must come up with either original designs or imagery from the public domain. If an actor’s real tattoo is going to be shown, their personal tattoo artist has to give approval.
Honestly, this is excellent. Tattoo artists should get credit or compensation if their artwork is portrayed on screen. Also, given that we’ve just talked about massive film budgets, I am in favor of forcing studios to pay lawyers or have production assistants track down tattoo artists - surely an easy task! - to get their permission to use a tattoo in a miniseries that features a talking penis. I bet it’s a fun job to come up with fake tattoos that look a lot like a famous person’s tattoos but fall just below the bar of infringement. Prop people are also now tattoo forgers! I love it.
Short Cons
VICE - “But a strangely familiar fate has befallen Bitcoin donations: Many truckers now can’t cash out their donated bitcoin due to financial sanctions, with some of the bitcoins being seized from NobodyCaribou by the authorities.”
NY Times - “A Louisiana man was convicted on Wednesday of defrauding the federal student loan system of more than $1.4 million in an elaborate scheme that involved posing as students and hiring impersonators to get financial aid he then pocketed.”
WaPo - ““We obviously can’t buy nuclear bombs or rockets,” said Kuna.io’s chief executive, Michael Chobanian. But “most nonlethal things you can buy with crypto.””
Bloomberg - “Homebuying startup Knock is scrapping plans to go public and laying off nearly half its staff after a tumultuous year for property technology companies.”
KUTV - “A Utah business owner and coin dealer has been sentenced to prison for running what officials called a “$200 million, multi state Ponzi scheme.””
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