Indecent Proposition
Prop 22
While most of the country was celebrating a Biden victory, millions of gig workers in the state of California were losing any hope they’d earn a living wage. Voters passed Proposition 22, which carved out a special contractor status for workers employed by gig economy companies:
Uber, Lyft and the delivery service DoorDash designed the measure to exempt the companies from a state labor law that would have forced them to employ drivers and pay for health care, unemployment insurance and other benefits. As a concession to labor advocates, the initiative offers a wage floor and limited benefits to drivers.
How did this happen? Gig companies spent over $200 million dollars and forced their workers to support of the measure. Pretty cool! Gig companies took some of the billions of investor dollars they lose every year and changed state law, saving billions. Totally how democracy is supposed to work.
Buoyed by their success in deceiving the people of California, they’ve now set their sights on other states and countries:
Shortly after the Nov. 3 victory, according to TechCrunch, Uber CEO Dara Khosrowshahi said in an earnings call that he will “more loudly advocate for laws like Prop 22,” and that the company will prioritize working “with governments across the U.S. and the world to make this a reality.”
It’s important to remember that Uber’s business model does not work even with all of its workers classified as contractors. All the gig companies were doing with Prop 22 was preventing a California law from going into effect that’d force them to pay their workers better, and probably put them completely out of business.
Unfortunately, California’s system of ballot initiatives allows an uninformed - or easily influenced - populace to essentially overrule its state legislature. Remember Proposition 8? Gay marriage opponents snuck through a ban using confusing language and targeted lobbying. The Supreme Court had to step in and overturn it. Now, gig companies have proven that with enough money and misinformation, they can shape state laws around the country, and continue to pay their workers subhuman wages.
Joe Biden came out on against Prop 22 on the campaign trail, but has surrounded himself with pro-tech advisers, and appointed a rideshare-friendly lobbyist to his national security council. A federal law protecting gig workers could make all of this moot, but we’ll see what this new administration can get done.
OnlyFans
Bloomberg recently published a piece on the very NSFW website OnlyFans, a place people go for photos and videos from creators they pay a fee to follow. Cardi B recently used the platform to post some non-pornographic content, which led Bloomberg to laud the “growing number of more traditional celebrities turning to OnlyFans to make a little extra revenue, raise money for charity or connect with followers in a new way.”
Okay, sure. I can appreciate that Cardi B, who was an exotic dancer in a past life, would be more open-minded about ways to interact with her fans. OnlyFans is an open secret on the Internet - even Beyoncé has called it out. Interactive porn is certainly nothing new - adult webcam sites have existed for decades.
Bloomberg can’t resist the serious business angle:
Along the way, OnlyFans has grown into one of the biggest media businesses hiding in plain sight. The company has 85 million users, upward of 1 million creators, and will generate more than $2 billion in sales this year, of which it keeps about 20%. That puts the site on track for $400 million in annual net sales — dwarfing Patreon, a platform devoted to helping creative types monetize their work, which is valued at more than $1.2 billion.
These are impressive numbers, to be sure! Also, it’s unequivocally a good thing that a platform exists to help out-of-work sex workers and others through a pandemic by allowing them to make money remotely.
There’s a glowing profile of the founder Tim Stokely, who founded OnlyFans after running a “financial domination” or findom website, where submissive clients gave gifts or money to dominant partners. Again, totally fine. What consenting adults do with their money is their business.
OnlyFans launched in 2016, and two years later Stokely sold a majority stake to a fellow named Leonid Radvinsky. Bloomberg describes him as:
…a Chicago-based Internet entrepreneur with a background in adult entertainment and direct marketing. In 2004, Microsoft Corp. sued Radvinsky for allegedly sending millions of deceptive emails to Hotmail customers.
Hmm, well that’s not great, but the adult entertainment business does have its share of scoundrels. If you read through the rest of the Bloomberg profile, you’d assume that Radvinsky and OnlyFans are running a positive, upright business.
However, sneakily hidden as a hyperlink about Radvinsky’s “background” is this article by Forensic News:
Behind this explosion of success, however, an analysis by Forensic News has revealed that OnlyFans is owned by a Ukrainian-American porn entrepreneur named Leonid Radvinsky with a history of lawsuits and allegations of spam, theft, fraud, and drug dealing.
[…]
Interviews with over two dozen content creators and users of OnlyFans and another large camming website owned by Radvinsky, MyFreeCams, illustrate a decade long laundry list of complaints against Radvinsky, with many losing thousands of dollars.
Other concerns include the uber-popular OnlyFans’ seemingly lax safeguards against possible child exploitation.
Uhhhh. That…seems…bad? So what’s going on at OnlyFans?
One recurring complaint that Forensic News documented by talking to various users and content creators of both MyFreeCams and OnlyFans was the arbitrary freezing of accounts, which left many without thousands of dollars.
One model who spoke to Forensic News said that she lost thousands when her account was banned without notice.
And therein lies the problem with “creator” platforms like OnlyFans. As some of the models on OnlyFans are finding out, the company has total control over their funds and their ability to make money, and can exercise that control in arbitrary ways. Some companies - Patreon being one - try to put reasonable guidelines in place and provide some level of transparency into how they review and manage accounts. Others, like OnlyFans, appear to be shutting down accounts for little or no reason - and seizing creator funds with no explanation.
Many tech companies use vague, voluminous Terms of Service or Acceptable Use policies. The legalese gives platforms unilateral control over everything that happens on their platform. On a site like Facebook, the stakes are significantly lower, but on OnlyFans, where a creator’s earnings sit in a digital balance, it’s a much bigger deal.
OnlyFans is a private company, run by a guy with a checkered past, and is credibly accused of stealing creator funds. On top of that, the website’s tech seems to be subpar, creating potential privacy issues for creator who would - understandably - wish to stay anonymous:
Within days of signing up for an OnlyFans account using the throwaway email, one of our staff writers received an email to her personal Gmail account, though her name nor the email address were ever provided to the company.
The email contained a one-time access code addressed to an account named ChevyCaldwell to complete an email update.
The email gave the Forensic News staff writer access to an account that was not hers.
Not good! Tech glitches are a thing, but, again, a website handling sensitive information that is allegedly worth a billion dollars should do a lot better.
A company worth a billion dollars would also - you’d think - hire an accountant. Turns out they’ve been dodging taxes for years:
They claimed the change was "due to a recent interpretation of an EU law by HMRC", although did not respond to a request for clarification on what this recent interpretation was.
In lieu of a more reputable platform offering adult creators the same services, OnlyFans is what they’ll have to deal with for the time being. But, the least journalistic publications like Bloomberg could do is not bury links to serious ethical and financial concerns in an unrelated quote in a piece crowing about how the website is disrupting fan interaction, or whatever.
Boring Company
I know I write about Elon Musk a lot in this newsletter - but in my defense, he does a lot of really stupid shit! Musk owns Boring Company, which he claims is going to reinvent subways by drilling holes under the ground and running…cars through them. If this seems preposterous it’s because it is. However, more than one mayor has bought into his bullshit, and he’s been allowed to dig “Loop” tunnels under American cities.
Las Vegas has contracted with Boring Company to build a system of tunnels under the convention center. And it’s going great:
The choke point isn’t technology — it’s fire regulations. In one of the three loading zones for the tunnel network, called the Convention Center Loop, only 800 passengers an hour are allowed. If that’s true of all three loading zones, the Loop will only move about a quarter of what it promised: just 1,200 people an hour, according to TechCrunch.
Vegas has strict fire regulations? Who knew. The various Loop projects are also a way to hype Tesla vehicles, because Musk is nothing if not an opportunist:
In the Las Vegas Loop, passengers will ride in Tesla Model Xs, Model 3s, and a modified Model 3 that can hold up to 16 passengers at a time, and they’ll travel through the tunnels at speeds of up to 155 miles per hour…
155 miles per hour seems fast, because we live in America where trains are slow. Every other developed nation has high speed rail that not only goes much faster, but travels farther than 1/8th of a mile at a time.
Oh, and they’re apparently going to build more tunnels under Austin. Everything is dumb.
Kodak
Remember when Kodak was going to pivot to becoming a COVID-19 drug company? And they couldn’t even do the press release properly?
Kodak had issued a press release to reporters that was supposed to be embargoed until the next day, so the president could announce the deal. Except they forgot to write EMBARGO on the press release, so local news in Rochester published it, and a lot of day traders - and others, one presumes - saw it before it was deleted, and started buying Kodak stock, which shot up and looked like a lot of suspicious activity. Great job, everybody.
The deal fell apart, but a bunch of people made a lot of money on the stock’s volatility. Elizabeth Warren requested a review of the deal and - good news! - the IG found no wrongdoing:
When the plan was announced, Kodak still had many steps to complete in its loan process with the DFC, including whether the plan met the agency’s minimum-eligibility requirements, the inspector general said in his review.
He found it reasonable for the DFC to consider Kodak for the loan, noting other companies’ recent pivots to Covid-19 supply-chain manufacturing and Kodak’s experience providing materials to the pharmaceutical industry.
Or, rather, he found no wrongdoing in the process of the federal government offering the loan to Kodak. So while the headline says “no wrongdoing” that’s not…entirely true. As a matter of fact, Kodak itself found a bunch of wrongdoing around the deal:
Kodak’s review did find several governance issues at play, however. One issue was a gift of Kodak stock made by Kodak board member George Karfunkel on the same day the stock’s price peaked, after the government’s announcement. Mr. Karfunkel donated the stock, worth $116 million, to a religious charity he started.
That’s uh, pretty generous. Donating $116 million to your own charity! What a guy. Other executives were a bit more brazen in their attempts at stock manipulation:
Kodak has admitted to other issues since then. Last month, the company said five former executives were able to collect millions of dollars by selling stock options they didn’t own due to weak internal controls that failed to prevent unauthorized issuance of the company’s stock.
Sheesh. It is sad to see a once-iconic company like Kodak circle the drain, but it’s hard to ignore that the company seems to be run by a bunch of greedy buffoons.
Ponzi Scooter
When the authorities went to arrest Matthew Piercey on Monday for what they said was his role in running a $35 million Ponzi scheme, he took off in his truck and led them to Shasta Lake, the largest man-made reservoir in California.
Tracked by air and trailed by F.B.I. agents and members of the California Highway Patrol, Mr. Piercey, 44, of Palo Cedro, Calif., was seen removing something from his truck and entering the frigid water with it in his street clothes, the authorities said. After about 25 minutes in the lake, part of which he spent submerged, a very cold and wet Mr. Piercey emerged and was arrested, the Justice Department said.
Talk about a low speed chase. The FBI cheekily refused to provide more details on the attempted escape:
It was not clear how long Mr. Piercey was underwater. Neither the F.B.I. nor the Justice Department answered questions about whether he used a snorkel or any kind of scuba gear to stay submerged.
The Justice Department noted in a detention memorandum, however, that Mr. Piercey “spent some time out of sight underwater where law enforcement could only see bubbles.”
What on earth? Turns out he was trying to flee with a…low speed diving scooter:
Mr. Piercey’s red Yamaha 350Li, an underwater sea scooter, was taken as evidence, the authorities said. The commercially available, battery-powered scooter has an enclosed propeller that can pull a diver underwater at just under 4 miles per hour, much faster than humans can move with fins.
Sure, okay. It’d probably have worked better if he didn’t lead the cops to the lake. I feel like Piercey watched one too many Bond movies and had it all worked out, then the FBI showed up sooner than expected.
Anyhow, this idiot defrauded investors out of $35 million dollars in a Ponzi scheme and is probably going to prison for a long time, where he can hopefully hatch a better escape plan for his next caper.
Short Cons
NY Times - “It was a surreal coda to nearly a year of deception for Mr. Hall. Since February, he had posed as political figures and their families on Twitter, including five of the president’s relatives.”
NY Times - ““Love Trump?” the fund-raiser, which kicked off Tuesday, reads. “Thank President Trump by contributing to this campaign to buy his childhood home in his honor!””
QCM Funds - “In fact, a substantial portion of scientific literature produced by Penumbra appears to have been authored by a fictional character in a sophisticated, multi-year gross deception.”
AP - “The company’s marketing materials don’t tell consumers that Bishop and Bond primarily derive their incomes from Raging Bull customers’ subscription fees, not from stock and options trades. The suit says they have incurred “substantial and persistent losses” from their own stock and options trading activities.”
WSJ - “Google, which determined that IAC misled users about its browser extensions, could go as far as banning those products from its Chrome browser. IAC, under Chairman Barry Diller, is pushing back, saying such a move would devastate a key part of its business.”
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