Off the Rails
Frozen Fish
If you ask the average person where fish sticks come from, a reasonable response would be something like - the fishermen catch it, send it to a factory where it gets broken down and pressed into shapes and covered with breading and frozen in bags, put in boxes, and delivered to grocery stores. The real answer, it turns out, is a lot more complicated:
Fish from Alaska take a long trip to supply the Eastern U.S.: Those caught in the Bering Sea are often frozen and packed into ships that sail thousands of miles from the remote fishing port of Dutch Harbor south through the Panama Canal and then north to an eastern Canadian port in Bayside, New Brunswick.
At the Canadian port, the fish is loaded into trucks, and onto a flatbed railcar, which rolls 100 feet forward and back, along a track shorter than most roller coasters.
The fish is then unloaded and driven to a border crossing in Calais, Maine. From there it heads south to U.S. processing plants, where it is formed into fish sandwiches for restaurants such as McDonald’s Corp. or frozen fish sticks sold at grocery stores.
People are talking a lot about supply chains lately, as they variously break down and we’re left without Christmas toys or sanitizing wipes or silicon chips or whatever. But, hear me out, maybe some of the supply chains were so fragile because they were insane to begin with? Why is fish from Alaska being shipped to New Brunswick? Anyhow, the issue with this particular supply chain is not that it makes no sense, it’s that the federal government has decided that the 100 foot long train trip the frozen fish takes in Canada is against the law now:
The companies say the U.S. government has known about the 200-foot railroad trip for years. Starting in August, though, government officials threw up a roadblock, levying more than $350 million in fines on firms that use the route and constraining the flow of pollock to the U.S. East Coast, the companies say.
26 million pounds of frozen pollock is now stuck in Canada while the parties battle it out in court. At issue is something called the Jones Act, a law from 1920 with very specific rules about how fish is imported to the US:
This 1920 law says cargo shipped domestically must travel via vessels built in the U.S. and 75% crewed by Americans. The Alaskan fish went aboard ships that don’t qualify.
But the Jones Act has an exemption for goods that go “in part over Canadian rail lines.”
Hence the 100 foot stretch of Canadian railway, which producers use to stay compliant with a law from 1920, as you do. A judge has ruled that the government is wrong, because a case from 2006 allows for sham railroads, why not:
Federal Judge Sharon Gleason doesn’t appear to buy CBP’s argument. Her order last Tuesday cites a 2006 court opinion that the Jones Act doesn’t include any “implied prohibition on sham or commercially impractical Canadian rail movement.” She also quotes a 2004 document from CBP: “We have long held that ‘in part over Canadian rail lines’ is any use of Canadian rail.”
What a relief. However! This particular bit of sham railroad doesn’t have the proper paperwork to be an officially sanctioned sham railroad:
Under this Jones Act exemption, shippers must go to the Surface Transportation Board to file a rate tariff for the route, and Judge Gleason says there isn’t a valid one for Bayside.
So now the fish companies have to get the proper paperwork and come back to the judge, who will presumably throw out the fines and the government’s case. In the mean time, US restaurants that depend on frozen fish are running dangerously low. All because of a law from the 1920s that companies have spent the last century circumventing in very silly ways. Maybe we should update our import laws more than once a century, I don’t know.
Take the Money and Run
Right now, most stories about art fraud involve NFTs and cryptocurrency and are very similar and boring. So it was refreshing to read about an artist taking money from a museum to create a piece of work, and then deciding to keep the money and call that the art?
For its current exhibition, the Kunsten Museum of Modern Art in Aalborg, Denmark, lent [Jens] Haaning 534,000 kroner ($84,000). Per their written agreement, the artist would exhibit the banknotes themselves, effectively recreating a pair of artworks he made in 2007 and 2010 that represented the average annual incomes of an Austrian and a Dane, respectively.
However, when the museum opened up the box containing Haaning’s piece, they found two empty frames. The banknotes were absent.
Haaning had a perfectly reasonable explanation:
“The work is that I have taken their money,” Haaning told the Danish radio program P1 Morgen last week. “It’s not theft. It is a breach of contract, and breach of contract is part of the work.”
I am not a lawyer, but I am not sure it is a valid legal argument, even in Denmark, to say that you can do breach of contract if it’s in the act of making a piece of art? Haaning says he’s keeping the money, in part, because he isn’t paid well as an artist, and also that the project is dumb:
According to him, he would have had to pay 25,000 kroner ($3,900) himself to realize the two older artworks, and that to do so misses the point of the originals, which presented a quantitative snapshot of a moment in time. “Why should we show a work that is about Denmark…11 years ago, or one that is about Austria’s relationship with a bank 14 years ago?” he asked.
For him, it’s a provocation as much as anything else. “I encourage other people who have just as miserable working conditions as me to do the same. If they are sitting on some sh*t job and not getting money and are actually being asked to give money to go to work, then take the box and [run] off.”
Again, not legal advice, but running off with the box is probably not a good idea when you’ve got a written contract saying you will use the money to make art. For now the museum is playing along with Haaning and has hung the empty frames in their gallery, but they insist he is going to need to pay them back when the installation is done.
Coupons
A Virginia couple pleaded guilty to what may be the biggest coupon fraud in US history:
Ms. [Lori Ann] Talens, 41, was sentenced to 12 years in prison on Tuesday for operating what prosecutors called “one of the largest coupon fraud schemes” in U.S. history, saying it cost retailers and manufacturers more than $31 million in losses.
Ms. Talens and her husband, Pacifico Talens, 43, pleaded guilty to mail fraud in April. Mr. Talens was sentenced last month to seven years and three months for his role in the operation.
It’s impressive, to be sure, and the Talenses might have gotten away with it for longer if they hadn’t gotten greedy:
“These counterfeit coupons were virtually indistinguishable from authentic coupons and were often created with inflated values, far in excess of what an authentic coupon would offer, in order to receive items from retail for free or for a greatly reduced price,” Joseph L. Kosky, an assistant U.S. attorney, wrote in court documents.
So how did they coupon empire get brought down? By a coupon snitch, of course:
But it was one of the fraud victims, described in court records as a “coupon enthusiast,” who began to unravel the scheme. The enthusiast reported the couple to the Coupon Information Center, a nonprofit that works against fraud.
The group bought coupons from the Talenses, confirmed they were counterfeit, and contacted the U.S. Postal Inspection Service for further investigating.
The Talenses were outed by a whistleblower who respects the sanctity of a legitimate retail discount. Also, there is apparently a non-profit organization working to combat coupon fraud? They’re funded - of course - by the retail industry, who stand to lose the most when people use fake coupons, but more importantly their director seems to have a bit of a chip on his shoulder about the whole thing:
“Despite Hollywood’s recent portrayal of coupon fraud as a comedy or simply ‘bending the rules,’ it is a serious matter,” the center’s executive director, Bud Miller, said in a statement.
While looking for images of coupons to use for this story, I discovered he’s referring to a movie called Queenpins that came out this year, about a couple of coupon scammers. It was apparently based on a true story about a different coupon scammer? I am having trouble keeping up. “Queenpins makes coupon scams funny”, says the New York Post. It seems Bud Miller disagrees, and the companies who pay his salary want you to know that coupon fraud is serious business that may land you in prison for 12 years.
El Salvador
People in the cryptocurrency community were very excited when the president of El Salvador announced the country would accept Bitcoin as legal tender:
In June, El Salvador’s 40-year-old, populist president, Nayib Bukele, announced that he would make bitcoin — a highly volatile financial token operated by a decentralized community of technology entrepreneurs — the national currency, on a par with the current legal tender, the U.S. dollar.
He was invited to speak at Bitcoin conferences, and it all seemed very promising. For crypto enthusiasts, that is, because the people of El Salvador were not enthused:
According to a poll conducted by El Salvador’s chamber of commerce, businessmen, international organizations and 93 percent of Salvadoran people opposed the adoption of bitcoin.
However, because Bukele had consolidated total control of the legal and banking systems in the country, he went ahead and did it anyhow. The government said it was forcing all vendors in the country to accept Bitcoin, which led to massive protests. Then, the government started buying up Bitcoin, though without disclosing how much it was buying, what it was paying, and who was holding onto it:
Nearly a month after the introduction of bitcoin, it remains unclear where the dollar funds and the bitcoin held by the government, or reflected in Chivo Wallets, are, or what they are worth.
Although all bitcoin transactions carry a code to ensure transparency, Mr. Bukele has treated the bitcoin policy as a state secret. He has classified all information related to Chivo Wallet, which was created with taxpayer funds, but is run as a private enterprise by undisclosed individuals.
Prior to the policy taking effect, some skeptics speculated this was a scheme between Bukele and private crypto companies to consolidate his control and siphon public money into private hands:
But, as he rapidly consolidates power and cracks down on opponents, there are growing concerns in El Salvador that Mr. Bukele’s adoption of bitcoin was motivated more by his quest for control — and desire to avoid international pressure — than by his desire for financial inclusion.
The problem Bukele faces is that his country’s currency is pegged to the US dollar - and the government is reliant on foreign aid and loans to keep its economy running. Introducing Bitcoin may seem like a way to give the country more financial leeway, but it’s still using dollars to buy crypto, and has no protection against the wild price swings in those markets - Bitcoin has fluctuated more than 25% in the last month alone. The US and IMF have been threatening to cut El Salvador off from money supplies because Bukele is brutally cracking down on his people, and the Bitcoin gambit may have made matters worse.
Despite initial optimism, it’s looking like the first experiment using crypto as a national currency is anything but the libertarian utopia its boosters had imagined.
Short Cons
Bloomberg - “When everything fell apart, it became the U.K.’s biggest financial scandal in more than a decade.”
WaPo - “Facebook knew all of those things because they were findings from its own internal research teams. But it didn’t tell anyone.”
WaPo - “It’s curious how at the prospect of losing control, Google — perhaps the greatest data harvester of our era — suddenly prioritizes your privacy.”
CNBC - “The trader made an astounding 3,900% gain in a single day on contracts expiring Sept. 17, the market sources say. That means a $40,000 bet would have turned into about $1.6 million.”
Tips, thoughts, or train cars full of fish sticks to scammerdarkly@gmail.com