July 2018 - cypherpunks-legacy

Re: <nettime> WikiLeaks and the Culture of Classification
by Brian Holmes 06 Jul '18

06 Jul '18

> WikiLeaks and the Culture of Classification > ... Instead of seeking to weed out the overclassified material and > concentrate on protecting the truly sensitive information, the > culture of classification reacts by using the WikiLeaks cases as > justification for continuing to classify information at the highest > possible levels and for sharing the intelligence it generates with > fewer people. The ultimate irony is that the WikiLeaks cases will > help strengthen and perpetuate the broken system that helped lead to > the disclosures in the first place. I think the above is characteristic of this phase of informationalism: organizational routines that formerly provided solutions are now stiffening to the point where they become problems in themselves. In this case, the ability to set up and manage huge encrypted networks leads to the overextension of classification even as it multiplies the opportunities for leaks. The interesting thing is, the dynamic is totally legible but nothing will be done about it: too many people have made careers setting up the systems, too much equipment has been bought, too much time has been spent inculcating a culture of secrecy, and even though all the above are not really productive, they represent a fixed capital that becomes a barrier to innovation. In short, we have entered the sclerotic phase of informationalism. The same thing can be seen in the financial markets: high-frequency trading works great, it makes the traders and investment banks very rich, it's totally unproductive, it can only produce more and worse crises, and there is no sign whatsoever that it will stop. I like Felix's idea that that Wikileaks is exacerbating dysfunctional organizational tendencies. It's probably an involuntary effect, but hey, you know that when you massively break a barrier of secrecy in this way, you are gonna produce some kind of welcome effects. This observation should be coupled with the one Felix makes in his excellent Mute magazine article: "People are asked to identify personally with organisations who can either no longer carry historical projects worthy of major sacrifices or expressly regard their employees as nothing but expendable, short-term resources. This, I think, creates the cognitive dissonance that justifies, perhaps even demands, the leaker to violate procedure and actively damage the organisation of which he, or she, has been at some point a well-acculturated member." That's a formula, not just for leaks, but for generalized low-level employee sabotage, i.e. the neoliberal manager's worst nightmare. In response, the entire social system stiffens, security panic sets in and gradually, the nightmare becomes a self-fulfilling prophecy. This is the way the great technologial and organizational paradigms like Fordism or Informationalism come to their end, not with a bang but with a slow deflating hiss of discontent from millions of disgruntled and exploited underlings. One can only hope that some dynamic of visionary change arises in counterpoint to this process of slow decay. Or rather: one can take heart in the slow decay, and move quicker on the vision thing! best, BH # distributed via <nettime>: no commercial use without permission # <nettime> is a moderated mailing list for net criticism, # collaborative text filtering and cultural politics of the nets # more info: http://mail.kein.org/mailman/listinfo/nettime-l # archive: http://www.nettime.org contact: nettime(a)kein.org ----- End forwarded message ----- -- Eugen* Leitl <a href="http://leitl.org">leitl</a> http://leitl.org ______________________________________________________________ ICBM: 48.07100, 11.36820 http://www.ativel.com http://postbiota.org 8B29F6BE: 099D 78BA 2FD3 B014 B08A 7779 75B0 2443 8B29 F6BE

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Re: <nettime> WikiLeaks and the Culture of Classification
by Brian Holmes 06 Jul '18

06 Jul '18

> WikiLeaks and the Culture of Classification > ... Instead of seeking to weed out the overclassified material and > concentrate on protecting the truly sensitive information, the > culture of classification reacts by using the WikiLeaks cases as > justification for continuing to classify information at the highest > possible levels and for sharing the intelligence it generates with > fewer people. The ultimate irony is that the WikiLeaks cases will > help strengthen and perpetuate the broken system that helped lead to > the disclosures in the first place. I think the above is characteristic of this phase of informationalism: organizational routines that formerly provided solutions are now stiffening to the point where they become problems in themselves. In this case, the ability to set up and manage huge encrypted networks leads to the overextension of classification even as it multiplies the opportunities for leaks. The interesting thing is, the dynamic is totally legible but nothing will be done about it: too many people have made careers setting up the systems, too much equipment has been bought, too much time has been spent inculcating a culture of secrecy, and even though all the above are not really productive, they represent a fixed capital that becomes a barrier to innovation. In short, we have entered the sclerotic phase of informationalism. The same thing can be seen in the financial markets: high-frequency trading works great, it makes the traders and investment banks very rich, it's totally unproductive, it can only produce more and worse crises, and there is no sign whatsoever that it will stop. I like Felix's idea that that Wikileaks is exacerbating dysfunctional organizational tendencies. It's probably an involuntary effect, but hey, you know that when you massively break a barrier of secrecy in this way, you are gonna produce some kind of welcome effects. This observation should be coupled with the one Felix makes in his excellent Mute magazine article: "People are asked to identify personally with organisations who can either no longer carry historical projects worthy of major sacrifices or expressly regard their employees as nothing but expendable, short-term resources. This, I think, creates the cognitive dissonance that justifies, perhaps even demands, the leaker to violate procedure and actively damage the organisation of which he, or she, has been at some point a well-acculturated member." That's a formula, not just for leaks, but for generalized low-level employee sabotage, i.e. the neoliberal manager's worst nightmare. In response, the entire social system stiffens, security panic sets in and gradually, the nightmare becomes a self-fulfilling prophecy. This is the way the great technologial and organizational paradigms like Fordism or Informationalism come to their end, not with a bang but with a slow deflating hiss of discontent from millions of disgruntled and exploited underlings. One can only hope that some dynamic of visionary change arises in counterpoint to this process of slow decay. Or rather: one can take heart in the slow decay, and move quicker on the vision thing! best, BH # distributed via <nettime>: no commercial use without permission # <nettime> is a moderated mailing list for net criticism, # collaborative text filtering and cultural politics of the nets # more info: http://mail.kein.org/mailman/listinfo/nettime-l # archive: http://www.nettime.org contact: nettime(a)kein.org ----- End forwarded message ----- -- Eugen* Leitl <a href="http://leitl.org">leitl</a> http://leitl.org ______________________________________________________________ ICBM: 48.07100, 11.36820 http://www.ativel.com http://postbiota.org 8B29F6BE: 099D 78BA 2FD3 B014 B08A 7779 75B0 2443 8B29 F6BE

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[tor-talk] Torservers.net Meetups in Dresden (3.9. and 15.10.)
by Moritz Bartl 06 Jul '18

06 Jul '18

Hi there, The non-profit association behind torservers.net invites everyone, especially its current members, to two meetings. The first meeting will be held on the evening of Saturday, 3.9., in my kitchen. The second meeting will be on the evening of Saturday, 15.10., most likely also in my kitchen but maybe somewhere else, depending on the interest. Main topics for first meeting: * create a todo list/wishlist and an agenda for the 15.10. meeting * assign tasks to all attendees stupid enough to be there ;) * update the list members about what happened in the last months (yes, there's been some activity!) > 3.9. 19:00 > 15.10. ~19:00 The 15.10. meeting is held in association with the CCC event "Datenspuren", www.datenspuren.de . If you want to come, be aware that most talks will be held in German. I can offer a limited number of floor space and inflatable mattresses. If you want to attend either of those meetings and don't know my address, contact me on IRC (gamamb/gamambel) or XMPP (same as email). -- Moritz Bartl https://www.torservers.net/ _______________________________________________ tor-talk mailing list tor-talk(a)lists.torproject.org https://lists.torproject.org/cgi-bin/mailman/listinfo/tor-talk ----- End forwarded message ----- -- Eugen* Leitl <a href="http://leitl.org">leitl</a> http://leitl.org ______________________________________________________________ ICBM: 48.07100, 11.36820 http://www.ativel.com http://postbiota.org 8B29F6BE: 099D 78BA 2FD3 B014 B08A 7779 75B0 2443 8B29 F6BE

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CFP: Financial Cryptography '02
by Matt Blaze 06 Jul '18

06 Jul '18

Call for Papers Financial Cryptography '02 March 11-14, 2002 Sonesta Beach Resort Southhampton, Bermuda Sponsored by the International Financial Cryptography Association Original papers are solicited on all aspects of financial data security and digital commerce for submission to the Sixth Annual Conference on Financial Cryptography (FC '02). FC '02 brings together researchers in the financial, legal, cryptologic, and data security fields to foster cooperation and exchange of ideas. Relevant topics include: Anonymity Infrastructure Design Audit Legal and Regulatory Authentication and Issues Identification Loyalty Mechanisms Certification and Peer-to-Peer Systems Authorization Payments and Commercial Transactions Micropayments and Contracts Privacy Digital Cash Risks Management Digital Rights Secure Banking Management Smart Cards Electronic Purses Trust Management Implementation Issues Watermarking Information Economics Instructions for Authors: Complete papers (or complete extended abstracts) must be at most fifteen (15) single-spaced standard pages in length and must be received before 23h59 UTC on November 4, 2001. All papers must be submitted electronically. (In exceptional circumstances, paper submissions can be accepted, but special arrangements must be made with the program chair prior to October 31, 2001.) Papers must be in either standard PostScript or PDF format, and should be submitted via electronic mail to fc02submit(a)crypto.com prior to the deadline. Note that submissions in formats other than PostScript or PDF, including word processor source formats such as MS Word or LaTeX, will be rejected. Submitted papers should include on the first page the title, all authors and their affiliations, a brief abstract, and a list of topical keywords. Papers must be original; submission of previously published material or papers under consideration in other conferences or journals is not permitted. Proposals for panels are also solicited, and should include a brief description of the panel as well as prospective participants. Panel proposals should be submitted by electronic mail to the same address, in plain ASCII format. Important Dates: Submissions due: November 4, 2001 Notifications to authors: December 23, 2001 Camera-ready papers due: February 4, 2002 General Chair: Nicko van Someren (nCipher) Program Committee: Matt Blaze, Program Chair (AT&T Labs) Dan Boneh (Stanford University) Stefan Brands (Zero Knowledge) Dan Geer (@stake) Ian Goldberg (Zero Knowledge) Angelos Keromytis (Columbia University) Paul Kocher (Cryptography Research) Ron Rivest (MIT) Tomas Sander (Intertrust) Rebecca Wright (AT&T Labs) --------------------------------------------------------------------- The Cryptography Mailing List Unsubscribe by sending "unsubscribe cryptography" to majordomo(a)wasabisystems.com --- end forwarded text -- ----------------- R. A. Hettinga <mailto: rah(a)ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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Protecting Privacy, SIGN THIS LETTER
by Hannah Woody 06 Jul '18

06 Jul '18

Matt, I am the coordinator of the Coalition for Constitutional Liberties and we are currently circulating a letter to organizations about the privacy violations involved in the drug war. This letter does not call for legalization at all, it simply brings forth important privacy related issues. With this letter, we are calling for the Senate Judiciary Committee to ask the Director of the Office of National Drug Control Policy nominee, John Walters, if he will protect privacy. Please consider signing on and perhaps sending it to your list. Thanks! Email Hannah Woody at hwoody(a)freecongress.org <mailto:hwoody@freecongress.org> with your name and business/organization. Coalition for Constitutional Liberties A project of the Free Congress Foundation's Center for Technology Policy 717 Second Street NE * Washington, DC 20002 * (202) 546-3000 * Fax (202) 543-5605 http://www.freecongress.org/ September 3, 2001 Sen. Patrick J. Leahy, Chairman Sen. Orrin G. Hatch, Ranking Member Senate Judiciary Committee United States Senate 224 Dirksen Office Building Washington, DC 20510 Re: Nomination of John Walters Dear Chairman Leahy, Senator Hatch and Members of the Senate Judiciary Committee: We are part of a broad coalition of groups concerned that the War on Drugs has degraded our privacy and civil liberties. We respectfully ask that the members of Committee consider raising the following privacy and civil liberties issues in connection with the nomination of John Walters to be the Director of the Office of National Drug Control Policy (Office of the White House). We intend by issuing this letter to signal neither support nor opposition to Mr. Walters' nomination. Rather, we hope are issuing the letter to urge members of the Committee to explore these issues in connection with Mr. Walters' nomination. As we set forth below, these issues include the use of new surveillance and investigative technologies, including the Carnivore/DCS1000 and Echelon systems, the "Know Your Customer" proposal of the Financial Action Task Force, asset forfeiture abuses, wiretaps and the drug war's sometimes corrupting influence on law enforcement itself. Rapid advances in technology have unfortunately brought with them new opportunities for the invasion of privacy in the form of programs like Carnivore, a system designed to allow the FBI to sift through vast quantities of Internet communications, or "Know Your Customer," -a proposed regulation requiring banks to collect personal financial information about their customers, "profile" them, and report "suspicious activities" to the Government. The misguided drug war is often a driving force behind these initiatives. "Know Your Customer" was prompted largely to further the drug war by combating drug-related money laundering. The FBI claims that Carnivore helps in narcotic investigations. We are concerned that "profiling," including racial profiling, appears to be an accepted component of the federal government's war on drugs. As noted by Georgetown University Law professor David Cole, characteristics of "drug courier profiles" used by U.S. Customs at airports have included: * Arrived late at night. * Arrived early in the morning. * Arrived in afternoon ... * One of first to deplane. * One of last to deplane. * Deplaned in the middle ... * Bought coach ticket. * Bought first class ticket ... * Used one-way ticket. * Used round-trip ticket ... * Traveled alone. * Traveled with a companion ... * Wore expensive clothing. * Dressed casually ... * Suspect was Hispanic. * Suspect was black female. In short, everyone anywhere at any time could fit the profile of a drug courier according to U.S. Customs officials. Court records confirm that highway patrol officers both in California and in New Jersey were taught to profile automobile drivers using minority status as an excuse to stop them, search their car, and in some cases, find drugs, a process known as racial profiling. In fact, civil rights organizations have charged that the DEA's own Operation Pipeline actually trains state and local law enforcement agents to engage in racial profiling. The extent to which our drug policy drives government surveillance and invasion of privacy is especially clear in the case of wiretaps. Three quarters of all wiretaps are authorized for narcotics investigations. The Administrative Office of the United States Courts reports that annually approximately 80 percent of conversations intercepted on wiretaps are innocent communications. In addition to government surveillance, there has been an increasing effort to have private businesses monitor their customers in order to fight the drug war. In the case of the "Know Your Customer" proposal now being resurrected by the FATF, the government attempts to force customer monitoring through regulation. More and more often, the DEA is using financial incentives to induce businesses to report personal information about their customers to the government. This undermines both consumer privacy and businesses' relationships with their customers. In April, the Albuquerque Journal reported that Amtrak was providing access to its ticketing database to the Drug Enforcement Administration. Amtrak provided agents with information such as passengers' last names, their destinations, their method of payment, and whether they were going on a round trip or only one-way. In return, Amtrak was given 10% of anything the government seized. Although controversy led Amtrak to discontinue the DEA's computer access, the company still provides information gleaned from the ticketing system to law enforcement officers and continues to receive a portion of assets seized on trains by agents. Several airlines reportedly have similar "cash for snooping and snitching" programs. The Amtrak case demonstrates the degree to which forfeiture laws are giving an incentive for law enforcement and private businesses to focus on seizing property supposedly related to drug crimes. The system is still very susceptible to abuse and one does not have to be convicted of a crime before their property is taken. Before the passage of the Civil Asset Forfeiture Act of 2000, which addressed some of the more egregious abuses, eighty percent of people who had property forfeited were never charged with a crime. While this number will likely become lower because of the reforms, the abuse of forfeiture laws continues. As reports (some of which were initiated by members of this Committee), have shown, the war on drugs has had a corrupting influence on the professionalism of law enforcement; one March 1999 GAO report described the problem as a "serious and continuing threat." We urge you to raise these issues with Mr. Walters and ask for assurances that he will reform the conduct of the drug war in order to address these problems and ensure that drug policies respect the privacy and other civil liberties of all Americans. If you have any questions or would like to discuss these issues further, please contact J. Bradley Jansen of the Free Congress Foundation at 202-204-5324 or by email at bjansen(a)freecongress.org <mailto:bjansen@freecongress.org> . Respectfully, Paul M. Weyrich Founder and President Free Congress Foundation Lisa S. Dean Vice President for Technology Policy Free Congress Foundation Grover Norquist Karen Kerrigan President Chairman Americans for Tax Reform Small Business Survival Committee Tom DeWeese David Banisar President Deputy Director American Policy Center Privacy International, London Amy Ridenour Chuck Muth, Chairman President Michael D. Ostrolenk, Capital Hill Liason The National Center for Public Policy Research Republican Liberty Caucus Gordon S. Jones Eric E. Sterling President Association of Concerned Taxpayers The Criminal Justice Policy Foundation Dr. Jane Orient, M.D. Carol W. LaGrasse Executive Director President Association of American Physicians and Surgeons Property Rights Foundation of America, Inc. Larry Cirignano Joseph Eldred President President and Founder CatholicVote.org God Bless America Dr. Alexander Tabarrok,Vice James Landrith Vice President and Director of Research Editor and Publisher The Independent Institute The Multiracial Activist & Abolitionist Examiner Benjamin Crocker Works Hank Whitmore Executive Director Chairman The Strategic Issues Research Institute of the United States People Against Church Taxation Eric Johnson Audrey Mullen Chairman Consultant Young Americans for Freedom Advocacy Ink Dottie Feder Miriam Archer Vice President Director of Operations Eagle Forum of Wisconsin Christian Coalition of California Ronald D. Bain Robert D. Lonn Former Chairman Consultant/Planner Libertarian Party of Colorado NW Council of Government & Associates Patricia J. Owens Peter J. LaGrasse Executive Director Chairman Wisconsin State Sovereignty Coalition Board of Assessors (New York) Duane Royal Galen E. Alexander Sampson County Republican Executive Committee (North Carolina) Founder & Chairman Ohio Conservative Alliance Victoria T. DeLacy Prince William & Manassas Family Alliance (Virginia) Warren Nelson Founder & Commander Helen E. Farson Ector County Volunteers (Tennessee) Phonetic Bible Printing Committee Roy S. Gillinson, M.D. ************************************************************************** Subscribe to Freematt's Alerts: Pro-Individual Rights Issues Send a blank message to: freematt(a)coil.com with the words subscribe FA on the subject line. List is private and moderated (7-30 messages per week) Matthew Gaylor, (614) 313-5722 ICQ: 106212065 Archived at http://groups.yahoo.com/group/fa/ **************************************************************************

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[Dewayne-Net] Airport ID checks legally enforced?
by Dewayne Hendricks 06 Jul '18

06 Jul '18

Airport ID checks legally enforced? By Declan McCullagh <http://news.com.com/Airport+ID+checks+legally+enforced/ 2100-7348_3-5987820.html> Story last modified Thu Dec 08 12:40:00 PST 2005 SAN FRANCISCO--A federal appeals court wrestled Thursday with what seems to be a straightforward question: Can Americans be required to show ID on a commercial airline flight? John Gilmore, an early employee of Sun Microsystems and co-founder of the Electronic Frontier Foundation, says the answer should be "no." The libertarian millionaire sued the Bush administration, which claims that the ID requirement is necessary for security but has refused to identify any actual regulation requiring it. A three-judge panel of the 9th Circuit Court of Appeals seemed skeptical of the Bush administration's defense of secret laws and regulations but stopped short of suggesting that such a rule would be necessarily unconstitutional. "How do we know there's an order?" Judge Thomas Nelson asked. "Because you said there was?" Replied Joshua Waldman, a staff attorney for the Department of Justice: "We couldn't confirm or deny the existence of an order." Even though government regulations required his silence, Waldman said, the situation did seem a "bit peculiar." "This is America," said James Harrison, a lawyer representing Gilmore. "We do not have secret laws. Period." Harrison stressed that Gilmore was happy to go through a metal detector. Gilmore sued the federal government after being told he could not fly without ID from Oakland, Calif., to Washington, D.C., which he said he was doing to exercise his First Amendment right to petition the government for a redress of grievances. U.S. District Judge Susan Illston dismissed (PDF) his case in March 2004, ruling that Gilmore had "numerous other methods of reaching Washington." Oral arguments on Thursday, which lasted about 40 minutes, returned repeatedly to that point. Judge Richard Paez suggested that when your ID is requested at an airport, "You can always leave." Waldman, the Justice Department attorney, said that as long as no commercial airline flight is required, Americans "can assemble wherever they want. They can petition wherever they want." He added, "I'm not aware of any right to travel anonymously." Two cases that were mentioned on Thursday could provide a glimpse into how the appeals court will rule. In one, decided in 2004, the U.S. Supreme Court ruled 5-4 that police could arrest anyone they stopped who refused to show ID. In the other, U.S. v. Davis, the 9th Circuit said in 1973 that airport searches were permissible as a form of administrative screening. It's unclear what will happen next. Because of a procedural twist involving lawsuits against federal agencies, the district court concluded that only an appeals court enjoys authority to resolve some aspects of the dispute. But the 9th Circuit judges also could, if they side with Gilmore, send the case back to the lower court for a full trial. On the courthouse steps after the arguments, Gilmore said he felt confident about the case and welcomed a verbal concession from the Justice Department. "I was glad the government admitted it was 'peculiar' and Orwellian to make secret laws," Gilmore said. The Justice Department has said it could identify the secret law under seal, which would be available to the 9th Circuit but not necessarily Gilmore's lawyers. But any public description would not be permitted, the department said. Weblog at: <http://weblog.warpspeed.com> ------------------------------------- You are subscribed as eugen(a)leitl.org To manage your subscription, go to http://v2.listbox.com/member/?listname=ip Archives at: http://www.interesting-people.org/archives/interesting-people/ ----- End forwarded message ----- -- Eugen* Leitl <a href="http://leitl.org">leitl</a> http://leitl.org ______________________________________________________________ ICBM: 48.07100, 11.36820 http://www.ativel.com 8B29F6BE: 099D 78BA 2FD3 B014 B08A 7779 75B0 2443 8B29 F6BE [demime 1.01d removed an attachment of type application/pgp-signature which had a name of signature.asc]

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[IP] Airport ID checks legally enforced?
by David Farber 06 Jul '18

06 Jul '18

Begin forwarded message:

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[tor-talk] Torservers.net Meetups in Dresden (3.9. and 15.10.)
by Moritz Bartl 06 Jul '18

06 Jul '18

Hi there, The non-profit association behind torservers.net invites everyone, especially its current members, to two meetings. The first meeting will be held on the evening of Saturday, 3.9., in my kitchen. The second meeting will be on the evening of Saturday, 15.10., most likely also in my kitchen but maybe somewhere else, depending on the interest. Main topics for first meeting: * create a todo list/wishlist and an agenda for the 15.10. meeting * assign tasks to all attendees stupid enough to be there ;) * update the list members about what happened in the last months (yes, there's been some activity!) > 3.9. 19:00 > 15.10. ~19:00 The 15.10. meeting is held in association with the CCC event "Datenspuren", www.datenspuren.de . If you want to come, be aware that most talks will be held in German. I can offer a limited number of floor space and inflatable mattresses. If you want to attend either of those meetings and don't know my address, contact me on IRC (gamamb/gamambel) or XMPP (same as email). -- Moritz Bartl https://www.torservers.net/ _______________________________________________ tor-talk mailing list tor-talk(a)lists.torproject.org https://lists.torproject.org/cgi-bin/mailman/listinfo/tor-talk ----- End forwarded message ----- -- Eugen* Leitl <a href="http://leitl.org">leitl</a> http://leitl.org ______________________________________________________________ ICBM: 48.07100, 11.36820 http://www.ativel.com http://postbiota.org 8B29F6BE: 099D 78BA 2FD3 B014 B08A 7779 75B0 2443 8B29 F6BE

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[tp] Anti-government extremist groups reach record levels in the US
by Hughes, James J. 06 Jul '18

06 Jul '18

http://edition.cnn.com/2013/03/05/us/splc-extremist-groups-report Anti-government extremist groups reach record levels, say experts By Callie Carmichael, CNN March 6, 2013 [Watch this video]<http://edition.cnn.com/2013/03/05/us/splc-extremist-groups-report> SPLC: Extremists on the rise in America (CNN) -- The number of American "patriot" extremist groups has reached a record level, according to a new study, and experts are warning of a wave of anti-government violence. A report released Tuesday by the Southern Poverty Law Center<http://www.splcenter.org/home/2013/spring/the-year-in-hate-and-extremism>counted 1,360 "patriot" extremist groups in 2012 -- up by 7% from 2011. The study defines patriot groups as anti-government militias driven by their fear that authorities will strip them of their guns and liberties. "They believe the Constitution is being raped. With hate groups, things are going to get worse because they feel like they're in battle," said David Gletty a former FBI informant who spent time undercover with various militia and extremist groups. "It's not surprising with their hatred of President (Barack) Obama that there are even more hate groups out there." The study said California has the most patriot extremist groups, with 81. ['Patriot' groups 1995-2012 (click to expand)] The SPLC report also offers a bit of good news: The number of "immigrant-bashing" extremist groups -- so-called nativism organizations -- is way down from 2011, falling by 88%. Related: Oberlin College cancels classes to address racial incidents<http://www.cnn.com/2013/03/04/us/ohio-oberlin-hate-incidents/index.html> The new statistics come after a string of crimes linked to extremist groups. A year ago, a Michigan militia leader and his son pleaded guilty <http://www.cnn.com/2012/03/29/us/michigan-militia-pleas> to federal gun charges. Last August, a 40-year-old ex-soldier-turned singer for a white supremacist rock band shot up aSikh temple in Oak Creek, Wisconsin, <http://www.cnn.com/2012/08/07/us/wisconsin-shooting-music> killing six people, before taking his own life. A few weeks later, a group of Georgia men was linked to an anti-government militia plot to assassinate Obama<http://www.cnn.com/2012/09/11/us/georgia-soldiers-plot>. Obama's election as the first African-American president and his pro-gun control stance have fueled the increase in anti-government groups, according to the report. "We are seeing a huge reaction to the potential for gun control, and that reaction is so angry that it's hard not to be afraid of what's coming down the road," said Mark Potok of the SPLC. Domestic terror: Are we doing enough?<http://www.cnn.com/2012/09/16/us/domestic-terrorism> The rise in such groups echoes a period almost 20 years ago, around the time when Congress passed the 1993 Brady Bill and the 1994 ban on assault weapons, the SPLC said. That legislation came near a period of infamous and deadly anti-government violence in Waco, Texas; Ruby Ridge, Idaho; and Oklahoma City, "and led to the first wave of the patriot movement," the report said. Extremists, Gletty warned, "are in a battle in their minds. Their backs are against the wall." Skeptics But Jesse Walker, of the Reason Foundation<http://reason.org/> and author of an upcoming book, "The United States of Paranoia: A Conspiracy Theory," said counting groups isn't a good way to measure the threat. "It's dubious to assume growth in numbers is related to violence." Also, the center's definition of hate groups has changed in the past year, kicking up a controversy. Critics accused the group<http://religion.blogs.cnn.com/2012/08/17/shooting-sparks-controversy-over-h…> of unfairly bundling together organizations with vastly different points of view -- and painting them all as potentially violent. For example a North Carolina-based group calling itself "Granny Warriors" appears on the SPLC list of active "patriots." But founder Linda Hunnicutt says her organization is harmless. "I am deadly!" she joked. "I'm 74 years old. I have COPD. I have congestive heart failure. I'm sewing a quilt." Hunnicutt acknowledges she's no friend of the federal government, but, she wishes no harm on anyone. "All these people that want to bomb places and kill children, come on," she said. "Who would be in sympathy with them?" Hunnicutt said she and her group just want Uncle Sam to leave them alone. When Granny Warriors showed up on the SPLC list, Hunnicutt said she wasn't surprised. But it made her wonder, "Is this all they have to do?" Nonetheless, Hunnicutt's thankful to be on the list because she said it increases her group's notoriety. Fringe elements Gletty said most of the fringe elements characterized in the report hate the government more than they do specific races. They hate everyone, Gletty said. Now a private investigator, Gletty spent years undercover as an FBI informant watching the internal workings of white supremacist groups. The groups named in the SPLC study came from information compiled from "field reports, Patriot publications, the Internet, law enforcement sources and news reports." Other highlights of the report include: -- The state with the most neo-Nazi groups: California, with 9. -- The state with the most Ku Klux Klan groups: Texas, with 26. -- The report breaks out a group it calls "Christian Identity," which the SLPC defines as "a religion that is fundamentally racist and anti-Semitic." Texas has the most, with five. -- Another category in the report, called "General Hate," is defined as groups that are anti-gay, Holocaust deniers, racist musicians or radical traditionalist Catholics. California has the most such groups, with 37. "The country needs to do better," Potok wrote in an editorial. The Department of Homeland Security, he said, needs to act to avoid a repeat of the kind of hate-based violence the nation saw in the 1990s. ----- End forwarded message ----- -- Eugen* Leitl <a href="http://leitl.org">leitl</a> http://leitl.org ______________________________________________________________ ICBM: 48.07100, 11.36820 http://www.ativel.com http://postbiota.org 8B29F6BE: 099D 78BA 2FD3 B014 B08A 7779 75B0 2443 8B29 F6BE

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MCI: Money Crimes Incorporated?
by R. A. Hettinga 06 Jul '18

06 Jul '18

See: <http://www.privacy.nb.ca/cryptography/archives/coderpunks/new/1999-01/0140.…> I remember hearing "I can get you MCI OC3's *real* cheap..." out of Hughes, Hilby, and Co. at Simple Access, back in the day. Now I know why. Cheers, RAH http://www.forbes.com/forbes/2002/0610/064_print.html Ring of Thieves Neil Weinberg, 06.10.02 MCI introduced Walter Pavlo to a world of armed thugs, duffel bags stuffed with cash and phony accounting. Now, sitting in a South Carolina prison, he points a finger back at his former employer. Walter Pavlo has plenty of time these days to walk the track inside South Carolina's secluded Edgefield prison. He takes a daily stroll with Mark Whitacre, the Archer Daniels Midland whistle-blower who is serving a ten-and-a-half-year sentence for fraud. Surrounded by drug convicts, camp fences and rolling woodlands, they chat about their pasts and draw parallels to the scandals swirling around big corporations now--at Enron, at Arthur Andersen, in telecom. Pavlo, blond and still boyish at 39, committed his crimes at MCI as the telecom business roared in the mid-1990s. He is in the 15th month of a 41-month sentence for obstruction of justice, money laundering and mail fraud. An unremarkable rank-and-filer in a 25-person billing department, he says he cooked the books, under pressure from higher-ups, to help bolster MCI's growth. Pavlo employed an array of tricks--taught to him, he says, at MCI--to hide hundreds of millions of dollars in aging bad debts and clearly uncollectable receivables owed by a raft of upstart telecom resellers. In the process, he used the same sleight of hand to skim $6 million on the sly for himself and a couple of partners; for that he is doing soft time. The resellers stoked growth at a time when MCI, lit up by the halo of the Internet frenzy, was prettying itself up for a sale to someone bolder. The company, with Walter Pavlo's copious assistance, granted easy credit to dozens of fly-by-nights looking to lease its lines and resell service to businesses and consumers. It blithely let just about anyone, from raw rookies to pornographers and astrological touts, run up tens of millions of dollars in bills. Then, Pavlo says, MCI kept the receivables on its books long after any real hope of collecting had vanished--with the resellers themselves, in some cases. Banks, eager for high interest and fees, financed it all. It was his job, he says, to hold these losses to a minimum, even if doing so required deceptive means. His actions benefited MCI. The company filed a proxy with the Securities & Exchange Commission recommending a $20 billion buyout by British Telecom in 1997, just days after management knew it had fraud on its hands, according to a brief filed by a group of banks that sued MCI in 1997. That deal collapsed, and MCI then accepted a $41 billion offer from WorldCom months later. MCI denied the banks' allegations and has claimed it was duped by its own employees. At MCI only Pavlo and James B. Wilkie, a senior manager, have been punished (along with a third partner, an outsider named Harold R. B. Mann). For five years Pavlo has wondered when someone might take a hard look at the four levels above him, from his boss up to the chief financial officer--Douglas Maine, who later became chief financial officer at IBM and now runs its online arm--and above him to MCI chief executive Bert C. Roberts, who now is chairman of WorldCom. And so when Pavlo learned one day in March, as he sat reading in the prison library, that the SEC is investigating whether there were any accounting misdeeds at WorldCom, he had one sentiment: "It's about time." He believes the remnants of his stunts are buried in a $685 million pretax charge for bad receivables that WorldCom took in October 2000. The company blamed the big charge ($405 million after tax benefits) on a handful of customers' going bankrupt in the previous quarter. Pavlo argues that the charge was, rather, a way to use the industry downturn to mask the writeoff of receivables that had been rotting for years on the books of MCI and WorldCom, artificially boosting profits. "This story is bigger than Walt Pavlo heisting money from MCI and going to jail," says Walt Pavlo. "This is about corruption of telecom, with lots of games. I didn't come to MCI knowing how to hide accounts receivable." Pavlo is a convicted felon and an accomplished liar. But his claims have some supporters. A shareholder lawsuit, dismissed in April and now under appeal, makes the same claim about the October 2000 writeoff. The SEC seems to harbor similar suspicions, and in March it asked WorldCom to list the carriers included in the big charge, how much each owed and how old their debts were. WorldCom says the charge was proper but declines to comment about the SEC's inquiry or events at MCI. Pavlo seemed an unlikely candidate for scandal. He grew up mostly near Sistersville, W. Va. and Savannah, Ga., with two younger brothers. His father describes Walter Jr. as a hard worker who started at quarterback in high school one season, more out of grit than athletic ability. Pavlo earned an industrial engineering degree at West Virginia University and an M.B.A. at Mercer in 1991. After working at Goodyear Aerospace, where he met his wife, Rhoda, he joined MCI in 1992 at age 29. He was assigned to head a four-person group in the sleepy carrier finance department in Atlanta, which handled about $240 million a month in billings in 1993. MCI and the entire telecom business were on the cusp of big change. After rising more than thirtyfold in 20 years, MCI's stock lost ground in 1994 and 1995. A year later deregulation promised to upend old monopolies and raze barriers to new competition, and soon MCI was in play. The smell of fast money was in the air. A raft of new resellers began buying contracts to repackage MCI capacity as cut-rate long-distance, prepaid phone cards and caller-paid 900 numbers. For MCI and other big carriers it was a godsend. Consumer long distance was getting cutthroat. Margins on big corporate accounts were thinning. Resellers were another story. Most started small and paid rates with gross margins of 50% or more. Some doubled or tripled billings in a month. The torrid growth set off a tug-of-war inside MCI: The sales side pursued resellers with alacrity, but the finance side worried about the resellers' ability to pay their bills. "Everyone who dealt with MCI considered them feudal and schizophrenic," says the chief of one prepaid-card service. By 1995 Pavlo had risen to senior manager and the carrier finance unit had grown to 120 employees. It was handling $650 million in collections a month. About 10% of sales, but a far larger slice of profits, came from resellers. At 32, Pavlo was the department's "target man," charged with handling high-risk accounts, collecting receivables and coming up with creative ways to dispose of them. It was a job Pavlo performed well, Ralph McCumber, his boss until the spring of 1996, stated in a deposition taken in the banks' 1997 lawsuit charging MCI with fraud. But the job was taking a heavy toll on Pavlo. MCI signed up resellers by the dozen and let bad billings mount. When Pavlo went out into the field to dun the debtors, he found a wild and woolly world. One prepaid calling card outfit, Caribbean Telephone & Telegraph in Bloomfield Hills, Mich., signed on in early 1995. By midyear CT&T owed MCI $30 million, Pavlo says. The small firm's debt swelled faster than MCI could even track it; MCI took 60 days to get a bill out and waited another 15 days before it came due. Pavlo visited CT&T's office in lower Manhattan, seeking payment, but owner James Franklin insisted he couldn't afford to pay. Really? Pavlo says he spotted duffel bags of cash, armed guards and money-counting machines. Pavlo returned to Atlanta empty-handed and convinced that CT&T's pleas of poverty were a bit exaggerated. By February 1996 MCI had cut off service to CT&T, which had filed for Chapter 11 bankruptcy protection. Franklin blamed CT&T's problems on slow payments from its own customers. At the Las Vegas office of one prepaid-card shop, Hi-Rim, a colleague of Pavlo's showed up to demand payment--and a Hi-Rim official threatened to go get his gun, the colleague says. Another reseller, Tel-Central, had a bit of star power: It was run by Dennis D. McLain, a 30-game winner as a Detroit Tigers pitcher who later was convicted of money laundering, theft and mail fraud. By early 1996 Tel-Central owed MCI up to $30 million and had been cut off. McLain was indicted in 1998 along with John A. (Junior) Gotti in a phone-card scam, but the charges were dropped in 1999. McLain is now doing time for stealing $3 million from Peet Packing's pension fund. Big carriers added to the problems by locking resellers into "ramp-up" contracts that charged them set prices for an increasing number of minutes. Many soon found rivals retailing service at prices below what they had paid wholesale. For resellers, the choice was simple: Either keep collecting from their customers, stop paying MCI and pocket wads of cash--or pay MCI and go bankrupt. The uncollected bills got so bad that managers at MCI, WorldCom, Sprint and elsewhere discussed setting up a database to track offenders. Pavlo was feeling the strain of it all. He was coming to work at 5 a.m. and staying late. He traveled constantly. Yet the more he worked, the worse the finances got. Until 1995 his group's bad debt had run $10 million or so a year, well within range of the unit's 2% ceiling. Accounts more than 90 days past due remained in the 5% to 7% target range. But 1995 bad debt came in at $90 million, and 90-days-late accounts had ballooned. Pavlo sent his superiors a memo on Jan. 4, 1996, warning of $88 million, and possibly more, in reseller receivables that MCI was unlikely to collect, the plaintiff banks allege. Accounting rules urge firms to write down such assets as soon as they realize they will not collect. But that means adding to bad debt reserves or posting a special loss, hurting earnings. The banks alleged that James Folk, vice president in charge of revenue operations, revealed the threat to Don Lynch, a senior vice president reporting to Chief Financial Officer Douglas Maine. Pavlo says he got word back via Steven Rubio, an accounting senior manager: Whatever the numbers said, the 1995 carrier bad debt charge would be $15 million. "We can't let this revenue get away. It's not in the plan," Pavlo says he was told. Folk, who has since left MCI, now lives in Olney, Md., Lynch is a telecom consultant in Fairfax, Va., Maine runs IBM.com and Rubio now is WorldCom's assistant controller. All four declined to comment. Pavlo says he, Rubio and other MCI financial planners started meeting monthly to discuss the extent of the problem and how to make it go away. By early 1996 they had found an ingenious way to keep a creaky unpaid bill off the past-due ledger: Turn it into a promissory note. MCI's carrier finance group did this on a large scale for the first time in early 1996, decreeing that CT&T owed $100 million on a promissory note. Recognizing that Hi-Rim was also going to welch, MCI disconnected it in March of 1996, wrote up a promissory note for at least $35 million and carried the balance into 1997, according to the deposition testimony in the banks' lawsuit, taken from James Wanserski, director of finance for credit and collections and Pavlo's boss from March 1996 onward. Wanserski, who now works for Arthur Andersen in Atlanta, declined comment. Pavlo says MCI had to have known the promissory notes were next to worthless but nonetheless told auditors it expected to collect 75% of face value. Even the promissory gimmick, however, couldn't keep pace with MCI's rising balance of bills 90 days late. So Pavlo and colleagues resorted to another trick: misapplying so-called "unapplied cash," money customers sent in without specifying the bill it was intended for. At the end of each month a member of the carrier division went around asking, "Who needs money?" Typically, $1 million to $2 million was doled out to cover older accounts, according to Pavlo and two other former members of the department. Another tactic: postdating invoices. "Accounting was real loose," says a former financial analyst in the department. "We'd move money around to keep over-90s down and managers off our backs." "Placeholder credits" were another tool. The carrier finance department used them to credit a customer for up to several million dollars in payments as if the money had already been received, when it hadn't yet arrived at MCI. Sometimes the money behind a placeholder never showed up. In one case, Hi-Rim said it was sending a payment via FedEx. Pavlo's group credited its account and tracked the payment's progress. When the envelope was opened, says the former analyst, it was empty. Placeholder credits apparently became common at MCI. "Competition among business divisions" over which one had the "youngest" receivables "has stimulated the posting of memo entries in advance of actuals," Folk, the revenue operations chief, wrote in a 1997 e-mail quoted in a lawsuit later filed by an MCI partner. "In time this practice became more the rule than the exception." Folk admitted in a deposition that this had led to "fudging" the age of receivables on MCI's books. What was in it for employees? "They get to keep their jobs." Pavlo was stuck: He knew customers were taking in piles of cash yet refusing to pay their bills; he says his MCI bosses knew of the chicanery but refused to write off the receivable. Increasingly, he feared for his job and fretted about falling into legal jeopardy. He was drinking heavily--and growing resentful. Even if MCI sold out at a premium, Pavlo wasn't going to get rich like top managers. He earned $70,000 and had vested options worth less than his salary. "I'm getting instructions from other parts of MCI that aren't in writing, like 'Make the bad debt $15 million,' but I'm the only one with my name all over this stuff," he says. "I started to feel I was going to be made into a scapegoat." In early 1996 Pavlo complained to a pal and customer, Harold Mann of Iris Enterprises, a caller-paid 900 service that handled phone sex, a lottery for fishing licenses in North Dakota and fundraising for racist David Duke. Mann soon became a central player (and codefendant) in MCI's reseller scandal, along with James Wilkie, Pavlo's buddy and senior manager in MCI's carrier finance unit. Mann introduced Pavlo to Mark Benveniste, president of Manatee Capital, an Atlanta firm set up in 1994 to factor, or collect, debts, for caller-paid phone services, including Mann's Denmark Dial. Why not move up the food chain, acting, in effect, as a factor for MCI? Benveniste proposed that Manatee could deliver MCI's receivables in days instead of months by collecting from resellers' clients directly. The only catch was that factoring reseller receivables was risky. Benveniste told Pavlo the only way he could get bank financing was for MCI to cover any collections shortfalls. Why not? Pavlo figured. MCI was out the money anyway. In March 1996 Pavlo met with Benveniste and several executives of National Bank of Canada at the swank Georgia Club in Atlanta. He told the bankers why MCI liked the factoring deal and said he was willing to sign a guarantee. After the meeting a loan officer called MCI's switchboard to make sure Pavlo worked there, according to court documents. That, it turned out, was the sum of due diligence for what turned out to be $45 million in revolving credit set up for Manatee by National Bank of Canada, NationsBank (now part of Bank of America) and CIT Group--the banks that ended up suing MCI in the fallout in 1997. Never mind that Pavlo had the power to authorize credits of only $50,000 at most, and that his superiors were unaware of the guarantee. "It's absurd, but that was the level of greed at the table," Pavlo says. Pavlo figured his superiors in finance would dislike the Manatee idea, so he pitched it to Dan Dennis, head of the $7 billion (1996 revenue) carrier division, who loved it, he says. "Walt, you've cornered the market. You control the cash. This product is ingenious," is how Pavlo recalls Dennis responding. At Dennis' urging, Pavlov says he gave the program a name: Rapid Advance. Dennis, who has left MCI and now lives in Michigan, says he doesn't recall discussing such a program with Pavlo. But Rapid Advance soon became big stuff in Dennis' division. In April 1996 MCI began using Rapid Advance to collect from delinquent resellers and lure new customers. It cranked out Rapid Advance banners, stopwatches and CD-ROMs. The sales force had Pavlo pitching it at its meetings. He was a star. Little did MCI management know that Pavlo was working a side deal with Mann. Not long after Rapid Advance was up and running, Pavlo was griping to Mann over drinks at Taco Mac in Atlanta. He cited one reseller, Robert Hilby of Telemedia Networks, who owed MCI $2 million and, Pavlo believed, had no intention of paying. Pavlo said he would love to rip off Hilby right back. Mann said he know how to make Hilby pay--and to pocket some cash in the process, according to Pavlo and Mann. Mann contacted Hilby and offered to have his own factoring firm, Orion Management Services, pay off Telemedia's MCI debt in exchange for a $200,000 upfront commission, 25% of Telemedia and a promise to pay back Orion over five years. Hilby took the offer, Pavlo says. He got a call from Hilby telling him of the Orion deal. Pavlo acted surprised and agreed. He wrote to Hilby, congratulating him for paying up. Then Pavlo and Mann flew first class to the Cayman Islands to party and deposit their $200,000. Pavlo put his account in the name of Parnell Investments, after the street he had once lived on in Savannah. They checked in to the Coral Stone Club and celebrated with Cristal champagne and Cuban cigars. "I felt on top of the world sitting in the middle of Seven Mile Beach," Pavlo says. Orion never paid MCI. Instead, Pavlo used tricks he had learned on the job, like diverting unapplied cash, to strike Telemedia's debt from MCI's books. Hilby could not be reached for comment, but in a deposition in the banks' suit against MCI, Hilby said he warned the carrier as early as October 1996 that he suspected a "conspiracy to defraud" MCI and its resellers. All told, Pavlo, Mann, Wilkie and at least one other cohort signed on seven resellers with Orion. That included Tel-Central, Denny McLain's old outfit. They figured that by owning a piece of the resellers and forcing them into Manatee-style factoring deals, they could keep some money flowing to MCI and still skim off a nifty slice. Orion also skimmed money from four Manatee customers by making bogus claims against them and diverting payments as they came in, Pavlo says. For a while, Pavlo says, he felt "bulletproof." Orion was bringing in tens of thousands of dollars a week and paying his wife $100,000 a year (though she held a full-time job elsewhere). Pavlo was wearing custom-tailored suits, tooling around in limos and flying to the Caymans regularly. Orion even bought the little West Virginia steel business where his father worked. He knew his actions were wrong. "Was it legal? No. Was it unethical? Absolutely," he says. "I know that now. But at the time you find yourself in a situation like this and somehow justify it." In August 1996 Pavlo visited Atlanta's exclusive Chateau Elan to brief senior MCI execs in town for the Summer Olympics. Pavlo says he reported that MCI held $170 million in doubtful reseller accounts. Wanserski, who also attended the meeting, said in a deposition later that senior management discussed the debts of CT&T and the likelihood that writeoffs could soar. "We just can't let this happen," Don Lynch, the senior vice president, responded in a conference call to the Atlanta group, Pavlo says. Pavlo left the meeting angry. The accounting games continued. Two months later, in October 1996, Wanserski flew to Washington D.C. to brief Chief Financial Officer Doug Maine on carrier bad debt. Maine declines to comment on the result. The following month, British Telecom announced plans to buy MCI for $20 billion in the largest cross-border deal ever. If it went through, many senior MCI managers would reap overnight riches. It was then, Pavlo says, that his boss, Wanserski, took him into his office and told him: "You have to get us through this purchase." But Pavlo was slipping. As the numbers mounted, it was becoming increasingly tough to disguise Orion's theft on MCI's books. Pavlo was gobbling Prozac and drinking a half-bottle of scotch a night. In January 1997 a carrier division analyst noticed that part of a $41.5 million payment WorldCom had made for using MCI's network had been posted elsewhere. At first the analyst thought it was just another "covering of agings." But it was too big. Pavlo had shifted $5 million to Denny McLain's Tel-Central in a desperate bid to cover his theft. Wanserski sent an e-mail to Pavlo, who was at the Four Seasons at Rancho Mirage, Calif., and demanded a call at 4:30 local time the following morning, Pavlo says. He stayed up all night drinking and popping antidepressants. Wanserski wanted him back in the office immediately. Pavlo said there was nothing to talk about. Pavlo never returned to the MCI office. An investigation soon uncovered his role. According to a brief filed by the banks, by March 3, 1997 Wanserski and Folk knew MCI had fraud on its hands. Saying nothing, MCI filed a proxy four days later, recommending the BT merger. Shortly afterwards James Folk, the boss of Pavlo's superior as vice president of revenue operations, discussed the events leading up to the fraud in an internal e-mail. "The second half of 1995 saw big growth in the carrier segment, which brought in unethical and shady companies," Folk wrote, according to a deposition he gave the following year in a breach-of-contract lawsuit that Manatee filed against MCI. The banks, still counting on Pavlo's MCI guarantee, kept pushing Manatee to lend more. Unaware that Pavlo had been fired, they hiked Manatee's credit limit to $30 million in March and to $45 million two months later. The legal wrangling began in the fall of 1997 when, seven months after it uncovered Pavlo's scam, MCI reported it to the banks. Out at least $28 million, they sued MCI for racketeering, fraud and breach of contract. The suit, in the U.S. District Court in Atlanta, charged MCI with using Rapid Advance to keep overstated assets on its books, avoid writeoffs and "conceal misconduct, including the alteration and falsification of MCI's financial books and records." Manatee owner Jack T. Hammer sued MCI for breach of contract. MCI countersued the banks and Manatee for negligent misrepresentation, fraud and civil conspiracy. MCI claimed that Pavlo, Mann, Wilkie and Benveniste used Orion to divert funds from its resellers to accounts they controlled in the Caymans and then doctored MCI's accounts to hide the theft. Shortly thereafter, a grand jury began looking into the fraud charges against Pavlo and his co-conspirators. Wilkie turned himself in to federal prosecutors in 1998 and received jail time. The maze of suits and countersuits was so complicated it took another two years to get to court. By then WorldCom owned MCI. It agreed in April 2000, on the second day of trial in the banks' case, to pay them $8 million. Manatee owner Jack Hammer received $1 million, though former president Benveniste is still fighting fraud charges in court and has pleaded not guilty. After Pavlo was found out in early 1997, he was constantly looking over his shoulder, fearing he was being followed by the feds. Finally, in the summer of 2000, he walked into the FBI office in Atlanta to cut a deal. He entered a guilty plea in October 2000--the same month WorldCom announced the $685 million write-off now under SEC scrutiny. Pavlo entered prison in March of last year to serve 41 months but hopes to reduce it by 10 months by completing an alcohol treatment program. Harold Mann will begin a 54-month sentence this summer. James Wanserski, Pavlo's ex-boss, stepped down when the scandal broke in October 1997. He was paid his $138,752 salary, plus a $50,000 incentive for cooperating in MCI's defense and for not disparaging the firm. The day after the agreement expired in 1998, he joined WorldCom's auditor, Andersen, in Atlanta. The drama continues. Pavlo and Mann insist they have disgorged their entire ill-gotten gain--there's no stash on some island. The shareholder suit filed against WorldCom last year was dismissed by a judge in March but is on appeal. Along with the SEC investigation, it may or may not prove Pavlo to be a legitimate, whistle-blowing crook--just like Mark Whitacre of ADM. "I started out a company man but abandoned that to act selfishly, as I believed others were doing. I was wrong," Pavlo says. "But so were they." -- ----------------- R. A. Hettinga <mailto: rah(a)ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire' --- end forwarded text -- ----------------- R. A. Hettinga <mailto: rah(a)ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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