By Mark AmesOn December 14, 2013
“We don’t believe the NSA has come near our data… We have a tremendous amount of thought and procedures and security around customer data.” –Devin Wenig, president, eBay Marketplace
“I don’t doubt Paypal cooperates with NSA…” — Glenn Greenwald
This past week, Wikileaks activist and close Snowden ally, Sarah Harrison, was quoted in the Guardian, asking “How can you take Pierre Omidyar seriously?”
Harrison’s outburst was prompted by the trial of the “PayPal 14,” and the company’s 2010 blockade of Wikileaks. PayPal is owned by eBay, the company that Omidyar founded and for which he still serves as chairman. Omidyar’s $250 million media startup, NewCo, recently hired Glenn Greenwald and Laura Poitras, the only two people with access to full cache of Edward Snowden’s NSA secrets.
”[Omidyar] is on the board of directors. He can’t shake off responsibility that easily. He didn’t even comment on it… If you set up a new media organisation which claims to do everything for press freedom, but you are part of a blockade against another media organisation, then that’s hard for us to take it seriously.”
[Disclosure: Peter Thiel, co-founder of PayPal, is an investor in Pando Media through Founders Fund. Former eBay president Jeff Jordan and eBay board member Marc Andreessen are personal investors in Pando Media. ]
In fact, Harrison was wrong about Omidyar not commenting on the Wikileaks blockade. In December 2010, in an editorial co-written for his Civil Beat media startup, Omidyar not only commented on the controversy but explained, in stark corporatist terms, why PayPal had no choice but to cut off funding to WikiLeaks: the interests of shareholders take precedence over the interests of a “principle” like supporting free speech rights.
“[T]he executives of these businesses [PayPal et al] cannot tell their shareholders that it will hurt their company more to cave on a matter of principle than to drop a customer. It is their right and common practice to shut a customer down when they receive complaints from criminal investigators, even without a court order. This even though the existence of a criminal investigation is no indication of guilt.“The executives have a fiduciary duty to do what’s best for their shareholders.”
Again, the largest shareholder in PayPal’s parent company is one Pierre Omidyar, who owns nearly 10 percent of the company. Unexpressed in that last sentence is the fact that “what’s best for their shareholders” means, in particular, “what’s best for Pierre Omidyar.”
Also missing from the op-ed was any suggestion that Omidyar had formally protested the blockade in his capacity as eBay’s chairman. It was only three years later that he insisted he had “expressed concerns” directly to company management. Concerns that, despite coming from the company’s chairman and single largest shareholder, were apparently ignored.
Until a few days ago, the world knew very little about Pierre Omidyar’s personal views on people who leak secrets, particularly secrets belonging to corporations rather than the government. (Remember that, before it started publishing government cables, Wikileaks made its name exposing corporate secrets.)
That changed last weekend when Pando investigations editor Paul Carr invited Omidyar to address remarks he made in 2009 about when editors should turn in non-violent leakers to the authorities.
Omidyar’s response must have horrified any source considering leaking to NewCo: ”[U]nless I judge significant pub interest in those docs, I’d prob tell the cops. My jdgmt”, he wrote, adding: “Every case is different, which is why you shouldn’t make absolute statements.”
For journalists who believe that (non-violent) sources should be protected under all circumstances, this apparent breach of journalistic convention was astonishing. And made all the more so, coming from the billionaire who just promised $250 million to secure the rights to secrets leaked by America’s most wanted whistleblower.
But Omidyar’s willingness to “probably” hand over sources to law enforcement looks positively Woodwardian when contrasted with the behavior of the company he still serves as chairman. A company that, it turns out, not only complies with requests from government agencies for user data but proudly boasts of doing so proactively, often without formal warrants or subpoenas.
From its earliest days, eBay has operated a vast trans-national private police force which has overseen thousands of arrests and convictions around the globe, has trained countless thousands of law enforcement officials in the US and abroad, and cooperates with police and intelligence agencies on every inhabitable continent.
Last year, eBay’s longtime Chief Internet Security Officer, David Culliname, told an audience of top private security executives that eBay’s global security operations led to the arrests of 3,000 people around the world over a period of three years — or roughly three people arrested per day, thanks to eBay’s work.
That represents an increase over the volume of eBay-led arrests cited in 2007, when eBay executive Robert Chesnut boasted before a House Judiciary Subcommittee on Terrorism:*
“The assistance that our teams provide to law enforcement agencies around the world lead to an average of two arrests every single day.”
Chesnut also revealed the scope of eBay’s training programs, back when eBay was a much smaller outfit than it is today:
“In 2006 alone, we trained over 3000 law enforcement personnel in North America about online fraud in the eBay/PayPal context and how we can help them prosecute criminals who attempt to abuse our users.”
He revealed that there were “over 2000 eBay Inc employees around the world working to combat all forms of on-line fraud” — out of a total of some 15,000 employees that year. (Today, eBay has some 30,000 employees worldwide.)
Up through 2008, eBay publicly touted its “Fraud Investigation Team” as the centerpiece of its private global policing. Chesnut, a former US Assistant Attorney General in the eastern Virginia District, told Congress that eBay’s Fraud Investigation Team “works closely with law enforcement officials at the federal, state and local levels,” and boasted:
“[W]e have teams in San Jose and Salt Lake City to serve enforcement agencies throughout North America. Because we operate in a truly global marketplace, we also have Fraud Investigation Teams in Dublin, Ireland and Dreilinden, Germany to serve law enforcement in Europe and Asia.”
eBay works closely with a variety of federal agencies, including the FBI, Homeland Security, and the DEA. In 2007, eBay spokesperson Nichola Sharpe told the AP, “We’ve been working with the Drug Enforcement Agency as far back as 2006. People buy items that are completely harmless — law enforcement can look at that and see it’s suspicious.”
According to a DEA agent from the Rocky Mountain Field division, Mike Tuner, working with eBay offered certain legal advantages. To search a person’s home, the DEA would need a court-ordered subpoena or warrant, but to search the suspect’s business information and behavior on eBay, the DEA only required an administrative subpoena, which eBay ensured would be easy to obtain.
Not that eBay’s cooperation with authorities was a one way street. The company lobbied state and federal legislators “calling for tougher penalties, mandatory sentences and higher priority prosecutions” of online retail thieves. As eBay’s Chesnut told the House Subcommittee:
“[A] legislative solution to the problem of organized retail theft is simple: increase the criminal penalties for this conduct. If these crimes are currently classified as misdemeanors, upgrade them to felonies. If the jail sentences tied to these crimes are too short, lengthen them.”
In 2008, eBay launched a new program to crack down on sales of stolen property called PROACT — Partnering with Retailers Offensively Against Crime and Theft –under which eBay assisted law enforcement in 7,400 stolen property investigations and helped in the arrests of 237 people in the US in 2008 alone.
In April 2009, eBay executives appeared at a “training day” conference with law enforcement officials in Washington, DC, which gave a further glimpse into eBay’s work with government law enforcement. At the meeting, according to Washington Internet Daily, eBay senior regulatory counsel Jack Christin boasted:
“The company referred over 500 cases ‘on a silver platter’ to law enforcement last year , with full records needed to bring cases…”
Christin’s colleague, Edward Torpoco, also admitted that eBay complies with authorities in foreign jurisdictions that may be less protective of data than the US. As recently as October of this year, the UK’s Independent newspaper revealed that British authorities had bought data from eBay for use in searching for unemployment benefits cheats.
In 2003, Israeli newspaper Haaretz reported on a confidential talk that eBay’s director of law enforcement and compliance, Joseph Sullivan, gave to senior representatives of US law enforcement agencies, in which Sullivan boasted:
Haaretz obtained a recording of Sullivan’s talk, which was closed to journalists, “and for good reason,” the Israeli newspaper reported:
“Sullivan tells the audience that eBay is willing to hand over everything it knows about visitors to its Web site that might be of interest to an investigator. All they have to do is ask. ‘There’s no need for a court order,’ Sullivan said, and related how the company has half a dozen investigators under contract, who scrutinize ‘suspicious users’ and ‘suspicious behavior.’”
Further down the article, eBay’s Sullivan is quoted telling law enforcement officials:
“‘We don’t make you show a subpoena, except in exceptional cases,” Sullivan told his listeners. ‘When someone uses our site and clicks on the I Agree button, it is as if he agrees to let us submit all of his data to the legal authorities. Which means that if you are a law-enforcement officer, all you have to do is send us a fax with a request for information, and ask about the person behind the seller’s identity number, and we will provide you with his name, address, sales history and other details — all without having to produce a court order. We want law enforcement people to spend time on our site.’ He says he receives about 200 such requests a month, most of them unofficial requests in the form of an email or fax.
“The meaning is clear. One fax to eBay from a lawman — police investigator, NSA, FBI or CIA employee, National Park ranger — and eBay sends back the user’s full name, email address, home address, mailing address, home telephone number, name of company where seller is employed and user nickname. What’s more, eBay will send the history of items he has browsed, feedbacks received, bids he has made, prices he has paid, and even messages sent in the site’s various discussion groups.”
Sullivan’s lecture came less than a year after eBay bought PayPal for $1.45 billion. Nimrod Kozlovski, who was with Yale Law School’s Internet Society Project at the time, told Haaretz that what made eBay’s policies so particularly insidious was the fact that on its platform, a range of private activities — from buying and browsing habits to financial information — that had once been atomized and harder for law enforcement to obtain was now being tracked on a grand scale under one private entity’s roof, an entity which was now essentially acting an unaccountable private-sector prosecutor, all with the users’ consent:
“‘By buying PayPal, eBay is merging the information about the goods trail with the money trail… Thus, in spite of the protective mechanisms of the law against disclosure of details on transactions, eBay is in a position to analyze the full set of data and ‘advise’ investigators when it might be ‘worthwhile’ for them to ask for a subpoena to disclose the details of a financial transaction. Essentially, this bypasses the rules on non-disclosure of details of financial transactions and the confidentiality of the banker-client relationship.’”
Others agree. In their book “Who Controls The Internet?” Harvard Law professor Jack Goldsmith and Columbia Law professor Tim Wu described eBay’s dystopian transformation from left coast anarcho-fantasy dream into a profit-making machine greased by big government coercion:
“Our peek below the surface of eBay’s self-governing facade revealed a far different story — a story of heavy reliance on the iron fist of coercive governmental power. Perpetually threatened by cheaters and fraudsters, eBay established an elaborate hand-in-glove relationship with the police and other governmental officials who can arrest, prosecute, incapacitate, and effectively deter these threats to its business model.”
In the years since these concerns were raised, eBay’s operations have grown by leaps and bounds. At the same time information about eBay/PayPal’s worldwide policing operations has become increasingly harder to come by, as talking up your company’s law enforcement capabilities and cooperation with the government are no longer considered good for business.
A few years ago, the 2000-plus man Fraud Investigation Team was renamed and reorganized — now it’s called the “Global Asset Protection Team.” In 2009, eBay also introduced its “Global Law Enforcement Organization” (GLEO) which hosts a police blotter page on eBay.com.
At a 2009 get-together with top law enforcement officials, eBay representativesdescribed the mission of its Global Law Enforcement Organization as:
“[T]o promote trust and protect our businesses by partnering with internal stakeholders and working with law enforcement and regulatory organizations proactively and reactively to support the prevention, detection and prosecution of criminal activity on the eBay and PayPal platforms.”
The Law Enforcement Program which the team operates under is now folded into the Government Relations Division. Which makes sense, when you consider that eBay’s private police force and its low-bar privacy policies are the company’s friendliest handshake it offers to the government.
Earlier this past week, Glenn Greenwald, Omidyar’s first editorial hire, responded to allegations from former FBI whistleblower Sibel Edmonds that the unpublished Snowden documents contain information about PayPal cooperation with the NSA, saying, “She made claims about what’s in NSA docs even though she has no idea what’s in them.” He also described Sibel as “crazy” and “stupid” before clarifying, “I don’t doubt PayPal cooperates with NSA.”
Asked by Pando whether the Snowden documents contained details of government cooperation by eBay, Greenwald did not respond. At publication time, eBay had not responded to Pando’s questions about data sharing with the NSA. eBay spokesperson Kari Ramirez told Pando: “eBay Inc. responds to lawful requests from law enforcement agencies worldwide regarding specific individuals or accounts. Regarding PayPal data, we respond to these lawful requests to combat any attempted use of our services for money laundering, terrorist financing or financial fraud.”
All of which brings us back to Pierre Omidyar. A recent Rolling Stone profile noted that “Omidyar came to Greenwald specifically because of the Snowden leaks.” Given that those leaks deal primarily with how government agencies have accessed data from technology companies in the name of law enforcement, eBay’s eagerness to cooperate with those same agencies without so much as a subpoena is troubling. It is notable, too, that aside from his continuing stockholding in eBay, Omidyar has jointly invested in at least one startup (Innocentive) with the CIA’s venture capital fund, In-Q-Tel.
Omidyar’s dual role as billionaire titan of the Big Data industry and outraged champion of anti-government whistleblowers means that secrets that rightfully belong to The People are now are controlled by a man whose wealth and power are directly dependent on profitable relationships with global law enforcement. A man who boasts of circumstances in which he might personally hand over a corporate leaker to authorities, while his for-profit news organization cries outrage at government overreach.
How can we take Pierre Omidyar seriously? With stakes so high, how can we not?
* Source: CQ Congressional Testimony, October 25, 2007, “ORGANIZED RETAIL THEFT PREVENTION,” SECTION: CAPITOL HILL HEARING TESTIMONY, “Statement of Mr. Robert Chesnut Senior Vice President, Rules, Trust and Safety eBay Inc.,” Committee on House Judiciary Subcommittee on Crime, Terrorism, and Homeland Security
Image credit: eBay