TBR News August 30, 2020

The Voice of the White House

Comments for August 30, 2020:  Waiting to Happen

It was in the Spring of 2001 when a young computer expert living in the Mid-West developed a lethal virus intended to do a full-bore global destruction to the international computer/internet system.

The virus is spread from computer to computer system to computer and it is so constructed that it cannot be searched out by any known computer security system. The virus remains placidly dormant until it is triggered and then after a specific lapse of time, is fully activated.

What does this virus do?

Totally obliterates the computer hard drive and expunges it of all memory.

In essence, the hard drive is flat line and cannot be reconstructed.

What sort of a trigger would activate this?

Perhaps a first, middle and last name coupled with a fake social security number.

The probability of this trigger accidentally emerging would be a mathematical impossibility.

Let us say that this was triggered on the computer system of a major bank.

When the activating time arrived, everything on the bank computer would be gone. No one could access the ATM machine, cash checks, or otherwise have access to the bank’s services.

There would be mass panic and the bank’s computer people would install backup systems.

After a frenzied flurry, all would return to normal, that is until the activated triggers would work again.

Official records, social security, food stamps, passport data, criminal rap sheets, and dozens and dozens more of vital services would, in essence, be gone with the wind.

And since this project has been silently contaminating the global systems since 2001, the length and depth of the infections would be immense and all-inclusive.

Of course the Russians would be blamed but the computers would be as dead as a squashed cockroach and the entire societal global informational and business structures would gasp, gurgle and die.

People could not buy food, electrical systems would fail and soon, the woodlands of America, and the world, would be filled with frantic citizens digging caves in the soil, or places to bury their surviving family members.

The motto?

Never put all your eggs in one basket

 

The Table of Contents

 

• The real threats to American law and order are Trump’s craven enablers
• How should Europe respond now its American ally has turned hostile?
• False Claims of Antifa Protesters Plague Small US Cities
• Nord Stream 2: Germany ‘displeased’ at US sanctions threat
• France arrests top military officer over Russian-linked ‘breach’
• In Taking Crimea, Putin Gains a Sea of Fuel Reserves
• Trump and Putin: The Prospering of Treason
• The Fintech debt trap
• The Encyclopedia of American Loons

 

 

The real threats to American law and order are Trump’s craven enablers

The president railed against ‘violent anarchists, agitators and criminals’ but he surrounds himself with lawless lackeys

August 30, 2020

The Guardian

One week ago, Rusten Sheskey, a seven-year veteran of the Kenosha, Wisconsin, police department, fired at least seven shots at the back of a Black man named Jacob Blake as he opened his car door, leaving the 29-year-old father of five probably paralyzed from the waist down.

After protests erupted, self-appointed armed militia or vigilante-type individuals rushed to Kenosha, including Kyle Rittenhouse, a white 17-year-old who traveled there and then, appearing on the streets with an AR-15 assault rifle, allegedly killed two people and wounded a third.

This is pure gold for a president without a plan, a party without a platform, and a cult without a purpose other than the abject worship of Donald J Trump.

To be re-elected Trump knows he has to distract the nation from the coronavirus pandemic that he has flagrantly failed to control – leaving more than 180,000 Americans dead, tens of millions jobless and at least 30 million reportedly hungry.

So he’s counting on the reliable Republican dog-whistle. “Your vote,” Trump said in his speech closing the Republican convention Thursday night, “will decide whether we protect law-abiding Americans, or whether we give free rein to violent anarchists, agitators and criminals who threaten our citizens.”

“We will have law and order on the streets of this country,” Vice-President Mike Pence declared the previous evening, warning “you won’t be safe in Joe Biden’s America.”

Neither Trump nor Pence mentioned the real threats to law and order in America today, such as gun-toting agitators like Rittenhouse, who, perhaps not coincidentally, occupied a front-row seat at a Trump rally in Des Moines in January.

Pence lamented the death of federal officer Dave Patrick Underwood, “shot and killed during the riots in Oakland, California”, earlier this year, implying he was killed by protesters. In fact, Underwood was shot and killed by an adherent of the boogaloo boys, an online extremist movement that’s trying to ignite a race war.

Such groups have found encouragement in a president who sees “very fine people” supporting white supremacy.

The threat also comes from conspiracy theorists like Marjorie Taylor Greene, the recently nominated Republican candidate for Georgia’s 14th congressional district and promoter of QAnon, whose adherents believe Trump is battling a cabal of “deep state” saboteurs who worship Satan and traffic children for sex. Trump has praised Greene as a “future Republican star” and claimed that QAnon followers “love our country”.

And from people like Mary Ann Mendoza, a member of Trump’s campaign advisory board, who was scheduled to speak at the Republican convention until she retweeted an antisemitic rant about a supposed Jewish plan to enslave the world’s peoples and steal their land.

Clearly the threat also comes from hotheaded, often racist police officers who fire bullets into the backs of Black men and women or kneel on their necks so they can’t breathe. Needless to say, there was little mention at the Republican convention of Jacob Blake, and none of George Floyd or Breonna Taylor.

And the threat comes from Trump’s own lackeys who have brazenly broken laws to help him attain and keep power. Since Trump promised he would only hire “the best people”, 14 Trump aides, donors and advisers have been indicted or imprisoned.

Trump’s personal lawyer Rudolph W Giuliani – who ranted at the Republican convention about rioting and looting in cities with Democratic mayors – has repeatedly met with the pro-Russia Ukrainian parliamentarian Andriy Derkach, whom American intelligence has determined is “spreading claims about corruption … to undermine former Vice President Biden’s candidacy and the Democratic Party”.

In addition, federal prosecutors are investigating Giuliani’s business dealings in Ukraine with two men arrested in an alleged campaign finance scheme.

Trump’s new postmaster general, Louis DeJoy, who had been a major Trump campaign donor before taking over the post office, is being sued by six states and the District of Columbia for allegedly seeking to “undermine” the postal service as millions of Americans plan to vote by mail during the pandemic.

Not to forget the secretary of state, Mike Pompeo, who spoke to the Republican convention while on an official trip to the Middle East, in apparent violation of the Hatch Act, which prohibits officials of the executive branch other than the president and vice-president from engaging in partisan politics.

You want the real threat to American law and order? It’s found in these Trump enablers and bottom-dwellers. They are the inevitable excrescence of Trump’s above-the-law, race-baiting, me-first presidency. It is from the likes of them that the rest of America is in serious need of protection.

 

 

How should Europe respond now its American ally has turned hostile?

As trusted friends join the ranks of predators, it could be time to take a tougher line – soft power is no longer enough

August 30, 2020

by Simon Tisdall

The Guardian

Making his celebrated return from exile in April 1917 to take up the reins of the Russian revolution, Vladimir Lenin caught a ferry to Sweden from Sassnitz, a small Baltic coastal town in north-east Germany, before taking the train to Finland station in Petrograd, the city that became Leningrad and is now St Petersburg. Sassnitz’s moment in the historical spotlight was fleeting. Now, thanks to Donald Trump’s blundering buddies, it’s back there again.

A trio of Republican senators – Ted Cruz, Tom Cotton and Ron Johnson – are threatening to wreak terrible punishment on Sassnitz, its elected officials and residents who make their living from the port. Luckily, Trump’s three stooges seem unaware of Sassnitz’s role in propelling the Bolshevik leader to power. Their beef concerns its present-day dealings with Russia and the almost-completed Nord Stream 2 Baltic pipeline project.

In an extraordinarily high-handed letter this month, the senators claimed the pipeline, which will import Russian natural gas to Europe via Germany, posed a “grave threat” to US security. If Sassnitz did not immediately halt its involvement, it would incur “crushing legal and economic sanctions” that could prove “fatal” to the region’s economy, they decreed. Sassnitz companies, shareholders and employees would face US government-ordered asset freezes and travel bans similar to North Korea and Iran.

The US has long opposed Nord Stream 2, arguing it will increase Europe’s dependence on Russia. Berlin has long resisted such claims, saying it alone determines national policy, in conjunction with the EU. What the feet-first intervention of Cruz and his arrogant cronies has done is turn the issue into another full-on US-Europe confrontation.

The reaction in Sassnitz and beyond is predictably furious. The Americans are accused of treating Germany more like an enemy, or a colony, than an ally. Foreign minister Heiko Maas said such behaviour reflected basic “disrespect” for European rights and sovereignty. The EU’s foreign policy chief, Josep Borrell, expressed “deep concern at the growing use of sanctions, or threat of sanctions, by the US against European companies and interests”.

Chancellor Angela Merkel’s relations with Trump were already icy after years of presidential insults and, more recently, his perverse decision to cut US troop numbers in Germany – a key part of Nato defences against Russia. Now the row risks rekindling broader resentment over Trump’s tariff wars, climate crisis denial, and efforts to divide the EU by wooing conservative eastern states.

America’s increasing resort to bullying and intimidation of old friends in place of reasoned persuasion was highlighted by another showdown last week, over Iran. US secondary sanctions have hurt European companies trading with Tehran but have failed, so far, to break the joint German-French-UK commitment to the 2015 nuclear deal jettisoned by Trump. So when the US sought to reimpose sanctions on Iran at the UN, it was roundly rebuffed.

Secretary of state Mike Pompeo reacted with a classic Trumpian tantrum. Europe was “siding with the ayatollahs,” he snarled. Kelly Craft, US ambassador to the UN, was every bit as offensive, absurdly accusing America’s most steadfast allies of “standing in the company of terrorists”. The fact Trump’s Iran policy has demonstrably backfired, pushing the Middle East closer to war, and Iran closer to a nuclear weapon, does not seem to matter.

Spare a thought at this point for put-upon Dominic Raab, Britain’s foreign secretary. Raab was in Jerusalem last week, bravely attempting to put a two-state solution for Israel-Palestine back on the table following the best efforts of Trump and Israeli prime minister Benjamin Netanyahu to bury it. Instead, he got a humiliating public dressing-down from Netanyahu and fellow ministers over Iran. This was rude and disrespectful. Sadly, their uncouth behaviour reflects Britain’s growing irrelevance.

Achieving a two-state solution is another big area of US-Europe disagreement. Yet similar difficulties arise on other key issues. Despite its desire to “save” Europe from the Russians (and sell it expensive gas from Cruz’s home state of Texas instead), Trumpland has shown a dismaying lack of concern over the plight of Alexei Navalny, the poisoned Russian opposition activist.

Be it the conflicts in Ukraine, Syria and Libya, or the uprising in Belarus, hands-off Trump has gone out of his way to avoid upsetting Russian president Vladimir Putin, to whom he seems in thrall. These are important matters affecting Europe’s security, prosperity and principles, yet scant solidarity, and often the exact opposite, is what it has come to expect from Trump’s America.

What to do? EU leaders can hope Joe Biden wins in November. But what if Trump triumphs again? Europe can expect more sanctions, selfish stupidity and brutishness where US foreign policy used to be. It would face a second-term president hostile to Germany in particular, contemptuous of the EU in general, and free to indulge his destructive instincts to the full. Nato and the transatlantic alliance might finally implode under the strain.

Even if that’s avoided for now, the possibility of such a nightmare in future is a compelling argument for strengthening Europe’s shared security, military and technological capabilities – and its protections against Sassnitz-style economic and financial blackmail. French president Emmanuel Macron urges greater EU integration, ambition and urgency, but Merkel and others are wary. Yet as Sophia Besch of the Centre for European Reform argued recently, Europe must be able to defend its geopolitical interests.

Call it “strategic autonomy”. Or simply call it survival. In a world where once trusted friends join the ranks of the predators, soft power is not enough.

Europe will not curb the depredations of major global players until it becomes one itself. Europeans must stand together. What an utter tragedy that Britain chose this dangerous moment to fall apart.

 

False Claims of Antifa Protesters Plague Small US Cities

June 4, 2020

by Associated Press

In the days since President Donald Trump blamed antifa activists for an eruption of violence at protests over police killings of black people, social media has lit up with false rumors that the far-left-leaning group is transporting people to wreak havoc on small cities across America.

The speculation was being raised by conservative news outlets and pro-Trump social media accounts, as well as impostor Facebook and Twitter accounts.

Twitter and Facebook busted some of the instigators behind the unsubstantiated social media chatter. Twitter determined Monday that a tweet promising antifa would “move into residential areas” and “white” neighborhoods was sent by the white supremacy group Identity Evropa. The tweet was shared hundreds of times and cited in online news articles before Twitter removed it Monday, a company spokesperson said.

Yet the tweet continued to circulate Tuesday on Facebook and Instagram.

Facebook, using information shared by Twitter, announced Tuesday night it also took down a handful of accounts on its platform that were created by white supremacy groups like Identity Evropa and American Guard, some of them posing as part of the antifa movement.

For years, some social media users have tried to delegitimize controversial or political protests with baseless theories that they were organized by wealthy financiers or extremists organizations. Over the weekend, Trump singled out antifa as being responsible for the violent protests triggered by the killing of George Floyd, saying in a tweet: “It’s ANTIFA and the Radical Left.”

“Usually you see this when there’s an interest to deflect conversations from protests to just accusing the protests of being violent, organized or having backers that are evil,”said Filippo Menczer, a professor of informatics and computer science at Indiana University. “The president mentioning it, of course, has generated a huge spike.”

The theories about antifa — short for “anti-fascists” and an umbrella term for lefitst militant groups that confront or resist neo-Nazis and white supremacists at demonstrations — have trickled through cities across the country in recent days.

Police departments say people are phoning in “tips” they see on social media claiming antifa is sending buses or even planes full of antifa activists to their area.

In Payette County, Idaho — a rural county of 24,000 — the calls started early Monday morning after one Facebook user said the sheriff had spotted antifa rioters in the area. The calls didn’t taper off until the sheriff’s office debunked the rumor on Facebook.

“It’s really a small community, where our citizens know us pretty well,” said Payette County Sheriff Lt. Andy Creech. “When the post got out there, we started getting phone calls directly.”

Meanwhile, Facebook users were also warning their friends to stay clear of a shopping center in a New Jersey suburb, saying it would be the center of antifa destruction on Tuesday.

But police had “no credible information” that antifa would be present in the area, Toms River Police Department media specialist Jillian Messina said in an email. The police aren’t aware of anyone showing up at all, she added.

Identical Facebook and Twitter posts about busloads of antifa protesters also stumped the Sioux Falls Police Department, where officers in the South Dakota city said they didn’t see any unusual bus activity in town. But the claims still spread for days ahead of a planned protest this Saturday, said Sam Clemens, a public information officer for the department.

“Everyone heard there were going to be buses of people,” Clemens said. “It was very specific: there were three busloads.”

Even the owner of a Michigan limousine business was forced to refute online rumors when two of his buses became the center of a conspiracy theory that liberal financier George Soros was funneling protesters to Milan, Michigan. Social media users widely shared a manipulated photo of his white buses, edited to show the words “Soros Riot Dance squad” emblazoned on the sides.

The buses belong to Sean Duval, the owner of local transportation company Golden Limousine International, and don’t have any words printed on them.

Said Duval: “It’s frustrating when people from the outside start instigating and try to turn American against American.”

 

Nord Stream 2: Germany ‘displeased’ at US sanctions threat

Germany’s foreign minister has expressed his dismay to his US counterpart over Washington’s threat of sanctions on a small German port where the final sections of the Nord Stream 2 pipeline are being constructed.

August 10, 2020

DW

German Foreign Minister Heiko Mass on Monday said he had expressed “displeasure” to US Secretary of State Mike Pompeo about threats made by three US senators.

Last week, Senators Ted Cruz, Tom Cotton and Ron Johnson in a letter pledged “crushing legal and economic sanctions” against Fährhafen Sassnitz GmbH, the operator of the Murkan Port, where Russian vessels are helping build the Nord Stream 2 natural gas pipeline.

“I mentioned it in a telephone call with Mike Pompeo yesterday and expressed my surprise and displeasure,” he told reporters.

Threatening letter

In their letter, the senators describe the nearly complete pipeline as a “grave threat to European energy security and American national security.”

“The only responsible course of action is for Fährhafen Sassnitz GmbH to exercise contractual options that it has available to cease these activities,” they said in the missive.

Murkan Port, located in the small seaside town Sassnitz on Baltic Sea island of Rügen, serves as a key logistic and service center for ships constructing the German end of the pipeline.

German Chancellor Angela Merkel’s spokesman, Steffan Seibert, said on Monday that Germany was opposed to “extraterritorial sanctions.”

“The German government is in contact with the companies against which sanctions have been threatened.”

Cleaner energy

The 10 billion-euro ($11 billion) pipeline, owned by Russian gas company Gazprom, is set to double Russian natural gas transported from Russia to Germany. The project is near completion beneath the Baltic Sea.

The US — which strongly opposes Nord Stream 2 — fears that the pipeline will increase Europe’s dependence on Russia, which both Berlin and Moscow dispute.

Ukraine and Poland, which will be bypassed by the gasline, argue that it will further embolden Russian President Vladimir Putin by giving Moscow more control over crucial energy flows.

Pompeo last month mooted the possibility that German companies could suffer sanctions for even small investments in the pipeline.

Germany had expressed anger at the US threat, saying it interfered in German internal affairs. Despite political differences with Russia, Berlin sees the Nord Stream 2 pipeline as a positive step towards more stable, cheaper and cleaner energy as it phases out coal.

 

France arrests top military officer over Russian-linked ‘breach’

French authorities are investigating a senior military officer for passing “ultra-sensitive” information to Russian intelligence. The officer was reportedly working at a NATO base in Italy.

August 30, 2020

DW

French Defense Minister Florence Parly told French media on Sunday that a senior military officer was under investigation for “serious security breaches.”

“What I can confirm is that a senior officer is facing legal proceedings for a security breach,” Parly told Europe 1 radio. She made similar statements to French television network Cnews and Les Echos newspaper.

The lieutenant-colonel was reportedly based at a NATO facility in Italy and was arrested while holidaying in his native France. He had reportedly passed on “ultra-sensitive” information to Russian intelligence services.

Parly said France’s armed forces have taken “necessary protective measures” following the security breach.

Russian connections

The arrest comes a week after US authorities arrested a former Special Forces officer for sharing his unit’s activities with Russian intelligence.

According to prosecutors, the Green Beret serviceman, who had been stationed in Germany and Azerbaijan, “thought that the United States was too dominant in the world and needed to be cut down to size.”

The NATO alliance has been on alert since 2014, when Russia fomented unrest and annexed parts of Ukraine following an internationally-condemned referendum. Western officials have also accused Russia of undermining global security by engaging in hybrid warfare.

In June, German Chancellor Angela Merkel said a cyberattack on the Bundestag that resulted in sensitive information being siphoned off the network was part of Russia’s “strategy of hybrid warfare including cyber disorientation and fact manipulation.”

 

In Taking Crimea, Putin Gains a Sea of Fuel Reserves

May 17, 2014

by William J. Broad

New York Times

When Russia seized Crimea in March, it acquired not just the Crimean landmass but also a maritime zone more than three times its size with the rights to underwater resources potentially worth trillions of dollars.

Russia portrayed the takeover as reclamation of its rightful territory, drawing no attention to the oil and gas rush that had recently been heating up in the Black Sea. But the move also extended Russia’s maritime boundaries, quietly giving Russia dominion over vast oil and gas reserves while dealing a crippling blow to Ukraine’s hopes for energy independence.

Russia did so under an international accord that gives nations sovereignty over areas up to 230 miles from their shorelines. It had tried, unsuccessfully, to gain access to energy resources in the same territory in a pact with Ukraine less than two years earlier.

“It’s a big deal,” said Carol R. Saivetz, a Eurasian expert in the Security Studies Program of the Massachusetts Institute of Technology. “It deprives Ukraine of the possibility of developing these resources and gives them to Russia. It makes Ukraine more vulnerable to Russian pressure.”

Gilles Lericolais, the director of European and international affairs at France’s state oceanographic group, called Russia’s annexation of Crimea “so obvious” as a play for offshore riches.

In Moscow, a spokesman for President Vladimir V. Putin said there was “no connection” between the annexation and energy resources, adding that Russia did not even care about the oil and gas. “Compared to all the potential Russia has got, there was no interest there,” the spokesman, Dmitry Peskov, said Saturday.

Exxon Mobil, Royal Dutch Shell and other major oil companies have already explored the Black Sea, and some petroleum analysts say its potential may rival that of the North Sea. That rush, which began in the 1970s, lifted the economies of Britain, Norway and other European countries.

William B. F. Ryan, a marine geologist at the Lamont-Doherty Earth Observatory of Columbia University, said Russia’s Black Sea acquisition gave it what are potentially “the best” of that body’s deep oil reserves.

Oil analysts said that mounting economic sanctions could slow Russia’s exploitation of its Black and Azov Sea annexations by reducing access to Western financing and technology. But they noted that Russia had already taken over the Crimean arm of Ukraine’s national gas company, instantly giving Russia exploratory gear on the Black Sea.

“Russia’s in a mood to behave aggressively,” said Vladimir Socor, a senior fellow at the Jamestown Foundation, a research group in Washington that follows Eurasian affairs. “It’s already seized two drilling rigs.”

The global hunt for fossil fuels has increasingly gone offshore, to places like the Atlantic Ocean off Brazil, the Gulf of Mexico and the South China Sea. Hundreds of oil rigs dot the Caspian, a few hundred miles east of the Black Sea.

Nations divide up the world’s potentially lucrative waters according to guidelines set forth by the 1982 Law of the Sea Treaty. The agreement lets coastal nations claim what are known as exclusive economic zones that can extend up to 200 nautical miles (or 230 statute miles) from their shores.

Inside these zones, countries can explore, exploit, conserve and manage deep natural resources, living and nonliving.

The countries with shores along the Black Sea have long seen its floor as a potential energy source, mainly because of modest oil successes in shallow waters.

Just over two years ago, the prospects for huge payoffs soared when a giant ship drilling through deep bedrock off Romania found a large gas field in waters more than half a mile deep.

Russia moved fast.

In April 2012, Mr. Putin, then Russia’s prime minister, presided over the signing of an accord with Eni, the Italian energy giant, to explore Russia’s economic zone in the northeastern Black Sea. Dr. Ryan of Columbia estimated that the size of the zone before the Crimean annexation was roughly 26,000 square miles, about the size of Lithuania.

“I want to assure you that the Russian government will do everything to support projects of this kind,” Mr. Putin said at the signing, according to Russia’s Interfax news agency.

A month later, oil exploration specialists at a European petroleum conference made a lengthy presentation, the title of which asked: “Is the Black Sea the Next North Sea?” The paper cited geological studies that judged the waters off Ukraine as having “tremendous exploration potential” but saw the Russian zone as less attractive.

In August 2012, Ukraine announced an accord with an Exxon-led group to extract oil and gas from the depths of Ukraine’s Black Sea waters. The Exxon team had outbid Lukoil, a Russian company. Ukraine’s state geology bureau said development of the field would cost up to $12 billion.

“The Black Sea Hots Up,” read a 2013 headline in GEO ExPro, an industry magazine published in Britain. “Elevated levels of activity have become apparent throughout the Black Sea region,” the article said, “particularly in deepwater.

When Russia seized the Crimean Peninsula from Ukraine on March 18, it issued a treaty of annexation between the newly declared Republic of Crimea and the Russian Federation. Buried in the document — in Article 4, Section 3 — a single bland sentence said international law would govern the drawing of boundaries through the adjacent Black and Azov Seas.

Dr. Ryan estimates that the newly claimed maritime zone around Crimea added about 36,000 square miles to Russia’s existing holdings. The addition is more than three times the size of the Crimean landmass, and about the size of Maine.

At the time, few observers noted Russia’s annexation of Crimea in those terms. An exception was Romania, whose Black Sea zone had been adjacent to Ukraine’s before Russia stepped in.

“Romania and Russia will be neighbors,” Romania Libera, a newspaper in Bucharest, observed on March 24. The article’s headline said the new maritime border could become a “potential source of conflict.”

Many nations have challenged Russia’s seizing of Crimea and thus the legality of its Black and Azov Sea claims. But the Romanian newspaper quoted analysts as judging that the other countries bordering the Black Sea — Georgia, Turkey, Bulgaria and Romania — would tacitly recognize the annexation “in order to avoid an open conflict.”

Most immediately, analysts say, Russia’s seizing may alter the route along which the South Stream pipeline would be built, saving Russia money, time and engineering challenges. The planned pipeline, meant to run through the deepest parts of the Black Sea, is to pump Russian gas to Europe.

Originally, to avoid Ukraine’s maritime zone, Russia drew the route for the costly pipeline in a circuitous jog southward through Turkey’s waters. But now it can take a far more direct path through its newly acquired Black Sea territory, if the project moves forward. The Ukraine crisis has thrown its future into doubt.

As for oil extraction in the newly claimed maritime zones, companies say their old deals with Ukraine are in limbo, and analysts say new contracts are unlikely to be signed anytime soon, given the continuing turmoil in the region and the United States’ efforts to ratchet up pressure on Russia.

“There are huge issues at stake,” noted Dr. Saivetz of M.I.T. “I can’t see them jumping into new deals right now.”

The United States is using its wherewithal to block Russian moves in the maritime zones. Last month, it imposed trade restrictions on Chernomorneftegaz, the breakaway Crimean arm of Ukraine’s national gas company.

Eric L. Hirschhorn, the United States under secretary of commerce for industry and security, said sanctions against the Crimean business would send “a strong message” of condemnation for Russia’s “incursion into Ukraine and expropriation of Ukrainian assets.”

Alexandra Odynova contributed reporting from Moscow.

Trump and Putin: The Prospering of Treason

‘Cui bono’ is a Latin phrase meaning ‘who benefits?’

In the matter of the accusations at a high level that President Trump has worked, does work, for the Russians, the application of this phrase is quite important.

• Who benefits from Trump’s economically restrictive tariffs?
• Who benefits from Trump’s undeclared war on Latin Americans?
• Who benefits from Trump’s harassment of China?
• Who benefits from Trump’s divisive attacks on sections of the American public such as the black community and the latino?
• Who benefits from Trump’s very ill-advised and illogical actions in the Middle East?

American interests, economic and social?

No, they not only do not benefit but they are seriously injured and impaired.

Who, then, benefits from these actions?

Simple logic and an application of Occam ’s Razor show with great clarity that only one entity benefits from Trumps belligerent actions and that is Vladimir Putin’s Russia.

The recent allegations that Trump worked for the Russians; had been gotten at by them earlier on is the only clear and logical answer to the question ‘cui bono.’

And for the leader of a country to deliberately work against the interests of his country for another is an act of treason and should be treated accordingly.

 

The Fintech debt trap 

Online lenders are preying on desperate borrowers and could trigger a new consumer financial crisis

August 30, 2020

by Alyssa Katz

The Intercept

The economic cataclysm brought on by the coronavirus caught American consumers in an extremely precarious position — one that was evident well before more than 50 million people filed for unemployment. By the end of last year, Americans had racked up nearly $4.2 trillion in consumer debt, not including mortgage debt — a record high. The greatest contributor to this surge was not credit card spending or student debt or auto loans, but something newer and, for many borrowers, even riskier: high-interest personal loans, increasingly offered by online financial technology companies known as “fintechs.”

These fintech firms have eclipsed banks and other traditional credit suppliers to become the nation’s No. 1 source of personal loans — the kind of loans people take out when they need extra cash to stay afloat, or when they have already amassed large amounts of debt and are looking to refinance. At the end of 2019, an unprecedented 20.8 million Americans owed money on at least one personal loan — more than one-third of which came from a fintech company.

This surge in fintech lending may have dire consequences for American consumers. Just as financial engineering by Wall Street banks fueled unsustainable consumer borrowing in the 2000s, online fintech companies’ quest to squeeze more debt out of borrowers through loans signed via a few clicks on screens has helped set the stage for a new consumer financial crisis today, an investigation by The Intercept and Type Investigations reveals.

Such borrowing might provide short-term relief to some Americans. And, in light of the current crisis, some fintech firms are working with borrowers to defer payments temporarily. But ultimately, the surge of fintech lending in recent years will likely result in a massive wave of loan defaults over the coming months, as borrowers burn through enhanced unemployment benefits, which have been reduced since the end of July, and the stimulus payments that the federal government began sending out in April. The resulting spike in defaults will be catastrophic for consumer credit.

“The significant GDP decline and unemployment spike in 2020 will pressure borrowers’ income levels and ability to make loan payments,” analysts at Fitch Ratings warned in May. Online fintech loans may be the first to go unpaid, as consumers prioritize keeping up with payments on their most essential possessions, such as homes and cars.

Moreover, Trump administration banking officials have begun to deregulate the industry. Those rule changes are poised to vault already aggressive lending into overdrive, capitalizing on desperation.

In late May, the Office of the Comptroller of the Currency, which regulates federally chartered banks, finalized a rule that would supercharge the online lending industry by bowling over the state interest rate limits that currently protect consumers. In June, the Federal Deposit Insurance Corporation finalized an equivalent rule that would cover the state-chartered financial institutions that currently dominate the online lending industry.

The attorneys general of California, New York, and Illinois have sued the OCC, contending that its rule violates federal banking law and other statutes, “and would facilitate predatory lending.” If those rules stand, borrowers in many states will face even higher interest rates than they do today, with state regulators powerless to stop them. A second lawsuit targets the FDIC rule.

The OCC is now taking comments on a separate proposed rule that declares a national bank the “true lender” in any partnership, further adding to fintechs’ ability to sidestep state banking regulations.

The mass unemployment brought on by the coronavirus, which has heightened uncertainty about who will be able to pay the loans back, has made investors who fund these loans skittish about pouring more money into the fintech industry, analysts say.

But once the pandemic eases and the economy improves, the new rules mean that the fintech industry — particularly the companies with the largest cash reserves, which are best positioned to weather the current crisis — will be poised for a major comeback. Even now, companies with cash reserves are pressing ahead with new loans, using invasive technologies to scrutinize borrowers’ bank accounts and other assets.

Many fintech companies offer loans in four and five figures while charging interest rates that can range up to 25 percent, 30 percent, or more per year — at a time when the cost of funds to bankers remains at near-historic lows. Some fintechs charge annual interest rates between 160 and 299 percent, in payday lender territory. But the fintech industry is operating at a scale that rivals the storefront payday lending industry.

Their expansion has been driven by firms that position themselves as consumer-friendlier alternatives, with names such as Best Egg, Prosper Marketplace, LendingClub, Avant, SoFi, and Upstart, which lend larger sums of money: often $15,000 or more, to be paid back over three or five years.

These companies are backed by pools of investors that include funds managed by George Soros’s wealth management fund and Goldman Sachs.

Fintechs market themselves as helping struggling Americans by offering cash more quickly than banks or other traditional institutions. And, indeed, for some people, these loans can be a godsend: providing them a financial cushion that allows them to ultimately dig themselves out of debt. Personal finance blogs and online chat boards teem with fintech loan success stories and advice for those struggling to bring their debt balances down and their credit scores up.

On the whole, however, the high-interest loans offered by fintech companies leave borrowers even worse off than before: drowning in an ever-rising sea of debt, with sizable numbers of borrowers unable to keep up with bills. Researchers have found that even before the coronavirus crisis, fintech borrowers were prone to fall behind on their debt payments.

So far, fintech companies have been constrained in many parts of the country by state interest rate limits that protect consumers from excessively costly loans. While fintechs are typically new to the banking industry, seeking fertile ground for profitable business disruption, they rely on old-school, state-chartered bank partners to actually issue the loans.

With the Trump administration mobilizing to deregulate those banks, however, borrowers will be at increased risk.

Members of both the Obama and Trump administrations have also pushed for a federal fintech charter that would allow fintech companies to sidestep state regulators, on the premise that it would help improve consumers’ access to credit. Raj Date, a Prosper Marketplace board member and the founding deputy director of the Consumer Financial Protection Bureau, sees fintech loans as “streamlining distribution into people’s lives” — a convenience for consumers in the era of Uber and Airbnb. “It’s about making the look and feel in financial services as easy as every other thing in your life,” he said in an interview.

In their quest to sign up new borrowers, however, fintechs are pushing the limits of what consumers can actually pay back. The parallels to predatory subprime mortgage lending are too close to ignore, said Diane Standaert, director of the Hope Policy Institute, a consumer advocacy group, and former executive vice president of the Center for Responsible Lending: “It’s like we’re repeating history.”

Preying on Desperate Borrowers

Finding customers whose finances have already spun out of control is a key to the fintech business model. Fintech companies decide what interest rates to charge by analyzing the risk profiles of prospective borrowers. Some base their calculations largely on a borrower’s FICO score. Others use custom algorithms. The higher the risk, the higher the interest rate.

“Part and parcel of the thinking [was] the customer we wanted to serve,” said Jeffrey Meiler, the founder and CEO of Best Egg, on a podcast for fintech investors. “When we really analyzed who we were going to be working with, who we were going to be helping here, it was typically a consumer who is 46 years old, is an individual that has liabilities that exceed assets, and they’re carrying typically $15,000-plus in credit card debt. And they’re looking to make a change.”

In Cleveland, Ohio, Kenneth Gibson fit that description. In the mid-2000s, he opened a restaurant and nightclub down the road from a strip mall in Cleveland Heights. Business was good. But in the winter of 2014, the movie theater in the strip mall closed, along with the nearby Walmart, leaving the area largely desolate during a rough winter. Business at the nightclub fell precipitously, Gibson recalled.

Gibson, now 63, was determined to keep the business going. He ran up tabs on multiple credit cards. But the business still wasn’t making enough money for him to pay back the debts that were piling up or to carry out the renovations he wanted to make on a new location in nearby Shaker Heights. He needed another source of funds.

In the summer of 2016, Gibson’s son suggested that he try getting a loan from Best Egg. It was simple for Gibson to apply online. Initially, he said, Best Egg turned him down. An agent got back to him a few weeks later, however, to discuss some adjustments to Gibson’s application, Gibson said. Once the updated application went through, $17,576.85 appeared in his bank account: the result of an $18,500 loan, minus a 5 percent cut for the lender.

That lender, the loan papers spelled out, was not Best Egg, nor its Delaware-based parent company Marlette Funding. The money actually came from a New Jersey financial institution called Cross River Bank. That meant Gibson’s loan would be subject to New Jersey’s interest rate, not Ohio’s.

Not that Gibson was paying attention to the details. “I don’t even know the amount they gave me,” he said. “I was scrambling. That wasn’t enough to do what I needed to do, so I got other loans, from credit cards or something, to upgrade the business.”

The annual interest rate on Gibson’s loan from Best Egg was a steep 27.25 percent, which vastly exceeded Ohio’s 8 percent annual interest rate limit. With broad exceptions, including payday lending, charging higher interest is barred as usury. But Best Egg and other fintech companies leapfrog over state interest rate caps via a legal springboard that allows lenders from elsewhere in the country to rely on their home state laws — and New Jersey allows interest of up to 30 percent for consumers.

Other online lenders charge even more to some borrowers by piggybacking on Utah banks with a special charter that licenses them to charge interest without any maximum at all. Utah’s WebBank supplies loans for Prosper, Avant, and other mainstream fintech lenders.

According to the terms of his loan, Gibson was required to make monthly payments of $567.67 for 60 months. For five months, he managed to stay current on his payments.

Ultimately, though, the loan from Best Egg didn’t provide a path to financial security. Instead, it dragged him even deeper into distress as his business and health took a turn for the worse.

Marlette Funding and Cross River Bank did not respond to questions about Gibson’s loan.

Gibson is in good company. Even before the pandemic, as much as $1 in every $10 borrowed from Best Egg could ultimately go unpaid, analysts at Kroll Bond Rating Agency estimated. And Best Egg performed better than peers like Avant, which as of early this year was projected to see as much as $1 in every $5 in certain pools go south.

In mid-July, KBRA, the leading ratings agency for the online personal loan industry, announced ratings watches with the potential for future downgrading on $5.6 billion in securities, noting that “uncertainties remain as to how borrowers will perform after the extra $600 weekly unemployment benefit expires at the end of July, other consumer debt products exit their deferral periods, and if the unemployment rate will remain elevated or increase due to continued economic pressure caused by efforts to contain the spread of COVID-19.”

In mid-June, KBRA found that about 10 percent of Best Egg borrowers had asked for payment extensions and another 6 percent in some loan pools were at least a month behind on their payments despite government coronavirus financial aid programs.

And in their August 2020 report on a Best Egg loan pool, KBRA’s analysts acknowledged that high-interest, high-risk loans in the mix could be perceived as “predatory lending” and lead to a backlash.

“These customers may have low income, limited financial means and a negative or limited credit history,” says a section headed “Perception of the Subprime Lending Market.” “Based on one’s view of this sector, it may be interpreted that these lenders are providing credit to an underserved demographic or conversely that they are engaging in predatory lending. This perception could cause lenders and capital providers to exit this market in an economic downturn or if social acceptance is negative.”

A decade after the financial crisis, overleveraged Americans once again stand to lose all that they have.

“Like a fool, I borrowed all that money and just couldn’t catch up,” Gibson said.

The Hamster Wheel

For most lending institutions, having so many borrowers default on their loans would be unsustainable. Indeed, in 2017, investors including George Soros supplied a financial lifeline of up to $5 billion to Prosper Marketplace, after a surge of borrower defaults and balking investors had the fintech firm facing a threat to its survival. Still, Prosper continues to operate in the red: It lost $39.9 million in 2018, despite issuing $2.8 billion in loans that year, and another $13.7 million in 2019.

But, at least before the pandemic struck, investors continued to buy the securities packed with fintech loans, based on analyst projections that the high interest paid will more than offset the hefty share of risky loans that borrowers will be unable to pay off.

Early this year, KBRA reported that privately held Marlette, owner of Best Egg, is profitable.

The need to turn a profit puts pressure on fintech companies to issue even more loans, in order to generate more revenue from interest and fees for issuing the debt. (Borrowers often pay 5 percent or more on top of the principal and interest just to close the deal.) Last year, Best Egg lowered the minimum credit score that it required borrowers to have — from 640 to 620 — deeper into subprime territory, widening its potential customer pool but also opening itself to borrowers who may have an even harder time repaying their loans.

Todd H. Baker, a former banker and now senior fellow at the Richard Paul Richman Center for Business, Law, and Public Policy at Columbia Business and Law Schools, calls the online lending business dynamic “the hamster wheel.”

“They don’t make any money unless they sell the next loan,” he said. “That leads to enormous incentives to do things that you shouldn’t.”

To keep the cash flowing in once borrowers stop paying, fintech investors sell off bad loans to other investors who specialize in collecting whatever they can. And so it was that a Minnesota company called Absolute Resolutions Investments purchased Kenneth Gibson’s loan in June 2017, along with a heap of other rotten Best Egg debts.

IRS, SEC, and New York State records show a fund affiliated with George Soros’s investment management firm has been an investor in Best Egg loans as well as Prosper Marketplace. One of the 11 investment funds that offloaded the pool of Best Egg loans to Absolute Resolutions was QPB Holdings LTD, which is tied to Soros Fund Management and the Fund for Policy Reform, a financial engine behind Soros’s global projects advocating for human rights, democracy, and progressive politics.

Having purchased the rights to the loans from the Soros funds and other investors, Absolute Resolutions sued Gibson in Cuyahoga County court in early 2018, seeking more than $20,000 once interest and penalties were piled on — more than Gibson had borrowed in the first place.

Soros Fund Management has since established a policy precluding investments in products that do not provide a path to financial resilience.

Gibson had no way to pay that money back. The Cleveland Heights City Council declared his nightclub a nuisance in 2016, after police were repeatedly called to the parking lot to respond to disturbances. That was the end for the business.

Unable to repay the loan, and with their finances hurting even more following a medical crisis, Gibson and his wife declared bankruptcy in October 2018.

Yet Best Egg keeps on rolling. As platforms that simply serve as intermediaries between borrowers, banks, and investors, fintechs aren’t set back by borrowers’ failure to pay — as long as someone keeps buying blocks of the securities. Last year, Marlette packaged $1.3 billion worth of consumer loans for sale.

“They may be able to make the loan work for the company, even if [borrowers] ultimately default,” said Lauren Saunders, associate director at the National Consumer Law Center.

A Recipe for Consumer Suffering

In Washington, fintech fanaticism has been a bipartisan affair. It was a banking regulator appointed by Barack Obama, Thomas Curry, who in the final weeks of that administration moved to allow the Office of the Comptroller of the Currency to charter fintech institutions, authorizing them to issue loans without partnering with traditional state-based banks. A federal fintech charter — a license for banks to do business under the oversight of federal regulators — would allow the companies to sidestep state regulators and state interest rate caps.

If fintechs have assurances they can charge higher interest rates, without concern that state regulators or courts might clamp down, the industry and its supporters contend, many consumers who previously couldn’t qualify for a loan would be able to get one.

In a speech at Georgetown University in December 2016, Curry raved about how fintechs had “great potential to expand financial inclusion, reach unbanked and underserved populations, make products and services safer and more efficient, and accelerate their delivery.”

A fintech charter also could help address a problem that has dogged online lenders since 2015: a federal appeals court decision that found that only the bank originating a loan could use its home state’s higher permitted interest rate in a state with lower caps, and could not transfer that rate to another company, such as a debt collection agency. That not only deterred lenders from making high-interest loans in New York, Connecticut, and Vermont but raised the possibility of the products getting blocked in other states too. A federal charter would allow fintechs to charge essentially whatever interest rates they wanted, anywhere in the country.

Donald Trump’s appointee as comptroller, Joseph Otting, took up the crusade to create a federal fintech charter and put out a call for applications in the summer of 2018. Otting had served as CEO of OneWest Bank while Treasury Secretary Steve Mnuchin was the bank’s chair, and there presided over aggressive foreclosures of mortgages relying on robosigned documents.

Otting resigned from the post in May 2020, handing the reins to another OneWest colleague, Brian Brooks, who in a statement upon taking office as acting comptroller made clear his intentions to carry on Otting’s work to deregulate fintech.

Dozens of firms expressed interest in a federal fintech charter. Speaking at the Antonin Scalia Law School at George Mason University in March 2019, Otting said his office was in talks with “25 to 50 entities” that “feel because they operate across multiple states that having a national banking charter is critical to their business plan.”

Earlier that day, his calendar shows, he made an appearance at the annual meeting of the Marketplace Lending Association, a trade group that represents fintech companies. He had already met with the Online Lenders Alliance, an association representing fintech firms specializing in high-interest loans — just as the Consumer Financial Protection Bureau was readying to roll back regulations requiring payday lenders to ensure that their borrowers have the ability to repay their loans. That change took effect in July.

Otting’s quest for a fintech charter suffered a setback in October, however, when a Manhattan federal court ruled against the Trump administration in a lawsuit filed by a state banking regulator. Judge Victor Marrero had found that the comptroller has the power only to license financial institutions that take customer deposits — a definition Congress set long ago with the National Bank Act. Because fintechs lend money that does not come from customer deposits, they don’t fall under the comptroller’s purview, Marrero ruled. In December, the Trump administration appealed the decision to the Second Circuit.

The lawsuit that led to Marrero’s ruling was filed by Maria Vullo, who until last year was superintendent of the New York State Department of Financial Services, which oversees hundreds of state-chartered financial institutions.

In an interview in her office a short stroll from Wall Street during her last weeks on the job, Vullo said she didn’t see an alternative to challenging the fintech industry’s push for a national charter.

“Combined with that attack really on the state regulatory system was the great concern of consumer groups with respect to payday lending and predatory practices,” she said. “Knowing what happened during the financial crisis.”

While serving as deputy attorney general of economic justice in 2010, when Andrew Cuomo served as New York state attorney general, Vullo had seen firsthand the wreckage left by Wall Street banks. A federal fintech charter, she had warned Curry in a January 2017 letter, would “imperil crucially important state-based consumer protection laws,” “create institutions that are too big to fail,” and “increase the risks presented by nonbank entities.”

Vullo remained concerned, even though Congress took steps to prevent a recurrence of the crisis driven by consumer debt and speculative investment. One provision of the 2010 Dodd-Frank Act requires banks that partner with investors on securitizations, including those associated with fintechs, to hold at least 5 percent of the product on their own books, aiming to discourage excessive risk-taking.

However, given the fintech industry’s complex web of online lending platforms, banks, securities pools, and investors, Vullo still sees no substitute for direct oversight by regulators.

“A lot of these nondepository institutions just have investors that are backing them, and I don’t know whether their credit decisions and their underwriting decisions and everything else are valid,” Vullo said. “They’re often selling these things in buckets and securitizing them — and, well, we’ve seen that before.”

And, as was the case during the financial crisis, if these lending institutions run into trouble, it’s consumers who stand to suffer most.

“These companies could be fly-by-night companies that then don’t survive, go away, and they’ve already sold the loans to people who are left holding them,” Vullo said. “And they are going after consumers for repayment of the loan, and there’s nobody to go to.”

Evading Usury Laws

The fintech industry has worked hard to stymie regulation at both the state and federal level. In 2017, Vullo and Governor Cuomo asked the state legislature for the power to license and supervise fintech companies doing business in the state, and to place companies issuing consumer loans under $25,000 under the oversight of the Department of Financial Services.

In response, the fintech industry mobilized. State Assemblymember Phillip Goldfeder, a Democrat from Queens and former operative for New York Sen. Chuck Schumer, declined to seek reelection in 2016. Instead, he returned to a job he’d performed even while serving as a New York state lawmaker, according to his financial disclosures: heading government affairs for Cross River Bank, a major player in issuing online loans.

Though Goldfeder waited out the 2017 legislative session before officially signing on with the company as a lobbyist, his 26-year-old chief of staff joined Cross River in late 2016 while the assemblymember was still serving in Albany and is listed on early 2017 lobbying filings as a Cross River contact.

In 2017, Cross River also spent $65,769 on a lobbyist from Mercury Public Affairs who previously worked for Cuomo when he was U.S. secretary of Housing and Urban Development, and the Marketplace Lending Association paid another lobbying firm $30,000, according to records from New York’s Joint Commission on Public Ethics.

Cross River Bank did not respond to a request for comment.

Vullo’s measure ended up going nowhere. The bill that Cuomo eventually signed at the end of 2017 merely called for the creation of a task force to examine the issue of online lending. That task force never formed. And despite a sea-change election in 2018 that put Democrats fully in charge in Albany, no online consumer lending bill has emerged from the state legislature.

Vullo is now a consultant advising firms on financial regulation and is “regulator in residence” at a financial innovation think tank affiliated with the Partnership for New York City business group.

Lobbyists for the fintech industry also went to work at the federal level, pushing a bill that, despite the 2015 federal court opinion, would free fintech companies to lend in any state, at whatever interest rate borrowers will accept, and pass on bad loans to debt scavengers for collection.

That was also a reaction to efforts like those in New York and other states to place limits on the activities of fintech companies. In 2017, Colorado’s administrator of the state credit code sued Marlette and another fintech lender, Avant, arguing that these companies — not their respective partners Cross River and WebBank — were the actual lenders of record. That determination would make Best Egg and Avant loans subject to Colorado’s restrictions on the interest rates, finance charges, and late fees that can be charged to borrowers. Colorado law limits interest to as low as 15 percent, depending on the size of the loan.

In June, a state court judge sided with Colorado and against Marlette, finding that banks can’t hand other states’ interest rates to their business partners. Under a settlement reached in August, Marlette and Cross River agreed to terms increasing consumer protections, including a process for fielding complaints.

Cross River Bank spent more than $450,000 lobbying Congress and federal regulators between 2016 and 2018, while the deregulation bill was brewing in the House, according to federal lobbying disclosures. In addition, the Marketplace Lending Association spent more than $250,000 on lobbyists, including former congressional staffers from both sides of the aisle.

That action had bipartisan support. Democratic Rep. Gregory Meeks of New York, a longtime friend of the banking industry, co-sponsored the original bill with Republican Rep. Patrick McHenry of North Carolina. And progressive Democratic Rep. Maxine Waters, now chair of the House Financial Services Committee, introduced an amendment in committee that would allow the fintech state interest rate shell game to continue so long as rates go no higher than 36 percent — an interest rate that would violate the law in New York, Connecticut, Minnesota, and other states.

After Democrats regained control of the House in 2019, Trump’s banking regulators again jumped into action. In November, the OCC and FDIC proposed rules that together would allow debt agencies to collect on fintech loans even when the original bank’s interest rate is higher than that permitted in the borrower’s state. Two dozen state attorneys general declared their opposition to the FDIC version of the rule, including the three who in July sued the Office of the Comptroller.

“The FDIC simply lacks authority to undertake the Proposed Rule,” wrote Georgetown University law professor Adam Levitin, an expert on the regulation of consumer credit — calling it bad policy as well as illegal, “contrary to the FDIC’s duties to ensure the safety and soundness of State Banks and consumer protection from predatory lending.”

Levitin added in his comment on the proposed rule: “[B]anks’ involvement in the loans is just window dressing for the purpose of evading usury laws.”

The National Consumer Law Center, Americans for Financial Reform Education Fund, the NAACP, Public Citizen, and other groups concurred regarding the OCC version of the rule, warning of a door opening to wider predatory lending. “The OCC’s proposal plays right into the hands of high-cost lenders and their unceasing efforts to evade interest rate and other consumer protection laws,” the groups said in a joint comment.

Noting that the median state interest rate cap on a five-year, $10,000 loan is 25 percent APR, they added: “Efforts to evade state usury caps are inappropriate even if the rates do not reach the triple digits.”

No Protection

Even now, though, Americans who take out loans through fintech companies have few legal protections. Loan terms generally prohibit borrowers from taking court action against a fintech lender directly. Where there’s a dispute, loan agreements typically require borrowers to turn to arbitration proceedings.

Consumer attorneys have begun to sue the debt collectors that pick up the shards failed online loans leave behind.

In California, for example, lawyers are suing Velocity Investments in federal court on behalf of multiple clients, all Prosper Marketplace borrowers. They allege that Prosper violated California law, which requires two witnesses or a notary to grant power of attorney, when it issued the loan, and that Velocity’s attempts to collect those debts were therefore invalid. (The law firm working on behalf of Velocity Investments claims that Utah law applies; before May 2016, Utah did not have any witness or notary requirements for signing over power of attorney.)

Bankruptcy lawyers who try to pin down lenders to work out a settlement often find themselves flummoxed as well. “It’s almost impossible to find a mailing address for these people, because their business is all online,” said Mona Rubinstein, an Ohio attorney who represents clients fending off creditors.

One of her clients filed for bankruptcy in 2018 after taking out loans from five fintech lenders in succession, beginning in 2013: LendingClub, Best Egg, SoFi, Avant, and SunUp Financial, leaving substantial balances unpaid to all of them. In her bankruptcy papers, she reported possessing $50 in cash and $30 in her bank accounts.

This is familiar territory for the woman, who reported earning about $58,000 a year working in human resources and has declared bankruptcy twice before. When she last filed for Chapter 13 in 2005, she had $3,831 in debts outstanding to eight payday lenders and check cashers; another $11,300 to consumer finance companies, the analog predecessors to the fintech lenders; and another $17,672 to various credit card, retail, and medical creditors — owing $32,803 in all, not counting money she owed on her home.

That credit history didn’t stop fintech lenders from approving her loan requests, however. All told, she’d piled up $82,140 in debts to the fintechs — nearly triple the amount she’d previously owed more traditional lending firms.

Austin-based BorrowersFirst is yet another fintech lender this woman is indebted to, for $14,272. But her lawyer Rubinstein can forget about working out a deal with the lender, whose former chair, New York City-based investor Neil Wolfson, once promised it would rival Prosper and LendingClub in size. BorrowersFirst, despite $400 million in investment capital and a partnership with Cross River Bank, is in bankruptcy too.

By pushing consumers to the brink, in pursuit of market share and returns for investors, fintechs are also pushing the limits of sustainable lending. It’s a business model that’s profitable — so long as more Americans dig deeper into the debt hole and enough have money remaining in their bank accounts to fulfill automatic payments. But it courts calamity when the well runs dry.

This article was reported in partnership with Type Investigations.

 

The Encyclopedia of American Loons

 

Jim Meehan

 

Jim Meehan is a dangerous crank and conspiracy theorist – he has been caught promulgating the craziest fake news – heavily involved in the anti-vaccine movement. Now, Meehan is an MD. That, of course, doesn’t mean that he knows anything about research or rational or scientific assessment of evidence (Meehan demonstrably does not), but the distinction between MD and medical researcher is one not generally recognized by conspiracy theorists, who’ll take anything whatsoever that looks like it can be promoted as an “expert” or authority supporting their side of things. Meehan has no background or expertise in vaccination or immunology – he is actually an ophthalmologist by training – but he is into functional medicine, which is as ridiculous as quackery comes. Currently Meehan operates a “wellness” center in Oklahoma.

He also doesn’t have the faintest idea how the VAERS database works. Meehan has tried to argue that the HPV vaccine is confirmed to have caused 144 deaths (by 2013), because there are 144 reports of death associated with the HPV vaccine in the VAERS database. This is not how the database works (indeed). “It absolutely is evidence,” says Meehan. It isn’t evidence.

But he does know how to parrot standard anti-vaccine claims, and his rants have been relatively widely distributed on social media by people who do not know anything about vaccines or actually bother with the evidence either; most of them is a combination of the claim that infectious diseases aren’t dangerous, toxins gambits – admittedly effective on the chemically illiterate – and conspiracy mongering: the science behind vaccines is untrustworthy because scientists are uniformly corrupt and bought by Big Pharma, who would actually benefit vastly more from hospitalizations due to vaccine-preventable diseases than from vaccines, but like all good conspiracy theories this one requires that you don’t look too closely. There is a thorough takedown of his claims here. Meehan has also been caught supporting the debunked idea that physical trauma and child abuse are “vaccine injury”.

Diagnosis: Aggressive lunatic and unhinged conspiracy theorist. Stay far away.

 

 

William John Meegan

 

William John Meegan is a fundie, conspiracy theorist, astrologist and author, for instance of the book The Sistine Chapel: A Study in Celestial Cartography. “From the brilliant mind of researcher-author William John Meegan, The Sistine Chapel … is a highly mystical and contemplative inquiry into The Mysteries and Esoteric Teachings of the Catholic Church,” says the description on Meegan’s website, apparently written by himself. (We do wonder how calling your inquiry “mystical” would be a selling point; not that the intended audience is likely to notice.) Apparently it’s the third of a series, following The Secrets & the Mysteries of Genesis: Antiquity’s Hall of Records and The Conquest of Genesis: A Study in Universal Creation Mathematics, which we haven’t seen but sounds suspiciously like it might deploy some serious numerology – Meegan is heavily into what he calls “esoteric science”, which is as far removed from science as numerology and astrology, which, by the way, is what his esoteric science apparently is (gematria, to be precise), with a heavy sprinkle of sacred geometry.

Senseless babble comes no less sensible than that. Illuminating sample: “Each letter of the world’s sacred literature is symbolized and alphanumerically structured, which makes the interpretation of each word far more important than the sum of its letters;” one would think that the interpretations of words go beyond the sum of their letters in ordinary conversation (insofar as there is a difference between seeing a string of letters you understand and seeing one you don’t understand), but we nevertheless have our doubts that they do in the rants and ravings of William John Meegan.

Despite their contents, Meegan’s books seem to be marketed as non-fiction.

Diagnosis: Small fish, but fantastically weird, colorful and insane. Probably harmless.

 

 

 Susannah Meadows

 

Oh, the nonsense! Susannah Meadows is a journalist and author of The Other Side of Impossible, a book describing various people facing difficult illnesses but who ostensibly have found ways of beating the odds and get better on their own without the use of evidence-based techniques. The stories – which are compelling stories taken at face value by Meadows; no pesky, confounding, careful assessment of evidence here – include one about a boy with severe food allergies who undergoes an unconventional therapy and is afterwards eating everything; one about a physician with MS who, using a combination of treatments she has figured out herself, is able to leave the wheelchair and ride a bike again (that physician would be woo legend Terry Wahls, no less; some of the holes in and problems with her story are described here); and one about child diagnosed with ADHD who refuses to take medication and instead improves both his own life and the lives of his family by changing in diet. Other families take on rheumatoid arthritis, intractable epilepsy, and autistic behaviors. Of course, few of the suggested means will actually help with the conditions they are described as helping (though some of them are, unbeknownst to Meadows, actually standard mainstream pharmaceutical remedies given different names!), and the book is aimed at suffering people in difficult situations (or people in positions of power over them) to make them forego treatments that actually work, adopt the woo, and subsequently take the blame themselves when the religiously motivated “natural” means for improvement fail to work. There are good discussions of Meadows and her rhetorical tricks, including her striking but effective appeals to chemophobia, here and here.

The book endorses a variety of quack treatments, including autism biomed quackery. And based on her – I hesitate to even call them – anecdotes, Meadows concludes that there is “at least three important influences on well-being that have yet to receive their just due in understanding what might cause or aggravate certain intractable medical disorders.” Nevermind that evidence contradicts her conclusions: science bases its conclusions on facts, but Meadows has instincts and beautifully crafted stories. As for the three influences, “[o]ne is a characteristic called “leaky gut,” essentially tiny holes in the intestinal walls that allow proteins to reach the bloodstream where they can trigger a vicious immune attack on healthy tissues,” a mythical condition much touted on and familiar from various conspiracy websites going all the way back to anti-vaccine high priest Andrew Wakefield himself, no less; “[a]nother is an imbalance of microbes in the gut and how communication between the brain and the gut can adversely affect behavior and emotional stability,” where “balance”, importantly, is used in the Medieval-medical “balance-of-humors/life-energi/chi” sense (the claim, of course, is flamboyantly idiotic, and “microbiome” has recently become the new “quantum” in quackery); “[a] third is the still underappreciated interaction of mind and body, especially the effect that anxiety and fear can have on the body’s response to otherwise harmless substances,” which of course is neither underappreciated nor particularly significant for most of the conditions in question but which is – importantly – the key to be able to blame the victims when they fail to experience improvements, which will certainly be necessary given the stupidity of the measures Meadows recommends.

The book grew out of Meadows’ own personal experience with her young son, who unexpectedly (according to her!; it really isn’t that uncommon) recovered from juvenile idiopathic arthritis. Apparently, by using “a combination of traditional and complementary medicine they beat the disease,” and therefore the quackery – in this Meadows relied on self-styled healer Amy Thieringer – must be at least partially responsible for the positive results. Some of Meadows’s other stories are apparently also Thieringer “success stories” – with no independent verification, of course: you trust your self-styled, homeopathy-pushing healer, otherwise it won’t work! Besides, Meadows paid her money, and she wouldn’t have invested in the treatment if it didn’t work, would she?

The book was well received by others who have little understanding or time for assessing evidence and facts, such as New York Times’s Jane Brody, who wrote a credulous article on Meadows and her claims. Both that article and the book are discussed here, and here. Brody, by the way, is also the author of The New York Times Guide to Alternative Health.

Diagnosis: Apparently Meadows is a journalist. Her inability to distinguish a compelling narrative from a fact-based one should therefore scare you. A disgrace to her profession, but since narratives like hers are so much more compelling to those with little knowledge of how to actually assess stories for accuracy and evidence (or interest in doing so), she is also genuinely dangerous.

 

 Dwight McKissic

 

William Dwight McKissic, Sr. is the founder and current senior pastor of the charismatic Cornerstone Baptist Church in Arlington, Texas, and a leader of the Bapticostal movement (rejection of cessationism, for instance; he claims to be speaking in tongues and using a private prayer language). McKissic is first and foremostly an evil man, but he is also a serious loon.

McKissic doesn’t like gay people, whom he thinks must be trying to recruit children to gayhood because they can’t have their own gay children, because he’s moronic. When Obama expressed his acceptance of gay marriage, McKissic responded that “Obama has betrayed the Bible and the Black Church with his endorsement of same-sex marriage. The Bible is crystal clear on this subject, and the Black Church strongly opposes same-sex marriage.” Therefore “[h]is endorsement is an inadvertent [?] attack on the Christian Faith,” so “America is now a candidate for the same judgment received by Sodom and Gomorrah.” Indeed, “the moral impact of this day and decision is equal to the military impact of AL-Queda [sic] when they attacked the Twin Towers on 911,” no less – people like McKissic are not associated with the qualities subtlety, sense and being reasonable. And of course: unless gay marriage is vehemently opposed, “our children and grandchildren will pay a far greater price in suffering from a governmental sanction of same-sex marriage than we would have under segregation.” In short, “[t]oday’s announcement is a moral earthquake equivalent to a tsunami or hurricane that will have far more devastating results than Katrina.” Hurricane Katrina, by the way, was also just God attempting to “purify the nation”; “New Orleans flaunts sin in a way that no other places do. They call it the Big Easy. There are 10 abortion clinics in Louisiana; five of those are in New Orleans. They have a Southern Decadence parade every year and they call it gay pride. When you study Scripture, it’s not out of the boundaries of God to punish a nation for sin and because of sin.”

One of the reasons gay marriage must be banned, is that “parents are now going to have an extremely difficult time teaching their children that marriage biblically and traditionally is between a man and a woman.” It doesn’t seem that hard to us, but one suspects McKissic would have a hard time explaining anything in a remotely reasonable manner to anyone anyways. Indeed, fighting the gays is just like the Civil Rights Movement – and it is deeply offensive for the gay right movement to invoke that movement (to “compare their sin to my skin,” as McKissic puts it); indeed, it’s not only offensive, but “tantamount to high crime and treason”. The civil rights movement, according to McKissic, speaking at the Values Voters Summit, was a matter of moral authority, truth, righteousness and the Holy Spirit, whereas the gay rights movement is inspired “from the pit of hell itself,” and has a “satanic anoinment.” So there’s that.

Meanwhile, people like Michael Sam, the University of Missouri defensive end who came out of the closet, are merely tools for the Antichrist. Concerned that the NFL draft pick will “become the face of the ‘gay rights’ movement that takes us down the road to Sodom and Gomorrah at a record setting pace,” McKissic has warned us that we are about to bring about the coming of the Antichrist, who he thinks will probably be gay. McKissic therefore wished to pass a resolution at the Southern Baptist Convention annual meeting denouncing the media for their positive coverage of Michael Sam and Obama.

In fairness, McKissic has apparently spoken out in favor of taking environmental issues seriously, and is surely no fan of the alt right.

Diagnosis: A hateful, horrible and apparently deeply confused maniac. But he is surely influential, and seems to wield quite a bit of authority among certain fundamentalist hate groups.