Quotulatiousness

November 1, 2011

Long Island Rail Road: “The scandal isn’t what’s illegal — but what’s legal

Filed under: Law, Politics, Railways, USA — Tags: , , , , — Nicholas @ 12:37

Nicole Gelinas points out that the Long Island Rail Road (LIRR) pension scam is only part of the problem:

Last week, the feds indicted 11 Long Island Rail Road retirees and their alleged associates in a “massive fraud scheme” to steal a billion dollars through fake disability claims. But the bigger outrage is that for decades the LIRR has held state taxpayers and riders hostage — thanks to outdated Washington labor laws.

The first inkling of the scandal came in 2008, when a press report noted that nearly every LIRR worker retired early, getting an MTA pension and a federal benefit. Looking into the anomaly, federal prosecutors unearthed evidence that at least two doctors and other “facilitators” had for years signed off on fake injuries and ailments so that workers could take their pensions.

[. . .]

The state’s fear of an LIRR strike helps drive up the railroad’s costs. Last year, the Empire Center reported, the average LIRR worker pulled in $84,850 — not including benefits.

That’s more than anywhere at the MTA except headquarters — and 23 percent more than subway and bus workers make. Seven of the top 10 people who made more in overtime than they did in regular wages hailed from the LIRR — including one conductor who tripled his $75,390 salary. Plus, workers pay nothing for health benefits.

October 31, 2011

China’s increased output of scientific papers masks deeper problems

Filed under: China, Media, Science — Tags: , , , — Nicholas @ 12:01

Colby Cosh linked to an interesting press release from the Chinese Academy of Sciences, which shows a surge in published papers from China, but a significant drop in the rate at which those papers are cited:

Chinese researchers published more than 1.2 million papers from 2006 to 2010 — second only to the United States but well ahead of Britain, Germany and Japan, according to data recently published by Elsevier, a leading international scientific publisher and data provider. This figure represents a 14 percent increase over the period from 2005 to 2009.

The number of published academic papers in science and technology is often seen as a gauge of national scientific prowess.

But these impressive numbers mask an uncomfortable fact: most of these papers are of low quality or have little impact. Citation per article (CPA) measures the quality and impact of papers. China’s CPA is 1.47, the lowest figure among the top 20 publishing countries, according to Elsevier’s Scopus citation database.

China’s CPA dropped from 1.72 for the period from 2005 to 2009, and is now below emerging countries such as India and Brazil. Among papers lead-authored by Chinese researchers, most citations were by domestic peers and, in many cases, were self-citations.

Being published is very important for sharing discoveries and advancing the careers of the scientists, but it’s more important that those publications be read and referenced by other scientists. Self-citations are akin to self-published works: it doesn’t guarantee that the work is useless, but it increases the chances that it is.

Perhaps worse than merely useless publication is the culture of corruption that has grown up around the scientific community:

In China, the avid pursuit of publishing sometimes gives rise to scientific fraud. In the most high-profile case in recent years, two lecturers from central China’s Jinggangshan University were sacked in 2010 after a journal that published their work admitted 70 papers they wrote over two years had been falsified.

[. . .]

A study done by researchers at Wuhan University in 2010 says more than 100 million U.S. dollars changes hands in China every year for ghost-written academic papers. The market in buying and selling scientific papers has grown five-fold in the past three years.

The study says Chinese academics and students often buy and sell scientific papers to swell publication lists and many of the purported authors never write the papers they sign. Some master’s or doctoral students are making a living by churning out papers for others. Others mass-produce scientific papers in order to get monetary rewards from their institutions.

October 23, 2011

What to do when “Tech Support” calls you

Filed under: Humour, Law, Technology — Tags: , , — Nicholas @ 11:39

crshbndct recounts the heart-warming story of his recent call from “Tech Support”:

“Good Morning Sir, I am calling to inform you that you have serious issues with your pc and that we can help you fix them”

“Really? I just got it working today (had been having a nightmare of a time with video drivers)”

“Yes, Sir, but do not worry, we can help you to fix this problems”

(Realising its a scam, but willing to play along)

“Oh OK well that’s good. How are you going to do that?”

“Well Sir, Your computer runs a thing called Windows XP, which has many viruses and malware and rootkits and things like this which infect your master root on your CPU and slow it down and causes problems with your computer which can cost a lot to fix. We can help you fix this really cheaply”
“Really cheaply?!?! That sounds fantastic!! How do I do it?”

California Democrats in sudden financial crisis

Filed under: Law, Politics, USA — Tags: , , — Nicholas @ 11:18

No, I’m not talking about the plight of the state itself, but the plight of hundreds of individual Democratic candidates whose political campaign funds may have been drained by the state campaign treasurer:

Stunning accusations that a top California Democratic campaign treasurer looted the war chests of her big-name clients have left candidates across the state scrambling to raise more money as election season looms.

Kinde Durkee, who controlled the funds of roughly 400 candidates and groups, ranging from Senator Dianne Feinstein to local Democratic youth clubs, was arrested in September and charged with fraud.

While the extent of the losses isn’t yet clear, the coffers of dozens of Democratic politicians have been frozen, prompting the crippled campaigns to ask the California Fair Political Practices Commission to permit further donations from contributors who have already given the maximum.

Feinstein, seeking re-election in 2012, has been forced to start from “square one” to raise campaign money, said Bill Carrick, political strategist and consultant to the Senator.

But a commission official said it wasn’t that simple.

“It’s quite clear that we can’t just say ‘the contribution limit is set aside’,” California Fair Political Practices Commission chair Ann Ravel said, adding that the commission’s legal team was researching what options were permissible by law.

September 29, 2011

Greek tax evasion: not a new problem at all

Filed under: Bureaucracy, Economics, Europe, Government, Greece — Tags: , , — Nicholas @ 09:28

In a New York Times article from last year, Suzanne Daley reported the rather amazing statistic from Athens:

In the wealthy, northern suburbs of this city, where summer temperatures often hit the high 90s, just 324 residents checked the box on their tax returns admitting that they owned pools.

So tax investigators studied satellite photos of the area — a sprawling collection of expensive villas tucked behind tall gates — and came back with a decidedly different number: 16,974 pools.

That kind of wholesale lying about assets, and other eye-popping cases that are surfacing in the news media here, points to the staggering breadth of tax dodging that has long been a way of life here.

H/T to Araminta Wordsworth for the link.

September 23, 2011

Solyndra: “They doubled down, just like some chump who lost his stake at the Vegas blackjack tables”

Filed under: Economics, Government, Politics, Technology — Tags: , , — Nicholas @ 10:55

Megan McArdle tries to figure out how Solyndra managed to spend nearly a billion dollars in two years:

By my count, Since September 2009, they borrowed $535 million from us to get their second fab up and running, raised $219 million in a private equity offering, got $175 million from issuing convertible promissory notes after their IPO was pulled, received $75 million in the last-ditch round where the DOE allowed their seniority to be subordinated, and maybe got a loan from a different bank. By the time they filed bankruptcy in August, my understanding is that they were basically out of cash.

The Washington Post‘s rather scathing new account, full of employees saying that post-loan, Solyndra started spending money like it was about to be discontinued, says the new facility for which we loaned them all that money cost $344 million to build. So it seems that in the space of two years, Solyndra managed to spend $344 million building a factory and $660 million . . . doing what?

September 20, 2011

China’s local and regional governments may be sitting on massive hidden debts

Filed under: China, Economics, Government, Law — Tags: , , — Nicholas @ 12:13

As with the US or Canadian government’s debt, not all debt is held at the federal level. It may take some digging to discover what the actual debt levels might be, but it’s possible. In China, however, as local governments are forbidden to issue bonds or to borrow from banks, they’ve had to become extremely creative in finding ways to borrow money for their pet projects. Not just creative — at least in some cases — legally dubious:

About 85% of Liaoning province’s 184 financing companies defaulted on debt service payments in 2010 according to a report from the province’s Audit Office. The report also noted that 120 of these borrowers, de facto government agencies, operated at a loss last year.

Since 1994, provinces and lower-tier governments have not been permitted to issue bonds or borrow from banks. Despite the strict prohibition, their debt has skyrocketed as local officials incurred obligations through LGFVs, local government finance vehicles. The central government’s National Audit Office said these companies, at the end of last year, had taken on 10.7 trillion yuan of debt. No one, however, knows the true amount of LGFV indebtedness, and some have calculated the real amount to be more than double the official figure.

Why the disagreement as to the amount of debt? Local governments have gone out of their way to hide borrowings, perhaps in part because of their doubtful legality. As famed economic journalist Hu Shuli points out, new local officials sometimes do not know the extent of obligations left by their predecessors. There have been a number of stratagems employed, from the issuance of illegal government guarantees to the transfer of funds in roundabout routes.

H/T to Jon, my former virtual landlord, for the link.

September 18, 2011

Solyndra: not just crony capitalism as usual

Filed under: Environment, Government, Law, Technology — Tags: , , , — Nicholas @ 12:28

Andrew C. McCarthy shows the difference between the collapse of Solyndra and ordinary crony capitalist use of government funds:

Homing in on one of the several shocking aspects of the Solyndra scandal, lawmakers noted that, a few months before the “clean energy” enterprise went belly-up last week, the Obama Energy Department signed off on a sweetheart deal. In the event of bankruptcy — the destination to which it was screamingly obvious Solyndra was headed despite the president’s injection of $535 million in federal loans — the cozily connected private investors would be given priority over American taxpayers. In other words, when the busted company’s assets were sold off, Obama pals would recoup some of their losses, while you would be left holding the half-billion-dollar bag.

As Andrew Stiles reported here at NRO, Republicans on the Oversight and Investigations subcommittee say this arrangement ran afoul of the Energy Policy Act of 2005. This law — compassionate conservatism in green bunting — is a monstrosity, under which Leviathan, which can’t run a post office, uses your money to pick winners and losers in the economy’s energy sector. The idea is cockamamie, but Congress did at least write in a mandate that taxpayers who fund these “investments” must be prioritized over other stakeholders. The idea is to prevent cronies from pushing ahead of the public if things go awry — as they are wont to do when pols fancy themselves venture capitalists.

[. . .]

The criminal law, by contrast, is not content to assume the good faith of government officials. It targets anyone — from low-level swindlers to top elective officeholders — who attempts to influence the issuance of government loans by making false statements; who engages in schemes to defraud the United States; or who conspires “to defraud the United States, or any agency thereof, in any manner or for any purpose.” The penalties are steep: Fraud in connection with government loans, for example, can be punished by up to 30 years in the slammer.

September 1, 2011

“It is rather amazing how fast Solyndra wasted over half a billion US taxpayer dollars”

Filed under: Environment, Government, Technology, USA — Tags: , , , , — Nicholas @ 09:34

Mike “Mish” Shedlock looks at the breakneck pace of loss at Solyndra, a solar power company that just went bankrupt:

The federal government should get out of the business of picking technology and “green” winners. Government backing of alternate energy companies has been nothing short of disastrous.

A solar energy firm touted by the administration in 2010 as a as a “gleaming example of green technology” today announced bankruptcy. 1,100+ employees will be fired.

[. . .]

The “seen” math is simple enough. $535 million divided by 1,100 is roughly $486,363 per job saved, now job lost.

That is just the “seen” consequence. The “unseen” consequences are not directly calculable but by giving Solyndra money, other companies that the free market would have preferred have been harmed, perhaps permanently harmed.

Although Obama clearly rushed this pathetic company for a nice photo-op, this is not a simple case of the president failing to do his homework as the GAO implies. The government has no business promoting this kind of crap in the first place.

In this case, it is rather amazing how fast Solyndra wasted over half a billion US taxpayer dollars, so fast I suspect fraud.

July 21, 2011

Quebec-based botnet taken down

Filed under: Cancon, Law, Technology — Tags: , , , — Nicholas @ 09:19

John Leyden reports on the Laval, Quebec man who has been arrested:

Joseph Mercier, 24, of Laval, Quebec, allegedly hacked school board systems in Canada as well as computer networks in the US, France, Russia and the United Arab Emirates. Mercier — who was in charge of his employer’s information security — reportedly ran his alleged botnet scam at home and at work, the Canadian Broadcasting Corporation reports.

Mercier was released on bail following a brief court appearance on Tuesday. The Royal Canadian Mounted Police are still investigating the scope of his alleged misdeeds. It’s unclear whether any banking fraud resulted from the scam, the precise motive for which remains unclear.

July 8, 2011

Oh Noes! My delivery has been intercepted!!!!

Filed under: Randomness, Technology — Tags: , — Nicholas @ 00:08

An urgent email to my account tells me that my “parcel from UPS COURIER SERVICE” has been intercepted by the “UNITED STATES POSTAL INSPECTION SERVICE”:

This is to notify you that we have intercepted your parcel from UPS COURIER SERVICE is making the delivery and we have stopped the delivery process for some security reasons stated below:

Our scanning system has detected that your parcel contains a confirmable CARD to the tune of US$1,500,000.00 USD.Such parcel coming from African /Europe/Asia is been verified by the postal inspection service.

Also for the Delivery of the Parcel to continue, you are in obligation to obtain from Spain, a Duly Sworn Affidavit from Spanish High Court which cost only but $320 which will back up the Origin of Fund. This is in line with the Anti-Terrorist Campaign which the USA Government has embarked on recently to protect our Territory from future attacks. You should therefore contact the sender of the CARD or the UPS Courier Agent in Madrid Spain to get the Sworn Affidavit for you while we wait to receive from you the Affidavit File Number to enable us forward your CARD to your address.

I’m so relieved that the US Postal Service is so dedicated to stamping out this sort of thing that it can intercept parcels from Spain to Canada! Of course, the last thing I bought from Spain was some wine through the Ontario government’s monopoly LCBO, so why someone from that country would be sending me a “confirmable CARD to the tune of US$1,500,000.00 USD” is a little bit of a mystery.

June 26, 2011

Skype’s PR problem over their sneaky options plan

Filed under: Economics, Law, Technology — Tags: , , , , , — Nicholas @ 13:35

Over my career in the software industry, I’ve worked for several companies who provided a stock option plan as part of their employee compensation scheme. Exactly one of those companies’ programs ever provided me with any actual tangible benefit (the company was bought, and the options were bought back at market rate). It netted me a couple of thousand dollars. Options may have been a way to get rich in the early 1990s, but they’re pretty much a longshot lottery ticket now.

Skype has found a sneaky way of making that longshot chance even more unlikely to pay off:

Employees aren’t even able to keep the vested portion of their stock options. The vast majority of stock options granted to startups have a vesting period, typically four years, with chunks of those options becoming vested during that four year (or whatever) period. If options are vested you can exercise them, pay for the stock and own that stock. At least that’s the way things have been done over the decades.

Skype did things differently. With Skype stock options the company has the right to not only terminate unvested options, but also vested ones. And any vested options that you’ve exercised (meaning you paid cash for them) that were turned into actual shares could simply be bought back by the company at the price you paid, regardless of their current value.

Turning your potentially lucrative stock holdings (if the value was higher than your strike price) into a mandatory zero-interest savings account. Nice.

The fact that Skype adopted this plan in the first place isn’t in itself “evil.” But they’ve done two things wrong from what I can tell.

First it appears that employees had no idea what they were signing and they probably expected it would be a normal stock option type deal that everyone in Silicon Valley has done for decades. If Skype wasn’t crystal clear with them, and explained it in normal human language that they understood, then these employees were intentionally misled. Skype had an incentive to make things unclear, because employees would demand far more compensation if they had understood. The fact that employees are so surprised that this is happening suggests that they didn’t understand the agreement. This is what lawyers call fraud.

The second thing Skype did wrong was not to waive this clause with the looming acquisition. The company can deny all day long that they fired these employees for cause, not to save a few dollars on stock options. But the appearance is the exact opposite.

June 20, 2011

SpaceX and the rogue consultant

Filed under: Law, Space — Tags: , — Nicholas @ 08:48

SpaceX is going to court over a would-be consultant’s claims that their rockets are unsafe:

According to SpaceX’s filing with the Fairfax County circuit court in Virginia, Joseph Fragola, veep at tech consulting firm Valador, tried to obtain a hefty deal from SpaceX at the beginning of June:

     Fragola attempted to obtain a consulting contract from SpaceX worth as much as $1 million. He claimed that SpaceX needed an “independent” analysis of its rocket to bolster its reputation with NASA based on what he called an unfair “perception” about SpaceX. SpaceX did not respond favorably to Fragola’s offer.

The rocket company — which as everyone knows is helmed, CTO’d and in part bankrolled by famous nerdwealth kingpin Elon Musk — says it then found out that Fragola had subsequently done his level best to create such a perception:

     SpaceX subsequently leamed that Fragola has been contacting officials in the United States Government to make disparaging remarks about SpaceX, which have created the very “perception” that he claimed SpaceX needed his help to rectify.

     For instance, in an email he wrote on June 8, 2011, to Bryan O’Connor, a NASA official at NASA’s headquarters in Washington, DC, Fragola falsely stated: “I have just heard a rumor, and I am trying now to check its veracity, that the Falcon 9 experienced a double engine failure in the first stage and that the entire stage blew up just after the first stage separated. I also heard that this information was being held from NASA until SpaceX can ‘verify’ it.”

SpaceX for its part says that this rumour is “blatantly false… as a purported ‘expert’ in the industry, he should have known that the statements were false.”

June 2, 2011

When shipyards produce pork instead of effective ships for the Navy

Filed under: Military, Politics, USA — Tags: , , , , — Nicholas @ 12:07

Shipbuilding for the navy has traditionally been a good source of pork for politicians to dole out as their political fortunes require. The US Navy is having monumental problems with the quality of ships, but the problem isn’t easy to fix:

The U.S. Navy continues to have serious problems with shoddy shipbuilders. The latest incident involved a support ship, the 12,000 ton, 172 meter (534 foot) long radar ship, the Howard O. Lorenzen. The ship recently failed its acceptance tests. The Lorenzen was built to carry a special, billion dollar, radar used to track ICBM tests. This tracking activity also supports verification of missile and nuclear weapons treaty compliance. The Lorenzen replaces a similar ship that is over 30 years old. The acceptance tests found serious problems with the steering, electrical system, damage control, anchor control, and aviation (helicopter) facilities. The yard that built the Lorenzen, VT Halter Marine, builds military and civilian ships, and has had problems with some of the other military ships it has built recently. Like the Lorenzen, the other ships were late, over budget and suffered quality control problems.

[. . .]

While the admirals are correct in blaming the shipyards for many of the problems, the navy shares a lot of the blame as well. It is, after all, the navy that draws up the contracts, and supplies inspectors during construction. However, inspectors are regularly deceived and lied to (about the quality of work and supervision and known defects being fixed). While Congressional interference can be blamed as well, in the end, it’s the navy that has the most to say, and do, about how the ships are built. The problem is, admirals who stand up and take on the contractors and politicians put their careers on the line. The ship builder deploys a large number of lobbyists and has many key politicians as allies.

[. . .]

The problems with nuclear subs and carriers were minor compared to the LPD 17 travails. Still, the sheer extent of the problems, across so many ships, is very disturbing. This may be why a growing number of admirals are willing to take career risks, and try for some fundamental reform, and finally fix the “system” that turns out more problems than warships. Victory is not assured. The shipyards and their suppliers have powerful allies in Congress. All that money translates into votes that gets incumbent politicians reelected. Congress is not inclined to attack this kind of patronage and pork, since nearly all members of Congress depend on it. The admirals can openly complain, but offended legislators can quietly cripple the careers of those critics. The smart money is betting against the good guys here. So far, the smart money is right. But the bad builder mess is so vast, expensive and messy that even many politicians are calling for some fundamental changes.

The poster children for defective ships is the San Antonio LPD 17 class of amphibious ships.

May 14, 2011

The woes of the USS San Antonio

Filed under: Military, USA — Tags: , , , — Nicholas @ 09:54

What do you do when you buy a lemon? What if the lemon isn’t the anomaly, but the standard?

Some warships are cursed. They just don’t work right. When this happens to an automobile, you call it a lemon. But a defective warship is a more serious matter, and the U.S. Navy now fears it has an entire class of ships that is cursed. For the last five years, ever since the USS San Antonio, the first of the LPD 17 class amphibious ships entered service, there has been one problem after another. It began during sea trials, and there is no end in sight. Worse, all four subsequent LPD 17s to enter service exhibit similar problems. Most of the woes were created by poor workmanship and inadequate quality control by the builder. Contributing to these problems there are some poor design decisions and inadequate maintenance practices by the crew. But most of the problems occurred in the shipyard, while the ships were being built. The U.S. Navy sees this as symptomatic of what is wrong with the handful of yards that build most of American warships. This is especially embarrassing when compared to how well foreign shipyards produce similar warships.

Originally, the plan was for twelve LPD 17s to replace 41 smaller, older and worn out amphibious ships. Five LPD 17s have been built, four are under construction and another has been ordered. When the USS San Antonio entered service it was suddenly discovered that the builders had done a very shoddy job. It took the better part of a year to get the ship in shape. The second of the class, the USS New Orleans, was also riddled with defects that required several hundred million dollars to fix. This pattern of shoddy workmanship, incompetent management and outright lies (from the ship builders) continued, and resulted the order being cut to eleven ships. To add insult to injury, the last ship in the class is being named after politician John P. Murtha, who is generally hated by soldiers and marines for the way he politically exploited and defamed the troops who served in Iraq and Afghanistan. This is particularly painful because the LPD 17s carry marines into combat.

Many consider the San Antonio class as a poster child for all that’s wrong with American warship construction efforts. The ships are being delivered late, and hundreds of millions of dollars over budget. The list of problems with the ships is long, embarrassing and seemingly without end. Although the San Antonio did get into service, it was then brought in for more inspections and sea trials, and failed miserably. Repairs are still underway to catch all the shipyard errors.


Detail from original image at Wikimedia.org.

Even more information on the long list of issues with the lead ship of the class here. According to the official website, the ship is “currently under going engine maintenance at Earl Industries shipyard in Portsmouth, VA”.

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