That title is funny. I work at big nameless european telco and for the last 10 years that's exactly how I perceive the whole culture here.
Some higher up, either the CTO, CIO, or close to those roles, gets a pamphlet about some shitty product. And without listening to anyone buys it and forces all us techs to use it for a year or two before they move on to the next shitty product.
In one case we even had a CTO force a shitty product on us, speak very highly about it, only to quit and take a position at the vendor of the shitty product.
I had a grand-boss who proposed buying an add-on to our PDM system. I explained how we already threw away $15 MILLION on buying ALL the licenses for a previous PDM system up front, only to scrap it when our company got taken over (and pillaged and destroyed, but that's a story for another day). I BEGGED him not to spend the money until we proved that we could actually, you know, integrate the add-on, and USE it successfully. No, of course, we spent all the money up front. And THEN found out that we couldn't use it. And then I heard he got a big kickback from the company, and I because a little less naive, and a lot more jaded.
Yeah, the same thing in European banks. It gets quite obvious when executives in local branches start pushing for shitty products.
When I started working professionally, I always thought that eventually the best product wins. Then I was struck with this kind of reality, where the product with the biggest people network wins.
Similar thing ended up being true for me. Without a good support network, I won't end up anywhere even if I have above average abilities.
This is so common, we even have ethics training at our mega tech corp and we are supposed to report any such activities. A lot of time kickbacks are subtle though like unpaid internship at vendor for CTO's niece. Or sometimes it is a bit more bold like a consulting contract that vendor need to sign up with CTO's brother's firm etc.
The most obvious and legal form of kickbacks is just regular sales process that involve a lot of nice dinners or even trips to conferences on nice resorts. One of my old boss owned his company and it was so normal for him to go out for 4 hour lunches with clients.
I feel exactly the same way. Worked for a big american Telco company that is universally hated everywhere (but unknown enough here in Europe so that they manage to hire) and I feel this is exactly how contracts of this kind worked.
We would hear that this or that product was forced on us because this or that senior executive's friend/relative owned the company producing that product.
Fighting against having to use crappy tooling because of this was one of the nuisances that we'd have to deal with a few times a year.
"Kail set up a corporation to receive bribes from Netflix contractors, the DOJ said."
Super blatant. I don't get how he expected to get away with it? You'd think there's a fair chance his employment contract at Netflix would prohibit having an outside interest like this. Plus you know, maybe learn how brown paper bags work. Or find a relative who has a consulting business to bill. Maybe read what cryptocurrency is. Seems like there are a lot of things you could do that aren't making a separate company which has bank accounts and files returns. Oh yeah and don't buy a house with it, a house can be confiscated.
Anyway he should have read the newspapers more. Clearly the thing to do is like your CTO or how politicians do it, just get them to pay you with a "job" after you leave. Perhaps he just hadn't reached scale yet like you can with political roles. Those £38B we spent on track & trace here in the UK will surely come back to the right pockets somehow.
Yeah this is pretty much how these decisions are made at many companies. If it's not a direct kickback its a friends of the decision maker and they go golfing together four times a year. At the vendors expense of course.
Did you an I work at the same place? We had the exact same thing happen. Incompetent CTO bought millions of dollars in unnecessary crap and consulting, quit and joined the unnecessary crap company.
This is, quite literally, how every It department is supplied. Some exec gets a BJ and a free trip and you get a terrible product you’re supposed to fit into your infra.
Not sure how the law works in said jurisdiction but shouldn't the companies that bribed him also see some punishments? I see some rather prominent names in the list of vendors who chose to "pay to play".
This reminds me the first time I got in the process to sign a 1MM contract. I kept pushing for a price reduction and the sales guy kept giving me clues of how this would affect commission. I had no idea that he was talking about my commission. It was so ridiculous that I involved compliance and shit scaled pretty quickly.
When I was signing off on a dotted line, I have adopted the Walmart approach from the early nineties -- vendors willingness to wine and dine us meant that the price was still too high. It worked surprisingly well as a signal. We were able to get our costs cut in nearly half on very expensive gear.
Welcome to the old boys network, same as it ever was. This isn't marketing, its corruption. The advantage of "knowing the right people" in this case was probably half of some of these companies value. You can say its always been that way and you'd be right, but I think its wrong, and ultimately bad for both customers and people who are forced to work with poor and broken tools.
I guess half a lifetime of slogging away at big orgs has made me cynical, but I can hardly even see how this rates as news. Once worked at a place where we spent a month on an app server bakeoff, selected vendor X. Following week, boss’ boss informs us we’re going with vendor Y. Corrupt? You tell me. Or the time I worked at a Fortune 100 company that had their entire IT outsourced to one of the big consultancies, only to find out that the CIO had a relationship with that consultancy. I could go on. It used to frustrate me more until I finally realized that in a big org, multiple games are being played, and you are probably not at the table of any game being played that matters.
One thing I've always found amusing about US is that bribing a normal person is illegal, as it should be, but bribing a politician/Congressman via campaign funds and lobbying is legal.
But almost all political donations, I would think, are because the entity donating already supports the viewpoint of the elected official.
Is it bribing if there isn't a quid pro quo? I can give a congressperson a bunch of money with a note attached saying "Don't vote for bill XYZ", but there is no promise or even acknowledgement from the congressperson that they will do anything at all for you.
I see this happening all the time. Our chief architect got a few trips to SF with hotel, lots of swag and now we all have to use this crappy data analytics tool. A manager got an invite to speak at a conference which was a disguised sales pitch, and a month later we switched static analysis tool. The former was working fine. Would be interesting to know if he's liable for that.
I’m shocked that what he did is considered criminal and worthy of prison. It should be a civil lawsuit between him and Netflix, and the worst they should be able to do is bankrupt him. This guy has not raped anyone, assaulted anyone.. why do we taxpayers need to pay to lock this guy up in a cage? Does no good for anybody.
I believe that white collar crime deserves the harshest punishment of all. It’s committed by intelligent people, premeditated and generally abuses a position of trust.
So all non-violent offenses are non-criminal offenses in your book? Steal a car, burglarize a vacant residence, defraud a company, these are matters to sort out via civil action?
I'm kind of confused how this is against the law? I can understand tax evasion component and maybe a little wire fraud. (Ignoring the tax evasion issue for a second)
They instilled confidence and the ability to award contracts to outside firms for this officer of the company. If company officer hired bad firms eventually he should have been fired for poor performance? Regardless how much kick back they provide him. It sounds like the contract were between two private citizens/entities. Why is the Federal Government doing internal investigation for Netflix?
Other than tax fraud, the only victim was Netflix. Not the American public?
Bribery is against the law, I presume this is simply the result of a criminal investigation.
Also, bribery is insidious. Once some happens, there is considerable pressure for competitors to also engage in bribery to stay in business. So it is important to stop earlier, where you can, because over time it can be very hard to root out. Like murder and theft, it will happen sometimes, but you're trying to discourage it.
Is it all that different that stealing from your employer? People agree that should be a crime. In this case he was stealing but using the vendor as a middleman.
The startup world version of this is being both a decision maker at a company and an angel investor, as then you can force what you invest in on your employer.
In mu opinion, enterprise product space is one of the weird space ever. Having seen tons of tools from big data to devops tools, it is all about marketing and more importantly hardcode sales. Another things that I observed is that no body gets fired for buying enterprise products. In the famous saying, "No body gets fired for buying IBM", these days you can replace IBM with any enterprise product company because they are using the same playbook. Another thing I have started observing is that startup who actually start with solving real problem from scaleups and midmarket, has to deploy a playbook like IBM, Oracle to win market share in Enterprise.
However, I am truly optimistics about the new trend of consumerization of enterprise as that starts democratizing these purchasing decisions and gives purchasing decision power to the dev themselves.
> "To facilitate kickback payments, the evidence at trial showed that Kail created and controlled a limited liability corporation called Unix Mercenary, LLC," the DOJ said. "Established on February 7, 2012, Unix Mercenary had no employees and no business location. Kail was the sole signatory to its bank accounts."
[+] [-] INTPenis|4 years ago|reply
Some higher up, either the CTO, CIO, or close to those roles, gets a pamphlet about some shitty product. And without listening to anyone buys it and forces all us techs to use it for a year or two before they move on to the next shitty product.
In one case we even had a CTO force a shitty product on us, speak very highly about it, only to quit and take a position at the vendor of the shitty product.
[+] [-] TheRealDunkirk|4 years ago|reply
[+] [-] knuthsat|4 years ago|reply
When I started working professionally, I always thought that eventually the best product wins. Then I was struck with this kind of reality, where the product with the biggest people network wins.
Similar thing ended up being true for me. Without a good support network, I won't end up anywhere even if I have above average abilities.
[+] [-] sdgasg|4 years ago|reply
The most obvious and legal form of kickbacks is just regular sales process that involve a lot of nice dinners or even trips to conferences on nice resorts. One of my old boss owned his company and it was so normal for him to go out for 4 hour lunches with clients.
[+] [-] lastofthemojito|4 years ago|reply
[+] [-] amelius|4 years ago|reply
[+] [-] Dansvidania|4 years ago|reply
We would hear that this or that product was forced on us because this or that senior executive's friend/relative owned the company producing that product.
Fighting against having to use crappy tooling because of this was one of the nuisances that we'd have to deal with a few times a year.
[+] [-] lordnacho|4 years ago|reply
"Kail set up a corporation to receive bribes from Netflix contractors, the DOJ said."
Super blatant. I don't get how he expected to get away with it? You'd think there's a fair chance his employment contract at Netflix would prohibit having an outside interest like this. Plus you know, maybe learn how brown paper bags work. Or find a relative who has a consulting business to bill. Maybe read what cryptocurrency is. Seems like there are a lot of things you could do that aren't making a separate company which has bank accounts and files returns. Oh yeah and don't buy a house with it, a house can be confiscated.
Anyway he should have read the newspapers more. Clearly the thing to do is like your CTO or how politicians do it, just get them to pay you with a "job" after you leave. Perhaps he just hadn't reached scale yet like you can with political roles. Those £38B we spent on track & trace here in the UK will surely come back to the right pockets somehow.
[+] [-] f00zz|4 years ago|reply
[+] [-] varispeed|4 years ago|reply
[+] [-] AlwaysRock|4 years ago|reply
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[+] [-] rasputnik6502|4 years ago|reply
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[+] [-] dsr_|4 years ago|reply
A coffee mug in exchange for an appointment.
A lunch coupon in exchange for an appointment.
A USB flash drive in exchange for intelligence about the company.
A "chance" at an iPad in exchange for filling out a 12 page survey.
These just don't cross any reasonable risk/reward threshold.
Did this person get offered multiple years of their salary, or did they not do any thinking at all?
[+] [-] patrec|4 years ago|reply
- Netenrich (and VistaraIT, wholly owned by Netenrich)
- Platfora
- Sumo Logic
- Netskope
- Maginatics
- ElasticBox
- Numerify
Any missing?
[+] [-] OldGoodNewBad|4 years ago|reply
[+] [-] spoonjim|4 years ago|reply
[+] [-] hannofcart|4 years ago|reply
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[+] [-] yumraj|4 years ago|reply
[+] [-] oh_sigh|4 years ago|reply
Is it bribing if there isn't a quid pro quo? I can give a congressperson a bunch of money with a note attached saying "Don't vote for bill XYZ", but there is no promise or even acknowledgement from the congressperson that they will do anything at all for you.
[+] [-] ativzzz|4 years ago|reply
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[+] [-] balozi|4 years ago|reply
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[+] [-] schiang|4 years ago|reply
[+] [-] lodovic|4 years ago|reply
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[+] [-] riku_iki|4 years ago|reply
In my mind his crime is much more severe than shoplifting or paying by fake banknotes.
> why do we taxpayers need to pay
Both, Netflix as a company, and its shareholders are also tax payers, and can expect to be protected from fraud/crimes using taxpayers money.
[+] [-] bm1362|4 years ago|reply
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[+] [-] lainga|4 years ago|reply
[+] [-] JackPoach|4 years ago|reply
[+] [-] chad_strategic|4 years ago|reply
I'm kind of confused how this is against the law? I can understand tax evasion component and maybe a little wire fraud. (Ignoring the tax evasion issue for a second)
They instilled confidence and the ability to award contracts to outside firms for this officer of the company. If company officer hired bad firms eventually he should have been fired for poor performance? Regardless how much kick back they provide him. It sounds like the contract were between two private citizens/entities. Why is the Federal Government doing internal investigation for Netflix?
Other than tax fraud, the only victim was Netflix. Not the American public?
[+] [-] dwheeler|4 years ago|reply
Also, bribery is insidious. Once some happens, there is considerable pressure for competitors to also engage in bribery to stay in business. So it is important to stop earlier, where you can, because over time it can be very hard to root out. Like murder and theft, it will happen sometimes, but you're trying to discourage it.
[+] [-] chad_strategic|4 years ago|reply
Everything I run across refers to public official and public trust.
I wonder if there are any lawyer out there that can clarify this?
I own my own company. I should be able to award any all contracts to who bribes me the most money?
[+] [-] bagacrap|4 years ago|reply
[+] [-] refurb|4 years ago|reply
[+] [-] buro9|4 years ago|reply
[+] [-] debarshri|4 years ago|reply
However, I am truly optimistics about the new trend of consumerization of enterprise as that starts democratizing these purchasing decisions and gives purchasing decision power to the dev themselves.
[+] [-] raverbashing|4 years ago|reply
The bigger companies will also bully you and "tell" you to your boss because how dare you don't buy their overpriced POS from that big company.
Are they indicting the companies that did this as well?
Be very aware if you're a founder, I wouldn't hire people with even a vague connection to those vendors and would watch out for purchases.
[+] [-] max_|4 years ago|reply
[+] [-] FriedrichN|4 years ago|reply
[+] [-] Andrew_nenakhov|4 years ago|reply