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How the chairman of the Milton Friedman Foundation and Fox News regular flouts the law.

If you don't like grimy stories about some real bottom feeders, pass this one on.

In my last diary I described how Patrick Byrne, chairman of the Milton Friedman Foundation and CEO of Overstock.com, planted spyware on me as he has done with other people he doesn't like. He happily admitted that in a comment to the diary.

I have more on Byrne, one from an email I got and the other from a blogger who has been tracking the way he runs his company, both describing how Byrne flouts the law in two different ways.

Some context on Byrne: Byrne is one of the biggest fat cats in the Republican Party. He is heir to the GEICO fortune, which he uses to fund far-right causes like the Swiftboat Veterans for Truth and the "65% deception" anti-schools campaign. He is the biggest political contributor in Utah, and practically bought the governorship for Jon Huntsman. But mostly he's known for his public tantrums and using his family fortune in what the NY Times described as a campaign of menace against his critics.

Lately he has been funding a website called Deep Capture that he finances through corporate shells. He's a class act who accused Bethany McLean, who exposed Enron and wrote a devastating story about him, of giving "blowjobs to Goldman Sachs traders." He does a lot of his dirty work through hired help called Judd Bagley, former press secretary to Jeb Bush and a veteran at this kind of thing. Byrne makes some Republicans puke, but party leaders happily take his money.

More on Byrne in Right Wing Watch and Pat Rusk's diary.

Byrne's day job is running Overstock.com, which just reported a profit. According to a blog out today from an expert in corporate crime and accounting fraud, Byrne has been systematically defrauding his shareholders. The author of the blog, Sam Antar, is at the top of Byrne's enemies list. You have to skip down to the bottom to get to the point:

Overstock.com only reported profits in Q4 2008 and Q2 2009 due to GAAP violations, buying back debt issued under false pretenses at a profit, and other one-time benefits. Overstock.com has never reported a profitable year during its entire existence and has accumulated losses of over $266 million. The company has a negative net worth of $4 million.

I think that's what they call "securities fraud."

The second way Byrne flouts the law has to do what he did, through his man Bagley, in sending spyware to me and in planting spyware on a Yahoo message board. According to an expert in these things who emailed me, it's a violation of federal law.

Ironically, Byrne (through Bagley) has fallen into the clutches of his pal Jeb Bush's favorite law, the Patriot Act:

This stuff clearly violates the Pen Register statute of the Patriot Act. His blog post is fantastically dumb in that it admits he is exploiting a Yahoo bug and explicitly admitting intent. Maybe Yahoo would be interested in trying to get an abuser of their system prosecuted.

He then quoted from an Internet Law blog:

"...the United States (U.S.) legislature revised the definitions under the Pen/Trap Act and expanded them as to include other communication media upon which tracking devices could be installed.  The USA PATRIOT Act of 2001 was the regulatory source expanding these definitions.

The Pen/Trap Act currently applies to the Internet and other information technologies, as per the expansion offered by the USA PATRIOT Act.  A pen register is now defined as a device or process which records or decodes dialing, routing, addressing, or signaling information transmitted by an instrument or facility from which a wire or electronic communication is transmitted, provided, however, that such information shall not include the contents of any communication...

Similarly, the definition of "trap and trace device' was updated.  It is now defined as a device or process that captures the incoming electronic or other impulses that identify the originating number or other dialing, routing, addressing, and signaling information that identifies the source of a wire or electronic communications, without including the content of that communication."

(the boldface is his)

So we've got Byrne breaking the securities laws and the anti-wiretapping laws, and it isn't even noon yet.

Originally posted to Tom Sykes on Wed Jul 29, 2009 at 05:19 AM PDT.

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