Former Netflix executive convicted of receiving bribes from contractors • Hacker News Board

Re: Former Netflix executive convicted of receiving bribes from contractors

#101

Post by poizan42 » Tue, Oct 19, 2021, 4:23 PM UTC

groby_b wrote: post #24

earthscienceman wrote: post #7

Earlier quoted context omitted.

It seems very unclear to me. I don't understand why that's illegal or wrong. Someone was hired and paid using fees and stock options? Seems fine to me. I don't understand corporate structure enough to understand why that's problematic... “leveraged his status as a leader of the IT community in Silicon Valley to subvert the trust of Netflix and others to profit at their expense” How did he leverage it in a way that wa…

"I will only sign this contract on behalf of my company if you give money to me personally" is not in any way ambiguous in terms of morality. If you don't understand why that's wrong, I strongly suggest maybe taking a few philosophy or ethics classes. In short: He was supposed to be acting on behalf of his employer - that's what being an exec means. He instead used the resources of his employer (not his to use, excep…

I don't think anybody is confused about the morality of "I will only sign this contract on behalf of my company if you give money to me personally". The problem is that this is never mentioned in the article. In fact at no point does the article say that the agreement was with the VP and not okayed by the decision makers at Netflix. It seems pretty clear to me why people are confused.

Re: Former Netflix executive convicted of receiving bribes from contractors

#102

Post by eganist » Tue, Oct 19, 2021, 4:23 PM UTC

ksdale wrote: post #64

numbsafari wrote: post #44

Earlier quoted context omitted.

The amount of "I don't get why this is wrong?" going on in this thread would seem to support the prosecutors' view that this is a widespread practice. Long ago, before Dotcom went Dotbomb, I worked for a firm where the CIO was being paid kickbacks by our hardware reseller. He was terminated for other reasons and, shortly after he left, our head of network ops got a call from the distributor asking where they should s…

When I was in law school, I felt patronized by the amount of time we spent talking about conflicts of interest because it seemed so obvious to me. In retrospect, having read so many of the disbarment announcements in the bar association newsletter, it's clear that a great many people do not understand what a conflict of interest is.

s/understand/care

Re: Former Netflix executive convicted of receiving bribes from contractors

#103

Post by aluminussoma » Tue, Oct 19, 2021, 4:24 PM UTC

jopsen wrote: post #42

Why? Is the VP compensation package at Netflix really that bad?

Because of greed. For most humans, what you have is never enough.

A few years ago, Netflix had a reputation of paying very well to lower level senior employees (think L5 and L6), but not as competitively for higher level employees (L7+).

Re: Former Netflix executive convicted of receiving bribes from contractors

#104

Post by kami8845 » Tue, Oct 19, 2021, 4:24 PM UTC

cabcabcab wrote: post #46

This is so incredibly common and is actually taught as tactic at many accelerators. You can form "customer advisory boards" which basically pay small percentages of common to early users to use the product. Like, seriously, more than half of the companies funded by YC do this. I think this is the norm more than the outlier.

In those instances, do the managers at BiggerCorp who initiate the deal get the equity or the company?

Re: Former Netflix executive convicted of receiving bribes from contractors

#105

Post by elliekelly » Tue, Oct 19, 2021, 4:25 PM UTC

This case is particularly interesting because he was convicted by a jury of the somewhat controversial charge of honest services fraud[1] in addition to the more common criminal fraud charges. Jeffrey Skilling (of Enron fame) was convicted under the same law (also among other charges) and successfully appealed to the Supreme Court where his convicted was reversed and his sentence was subsequently reduced. Skilling v. United States[2] and Black v. United States[3] (Conrad Black, the Canadian media mogul) significantly narrowed the scope of the crime. The Court came eversoclose to finding the law unconstitutionally vague but instead limited its applicability to situations where a fiduciary duty exists and there is evidence of bribery or a kickback scheme. Since Skilling the charge has most often been used for holders of political office, like Rod Blagojevich[4] but prosecutors couldn’t even get the charge to stick there. (Trump pardoned both Black and Blagojevich before leaving office.) More recently the charges have been brought against participants in the “Varsity Blues” college admissions scandal.

The Supreme Court definitely left the door open for this law to be ruled unconstitutional so I’m curious whether any of the very wealthy and newly convicted-at-trial defendants will pursue the matter.

Edit: Reading the DOJ press release and the way it’s worded I’m not so sure whether Kail was convicted of honest services fraud. It seems there was one count for which the jury did not return a guilty a verdict and I’d bet it was this one.

[1]https://en.m.wikipedia.org/wiki/Honest_services_fraud

[2]https://en.m.wikipedia.org/wiki/Skilling_v._United_States

[3]https://en.m.wikipedia.org/wiki/Black_v._United_States

[4]https://en.m.wikipedia.org/wiki/Rod_Blagojevich_corruption_c...

Re: Former Netflix executive convicted of receiving bribes from contractors

#106

Post by lobocinza » Tue, Oct 19, 2021, 4:26 PM UTC

kcsavvy wrote: post #26

I have heard of many startups bringing early customers onto their advisory board - it seems like a relatively common practice. I am curious what makes this fraud? The timing? Or the fact that the Netflix VP did not disclose this to His employer?

I'm not knowledgeable at all in this matter but the issues here are clear at least to me. Let's forget the conflict of interests he would face when working for both companies. He was charged with bribery, the issue here is that hiring him as a paid consultant was put as a condition for the contract approval. A deal which would benefit exclusively him and not his employer. Quite literally the companies were paying to receive lucrative contracts.

Re: Former Netflix executive convicted of receiving bribes from contractors

#107

Post by rchaud » Tue, Oct 19, 2021, 4:27 PM UTC

whymauri wrote: post #12

>In his own memorandum to the court, requesting that he be sentenced to a year of house arrest, Kail, 49, described himself as a “global power leader, top dev ops influencer and a thought leader.” So very humble of him.

Ridiculously pompous thing to say once the decision to convict has been made.

Even in TV episodes of Law & Order, the furthest defense attorneys go is to ask to serve house arrest before trial because their client is "a pillar of the community" aka very wealthy.

Re: Former Netflix executive convicted of receiving bribes from contractors

#108

Post by simonh » Tue, Oct 19, 2021, 4:27 PM UTC

tomp wrote: post #61

tptacek wrote: post #8

Earlier quoted context omitted.

The article describes an absolutely standard kickback scheme. If you're an employee of a company and arrange to take kickbacks from vendors without the approval of your employer, you're defrauding your employer.

But the article doesn't say that he was taking "kickbacks", but that he was hired as a "consultant". Is that illegal? "We'd like to do business with Netflix, hmmm whom should we hire as a consultant, maybe someone at Netflix, surely knows a lot about the kinds of companies that do business with Netflix." Edit: I agree it's immoral just like how FDA leaders approving drugs then getting hired by the drug industry is im…

His jobs at Netflix is to get the best deal for Netflix, not to get the deal that nets him the most money from the vendor. The vendor paying him is increasing the costs to the vendor, therefore presumably increasing the costs they will pass on to Netflix.

The problem there is the money comes first. In the case of former regulators, by the time they are hired by the drug company they're no longer a regulator. It's not clear the drug company has anything to gain from hiring them. Yes it's grubby, but it's hard to prove anything. If the money comes up front, that's easy to prove.

Re: Former Netflix executive convicted of receiving bribes from contractors

#109

Post by Phillip98798 » Tue, Oct 19, 2021, 4:27 PM UTC

xyzzyz wrote: post #84

Phillip98798 wrote: post #68

Well, I'll be losing sleep hoping Netflix can make it through this tough time. Seriously, is there one person alive who believes the guy should get seven years in prison? Fire him, do your character assassination thing, but prison time? Why are our tax dollars being used to defend a multi-billion dollar corporation? Let Netflix run its own company. Change compensation structure or something to reduce corruption. Douc…

There are in fact plenty of people who believe that people shouldn’t be able to get away with white collar crime to the tune of millions of dollars with a slap on the wrist, when petty criminals get much worse sentences for more minor trespasses.

Sure, there's Bernie Madoff stuff, and then there's this. Are you comfortable with big corporations and government hegemony muscling employees into compliance? I'm not. The guy should undoubtedly be sued, but it feels wrong to create an equivalency here with violent offenders.

Re: Former Netflix executive convicted of receiving bribes from contractors

#110

Post by nindalf » Tue, Oct 19, 2021, 4:28 PM UTC

ksdale wrote: post #64

numbsafari wrote: post #44

Earlier quoted context omitted.

The amount of "I don't get why this is wrong?" going on in this thread would seem to support the prosecutors' view that this is a widespread practice. Long ago, before Dotcom went Dotbomb, I worked for a firm where the CIO was being paid kickbacks by our hardware reseller. He was terminated for other reasons and, shortly after he left, our head of network ops got a call from the distributor asking where they should s…

When I was in law school, I felt patronized by the amount of time we spent talking about conflicts of interest because it seemed so obvious to me. In retrospect, having read so many of the disbarment announcements in the bar association newsletter, it's clear that a great many people do not understand what a conflict of interest is.

I feel patronised by yearly mandatory training. All of it seems obvious and not relevant to me because I’ve never negotiated a contract on behalf of my employer. Still, good to know there’s plenty of people who might find training useful.