In the early morning on June 9, we reported that CalPERS had engaged in systematic copyright infringement by operating a daily news site that had published the full text of news stories from many publications for years.
Because CalPERS refused to take down its website even after it was caught out, we set out to determine the full extent of the misconduct.
From the inception of the site on August 2, 2009 through June 9, 2017, CalPERS has published the full text of over 50,000 articles. These articles were on an internet address open to any member of the public. All the articles were in a standardized format. None had any indicators that the CalPERS had paid the license fees to allow it to present them to its roughly 2,700 employees and board members, such as notices of copyright that publishers typically require for authorized republication.
To perform our analysis, we downloaded and archived all of the articles from the CalPERS site. At the end of this post, we have embedded a page from one of them, along with a second document with full list of publication names and the number of articles per name.1
Here are the sources from which CalPERS heisted the most articles:
Our efforts to understand the scope of CalPERS’ exposure did not just get the attention of some major publications but also prompted swift action. The New York Times sent a cease and desist notice to CalPERS’ CEO Marcie Frost before the start of business in Sacramento on Thursday, June 14, less than a week after our story. CalPERS posted its news summary that day but had no New York Times articles in it. It then took the entire site down sometime between Thursday night and Friday morning.
The New York Times’ letter threatened legal action if CalPERS did not remove the articles within three business days and reserved its other rights. Under copyright law, the Times has up to three years in which to pursue damages from CalPERS. Given the magnitude of the potential recovery and CalPERS’ financial resources, it would seem reasonable that the Times and other major publications may seek restitution. The Wall Street Journal, which has had the most articles purloined by CalPERS, was the first major publication to move to a subscription model. Its parent, Dow Jones, has been vigilant about seeking damages for copyright infringement, even minor-seeming ones. We know at least two other major publishers have their lawyers looking into the matter seriously.
Please note that CalPERS having removed and potentially erased the contents of the site does not shield it from legal action. We had our colleague Michael Olenick, who has created and managed very large databases, download the entire contents of the CalPERS news site last weekend. He has all of the news articles and will provide them to any interested publisher.
As we explain in more detail, every lawyer with copyright or intellectual property expertise that we consulted said that for publications that registered their copyrights, CalPERS has no defense.
They were also stunned at the scale and brazenness of the infringement. CalPERS is liable to the Times and Dow Jones alone for over $10 million each. Other publications have significant claims they could pursue.
Why Did We Pursue This Story?
Frankly, ever since I first learned about CalPERS’ news site, I debated whether I should expose it with the intent of getting CalPERS to shut it down. Since 1989, I have made my living selling intellectual property. Preventing theft of copyrighted material has become a life-or-death issue for most publications. Many online publishers have been placing more restrictions on their online editions to get more readers to subscribe.
As we explained in our initial post, when we first discovered the CalPERS news site, it had been doing a fair-minded job of presenting CalPERS-related reports, including critical stories like ours. That was important enough to our objectives of private equity reform and trying to get CalPERS to address its governance failings that we thought it better to focus elsewhere.
But over time the site descended into presenting only internal propaganda and ignored unflattering stories on CalPERS, even ones by major newspapers. The equation for us changed when the news site omitted a recent Wall Street Journal article that criticized how CalPERS misrepresented its private equity costs.
Despite putting a harsh headline on our post, CalPERS Internal News Site Ignores Unfavorable Stories, Steals Copyrighted Material, we actually gave CalPERS a break. We didn’t publish the URL of the site, which was open to anyone. That not only kept publishers from finding it but also kept it from being indexed on search engines, which meant it continued to be hidden from internet searches.
There is no question that the pension fund’s media department has a Google alert on “CalPERS” and would have seen our post. We were shocked that CalPERS didn’t take the site down immediately and instead continued to add copyrighted articles to it.
So we decided to dig further. The extent of the misconduct was far greater than we imagined.
The Scale of Potential Damages
17 U.S. Code § 504 describes the remedies for copyright infringement. If the plaintiff has not registered the copyright with the Copyright Office, the damages are the greater of lost profits of the creator of the work or the profits earned by the infringer. Even though the Times and Dow Jones would seem to be able to assert eye-popping damages using that method2, I am told it is more common for major publications to settle based on statutory damages, an option available only to holders of registered copyrights.
Statutory damages are from $750 to $30,000 per registered work, and in the case of willful infringement can be as high as $150,000 per infringement, with infringement being counted as the number of registered copyrights infringed upon. A creator or publisher has up to 90 days after publication to register a copyright. Since some publications may copyright only entire issues, and not individual articles, they would be entitled to only a single charge per issue infringed, regardless of the number of articles CalPERS stole. Some of the blogs that CalPERS republished regularly, like Calpensions, may not have filed with the Copyright Office at all. However, even those publishers could pursue CalPERS to recover lost profits. Nevertheless, given that the Times and Dow Jones are both licensing individual articles, our assumption is that they have registered all their articles in recent years with the Copyright Office. That means each article misappropriated would trigger separate damages.
Courts are also permitted to and often do award the reimbursement of legal fees to successful plaintiffs.
Many readers might assume that damages would tend to be the statutory minimum, which based on our tally would put the total damages for infringement of Wall Street Journal articles at $6.8 million and for the Times, $5.2 million.3 But even if either publication were to use this basis for arguing damages, the actual exposure is much greater. As Boston-based intellectual property lawyer Dan explained:
The assignment of damages is intended to have a punitive effect. If the plaintiff goes for statutory damages, they are $750 to $150,000 per infringement based on willfulness. Courts have tended to award higher damages because otherwise users could look at the cost of getting a license versus paying minimum damages, and say, “I’ll take a chance. If I get caught infringing, I know my maximum downside and it’s worth playing the odds.”
The intention of the legislation is also to encourage copyright registration, which is another factor in courts in looking favorably upon plaintiffs who have registered their copyrights. Finally, in cases that are pretty cut and dried, judges are not keen about parties showing up in court because the defendant appears unwilling to pay a reasonable settlement and tend to weigh that in their thinking process.
And that is before considering that the copyright law explicitly allows for much higher damages in the case of willful infringement. In the event that CalPERS were so foolish as to not settle any claims out of court, it would be very difficult for CalPERS to rebut the contention that its infringement was willful. The misappropriation of over 53,000 articles from virtually every news publication in the US over a period of eight years was deliberate and programmatic. CalPERS could even more easily have prepared the same “Daily News Summary” page by linking to the chosen articles at the sites on which they appeared, just as Drudge, FT Alphaville, yours truly, and other sites do. The only plausible explanation for CalPERS having behaved the way it did was to evade paying licensing and subscription fees.
As Jim Moody, who has won high profile media and whistleblower cases, said:
I can’t tell you how shocked I am. As an investor, CalPERS should understand the importance of property rights. I don’t see how they have a defense. Copyright law is strict liability for statutory damages. The purpose of such strong protection, including criminal penalties for willful infringement, which seems apparent here, one of the few topics for Congress actually mentioned in the Constitution, is to properly protect and value the property we create. You might go easy on an infringing high school website, but not a large organization.
Another lawyer who has been party to copyright infringement negotiations said that copyright infringements of a scale similar to those suffered the Wall Street Journal and New York Times have gotten eight-figure private settlements.
Does CalPERS Have Any Defense?
CalPERS, in its Sacramento bubble, may think it can dodge this bullet. But if any major publisher goes after them, no lawyer I spoke to thought CalPERS had any hope of escaping very substantial damages.
CalPERS cannot credibly claim “fair use”. Copyright law does allow for limited excerpting of copyrighted material. But reproducing articles in full is so far outside the pale that CalPERS has no credible basis for asserting its conduct was kosher.
As another lawyer wrote:
The only defense against willfulness is when, say, there is ambiguity about when a republication contract expired. CalPERS didn’t have a contract. There’s no fair use defense: they republished entire articles. There’s no DMCA argument: they posted it themselves. It doesn’t matter whether it was for internal use or not (and, anyway, they published it literally to the whole world).
While 17 U.S. Code § 504 does allow for statutory damages to be reduced to $200 per violation if “infringer was not aware and had no reason to believe that his or her acts constituted an infringement of copyright,” experts rejected the idea that CalPERS could try making that argument out of hand. As Jim Moody said, “You might get away with that in 1999. Any web designer by 2002 would know copying articles in full was not permitted.” That position is even less tenable today as more and more news sites are limiting access to articles and demanding registrations.
CalPERS does not have sovereign immunity. The 11th Amendment provides for states, and by extension, state agencies, to enjoy sovereign immunity from the reach of Federal courts. Our analysis above has been based on Federal law.4 California has waived sovereign immunity for most claims except the ones listed in this section of the California Government Code. Copyright infringement is not included.
CalPERS will not get favorable treatment by virtue of being a government agency. As one lawyer noted:
CalPERS is a perfect defendant: nobody especially likes them, they have unlimited money, they can’t plead stupidity (while managing $300B+), and the copyright infringement was over-the-top; it’s not like they passed around a few photocopied articles. The newspapers are the perfect plaintiff: they’ve suffered financially, they’re well liked by educated people, and they serve an essential function.
The movie and music studios routinely drag people to court to send a message. This could be a large enough verdict that every business would get the point: stop stealing articles. Buy each employee a subscription and circulate links. Besides a big pot of gold from CalPERS it could send a message and drive meaningful subscription growth.
CalPERS would not get favored treatment even in California. One strategy litigators often use is a war of attrition: to draw out a case and inflict high wear and tear, as well as costs, on the plaintiff. This is not likely to be productive with the larger publications, since they have deep pockets and have good reason to expect that they could recover their legal costs.
On top of that, CalPERS would be unwise to assume that if it were to lose at trial, it could appeal in a Federal court in California and get a home court break. As Dan explained:
Intellectual property rights of media companies are extremely important to the California economy. California judges almost without exception award damages above statutory minimums. They would be very unlikely to change from that practice here, particularly as this would be a case that the movie and music studios would watch closely.
CalPERS Faces Other Significant Disadvantages
CalPERS lacks the in-house expertise to analyze the magnitude of its liability against specific copyright infringement claims, much the less mount a defense. It will find it difficult to retain legal representation of the same caliber as major publishers. As one lawyer said:
They’re idiots. New York, California … they’re in the sink in either state. Both are home to the largest media companies. The New York Times and Dow Jones both already have national firms with local offices staffed by top IP lawyers. No top-tier copyright lawyer will want a case against the New York Times or Dow Jones: too much potential lost business in the future.
That’s before you get to the fact that CalPERS has infringed the copyright of virtually every news publication in the US. Even if a law firm had a copyright practice and had a qualified attorney who did not have a direct conflict, most would be loath to represent CalPERS due to the bad optics and the risk of alienating existing or potential media clients.
CalPERS will also suffer considerably in the court of public opinion. Public pension funds are already under attack. Newsrooms are fighting for financial survival. Even the highest profile publications on this list have made deep cuts in their staffing. For instance, both the New York Times and Sacramento Bee have fired or forced out reporters this year.
Any institutional investor expects to pay for research such as data feeds. The spectacle of a government agency with a huge budget and handsomely-paid top executives ripping off hard-pressed publishers is a public relations disaster and a grave injustice. Refusing to settle up on reasonable terms, pronto, with any firms that assert claims will only compound the damage.
____
1 Note that CalPERS was not consistent in how it labeled articles from various publications. For instance, Sacramento Bee articles are tagged both as “Sacramento Bee” and “The Sacramento Bee”. Our data maven Michael Olenick constructed a name standardizer for the larger and more easily reconciled names but it does not include many of the publications in the embedded PDF below. We recommend that reporters and business people search by distinctive words in their publication’s name to double check. As he explained by e-mail:
There are 4,583 unique publication names in the list. I reduced that to 4,064. You have to find the unique name that is obviously a different name. So it requires making a list by hand that the computer can use to join them up. The list I’ve made has 637 substitution entries. If any single publication wanted I could probably do better using specific searches but sorting through 4000+ different names, to match them, is a brute force exercise.
2 The New York Times’ licensing department made it very clear that there was only one “product” that would correspond to what CalPERS did, as in republishing full text. That was what they call an “e-print.” The Times does not care how many users there are in an organization that seeks to put an article up on its internal internet, since they correctly regard that as giving the party the right to unlimited use. The price for an e-print is $5,300 per article. There are no volume discounts or discounts for not for profits. And an e-print is valid for only twelve months of use.
So if you merely take the last twelve months, CalPERS would have had to have licenses for all the 6,878 articles we are using from the June 9 cutoff date for the purpose of our estimate. 6,878 x $5,300 = $36.5 million in revenues. From that the New York Times would have to deduct its costs. The reality is incremental sales are pure profit save the cost of the licensing personnel, but the convention may be to allocate some of the journalism and administrative overheads too. An estimate of 10% costs would seem generous, leaving $32.8 million in profits.
And mind you, that is only for the last twelve months. The statue of limitations is six years, so the New York Times would be entitled to recover on lost profits for the previous five years as well. The Times was hesitant about going to an online model, so its older licensing fees are likely to be comparatively modest. But anything on top of the most recent year would be gravy.
Surprisingly, Dow Jones’ price for what seemed to be a comparable product was only $1,900 per article for a one-year license for the most stripped-down version of electronic publication of an article, again no discounts for volume. While the Dow Jones staff were in theory willing to consider some sort of “customized solution that would fit your organization’s needs,” it was clear they had nothing off the shelf and were flummoxed about devising a “solution” similar to what CalPERS had done. The limited and perhaps lack of any precedents would seem to work in Dow Jones’ favor if they were to go this route. 9,011 articles x $1,900 = a comparatively modest $17.1 million. Taking off 10% for a generous estimate of expenses gives $15.4 million. That excludes other Dow Jones products, like the over 300 Barrons articles that CalPERS posted. And again, that’s for only the most recent of the six years of infringement. The Journal was the first to monetize its Internet site in a serious way, so it’s likely to have been charging higher licensing fees than the Times in the earlier part of the six-year period.
3 Our estimate is limited to the Wall Street Journal. We did not include articles other Dow Jones publications like Barron’s, which also suffered from CalPERS’ copyright infringement.
4 California has its own copyright law but most plaintiffs assert claims under Federal rather than state law.
CalPERS Naked Capitalism 2014 StoryCalpers-EntirePublicationList
66 comments
Comments are closed.
If after this CALPERS board/senior management is not a toast, I don’t know what would it take to bring them down. This is idiocy and recklesness on a massive scale..
Well done Yves!
Be sure to read the companion post here, which includes contact information on the officials to contact.
Not US resident, so would have zero impact (but others, especially in Cali absolutel should..)
Incidentally, if NYT/DJ sue and settle out of court, how would it impact other parties? Can NC go after CALPERS for statutory damages? 44 x 150k would keep NC going for quite some time..
Tha bad thing is that ultimately, it will be the pensioners whose pockets this will come from – on the other hand, if it means that CALPERS gets its house in order (finally), long run it may be a cost worth paying.
No, we didn’t copyright our articles and the ones CalPERS did repost without permission are from too long ago for us to copyright them now. Plus as CalPERS’ most hated outside party, the pension fund would be certain to make us file a suit order to force us lay out large legal fees. Even though we would have high odds of winning, we could easily have to deploy over $100,000, since they would play every procedural trick in the book to make our lawyer spend more time. And they’d be sure to appeal out of general cussedness to delay our receipt of damages and reimbursements and put more legal dollars at risk.
ah well. Pity there’s no whistleblower reward from NYT/DJ.. I feel that NC should be rewarded for bringing out CALPERS debacle out, but at the moment it looks like “thanks” may be all you get.. (and I’m not even sure you’d get it from anyone but the readers/commenters).
If ever there was a reason to click on the tip jar link, this reporting is it. Direct rewards for exceptional work.
Maybe some of the publications who win big settlements will send a donation to NC. It would be the right thing to do.
Right thing to do, maybe, but bad for the quarterly reports and bottom line.. and of course “no sleeping with the enemy…”
Ah, c’mon, it would disappear under “Subscriptions and donations” or “Research costs”.
Yes, compared to what CalPERS spends on consultants, getting subscriptions for the people who ought to have them is chicken feed.
Maybe an investor(s) would fund the costs for share in settlement if eventual win looks substantial and likely? What is cost to copyright that keeps option open?
And maybe judge would be sympathetic since you exposed wrongdoing.
Looks like there is really only one viable defense strategy for CALPERS. Secede from the Union and form an independent nation, the Republic of California, and then claim sovereign immunity. Wouldn’t it be ironic if the actions of a corrupt agency should be the catalyst for such a positive development as the breakup of the world’s one Great Power into a group of smaller nations that were no longer capable of trying to rule the world? LOL
CalPERS has always behaved like they have total impunity if not immunity. Their disregard of the law is amazing. They prolly assumed nobody could touch them, so this is very interesting. Nobody wants to see a pension fund ransacked by their own idiots. But after so long a time, with people suffering CalPERS imperviousness – including its pensioners, this is as refreshing as it is flat-out amazing. Pension funds, private equity sharks, curious fiduciaries, copyright law, a sovereign state and a federal government. This will be stuck in court forever.
To your point, I’m curious about this:
Whoever wrote this is assuredly more informed than I am, but given how badly CalPERS has been caught with their pants down, isn’t the most likely strategy for them to try to spin this as the papers unfairly victimizing retired teachers and firefighters? I would expect that a lot of observers who aren’t interested to learn the details of the case will be ready to see it that way. Especially people with money at stake.
Well, the retirees were f*cked up by the CALPERS board/management, who IMO failed on their fiducary duties – assuming that CALPERS pays 10s of mils to newspapers, that’s directly from their beneficiaries pockets and entirely due to CALPERS. Again, not knowing US legal system that well, I don’t know what recourse the beneficiaries have, but if CALPERS was a public company, I’d see a class action comming.
Sarb-Ox unfortunately (if I remember it right) doesn’t apply to something like CALPERS, otherwise I’d also see that as an opportunity to get the management.
As per your “money at the stake” – well, the people who have most money at the stake are the newspapers etc. – so it’s going to be hard for CALPERS to spin it.
The taxpayers of California will for that bill.
The financial outlay by the taxpayers of Cali for this egregious behavior by CalPers, is small potatoes compared to the exorbitant fees being paid to PE firms for management services.
The best outcome for the citizens of Calif, is that the current CalPERS board be washed away in a tidal wave of criticism. (the damage is done; but must end.)
Indeed. From that perspective, Yves/NC getting their due for the exposure (whatever form it would take) would come cheap even at the highest settlement cost (44x150k).
Who would they spin it with? They’ve stolen from every major newspaper, TV network, and plenty of radio stations. They’ve ripped off blogs and magazines. While the payouts might be taken from retired teachers and firefighters the lost income were funds that should have gone to journalists and retired (or laid off for lack of funds) journalists. It’d be like an arsonist trying to justify their behavior to firefighters.
Good point. I missed the obvious in that they’re dependent on these same outlets that they’ve made enemies with if they’re going to try to amplify a press release.
Breitbart….continuing to support the poor and downtrodden public union workers.
It probably wouldn’t be Fox News, even though they would love to take on the NYT and WP, since it is owned by the Murdochs who own DJ. In rock-paper-scissors, money and self-interest trump ideology.
Scared me here a bit, on the selfish side. My husband, a regular NC reader, sent this article to me. Here in Oregon, teachers’ pensions are in PERS. In California, however, where I was a teacher for 20 years, teacher pensions are in CalSTRS, a separate entity, one I’ve generally been impressed with getting through tough financial times. So, just waking up, I’m thinking, oh my lord, there goes my main pension. Then I see a statement about pensions for teachers and firefighters and I remember, whew, not my pension. Like I said, selfish. I wonder if there is a way to structure the lawsuits that go after the offenders more than the innocent pensioners? Because, unfortunately for the pensioners, the case is pretty solid and papers have been losing money a long time. CalPERS is going to be sued, and rightly so. Selfishly, again, I worry about my friends who are or were teachers’ aides and dependent upon CalPERS for their retirement. I don’t know if they paid into Social Security, but CalSTRS contributors did not. I am hit with WEP which will pull $446 a month from my earned SS benefit (averaging some 30-35 yrs earnings, including 20 zeroes when I was a CA teacher, already resulting in a very low benefit). It could be quite an impact on them.
None of this has any impact on the rightful and likely lawsuits. Stupid CalPERS management!
I wonder, did CalPERS’ Rulers deign to buy errors&omissions coverage, and if so, have they notified their carriers? And can they sue their counsel and risk managers, if no coverage was obtained?
In the end this could wipe out Uncle Warren.
A clarification: CalPERS does not manage the pensions of teachers, save of some higher educational institutions. CalSTRS manages public school teacher pensions. CalPERS does manage the pension of other public school employees like bus drivers and school administrators.
CalPERS’ payments backstopped by the State of California under the California Constitution, so there’s no risk to any beneficiaries.
And teachers are in CalSTRS, not CalPERS.
re:”Tha bad thing is that ultimately, it will be the pensioners whose pockets this will come from – on the other hand, if it means that CALPERS gets its house in order (finally), long run it may be a cost worth paying.”
I do not believe this is the case for pensions handled by CALPERS.
I would be very happy to find I am wrong in my understanding, so please step in and correct me.
As a CA taxpayer, from what I’ve read for the last 20 years, if CALPERS comes up short for pension benefits it is the requirement that the government entities that the worker retired from be it City, County, or special district that must make up the difference.
The taxpayer/ratepayer are stuck with the shortfall tab, not the pensioners.
This is done in a pro-rata fashion, so if one works for one entity for 30 years, another for 2 years and then retires, the 30 year entity is responsible for 30/32 of the pension and the other for 2/30.
This surfaced in the City of Bell salary/pension scandal as workers “retired” as an extremely high paid Bell worker, with a large pension, but much of the pension liability went to other governmental entities they worked for many years (at much lower pay).
I suspect the pass-thru liability feature is why CALPERS does not respond to benefit spiking in the last years of service and their support for the 1999 sweetening of benefits.
See http://www.latimes.com/projects/la-me-pension-crisis-davis-deal/
“It was a deal that wasn’t supposed to cost taxpayers an extra dime. Now the state’s annual tab is in the billions, and the cost keeps climbing.”
“Proponents sold the measure in 1999 with the promise that it would impose no new costs on California taxpayers. The state employees’ pension fund, they said, would grow fast enough to pay the bill in full.”
“CalPERS had projected in 1999 that the improved benefits would cause no increase in the state’s annual pension contributions over the next 11 years. In fact, the state had to raise its payments by a total of $18 billion over that period to fill the gap, according to an analysis of CalPERS data.”
A pension fund run by a private insurance company would likely have been more circumspect, especially when it did not have to sweeten benefits retroactively.
And a reasonably well run pension fund would have had a benefit claw back if their projections proved wrong.
I was one of the CA voters who voted to recall Governor Davis in response to this action and his handling of the energy (Enron) issues.
We had an interesting replacement election, with the Terminator becoming CA governor..
Just donated the annual cost of my NYTimes subscription for your exceptional work here. The calpers work you are doing is exceptional.
You do some amazing work. This is a major story.
Hmm. CalPERS going head to head with Yves somehow reminds me of that old Roman scoreboard;
Lions – 5
Christians – Nil
Calpers — the Kim Dotcom of pension sponsors.
Where do they post the free movies? ;-)
Unbelievable! I hate copyright infringement as much as any other writer. Now you have a mega bucks pension fund ripping off pensioners and they are to cheap to pay copyright fees on top. Great work Yves and hopefully this will have a big, big impact!!!
Busted!
Well played.
Is there a Pulitzer in NC’s future?
On a related matter, someone may want to look into CalPERS’ relationship with a mail order pharmacy known as OptumRx. On January 1, 2017 they required retirees who use their medical insurance plans to switch to these guys. It has been a nightmare ever since. At a minimum there’s gross incompetence. But I became suspicious when a medication that used to cost the previous pharmacy less than $100 is priced at over $1000. Sounds like there may be more than incompetence involved.
Optum was born of bad blood a decade ago. It was rebranded after the UnitedHealth Care subsidiary company Ingenix got hit with class action lawsuits for lowballing the price of out-of-network care. UnitedHealth Care had a monopoly on this data–which other insurance companies gladly used to pretend that their out-of-network care was much cheaper than it was.
This left patients who paid way too much or just couldn’t pay their doctors–and a boondoggle for then-NY AG Andrew Cuomo led lawsuit… followed by physician class action settlements against UnitedHealth, Cigna and Aetna.
http://www.modernhealthcare.com/article/20090126/modernphysician/301269977
http://www.healthcareitnews.com/news/ama-others-join-lawsuits-against-aetna-cigna
As a result, the Ingenix brand was toast. https://www.aapc.com/blog/11560-ingenix-soon-optuminsight/
Optum® is powering modern health care to create a healthier world. We do this by modernizing infrastructure, advancing care and empowering consumers.
https://cdn-aem.optum.com/content/dam/optum3/optum/en/resources/brochures/Optum_Story_8.5x11_V1.pdf
As a nurse working in a doctors clinical practice, I hate, just HATE, the entity known as Optum (rhymes with “sputum,” sort of.) The corp is not only a dispensing pharmacy for mail order, but parts of it serve as “gatekeepers” for a lot of other Medical UNsurance corps. This “corporate thing/thug” gives looting a bad name. Prices go up, formulary “UNcoverage” grows apace, and I sort of pity the poor mopes who have signed up, just to have jawb, as call center point people for this ungodly bunch of thieves. If you can ever get past the multi-tiered phone “your call is important to us” tree to a human, what the person wearing the headset and going blind staring at the monitor and going crazy trying to “meet their metrics” will say sounds to my old ears like “Department of Denial, how may I obstruct you?”
Here’s the current Internet Face of Optum, “a health services and innovation company.” [emphasis in original]: https://www.optum.com/ The apparent corporate motto? “HOW WELL GETS DONE.” Should be “cook you till you’re done.”
I try to engage these folks a bit, offer solicitude for their monstrous task, ask them what it’s like reading off the scripts telling people they ain’t getting no dam’ “coverage” for medications or procedures or medical equipment that are in fact demonstrably medically necessary. Sometimes an unguarded response will slip through, confirming the horror of it all, but I do feel a little ashamed, knowing that I have been advised of what the mopes know, omnipresently: “All calls are monitored for quality and performance improvement.”
Optum is also a notorious robocall spammer. Three years in a row (2014, 2015, 2016) Optum launched robocall campaigns, spamming my phone with 5 or 6 calls per day all week long.
Last August after I threatened to complain to the Minnesota Attorney General about Optum’s obnoxious refusal to remove me from their robocall sucker list, I got a reply from Consumer Affairs promising to stop the nonsense. This is the person to contact:
Don’t take sh*t from a sleazy racketeering operation like Optum. Whack ’em between the eyes. And if that don’t work, sic the attorney general on them.
i think might just try that
So just to be clear the articles were only available on an IP unregistered with any DNS? If one were to Google “Calpers News Site” would it have shown up? The way the articles were distributed might affect damages and the inclination of the NYT et al to seek them.
No, CalPERS has a range of IP addresses assigned to it. The indexing of a site or sub-site is not supposed to be based on IP addresses, see this as an example:
https://www.searchenginenews.com/sample/content/google-has-indexed-my-site-by-my-ip-address.-how-can-i-correct-this
Here is some additional detail:
https://stackoverflow.com/questions/5211820/what-does-it-mean-to-index-a-page
Since no one (including moi) had linked to the CalPERS site, it was invisible to search engines.
The URL was a http://www.calpers.ca.gov – registered with DNS but not linked to. Or maybe there was a noindex command: we didn’t check.
I think the latter is more likely. If it was out there and unsecured for a long time then Google would be almost certain to become aware of the address sooner or later (a user browsing to the site with a tracking add-on like Google toolbar installed would be sufficient, or a user e-mailing a link to it via Gmail). If it was an unsecured URL then they would likely conclude it was public and index it unless explicitly told not to.
It would be interesting to know how much traffic the site received from IP addresses external to Calpers. That would depend on how long Calpers kept the access logs (public sector companies often have record retention obligations under the law). It would provide a counterargument to a ‘security by obscurity’ defense if Calpers was to try it. We know that at least one person outside the organization (Yves) got hold of it and it’s reasonable to suppose there were more.
No, the site was not indexed on Google. I checked repeatedly, even typing in the address of the site as a search item. If you had looked at the links I provided, what leads Google to index a site is hyperlinks to it. Traffic has nothing to do with it.
The only way you could find how much external traffic the site got would be by getting CalPERS log files. They’ve refused to do that in past Public Records Act requests even though there were no security issues related to the particular requests I made.
I’m not disputing your assertion that the site wasn’t indexed. I was just observing that the simplest way to achieve that would be to explicitly tell Google not to do so via a noindex command, as Michael O mentioned (which is simple to do and is supposed to be respected by all search engines). That way even if the crawler does ever reach your site somehow, you’re covered. Otherwise you would be entirely dependent on total obscurity and even one link, share to Facebook/G+ etc. would blow your cover, which clearly hasn’t happened.
Interesting that they blocked your request for access logs. I recall they fulfilled your request for internal IP addresses, and I certainly wouldn’t rate Web server access logs as any more sensitive than those. Would they be forced to cough them up if they were sued by someone like NYT or WSJ, I wonder?
No, no, they did not give me the logs or the internal IP addresses in my previous PRA request. Instead, they gave me the answer to the question I was clearly seeking to have answered, which was who has trolled my site. The fact that they gave me the answer (when they are required to provide records only) was a tacit admission that I could have gotten the internal network information but they were really keen not to do that with me to deter other similar queries (maybe by employees in termination cases? I can’t fathom the reason).
Perhaps I misunderstood what my web host said (and he’s very skilled, he teaches and has some very savvy mid-sized Silicon Valley tech cos as clients) but we had a dev site (what is now our Documents Trove) up on the net on the same basis as CalPERS. He said at the time it wasn’t accessible to search engines because he hadn’t indexed it. And what he said re the CalPERS site was consistent, that if I had linked to it without an instruction not to index it, like “rel =”nofollow” I would have gotten it indexed. So the fact that I don’t believe that he used a noindex command on a site we did not want others to find suggests he believes or knows those don’t offer any real protection in practice.
Wikipedia confirms my suspicions:
https://en.wikipedia.org/wiki/Noindex
The NYT or WSJ could most certainly get the information in discovery if they sued and if CalPERS hasn’t destroyed it.
Yves – Fantastic work.
When you finished your MBA and headed out into the working world, did you ever imagine you would end up doing investigative reporting?
Of course, with your education and experience, you are perfectly suited to digging out the dirt in the world of finance. No one I know does it better.
I don’t know if the Pulitzer committee considers work published in blogs, but you certainly deserve some kind of national recognition for exposing the shenanigans of the people who run CalPERS.
>>>Under copyright law, the Times has up to three years in which to pursue damages from CalPERS.
The Calpers news site may have been up since at least 2006—as the link appears to have been live, but secured, back then.
https://web.archive.org/web/*/calpers.ca.gov/apps/news/default.asp
Aha, thanks for that. In its redone form, it had articles “only” from August 2, 2009. But yes, I’m not surprised that there was a predecessor version. However, only the articles that were infringed upon in the last six years would be subject to claims. from publishers.
One former state employee told me he was sure it was common for state agencies to distribute news stories internally. Where he had worked many years ago, one guy was in charge of cutting out, photocopying, and distributing articles, but only those about his agency. And they’d send a copy of the articles only to each department, not to every employee. I think publishers would be not thrilled about that but they wouldn’t necessarily go beyond a “cut that out” response if they found about about it, because the scale was limited. CalPERS was mainly distributing news relevant to the employees and board members over a whole range of topics, like investments, pensions, health, state news. There would be a section on CalPERS news, but on a typical day in the last couple of years, it would be 2 to 4 articles out of a usual 20 or so. And in 2010 and 2011, the site was showing even more total articles every day.
The earliest article ID that I found, which returned data, was 46998. That’d obviously be an odd number to use as a starting point so there may have been earlier articles that were inaccessible. Or maybe they changed the way articles were served at some point.
We see who does not think that your reporting is fake news that should be ignored. (8^))
The memo supporting this rule change cites Bagley-Keene for its authority. I’m by no means an expert on the public meeting law of California, but I quickly read the supposedly relevant sections, and it’s not readily apparent to me that Bagley-Keene supports this proposed rule.
CalPERS describes itself as a leader in corporate governance. I can’t imagine how they’d react if one of CalPERS’s equity holdings proposed this kind of rule for its board.
http://meditationonmoneymanagement.blogspot.com/
You are 100% correct. The proposed rule change is a travesty.
Bagley-Keene is meant to assure that deliberative processes take place in public, or that proper notice is made of any board deliberations that are private, which includes citing the statutory authority for taking it off line.
Merely distributing articles, with no additional commentary, is not a meeting or part of a meeting, which is what Bagley-Keene is meant to prevent. JJ Jelinicic asked a deputy attorney general specifically about this issue and was told immediately that sending articles was perfectly fine.
Some thoughts…
As a Calpers recipient I wonder about the hit…
Say 100 mil.
300,000 mil assets.
100/300,000 = .00033 = .03%
So courts will think pockets very deep and may want to set example, maybe 200 mil.
Hit is not to recipients, who have guaranteed benefits, but to taxpayers. Course, I’m also a Ca taxpayer…
Best part by far is black eye for staff and board… and all news sites will come down hard, including (sting like a) Bee, which pols read, plus LA times… as do recipients, some of which will write letters to pols and papers. Story might fester for a while until most have settled…
Certainly more scrutiny… who made and approved the theft? might just be what is needed to shake up board. Might jj stay?
The technical and legal details are beyond me, but:
Woo-Hoo!
Excellent work, as always.
As a CalPers contributor and hopeful annuitant (some day, maybe), I read this with a lot of ANGER at CalPers and how reckless, stupid, and frankly idiotic and financially insane their practices are.
Yes, as always writing to the usual suspects, for whatever good it will do. Those in power at the State Capital don’t seem to give a stuff. I guess it’s “only money” to them.
Grrrrrr
This is what independent news organizations are for.
Funny how the major mass media outlets have been reporting fewer and fewer scandals over the course of the last decade, it seemed to me to be a glaring and growing void in the basic responsibility of journalism.
Bravo! Let’s hope this makes a great big noise and in the process plants the seed of the need for such investigative reporting in the minds of millions of Americans. It wouldn’t be a moment too soon.
If sued, does this affect the pension funds they hold?
Not really. Even though this would be a meaningful number to the bigger papers, it’s small beer for CalPERS. And they are backstopped by the State of California, effectively.
I wonder how common such news websites are. The internet has always been the Wild West of copyright violations.
Amazingly well done, Yves. Like many of your other readers, I’m very annoyed with people who think the laws do not apply to them.
the law does not apply to governments, especially in blue states.
And in today’s news it seems management is looking for raises >:(
Check out Legg Mason v. Lowry Reports. Legg got caught being too cheap to purchase subscriptions and they got dinged $19m.
http://articles.baltimoresun.com/2003-10-07/news/0310070213_1_legg-mason-copyrighted-material-market-analysis
http://www.internetlibrary.com/cases/lib_case520.cfm
https://files.skadden.com/sites%2Fdefault%2Ffiles%2Fpublications%2FPublications2430_0.pdf
Thanks for that!