by Mark Ames
Last month, a multiagency task force composed of federal, state, and local authorities busted open a major Bay Area
wage theft operation, leading to arrests, raids,
mug shots on the local news, and big
speeches about the injustice and immorality of wage theft:
“Businesses should not profit by stealing from their hard-working employees.”
For months here at Pando, we’ve been reporting on Silicon Valley’s
Techtopus, the wage-fixing cartel organized by Steve Jobs, George Lucas, Eric Schmidt, Bill Campbell,
Meg Whitman
and other superstar luminaries. According to experts’ models, just four
Big Tech companies at the center of the Techtopus—Apple, Adobe, Google
and Intel—effectively stole up to
$3 billion in employee wages between 2005-2010. This doesn’t include the
dozens of other companies who appear as co-conspirators, from
Disney and
Dreamworks Animation to IBM, Microsoft, Oracle, Dell, WPP, Comcast and others named in secret internal company documents first
revealed by Pando.
But September’s massive crackdown on wage theft, the culmination of a
year long investigation, was not aimed at those very real wage heists.
Rather, the accused wage thieves are a handful of sleazy senior care
home operators: A 76-year-old woman and her daughter and son-in-law; and
a 61-year-old
Filipino woman.
In all, the care home operators are accused of stealing roughly $2
million in underpaid wages to some 60 care home workers — largely
imported Filipino workers.
It’s become almost a cliche by now to call attention to just how
grotesque America’s two-tier justice system has become, a grotesquerie
accelerating in tandem with our record levels of
inequality.
It isn’t that there was once a golden age where all were judged equally
here; but degrees do matter a lot, and the degree of unequal justice
today has reached cartoonish levels that were only supposed to happen
in basket cases like Boris Yeltsin’s Russia.
Here then is a stark example of justice in greater Silicon Valley, the political economy of the future:
Get caught red-handed by the Department of Justice stealing an
estimated $3 billion dollars in wages from tens of thousands of
employees — and your “punishment” is an
agreement
with the DOJ “that does not constitute admission by the Defendants that
the law has been violated or of any issue of fact or law.” And, no
fine. Let me repeat that: $3 billion in stolen wages; no admission of
guilt, no fine. The only punishment is an agreement to submit to
periodic checkups on compliance with antitrust law as regards to illegal
wage-fixing cartels. (See the
DOJ settlement sections labeled “Required Conduct” and “Compliance Inspection.”) Only eBay was slapped — more like flicked — with a
$3.75 million
fine, and only because eBay kept brushing off the DOJ’s “threats,”
presumably because they didn’t find the DOJ’s no-guilt, no-fine
“punishment” of Apple, Google et al particularly frightening.
Considering that eBay’s 2013 revenues
totaled over $16 billion, on $212 billion in “enabled commerce volume” — a $3.75 million fine is worth less than the pocket lint in
Pierre Omidyar’s Bermuda shorts.
Contrast that with the multi-agency
Contra Costa Employer Fraud Task Force —
combining the power of the US Labor Department, the California state
departments of Employment, Insurance, Employment Development, and the
Contra Costa County Department of Insurance, along with the district
attorney’s office and various police forces — all to bust a grubby
small-time wage theft ring at a handful of local senior care homes,
ending in police raids, arrests, and frog-marching a 76-year-old and
61-year-old woman into custody, over an estimated $1.5 million to $2
million in underpaid wages to care home providers. The punishment,
according to deputy district attorney William Murphy, will include full
restoration of the nearly $2 million in stolen wages, plus another
$624,000 in fines. Plus at least a dozen criminal felony charges. That’s
the result of a year long investigation by the so-called Contra Costa
Employer Fraud Task Force.
Don’t get me wrong — underpaying the care home providers for a job as
wretched as taking care of inconvenient elderly suburban Californians
is disgusting and criminal. The care home business is a mean, grubby
business; the owners of these operations, from my limited personal
experience many years ago, tend to be hardened people in a hard job.
It’s an ugly way to make money, profiting off discarded elderly
suburbanites — suburban middle-class feeding cows to the care provider
entrepreneurs, dead weight to everyone else in the Bay Area caught up in
the cult of individual self-fulfillment. Though it’s little talked
about, there’s an enormous amount of sublimated shame and guilt
underlying the entire care home industry. Small-time care home providers
aren’t heroic entrepreneurs; they’re something we’d all rather not talk
about, because it’s a giant bummer and shameful if one thinks about it.
Which one doesn’t, if one is a true Californian.
What’s galling is not just the blatant two-tier justice treatment, reminiscent of the Russia
I left behind
— but also the fake populist outrage used to PR the Big Wage Theft
Crackdown. Noting that some of the care homes raided in Walnut Creek,
Brentwood and Antioch were “million dollar homes,” deputy district
attorney Murphy told reporters as he
announced the arrests:
“(The owners) can afford to pay off these million-dollar homes because they’re only paying their workers a couple of bucks.”
Indeed. Except for the fact that these “million dollar homes” were
filled with lonely, elderly boarders, dropped off with a suitcase and a
promise to visit by their healthier blood relatives — to board with
other semi-abandoned elderly, suburbanites… California’s Walking Dead,
attended to by dozens of miserably exploited and lonely Filipino migrant
care givers, whose families back home need every dollar that can be
wired back their way. It’s not exactly like the four arrested care home
owners spent 2013 waterskiing across Martha’s Vineyards with the Obama
Family, like your
Eric Schmidts and
Pierre Omidyars and
Jeffrey Katzenbergs and the rest of the Techtopus wage theft profiteers.
The deputy DA is right to point to the very real consequence of wage
theft — those stolen wages mean more equity, in this case a handful of
suburban California tract homes. That’s what wage theft does, it
transfers wages from the many employee-victims, and converts it into
real equity for the very few wage thieves. The value of that equity
grows exponentially in a place like Greater Silicon Valley, whether
it’s equity in a tract home in the East Bay, or equity in a tech firm
that grows into billions.
You can see how this terrible wage-theft-into-equity calculus works
most clearly in the way George Lucas became a multibillionaire. Lucas,
as I wrote, was the
Obi-Wan Kenobi
of the illegal wage theft conspiracy back in the mid-1980s, initiating
the secret illegal scheme with Steve Jobs and Pixar president Ed
Catmull. In his deposition last year, Lucas reveals himself as someone
totally deluded into believing that his years illegally suppressing his
employees’ wages was an act of moral courage, responsibility, and a sort
of anti-capitalist collective rebellion against evil corporations. By
secretly and illegally suppressing his workers wages and their
opportunities, Lucas argued, he was serving a higher cause for their
benefit and for Art. And Lucas clearly believes himself.
Towards the end of the deposition, as Lucas is caught contradicting
himself — on the one hand insisting that without wage-fixing agreements,
the entire VFX digital animation industry would implode, then insisting
that LucasFilm did not need to suppress wages in order to survive as a
business, because it wasn’t really about profits and competition but
about artistry and cooperation — Lucas let loose his twisted logic,
polished over in the confused language of 60s resistance and Weathermen
anti-capitalism:
“I was trying to — we were trying to protect the San
Francisco film industry. It is very, very small. It is very hard for us.
We’re not like Hollywood. And the only way we can survive is if we do
it together. United we stand, divided we fall. This is not like a
regular capitalist kind of operation where you’re out to kill the other
guy. I’m promoting digital technology for cinema, and I’m devoting a lot
of my time working with animators and with visual effects people to try
to expand the entire medium and discipline for everybody. When I came
here, there were nobody — there was nobody.”
And yet, to borrow from deputy DA Murphy, those wages stolen from
Lucas’ workers over a period of decades allowed George Lucas to cash out
of LucasFilm two years ago, selling his stake for
$4 billion
— $2 billion in Disney stock (making him the largest or second-largest
shareholder in Disney) and $2 billion in cash. (A few years earlier,
Steve Jobs cashed out his stake in Pixar — co-initiator of the illegal
wage theft cartel — for
$7.4 billion, making Jobs Disney’s largest shareholder at the time.)
One could respond to Lucas’ garbled admixture of radical cliches and
mysticism —Angela Davis by way of Yoda: “stand we do united, operation
like capitalist this is not, m’m!” — that if he’d taken just half of his
$4 billion cash-out in 2012 and redistributed it to the several
hundreds of workers whose wages he suppressed to build up that equity,
that then he’d make some sense.
But that is the stuff of hippie fantasies, and Lucas is in the
business of selling fantasies. As for the real George Lucas,
instead redistributing back the equity earned from suppressing his
workers’ wages, he shrewdly held on to his wealth, and now
he’s shoveling close to $1 billion of his wealth into a
controversial museum project with Chicago mayor
Rahm Emanuel. It’s an old tradition going back to the robber baron days — endowing museums,
sleazy land deals
with local power brokers — which appears to be philanthropic but in
fact serves to protect the billionaire’s ill-begotten wealth by
integrating the riches into the cultural and political DNA, all with tax
benefits.
And therein lies the problem with the four arrested care home
providers: They didn’t steal nearly enough money. Just enough to gain
some equity in a few miserable East Bay homes. And now they don’t have
that, and the fleeced care workers will have to wait as the money
trickles in from freshly abandoned elderly suburbanites, whose checks
will presumably be garnished so that they can trickle down at last to
the 60 or so exploited Filipino care home employees and their families
somewhere on the other side of the Pacific Ocean.
