Foxconned

The Epoch Times, Electric Vehicles, Foxconn, and Drop the Charges

The Epoch Times

In 2016, a publication emerged on Facebook and YouTube, pushing a pro-Trump, anti-China narrative via paid ads and a network of “news” pages. The Epoch Times had existed for years as a small, low-budget newspaper handed out for free in cities around the world. It was the propaganda arm of Falun Gong, a fringe religious group founded by Li Hongzhi in China in the early 1990s. He claimed his followers could achieve spiritual enlightenment through a series of five meditation exercises and moral self-improvement. After Chinese government crackdowns, Falun Gong relocated to upstate New York, and spent decades fighting what it deemed the Communist Party menace.

The group saw Trump’s anti-China rhetoric as a way to advance two goals - grow their publication, and turn public sentiment against the CCP. They turned to Facebook:

The publication and its affiliates employed a novel strategy that involved creating dozens of Facebook pages, filling them with feel-good videos and viral clickbait, and using them to sell subscriptions and drive traffic back to its partisan news coverage.

And, like any inflammatory content in 2016, it spread like wildfire:

Today, The Epoch Times and its affiliates are a force in right-wing media, with tens of millions of social media followers spread across dozens of pages and an online audience that rivals those of The Daily Caller and Breitbart News, and with a similar willingness to feed the online fever swamps of the far right.

It also has growing influence in Mr. Trump’s inner circle. The president and his family have shared articles from the paper on social media, and Trump administration officials have sat for interviews with its reporters. In August, a reporter from The Epoch Times asked a question at a White House press briefing.

Cool, cool. A right-wing propaganda machine amplified by the president and his political party, run by a secretive group with unknown sources of funding? What could go wrong! The Epoch Times isn’t just an America problem, it’s become popular in countries all over the world:

In Vietnam, Mr. Trung’s strategy involved filling a network of Facebook pages with viral videos and pro-Trump propaganda, some of it lifted word for word from other sites, and using automated software, or bots, to generate fake likes and shares, a former DKN employee said. Employees used fake accounts to run the pages, a practice that violated Facebook’s rules but that Mr. Trung said was necessary to protect employees from Chinese surveillance, the former employee said.

[…]

According to the 2017 email sent to Epoch Times workers in America, the Vietnamese experiment was a “remarkable success” that made DKN one of the largest publishers in Vietnam.

Building off this success, they employed the same tactics in the US:

Perhaps the most audacious experiment was a new right-wing politics site called America Daily.

Today, the site, which has more than a million Facebook followers, peddles far-right misinformation. It has posted anti-vaccine screeds, an article falsely claiming that Bill Gates and other elites are “directing” the Covid-19 pandemic and allegations about a “Jewish mob” that controls the world.

They likely helped grow their followings by buying fake click farm traffic:

Several of the pages gained significant followings “seemingly overnight,” said Renee DiResta, a disinformation researcher with the Stanford Internet Observatory. Many posts were shared thousands of times but received almost no comments — a ratio, Ms. DiResta said, that is typical of pages that have been boosted by “click farms,” firms that generate fake traffic by paying people to click on certain links over and over again.

In 2019, Facebook banned The Epoch Times from advertising on its platform, after it had spent $1.5 million in seven months to push pro-Trump, right wing propaganda. So, it moved the ad spend to YouTube:

Since being barred from advertising on Facebook, The Epoch Times has moved much of its operation to YouTube, where it has spent more than $1.8 million on ads since May 2018, according to Google’s public database of political advertising.

Google apparently has no compunction taking money from a group that calls COVID-19 the “CCP Virus” and publishes hundreds of videos spreading disinformation and fringe conspiracy theories. Freedom of speech, baby.

Falun Gong is also hiding who funds them, because of course they are:

Where the paper’s money comes from is something of a mystery. Former employees said they had been told that The Epoch Times was financed by a combination of subscriptions, ads and donations from wealthy Falun Gong practitioners. In 2018, the most recent year for which the organization’s tax returns are publicly available, The Epoch Times Association received several sizable donations, but none big enough to pay for a multimillion-dollar ad blitz.

By registering as a non-profit, The Epoch Times has left itself open to investigation by state and federal authorities, much like the NRA or Steve Bannon’s shady non-profit. Certainly, the tech platforms are not going to save us as long as the ad dollars keep flowing.

Electric Vehicles

Remember Nikola? The hyped maybe-hydrogen-but-also-battery-powered truck start-up that went “public” and was briefly worth $30 billion dollars before it was exposed as a fraud? Surely the markets won’t fall for that ruse again and throw billions of dollars at unproven technology:

Early this summer, electric-vehicle startups Hyliion Inc., Fisker Inc. and Lordstown Motors Corp. were tiny companies with staff numbers measuring in the dozens. Two had built little more than a prototype. None have reported any revenue.

Today, they are valued at more than $3 billion apiece by stock-market investors.

Oh, god damn it. EV companies are now turning to “blank-check” companies which are, well, basically what they sound like. Investors in these companies write a blank check to the people managing them, hoping that they’ll use that money to make big bets:

Companies at such a nascent stage are inherently risky and are typically funded by venture-capital investors as they build out assembly lines and sales operations. Instead, these startups are going public at a far earlier stage than is standard by merging with blank-check companies, before they have proven that they can manufacture their product or that they have a viable business model. Blank-check companies are publicly traded shell companies that merge with private companies, enabling the private firms to sidestep an initial public offering.

The rush to go public is the “product of a euphoric market,” said Mike Volpi, a partner at venture-capital firm Index Ventures

Ah yes, these euphoric markets we have right now, in the midst of a global recession, a deadly pandemic, and record unemployment. So, what are these companies promising?

Fisker, which went bust in 2013 and is now back in the car business says it’s going to be making $13 billion in revenue in 5 years, which is quite the claim considering it is making zero revenue right now.

What is going on? Well, much of it can be traced to Tesla mania, which doesn’t really make sense either:

Even Tesla’s stock price—up more than fourfold this year—has baffled many in the sector. Tesla Chief Executive Elon Musk said in May the share price was too high. The company is valued at around $400 billion, roughly five times as much as General Motors Inc. and Ford Inc. combined; it had one-twelfth their combined revenue in 2019.

Also, let’s not forget Tesla makes a lot of its money from reselling tax credits, and not from building cars.

Is a lot of this hype around electric vehicle companies - excluding outright frauds like Nikola - simply investors trying to flip a quick buck? Maybe:

Blake Denton, 25 years old, trades stocks on the Robinhood app. After watching Nikola’s ascent, he figured other electric-vehicle companies might follow a similar path given the enthusiasm from retail traders.

He learned about Hyliion, which plans to mass produce electric drivetrains for semi-trucks, while looking through posts on the online message board Reddit. The company announced a deal to go public in June by merging with a SPAC called Tortoise Acquisition Corp., and buzz began to grow online, with some thinking it could be the next Nikola.

“I had invested in Hyliion on pure hype—literally pure hype,” Mr. Denton said. “I knew nothing about the company.”

He said he sold after the price went up and made about $50,000.

Ahhhhhhhh. This anecdote has it all - a 25-year-old who found a meme stock on Reddit, a company named Tortoise, and blind stock trades that make obscene profits. Also, yet another twenty-something founder with ideas:

Hyliion CEO Thomas Healy, 28, began gradually putting together plans to make a natural gas-and-battery-powered drivetrain that didn’t need diesel after he graduated from Carnegie Mellon University with a mechanical-engineering degree.

His company has produced a few prototypes, hasn’t sold a single unit of its drivetrain, and is now worth $3.5 billion dollars. Euphoric markets!

Foxconn

In 2017, Donald Trump and Wisconsin governor Scott Walker announced a multi-billion dollar deal with Chinese electronics giant Foxconn to build a factory and technology complex. The company would invest $10 billion in the state, build a 20 million-square-foot manufacturing facility, and create 13,000 new jobs.

Three years later, how’s that going? Josh Dzieza of The Verge fills us in:

The renovations never arrived. Neither did the factory, the tech campus, nor the thousands of jobs.

Huh, well. Surely something happened?

State and local governments spent at least $400 million, largely on land and infrastructure Foxconn will likely never need. Residents were pushed from their homes under threat of eminent domain and dozens of houses bulldozed to clear property Foxconn doesn’t know what to do with.

Not ideal. It’d be easy to write this off as another government boondoggle, a state trying to lure a company with tax credits, only to have the promised jobs fail to materialize. I promise you, this is far more than a few broken promises.

Let’s start at the beginning:

Foxconn’s Wisconsin saga began two days after Trump’s inauguration, when the company’s founder and CEO, Terry Gou, told reporters he was considering building a $7 billion factory in the US and employing as many as 50,000 people.

Such announcements are far from unusual for Gou, and often, nothing comes of them. In Vietnam in 2007, in Brazil in 2011, in Pennsylvania in 2013, and in Indonesia in 2014, Foxconn announced enormous factories that either fell far short of promises or never appeared.

Gou found eager marks in Trump and Walker. Within the year the governor had signed a deal that - even at the time - seemed unusually generous:

…nearly $3 billion in “refundable” tax credits, most likely to be made in the form of direct payments to Foxconn. Combined with infrastructure the state promised to build, approximately $800 million in additional incentives mostly from the small town of Mount Pleasant, where the “Fab” was to be located, and other contributions, the package totaled more than $4 billion. In a best-case scenario, the Legislative Fiscal Bureau found the state wouldn’t break even until 2043. Depending on how many people Foxconn hired, each job would cost taxpayers somewhere between $200,000 and more than a million dollars. The average subsidy in the US is around $24,000 per job.

So, Walker put the state on the hook for 10 to 20 times the cost of a normal job subsidy, and expected to ride it to reelection. The polls still weren’t looking great, so Walker had Foxconn make some outlandish promises during his election campaign:

Walker campaigned to show that all of Wisconsin would feel the effect of the “Foxconn bonus.” He was aided in this message by a string of announcements from Foxconn: a promised gift of $100 million to the University of Wisconsin-Madison; partnerships with local companies; and the purchase of buildings in far corners of the state that would become “innovation centers,” which Walker quickly featured in campaign ads. In September, Foxconn released a video rendering of its plans for Mount Pleasant: a futuristic corporate campus where employees read books as they took self-driving cars to work in glass orbs.

It didn’t work, and Walker lost in 2018. However, due to the extreme gerrymandering he put in place during his tenure, the state legislature remained Republican, despite the Democrats receiving more votes. Fearing for the Foxconn deal, Walker and the legislature signed three “lame duck” bills, stripping the incoming governor of significant powers, including limiting his oversight of the project.

Foxconn took the loss of its head cheerleader as a sign it needed to pull back on the project, which hadn’t really gone anywhere:

Rather than the 1,040 people Foxconn intended to hire by the end of 2018, per its contract with the state, or even the 260 needed in order to receive subsidies, an audit found the company had managed to hire only 113. At the Mount Pleasant campus, it had erected a single structure, a 120,000-square-foot space that sat virtually empty. Its very name, “the multi-purpose building,” seemed noncommittal. As for the promised LCD factory, the “Fab,” Foxconn boasted in a letter that a contractor had moved 4 million cubic yards of dirt. As 2018 came to an end, the company froze budgets and canceled planned career fairs.

The problem wasn’t a lack of enthusiasm from the state of Wisconsin or the Trump administration, however. It was that Foxconn hadn’t apparently made a plan for what its business was going to be:

There appeared to be no research into the market for products Foxconn might make or the costs of producing those products in Wisconsin. Employees know this because many of them, no matter what role they had been hired for, were told to figure out what Foxconn should do in Wisconsin themselves.

“They asked me to create a business in Wisconsin, to come up with a business model, whatever I thought would make money,” said one of several engineers who was training in Taiwan when Foxconn called him home to help figure out what to do. He came to a conclusion shared by many who joined the project: “The most common misunderstanding with Foxconn is people here thought Foxconn had a strategy and a business plan when they were coming into Wisconsin. They did not. They had no plans at all.”

That’s…one way to do it. Some of the project’s dysfunction could be attributed to the leadership structure at Foxconn, which organized itself into “business groups” who competed amongst themselves.

One group had been responsible for the planning of the Wisconsin project, and it was supposed to lay the groundwork for other divisions of Foxconn to come in and make stuff, like LCD screens and computer processors. The problem was, those leaders didn’t want to take the risk of failing, so they refused to make stuff. Soon, the project devolved into a rotating cast of senior executives, each coming in and creating their own unique flavor of chaos, while nothing actually got done.

For the workers, things were comically bad from the get go:

…new recruits arriving at the 1960s office building Foxconn had purchased in downtown Milwaukee were surprised to discover they had to provide their own office supplies.

[…]

They listened to the cries of co-workers trapped in the elevators that often broke, noted the water that occasionally leaked from the ceiling

[…]

At one point, people were stuck without desks at the Milwaukee headquarters because the Foxconn subsidiaries they worked for refused to pay rent to FEWI

[…]

Wisconsinites who attended the company’s enormous hiring events fared little better. Especially during the late 2018 hiring spree, these events could have what employees describe as a “speed-dating”-like atmosphere, with applicants offered jobs on the spot and given 24 hours to accept. The problem was that the Wisconsin project never had a conventional budget: everything from printing business cards to hiring people had to be sent back to Taiwan for approval, a process that could last months and which often ended in a denial.

Working in substandard conditions - if the job they were offered even materialized -became a reality for the hundreds of workers at Foxconn’s campus. Then there was the late-year hiring binge in 2019, as the company tried desperately to meet its agreement with the state:

The company only gets paid subsidies from the state if it employs a certain number of people each year. But this mechanism also creates a perverse incentive: because employees are only counted at the end of the year and their pay is annualized to see if it meets the minimum yearly salary, Foxconn could hire people in the final weeks of the year, get tens of millions in subsidies, and be free to lay them off once the quota filing deadline passed.

Foxconn devised a solution:

Foxconn devised two programs to meet the quota. The first, called Earn and Learn, was marketed as a way for students at nearby colleges to work at Foxconn as they finished their degrees. There was no work for them to do, but provided they badged into Foxconn buildings they would count toward the company’s employment quota. “Everyone was watching YouTube or doing homework,” said an employee.

The other initiative, called Foxconn Future Leaders, targeted recent college graduates, preferably foreign students in the US on visas, according to multiple employees.

[…]

Foxconn contracted with a recruiting service that found the students. A makeshift call center was set up, with employees hiring after cursory conversations, according to an employee who witnessed the operation.

What did it do with all these new “employees”? Crammed them into a few offices for the final months of the year:

By December, Foxconn had hired so many students and graduates it had to put them in the multipurpose building and a nearby rented space, where they sat at folding card tables watching cooking videos and doing schoolwork. In the Milwaukee headquarters, cubicles were torn out and replaced with long tables where people sat shoulder to shoulder. “You needed a plunger to force people in the building, it was so packed with people,” said an employee.

Foxconn CEO Gou took a victory lap through Wisconsin on the way to the White House, getting praise from Trump for Foxconn’s progress. The minute that was over, though:

The layoffs began with the new year. Starting in January, when the promised LCD factory was originally scheduled to open, Foxconn instead began letting employees go in batches.

“It was a pump and dump,” said an employee. Many of the Wisconsin residents were laid off, as were many of the local college students.

They retained much of their immigrant workforce, who they forced to work long hours for little pay, confident they would silently accept the abuse to keep their visas. By the time Gou showed up in Wisconsin in February, they’d fired so many Wisconsinites the company instructed their Asian employees to stay out of a group photo for fear it’d expose how little diversity remained.

It wasn’t the first staged photo op Foxconn had put together. In advance of a scheduled visit from Trump, which ended up being cancelled due to COVID:

A demonstration manufacturing line making circuit boards was to be set up, along with kiosks from tech companies that, while not currently buying products from Foxconn’s Wisconsin operation, theoretically might have done so in the future. In lieu of the data center Foxconn had scrapped, a shipping container-sized modular data center was to be brought in to sit beside the hastily constructed sphere, an odd disco ball-like rendition of the sleek domes built elsewhere by Amazon and Apple.

[…]

“We were going to have a fake data center there, and all these brands that we don’t have relationships with, and we were going to plead that we were doing business with them,” said another employee involved in the planning. “Oh my god, that was distasteful.”

So what was Foxconn’s actual plan if it wasn’t to make LCDs? They’d tasked employees with thinking up business ideas, and cycled through different leadership, who provided little guidance or continuity. The ideas senior management did try to implement were, to put it mildly, a bit out there:

In reality, the “innovation centers” were meant to be co-working spaces. “Alan constantly referenced WeWork and how we should be following that model, thinking it was brilliant,” said an employee. It was branded “Blaze.”

Imitating WeWork, seems like a good idea. What else?

With Blaze stalled, employees began convening to discuss literally any other idea to make money. They searched for things in Wisconsin they could export to China: cosmetics, designer handbags, ice cream, carp. Yeung asked them to draw up a plan for building an aquaponic fish farm in Mount Pleasant, having been inspired by a company in northern Wisconsin and reasoning that Foxconn had access to cheap water the state provided for LCD manufacturing. They briefly explored doing something with esports, maybe sponsoring a gaming team that could use the empty innovation centers, according to one source. A plan to export dairy to China got as far as a meeting with the Wisconsin Department of Agriculture before collapsing.

Exporting carp and handbags to China, okay. Any other ideas?

In meetings at Racine’s City Hall, Foxconn representatives and city officials started developing a plan, elements of which Racine submitted to a competition called the Smart Cities Readiness Challenge in 2019: camera-festooned autonomous vehicles would patrol high-crime areas, the city said in its proposal, guided by 5G cells mounted on lamp posts. Self-driving vehicles — retrofitted golf carts at first, then shuttles as soon as 2020 — would ferry Racine’s workers to Foxconn’s campus. Foxconn, the city noted in the submission, was a “particularly important stakeholder” and would help provide financing and technology.

Golf carts to patrol high crime areas? Golf carts to take people to work? Okay. How’d that go?

Foxconn only ever got as far as buying the golf carts. They arrived from China disassembled, in orange, pink, and other festive colors. One employee described them as “the biggest pieces of shit,” like something “bought off Wish.com.” Unable to make them autonomous, Foxconn put them in storage in the multipurpose building. At one point, the company discussed outfitting them with lights and turning them into security vehicles, but the subsidiary in charge of security refused to pay FEWI for the carts, according to one employee. As the divisions bickered, bored employees would come down from the Milwaukee headquarters to race the carts around the empty building, until the batteries finally died.

Hmmm. Finally, having exhausted local resources and alienated every supplier they attempted to work with, Foxconn turned to the White House:

Woo flew to DC to meet with Trump trade adviser Peter Navarro, who suggested Foxconn become a vendor to the US General Services Administration (GSA), the agency that procures products for the federal government, according to an employee with knowledge of the visit.

[…]

The solution had a neat circularity to it — a government-subsidized project meant to earn government goodwill finding salvation in selling back to the government — but like almost everything Foxconn tried, it ended in failure. Employees searched for products Foxconn already made that were eligible for the GSA, but everything was either unprofitable or already being sold by major Foxconn customers like Dell and Cisco, according to a source with knowledge of the project, which would mean Foxconn would risk undermining actually profitable business relationships to salvage the Wisconsin project.

Ah, well. So, what has Foxconn actually made with half a billion dollars in public investment and two years of shuffling people and dirt around in Wisconsin? The Verge’s Dzieza says it better than I could:

But in actual reality, the project has succeeded in manufacturing mostly this: an endless supply of wonderful things for the President to promise his supporters. This past weekend, in an interview with a local Wisconsin TV station, Trump insisted Foxconn had built “one of the most incredible plants I’ve ever seen” in Mount Pleasant and would keep its promises and more if he was reelected. “They will do what I tell them to do,” he said. “If we win the election, Foxconn is going to come into our country with money like no other company has come into our country.”

In Gou and Foxconn, Trump and the Wisconsin GOP found willing collaborators in their willingness to loot public coffers to stay in power. After all this is done, and the taxpayers are on the hook for decades, they’ll find another excuse - the new governor, the new president, or forces out of their control. For them, it was only ever about the press release, the ribbon cutting, and the first shovel of dirt. Everything after that is someone else’s problem.

Drop the Charges

That is the face of a woman who knows she was this close to getting away with it:

A Littleton woman allegedly impersonated a Hillsborough County prosecutor when she filed bogus documents with court officials declaring that the drug possession and stalking case against her had been dropped, according to recently released indictments.

She faked out the courts three times. She didn’t just impersonate a prosecutor either, she also impersonated a judge, and one of her relatives!

Indictments allege Landon also filed an order falsifying a decision of retired Superior Court Judge Gillian Abramson to waive filing fees in a lawsuit she brought against Hillsborough County. And she allegedly filed an order on behalf of a relative to halt guardianship proceedings involving Landon’s child.

Lisa…while I don’t condone the, uh, stalking and possession of meth, I hope you can put your legal brain to work during your time in jail. You can earn a law degree! While it’s extremely difficult to become a licensed attorney with a criminal record, especially when it includes impersonating a judge and a prosecutor, I have faith in your abilities. Chase your dreams.

Short Cons

Washington Monthly - “But podcasting’s bright future is under increasing threat. The medium stands in danger of being rolled up by monopolistic tech platforms that could come to own and control the marketplace itself.”

Marker - “How could an entrepreneur who spent 15 years building an empire that was the envy of the retail fashion industry allow it unravel so spectacularly?”

NY Times - “It was not the first time Mr. Berman, the United States attorney for the Southern District of New York, had fended off attempts by top Justice Department political appointees to disrupt the Halkbank investigation.”

Tips, thoughts, and carp export strategies to scammerdarkly@gmail.com