Get It In Writing

Stolen Bible Fragments, Forged Telecom Contracts, and Legal Fees

The Word of God

As humans get better at archaeology, we are able to uncover and - more importantly - preserve some really interesting artifacts of our past. Once in awhile scientists will make a huge find, and it may take years or decades to fully analyze and assess what they’ve found, and what it means. This is unfortunate for scholars and enthusiasts who are eager to hear about new finds, because they may have to wait to find out new information.

In much the same way the art world has gone out of control as rich people use it as a way to achieve status or launder their wealth, collecting relics has become a target for the ultra-wealthy. One family absolutely obsessed with ancient texts is the Green family, who own the company Hobby Lobby, which you may remember was caught smuggling ancient Middle Eastern artifacts into the US for their museum in 2017:

Shipped from the United Arab Emirates and Israel without declaring their true Iraqi origin, some of them were marked "ceramic tiles" or "clay tiles (sample)."

They'd been purchased by Hobby Lobby for $1.6 million.

While they are opposed to spending money for their employees to have birth control, the Greens have spent over $200 million to acquire items for their Museum of the Bible in Washington, D.C. After the collapse of Iraq in 2003 American soldiers were busy protecting oil refineries, and looters ran wild in the country’s museums:

Fifteen years after U.S. forces toppled Saddam Hussein, ushering in a period of instability that led to the plunder of the [Baghdad] museum while ignoring pleas to secure the building, some 7,000 looted items have been returned, but about 8,000 are still out there. And that’s only counting the items that were stolen from the museum. After the invasion, thousands of other artifacts were taken directly out of the ground at archeological sites. In most cases, their whereabouts are unknown.

It doesn’t end with the stolen Iraqi tablets. Hobby Lobby is now embroiled in another scandal, this time centering around a sketchy Oxford papyrologist - someone who studies ancient manuscripts - and scraps of paper found in Egypt in the late 19th century.

Dirk Obbink has a long CV - he was a respected scholar in the field of papyrology for decades. In 1995 he was put in charge of studying a cache of ancient documents by the EES, or Egypt Exploration Society. They are the owners of the famous Oxyrhynchus collection - around half a million papyrus scraps found in an excavated trash dump in an ancient Greek city of the same name. As scholars pieced the documents together, a new picture emerged of humanity’s ancient past - the papers were hundreds of years older than any previously discovered.

There was one particular piece of paper that was very exciting to Biblical scholars - a fragment of the Gospel of Mark, copied less than 30 years after Mark had written it. This made it the world’s oldest surviving manuscript of the New Testament.

During a conference of Theologians in 2012, a professor named Daniel Wallace announced its existence, saying he had it on good authority that the fragment existed and was genuine, and set off fireworks in the field. A few months later a new publication was announced - edited by Obbink - which implied the existence of the Mark fragment, and said it was…part of the Green collection. Yeah, that Green family. However, they didn’t actually publish the Mark fragment or any additional proof. For years! People, understandably, began to get suspicious.

It wasn't the first time Obbink had been in the middle of controversy over ancient documents under his control. In 2014 he published two fragments of poems by the seventh-century BC poet Sappho. It made global news. The problem was that this poem wasn’t a part of an Oxford collection, or any academic vault. Obbink had somehow discovered it himself, and sold it to the Greens. What a coincidence! There were all sorts of issues with the “provenance” of the documents, or the proof that the item was legally removed from its country of origin. Obbink’s story changed a couple of times:

At first, in January 2014, he revealed only that the Sappho papyrus was owned by an anonymous private collector in London. Then, in February, he said the manuscript had come from “a mummy cartonnage panel”.

[…]

In January 2015, the story changed. The Sappho manuscript hadn’t been found in mummy cartonnage, after all, but “industrial cartonnage”, perhaps used for bookbinding.

One fun fact I learned about the ancient Egyptians is that they were eco-friendly, and would use old documents to wrap their dead:

Because some mummy masks had been manufactured from a kind of papier-mache of recycled papyrus, known as “cartonnage”, you could, he told audiences, dissolve the masks in soap and warm water, prise the constituent sheets of papyrus apart and, hey presto, reveal early manuscripts – fragments of the Gospels, of Homer, whatever.

Obbink was claiming, in essence, that his discovery was found in a mummy mask - a controversial method, since it destroys the underlying artifact with no way of knowing whether it will result in one of these unique finds - which is also, conveniently, a good way to launder fake or stolen ancient papyrus, since mummy masks are so common as to be available for purchase on eBay. Then, when it became clear it couldn’t have been a mummy mask because the years didn’t line up, he claimed it was a mistake and that it had been part of a mixed lot of papyrus sold by Christie’s.

Everyone claims the Sappho is real, because of course they do, but at best Obbink was trying to cover up illegally obtained items he sold to the Greens.

That brings us to 2018 when, after years of being admonished to publish his information on the Mark fragment, Obbink submitted his work and it was listed as part of the Green collection. How about that!

It gets even weirder, because while Hobby Lobby bought it and “donated” it to the Green collection, the papyrus itself hadn’t even changed hands. Five years later, they didn’t have it in their collection. A bit odd, considering it was the most sought-after piece of New Testament papyrus ever discovered.

The evidence against Obbink seems overwhelming - there are signed sales contracts between Obbink and Hobby Lobby for the manuscripts - but he has yet to be charged with anything. It’s clear someone stole and sold the fragments to the Green family. Between these pieces and the Sappho, the thief (or fraudster) would have pocketed potentially millions of dollars. This is what can happen when the ludicrously rich invade collectors’ markets, throwing their cash at things with no regard for the origin, or cultural impact. The financial incentive for otherwise respectable people to break the law is too great. I’ll let a biblical scholar speak for herself, at a recent conference:

The Greens have “poured millions on the legal and illegal antiquities market without having a clue about the history, the material features, cultural value, fragilities and problems of the objects,” she said. This irresponsible collecting “is a crime against culture and knowledge of immense proportions – as the facts unfolding under our eyes do prove.”

Under the Sea

Let’s talk about an Elizabeth. Not that one. This one is called Elizabeth Pierce, and she co-founded a company called Quintillion Subsea Holdings in Alaska, her home state. The company’s stated goal was to build a trans-Arctic data cable that would improve Internet speeds for much of the Northern hemisphere, especially Alaska, which has notoriously bad connectivity.

It was an ambitious idea, and people loved it, but unfortunately Pierce built the myth on a series of outrageous claims and, when she had difficulty getting the funding needed to plow through sheets of ice in the Arctic Circle, she did some fraud:

Pierce had raised more than $270 million from investors, who had been impressed by her ability to rack up major telecom-services contracts. The problem was that the other people whose names were on those deals didn’t remember agreeing to pay so much—or, in some cases, agreeing to anything at all. An internal investigation and subsequent federal court case would eventually reveal forged signatures on contracts worth more than $1 billion.

Classic Elizabeth behavior - you get a bunch of people very excited about your moonshot project, lie about who your clients are, and get a lot of money from investors, including personal friends:

In 2013, Pierce mentioned an opportunity to invest in Quintillion to an old work acquaintance, Julian Jensen, who thought the project was “strategically viable.” In May that year, according to court documents, he wrote her the first of three checks totaling $325,000, a third of his savings.

The similarities between Quintillion and Theranos mostly end there, however, because Pierce was selling something that was real - the technology exists to run undersea cables in the Arctic. It’s long been a dream of the biggest tech firms:

Soaring demand for broadband helped drive companies, including Google, Facebook, and Amazon.com, to spend tons on high-speed underwater cables that keep customers watching Netflix and YouTube with minimal delay. But many of those lines run in parallel in the Atlantic and Pacific along well-established ocean routes, leaving the world’s internet vulnerable to earthquakes, sabotage, and other disasters both natural and human-made. A trans-Arctic route would help protect against that while offering a more direct path, potentially making internet speeds much faster.

Pierce initially partnered with a pair of Canadians, whose company would have been responsible for the international portion of the proposed 9,500 mile cable, running from Japan to England(!) She ended up taking over their company’s assets and locking them out of the deal. She used their contacts in the investment world to attract more funding from larger firms, securing $270 million from private equity and a French bank.

The problem was that, on paper, Alaska fiber contracts were not worth very much money. Connecting entire portions of the globe, sure, but there was no guarantee how well that would work, so firms did not want to invest a large amount of capital up front to build it. Pierce solved this by signing inflated deals with Alaskan telecoms, promising her investors that the company would make their money back quickly. Some of the deals she forged outright, others she simply modified after they were signed to show more favorable terms.

It all fell apart when Quintillion had to send out its first round of invoices, and the clients, understandably, were a mix of confused and outraged at the massive bills. Pierce’s fraud quickly unraveled, and she resigned. Criminal charges were filed, and she was sentenced to 5 years in prison.

However! The company did not simply go belly up. Most of the money Pierce had raised had gone into clearing a passage and laying a “subsea” cable around the tips of the coast of Alaska. Alaskans got their upgraded Internet, which currently serves over 10,000 customers across the state. Reviews of the quality are mixed, but the new CEO of the company promises they’ll improve speeds over time. Even the whalers love it:

Crawford Patkotak, a whaleboat captain and chairman of the Arctic Slope Regional Corporation, a native-owned business group and a minority shareholder in Quintillion, similarly credits the cable company with bringing Utqiagvik into the digital age. “There’s even ocean service now,” he says over reindeer Bolognese at the Top of the World Hotel restaurant. “My friend gets mad at his crew: ‘Get off your damn phone! We’re out here whaling!’ ”

I mainly write about financial frauds that result in everyone losing their shirts, so it’s nice to come across a story with a…neutral ending? Unfortunately the couple of individual investors Pierce conned are still out their savings. The institutional investors may not make wild profits, but they may be okay:

It’s true that CIP didn’t lose everything. Court documents indicate that while Quintillion’s telecom contracts will generate $480 million less than what Pierce projected, annual earnings could reach their promised 2018 numbers by 2023.

I am not encouraging anyone to do a nine-figure fraud just to get better Internet service for their state, but if I was still paying for dial-up modem speeds in 2017 I can’t say I wouldn’t think about it.

Lampreys and Lawyers

Bankruptcy sucks. Every year more than 20,000 businesses file for bankruptcy. Most of those are smaller companies who do so because they can no longer afford to pay their bills. Sometimes big companies file for bankruptcy, which is significantly more messy, because they owe a lot more people a lot more money. This is when lawyers get involved.

Sears was, for more than a hundred years, an iconic brand in American retail. In the early 2010s a young hedge fund billionaire named Eddie Lampert began to take the company over, first as an investor and then as the CEO. I will likely write about him at some point, because frankly I’ve listened to a number of podcasts and read a number of articles about what he’s done to Sears, and I’m still not entirely sure I get it? Maybe that’s how you earn the title of investment genius - create frauds so clever even the experts can’t untangle them. Anyhow.

Lampert essentially bought Sears, and spun off a lot of its assets into a real estate trust he controlled. He left the “company” Sears as a mostly empty shell, with a lot of debt it couldn’t really afford to pay. Eventually, despite his…best? efforts, Sears filed Chapter 11 bankruptcy.

Then came the lawyers:

A year after the Sears Holdings Corp. sold more than 400 stores and other assets to an investment firm owned by former Sears chief Edward Lampert, the shell left behind in bankruptcy is struggling to pay its debts. Meanwhile, it has been billed more than $200 million by lawyers and advisers.

That seems like…a lot? Considering the employees barely got anything in the deal, in addition to being suddenly fired when the company closed stores:

Sears paid $10 million in severance to employees laid off during the bankruptcy case, but owes more than $3 million in severance to some staff at stores that closed just before the bankruptcy filing, court filings show.

If this seems utterly crazy to you, that’s because it is. It’s also somehow the law:

Big fees and low recoveries for creditors are common in chapter 11. But Sears is an extreme example of disparity between fees paid to lawyers and advisers—who by law are required to be paid in full—and what creditors received, bankruptcy lawyers and others say.

Neat! I find stories like this one particularly upsetting because, regardless of what you may think about the continued value of big box retail stores, there are tens of thousands of real people who depend on these jobs, and they receive little to nothing. I wasn’t even able to find the actual number of store employees laid off since the bankruptcy, because many news outlets are writing about the 300 “corporate” employees who were let go from their headquarters. Ah, capitalism.

The law firms are doing okay though:

Sears’s main bankruptcy law firm, Weil, Gotshal & Manges LLP, where top partners charge $1,695 an hour, had billed more than $65 million through October. The tab from Paul Weiss, where top restructuring lawyers charge $1,560 an hour, exceeded $20 million.

Since I have some experience on the topic, let me explain to you how lawyers are paid for personal bankruptcy filing. When a person - and there are around 750,000 of those persons per year - files for bankruptcy, the lawyer is paid a flat fee by the court, which is typically taken out of any assets the person pays or forfeits as part of the filing. It ranges from $1,000 to $4,000. For the entire case. All the legal work required, including court appearances and filings, gets that lawyer paid a couple grand a case, if they’re lucky. That’s less than one hour of billables from a top partner in the Sears case.

In addition to the Sears employees who are being fucked over by this process, the vendors who supply the goods and services to the stores are expected to take 33 cents on the dollar, while the lawyers appear to be getting full freight? This sucks, man.

There is an open lawsuit by Sears creditors against Lampert, though who knows how long that will take to wind its way through the courts. In the mean time, the law firms are draining the remaining available funds as both sides battle it out. Good times.

Short Cons

The Guardian - “The encrypted message from the number used by Mohammed bin Salman is believed to have included a malicious file that infiltrated the phone of the world’s richest man, according to the results of a digital forensic analysis.”

Yahoo! News - “Jordan Belfort, who served as the inspiration for the hit 2013 film “Wolf of Wall Street,” is suing the production company behind the film for $300 million, saying they lied to him when he first agreed to sell them his rights.”

South China Morning Post - “Using fake identities, criminals dupe internet users into performing sex acts online and then threaten to release the videos or photos unless the victims pay”

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