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Collapsed UK Bank Attempts to Censor Wikileaks
Posted by
CmdrTaco
on Mon Jan 21, 2008 09:00 AM
from the this'll-only-happen-more dept.
from the this'll-only-happen-more dept.
James Hardine writes "Wikileaks has released a couple of hilarious legal demands over a confidential briefing memo entitled Project Wing — Northern Rock Executive Summary. Northern Rock Bank (UK) collapsed spectacularly late last year on the back of the sub-prime lending crisis and was re-floated by the Bank of England at a cost of over £24bn. The memo was used by the Financial Times, the Telegraph and others. It attracted a number of censorship injunctions, as reported by the Guardian, which only Wikileaks continues to withstand. In their legal demand to Wikileaks, Northern Rock's well-known media lawyers, Schillings, invoke the DMCA & WIPO, claim it'll be 10 years in prison for Wikileaks operators for not following the UK injunction, but then, incredibly, refuse to hand over a copy of the order unless Wikileaks' London lawyers promise not to give it to Wikileaks. Finally they claim copyright and more — on their demands! The letters raise a serious issue about the climate of censorship in the UK, where one can apparently easily obtain a censorship order — a judge made law — that everyone is meant to obey, but no one is meant to know."
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It's obvious. (Score:5, Funny)
Re:It's obvious. (Score:5, Interesting)
"Fascism could better be called 'corporatism', for it is merely the merging of state power with corporate power." -- Benito Mussolini, the Italian dictator who "invented" fascism.
"I hope we shall take warning from the example of England and crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our Government to trial and bid defiance to the laws of our country." -- Thomas Jefferson
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Re:It's obvious. (Score:5, Informative)
(see http://www.publiceye.org/fascist/corporatism.html [publiceye.org])
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Re:It's obvious. (Score:4, Interesting)
The term "Corporazioni", especially in the Mussolini context, refers to "associations" of people/companies doing the same kind of work.
It would be like
Associations of car makers
Associations of car makers' employees
Associations of lawyers
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MAFIAA? (Score:5, Insightful)
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Corporate Oligarchy (Score:4, Informative)
Conversely, a trend towards allowing corporate entities more rights and responsibilities removes everyday power from the government and places it in the control of the officers and owners of the corporations. This is a move towards oligarchical control and is the antithesis of fascism.
While a fascist state could itself be oligarchical in nature, it would still seek direct control of power and not divest it to the political systems that exist in and serve corporate interests.
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No comment yet ? (Score:2)
That may be a good thing (Score:5, Insightful)
While I am as wary of any kind of censorship as the next guy, we would also do well to remember that the entire Northern Rock episode was basically caused by media over-hyping a short term liquidity problem, which is a relatively benign, if somewhat unusual, banking situation.
The way the credit crunch/government loan issue has been portrayed in the mainstream media, even relatively decent sources like the BBC, has made it sound disastrous, thus prompting a full scale run on a bank. Given that the entire consumer banking industry basically runs on a trust system, everything would probably have worked out fine, but the resulting panic has exacerbated the problem and now we have had the big government bail out.
So, while I'm all for free speech, I'm also all for people using it responsibly. The responsible thing to do before would have been for the media to explain that Northern Rock had a relatively sound loans book in the long term (they actually have far less exposure to sub-prime losses than many of the big banks), and that the central bank (well, "the government" in this case, argue it how you like) stepping in to smooth over a temporary liquidity problem is the correct response to this, economically speaking. Indeed, it seems unlikely that these circumstances are specific to Northern Rock: much the same could have happened (and perhaps more deservedly) to many other banks in the current economic climate. NR were just in the wrong place at the wrong time, metaphorically speaking. So it would be better if the average person had some understanding of the basic economic idea, so we don't see a repeat performance when the next big bad announcement is made by another bank.
The responsible thing to do now would be to allow Northern Rock, the government, Virgin, and whoever else is playing behind the scenes to get on with making a deal. All leaking confidential documents mid-process does is make it harder to find a mutually beneficial way out of the current predicament, which ultimately just shafts everyone, including the taxpayer and potentially those who have money held by NR.
Censorship has a chilling effect, but so does irresponsible spreading of half-truths and misinformation by the tinfoil hat brigade on the pretence of defending free speech. With freedom comes responsibility, always.
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Re:That may be a good thing (Score:5, Interesting)
This is basically caused by a wunch of bankers who loaned money they did not have to people who cannot afford to repay it.
That's what the sub-prime crisis is all about, yes. But Northern Rock's problem was not primarily that they did not have the money, but rather that they did not have the liquidity and were caught off guard. Also, while NR did lend in some dubious ways (another reply to my previous post noted some particularly daft examples), so did almost everyone else in recent years, and Rock are reportedly much less exposed in this way than much of the competition.
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Re:That may be a good thing (Score:4, Informative)
However, your repeated claims they 'have the money' are false. They did not, (+ do not, and never will) 'have the money', and therefore they could not honour their creditors when they got nervey and tried to withdraw their money. Wham! Instacrisis.
Having the deeds on a lot of property on which you have lent Mortgages is not the same as having the actual money itself, since it's 'value' is wildly overinflated in our current economics. Basically they (and indeed most other 'geniuses' of the modern economics) are treating money reserves that have been unrealistically inflated by the housing bubble as if it is real, cash-in-your-pocket money.
This is the same root cause as the sub-prime crisis, the whole pack of cards is built on a fictional basis: 'lending money you don't have to people who cannot afford to repay it'.
It's easier to see in the Sub-Zero examples because the lending was done to obvious bad risks. Whereas with Northern Rock the lending is done to ostensibly affluent people who can easily be painted as 'good risks'. But in fact their debt is also crippling them and if there is any downturn in their income they're screwed, if it's a mass downturn in income the banks are screwed too. (Think: governments urging pay restraint to combat inflation and most people getting meagre pay-rises.)
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Real bills doctrine... (Score:3, Informative)
Re: (Score:3, Interesting)
The initial problem may have been a liquidity crunch, but the subsequent problem is that they do not, in fact, have the money. They cannot sell their mortgages for the booked value on the market today, they cannot borrow against them, they cannot in any way obtain the money needed. This is not a liquidity problem, this is a solvency problem.
so did almost everyone else in recent years
Yeah, well, some didn't.
The fact is, 'everyone e
Re:That may be a good thing (Score:5, Insightful)
And the government has bailed them out with over £1,000 for each man, woman and child in the whole United Kingdom - an utterly colossal sum of money. Is that good value for your taxes? It certainly doesn't look like good value for money for mine.
That depends on whether there's a good chance of getting it back, doesn't it?
Certainly the government takes a lot of my money and does things I don't approve of with it. But in this case, if it really is effectively just a loan and it avoids a financial melt-down, it's probably a loan I'd rather make.
The Rock is bankrupt. It has suffered the consequences of bad lending practices. Admittedly the hype over sub-prime lending didn't help, but sooner or later this sort of thing was going to happen. The government should just have stood back and let it crash.
Perhaps. But then a lot of innocent people who kept their savings with NR would lose money. Confidence in the UK's banking industry would collapse. A large-scale run on every major bank would inevitably follow, and if not rapidly corrected by much more dramatic government action than what we've seen with Rock, that in turn would be followed by the biggest national financial meltdown in history.
At that point, it wouldn't matter whether you were a higher-rate taxpayer with lots of savings or a minimum wage slave living month to month. It wouldn't matter whether you prudently checked out your bank's policies on sub-prime lending before keeping your savings there, or just went with what looked like the best deal when you compared the numbers. If the banks collapse, in a modern economy that depends on them and the trust system underwriting them, everyone is seriously f**ked — I'm not talking a tax hike next year, I'm talking likely total failure of law and order.
This is what a lot of the "shoulda just let 'em crash" brigade don't seem to appreciate. Even if we do all lose £1k each because of the government intervention, it's still a lot less in real terms than we would have lost if they hadn't intervened and things had gone south fast. Of course, no remotely competent government would ever let things get anywhere near that far, but the point is that if you don't act decisively early on, you may be forced to take even more dramatic actions later that are even more dubious if you look at the long-term economic picture alone.
Now, letting the investors in an organisation that fails off the hook is an entirely different question. The government shouldn't underwrite bad investments, because it just encourages more bad investments and rewards those who should pay for their poor choices using taxpayers' money. But remember, a lot of the government money involved in the Rock case isn't underwriting the investors, it's underwriting the everyday people who have savings with Rock. If Rock gets bought out at well below its previous value, that's just market forces in action, but it's only the investors who lose out, not the customers or the taxpayer. There's a world of difference.
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Re:That may be a good thing (Score:5, Insightful)
You could not take out a loan entirely online with Northern Rock.
I know, I have a loan with them. It is, in fact, one of their (smaller) assets.
You can apply for the loan online. You can use their loan calculator to view your payments reschedule. You can do that with a dozen other lenders too.
I went with them because they offered the best rate. Looks like they couldn't quite afford it. But to actually get the cash, I had to sign and return a printed loan agreement. And pass a credit check.
No different to going into a bank really. Except less hassle, cheaper (for me and for the loan provider) and easier to comparison shop.
Offering internet loans is not a dodgy lending practice. Failing to predict a sub-prime credit crunch possibly is. And I strongly doubt Northern Rock are remotely to blame for the state of the housing market - my guess is that it's closer to the opposite.
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billion? (Score:2)
Re:billion? (Score:5, Funny)
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Re: (Score:2, Informative)
Re: (Score:3, Informative)
Good think you didn't post AC, you have shown your ignorance.
Re: (Score:3, Informative)
Re: (Score:3, Interesting)
Re:billion? (Score:5, Funny)
Twice a million is two million. What the hell do they teach in math classes these days anyway?
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HI-friggin' larious (Score:2)
As someone who lives in the UK.. (Score:5, Insightful)
Re: (Score:3, Informative)
Re:As someone who lives in the UK.. (Score:5, Interesting)
(actually in most of the EU it's the same - e.g. in Germany, Nazi related things are illegal -- um, ironically...) In the UK this has most often been used in relation to the IRA, e.g. internment in the early 70's, or the forbidding of Sinn Fein to speak publicly in the early eighties -- which resulted in the BBC using actors to relay their words. Actually, it's very, very interesting that the BBC were keen on free speech in the Eighties, but are no longer so bothered about it.
Nor, incidentally, do you truly have the right to remain silent. That was removed a few years ago as well. You silence can be construed as admission of guilt -- no pleading the fifth.
It really is time that the UK people realised that Big Brother is here, today, right now. The UK is not as free as some dictatorships in the World. Democracy is smoke and mirrors here, nothing more. It probably is already too late. Americans, you need to ensure you have a change in your Government. Do not repeat the UK's mistakes.
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Re:As someone who lives in the UK.. (Score:4, Insightful)
I find the arguments surrounding freedom of speech interesting. While it'd be brilliant to be able to say what you like, there are still some cases where it isn't ideal: for example, there are laws against slander and libel. Then there's soliciting crime, encouraging racial hatred and similar. The government try to cut a fine line between what *needs* to be restricted, and what doesn't, and they do get it wrong - I agree censoring Gerry Adams was idiotic.
But if you RTFA, you'll find that the judge hearing the case ordered the leaked document to be removed from publication, but not to gag the press from talking about the fact that it had happened, nor to stop people reporting what was in it. This is not censorship, this is protecting confidentiality.
As for the UK not having free speach, name a particular UK law regulating it that you believe shouldn't be a crime.
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Collapsed? (Score:5, Informative)
Re:Collapsed? (Score:5, Informative)
I think it has, actually. The UK government injected a huge amount of tax-payers money into it, and there has been talk of forced nationalisation.
The London Review of books has a very interesting article about it that also gives quite a bit of financial background (eg. regarding futures, options, and the way that banks operate) that helped me to better understand the context of the whole thing.
http://www.lrb.co.uk/v30/n01/lanc01_.html [lrb.co.uk]
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Re:Collapsed? (Score:5, Insightful)
The Bank did the right thing in extending credit (albeit at an uncompetitive rate), but the Government did the wrong thing in guaranteeing saver's deposits. They would probably have survived anyway and given the entire industry a harsh lesson in the realities of financing. As soon as they did that the nationalisation genie was out the bottle, and once it's out it is very difficult to put back.
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Re: (Score:3, Informative)
Re:Collapsed? (Score:4, Insightful)
Of course some people would rather have lots of ammo and guns.
You can't eat gold. Maybe it might be used as a currency, but maybe not.
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Re: (Score:3, Informative)
Re: (Score:3, Interesting)
Likewise, a more enlightening comparison would be against the Euro [yahoo.com], where a *VERY* perceptible dip is noticeable, considering that the exchange rate between the two has remained constant, apart from a bit of "noise" for the past few years. This is the first time the pound has taken a noticeable "hit" against th
Re:Collapsed? (Score:5, Interesting)
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Re:Collapsed? (Score:5, Insightful)
HOWEVER, if it was a case of "We're lending you the money, even though we know your loans are bad and you can't actually pay us back but we're going to prop you up anyway", THEN you have good reason to object to it, and it would be an unfair taxpayer bailout.
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Re:Collapsed? (Score:5, Insightful)
Very true. Over the course of the last 24 hours, Northern Rock shares are up 25%.
But 12 months ago, Northern Rock shares were touching 1200p each. Today they're worth 88p each. That's more than a 90% drop. Take a look at the graph for the last years' share prices here:
http://www.citywire.co.uk/Shares/ShareFactsheet.aspx?InstrumentID=2375 [citywire.co.uk]
Right now Northern Rock shares are only for those with brass balls so big they need a wheelbarrow to carry them around in.
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Were you taught monetary theory in school? (Score:4, Informative)
Re:Were you taught monetary theory in school? (Score:5, Informative)
If the system were as that video states than banks would never go bust - they could make infinite money just by lending it to each other!
The wikipedia article covers what really happens http://en.wikipedia.org/wiki/Fractional-reserve_banking [wikipedia.org]
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link to file to mirror (Score:3, Informative)
grab it before it gets taken down.
when i lived in the usa i got quite peeved by the way bills were just put into place by companies who "owned" congressmen and senators (dmca is a prime example). now i'm back in the uk the practice seems to have followed me - it wasn't my fault honest!
Assassinate the assassins (Score:3, Insightful)
Taking a page from the business of assassination: censor the censoring documents.
This is what the DMCA is really about- censorship (Score:5, Insightful)
History will show that the DMCA is one of the most evil laws ever past in the country, and is the lynch pin to Fascism.
The whole WIPO organization is simply there to protect the rich, and do no good whatsoever for the common man.
But it is censorship, not music that the DCMA is about.
Just try and see how far anyone gets getting congress to repeal this one.
This is the keystone of total control by the rich.
Have a nice day.
Re:This is what the DMCA is really about- censorsh (Score:3, Informative)
Re:This is what the DMCA is really about- censorsh (Score:4, Interesting)
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Raising a serious issue (Score:5, Insightful)
Well, maybe. I can claim anything I want, and unless you can put a dollar figure on the cost of my making that claim, you don't have a legal claim against me. In some ways the more outrageous the claim, the safer I am in making it. I can claim I own everything written on Slashdot because God told me it was mine. If Slashdot shut down, and sued me for damages, I suspect the judge would throw the case out on the basis that we're both as crazy as a bedbug.
The art, I suppose, is to make a threat that is credible enough to make others do your bidding, but not so credible it can't be construed as fraud. Making wild DMCA claims is pretty borderline. What you're really saying is that while I'd almost certainly beat the snot out of you in a court of law, life's short and is it really worth my while just for this? If there were quantifiable money on the table, I'd got to court, but if I could assuage you for nothing, I might well do so, even if I wouldn't bother if you were asking nicely.
With respect to this being censorship -- well whether it is or not depends on whether the content is the deciding issue. If you break into my house and steal my diary, and a judge orders you not to print my diary, it's not censorship, because the issue here is ownership. If you anonymously mail the diary to my local paper, I can get an injunction against their publishing it. It's not the content of the diary that is at issue, it's the fact that I have a common law copyright to my private, unpublished papers.
If you want to publish your diary and I don't like what you have to say about me, my stopping you would be censorship, except if it were defamation.
There are two issues here: freedom of expression and privacy. I don't like the term "balancing", because that gives a false impression of what has to be done. The two issues have to be reconciled. Freedoms to do something do not, in general, mean you are free of obligations that might restrict you. If you have a document I created, the question is what duties do you have to me relating to publishing that document and disclosing its content? Whether you have a right to even posses the document certainly matters. Your duties to others and the public certainly matters. If I carelessly leave a private letter in the coffee shop, and it just has personal (although amusing) information, a reporter who discovered it would, I think, be duty bound to return it to me unpublished. If it details my involvement in embezzling public funds, the reporter's duty to the public is paramount.
It's not cut and dried.
Re:Raising a serious issue (Score:4, Insightful)
Whether or not something is "censorship" has nothing to do with the content. Censorship is simply the act of erasing something that is deemed objectionable by someone else. It doesn't matter what the "thing" is, who is erasing it, or who "someone else" is.
You might argue that some kind of censorship, such as your diary example, is justifiable, but it is still censorship.
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A more nuanced question (Score:5, Insightful)
Does it? From the linked newspaper article:
But the judge, Mr Justice Tugendhat, rejected a more stringent prohibition that Northern Rock had sought - to ban news coverage of the memo on FT.com and other websites.
"We were looking at funding a principled legal case about news that was looking increasingly historic by the day," said Paul Murphy, the editor of Alphaville.
Northern Rock failed to win an injunction against the Telegraph after the paper revealed details of the sales document sent out to prospective bidders.
The bank failed to force the Daily Telegraph to reveal its source for the article and failed to get the newspaper to remove its article.
Even as a British taxpayer, I struggle to work up much concern about "censorship" when clearly no-one's freedom of speech is being curtailed. A judge says newspapers can't publish private documents, and the newspaper drops the "public interest" appeal because it's already become old news. In the meantime, newspapers remained free to publish their articles and protect their sources.
It's quite a leap to go from those decisions to taking a mercenary law firm's typically overstated demands as being a "serious issue".
p.s. on the subject of not being serious, I can't be the only one who would struggle to take a judge called "Tugendhat" seriously. Tug who's end into who's hat, I'd like to know...
This is rubbish (Score:4, Insightful)
This is false. There is no legal basis in the UK for what they are doing. They're chancing their arm, and hoping that the threat of big scary lawyers will frighten away the... other big scary lawyers. I can't see that working.
There is no copyright on legal documents (Score:4, Informative)
The text of a legal document sets forth a demand, a contract, etc. The writing is not creative, it is just a listing of facts or positions. I was told this by one of the top partners at WSGW (top legal firm in Silicon Valley) when he advised me to copy another company's contract. The formatting of the contract (e.g. the forms you can buy at a stationer's store or download pdfs online) is creative layout - you can't just photocopy the contract and use it as that is a copyright infringement. But if you want to make your own form with a different layout and using the exact same words, that is perfectly legal.
Of course, lawyers can CLAIM copyright on their legal documents, but that doesn't mean they are correct. Lawyers make false claims all the time, when it suits them or suits their case. Recently the RIAA made a claim that it is illegal to rip music from your own CDs [washingtonpost.com] to listen to that music on different devices that you own. In the 1974 Supreme Court ruling in Sony VS Universal Studios [everything2.com], this type of personal use copying was ruled as fair use, but that didn't stop the RIAA from making this new outrageous claim.
Re: (Score:3, Interesting)
By your definition I can freely copy anything by Britney Spears because it's not remotely creative
"Recently the RIAA made a claim that it is illegal to rip music from your own CDs to listen to that music on different devices that you own"
In the UK this is in fact 100% illegal. As is using a VCR to record a TV programme, for example.
Luckily we don't enforce the law over here... In Europe
Re:Link to the full story is missing! (Score:4, Informative)
Indeed, linking to the full Northern Rock vs. Wikileaks [wikileaks.org] page is more useful, because it contains links to the all (hilarious) letters that have been received in that context
At the end of that page, you find links to:
Being able to read the letters in the right context is much more useful. The first censorship demand (a fax in PDF format) is well worth reading.
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