When five Supreme Court Justices recuse themselves from a single case, that’s news. When they do it because most of them have book deals with the same publisher, that’s potentially a problem.
Last week’s Monday order list included this unusual admission: five Justices recused from Baker v. Coates, a silly plagiarism case involving Ta-Nehisi Coates (that both lower courts dismissed). The reason? Four of them — Sotomayor, Gorsuch, Barrett, and Jackson — all have books published by Penguin RandomHouse, which is owned by Bertelsmann, a named plaintiff in the case. (Alito also recused for unknown reasons.)
At first glance, this looks like progress. Ethics watchdogs have long argued that Justices should recuse when they have financial relationships with parties before the Court. And these Justices finally did, leading the watchdogs like Fix the Court to celebrate.
And, given the conflict scandals plaguing the Court over the last few years, it sure sounds like progress. But it makes me wonder: does this mean that no case involving Penguin RandomHouse can ever be heard at the Supreme Court?
Because if so, that sure seems like a problem.
Not only is it a publishing giant, but it’s also involved in some fairly consequential lawsuits that have a high likelihood of reaching the Supreme Court.
For example, it’s one of the publishers suing the Internet Archive claiming copyright infringement. And while I don’t think it’s actually sued any AI companies yet, it’s made it clear it does not want its books used for training, so it may only be a matter of time. It has also sued over some state book bans. These are all pretty hot topics, and you could see some of these cases reaching the Supreme Court at some point.
But, do these recusals mean… they can’t? That would certainly put things in a somewhat awkward position, where the appeals courts’ rulings would carry a lot more weight. But it gets pretty odd if there’s then a circuit split between different appeals courts on an issue involving the company.
In some ways, this exposes the deeper farce of current Supreme Court ethics. We’re supposed to celebrate when Justices finally follow basic conflict-of-interest rules, but those same rules might render the Court unable to hear major cases involving one of the world’s largest media companies.
The problem isn’t just Penguin RandomHouse. It’s that we’ve created a system where sitting Justices routinely may have significant financial relationships with entities that appear before the Court. Book deals, speaking fees, luxury trips—the conflicts are everywhere, and historically (as we’ve learned) some Justices just ignored them.
So when they finally do recuse — as happened here — it’s good to see a bit of ethics creep in. But, it creates a new problem: what happens when enough Justices are conflicted that the Court can’t function?
Anyway, this brings me back, yet again, to my big idea for fixing the Supreme Court, which is to load it up with around 100 Justices, who can hear cases in groups of nine. Make it so that no individual Justice matters that much, and you deal with conflicts by keeping those conflicted off of any particular case. And, at 100 Justices, it’s not like just adding a few Justices where it can be seen as packing the Court in one direction (hell set up some rules to try to keep some kind of balance).
With 100 Justices, you could have entire panels recuse without losing the ability to hear important cases. You’d also dilute the power of individual Justices, making their book deals and speaking fees less valuable to potential influence-peddlers.
Until then, we’re stuck with a Court that either ignores obvious conflicts or becomes paralyzed when it finally acknowledges them. Neither option inspires much confidence in the institution that’s supposed to be the final arbiter of our most important legal questions.
One of Elon Musk’s employees is earning between $100,001 and $1 million annually as a political adviser to his billionaire boss while simultaneously helping to dismantle the federal agency that regulates two of Musk’s biggest companies, according to court records and a financial disclosure report obtained by ProPublica.
Ethics experts said Christopher Young’s dual role — working for a Musk company as well as the Department of Government Efficiency — likely violates federal conflict-of-interest regulations. Musk has publicly called for the elimination of the agency, the Consumer Financial Protection Bureau, arguing that it is “duplicative.’’
Court records show Young, who works for a Musk company called Europa 100 LLC, was involved in the Trump administration’s efforts to unwind the consumer agency’s operations and fire most of its staff in early February.
Young’s arrangement raises questions of where his loyalty lies, experts said. The dynamic is especially concerning, they said, given that the CFPB — which regulates companies that provide financial services — has jurisdiction over Musk’s electric car company, Tesla, which makes auto loans, and his social media site, X, which announced in January that it was partnering with Visa on mobile payments.
“Musk clearly has a conflict of interest and should recuse,” said Claire Finkelstein, who directs the Center for Ethics and the Rule of Law at the University of Pennsylvania. “And therefore an employee of his, who is answerable to him on the personal side, outside of government, and who stands to keep his job only if he supports Musk’s personal interests, should not be working for DOGE.”
Young, a 36-year-old Republican consultant, has been active in political circles for years, most recently serving as the campaign treasurer of Musk’s political action committee, helping the tech titan spend more than a quarter billion dollars to help elect Trump.
Before joining Musk’s payroll, he worked as a vice president for the Pharmaceutical Research and Manufacturers of America, the trade association representing the pharmaceutical industry’s interests, his disclosure shows. He also worked as a field organizer for the Republican National Committee and for former Louisiana Gov. Bobby Jindal, the New York Times reported.
Young was appointed a special governmental employee in the U.S. Office of Personnel Management on Jan. 30 and dispatched to work in the CFPB in early February, according to court records and his disclosure form. Someone with his position could be making as much as $190,000 a year in government salary, documents obtained by Bloomberg show. At the same time, Young collects a salary as an employee of Musk’s Texas-based Europa 100 LLC, where, according to his disclosure report, his duties are to “advise political and public policy.”
Beyond that description, it’s not clear what, exactly, Young does at Europa 100 or what the company’s activities are.
It was created in July 2020 by Jared Birchall, a former banker who runs Musk’s family office, Excession LLC, according to state records. The company has been used to pay nannies to at least some of Musk’s children, according to a 2023 tabloid report, and, along with two other Musk entities, to facilitate tens of millions of dollars in campaign transactions, campaign finance reports show.
As a special government employee, Young can maintain outside employment while serving for a limited amount of time. But such government workers are still required to abide by laws and rules governing conflicts of interest and personal and business relationships.
Cynthia Brown, the senior ethics counsel at Citizens for Responsibility and Ethics in Washington, which has sued the administration to produce a range of public records documenting DOGE’s activities, said that Young’s government work appears to benefit his private sector employer.
“Which hat are you wearing while you’re serving the American people? Are you doing it for the interests of your outside job?” she asked.
In addition to his role at Europa 100, Young reported other ties to Musk’s private businesses. He affirmed in his disclosure form that he will “continue to participate” in a “defined contribution plan” sponsored by Excession, the Musk home office, and that he has served since February as a “vice president” of United States of America Inc., another Musk entity organized by Birchall, where he also advises on “political and public policy,” the records show. While he lists the latter among “sources of compensation exceeding $5,000 in a year,” the exact figure is not disclosed.
Young did not return a call and emails seeking comment. The CFPB, DOGE and the White House did not respond to requests for comment.
Musk didn’t respond to an email seeking comment, and Birchall didn’t return a call left at a number he lists in public formation records. A lawyer who helped form United States of America Inc. hung up when reached for comment and hasn’t responded to a subsequent message. Asked about how his business interests and government work may intersect, Musk said in a February interview that, “I’ll recuse myself if it is a conflict.”
The revelation of Young’s apparent violation of federal standards of conduct follows a series of ProPublica stories documenting how another DOGE aide helped carry out the administration’s attempts to implement mass layoffs at the CFPB while holding as much as $715,000 in stock that bureau employees are prohibited from owning — actions one expert called a “pretty clear-cut violation” of the federal criminal conflict-of-interest statute. The White House has defended the aide, saying he “did not even manage” the layoffs, “making this entire narrative an outright lie.” A spokesperson also said the aide had until May 8 to divest, though it isn’t clear whether he did and the White House hasn’t answered questions about that. “These allegations are another attempt to diminish DOGE’s critical mission,” the White House said. Following ProPublica’s reporting, the aide’s work at the CFPB ended.
Last Monday, a group of 10 good government and consumer advocacy groups, citing ProPublica’s coverage, sent a letter to the acting inspector general of the CFPB, asking him to “swiftly investigate these clear conflicts of interest violations of Trump Administration officials acting in their own personal financial interest.”
ProPublica has identified nearly 90 officials assigned to DOGE, though it’s unclear how many, if any, have potential conflicts. Government agencies have been slow to release financial disclosure forms. But Finkelstein said the cases reported by ProPublica call into question the motivation behind DOGE’s efforts to undo the consumer watchdog agency.
“It matters because it means that the officials who work for the government, who are supposed to be dedicated to the interests of the American people, are not necessarily focused on the good of the country but instead may be focused on the good of themselves, self enrichment, or trying to please their boss by focusing on enriching their bosses and growing their portfolios,” she said.
Unionized CFPB workers have sued the CFPB’s acting director, Russell Vought, to stop his attempts to drastically scale down the bureau’s staff and its operations. Since taking office, the Trump administration has twice attempted to fire nearly all of the agency’s employees, tried canceling nearly all of its contracts and instituted stop-work mandates that have stifled virtually all agency work, including investigations into companies, ProPublica previously reported.
The parties will appear before an appeals court this Friday for oral arguments in a case that will determine just how deeply Vought can cut the agency while still ensuring that it carries out dozens of mandates Congress tasked it with when lawmakers established the bureau in the wake of the 2008 financial crisis.
The court records produced in the litigation offer a window into the role Young played in gutting the CFPB during the administration’s first attempt to unwind the bureau beginning in early February.
He was dispatched to the CFPB’s headquarters on Feb. 6, just two days after Treasury Secretary Scott Bessent, then the agency’s acting director, told the staff and contractors to stop working. The following day, Young and other DOGE aides were given access to nonclassified CFPB systems, court records show. That same day, Musk posted “CFPB RIP” with a gravestone emoji.
In his financial disclosure form, which he signed on Feb. 15, Young listed his employment by Musk’s Europa 100 as active, beginning in August 2024 through the “present.”
Then, in early March, as the legal fight over the administration’s cuts played out before a federal judge, Young sent the CFPB’s chief operating officer a message about forthcoming firings, known as a “reduction in force,” or RIF, in government parlance. In the email, he asked whether officials were “prepared to implement the RIF” if the judge lifted a temporary stay, according to a March district court opinion that has for the moment stopped most of the administration’s proposed cuts.
In addition to his employment, Young’s disclosure presents another potential conflict.
He also lists owning as much as $15,000 in Amazon stock, a company that is on the bureau’s “Prohibited Holdings” list. Agency employees are forbidden from having such investments, and ethics experts have said that participating in an agency action that could boost the stock’s value — such as stripping the CFPB of its staff — constitutes a violation of the criminal conflict-of-interest statute.
Young hasn’t responded to questions about that either.
Since then, the DOJ has generally been run as an impartial law enforcement agency, separated from the executive office and partisan politics.
Those guardrails are now being severely tested under the Trump administration.
In February 2025, seven DOJ attorneys resigned, rather than follow orders from Attorney General Pam Bondi to dismiss corruption charges against New York Mayor Eric Adams. Adams was indicted in September 2024, during the Biden administration, for alleged bribery and campaign finance violations.
One DOJ prosecutor, Hagan Scotten, wrote in his Feb. 15 resignation letter that while he held no negative views of the Trump administration, he believed the dismissal request violated DOJ’s ethical standards.
Among more than a dozen DOJ attorneys who have recently been terminated, the DOJ firedErez Reuveni, acting deputy chief of the department’s Office of Immigration Litigation, on April 15. Reuveni lost his job for speaking honestly to the court about the facts of an immigration case, instead of following political directives from Bondi and other superiors.
Reuveni was terminated for acknowledging in court on April 14 that the Department of Homeland Security had made an “administrative error” in deporting Kilmar Abrego Garcia to El Salvador, against court orders. DOJ leadership placed Reuveni on leave the very next day.
Bondi defended the decision, arguing that Reuveni had failed to “vigorously advocate” for the administration’s position.
I’m a legal ethics scholar, and I know that as more DOJ lawyers face choices between following political directives and upholding their profession’s ethical standards, they confront a critical question: To whom do they ultimately owe their loyalty?
Identifying the real client
All attorneys have core ethical obligations, including loyalty to clients, confidentiality and honesty to the courts. DOJ lawyers have additional professional obligations: They have a duty to seek justice, rather than merely win cases, as well as to protect constitutional rights even when inconvenient.
DOJ attorneys typically answer to multiple authorities, including the attorney general. But their highest loyalty belongs to the U.S. Constitution and justice itself.
DOJ attorneys reinforce their commitment to this mission by taking an oath to uphold the Constitution when they join the department. They also have training programs, internal guidelines and a long-standing institutional culture that emphasizes their unique responsibility to pursue justice, rather than simply win cases.
This creates a professional identity that goes beyond simply carrying out the wishes of political appointees.
Playing by stricter rules
All lawyers also follow special professional rules in order to receive and maintain a license to practice law. These professional rules are established by state bar associations and supreme courts as part of the state-based licensing system for attorneys.
The McDade Amendment, passed in 1998, requires federal government lawyers to follow both the ethics rules of the state where they are licensed to practice and federal regulations. This includes rules that prohibit DOJ attorneys from participating in cases where they have personal or political relationships with involved parties, for example.
This law also explicitly subjects federal prosecutors to state bar discipline. Such discipline could range from private reprimands to suspension or even permanent disbarment, effectively ending an attorney’s legal career.
This means DOJ lawyers might have to refuse a supervisor’s orders if those directives would violate professional conduct standards – even at the risk of their jobs.
This is what Assistant U.S. Attorney Danielle Sassoon wrote in a Feb. 12, 2025, letter to Bondi, explaining why she could not drop the charges against Adams. Sassoon instead resigned from her position at the DOJ.
“Because the law does not support a dismissal, and because I am confident that Adams has committed the crimes with which he is charged, I cannot agree to seek a dismissal driven by improper considerations … because I do not see any good-faith basis for the proposed position, I cannot make such arguments consistent with my duty of candor,” Sassoon wrote.
As DOJ’s own guidance states, attorneys “must satisfy themselves that their behavior comports with the applicable rules of professional conduct” regardless of what their bosses say.
Post-Watergate principles under pressure
The president nominates the attorney general, who must be confirmed by the U.S. Senate.
That can create the perception and even the reality that the attorney general is indebted to, and loyal to, the president. To counter that, Attorney General Griffin Bell, in 1978, spelled out three principles established after Watergate to maintain a deliberate separation between the White House and the Justice Department.
First, Bell called for procedures to prevent personal or partisan interests from influencing legal judgments.
Third, these principles ultimately depend on DOJ lawyers committed to good judgment and integrity, even under intense political pressure. These principles apply to all employees throughout the department – including the attorney general.
Recent ethics tests
These principles face a stark test in the current political climate.
The March 2025 firing of Elizabeth Oyer, a career pardon attorney with the Justice Department, raises questions about the boundaries between political directives and professional obligations.
Oyer initially expressed concern to her superiors about restoring Gibson’s gun rights without a sufficient background investigation, particularly given Gibson’s history of domestic violence.
When Oyer later agreed to testify before Congress in a hearing about the White House’s handling of the Justice Department, the administration initially planned to send armed U.S. Marshals officers to deliver a warning letter to her home, saying that she could not disclose records about firearms rights to lawmakers.
Officials called off the marshals only after Oyer confirmed receipt of the letter via email.
Why independence matters
In my research, I found that lawyers sometimes have lapses in judgment because of the “partisan kinship,” conscious or not, they develop with clients. This partisan kinship can lead attorneys to overlook serious red flags that outsiders would easily spot.
When lawyers become too politically aligned with clients – or their superiors – their judgment suffers. They miss ethical problems and legal flaws that would otherwise be obvious. Professional distance allows attorneys to provide the highest quality legal counsel, even if that means saying “no” to powerful people.
That’s why DOJ attorneys sometimes make decisions that frustrate political objectives. When they refuse to target political opponents, when they won’t let allies off easily, or when they disclose information their superiors wanted hidden, they’re not being insubordinate.
They’re fulfilling their highest ethical duties to the Constitution and rule of law.
Last month, a Department of Government Efficiency aide at the nation’s consumer watchdog agency was told by ethics attorneys that he held stock in companies that employees are forbidden from owning — and was advised not to participate in any actions that could benefit him personally, according to a person familiar with the warning.
But days later, court records show, Gavin Kliger, a 25-year-old software engineer who has been detailed to the Consumer Financial Protection Bureau since early March, went ahead and participated in mass layoffs at the agency anyway, including the firings of the ethics lawyers who had warned him.
Experts said that Kliger’s actions, which ProPublica first reported on last week, constitute a conflict of interest that could violate federal criminal ethics laws. Such measures are designed to ensure that federal employees serve the public interest and don’t use their government power to enrich themselves. At the CFPB, which regulates companies that provide financial services, there are strict prohibitions on the investments that employees can maintain.
As ProPublica previously reported, Kliger owns as much as $365,000 worth of shares in Apple Inc., Tesla Inc. and two cryptocurrencies, according to his public financial report. Investments in those businesses are off limits to employees since the bureau can regulate them. A further review now shows that he’s invested in even more companies that are on the agency’s “Prohibited Holdings” list. Kliger also disclosed owning as much as $350,000 worth of stock in Google parent Alphabet Inc., Warren Buffett’s Berkshire Hathaway and the Chinese e-commerce company Alibaba.
That means, at a maximum, Kliger could own as much as $715,000 of investments in seven barred companies, the records show.
Experts said a defanged and downsized consumer watchdog is unlikely to aggressively regulate those and other companies, freeing them of compliance costs and the risk associated with examinations and enforcement actions. That in turn could boost their stock prices and benefit investors like Kliger.
Don Fox, a former general counsel of the independent federal agency that advises executive branch workers on their ethical obligations, said that “this looks like a pretty clear-cut violation” of the federal criminal conflict-of-interest statute.
Richard Briffault, a government ethics expert at Columbia Law School, said the fact that Kliger was warned not to take any actions that could benefit him personally showed that “he’s on notice that this is a problem, as opposed to doing this by accident, or unintentionally.”
But Briffault said there would likely be no recourse for Kliger’s actions given that the Department of Justice under President Donald Trump has “greatly deprioritized public integrity, ethics and public corruption as issues for them.” The New York Times reported last week that the section handling such cases is down to just a handful of lawyers.
From the outset, the Trump administration has been dogged by ethics controversies, from the president’s own foray into the cryptocurrency industry to Elon Musk’s dual roles as both the head of DOGE and a major federal contractor. Kliger’s case is “a nice illustration of how even on this micro level, they are violating the law, acting in ways that positively should cause people to not trust what they’re doing because there is no question that these corporations will benefit,” said Kathleen Clark, an expert on government ethics at Washington University in St. Louis.
Kliger hasn’t returned a phone call or email seeking comment. The CFPB didn’t respond to a request for comment.
The White House didn’t answer questions about the warning, whether Kliger had sought ethics waivers or if he was in the process of divesting. Instead, a spokesperson provided ProPublica the same statement it previously had, writing that Kliger “did not even manage” the layoffs, “making this entire narrative an outright lie.” A spokesperson said that Kliger had until May 8 to divest.
The April 10 ethics warning came amid a heated legal battle over the future of the CFPB.
The following day, an appeals court in Washington, D.C., allowed the agency’s acting director, Russell Vought, to implement mass firings after a lower court judge had stayed them. The court instructed Vought to conduct a “particularized assessment” of the bureau and to lay off only those employees who were deemed to be “unnecessary” to perform the agency’s statutorily required duties. In court filings, the government has said that review was done by the bureau’s chief legal officer, Mark Paoletta, and two other attorneys. In court papers, Paoletta has said the cuts are designed to achieve a “streamlined and right-sized Bureau.”
On April 13, Kliger was among a small team of DOGE and agency officials who received an email from Vought about the coming layoffs with the subject line “CFPB RIF Work” — government parlance for reduction in force, according to emails produced in court records. Vought’s email is redacted in the filing, but hours after he sent it, records show the bureau’s chief information officer wrote to Kliger and another DOGE aide regarding a “follow-up on Russ’s note below” and advised Kliger that he’d been granted access to agency computer systems that “should allow you to do what you need to do,” according to the email.
Layoff notices to more than 1,400 bureau employees went out on April 17.
In the preceding 36 hours, “Gavin was screaming at people he did not believe were working fast enough” to get the notices out and “calling them incompetent,” a federal employee on the layoff team using the pseudonym Alex Doe wrote in sworn declaration filed by lawyers for unionized employees trying to stop the administration from dismantling the bureau.
Among those laid off were the agency’s ethics officer and their “entire team” of lawyers, according to court records.
Those are the very employees who’d twice notified Kliger that he was required to identify any investments in companies on the bureau’s Prohibited Holdings list. The warning last month explicitly instructed him not to participate in any bureau activity that could benefit the businesses whose stocks he owned, said the person familiar with the notice, who spoke on condition of anonymity because of its sensitivity.
Last week, the appeals court reversed course and temporarily stopped the firings at the CFPB amid a flurry of legal challenges. Agency officials then notified the more than 1,400 fired employees who’d been told they were being let go that the pink slips were being rescinded.
The court battle over the CFPB’s future is ongoing, though, with oral arguments before appellate judges in Washington, D.C., scheduled for later this month.
A federal employee who is helping the Trump administration carry out the drastic downsizing of the Consumer Financial Protection Bureau owns stock in companies that could benefit from the agency’s dismantling, a ProPublica investigation has found.
Gavin Kliger, a 25-year-old Department of Government Efficiency aide, disclosed the investments earlier this year in his public financial report, which lists as much as $365,000 worth of shares in four entities that the CFPB can regulate. According to court records and government emails, he later helped oversee the layoffs of more than 1,400 employees at the bureau.
Ethics experts say this constitutes a conflict of interest and that Kliger’s actions are a potential violation of federal ethics laws.
The CFPB oversees companies that offer a variety of financial services, including mortgage lending, auto financing, credit cards and payment apps.
Two of the companies in which Kliger is invested — Apple and Tesla — are on the CFPB’s list of prohibited holdings. Two other cryptocurrency holdings — Bitcoin and Solana — aren’t on the list but are nevertheless barred under agency guidance on investing in cryptocurrency firms.
Court records show that Kliger was among a small handful of top CFPB and administration officials discussing the implementation of the layoffs in emails. Separately, a federal employee who works on the layoff team said that Kliger “managed” the firings of about 90% of the bureau’s staff earlier this month, according to a sworn declaration filed by lawyers opposing the administration.
The employee, using the pseudonym Alex Doe for fear of retaliation, said they learned of Kliger’s role from colleagues and described Kliger keeping the CFPB employees “up for 36 hours straight to ensure that the notices would go out,” the declaration states. “Gavin was screaming at people he did not believe were working fast enough” and “calling them incompetent.”
Among those fired were the bureau’s ethics team, according to an agency lawyer, who wrote in an April 25 court filing that “I am not aware of anyone remaining at the CFPB who has the requisite expertise to fulfill the CFPB’s federal ethics requirements.”
Ethics experts said that getting rid of government regulators who oversee companies and set industrywide rules could impact the share price of the businesses subject to that regulation, since doing away with oversight can free companies from compliance costs and the exposure that stems from enforcement actions.
“Destroying the CFPB is likely to have, I believe, a direct and predictable effect on his financial stock,” Kathleen Clark, an expert on government ethics at the Washington University in St. Louis, said of Kliger.
Unionized bureau employees have sued the agency’s acting director, Russell Vought, to stop the administration’s efforts to wind down its operations and reduce its staff. The subsequent months of litigation have been head-spinning.
At the end of March, a district court judge issued a sweeping stay on the administration’s actions. Then on April 11, an appeals court in Washington, D.C., partially lifted that stay. In its order, the panel wrote that bureau leaders must conduct a “particularized assessment” before firing workers.
Days later, most of the agency’s staff was notified that they were being fired.
The bureau’s chief legal officer, Mark Paoletta, and two other lawyers conducted the court-ordered review, the government said in legal papers. In a recent filing, Paoletta wrote that the administration is attempting to achieve a “streamlined and right-sized Bureau.” Instead of 248 enforcement division employees and 487 in the supervision division, he wrote, he planned to keep 50 workers in each.
But on Monday evening, amid vigorous dispute over the legality of the firings and the definition of “particularized assessment,” the appeals court backtracked, upholding the trial court’s initial stay on the mass layoffs as the case plays out. The CFPB then notified the more than 1,400 employees who’d been laid off that their firings were being rescinded. The lawsuit is ongoing, with oral arguments before the appeals court scheduled for next month.
Kliger didn’t respond to voicemails or emails seeking comment for this story. The CFPB didn’t respond to a request for comment.
In a statement, the White House said that “these allegations are another attempt to diminish DOGE’s critical mission.”
Kliger “did not even manage” the layoffs, the statement said, “making this entire narrative an outright lie.”
Asked to clarify Kliger’s role in the administration’s cuts, a spokesperson said, “You have 90 days from the start date to divest which is May 8th — it is only April 28th.” It’s unclear what rule the White House was referencing; the spokesperson did not respond to follow-up questions. But ethics experts said there are two scenarios that could apply: Sometimes, high-level government officials pledge to divest their holdings by a certain date to avoid conflicts of interest. And at the CFPB in particular, regulations give employees 90 days to divest prohibited holdings.
In either case, though, the employee is required to recuse themselves from any actions that could affect their investments.
Delaney Marsco, a government ethics expert at the Campaign Legal Center, said Kliger’s holdings and his involvement in winding down the agency erode the public’s faith that government officials are serving its best interests.
“When you have these facts, it raises the question, which is just as bad as when you have the actual violation because it makes the public question,” she said.
Kliger owns between $15,000 and $50,000 of stock in Apple, which the CFPB regulates. The company agreed to pay a $25 million civil penalty last October following a bureau investigation into Apple Card, a credit card in the company’s software. The bureau said that Apple did not have a proper transaction dispute system when it launched and also that it misled some customers about its financing. The company agreed to the consent order, records show, “without admitting or denying any of the findings of fact or conclusions of law.” In a statement at the time, Apple said that “while we strongly disagree with the CFPB’s characterization of Apple’s conduct, we have aligned with them on an agreement.”
Kliger also owns between $100,000 and $250,000 of Tesla stock. The company, founded by DOGE boss Elon Musk, falls under the bureau’s purview because it offers financing, a key area of scrutiny for the CFPB.
Kliger also owns cryptocurrencies: between $1,000 and $15,000 of Solana and between $15,000 and $50,000 of Bitcoin.
Any federal worker who “holds any amount of a cryptocurrency or stablecoin may not participate in a particular matter if the employee knows that particular matter could have a direct and predictable effect on the value of their cryptocurrency or stablecoins,” according to a legal memo issued in July of 2022, under then-President Joe Biden, by the independent federal agency tasked with advising executive branch employees on how to avoid conflicts of interests.
An internal notice to CFPB employees the following month instructed anyone with such a holding to “immediately recuse yourself from working on any Bureau particular matter,” report the ownership and divest within 90 days, records reviewed by ProPublica show.
Since the beginning of President Donald Trump’s second presidency, the administration has sought to significantly reduce the size, scope and nature of America’s consumer watchdog, which was created in the wake of the 2008 financial crisis.
In a recent court filing that supplements a newly released policy memo, Paoletta wrote that, in recent years, “the Bureau has also engaged in intrusive and wasteful fishing expeditions against depository institutions and, increasingly, non-depository institutions” and that it had “pushed into new areas beyond its jurisdiction such as peer-to-peer lending, rent-to-own, and discrimination as unfair practice.”
Automation can be helpful, yes. But the story told to date by large tech companies like OpenAI has been that these new language learning models would be utterly transformative, utterly world-changing, and quickly approaching some kind of sentient superintelligence. Yet time and time again, data seems to show they’re failing to accomplish even the bare basics.
Case in point: Last December Apple faced widespread criticism after its Apple Intelligence “AI” feature was found to be sending inaccurate news synopses to phone owners. And not just minor errors: At one point Apple’s “AI” falsely told millions of people that Luigi Mangione, the man arrested following the murder of healthcare insurance CEO Brian Thompson in New York, had shot himself.
Now the BBC has done a follow up study of the top AI assistants (ChatGPT, Perplexity, Microsoft Copilot and Google Gemini) and found that they routinely can’t be relied on to even communicate basic news synopses.
The BBC fed all four major assistants access to the BBC website, then asked them relatively basic questions based on the data. The team found ‘significant issues’ with just over half of the answers generated by the assistants, and clear factual errors into around a fifth of their answers. 1 in 10 responses either altered real quotations or made them up completely.
Microsoft’s Copilot and Google’s Gemini had more significant problems than OpenAI’s ChatGPT and Perplexity, but they all “struggled to differentiate between opinion and fact, editorialised, and often failed to include essential context,” the BBC researchers found.
BBC’s Deborah Turness had this to say:
“This new phenomenon of distortion – an unwelcome sibling to disinformation – threatens to undermine people’s ability to trust any information whatsoever So I’ll end with a question: how can we work urgently together to ensure that this nascent technology is designed to help people find trusted information, rather than add to the chaos and confusion?”
Language learning models are useful and will improve. But this is not what we were sold. These energy-sucking products are dangerously undercooked, and they shouldn’t have been rushed into journalism, much less mental health care support systems or automated Medicare rejection systems. We once again prioritized making money over ethics and common sense.
The undercooked tech is one thing, but the kind of folks in charge of dictating its implementation and trajectory without any sort of ethical guard rails are something else entirely.
As a result, “AI’s” rushed deployment in journalism has been a keystone-cops-esque mess. The fail-upward brunchlords in charge of most media companies were so excited to get to work undermining unionized workers, cutting corners, and obtaining funding that they immediately implemented the technology without making sure it actually works. The result: plagiarism, bullshit, lower quality product, and chaos.
Automation is obviously useful and language learning models have great potential. But the rushed implementation of undercooked and overhyped technology by a rotating crop of people with hugely questionable judgement is creating almost as many problems as it purports to fix, and when the bubble pops — and it is going to pop — the scurrying to defend shaky executive leadership will be a real treat.
Back in 2022, you might recall that ex-Moviepass executives Theodore Farnsworth and J. Mitchell Lowe were charged by the DOJ for wire and securities fraud, after it was found they’d repeatedly misled investors about the profitability of their “all you can eat” movie ticket efforts.
“Mitch is a good man who is looking to move forward with his life,” said his attorneys, Margot Moss and David Oscar Markus, in a statement. “He has accepted responsibility for his actions in this case and will continue to try to make things right.”
Originally, the MoviePass business model seemed like a semi-sensible idea, though back in 2012 we were quick to wonder if it would ever actually make a profit. Under the model, users paid $30 a month in exchange for unlimited movie tickets at participating theaters, provided they signed up for a full year of service.
There were, of course, caveats: you could only buy a ticket per day, and could only buy one ticket per movie. It also prohibited users from viewing 3D, IMAX, or XD films. Still, the proposal was widely heralded by many media outlets as a savior for the traditional, brick and mortar, sticky-floor movie industry. The problems really began when the company lowered its monthly price to $10 to goose growth.
In 2019, a four-month investigation by Business Insider found that MoviePass had been bleeding money for years, and misleading investors for much of that time. Not only was the idea never really profitable, the company couldn’t even manage to acquire enough plastic to keep up with membership card demand. All the while, company execs were wasting money on lavish parties and nonsense.
Showcasing the width and depth of the dodgy effort, at one point Farnsworth and Lowe genuinely thought it would be a good idea to actually change user passwords so paying customers couldn’t use the service, thinking this would let them get their head above water. Things… didn’t work out.
If you haven’t seen it yet HBO (Max) has a decent documentary on the collapse, illustrating how original concept creator Stacy Spikes (who has since relaunched the effort) was generally screwed by Lowe’s and Farnsworth’s mindless, ethics-optional rush toward impossible scale.
It’s pretty rare to see a judge disqualify a law firm from taking on a case. But Judge William Alsup has done just that, disqualifying the litigation powerhouse law firm Quinn Emanuel from representing ExTwitter in a big data scraping case.
We wrote about this case back in May, highlighting both the importance and complexities of it. There are all sorts of questions about whether or not scraping content from the public web should be allowed or not. Companies like Facebook have fought against it for years, but other companies were less concerned about it until recently. And that’s because over the last couple of years, they’ve realized that AI companies are willing to pay millions of dollars to get access to that data.
Both Meta and ExTwitter have targeted Bright Data, one of a number of scraping companies. So far, Bright Data has won lawsuits against both companies. Courts have said, “hey, look, this is public information, and you can’t sue someone for collecting public information.”
In the ExTwitter case, Judge Alsup gave the company about a month to try to file an amended complaint to see if the company could salvage any sort of legitimate claim. Just before that deadline, some lawyers from Quinn Emanuel (one of Elon’s favorite law firms) made an appearance on behalf of ExTwitter (basically, because the original complaint was so trounced, Elon was handing the case over to Quinn in hopes they could rescue it).
However, the folks at Bright Data were a bit surprised by this and quickly filed a motion to disqualify Quinn from the case, noting that Quinn had been retained and done work with Bright Data in its nearly identical case against Meta. This meant that (1) they would have inside knowledge of Bright Data and its litigation strategy and (2) they were effectively “switching sides” in a case, which is a huge legal ethical problem.
When Meta and Bright Data filed dueling lawsuits against each other, Bright Data engaged Quinn, Emanuel, Urquhart & Sullivan, LLP for advice. Now, Quinn has switched sides, representing X in suing Bright Data to prevent public web scraping and to shut down the same services at issue in the Meta case. Doing so violates the core tenets of loyalty and confidentiality under California’s Rules of Professional Responsibility. Quinn must be disqualified.
Quinn shot back that it had really done nothing too big or important for Bright Data, hadn’t learned anything confidential, and that this was another case anyway (this one is about ExTwitter, not Meta!)
The fact that different Quinn Emanuel attorneys (who are now ethically walled), pursuant to a tailored engagement letter, previously billed 30.6 hours for discrete, peripheral advice regarding a specific lawsuit in which Bright Data allegedly breached a different social media platform’s different terms and conditions should not result in X being deprived of its chosen attorneys at Quinn Emanuel in a case concerning Bright Data’s breach of X’s terms of use and other claims.
Judge Alsup is not known for putting up with bullshit, and has disqualified Quinn, and did so in fairly stringent terms. I’d call this a minor benchslap.
X does not dispute the central facts or law undergirding Bright Data’s motion. In its own words, “disqualification becomes mandatory” if the X and Meta matters are “substantially related.” And it tallies a team of nine attorneys who provided an overall assessment of the Meta litigation. Save for what it acknowledges are “minor wording” differences between Meta’s and X’s Terms, it agrees the cases are virtually identical, involving the same Bright Data services and conduct, and the same legal issues for the overlapping claims. The cases are irrefutably “substantially related.”
X argues this is not dispositive because Quinn’s role in the Meta case was too short-lived, “discrete,” or “limited” to trigger any ethical obligation beyond that, no matter how related it is. But the disqualification inquiry focuses on the relatedness of the cases and whether the lawyer had a “direct and personal” contact with the former client. That Quinn was not lead counsel is irrelevant. Nor can Quinn escape disqualification by characterizing its engagement as “limited.” That is just lawyer argument. The facts are that Quinn was hired to provide an overall assessment of the Meta litigation, and its report covered all aspects of the case, including procedural issues, discovery, strengths and weakness of the claims, defenses, and other issues.
And what about the fact that that case was about Meta, and this one is about ExTwitter? Judge Alsup wasn’t born yesterday.
True, X says, but irrelevant, because X was not mentioned by name. But cases can be substantially related even if the plaintiff is different. X concedes it geared its advice to place Bright Data in the best position procedurally and substantively to defend future claims by other website operators. That these other operators were referred to categorically, rather than by name, does not render Quinn’s advice immaterial, given that the conduct and governing law are the same.
Faced with undeniable factual and legal similarity, X tries changing the test. “To determine whether a substantial relationship exists,” it says, Bright Data must show that “any information Quinn Emanuel acquired … is material to the X Matter.” Q.Br. 8-9. But “this type of inquiry is outlawed.” Farris v. Fireman’s Fund Ins. Co., 119 Cal. App. 4th 671, 683 n.10 (2004). Under Rule 1.9(a), access to confidential information is irrelevant; and under Rule 1.9(c), access is presumed in substantially related matters. Neither rule would make sense if Bright Data had to prove that Quinn has confidential information to avoid proving that fact.
Regardless, Quinn possesses a wealth of material information. X’s efforts to minimize this through lack of recollection and disregard for the connections between the two cases cannot overcome the facts. Elan Transdermal Ltd. v. Cygnus Therapeutic Sys., 809 F. Supp. 1383, 1392- 93 (N.D. Cal. 1992) (“The Court, reading the stack of declarations from Irell attorneys, all proclaiming their ignorance …, is reminded of the words of Hamlet’s mother: ‘The lady doth protest too much, methinks.’”). Quinn prepared and received attorney work product, and engaged in multiple attorney-client communications, going to the heart of the legality of the services at issue. Not even the Quinn Report’s primary author claims irrelevance.
And, just to drive the point home:
The Court, it says, should use its “equitable” powers to forgive its past transgression and sanction its continuing ethical violation. But California courts do “not engage in a ‘balancing of equities’ between the former and current clients. The rights and interests of the former client will prevail.”
There’s a lot more in the opinion, but Judge Alsup is not at all impressed by the arguments Quinn lawyers are making here. I mean:
In any event, Quinn’s representation was not narrowly circumscribed. It was not asked to opine on some arcane or peripheral issue of, say, tax law or even copyright law. Bright Data retained Quinn because it was lead counsel in hiQ and familiar with Bright Data’s scraping technology from discovery in that case. Avisar ¶ 2. Quinn was given broad remit to advise on all of Bright Data’s defenses and strategies in the Meta cases. That is not “peripheral;” it is core.
Nor is there merit to X’s argument that Quinn’s advice was only tangentially relevant to this case. Quinn concedes it provided advice with an eye towards future suits by “other” website operators. Skibitsky ¶ 11. To minimize this fact, Ms. Skibitsky observes that Bright Data only quoted from the Quinn Report’s Executive Summary. Id. at ¶ 18. But the very purpose of an Executive Summary is to highlight the most important points in the Report. And this one was even in bold italics. One does not do that for unimportant points. Nor does Ms. Skibitsky deny that Quinn extensively discussed these issues with Bright Data’s Board. At most, she states that she can’t recall which “specific website operators” were discussed. Id. But that does not change the undisputed fact that she and her colleagues discussed Bright Data’s strategy for defending the identical services from identical claims by other website operators.
And thus, sorry Elon, Quinn needs to sit this one out.
Note: Since the publication of this article, the iBorderCtrl website has disappeared. We have updated the links in the post to point to an archived version of the site.
iBorderCtrl provides a unified solution with aim to speed up the border crossing at the EU external borders and at the same time enhance the security and confidence regarding border control checks by bringing together many state of the art technologies (hardware and software) ranging from biometric verification, automated deception detection, document authentication and risk assessment.
“Automated deception detection” is jut a fancy name for lie detection, but with the twist that it uses AI to analyze “non-verbal micro-gestures”. As the earlier BestNetTech article pointed out, there’s no hard evidence this approach works. Even the project’s FAQ admits there are issues:
With regard to iBorderCtrl, it can be concluded that the automatic deception detection system (ADDS), which relies on AI, poses various risks with regard to fundamental rights. As the iBorderCtrl cannot provide 100% accuracy, there is always a risk of false positives (people being falsely identified as deceptive) and false negatives (criminals being falsely identified as truthful). This is true of any decision-making system, including those where classifications are made by humans. This might also lead to a stigmatisation or prejudice against affected persons, for instance when talking to a real border guard afterwards.
The FAQ also makes clear that the two main tests of the system, at borders in Hungary and Latvia, have concluded, and that there are no plans to roll it out anywhere in the EU, not least because there are unresolved legal and ethical issues of its approach:
How far the system, or parts of it, will be used at the border in the future will need to be defined. It should be also noted that some technologies are not covered by the existing legal framework, meaning that they could not be implemented without a democratic political decision establishing a legal basis. At the time of doing so, appropriate safeguards would also need to be considered, e.g. as proposed by the iBorderCtrl Consortium, to ensure the system operates with full respect for protect human rights.
The iBorderCtrl project received €4.5 million from the EU, so it would not be unreasonable for EU citizens to be able to see what their money was used for. In 2018, Patrick Breyer, a member of the European Parliament, requested access to documents held by the European Commission regarding the development of iBorderCtrl. As Article 19 recounts:
The REA [EU Research Executive Agency] – the agency at the helm of the iBorderCtrl project – granted Breyer full access to one document and partial access to another. They denied him access to numerous additional documents, citing the protection of the commercial interests of a consortium of companies collaborating with the REA on the project.
Breyer challenged this decision, pointing out that there was a strong public interest in having access to information about projects that used controversial technology, as iBorderCtrl certainly did. The EU’s so-called “General Court” published a ruling in December 2021:
the General Court established that a number of access requests denied to Breyer were not sufficiently justified by the REA. While the Court’s recognition of public interest in the democratic oversight of the development of surveillance and control technologies is a step in the right direction, the decision did not go far enough and Breyer appealed. In its decision, the Court suggested that such democratic oversight should begin only after these types of research and pilot projects were concluded. In other words, the Court failed to acknowledge the importance of ensuring transparency is in place at the outset of taxpayer-funded projects with immense impact on citizens, rather than when research and development has already been completed.
Breyer took his case to the main EU Court of Justice (CJEU), which has just issued its judgement:
While the CJEU did recognise that the fact that the obligation of participants in the iBorderCtrl project to respect fundamental rights is not grounds to assume that they will automatically do so, it maintained that because this was a research project, the public’s right to know about the results – rather than the process of the research – was sufficient.
The CJEU agreed with the General Court that the commercial interests of the REA outweighed the public interest. But as a listing of the documents requested indicates, several were about the ethics of the project, and others were general progress reports. It seems entirely legitimate for that information to be available to the public: claims of commercial interests should not be able to stymie the crucial oversight of new surveillance and control technologies funded by taxpayers.
More generally, the idea that people can only see the results of publicly-funded research is absurd. Today there is a recognition that science research needs to be open – not just in its results, but in its entire process. The CJEU ruling that the public can only ask to see the results is retrogressive, and a return to the bad old days of science funding when the public was expected to pay up and then shut up.
Clearview AI — the facial recognition tech company so sketchy other facial recognition tech companies don’t want to be associated with it — is about to get a whole lot sketchier. Its database, which supposedly contains 10 billion images scraped from the internet, continues to expand. And, despite being sued multiple times in the US and declared actually illegal abroad, the company has expansion plans that go far beyond the government agencies it once promised to limit its sales to.
The facial recognition company Clearview AI is telling investors it is on track to have 100 billion facial photos in its database within a year, enough to ensure “almost everyone in the world will be identifiable,” according to a financial presentation from December obtained by The Washington Post.
As the Washington Post’s Drew Harwell points out, 100 billion images is 14 images for every person on earth. That’s far more than any competitor can promise. (And for good reason. Clearview’s web scraping has been declared illegal in other countries. It may also be illegal in a handful of US states. On top of that, it’s a terms of service violation pretty much everywhere, which means its access to images may eventually be limited by platforms who identify and block Clearview’s bots.)
As if it wasn’t enough to brag about an completely involuntary, intermittently illegal amassing of facial images, Clearview wants to expand aggressively into the private sector — something it promised not to do after being hit with multiple lawsuits and government investigations.
The company wants to expand beyond scanning faces for the police, saying in the presentation that it could monitor “gig economy” workers and is researching a number of new technologies that could identify someone based on how they walk, detect their location from a photo or scan their fingerprints from afar.
Clearview is looking for $50 million in funding to supercharge its collection process and expand its offerings beyond facial recognition. That one thing it suggests is more surveillance of freelancers, work-from-home employees, and already oft-abused “gig workers” is extremely troubling, since it would do little more than give abusive employers one more way to mistreat people they don’t consider to be “real” employees.
Clearview also says its surveillance system compares favorably to ones run by the Chinese government… and not the right kind of “favorably.”
[Clearview says] that its product is even more comprehensive than systems in use in China, because its “facial database” is connected to “public source metadata” and “social linkage” information.
Being more intrusive and evil than the Chinese government should not be a selling point. And yet, here we are, watching the company wooing investors with a “worse than China” sales pitch. Once again, Clearview has made it clear it has no conscience and no shame, further distancing it from competitors in the highly-controversial field who are unwilling to sink to its level of corporate depravity.
Clearview may be able to talk investors into parting with $50 million, but — despite its grandiose, super-villainesque plans for the future — it may not be able to show return on that investment. A sizable part of that may be spent just trying to keep Clearview from sinking under the weight of its voluminous legal bills.
Clearview is battling a wave of legal action in state and federal courts, including lawsuits in California, Illinois, New York, Vermont and Virginia. New Jersey’s attorney general has ordered police not to use it. In Sweden, authorities fined a local police agency for using it last year. The company is also facing a class-action suit in a Canadian federal court, government investigations in Canada, Sweden and the United Kingdom and complaints from privacy groups alleging data protection violations in France, Greece, Italy and the U.K.
As for its plan to violate its promise to not sell to commercial entities, CEO Hoan Ton-That offers two explanations for this reversal, one of which says it’s not really a reversal.
Clearview, he told The Post, does not intend to “launch a consumer-grade version” of the facial-search engine now used by police, adding that company officials “have not decided” whether to sell the service to commercial buyers.
Considering the pitch being made, it’s pretty clear company officials will decide to start selling to commercial buyers. That’s exactly what’s being pitched by Clearview — something investors will expect to happen to ensure their investment pays off.
Here’s the other… well, I don’t know what to call this exactly. An admission Clearview will do whatever it can to make millions? That “principles” is definitely the wrong word to use?
In his statement to The Post, Ton-That said: “Our principles reflect the current uses of our technology. If those uses change, the principles will be updated, as needed.”
Good to know. Ton-That will adjust his company’s morality parameters as needed. Anything Clearview has curtailed over the past two years has been the result of incessant negative press, pressure from legislators, and multiple adverse legal actions. Clearview has done none of this willingly. So, it’s not surprising in the least it would renege on earlier promises as soon as it became fiscally possible to do so.
