From the Glitch Watch: Deja Vu All Over Again in Tokyo Major Malfunction

The crash of your gazillion-dollar trading system — Again? Again! — makes the news. Except on your corporate communications Web site. Is this a best practice in crisis communications?

From my standing Google News Alert on one of the most interesting words in the English language, “glitch”: Systems glitch hits TSE trading (Finextra).

Ouch. Some historical background:

In November 2005 the TSE suffered a systems crash that halted trading for more than four hours, which was later blamed on Fujitsu. Just two week’s later the TSE’s computer systems failed to cancel a mistaken order from a fat-fingered Mizuho trader to sell 610,000 shares for one yen, instead of one share for Y610,000.

¥610,000.

Furthermore in January 2006 the Tokyo exchange was was [sic] forced to close trading early after its system was unable to cope with a surge in sell orders.

I took detailed notes on the incident, but they are all in the MySQL database from the offline first version of The New Market Machines, and living on a storage brick somewhere that I need to get organized one of these days.

Following a major system malfunction, sober reflection and heads rolling:

Following these incidents TSE said in 2006 that it was investing around US$529 million on overhauling its Fujitsu-built trading technology.

See also

• Tokyo Contrite

But — as Pee Wee Herman says to the waitress who dreams of traveling to Paris, “Let’s talk about your big but” — and however:

Design for Usability No-Brainer of the Week

The Gnome Search Tool: Not very sexy, but works okay for me. I am getting better at using grep, too, though for poetry majors, it has a bit of a learning curve.

The GAO reminds the SEC that collecting lots of data without being able to organize and search it quickly and efficiently mean you have no way of converting that data into usable information.

SEC’s Division of Enforcement uses an electronic system to receive referrals of potential violations from SROs. These referrals undergo multiple stages of review and may lead Enforcement to open an investigation. From fiscal years 2003 to 2006, SEC received an increasing number of advisories and referrals from SROs, many of which involved insider trading. However, SEC’s referral receipt and case tracking systems do not allow Enforcement staff to electronically search all advisory and referral information, which may limit SEC’s ability to monitor unusual market activity, make decisions about opening investigations, and allow management to assess case activities, among other things.

Brazil: “Consultor Jurídico Sounds False Note on E-Vote”

The interface is not the algorithm. “Electronic ballot box” simulation on the TSE Web Site: requires Java.

If you cannot bring good news then don’t bring any — Bob Dylan, “Wicked Messenger”

Consultor Jurídico runs an article reporting that “Congress proposes to strip the federal elections tribunal of the power to oversee the electronic voting system.”

Amilcar Brunazo Filho, who runs the Voto Seguro e-voting forum, and testified at the congressional hearings that led to the setting up of a subcommittee on e-voting security — see Brazil: E-Vote Gets the Attention of Congress — objects strenuously to the story.

He writes to his mailing list (I subscribe):

Vejam, abaixo, a matéria que saiu no Consultor Jurídico sobre a idéia de tirar do TSE o poder de regulamentar a fiscalização do voto-e.

Attached is the article that came out in CJ on the idea of stripping the TSE of the power to regulate oversight of the electronic voting system.

Está totalmente distorcida. Diz que o congresso quer tomar o controle das urnas-e do TSE. Que besteira! Não é nada disso!

It is totally distorted. It says that congress wants to control the TSE’s e-voting machines. What nonsense! It proposes nothing of the kind!

CJ is involved in another flap at the moment over an exclusive interview with a woman identified as a translator involved in the Telecom Italia spy case.

Challenged to put other journalists in contact with the alleged “source,” CJ’s editor in chief has refused to produce contact information for the “translator.” Weird. More as that firms up. On the flap in question, see

• The Persecution of Daniel Dantas: An Italian Opera in (?) Acts

Mexico: “Harvard Declares Redmond’s Enciclomedia Useless”

Microsoft “digital divide” project queried by congressional subcommittee: the gizmo has tended to fall off the back of the truck a lot, one reads, if you get my drift.

Comisión legislativa revela irregularidades en Enciclomedia; entrega informe a la SEP: The front page headline in La Jornada is “Enciclomedia is useless and excessively costly, Congress tells the Secretary of Education.”

The inside-page headline: “Congressional commission finds irregularities in Enciclomedia; hands over report to Secretary of Education.”

Harvard determinó que no hay evidencia de que el programa cause impacto en el aprendizaje

Harvard has determined that there is no evidence that the program has an impact on learning.

On June 5, 2007, The Guardian reported (“Mexican Digital Wave“):

A US academic who headed an external evaluation by the Harvard graduate school of education calls it “very positive”. An article in the Guardian in January gushed that it was “probably the world’s bravest, most imaginative and ambitious implementation of education technology”.

What was the name of that U.S. academic?

La mayor parte de los recursos se ha destinado a actividades administrativas no prioritarias

Most of the funds have been destined for non-priority administrative activities.

Bylined to Enrique Méndez and Roberto Garduño

La Comisión de Educación de la Cámara de Diputados, mediante la subcomisión especial que investiga a Enciclomedia, envió un informe a la secretaria de Educación Pública, Josefina Vázquez Mota, donde se revela que la Universidad Harvard determinó que “no existe evidencia empírica contundente que demuestre que el uso del programa en las aulas impacte en el aprendizaje”.

The Education Committee in the lower house of the federal congress, through the special commission investigating Enciclomedia, has sent a report to the secretary of Public Education, Josefina Vázquez Mota, in which it reveals that Harvard University determined that “there is no convincing empirical evidence to show that the use of this program in classrooms has an impact on learning.”

See also

• Mexico: “Harvard Role in Enciclomedia Fraud Scheme Denied”

The volume of oily “rhetoric of the technological sublime” with which this program has been anointed is really astonishing. Some of the most egregious examples:

• BBS: The Beeb 2.0 Touts Enciclomedia
• Redmond & Televisa: A Match Made in Tijuana?
• Bill Gates Preaches Revolution In Cartagena
• “Enciclomedia’s Shining Example” (Brazil)

Nassif on the Brazilian “Risco Cisco”: No Fun for SUN?

Luis Nassif (Brazil) hints that we should look at a firm called Cobra Equipment to understand how “permanent operators” influence government technology contracting in Brazil, regardless of who is currently occupying elected office.

Nassif, not generally given to hyperbole, makes some strong claims about the profundity of the maracuatias involved, so I figure I should try to dig up some background on the case he is referring to.

O relatório do TCU (Tribunal de Contas da União), mostrando favorecimento da Cisco pela Caixa Econômica Federal em 2002 (Blog do Josias) vai comprovando a perpetuidade dos operadores de governo.

The report from the Federal Accounting Tribunal (TCU), showing favoritism to Cisco by the Caixa Econômica Federal (federal credit bank) in 2002 is another proof of how government operators perpetuate their influence.

In the specific example Mr. Nassif cites, however, the equipment purchased was SUN enterprise servers, not Cisco stuff.

Mr. Nassif cites the Folha de S. Paulo Web-only column of Josias de Souza, who points to a 2004 TCU report that questions the lack of a competitive bidding process for equipping the federal financial institution with IT hardware and services, signed in 2002.

The CEF acquired lots of Cisco gear through the systems integration arms of IBM and Alcatel.

Oh, and non-Cisco gear as well. De Souza’s headline: “Government bought Cisco equipment under irregular circumstances under Cardoso.”

Which, now that I read the report myself, is true, but only part of the story.

The TCU questioned some procurement of Cisco equipment in the report Souza cites, resold by Alcaltel and IBM. But it also questioned the procurement of SUN boxes, through Cobra. And an emergency no-bid contract for IBM OS/390 systems management services.

This is why I normally do not pay much attention to de Souza.

Rather than going out and finding stories, the guy, like most Brazilian Bob Novaks, he mostly just seems to sit by the phone waiting for an anonymous Magalhães to feed him one (a common journalistic vice here).

I do understand Nassif’s general point, though.

Folks like Larry Rohter try to get you all interested in the notion that one government is viciously corrupt (and lumpen-Stalinist) and another virtuous (and Ayn-Randy capitalist-heroic).

But the more you look at it, the more you see the need to distinguish between the State (permanent bureaucracy) and Government (the elected officials who get to wear the ceremonial hard hats at the ribbon-cuttings.)

Wanderley dos Santos has written quite a few good books on the subject. I am in the process of poring over them.

These sorts of cases are of interest to gringos, of course, because government technology procurement contracts are under scrutiny back in the Homeland as well.

This after some tech Big Digs aparently collapsed into black holes under the event horizon of that hysterical state of exception declared for the so-called Global War on Terror (GWOT). Which the GAO is now extremely busy trying to learn about.

In Brazil, meanwhile, it seems, the exception remains pretty much the rule. If the State objects to the Government’s policies, it pretty much just tells the Government to go fuck itself. You can observe this on many levels.

In a way, after the Bush years, this sort of puts us gringos in a similar position to the Brazilians: Trying to find our way out of this nightmare. Which is one of many reasons why Brazil is so interesting to watch.

Collapsed Big Digs — and Big Digs that do not collapse, and reflecting on what tends to make the difference between collapsing and non-collapsing big digs — have become something of a hobby of mine. So I will have to update my notes on such things, dig through some back issues of Government Computer News.

Not, mind you, that the Big Digs in question here necessarily collapsed. That is a separate, and equally interesting, technical issue.

But I have seen some really astonishing bad database-driven government Web sites here that make a real mockery of the “rhetoric of the technological sublime” used to promote transparent e-government as the gateway to a new era of global peace and prosperity. Generally Microsoft and Oracle-driven.

I cannot comment on the procurement procedures for these information systems (partly because in order to get such information you have to use the technology in question, which throws more database connectivity errors than the fiercest bull on the pro rodeo circuit throws cowboys). But I think I can make a pretty good case, as a frequent user of databases, that getting information out of these gizmos can be like getting blood from a stone.

Pelo relatório, se identifica desde o governo FHC o uso da Cobra Equipamentos para driblar licitações.

According to the report, Cobra has been used since the Cardoso administration to get around competitive bidding requirements.

TeleSíntese on Cisco and the Fisco

The switch-rich black-box jocks find that their diffuse network of “small pieces, loosely joined” has had its ups and downs lately.

A good moment, this, to rethink the idea of requiring that companies installed in Brazil — at the very least those that are publicly traded, but not exclusively — render accounts about their local operations. Even if 1% of $34.5 billion is next to nothing, as the corporate parent insists, its Brazilian subsidiary and other domestic and American firms have been bombarded with information and counterinformation whose sources and backing have yet to be presented adequately to the public.

Writing in TeleSíntese (Brazil), Lia Ribeiro (with reporting by Anamárcia Vainsencher) learns the lessons of Cisco’s troubles with the fisco. Lucidly, as always.

• As lições do caso Cisco

See also

• Cisco Brasil’s Fiasco With The Fisco: “What The Biz Press Missed”

For my money, Ms. Ribeiro, in her weekly column, regularly defies the common wisdom that the business press here “does not get the new paradigms.”

No ano passado, na comemoração dos resultados do exercício, na sede da Cisco Systems, em São Francisco (EUA), um quadro luminoso classificava o desempenho das subsidiárias da corporação. O Brasil estava no topo em matéria de expansão, ainda que respondendo apenas por 1% das vendas globais da companhia, cujo faturamento líquido foi de US$ 34,9 bilhões. Contudo, tanto a subsidiária brasileira da Cisco, como as de algumas dezenas de outras grandes corporações que atuam no país não divulgam os resultados de suas operações locais. Elas são, na esmagadora maioria, empresas de capital aberto, com papéis negociados em bolsas de valores, em seus países de origem.

Last year, in a celebration of its annual results at its headquarters in San Francisco, Cisco Systems shone the spotlight on the performance of its subsidiaries. Brazil was at the top of the list in terms of expansion, even though it still only accounted for 1% of Cisco’s global sales, with liquid revenues of US$34.9 billion. And yet Cisco’s Brazilian subsidiary, like those of dozens of other large corporations operating in Brazil, does not make public the results of its local operations. And the vast majority of these are publicly traded companies in their countries of origin.

Porém, aqui, a maioria dessas subsidiárias funciona como sociedade limitada, não anônima e, assim, não precisam divulgar seus balanços. Uma situação incômoda porque a falta de resultados auditados não só compromete a veracidade das informações prestadas, como a própria transparência da atuação das companhias em questão. Sem esquecer que as brasileiras que abrem seus dados reclamam do tratamento desigual.

Here, however, they function as limited partnerships, not corporations, and therefore are not required to publish their financials. It makes for an awkward situation, because the lack of audited results undermines not only the credibility of the information provided, but also the transparency of operations at the companies in question. Not to mention the fact that Brazilian companies that publish their data complain of unequal treatment.

Brazil, After Cisco: “E-Commerce Targeted by Taxman”

The camelódromo on the Calçadão de Mascates, Recife, Pernambuco, Brazil. Can street vendors survive selling only legitimate goods? Can enough real jobs and small-business opportunities be created to absorb a shrinking of the mobbed-up Sino-Paraguayan gizmo and infotainment sector? These are burning questions of the hour. I confess that I tend to hope so.

“We are not going to become a Grand Caymans on the banks of the Hudson” — Manhattan D.A. Morgenthau on the indictment of Paulo Salim Maluf. See Rohter on Maluf: The Blind Eye Misreading the Blind Eye

Don’t ask me what I want it for (ah-ah, Mister Wilson)
If you don’t want to pay some more (ah-ah, Mister Heath)
‘Cause I’m the taxman,
Yeah, I’m the taxman.
–The Beatles, “Taxman”

In the worst news for [extreme-right] tax protesters, the Bush administration announced in early 2003 that its proposed IRS budget would include significant increases in several different areas of tax law enforcement, including the prosecution of “tax denial” schemes and the misuse of trusts and offshore accounts. While, adjusting for inflation, the IRS budget would still be lower than it was five years ago, it would nevertheless give the IRS an additional ability to investigate and prosecute tax protesters who committed illegal acts. … In April 2003, a north Idaho businessman, David Roland Hinkson, was arrested for trying to hire an assassin to kill a federal judge, a prosecutor, and an IRS agent. Hinkson had been facing federal charges related to an alleged $938,000 in unpaid federal income taxes.

Comércio via web é novo alvo da Receita: The Folha de S. Paulo (Brazil) conveys a fair warning today from the Tupi federal taxman.

Among the operations more or less coinciding with the case of Cisco resellers accused of using shell corporations, set up by the Panamanian lawfirm that (unwittingly, it says) that set up offshore trusts, to break Brazilian tax and foreign trade laws was, in fact, a crackdown on e-commerce schemes like one that I actually used to use back in New York.

Until they outlawed it, that is. Which I  grudgingly agree that they (freaking Mayor Bloomberg and his famous “Bloomberg bucket”) had to do.

I would order my cigarettes — these freaking things are going to kill me someday if I cannot find a way to get the monkey off my back — from a semi-sovereign Indian reservation, over the Internet. The transnational Mohawks, I believe it was. They would ship them to me by FedEx.

As a result, I would pay $1 per pack rather than the $6.50 you now pay in New York City.

Similar scheme here. Federal agents are reportedly busy seizing goods — mostly electronic gizmos — of Sino-Paraguayan provenience that are being shipped to e-commerce customers on domestic flights.

As operações para combater a importação ilegal serão cada vez mais freqüentes no país, segundo Edmundo Rondinelli Spolzino, superintendente da Receita Federal em São Paulo. Investigações como a que resultou na Operação Persona, que envolve a americana Cisco Systems, estão em andamento.

Operations to combat illegal importation are more and more frequent here in Brazil, according to Mr. Spolzino, superintendent of the federal tax authority in São Paulo. Other investigations like the one that led to the arrests in Operation Persona, which involves the U.S. firm Cisco Systems, are in progress.

Nesta semana, o comércio pela internet de importados de forma irregular deve ser alvo de nova ação da Receita e da Polícia Federal.

This week, e-commerce in irregularly imported goods is due to be targeted by a new action by the tax authority and the federal police.

A Carnevali of Maracutaias? “Cisco top brass arrested in bizarre investigation”

White-collar perp walks: “The people like it that way.” The Caros Amigos cover story seems like an astute piece of political analysis.

Cisco top brass arrested in bizarre investigation: Network World‘s dedicated Cisco blogger finds the Brazilian investigation into an alleged scheme of tax evasion “bizarre.”

Likewise, when the Manhattan District Attorney indicted former São Paulo governor Paulo Maluf earlier this, Larry Rohter of the New York Times, editorializing in the news hole, said he found Morgy’s entree into foreign affairs “bizarre.” See

• Rohter on Maluf: The Blind Eye Misreading the Blind Eye

I thought Morgy expressed himself rather clear on why it makes sense to cooperate with foreign governments to avoid aiding and abetting massive kleptocrats:

“We are not going to become a Grand Caymans on the banks of the Hudson.”

As a New Yorker myself, I second that emotion. If I wanted to live in Paraguay — God help those poor people anyway, and best of luck to responsible adults bent on cleaning the place up — I would move to freaking Paraguay.

Cisco itself has issued a statement acknowledging a problem with its network of resellers, and said it would cooperate with Brazilian federal authorities. It noted that executives at its Brazilian subsidiary had not yet been formally charged.

It was, I thought, a very well thought-out damage-control press release.

Another detail that struck me was the Brazilian federales, at their news conference at the event, were careful to say that criminal charges, if any, will apply to individual conduct, not to the corporation — which may, however, owe some back taxes.

The New York Times notes the incident only briefly today, off the no-nonsense Dow Jones Newswires:

In a news release, Cisco said it was “cooperating fully with Brazilian authorities.” Cisco said Brazil represented approximately 1 percent of its overall business.

I was wondering about that last point: COMPUTERWORLD Brazil ran a story suggesting that the incident could produce a scandal of “Enron-like” proportions and seriously erode the CSCO share price.

Its single source: a consultant (whose clients happen to be Microsoft and Intel, though the publication does not think you need to know that in order to “consider the source”).

See

• Cisco in Deep Crisco: “Could Be Another Enron!”

The whistleblower was a “disgruntled former employee,” the NW Cisco blogger emphasizes — without identifying the employee or detailing the circumstances of his or her separation.

The retribution of a fired Cisco employee has led to the seizure of a commercial jet, large sum of cash, a sizeable cache of Cisco networking equipment and the arrest of the Latin American top brass employed by Cisco.

A profile of one of the arrested executives.

Carnevali [!] joined Cisco in 1994 and has always been able to keep pace with the international growth of Cisco, managing to show results above average. An Electronic Engineer who graduated from Santos (Sao Paulo, Brazil), he holds the degree of Manager Businesses awarded by the University Mackenzie (Sao Paulo, Brazil), as well as a specialization in marketing and an MBA from Stanford University (USA).

Graduated from what university in Santos? UNISANTOS? UNIMES? UNIP Santos? FATEC?

Santos is a tough, tough town. Chicago during the Great Depression tough. Sort of a runner-up to Rio in the contest to name “the Miami of the tropical coast.” Miami in the 1980s, that is.

On the intellectual tenor of a Mackenzie University education, read some of the recent writings of its rector (who, naturally, blogs):

• Lula, Scourge of God

Cisco in Deep Crisco: The GZ’s Take

“Without it, life would be hell on earth.” Microtec advertisement, Veja magazine, issue 87. File under “the rhetoric of the technological sublime (RTS) in postmodern technology PR, Velvet Elvis tendency.”

The Gazeta Mercantil (Brazil) confirms it: The multinational tech giant whose Brazilian chief executive has been perp-walked for engaging in Sino-Paraguayan “quaint customs” — along with a number of federal tax authority officials who were bought off to let the scheme operate — is Cisco Systems.

Next task here: Evaluating Cisco’s crisis communications on the episode. And exploring the Cisco-MUDE “business ecosystem” to see what other fallout might be expected.

(October 20: Updated spot news on the case, in draft-quality translation:

• Cisco Case: “Media Gives Evil Multinational Kid Gloves Treatment!”
• Cisco Case: “Senhor Smith Should Stay in Washington”
• AMCHAM on the Cisco Case: “The U.S. Chamber of Commerce Does Not Speak for Us”
• After Cisco: “Brazucos Bust Bad Beancounters”
• Cisco in Crisco: The Miami Connection
• Cisco in Crisco: The Latest Foreign Corrupt Practices Newsflow!

In a paid ad in the Estado de S. Paulo yesterday, Cisco pointed out that only four of the 40 arrested in the case were Cisco employees, characterizing the case as mainly a “problem in our distribution channels.” Which is acctually not a completely absurd interpretation of the facts as we know them.)

The illegal import scheme described here, by the way, resembles the scheme of which the “Monkeyman” — primatologist van Roosmalen, the “martyr to science” — was accused: Importing video production equipment under the guise of a “donation” to a federal environmental agency, then reselling it to a Brazilian production company and passing the profits back to the foreign seller, avoiding import duties. See

• Brazil: The Monkeyman in Monkeybars Monkey Business?

The incident also reminds me of that interview that Roberto Civita gave to Knowledge@Wharton about a year ago in which, asked why Brazilian “investigative journalism” focuses exclusively on political corruption and rarely, if ever, on business corruption, replied that, in Brazil at least — “we are not yet as sophisticated here as you are in the United States” — corporate corruption in Brazil simply does not exist.

It is not primarily a matter of business corruption; it’s mainly a matter of corrupt public-private relationships. As far as I can recall, we have never had any exclusively corporate scandals.

This is a bit like saying that, in a case of a man who beats the snot out of his wife every night — or vice versa — that the problem here is “a dysfunctional relationship.”

Avoiding the question of agency. Whose fist connects with whose nose? The man’s consistent talking point on other occasions: It is government that corrupts the private sector, not the other way around.

You know the type: “All taxation is a form of government corruption!” In which case evading taxation — with representation or not — is a sacred duty of all true sons of liberty! The corrupt government will only waste it!

Not that these people do not have plenty of representation themselves, mind you … See

• Civita 2.0: The New Lacerdism

17 de Outubro de 2007 – Um mega-esquema de fraude na importação e distribuição de equipamentos de alta tecnologia para redes corporativas de internet e telecomunicações operado por uma multinacional líder no segmento no mercado mundial, a Cisco System, dos Estados Unidos, foi desarticulado ontem pela Polícia Federal (PF) e Receita Federal. Segundo estimativa dos órgãos, nos últimos cinco anos a Cisco e outra multinacional, a Mude, comandaram esquema que sonegou mais de R$ 1,5 bilhão em multa e tributos de importação que deveriam ter sido recolhidos aos cofres públicos.

A massive fraud scheme in the importation and distribution of high-tech equipment for corporate data and telecommunications networks, operated by Cisco Systems, was broken up yesterday by the feds and the tax authority. According to estimates from those two agenices, in the last five years, Cisco and another multinational, MUDE, commanded a scheme that avoided paying $1.5 billion in taxes and penalties into the public coffers.

Skipping some details we already have on file.

A PF pediu também o apoio da polícia americana para localizar e prender outros cinco executivos das duas empresas, que trabalham nos Estados Unidos. Foram aprendidos US$ 10 milhões em mercadorias nos endereços da Cisco e outros R$ 45 milhões de mercadorias junto à Mude – maior distribuidora dos produtos importados ilegalmente -, US$ 290 mil, R$ 240 mil em espécie e 18 automóveis de luxo.

The Brazilian feds also asked for support from American police in locating another five executives of the two firms, who work in the United States. Seized in the raids were US$10 million in merchandise from Cisco offices and another $45 million in merchandise from MUDE — the largest distributor of illegally imported products — along with US$290,00 and R$240,000 in cash and 18 luxury automobiles.

Brazil: “American Tech Firm Cheats Tax Man of Gazillions”

Daslu House Music CD, export edition, $25

The protest leader, PSDB deputy Alberto Goldman, explained the rationale for the protest. According to Goldman, “this arrest could lead to an economic crisis. Businesses will say: why invest in Brazil if we are going to wind up getting arrested?” That is: in the Toucan view of the world, the only folks that ought to be in jail in this country are the chicken thieves! The businessman who evades taxes, sends money out of the country illegally or commits other crimes can’t be touched and can even count on the help of certain politicians — who will later get a nice campaign contribution. See Cultural Reference Lexicon Entry No. 48: Daslu

PF realiza operação contra sonegação em SP, RJ e BA: The Estado de S. Paulo reports on Operation Persona, a joint operation of the Brazilian federal police and the federal tax authority.

Persona non grata, apparently.

Updates (October 19):

• After Cisco: “Brazucos Bust Bad Beancounters”
• Cisco in Crisco: The Miami Connection
• Cisco in Crisco: The Latest Foreign Corrupt Practices Newsflow!
• Cisco in Deep Crisco: “Tech Sector Feels Hectored!”
• Gazeta: “Tupi Tech is a Nervous Wreck”
• “Brazil Is Vulnerable to The Cisco Gambit”

SÃO PAULO – A Receita Federal e a Polícia Federal deflagraram na madrugada desta terça-feira, 16, a Operação Persona, cujo objetivo é desarticular uma rede de fraudes no comércio exterior envolvendo uma multinacional americana. Segundo a Receita, a empresa é líder mundial no segmento de serviços e equipamentos de alta tecnologia para redes corporativas, para internet e telecomunicações.

The Federal Revenue and the Federal Police unleashed Operation Persona in the early morning hours today, October 16. Its objective is to bring down a network of fraud in foreign trade involving a U.S. multinational. According to the tax authority, the firm is a global leader in the area of high-tech equipment and services for corporate networks, Internet and telecommunications.

Uh oh.

Brace yourself for a wave of screeching lectures from the usual suspects on the dangers of “nationalism,” “protectionism,” “socialism,” “demagogic populism” and, of course, the inference that “nationalism + socialism = Nazism.”

The firm in question receives the courtesy of not being perp-walked — mentioned by name — in this report. Or in any other news reports on the case so far. Cisco Systems is the guess going around, but I stress GUESS.

I have not confirmed it, so please: no wagering. Seriously. I do not know that for a fact. And I really do not think either humans or algorithms should be making investment decisions based on what they read on blogs.

Costa Rica: After the CAFTA Referendum

Process handoffs in Costa Rican electoral tribunal quick-count system. Votes (1) transmitted by telephone to regional centers, where the data is (2) manually entered for transmission to the TSE, via both private network and Internet, and from there to (3) the news media, via Internet. Network and telephone lines monitored by two private firms, ICE (telephony) and RACSA (ISP). A manual count is taken to confirm the quick-count, once (5) the ballots are physically delivered to the TSE in San Jose. White-hat hackers: Devise the simplest possible plan for defrauding this system. What occurs to me is that you (1) mess with the preliminary results during data entry or transmission, and then (2) mess with the ballots during transportation to make the results agree with the quick count. This is how the mapaches did it in Mexico. A very rigorously documented chain of custody on the ballot documents would therefore be paramount. In Mexico, cases of ballots tampered with while in IFE custody were documented.

TSE debe concluir conteo a más tardar 20 de octubre: La Nación (Costa Rica) reports the final vote count for the national referendum over ratifying the CAFTA free trade agreement will be complete by October 20.

It notes a Washington Post editorial calling the apparent victory of “Yes on CAFTA” a “defeat for Hugo Chávez.” The OAS certified the transparency of the election and called on all sides to respect the results.

“Preliminary results” suggested that the measure passed by a margin of 51.6% to 48.3%, or 3.3% — about your standard margin of error in opinion polling, right?

But the manual recount will not be completed until October 20.

One public opinion poll indicated a margin of 12% in favor of “no.” Another — by a firm which lists the Presidency of Costa Rica as a market research client — indicated a technical tie. See

• Dueling Polls in Costa Rican Referendum

I have been reading a University of Costa Rica publication — from the statistics faculty — on the role of the new media in forming public opinion during the recently completed referendum on CAFTA, the Central American Free Trade agreement. So I thought I would take a quick survey of coverage of the issue, by looking at the principal daily newspapers.

The Web site of the Diário Extra leads today with a photograph of two women fighting in the public street, captioned something like “Cat Fight!”

Its top headline is “Judge Accused [by ex-wife] of Raping Daughter, 6.”

That story is followed by “PAC will not obstruct the TLC.”

The opposition party, which campaigned for a “no” vote in the referendum as in the 2006 Presidential campaign, will reportedly boycott the ratification of the referendum result by Congress, but will not attempt to obstruct it.

That, nearly word for word, is also the top headline on the CAFTA issue in Al Día, and its top headline overall.

La Republica (a business publication) leads with “Arias leads trade delegation to China.”

Panic at COPOM: Radio Games During São Paulo’s PCC-PM Wars?

I’ve paid my dues –
Time after time –
I’ve done my sentence
But committed no crime –
And bad mistakes
I’ve made a few
I’ve had my share of sand kicked in my face –
But I’ve come through
— Queen, “We Are The Champions,” used as a theme song for a São Paulo PM recruiting video

SÃO PAULO — Central da PM não gravou reação aos ataques do PCC: The Estado and Folha are both working the story of a 72-day blackout in a system for recording police communications during the PC-PMM wars of May 2006.

See also

• “It Was a Cold and Calculating Night”: Tognolli on Fear, Uncertainty and Doubt
• “São Paulo’s Trooper Elite”: The Estadão on ROTA
• Sampa Diary: The PM-PCC Wars, One Year On
• The PM-PCC Wars, One Year On: Who Killed Lindomar?
• São Paulo: A Criminal Middle Finger As The Buses Burned?

And compare

• “Difficult to Investigate Rio Militias”: Military Police

A investigação sobre as mortes de civis durante a reação policial aos ataques do PCC (Primeiro Comando da Capital), no ano passado, perdeu uma de suas principais provas. Contrariando procedimentos normais de segurança, o Copom (centro de operações da Polícia) de São Paulo afirma não ter gravado as comunicações entre o órgão e os carros dos policiais acionados nos supostos confrontos.

Investigations into the death of civilians during the police response to attacks by the PCC criminal faction last year have lost one of their principal pieces of evidence. Contrary to normal security procedures, São Paulo’s COPOM (police operations center) says it did not record communications between COPOM and police cars dispatched to alleged confrontations.

A Polícia Militar diz que houve uma pane no aparelho que grava as comunicações do Copom na capital paulista e nega sabotagem. As conversas nem chegaram a ser gravadas, segundo a corporação. O Ministério Público classifica o episódio como “esdrúxulo” e promete investigar o caso.

The state military police says there was a failure in the system for recording COPOM communications, but denied sabotage. The conversations were never even recorded, according to the police force. The public prosecutor called the episode esdrúxulo and promised to investigate.

Esdrúxulo:

… fora dos padrões comuns e que causa espanto ou riso; esquisito, extravagante, excêntrico

… unusual, surprising or laughable; weird, extravagant, eccentric

Gravadores do Copom registram as ligações para o telefone 190 e as comunicações, por rádio, entre o órgão e os carros da PM acionados para atender as ocorrências policiais.

COPOM recordings register calls to [São Paulo’s version of 911] and the radio communications between the operations center and military police patrol cars dispatched to the scene of police incidents.

O registro dos diálogos é utilizado para esclarecer as circunstâncias de ações consideradas suspeitas. Em alguns casos, por exemplo, a gravação traz até sons dos tiros durante a ação policial, o que ajuda a avaliar a atuação dos policiais nos confrontos.

The recorded communications are used to clarify the circumstances of activities considered suspect. In same cases, for example, the recordings capture the sound of gunshots during police actions, which helps to evaluate the actions of policemen during armed confrontations.

Segundo a PM, no entanto, houve interrupção no serviço entre os dias 26 de abril e 11 de julho do ano passado, conforme antecipou ontem o jornal “O Estado de S. Paulo”. O equipamento, que era obsoleto, teria sido encaminhado para conserto, que durou 76 dias.

According to the PM, however, there was an interruption in service between April 26 and July 11, 2006, as the Estado de S. Paulo reported yesterday. The equipment, which was obsolete, had been sent off for repairs that took 76 days.

“Unisys in Homeland Hell”

Mexican vote-by-voters are mad as hell and say they have seen this movie before.

Congressional probe suggests security contractor’s ‘incompetent’ activity allowed hacking (Raw Story): The Homeland Security state is an crony-capitalist enterprise-integration boondoggle! Another case in purported point.

Unisys received a contract to secure unclassified computer systems for TSA and DHS headquarters. But, the Post reports, the company failed to properly install equipment, leaving the government open to three months of cyber attacks.

Ouch.

Unisys “incompetence” also determined the outcome of the 1988 Mexican elections, you may recall:

On July 6, 1988, when the polls closed and the government started tallying the count at its central computing office in Mexico City, the country eagerly awaited the results. There was much disappointment when Manual Bartlett, the PRI’s interior minister in charge of administering the vote, announced the next morning that the Federal Election Commission’s computer system, supplied by UNISYS, had crashed and that the results would be delayed.

This time around, Mexico’s IFE decided to hire someone better qualified: A firm owned by the brother-in-law of one of the candidates. The one who eventually won, actually.

Mexico: “Enciclomedia Probe Authorized”

Microsoft “digital divide” project seems to have sunk into the sea of mud.

Among the most frequent complaints by teachers were such things as that “there were incorrect dates in the digital history textbook” and that the digital version of the math textbook was not the latest edition. Other teachers commented that “windows appear that there is no way to close” and that “there is no way to get the computer back after it freezes.”

And those are the units that were actually delivered to a place with electricity to run them on, rather than, say, falling off the back of a truck.

Items:

1. Diputados aprueban que se exija auditoría a Enciclomedia (La Jornada): “Mexican lawmakers approve audit of Enciclomedia program”
2. Secretary of Education defends Enciclomedia program (Correo, Guanjuato)

See, I occasionally do write about what I say I am actually mainly interested in: Technology “big digs.”

On the troubled Enciclomedia program — which the BBC (“BBC Business Coverage: Innocent of Bias 2.0!”) apparently wants you to think is the best thing since sliced bread — see also

• Mexico: Congress Will Audit Enciclomedia
• Mexico: “Harvard Role in Enciclomedia Fraud Scheme Denied”
• E-ducational Savior Machines on the Hot Seat
• Veracruz: Black Market in Digital Chalkboards
• Enciclomedia’s Shining Example (Brazil)
• Mexico: Shedding Light on Contracting Procedures for “Digital Chalkboard” Program
• Mexico: Computerization of Rural Secondary Education Studied
• Redmond & Televisa: A Match Made in Tijuana?
• E-ducation Projects: “The Caprichos of Vincente Fox”
• BBS: The Beeb 2.0 Touts Enciclomedia
• Megabiblioteca and Enciclomedia: Black-Box Boondoggles?
• Enciclomedia: Gordillo Son-in-Law Summoned in Savior Machine Case
• Enciclomedia: The Passion of the Savior Machine
• “The Technical and Educational Failure of Enciclomedia”
• The Diamond Age, Dystopia Version

La Cámara de Diputados solicitó a la Secretaría de la Función Pública (SFP) que inicie una investigación que derive en una auditoría integral al programa Enciclomedia, que Vicente Fox y Marta Sahagún impulsaron como su mayor logro durante el pasado sexenio.

The lower house of the Mexican congress will ask the secretary of the civil service to initiate an investigation that may lead to a complete audit of the Enciclomedia program, which Fox and his wife have touted as the most significant achievement of the Fox administration.

Left-Coast Red Teams “Hack Into Electronic Voting Machines”

Zerésima for a Brazilian voting machine: Analogous to the “zeroed” odometer on a new car, it certifies that the equipment is “in perfect working order.” The gizmo churned out anomalous results in a state election in Alagoas last year.

… no security should ever rely solely on secrecy of defensive mechanisms and countermeasures. While not publishing details of security mechanisms is perfectly acceptable as one security mechanism, it is perhaps the one most easily breached, especially in this age of widespread information dissemination. Worse, it provides a false sense of security. Dumpster diving, corporate espionage, outright bribery, and other techniques can discover secrets that companies and organizations wish to keep hidden; indeed, in many cases, organizations are unaware of their own leaking of information. –Matt Bishop, UC Davis, Overview of Red Team Reports from California’s 2007 “Top To Bottom Review” of e-voting machines used in the state.

Scientists’ Tests Hack Into Electronic Voting Machines in California and Elsewhere: The New York Times reports.

An item to send along to the folks at Brazil’s Voto Seguro, whose efforts, as an aficionado of electronic beancounting systems, I follow.

The Brazilian Congress has convened a subcommittee on e-voting security, but the search for explanations of perplexing data from the state gubernatorial elections in Alagoas last year — a candidate with pre-election poll numbers suggesting an easy victory is resoundingly thumped, according to official results while quality-control systems apparently failed on a massive scale — has died on the vine.

Voting machines, diskettes and paperwork were later found incincerated in a vacant lot near a warehouse where software was uploaded by an IT outsourcing firm hired by the state elections tribunal. But don’t just take my word for it:

• The Urnas of Alagoas: Picking Up The Pieces
• Alagoas Election Techie: What? Us? Fraud? Naw.
• Alagoas: Elections Evidence In Bonfire of the Vanities?
• Alagoas: Bonfire of the Vanities Update

Brazilian election authorities continue to resist open-source adoption for elections software, I think it is fair to say. Technology contractors seem to be lobbying heavily to continue the black-box codebase approach to security (which the California Red Teams advise against). But there are also some hints, for example, that Windows CE will no longer used. The Brazilian federal lotteries are all now Penguin (Linux)-powered, I read.

Computer scientists from California universities have hacked into three electronic voting systems used in California and elsewhere in the nation and found several ways in which vote totals could potentially be altered, according to reports released yesterday by the state.

The state government commissioned “red teams” and is in the process of posting their reports, according to which:

Each “red team” was to try to compromise the accuracy, security, and integrity of the voting systems without making assumptions about compensating controls or procedural mitigation measures that vendors, the Secretary of State, or individual counties may have adopted. The red teams demonstrated that, under these conditions, the technology and security of all three systems could be compromised.

Manufacturers: Diebold Election Systems, Hart InterCivic and Sequoia Voting Systems.

The reports, the latest to raise questions about electronic voting machines, came to light on a day when House leaders announced in Washington that they had reached an agreement on measures to revamp voting systems and increase their security.

Voter verification.

The House bill would require every state to use paper records that would let voters verify that their ballots had been correctly cast and that would be available for recounts.

Badillo: “Oracle’s Mexican Tax Big Dig Gets Deeper?”

Business process management. Source: Oracle.com.

 Time will tell whether the emergence of the quasi government is to be viewed as a symptom of decline in our democratic government, or a harbinger of a new, creative management era where the purportedly artificial barriers between the governmental and private sectors are breached as a matter of principle. — Kevin R. Kosar, “The Quasi Government: Hybrid Organizations with Both Government and Private Sector Legal Characteristics” (Congressional Research Service, February 13, 2007)

Oficio de Papel is the weekly Web column of journalist Miguel Badillo, who has written extensively about the kinds of funky goings on in Mexican customs now brought back into the spotlight by the Ye Gon case.

This week, however he sticks to the story of an Oracle tech big dig gone awry (which is really more up my alley as well): a new technology platform for the Mexican tax authority that bogged down in that peculiar public-private partnership known as ISOSA — part of the controversy over which has to do with how it managed to hang on to cash collected from customs duties in a system run by Gil Díaz cronies and relatives.

E-week announced the project in August 2004 as “the biggest deal in [PeopleSoft’s] 17-year history.”  I translate for future reference and pra inglês ver only. So please: no wagering.

Una vez más la oscura estructura administrativa de la empresa privada ISOSA (Integradora de Servicios Operativos S.A.), creada por el exsecretario de Hacienda, Francisco Gil Díaz, vuelve a permitir al gobierno federal disponer de recursos fuera del presupuesto para enfrentar irregularidades y desvíos de recursos generados con el diseño y operación de la Plataforma Integral del Servicio de Administración Tributaria (SAT).

Once again the obscure administrative structure of the private ISOSA (from an acronym for the Spanish phrase “operational services integrator”), created by former Treasury secretary Francisco Gil Díaz, will enable the federal goverment to make use of out-of-budget funds in order to address irregularities generated by the design and operation of the tax authority’s “integrated platform.”

Rio: One-Armed Bandits Are Rigged! Safadeza Lab Busted!

A caça-níquel machine offered for sale recently on MercadoLivre.com.br — “Brazil’s answer to E-Bay.”

Receita desmonta o mais sofisticado laboratório para ‘viciar’ caça-níqueis no Rio: Brazil’s federal taxman busts in on a workshop where the electronic gambling machines known as “nickel-hunters” get rigged so the end user cannot possibly win.

We have a very dear friend — she works in the, er, informal facilities maintenance and alt.real.estate line — whom we have been warning constantly about this sort of thing, after hearing that she likes to spend Saturday night down at the bingo.

Neuza, show our hard-working, familly-values friend this clipping.

The game is fixed so you cannot win! Duh.

The operation was dubbed Tormenta (“Storm”), suggesting a link to Operation Hurricane.

In that case, senior federal judges and police officials were charged with selling favorable judicial rulings — such as court orders allowing gambling joints to operate — to organized gambling mobsters.

A similar case, Operation Themis, is proceeding in São Paulo, but may have been damaged by an inside tip-off from a Telefónica employee to wiretap targets.

The São Paulo state supreme court [STJ] judge who refused to issue arrest warrants in Themis, by the way — Fischer — was recently elevated to the federal elections court. What is that about?

The Supreme Court recently clarified — yet again — that under the Brazilian constitution, only the federal government can regulate gambling.

Technically, Brazil has no Nevadas for Bill “The Moralist” Bennett to gamble in. Or Gardena poker clubs. Or Indian reservations. But it certainly has a surfeit of folks that could teach old Abramoff a thing or two.

Técnicos da Receita Federal, que estão desde a manhã desta quarta-feira (16) em um dos dois depósito onde foram apreendidas 843 máquinas caça-níqueis, em Duque de Caxias, Baixada Fluminense, afirmaram que encontraram no local um dos mais sofisticados laboratórios para manipulação desses equipamentos.

Technicians from the federal tax authority who have been working since the early morning today (May 16) in one of two warehouses where 843 gambling machines were seized, in Duque de Caxias, downstate Rio, said they found one of the most sophisticated laboratories ever found for the manipulation of these gadgets.

Merc Still Hot for BOT!

CBOT financial screen trading back up after glitch (August 5, 2006)

CME raises offer for rival CBOT by 16%: This, ostensbily, is the kind of story that the New Market Machines Web log was set up to track — new market machines set up to count trades in pork belly futures, not new market machines set up to churn and burn body counts in Third World hell holes.

Still, transaction processing and creative accounting for smoldering corpses — see Colombia: Body Count Audit Finds Surplus of Misfiled Corpses and “Deconstructing Alckmin”: Books Cooked on São Paulo Bank Robberies, for example — are both merely forms of bean-counting, are they not?

The numbers are the numbers, unless you are an Enron executive or an Arthur Andersen audit accountant.

So it seems natural enough to transfer one’s interest in hard-number journalism from one to the other, under the general rubric of “accountability.” That’s what the World Bank wants emphasized these days, right? Democratic transparency and accountability?

I remain just as interested in swaption automation and newsflow arbitrage and all that geeky stuff, of course.

Frankly, one reason I do less blogging about this sort of thing these days because I have been doing more freelance work for paying clients in this area recently. I do try not to mix off-hours fun with work-week profit.

Besides, I own a handful of CME shares, and I am not one of those “pump your own holdings” sort of bloggers along the lines of AOL’s Blogging Stocks — the first stock to be blogged being, of course, AOL-Time Warner’s.

The Chicago Mercantile Exchange on Friday lifted its offer for CBOT Holdings, the rival Chicago exchange, by 16 per cent in a determined effort by the CME to avoid missing out on the current round of industry consolidation and defeat a competing offer from Intercontinental Exchange (ICE).

Mexican Tax Man: Bad Business Logic Behind Miscounted Beans

Paramount-Universal joint venture was one of a number of companies receiving irregular tax refunds on the Iron Auditor’s watch, says Mexican federal auditor.

In his weekly Web column, Oficio de Papel, Mexican journalist Miguel Badillo provides an update on funky doings in Mexico’s tax and customs institutions — including the troubled “enterprise integration” Big Dig at the Mexican tax authority under former Treasury secretary Francisco “The Iron Auditor” Gil Díaz.

See Badillo: Oracle-Powered Mexican Tax Machine Bogs Down.

Badillo’s axe to grind this week is a new list of firms that received improper tax refunds, for reasons that need clarifying.

If I understand this properly, the Mexican tax man says design limitations in the business logic of its “integrated solution” were to blame for the “anomalies,” in which tax breaks were misclassified under the heading of a customs duty known as the DTA.

On the problematic administration of the DTA program, see also

• Mexico: Tax Man Tracks Turpitude in Customs
• New From the ‘Fools Running Stateside Games’ File (Gil friends and relatives running customs houses as political patronage prizes)
• Gil Díaz On The Hot Seat (Calderón relatives also benefited from customs patronage)

We translate, as always, in haste.

Hace unas semanas comentamos los problemas que enfrenta el presidente de Servicio de Administración Tributaria (SAT), José María Zubiría Maqueo, por el costoso retraso en la aplicación de un sistema contratado para modernizar su plataforma tecnológica denominado “Solución Integral” y que representó un gasto de más de 52 millones de dólares, lo cual ha causado disgustos y desconfianza al secretario de Hacienda, Agustín Carstens.Según Zubiría Maqueo los problemas con este contrato no son atribuibles a hechos de corrupción o negligencia en el organismo que preside, y también ha exculpado del atraso a la empresa Oracle o Peoplesoft, que originalmente fue la que ganó el contrato, bajo el argumento de que se trata de un nuevo sistema es una arquitectura tecnológica muy compleja.

Some weeks ago we noted the problems faced by the head of the federal tax administration in Mexico (SAT), Mr. Zubiría, because of costly delays in the implementation of a system designed to modernize its technology platform, know as the “integrated solution,” representing an expenditure of $52 million, which has led the current treasury secretary, Carstens, to express annoyance and doubt. According to the head of the SAT, the problems cannot be attributed to acts of corruption or negligence at the SAT, and has also exonerated Oracle-Peoplesoft, which won the original contract, arguing that the new system has a very complex technical architecture. 

Pues en medio de la crisis que vive el presidente del SAT y sus problemas con su jefe Carstens que lo mantienen al borde de la renuncia, hay que agregar las graves acusaciones de supuesto delito de peculado que le hace la Auditoría Superior de la Federación en su último informe sobre la cuenta pública correspondiente a 2005, en donde señala que el SAT extrajo de manera irregular más de mil 200 millones de pesos correspondientes al Derecho de Trámite Aduanero para entregarlos a grandes contribuyentes como son Mexicana de Aviación, Aeroméxico, United International Pictures y Minsa, entre otras empresas privadas nacionales y extranjeras.

Now, in the middle of that crisis and the trouble that the SAT director is having with Carstens, who is on the verge of asking for his resignation, we have to add the serious accusations of misappropriation of funds made by the federal auditor (ASF) in his last report on the 2005 public accounts. The ASF indicated that SAT improperly took more than 1.2 billion pesos ($110 million) out of the customs duty fund and paid them out to large taxpayers such as Mexicana Airlines, Aeroméxico, United International Pictures, Minsa, and other private Mexican and foreign firms.

Mexico: Shedding Light on Contracting Procedures for “Digital Chalkboard” Program

Microsoft “digital divide” project queried by congressional subcommittee.

The PRI congress member said that ex-president Fox is saying, in appearances at conferences abroad, that all elementary school classrooms are equipped with the Enciclomedia device, which is false.

Whoa. Did El Zorro really say that? Fox stocks continue to plummet since this item from mid-January: The Great Fox (and Sahagún) Fire Sale: Everything Must Go!

The latest: Citarán a comparecer a titular de la SEP por Enciclomedia (El Universal, Mexico City).

The Mexican secretary of education will have to testify to Congress on the controversial “digital chalkboard” system, including an explanation of the contract bidding and award process.

Why is it in stories like this the vendor never gets identified, even when the contracting process is called into question?

I repeat: You can read the government’s contract with the vendor on the project — Microsoft, represented by Maggie Wilderotter — here.

The Televisa Foundation was also involved in some way with the content of the system. See also Redmond & Televisa: A Match Made in Tijuana?

La Subcomisión de Investigación del Programa Enciclomedia de la Cámara de Diputados citará a comparecer a la titular de la Secretaría de Educación Pública (SEP) , Josefina Vázquez Mota, para que aclare todo lo relacionado con ese proyecto.

The investigative subcommittee on the Enciclomedia program in the lower house of Congress will summon Education Secretary Josefina Vázquez Mota to answer questions about the project.

Vázquez was Calderón’s campaign manager in the 2006 elections, after serving as Fox’s cabinet secretary for Social Development. This was an area in which the Contigo program received qualified international praise, although from a long-term perspective Mexico made no advances over the Zedillo era:

In 2002, half of Mexicans lived in poverty with one fifth in extreme poverty. The current poverty level is only slightly lower than before the 1994–95 crisis, according to the World Bank. (Source: Center for Latin American Studies, UC Berkeley, 2005)

She is also a Wikipedia autohagiographer by proxy: The entry is clearly plagiarized from her official bio, as it appeared in all the newspapers and official PAN press releases.

Does her husband, identified only as a “computer science graduate” in all her official bios, actually work for a living in the IT field?

And if so, doing what?

Recall that the company hired to perform the computerized quick count in Mexico’s July 2006 election is owned by Felipe Calderón’s brother in law, a Mr. Zavala.

See NMM-TV: The Hildebrando Case So Far.

From the Glitch Watch: Human Capital x The Legacy-Admission State

A Jan. 2005 Washington Post profile of ChoicePoint’s lines of business. Click to zoom.

Lawsuit Says Education Dept. Overcharged on Student Loans (WaPo):

U.S. Department of Education has overcharged millions of Americans with student loans during the past decade despite repeated warnings that it was breaking the law, according to a lawsuit filed yesterday.

The plaintiffs’ press release, from BusinessWire.

A computer glitch:

A computer glitch apparently caused more than 3 million student loan borrowers to be billed hundreds of millions of dollars more than they owed, said lawyers who brought the class-action suit. It’s unclear how much individuals were overcharged.

Hacking the Habeas Data Server: In Brazil, The Second Superpower Plans to Plan

Governo abre Orçamento da União para ONGs: “The Brazilian government opens up the federal budget to non-governmental organizations” (Terra Magazine).

I am a frequent complainer about the astronomically high ratio of (1) “rhetoric of the technological sublime” press releases to (2) successfully completed acts of accessing actual information, in usable form, on e-government Web sites — both here (Brazil) and there (Brooklyn).

That is why it it is interesting to read this interview with the fellow in charge of improving the situation for the Brazilian executive and legislative branch on behalf of the Brazilian public.

Oh, no, sorry, wait a minute.

The interview is not with the person responsible for implementing existing transparency policy in technical and design terms.

It’s with some Brazilian quango-banger in charge of negotiating a new and improved “equal access” policy.

In which I am less inclined to be interested, personally. It strikes me as a typical postmodern technology sales pitch: Trying to sell you a solution without explaining why the solution you already have is broken or inadequate.

Defining the problem to fit the solution on offer.

But it is still makes an interesting read.

Government transparency, it seems, is governed principally by Law No. 9,507 (1997), which

Regula o direito de acesso a informações e disciplina o rito processual do habeas data.

Legal defines the right to access to information and regulates the legal procedures for “habeas data.”

But that has been supplemented by a number of decrees during Lula I, including a flurry of decrees in 2005 and 2006. You would think a competent backgrounder on the regulatory framework here would summarize those briefly, at the very least.

Besides the government data-publishing programs mentioned in this story, by the way, the CGU — something like the executive-branch OMB in the U.S., with the autonomous para-judicial TCU occupying the adversarial role played by the congressional GAO in our great gringo republic — promotes Olho Vivo no Dinheiro Público (“live eye on public money.)

I have yet to test-drive that.

On the general kinds of things that can go spectacularly wrong when you have fast and loose rules on the management of public data, see, for example, ChoicePoint: Data Brokerage, Election Jokerage? and Fines Levied in That Other ChoicePoint-Facilitated Elections Governance Fubar.

The story is by a fellow named Daniel Bramatti, who was the section editor for the Folha de S. Paulo‘s national (Brasil) section for 12 years before being hired as a “gestor de conteúdos” (content manager) by Bob Fernandes for the e-publication on the Terra internet porta, according to a brief note in the trade press.

Alvo dos mais variados lobbies, controlado por políticos e tecnocratas e alimentado pelo seu bolso, em breve o Orçamento Geral da União poderá ser integralmente fiscalizado por todos os cidadãos com acesso à internet. O governo federal já deu o primeiro passo para submeter o Siafi – sistema informatizado que controla todos os gastos e investimentos federais – ao controle público. No início do mês, um decreto autorizou representantes de ONGs a vistoriar os dados. No futuro próximo, o acesso será universal.

Targeted by various lobbies, controlled by politicos and technocrats and fed by your wallet, the federal budget will soon be fully available to all citizens over the Internet. The federal government has already taken the first step by submitting SIAFI — the IT system that controls all federal expenditures and investments — to public control. At the beginning of [this] month, a decree authorized representatives of NGOs to review the data [what decree?]. In the near future, access will be made universal.

As if the existence of NGOs that are set up specifically for lobbying purposes, and staffed by lobbyists who do nothing but lobby, were somehow unthinkable.

A logical surd, a category mistake, a paradox, a hippogriff, a contravention of the natural order and the laws of physics, like the lion lying down with the lamb.

Give me a freaking break.

This is, after all, the Age of Abramoff. The Age of GONGOs.

And yes, fine, hooray for “universal online access,” but let us not forget the principal argument in the case brought against “paperless justice,” which we clipped early: Hardly anybody in Brazil has a computer.

Also, Brazilian e-government online public information databases, as I have informally surveyed them, are — here comes my usual Jakob Nielsen-inspired carping — a porcaria.

However, since each branch of government has its own standards and practices, it might be worthwhile asking which branch of e-government mounts the worst data access systems, and which has shown signs of improvement and deterioration, as a result of what initatives. Standard Government Computing magazine type of stuff.

See, for example, Brazilian Election Tech: Random Notes.

I keep wanting to know what firm the regional elections tribunal in Alagoas reportedly outsourced its storage, maintenance, and voting-machine prep work to.

I still do not know. And I have actually tried.

Some Brazilian Web sites — in the executive branch, mostly — now sport W3C accessibility credentials, while others have even switched to open-source platforms. See Brazil: Open E-Gov Renaissance?

But on the back end, where the ODBC driver digs into the hard numbers, as far as I can see — and I have not looked systematically, mind you — the song often remains the same:

Exceção de E/S: The Network Adapter could not establish the connection

On to the interview:

Enciclomedia: Gordillo Son-in-Law Summoned in Savior Machine Case

The Teacher: Batman villain-style henchman in high places in the Calderón government include elections commissioners, an anti-terror czar and the education bureaucracy.

Pide el Senado a la SEP informes sobre el programa Enciclomedia (La Jornada): You will recall that when attempts were made to block the nomination of Elba Esther “The Teacher” Gordillo’s son-in-law as underscretary of elementary education, she threatened to rat out massive corruption in the “digital chalkboard” program. See The Teacher Takes Rove to School for an early report.

Fox had contracted for the Enciclomedia on a massive scale with Microsoft and promoted it heavily as a “digital divide”-bridging “qualitative leap” for education.

See also

1. Enciclomedia: The Passion of the Savior Machine
2. Elba “The Teacher” Esther: The Rank and File Fester
3. “The Technical and Educational Failure of Enciclomedia”

On the other hand, the incoming Calderón government — or philanthropreneurshipists of the permanent institutional interregnum, perhaps, who really knows? —  immediately signed a new Enciclomedia contract, this time for satellite aDSL to be provided by Hughes.

Subsequently, program audit documents allegedly supressed by Fox’s education secretary were leaked to investigative journalists, and critics started howling “boondoogle!”

The SNTE she-cacique has boasted considerable success in naming collaborators to high posts in the Calderón government, cashing in election-season favors to PAN whose precise nature remains, er, the object of intense curiosity.

This is a principal reason, for example, why the investigative journalism weekly Proceso keeps roasting Calderón in his own juices.

This is a one-source political press conference story, of course, so take it for what it is worth. I’ll keep on clipping.

El subsecretario de Educación Pública, Fernando González, yerno de Elba Esther Gordillo, fue citado a comparecer en el Senado, a fin de que explique las irregularidades en el programa Enciclomedia.

Public Education undersecretary Fernando González, son-in-law of Elba Esther Gordillo was summoned to appear before the Senate to explain irregularities in the Enciclomedia program. 

Brazilian Election Tech: Random Notes

“The server encountered an internal error () that prevented it from fulfilling this request. The full stack trace of the root cause is available in the Apache Tomcat/5.0.25 logs.”

Item: TSE: Sistema de Acompanhamento de Contratos (SIACWEB), the public contracting information Web site of the Brazilian federal elections tribunal.

I keep thinking that it would be interesting to know exactly what firm was hired to load software and otherwise prepare voting machines for the controversial October 2006 elections in Alagoas — a story I am trying to give my full attention to, time permitting.

Judge Tourinho has pointed to rogue employees as the source of any irregularities that might be discovered, and there have been references in the news coverage to an outside firm hired to pull the machines out of storage, spin them up, load the software and offload the results.

Cloning of machines has already been documented in a São Paulo election in 2004, though the case has not yet followed up on by elections courts.

Alagoas still uses land transport to move machines to and from voting places, as I read in a contract I was able to access when the system was up and running. This, according to fraud experts here, provides an opportunity for “clone” machines, programmed with the desired results, to be substituted for the machines actually used.

Ask any engineer: Process handoffs — and software upgrades, which are arguably a kind of handoff — are always the riskiest.

Among the items discovered burned in a vacant lot near the TRE warehouse in Maceió were yellow diskettes of the kind used to load elections software into the machines prior to use, one reads.

So I keep going over to the Web site of the Alagoas TRE, or regional elections court, to see whether that contract is set forth in the court’s public contracts.

I keep getting the results seen above, or an error message to this effect:

Exceção de E/S: The Network Adapter could not establish the connection

E/S — entrada/saida — is Portuguese for I/O, or “input/output.”

The database is apparently maintained centrally by the TSE.

One can, however, start building up a profile of federal IT activity related to the 2006 elections year by looking at the TSE’s contracting Web site.

The TSE bought 70 Lenovo laptops last year, for example, at about R$5,000 ($2,500) per machine, for example. The 2,480 IBM ThinkTops it bought in 2005 went for a unit price of about R$3,500 (US$1,600).

The U.S. Dept. of State had an order for thousands of Lenovo machines — Lenovo is IBM’s former personal computer division, spun off to the Chinese — cancelled last year over security concerns, one recalls.

So let’s take some notes.

Enciclomedia: The Passion of the Savior Machine

Microsoft “digital divide” project sinks deeper into a sea of mud.

Desplome de Enciclomedia entrampa a la SEP: “Collapse of Enciclomedia program corners Public Education” (El Universal, Mexico):

El desplome del programa educativo Enciclomedia coloca a la Secretaría de Educación Pública (SEP) en medio de reclamos de empresas, dudas de legisladores y señalamientos de que hubo procedimientos viciados en el proceso de licitación.

With the sudden collapse of the Encyclomedia educational program, the federal Public Education department is besieged by complaints from the private sector, questions from legislators and signs of irregularities in the contracting process.

I repeat:

you can read the government’s contract with the vendor on the project — Microsoft, represented by Maggie Wilderotter — here.

The undersecretary for basic education, appointed by Calderón, continues to defend the program.

The official in question is Gordillo‘s son-in-law.

I Am Qurious (Yellow Journalism): A Trivial Exercise in Documenting the Rhetoric of the Technological Sublime

This press release from iQurious arrives in my Gmail inbox — a key component of the NMM open-source Bloomberg box, though it is possible that other news alerts services might be just as good.

I have not formally compared them.

Look, you know the drill here, if you read the blog: it’s all about how a professional consumer of public relations sorts the daily flux of flackery into two piles: “Probably bullshit” and “possibly not bullshit.”

Once a vast, vast proportion of the content on post-contemporary flackwires is summary dealt with, then, the “possibly not bullshit pile” can be filtered further using tests designed to determine more precisely the S/PN ratio — sense to patent nonsense.

But there is an important caveat: Sometimes otherwise capable companies, with products or services that in a world ruled by a just and loving God would merit a fair chance of finding a market, hire lousy hack publicists.

I do admit that — although I tend to think of it, in my more cynical moments, as “The Wal-Mart Defense” — as a methodological axiom.

All I am saying here, then — knowing nothing of the company in question — is that the following is a good example of how to direct your release straight into my “probably bullshit” pile.

With prejudice.

First step, as always: circle the adjectives and buzzwords.

AUSTIN, Texas, Jan. 31, 2007 — iQurious(TM) Corporation, leaders of the revolution in application delivery, announced at the Government Technology Conference (GTC) Southwest that they have released iQaradigm(TM) 4G, a version of their groundbreaking iQaradigm application delivery system built specifically for federal, state and local government organizations. iQaradigm 4G, a set of software, tools, templates, and services, is built to save government agencies dramatic amounts of time and resources when creating, upgrading, and maintaining their IT infrastructures.

The clause that begins “when creating …” is a classic dangling modifier, because the grammatical subject of the sentence is “iQaradigm 4G.”

Based on extensive study, computer-aided by the NMM buzzword database, “Revolution,” “paradigm [shift],” “groundbreaking,” and “dramatic [savings of time and resources]” are among the words most highly correlated with the RTS, or “rhetorical of the technological sublime, which is itself proves to be significantly correlated with hype that does not pan out on closer inspection.

Unclear on the Concept: XML in Lagos

THISDAY ONLINE (Nigeria) editorializes aganst resistance by Nigerian banks to “a special computer software known as the XML,” which will “enable them keep a close tab on suspicious transactions by their customers.”

Recent newspaper reports indicate that the Economic and Financial Crimes Commission (EFCC) has extended till March 31 the deadline for Nigerian banks to install a special computer software known as the XML which will enable them keep a close tab on suspicious transactions by their customers. The initiative is part of the effort to check money laundering — a malaise that had once blighted the nation’s banking industry.

“Had once blighted”? The pluperfect past tense? Really?

According to the EFCC Web site,

The computer soft ware is called the XML reporting format …

Could we be talking about XBRL here? Promoted heavily by the SEC but recently rejected by the U.K. Financial Services Authority as an XML-based standard for financial data processing?

For a harbinger of which, see MSFTML in Hell.

The EFCC Web site is a little vague on this point. They refer elsewhere to

… new version 1.8 standard XML reporting instructions and specifications, prepared by the United Nations in its war against money laundering requires the creation of compatible XML files using the provided XML schema for suspicious transaction reports (STRs) and Currency Transaction Reports (CTRs).

I am confused again. Perhaps if I could learn what vendor is providing this technology to Nigerian banks I could zero in on the details.

Another report does describe the change further as “a phase-out of Microsoft Excel in favor of XML.”

Oh, well, moving on.

BOT Gets The Trots; A Virtual Pattern?

My not even half-finished, and probably all wrong, “tech side of the exchange M&A scenario” concept map. NYSE Arca recently asked the SEC for an extension in implementing Reg NMS in the back office. Click to zoom

Cbot e-trading platform hit by glitches:

The Chicago Board of Trade (Cbot) says it is working with Atos Euronext Market Solutions (AEMS), which hosts its e-cbot electronic trading platform, to fix technical glitches that brought the system to its knees three times at the end of last week.

Interesting: In the Tokyo fat-finger glitch cases, it was almost impossible to try and found out who the vendor was: Fujitsu, which worked closely with Atos on .NET-based migration from legacy servers to a “virtualized” computing environment.

Fujitsu at one point acquired Atos Origin’s operations in Australia, in fact.

In the aftermath of that debacle, as I understand it, Japan’s capital markets authority opened up the tech market, once controlled by a handful of zaibatsus, to foreign competition, including the pan-Nordic exchange operator and trading platform in-a-boxer OMX.

OMX succeeded, it seems to me, in driving Atos Origin out of its Nordic regional market.

May 2005 – Atos Origin sells its activities in the Nordic region, which became part of the company with the acquisition of Sema Group, to WM-data.

But that may be too sloppy a way of looking at it.

OMX has had a few trading-platform hiccups itself, but seemed to handle them reasonably well. As I wrote but now cannot find to link to. Recent platform wins include Osaka, DIFX and the Borsa Italiana, I note.

I actually ran into — well, strolled past — Magnus Bocker in the hall at the WFE meeting in São Paulo a while back. Interesting man.

Athos also acquired portions of the ill-fated KPMG [cough:abramoff] — other parts of which merged with an E&Y consulting practice to become Bearing Point, which now partners with Google.

Part of the reason the Deutsche Borse-Euronext tie-up failed to go through, one reads, was “disagreements over IT ‘synergies.‘”

DB later offered concessions on those points, however.

AtosEuronext had problems in Malaysia, too.

In a statement Cbot COO Bryan Durkin says the exchange “has identified an issue with our trading host” which forced it to periodically suspend trading on the e-cbot platform.

Ouch. For “periodically” understand “repeatedly.”

Here is the full statement from the BOT COO, by the way.

The poor guy: he is trying to get a merger done with the Merc, after all, right? Yaaaagh! Bring me a double Scotch and a tranquilizer!

The new system, which connects to Euronext Liffe, was rolled out in October.

More on Mexico’s 10 Billion Peso Mafia Macbeth

Preliminary sketch of a candidate hypothesis. Source: NMM-Tabajara Risk Management & Infotainment Almagmated (formerly Acme, but bought for a song after the famous case of Wile E. Coyote vs. Acme, et al.).

Item: ISOSA controló también el registro de vehículos: ASF (La Jornada).

If you have missed the crazy, mixed-up saga of Mexican business process automation powerhouse ISOSA — owned and operated as a personal fiefdom by the sitting treasury secretary under President Fox — as pieced together by enterprising Mexican investigative reporters, then you understand precisely bupkis about the “politically exposed persons” angle in the recent flap over the man’s appointment to the board of HSBC.

La Jornada adds another piece of the puzzle today — one that might, I think, even suggest where to start digging for a link between ISOSA’s Customs operations and that data-processing and privacy governance quango tango of the century, the ChoicePoint Affair.

I now proceed to violate their copyright in order to translate it for you — though note, I make no money with this blog.

So maybe I will get off with a slap on the wrist.

Which would be a small price to pay given that a lot of people doing this kind of work end up freaking dead.

Integradora de Servicios Operativos S. A. (ISOSA), la empresa fundada por Francisco Gil Díaz, que por más de 10 años obtuvo ingresos del cobro de un impuesto no enterado al erario, recibió del sector público no sólo personal, bienes e instalaciones sin costo, sino la administración del Registro Federal de Automóviles, reveló el titular de la Auditoría Superior de la Federación (ASF), Arturo González de Aragón.

“Operational Services Integrator” (ISOSA), the firm founded by Francisco Gil Díaz, which for more than ten years handled funds from the collection of taxes on behalf of the public treasury, not only received personnel, goods and facilities from the public sector at no cost, but was also assigned to managed the Federal Automobile Registry, revealed the head of a federal auditing agency (ASF), Arturo González de Aragón.

Beware of Geeks Bearing Grifts From Greece

Athens 2006: Grifters, grafters, geeks and Greeks

Age shakes Athena’s tower, but spares gray Marathon — Lord Byron

Item: Atenas 2006: Relatório de Viagem (Brazil, Ministry of Culture)

When I get a chance, I need to really zoom in the question of who is who and what is what in the area of Internet governance in Brazil at the moment.

This is a needful task because people like Murilo, whom we — readers of (Hearing) Global Voices Online, of the Berkman Center for the Intel-Inside Society, and Brazlian taxpayers alike, apparently; and how does that work, anyway? — ostensibly are to rely on for solid information on this score, do not seem very reliable, given their deep structural conflicts of interest.

Oh, and also the fact that “citizen journalist Roberto Marinho” Murilo recently flunked a fundamental NMM fact-check. Badly.

Never trust a grinning Brazilian legacy admission who says “Just trust me.”

Or a grinning anybody who says it, for that matter.

Especially if they are in the habit of inducing deep states of psychosis in themselves.

I would say that the Orkut and the YouTube cases should give you a solid clue that Brazil, under the various chefs that have a hand in stirring the stew, is moving very politely but firmly in a direction that it believes will best defend its “public intellectual property” (patrimônio) and it right to autonomous governance of its own information sphere, so to speak.

And it is not alone in taking this position.

Meanwhile, your Internet and trade policies, my American friends and compatriots, are being negotiated by Moonies.

I am telling you: the defenders of your interests abroad are way outclassed here. Time to pull the starter and send in the reliever.

Which I guess, in a way, Hank Paulson kind of is at Treasury.

On a more general level, I think there is an awareness that both India and Brazil — and France, too, for example, and many others — are generating significant momentum in this direction; that they have good, sound reasons for doing so (let’s face it, the emperor has no clothes), with good political will behind their rationale; and that the thing for foreign corporations who want a piece of the action in these markets to do now is sit down and deal straight.

Hard as you like, because Brazilians love to horse-trade.

(It sounds like a stereotype, I know, but if it is, it is one that a lot of Brazilians I know really do seem to promote with pride.)

But straight. From the top of the deck.

This is no longer the Barbary Coast of the Roaring Nineties.

See, to take some randomly annotated examples, Stateless Memes and the IBM exec who declared “the death of the multinational.”

Because when IBM corporate communications stops gushing endlessly about the future of this and the future of that, reality-based rhetorical radar operators sit up and take notice.

Some notes, in that light, on Murilo of the MiniC’s report from Athens:

They Kill Nerds, Too: Notes from the ISOSA Watch

Hildebrando of Mexico: Candidate for “innovative” data management PPP strategy of the year.

Oficio de Papel, the weekly Web column of Mexican journalist Miguel Badillo, brings me some new shreds of insight into Hildebrando and ISOSA.

WTF, Colin? Why should I give a damn about ISOSA, whatever the hell that is?

I’m not saying you should.

But I’m telling you, its a fascinating case study in quango governance — it involves outsourcing of data-processing functions to a private firm founed and owned by the government minister responsible for the area in question — and hard-core investigative reporting.

I have translated offline in this case.

If you want to compare the translation with the original, follow the link and do it yourself. I’m not your volunteer butt-boy, viu?

But by all means, do double-check.

Because you will find it difficult to believe, no doubt, that in Mexico, Hank Paulson’s counterpart in Fox’s Treasury gets away with hiring a private firm he founded and still owns to process revenues from the customs duty collection service — in partnership with the same data processing firm, owned by Felipe Calderón’s brother-in-law, that processes elections data for IFE, the federal elections commission.

A private firm that does not account publicly for its financial operations, according to Mexico’s federal audit authority, which charges the firm with skimming off billions of pesos (hundreds of millions of dollars, with the dollar at about 11 pesos today) from the federal coffers.

It is hard to believe.

But it is true.

Another one of those proudly democratic Mexican public institutions whose integrity, Fox insists, with the backing of reputable businesses and EU delegations — Mexico, astonishingly, improved its TI corruption score this year — is beyond question. As he added to the script of this year’s grito, which was held under tight security in an undisclosed location:

¡Que vivan nuestras instituciones!

Yeah, right, whatever. Translation starts here:

Faced with negative public opinion of the private firm ISOSA (Integradora de Servicios Operativos S.A.) and the demand from civil society for transparent investigation of acts of corruption committed by a group of Treasury Dept. employees led by Treasury Secretary and ISOSA owner Francisco Gil Díaz, the firm began, in 2003, a “restructuring process” ostensibly to reorganize itself for more efficient performance; however, files from the archives of ISOSA, operations director Francisco Obel Villareal Ontelo, who was murdered on August 20, 2006, indicate that the real objecdtive was to quitely close the firm down before the end of the current federal government, a goal that the Vicente Fox administration managed to achieve, in part.

IBM: Implicated in Bribery Matter?

I find it astonishing that only the Gazeta Mercantil and a Midwestern regional newspaper have followed up on this Bloomberg report in the last 24 hours — even though IBM was not found to have committed any wrongdoing, and two IBM employees testified in the case.

Did Google News just happen to miss the Dow Jones Newswire and AP reports on this one? They did file this, right? Did Xinhua? China Daily?

Nov. 6 (Bloomberg) — International Business Machines Corp., the world’s biggest computer-services company, paid $225,000 to a sales agent who helped bribe the former chairman of the country’s fourth-biggest bank, a Beijing court verdict said.

IBM was identified by Beijing No. 1 Intermediate Court as one of three companies introduced by the agent, Zou Jianhua, to former China Construction Bank Corp. Chairman Zhang Enzhao. The court determined Zou paid 2.68 million yuan ($340,000) in bribes to the banker, who was sentenced to 15 years in jail on Nov. 3.

“I have no knowledge of the matter,” said Amanda Garland, IBM Asia Pacific’s communication director. “We’re not going to comment on the court document.”

Tropical E-Proxy Coming To Sampa

Top story on the Gazeta Mercantil today: “The Internet can be used to allow foreign investors to participate in shareholder votes electronically.”

Imagine.

São Paulo, 27 de Outubro de 2006 – Internet pode ser usada para permitir que acionista externo participe de decisões com voto eletrônico. A crescente participação dos investidores estrangeiros nas ofertas públicas de ações nos últimos três anos tem sido fundamental para o desenvolvimento do mercado de capitais brasileiro. …

See, now here’s a true, blue, on-topic NMM story. The governance and technical parameters of electronic proxy voting are just the kind of thing that lights my fire, you know.

Watershed Moment in Blog PR

DealBook passes along the item:

Sun Microsystems‘ chief executive, Jonathan Schwartz, has asked the Securities and Exchange Commission to let him announce news about his computer networking company on his personal blog. “If we have material news to disclose, we have to hold an anachronistic telephone conference call, or issue an equivalently anachronistic press release,’’ Mr. Schwartz wrote in his online diary on Oct. 2. “I would argue that none of those routes are as accessible to the general public as a blog, or Sun’s Web site.’’

LCH.Clearnet: Big Dig as Romantic Ruin

LCH.Clearnet ditches IT integration project (Finextra):

European clearing house LCH.Clearnet is to write off EUR47.8 million in development costs as it pulls the plug on an “over-complex” IT integration project that has already claimed the jobs of a number of top executives.