What Happened Today: November 15, 2022
Widespread cyberattacks on healthcare system; Iranian stores join protest; Inventing the Crypto King
The Big Story
An October cyberattack on CommonSpirit Health, one of the nation’s largest healthcare systems, continues to threaten critical operations across the system’s 142 hospitals and 1,000 care sites in 21 states. Some hospitals have been forced to take CommonSpirit’s information systems offline entirely as it struggles to repair ransomware damage to its electronic prescription and medical record portals, according to an online statement posted last Wednesday on the Chicago-based company’s website. Although CommonSpirit has not confirmed who carried out the attack, shortly after the breach the Department of Health and Human Services and the Federal Bureau of Investigation alerted healthcare systems that they were being targeted by the ransomware extortion group Daixin Team. Last week, the Texas-based OakBend Medical Center, which had suffered an attack by Daixin in September that knocked out its phones and critical communication devices, informed 500,000 patients that an unknown number of their social security numbers, medical data, and other personal information were obtained by Daixin during the security breach.
The ongoing assault of critical medical infrastructure systems has affected smaller medical operations as well: Last week, the DHHS reported “data security incidents” at some 20 anesthesia practices that led to the leak of sensitive biomedical data for at least 435,000 patients in the New York region, though it is unclear if Daixin was involved in those data breaches.
The attacks are expensive for health institutions as hacker groups demand millions of dollars in ransom on the threat of leaking data—a fate that befell Austrian health insurance company Medibank this week; after it refused a ransom demand, hackers leaked the medical records from 9.7 million patients onto the dark web. Two of OakBend’s patients have already filed a lawsuit against the hospital system for a failure to protect their medical records, though the ongoing system outages across OakBend remain a danger for those currently seeking treatment: Critical surgeries have been postponed and a lack of access to medical charts led to one 3-year-old boy overdosing on the improper quantity of a medication.
On Monday, a new report from the Center for Internet Security underscored the cybersecurity vulnerability for information systems across the full breadth of American institutions. An examination of K-12 school districts by CIS found 81% have failed to properly install password security protection. “Many K-12 school districts are data-rich and resource-poor, making them attractive targets for financially motivated cyber threat actors,” the report said.
In the Back Pages: Inventing the Crypto King
→ Ongoing protests in Iran following the September death of a 22-year-old woman in police custody after she failed to adhere to morality dress codes prompted stores across the nation to shutter their doors on Tuesday. The three-day shop strike will mark the anniversary of the 2019 protest against Iranian clerical leaders that led a violent state crackdown against demonstrators. Iranian government officials say the protests are being instigated by foreign enemies, and have refused to address the demands of the demonstrators, who largely appear to be without any single leader. Activist groups say some 344 people have been killed by military personnel during demonstrations. Iran has tried to rally support ahead of its upcoming entry into the World Cup of soccer in Qatar, but two high-profile former Iranian soccer stars say they will not attend the ceremony. Ali Daei, a former captain of the Iranian team, said he could not go to Qatar because his country is “grief-stricken.”
→ Family members of the victims who were murdered or injured when a man intentionally barreled through a Milwaukee Christmas parade last year confronted the driver in court on Tuesday for the beginning of the two-day sentencing after he was found guilty of 76 criminal charges in October. “I feel gutted and broken. It hurts to breathe sometimes,” said Sheri Sparks, the mother of an 8-year-old boy named Jackson who was one of 18 children hurt or killed. Her other son was also injured. “This man not only took Jackson away from our family, he violently ripped Jackson out of our lives.” Court watchers anticipate that the driver, Darrell Brooks, 40, will receive a life sentence for each of the six counts of homicide.
→ A former Goldman Sachs partner received $12 million in what could be the largest Wall Street payout in a deal “that kept secret her detailed account of senior executives making vulgar and dismissive comments about women,” Bloomberg reported on Tuesday. Though remarks allegedly made by CEO David Solomon were part of the complaint made by the partner, the deal focused on incidents of bias observed by the partner toward women across the entire bank between 2018 and 2019. “The potential for embarrassment for Goldman Sachs drove its decision to settle,” according to Bloomberg.
→ Ongoing tension with China, along with numerous vulnerabilities to critical supply chains exposed during the COVID-19 pandemic, has prompted the Pentagon to fund projects to source rare and essential minerals in Canadian mines for the production of weapons, electronics, and consumer products. The move comes after President Joe Biden tapped the 1950 Defense Production Act to increase domestic mining sector production, and underscores a rapid push to move more critical points in major supply chains closer to U.S. borders. Canadian officials have recently provided a list of some 70 mining and production projects across 200 mines already eligible for U.S. military funding because they were considered to be part of the U.S. military industrial base, which reduces the regulatory hurdle for government funding.
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→ Deciding who gets what ministry posts in Israel’s new government has stalled coalition talks between the Likud Party, led by prime minister-elect Benjamin Netanyahu, and the Religious Zionism Party, fronted by Bezalel Smotrich. Ahead of what had appeared to be a swift government formation after Netanyahu secured the official mandate on Sunday, Smotrich’s demand for the position of defense minister has chilled discussions between party leaders. Likud negotiators have attempted to smooth things over with Smotrich by offering him the finance ministry, which he’s amenable to, but according to Channel 12 News, that offer became more complicated when Aryeh Deri, head of the Shas Party, said the finance post should be his. Netanyahu will now have several weeks to iron out all the conflicting egos and grabs for power, including those already within the defense ministry: Top defense officials are pushing back against Smotrich’s defense appointment given his brief stint in the Israel Defense Forces and a history of protesting past Israeli military operations.
→ France and Italy are squaring off over how to handle the tens of thousands of migrants arriving in need of dire medical care and shelter as they land on European shores after dangerous voyages from Africa and the Middle East.
A ship carrying more than 230 migrants, including 57 children, docked at French port on Friday, but the arrival of the humanitarian vessel, which had been held up for weeks in an Italian port, has only added more tension to ongoing diplomatic strain over the flow of migrants.
With Italy on the front lines for sea-faring migrants, 19 European nations have agreed to accept some of the boat passengers who arrive each year. But Italy charges that other nations have failed to live up to their voluntary commitments, with only a few hundred of those seeking asylum in Italy being taken in by other countries, just as Italy has seen more than 88,000 migrants arrive to its shores in 2022.
Now, French Interior Minister Gerald Darmanin is saying he will pause France’s pledge to take 3,500 migrants arriving in Italy after he slammed the Italian government for its “incomprehensible” refusal of the ship that eventually disembarked at the French port.
Darmanin’s Italian counterpart, Matteo Piantedosi, said he was dismayed by the French response. “The French reaction to taking in 234 migrants, when Italy has taken in more than 90,000 this year alone, is totally incomprehensible,” he said.
→ Massive layoffs continue across the tech sector as Amazon says it will now reduce its global workforce by 10,000. With inflation still roaring along and consumers dialing down their spending, the past decade of wild growth and sometimes careless hiring sprees has led outfits like Meta and Netflix to quickly scale down their payrolls as they brace for the continued economic downturn that has investors worried. The activist hedge fund TCI Fund Management sent a letter to Alphabet, the parent company to Google, to begin slashing their staff. “We are writing to express our view that the cost base of Alphabet is too high and management needs to take aggressive action,” TCI wrote. “The company has too many employees and the cost per employee is too high.”
→ Number of the Day: 8 billion
That’s how many people live on earth as of today, according to the United Nations, which keeps track of such things. It’s likely that the baby born today, the 8 billionth person on the planet, will arrive somewhere in the Global South, though he or she could just as well be born in Tucson, Arizona. Declaring Nov. 15 the Day of 8 Billion, the obsessive counters at the United Nations say most of the population growth over the next several decades will predominantly come from eight countries in sub-Saharan Africa and Asia, including India, whose growing tally of 1.4 billion will soon put it over China as the world’s most populous nation.
TODAY IN TABLET:
From Jew to Judge by Andrew Porwancher and Taylor Jipp
Felix Frankfurter’s journey to the Supreme Court meant trading his Judaism for the “true democratic faith”
Shouting Into the Void by Jeffrey Weinstock
Why I finally decided to learn Yiddish
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Inventing the Crypto King
How the media created the myth of Sam Bankman-Fried
By Ashley Rindsberg
One of the most striking things about the collapse of crypto exchange FTX, once counted among the world’s largest, is the extent to which it caught the supposed watchdogs of the tech industry by surprise. How could Sam Bankman-Fried, the brainiac financial visionary, crowned earlier this year the “crypto emperor” by The New York Times, have steered his armada of crypto firms into the rocks so recklessly? With allegations of an enormous, brazen fraud lingering, the first place to look is at the central role of the media in this fiasco. Through an almost endless churn of fawning coverage, the news media turned an inexperienced—and, it seems, ethically deranged—trader into the second coming of Warren Buffett.
Over the past two years, Bankman-Fried cultivated the media lavishly, if not carefully. Drawing on what then seemed like an unlimited pool of cash, SBF (as we’ll call the mythologized version of the real person) dispersed investments, advertising dollars, sponsorships, and donations to key news outlets—including ProPublica, Vox, Semafor, and The Intercept—with extraordinary effectiveness.
Bankman-Fried’s head has filled the frame of the most coveted business news covers in the world, including Fortune (“The next Warren Buffett?”) and Forbes (“Only Zuck has been as rich (23 billion) this young (29)!”). CNBC star Jim Cramer once compared Bankman-Fried, who has been active in crypto finance for only a handful of years, to John Pierpont Morgan, the giant of industry who worked in banking for nearly four decades before striking out on his own.
Remarkably, some major news outlets have continued to round the edges of the SBF myth, even after the discovery of at least a billion dollar hole in FTX’s books, the assets seeming to vanish into the crypto ether. This week, Twitter erupted in outrage when the New York Times published what many have described as a “puff piece” on Bankman-Fried, whose whereabouts remain unknown.
The Times story on Bankman-Fried, who allegedly funneled FTX customer money into his private hedge fund, Alameda Research, is couched in passive, soft-touch language reflected even in the headline: “How Sam Bankman-Fried’s Crypto Empire Collapsed.” The Times pieces describes Bankman-Fried’s misallocation of funds—which, if true, amounts to mass-scale fraud—in terms that remove active agency, writing: “Alameda had accumulated a large ‘margin position’ on FTX, essentially meaning it had borrowed funds from the exchange, Mr. Bankman-Fried said.” The piece, which describes Bankman-Fried as “surprisingly calm,” lays little to no blame at SBF’s feet, writing that FTX “lent as much as $10 billion to Alameda.” In contrast, business writer Trung Phan noted in a widely shared tweet that “fraud,” “crime,” “stolen,” “theft,” “criminal,” and “hidden,” make no appearance amid the article’s 2,000-plus word count.
But if critics found the recent Times article full of off-the-charts puffery, previous coverage makes this latest, post-FTX collapse piece look like searing investigative journalism. A May 2022 article by the same writer, The New York Times’ David Yaffe-Bellany, titled “A Crypto Emperor’s Vision: No Pants, His Rules,” jump-cuts from rapt audiences “roaring” with laughter at Bankman-Fried’s wit to his penchant for living “modestly” (in a $40 million Bahamas penthouse) to his chummy relationship with Tom Brady that purportedly began with Brady approaching the unassuming Bankman-Fried at a party to talk crypto.
In its flattery, the 3,500-word Times article flipped the famous fable about a naked emperor alluded to in the piece’s headline; rather than showing a naked emperor who thinks he’s elegantly clothed, it paints a picture of a figure we might all consider larger than life but who, by the Times’ account, is just a regular do-gooder whose smarts led him, almost haphazardly, to invent a proprietary money-printing machine.
Far from a one-off, the May Times piece was the culmination of a drumbeat of coverage by the paper that, collectively, helped to create the myth of SBF as “an uncannily sharp altruistic billionaire,” as Vox recently described him. A narrative of this scope, especially one that lacks substance to this degree, is never the product of an article or two, or even of a few dedicated news cycles. Rather, it’s the result of sustained, coordinated effort.
The famously acerbic Times tech columnist Kara Swisher quoted SBF approvingly, noting “Sam Bankman-Fried was right when he pointed to the unbanked and those left out of the system: ‘The [crypto] industry has the potential to improve a lot of people’s lives.’” A July Dealbook interview gave Bankman-Fried free rein to opine on trading crypto derivatives. Another Times piece, which cited SBF's “penchant for haphazardly tied shoes and company-branded T-shirts,” focused on an FTX Super Bowl commercial featuring Larry David.
With all of the puff pieces from the press, there was apparently little interest in investigating SBF’s web of interlocking firms. A number of high profile outlets best known for investigative reporting took money from Bankman-Fried—in some cases money earmarked to fund investigative journalism—and yet did little, it appears, to investigate the source of those funds.
This was the case with a $5 million pledge to ProPublica from Bankman-Fried’s family foundation, Building a Stronger Future. Vox, which published a March 2021 interview with Bankman-Fried, introduced the FTX founder by praising his “civic-mindedness,” which was guided by an algorithm-like statement of purpose: “Make a tremendous amount of money by any means necessary. Then give it all away by the best means possible.” Perhaps their praise payed off: in a recent article on the fall of SBF, Vox mentions—albeit buried in the form of a parenthetical “Full Disclosure” in the middle of the piece—that they had receieved an undisclosed sum from Bankman-Fried’s foundation. (Vox and ProPublica did not respond to requests for comment.)
Semafor, the new publication led by former New York Times media columnist Ben Smith, similarly received an unspecified investment from Bankman-Fried. Notably, Semafor prominently publicized this information in a piece about Matt Yglesias’ and Nate Silver’s refusal to join a different venture funded by SBF.
SBF possesses a kind of media aptitude that you would not expect to find in a young finance focused techie, or even in a fairly seasoned media hand--a media canniness Bankman-Fried has displayed again and again, including with his foray into backing, buying, or producing his own media.” In one example, Bankman-Fried interviewed the famous Princeton ethicist Peter Singer about effective altruism, a philosophical movement founded by Oxford sociologist William MacAskill that Bankman-Fried has aligned himself with. The interview received a fairly paltry number of views for a video featuring two big names, but it successfully drove headlines and helped burnish Bankman-Fried’s reputation and image, his connection to Singer cited repeatedly as evidence of his ethical bona fides.
This is the kind of strategic decision making that top PR firms employ when building the brands of their biggest and best clients. Key to this strategic approach was Bankman-Fried’s exceptional ability to continually create fresh headlines about himself and his company. One of the most important tactics he used to do this was the creation of top-tier brand partnerships that would drive headlines. FTX’s relationships with Mercedes’ F1 team, naming rights negotiated with the Miami Heat, stage-sharing with Bill Clinton and Tony Blair (a pair not usually known for their altruism), the launch of an FTX gaming unit, the Larry David Super Bowl Ad—each one represented another PR opportunity that would generate dozens of headlines. With so much news real estate devoted to breathlessly boosting the latest FTX deal, sponsorship, or main-stage appearance, there was hardly room left over for investigations—or even for a critical op-ed.
Perhaps the most ironic moment of media myth-making was Fortune’s “Warren Buffett” cover story from this past August. Despite the question mark included in the copy on the cover—“Is Sam Bankman-Fried the next Warren Buffett?”—the phrase was not a question but a statement. While Buffett and his longtime business partner Charlie Munger have said time and again that their success came with years of patience, Fortune crowned Bankman-Fried the next Buffett seemingly because he’d become so rich so quickly.
Only months before the Fortune cover, another business media heavyweight had put Bankman-Fried on its cover. The 2021 Forbes 400 list special annotated its cover image of SBF with an alluring yet unnervingly prescient quote from Bankman-Fried: “I got involved in crypto without any idea what crypto was.” If there was a single tipping-point in the creation of the SBF myth, this was it. Beyond mere inclusion on the Forbes 400 list (the one Kanye West frequently invoked in his recent antisemitic tirades, and which made headlines for re-including Trump), Bankman-Fried was now the very face of America’s most hallowed symbol of financial success.
The piece included all the usual SBF tropes—the black hoodie, the extreme wealth, the effective altruism. “He’s a mercenary,” Fortune wrote, “dedicated to making as much money as possible (he doesn’t really care how) solely so he can give it away (he doesn’t really know to whom, or when).” SBF had won.
And yet Forbes had also been pulled into the Bankman-Fried money vortex. In February, Binance, another major—but even larger—crypto exchange, invested $200 million in Integrated Whale Media, the Hong Kong-based company that owns Forbes. Binance was also a major holder of FTX’s cryptocurrency, FTT, with at least $580 million dollars’ worth of the currency banked away.
It was Binance’s $580 million dollar holding of FTT that precipitated FTX’s fall. But crucially, what triggered that sequence of events was not a months-long investigation by a mainstream news outlet, like the ones Bankman-Fried had invested in or donated to, which employ dozens or in some cases hundreds of investigative journalists. Rather, it was the work of far smaller—and far more diligent—news outlets doing their jobs.
On November 2, CoinDesk broke the news of the connection between FTX and Bankman-Fried’s hedge fund, Alameda Research. This quickly led to a Substack called Dirty Bubble Media questioning FTX’s solvency. The CoinDesk piece and the Dirty Bubble Media Substack in turn led to Binance’s CEO tweeting that the company was dumping its holdings of FTT, triggering a financial domino effect that led to FTX’s swift collapse.
In the space of four days, media participants that lie far outside the highly capitalized mainstream did more investigative work than the entire corporate media had done in two years. Once the bubble—financial and conceptual—was popped, however, the media began whirring into action, manufacturing a new SBF myth, this one as breathless, hyped and sure of itself as the old one, with The Times rushing to tell its readers not about SBF’s misdeeds but about his “surprisingly calm” state of mind. “You would’ve thought that I’d be getting no sleep right now,” SBF tells his worried handlers at The Times. “And instead I’m getting some. It could be worse.”