PayPal cuts service to Courage to Resist, Bradley Manning support

[Dystopian]

By Bradley Manning Support Network. February 24, 2011

San Francisco, CA – The online payment provider PayPal has frozen the account of Courage to Resist, which in collaboration with the Bradley Manning Support Network is currently raising funds in support of U.S. Army Pfc. Bradley Manning. PayPal was one way people--especially international residents--were able to contribute to the grassroots effort supporting the accused WikiLeaks whistleblower. “We’ve been in discussions with PayPal for weeks, and by their own admission there’s no legal obligation for them to close down our account,” noted Loraine Reitman of the Bradley Manning Support Network (Support Network). “This was an internal policy decision by PayPal.”

“We exchanged numerous emails and phone calls with the legal department and the office of executive escalations of PayPal,” explained Jeff Paterson. “They said they would not unrestrict our account unless we authorized PayPal to withdraw funds from our organization’s checking account by default. Our accounting does not allow for this type of direct access by a third party, nor do I trust PayPal as a business entity with this responsibility given their punitive actions against WikiLeaks—an entity not charged with any crime by any government on Earth.”

*************
Timeline
Courage to Resist registered the PayPal account in 2006. There were no issues with this account until supporters were encouraged to donate via PayPal to help fund the “Stand with Bradley Manning” public statement and petition effort (www.standwithbrad.org ).

In late 2010, PayPal, MasterCard and Visa closed down payment services to WikiLeaks, severely restricting that organization’s ability to accept online donations. Within days, Courage to Resist project director and Support Network steering committee member Jeff Paterson fielded lengthy calls from executives at PayPal regarding website content, the intended use of the funds being solicited in support of Bradley Manning, and accountings of the recent purchases (primarily envelopes, paper, and postage stamps) made with PayPal funds.



More at link:
http://www.couragetoresist.org/x/content/view/891/1 /

peace~

[white_wolf]

1. Haven't they learned their lesson?

I'm betting Anon won't take kindly to this.

[Kurovski]

3. +100

[divine_truine]

7. looks like Anonymous wil be performing a peaceful cyber sit-in against these traitorous f#€kers...

...once again! Will they ever learn? Probably not! pfc manning was protecting the country against enemies BOTH FOREIGN & DOMESTIC! Instead of going after pfc manning, why are these wall st. criminals (that caused the Dow to sink from 13k to 6k) running around free as a bird while the country's finances went to hell in a handbasket starting in the spring of '08? OMFG!

[Robb]

16. Anon is not stupid. This is a publicity stunt.

http://www.democraticunderground.com/discuss/duboard.ph...

[jberryhill]

2. The "public statement and petition effort"

Would I be correct in understanding that this fund does not provide any direct material support to Mr. Manning?

[Dystopian]

4. Defense fund & other expenses

Information links:
http://www.couragetoresist.org/x/content/view/858/1 /

http://www.couragetoresist.org/x/content/view/850/1 /

peace~

[jberryhill]

8. delete- wrong place.

[jberryhill]

10. See my note below on IOLTA regulations and credit cards

Ah, they are using an IOLTA account. That's the problem here.

[Name removed]

5. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Oak2004]

6. Evidently paypal is a little weak on the "right to be represented" thingy

fascists

(and I say that with all sincerity)

[jberryhill]

11. Question

In the event a donor makes a chargeback or claims an unauthorized transaction, or if someone makes a donation with a stolen credit card, then who, in your mind, should pay the refund to the credit card processor?

[Oak2004]

12. Generally speaking it ought to come out of the user's (i.e., the merchant's) account

Though since it is Paypal that is processing the accounts, if they're careless about accepting bad credit cards, they ought to be held accountable. Remember, this isn't like a traditional merchant account, where the merchant has some control. The merchant has ZERO say in what Paypal does or does not process.

Paypal has lots of bad policies. Lots of them. Since they're a near monopoly on the net I'm stuck with accepting them. But this is hardly the only dubious incident I've heard of with Paypal.

[jberryhill]

14. chargebacks can come up to 60 days after a credit transaction

Sorry, but there is no automated system in the world that can 100% avoid chargebacks and fraud.

I just got through a month ordeal over an $800 unauthorized charge on one of my own cards.

Chargebacks don't all come from "bad credit cards". Some do it from buyer remorse, sometimes it is a dispute between spouses or other family members, and quite often it is the first charge on a compromised account.

This group wants to take credit card donations and don't want Paypal to be able to recoup chargebacks. That's just not reasonable.

I understand the group's position, because you can't do that with an attorney trust account, but that is not a circumstance of Paypal's making.

[jberryhill]

9. The Problem Is IOLTA Regulations

That's not a new "Paypal policy" and the problem isn't really with Paypal.

When you link a Paypal account to a bank account, Paypal's system is set up to make deposits to, and withdrawals from, that bank account. That's how Paypal works.

The "accounting issue" they mention arises from regulations on the way that attorney trust accounts are managed.

A little background... Among the funds they manage, you'll notice there is reference to an IOLTA account. IOLTA is an acronym for "Interest On Lawyer Trust Accounts". Many states require that attorneys maintain a separate bank account for holding short term client funds, so that client funds are not commingled with the lawyer's own money. There are a lot of instances, such as retainers, settlements, etc., where a lawyer has to hold money that belongs to a client instead of the lawyer. Historically, this has caused a lot of headaches. For example, to account for interest on the deposit a lawyer could open a separate account for each client, but that's a headache. However, if the lawyer is holding all client funds in a single account, then dividing up interest and accounting over time is also a headache. If the lawyer holds client funds in her own account, then the lawyer has an incentive to be slow in making payments out of it.

To get around these problems, many states have set up programs with participating banks in which (a) the lawyer opens an account, (b) the interest from the account is paid to the state IOLTA program, and (c) the bank agrees that its fees are limited to a portion of the interest. The state IOLTA program uses its share of the interest to pay for things like legal aid programs and other public interest legal projects.

The convenience of it is that the lawyer can receive $10 for a client, put it in the IOLTA account, and later pay $10 on behalf of that client, without having to allocate or account for nickels and dimes on behalf of all of the clients whose funds are held in that account.

One of the restrictions on IOLTA accounts is that withdrawals from an IOLTA account can ONLY be made by the attorney pursuant to an authorized payment made on behalf of that client. Nobody else can be authorized to make withdrawals from the account.

Paypal's issue here is that when you connect a Paypal account to a bank account, it works bi-directionally. That's the problem with trying to use Paypal with an IOLTA account. What seems to be happening is that they are trying to tell Paypal that they want to use Paypal for deposits only, since the attorney responsible for the IOLTA account cannot give Paypal blanket authorization to withdraw funds, which is Paypal's standard arrangement. Paypal also uses the bi-directional arrangement to assess fees and deal with chargebacks.


The problem here is that if a donor initiates a chargeback, that money is going to come out of the IOLTA account, and that would violate the IOLTA regulations.

Here is an article from the Massachusetts Bar, entitled "Should Attorneys Take Credit Cards" which explains the problem:

http://www.massbar.org/publications/section-review/2010...

You do not want the fees and other charges to go through your IOLTA account because this would violate IOLTA rules.

-----

So, in a nutshell, it seems they are looking for an accommodation from Paypal under which Paypal won't access the bank account in the event of a chargeback. Meanwhile, they want to take credit card donations.

That's not a proposition that Paypal is going to accept, because then Paypal would be bearing the full risk of chargebacks on what amount to credit card transactions on the internet. Internet transactions have a markedly higher chargeback rate than other credit card transactions, and the dispute here is that Paypal is refusing to bear the chargeback risk.

Would YOU want to insure an operation, however worthy, against the risk of chargeback fees from unauthorized credit card purchases?

The clue is in this quote:

"They said they would not unrestrict our account unless we authorized PayPal to withdraw funds from our organization’s checking account by default. Our accounting does not allow for this type of direct access by a third party..."

Translation:

"We want to take credit card donations over the internet, but we want Paypal to bear the fraud and chargeback risk because we can't let them withdraw from an IOLTA account."

[Dystopian]

13. IOLTA

These direct contributions can only be made by check or money order. I don't think PayPal has anything to do with the IOLTA account.
I'm assuming, as am not familiar with the legal terms.
************************************
From link:
Can I donate only to legal expenses?

Quick answer: Yes.

The Bradley Manning IOLTA legal trust account is managed by attorney David Coombs under regulation of the Massachusetts IOLTA (Interest on Lawyers Trust Accounts) Program, and the American Bar Association. All proceeds will offset Bradley's legal expenses. Any funds remaining in the trust account at resolution of the legal case will become Bradley's with interest. Note that contributions to Bradley’s legal trust account are not tax-deductible and must be made by check or money order.

To make a non-deductible contribution directly to the legal trust account, please make checks payable to “IOLTA / Manning” and mail to: Courage to Resist, 484 Lake Park Ave #41, Oakland CA 94610.

http://www.couragetoresist.org/x/content/view/850/1

peace~

[jberryhill]

15. "I don't think PayPal has anything to do with the IOLTA account."

That's what the issue is, as noted in one of the links you posted above:

http://www.couragetoresist.org/x/content/view/858/1

NOTICE. On January 29, 2010, PayPal restricted access to our account based on the "need for additional information." The actual issue is that PayPal is demanding that we financially link our primary bank account (including the Bradley Manning Defense Fund) to PayPal. We are unwilling to do this for a few reasons.

---

What I have done is explain those reasons. So, yes, if you want to contribute directly to Manning's defense, you have to send a check.

The point remains that Paypal is not going to let anyone collect credit card donations without having backup access to the destination bank account in the event of chargebacks. It has nothing to do with some animus against the cause. Paypal won't do that for ANYONE, and they would be idiots if they did.