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Fri Apr 30, 2021, 10:38 PM

Netflix former exec found guilty of taking 'pay-to-play' bribes

Source: San Jose Mercury News

A jury found Michael Kail, vice-president of internet technology at Netflix from 2012 to 2014, guilty of more than two dozen counts for accepting cash, stock options and gifts from third-party vendors in exchange for contracts with the firm.

“He used his kickback payments to pay personal expenses and to buy a home in Los Gatos,” the U.S. Department of Justice said in a statement Friday that referred to “pay-to-play bribes.” The verdict means the house — valued at about $3 million by Zillow — will be forfeited to the federal government, the department said.

When Netflix co-founder and then-CEO Reed Hastings questioned Kail about conflicts of interest, Kail “falsely denied that he was receiving compensation from vendors,” according to an indictment filed three years ago in U.S. District Court in San Jose.

Kail, 49, had set up a consultancy called Unix Mercenary along with associated bank accounts that he used to take in ill-gotten gains in a scheme involving at least nine outside companies, prosecutors alleged in court filings. His total take was worth about $690,000, according to the indictment.

Read more: https://www.mercurynews.com/2021/04/30/netflix-former-exec-found-guilty-of-taking-pay-to-play-bribes/

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Reply Netflix former exec found guilty of taking 'pay-to-play' bribes (Original post)
SouthBayDem Apr 30 OP
PoliticAverse Apr 30 #1
soothsayer Apr 30 #2
Pinback Apr 30 #3
thesquanderer Apr 30 #4
PoliticAverse Apr 30 #5
Hugh_Lebowski Apr 30 #6
thesquanderer May 1 #8
ZonkerHarris May 1 #7

Response to SouthBayDem (Original post)

Fri Apr 30, 2021, 10:43 PM

1. "Unix Mercenary" - indeed. n/t

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Response to PoliticAverse (Reply #1)

Fri Apr 30, 2021, 10:50 PM

2. Exactly

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Response to PoliticAverse (Reply #1)

Fri Apr 30, 2021, 11:02 PM

3. That's like Matt Gaetz setting up the Cheerleader Travel Agency (nt)

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Response to SouthBayDem (Original post)

Fri Apr 30, 2021, 11:12 PM

4. I didn't even realize this would be illegal.

But sure enough, google tells me that "commercial bribery" (bribery that takes place in a commercial enterprise) is illegal in 36 states. (As opposed to bribery in government--bribery of public officials or employees--which is illegal everywhere.) I would have expected that Netflix could file a civil suit against this employee for acting in his own interests rather than the company's, essentially a breach of contract, but I didn't realize it was a criminal offense one could go to prison for. It is in California, though.

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Response to thesquanderer (Reply #4)

Fri Apr 30, 2021, 11:57 PM

5. ...



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Response to thesquanderer (Reply #4)

Fri Apr 30, 2021, 11:59 PM

6. I suspect that if Netflix itself was doing this all above board as a matter of policy it's fine

and dandy.

The days of people going to jail over 'payola' as they called it back in the day, are long over.

I am 99% sure that Netflix, Prime, Spotify, etc ... take money to prioritize and give advantages to certain pieces of media as a business model.

This guy is in trouble for doing it w/o Big Daddy's permission, to benefit himself personally, rather than the shareholders.

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Response to Hugh_Lebowski (Reply #6)

Sat May 1, 2021, 08:00 AM

8. Exactly right....

...and as I understand it, the crime is not *taking* the kickback, rather it is concealing it from the employer. There appears to be an assumption there that the employer would stop the employee from doing it... but if the employer said, "hey, that's okay by me," then it would be perfectly legal. And there is no requirement that anyone reveal it to the public. So yeah, if Netflix, Prime, Spotify, etc are doing what you describe, it's not illegal. Your analogy to payola is apt, and here's an interesting article on that:

https://slate.com/business/2005/07/what-s-wrong-with-payola-nothing.html

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Response to SouthBayDem (Original post)

Sat May 1, 2021, 12:53 AM

7. Capitalism at its finest.

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