rwmj
2 days ago
The method is buried about 60% through the article, but it's interesting. It seems incredibly risky for the cloud companies to do this. Was it agreed by some salespeople without the knowledge of legal / management?
Leaked documents from Israel’s finance ministry, which include a finalised version of the Nimbus agreement, suggest the secret code would take the form of payments – referred to as “special compensation” – made by the companies to the Israeli government.
According to the documents, the payments must be made “within 24 hours of the information being transferred” and correspond to the telephone dialing code of the foreign country, amounting to sums between 1,000 and 9,999 shekels.
If either Google or Amazon provides information to authorities in the US, where the dialing code is +1, and they are prevented from disclosing their cooperation, they must send the Israeli government 1,000 shekels.
If, for example, the companies receive a request for Israeli data from authorities in Italy, where the dialing code is +39, they must send 3,900 shekels.
If the companies conclude the terms of a gag order prevent them from even signaling which country has received the data, there is a backstop: the companies must pay 100,000 shekels ($30,000) to the Israeli government.
levi-turner
2 days ago
> Was it agreed by some salespeople without the knowledge of legal / management?
Never worked for either company, but there's a zero percent chance. Legal agrees to bespoke terms and conditions on contracts (or negotiates them) for contracts. How flexible they are to agreeing to exotic terms depends on the dollar value of the contract, but there is no chance that these terms (a) weren't outlined in the contract and (b) weren't heavily scrutinized by legal (and ops, doing paybacks in such a manner likely require work-arounds for their ops and finance teams).
rwmj
2 days ago
That's my experience too, but it seems impossible that a competent legal team would have agreed to this.
gadders
16 hours ago
Legal can advise, but it's ultimately up to the business to risk-accept. If they think the risk vs reward analysis makes it worthwhile, they can overrule legal and proceed.
bostik
14 hours ago
When advice from legal conflicts with the upcoming sound of ka-ching! the only question that matters is: "how loud is that cashier going to be?"
nitwit005
16 hours ago
It does seem a bit baffling. This method just adds a second potential crime, in the form of fraudulent payments.
falcor84
13 hours ago
Why would it be fraudulent in this case? I assume that these would be paid as refunds accounted for as a discount to a particular customer - aren't these generally discretionary? Also, I would assume that it would be the Israeli government getting services from the Israeli subsidiary of that company, so it's not clear whether even if it were a crime, which jurisdiction would have an issue with it.
You could argue that it's against something like the OECD Anti‑Bribery Convention, but that would be a much more difficult case, given that this isn't a particular foreign official, but essentially a central body of the foreign government.
Just to clarify, not saying that it's ok, but just that accusing it of being a "crime" might be a category error.
prodigycorp
9 hours ago
Not speaking to the fraudulence of this specific case, but wire fraud is an umbrella term that covers pretty much every non tangible crime.
It's kind of like how everything can be securities fraud[0]
bloomberg article: https://archive.is/ixwRi
deaux
5 hours ago
"Everything" here meaning "blatant lying" - and knowingly staying silent on something that obviously has a huge impact on a company is lying - which in corporate America is so normalized that some mistake it for being "everything". Securities fraud is incredibly easy to avoid if executives just stop lying. This soon becomes clear when clicking through the links in the article.
> Yesterday New York State Attorney General Barbara Underwood filed a securities-fraud lawsuit against Exxon Mobil Corp. “alleging that the company misled investors regarding the risk that climate change regulations posed to its business.”
Blatant lying
> if you are a public company that suffers a massive data breach and exposes sensitive data about millions of customers without their consent, and that data is then used for nefarious purposes, and you find out about the breach, and then you wait for years to disclose it, and when you do disclose it your stock loses tens of billions of dollars of market value, then shareholders are going to sue you for not telling them earlier
Blatant lying
The fact that most of this lying (see Exxon) is done under some kind of "nudge nudge, wink wink, we all know what's really going in" doesn't stop it from knowingly lying.
That knowingly lying is securities fraud seems very logical, and nothing like "everything".
This is all moot anyway now that the US is no longer interested in upholding any laws against large companies whatsoever.
sebzim4500
16 hours ago
In what sense would the payments be fraudulent? It would be real money paid out of Amazon's accounts as part of a contract they willingly signed with Israel.
master_crab
16 hours ago
It is two crimes:
1. Alerting a country to secret actions taken by a third party government (my nation of citizenship, the US, definitely has rules against that)
2. Passing money to commit a crime. See money laundering.
Honestly, the second crime seems aggravated and stupid. Just pass random digits in an API call if you want to tell Israel you did something.
pcthrowaway
11 hours ago
Wouldn't just having 1000 canaries be a "legal" way to do the alerting?
A government can compel Amazon to avoid notifying a target (Israel in this case) that their information has been subpoenaed, but can't compel Amazon to lie and say it hasn't sent their info.
Or is the concept of a canary pretty much useless now?
I'm personally one of the "activists" who is trying to avoid Amazon and Google to a practical degree, due to project Nimbus, so I'd be more than happy if their data could be accessed, and even happier to see Amazon and Google just cut ties with them altogether.
JuniperMesos
an hour ago
And I'm personally one of the "activists" who is trying to avoid Amazon and Google to a practical degree, because they might be ordered by a foreign government (or my own government) to turn over my data to that government and be legally forbidden from saying that they have been required to do this. Or because they might succumb to activist pressure to deplatform me.
sebzim4500
14 hours ago
I'm not disputing that the company would be breaking the law by doing this. That's not what fraud is though.
Retric
14 hours ago
Fraud is intentional deception + criminal intent. The deception comes from using payments as a code instead of say an encrypted channel.
victorbjorklund
13 hours ago
No, fraud is intentional deception to deprive a victim of a legal right or to gain from a victim unlawfully or unfairly.
Who exactly here is the victim that gets it legal rights deprived or what is the gain at the expense of the victim?
toast0
5 hours ago
In this scheme, the government would be deprived of its legal right to obtain information about a business's customer without the consent or knowledge of said customer.
In many/most? cases, a customer can be notified and can attempt to block such information gathering, but there are also many where it's not permitted.
victorbjorklund
2 hours ago
then pretty much every crime is ”fraud”. You are wrong.
Spooky23
8 hours ago
The shareholders of Microsoft or Amazon are deprived of their value.
victorbjorklund
2 hours ago
then every crime is fraud. I murder you. Your employers shareholders are deprived of a worker.
jazzyjackson
8 hours ago
"everything is securities fraud"
Retric
11 hours ago
IE criminal intent vs criminal activity, critically the criminal activity only needs to be intended not actually occur for it to be fraud. Specifying which criminal intent is applicable is reasonable but nothing I said was incorrect.
The victims are the people being deprived of their legal protections.
Not everyone agrees which information should be protected but sending information can be a form of harm. If I break into your bank, find all your financial transactions, and post it on Facebook, I have harmed you.
Courts imposing gag orders over criminal or civil matters is a critical protection, and attempting to violate those gag orders is harm. The specific victims aren’t known, but they intend for there to be victims.
victorbjorklund
2 hours ago
so which intent of benefit at the cost of which victim do you claim that Aws had when they committed the crime?
gmueckl
13 hours ago
IANAL, but all criminal definitions of fraud that I am aware of require an intention to harm to a victim. It's kind of hard to argue that sending money fulfills this criteria.
adriand
9 hours ago
The harm is not to the recipient of the funds in this case, but to the investigating authorities, who have had the secrecy of their subpoena compromised.
There is wide latitude in the criminal code to charge financial crimes. This reminds me a bit of Trump's hush money conviction. IIRC, a central issue was how the payment was categorized in his books. In this case, there would be a record of this payment to Israel in the books, but the true nature of the payment would be concealed. IANAL, but I believe that is legally problematic.
dlubarov
7 hours ago
The investigating authorities aren't being defrauded though; making someone's job harder isn't fraud. Google or Amazon could be committing other crimes,[1] but not fraud.
[1] If they actually violated a gag order, which realistically they won't. In all likelihood there's language to ensure they're not forced to commit crimes. Even if that wasn't explicit, the illegality doctrine covers them anyway, and they can just ignore any provisions which would require them to commit crimes.
NoMoreNicksLeft
6 hours ago
This is a bizarre reddit-brained legal theory.
Almost all crime requires some form of lying, at least by omission and often of the explicit sort. Fraud though, is much more narrow than "they deceived but also crimed"... and anyone saying otherwise should be so embarrassed that we never have to hear their halfwittery ever again.
Retric
11 hours ago
Americans get legal protections for their private health data because the disclosure of such information is considered harmful.
Other countries provide legal protections for other bits of information because disclosure of that information is considered harmful to the individual, it’s that protection they are trying to breach which thus harms the person.
gmueckl
11 hours ago
How is this related to the fraud discussion in this thread? Illegal disckosure of confidential information is usually handled by a separate legal framework.
Retric
11 hours ago
Stuff is generally also fraud rather than only being fraud. We don’t know the details of what else happened so we can’t say what other crimes occurred.
Same deal as most illegal things public companies do also being SEC violations.
immibis
10 hours ago
The other person is saying that disclosure of health data in violation of HIPAA wouldn't be fraud. It would be a HIPAA violation, not fraud.
Retric
9 hours ago
The same action can break multiple laws. Unlawful discharge of a firearm is a crime, but it can also kill someone and thus break a different law. https://www.azleg.gov/ars/13/03107.htm
Here we don’t know which specific laws were broken because we lack details, but the companies definitely signed a contract agreeing to commit fraud.
Anyway, the comment I responded to had “require an intention to harm to a victim” it’s that aspect I was addressing. My point was the transmission of information itself can be harmful to someone other than the recipient of that information. So the same act fulfills both aspects of fraud (deception + criminal intent), and also breaks some other law.
Spooky23
8 hours ago
It depends on the context. I’ve gathered evidence to support prosecution of an individual disclosing PHI who was doing so to facilitate criminal acts.
einpoklum
3 hours ago
> (my nation of citizenship, the US, definitely has rules against that)
US rules are, unfortunately, nortoriously and outlandishly broken whenever it comes to Israel: Foreign Agent Registration Act, the Leahy Law, and probably a bunch of others as well.
Spooky23
8 hours ago
The payments are an act of fraud as they deprive the company of resources for no tangible business purpose. No contract authorizes the use of payments to bypass communications controls and exfiltrate data.
The act of communicating privileged or sealed information on itself is at minimum contempt of court and perhaps theft of government property, wire fraud or other crimes. Typically accounts payable aren’t aware of evidence gathering or discovery, so the actor is also facing conspiracy or other felonies.
DeathArrow
2 hours ago
Who is going to prosecute those crimes?
8note
16 hours ago
> If either Google or Amazon provides information to authorities in the US, where the dialing code is +1, and they are prevented from disclosing their cooperation, they must send the Israeli government 1,000 shekels.
its a buggy method, considering canada also uses +1, and a bunch of countries look like they use +1 but dont, like barbados +1(246) using what looks like an area code as part of the country code.
toast0
15 hours ago
> its a buggy method, considering canada also uses +1, and a bunch of countries look like they use +1 but dont, like barbados +1(246) using what looks like an area code as part of the country code.
You are correct that ITU code is not specific enough to identify a country, but I'm sorry, +1 is the ITU country code for the North American Numbering Plan Area. 246 is the NANPA area code for Barbados (which only has one area code) but as a NANPA member, Barbados' country code is +1, same as the rest of the members. There is no '+1246' country code.
There's not a lot of countries that are in a shared numbering plan other than NANPA, but for example, Khazakstan and Russia share +7 (Of course, the USSR needed a single digit country code, or there would have been a country code gap), and many of the former Netherland Antilles share +599, although Aruba has +297, and Sint Maarten is in +1 (with NANPA Area code 721)
coliveira
11 hours ago
It's a criminal scheme to spy on law enforcement. Both the company and the scheming country are committing crimes.
dodomodo
4 hours ago
spy on law enforcement that spy on your government, seem like a fair game
Frieren
3 hours ago
This is not about spying, but fighting money laundering, persecuting war criminals, even common crimes.
To spy on law enforcement that is trying to fight crime is not a good thing. Israel is not the world police.
yehat
2 hours ago
Does that apply for China, Russia, North Korea, Iran, Venezuela, Brazil and so on?
dummydummy1234
11 hours ago
Can a country commit a crime?
marcosdumay
10 hours ago
No, it's the government that commits it.
People use the country = government metaphor as a shortcut for communication, but this one takes it further than usual.
blharr
6 hours ago
> country = government metaphor
This will probably never be particularly useful, but this figure of speech is a "synecdoche" (a "metonymy" instead of a "metaphor")
brookst
5 hours ago
As long as we’re being pedantic, synecdoche means referring to part as the whole (nice wheels = car, nice threads = clothes).
Saying the US did something when referring to the government is metonymy, but not synecdoche.
largbae
10 hours ago
Extradition by tectonic subduction
alt187
8 hours ago
Obviously illegal lowbrow schemes asixe, it's hilarious that the company has to SEND money to Israel to notify them of a breach.
hsuduebc2
7 hours ago
It seems weirdly complicated. At this point I would assume it's much easier and secure just to bribe someone to tell them directly. This is like roleplay of secret sleeper agents during the cold war.
Havoc
16 hours ago
Very much doubt something this hot in an agreement with a foreign government as counterparty gets signed off by some random salesman
JumpCrisscross
16 hours ago
> If either Google or Amazon provides information to authorities in the US, where the dialing code is +1, and they are prevented from disclosing their cooperation, they must send the Israeli government 1,000 shekels
This is criminal conspiracy. It's fucking insane that they not only did this, but put the crime in writing.;
tgsovlerkhgsel
10 hours ago
I'm always surprised how often crimes get put in writing in big companies, often despite the same companies having various "don't put crimes in writing" trainings.
NewJazz
6 hours ago
To be fair it is not necessarily true that they did this. Devil's advocate (emphasis on the devil part) -- google and amazon may have agreed to do this / put it in the contract but never followed through.
Cheer2171
4 hours ago
It is criminal conspiracy, a federal felony in the US, if you contract to commit a crime. Conspiracy is a standalone crime on its own, independent if the contracted crime is never carried out (in breach of contract).
The mob tried your argument generations ago. It never worked.
Spooky23
8 hours ago
I’d assume they have agents inside the companies smoothing the way or even running interference against any inconvenient questions.
IshKebab
2 days ago
> If the companies conclude the terms of a gag order prevent them from even signaling which country has received the data, there is a backstop: the companies must pay 100,000 shekels ($30,000) to the Israeli government.
Uhm doesn't that mean that Google and Amazon can easily comply with US law despite this agreement?
There must be more to it though, otherwise why use this super suss signaling method?
skeeter2020
16 hours ago
How can they comply with a law that forbids disclosing information was shared, by doing just that? THe fact it's a simply kiddie code instead of explicit communication doesn't allow you to side step the law.
shevy-java
16 hours ago
I don't quite understand this. How much money would Israel be able to milk from this? It can't be that much, can it?
sebzim4500
16 hours ago
It's not about money, it's about sending information while arguably staying within the letter of US law
ceejayoz
16 hours ago
Kinda similar to a https://en.wikipedia.org/wiki/Warrant_canary, with the same untested potential for "yeah that's not allowed and now you're in even more trouble".
dredmorbius
13 hours ago
Are there any instances anyone knows of in which a warrant canary has been found to violate antidisclosure law?
(Australia apparently outlaws the practice, see: <https://boingboing.net/2015/03/26/australia-outlaws-warrant-...>.)
ceejayoz
13 hours ago
Any such case seems likely to wind up in something like the secret FISA court.
https://en.wikipedia.org/wiki/United_States_Foreign_Intellig...
cogman10
7 hours ago
Except this is an affirmative action. Warrant canaries are simply removing from the TOS that the company has not/will not interact with law enforcement.
This is directly violating gag orders. Passing a message, even if it's encrypted or obfuscated is absolutely illegal. The article is a little BS as this sort of thing has been tested in court.
The only reason warrant canaries are in the gray zone is because they are specifically crafted that the business has to remove their cooperation clause to keep the ToS contract valid.
There's nothing like that at play here. It's literally "Just break the gag order, here's our secret handshake".
tzahifadida
2 hours ago
I don't understand these legal mambo jumbo, but lets make it simpler. Israel and the US have a tight intelligence agreements. No one have to keep secrets since they share information readily. That is what it means to be friends. Israel is the best outpost for western influence in the Middle East, and the US have a strategic need to maintain that to oppose forces such as China, Russia and Iran axis. There is no need for bribes or anything like that to get intelligence from both sides... The last time they started lying to each other was disastrous and henceforth I believe the relationship is stable. Not to mention it includes European powers, even though they are happy to defame Israel, they share intelligence, participate in joint operations and buy a huge amount of arms and technology from Israel and sell arms to Israel. So don't let the media fool you...