While most of you are busily reading about the latest effort from U.S. News to calculate with the incalculable, applying its formula to tease out razor-thin distinctions between law schools, you’re missing the demise of the once lauded Internet prediction site, InTrade. What were the odds?

Over the weekend, the Irish-based website shuttered itself completely, noting in a statement to customers that there may be “financial irregularities.” Uh-oh.

All this comes at the worst possible time for InTrade customers, who were looking to cash in on that sweet, sweet Conclave action…

Customers in the U.S. already lost access to InTrade back in November, when the CFTC waved around a 2005 cease and desist. The CFTC’s beef with InTrade revolved around the website selling contracts that looked an awful lot like commodity futures. The CFTC does not like commodity futures traded from outside their regulatory framework. And even though InTrade specifically asked the CFTC to step in and regulate their trading, the CFTC opted to functionally shut them down (once the Presidential election contracts were all paid out, of course). The CFTC didn’t give a very clear explanation for this decision, but the CFTC apparently felt that allowing micro-level trading on commodity futures constituted a societal ill they could not accept — while institutional investors tossing around trillions seems perfectly harmless. Or the CFTC was just lazy. Never underestimate “just lazy.”

InTrade’s closure over the weekend was not related to trading commodity futures, but some vague suggestion of “financial irregularities.” Details remain sketchy, but the best guess out there alleges that InTrade failed to maintain duly segregated accounts.

What on earth is going on? My best guess is that the margin posted by traders was not held, as it should be, in segregated accounts separate from company funds. When bets are made on this market, both parties must post margin equal to their worst-case loss, so that neither is subject to counterparty risk. In effect, each party is taking a position against the exchange, but these positions are exactly offsetting so the exchange bears no risk. To ensure that all promised payments can be made, these funds must be held in the form of cash, insured deposits, or safe dollar-denominated securities such as Treasury bills. They cannot be invested in risky assets, and cannot be used for the payment of salaries or expenses.

The latter point about the “payment of salaries or expenses” is in line with the recent announcement that auditors had flagged payments to InTrade’s former CEO, the late John Delaney.

The loss of InTrade will spark glowing eulogies from multiple sectors, but losing the political prediction market will be the toughest loss. The political reporting class openly crowed about InTrade’s predictive power for years. The Washington Post already published its lament over the passing of InTrade as the loss of the last, best hope for pundit accountability:

It’s a shame, and this is why. We live in a world of punditry in which there are large amounts of, to put it nicely, horse manure. Those of us who write and talk about what will happen inevitably rely on vague predictions, full of qualifications. I’m guilty of it myself, and often find myself writing things like “this ought to be an OK year for the economy, if fiscal austerity isn’t too severe and there isn’t a return of the European crisis.”

On Intrade, by contrast, the traders who participate and collectively set market prices, are forced to choose—and put money where their mouths are. Will the United States enter a recession in 2013? Before it shut down, the prices for that contract on Intrade implied a 16.9 percent chance that the answer was “yes.” In a world in which people hold their pundits to a higher standard, people spouting off on the economy (or politics, or foreign affairs, or the selection of the pope) would be forced to make specific, testable predictions, and attach probabilities to those guesses.

I actually thought the best hope for pundit accountability would be a media willing to confront their own pundits with past flawed predictions, rather than sweeping the past under the rug every day, but what do I know?

But the legal fallout from the end of InTrade, for the U.S., will be the inevitable rise of the next online predictive market. With InTrade out of the way, some other online gambling site — anyone from PaddyPower to Betfair — will grow into the hole created by InTrade, subtly open itself to U.S. customers, and likely reignite the legal battles with the CFTC all over again. Hopefully, next time around, cooler heads will prevail at the CFTC and welcome these predictive markets to the regulatory regime.

But I’m not buying that contract.

To Our Customers [InTrade]
A Prediction Market Mystery [Rajiv Sethi]
RIP Intrade: The Last, Best Hope for Pundit Accountability [Washington Post]
Now You Can’t Buy Your Crude Oil Futures In $10 Increments On Intrade [DealBreaker]

Math geeks rejoice! It's Pi Day again! Why is the number pi so awesome? Because, as Mr. Spock once explained, "the value of pi is a transcendental figure without resolution." Here are a few more cool pi-related links.

• On March 14, 1:59 pm, the Exploratorium in San Francisco (which invented Pi Day in 1988) will be featuring an art installation called "Pi In The Sky." Created by artist ISHKY with the help of a team of artists, designers, and scientists, "Pi In The Sky" will be visible in the sky at more than 10,000 feet over San Francisco. Five synchronized planes equipped with dot matrix technology will skywrite the first 314 numbers of pi, with each number measuring over a quarter-mile in height. [url]
• How "old" is pi? The ancient Babylonians were able to come up with a close approximation of pi (3.125) around 2000 B.C. [url]
• How many digits of pi are required to be able to measure the circumference of the observable universe, with an accuracy of less than the width of a hydrogen atom? The answer is... 39. [url]

If you'd like to read more awesome and interesting stuff, check out this unrelated (but not entirely random!) Techdirt post via StumbleUpon.

There's an interesting event going on today and tomorrow at the Cato Institute, with a very practical focus: looking at ways to automate the process of getting legislative data into Wikipedia. That is, when new bills are introduced, and as they make their way through Congress and to the President, is there any reason that data doesn't automatically populate to Wikipedia?

Our project to produce enhanced XML markup of federal legislation is well under way, and we hope to use this data to make more information available to the public about how bills affect existing law, federal agencies, and spending, for example.

What better way to spread knowledge about federal public policy than by supporting the growth of Wikipedia content?

There are a bunch of services out there that present such legislative data, but having a straight XML feed from Congress to Wikipedia seems like an all around good idea.

Many in the internet community were disappointed a year ago when Facebook came out in favor of CISPA. Facebook made its case publicly, agreeing that there were some privacy and civil liberties concerns with the bill, but that on the whole the bill was good. Of course, more cynical people might point out that since the general immunity provisions of CISPA would protect Facebook from liability in sharing info with the government, that of course they'd like it. However, it appears that Facebook is reconsidering that position, perhaps aware of how much public opposition there is to CISPA. Facebook is no longer listed as a CISPA supporter, though it also has not come out directly against the bill. Instead, it issued a statement that says basically nothing:

We are encouraged by the continued attention of Congress to this important issue and we look forward to working with both the House and the Senate to find a legislative balance that promotes government sharing of cyberthreat information with the private sector while also ensuring the privacy of our users.

Still, it's encouraging that a company, like Facebook, which really does rely on the support of their userbase, appears to at least recognize that something like CISPA might not be good for its users. In fact, this seems similar to when Microsoft backed away from its CISPA support last year as well. The article linked above notes that Microsoft still feels the same way, citing the concerns about user privacy with the current draft of CISPA.

So, who is supporting CISPA? The telcos are still there, not surprisingly, as well as mostly infrastructure providers, rather than any company that has a bunch of its own internet users. So, you see IBM, Intel and Juniper Networks. But there is not a single real "internet" company in the bunch any more. Perhaps that should be a loud hint for CISPA's sponsors that the bill is not a good thing for the internet world.

Like any good debacle, this whole Sim City SNAFU breeds all manner of hostility. The reviews have begun to reflect the incredible amount of frustration at EA's mis-forecast of their launch-date readiness. Even retailers are poking the bear, so to speak, by offering reminders that past iterations of Sim City don't have the same problems and are still super fun to play. The calls for boycotts have been getting louder. But let's be careful not to slip into the land of the silly.

And by silly, I mean launching into a diatribe about how awfully the launch was handled by EA and then concluding that all gamers obviously need a wordily constructed Bill Of Rights. The explanation of what gamers shouldn't stand for isn't bad, actually.

We shouldn't only be upset that EA didn't have enough servers running for the game's launch. We should be upset that it was unnecessarily designed from the ground up to require an always-on online component. We should be upset that a series that has always been large and single-player has been made small and multiplayer with gamers having no choice in the matter. This wasn't an issue of not enough servers and poor planning. This was an issue of ignoring gamers' needs and wants in favor of a system that treats users as children and criminals.

Hell yes! I'm pissed off about it too, and I didn't even buy the damned game. I'm just angry by proxy, the use of which would likely cause a server connection error if I actually did try to play the game! What the hell, let's do something about, comrades! What's first? Storm EA's building and issue them stern looks and wagging fingers? Tweet at them with specific insults about their lineage? Wrap aging cheese up in tin foil and mail it to their offices as a kind of methodical stink bomb? C'mon!

Because of this, I offer the Gamers' Bill of Rights. It enumerates what we should expect from game developers, publishers, and retailers, and limits the unnecessary and offensive overuse of copy-protection measures. We should be able to expect a certain level of support for the games we buy, and we should feel safe in the fact that they won't violate our computers when we run them.

Yeah! That'll teach--wait, what? So...we're essentially going to tell game publishers what we want from them? Don't we...kind of do that already? Isn't that what buying their products is? Do we not have the option to boycott, to buy elsewhere, and all that? Hey, how long is this Bill Of Rights, anyway? 355 words!?!?

You know what, let me see if I can create my own gamer bill of rights that is just a single bullet point.

1. Gamers have the right not to give money to assholes

The end.

This morning, Judge Otis Wright issued a new order in the big Prenda case, in which he's set up a new hearing, for March 29th, and made it quite clear that everyone associated with Prenda had better show up this time. He's rejected the motions from Team Prenda claiming that the court has no jurisdiction, saying that he's satisfied that he has specific jurisdiction over everyone involved based on the evidence from the hearing this week, "because of their pecuniary interest and active, albeit clandestine participation in these cases." Also, he's clearly not pleased about the claims that the court has no jurisdiction over Team Prenda:

Not only does the Ex Parte Application lack merit, its eleventh-hour filing exemplifies gamesmanship. Accordingly, the Ex Parte Application is DENIED.

Judge Wright again notes that there is evidence of sanctionable activity, as well as the possibility of fraud on the court, and he's ordering everyone involved to show up. The list has expanded somewhat. This is who is ordered to show up:

a) John Steele, of Steele Hansmeier PLLC, Prenda Law, Inc., and/or Livewire Holdings LLC;
b) Paul Hansmeier, of Steele Hansmeier PLLC and/or Livewire Holdings LLC;
c) Paul Duffy, of Prenda Law, Inc.;
d) Angela Van Den Hemel, of Prenda Law, Inc.;
e) Mark Lutz, of Prenda Law, Inc., AF Holdings LLC and/or Ingenuity 13 LLC;
f) Alan Cooper, of AF Holdings LLC;
g) Peter Hansemeier, of 6881 Forensics, LLC;
h) Prenda Law, Inc.;
i) Livewire Holdings LLC;
j) Steele Hansmeier PLLC;
k) AF Holdings LLC;
l) Ingenuity 13 LLC; and
m) 6881 Forensics, LLC.

Obviously, it is likely that there is a fair bit of overlap between the main players behind many of these entities. I note that he's still asking Alan Cooper from AF Holdings to show up... but no longer demanding Alan Cooper, caretaker to show up. Basically, one last chance for Steele to prove that the "other" Alan Cooper really exists. I'm a bit surprised there's no request for Alan Mony/Monay too.

Judge Wright even tells the lawyers from the other side -- Morgan Pietz and Nicholas Ranallo -- that they don't have to show up, though they're welcome to "if so desired." In other words, they don't have to do any more to prove the claims that they were making. The judge knows what's going on.

In terms of what the hearing will cover:

These persons and entities are ORDERED to appear on March 29, 2013, at 10:30 a.m., TO SHOW CAUSE for the following:

1) Why they should not be sanctioned for their participation, direction, and execution of the acts described in the Court’s February 7, 2013 Order to Show Cause;

2) Why they should not be sanctioned for failing to notify the Court of all parties that have a financial interest in the outcome of litigation;

3) Why they should not be sanctioned for defrauding the Court by misrepresenting the nature and relationship of the individuals and entities in subparagraphs a–m above;

4) Why John Steele and Paul Hansmeier should not be sanctioned for failing to make a pro hac vice appearance before the Court, given their involvement as “senior attorneys” in the cases; and

5) Why the individuals in subparagraphs a–g above should not be sanctioned for contravening the Court’s March 5, 2013 Order (ECF No. 66) and failing to appear on March 11, 2013.

Furthermore, to prevent further gaming around claims of not having enough time to find out about this order, Judge Wright has ordered Brett Gibbs to serve everyone by tomorrow, and to file proof of service by Monday. Oh yeah, he also has to show up for the big hearing on the 29th.

Oh, and should Team Prenda decide not to show up on the 29th? Sounds like it won't be a pretty picture:

Should the persons and entities in subparagraphs a–m above not appear on March 29, 2013, the Court is prepared to draw reasonable inferences concerning their conduct in the cases before the Court, including any inferences derived from their failure to appear. Failure to comply with this order will result in the imposition of sanctions.

And I had just been running out of popcorn....

Last night, after posting the story about Google Reader being shut down, I received an email from someone in China, telling me that it was an even bigger deal for him, because "even with a VPN it can be very difficult to access outside news sites," but that the Great Firewall doesn't block Google Reader -- so that's his one way of reading outside news. And today, European MEP Marietje Schaake tweeted nearly the same thing about Iran. Apparently, neither country blocks Google Reader, and thus people in both countries rely on it as a tool to get around censorship. Of course, Google need not keep Reader running just for that reason, but it does highlight just how important Google Reader is to some people. And, yes, there are other RSS readers out there, but as people are quickly discovering, they tend to be much more limited (and, one imagines, more likely to be blocked in those countries).

A little while back, on one of our "funniest/most insightful comments of the week" posts, we featured a comment that someone made anonymously, in response to a story about Bjork's Kickstarter project that was taken down before it ended, after it did not look like it was going to get anywhere near the required threshold. However, the comment has stuck with me and I think it deserves a post. In particular, the commenter called us out for saying that her project "failed."

This was not a "failure!"

Platforms like Kickstarter have changed the way the market is functioning, and our ways of thinking about it (even here on Techdirt) have to catch up.

Bjork's campaign did not fail, even though the results were not what she was hoping for. She successfully learned that the market was not interested in this product.

Spending £375,000 of her own money? Now THAT would have been a failure.

Using Kickstarter is more like running a science experiment than it is like selling a product. It increases the efficiency of the market by orders of magnitude, and apparently beyond our ability to think about it clearly.

This point -- even if it was calling us out -- is so true, and it's so important for people to understand. It's easy to use the word "failure" for those projects that don't meet their goal. Hell, just in writing this post, I repeatedly had to consciously stop myself from using the words "fail" or "failure" in describing projects that don't reach their goal. But, the commenter is right: those projects are not failed projects once you realize what Kickstarter really is: a platform to judge the market for products, and to build commitment and funding around them. If a project doesn't reach the goal, that's actually valuable market research, suggesting that if they had gone ahead, without going through the experience, they likely would have "failed."

So, in actuality, it makes sense to look at such projects and recognize that they were saved from a dismal failure, in which large sums of money may have been spent, but at the same time clarifying the market's reaction to a product before it's even been introduced. With so many people thinking of Kickstarter more as a store, than as a platform for supporting people trying to turn cool ideas into reality, it's important to be careful in how we choose our language. Putting up a Kickstarter project that doesn't reach its goal shouldn't be seen as a failure. It should be seen as a useful bit of data, which helps one avoid failure, and also to (hopefully) sharpen up their product and pitch so that the next time, it is more likely to be funded.

A year ago, we wrote about a fantastic episode of the radio program This American Life, which was all about lobbying. One part of it revealed just how much time our elected officials in Congress spend fundraising, and the numbers were somewhat astounding. Both major political parties have set up phone banks across the street from the Capitol (because it's seen as demeaning to do the calls directly from your Congressional office) and members of the House and the Senate spend a ridiculous amount of time there. The report suggested multiple hours each day on average, just focused on raising money for their re-election campaign. It's really quite incredible.

The folks over at MapLight recently used Federal Elections Commission data on the 2012 elections to work out just how much it costs to win a seat in Congress:

• House members, on average, each raised $1,689,580, an average of $2,315 every day during the 2012 cycle.
• Senators, on average, each raised $10,476,451, an average of $14,351 every day during the 2012 cycle.

No wonder they're hitting the phones every day. Of course, since these are averages, and averages can be skewed, it might help to dig in a bit, and thankfully, MapLight has supplied all the data in a handy dandy spreadsheet. Digging a bit deeper, we see that the campaign that got the highest amount of money is (no surprise) Elizabeth Warren's Senate campaign, which raised $42,506,349. That's a real outlier, as the second highest amount was less than half of that (Sherrod Brown, who raised $20,945,196). The lowest amount for a Senate campaign? Angus King, the Independent from Maine who raised just $2,964,323 -- though he's beloved in Maine and most people thought he had the campaign locked up from the beginning (which is a good thing, since we need more non-partisans in Congress, and King seems to be quite good). There were a few other campaigns around $3 million as well. At the very least, the data suggests that $3 million is the basic entry fee. The median for Senate campaigns pops out at $9,341,391 -- not far off from the mean. That median campaign was Dean Hellers.

On the House side, there were a few clear outliers, topped by Michele Bachmann's $25,894,721 -- though I assume much of that was raised back when she was running for President -- so not particularly representative. The other outlier on the high end: Speaker of the House John Boehner's $22,024,288. No one else came even remotely close. Third place was House Majority Leader Eric Cantor who took in $7,640,467. Note that Bachmann and Boehner actually raised more than any victorious Senate campaign, other than Warren's. The lowest amount raised? That would be Eni Faleomavaega (who?) who raised just $110,570. Of course, he's a non-voting "delegate" to the House, representing American Samoa's at-large district. Similarly, another non-voting delegate, Gregorio Sablan (from the Northern Mariana Islands) raised just $111,145. The lowest amount raised by a winning voting House member would be the $212,068 raised by Jose Serrano. The median amount in the House (including the non-voting members...) is $1,350,902 (for Rep. Janice Schakowsky). That's just a bit lower than the mean, which is probably the impact of the two massive outliers on the high end.

Of course, this data only looks at the winners, not the losers, and you could make a case that that data is pretty relevant as well. Still, the data makes it clear that successfully running for office requires a lot of money, which is why our politicians spend so much time fundraising. If all that fundraising kept them away from making bad laws, perhaps it would be a good thing, but, of course, part of the problem is that implicit in at least some of the fundraising effort is that these politicians will scratch the back of the donors -- which is how we end up in a world where so many politicians seem to focus on crony capitalism and rewarding those who fund their campaign, over what may be best for their actual constituents.

This SimCity debacle can only be described as an onion. Every time you peel back another layer, you just find yet another bitter layer underneath to make you cry. It all started, as you no doubt know, when EA decided to make the game with an always online requirement. The explanation for this was that it was in part a DRM attempt, but also SimCity was developed to be a social game, requiring an online connection, and EA had also shifted resource consumption and calculation to their own servers, ostensibly freeing up resources on the player's machine. Regardless, the launch looked more like an attempt to reporduce the Hindenburg disaster than any attempt at serving EA's customers and the backlash that followed was harsh. Most recently, someone inside of Maxis reached out to RockPaperShotgun to suggest that the online requirement was strictly DRM and that no important server-side calculations were actually being done. Despite the report, EA maintained that offline play of the game is logistically impossible.

And by logistically impossible, they must have meant that all they'd have to do is turn on the debugging mode, as that's what one game modder has done to make the game work nearly flawlessly without any online connection.

The video above shows the game being played offline. The modder states that this can be done for as long as you like without issues. The only real downside being you can’t save the game because it utilizes cloud saves. However, if you reconnect the game it does save, so you can play all day then just go online to save your progress at the end of a session.

Thanks, random modder guy, for making EA's product do what EA couldn't, or wouldn't, enable it to do themselves. Assuming this is all legit, the excuses for server-side calculations melt away like the loyalty of EA's customers when they bought this game-on-crutches. Hell, even the requirement for online saves needing a constant connection is clearly nonsense. It isn't like the game couldn't be written to only connect once a save is initiated.

Now, here's the fun part. To achieve this, the modder had to go in and edit the game code to enable debug mode, as I mentioned. Far from simply removing the online requirement, it actually made the game perform better.

In fact, it actually improves the game in some ways. City populations are actually tracked correctly and you can edit outside of your city boundaries. Those additional edits are also saved when you reconnect.

Great job, EA. You made your game worse even when it did function, which it mostly didn't, all the while lying your collective faces off to the people giving you their money. It's probably time to come out and issue a serious mea culpa.

I have to admit, I kind of like writing about Iran. They make posting about them so much fun. From their photoshopped war-machines to their plans for internet IDs all the way to their blocking useful internet services like email, it's like watching a documentary on how to be ineffective at trolling the rest of the world and your own people. But this time they've gone too far, damn it. Iran wants to take on Hollywood over Argo, specifically calling out director Ben Affleck for not including things they wanted him to include in his movie.

Side note: I consider the Iranians not protesting Gigli an act of war
Image source: CC BY 2.0

Of course, if you'd like any real details on what Tehran is planning on doing about any of this, good luck.

Iran is planning to sue Hollywood over the Oscar-winning "Argo" because of the movie's allegedly "unrealistic portrayal" of the country, Iranian media reported Tuesday. Several news outlets, including the pro-reform Shargh daily, said French lawyer Isabelle Coutant-Peyre is in Iran for talks with officials over how and where to file the lawsuit. She is also the lawyer for notorious Venezuelan-born terrorist Ilich Ramirez Sanchez, known as Carlos the Jackal.

Ah, lovely. The problem is that, while Iran is dismissing Argo and its awards as CIA propaganda, because everyone knows how pro-military Hollywood is, they aren't really disputing any specific points in the movie. They just say it shows Iranians as being too violent during the hostage-taking (er...), that Affleck failed to show why Iranians were so angry at the United States (they must have missed the movie's opener), and called Argo's awards an "attack against humanity." Other than that, no details were provided on what charges they were going to bring in what court and at what time. Why?

Well, probably because there is roughly f#@$-all they can actually do about it, outside of their own borders, where their own population has been gobbling the movie up via bootleg DVDs (are copyright pirates also pro-CIA?). Regardless, a quick message for my Iranian friends: it's a movie, get over it.

Last week, we wrote about Aaron Swartz's girlfriend, Taren Stinebrickner-Kauffman, releasing a statement accusing the DOJ of a variety of things that hadn't really been covered before, including lying, seizing evidence without a warrant and withholding exculpatory evidence. That resulted in an interesting discussion in the comments, in which a few DOJ defenders suggested that since there were no details, we were probably making this up (as if we don't have better things to do). Now, however, the details have come out. In a letter that was sent at the end of January (but just now leaked to the press), Swartz's lawyers highlight how Assistant US Attorney Steve Heymann was responsible for the charges above.

The key issue is the search of Aaron's laptop. Cambridge police seized the laptop on January 6, 2011. The Secret Service did not obtain a warrant until February 9, 2011, even though it had clearly been involved since before the arrest and was leading the investigation. Swartz's legal team, quite reasonably, argued that the evidence from the laptop should be suppressed due to the massive delay in obtaining the necessary warrant. Heymann hit back that it was the Cambridge Police who had the laptop, so the Secret Service had nothing to do with it until it got the warrant. There was a court hearing about all of this, and Heymann again insisted that the Secret Service had no responsibility until after the warrant.

However, right after that hearing, Heymann apparently approached Swartz's lawyers to reveal a key email from the lead Secret Service agent on the case, Michael Pickett, to Heymann himself. The email had been sent on January 7, 2011 in which he noted that he was "prepared to take custody of the laptop anytime, or whenever you feel is appropriate." In other words, the Secret Service clearly had de facto control over the laptop, directly contrasting Heymann's claims. Furthermore, withholding that bit of evidence, which would have raised serious questions about Heymann's claims to the court, until after the hearing just makes the whole thing even more sketchy.

We were surprised to learn of the existence of an email that demonstrated that the Secret Service both had effective control over Mr. Swartz's electronic devices and knew it needed to obtain a search warrant as of January 7, 2011, especially in light of AUSA Heymann's representation that they had neither "seized" nor "possessed" it. The email made clear that the Secret Service had control over these items of evidence and were able to search them whenever AUSA Heymann desired. This evidence contradicted the Government's representation to the Court that federal law enforcement could not be held responsible for the delay between the items' seizure and their search. The email confirmed what we had previously suspected: that AUSA Heymann and Agent Pickett directed and controlled the investigation of Mr. Swartz from the time of Mr. Swartz's arrest on January 6, 2011. The email also confirmed to us for the first time that AUSA Heymann's involvement in the case had commenced very early in the investigation and that Agent Pickett was following AUSA Heymann's orders on the search and seizure issue.

Given that, Swartz's legal team questioned if there were more relevant items that had not been turned over when required. A further search by the US Attorney's office apparently found quite a bit.

Meanwhile, on December 21, 2012, AUSA Heymann produced yet another, much larger set of documents relevant to Mr.' Swartz's motion to suppress. This voluminous, disorganized production consisted of hundreds of previously-undisclosed emails, as well as hundreds of other documents, including undisclosed investigative reports, 'photographs, spreadsheets, and screen captures. Many of the newly-disclosed emails and reports further illustrated that the Secret Service was in control of investigating Mr. Swartz, and that Heymann was himself involved in the investigation even before Mr. Swartz was arrested on January 6, 2011.

They argue that this was a failure to disclose exculpatory documents, combined with evidence that Heymann appeared to know about but leave out.

Furthermore, the claims of prosecutorial misconduct are bolstered by showing how Heymann and others in the US Attorney's office appear to have abused the plea bargaining process, in that it's not supposed to result in a punishment that is massively different than what would happen via a full trial. Of course, in practice, prosecutors almost always ignore that rule because it gives them a bigger stick when going in to negotiate. Given that it was regular conduct, however, perhaps makes this particular claim a little less certain. Still, it's more evidence of how single-focused the DOJ was on this case.

There aren't many consumers out there who are pleased with long-term contracts, whether it's their cellphone provider or their ISP. For most, a one or two-year exclusive contract makes it economically unfeasible to switch carriers at the drop of the hat. These contracts tend to result in lower quality service, as exclusive, lengthy deals rarely stoke the fires of innovation or improvement.

Now, take that 1-to-2-year deal and its attendant downside and extrapolate it to the length of a murder sentence. That's the reality being faced by residents of Loudon County, Virginia.

With help from a local developer, OpenBand apparently convinced a lot of communities to sign exclusive franchise agreements that ran for between 25 to 75 years. While users in these developments could sign up for other TV or broadband services, they still had to pay the $150 monthly association fee to OpenBand.

If you can lock customers into a contract that runs their entire lifetime, you're hardly going to be providing top notch service. Why? Because the pressure provided by competition is no longer an issue. OpenBand did what most companies would do in this situation -- nothing.

Complaints grew and grew over the years, with customers saying it reached the point where they stopped contacting the ISP, given their exclusive arrangement resulted in them being totally unwilling to improve service. It got so bad, some locals wound up getting a second broadband provider -- and just paid two bills for service with nothing they could do.

These complaints finally reached the FCC, which decided to implement some rules changes to make these long-term contracts illegal. The housing developments locked into these deals also pushed back, declining to renew their contracts with OpenBand.

This made OpenBand unhappy and it decided to respond the way most companies do when their monopolies are threatened -- by filing lawsuits.

Last fall they decided to sue everyone, including the county Board of Supervisors, two supervisors individually, and several homeowners associations.

Despite the fact that the FCC itself has declared these long-term contracts to be anti-competitive and "forbidden" (by a 2007 FCC order banning "exclusivity clauses"), OpenBand is still trying to get its monopoly reinstated. Its arguments represent the "best" qualities of pedantic legal wrangling, boiling down to some very specific wording.

First, OpenBand claims that the FCC has no jurisdiction over its "arrangements" with Loudon County homeowners:

Saunders also argued that neither Lansdowne or Southern Walk could receive the relief they seek from the courts because the FCC order only addresses video service and not Internet or telephone, both of which the communities get from OpenBand...

OpenBand is attacking very specific wording here, attempting to justify its monopoly over the two other services (phone and internet) it provides. The second aspect of its argument relies on specific terminology as well -- contracts vs. easements. One of the judges hearing the appeal has already sniffed this weasel-wording out.

"The FCC ruling, it seems so clearly directed at prohibiting exactly what is taking place here," Judge J. Harvie Wilkinson III said as OpenBand began its arguments in the Lansdowne case. "And I am beginning to get the idea that these standing questions, these ripeness questions, a lot of them are just a fog that's being thrown up [by OpenBand attorneys] to provide protection for a shell game that's going on here with all these different companies and different agreements."

Wilkinson repeated the sentiment when the discussion of the telecommunications easements owned solely by OpenBand were raised. He said it was all a part of an "evasive web" and that OpenBand appeared to be seeking "to evade the FCC exclusivity order by calling the contractual agreements…easements. It is one thing after another. The whole thing is a subterfuge."

OpenBand's arguments are already being challenged in the appeals court, which is rehearing the lawsuits brought against it by two Virginia homeowners' associations. The lawsuits OpenBand filed against two Loudon supervisors and two homeowner's associations are currently on hold, as all county judges have recused themselves from the case because of their familiarity with one of the defendants, an attorney who is also a former board member of one the HOAs.

Whatever the result of these lawsuits, OpenBand's reputation is already mostly destroyed. It was already a cursed name in Virginia six years ago and looks as if it's done nothing over the last half-decade to improve its service or its relationship with its "customers." (It's really tough to characterize people stuck in a 25-75 year contract as "customers," hence the quotation marks. Customers usually have a bit of freedom when purchasing goods and services. The members of these HOAs clearly don't.)

The fact that OpenBand is willing to spend millions ($4 million so far) to reclaim its monopoly clearly indicates that infrastructure and customer service are the last things on its mind. These short-sighted and recriminatory lawsuits will only make it that much tougher for it to land contracts (or "easements") with anyone in the future. Even if it wins, it loses.

One of the big surprise revelations at the infamous Prenda hearing on Monday was that John Steele had been calling Alan Cooper and leaving voicemails for him of a threatening nature. If you haven't been following all of this, Alan Cooper was Prenda lawyer John Steele's caretaker for some homes he owned in Minnesota. Some of the many shell companies that Prenda law was "representing" (and which it almost certainly set up itself for itself) supposedly had an "Alan Cooper" as a representative who "signed" all of the legal documents. At some point, caretaker Cooper learned of this and worried that Steele was illegally using his identity -- leading to his notifying a few judges overseeing Prenda cases of this fact. It eventually resulted in Cooper suing Steele. Steele and Prenda (separately) along with Prenda's only official partner, Paul Duffy, then all sued Cooper for defamation. Oh, and at no point has anyone associated with Prenda done or said anything to suggest that there is a real Alan Cooper who is not the caretaker, but who signed those documents. Steele, at one point, insisted he was real, but declined to provide any more info because (he claimed) of those lawsuits from Alan Cooper. Of course, that makes no sense. If there really was an Alan Cooper associated with AF Holdings and Ingenuity 13, the fastest way to win the lawsuit with caretaker Alan Cooper would be to have the other Alan Cooper show up. But that's difficult if he doesn't exist.

Anyway, in the court hearing on Monday, Cooper played a bunch of voicemails from Steele, which Steele had left recently, which do not look good for Steele. Here's what Ken White wrote about the calls in the post he did for us:

The most dramatic part of Cooper's testimony -- and perhaps the most dramatic moment in the hearing -- came when Cooper described what happened when his lawyer Paul Godfread notified Prenda Law that he was suing for the misappropriation of his identity. Within minutes, he said, John Steele began to call him. Steele called many times, and over the course of weeks sent texts and left several voice mail messages. Mr. Pietz played the messages for the court.

In each message, Steele began by telling Cooper that Steele understands that Cooper's lawyer is only representing Cooper in Cooper's lawsuit, not in Steele's and Prenda's and Duffy's lawsuits against Cooper. It's evident that Steele was saying that in an attempt to justify why he would be directly calling a represented party, which lawyers are prohibited from doing by the disciplinary rules of every jurisdiction. In the calls, Steele talked with escalating intensity about how Cooper was now facing lawsuits, that Cooper needed to call Steele to talk about being deposed and responding to discovery, how things were going to "get ugly" now, and how things were now "complicated." On hearing the voice messages, I thought there was only one reasonable interpretation: John Steele was trying to menace and intimidate Alan Cooper to get him to back off from talking about John Steele's use of his name. By the end of the calls, there was a stunned silence in the courtroom, and I suspected that many spectators were sharing with me a deep sympathy for Mr. Cooper and an abiding sense of revulsion for John Steele.

And... yesterday the transcripts of those voicemails was added to the docket as an exhibit by Morgan Pietz, one of the lawyers fighting against Prenda. The transcripts really are about as incredible as White described -- and really suggest attempted intimidation (poorly done, mind you). You would think that a lawyer would know better than to so clearly threaten someone via a recorded message. A couple snippets:

From second voicemail:

It's like if you refuse to, you know, return my calls or -- or engage in mandatory conference, then I'm going to have to be forced to ask the judge to, you know, force you to do things and it just gets ugly from there.

So if you do decide to get an attorney in either of those matters or in the other cases which we're filing against you in the upcoming weeks, please let them -- have them give me a call. This number's fine. Otherwise, I expect to hear from you shortly.

From third voicemail

Alan, this is John Steele again.

You have not responded or contacted me regarding litigation you're involved in. I know you've been served with a third lawsuit. And there are more coming. Don't worry about that.

Well, obviously, if I don't hear from you, I'm going to start filing for certain default motions and start getting relief that way.

I can assure you that just ignoring legal matters, it's not going to go away. I can guarantee you, I'm not going away.

So I highly recommend you at least, you know, follow the rules.... otherwise your life is going to get really complicated.

It's just classic bullying talk. Incredible.