Saturday, December 9, 2017

Rise of the Anti-Masons: America's First Third Party

In 1826 William Morgan, a Freemason and printer from Batavia in New York, became dissatisfied with his lodge and decided to publish the details of some Masonic rituals. That September he was seized by parties unknown, taken to Fort Niagara, and never seen again.

     It was widely believed that Morgan had been kidnapped and killed by fellow Masons, a suspicion that fed growing hostility to the order. The Anti-Mason movement spread rapidly across New England and eventually west, along the way introducing important political innovations like nominating conventions and the adoption of party platforms.
     Morgan’s disappearance – a crime-based political scandal in its day – led more people to suspect that Freemasons were just not loyal citizens. In fact, many Masons were judges, businessmen, bankers and politicians, which made it easy at the time for ordinary people to view the group as a powerful, secret and potentially anti-democratic society. Others suspected its links to the occult and ceremonial magic. This was, after all, the time of the Second Great Awakening.
     A more broadly persuasive argument was that the secret oaths administered by lodges could bind members to favor each other over “outsiders.” Popular outrage spread as people decided to challenge what they viewed as basically a conspiracy.
   
     One of the leading Anti-Masons was Thaddeus Stevens, a Vermont native of Danville who made his name in Pennsylvania and later emerged as a leading abolitionist, founder of the Republican Party, and post-Civil War activist for civil rights and stiff retribution against the south. Attending the Anti- Mason Party’s first national convention, Stevens attracted notice with his strong speeches and oratorical style. In one of them, “On The Masonic Influence Upon The Press,” he deplored the lack of publicity given to the convention and attributed that as well to Masonic influence.
     In 1833 Stevens was elected to the Pennsylvania legislature on the Anti-Masonic ticket, where his legislative talents quickly showed themselves. He was an excellent debater with a devastating wit who could cut his opposition to shreds. He also knew how to maneuver behind the scenes. But that’s another story…
     Two years before Stevens’ election in Pennsylvania the Party was already so popular that Vermont elected an Anti-Mason governor, William Palmer. His victory indicated the intensity of public opposition to elite power in the state, not to mention how far a single-issue movement can go.

Vermont’s Anti-Mason Interlude

     William A. Palmer was no political newcomer. He was a popular Jeffersonian Democrat and former judge who had previously represented Vermont in the US Senate by the time he ran for governor on the Anti-Mason ticket in 1831.
     Vermonters had already elected another Anti-Mason to Congress, and more than 30 members of the movement represented the party in the General Assembly. Still, it was a shock to the establishment when Palmer led in the statewide popular vote. It took nine ballots in the legislature before he won.
     And who was Palmer? A graduate of UVM with a law degree, he had practiced in Chelsea and held numerous posts, including State Supreme Court judge for two years. In 1818, when Palmer was elected to the US Senate he was a Democratic-Republican. In 1823 he became a National Republican. He was a delegate to three State Constitutional Conventions between 1828 and 1850. In other words, Palmer was clearly part of the political establishment – but not a Mason.
     He sincerely believed that secret societies were “evil.” But he didn’t make radical claims in his speeches. In his first inaugural speech, Palmer promised to appoint only men who were “unshackled by any earthly allegiance except to the constitution and laws,” and he suggested legislation to prohibit the administration of oaths except “when necessary to secure the faithful discharge of public trusts and to elicit truth in the administration of justice.”
    And why did Palmer want to “diminish the frequency” of oaths, as he said. Because of the “influence which they exercise over the human mind.”  In other words, a chilling effect.
     

     In 1832, the national Anti-Mason Party conducted the first presidential nominating convention in US history in Baltimore. Its presidential candidate was William Wirt, a former Mason who won 7.78 percent of the popular vote – but Vermont’s seven electoral votes. William Slade, who would later become Vermont governor as a Whig, was sent to Congress as an opponent of both Masonry and slavery. Since the state had one-year terms of office, Palmer ran and won again. But he still couldn’t attract a clear majority of the vote. This time it took 43 ballots before he was re-elected. 
     In 1834, he finally won on the first ballot, but that was because the other political parties could see the collapse of the Anti-Masons coming and were competing to win over its constituents. 
     Palmer also led in the 1835 vote. But this time he couldn’t convince the legislature. After weeks of wrangling and 63 ballots the lawmakers declared themselves deadlocked and turned to Silas Jenison, a former Anti-Mason official and winner of the Lieutenant-Governor’s race. The rest of the Anti-Mason ticket was endorsed by the Whigs. 

***

     Gridlock in Vermont’s General Assembly over Palmer’s elections was so disruptive that it led to a Constitutional Convention and the amendment that created the State Senate. Criticism of the unicameral legislature was not new and proposals for a second chamber dated back to 1793. But in 1836 the idea of reducing the power of the House achieved critical mass. The Convention stripped it of “supreme legislative power.” 
     Crucially, bankers backed the change, mainly with the expectation that two chambers would be easier to handle. This is circumstantial evidence suggesting that, in opposing the Masons, the movement was also confronting the banks. The general public mainly thought the House had become too arrogant, intransigent and uncooperative. 
     For Vermont Anti-Masons, the use of secret oaths represented an invasion of the “civil power of a sovereign state” and a violation of liberty. In June 1833, at the height of movement, the Anti-Mason State Convention passed a dozen resolutions defining its position. 
     Vermont’s Anti-Masons ultimately succeeded in forcing the lodges to close – for a while. But that left the state party with less reason to exist. In 1836 Vermont’s Anti-Mason leaders, including future governor Slade, joined the new, anti-Jacksonian Whig Party. 
     The party’s third and final National convention was held in Philadelphia’s Temperance Hall in November, 1838. Almost entirely engulfed by the Whigs, the gathering unanimously supported William Henry Harrison for President and Daniel Webster for Vice President. When the Whig National Convention chose Harrison and John Tyler, the Anti-Masons did nothing... and soon vanished.

Originally posted on December 14, 2015 

Wednesday, September 13, 2017

Too Big to Care: Why Equifax hasn't been credit worthy

It should not come as a shock that Equifax, one of the three big agencies that track credit status, has failed to protect the data it has on 143 million people. Nor should it be surprising that the company didn't inform its affected customers for six weeks after discovering that hackers had gained access to their private information. Collecting, selling and sometimes misusing mountains of sensitive data for decades, Equifax has evidently become too big to care.

Instead, three executives sold $1.8 million of their company shares days after the company discovered the problem, more than a month before it was made public. "If that happened, somebody needs to go to jail," threatened Sen. Heidi Heitkamp, a Democrat on the Senate Banking Committee. In the days following the breach announcement Equifax shares dropped 20 percent. 

At first, the company wanted customers to pay for a freeze to their accounts. That would protect their personal data. But after a deluge of complaints, the offer changed, with Equifax opting instead to waive fees for customers who want to freeze their credit files -- but only until November 21. Going forward, it could face the largest class action lawsuit in history, with the potential to bankrupt the company. 
1978 investigative feature
Original Publication PDF Here 

When I first looked into Equifax in 1978, it was already a corporate force, with 1,800 offices, 14,000 employees, and a nationwide investigative system maintaining dossiers on 46 million people. The oldest of the three largest US credit agencies, it had revenues of $275 million a year. Equifax's services at the time ranged from credit reporting, insurance investigations and underwriting to motor vehicle data tracking and assorted "management system services" - aka private investigations. 

Today Equifax holds information on more than 800 million consumers and almost 90 million businesses. Operating in 14 countries it produces annual revenues of more than $3 billion. On the other hand, the employee roster is down to about 9,000. 

Founded in 1899, Equifax had not fully committed to computers by the late 1970s. But an industry transition was underway. In Vermont, the Credit Bureau of Burlington had taken an early lead, working with Trans-Union Systems, a national computer network used by retailers and credit card companies. Data flowed in multiple directions, with stores seeking information on potential customers and other clients using the data those businesses amassed.  

Before the digital age, collecting information and creating a customer profile -- to establish what was known as "creditworthiness" -- involved a larger staff and considerable legwork. For Equifax "field investigators" it meant conducting interviews, with the subject as well as friends and neighbors. From courts and police departments they gathered any criminal information, while desk-bound staffers clipped newspapers and gathered reports. To complete a dossier, an investigator might talk to your employers, hunt down old government records, or even strike up conversations with local shop keepers. 

But mass producing customer dossiers (investigators worked on up to 40 a day), particularly profiles that included not just hard data but also tidbits of gossip, could lead to mistakes and abuses. Creditworthiness was a slippery concept, an imprecise composite of job patterns, credit and bank accounts, character, habits, family status and morals. As a result, Equifax was hit with a batch of lawsuits during the 1970s, losing some and quietly settling others. 

One Michigan woman collected $321,000 when the company falsely reported that she was an excessive drinker. Another woman from South Dakota won a settlement when Equifax said that the money for her new Chevy had come from prostitution -- also proven false.

There was also the California insurance broker who won $250,000 when Equifax investigators alleged she was dishonest. In New Jersey there was trouble when State Farm refused coverage to a Princeton faculty member after Equifax reported (accurately but irrelevantly) that she was living with a man "without the benefit of wedlock."
When I called up Ralph Bushey at the Equifax office in Burlington, the first thing he asked was how I spelled my name. Frankly, the same thing happened every time I interviewed someone in the industry. But Bushey was more cautious than most and said he had to check with higher ups. After he didn't call back, I decided to make a personal visit. 

Equifax had outposts in Burlington, Rutland and Bennington, all reporting to a branch office in Albany, New York. A Barre office, along with the rest of eastern Vermont, reported to Manchester, New Hampshire. The regional office was in Boston. 

The Burlington station was small and didn't maintain files, in contrast with Burlington Credit's relatively high tech layout. But the modest appearance was deceptive. Bushey explained coyly that Equifax  handled "all the major insurance groups," specifically mentioning Prudential and National Life. "We've gotten away from the credit line of work, and have picked up more types of business."

At times, Equifax operated like a private detective agency. In at least one case, it was caught helping a corporation to obtain gossip about a critic. An executive at American Home Products, a major drug manufacturer, had hired the company to dig into the personal affairs of Jay Constantine, a congressional staffer who was helping to write legislation opposed by Big Pharma.

This was before the Retail Credit Company of Atlanta, Georgia changed its name to Equifax. After 77 years in business, the 1976 rebranding was prompted by all the bad press, including a Federal Trade Commission lawsuit filed in 1975. The charges, as outlined for me by an FTC staffer, included illicit use of consumer information, failure to disclosure terms, and false and misleading advertising. 

The technology of data gathering has changed since then, but the shabby tactics have survived.  In 2000, Equifax, along with Experian and TransUnion, was fined $2.5 million for blocking and delaying phone calls from consumers trying to obtain information about their credit. In 2013, a federal jury in Oregon awarded $18.6 million to Julie Miller against Equifax for violations of the Fair Credit Reporting Act. 

In contrast, Equifax has had no problem sharing files and data with the FBI and other government agencies, according to George O'Toole, a former CIA agent. While reporting on Vermont's private intelligence industry, I was told that Equifax tended to hire ex-State Police officers, possibly because they might have access to government information that was off limits to the public.

Another ex-CIA operative, Harry Murphy, claimed that Equifax was especially useful to federal agencies. The draw was its enormous files of auto and life insurance applicants. Even back in the 1970s, however, big data transfers between public and private entities were difficult to control, and law enforcement and intelligence officers often moved into the private sector after retirement, or for the paycheck. 

The emerging private dossier industry was run largely by law enforcement and intelligence alumni, an Old Boy Network that closely linked it with government operations. The data moved freely, but the potential for mischief was not widely recognized.

During my research into the activities of Equifax and other big data agencies, I also heard about an odd encounter with Earl Hanson, a Barre resident who applied for insurance with Colonial Penn Mutual. In return he received a letter from Equifax asking for more information about an auto accident he had forgotten to report. Hanson was cooperative, explaining all about hitting a deer. But the exchange made him curious to know what else they had discovered about him, from the Motor Vehicles Department or anywhere else. 

After writing to the company's Dataflo center and to the New Hampshire branch office, however, Hanson was told that Equifax actually had no file on him. Unsatisfied with that response, he filed a complaint with the Attorney General's office. But the State lost interest, eventually closing the case, and Equifax didn't share any further information. As usual, it was too big to care.