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This is not a Quality Contribution.
This is a Quality Contribution. You really ought to just read the whole thing and maybe not even bother reading my comment.
Patrick McKenzie, if you don't know, knows a lot about financial infrastructure and its interaction with tech, regulatory, and human systems. He routinely shares his knowledge in mostly accessible form online. He is also one of the few authors where I would be shocked if I learned that he used LLMs in his written work. When I read him, he often plays incredibly subtly, almost understating his point, often making me have to think again to see if think he's making the implication I think he might be making. His writing is quite unique in my mind. The linked post is his sizable contribution to the conversation about the SLPC indictment.
When the indictment came out, I didn't really say much. I didn't have a lot of specific expertise on the legal case. I was generally suspicious of how one could draw proper lines around the idea of 'donor fraud', where non-profits are defrauding donors who usually give money to non-profits without any strings attached.1 I upvoted @Rov_Scam's comment to that effect. I don't want to denigrate it; I think it was a great comment, fully deserving of a Quality Contribution in its own right. However, I now (only with the benefit of hindsight of McKenzie's post) think it may have taken a bit too much of a gloss over the bank fraud charge.
McKenzie is very serious about the bank fraud charge. He appears to have lived and breathed a world where bank fraud charges are routinely brought and routinely won by the government. He recounts how incredibly easy it seems to be for the government to routinely win on these cases. I don't know that I have a good summary of this; again, you kind of should just read it. He seems to think that basically any lie to a bank will do (a single piece of paper or a single word, he says), and he goes on at length about the extensive record-keeping done by banks and how these systems allow both internal-to-banks investigators and external regulators to easily find the documents or communications to make such charges a done deal. He gives a plethora of examples of actual people going to prison for these exact charges to make his case.
He then turns to what may be more important for the broader Culture War. Sure, lots of conservatives are vaguely annoyed with the SPLC, but even if they get brought up on charges, how much does that really change in the world? He lays out the technical means by which banks evaluate their customers and their transactions. Some of this might be known to people who were already steeped in this portion of the Culture War, but I hadn't really realized until he laid it all out. Sure, I knew of stuff like OFAC, where the Treasury will give a list of foreigners/entities that US banks are prohibited from dealing with, and sure, they pay close attention to that list and scrutinize their customers/transactions accordingly. But they also use all sorts of other 'data products' to screen out potentially 'problematic' customers/transactions. One of the most widely used was developed by the SPLC, which if you're one of those conservatives who were vaguely annoyed by the SPLC but didn't know this already, get ready for your blood to boil.
Admittedly, as he points out, much of this was actually public information. I just never had it laid out in one place, in a way that really made it sink in what was going on.
Not just banks, but all kind of other tech/finance companies, including regular companies who have employer matching contributions to non-profits, use lists like those generated by SPLC, to filter who they transact with. They want to tell regulators that they take steps not to transact with The Bad People, and how else can they feasibly do that other than to just use the SPLC list? In one of those 'public, but I didn't really know about it/internalize it' moments, he talks about how Amazon used the SPLC list, and how Jeff Bezos talked about it in public Congressional testimony:
[Me here: returning to it after a minute]
[Me here: returning to it after another minute]
What's next is what may be the biggest impact of the SPLC indictment. Not some guys from some non-profit, no matter how influential, going to prison. Instead:
That is, he thinks that all those companies, those banks, finance companies, internet companies, employers matching contributions to non-profits, etc. will probably have to stop letting the SPLC tell them who The Bad Guys are that they shan't transact with.
His post goes on.
He describes an alliance of non-profits, organized by SPLC, that he describes as having engaged in an extremely lengthy campaign to pressure companies. He describes the mechanics of how their pressure campaign worked, how they burrowed themselves into the policies and workings of many companies. Again, I find it hard to summarize, and you should read, but his persistent theme is to imply that these folks were claiming to be non-partisan in this non-profit work, but building an extensive case that they were clearly targeting partisan targets, and their entire operation dried up after their partisan targets seemed to be no longer a target.
In his typical understated fashion, right near the end, he tells a parable, presumably for those who have eyes to see and ears to hear. My interpretation of his parable is that non-profit law requires folks to actually be non-partisan. Of course, non-profit law is not McKenzie's specialty, so others closer to that world will have to chime in. But it seems to me that he's clearly indicating that he thinks it's plausible, perhaps likely, and if The Powers That Be haven't thought of it yet they probably should, for the gov't to continue going after various folks who were involved in this.
1 - For, uh, reasons, I am aware that people can and do attach strings to donations plenty of times. Moreover, I'm aware that from the non-profit's perspective, this can be quite annoying unless they've already chosen to build boxes for those particular strings (e.g., "We have a 'X Fund', and donations marked as going to the X Fund will be used in the X Fund"). In fact, my sense is that plenty of non-profits will simply refuse donations that try to attach additional strings that they don't already have boxes for.
Ok, but what’s to stop thé SPLC from handing it’s list off to some other foundation?
50-odd years of legitimacy are difficult to hand off.
Whether or not that matters in practice probably varies by industry.
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