Briefing for Representative Jim Jordan (OH-4th)
Critical Constitutional Matter for the House Oversight Committee
Prepared October 19, 2012
American and Russian Opportunists Undermining U.S. Sovereignty and Corrupting U.S. Financial and Judicial Systems
Tom Clancy couldn’t make this up. Sadly, the facts seem to point to a self-styled Facebook “ecosystem” of principals who are pressing an internationalist agenda that undermines U.S. sovereignty and corrupts U.S. financial and judicial systems. They are also exploiting the innovations and stolen intellectual property from Ohio-based Leader Technologies to achieve their goal.
Facebook has one billion users—three times the U.S. population. Their continued unscrupulousness cannot be anything other than an external shock to our financial system. Congress needs to act to prevent more damage.
Lawrence Summers, who has held numerous senior positions in both the Presidents Bill Clinton and Barack Obama White Houses, looms large in this Facebook “ecosystem,” as do two of his protégés, American Sheryl Sandberg and Russian Juri Milner. Summers recently popped up in Silicon Valley as a newly-appointed “special adviser” to Facebook director, Marc Andreessen; coincidentally while Andreessen was completing a dubious $1 billion Facebook acquisition of Instagram — a company with 13 employees and no revenue. Andreessen was (and continues to be) a director in both companies. Summers also accepted appointment to the board of a financial transactions company, Square — a curious development given Facebook’s evident plan to make Facebook Credits an unregulated global currency. Summers’ interconnections within the Facebook “ecosystem” are astounding, most notably Summers’ 20-year World Bank associations with (a) Facebook COO Sheryl Sandberg, (b) Facebook’s second largest investor, Moscow-based Juri Milner and his companies Digital Sky Technologies and DST Global, and (c) Goldman Sachs and Morgan Stanley to whom Summers provided $20 billion in U.S. taxpayer bailout funds while chief of President Obama’s National Economic Council.
Goldman Sachs & Morgan Stanley
Goldman Sachs is an equity partner in Digital Sky Technologies (aka DST Global) with Juri Milner and Russian oligarch Alisher Asmanov. This partnership appears to have been created prior to the $20 billion bailout of Goldman Sachs and Morgan Stanley by the U.S. taxpayers in 2008. DST has invested up to $3 billion in Facebook. Goldman Sachs’ involvement in DST raises the obvious question as to whether DST may have used TARP funds to invest in Facebook. Goldman Sachs obfuscated when asked by Senator Chuck Grassley on July 24, 2010 where the bailout funds went that Goldman distributed to its partners overseas. Who in this administration said that was permissible? Goldman Sachs also underwrote a multi-billion dollar private market in Facebook’s insider stock sales while blocking American investors from participating. Fortune said the DST funds had “unknown origins.” Did Juri Milner use TARP funds received from Goldman Sachs to invest his billions into Facebook stock? Milner was involved in the late 1990’s in Bank Menatep which was caught laundering billions for the Russian mob as well as diverting $10 billion in World Bank and IMF funds.
Economist Code of Ethics
A recent gathering of American economists were highly critical of economists who use their knowledge of global financial systems for personal gain. Where does Lawrence Summers fall along the ethical continuum involving “recommend[ing] policy prescriptions that served their clients’ interests, at the expense of the economy as a whole?”This Wall Street Journal article continued “A leading group of academic economists has adopted conflict-of-interest rules in response to criticism that the profession not only failed to predict the 2007-2008 financial crisis but may actually have helped create it.”1
Sheryl Sandberg; Juri Milner; Moscow State University; The Russian Academy of Sciences; DST (aka Digital Sky Technologies); Oligarch Alisher Asmanov
The three figures in the Facebook “ecosystem”—Summers, Sandberg, Milner—appear to be at the epicenter of an international scheme to fleece the American public by using corrupt legal tactics, steal intellectual property required to implement the collusion, and establish an unregulated global money system. Remarkably, these three individuals played a central (and quite destructive) role in the early 1990’s in the failed Russian voucher system that spawned the current oligarchy economy in the former Soviet Union. Now they have one billion current users of their core (stolen) technology and would have a significant impact on the U.S. and world economies.
The curriculum vitaes of these individuals follow, compiled from publicly available sources.
Numerous Leader shareholders reside in Ohio’s 4th Congressional District which Congressman Jim Jordan represents.
Are the facts, opinions and circumstances herein merely a random string of unflattering coincidences, or are they evidence of a more nefarious agenda?
Click the image to enlarge the Summers-Sandberg-Milner biographies timeline
Figure 1: Biographies of Lawrence Summers, Sheryl Sandberg and Yuri Milner
Between 1991 and 1993 “wunderkind
professors of economics” including Larry Summers
were unleashed as “ersatz policy ‘experts’” by the World Bank
to implement their “flawed” plan for privatization of banking in the Soviet Union
This reckless voucher system resulted in the emergence of the current system of corrupt Russian oligarchies controlled by the Kremlin
; oligarchies that Summers is now exploiting.
Click image to enlarge
Figure 2: Summers, Sandberg and Milner were proponents of a Harvard-wunderkind-led, neo-classical Russian voucher privatization system that devastated reform and created the current oligarch system. They appear poised to finally capitalize on this tragedy via the Facebook “ecosystem.”
In 1993 Larry Summers
with Sheryl Sandberg’s
assistance engaged the energies of a then-Wharton MBA student, Russian Juri Milner
, to write the World Bank
paper “Voucher Investment Funds” advocating the Russian voucher system3
in their “insane and unnecessary haste.”4
While at the World Bank
working with Larry Summers
and Sheryl Sandberg
, Juri Milner
met Russian oligarch Mikhail Khodorkovsky
. He returned to Russia and worked for Khodorkovsky who owned Bank Menatep
which in 1999 became involved in the diversion of $4.8 billion in IMF
This money-laundering of an estimated $10 billion by the Russian mob via Bank Menatep also involved World Bank
Tellingly, Juri Milner does not disclose this association in any of his current biographies. Milner’s activities between 1994 and 2007 are murky.
Sheryl Sandberg served as Larry Summers’ Chief of Staff at the U.S. Department of the Treasury while he was Secretary of the Treasury under President Bill Clinton.
Click image to enlarge
Figure 3: While Summers and Sandberg worked for President Bill Clinton in the Treasury Department, Summers’ protégé Juri Milner worked at Bank Menatep, which laundered billions of dollars for Russian organized crime and diverted $10 billion in funds from the World Bank and the IMF.
Between 2001 and 2003 Fenwick & West LLP represented Columbus, Ohio inventor Leader Technologies as counsel and was privy to Leader’s trade secrets.
In late 2002 Leader Technologies filed for patents on its innovations, now called “social networking.”7
Earlier, in early 2000, Leader’s patent attorney James P. Chandler, III began learning about Leader’s innovations after he had entered into multiple legal attorney-client engagement letters, promising to keep Leader’s innovations strictly confidential. Hindsight shows that as fast as Chandler was learning about Leader’s innovations, he was secretly feeding them to the IBM Eclipse Foundation, who was in turn feeding the inventions to a rogue C.I.A. operation who was in the process of weaponizing the Internet. Zuckerberg and Facebook were one of their creations. Zuckerberg was a C.I.A. stooge.
During 2003 Leader Technologies prepared its innovations for market. New testimony reveals that Mark Zuckerberg and his Harvard roommates Dustin Moskowitz and Chris Hughes learned about Leader technology in early 2003, stalled other students working on other “facebooks” during the year, received a copy of Leader’s platform source code on about Oct. 28, 2003, and used it to launch Facebook on Feb. 4, 2004.
From Oct. 23, 2003 to Sep. 15, 2004 The Harvard Crimson
carried 22 news articles about 19-year old sophomore Mark Zuckerberg
. Only Bill Clinton
and George Bush
received more mentions. Al Franken received 16, Google 14, Microsoft 10, Bill Gates and Pope John Paul II 3 each. By comparison, the two other “facebooks” at Harvard, namely the Winklevoss Twins’ Harvard Connection and Aaron Greenspan’s houseSYSTEM, received 4 mentions each. Larry Summers
was President of Harvard during this time,8
creating the reasonable speculation that only he could have organized such inordinate coverage.
By May 2004 former PayPal
co-founder Reid Hoffman
had become a first investor and business coach for Mark Zuckerberg
. He has just recently started claiming that he was the first outside investor in Facebook and introduced Zuckerberg to Peter Thiel
, his fellow former PayPal executive. This account is markedly different from earlier accounts that credit Napster founder Sean Parker
with the introduction. The story morphs with each new telling. If Hoffman did coach Zuckerberg at Harvard, this contradicts Zuckerberg’s testimony in ConnectU
where he makes no mention of Hoffman.9
In Jun. 2004, former PayPal co-founder Peter Thiel is introduced to Mark Zuckerberg by Reid Hoffman or Sean Parker (depends upon who is telling the story) and immediately invests $500,000.
Leader Technologies’ patent on social networking publishes for the first time at the U.S. Patent Office. Zuckerberg hires Stephen Dawson Haggarty because the Leader code is too sophisticated to change. These changes in Groups functionality are heralded.
James W. Breyer
and Accel Partners LLP
announce publicly a $12.7 million investment in Facebook
James W. Breyer
of Accel Partners LLP
and Mark Zuckerbergsolicit to induce
third party developers at Stanford University to build apps on the Facebook
framework stolen from Leader Technologies
for the first time.11
On Nov. 21, 2006 Leader Technologies received U.S. Patent No. 7,139,761; the platform that is the Facebook engine.
has never disclosed exactly when they became a substantial investor in Moscow-based DST
(aka Digital Sky Technologies
) along with Russian oligarch Alisher Asmanov
and Juri Milner
, but they are believed to be “among DST’s five investors.”12
Approximately 70% of DST’s employees and executives in London and Moscow are former Goldman Sachs employees.13
invested $250 million in Facebook
Microsoft is implicated in the cover up of investments by the judges in Facebook and other conflicts of interest at the Federal Circuit
in Leader v. Facebook
Sheryl Sandberg left Google (where she oversaw the creation of Gmail) and became Chief Operating Officer at Facebook.
Facebook filed for an SEC exemption from the 500 shareholder rule. The exemption filed by Fenwick & West LLP, former corporate counsel to Leader Technologies.
Facebook received an SEC exemption from the 500 shareholder rule.16 The ostensible purpose of the exemption was with regard to the “employee benefit plan” and “for compensatory purposes,” although hindsight finds deceptive language including the inserted phrase on page 2: “(and may in the future grant RSUs [Restricted Stock Units] to directors and certain consultants as well)” and “could in the future have more than 500 holders of RSUs” and “only be issued to employees and directors of the Company and consultants.” No reasonable person would read this disclosure to include a $3 billion dollar Goldman Sachs “special purpose vehicle” to make a private “pre-IPO supplement” market that locked out American investors. SeeJan. 7, 2011.
The one-day turnaround of this SEC exemption is remarkable.
, Morgan Stanley
and State Street Corporation
received $22 billion in bailout funds from U.S. taxpayers in the “First Tranche” of the Emergency Economic Stabilization Act of 2008
Former FDIC Chief Sheila Bair
says it was not necessary. Could the agendas finally be revealed in this briefing?18
sues Facebook for patent infringement captioned Leader Technologies, Inc., v. Facebook, Inc.
, 08-cv-862-JJF-LPS (D.Del. 2008).19
nominated by President Barack Obama
to head of the National Economic Council
despite criticism that Summers played a role in the 2008 economic meltdown.20
Click image to enlarge
Figure 4: Summers and his protégés make their moves to consolidate their holdings in the Facebook “ecosystem” having (a) stolen the Facebook platform technology from Leader Technologies, (b) fleeced a $3 billion private market of investors to pump up the pre-IPO valuation to $100 billion, and (c) fleeced the public market again by raising over $10 billion in cash at an inflated valuation while the insiders cashed out over $13 billion of their shares on Day 3 of the IPO. Juri Milner alone sent about $3.79 billion back to Moscow. Accel Partners LLP and James W. Breyer pocketed $6.5 billion.
announced a $200 million investment from DST Moscow
and Juri Milner
, arranged by his new COO, Sheryl Sandberg
. Zuckerberg said Facebook is relying on DST for its Facebook Credits
Figure 5: Facebook Credits Word Mark – The new world currency?
USPTO, Ser. No. 77934145, Filed Feb. 11, 2010.
Fenwick & West LLP
discloses Leader Technologies’
patent as a prior art reference on Marc Andreessen’s
social networking patent applications, but subsequently fails to do so on all of Facebook 700+ patent applications. This willful fraud
, called “inequitable conduct” in the patent world, if true, created a strong motive for Fenwick & West to undermine Leader Technologies, their former legal client in 2001-2003.22
James W. Breyer: His money is not on the United States. (Breyer extracted $6.5 billion on Day 3 of the IPO at $37.58 per share)
Facebook’s Chairman and largest investor James W. Breyer, Managing Partner of Accel Partners LLP
Palo Alto, CA said in Munich, Germany that the decline of venture investing in the U.S. is “probably a good thing” and says there is “enormous opportunity globally” and that new venture capitalists should be “on a plane to London, Bangalore and Beijing, and not necessarily Palo Alto, California;” apparently selling the U.S. short.23
Collusion with Foreign Powers Is Destabilizing U.S. Financial Interests and Property Rights
disclosed that they sent $4.3 billion of the taxpayer stimulus funds overseas.24
Both Goldman Sachs
and Morgan Stanley
have also admitted using TARP
funds to pay executive bonuses.25
Given this questionable conduct in supporting concealed “ecosystems,” did they also send money to their DST-Moscow
business partners? Were some of these funds used in Goldman’s Jan. 2011 self-described multi-billion dollar “pre-IPO supplement” private market by DST-Moscow, Juri Milner
and tight-with-the-Kremlin oligarch Alisher Asmanov26
(who became the second largest Facebook
stockholders behind James W. Breyer
and Accel Partners LLP
The Leader v. Facebook
patent infringement trial results in a split verdict. Facebook
was found guilty of infringement on all 11 of 11 counts. Leader Technologies
lost on a dubious “on-sale bar” claim.27
Overturn of the jury seemed likely given the jury’s admission to the judge that they had no evidence and the “clear and convincing” burden of proof is a “heavy burden.”
Judge Leonard P. Stark’s appointment by President Barack Obama was confirmed by the U.S. Senate, just nine (9) days after the Leader v. Facebook split verdict.
uses the SEC
exemption obtained by Fenwick & West LLP
on Oct. 14, 2008, which was created as a “special purpose vehicle” to pool thousands of investors, but count them as one investor, and make a private market in Facebook insider stock.28
Goldman Sachs then infused $500 million into Facebook
; $50 million from Goldman itself, and $450 million from DST Moscow
. This investment pumped Facebook’s valuation to $50 billion. Fortune
magazine described the source of Alisher Asmanov
’s funds as “not clear.”29
Tellingly, Fenwick does not disclose such a “special purpose vehicle” intent to the SEC. See
Oct. 13-14 2008.
Goldman Sachs “slammed the door on U.S. clients” (The Wall Street Journal) from participating in the private offering of Facebook stock after receiving inquiries from the brokerage community about the 500 shareholder rule.30
Longstanding SEC rules required Goldman Sachs to have counted each of these pooled investors separately. Otherwise, brokerage houses could create private markets for any client by first buying the client’s stock, subdividing the stock themselves, then make their own private, unregulated stock exchange—which is exactly what Goldman did. Consequently, by the rules other companies must follow, Facebookbecame a de facto, noncompliant public company in January of 2011. Nonetheless, the 2008 SEC exemption request by Fenwick & West LLP appears to have been the ruse that Goldman Sachs would use as its ostensible authority to pursue this private market; effectively taking Facebook over the 500 shareholder rule five-fold (this number had never been disclosed; including not in the S-1).
Facebook used $1 billion of this unregulated pre-IPO money to make the dubious purchase of Instagram in which Larry Summerspopped up suddenly as a Marc Andreessen “special adviser.”
Judge Leonard P. Stark refused to set aside the on-sale bar verdict in Leader v. Facebook; forces Leader Technologies to appeal.
DST’s Juri Milner
of Moscow, Russia, purchased a 25,000 square foot, 11 acre Silicon Valley mansion for $100 million; called “one of the most expensive homes in the U.S.”31
More use of TARP funds?
announced it would outsource 1,000 American jobs to Singapore
Fenwick & West LLP—Material Securities Nondisclosure
, Goldman Sachs
, Morgan Stanley
and Fenwick & West LLP
issue the first of many iterations of the Facebook S-1 registration and systematically
failed to disclose the risks to investors associated with the verdict of “literal infringement” on 11 of 11 counts of patent infringement33
of Leader Technologies’
U.S. Patent No. 7, 139,761.34
Fenwick & West LLP—Material Breaches of Attorney-Client Privilege
Fenwick & West LLP’s
attorney Tyler A. Baker
, speaking for Managing Partner Gordon K. Davidson
(the lead Facebook IPO attorney; See
Facebook S-1 tombstone),35 denied
any conflict of interests as Leader Technologies’
corporate counsel and close collaborator with Leader’s patent attorney Professor James P. Chandler
during the 2001-2003 when Leader’s patents were being prepared. Leader Technologies said that Fenwick did not seek a conflicts waiver
before agreeing to represent Facebook. Leader had given Fenwick & West LLP copies of Leader’s invention source code for their client files to which multiple Fenwick personnel had access.
On the same day that Facebook began its IPO Road Show in New York City, the Federal Circuit Court affirmed Facebook guilty of “literal infringement” on 11 of 11 counts, but refused to overturn the jury’s dubious “on-sale bar” ruling in Leader v. Facebook. Leader petitioned for rehearing citing the numerous mistakes of law. See Jul. 27, 2010.
Day 3 of the IPO: Facebook
insiders cashed in $13.26 billion of their shares in a coordinated sell-off
at $37.58 per share. Facebook Director James W. Breyer
and his company Accel Partners LLP
cashed in $6.5 billion of their Facebook stock. The sell-off also included Microsoft
($246 million), Peter Thiel
($633 million), Mark Zuckerberg
($1.13 billion), Goldman Sachs
($914 million), Meritech Management
($263 million) and Juri Milner / DST / Digital Sky Technologies / Mail.ru
Material Undisclosed Judicial Conflicts of Interest
Judicial financial disclosure filings revealed that at least two of the three Leader v. Facebook
judges, namely Presiding Judge Alan D. Lourie37
and Judge Kimberly A. Moore
have substantial undisclosed investments in Facebook
appears, unexpectedly according to the financial press, as “special adviser” to Marc Andreessen
just in time to cash in on the dubious $1 billion Instagram
purchase by Facebook
Internet pioneer, inventor and former Sun Microsystems Director of Network Architecture, Dr. Lakshmi Arunachalam
files an amicus curiae
(friend of the court) brief on behalf of the public, pointing out the egregious mistakes of law in Leader v. Facebook
Her motion was never docketed
by the Clerk of Court Jan Horbaly
, but was nonetheless denied by the Court.
Material Evidence Withheld by Mark Zuckerberg; Federal Courts Are Coddling Facebook42
experts reveal in the Paul Ceglia v. Mark Zuckerberg
litigation that Mark Zuckerberg concealed 28 computer hard drives
and Harvard email archives
in Leader v. Facebook
. The Federal Circuit Court
ignored this explosive new evidence.43
files a renewed motion pointing out the egregious and undisclosed conflicts of interest inside the Court.44
This motion was never docketed
by the Clerk of Court Jan Horbaly
Federal Circuit Court issued a surprising four-page Order denying Dr. Arunachalam’s July 27, 2012 renewed motion (even though the Clerk of Court had never docketed it). The Order containing numerous false and misleading statements evidently designed to cover-up judicial misconduct.
Facebook director Peter Thiel
dumped another $400 million of his Facebook
shares on top of the $633 million he dumped on Day 3 of the IPO prompting CNBC’s Jim Cramer
to ask live on camera “where’s the outrage?”45
Banana Republic Cronyism at the Federal Circuit
The Federal Circuit Bar Association
filed a Request to have the Aug. 10, 2012 Order be made precedential. This move would essentially absolve
the judges of their wrongdoing in this case.46
Four of Facebook’s attorneys and Microsoft, one of Facebook’s largest shareholders, populate the “Leaders Circle” at this bar association. See
Amicus Curiae Dr. Arunachalam
responded with a stinging critique of The Federal Circuit Bar Association’s
attempt to cover-up the judicial misconduct and failure to disclose conflicts of interest. This motion was also never docketed
by Clerk of Court Jan Horbaly
. The Bar Association also failed to disclose its own conflicts of interest in that four different Facebook law firms, namely Fenwick & West LLP
, Gibson Dunn LLP
, Orrick Herrington LLP
, Weil Gotchal LLP
, participate in the Bar Association’s “Leaders Circle” and one of Facebook’s
largest shareholders, Microsoft
, is a director of the Bar Association.47
Such nondisclosure renders the Bar Association’s Request dubious at best.
Naked Corruption at the U.S. Patent & Trademark Office; Inequitable Conduct
The U.S. Patent Office Patent Trial and Appeal Boards
has just overruled
reexamination rulings affirming Leader patent claims over the prior art in U.S. Patent No. 7,139,761
. They are attempting to have an Examiner invalidate ALL of Leader’s 35 claims in an administrative decision (only 11 claims were asserted at trial). Such action by the Patent Office exhibits unconscionable favoritism and evident collusion. The action is a naked attempt to protect Fenwick & West LLP
from having their 700+ patent filings invalidated for “inequitable conduct” (fraud).48 See
Jul. 24, 2009.
James W. Breyer’s Self-fulfilling Prophesy
It also appears that the U.S. Federal Courts and U.S. Patent Office are equally supporting Breyer’s prophesy. If inventors and private property are not protected, then American innovation is not worthy of investment.
Or, is all this just “innocent” and “coincidental?”49
In closing are cautionary words from Professor Hy Berman, eminent American historian, and Professor Emeritus of History at The University of Minnesota, who served as a political adviser to former Vice President Hubert Humphrey and is a close friend of former Vice President Walter Mondale.
“As an American historian, I am particularly concerned by the implications of allowing powerful forces to violate intellectual property rights. Our economic and industrial development was made possible by inventors, innovators, scientist and engineers who developed the technology undergirding our national development. Through our patent and copyright protection system, these innovators were able to be rewarded for their efforts. If intellectual property theft by the powerful and well-connected is not stopped, future innovation is jeopardized.”50
Abuse of the Public Trust
Opportunism means consciously taking selfish advantage of circumstances with little regard for what the consequences are for others. The opportunism described herein uses the special knowledge vested in “Facebook ecosystem” cronies whereby the economists and lawyers involved use their knowledge of the weaknesses or our public institutions for their own selfish and illegal gain.
Will we permit such misconduct to continue, or will we act? Will we act to right the injustices perpetrated in this matter against both the American and Russian peoples. Will we act to stop this flagrant abuse of the public trust?
America Is The Land Of Opportunity,
The Fleecing of Propriety
The evident agenda of the principal cronies in the Facebook “ecosystem” is to establish a means of international exchange via Facebook Credits that is free of U.S. legal and banking regulations. They appear willing to go to whatever lengths necessary, legal and illegal, to achieve this goal.
If the Facebook “ecosystem” is allowed to succeed, they will do so having fleeced the American public three times:
- 2003-2004 theft of a validly issued U.S. Patent No. 7,139,761 invented by Leader Technologies, Inc., Columbus, Ohio;
- 2008 fleece of the American public by the so-called “Economic stimulus” whereby Summers, Breyer, Milner and their cronies received American taxpayer dollars in a “legal” transfer of wealth to their cronies; and
- 2012 fleece of the American public by the Facebook IPO whereby, once again, Summers, Breyer, Milner and their cronies took American investor monies in another “legal” transfer of wealth to their cronies?
The Facebook “ecosystem” has learned that in aggression there is profit. Has the American public had enough? Are we going to let these people succeed with their opportunism, their abuse of due process, their theft of property, their abuse of power?
Finally, shall we let these unscrupulous people continue to press their agenda to establish a “virtual” world currency called Facebook Credits or similar systems emerging from “London, Bangalore and Beijing” using stolen technology and funds fleeced from the American public?51
If Congress fails to act, a financial “army” of more than one billion Facebook users (more than three times the U.S. population) who are poised to undermine our country. What damages will their external shock cause to our already weakly growing, battered economy?
Available from Americans For Innovation and
Against Intellectual Property Theft
October 19, 2012
Continue reading HERE.