Equifax is a garbage company whose claim to fame is letting damn near everyone’s social security number out into the open (among a wealth of other sensitive information), and then not telling anyone about it for a few months while their executives sold their stock ahead of the coming shitstorm. To recap what has transpired with the credit monitoring agency this year:
1. In early March, Equifax began notifying a small number of outsiders and banking customers that they were bringing in a security firm to help investigate a breach.
2. In late July, Equifax suffered another breach through the same well-known and unpatched hole that hackers found their way through in March, compromising roughly 143 million accounts. They did not announce this hack to the public.
3. Shortly after the hack, in early August, three Equifax executives named John Gamble, Joseph Loughran, and Rodolfo Ploder sold shares worth $1.8 million. The public still had no knowledge of the breach.
4. After announcing the hack in September, Equifax devised a trick that lawyers worried would waive your right to a lawsuit against them. Prior to the webpage showing you if your data had been compromised, they made you agree to some fine print that may have let them off the hook entirely. After a widespread uproar, they removed it. To top it all off, they subsequently left a tweet up for 24 hours directing their concerned customers to a phishing website.
5. Shortly after initial reports that Tom Petty had died on Monday, and while we were still piecing together the horror that occurred in Las Vegas, Equifax tried to slip more bad news past us while we grieved.
If we actually lived in a capitalist society, Equifax would cease to exist in the wake of this massive failure. However, we don’t live in a capitalist society—but an oligarchic one—and America’s least favorite government agency just handed millions of taxpayer dollars to a company which has proven that it doesn’t deserve to exist anymore. Per Politico:
The IRS will pay Equifax $7.25 million to verify taxpayer identities and help prevent fraud under a no-bid contract issued last week, even as lawmakers lash the embattled company about a massive security breach that exposed personal information of as many as 145.5 million Americans.
A contract award for Equifax’s data services was posted to the Federal Business Opportunities database Sept. 30 — the final day of the fiscal year. The credit agency will “verify taxpayer identity” and “assist in ongoing identity verification and validations” at the IRS, according to the award.
The notice describes the contract as a “sole source order,” meaning Equifax is the only company deemed capable of providing the service.
Imagine you walked into work, and did something so unfathomably stupid that put almost all of your customers at risk of identity theft. Then imagine that not only did you not tell your boss about it, but you made financial trades to benefit yourself based on knowledge that you should have disseminated to the victims of your mistake. To top it off, picture getting a raise without having to even fight for it. Sounds completely insane, right? Well, that’s just another day in the life of America’s corporate oligarchs. Republican Senator Orrin Hatch of Utah put it succinctly:
“In the wake of one of the most massive data breaches in a decade, it’s irresponsible for the IRS to turn over millions in taxpayer dollars to a company that has yet to offer a succinct answer on how at least 145 million Americans had personally identifiable information exposed.”
The IRS defended their decision in a statement:
Following an internal review and an on-site visit with Equifax, the IRS believes the service Equifax provided does not pose a risk to IRS data or systems. At this time, we have seen no indications of tax fraud related to the Equifax breach, but we will continue to closely monitor the situation.
If you think that we still live in a capitalist economy, you’re living under a rock. For all the issues with capitalism, what 2017 America resembles is textbook oligarchy—which can take root in any economic system (and I would argue that the history of mankind proves that all economic systems eventually devolve into this wealthy man’s inevitability). This Equifax mess is the perfect example of how our economy is littered with firms either too big or too connected to fail. Equifax is sure looking like the latter with this no-bid contract, even as they look like the former given that we don’t really have much of a choice whether to use Equifax or not. As dismaying as this case is, Equifax is far from the only titan in our economy that exhibits these characteristics.
American identity is defined by our competitiveness and our desire to prove ourselves, but the c-suites of corporate America seem to have lost all pride in this regard. Their actions over the last half-century demonstrate a group of mainly white, male executives far more concerned with doing as much as they can to eliminate even the possibility of competition, all so they can gouge their customers for even more money while they cut their workers’ wages. It’s cowardice marketed as economic savvy.
The next time you hear the Republicans go on and on and on about our beloved “job creators,” know that they’re not talking about your local small business owner, but people like Equifax’s CFO—John Gamble—who sold almost a million dollars in stock, not filing it under the 10b5-1 scheduled trading plans. Equifax donated fairly evenly to both parties up until 2012, when they gave twice as much to Republicans as Democrats, and that ratio skyrocketed to a little more than five to one in 2014 and 2016. If you don’t think that this change in behavior, the breach and the GOP’s unified relationship with big business all point towards a larger issue of increased rent-seeking by Equifax, you’re not paying attention to modern America.
Everyone does this. We have the most fucked up health care system in the world because insurance companies grease both sides of the aisle, ensuring that any legislation which comes out of the most powerful entity in the world favors them more than anyone. Same with Wall Street. Our political system ensures that you must pass through a donor’s primary before you ever get the chance to run in an actual primary, and the result of the widespread corruption in Washington is that our oligarchs don’t just avoid punishment for incompetence and/or malfeasance on a scale like Equifax, but they’re rewarded for their largesse afterwards.
Equifax lost 145.5 million social security numbers and other personal information. To put that figure in context, the IRS said that they received 152.5 million tax returns in 2016. Equifax didn’t even take the basic and incredibly necessary step of encrypting your data. Any company that doesn’t encrypt sensitive customer information is too incompetent to survive in a purely supply and demand driven economy, and if we had the ability to choose our vendor in this space, Equifax would be on its way to the graveyard. But we don’t, because this is America: the land of the oligarch, and the home of their subjects.
Jacob Weindling is a staff writer for Paste politics. Follow him on Twitter at @Jakeweindling.