HOW BIG TECH PUTS HIT-JOBS ON CITIZENS

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HOW BIG TECH PUTS HIT-JOBS ON PUBLIC CITIZENS

 

‘Crush This Lady.’ Inside eBay’s Bizarre Campaign Against a Blog Critic.

Security employees orchestrated deliveries of live cockroaches, pornographic videos and a mask of a bloody pig’s head

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The box of live cockroaches delivered to their door was the last straw for David and Ina Steiner.

For more than two decades, the professional collectors ran a niche e-commerce blog out of their home in the Boston suburbs, with a focus on Amazon.com Inc. AMZN -1.09% and eBay Inc. EBAY -2.07%

Then, last August, the couple started receiving threatening emails and tweets. Not long after, according to federal investigators, a package arrived with a mask of a bloody pig’s head. Next, they received a funeral wreath. Neighbors were sent pornographic videos addressed to one of the Steiners. Strange cars seemed to follow them around their small town of Natick, Mass.

They repeatedly called the local police, who say they initially thought the incidents might be pranks. The Steiners photographed one of the suspicious vehicles tailing them. With the photo, the local police tracked the license plate to a rental car checked out to a Veronica Zea, staying at Boston’s Ritz-Carlton hotel along with a man named David Harville, according to an affidavit from a Federal Bureau of Investigation agent working the case.

 

Then the police discovered something really curious: Both Ms. Zea and Mr. Harville worked for eBay, the $34 billion online marketplace based more than 3,000 miles away in San Jose, Calif. The once dominant site was a frequent target of the Steiners’ blog posts on their site, called ECommerceBytes.

Among the items sent anonymously to the Steiners was a grief-themed book and a bloody pig mask.

Photo: U.S. Attorney's Office, District of Massachusetts (2)

That discovery kicked off a criminal investigation into an alleged corporate harassment campaign that reached into eBay’s executive ranks. The campaign was as bold as it was bizarre, beginning with pranks inspired by the 1988 movie “Johnny Be Good” and escalating to more sinister threats and stalking, according to the affidavit.

Last Monday, the U.S. attorney’s office for the District of Massachusetts said it charged six former eBay executives and employees, all part of its security team, with taking part in a weekslong harassment campaign that included threatening emails and tweets, fake Craigslist posts and the mysterious deliveries.

 

Now the U.S. attorney’s office is investigating whether eBay targeted any other critics with harassment campaigns, according to a person familiar with the investigation.

This account of what happened is based on more than two dozen interviews with current and former eBay executives and people familiar with the company, government and police officials and documents released by the U.S. attorney’s office, including the affidavit from FBI agent Mark Wilson.

E-Commerce StrugglesEBay used to be more valuable thanAmazon.com, but recent years have beendifficult.Market valueSource: FactSet

The alleged cyberstalking campaign was launched soon after Devin Wenig, eBay’s chief executive at the time, and his chief communications officer, Steve Wymer, embarked on a more aggressive public-relations strategy that included challenging critics such as ECommerceBytes, people familiar with the matter say.

As part of that strategy, eBay executives tried to prove their suspicion that its rival Amazon.com Inc. was helping to fund ECommerceBytes, two of these people said. They ultimately didn’t find any evidence of that. An Amazon spokesman said the company has never funded the site.

Mr. Wenig’s wife, Cindy Wenig, had complained to eBay’s security team about the tone of ECommerceBytes’ reader comments about her husband, particularly after an unknown man had shown up at their house.

Mr. Wenig, who left the company last fall, said in an interview he didn’t order any type of harassment of the Steiners, nor was he aware of the security team’s efforts. Mr. Wenig said he was in a monthlong sabbatical in Italy when the alleged activity took place last August and didn’t find out the details until they were made public on June 15.

“It’s totally embarrassing, and it’s just ridiculous,” he said. “It’s so not the culture of the company.”

Mr. Wymer, his former communications chief, said, “I would never condone or participate in any such activity.”

Devin Wenig, who stepped down as eBay CEO last fall, said he didn’t order any type of harassment.

Photo: Jacob Kepler/Bloomberg News

The woman said to have rented the car, Ms. Zea, an eBay contractor who worked as an intelligence analyst, declined to comment. Mr. Harville, eBay’s former director of global resiliency, didn’t respond to requests for comment. They were two of the six charged with conspiracy to commit cyberstalking and conspiracy to tamper with witnesses.

When Mr. Wenig took over eBay in 2015, the company had been struggling to compete with a surging Amazon in the marketplace business. He was intent on restoring it to its glory days as a tech darling. He sometimes wore a black T-shirt with a white pirate emblem, given to him by employees, to encourage disruptive thinking. He redesigned eBay’s logo and poured millions of dollars into renovating its San Jose headquarters.

 

Yet even as he sought to aggressively recast eBay as a Silicon Valley underdog, he often reacted forcefully to what he perceived as negative coverage of the company. Former employees say he could be set off by even the smallest of slights, including reader comments on blog posts, YouTube videos and media reports about his compensation. Some of his concerns about critical coverage or comments were voiced in text messages he exchanged with Mr. Wymer.

After a May 31, 2019, post on the Steiners’ site analyzed Mr. Wenig’s remarks at a shareholder meeting, according to the affidavit, the CEO texted Mr. Wymer. “I couldn’t care less what she says,” he said, referring to Ms. Steiner. “Take her down.” Mr. Wenig said he was referring to the aggressive media campaign.

EBay has at other times pressured detractors to remove negative content.

Longtime seller Casey Parris said eBay threatened him with a lawsuit if he didn't remove a YouTube video the company perceived to be negative.

Photo: Theresa Cox

In late 2018, eBay executives pushed longtime seller Casey Parris to remove what the company perceived to be a negative YouTube video about the company, saying the company “didn’t like the tone” and threatened a lawsuit if it wasn’t removed, Mr. Parris said.

When he asked his contact at eBay how the company would have even seen his video, Mr. Parris said, he was told that its security team was watching all the time. He said he recently told eBay about the incident and the company said it would investigate. “I’m still scared by it,” he said.

 

Another seller, Danni Ackerman, said eBay stopped inviting her to events after she started a YouTube channel that criticized policy changes that affected sellers, as part of what she called the company’s “bully culture.”

A spokeswoman for eBay said the company “has always sought out candid and constructive feedback from all of our stakeholders, in particular our seller community. We deeply value this input.”

In a blog post addressed to sellers last week, Jordan Sweetnam, head of eBay’s marketplace business in the U.S., Canada and Latin America, said the alleged acts by eBay security officials “were isolated incidents and not a systemic issue.” EBay held a private Zoom call Thursday for its sellers, assuring them that all the bad apples at the company were gone, and that eBay was looking into individual claims, according to a person familiar with the call.

ECommerceBytes was founded in 1999 after Mr. Steiner, 61 years old, an auction enthusiast and video producer, had difficulty placing a listing of video equipment on eBay. Figuring other sellers might also be having similar trouble, the Steiners launched the site—then called AuctionBytes.com—to help others navigate the online commerce world.

Ms. Steiner, 58, a longtime writer and editor, writes most of the website’s content. Both of the Steiners are collectors, browsing garage sales in their free time.

“Here was a new market that no one was writing about, so they began to cover the market in an agnostic way,” said Gary Sohmers, an early eBay seller and longtime appraiser who knows the Steiners. The Steiners didn’t respond to requests for comment.

Though obscure, the site built a significant following among eBay sellers, with several thousand subscriptions by 2019. The reader comments on the posts were at times snarky and personal.

Some taunted eBay executives, including then-CEO Meg Whitman and John Donahoe, now CEO of Nike Inc. A comment from 2017 called Mr. Wenig the devil, according to the affidavit.

Share-price and index performanceSource: FactSetAs of June 24, 4:12 p.m. ET

Mr. Wenig, a New York transplant who once ran the financial and media businesses at Thomson Reuters Markets LLC., became CEO after eBay spun off payments giant PayPal Holdings Inc. in 2015.

In January 2019, hedge fund Elliott Management Corp. disclosed a more than 4% stake in eBay and said the company should consider selling its StubHub ticketing business and classifieds-ads unit and focus on repairing its core marketplace.

 

By early that year, Mr. Wenig and his public-relations team had decided to alter the company’s public-relations strategy. Rather than responding to interview requests or sending out news releases, they planned to take a more aggressive approach with publications that wrote negative stories about eBay, according to people familiar with the decision.

In the recent interview, Mr. Wenig said he didn’t spend any more or less time than the average CEO thinking about media coverage. “I think all CEOs care about the coverage of their company,” he said.

In April 2019, Ms. Steiner wrote a short article about Mr. Wenig’s compensation, based on a public Securities and Exchange Commission filing, titled “eBay CEO Devin Wenig Earns 152 Times That of Employees.” A commenter posted: “What a foolish Board. What an overpaid empty suit. What a joke.”

According to the affidavit, Mr. Wymer, then eBay’s communications chief, texted Mr. Wenig that they would “crush this lady.”

The Wall Street Journal wrote a 164-word article about Mr. Wenig’s $18.2 million compensation around the same time, with the headline “Ebay Chief Executive Wenig Got Raise in 2018.”

“F— them,” Mr. Wenig texted Mr. Wymer, according to the affidavit. “The journal is next on the list” after Ms. Steiner. After brainstorming ways to go after the Journal, eBay employees ultimately abandoned the effort, according to people familiar with the plans.

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EBay executives decided to examine Amazon’s relationship with ECommerceBytes, hoping to be able to point out to a reporter or publish a blog post on its website arguing that it was improper for a publication to accept money from an e-commerce giant it was writing about, according to people familiar with those plans. EBay also is suing three Amazon employees who it claims worked to illegally recruit its third-party sellers.

By the summer of 2019, James Baugh, then eBay’s director of safety and security, was laying the groundwork for an alleged campaign to silence the Steiners, according to the affidavit. Mr. Baugh, a native of Arkansas and longtime security executive, joined the company in 2016.

At one meeting, the affidavit said, Mr. Baugh showed his team a clip from the 1988 film comedy “Johnny Be Good,” in which two friends arrange for a series of odd, unwanted deliveries to their football coach. Mr. Baugh allegedly said he wanted something similar to happen to the Steiners.

Mr. Wenig’s wife had texted Mr. Baugh in July about a reader comment that called Mr. Wenig a “con artist and thief,” under an ECommerceBytes article. “The author gets people worked up with the way she skews her stories,” Ms. Wenig wrote, according to the affidavit.

A spokeswoman said Ms. Wenig was concerned about the safety of her family after one commenter threatened a “crash landing” for Mr. Wenig shortly before the family was planning to fly to Italy.

In an August text exchange cited in an FBI affidavit, Steve Wymer, then the company’s chief communications officer, told eBay's former senior director of safety and security, James Baugh, that he would ‘embrace managing any bad fall out’ from actions taken against the Steiners.

Photo: U.S. Attorney's Office, District of Massachusetts

ECommerceBytes published several more negative stories about eBay around the time of its annual seller conference in Las Vegas in July 2019. A text exchange cited in the affidavit indicates that after being alerted to the stories by Mr. Wymer, Mr. Wenig texted him: “If you are ever going to take her down, now is the time.”

“On it,” Mr. Wymer responded.

He texted Mr. Baugh the message from Mr. Wenig, adding, “She is biased troll who needs to get BURNED DOWN.”

“Copy that,” Mr. Baugh said. “I have a plan B. I will put it in motion.”

In meetings with his analysts and other members of eBay’s security team, Mr. Baugh warned that the campaign had to be kept confidential, but told them he had support of executive management.

According to the affidavit, the planned campaign against the Steiners was supposed to have two parts. After the initial harassment, eBay would begin a “white-knight strategy” of offering to help the victims end the mysterious communications and deliveries, the affidavit said. Local police stepped in before that happened.

Mr. Baugh, who also was charged by the U.S. attorney’s office, didn’t respond to requests for comment, nor did his lawyer.

In Natick, Ms. Steiner began getting dozens of emails and newsletters she hadn’t signed up for with subjects like “Cat Faeries,” and “the Satanic Temple.” An anonymous Twitter user sent her private messages, demanding her response and then threatening “I guess im goin to have to get ur attention another way bitch…”

An anonymous Craigslist ad targeting the Steiners.

Photo: U.S. Attorney's Office, District of Massachusetts

On Craigslist, a post popped up with the Steiners’ address, and a title “M/F couple seeking activity partner.” Another post announced “BLOCK PARTY in Natick - Let’s have some fun!”, again with the couple’s address, and inviting people to stop by “anytime of day or night.”

Once the police connected the activity to eBay, the executives involved allegedly tried to cover their tracks.

Mr. Baugh sent a message from his personal cellphone to Mr. Wymer, saying he and members of his team were cooperating, that they had done nothing illegal, and asking “if there is any way to get some top cover that would be great.” Mr. Baugh directed his team members to delete their WhatsApp and phone data, according to the affidavit.

The eBay board’s audit committee learned of the investigation in late August, and the broader board was briefed the following month during a five-hour call led by lawyers at Morgan Lewis & Bockius, according to people familiar with the matter. The board was told the investigation found no evidence that Mr. Wenig was aware of the actions, these people said.

The company placed Messrs. Baugh and Harville and another member of the security team on administrative leave on Aug. 30. The company later fired all six who were charged, and Mr. Wymer.

U.S. Attorney for Massachusetts Andrew E. Lelling announced charges against the former eBay employees on June 15.

Photo: CJ Gunther/EPA/Shutterstock

When Mr. Wenig was pushed out as CEO in late September, the directors said the main reasons were the company’s financial performance and his disagreement with a large investor about the best path forward for the company, according to people familiar with the matter. The investigation also played a role, and directors blamed him for setting a cutthroat tone at the top. Mr. Wenig received a $57 million exit package.

On the day the U.S. attorney’s office announced its charges, Ms. Steiner posted the press release to ECommerceBytes, with no further comment.

 

 

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