Dumb and Dumber — Secret Service Secrets, and Possibly the Worst CEO Ever?

Hi everyone! Thanks for joining me here on Wells $treet, where one of my jobs is to point out bad business behavior and other money-related malarkey, hoping to nudge humanity towards a smarter approach. It’s both a burden and a gift.

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I’m still in Japan, but bad news travels fast.

First, some great news. The FCC is ordering phone companies to put a stop to those awful spam calls selling scam auto warranties. Apparently there have been 8 BILLION of these calls in the last four years (5 billion of them to my phone). “The calls are coming from Roy Cox, Jr., Aaron Michael Jones, and related companies and associates,” reports Bloomberg. Whoever Roy and Aaron are, let’s start calling them every minute of every hour of every day.

Fingers crossed that the situation improves. I never thought I’d see it happen, but the government is actually trying to do something for me instead of to me.

Sadly, that is not always the case, as we are about to find out.

DUMB — Secret Service Secrets

The main job of Secret Service agents is to protect federal political officials and their families, often risking their lives to do so. Those protecting former Vice President Mike Pence on January 6th feared the worst, according to Congressional testimony from an anonymous White House security official.

But taxpayers don’t pay the Secret Service to keep secrets. And when agents are busy protecting the Leader of the Free World, who may or may not have egged on an illegal insurrection, and when that Leader may or may not have tried to grab the wheel of a vehicle to steer it back to the Capitol, and when there’s a Congressional investigation into the matter, and when (inhale) the watchdog for the Department of Homeland Security asks the Secret Service for text messages from January 5-6, 2021… you turn them over.

You don’t delete them.

A text from former White House aide Cassidy Hutchinson to then White House Deputy Chief of Staff for Operations Anthony Ornato appears on screen above the Select Committee (inhale) to Investigate the January 6th Attack on the U.S. Capitol./Kevin Dietsch, Getty Images

The Inspector General (IG) for the Department of Homeland Security, which oversees the Secret Service, wants to know why texts between agents and others during those dark days of January were deleted after the IG asked to see them. The watchdog has now launched a criminal investigation into the matter.

The Secret Service says the texts disappeared during a scheduled changeover to new phones, and that the IG’s request came after they were deleted. “The insinuation that the Secret Service maliciously deleted text messages following a request is false,” said the agency’s head of communications, who added that the Secret Service has already turned over about 800,000 emails and chats related to events around January 6th.

Just not the texts on January 6th.

“We need to get to the bottom of whether the Secret Service destroyed federal records or the Department of Homeland Security obstructed oversight,” said Sen. Gary Peters, D-Mich.

The National Archives asked the Secret Service to investigate what happened to the texts and whether they can be recovered. Investigate itself? The IG said, uh, no. That’s his job, and he told everybody to stop digging for answers until he concludes his own probe. (Also, does this mean that when you delete a text, it’s really gone? Not even the United States Secret Service or the Department of Homeland Security can retrieve it?)

Finally, has anyone tried to tally up the cost of 1/6 — the damage, the deaths, the investigations, the hearings, the lawyers, the security detail for Cassidy Hutchinson? On the upside, the hearings have occasionally been good for ratings (though not for Fox). Glad someone’s winning! As CNBC’s Jim Cramer says, “There’s always a bull market somewhere!”

DUMBER — Move Over, Wells Fargo…

In the kind of news we’ve unfortunately come to expect from Wells Fargo, this time it’s Bank of America making the wrong kind of headlines. BofA has been fined $225 million by two federal agencies that claim the bank deceived customers and mishandled disbursement of unemployment benefits during the pandemic.

Image credit: VIEWpress/Getty Images

Taxpayers in about a dozen states — including me in California — have been paying BofA for years to directly deliver jobless benefits, often via prepaid debit cards. Now the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau say that when the pandemic hit and unemployment skyrocketed, the bank couldn’t handle the traffic.

Concerned about a potential avalanche of fraud, BofA skipped doing “reasonable investigations” into questionable recipients, and instead defaulted to an automated fraud filter that froze the accounts of thousands of legitimate recipients, innocent people who really needed the money like, yesterday.

Making things worse, customers trying to unfreeze their accounts could only do so by calling a claims center. You can guess how that worked out.

In addition to the federal fines, the bank has been ordered to pay people money they’re still due, plus a “consequential harm” penalty. The New York Times estimates the number of affected customers is 100,000. Doing some brief math (punches numbers into calculator), we’re looking at — whoa! — hundreds of millions of dollars.

Bank of America responded in a statement that it dispersed more than a quarter trillion dollars in pandemic relief to 14 million people, more than any other bank, and that it’s up to the states it contracts with to vet who should receive benefits. So what have we been paying for?

DUMBERER — Water, Water, Everywhere but Here

California is in the middle of a severe drought. Again. Brown is the new green. Again.

There goes the lawn. Sacramento, CA/Melinda Podor, Getty Images

The irony is that California has access to the biggest water source on the planet, the Pacific Ocean. News articles out this month — like “One Way Out of a Drought? Technology That Makes Water Potable” — tout the promise of desalination. A desal plant near San Diego produces 10% of that county’s water, though at a higher cost than traditional water up in Los Angeles County. But expensive water is better than no water, and San Diego is one county that isn’t restricting water usage.

The Golden State could accommodate more desalination plants at strategic points along the shoreline, but good luck with that. The California Coastal Commission has drawn a line in the sand.

A $1.4 billion plant proposed for Orange County, by the same developer who built the one in San Diego, was rejected by the Commission despite 20 years of filings and reviews that cost the developer $100 million (20 years! $100 million!). The plant would’ve turned 50 million gallons of seawater into drinking water every day, enough for 400,000 people.

But nobody cares about people.

The panel voted 11-0 against the project, with one abstention, saying the plant would destroy marine life. News flash: There’s also an environmental impact in letting the state shrivel up and die.

Environmentalists are thrilled with the plant's rejection, saying the facility isn’t needed. “The plant would soon be made obsolete by water recycling,” according to Reuters. Really? How soon can Orange County recycle 50 million gallons of water a day? Pray tell.

DUMBERERER — Threading the Legislative Needle in Kansas

In what the Wall Street Journal calls one of “the dumbest occupational licensing requirements,” professional threaders in Kansas — who use thread to pluck and shape eyebrows — have traditionally needed an esthetician’s license.

This meant that anyone who wanted to provide a cosmetic treatment that involves no sharp instruments or hot wax or anything more dangerous than painful plucking would have to fork over as much as $10,000 to go to esthetician school. Then they'd have to acquire 1,000 hours of experience in esthetician-related work — which might not even include threading.

Doesn't that look like fun? Photo by Tim P. Whitby/Getty Images

This is like asking a dog sitter to go to vet school. I mean, they don’t even require licensing for threading in California, where they’re always needling you for money.

Fortunately, Kansas has come to its senses and voided the rule this month. Kansans can now thread without a license, and America has witnessed a rare (though small) shrinking of government overreach.

DUMBERERERER — Love is Blind… and Dangerous (and Dumb)

Have you watched “Love is Blind”? (Hand goes up.) It’s a stupidly entertaining show about men and women who get to know each other with a wall between them so they can’t see each other. After a few hours or days of these “blind” encounters, some of the men propose marriage, and the women usually say yes. Then the couples finally get to see each other.

Drama ensues.

Anyhow, it’s been a huge success for Netflix. But one contestant who didn’t make a love connection is now suing on behalf of all contestants, claiming conditions on set were “inhumane,” and the pay was inadequate.

According to CNN, Jeremy Hartwell says he was forced to have conversations with unknown women behind a wall, operating on very little sleep, while being filmed under bright lights for hours on end. “On set and back in his hotel, Hartwell says he could not access food and water, but alcohol was available — and even encouraged on an empty stomach.” This, he claims, skewed contestants’ judgment. (Maybe going on this show suggests everyone’s judgment was already skewed, amirite?)

As for the pay, “During the production, producers paid contestants a flat rate of $1,000 per week — despite forcing them to work up to 20 hours per day, seven days per week,” reports Variety. “That works out to as little as $7.14 per hour, well under the minimum wage in Los Angeles County of at least $15 per hour, according to the complaint.” And if you quit the show before shooting was completed, contestants had to pay $50,000 to producers, according to the lawsuit.

The show’s producers dispute all of this, and Netflix hasn’t commented. But the only thing worse than these allegations is that anyone agreed to participate in a nutty reality TV show for only $1,000 a week.

DUMBEST — 2022’s Worst CEO? (So far!)

Say you’re some schlub working at a logistics tech startup, and you know it might be rough going in the early days. So when you don’t get paid one week, you figure that’s just part of the crazy startup life. Soon, you hope, there will be a big payday when the company raises a gazillion dollars or goes public or is acquired. Then you can cash in your company shares and afford a Baby Elon NFT (currently at bargain basement prices).

But when you’re not paid for two months? And then you discover your CEO is living large with a private jet and a Ferrari and fancy golf trips?? And then two top executives are (allegedly) fired for asking questions, and the board (allegedly) doesn’t care???

A jaw-dropping investigation by Forbes claims this is no made-up scenario; a former Best Buy salesguy named Chris Kirchner became CEO of a logistics tech startup he co-founded called Slync, which had a $240 million valuation after an investment by Goldman Sachs. Kirchner has no background in logistics or tech, but he brought in partners who did. The 34-year-old CEO was considered a helluva salesman.

Chris Kirchner at a soccer match between Derby County and Fulham at Pride Park Stadium on April 15, 2022 in Derby, England/Photo by Nathan Stirk / Getty Images

Welp, if the Forbes story is accurate, Kirchner appeared more interested in selling himself than growing a company. Reporter David Jeans spoke to current and former employees and went through court filings, and he describes a CEO lifestyle far from the stereotypical startup existence where the whole team works 24/7 and only eats ramen (e.g., Elon Musk slept at the Tesla factory).

Kirchner allegedly spent millions on a Gulfstream G550 private jet, purchased a black Ferrari and painted it red, and paid for Slync to be the title sponsor of the Dubai Desert Classic golf tournament. But it was a troubling sign when Kirchner tried — and failed — to come up with the funds to buy an English soccer club. (“A shambles!” screamed the Daily Mail.)

Slync‘s CFO and the Chief Revenue Officer reportedly weren’t privy to all of the company’s bank accounts, and Jeans reports that when the two approached the board with questions about how the numbers weren’t adding up, they were suddenly no longer working at the company. Here’s more from the Forbes investigation:

According to multiple people familiar with the matter, Kirchner reported to the board that Slync generated close to $30 million in revenue in 2021, from about 20 customers. In fact, the real figure was close to $1 million in annual revenue and fewer than five customers, these people say. In response to these claims, board member Jim Atwell said that Slync “has many more than five customers and the company’s annual revenue is significantly higher than your information,” but declined to say how many or how much.

Atwell also told Forbes that employees are now being paid, but as the story went to press, some said they were still waiting for paychecks.

A lot of this is being played out in lawsuits, but Kirchner is still on the job, presumably with the board’s support. Earlier this year he was interviewed about sponsoring the Dubai tournament and compared his golf game to his leadership philosophy: “It is better to be lucky than good.”

Maybe, but you need to be at least one of those things.

DUMB BUT WONDERFUL — Zoombombing 2022

Let me leave you with a good laugh.

We’ve all been Zooming for over two years now, and yet most of us still haven’t mastered it. I personally find it delightful that we‘re still yelling, “Unmute yourself!”

And then there’s the underwear.

CNBC’s Andrew Ross Sorkin was interviewing Karen Firestone, CEO of Aureus Asset Management, about… well, who cares? First a dog starts barking, and then a man (husband?) dashes across the background wearing only his boxer shorts, frantically hoping he won’t be seen.

Go to the 1:45 mark. It’ll make your day.

Has this happened to you? It happened to me, but at least I wasn’t on live television.

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So what money mischief did I miss while enjoying my grandkids here in Okinawa? Let me know by joining the discussion below.

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Until next time…