I mean, it’s fine to write puff-pieces from time to time, but it rings hollow in a world where actual institutional reform as a result of FTX has been almost completely absent.
We really need to see the receipts on any claim that a significant degree of actual institutional reform as a result of FTX has occurred. I think that’s part of why the op-ed comes off as a puff piece. Another reason is that we haven’t seen the receipts to sufficiently establish that there was meaningful investigation of any question beyond whether anyone at EVF had actual knowledge of the fraud.
The kinds of reform-with-receipts I’d be looking for might include:
A published policy against retaliation against any person on the basis that the person expressed concern about possible unethical, illegal, or fraudulent activity by a donor. For certain classes of protected persons (e.g., an employee), this should include a right to a hearing before an independent arbitrator (e.g., at the AAA) with the ability to order reinstatement, appropriate damages, and fees/costs.
A publicly-known staff member with express responsibility for making determinations on donor risk issues, whose judgment of excessive risk could only be overturned by formal board action, and whose employment contract sharply limited the staff member’s exposure to adverse employment action (e.g., such action could only be taken for good cause shown to an independent arbitrator).[1]
By analogy, administrative law judges in the US federal government enjoy very strong protections from adverse actions by their employing agencies. The costs of these protections (e.g., shielding ALJs who are just plain awful at their jobs) are seen as less important than promoting their independence from the agency that has an interest in their judicial decisions.
I agree with this overall sentiment, though want to mark that I don’t think “donor risk” is the right way to model this.
The key thing to IMO investigate is why SBF, substantially driven by EA principles, built FTX on a substantial basis of fraud. Even if FTX/Sam had donated nothing to CEA, the harm seems just as big, and the key thing to investigate is what role EA played in FTX coming into existence, not what EA could have done to avoid being associated with SBF.
Examining “what role EA played in FTX coming into existence” seems desirable, but doing a good job on this still seems rather challenging as a practical matter at least for now. FTX is unlikely to cooperate (and doing so would consume revenue that morally belongs to the victims). SBF denies having done anything wrong and will appeal. The co-conspirators are not going to talk because of their deal with USAO/SDNY, and even once that is done, I’d probably be worried about state and foreign criminal exposure in their shoes.[1] Although EVF settled with the FTX estate, many actors and orgs still have legal exposure. EVF could have counsel investigate EVF and keep the results privileged, but a license to practice law doesn’t give you the ability to investigate whatever you’d like and keep the results secret.
One final issue is who should sponsor an investigation of “what role EA played in FTX coming into existence”; given the linkages between EVF, EVF insiders, and SBF, EVF would be somewhere in the vicinity of last place on my ideal preference list.
As for the reference to “donor risk” in the reform-with-receipts segment, I had examples of the policy response I’d like to see specifically from EVF in mind. But I do think donor-risk management is part of a defense-in-depth strategy. No one owns EA principles, and while taking steps to discourage people away from fraud-approving views, we’re not going to find any way to absolutely preclude people from interpreting / applying those principles in a way that motivates them to do awful things.[2]
That means we shouldn’t put all the marbles into one basket. If a would-be fraudster knows ahead of time that EA orgs will reject his money if it seems too suspect, and that in fact the donor due diligence process might lead to discovery of the fraud --> life in a prison cell, then they are less likely to start fraud-to-give in the first place. There being no way to be 100.00% sure donor money is clean, I gestured to “donor risk issues” rather than overselling with words like assure, ensure, guarantee, etc.[3]
It’s usually not considered cool for a state to prosecute after the feds, but it’s not against the rules. And it’s likely that the co-conspirators violated criminal laws in a number of countries where victims lived. I would not assume that the US, which can be pretty aggressive on seeking extradition for financial crimes where the defendants never set foot on U.S. soil, would deny such a request.
In the same way, no one owns any set of ideas, and almost all ideas worth having can be twisted to justify bad actions. Of course, I would definitely agree that EA ideas are unusually vulnerable to being transmuted into naive consequentialism.
As someone who is significantly less than 100% a utilitarian, I also identify a moral obligation to take reasonable steps to address the possibility that an organization might be receiving funds tainted by fraud (among other things).
One final issue is who should sponsor an investigation of “what role EA played in FTX coming into existence”; given the linkages between EVF, EVF insiders, and SBF, EVF would be somewhere in the vicinity of last place on my ideal preference list.
I think CEA or EV collaborating with an external but still within-EA trusted organization seems like the best choice to me here. Hiring someone who is broadly known to be independent (like, IDK, you could choose someone from Rethink, or Tyler Cowen, or someone else in that kind of reference class), seems like a good idea.
[Edit: With “collaboration” as defined in Habryka’s response below, my question dissolves.]
Is there a reason to prefer CEA or EV collaborating with an investigator versus someone (or several someones) funding an investigator(s), taking a back seat once the proposal is accepted and funded, and deferring to the investigator(s) what to publish? [I may be reading too much into “collaborating” in your first sentence.]
What I mean by collaboration is “is willing to share any information with them and allow staff to speak freely”. The key obstacle I have faced in trying to do investigations is that nobody is willing to talk or say anything that goes on the record by organizational policy, which of course makes this kind of thing very hard to pull off.
I also think it would help a lot if CEA were to lend some credibility to the investigation. People don’t want to repeat the same thing hundreds of times, and it would IMO be good for CEA/EV to put some social capital on the line to encourage people to talk to the investigators.
We really need to see the receipts on any claim that a significant degree of actual institutional reform as a result of FTX has occurred. I think that’s part of why the op-ed comes off as a puff piece. Another reason is that we haven’t seen the receipts to sufficiently establish that there was meaningful investigation of any question beyond whether anyone at EVF had actual knowledge of the fraud.
The kinds of reform-with-receipts I’d be looking for might include:
A published policy against retaliation against any person on the basis that the person expressed concern about possible unethical, illegal, or fraudulent activity by a donor. For certain classes of protected persons (e.g., an employee), this should include a right to a hearing before an independent arbitrator (e.g., at the AAA) with the ability to order reinstatement, appropriate damages, and fees/costs.
A publicly-known staff member with express responsibility for making determinations on donor risk issues, whose judgment of excessive risk could only be overturned by formal board action, and whose employment contract sharply limited the staff member’s exposure to adverse employment action (e.g., such action could only be taken for good cause shown to an independent arbitrator).[1]
By analogy, administrative law judges in the US federal government enjoy very strong protections from adverse actions by their employing agencies. The costs of these protections (e.g., shielding ALJs who are just plain awful at their jobs) are seen as less important than promoting their independence from the agency that has an interest in their judicial decisions.
I agree with this overall sentiment, though want to mark that I don’t think “donor risk” is the right way to model this.
The key thing to IMO investigate is why SBF, substantially driven by EA principles, built FTX on a substantial basis of fraud. Even if FTX/Sam had donated nothing to CEA, the harm seems just as big, and the key thing to investigate is what role EA played in FTX coming into existence, not what EA could have done to avoid being associated with SBF.
I doubt we disagree much, if at all.
Examining “what role EA played in FTX coming into existence” seems desirable, but doing a good job on this still seems rather challenging as a practical matter at least for now. FTX is unlikely to cooperate (and doing so would consume revenue that morally belongs to the victims). SBF denies having done anything wrong and will appeal. The co-conspirators are not going to talk because of their deal with USAO/SDNY, and even once that is done, I’d probably be worried about state and foreign criminal exposure in their shoes.[1] Although EVF settled with the FTX estate, many actors and orgs still have legal exposure. EVF could have counsel investigate EVF and keep the results privileged, but a license to practice law doesn’t give you the ability to investigate whatever you’d like and keep the results secret.
One final issue is who should sponsor an investigation of “what role EA played in FTX coming into existence”; given the linkages between EVF, EVF insiders, and SBF, EVF would be somewhere in the vicinity of last place on my ideal preference list.
As for the reference to “donor risk” in the reform-with-receipts segment, I had examples of the policy response I’d like to see specifically from EVF in mind. But I do think donor-risk management is part of a defense-in-depth strategy. No one owns EA principles, and while taking steps to discourage people away from fraud-approving views, we’re not going to find any way to absolutely preclude people from interpreting / applying those principles in a way that motivates them to do awful things.[2]
That means we shouldn’t put all the marbles into one basket. If a would-be fraudster knows ahead of time that EA orgs will reject his money if it seems too suspect, and that in fact the donor due diligence process might lead to discovery of the fraud --> life in a prison cell, then they are less likely to start fraud-to-give in the first place. There being no way to be 100.00% sure donor money is clean, I gestured to “donor risk issues” rather than overselling with words like assure, ensure, guarantee, etc.[3]
It’s usually not considered cool for a state to prosecute after the feds, but it’s not against the rules. And it’s likely that the co-conspirators violated criminal laws in a number of countries where victims lived. I would not assume that the US, which can be pretty aggressive on seeking extradition for financial crimes where the defendants never set foot on U.S. soil, would deny such a request.
In the same way, no one owns any set of ideas, and almost all ideas worth having can be twisted to justify bad actions. Of course, I would definitely agree that EA ideas are unusually vulnerable to being transmuted into naive consequentialism.
As someone who is significantly less than 100% a utilitarian, I also identify a moral obligation to take reasonable steps to address the possibility that an organization might be receiving funds tainted by fraud (among other things).
I think CEA or EV collaborating with an external but still within-EA trusted organization seems like the best choice to me here. Hiring someone who is broadly known to be independent (like, IDK, you could choose someone from Rethink, or Tyler Cowen, or someone else in that kind of reference class), seems like a good idea.
[Edit: With “collaboration” as defined in Habryka’s response below, my question dissolves.]
Is there a reason to prefer CEA or EV collaborating with an investigator versus someone (or several someones) funding an investigator(s), taking a back seat once the proposal is accepted and funded, and deferring to the investigator(s) what to publish? [I may be reading too much into “collaborating” in your first sentence.]What I mean by collaboration is “is willing to share any information with them and allow staff to speak freely”. The key obstacle I have faced in trying to do investigations is that nobody is willing to talk or say anything that goes on the record by organizational policy, which of course makes this kind of thing very hard to pull off.
I also think it would help a lot if CEA were to lend some credibility to the investigation. People don’t want to repeat the same thing hundreds of times, and it would IMO be good for CEA/EV to put some social capital on the line to encourage people to talk to the investigators.