Lawyer from New Zealand. Largely taking a break from direct EA work for mental wellbeing reasons (I burned out and am probably less baseline mentally resilient than the modal EA), but happy to provide pro or low-bono legal support to EA orgs. I donāt log in to the forum too often right now, but feel free to hit me up by email: tyrone@spiltmilk.nz
Tyrone-Jay Barugh šø
Karma: 747
I think itās plausible that grant recipients in countries other than the United States could be subject to clawback action under the laws of those countries, and the applicable limitation period may well be longer.
In my case, I wonāt be totally certain until the six year limitation period under New Zealand law has run. Luckily there are much more favourable defences under New Zealand law, and even if their prospects of success were higher I somewhat doubt that Sullivan & Cromwell would bother instructing New Zealand counsel to chase up a relatively meagre grant.If your grant was small (e.g. salary/āexpenses for one person), you might adopt the same āsheāll be rightā attitude Iām taking to this. But if youāre based in a country other than the United States and got a big grant then you may want to keep this risk in the back of your mind and/āor speak with a lawyer in that country.
Epistemic status: I suspect itās more of a hypothetical risk than a real one, but mentioning it for completeness and for the benefit of folks with a very low appetite for risk.
Yasssssssss
Thanks heaps AngelinaāI agree. Thanks for pointing out the need for clarification.
Iām surprised to see many comments that treat something other than this (particularly the request to transport drugs across a country border) as the crux.
From my read of Ben Paceās post, Nonlinear admits that this is true.
Yes, although objectivity and independence trades off against other things EA orgs might value in a lawyer. I think of the āEA lawyerā idea similarly to the idea of an in-house lawyerāand in my previous practice as an in-house lawyer sometimes we would go to external lawyers for objectivity/āprofessional distance (and not just for, say, specialist expertise).
Apologies for the delayed response.
Quick thoughts, which are further questions rather than answers. I donāt have a good answer off the top of my head, but these are the kinds of questions Iād think about to kick off my research if I were looking into this:
- pledge that you give to a particular legal person in the future might be enforceable by that person (but, depending on the rules in your particular jurisdiction, you might be able to evade such a pledge on the basis of how one-sided it would be);
- not sure whether you could make a more open ended pledge (to a particular cause but not a particular org, or cause neutrally), because it wouldnāt really be clear who would have standing to bring a claim to make you go ahead with the case;
- a slightly different approach could be to put assets you have already into a non-profit.I would like to know the answer to this question too, but donāt have time to look into it right now. If someone else doesnāt chime in, I may come back to this in the new year.
To clarify, my update isnāt that I think there shouldnāt be a ādid anybody knowā aspect to the investigationābut rather that a broader fact-finding review would be useful, and that my original suggestion was probably too narrow.
I would like to know, for example, whether any large EA orgs (and EA thinkers, I suppose too) have formally engaged with those criticism contest entries. Like, was it somebodyās job to think about when anything should change as a result? Or something discussed by a governance board (or similar)?
This comment is being downvoted, but I think itās probably a worthwhile exercise (even though I expect it to be really net negative)
Iām updating towards the view that there are two different tasksāfirst, a fact-finding exercise and second, decisions about how to respond.
It doesnāt seem appropriate to me that Open Philanthropy directly conducts the fact-finding exerciseāit seems important to have an independent person(s) who are able to receive confidential feedback. It does seem appropriate to me, though, for Open Phil to commission that investigation/āinquiry though.
I donāt know how EA should decide how to decide how to respond. Iām not sure that the financial dependence on OP is as much of an issue in this context, but agree itās probably worth addressing.
This seems directionally right to me. My current view is that an investigation should stick to objective questions rather than normative stuff about, for example, whether the EA movement is in principle OK taking funding from the crypto industry (or some other potentially destructive industry). I think my thinking here is that a person who isnāt involved in EA should think about those objective questions, and then folks in the EA movement itself should make arguments for and decide on the future direction in response. I trust a lawyer specialised in independent investigations to do the fact-finding work and the āwhat went wrongā work, but not to make principled judgements about what EA should think or do more broadly.
Thanks Geuss.
The failure here is becoming so dependent upon, and promoting the virtues of, someone engaged in a crypto business with a lot of red flags. In my opinion, that is what merits āreviewā.
I agree, without prejudging what the answer to that would be. I think itās very likely that EA will do some soul searching, although this is a moral question rather than a question of fact, and so my sense is that itās probably less suitable for an independent fact-finding review.
Investigating your own personnel for something you have no probable cause for will only consolidate the bad publicity EA is getting now. It will make EA look guilty for something it did not do.
If I am being honest, this comes across as an over-the-top attempt at self-cleansing that is motivated more by prim sanctimony than any real reckoning with the situation.
I do care about the optics of EA, but I am more concerned for the epistemic and moral health of the community. For me, this is about taking seriously the fact that EA was in the orbit of a very bad thing that has caused significant suffering. I realise that this comes across differently if you see EA as being a less earnest movement than I do. There possibly is some reputational cost (which may or may not be outweighed on net by reputational gains) to doing this, but the reason for doing it largely sits outside some kind of optics calculus.
There is some possible optics benefit to it, yes, in that we could point to this action in (careful, measured) response to future criticism of EA from this angle. But I think the much more important reason to do it is for own health as a community of do-gooders. Even if we didnāt expect criticism, I would still want to prevent someone who was so careless from making decisions about the trajectory of the movement or about grant allocation etc (at least initially; expressing no view about whether such a person could redeem themselves, as that seems pretty fact specific and Iām not in a good position to offer a view anyway).
Thanks Miguel. I am worried about a witch hunt too, although I think itās unlikely that a carefully conducted investigation that adheres to the principles of natural justice would destroy the EA community. My sense is that if the EA community is so weak that such an investigation would destroy the community, then the EA community will be toast anyway from the hit to community trust that is resulting/āwill result from the FTX situation.
Your suggestion is that there only be an investigation if some piece of evidence emerges. On first glance, my lawyer brain wants to agree with this. But if two weeks ago you had posed the hypothetical question to me āFTX has collapsed and SBF/āothers have misappropriated user funds; what is the probability that someone else in EA knew about it?ā, I think my answer would probably have been higher than 1% or 2%. For a movement that wants to positively affect the trajectory of humanity (and to be taken seriously by governments and civil society), I think that even 1% or 2% is high enough to justify an (carefully conducted, natural justice-oriented) investigation.
Do you know how likely it is that United States law applies? I havenāt thought about this properly, but it seems like the main entity that is insolvent is a Antigua and Barbuda company doing business in the Bahamas? And Iām also uncertain which FTX entities were actually distributing the grants.
This looks like the position under Bahamian law (which might be the relevant law, not Antigua and Barbuda law or US law, given FTX was operating in the BahamasāI just donāt know how this actually works).
Re the 90 day rule in the United States, see here under the heading āAvoidable Transfersā: https://āāwww.uscourts.gov/āāservices-forms/āābankruptcy/āābankruptcy-basics/āāchapter-11-bankruptcy-basics
Just to reiterate, Iām not a US, Antigua+Barbuda or Bahamas lawyer, and this isnāt legal advice.
Edit: see Cate Hallās comment for a better summary of the position under US law, and Mollyās comment re further information OP intends to share from its external counsel shortly.
Epistemic status: I am not a lawyer in either the United States, or in Antigua and Barbuda (where FTX Trading Ltd was registered). Iām also not an insolvency expert. Take all this with a grain of salt. This comment is not legal advice.There are lots of things that might make answering this question in theory tricky, including identifying:
which FTX entity paid your grant;
which jurisdictionās insolvency law applies;
whether that FTX entity was insolvent at the time it paid you;
whether the relevant insolvency law allows for clawing back payments made prior to filing for bankruptcy/āliquidation/āetc.
There are also practical questionsāif there is a multibillion dollar hole arising from illegitimate payments from FTX entities to Alameda, then would the liquidator/āUS trustee (etc) bother coming after small amounts (e.g. a $25,000 grant)? This isnāt me suggesting that they wouldnātāI genuinely do not know.
It looks as though the law in Antigua and Barbuda differs quite a bit from the United States law. This article suggests that Antigua and Barbuda law is that losses lie where they fall once the music stops.
I received a grant in March 2022, and I donāt feel especially worried right now. Even if it turns out that some FTX entities were insolvent then, my rough sense is that either Antigua and Barbuda law applies and losses lie where they fall or that if US law applies then the transfer wonāt be considered a preferential transfer subject to clawback because it occurred more than 90 days before any filing for bankruptcy. (I donāt know if I am understanding the 90 day rule correctly, so please seek advice or look for yourself before making any decisionsāthis comment isnāt legal advice.)
If I had received a grant more recently, then I would feel less confident. I might avoid spending the grant until learning more.
If any insolvency lawyers read this, consider commenting (even if not under your actual name) - or PM me to suggest any corrections/āclarifications.
Thanks for taking the time to explain, David!
Edit:
sorry, I see now that youāve discussed the point in my comment below (which Iāve now put in italics) in the linked document. Iām grateful for, but not surprised at, the care and thought thatās gone into this.
If itās not too much of your time, I just am curious about one more thing. Is the paragraph below saying that surveying the general population would not provide useful information, or is it saying something like āthis would help, but would not totally address the issueā. Like, is there any information value in doing thisāor would it basically be pointless/āpseudoscientific?Surveying the general (non-EA) population as part of larger representative surveys to get a sense of the overall composition of EAs (e.g., the gender ratio). However, differential non-response, to these larger surveys would again throw this in doubt. Standard corrections may not be easy: and relative non-response among EAs (e.g., male versus female EAs) may differ from the relative non-response to such surveys in other populations.
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Original comment:
Thanks for the in depth response, David.The difficulty here is that it doesnāt seem to be possible to actually randomly sample from the EA population
Sorry, I explained poorly what I meant. What I meant to ask was whether you could randomly sample from a non-EA frame, identify EAs based on their responses (presumably a self identification question), and then use that to get some sense of the attributes of EAs.
One problem might be that the prevalence of EAs in that non-EA population might be so minuscule that youād need to survey an impractical number of people to know much about EAs.Another response is that it just wouldnāt be that useful to know, although the cost involved in hiring polling companies in a few places to do this maybe is not that much when weighed against the time cost of lots of EAs doing the survey at 10min/āresponse.
I was a pretty motivated EA (donated, sometimes read EA literature) who did consider myself an EA but was entirely disengaged from the community from 2013-2017, and then barely engaged from 2017-2020. Additionally, when I speak with other lawyers itās not uncommon to hear that someone is either interested in EA or has begun donating to an EA charity, but that they havenāt gotten involved with the community because they donāt see how that would help them or anyone else do more good.I donāt know how useful you think it would be to know more about the makeup and size of that population of unengaged EAs (or EA-adjacent folk, or whatever the label). Maybe it just wouldnāt be very decision-relevant for the orgs who have expressed interest in using the data. My initial sense is that it would be useful, but I donāt really know.
Been off the forum for a while. Just occurred to me that I forgot to post about this, and I felt sad for the foregone expected utils. So I was glad to see that you signal boosted this again for 2024. Good luck to everyone entering!