The price of wanting more

The arrest of Martin Shkreli on charges of securities fraud has certainly attracted attention, and the internet is riddled with helpful advice, mainly directed to ensuring Shkreli has to pay a huge amount more than anyone else for the same service, especially lawyers’ fees, or bail fees. The reason lies in Shkreli having had control of Turing Pharmaceuticals, which purchased to sole rights in the US for the drug Daraprim. Daraprim is the go-to drug for treating toxoplasmosis, which, while not common, can be deadly for unborn babies and for people with compromised immune systems. He then decided to raise the price of a pill from $13.50 to $750, seemingly because he wanted more money. Don’t we all! Somewhat later, he stated that if he had the opportunity to do it again, he would have raised it higher. Now, there is compassion and contrition, Wall St style.

Naturally, this sort of person does not do something only once. Kalobios Pharmaceuticals acquired the licence for Benznidazole, the standard treatment fro a deadly parasitic disease in Central and South America, and has announced plans to increase the price from something like $200 for two months, to something more like $60,000. So far, it appears it has not done it, and with Shkreli where he is, maybe they won’t. He is also allegedly responsible for raising the price of Thiola from $1.5 per pill to $30. A deeper background can be found at http://www.bloomberg.com/features/2015-martin-shkreli-securities-fraud/

However, the current arrest has nothing to do with price gouging, but rather to do with fraud. Shkreli has a raft of companies, and he is accused of taking money from one to pay off debts of another. He is accused of backdating records, making phoney loan agreements between one of his companies and a hedge fund, and creating sham consulting agreements as a way to route cash from recent investors to earlier ones, which of course, is partly the structure of a Ponzi scheme.

Apparently in an earlier phase, he set up a hedge fund, trashed biotech stocks in online chat rooms, then shorted them, making lots of money. Meanwhile, lots of ordinary people were losing lots of money. This is, of course, the deep spirit of capitalism.

At this stage, we might wonder at the efficiency of the laws. The good news is that Daraprim may now have a generic alternative, from San Diego-based Imprimis Pharmaceuticals Inc. The drug is 60 years old, so it is clearly out of patent, and the only things stopping manufacturing generics is the question, is it worth it? Following Shkreli’s approach, most certainly, if only for the advertising.

One of the other things that impressed me about this is the antics the SEC accuses Shkreli of are very similar in nature to the antics I described in my novel Red Gold, which was about fraud during the colonization of Mars. It is always comforting to get confirmation from a good authority, and the SEC is a good authority on fraud, that the antics I described are indeed characteristic of frauds.

One unusual thing about fraud is that it takes quite a lot of thought and effort to carry it out successfully, and if the same effort were to be put into more respectable activities, the person might be hailed as a successful citizen. So the question is, why carry out fraud? At first sight, greed, but I don’t think that is enough. I think in only too many cases the desire to be seen as important, and to wield power, are also important.

This will be my last post for 2015. I live in the Southern Hemisphere, and here, Christmas is hot, and subsequent days are also hot, so working is less desirable and most people go on vacation. So, guess what I shall be doing? I shall be back about the third week of January.

Meanwhile, I hope you all have a very merry Christmas with friends and family, and I wish all the best for 2016.

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Governance behaving badly

For the last couple of posts, Turkey has featured, and not favourably. However, we must not lose track of other examples of governance issues. My first example is Syria. The West seems to have two objectives that seem to be counter to each other. The first is to get rid of ISIS, but they need someone else’s ground troops to do it. The second is to get rid of Assad. Accordingly, they are supporting a variety of “moderate” opposition. Seemingly they think this “moderate” opposition will bring peace and good governance to Syria.

Some of these “moderate” opposition comprise branches of al Qaeda, which does not meet my definition of a desirable winning party, but let us look at the behaviour of yet another group that has no blatant connection with al Qaeda: the Army of Islam. It apparently has its own news agency, Shaam, and one piece of news this agency has released is to note that in Douma, a suburb outside Damascus, rebels have been launching rockets into civilian areas of Damascus. The Russians, or Syrians, have in turn bombed sites in Douma, and inevitably, civilians have been killed. The Army of Islam have responded by taking Alawite prisoners, some of whom they have held for at least three years, presumably for the crime of being Alawite, and putting them into cages that are driven around the town as human shields. Two thoughts come to mind. The first is that is not moderate; that is a war crime. The second is that the West has made no objection, at least none that I know of. No threat of withdrawing support, or anything like that. Moral responsibility is a bit thin here.

But wait, there’s more! Ukraine seems to have faded from interest, and maybe that is encouraging aberrant behaviour. In my fiction, I have created some very evil characters in positions of power, but always they try to give the public impression that they are behaving legally. Even Hitler’s mob did that. They may have been the most illegal ever, but they passed laws and fixed judges, and painted pictures of themselves as legally responsible, even if they could hardly be further from it. No such pretence from the Ukraine.

A decade ago, 24 art works were stolen from Westfries museum in Hoorn, which is north of Amsterdam. These are believed to be worth about 10 million euros. The museum alleges that it has been approached by right wing Ukrainian agents and high level politicians. A year ago, the museum noticed one of the stolen paintings posted on a Ukrainian website, following which the Dutch embassy in Kiev was approached by two men who offered to return the paintings, eventually for 50 million euros. According to the article I saw, the museum claimed that one of the men behind this was Oleh Tyahnybok, leader of the Svoboda party. Two other high level Ukrainians were also named. If this is true, then the Ukrainian government is supporting extortion and theft; if it is not true the Ukrainian government should be investigating the claims. After all, the website posting at least shows that one of the stolen paintings is there. So, what has happened? As far as we can tell, nothing.

So, what should happen? If the West had any moral fibre, they should tell Ukraine that the West will not tolerate a criminal government, and require the Ukrainian government to investigate this allegation and if it is true, return the paintings and arrest the miscreants. And what if the Ukrainian government ignores this? One option is inform the right wing government that they would tell Putin that the West would take no further action in the Ukraine. Provided Russia treated civilians fairly, they could have a free go. My guess is, the paintings would be returned rather promptly.

However, the paintings are not really the issue; they are merely a symptom. If the right wing government is criminal, and is prepared to steal and extort for the benefit of a few party members, then why would the Eastern Ukrainians want to be part of that? By definition, their property would likely to be that of first resort for further appropriation. For a minority to accept majority government, there has to be evidence that the majority will at least respect the rights of the minority.

Turkish Justice

I gather Turkey claims it is a democracy, and wishes to join the European Union, which raises the question, what sort of democracy is it? Actually, it is not a democracy, because in a democracy, everyone has the right to vote on every issue; what most of have is a Republic, where the people vote for representatives to vote on issues for them, but let us put this to one side.

For a Republic to work properly, the people have to be able to assess their representatives, to ensure they vote the way they would wish. Of course nobody who has any serious thoughts on issues gets a representative to vote every way they would vote, but that is life. The representative stays in power if he or she can reasonably persuade the majority of voters that they are at least doing an adequate job, and a better job than the opponent would do. But to do that, people have to have the right to express their views without threat of reprisal. In my country, I have that right, and more than once I have published letters asserting incompetence by a politician, with an explanation of what I assert proves my point. Whether it does any good is questionable, but it is my right, and I know I can exert it without any reprisal.

Back to Turkey. That right is either not there or not working very well, as shown by the current trial of Bilgin Ciftci, who is on trial for insulting President Recep Tayyip Erdogan. Apparently, Mr Ciftci produced some images of Erdogan and his expressions, and alongside these were pictures that are allegedly of Gollum, from the movie Lord of the Rings, with similar expressions. I find these quite amusing, even if the images are not exactly with the same expression. The “Gollum” always has his eyes wide open, whereas Erdogan does not. One pair has the two eating something like a meat from a chicken leg, and Erdogan has his eyes shut. Anyway, the Judge has decided to appoint five”experts”, which reportedly includes two academics, two behavioural experts and an expert on cinema productions, and they have to decide whether Gollum as portrayed in the movie is good or bad, i.e. is this a real insult?

Mr Ciftci’s defence is apparently going to be that the comparison to Gollum is not an insult, and indeed Gollum is the real hero of the series. You may well think this is funny (and I must confess to having smiled at the images) but insulting the President is punishable by a significant prison sentence in Turkey. (Imagine trawling through the web in the US to find people who had insulted President Obama and incarcerating them? The prison system would then really be overflowing.) Apparently more than two hundred people have been investigated for this “crime” between August 2014 and March 2015. Hardly a great length of time. Merve Büyüksaraç, a model and former Miss Turkey in 2006, now faces two years in prison for “insulting” Erdogan. She apparently placed some lines from the Turkish national anthem on an instagram account that had been used elsewhere to criticise Erdogan.

Anyway, back to Mr Ciftci. The situation has not become more complicated thanks to a New Zealand intervention. Yes, really!! Sir Peter Jackson, alongside Fran Walsh and Phillippa Boyens, have issued a statement saying the Turks have it all wrong. The images are actually of Gollum’s alter ego, Smeagol, a “joyful sweet character”. What will the Turkish courts make of that? Since Jackson directed the Lord of the Rings, and the other two were script writers, it would seem they have some authority here, and more so than five Turkish “experts”.

We shall have to wait and see, but for my money, if a Turkish politician cannot stand being insulted (even if the insults seem obscure to say the least) then Turkey has no right to be in European Union. Another interesting question is what will Erdogan do about the stream of insults that I am sure will continued from Putin? Not much, I guess. And I also guess that Turkey should not be on my travel list.

Turkey – not pardoned by all

Last week ISIS scored a stunning victory, and without breathing very hard to do it. The uncontested facts are simple: two Turkish F16s shot down a Russian SU24. The pilots parachuted down into Syrian territory, and one was shot by anti-Assad militias, and a Russian rescue helicopter was fired at by a US made shoulder-held light missile launcher. President Obama could not wait to announce that Turkey had the right to defend its territory. Those who shot at the pilots were almost certainly Turkmen, of which there are a number in Syria.

The disputed information is whether the aircraft flew over Turkish territory. The Russians claim it did not; the Turks claim it flew over a narrow finger of Turkish territory that points into Syria. The Turks finally stated that the aircraft was over Turkish territory for 17 seconds. The Turks claim they spent five minutes warning the Russian aircraft; the Russian recovered from the aircraft claim no such warning was received. Nobody has stated where the aircraft was when it was shot down, but if the Turks are to believed that the aircraft was over Turkish territory for 17 seconds, it follows it had left it after those 17 seconds, and it was shot down over Syria. That is not defending its territory.

The puzzling question is whether Turkey planned this. My guess is, they did, and bearing in mind how narrow that “finger” is, and how fast a F16 flies, it is highly probable the Turkish planes flew into Syrian airspace at some point. Let us consider the question of the “warnings”. What the Turks have NOT announced is on what frequency these warnings were sent. A radio set generally only monitors one frequency at a time, and warplanes would presumably leave ground control to monitor enemy frequencies. At the speed they fly (although the SU24 is rather old, and is most certainly not a fighter) the crew will still have plenty to do besides sweep through radio frequencies in case there is something relevant. If the Turks wanted to be malicious, all they had to do was to send their warnings on frequencies the Russians would not receive.

The next question is why did the Turks simply not protest through diplomatic channels and threaten to shoot aircraft down if this was repeated. Assuming the Russians did fly over Turkey by mistake, the mistake would be corrected. Of course, then Erdogan could not claim he was “being tough on Russia” in the forthcoming elections.

The reasons why Turkey might have planned it are reasonably clear. Doing that and getting away with it is good election material. Erdogan has a deep dislike of Assad, and the Syrian Turkmen are strongly resisting Assad, and hence may well be subject to Russian bombing. The Turkmen resistance is, of course, another example of people working against their own best interests. In the event that Assad goes, who will rule Syria? My guess is obvious: ISIS. And if the Turkmen think Assad is bad, wait until they see ISIS up close. Meanwhile, the Russians are less than happy with the Turkmen who shot the Russian pilot while parachuting. Apparently they have stated that Alpaslan Celik is a “dead man walking”. We may now see how good the modern Spetsnaz is. To add to the confusion, President Obama is apparently deploying further US special forces to Syria, with the apparent goal of killing ISIS leaders. How much good this will do remains to be seen.

As for Turkey’s role in this, it flaunts its NATO membership when it shoots down a Russian plane, while expecting the threat of NATO will prevent Russia from taking any revenge. It had better be right, because that could trigger WW III, and nobody wins that. On the other hand, it knows many of its NATO “allies” are fighting ISIS, so what does Turkey do? It helps ISIS. Syrian oil comes from the eastern part of the country, while oil also comes from ISIS controlled areas in Iraq. The oil money finances ISIS, so where do they sell the oil? A casual glance at the map leaves one country as an obvious transit point: Turkey. Russian air strikes had apparently destroyed 800 tankers of oil heading towards Turkey, and that may have inspired the attack on the Russian aircraft. Russia is satisfied that it understands Turkey’s role, and is apparently imposing a number of economic sanctions on it, which may not be what Erdogan wants to see in his election campaign. The situation in the Middle East is not getting any closer to resolution any time soon.