The French cement giant started operating in Syria just before the civil war erupted. When Islamic State took over the region, Lafarge paid them protection money so it could keep trading. The consequences are still playing out
Again and again, Bruno Pescheux made one point to his colleagues: no one must know what their company was up to. Secrecy was paramount. In 2013 and 2014, Pescheux ran the Syrian subsidiary of Lafarge SA, the French company that was then the world’s biggest cement conglomerate. As a civil war caught and spread, the company struck a grim deal: to pay millions of dollars to Islamic State (IS), the world’s most notorious terrorist group, treating it as a strategic ally.
These payments bought IS’s blessing so that Lafarge’s factory in Syria could keep making and selling cement – even as its European executives left the country, its local employees got kidnapped, and bombs and gunfire tore up the region. Lafarge bought raw materials from IS-approved vendors, supplied IS with cement, and paid them to squeeze the competition – in this case, cement imports coming over the border from Turkey. In mob jargon, this was more than protection money; in MBA jargon, the company optimised for IS. The managers in Lafarge’s Syrian subsidiary knew all too well what they were doing, and they tried hard to hide it. Once, while referring to vehicle passes that IS issued Lafarge’s trucks, Pescheux emailed a go-between to say that “the name of Lafarge should never appear for obvious reasons in any document of this nature. Please use the words Cement Plant if you need but never the one of Lafarge.”
At the time, the factory, in the town of Jalabiya, was one of more than 1,600 that Lafarge ran in 61 countries. But this was no distant outpost going rogue, unnoticed by headquarters. Executives in Lafarge’s offices in Paris were complicit in the relationship with IS, as dozens of internal emails and documents show. On such evidence of wilful collaboration with IS, the US Justice Department filed criminal charges against Lafarge. (The company merged with the Swiss cement giant Holcim in the summer of 2015, not long after IS finally annexed the Jalabiya factory for itself.) Lafarge pleaded guilty to conspiring to provide material support to terrorist groups – the first successful criminal prosecution of any company on this charge in the US. In the autumn of 2022, the Justice Department fined Lafarge $778m. One prosecutor described Lafarge’s acts as a “staggering crime”.
The penalty threw open the doors to still more legal trouble. A group of more than 800 Yazidis, represented by Amal Clooney and other lawyers in the US, is suing Lafarge for its aid to IS, which murdered, kidnapped and raped thousands of members of this religious minority group in northern Iraq. Others who have suffered IS’s violence have filed separate lawsuits, including US journalists, aid workers, military service members and their families. “None of the $778m fine imposed by the Justice Department went to any of the victims,” a lawyer in one of these suits told me. “And this is a deep-pocketed defendant – not a random front company for al-Qaida.” These are civil cases, though, so even if Lafarge loses them, the consequences will be all too familiar. A corporation pays an affordable sum in damages. The court issues a stern scolding. Onward to business as usual.
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Fintech bullies stole your kid’s lunch money
I'm coming to DEFCON! On Aug 9, I'm emceeing the EFF POKER TOURNAMENT (noon at the Horseshoe Poker Room), and appearing on the BRICKED AND ABANDONED panel (5PM, LVCC - L1 - HW1–11–01). On Aug 10, I'm giving a keynote called "DISENSHITTIFY OR DIE! How hackers can seize the means of computation and build a new, good internet that is hardened against our asshole bosses' insatiable horniness for enshittification" (noon, LVCC - L1 - HW1–11–01).
Three companies control the market for school lunch payments. They take as much as 60 cents out of every dollar poor kids' parents put into the system to the tune of $100m/year. They're literally stealing poor kids' lunch money.
In its latest report, the Consumer Finance Protection Bureau describes this scam in eye-watering, blood-boiling detail:
https://files.consumerfinance.gov/f/documents/cfpb_costs-of-electronic-payment-in-k-12-schools-issue-spotlight_2024-07.pdf
The report samples 16.7m K-12 students in 25k schools. It finds that schools are racing to go cashless, with 87% contracting with payment processors to handle cafeteria transactions. Three processors dominate the sector: Myschoolbucks, Schoolcafé, and Linq Connect.
These aren't credit card processors (most students don't have credit cards). Instead, they let kids set up an account, like a prison commissary account, that their families load up with cash. And, as with prison commissary accounts, every time a loved one adds cash to the account, the processor takes a giant whack out of them with junk fees:
https://pluralistic.net/2024/02/14/minnesota-nice/#shitty-technology-adoption-curve
If you're the parent of a kid who is eligible for a reduced-price lunch (that is, if you are poor), then about 60% of the money you put into your kid's account is gobbled up by these payment processors in service charges.
It's expensive to be poor, and this is no exception. If your kid doesn't qualify for the lunch subsidy, you're only paying about 8% in service charges (which is still triple the rate charged by credit card companies for payment processing).
The disparity is down to how these charges are calculated. The payment processors charge a flat fee for every top-up, and poor families can't afford to minimize these fees by making a single payment at the start of the year or semester. Instead, they pay small sums every payday, meaning they pay the fee twice per month (or even more frequently).
Not only is the sector concentrated into three companies, neither school districts nor parents have any meaningful way to shop around. For school districts, payment processing is usually bundled in with other school services, like student data management and HR data handling. For parents, there's no way to choose a different payment processor – you have to go with the one the school district has chosen.
This is all illegal. The USDA – which provides and regulates – the reduced cost lunch program, bans schools from charging fees to receive its meals. Under USDA regs, schools must allow kids to pay cash, or to top up their accounts with cash at the school, without any fees. The USDA has repeatedly (2014, 2017) published these rules.
Despite this, many schools refuse to handle cash, citing safety and security, and even when schools do accept cash or checks, they often fail to advertise this fact.
The USDA also requires schools to publish the fees charged by processors, but most of the districts in the study violate this requirement. Where schools do publish fees, we see a per-transaction charge of up to $3.25 for an ACH transfer that costs $0.26-0.50, or 4.58% for a debit/credit-card transaction that costs 1.5%. On top of this, many payment processors charge a one-time fee to enroll a student in the program and "convenience fees" to transfer funds between siblings' accounts. They also set maximum fees that make it hard to avoid paying multiple charges through the year.
These are classic junk fees. As Matt Stoller puts it: "'Convenience fees' that aren't convenient and 'service fees' without any service." Another way in which these fit the definition of junk fees: they are calculated at the end of the transaction, and not advertised up front.
Like all junk fee companies, school payment processors make it extremely hard to cancel an automatic recurring payment, and have innumerable hurdles to getting a refund, which takes an age to arrive.
Now, there are many agencies that could have compiled this report (the USDA, for one), and it could just as easily have come from an academic or a journalist. But it didn't – it came from the CFPB, and that matters, because the CFPB has the means, motive and opportunity to do something about this.
The CFPB has emerged as a powerhouse of a regulator, doing things that materially and profoundly benefit average Americans. During the lockdowns, they were the ones who took on scumbag landlords who violated the ban on evictions:
https://pluralistic.net/2021/04/20/euthanize-rentier-enablers/#cfpb
They went after "Earned Wage Access" programs where your boss colludes with payday lenders to trap you in debt at 300% APR:
https://pluralistic.net/2023/05/01/usury/#tech-exceptionalism
They are forcing the banks to let you move your account (along with all your payment history, stored payees, automatic payments, etc) with one click – and they're standing up a site that will analyze your account data and tell you which bank will give you the best deal:
https://pluralistic.net/2023/10/21/let-my-dollars-go/#personal-financial-data-rights
They're going after "buy now, pay later" companies that flout borrower protection rules, making a rogues' gallery of repeat corporate criminals, banning fine-print gotcha clauses, and they're doing it all in the wake of a 7-2 Supreme Court decision that affirmed their power to do so:
https://pluralistic.net/2024/06/10/getting-things-done/#deliverism
The CFPB can – and will – do something to protect America's poorest parents from having $100m of their kids' lunch money stolen by three giant fintech companies. But whether they'll continue to do so under a Kamala Harris administration is an open question. While Harris has repeatedly talked up the ways that Biden's CFPB, the DOJ Antitrust Division, and FTC have gone after corporate abuses, some of her largest donors are demanding that her administration fire the heads of these agencies and crush their agenda:
https://prospect.org/power/2024-07-26-corporate-wishcasting-attack-lina-khan/
Tens of millions of dollars have been donated to Harris' campaign and PACs that support her by billionaires like Reid Hoffman, who says that FTC Chair Lina Khan is "waging war on American business":
https://prospect.org/power/2024-07-26-corporate-wishcasting-attack-lina-khan/
Some of the richest Democrat donors told the Financial Times that their donations were contingent on Harris firing Khan and that they'd been assured this would happen:
https://archive.is/k7tUY
This would be a disaster – for America, and for Harris's election prospects – and one hopes that Harris and her advisors know it. Writing in his "How Things Work" newsletter today, Hamilton Nolan makes the case that labor unions should publicly declare that they support the FTC, the CFPB and the DOJ's antitrust efforts:
https://www.hamiltonnolan.com/p/unions-and-antitrust-are-peanut-butter
Don’t want huge companies and their idiot billionaire bosses to run the world? Break them up, and unionize them. It’s the best program we have.
Perhaps you've heard that antitrust is anti-worker. It's true that antitrust law has been used to attack labor organizing, but that has always been in spite of the letter of the law. Indeed, the legislative history of US antitrust law is Congress repeatedly passing law after law explaining that antitrust "aims at dollars, not men":
https://pluralistic.net/2023/04/14/aiming-at-dollars/#not-men
The Democrats need to be more than The Party of Not Trump. To succeed – as a party and as a force for a future for Americans – they have to be the party that defends us – workers, parents, kids and retirees alike – from corporate predation.
Support me this summer on the Clarion Write-A-Thon and help raise money for the Clarion Science Fiction and Fantasy Writers' Workshop!
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
https://pluralistic.net/2024/07/26/taanstafl/#stay-hungry
Image:
Cryteria (modified)
https://commons.wikimedia.org/wiki/File:HAL9000.svg
CC BY 3.0
https://creativecommons.org/licenses/by/3.0/deed.en
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What's Aubree's coolest story about how she got one of her scars? (Besides the one she doesn't talk about)
"Although, really it's a bit of a stupid story if I'm being honest, but the scar's cool as hell and that counts for something, yeah?
“It was one of my first jobs with a trade caravan, just as an extra pair of hands-- green as I was, they wouldn’t have hired someone like me as an armed guard even if I’d thought to offer back then, but it’s easy enough to prove I can haul shit around, and not a lot of folks are keen to take the pass north of Stormridge in any case so they were happy for the extra help.
"We were five days into the Wildcrest Mountains-- about halfway through. It was just starting to get into nightfall, and we were trying to push through to a sheltered spot one of the guards knew was a little ways ahead to camp for the night, when we heard the howlin up in the ridges, and comin down toward us.
"Now, we get wolves out in Crickhollow, sometimes; usually just one by itself skulkin round the pastures, and if they can catch em in time it mostly only takes a few dogs to run em off back where they came. We’d spotted some goblin scouts makin eyes at the caravan a few days earlier and spooked em away easy enough with a bit of barkin of our own, so when we heard the wolves I figured I knew what we were in for. But let me tell you: wolves in the mountains are different than the ones you get round halfling country. It’s cold, and hard, and it makes em strong, and it makes em hungry.
"We had six armed guards with us, proper kitted with swords and shields and all, and of course I was out there with Corker, hangin back a bit just not to get underfoot of em. They were spreadin out to circle the wagons, but the wolves had the jump on us and came leapin out the dark before we were ready. Biggest godsdamned things I ever saw! One slipped through and went straight for the horses, but I was ready for him-- hit him midair and sent him reelin away, and I figured that’d be the end of it for that one. Turned around and saw another one was lungin and snappin at one of the guards-- skinny lad called Derek-- and had him in a bad way; it’d got him offbalance, and looked about to take him down. I was to em before I could even think-- well, what else could I have done? The wolf had got its teeth in him, but it didn’t see me coming-- I hauled off-- WHACK-- cracked him square in the face, must have damn near caved his skull in! Just as he was getting his bearings, and I was pulling back for another swing-- the bloody bastard I’d clipped earlier came in from behind and sank every damn one of his teeth into me, and dragged me to the ground.
"Well, Derek managed to get his feet under him in time to stop the other one from jumpin in and tearin my damn guts out, but only just. The one that had me by the shoulder had a death grip on me-- I was swinging Corker round like mad, but I couldn’t get any good blows in like that, on the ground and backwards and with only one arm. Still put in a fair fight, for all that-- I was snarlin like a beast myself, grabbin for its face with my left hand best I could. Then suddenly he dropped me, yowling somethin awful. Another guard, big fella called Radimir, saw him layin into me and ran him straight through. Good thing, too! If I’d been alone out there that would have been it for me. Stupid way to learn not to put your back to a wolf, but it’s always better to have friends to back you up anyway. Especially when you’ve got more muscles than good sense, haha!
"Anyway, the rest of the pack did take off after seeing we could put up more fight than they wanted-- they’re tough, not stupid. No one was hurt except a couple of the fighters and myself, and we made it to the outpost just fine. I hadn’t really imagined I’d be spendin my first couple weeks in Pelora laid up all in bandages with a broken collar, but hey, it gave me a good story for breakin ice at taverns. Bit more impressive to talk about than this-- [she points to one mark among many on her arms, brown with age]-- that I got trying to help with the bakin when I was six…"
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