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Comment by joshstrange | Hacker News Reader

> There was just one catch to landing that deal: It had to hire the streaming company’s vice president of IT operations, Michael Kail, as a consultant and an advisor, and pay him with fees and stock options.

I completely get how a startup would take this deal, however gross it is, but what I don't understand is how the exec got away with it from Netflix's side. And the fact this wasn't just 1 but 8 other startups he did this to/with as well. I can't tell from the article if Netflix was aware or unaware of this "Agreement" and if they weren't aware... how? Did no one ever mention "Oh yeah, we hired Kail like you asked/required us to"?

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This was a vendor/customer relationship. Once that's set up, the only communication would be via accounts payable and technical staff, and probably wasn't frequent or deep. It's perfectly possible that nobody ever mentioned it.

The companies paying Kail know enough to never mention this to anyone else at Netflix. They know what they are doing. And this is why it is common in industry--it's commonly undetectable, and, sadly, that alone will influence many folks' moral compass heading.

One point that was mentioned that was interesting was...

> "When an inquiry from the Netflix CEO ensued, Kail falsely denied that he was formally working with Platfora."

This data point suggests that Kail was pushing underwhelming or otherwise odd-shaped vendor products frequently and/or persistently enough that people at Netflix suspected he was a shill for vendors. The fact that Reed Hastings is presumably calling Kail out for this means the bad smells were pretty powerful. Kail probably does not have final boss-level skills at reading the room.

HR and rules are for the little people. VPs can do pretty much whatever they want for a LOOOONG time at large tech companies before any consequence catches up with them.

This isn’t true at the big company I’m at. I’ve seen several VPs fired in the 10 years I’ve been here.

That doesn't make anything I said less valid. You just experienced the losers of the internal game of thrones, the question is "fired why?" and "how long did it take?"

For inappropriate behavior, and fired very quickly

Big pharma CTO mandated the use of a certain software while everyone knew they were coming from the company and sits on their board. I'm certain the kickbacks are still happening but in different forms: job, advisory role ...so on and so forth.

That's the key question.

In all the companies I worked for in the last 20 years he would have been fired instantly.

As soon as the right person found out about it...

How would it be detected?

The journalist got it wrong. The startups weren't victims. They were clearly complicit in the crime. They could have very easily reported the bribery scheme to the Netflix board and gotten him fired, but they took the contract instead. The DOJ claimed that the people at Netflix who used the services assumed they were evaluating the services and not paying for them.

There are many better articles about this story from reputable news sites. The more interesting story from this article is what is Business of Business and Thinknum? Is it another Ozy?

> “The startups that paid to play, and possibly many others, believed this was how Netflix did business,” the prosecutors said.

You're actually accusing the prosecutor of getting it wrong... which seems a bit arrogant.

Believing that a corp you do business with does things illegally doesn't relieve you from some duty to report it (especially if you become involved). Very likely, providing evidence relieved them from being prosecuted.

The prosecutors were making a case against Kail. If they make it seem like the startups were complicit or even proposed it, that would hurt their case against Kail.

These arrangements were obviously illegal, and it beggars belief to suggest that so many startups were unaware of that.

If complicity weakens the case against Kail, why are you suggesting the startups did something illegal? You can't have it both ways. The complicity is either a crime alongside Kail's crime (and completely independent), or it isn't.

They both did something illegal. Did something I say make you believe I think otherwise?

The prosecutors chose to go after Kail because he is easier to nail. They get to charge him separately for the fraud he committed with each startup, so it's more likely that at least one will stick. The startups are required to help the DOJ build a case and get a warning that they won't get off so easily if they're caught again. Since they weren't charged this time, these cases are fair game to litigate in the future together with any new charges.

What these startups did is obviously illegal, and they and the DOJ are obviously well aware.

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