Time Article Discussion - "Effective Altruist Leaders Were Repeatedly Warned About Sam Bankman-Fried Years Before FTX Collapsed"

MaxRa - I agree this is also part of the mainstream media's anti-EA mind-set: a zero-sum view of influence, prestige, and power. There are many vested interests (e.g. traditional political institutions, charities, think tanks, media outlets) that are deeply threatened by EA, because they simply don't care about scope-sensitivity, tractability, neglectedness, or long-termism. Indeed, these EA values directly challenge their day-to-day partisanship and virtue-signaling.

The EA movement may have naively under-estimated the strength of these vested interests, and their willingness to play dirty (through negative PR campaigns) to protect their influence.

Hm you say "EA didn't listen to anyone who warned them about obvious scams", but the article says: 

None of the early Alameda employees who witnessed Bankman-Fried’s behavior years earlier say they anticipated this level of alleged criminal fraud. There was no “smoking gun,” as one put it, that revealed specific examples of lawbreaking. Even if they knew Bankman-Fried was dishonest and unethical, they say, none of them could have foreseen a fraud of this scope.

And

No one has alleged criminal behavior on the part of top EA figures. None of the people who raised concerns about Bankman-Fried to EA leaders in 2018 and 2019 say they warned about specific criminal activity, nor did they foresee the size and scope of the alleged fraud at the heart of the FTX collapse. In charging documents, federal prosecutors identify the start of Bankman-Fried’s alleged fraud as 2019.

So I'm not sure you can say there were warnings of "obvious scams".

Also

Sometime [in 2019], the Centre for Effective Altruism did an internal investigation relating to CEA and Alameda, according to one person who was contacted during the investigation, and who said it was was conducted in part by MacAskill. Bankman-Fried left the board of the organization in 2019. The Centre for Effective Altruism did not respond to repeated requests from TIME to discuss the circumstances leading to his departure; MacAskill and others declined multiple opportunities to answer questions about those events.

So I'm not sure it is accurate to say that "EA didn't listen to" the warnings which were given. I'm certainly curious about the quality of the internal investigation by CEA. I wouldn't be surprised if there were gaps/it was of low quality. But I also wouldn't be surprised if it was of expected/good quality given the nature of the complaints made. And I wouldn't be surprised to find that Sam would have fooled a non-EA, commissioned investigation too, enough that non-EA nonprofits would have felt comfortable taking his money. I mean, I assume Sam would have refused to give internal financial documents to independent investigators, and such a refusal to engage thoroughly from Alameda ("Um, no you can't see our internal documents? Who do you think you are..?") would be so normal for an investment firm that it can't even be seen as a red flag. 

I'm not surprised that CEA is refusing to comment til after the commissioned independent investigation is complete, whether or not their 2019 internal investigation was of high, decent, or low quality. I'm not sure which it was yet. I guess I'll wait to see. 

[Edit: In general I'm against pushing to make others responsible for the sins of others  without a lot of proof.  Especially when the "sinners" had dark triad traits who could have been trying to manipulate the others. I know the general population and journalists don't think that way or have as much patience in that regard, but I'd like it if EAs did. Judge leadership for competence, and replace them if needed, sure, but comeuppance here is still likely to be punishment for trying and failing. And I think punishment should be reserved for the actual sinners themselves. I'm not at all sure anyone who didn't work directly with SBF at Alameda "sinned" here. And if they didn't, EA itself and EA leaders don't "deserve" comeuppance, IMO. 

I find comeuppance as journalistic motivation plausible, but I also admit that comeuppance might not be the journalist's intention with this article, even subconsciously. But it sounds like you are also arguing that comeuppance would be warranted for other reasons here, and I just don't think so. Comeuppance is moral punishment. I'll reiterate that it would be fine to push that leadership should be changed (after the investigation). But let the actual sinners, and the sinners alone, be punished for their sins. [[I don't want to suppress discussion, so sure, place your bets, but please don't assume moral fault yet.]]

Finally, I agree with you that many journalists are activists themselves. But I'll also note that when journalists and others say that "EA isn't doing enough", they are still potentially using another way to shame moral actors who otherwise appear to be doing more than them. It is a frame that EA has more agency and privilege than them (perhaps unjustly given), but still has less actual goodness and merit than them. So I still find it very plausible that the recent journalists are (consciously or unconsciously) doling out extra blame and shame to put aspiring altruists in their place. And if it is not the journalists themselves doing this, perhaps, as a business, they are catering to the many, many readers who click for and revel in "comeuppance".]

I don't want to say your take is wrong because you are sort of sharing feelings, but like.... according to the article, ex-Alameda employees don't seem to think that those flags were warning flags for the massive fraud and crash-and-burn failure that was to come. And re: inaction, the article says CEA did an internal investigation in 2019 (it drops the info kinda randomly. As you say, the article isn't well-optimized to come away with an understanding of the details). And idk what new warning flags came after 2019, I'm not seeing any in the article.

I don't know what you mean by this. I've definitely talked to many ex-Alameda employees and they totally think this was a warning flag for the massive fraud. Nobody assigned huge probability to the specific scenario that happened but "Sam causes some kind of huge explosion, or does something pretty fradulent or at the very least builds a highly unethical organization" was totally the kind of thing many people were worried about (which is indeed why some of them went around warning others).

I've written about this in many of my other comments. Also, CEA doing an investigation in 2019 seems I think wrong, or at least I have never heard of this investigation, and if there was an investigation it seems like it was worse than useless by creating a sense that "something" had been done, but really without any actual consequences as far as I can tell.

How so? Aren't these both cases where Habryka has similar amounts of professional knowledge? If not, which case do you think he knew more about?

"every other long-time EA involved had left because of the same concerns" is significant corroboration though (and a direct quote from an on-the-record source).

Threats are (usually) very bad, even if the person threatened later does something bad. But I still don't actually feel I know "Will did something really bad to Tara"*, because it's so vague how far a stretch "basically threatenrd" is from "threatened".

*I'm already convinced he made a major error of judgment in backing Sam given the existence of thr doc listing his misdeeds mentioned in the Time article.

You may indeed believe that and have said that, but the question for us is: Was it reasonable for EA leaders to think this degree of bad behaviour was particularly out of the ordinary for the early days of a startup?

To take Nathan Young's four examples, looking at some of what major news outlets said prior to 2018 about these companies' early days...it doesn't seem that unusual? (Assuming we now know all the key accusations that were made - there may of course have been more.)

• Facebook
  • "The company and its employees have also been subject to litigation cases over the years...with its most prominent case concerning allegations that CEO Mark Zuckerberg broke an oral contract with Cameron Winklevoss, Tyler Winklevoss, and Divya Narendra to build the then-named "HarvardConnection" social network in 2004, instead allegedly opting to steal the idea and code to launch Facebook months before HarvardConnection began... The original lawsuit was eventually settled in 2009, with Facebook paying approximately $20 million in cash and 1.25 million shares." (Wikipedia, referencing articles from 2007 to 2011)
  • "Facebook co-founder, Eduardo Saverin, no longer works at Facebook. He hasn't since 2005, when CEO Mark Zuckerberg diluted Saverin's stake in Facebook and then booted him from the company." (Business Insider, 2012)
  • "we also uncovered two additional anecdotes about Mark's behavior in Facebook's early days that are more troubling...— an apparent hacking into the email accounts of Harvard Crimson editors using data obtained from Facebook logins, as well as a later hacking into ConnectU" (Business Insider, 2010)
• Google
  • “Asked about his approach to running the company, Page once told a Googler his method for solving complex problems was by reducing them to binaries, and then simply choosing the best option,” Carlson writes. “Whatever the downside he viewed as collateral damage he could live with.” That collateral damage sometimes consisted of people. In 2001, frustrated with the layer of managers overseeing engineers, Page decided to fire all of them, and publicly explained that he didn’t think the managers were useful or doing any good." (Quartz, 2014)
  • "Page encouraged his senior executives to fight the way he and Brin went at it. In meetings with new hires, one of the two co-founders would often provoke an argument over a business or product decision. Then they would both sit back, watching quietly as their lieutenants verbally cut each other down." (Business Insider, 2014)
• Gates
  • "Allen portrays the Microsoft mogul as a sarcastic bully who tried to force his founding partner out of the firm and to cut his share in the company as he was recovering from cancer." (Guardian, 2011)
  • "...he recalls the harsher side of Gates's character, anecdotes from the early days...Allen stopped playing chess with Gates after only a few games because Gates was such a bad loser he would sweep the pieces to the floor in anger; or how Gates would prowl the company car park at weekends to check on who had come in to work; or the way he would browbeat Allen and other senior colleagues, launching tirades at them and putting them down with the classic denigrating comment: "That's the stupidest fucking thing I've ever heard!" (Guardian, 2011)
  • "They met in 1987, four months into her job at Microsoft...meeting her in the Microsoft car park, he asked her out" (Independent, 2008)
• Bezos
  • Obviously his treatment of workers is no secret (and it seems natural for people to think he's probably always been this way)

It's not surprising to me if EA leaders thought most startups were like this - we just only hear stories about the ones that make it big.

I've only worked for one startup myself and I wasn't privy to what went on between executives, but: one of them said to a (Black, incidentally) colleague upon firing him "You'll never work again," another was an older married man who was grinding up against young female colleagues at an office party (I actually suggested he go home and he said, "No - I'm having fun" and laughed and went back to it), and another made a verbal agreement with some of us to pay us overtime if we worked 12-hour days for several weeks and then simply denied it and never did. [edit: I should clarify this was not an EA org]

Thanks for giving honest quotes on a serious crime. On balance I'm in favour of your giving quotes here and that can't have been easy (though I feel the article is inaccurate in tone).

I'm sad to hear that this is tiring, though I still am gonna say things I think. Feel free to DM me if you think I'm wrong but don't want to engage publicly.

My error, By normal I don't mean good, I mean "not usual". 

I sense there were this level of concern externally about facebook, that google did some pretty shifty shit, that Gates and Bezos were similarly cutthroat.

Do you disagree.

I feel glad.

Personally it doesn't need to be soon, but I appreciate something I can hold you to a lot, that makes me not worry that this trying to minimise.

Thanks for making the case. I'm not qualified to say how good a Board member Nick is, but want to pick up on something you said which is widely believed and which I'm highly confident is false.

Namely - it isn't hard to find competent Board members. There are literally thousands of them out there, and charities outside EA appoint thousands of qualified, diligent Board members every year. I've recruited ~20 very good Board members in my career and have never run an open process that didn't find at least some qualified, diligent people, who did a good job.

EA makes it hard because it's weirdly resistant to looking outside a very small group of people, usually high status core EAs. This seems to me like one of those unfortunate examples of EA exceptionalism, where EA thinks its process for finding Board members needs to be sui generis. EA makes Board recruitment hard for itself by prioritising 'alignment' (which usually means high status core EAs) over competence, sometimes with very bad results (e.g. ending up with a Board that has a lot of philosophers and no lawyers/accountants/governance experts).

It also sometimes sounds like EA orgs think their Boards have higher entry requirements than the Boards of other well-run charities. Ironically, this typically produces very low quality EA Boards, mainly made up of inexperienced people without relevant professional skills, but who are thought of as 'smart' and 'aligned'.

Of course, it will be hard to find new Board members right now, because CEA's reputation is in tatters and few people will want to join an organisation that is under serious legal threat. But it seems at best a toss up whether it's worth keeping tainted Board member(s) because they might be tricky to replace, especially when they have recused themselves from literally the single biggest issue facing the charity.

Overall, I think Nick did the right thing ex ante when he chose to run the Future Fund and accept SBF's money (unless he knew specifics about potential fraud). 

If he should be removed from the board, I think we either need an argument of the form "we have specific evidence to doubt that he's trustworthy" or "being a board member requires not just absence of evidence of untrustworthiness, but proactively distancing yourself from any untrustworthy actors, even if collaborating with them would be beneficial". I don't buy either of these.

I of course knew that FTX and Alameda were very closely related, that Sam and Caroline were dating and that the two organizations had very porous boundaries. But I did not know that the rest of the world did not know this, and I had no idea that it mattered much legally. They were both located in the Bahamas, and I definitely did not know enough finance law to know that these two organizations were supposed to operate at arms length.

Maybe there was someone else who did successfully put the pieces together and then stayed quiet, but I would definitely not treat this as a "smoking gun" since I saw it myself, as did many people I know, and neither me nor other people realized that this was actually pretty shady.

And legally there were actually distinct companies, at least the same way GiveWell and OpenPhil were different companies back in 2018 when they still worked in the same office and shared some leadership, and that itself doesn't raise any flags for me. FTX and Alameda definitely actually were different companies with some offices being just for Alameda (like the one in Berkeley), though they definitely did not operate "at arms length" as I think the legal situation required.

E.g. concerns about the other half of the FTX/Alameda split are labelled as just "internal politics,"

What do you mean by "concerns about the other half of the FTX/Alameda split"?

Look, I think Will has worked very hard to do good and I don’t want to minimize that, but at some point (after the full investigation has come out) a pragmatic decision needs to be made about whether he and others are more valuable in the leadership or helping from the sidelines. If the information in the article is true, I think the former has far too great a cost. 

This was not a small mistake. It is extremely rare for charitable foundations to be caught up in scandals of this magntiude, and this article indicates that a signficant amount of the fallout could have been prevented with a little more investigation at key moments, and that clear signs of unethial behaviour were deliberately ignored. I think this is far from competent. 

We are in the charity business. Donors expect high standards when it comes to their giving, and bad reputations directly translate into dollars. And remember, we want new donors, not just to keep the old ones. I simply don’t see how “we have high standards, except when it comes to facilitating billion dollar frauds” can hold up to scrutiny. I'm not sure we can "credibly convince people" if we keep the current leadership in place. The monetary cost could be substantial. 

We also want to recruit people to the movement. Being associated with bad behaviour will hurt our ability to recruit people with strong moral codes. Worse though, would be if we encouraged “vultures”. A combination of low ethical standards and large amounts of money would make our movement an obvious target for unethical exploiters, as appears to have already happened with SBF.

Being a brilliant philosopher or intellectual does not necessarily make you a great leader. I think we can keep the benefits of the former while recognizing that someone is no longer useful at the latter. Remaining in a leadership position is a privilege, not a right.

Isn't part of this considering whether Will's comparative advantage is as a Board member? It seems very unlikely to me that it is, versus being a world class philosopher and communicator.

So I agree with your general point that leaders who make mistakes might not need to resign, but in the specific case I can't see how Will is most impactful by being a Board member at really any org, as opposed to e.g. a philosophical or grant-making advisor.

That assumes their level of ‘public leader-ness’ is fixed. You might prefer to have no one trying to represent EA publicly than to have people doing it sub-optimally.

I think I agree with both of these, actually: EA needs unusually good leaders, possibly better than we can even expect to attract.

(Compare EA with, say, being an elite businessperson or politician or something.)

to put this guy on a pedestal; to elevate him as a moral paragon and someone to emulate; to tie EA's reputation so closely to his

I always find this claim a bit confusing: did we actually do those things? Are there some specific examples of doing this?

I can think of... the 80k interview and that's about it? I guess engaging with the FTX Foundation was somewhat positive but I don't think it was putting him on a pedestal. In fact when I look back I feel like a lot of the content linking Sam to EA came from people talking to Sam. I may well just not be remembering stuff though!

I don't deny that Sam was perceived in that way, but it's not clear to me that this was something that was done (even accidentally) by "EA leaders".