THE RULES, THE MEDIA and THE MADNESS
This segment of the Price investigation involves a mysterious BMW, Bloomerg BusinessWeek, breaking news about restaurants, berating employees, 120,000 jobs, Glassdoor.com and a dog... albeit not necessarily in that order.
Hundred Eighty Degrees gets it. Payment processing is not sexy. It's not a conversation-starter for your next cocktail party. In fact, our investigation of Gravity Payments and Dan Price can sound downright wonky at times.
That said, make no mistake -- this is a blockbuster. More importantly, it's a blockbuster with massive implications.
Hundred Eighty Degrees has alleged that Price, CEO of the Seattle-based Gravity Payments - the 35th largest credit card processing outfit - leverages unsuspecting restaurant accounts in order to process fraudulent credit card transactions. Price codes these restaurants as bars because bars have lower processing fees. This affords him an incomparable competitive advantage which, in turn, adds more and more merchants to his growing stable and more and more revenue to company coffers. It also means Price can pay himself 400 percent more than the average CEO in his industry... and it means he can buy a massive house, a yacht, hire a round-the-clock personal handler, and even add a super-precious puppy to his personal portfolio perhaps to deflect the narrative away from the fact that he dramatically underpaid his staff for years. After all what's cuter than a fluffy puppy smoking a cigar.
By the way, recently available court documents reveal that Price's income through September 2015 was over $475K. Didn't he pledge that he was immediately dropping his wage to $70K in order to earn the same wage as his minions?
And regarding those excessively low wages Price assigned to his minions for years, when April 15, 2015 rolled around, suddenly somehow Price had a soul-filled epiphany that rocketed him into the celebrity stratosphere and earned him the title of "Corporate Jesus." He told his crew in a room filled with camera operators from The NY Times and NBC, from that point forward, the minimum salary would be $70K... although, lest we forget about the little caveat that said minions would reach such an enviable watermark after yet another two years and 8 months on the job. All the ensuing pandemonium over the $70K figure was a direct result of Price feeding media the big number and media biting into it like a cheetah on a gazelle. More on this later.
One other note that adds to this bizarro breadcrumb trail of deceit that Price incessantly perpetuates. As the story broke of his wage announcement, article after article, interview after interview quoted Price explaining how he still drove the same 12-year-old Audi he bartered for in exchange for processing services rendered to a local car dealer. Like a fluffy puppy, the Audi sound byte was yet another carefully crafted mechanism Price invoked to prove he was just a regular guy living a low-key, unadorned lifestyle. However, a source close to Gravity has come forward to inform Hundred Eighty Degrees that Price also drove a brand new BMW sedan, likely an i750, which somehow magically and quickly disappeared following more scrutiny of his erroneous claims regarding the lawsuit with his brother, the remortgaging of his properties and the renting of his house. We invite anyone with further information about this BMW to contact us. While this carries nowhere near the weight of widespread fraud, it does, however, add to an ever-growing battery of lies that define this character.
Ultimately, in just a few short years, Price went from the buttoned-up young pioneer to the bearded guardian spirit of the small business universe seemingly capable of walking across the Puget Sound. But herein lies the rub; Price's empire is built upon a foundation of smoke and mirrors. His fame is no more than a vainglorious take-no-prisoners PR assault. And, in true tragic irony, his obsession with being able to sustain the ride might just become that which does him in.
Let's get the latest wonky stuff out of the way first.
Price has claimed that 25 percent of gravity merchant accounts are restaurants. However, a source with INTIMATE knowledge of his operation HAS informed us that 60-80 percent of its merchants are restaurants. Cue blockbuster movie soundtrack, explosions and unsuspecting souls running for their lives.
Gravity serves somewhere between 14,000 and 19,000 merchants. For the sake of argument, let's say they serve 14,000 merchants. On the low end, 60 percent of 14,000 Dan Price clients equals 8,400 merchants who fraudulently process transactions. On the high end, 80 percent of 14,000 Dan Price clients equals 11,200 merchants who fraudulently process transactions. Either way, it's massive fraud. And here's just how massive it is.
Let's say Price's scam involves only 5,000 restaurants, regardless of the fact that we've now been told it's likely double that amount. And let's say the average annual gross revenue of those restaurants is $500,000. Therefore, 10,000 x $500,000 = $5,000,000,000 per year. Yes, five billion dollars per year. (We must remember, that each and every transaction within an incorrectly classified restaurant is a fraudulent transaction deserved of fines and other penalties, according to Visa itself.) Visa and MasterCard transactions account for about 70 percent of all restaurant transactions. Therefore, $5,000,000,000 x .70 equals a gross of $3,500,000,000 per year in fraudulent transactions subject to fines and penalties. Some of Price's merchant accounts have been with him for 5-10 years. It's safe to say, revenue figures like these might even make the Koch Brothers fidget in their knickers.
Another interesting little tidbit is the fact that, because Price fraudulently codes restaurants as bars, American Express customers are cheated out of their rewards. So too are Visa members and MasterCard members and Discover members.
To understand why all of this matters and how this further affects the public, Hundred Eighty Degrees will first share a recent email from someone who obviously drank a vat-full of Price's Kool-Aid. Please note that said disciple was courageous enough to provide a fake name and fake email address.
Just in case Mr. "Steinert" cares to sniff around this site again to see how his anonymous bravado has affected our forward march on this investigation, here would be the official Hundred Eighty Degrees response:
We appreciate you reaching out. That you think Dan Price "started an important wage debate" is simply fascinating unto itself. But that you think our story is funny is even more curious. That's because we don't think it's funny to jeopardize thousands of small businesses or tens if not hundreds of thousands of jobs. We don't think it's funny to commit fraud to the tune of hundreds of millions of dollars or more. We don't think it's funny to dramatically underpay employees for years and then suddenly play the role of global saint. We don't think it's funny to also viciously berate those same employees in front of one another, over and over again. We don't think it's funny to beat one's wife. And we certainly don't think that it's funny how people like you, across this nation and this planet, are so utterly ready and willing to be played like a bad violin by a bad violin player. Perhaps you will find something valuable about that.
If Price's scam involves 5,000-10,000 restaurants, each of those restaurants likely employs an average of a dozen people, at the very least. That means 60,000-120,000 jobs would be consequently jeopardized by Price's swindle. Every one of those staffers can lose a job because the restaurants they work for, per Visa and Mastercard rules and regs, can be held liable for unsustainable fines and penalties. Even if Visa and MasterCard do not fine these restaurants, they still have the right to audit them in order to ascertain how much fraud has been executed. Audits are not exactly free, considering accountants and lawyers and internal bookkeepers and owner-managers might very well have to wade through that muck for weeks if not months - and we all know time is money.
As we craft this very article, our sources tell us that Price is in the midst of a campaign to personally contact his restaurant merchants including Canlis and Agrodulce and other longtime allied and high-profile accounts stating, "...your MCC code is categorized correctly" and "that any fines or fees regarding this issue would be the responsibility of Gravity Payments." He has even gone so far as to tell these restaurants that being coded as a bar is absolutely fine. Makes sense that he's perpetuating the lie, because if he had to code the restaurant merchants with the proper MCC, at this point, he would be underwater on all of those accounts, and game over for him and Gravity. In other words, this is how he grew the company to what it is today, and this is how he games the system for personal gain.
So there again is Dan Price stating, "The business should elect the category..." WRONG. WRONG. AND WRONG. Dan Price is responsible for that determination. Price is flat-out lying to his merchants, to the industry and to his disciples in order preserve his lifeline to the silly money he's been paying himself for years. If Dan Price has somehow carved a sweetheart deal with Visa and MasterCard and Discover and Amex and all the card-issuing and card-acquiring banks on the planet, then that will most certainly be news to the remaining 99.999999% of the processing industry that is bereft of such privilege.
Merchants who have an MCC of 5812 do more food business than booze business and are thereby restaurants. Merchants who have an MCC of 5813 do more booze business than food business and are thereby bars. It's that simple.
Hundred Eighty Degrees has called and texted Price on three occasions concerning its findings to date. Price has neither responded nor has he specifically refuted our allegations at any time via any public media vehicle. This is eerily similar to Price refusing to specifically state that "he never beat Kristie Colón." This type of obfuscation or outright evasion typifies Price.
We have also emailed the entire Gravity Payments staff to let them know what they face. While our first email transferred without issue, our latest attempt revealed that Price has instituted a spam blocker for Hundred Eighty Degrees. No surprise. For one who seemingly cannot soak up enough media attention, we find it interesting how Price refuses to respond to a relative no-name like Hundred Eighty Degrees. If you read this, Dan Price, we have assembled a documentary film team and will be making our way toward you in the very near future. We hope you will make yourself available for an interview as you have for anyone and everyone over the past year.
Just today, Price made a very conspicuous nod via Facebook post to his "cherished Seattle clients," who happen to be nominated for prestigious James Beard Awards...
With the exception of Columbia City Bakery and Canon, which is obviously a bar, every single one of these accounts has been fraudulently coded by Mr. Price and therefore placed squarely in harm's way. Congratulations, James Beard nominee restaurants, you've been committing fraud! First, check out the James Beard Award categories above which specifically cite "restaurants" and "chefs," not bars. Second, if you don't believe Hundred Eighty Degrees fraud allegations, take a look at the four digit Merchant Category Code (MCC) of 5813 (bar, not restaurant) on the screen shots below. Guess you should have thought twice before you posted this, Mr. Price...
If restaurants choose to believe Mr. Price and remain within his fold, they are therefore liable when the castle is under siege and the arrows from industry gatekeepers begin to fly en masse. Hundred Eighty Degrees has made it crystal clear that we do not need anyone to take our word for it; all one has to do is read the card brands' terms of service.
It is also critical to note key clauses within Gravity Payments' very own Merchant Services Program Guide:
You shall be charged fees for the Services, which shall be calculated and payable pursuant to this Agreement and any additional pricing supplements. You acknowledge that the fees agreed to are based on the assumption that your transactions will qualify for certain interchange levels (your Anticipated Interchange Levels), as set by the applicable Association. If a transaction fails to qualify for your Anticipated Interchange Levels, then the Association will downgrade the transaction and process it at a more costly interchange level for which it does qualify. In that event, you shall be charged a Non-Qualified Interchange Fee, which is the difference in the interchange fee associated with the Anticipated Interchange Level and the interchange fee associated with the interchange level at which the transaction actually was processed; plus, any applicable Non-Qualified Surcharge for each non-qualifying transaction, the amount of which is set forth in the service fee schedule. For more information on Visa’s and MasterCard’s interchange rates, please go to www.visa.com and www.mastercard.com.
Price approaches restaurants prospects with flat rate proposals that reveal nothing other than the fact that they will save big bucks using his services and he will keep things simple. He doesn't explain how he comes in so far below competitors and that his flat rate disguises how he fraudulently codes restaurants as bars in order to gain a competitive advantage, gain their business and game the system. The above statement, however, shifts the liability to his merchants and essentially holds them responsible for making up the difference between the proper interchange fee and the fraudulent one that he forced upon them without their knowledge or consent.
You agree to pay any fines imposed on us by any Association resulting from charge backs and any other fees or fines imposed by an Association with respect to your acts or omissions. You are also responsible for any fines or fees imposed on us as a result
of acts or omissions by your agents or third parties.
This statement is further proof that Price is ready, willing and able to shift the financial burden to his merchants should/when the credit card brands or issuers levy fines and other penalties.
Without limiting any other warranties hereunder, you represent and warrant as to each Card transaction submitted under our Agreement that you have no knowledge or notice of any fact, circumstances or defense which would indicate that the Card transaction was fraudulent or not authorized by the Cardholder or which would otherwise impair the validity or collectibility of the Cardholder’s obligation arising from such Card transaction or relieve the Cardholder from liability.
This statement is ironic, considering Price is the party that has knowledge of the fact that the Card transaction is fraudulent.
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY (INCLUDING BUT NOT LIMITED TO SECTIONS 26 or 20.5), OUR CUMULATIVE LIABILITY FOR ALL LOSSES, CLAIMS, SUITS, CONTROVERSIES, BREACHES OR DAMAGES FOR ANY CAUSE WHATSOEVER (INCLUDING, BUT NOT LIMITED TO, THOSE ARISING OUT OF OR RELATED TO THIS AGREEMENT) AND REGARDLESS OF THE FORM OF ACTION OR LEGAL THEORY SHALL NOT EXCEED, (I) $50,000; OR (II) THE AMOUNT OF FEES RECEIVED BY US PURSUANT TO THE AGREEMENT FOR SERVICES PERFORMED IN THE IMMEDIATELY PRECEDING 12 MONTHS,
WHICHEVER IS LESS.
This statement relieves Price of the actual financial liability for which each restaurant merchant can be held. In essence, even though Visa and MasterCard can fine each restaurant up to $10,000 per month for EACH fraudulent transaction it processes (and if you're one of Price's high ticket restaurants you process thousands of fraudulent transactions per month), this clause stipulates that Price would only be held liable for a max dollar amount of $50K, a grain of sand on a mile-long beach.
To secure your obligations to Servicers and our affiliates under this Agreement and any other agreement for the provision of related equipment or related services (including any obligations for which payments on account of such obligations are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party under any bankruptcy act, state or federal law, common law or equitable cause), you grant to Servicers a first priority lien and security interest GP1208(ia) 15 in and to (i) the Reserve Account and (ii) any of your funds pertaining to the Card transactions contemplated by this Agreement now or hereafter in the possession of Servicers, whether now or hereafter due or to become due to you from Servicers.
This statement stipulates that should the merchant be held in default, which they certainly can be if they are implicated in fraud, third parties can invoke liens and tie up merchant funds.
We agree to indemnify and hold you harmless from and against all losses, liabilities, damages and expenses resulting from any breach of any warranty, covenant or agreement or any misrepresentation by us under this Agreement or arising out of our or our employees’ gross negligence or willful misconduct in connection with this Agreement; provided that this indemnity obligation shall not apply to Bank with respect to Discover Network Card Transactions, American Express Card Transactions and Other Services, including JCB Card, PIN Debit Card, and Electronic Benefits Transfer Transactions..."
This statement should relieve merchants of their liability if Price were to be processed/prosecuted for fraud in some manner, however, he is more than capable of deflecting blame and has already gone on record via his Facebook post to shift accountability to his merchants.
The parties acknowledge that the Visa, MasterCard and Discover Network Association Rules give Visa, MasterCard and Discover Network certain rights to require termination or modification of this Agreement with respect to transactions involving Visa, MasterCard and Discover Network Cards and the Visa, MasterCard and Discover Network Card systems and to investigate you. The parties also acknowledge that issuers of other Cards, for which we perform services on your behalf, may have similar rights under their applicable Association Rules with respect to this Agreement’s applicability to transactions involving such other Cards.
This statement illustrates how Price's merchants can be the subject of broad, invasive and expensive investigations by credit card brands and banks who suspect them to be involved in a fraud scheme, even though the scheme was engineered and conducted by Price and Gravity Payments.
Incidentally, by now, Gravity Payments restaurant merchants should have received a little piece of paper called a 1099-K. The form is actually sent by First Data Corporation, a global payment technology solutions provider responsible for 6 million merchant accounts and nearly half of the nation's credit and debit transactions. Gravity is a sales reps for First Data. The 1099K is an IRS information return used to report certain payment transactions to improve voluntary tax compliance. First Data sends the 1099K on behalf of Gravity Payments and then Gravity's merchants verify and account for their credit card income to ensure that the proper tax is paid.
Here's the kicker. Front and center on the form are two boxes that show, 1.) the Merchant Category code, and 2.) who the payment processor is. Therefore, every Gravity Payments restaurant merchant can see if it is fraudulently coded.
This is yet another mechanism for restaurant folks and for industry authorities - who might think we're making this stuff up - to cross-check Gravity accounts so they can see just how much fraud Price and company are dishing out.
One of the other cross-checking devices for our investigation has been the Visa Supplier Locator. In order to find what should be bars, nightclubs, discotheques and lounges in a certain zip code or region, this is what it looks like:
However, two days after Hundred Eighty Degrees published its investigation on Friday, January 29, the site mysteriously went down. Therefore, instead of getting results that look like this:
You now get scrambled code that looks like this:
Hundred Eighty Degrees has since requested comment from Visa representatives on over a half dozen occasions, to no avail. On February 10, Vice President of Media Relations, Connie Kim sent us this email:
Incidentally, we were alerted by an industry insider to a similar tool provided by MasterCard, and have further cross-checked accounts which not only confirm our findings but also reveal far more fraudulently coded restaurant clients than expected. Screen shots of the MasterCard Merchant Locator are seen above regarding the James beard nominees.
Bottom line, Ms. Kim's response to us was as boilerplate as it gets. And we told her as much with this response, "As a former marketing exec of over 25 years, I know what a boilerplate statement looks like. And as a former marketing executive in the hi-tech space, I also know what 'periodic maintenance' looks like. And this is not it."
The Visa Supplier Locator is a massive database availed to the world, and it certainly would not ordinarily be down for three weeks, let alone three days or three hours. UPDATE: the tool has just gone back online for the moment, but we fully expect it to go offline as has been the case for the three weeks after our investigation hit.
Ms. Kim and Visa refused to tell Hundred Eighty Degrees (or to refer us to someone who could tell us) if Visa is investigating Price or if what Price is done is worthy of a cease and desist. Though it has been three weeks since this investigation broke, not an eternity by any means, how long will...
Visa go without making a public statement?
How long will MasterCard go without making a public statement?
How long will Discover go without making a public statement?
How long will American Express go without making a statement? (And btw, Amex customers lose out on valuable Rewards by using their plastic at a restaurant coded as a bar.)
How long will First Data Corporation go without making a public statement?
How long will Wells Fargo and BMO Harris Bank go without making public statements?
How long will Citigroup and JP Morgan and Bank of America and Capital One and Barclays and US Bancorp and Synchrony go without making public statements?
After all, these folks are tied directly into the system. Sure, they may be classified as "too-big-to-fail" financial empires, but is Price now in their company as a too-small-too-fail? After all, he has become the it-brand of the payment processing industry, regardless of how other processing corporations feel about such a thing and regardless of whether he personally handcrafted such an ascent.
We are not talking about a minor hiccup here. We are talking about hundreds of millions if not, what we believe to be, billions of (gross) dollars worth of fraudulently processed transactions over 5-10 years.
Here are critical rules and regulations that essentially necessitate Visa (and MasterCard and Discover) and First Data Corp., Wells Fargo and BMO Harris Bank to not only investigate Price and Gravity Payments but to likely terminate business practices based on fines that would make gravity payments unsustainable for price. If visa does not take action, especially considering that it enacted the below demands to punish precisely what price is doing, this means that said demands are entirely devoid of substance. lastly, are the banks willing to let price bilk hundreds of millions, because of the reputation management issues that big finance has faced for years now? for them to recoup their losses after being tangled in the greatest recession since the great depression, this narrative might play out as an utter pr nightmare. After all, payment processing is another almost entirely unregulated industry.
Will someone drop a cease and desist upon Mr. Price's front door? Time will certainly tell. But make no mistake about it, if they do not, that will denote an even more muscular if not unfathomable story and one that will fuel a heartier investigation by Hundred Eighty Degrees. Having been so deeply embedded in this matter, we pledge to be a pit bull on a pant leg.
Also, gatekeepers like Ms. Kim should prepare for an all-out assault by other processors, including some of the biggest names in the industry, who have told us that they are eagerly awaiting a public response to Price's transgressions from card brands, card issuers, merchant banks and even the likes of First Data, Dinerware and other associated parties. In the case of these processors, should no action be taken against Price, we have been told that all bets are off and all hell will break loose when it comes to enforcing industry regulations here forward.
What are the restaurant merchants to do if the card brands drop a giant cease and desist order on Mr. Price? Not only are they immediately left without a processor, but when they do find one, their fees are going to take a jump; albeit a legitimate jump, but a jump nonetheless, and one that will take a nice bite out of the bottom line to which they have grown so dearly accustomed. This is the very definition of "disruption."
And what about the customers who love and patronize these merchants, where they have made personal or professional memories and where they avidly expect to continue to do so. Were these merchants to be convinced by Price that all is peachy or if they consciously choose to assume the risk, they become complicit in this scheme and more and more liable to suffer its repercussions including, potentially, their own cease and desists.
And what about the 150 Gravity Payments employees? Were this fraud to be prosecuted in some manner, the recipients of Price's seemingly noble deed might never realize the very fruits of the hard labor Price promised to reward. Those who ebulliently spoke of being able to afford a car or further education or a family or a house will, conversely, face unemployment and subsequent job interviews during which they must explain away their roles in a company that bilked tens of millions on the backs of unsuspecting small businesses. How do you craft that experience on a resume?
Hundred Eighty Degrees has spoken to a number of former Gravity Payments employees. These folks must abide by what has been described as a dubious non-disclosure covenant that demands no ill-will be directed toward their fearless leader, otherwise, Mr. Price can legally hammer down upon them as thunderously as Thor. Off the record, however, almost all have told me Price is a man with a history of aggressively and excessively berating employees in front of one another to a point at which many have been driven to tears or driven out.
Related to these employee-related enigmas, Hundred Eighty Degrees suspected that Gravity Payments reviews on Glassdoor.com were also somehow manipulated. The company's Glassdoor page illustrates deeply negative reviews followed by glowing reviews, and the glowing reviews often read like fine-tuned, marketing-driven talking points; the kind of talking points that define Price's canned speeches. We spoke with Associate Director of Corporate Communications for Glassdoor, Scott Dobroski who said, "We have a multi-tiered content moderation process in place that ensures adherence to our community guidelines. We strictly prohibit reviews that are in any way incentivized, and though we have dozens of content moderators and technology checkpoints, we acknowledge that it's not one hundred percent foolproof." Mr. Dobroski did raise an interesting point that, though Price has been in business for over ten years and has employed hundreds of employees over such time, for some reason, only 29 reviews appear on the site to date. Clearly this is anomalous.
(Let's be perfectly clear about Glassdoor and its relevance. Glassdoor is a marketing engine with one of the largest job search and recruiting platforms including 27 million members, 2,000 enterprises that pay for branding and recruiting tools and over 31,00 companies that leverage free employer accounts to respond to reviews. Reviews do not fuel this freight train. Funding rounds from Google Capital, Tiger Global and others do as do ancillary fees from subscription services. Similar to Gravity Payments, do not judge this book by its cover.)
Hundred Eighty Degrees has also illustrated that Price is a man with a history of litigiousness, primarily on the receiving end for your garden variety breach of contract, fraud, negligent misrepresentation, recording private phone conversations without consent, consumer protection issues, excessive enrichment and even assault. As his highly publicized lawsuit with his brother-business partner approaches, will this investigation and its allegations of widespread fraud, in any way, affect tactics by Price's legal team? Again, only time will tell.
And speaking of excessive berating and assault, there is, of course, the other matter of horrific domestic abuse alleged by Price's ex-wife, Kristie Colón. Ms. Colón has appropriately remained off the record and off the grid with mass media. Hundred Eighty Degrees applauds the way she has charted her own way forward, and in due time, we expect that she just might make a significant difference in the lives of those who have suffered similar circumstances.
One of the most contemptible slices of this unsavory pie is how eerily silent nearly every media outlet is at this very moment. For months upon months following his wage announcement, Dan Price and his indefatigable grin graced more broadcasters, more print pubs and more digi-platforms than most of us even knew existed. ABC, NBC, CBS, FOX, MSNBC, CNN, CNBC, Bloomberg, The Huffington Post, The NY Times, The LA Times, The Seattle Times, The Boston Globe, The Chicago Tribune, Forbes, The Guardian, US News & World Report, Esquire, Inc., Slate, Entrepreneur - that's the very short list of the folks who clamored for a piece of Price.
William Morris Endeavor signed him as a speaker as fast as Penguin Random House signed him as an author. Bernie Sanders and Dave Grohl raced Deepak Chopra, Wieden+Kennedy, Brown University and even The United Nations to see who could jump on the Price bandwagon faster. There was not stopping this self-propelled Gravity Payments gravy train.
Until December 1.
That's when Bloomberg punched in with a piece alleging that Price had less than praiseworthy motives for the wage hike followed by a blurb about the potential domestic abuse of his ex. Karen Weise authored the story widely lauded for what was seen as a deep dive on someone who was seemingly saintly to date. During an interview with Huff Post Live, Ms. Weise recounted how she put the puzzle pieces together. She essentially explained how Price had lied to her about the date he was served with a lawsuit by his brother Lucas. She claimed Price told her that the lawsuit was a response to the wage hike when, in fact, the court documents revealed that Price was served prior to his announcement. That was her gotcha moment.
Thing is, Ms. Weise and Price have similar issues with their explanations of timing. Four and a half months prior to Ms. Weise's piece, The Seattle Times had already reported what she reported. In other words, it was common knowledge that Price was served prior to his announcement. The court docs were available for all the world to see.
So, Price tried to willfully mislead Ms. Weise, and that's news? A CEO of a tech-finance company overpays himself and underpays his underlings, and that's news? That same CEO faces internal and external push-back that reaches critical mass and forces him into such a pickle that he suddenly has a personal revelation to right the ship, and that's news? Has anyone heard of Bill Gates or Mark Zuckerberg?
How about the five other court cases that Hundred Eighty Degrees dredged up that were never previously reported, all of which involved Price misleading people - small business merchants, employers, employees, the financial system, the judicial system? One of the most pivotal cases occurred in 2004 when Price was sued for stealing customers from the payment processing firm from which he, his brother and his father were fired. He attempted to steal these customers in order to found his own business with his brother - this was the business that would eventually become known as Gravity Payments. Ring a bell?
That case along with the others involved fraud and wiretapping and breach of contract, all BUSINESS matters that one would think a world-renowned news lion like Bloomberg Businessweek should absolutely roar about. Nope. A little redux of an existing narrative, a brief punch in the gut concerning a domestic abuse matter, and some additional attention paid to the fact that Price overpaid himself, and that's all it takes to get the world talking about the extraordinary reporting from Bloomberg Businessweek.
It sure was enough to get Bloomberg Businessweek Editor Ellen Pollock talking about herself in an interview with Politico.
In January, Hundred Eighty Degrees approached Ms. Pollock about its investigation. Given Weise's recent piece and the fact that Price was interviewed on Bloomberg TV soon after his announcement and the fact that our story was a business story, we assumed all worked in perfect harmony, and our investigation would be a no-brainer for their countless faithful to discover the proverbial nail in the coffin of the Price exposé. During a second lengthy phone call about the investigation, Ms. Pollock said, "We can't have you write the story. You're not a journalist. We don't work with outsiders or freelancers. We can certainly say how you uncovered some of the information, but we need to do our own investigation."
Yep, you sure did need to do your own investigation. But you didn't. As much as our ire bubbled beneath the surface, Hundred Eighty Degrees did its best to take a high road and proposed perhaps working with Ms. Weise to further extract and deliver the story. Then we thought better of it, especially because of our four-month investment at that time, and something about these exchanges with Bloomberg Businessweek seemed suspect, at the very least. We contacted Ms. Pollock:
In other words, thanks but no thanks, we're going this alone because of our investment to date and our sources who were airtight. Ms. Pollock:
In other words, even though Hundred Eighty Degrees did not wish to further pursue with Ms. Pollock, she made it a point to tell us it was her choice not to pursue with us and with the caveat that they could pursue should they choose to based on their "sources." This is rings of classic TV network technique. After you pitch a show to a room full of shiny happy TV agents, they often say that they already have something like it in the works. Yeah, uh-huh.
Welcome to today's big media machine.
The "sources" that Ms. Pollock mentioned above is actually one source and the only source that would have intimate knowledge of Price's potential scheme at the time. How do we know that? Because this was and has been my pivotal source. This was the same source that told Ms. Weise little if anything about the nature of that scheme and who explained to me that Weise said she was not interested in further exploring related matters. So why was Hundred Eighty Degrees interested in this source? Only because the source would eventually help us unravel a scheme that involved thousands of small businesses, the nation's finance giants, millions upon millions of fraudulently transacted dollars and an overnight celebrity by the name of Dan Price.
Why would Bloomberg Businessweekcare about delivering that kind of story?
And by the way, Ms. Weise's piece about Price's ex-wife also shouldn't be that skull-slapping. That's because Kristie Colón has been publicly and courageously sharing her journey for almost 10 years via her blog. In that very blog are many mile markers that lead one down a path to the conclusion that this woman was abused by the only husband she ever had. Ms. Colón's TEDx talk was news for Bloomberg because it could be "sensationalized" and because it had the TEDx brand attached to it, not because Ms. Colón hadn't already publicly shared her need to write in order to exhume and expunge demons.
Three more notes about media and this story.
Entrepreneur Magazine named Price "Entrepreneur of the Year" for 2014. Geekwire named Price "Young Entrepreneur of the Year" for 2013. Seattle Business Magazine named Price "CEO of the Year" for 2014. Less than two years removed from such accolades all three are suddenly reporting about the other Dan Price. The one who lied, stole and cheated his way into clutching their trophies and speaking at their lavish awards ceremonies.
And speaking of speaking at awards ceremonies, Price was the keynote speaker at Inc. Magazine's annual Inc. 500 conference. Where do we even begin with these folks. For some reason, Contributing Editor, Paul Keegan refuses to let facts get in the way of his overt and perhaps troubling fondness for Dan Price. Of the court documents that disprove Keegan's prior musings, he declares, "Nothing in the new court documents suggests that our reasoning is wrong." Apparently, court documents are a distant second in terms of believability compared to Price's proclamations.
Keegan: "Price had not only struck a nerve; he had also turbocharged a debate now raging across the American landscape, from presidential forums to barrooms to fast-food restaurants. How much -- indeed, how little -- should workers be paid?" So it was Price who turbocharged a debate? Not the hundreds of thousands of people marching in the streets year over year since Occupy Wall Street?
Keegan: "Price never thought of his enterprise as a way to make money." Is that why he owns two houses and a yacht and pays himself far more than even Fortune 500 CEOs at larger outfits while stiffing his staffers?
Keegan: "He [Price] also believed that low starting salaries were simply wrong -- contrary to his values, which his father had always taught him to respect." And that's why he dramatically underpaid his staffers year after year right up until his epiphany in Paril of last year, while all the while he made millions on their backs?
And finally, Keegan's crème de la crème: "In fact, the biggest threat to Price's company isn't his strategy; it's his brother." No, Mr. Keegan. The biggest threat to Price's company is Price himself. the fraudster who willingly throws his employees and the small businesses he dupes under the bus, over the cliff and through the ringer. And by the way, you too, Mr. Keegan are another threat. A threat to journalism.
Price tells Keegan he remortgaged his houses to pay down business debt. Keegan buys it lock, stock and barrel. Geekwire reports that there are no mortgages. Keegan says their original story was incorrect, but, and wait for it... "a review of documents provided by Gravity shows that he [Price] had, in fact, begun the process when our issue went to press in late September." So we guess Keegan believes that four tires are all you need to drive a car and all you need is sparkledust and a wand to make a unicorn.
In this day and age, no real news is good news. Most news is the news that's fit to print, because it's easy to print. It's not an investment of resources and time and sleepless nights. It's a matter of filing as many sound-byte-stories in a week as one possibly can instead of getting the story right from the beginning.
Prior to the self-release of its article, Hundred Eighty Degrees also had discussions with The NY Times, the very folks who broke the Dan Price story and were in the room with him when he announced his hike. On a phone call with NYT Editor Tom Redburn (after an email exchange), he explained that it was not necessarily for lack of interest in our investigation that they had to pass, but for lack of resources to vet the information that we alleged. When one thinks for a moment that "The Old Gray Lady" does not have enough resources to report about an immense fraud scheme conducted by the very payment processor that, in one way or another, they helped celebritize, one can only conclude that this is tragi-comedy at its very least. Mr. Redburn was wholly considerate, insightful and generous with his time as was Patti Cohen with whom we also spoke at length and who broke the story on April 15, 2015, but in the end, it is what it is. Price spoon-fed them this spoof of a story and they drank it up.
Nobody - and we contacted numerous media outlets - found our investigation worthy of further exploration. Nobody wanted to work with an outside party, a freelancer, "non-journalists." This was flat out rejection over and over again. And perhaps they were right to do so. After all, there are far more capable and accomplished "journalists" doing yeoman's work far better than we are. In the end, we had to publish somewhere - which was right here - and appreciate whatever eyeballs we can get. Here are just a few of the folks who rejected or otherwise ignored us.
But are these outlets simply waiting for us to fail or succeed before chiming back in? Or have they simply and swiftly moved on from the very story that they reported ad nauseum, because that story of the celebrated-sexy-Seattle-do-gooder-Millenial-hipster was a lot easier to send out into the ether than a story of what could be a serial personal and professional fraudster.
Regardless, while they wait and see, Hundred and Eighty Degrees will actually continue to do work that it considers to be journalism. We believe that small businesses and regular, hardworking people, regardless of their political posture or their personal compass, deserve the entire picture, not just that which is carefully selected by corporate generals in order to sell another widget.
Mass media and even minor media outlets have become machine-like, stealing away information from one another but also stealing our time by teasing with "breaking news" bytes instead of reporting what matters and why. Accuracy and honesty are far less important than speed and subscriptions. This is so very important because it affects our decisions and our lives... from choosing a payment processor for the small business we are about to launch with our life savings to choosing a bank that will protect those life savings to choosing a politician that will hold those processors and banks accountable if and when they jeopardize our dreams.
Let's be clear. Were Hundred Eighty Degrees to indict the lot, it would be disingenuous and dumb. We have clumsily worded our contempt for myopic media in past posts, and it is wholly unfair to state that all media is bad media. For that we owe a sincere apology. There are remarkable reporters doing yeoman's work at every turn but the public does not, in general, see those folks or their work. And while Geekwire and Entrepreneur have reported very relevant and very insightful news since Weise's piece, we cannot forget that they helped bless Price's fraudulently acquired fame.
We are infinitely indebted to our sources without whom this investigation would be but a shell of what it has become, period, end of story. You know who you are. And we thank you. Finally, Hundred Eighty Degrees invites you to go here and take one more look around. That's because, we do believe that it may not be much longer before such a page in such a chapter of such an absurd narrative may no longer exist.