Peter Thiel – Image by Dan Taylor.
Peter Thiel became a billionaire by co-founding Paypal (with the even-more-famous Elon Musk), then using the $55 million he received for its sale to eBay to invest in other startups, notably Facebook. He’s also becoming famous as a maverick, a gay iconoclast who spoke in support of Donald Trump at the 2016 Republican National Convention and has been suggested as a possible Trump Supreme Court pick. However unlikely that is, it would be at least interesting.
He gained more fame in his takedown of Gawker Media by funding Hulk Hogan’s privacy lawsuit against them, which I wrote about in The Justice is Too Damn High! — Gawker, the High Cost of Litigation, and the Weapon Shops of Isher.
The latest news is the Dept. of Labor’s suit against one of the companies Thiel founded, secretive Spook-connected unicorn Palantir, which uses big data analytics algorithms developed at PayPal to combat fraud. Palantir’s software is used by intelligence agencies, government, and industry to detect patterns of hacker and terrorist activity in big datasets. Since much of its revenue comes from government contracts, threats to end Palantir’s government contracts threaten its existence.
The Dept. of Labor (DoL) opened an investigation in 2010 to scan applications for a narrow set of jobs at Palantir to determine whether any bias in hiring was evident. In their filing, the DoL claims Palantir’s applicant pool was predominantly Asian, but those hired were mostly white:
For the QA Engineer Intern position, from a pool of more than 130 qualified applicants — approximately 73 percent of whom were Asian — Palantir hired 17 non-Asian applicants and only four Asian applicants … The likelihood that this result occurred according to chance is approximately one in a billion.
The unstated assumption is that statistical tests of “adverse impact” are good enough to prove illegal discrimination — that the applications of all protected classes were equally strong in the aggregate, and therefore the only acceptable outcome would be hiring in proportion to the applications received from each class of applicant.
This is self-contradictory, of course, since if the DoL wanted to they could claim statistics prove Palantir somehow discriminated against all applicants except Asians in attracting an applicant pool so disproportionately Asian compared to the local job market! And as Palantir states in its response, the DoL made no effort to determine how many of the applicants were even close to qualifying for the positions.
In Death by HR I wrote about the EEOC and its occasional use as a political tool to demonstrate an administration’s commitment to a protected class. Some scapegoat company is picked at random and a suit is brought despite a very weak case, so the government attorneys are often slapped down by annoyed judges.
This case starts to look like something worse — the intentional use of prosecutorial discretion to punish political enemies. Peter Thiel is the only Silicon Valley figure to publicly support Donald Trump, a fact which was known when the decision to file suit was made. We’ve seen an apparently corrupted decision not to prosecute Hillary Clinton for willful violations of secrecy statutes and other actions of the DoJ which demonstrate that Administration-connected figures can violate the law with impunity.
The Administrative State is largely unaccountable, shielded by Civil Service rules and employee unions in the Democratic coalition. With a president of their party, the bureaucrats are impossible to rein in using the budgetary authority of Congress, since any attempt to control them will be vetoed or result in the government shutdown faceoff. If the Administrative State grows bolder in favoring the party that feeds it through selective enforcement, there will be no turning back from the repressive superstate I wrote about in Substrate Wars.
The technology community should be alert to the dangers it faces in flirting with DC politicians. Google’s image is already being damaged by its favoritism toward Democrats, and Twitter has lost its freedom of speech cred by giving censorship authority to self-appointed social justice activists. Meddling in elections is a dangerous game, since even if you win, your partisan actions are remembered, and the regulatory state can come down on you when it’s run by a new administration.
The TechCrunch story is a typical writeup.
Death by HR: How Affirmative Action Cripples Organizations
[Death by HR: How Affirmative Action Cripples Organizations, to be published Oct. 17th but available now for pre-order in Kindle and trade paperback.]
The first review is in: by Elmer T. Jones, author of The Employment Game. Here’s the condensed version; view the entire review here.
Corporate HR Scrambles to Halt Publication of “Death by HR”
Nobody gets a job through HR. The purpose of HR is to protect their parent organization against lawsuits for running afoul of the government’s diversity extortion bureaus. HR kills companies by blanketing industry with onerous gender and race labor compliance rules and forcing companies to hire useless HR staff to process the associated paperwork… a tour de force… carefully explains to CEOs how HR poisons their companies and what steps they may take to marginalize this threat…. It is time to turn the tide against this madness, and Death by HR is an important research tool… All CEOs should read this book. If you are a mere worker drone but care about your company, you should forward an anonymous copy to him.
More reading on other topics:
The Justice is Too Damn High! – Gawker, the High Cost of Litigation, and the Weapon Shops of Isher
Regulation Strangling Innovation: Planes, Trains, and Hyperloop
Captain America and Progressive Infantilization
FDA Wants More Lung Cancer
Corrupt Feedback Loops: Public Employee Unions
“The unstated assumption is that statistical tests of “adverse impact” are good enough to prove illegal discrimination … “. I’m afraid you are incorrect here. Adverse impact stats are “prima facie” evidence of discrimination, but the assumption is that said stats are “rebuttable” (in much the same way that statistical disparities found in Affirmative Action Plans/Reviews are explainable). Prima facie is defined as “based on the first impression; accepted as correct until proved otherwise”.
The actual problem is that many smaller employers do not know this or do not have the resources to put together a defense. With larger employers I experienced instances where HR professionals either did not know this or lacked sufficient knowledge of the actual work performed that they were unable to defend selection criteria (or help management do it). Many people, in both large and small firms, in HR or the parts of organizations actually believe that statistical disparity come about primarily as a result of discrimination or discriminatory “systemic” flaws — and far too many HR professionals are ill equipped to educate them.
That’s certainly not the impression the DoL press release is trying to give. Reading between the lines, it looks like Palantir tried to rebut in negotiations but the DoL did not find their evidence acceptable. One story implied there had been two years of negotiations prior to DoL’s filing suit, and now the DoL states their response was “unsatisfactory.” Presumably we won’t know more until trial, if they get that far.
Read Mr. Jone’s review but found it difficult to put much weight in it after his statement “The purpose of HR is to protect their parent organization against lawsuits for running afoul of the government’s diversity extortion bureaus.”, as while that is indeed one function of HR departments, it is by no means the most important one. His “rage” comes through loud and clear; actual knowledge not so much.