John McCains grumpy old pal writes to Bo Cowgills boss.

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Joe Lieberman:

May 19, 2008

Dr. Eric Schmidt
Chairman of the Board and Chief Executive Officer
Google, Inc.

1600 Amphitheatre Parkway
Mountain View, CA 94043

Dear Dr. Schmidt:

YouTube is being used to share videos produced by al-Qaeda and other Islamist terrorist groups. The purpose of this letter is to request that Google implement its own policy against this offensive material, remove these videos from YouTube, and prevent them from reappearing.

Today, Islamist terrorist organizations rely extensively on the Internet to attract supporters and advance their cause. The framework for much of this Internet campaign is described in a bipartisan staff report released last week by the Senate Committee on Homeland Security and Governmental Affairs (“Committee”), which I am privileged to chair, titled Violent Islamist Extremism, the Internet, and the Homegrown Terrorist Threat. The report explains, in part, how al-Qaeda created and manages a multi-tiered online media operation that produces content intended to enlist followers in countries all over the world, including the United States. Central to this media campaign is the branding of content with an icon or logo to guarantee authenticity that the content was produced by al-Qaeda or allied organizations like al-Qaeda in Iraq, Ansar al-Islam (a.k.a Ansar al-Sunnah) or al-Qaeda in the Land of the Islamic Maghreb. All of these groups have been designated Foreign Terrorist Organizations (FTO) by the Department of State.

Searches on YouTube return dozens of videos branded with an icon or logo identifying the videos as the work of one of these Islamist terrorist organizations. A great majority of these videos document horrific attacks on American soldiers in Iraq or Afghanistan. Others provide weapons training, speeches by al-Qaeda leadership, and general material intended to radicalize potential recruits.

In other words, Islamist terrorist organizations use YouTube to disseminate their propaganda, enlist followers, and provide weapons training – activities that are all essential to terrorist activity. According to testimony received by our Committee, the online content produced by al-Qaeda and other Islamist terrorist organizations can play a significant role in the process of radicalization, the end point of which is the planning and execution of a terrorist attack. YouTube also, unwittingly, permits Islamist terrorist groups to maintain an active, pervasive, and amplified voice, despite military setbacks or successful operations by the law enforcement and intelligence communities.

YouTube posts “community guidelines” for users to follow, but it does not appear that the company is enforcing these guidelines to the extent they would apply to this content. For example, the community guidelines state that “[g]raphic or gratuitous violence is not allowed. If your video shows someone getting hurt, attacked, or humiliated, don’t post it.” Many of the videos produced by one of the production arms of al-Qaeda show attacks on U.S. forces in which American soldiers are injured and, in some cases, killed. Nevertheless, those videos remain available for viewing on YouTube. At the same time, the guidelines do not prohibit the posting of content that can be readily identified as produced by al-Qaeda or another FTO.

I ask you, therefore, to immediately remove content produced by Islamist terrorist organizations from YouTube. This should be a straightforward task since so many of the Islamist terrorist organizations brand their material with logos or icons identifying their provenance. In addition, please explain what changes Google plans to make to the YouTube community guidelines to address violent extremist material and how Google plans to enforce those guidelines to prevent the content from reappearing.

Protecting our citizens from terrorist attacks is a top priority for our government. The private sector can help us do that. By taking action to curtail the use of YouTube to disseminate the goals and methods of those who wish to kill innocent civilians, Google will make a singularly important contribution to this important national effort.

Thank you for your immediate attention to this critical matter and I look forward to your response.


Joseph I. Lieberman (ID-CT)
Chairman, Senate Committee on Homeland Security and Governmental Affairs

Summary of the Tradesports DEMS.HOUSE.OVER29.5 issue, and the TS credibility gap

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In the past weeks, there was something of a dust-up over TS&#8217- handling of the DEMS.HOUSE.OVER29.5 contract. According to all American media, the Democrats needed 15 new House seats to gain control of the House of Representatives. And, indeed, in the final days leading up to the election, there an excellent synchronization between the DEMS.HOUSE.OVER14.5 contract and the inverse of HOUSE.GOP.2006, indicating a perceived equivalence between 100 – p(HOUSE.GOP.2006) and DEMS.HOUSE.OVER14.5. Thus, the (presumably overwhelmingly American) market inferred that TS would follow the same convention as all American media, mainstream and otherwise, did. And according to American media, a Democrat replacing independent Socialist Bernie Sanders didn&#8217-t count as a Democratic pickup, because he already caucused with the Democrats anyway. However, TS initially disagreed with that, and counted Sanders as a non-Democrat. (More on that soon.)

Speaking personally, TS reinforced this perception&#8211-that independents who caucused with the Democrats counted as Democratic seats, and if they were replaced by an official Democrat, that wouldn&#8217-t increase the Democrats&#8217- vote total&#8211-by specifically stating, in regards to SENATE.GOP.2006, that a &#8220-loss&#8221- of the Connecticut seat to Joe Lieberman (who had switched from Democrat to Independent) would still be counted as a Democratic seat, because Lieberman already caucused with the Democrats anyway.

The fine print of the Tradesports DEMS.HOUSE.OVERXX contracts was, for most of the time, fairly clear in stating that the Democrats started from 201 seats, and anything over that number would constitute a gain. Judging from the activity of DEMS.HOUSE.OVER14.5, however, I believe that most of the market inferred (as did I) that 201 was the initial starting number of of Democrat seats according to American convention as well as TS, and didn&#8217-t realize the difference between the two systems. A very technical mistake, but not one for which TS deserved blame.

However, TS threw a monkey wrench in the system by telling forummer &#8220-gekko6&#8243- that Bernie Sanders&#8217- Independent seat going Democratic would not count as a Democratic pickup, because Sanders had already caucused with the Democrats in the first place. In this decision, as in its Connecticut Senate decision, TS showed an impressive grasp of the vagaries of the American political system&#8211-namely, that the size of each caucus was the real issue- and Congressional majorities being determined on the basis of caucus, not party affiliation, it only made sense to calculate the shift in power in the House on the same basis.

Unfortunately, that also meant that TS had, at the same time, repudiated its own convention for what constituted a &#8220-gain.&#8221- &#8220-gekko6&#8243- had already been very aware of this issue, because he had pointed out that the actual starting count according to the American system was 203, not 201&#8211-due to Sanders&#8217- being an independent endorsed and unopposed by the Democrats, and the vacancy of Bob Menendez&#8217-s seat after Menendez was appointed to the Senate by NJ Gov. Corzine. (From a foreign, technical perspective, this was defensible&#8211-Menendez&#8217-s seat was vacant, so the winner on Nov. 7 would count it as a &#8220-gain.&#8221- However, the Republicans did not contest Menendez&#8217-s very Democratic seat, so in the American convention, it was never counted as a Democratic pickup.) Tradesports&#8217- convention effectively said that the Democrats gained two more seats than the American convention did, and several days after the November elections, the American convention said that the Democrats had gained 28 House seats with 1 certain to go Democratic in a runoff (in Louisiana), so 29 seats total, while the Democrats had effectively gained 31 seats according to TS. Hence the problem with DEMS.HOUSE.OVER29.5. And while a legalistic interpretation would favor TS, I believe that the synchronization of DEMS.HOUSE.OVER14.5 and 100 – p(HOUSE.GOP.2006) indicated that most trading during the final few days showed that the market was unaware of TS&#8217- own convention for the election outcome.

I sent Tradesports an e-mail about it (apparently they don&#8217-t accept new entrants to their forum anymore, because my application has been pending for about a month), and they replied that the new number of Democrats minus 201 would constitute the number of Democrat gains, thus contradicting what they had told &#8220-gekko6.&#8221- I then publicly denounced TS for waffling the issue. TS did nothing, and apparently hoped the controversy would blow over. A bunch of recounts in close races later, TS appears to have lucked out, because according to the American convention, the Democrats now have at least 233 House members, up from 202-plus-one-Socialist, so the American system now says the Democrats have gained 30 seats and DEMS.HOUSE.OVER29.5 has been fulfilled either way.

Honestly, I was impressed that TS understood the American system as well as they did. Unfortunately, TS&#8217- subsequent &#8220-flip-flopping&#8221- showed that it did not, in fact, understand its own contract specifics. It also fit a larger pattern of cavalier disdain for its clients, often interpreting an ambiguous outcome significantly contrary to that of the market-majority (Harriet Miers confirmation, NK missile test contract) without appropriate compensation, setting up a joke &#8220-Arbitration Committee&#8221- that, if it even exists, has done nothing except infuriate customers, and most recently expiring sports contracts before the games were even concluded &#8211-and coincidentally raking in tons of expiry fees from people who weren&#8217-t given a chance to liquidate.

The latter, in fact, has happened with enough cavalier consistency that one can only wonder whether TS simply plans on milking its American consumers for as much as possible before closing the site to new American participants as a result of the recent US legislation. SportsBook has downgraded Tradesports to a C+ rating, which is at the very low end of what SportsBook can vouch for.

If TS plans on more effectively structuring its futures contracts, it should structure them along the lines of, &#8220-At 11:59:59 PM GMT on dd/mm/yyyy, Democrats will control ON or OVER XXX seats in the US House of Representatives.&#8221- If it wants to undertake a broader effort to restore its own credibility, it needs to stop the caprice that is fast becoming the norm for how it adjudicates contract outcomes&#8211-whether that adjudication occurs before or after the outcome has actually occurred. [added:] TS&#8217- infrastructure and trader base are both excellent, and there&#8217-s no point in wasting those assets on sloppy legalese and interpretation.

&#8211-Alex Forshaw

Tradesports forum homepage:

Addendum: As for 100 – p (HOUSE.GOP.2006) vs DEMS.HOUSE.OVER14.5, I remember them consistently mirroring one another, and thinking to myself, &#8220-Aha! Efficient markets at work.&#8221- However, what little historical data TS makes publicly available makes it hard to judge that, and there were snapshots when the two were de-coupled, so perhaps a minority of perceptive traders _did_ trade on the differences in the rules. But in the sample of snapshots that I looked at, the two were coupled (within 2 points) much more often than not during the final days, when liquidity was high enough to make arbitraging the two contracts a worthwhile use of capital.