DataPortability Still Doesn’t Exist, Did Michael Arrington Lie?
Updated below with a discussion of Brady Brim-DeForest’s response to my email.
After noticing that DataPortability’s Chris Saad had responded to a post I wrote more than 6 months ago on the subject of “data portability” (hey, he’s busy), I was reminded of the issues I raised about DataPortability and TechCrunch’s relationship with DataPortability.
Let’s jump right in.
First, it appears that DataPortability has still yet to organize itself as a legal entity. Like any good budding bureaucracy, taskforces and committees are needed. Of course, the fact that DataPortability still apparently doesn’t exist legally hasn’t stopped the people involved with DataPortability from continuing to let others categorize it as a “non-profit.”
But I should be fair. Even though Saad’s LinkedIn profile still lists his title as “Co-Founder and Chairperson” and describes the DataPortability Project as a non-profit with “1001-5000 employees,” it does appear that DataPortability finally recognized the problem with actively promoting itself as a non-profit when it isn’t one. This page actually notes the fact that DataPortability is not “a legal entity providing legal-level precision.”
While I have no idea what “legal-level precision” has to do with forming a legal entity, I do applaud DataPortability for now describing itself as an “open, grass-roots initiative” as opposed to some sort of non-profit. That said, there are still some problems, namely:
- The people behind DataPortability previously stated that they were going to form a legal entity. In an email to me on April 17, Saad wrote “we are working through setting up a legal entity and decision making body” and “please stay tuned for our announcement about the entity.” There are a host of obvious reasons why an entity should be set up (transparency, protection against certain liabilities, ownership of intellectual property, avoidance of disputes, etc.) so it’s quite curious that this hasn’t been a priority.
- The DataPortability “governance model” makes absolutely no sense in the absence of a legal entity (there’s nothing to govern). Specifically, how can you have a treasurer who is tasked with keeping “custody of all corporate funds and financial records” and “render[ing] accounts thereof at the annual meetings” if you don’t have a legal entity? Answer: you can’t.
- There are apparently individuals involved who are concerned that there is no legal entity.
Which brings us back to Michael Arrington’s “donation” to DataPortability.
Despite Arrington’s invitation to “discuss this further, on or off record,” he did not respond to the email I sent him which reiterated my simple questions, such as “When you posted about the donations being made, did you know that DataPortability was neither a ‘charity’ nor a tax-exempt, non-profit organization?” and “Would you not agree that an average person reading about a ‘donation’ to a ‘charity’ would reasonably assume that a donation was being made to a legitimate, duly-organized charitable organization?”
While Arrington was certainly under no obligation to answer my questions (Drama 2.0 is, after all, a C-list blogger at best), when somebody publicly invites a private discussion but refuses to engage in one, it’s quite telling. Frankly, I think Arrington preferred not to answer my questions because he had no convincing answers.
Bottom line: I do not believe Arrington was being honest when he made the following claim in his comment:
They’re setting up as a nonprofit through a third party organization, and we are holding the money until that is completed.
Clearly, by DataPortability’s own admission, that turned out not to be the case. So that means that TechCrunch’s donation didn’t happen, right?
On May 6, 2008, in response to the legal issues that had arisen over the DataPortability logo, Saad sent an email to the DataPortability mailing list containing the following:
Does anyone have any problem with.
1. Rotating the Logo 90′
2. Using $1200 of Techcrunch’s donation on this exercise?
Saad indicated that his “personal opinion is that we go for it.”
This email therefore seems to indicate that Saad had access to the money “donated” by TechCrunch. After all, if he sought approval to spend the money, one would logically infer that he had possession of it.
Since DataPortability was not yet organized as a legitimate non-profit organization at the time (and still isn’t), Arrington’s claim that he was “holding the money” until it was can be classified as nothing other than “patently false.”
While some might argue that I’m providing more “hairs to split,” I suppose I’m simply the type of person who values not only accuracy, but honesty. Especially from someone who likes to demand it of others. At the very least, Arrington could have stated “I don’t give a shit whether or not DataPortability is a non-profit. I felt like giving them money and that’s my prerogative.”
And that would have been fair. Instead, it appears that he, for some bizarre reason, chose to tell what appears now to be a lie on this little blog. Which I think says something. But I’ll let readers figure out what that is.
Back to the star of the show: DataPortability.
In his post yesterday, Saad states “Just because it’s hard to work out doesn’t mean it’s not worth trying.” Fine.
But I’m still unclear on what exactly DataPortability is trying to do. The “leaders” of this “open, grass-roots initiative” seem to have spent the bulk of this year structuring a bureaucracy for an entity that doesn’t legally exist, putting together snazzy presentations and jetting around from event to event preaching the gospel of data portability.
Maybe I’m just not hip to how people like Saad do “business,” but where I’m from, we employ the “get shit done” approach. No bureaucracy, no pretty presentations, no clusterfuck meetings and events. Just hard work day in and day out so that, in the best case, success is achievable and, in the worst case, failure comes quickly so that everyone can move on to the next opportunity.
Identify the problem, craft a solution, develop a plan, bring the right people together, form a legal entity, sign agreements, execute the plan, build, deliver. It’s usually not easy and it’s not always successful, but that doesn’t mean the “get shit done” approach doesn’t work. From Dubai to Shanghai, Houston to Rio, there’s plenty of evidence of the virtues of simply “getting shit done.” After all, nobody built a city of skyscrapers where there used to be sand by sitting around engaging in mental masturbation.
Unfortunately, Saad appears to be a fan of the “talk about getting shit done” approach. He’s too busy tweeeting, traveling and typing the words to his book to actually devote himself to seeing if DataPortability can become anything more than a vision.
So here we are. Nearly half a year after I first wrote about DataPortability and its relationship with TechCrunch, DataPortability still doesn’t officially exist and it appears that Michael Arrington lied about the terms of his “donation.”
Why is neither of these two things surprising?
Update: Brady Brim-DeForest, who is actively involved with DataPortability, insisted in an email to me (which he reposted in the comments below) that TechCrunch never actually donated the money to DataPortability. According to Brim-DeForest, when Chris Saad sought approval to spend $1,200 of the TechCrunch donation which he didn’t have, he assumed that Michael Arrington would transfer the money directly to whomever he instructed Arrington to.
While the inconsistencies and contradictions here leave me wondering, let’s take Brim-DeForest at his word.
This, of course, raises some questions. If Arrington is willing to pay people on Saad’s behalf as the “leader” of a non-existent organization, one might ask: why doesn’t he just give Saad the money? One of the most logical reasons Arrington would hold the donation until DataPortability exists as a legal entity is that, as a former lawyer, he understands that transferring money to an individual as part of a “donation” to an organization that doesn’t legally exist does not represent a “donation” and could leave the “leadership” of DataPortability (including Saad) in a precarious position should others involved with DataPortability later question how that money was spent.
If Brim-DeForest is telling the truth, Arrington is still guilty only of promoting to his readers a “donation” that he hasn’t (yet) made (at this pace, one wonders if he ever will get the opportunity to make it) and I apologize for mistaking Saad’s asking for permission to spend money he doesn’t have as dishonesty on Arrington’s part as it relates to his previous comment on this blog.
As for Saad, if Brim-DeForest is telling the truth, Saad has demonstrated that he’s inept. After all, he’s apparently completely willing to seek approval to commit financial resources on behalf of the DataPortability “initiative” even though the money isn’t in his possession and he was ostensibly told by Arrington that the conditions upon which the money would be transferred to him required the establishment of a legal entity, which he, of course, knew he didn’t have.
Two words for dealing with individuals and “groups” that operate like this: caveat emptor. Even with the best of intentions and integrity, when things are run in this shoddy a fashion, it doesn’t bode well.
Next time – just drop an email into the DataPortability.Public list, or the the DataPortability.Steering list and you would have had answers to 99% of the questions you posed.
DataPortability is actively pursuing formation of a legal entity – but we are giving ourselves enough time to make an educated decision about what path to take. Although we would like to create a formal legal entity soon, there is no immediate rush.
In part, we are waiting to see how the Liberty Alliance/IDTBD discussion shakes out before we make a definitive decision. If we can work within the framework of a larger legal entity, and therefore minimize direct cost, as well as reduce redundant expenses among similar organizations in this space, we will.
As for the donation from TechCrunch, it is still in their possession, and will be until we can accept it on behalf of a legal entity representing the DataPortability organization.
Hope this helps to clear things up. Feel free to drop me a line if you would like further clarification.
Best,
Brady Brim-DeForest
Brady: you’re not telling me anything I don’t already know. All of what you’ve posted is addressed above. I had no questions for you.
I know DataPortability isn’t a legal entity. That’s one of the points made in the post – for all of the time that’s passed (and Chris Saad’s previous claims that DataPortability was in the process of getting one structured), you’ve decided to do nothing.
Apparently you don’t see the problem with this – the more “stuff” you do, the more people that get involved, etc., the more potential for disagreements and legal disputes.
I know you have a legal entity “taskforce.” I linked to its page on your website. It hasn’t done anything tangible. Which is why I applaud you for at least now properly describing yourself as an “initiative” instead of a “non-profit.”
The point: DataPortability looks like a clusterfuck. You’ve spent all this time on a “governance model” when you apparently don’t know even yet know what type of legal entity you’re going to form (or operate under). Your “leaders” go around preaching the gospel when they haven’t even dotted the I’s and crossed the T’s.
One thing is for sure – you have bureaucracy down.
As for the TechCrunch “donation,” can you explain why Chris Saad sought approval to spend it on your logo problems when he apparently doesn’t have it?
I’m hoping you’ll provide more insight than “it’s still in their possession” because if you stick with that bullshit, you’re either:
1. Lying.
2. Telling me that Chris Saad asked to spend money he didn’t have.
If you’re lying, the implications are obvious. If Chris Saad was asking permission to spend the money from a donation he didn’t have, then you’re telling me Chris Saad is an idiot.
I think you see the point – the inconsistencies and contradictions here don’t reflect well on anyone involved.
In the spirit of full disclosure, I received an email from Drama2.0 which is reprinted below, along with my response:
My response:
Hi,
Several inaccuracies
- Chris Saad is no longer leader. There is a new chair person
- you can’t have a legal entity without a governance model, which we now have. It took us a while to work out this complex issue that involved 70+ hours work. And based on our experience, we need a governance model as our previous approach of rough consensus was not working
- As Brady mentioned, since our governance model was finalised, there have been some ongoing discussions on DataPortability’s proposed inclusion in a broader community effort called IDTBD. I’m an accountant so full well know what is involved in setting up a coporation, its cost, its commitments – don’t think we haven’t taken a considered approach to this.
- DataPortability’s members are volunteers with no paid offices: something that is a big deal on how it works. For example, I am a key driver of the work, and yet for the last two months I was doing sixteen hour days on a messy client. Volunteer work has to take a backseat.
There are several more points which I think it is best we discuss via telephone/Skype. Whilst your blog is entitied to hold groups accountable, you should at least employe some journalistic rigour to get your facts right, which as they stand are distorted.
Regards,
Elias Bizannes
Vice-Chair, DataPortability.Org
Elias: with all due respect, the facts I’ve presented are not in question. Everything I’ve written about is based upon information published by the people associated with DataPortability and TechCrunch. I’ve provided links in both my posts. You may disagree with my perception of the situation and may be privy to details that haven’t been disclosed publicly, but readers of this post can easily verify the facts, which include:
1. The disclosure of a “donation” by TechCrunch to DataPortability.
2. The subsequent claim that this “donation” would not take place until DataPortability forms a legal entity.
3. The request from Chris Saad to spend money from the “donation” that he supposedly didn’t even have when he asked to spend it.
I’d love for you to point out what I’ve distorted and I’d be happy to point you to the information on which these alleged “distortions” are based.
As for Chris Saad no longer being leader of DataPortability, you might want to suggest that he change his LinkedIn profile to reflect this. I’d also point out you can’t be “Chairman” of an organization that doesn’t exist.
Finally, I would point out that you’re overcomplicating the formation of a non-profit entity. I serve on the board of a 501(c)(3) and have served on two other non-profit boards in the past so I know a thing or two about non-profits.
In my humble opinion, the “governance model” you’ve created (and all of the committees you’ve formed) not only overcomplicates things, but puts the cart before the horse.
The majority of the items in your governance model have no applicability to the by-laws you would write if you choose to form a non-profit corporation.
In fact, if you form a non-profit corporation, I frankly don’t see how your governance model is worth anything. After all, who actually ratified it? You don’t have officers and directors who are permitted under boilerplate by-laws to conduct the organization’s business, form committees, etc.
I hate to be harsh, but for all of the wonderful and effective DataPortability self-promotion, I’m astounded at just how amateurish your operation is.
Presumably the $1,200 spent on … ahem … a logo could have been spent on actually setting up the legal entity.
So DataPortability doesn’t have any legal structure yet, which in my opinion is ok for an open-source project, if the developers implied are ok with it.
I really liked reading this post, very instructive, and you sure know how to argue. However, what is your point? Is it really about a 12 hundred bucks fake donation? Or do you think there is something bigger happening in the background?
12 gs is no big deal, and Arrington is still allowed to say whatever he wants on his blog (I just wish less people would read it). Plus probably a majority of software development projects do not exist on paper as well.
So is there a bigger picture to this story or are you just denouncing procrastination?
I agree with Paul, $1200 to run a logo 90degrees? I’ll do it for that….
and that could have covered the legal fees
if you want a really great non-profit lawyer, call Dan Leer at the Entrepreneur’s Law Group – he’s helped all sorts of non-profits get their 501c3 status (and it didn’t take this long, nor was nearly this complicated)
xavierv: I don’t see procrastination. I see incompetence.
Here’s the big picture:
1. Michael Arrington originally announced to TechCrunch readers that he had made a “donation” to a “charity.” Based on his own statement indicating that his donation would be held until DataPortability was able to accept a donation as a non-profit, this was grossly inaccurate as not only is DataPortability not a “charity,” it doesn’t even exist. Arrington, of course, didn’t bother to inform his readers of this. In my book, that’s disingenuous at best, journalistically unethical at worst.
2. Months later, despite making its plans to quite clear, DataPortability still has not formed a non-profit. Yet an email from Chris Saad to the DataPortability mailing list requested permission to spend part of TechCrunch’s supposedly-not-yet-executed donation. Quite logically, either Arrington was lying about holding his donation until DataPortability was a legal entity or Saad was asking permission to spend money he didn’t have with the assumption that Arrington would provide it despite the condition he publicly set. DataPortability’s Brady Brim-DeForest claims the latter, demonstrating, in my opinion, that Saad is an idiot.
3. For all of the hypemongering people like Saad have done for DataPortability and all of the beaurocratic exercises that DataPortability’s “leadership” has engaged in, it still doesn’t legally exist. Forming a 501(c)(3) isn’t rocket science and as I pointed out, much of the bureaucracy the people involved with this “initiative” have created actually makes little to no sense in the absence of a legal entity.
Bottom line: one of Web 2.0’s most heralded “organizations”/”initiatives” is a clusterfuck of incompetence.