Thomas L. Knapp

Tom Knapp is the publisher of Rational Review.


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Never draw to an inside straight
PayPal vs. PATRIOT
by Thomas L. Knapp

Doesn't the USA PATRIOT Act make you feel all warm and fuzzy inside? The Ministry of Truth said that it would protect us from terror, and the Ministry of Truth wouldn't lie, you know.

Yesterday, the US Attorney for the Eastern District of Missouri swung into action against one of those evil terrorist groups that USA PATRIOT was intended to protect us from:



I was shocked to learn that the world's most-used Internet payment system was, in actuality, a plot hatched in the bowels of a cave in Tora Bora by some towel-headed terror magnate. I suspect that most people were. But the Ministry of Truth says so, and the Ministry of truth wouldn't lie, you know.

At issue is PayPal's processing of payments for online casinos. Yep, casinos. You didn't know that playing a hand of blackjack could be a terrorist act? Neither did PayPal, but the Ministry of Truth says so, and the the Ministry of Truth wouldn't lie, you know.

Unless PayPal hands over about nine months' worth of the revenues it collected on behalf of online -- but offshore -- casinos, MiniTrue threatens to hand them over to the tender mercies of the Ministry of Love.

There's a certain amount of poetic justice in all of this. PayPal, especially of late as it transitions to a new owner (auction giant EBay) has a pretty lousy record when it comes to respecting the privacy and rights of its customers. PayPal's decision to support the victim disarmament lobby by banning use of the service by perfectly legitimate gun dealers and their customers comes to mind. As a matter of fact, we at Rational Review have been examining alternatives to PayPal for processing our donations, subscriptions and product sales for that very reason.

PayPal's pecadilloes aside, though, it isn't really the company that the US Attorney is after. It isn't Osama bin Laden, either, or even Saddam Hussein. It's you.

US Attorneys and other parasites just can't stand the idea that anyone might engage in any unsupervised, unregulated activity. US Attorneys and other parasites, after all, depend on the opportunity to supervise and regulate for their livelihoods, and on the opportunity to punish their supervised and regulated victims for psychic self-aggrandizement.

Five bucks placed on the spin of a virtual wheel located on a server in the Caribbean might not seem like a big deal to you or to me, but to US Attorneys and other parasites, that five bucks represents a threat that 19 Arabs can't hold a boxcutter to. It represents freedom. It represents activity not subject to their supervision and regulation -- and such activity must be prevented, or at least punished, at all costs.

We all knew that the USA PATRIOT Act would be abused -- it was specifically crafted with "broad powers" in mind -- but the speed with which that abuse has left even nominal claims of relationships to terrorism behind is an indication of just how big in their britches US Attorneys and other parasites are getting.

And why shouldn't they? Businesses like PayPal have continually ignored the One Big Rule of Dealing with Government.

In poker, novices are warned never to draw to an inside straight.

In business, the One Big Rule is never believe US Attorneys and other parasites when they "talk straight" with you. "This will never be applied to normal, private business transactions -- it's only intended to stop (insert villain of the day here) from accomplishing (insert villainous act of the day here)" is the equivalent of "the check is in the mail" and "I promise not to come in your mouth."

There's little doubt that PayPal will knuckle under and fork over. When US Attorneys and other parasites get you by the balls, your heart and mind are bound to follow.

There's also little doubt that, somewhere out there -- offshore -- entrepeneurs are already shopping for servers and hiring phalanxes of programmers to set up a transaction system located out of the reach of US Attorneys and other parasites. PayPal's loss will be their gain.

It won't be long before US Attorneys and other parasites are reduced to tracking down individual gamblers and begging for the authority to "bottleneck" the Internet so as to better supervise and regulate the little packets of information that travel offshore from your computer and mine.

Then they'll start beating the drum about strong encryption again ... but it stops there. That genie's already out of the bottle. A man's public key is his castle and US Attorneys and other parasites are not invited to the Renaissance Faire.

The hoary arm of the law is long -- but not infinitely so. And that's our ace in the hole.

April 1, 2003