What Lies Beneath the Gates

[NB: Note the byline; this post is speculative. /~Rayne]

It’s amazing what a simple internet search can reveal. Take, for instance, a search using the rather innocuous parameters, [“rick gates” iii “press release”].

A little scrolling and presto — some interesting things surface.

Did you know that Rick Gates had served on the board of ID Watchdog, a “consumer-facing identity theft protection and resolution services” firm for use in safeguarding personal credit? But that’s not the entire story; take a look at this timeline:

2010 — Gates, along with his business partner Paul Manafort, worked as an unregistered agent for Victor Yanukovych (who would take office as Ukraine’s president in 2010) and Yanukovych’s political parties. Gates and Manafort represented Yanukovych from at least 2006 through 2015, laundering Yanukovych’s payments through scores of U.S. and foreign entities and bank accounts, using foreign nominee companies and bank accounts created/opened by them and their accomplices in nominee names and in various foreign countries (see DOJ’s indictment dated 27-OCT-2017).

19-APR-2011 — Gates joined the board of publicly-listed credit monitoring firm ID Watchdog. Gates bio from the press release:

Mr. Gates has over 15 years of international political, finance and business development experience working for multinational firms. Currently, he is the managing partner of Pericles LP, a private equity fund, that focuses on technology, infrastructure, and real estate targets. Much of his work focuses on investment, business development and deal structures in Europe.

Mr. Gates has worked on several US presidential campaigns and has participated in many international political campaigns in Europe and Africa. Mr. Gates graduated with a M.A. in Public Policy from George Washington University and a B.A. in Government from The College of William & Mary. He also completed the Executive Management Programme in Brussels and London.

26-JUL-2011 — 2010 tax filing (assume Gates filed his taxes on/about this time in the absence of confirmation by image of tax return); a fraudulent tax return was filed.

11-OCT-2012 through 14-OCT-2015 — Gates under-reported his income, filing fraudulent tax returns during this period which did not reflect full amount of payments from Yanukovych and parties. Gates also did not file Foreign Bank and Financial Accounts (FBAR) reports disclosing offshore bank accounts from which cash was wired after being laundered through numerous shell businesses.

21-JUN-2016 — When Paul Manafort was elevated by Donald Trump to campaign chair after firing Corey Lewandowski, Gates worked as Manafort’s deputy. He would remain deputy after Manafort resigned on August 19.

09-NOV-2016 — Gates stepped down from his role at ID Watchdog, a day after the 2016 presidential election. He then became deputy chairman of the inaugural committee.

??-DEC-2016 — A security researcher notified credit reporting company Equifax that an employee portal was open to the internet and vulnerable.

07-MAR-2017 — A patch was issued for the Apache Struts (CVE-2017-5638) vulnerability.

??-MAR-2017 — Equifax was hacked for the first known time; it contacted Mandiant for assistance. It did not notify the government or consumers.

…the company said it experienced a security incident involving a payroll-related service during the 2016 tax season earlier this year. Equifax said the incident was reported to customers, affected individuals and regulators.

??-JUN-2017 — Equifax closed the vulnerable employee portal

16-JUN-2017 — ID Watchdog announced it had agreed to be acquired by Equifax.

13-MAY/30-JUL-2017 — From Equifax’s press release dated September 15:

Based on the company’s investigation, Equifax believes the unauthorized accesses to certain files containing personal information occurred from May 13 through July 30, 2017.

29-JUL-2017 — Date which Equifax’s CEO said a breach was first noticed.

01/02-AUG-2017 — Four Equifax executives who sold a combined $2 million in company stock over these two days claimed they did not know about the breach at the time they traded their shares.

02-AUG-2017 — Equifax contacted Mandiant to conduct a forensic investigation into the breaches. The fourth of four Equifax executives sold a portion of his company stock on the same day.

10-AUG-2017 — Equifax announced it had acquired ID Watchdog.

07-SEP-2017 — Equifax notified the public that it has been breached and 145.5 million consumers’ credit data has been exposed.

18-SEP-2017 — Equifax’s earlier breach in March was made public.

27-SEP-2017 — Consumer Financial Protection Bureau’s then-Director Richard Cordray said regulators would be embedded within credit reporting companies to prevent future breaches of consumers’ data.

15-OCT-2017 — About this time, local news reported Gates was still working for Tom Barrack, CEO of Colony Capital and a member of the Presidential Council of Economic Advisers, prior to the indictment.

27-OCT-2017 — Gates was indicted for the first time.

15-NOV-2017 — Cordray stepped down as CFPB’s director.

25-NOV-2017 — Trump named Office of Budget and Management’s director Mick Mulvaney to succeed Cordray, to hold two offices concurrently.

18-JAN-2018 — Mulvaney allotted zero dollars for CFPB in the federal budget.

05-FEB-2018 — Mulvaney “pulled back from a full-scale probe” into Equifax’s breach.

This chain of events raises so many questions.

— Why Gates? Of all the people a public-listed company like ID Watchdog could pick, why this particular person with weak credentials in technology, let alone identity management or credit monitoring? Does Gates have a special relationship to ID Watchdog in some way?

— As a board member, what kind of access did Gates have to ID Watchdog’s systems? Did ID Watchdog have any ties or links to Equifax before the breaches?

— Did ID Watchdog provide any services to Gates — and possibly his partner, Paul Manafort — related to identity validation and monitoring? Did Gates acquire his second passport while serving on ID Watchdog’s board? What of his partner Manafort, who had at least 10 passports and possibly more identities?

— If ID Watchdog provided services to Gates, did any of Gates’ many bank accounts ever trigger alerts?

Gates “frequently changed banks and opened and closed bank accounts,” prosecutors said. In all, Gates opened 55 accounts with 13 financial institutions, the prosecutors’ court filing said. Some of his bank accounts were in England and Cyprus, where he held more than $10 million from 2010 to 2013.

— Doesn’t it seem odd Gates would serve on the board of an identity-monitoring firm located in Denver, CO while he was working frequently on lobbying-related contracts overseas and on the Trump campaign? Was he compensated by ID Watchdog and was this income reported accurately on tax filings?

— Did Equifax begin acquisition negotiations with ID Watchdog before or after Gates’ departure from the board? If before, did Gates play any role in the negotiations? Or does the timing of the acquisition simply look bad because of the breaches?

— Did Mick Mulvaney pull back on the CFPB’s investigation and oversight measures into Equifax as well as the other credit reporting bureaus to prevent any review of Trump campaign or administration members’ relationships with Equifax, or their data reported by Equifax and ID Watchdog? Did Mulvaney suppress the Equifax investigation and starve CFPB because he’s a misogynist ass and just wants to be a dick to Senator Elizabeth Warren? Or did Mulvaney merely toss ethics in his handling of CFPB including the Equifax investigation as payback for campaign contributors when he represented South Carolina as a congressman?

Perhaps it’s simply an interesting coincidence that a former Trump campaign team member who has been charged with multiple counts of bank and tax fraud, just happened to sit on ID Watchdog’s board of directors while he committed aforementioned fraud.

Maybe it’s just a weird quirk of fate that Equifax bought ID Watchdog around the same time it was being hacked a second time, potentially exposing Rick Gates’ credit records (and Paul Manafort’s) along with those of +145.5 million other consumers.

But it seems a massive stretch for us not to look a little further when Trump’s OMB director commits the CFPB to a slow death by budgetary starvation before icing the Equifax investigation and ID Watchdog’s role along with it.

83 replies
  1. Rayne says:

    There is so much bullshit surrounding Equifax I don’t know how we’ll ever get through it. It was bad enough before I found the Rick Gates > ID Watchdog > Equifax relationship.

    Like this: IRS awards multimillion-dollar fraud-prevention contract to Equifax (03-OCT-2017)
    Fortunately followed by this: IRS temporarily suspends contract with Equifax (12-OCT-2017)

    Though we should take careful note that suspension is temporary.

    I don’t think the public has clued in how valuable Equifax’s consumer data is when combined with the voter record database (it was hacked, out on the dark web for at least two years) and Facebook’s social media data. An entity with those three databases knows ~EVERYTHING~ about voting age Americans.

  2. earlofhuntingdon says:

    ID Watchdog. Who would want to follow developments in that industry more than a money launderer, offensively and defensively? Who would know better that its product would become even more valuable – assuming consumers believe it has any value – than a money launderer? Whose information would be more valuable to a potential election fraudster?

    I’ve always wondered what “consumer-facing” means. Sounds predatory, not helpful.

    • Rayne says:

      I suspect “consumer” in “consumer-facing” could be flexibly defined. I want to know if banks (as consumers) used this service to validate identities of persons asking for credit — ahem.

      I’d also like to know if an identity coyote like now-indicted Ricky Pinedo used this service to validate stolen identities — ones the Russian IRA could use to synthesize Americans online, let alone use for opening bank accounts to launder payments.

      • cfost says:

        Yes. It’s as if Paul and Rick were learning on the job, and/or being coached by their “benefactors .”

        I can imagine any number of uses of an arrangement like this, not the least of which: identities can be built and destroyed quickly and automatically. One creates an identity, puts it to use, and monitors the webs for any mention of the identity. When the heat turns up, one simply deactivates the identity and moves into a new one.

        They want what Michael Corleone wanted: the veneer of legitimacy.

        • Rayne says:

          I can think of a more nefarious use — like the “voter foreclosure” suppression technique, on crack and at scale. But I don’t know if we’re looking at that just yet, perhaps the threat this could be used. In Gates’ case ~IF~ there was a link between his work with Manafort and his board membership, it may have been a much more specific arrangement to facilitate laundering money.

          • Desider says:

            There’s also the chance to run thousands upon thousands of low dollar, untracked payments in the name of voters who would normally not donate, like granny in the nursing home. Trump’s low $ donations were much larger than Bernie’s, but they might have cut their teeth on The Bern.

  3. orionATL says:

    sounds like these matters could involve another carefully-worked-out fraud maze.

    Q: seems like the mulvaney-cfpb-eqifax dispensation deserves attention on its own merits.

    i believe i’m right that equifax has had three data breeches in recent years. i’ve read they make money (from the “protection” (racket) offered to worried citizens whose records may have been stolen) from these data thefts. if so, they have little incentive, short of loud public shaming or even a serious congressional investigation, to protect the data they acquired – without the knowledge or consent of citizens whose records may have been stolen.

    Q: why hasn’t one or the other branch of the republican congress conducted a serious investigation of credit reporting services data thefts?

      • Rayne says:

        This is the link you need. Jesus Christ on a pogo stick…there’s been an FBI and a counterintelligence investigation into Equifax. This bit right here:

        The handoff to more sophisticated hackers is among the evidence that led some investigators inside Equifax to suspect a nation-state was behind the hack. Many of the tools used were Chinese, and these people say the Equifax breach has the hallmarks of similar intrusions in recent years at giant health insurer Anthem Inc. and the U.S. Office of Personnel Management; both were ultimately attributed to hackers working for Chinese intelligence.

        Others involved in the investigation aren’t so sure, saying the evidence is inconclusive at best or points in other directions. One person briefed on the probe being conducted by the Federal Bureau of Investigation and U.S. intelligence agencies said that there is evidence that a nation-state may have played a role, but that it doesn’t point to China. The person declined to name the country involved because the details are classified. Mandiant, the security consulting firm hired by Equifax to investigate the breach, said in a report distributed to Equifax clients on Sept. 19 that it didn’t have enough data to identify either the attackers or their country of origin.

        Bold mine.

        Equifax is located in Atlanta, GA. Russian IRA sent somebody there much earlier, like 2014:

        d. Another co-conspirator who worked for the ORGANIZATION traveled to Atlanta, Georgia from approximately November 26, 2014 through November 30, 2014. Following the trip, the co-conspirator provided POLOZOV a summary of his trip’s itinerary and expenses.

        Team Mueller knows what this trip to GA was about; I hope it’s something far more tame than the possibility I just imagined.

        • SpaceLifeForm says:

          I have zero reasons to believe Equifax Is still not hacked. None. Zilch. Nada.
          You do not hire a music major for IT security.

          From your last link:

          Spinelli left in 2013, followed less than a year later by his top deputy, Nick Nedostup. Many rank and file followed them out the door, and key positions were filled by people who were not well-known in the clubby cybersecurity industry. The company hired Susan Mauldin, a former security chief at First Data Corp., to run the global security team. Mauldin introduced herself to colleagues as a card-carrying member of the National Rifle Association, according to a person familiar with the changes.



          In response to a CNNMoney inquiry, the company said Susan Mauldin is retiring as chief security officer and Dave Webb is retiring as chief information officer.

          [Retire? BS]

          Webb joined Equifax in 2010, according to his company bio. He previously served as chief operations officer at Silicon Valley Bank and as a vice president at Goldman Sachs. Before earning his MBA, Webb earned a bachelor’s degree in Russian from the University of London.

          [Smells of dots]

        • orionATL says:

          rayne –

          thanks. i had already read that article.

          the articles i listed lay out equifax’s pattern of behavior, and lack of serious response by congressional leaders.

          as for your “possibilities” i’d say they aren’t that far off.

        • cfost says:

          So. No surprise that “certain individuals” were targeted by the hack, for their financial and intelligence value. And no surprise that someone from within Equifax is thought to be an accomplice. And no surprise that the real, ontheground, security lapses within the building were criminally negligent before the hack.
          Hopefully this will lead to a rethink of the whole paradigm of “personally identifiable attributes.” Given that back doors are built into most software on purpose, it can’t be a number, or any other type of low hanging fruit.

  4. Charles says:

    Thanks, Rayne. Just thinking about Gates and Manafort in charge of a  credit monitoring/identity protection company gives me the willies. Brr!

  5. cfost says:

    Rayne, this seems quite significant, thank you.

    First thing I would want to know: who are mssrs Lewis, Greene, Ramsey, and the rest of the mgmt and board? What are their connections, if any, to our broader investigation? Who is Arthur Cohen, the real estate guy named along with Gates in the press release? He sure brags a lot. What are his connections?


    Pandora has more boxes than we thought….

    • Rayne says:

      The question more accurately about Arthur Cohen is who ~was~ he as he died in 2014. I looked at him, immediately suspicious because he was in NY real estate; but of all the people I’ve looked at lately, he seems least likely to be anything more than a senior dude with good cred who made a board look better. Even without a technology or banking background, this guy seemed a better fit based on gravitas than Gates.

      • cfost says:

        LOL. Right there on the wiki, of all places.
        Have you looked at Edward Cash yet?
        Are the any goodies to found by following Gates’ claim to have consulted in Africa? Africa would be the nexus between the “nation state” player(s) involved and whomever else.
        Kind of like the movie Casablanca….

  6. matt says:

    Putin is smart, smart, smart. He is not conducting a traditional war, or traditional cold war for that matter. I would bet, as you infer, that Russia is the entity that already has “EVERYTHING” on voting age Americans. Boy, if you could tie the Equifax breech to the Russians through Gates… that would rock our county to the core. Assuming that Mueller knows of such connections, and Gates will work with the investigation… that’s an epic bombshell.

    As long as this is a speculative post… Don’t you think this whole shift (or conspiracy) with Russia precedes the 2016 election? Mercury and Podesta Group being two of the most powerful influence firms in DC were directed by Manafort & Gates to hatch a major shift to pro-Russia global policy against the State Dept and Obama (and of course to and build a ground floor of economic enrichment for themselves and associates).

    This conspiracy goes deep- even into the Democratic Party. Kerry and Biden were heavily involved in Ukraine, though after their efforts to NATOize failed their sons went to work for a Yanukovych/Russia friendly Burisma. Why? At the same time, Tony Podesta was right in there with Manafort and Gates working along side them to promote Russia’s interests not only in Ukraine but the world over. Its beginning to seem like the only holdouts in this new, “new world order.” were Barrack Obama and Hillary Clinton.

    I’m not trying to pull a “zerohedge” on you… but it is quite possible that Hillary had moles in her campaign, and that all throughout her tenure at the State department she made quite a few enemies (or opportunists) on both sides of the polticial aisle that didn’t necessary “collude” with Trump, but found “opportunities” with pro-Russian sympathies.

    My point being, Gates was already the can-opener to the Russiagate can-of-worms before you tied him to the Equifax breech, and there are many, many worms in high places that are squirming. The bigger issue than legitimacy of the 2016 election is the possibility that certain players will continue to undermine the American election system in the decades to come if they are not also exposed in this debacle.

    • maybe ryan says:

      Cofer Black is at Burisma too.

      But by the time Hunter Biden joined, Burisma seemed to have acclimated to the new power structure in Ukraine.  Forbes has recently written about Burisma expanding production in Ukraine as part of the Ukrainian strategy to reduce dependency on Russian oil.

      So your theory that Biden at Burisma is part of a turn to Russia by corrupt American elites seems to have some timeline problems.  Is there other evidence that Burisma sides with Russian or with heldover Yanukovych allies in today’s Ukraine?

      • maybe ryan says:

        Not that I’m that well versed in Burisma or Ukraine.  At the “International Fest” at my daughter’s grade school last week, I made the mistake of saying “the Ukraine” to the women at the table offering Deruny and decorate paper eggs.  I know the terminology, but I don’t use it often enough not to stumble.

        • matt says:

          Thank you for clarifying, maybe ryan.  Yes, I was confused with the involvement of Biden & Kerry’s sons in Ukraine- not that they were involved per se, because many investors were falling over themselves to get a piece of the energy market pie.  What confused me was that Burisma was associated with Putin and Yanukovych- opposite the side of the State Department/Obama and in line with Manafort, Podesta, Mercury, et all.  It is an honest question, and it doesn’t really make sense that people associated with Obama administration were on-board with Putin energy interests as you would think they would be associated with the independent/separatist Ukraine- the side the State Dept supported.

          After reading into it a little, it looks like Mykola Zlochevsky- the corrupt oligarch who owns Burisma may have hedged his bets after Yanukovych was ousted by “reaching out” to the American establishment that just ousted his boss- so as not to be treated too harshly by the incoming government.  The timeline as you suggest indicates this was more a “shift” in control of the company away from Putin/Russia and towards US interests in Ukraine.  Russians, if anything, are always pragmatic.

    • bmaz says:

      You are a disingenuous troll. You are completely laying out an excusatory path.

      Who is your base Matt, the NRA, Putin/Russians, or both.

      I remember well all your self professed “pithy comments” before that period. Oh, wait, I don’t. You magically appeared just then. Isn’t that swell. You want to pull that nonsense here, you will have to mask it better. And we will see that too, “Matt”.

      • matt says:

        Eh?, Did you read maybe ryan’s comment? He answered my question and debunked Kerry/Biden’s sons connection to the Putin backed, Manafort/Gates advised Yanukovych govt.

        • bmaz says:

          Yes. I read it all. Have read most all of the comments since the founding of this blog.

          I think you are full of shit, and a troll.

          • matt says:

            I think you are a beautiful human being- intelligent, hardworking- who cares very much for justice and democracy.

              • matt says:

                Speaking of guns (you brought it up)… Trump actually did a good thing and bucked the NRA- asked for a bump stock ban, reform of the background check system, and the 21 age requirement for rifle purchase.  Nearly all Americans agree with this, so if the GOP and NRA stonewall it, it will hurt them tremendously.


                I still believe a “troll” is someone who spews insults and propaganda… not necessarily an informed person who disagrees with you.

                Blessings to you and yours.

                • bmaz says:

                  No, Matt, YOU were the one that commandeered the comment section of this blog for more than one day with gun crap. Do not try for one second try to say that others “brought it up”. You can take your gun mentality and shove it. As for your pathetic attempt to try to turn me into the “troll” instead of you, don’t be an assclown; and that will not work here.

                • earlofhuntingdon says:

                  Day late, dollar short.  Bump stocks were to have been banned after Vegas – as a beginning.  Nada from the WH and Congress.

                  Trump’s direction is like a bumper car’s: he goes straight until he hits resistance, then changes tack.  His bucking the NRA will last until his next lie.  He’s running out of friends and confidantes and will take them anywhere he can find them.  Just like Jared and his lenders.

                  Yes, most of America wants significant restrictions on gun ownership.  They also want universal health care and corporations to pay a fair share of taxes, now at their lowest contribution in modern times.  Congress and the WH don’t much care.  Most of what Congress and this WH do works against what most Americans want.

                  • matt says:

                    Guys, I’m on your side.  I hope legislation passes.  Hey BMAZ, I followed Rayne’s direction and made my comments on the Bloody Guns Post as instructed.  Any other post was a response.  Look it up.

                    Too bad we can’t meet face to face- as human beings, I think we’d all get along- chill and have a beer or something.


  7. earlofhuntingdon says:

    Whoever would have thunk that a long-time direct report to Donald Trump would have been smart enough to admit she tells “white lies” to congressional investigators and indirectly to Robert Mueller?

    Should someone tell Hope Hicks that in the context of federal criminal investigations, there are no such things as little girl white lies?  Donald’s obsessions notwithstanding, size doesn’t matter.  Neither does color.  Nor a pretty smile or that Breck Girl look.  There are truth and lies.

    Ms. Hicks has just impugned her own credibility and that of the boss that employs her.  She will now have a lot more explaining to do.  I’ll bet Bob Mueller knows how to get in touch with her.

  8. tinao says:

    Wow Rayne what a catch! After reading the Atlantic article, Paul Manafort-American Hustler someone put up in another post, (Sorry to who ever that was. I really appreciated that link and should have thanked you then.) I got a pit in my stomach that just would not go away. I realized just how depraved these people were, literally sociopaths and Gates is right in there with Manafort.  Being a nurse I don’t say that lightly.  Then on top of that Ive been reading Jane Mayer’s Dark Money, and again feeling astounded how deeply sick and devious the elite’s thinking is. I guess what I’m trying to say is I believe there could be some there there.

    Which brings me to your response Mat, I totally agree Putin could be sitting on that whole box of chocolates. That’s just where my mind jumped!  I’ve also wondered all along just how far Mueller will go into the swamp when other issues are uncovered.

    • earlofhuntingdon says:

      Putin doesn’t have to have a hand in all the dissonance and conflict, the division and inequality in America today.  Just as he doesn’t need to take over the whole restaurant.  He need only unscrew the lids on the salt shakers.

    • Desider says:

      It was me, but original finder was Art Appraiser over at Dagblog. Anyway, glad you found it of interest – I thought it amazing.

    • posaune says:

      Just noticed the footnote on page 6 of SCO’s Status Report to EDVA re Manafort sentencing upward departure:

      “An additional two-level enhancement for a managerial role would apply for Manafort, pursuant to § 3B1.1(c).”

      Yeah, I guess someone who can’t make a pdf would definitely be management, yes?


  9. Galactus-36215 says:

    Rick Gates may financially benefit from this acquisition. He has 10,920 vested awards that somehow have not expired. How is this possible? Usually all awards if not exercised within 90 days of departure are forfeited. Gates resigned on Nov 9, 2016 and the meeting to approve the merger occurred on August 10, 2017. That’s 10 months.

    Gates’ award disclosure is on page 60 with a footnote on page 61 of the merger plan document located here: https://www.idwatchdog.com/Ir/idw_circular_2017.pdf

    • Rayne says:

      An excellent question. Looks like it wasn’t worth much, though, if I read this correctly, just $0.40/share? But the tick-tock handily provided in this circular looks like Gates must have been involved in the earliest stages with the rest of the board, just before they began to accept bids. He would have known the firm was going to go to auction.

      Now I wonder if bidders were poking around in the back end via hackers…LOL What a mess!

      • SpaceLifeForm says:

        What if Gates was feeding info to a potential bidder?

        The problem with phantom stock, is if one believes they are going to make good money out of it, they are likely a puppet.

      • Galactus-36215 says:

        Don’t let price per share distract you. My private company just sold/merge with a large silicon valley company. (Very Well Known). In that merger, management of the private company issues notes/loans to the company where they not only received interest on the note, but an additional 100% principal payment. All carved out of the deal BEFORE the shareholders get their proceeds. What needs to be known in this situation is if any notes or other debts of IDWatchdog were related to management and what the terms of those notes were. That’s why I’m suspicious.

        Here is an excerpt from the merger document.

        “On May 19, 2017, the
        Special Committee met and resolved to recommend the revised terms of the proposed Merger to the
        Board. After extensive discussion regarding the updated valuation analysis, continued performance in line
        with forecast, and the Purchaser obtaining increased visibility into ID Watchdog’s business and operations
        through diligence, the parties reached an agreement on the revised terms on May 19, 2017, which
        resulted in a purchase price of approximately $63
        million, after taking into account deductions for
        indebtedness and certain transaction and other related
        expenses. ”

        See, AFTER taking into account certain indebtedness. That’s the kicker right there. If Gates lent them X millions of dollars, he’ll get basically a huge payday.


        Page 20

        • Galactus-36215 says:

          Another aspect of the merger that I’m familiar with is that management got HUGE bonuses that were also stripped out as a carve-out to the general merger and came before any shareholder received funds. So, Rick Gates could be assigned a HUGE merger bonus and have received it from this merger.

          That’s why his share being listed is so troublesome to me. His rights in those options in the company should have expired but don’t seem to have expired 10 months later, he’s still somehow connected to the company even though he shouldn’t be.

          • Galactus-36215 says:

            In the event that ID Watchdog completes
            an Acquisition Transaction (as defined below) during
            Mr. Greene’s tenure or within six months following the termination of his employment for any
            reason other than termination for cause, Mr. Greene shall be entitled to participate in an
            acquisition bonus pool, distributable to eligible
            executives of ID Watchdog”

            Found it! Here is the bonus pool I was speaking about in my last post. There is an executive bonus pool. I’m sure per SEC rules that they have to disclose what is known as section 16 SEC officers, but do notice how the term “Eligible Executives” is used. ie..there may be other in the pool such as Gates.

            Gates left the company, but do we know what his exit package or agreement states? Nope. But I’d be willing to be it had language that allowed him to retain rights in shares and bonus payments related to this merger.


            Page 55 of the merger doc on the quote above.

            • Galactus-36215 says:

              “Section 5.12.
              Payment of Certain Amounts
              . At the Effective Date, Parent shall pay,
              on behalf of the Company (and the Company hereby authorizes and directs Parent to pay), the
              amounts described on Schedule 5.12 to the Personsset forth thereon, in each case by wire
              transfer of immediately available funds.”

              Page 46 of the merger agreement. In a disclosure letter to Equifax, management gave a schedule of individuals and/or companies to be paid directly AFTER the merger. So, is Gates on this list? Another good question for Mueller.

              • bmaz says:

                Galactus – pretty interesting stuff.

                Thank you. I do only a little corp work, but have seen a situation (on a small scale) like you describe. The interaction of corporate law, tax law and, if it all goes belly up, bankruptcy law, is an amazing point. And not one that most businesses can absorb. Even the ones that are worth saving. It is an interesting confluence of law.

                • Galactus-36215 says:

                  Getting closer to know how much those payments might be. According to SEC filings for Equifax, Equifax paid out $77.3M in cash, net of cash received for the ID Watchdog merger. See Page 32 of the document linked below.


                  The bonus pool for execs was 3% which was split by the 3 head execs (not Gates). That amount was $1.89M split between CEO, CFO and CIO.

                  I read merger costs were about $2.4M I believe. Add those two amounts to the cost of the merger of $63M and you come up with ~$67.3M. According to financial statements for Equifax, they spent $77.3M leaving ~$10M unaccounted for which could be related to that section 5.12 list of other payments to be made after the merger.

                  If it’s one thing I’ve seen working for companies, it’s that leaving execs get great exit packages and side deals. I’d be willing to bet that Gates received some portion of that unknown $10M paid by Equifax.

                  • Galactus-36215 says:

                    My bad. The merger doc says purchasers expense cannot exceed $500K or $0.5M (Page 2) which means the “Other Payments” clause in section 5.12 would be ~$11.5M.

                    Seriously, I wonder how much Gates will get. I think I’m gonna call the SEC and request that they make Equifax disclose his exposure since the guy has plead guilty.

                    • Rayne says:

                      Thanks so much for weeding through that circular. Superb stuff. It didn’t occur to me that Gates might have loaned the company money — this might have been a means to launder some of the offshore cash. I wonder if there were a loan if it would be in Gates’ name though, or would it have been made by another entity on behalf of gates — either a pass-through or a bank or investment bank (thinking Federal Savings or Colony Capital) with which Gates had an understanding. Also not clear if Gates owned shares in addition to the awards noted in the circular.

                      And definitely, if he still has a relationship with Equifax as heir to ID Watchdog, I would hope SEC demands an announcement since this could be material to the stock’s value.

                      Occurred to me last night the link between Gates and ID Watchdog might not be direct, but through Gates’ father who launched Gates Group Intl which does consulting, may include tech integration work. Wonder if there was a referral when IDW needed a board member?

                    • Rayne says:

                      By the way, did you happen to see the press release issued when Gates departed ID Watchdog’s board?

                      Note how there is zero mention of Gates’ relationship to Manafort or to Trump’s campaign. Huh.

                      p.s. Two things — 1) We probably need to end this ziggurat with a fresh reply or no one on mobile devices will be able to read this. 2) Would you feel comfortable if I were to repost your findings in a followup blogpost? Thanks!

                  • pdaly says:

                    Wow! Thanks, Rayne and Galactus-36215. Amazing sleuthing. Any idea why/how if Gates is among those to be paid his name can remain elusive to public document reporting? (Or can we ask aloud if Gates can assume another identity, for payment purposes?)

    • orionATL says:

      galactus –

      thanks for this set of comments.

      this kind of knowledge about the inner workings of corporations – dividends payment decisions, executive pay, mergers, etc. is rather rare. however this may end up working out for gates, the details you provide into the world of corporate mergers is very informative.

  10. earlofhuntingdon says:

    Gates wants to unleash his real self.  According to reports, now that he’s a cooperating witness, Gates wants to have his gps ankle bracelet removed and to be free to travel between Richmond and DC. Apparently, Mueller’s team is fine with that.

    Perhaps it’s not important to Mueller’s team which tree their goat is tethered to.  But if I were Gates, and knew the guys Manafort and I used to work for, I’d want the FBI to know where most of my body was at all times.

    • Rayne says:

      I can’t help wonder if the dude will be “wearing a wire,”* and all this spring break freedom is an opportunity to catch somebody else.

      * come on, now, we all know cellphones are “wires,” right?

    • SpaceLifeForm says:

      Which is a good reason to *not* remove the ankle bracelet.

      If DOJ/FBI says he can move around, fine. He can still have the bracelet.

      It is to Gates benefit and security that he continue to wear it.

      “most” being the keyword.

  11. cfost says:


    Some past uses of information/cyber warfare techniques on display in Estonia, 26April2007.
    Hacking Equifax is roughly equivalent to the old practice of manufacturing tanks. Military readiness.
    Philosophy of Information Warfare, by Sergei P. Rastorguev.
    “The Gerasimov doctrine,” named after an article written in 2013 by Valery Gerasimov, chief of the general staff of the Russian military, in the Russian journal Military Industrial Courier.

  12. SpaceLifeForm says:

    Typo-search can be handy.

    He earned between $2.5 million and $2.8 million in hotel management fees from a hotel that has never opened

    Alan Garten
    Ziya Mammadov
    Anar Mammadov
    Richard Kauzlarich
    Bill Clinton
    George W. Bush
    Matt Bryza
    Barack Obama
    Kamal Darvishi
    Leib Waldman
    Alex Shnaider
    Tevfik Arif
    Felix Sater
    E.J. Ridings



    “I don’t see Felix as being a member of the Mafia” (2013 deposition)

  13. pdaly says:

    Franklin Foer’s Slate article published in Oct 2016 reviews the activity between the Trump Tower computer server and Russia’s Alfa Bank.
    There is a huge spike in midAugust 2016, which I assumed corresponded to Manafort’s drop from the Trump campaign team.
    But the Trump Tower’s server  “was set to accept only incoming communication from a very small handful of IP addresses. A small portion of the logs showed communication with a server belonging to Michigan-based Spectrum Health” [and also the marketing company Cendyn].
    Wondering if there might be recognizable Trump Team names on the rosters of those two entities.

      • Rayne says:

        Which is really code for Erik Prince — Betsy DeVos’s brother. It’d be nice to know how Spectrum Health handles its IT; is it in-house or outsourced, or is there a contractor in the mix?

        [p.s. I trashed your duplicate post. ;-)]

  14. JD12 says:

    Appreciate that.

    When the story broke, Hope Hicks responded by saying Cendyn was an email marketing company coincidentally used by both Trump’s hotels and Spectrum, and that it was spam. But it may have been one of her “white lies” because it doesn’t quite explain the pattern.

    Here’s a different theory that could help support your hypothesis. The pattern looks like SQL database replication.

    I’d never thought much about the Equifax breach, but after seeing what you wrote, the possibilities are mind blowing. Trump also took Michigan by just 0.22%, the closest of all states.

    • Rayne says:

      Check this description of Cendyn’s offering from an announcement by a hotel chain which selected them as a contract service provider:

      Using unrivalled connectivity to third party vendors, reporting and analytics, Cendyn will provide Minor Hotel portfolio of 154 hotels and resorts in 24 countries across Asia Pacific, the Middle East, Europe, South America, Africa and the Indian Ocean. with true intelligence of every guest, across all their hotels, no matter what channel they came through. Cendyn will implement a guest intelligence solution utilizing data collected from multiple sources to provide a true, single profile of each guest. This visibility will enable every brand in the group to gain a clear understanding about the history and preferences of each guest in real time, regardless of how they booked.

      Uh, yeah…imagine this as the front end on a massive database built on Facebook’s social media content and voter records. Only thing more dangerous would be adding consumer credit data.

      EDIT — 9:32 am ET — Cendyn looks like it could be a service provider to both Spectrum and Trump org hotels. BUT…two questions need answers: 1) Does Cendyn provide HIPAA-compliant services to health care facilities? (I don’t see that right off.) 2) Why does the timing of communications and the pings between Spectrum and Trump org not jibe with legitimate business if Cendyn is really a CRM service provider?

      • JD12 says:

        This is interesting. In response to questions, the owners of each server gave different explanations. Spectrum claimed they found nothing but a few spam emails from Cendyn. That matches what Hicks said, but the Trump server was set up for email marketing by Trump in 2009, the activity in 2016 wasn’t nearly as much as it had been using. It looks like a coordinated response, but the Russians must not have seen the memo, Alfa Bank said hackers were trying to make it look like they were tied to Trump. Spectrum later changed their explanation, saying it was voice over IP traffic.

        Database replicationis a distinctly different pattern, and each company has  legitimate uses for similar lists. Cendyn could give them some deniability,and cover themselvesby pointing to their third parties. But if the database is all stolen data, I could see wanting to come up with an excuse.

        Even if Cendyn is just a cover story, it would help to know more about them, and why they’re ok being named.

  15. pdaly says:

    If one wanted a hidden yet in-the-clear communication system, this setup described by teapainUSA (in the link provided above by JD12) certainly sounds convincing.

    I followed the link on to another teapainUSA post published in September 2017 in which the following claim about the Trump Tower server was news to me: it was not physically located in Trump Tower.

    “One of the facts that is not well known about this server is that it was a leased server physically housed in Lititz, Pennsylvania. It don’t take an orbital payload specialist to figure out why Trump Tower chose a leased server, not a managed, physical server in Trump Tower, to host all this treasonous data hanky-panky.”


    • JD12 says:

      That’s news to me as well. With the Trumps’ overconfidence in everything, you can bet they thought it would never be discovered.

      That reminds me of EW’s recent post about Hope Hicks saying certain emails will “never get out.” She couldn’t be naive enough to say that about the Don Jr. emails, they involved too many people. The analysis from the link you gave shows that it appeared to be set up on June 27, and the Trump Tower meeting happened June 9. Perhaps this is how they continued communicating with each other.

      What led to the SQL database idea was that Hicks said they were marketing emails, which are high volume. Obviously a back channel could be lower volume. But honestly there’s no reason why it couldn’t be both.

      The Spectrum/DeVos/Prince connection makes sense too, because Trump had the nomination in hand and GOP could begin working with him.

      The Trump campaign said publicly that they were using Cambridge Analytica with their personality algorithm to target voters, but the Equifax info could make it a lot more efficient and might actually be more important.

      The scary part still is the voting machines and voter rolls. It wouldn’t be that hard to manipulate, and if you have real voter info and only do it in a few districts you might not draw attention. It was a while ago now, but Manafort’s pal Yanukovich did it in 2004.

      On Election Day, the OSCE observers claim that thousands of people were suddenly added to the electoral rolls. Many of these voters used absentee certificates, and the majority were in the pro-Yanukovych eastern half of the country. Approximately 5 percent of all votes cast came from these last-minute voters.


      • Bruce Olsen says:

        I worked at Oracle in database R&D for 12 years and TeaPain’s analysis is very plausible, assuming the logs are complete and accurate. I especially like the ping he noticed, which is exactly what admins the world over do as their first test. A few other sites debunk the idea by claiming that Cendyn’s control over the server meant Trump (or other 3rd party) couldn’t control it, but that’s impossible to know either way.

        There’s no need to assume any Equifax data was made available to CA; there are plenty of ways to feed Facebook’s targeting algorithms with data already available on FB (like lists of friends, or scraped comments). Even easier, CA could have bought a list from any of multiple vendors that contain  email addresses, phone numbers, physical addresses–anything IRA would need. Ten cents to a dollar a name, depending on what you want to know. Americans give this up freely. I think I’ve heard CA has a “house list” as well, so there might have been no need to buy anything.

        Cendyn would be the perfect cover for this activity, even if the company itself were not compromised. CA would make periodic updates to the SQL database that comes with their service, but would never (or only occasionally) launch an actual email campaign. Instead they’d rely on SQL replication to move the data to Alfa Bank–and back again if they wanted a two-way channel.

  16. JD12 says:

    The test ping was convincing, especially coming from the Russian telecom company. Could that service provide communications that bypass NSA and hide from subpoenas? Spectrum is a possible link to Erik Prince, who presumably has methods for covert comms with his spy contractors.

    You’re right about the social media component of it, and that would capture undecided voters, but I can’t help but wonder about actual voter fraud, since reports of Russians attempting to tamper with machines are now coming out. The way to do it would be to purge voter rolls in blue districts (like what happened in NC) and to stuff ballots in red districts. You could use a list of elderly names, which wouldn’t be on social media, to stuff absentee ballots and maybe even electronic ballots, since those machines still aren’t secure. Spectrum might have information on folks in Michigan who are hospitalized or physically unable to vote anymore, and allegations of dead people voting have been around forever. With accurate polling an real names you could target districts like digital gerrymandering, and only do enough to win but not enough to make it widespread.

  17. pdaly says:

    Thanks for the information, Bruce Olsen.
    The Spectrum Health detail in that Trump Tower server story has me wondering whether any patient health information was leaked. A patient’s name, the birthdate, and even just a patient’s address are considered protected information by HIPAA, the federal patient privacy law. Health centers are assessed monetary fines for HIPAA violations.

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