eBay & San Jose Mayor Matt Mahan Discuss Shared Priorities & Continued Collaboration
San Jose Mayor Matt Mahan recently stopped by eBay to meet with CEO Jamie Iannone and CFO Steve Priest to discuss "shared priorities", eBay's commitment to the San Jose community and continued collaboration with city leaders.
The trio posed outside of eBay' infamous on campus pub, Walker's West/The Sellar, which is more than a little ironic considering the role that both the pub and local politics played in the 2019 cyberstalking scandal that targeted journalists Ina and David Steiner of EcommerceBytes, seeking to change their reporting through intimidation and to gain their assistance to unmask the identity of Fidomaster/unsuckEBAY, a frequent commenter and source who also sparked the ire of top executives at the company.
Liz Morton
At one point in the ongoing litigation regarding this scandal, eBay was sued by their insurance provider, ACE Property and Casualty Insurance, arguing they should not be responsible for any judgement or settlement against eBay or the former executives and employees named in the case and revealing ex-Chief Communications Officer Steve Wymer's close ties with the San Jose political establishment.
Liz Morton
Wymer, along with then CEO Devin Wenig, and VP Global Operations Wendy Jones, sent inflammatory messages to Security Director Jim Baugh, allegedly "egging on" the criminal activity that Baugh and 6 other members of eBay's security department would later plead guilty to as they unleashed a campaign of stalking and harassment against the Steiners in August 2019.
Court documents revealed (among other things) a series of texts wherein Wymer said "If we're ever going to take her [Ina Steiner] down, now is the time....hatred is a sin. I am very sinful."
Baugh replied "Let me ask you this. Do we need her entire site shut down? I'm not fucking around with her anymore."
Wymer: "Amen, I want her DONE"
Baugh: "[Wenig's initials] said to burn her to the ground correct?"
Wymer: "She is a biased troll who needs to get BURNED DOWN."
The conversation continued -
Baugh: "Copy that. I have a plan B. I will put it in motion. Will take 2 weeks"
Wymer: "I'll embrace managing any bad fall out. We need to STOP her."
A PowerPoint presentation made by eBay to the U.S. Department of Justice, in which the company said it was troubled by the roles Wenig and Wymer played, described Wymer's conduct as "inexcusable" and recognized Wenig and Wymer had "contributed significantly to the crimes."
Wymer was fired for cause while Wenig was graciously allowed to resign and take a ~$57 Million severance on his way out the door.
But it didn't take long for Wymer to land a new job as CEO of the Boys and Girls Club of Silicon Valley, with a little help from a friend - former San Jose Mayor Sam Liccardo.
Brian Howey of the San Jose Spotlight reports Wymer's political connections go deep, including campaign donations, vetting of the mayor's staff, and many social engagements with both Licardo and current Mayor Matt Mahan.
Brian Howey, Tran Nguyen
A disgraced ex-eBay employee helped make high-level decisions for former San Jose Mayor Sam Liccardo three months after he lost his job at the tech giant for his alleged part in a stalking campaign.
Boys and Girls Club Silicon Valley CEO Steve Wymer, who was fired by eBay in September 2019 for his alleged involvement in the harassment scheme, joined Liccardo’s communications team in December that year and worked for the former mayor for at least five months, emails obtained by San José Spotlight show. Wymer was a “volunteer” and wasn’t paid a penny, city officials say, yet he received an official city email address and advised Liccardo on everything from how to respond to media inquiries to who to hire for the mayor’s team, a San José Spotlight investigation has found...
...Wymer lost his job at eBay for allegedly facilitating a harassment campaign against a Massachusetts couple that included sending them disturbing packages with live insects and bloody masks.
San José Spotlight previously revealed how Wymer’s ties with powerful Silicon Valley politicians, including Liccardo, appeared to shield him from criticism over the eBay scandal that made national headlines and potentially helped him land the top job at the nonprofit agency—a sector he had no experience in. The emails further shed light on Wymer’s far-reaching influence over the mayor’s office and city business. He also socializes with newly-elected Mayor Matt Mahan, raising questions about his continued influence at San Jose City Hall.
Wymer isn't the only one involved in the scandal with eyebrow raising local ties - Security Manager Philip Cooke and Senior Manager Special Operations Brian Gilbert are both retired Santa Clara Police Captains and, despite suggesting they could use a "friendly" connection at SCPD to help try to cover up their crimes and eventually pleading guilty to federal felony charges , they have retained their $200K+/year police retirement benefits.
Is this the kind of "collaboration with city leaders" that Iannone and Priest are looking to continue?
Or maybe it's collaboration for eBay and the city of San Jose to continue to financially benefit from a sweetheart sales tax sharing deal that siphons revenue away from other California cities.
Liz Morton
When the Supreme Court decision in South Dakota v. Wayfair opened the door for states to collect sales tax on online transactions in 2018, eBay worked with the city of San Jose to hammer out a special tax sharing agreement that designates all sales on the platform that are shipped anywhere in the state of California as taking place at eBay's corporate headquarters for tax accounting purposes.
That means in addition to tax that is collected and remitted at the state level, San Jose gets to collect 1% local tax on each and every eBay order within California, regardless of where in the state the buyer actually lives.
According to the terms of the tax sharing deal, the city keeps the first $5 million it gets from eBay online sales tax annually, then pays eBay 30% of any additional proceeds - since 2019, San Jose has paid eBay $26.4 million of the $97.2 million it’s received through sales to Californians on eBay’s platform.
But other California cities are pushing back on tax sharing deals, including this one with eBay and others made with other big corporations like Apple and Best Buy, as they say the practice deprives their communities of vital tax revenue for infrastructure and other needs.
The city of Cupertino has already set aside over $56M, preparing for the possibility of having to pay back sales tax revenue it "may have received improperly" from in-state sales of iPhones, Macbooks, and other products under their tax sharing deal with Apple and the California Department of Tax and Fee Administration is reportedly scrutinizing the eBay/San Jose deal as well.
The Apple deal has language that conveniently placed the burden of footing the bill of any payback onto the city, but eBay has no such coverage in their agreement with San Jose according to Laura Mahoney from Bloomberg.
...It is unclear how much of San Jose’s revenue could be shifted elsewhere, but it would be some portion of the $97.2 million the city received from eBay’s sales since the tax-sharing agreement took effect in 2020.
Under state law, the tax department can reach back as far as two quarters before it “obtained knowledge of the improper distribution.” EBay could be required to give back all of the money it’s received from San Jose, based on terms of the agreement.
While ~$26M+ may be considered by some to be chump change to eBay (which reported ~$10B in revenue in 2023) the increased scrutiny and possible expense couldn't come at a worse time as eBay is currently face with legal and regulatory issues on multiple fronts.
eBay recently entered into a deferred prosecution agreement with the DOJ accepting criminal liability for the felonious acts of their employees in the cyberstalking scandal, which includes a $3 Million fine and 3 years of enhanced compliance monitoring.
Curiously, the compliance monitoring requirements specifically call out Mergers & Acquisitions due diligence and risk.
Liz Morton
That may indicate federal authorities and regulators have broader concerns about eBay's operations, such as apparent due diligence and disclosure failures in eBay's acquisition of trading card marketplace TCGPlayer, which led to the formation of the first US labor union in eBay's history and the sudden departure of Chief Accounting Officer Brian Doerger last year.
In addition to ongoing labor troubles and due diligence concerns, eBay has also agreed to a historic $59 Million settlement with the DEA to resolve allegations involving pill presses being sold on the site in violation of the Controlled Substances Act and is involved in ongoing litigation brought by the EPA due to sales of certain pesticides, chemicals, and emissions-control cheat devices.
If eBay loses that case, they could be subject to fines up to an estimated ~$2 Billion and potential shareholder lawsuits, and recent decisions they've made to move into competing directly against sellers on their own site could jeopardize one of their main defences in the EPA suit - that eBay is never a seller and only a pure third party peer to peer marketplace.
Amidst all this turmoil, eBay announced last month that Chief Legal Officer Marie Oh Huber will be leaving the company, though they did not give a timeline for her departure.
While Oh Huber was not named in either the criminal or civil cases regarding the cyberstalking scandal, she was copied on multiple emails revealed in court documents, including Wymer's infamous "Whatever...It...Takes" rant noted above and communications with Wenig, Baugh and other eBay legal personnel regarding their Fidomaster/ unsuckEBAY "problem."
An August 6, 2019 email chain started with Wenig expressing his desire to see the unsuckEBAY Twitter account shut down - assigning the task to Baugh, with Oh Huber and Wymer copied.
Wymer confirmed he had previously discussed the issue with Baugh and explored all angles with Twitter but had been unable to get the account killed.
Oh Huber echoed the frustration, but her and another member of eBay legal, Aaron Johnson, advised there wasn't a strong claim to appeal to Twitter to take action.
Baugh appeared to be trying to placate his bosses by offering that his team had been investigating for weeks and were close to discovering the identity and location of unsuckEBAY.
Oh Huber accepted that answer with a smiley face emoji, saying she would hold off on pursuing further legal steps in light of Baugh's investigation.
Inexplicably, not only did Oh Huber retain her position after the scandal, but as a result of eBay's internal investigation, the Safety & Security unit was moved to the Legal Department from the Global Operations division, putting the entire security apparatus at eBay ultimately under her control.
eBay has not yet announced who will be taking on the challenge of tackling their significant ongoing and impending legal and regulatory problems - but maybe the Mayor's office can suggest some suitable candidates for Oh Huber's replacement, in the interest of "shared priorities", of course.
