Ex-eBay Security Analyst Describes Toxic Work Culture In Cyberstalking Case
UPDATE 1-11-24
eBay has been found criminally liable in connection to the 2019 cyberstalking of journalists Ina and David Steiner of Ecommercebytes, and agreed to pay a penalty of $3 million as part of a deal to defer further prosecution.
Liz Morton
UPDATE 11-3-22
As expected, Zea was sentenced today to the 2 years probation and $5,000 fine the US Attorney's office had requested in the sentencing memo filed earlier this week.
The final defendant in the criminal case, Brian Gilbert, has had his sentencing indefinitely postponed due to a diagnosis of colorectal cancer.
Veronica Zea, 28, of San Jose, Calif., a former eBay contractor who worked as an intelligence analyst in eBay’s Global Intelligence Center (GIC), was sentenced by U.S. Senior District Court Judge William G. Young to two years’ probation with her first year to be served in home confinement and a $5,000 fine. In October 2020, Zea pleaded guilty to conspiracy to commit cyberstalking and conspiracy to tamper with witnesses.
UPDATE 11-1-22
The US Attorney's office submitted their sentencing memo for Ms. Zea today, requesting a sentence of 2 years’ probation, with the first twelve months to be served in home confinement, a $5,000 fine, and a $200 special assessment.
The government had originally sought a 30 month prison term for Zea, but has revised their recommendation in light of her cooperation with the investigation, recent diagnosis of ADHD and Autism Spectrum Disorder, and being found to be one of the least culpable participants in the charged conspiracies.
If granted, the two years probation would be the same as fellow defendant Stephanie Stockwell received, with many of the same mitigating criteria.
The final sentencing hearing will be held November 3rd, 12:00 PM Eastern.
Former eBay Security Contractor Veronica Zea faces sentencing next week for her role in the 2019 cyberstalking and harassment scandal that targeted Ina and David Steiner, publishers of the EcommerceBytes blog, as well as unsuckEBAY / FidoMaster - an anonymous online persona that posted comments about eBay on Ecommercebytes, Twitter and other sites.
Liz Morton ~ Founder
Zea's attorney's have filed a sentencing memorandum, laying out background about their client, letters of reference from friends, family, and coworkers, as well as details of the toxic and abusive work environment at eBay under Security Director Jim Baugh in support of their request for Zea to be spared prison time and instead be sentenced to probation and community service.
Initially, the ability to work at eBay, even on a contract basis, seemed like the dream job as Veronica had hoped for a career in law enforcement in some capacity. What seemed like a dream job soon became a nightmare as Veronica was exposed to excessively long hours with no overtime pay (8 a.m. to 10 p.m.) and subject to a manipulative and abusive boss in Jim Baugh.
Veronica Zea’s statement to this Court...lays out in exquisite detail what employment under Jim Baugh was like...
As another young, female analyst described work in the Global Intelligence Center under Baugh: it was a toxic and manipulative work environment where the leadership (Jim Baugh, Dave Harville and Stephanie Popp) continually tested the analysts’ loyalties and erased boundaries through psychological manipulation... because the analysts were contractors through Concentric Advisors, they did not have access to eBay’s human resources and Baugh and the other managers effectively blocked communication with Concentric.
...When Concentric learned of the intolerable work environment and asked to speak to eBay management about the problem, Baugh immediately terminated the Concentric contract and all of the analysts, including Veronica, were then employed through Progressive F.O.R.C.E. Concepts, a company owned and operated by a close friend of Baugh’s.
...Paul Florence, the chief executive officer of Concentric Advisors, said: “It felt like eBay was breaking the analysts down psychologically – making them doubt themselves, isolating them, turning them against each other.” In 18 months, eBay fired at least a dozen analysts. As [Analyst] said, when Mr. Florence protested the treatment of the contract analysts, his firm was fired too. “I was relieved,” he said. “It seemed like a cult.”
Source: USA v. Gilbert et al 1:20-cr-10098 Doc 103
Zea's personal letter to the court detailing her experiences at eBay and remorse for her involvement paints a shocking and disturbing picture of corporate security run amok with no apparent oversight or accountability to be found.
The letter starts with background on the day to day experience of life at eBay under Baugh with Zea describing both specific alleged incidents of abusive behavior and more generally the toxic work environment that was reportedly "breaking" security personnel.
More specific to this case and the events that led up to and included the stalking and harassment of the Steiners, Zea says there was increasing pressure in 2018 and 2019 that came from the top down to Baugh and then to the security team.
The tension in the c-suite seems to have especially centered around discovering the identity of the person behind the FidoMaster/unsuckEBAY Twitter account and finding any connection between the Twitter account, the Steiners, and activist investor Elliott Management.
Elliott Management made big waves in January 2019 with a public letter to eBay's Board of Directors calling for a portfolio review, renewed focus on the core marketplace and improved operational execution.
According to the letter, despite its remarkable history as one of the world’s largest e-commerce platforms, eBay as a public-company investment has underperformed both its peers and the market for a prolonged period of time.
While eBay’s core Marketplace continues to enjoy sustained growth and the two other franchises that eBay owns, StubHub and eBay Classifieds Group, are thriving, eBay suffers from a deeply depressed valuation due to its history of misexecution. Elliott believes that eBay is worth far more – but change is urgently needed to address both public perceptions and real business issues.
The increased investor pressure came at a time of increased public scrutiny from many quarters but articles and comments on EcommerceBytes as well as unsuckEBAY's tweets particularly vexed CEO Devin Wenig and Chief Communications Officer Steve Wymer, as revealed in previous emails and texts released in this case.
Liz Morton ~ FounderOne sore spot for the execs was an article written about CEO Devin Wenig turning a historic house on the eBay campus into a replica of his favorite NYC bar at a time when the company had gone through mass layoffs the year before and had an activist investor calling for an end to wasteful spending.
According to the letter from Elliott:
Today eBay suffers from an inefficient organizational structure, wasteful spend and a misallocation of resources. By increasing operational efficiency, eBay can free up capital to invest in capability- and revenue-enhancing activities.
The executive leadership team was so concerned about the optics of the story, SVP Global Ops Wendy Jones (Baugh's direct supervisor) requested to "huddle" about the matter over lunch.
According to Baugh's legal team:
At the lunch meeting, Jones asked Mr. Baugh if he could find a way to deal with the issue “off the radar since comms and legal couldn’t handle it.” Jones told Mr. Baugh, “Just get it done. I don’t want to know the details, just make sure you sync with Wymer.” Mr. Baugh thereafter provided regular updates to Jones.
In one chilling section of Zea's letter to the court, she recounts being shown a graphic video supposedly of an employee jumping in front of a train after being laid off to drive home the point that anything perceived as bringing negative attention on eBay was a "threat" to morale that it was her job to guard against.
As public scrutiny of the company grew, so did pressure on the security team.
For the record, Baugh was completely wrong in many of his assumptions and even eBay themselves have admitted they found no evidence to support Baugh's alleged beliefs about there being a connection.
The fake disgruntled employee referenced here may have been "Marissa" - UnsuckEBAY provided Value Added Resource with exclusive excerpts from those messages:
Previously released text messages between Wenig and Baugh also showed Baugh appearing to claim to have also been involved with the Twitter messages seeking to out unsuckEBAY.
It's not clear if Baugh himself actually wrote some of the messages or if he was simply taking credit for the actions of the "team" when talking to the boss, but either way, Wenig was made aware of the "investigation" and Wendy Jones was also then copied in for "visibility."
On August 6, 2019, Wenig received another email complaint about FidoMaster. He sent the following email to Huber, Wymer, and Mr. Baugh: “First of all we should shut down the account. Second, this user name keeps popping up causing all kinds of trouble. Might be worth some research Jim.” Wymer responded that he had Mr. Baugh had been working on the issue. Huber and her colleagues responded that legal remedies were not and would not be effective...Mr. Baugh separately texted with Wenig:
Mr. Baugh then forwarded the thread to Jones (to provide “visibility,” keeping her in the loop). Jones responded with a “thumbs up.”
Things reached a boiling point in early August with a string of emails between Wenig, Wymer, Chief Legal Officer Marie Oh Huber, and Baugh bemoaning the fact that Twitter would not act to shut down the unsuckEBAY account and that typical legal means would not be able to remedy the situation.
Zea notes the same in her letter, saying Baugh demanded the problem needed to be taken care of before Wenig and Wendy Jones returned from their sabbaticals.
Even with the understanding that Zea's letter may be somewhat self-serving in an effort to convince the court to be lenient in sentencing, the documents that have been released in both civil and criminal cases so far show an absolute failure of leadership that went all the way through the c-suite and up to the board of directors - including eBay founder Pierre Omidyar, who stepped down from the board in the wake of this scandal and activist investor campaigns.
How is it possible that Baugh was running the security department this way for years, with outside contracting services being very vocal in their concerns, without anyone in Operations, HR, Legal or other departments taking action to stop it?
Liz Morton ~ Founder
Where's the corporate accountability?
eBay conducted their own internal investigation and determined Wenig and Wymer's tone and communications were "inappropriate" but not, they believed, criminal.
Wymer was fired by eBay for cause in September 2019 but landed a new gig a year later as CEO of the Boys & Girls Club of the Silicon Valley - announced on Twitter with his signature "whatever it takes" hashtag.
Wenig resigned and was allowed to take a $57 million golden parachute on his way out, blaming conflict with the board and activist investors - news of the scandal had not yet been made public.
The internal investigation also found "no wrongdoing" in regards to Wendy Jones, despite the fact she was Baugh's immediate supervisor. Not only that, she was allowed to continue in her role as SVP Global Ops through December 2020 - well into current CEO Jamie Iannone's first year back at the company.
When she departed, she took an $11M+ severance package, in addition to the $11M bonus Wenig had granted her for 2018, $8M of which was earmarked as a retention bonus.
Marie Oh Huber is still eBay's Chief Legal Officer and, as a result of the internal investigation, the Safety & Security unit was moved to the Legal Department from Global Operations division.
That unit now reports to eBay Legal VP, Chief of Litigation, who of course reports to the Chief Legal Officer - meaning the entire security apparatus at eBay now resides ultimately under Huber's purview.
Jones and Huber were not named either criminally or in the ongoing civil suit against the seven named criminal defendants as well as Wenig, Wymer, Progressive F.O.R.C.E.Concepts, LLC and eBay Inc.
Most of Zea's co-defendants have already been sentenced. Jim Baugh received 57 months in prison, David Harville got 24 months and Stephanie Popp was sentenced to 1 year in prison while Stephanie Stockwell received 2 years of probation - all who received prison sentences have been ordered to report to federal prison to begin serving them after the first of the year.
Philip Cooke was originally sentenced to 18 months, but was recently released after serving only 13 months.
Brian Gilbert was scheduled to face sentencing the same day as Zea, but his lawyer's have requested a delay, stating there are medical issues for which he is currently undergoing tests that may be essential for the court in determining an appropriate sentence.
Aside from an apology letter from CEO Jamie Iannone in 2020, eBay has done very little to publicly acknowledge the failures in corporate governance that led to this debacle or take accountability in any meaningful way.
The civil suit was put on hold for 90 days in February 2022 to allow the parties to work out a settlement, but negotiations stalled and the case continues, with eBay and the other defendants filing motions to dismiss in hopes of avoiding being found liable or having to pay damages to the victims.
And despite the heavy drinking corporate culture at eBay being blamed by Baugh, Cooke and others for their "poor judgement" in participating in the cyberstalking and harassment campaign, it appears eBay may still be operating the on campus pub - having renamed it The Sellar in an apparent attempt to distance from Wenig's legacy.
Liz Morton ~ Founder
