
Gizmodo editor Brian Lam's email to Steve Jobs - anderzole
http://www.networkworld.com/community/node/61295
======
anigbrowl
tl;dr from the affidavit:

    
    
      [Suspected CA penal code violations by Chen]
      496(a) - Buy or receive stolen property (felony)
      499c(b)(3) - Without authority make [photographic copy of] a trade secret (felony)
      594(b)(1) Maliciously damages property of another valued over $400 (felony)
    

Gray Powell last saw the phone when he put it in his bag on the floor, which
was subsequently knocked over. He left with his uncle at closing time, unaware
of his loss. A drunk guy gave the device to Hogan in the belief that it was
his. Hogan took it home and realized it was worth money. Next day, he and a
roommate found Gray Powell on LinkedIn and Hogan recognized him from the
previous evening in the bar. Hogan removed the stickers with serial numbers.

Gizmodo, via Chen, paid Hogan $8500 or $7500, including $5000 in cash, and
promised a bonus if Apple launched a phone by July and it was the same device.
Chen damaged the phone during his teardown, rendering it inoperable. Gizmodo
published their story on 4/19. Hogan's roommate called Apple the same day and
informed them of Hogan's possession and plans to sell it. Gizmodo editor Brian
Lam refused a telephone request from Steve jobs to return the device,
demanding a written confirmation from Apple.

When police attempted to contact Hogan and his other roommate (not the
informant), they tried to destroy evidence by throwing away Hogan's computer
and SD cards, all of which were later found, along with the phone stickers.
Hogan's roommate was arrested on unrelated outstanding warrants.

...

On the facts in the affidavit, it looks bad for Gizmodo/Gawker. Admittedly,
I've said that since the outset. Much depends on who authorized payment and
how, and what Chen was told by his supervisor(s) about his legal position, if
anything.

Edit: corrected an inaccuracy about when the roommate called Apple, which I
had put in the wrong paragraph.

~~~
grellas
Very nice recap of the important points of the affidavit.

A couple other items of note:

The detective's summary relates the facts concisely in terms of the crimes
believed to have been committed, as follows:

"Suspect Brian Hogan found or stole a prototype iPhone 4G that was
accidentally left at a restaurant by Apple employee Robert 'Gray' Powell.
Hogan identified the owner of the phone as Apple Engineer Gray Powell through
the contents of the phone and through Internet searches. Rather than return
the prototype phone to Powell and/or Apple, Hogan subsequently sold the iPhone
[to] Jason Chen in Fremont for $5000. Upon receiving the stolen property, Chen
disassembled the iPhone, thereby causing it to be damaged. Chen created copies
of the iPhone prototype in the form of digital images and video, which were
subsequently published on the Internet based magazine Gizmodo.com."

California Penal Code 499c(b)provides: "Every person is guilty of theft who,
with intent to deprive or withhold the control of a trade secret from its
owner, or with an intent to appropriate a trade secret to his or her own use
or to the use of another, does any of the following . . . (3) Having
unlawfully obtained access to the article, without authority makes or causes
to be made a copy of any article representing a trade secret." ["Copy" is
defined in 499c(a)(7) to mean "any facsimile, replica, photograph or other
reproduction of an article, and any note, drawing or sketch made of or from an
article."] Violation of 499c(b)(3) is a felony.

The real damage here consists of revealing Apple's trade secrets to the world,
and it was apparently done deliberately for direct financial gain (even if
that gain did take the form of hits to the Gizmodo site).

The investigation is being led by the San Mateo County REACT unit, which often
works in cooperative investigations between the local D.A.'s office and the
U.S. Attorney's office. So far, we have not seen any involvement publicly of
the U.S. Attorney's office in this case. That does not mean, though, that they
are not involved. If the economic harm stemming from trade secret thefts is
significant (as it appears to be here), the Economic Espionage Act of 1996
might also be used as a basis for prosecution under federal law. It provides
in relevant part as follows: "Whoever, with intent to convert a trade secret,
that is related to or included in a product that is produced for . . .
interstate . . . commerce, to the economic benefit of anyone other than the
owner thereof, and intending or knowing that the offense will, injure any
owner of that trade secret, knowingly . . . steals, or without authorization
appropriates, takes, carries away, or conceals, or by fraud, artifice, or
deception obtains such information . . . shall . . . be fined under this title
[i.e., up to $5 million] or imprisoned not more than 10 years, or both."

A final note on how these sorts of matters tend to unravel for the
malefactors. The recitals of probable cause that one or more crimes have been
committed, as set forth in the affidavit, concern Jason Chen _individually_
and _not_ his employer (meaning that he personally will be charged in any
indictment that is filed). Mr. Chen has retained his own separate criminal
defense lawyer to defend himself
(<http://www.law.com/jsp/article.jsp?id=1202453303236>). Prosecutors have
broad discretion in such cases on how to fashion the charges brought and also
concerning any plea deals struck. If the goal here is ultimately to get to
Gizmodo/Gawker, who do you think will be the first to incriminate them?

~~~
sound
YOU MAY DOWN VOTE ME but:

First thing first: Gizmodo should have taken high road, and that email was
certainly a mistake ...

But it is also important to note that Steve Jobs called Gizmodo after the
whole story was published (I guess so) this puts Gizmodo in very risky
position if they don't give an CONVINCING explanation to their readers
regarding whereabouts of iphone ... nobody will believe if they said that
Steve Jobs called them and they returned the phone ...

If I were Gizmodo, I wud have called Jobs before publishing anything and got
myself in his good books and I guess Jobs would have certainly returned my
favor in one or other way ... alternatively If he (Jobs) called me after
details were published, even then I wud have returned the phone by being as
humble as possible at the same time making sure that I dont loose face in
front of my readers (again I guess Steve Jobs wouldn't have ignored my
favor)...

~~~
IdeaHamster
I'm sorry, but this logic is like saying that after you've paid for and beaten
the hooker, well, you pretty much have to kill her, because otherwise she'll
probably turn you in to the police...

~~~
sound
what i'm trying to say is Gizmodo could have been humble and got more in
return from Steve Jobs ...

------
timcederman
This bit made me do a double-take:

 _While in the residence, I observed Hogan utilize a black LG cellular
telephone (bearing SN 911 KPFX363699) to make and receive telephone calls.
Based upon my training and experience, I know that persons who buy and sell
stolen property often use cellular devices to negotiate via telephone calls,
email, and/or text message. I also know that the continued use of the phone
would likely overwrite and destroy evidence that currently exists on the
phone. Based upon the above facts and the fact that the cellular device was in
plain view, I seized the phone as evidence and to prevent any further
destruction of the digital evidence._

But then Warner seems pretty sketchy:

 _A records check through County Communications revealed two (2) outstanding
misdemeanor warrants for Suspect Warner. Warner was subsequently arrested and
handcuffed by Deputy Jim Goulart of the Sheriff's Office for the outstanding
warrants only. While seated in the back of a patrol car, Warner made a
spontaneous statement to Det. Josh McFall that he knew where the missing flash
drive was located. Det. McFall read a Miranda Advisement to Warner and Warner
waived his rights. Warner subsequently directed us to a bush located on the
north side of Harding Ave at the intersection of Lancaster Way, Redwood City.
In the bush, I located a 512 MB Memorex thumb drive and a 1GB Lexar Media
compact flash card. The Lexar 1GB flash card appeared to be of the same type
that would be utilized by the previously mentioned and seized Canon SLR
camera.

At approximately 0230 hours, I went to the Chevron Gas Station located at 585
Whipple Avenue in Redwood City. I conducted a search of the premises and
located the missing Apple prototype sticker in the parking lot near the
entrance_

And this line was another odd one.

 _I therefore pray that a search warrant be issued._

~~~
bbatsell
"Pray" is a legal term. See definition (b) here:

<http://www.lawyers.com/glossary/pray.html>

~~~
gruseom
As in the phrase "pray tell". I had no idea the archaic meaning survives in
legalese. I wonder what other pieces of Middle English are floating in there.

~~~
pbhjpbhj
In the UK it's not unheard of to use the term "pray tell" in parlance.
Particularly in phrases like "And pray tell what did you get up to last night"
expecting a stretching of the truth in return or tales of derring-do or
misdemeanour moral offences.

~~~
gruseom
That's the point: "Pray tell" is still common enough in contemporary English,
while "pray" hasn't meant that for a long time. Archaisms survive in idioms.

------
raganwald
Let me see if I have this straight. It's alleged that Mr. Hogan was handed the
phone in the bar by somebody else who thought it belonged to Mr. Hogan. Mr.
Hogan then removed the phone, which didn't belong to him, from the bar,
premises which didn't belong to him, without informing employees of the
establishment where the phone was found and handed to him.

In what sense did Mr. Hogan "find" the phone?

I have previously suggested that removing a chattel that doesn't belong to you
from property that doesn't belong to you is theft. Hearing these allegations
doesn't change my view in any way. In the hypothetical case that someone hands
you something that doesn't belong to you or to them, the correct thing to do
on the spot is to refuse. Accepting something that doesn't belong to you is
already wrong. The simplest and easiest thing to do is to simply say, "Not
mine, but thanks."

~~~
catch23
I think everyone assumed he "found" the phone... until now. Previously we
didn't have the whole story, so we just gave Hogan the benefit of the doubt.

~~~
raganwald
> gave Hogan the benefit of the doubt.

I feel for Mr. Hogan and Mr. Lam. Of course, none of these allegations have
been proven in court, so I have no idea what they actually did or did not do.

But my short time on this ball of rock and water has taught me that when
people support you only to discover that you were a blackguard all along,
their goodwill becomes countered by an equal and opposite reaction of
contempt.

The people who shrugged their shoulders initially are probably still
shrugging. But I predict that many of those who stood up and defended Mr.
Hogan's and Mr. Lam's actions will swing to become their most vocal critics if
these allegations are borne out. Nobody wants to feel like their good nature
and trust has been abused, even if indirectly.

------
fuzzmeister
"Steve Jobs himself called Gizmodo editorial director Brian Lam to personally
request that Gizmodo return the iPhone to Apple"

I imagine not going volcanic on that call was the hardest thing Steve Jobs has
ever done.

~~~
rbanffy
I was going to mention when Jobs left Apple to create NeXT but creating the
company that now _is_ Apple is more or less going nuclear.

~~~
rbanffy
I know you may not agree current Apple is NeXT, but:

\- Apple makes beautiful computers

\- ... that run a descendant of NeXTSTEP

\- ... with development tools that are direct descendants of the NeXT tools
(down to the use of Objective-C)

Apple is a well funded NeXT. Jobs turned the post-Jobs Apple into NeXT 2.0

And that's a high compliment both to him and to Apple. Nobody would like to be
90's Apple.

~~~
rufo
I always refer to the Apple/NeXT acquisition as "the time NeXT bought Apple
for negative $429 million."

~~~
rbanffy
On very rare occasions, vengeance is also very profitable ;-)

------
ashishbharthi
I can't believe he just wrote that to Steve Jobs. No wonder Apple reacted the
way they did. Gizmodo/Gawker is in big trouble.

~~~
abstractbill
Yes, the phrase _"Right now, we have nothing to lose."_ in particular stood
out to me from the email - I think the author was being insufficiently
imaginative.

~~~
raganwald
I have to thank you, "insufficiently imaginative" is one of the phrases I am
going to remember for a very long time.

~~~
js2
I like “failure of imagination” myself:

The phrase failure of imagination has been used to describe the cause of the
Apollo 1 fire in 1967. The term was attributed to astronaut Frank Borman,
speaking at the Apollo 1 investigation hearings (dramatized in the HBO mini-
series From the Earth to the Moon in 1998.) — wikipedia

------
jbrennan
It certainly sounds shady to me. What I can't believe is Apple would even bend
to Gizmodo by sending them the publishable letter.

It surprises me because I can't imagine Gizmodo having any right to withhold
the phone from its rightful owner (Apple). Like "Oh we have your missing
property, and we'd love to give it back, but you have to do something for us
first". I don't know the legal system, but that just can't be right.

~~~
mirkules
To give them the benefit of the doubt, maybe Gizmodo was asking for proof that
it was actually Apple's phone before they give it back. It would have (almost)
been ok to state "give me proof." Instead, he rambled on about profits, and
how this might hurt Apple, etc, which is pretty damning evidence IMHO - IANAL
though.

~~~
jbrennan
Ah, I hadn't thought of it like that. Still somewhat ridiculous, and a bit
slimy but I suppose rational.

~~~
mirkules
If I find a cell phone, I'm not going to give it away to the first person who
comes forward about the "lost phone ad". I'm going to ask the person 20
questions to make sure it's really their phone (what color, brand, etc). If
you look at this "at just the right light" you could _almost_ see it... until
the editor went on about profits, etc.

It's an apple-branded phone ffs. The Gawker editor _clearly_ dug a hole for
himself with that email, and Jobs was right to send in the dogs (as much as I
hate to admit it)

------
aresant
It's hard for me to believe that Bran Lam would feel invincible enough to
write that response to Jobs, who is well known for going ballistic to end all
ballistic when he gets wound up, without Denton’s hand directly at his back .
. .

What's missing is how much of this unfolding debacle (including the letter)
was approved directly by Nick Denton?

------
luckyland
Brian Lam: worst poker face in the history of tech 'journalism'?

------
fleitz
Wow. What a seriously damaging email. Has this guy not heard of lunch?

~~~
potatolicious
This is Gizmodo we're talking about - the depth of their talents include
things like griefing a conference by walking around with universal remotes
turning people's presentation screens off, and inserting puns into technology
news.

Extortion and coercion are clearly not their strength, though they seemed to
think it was :)

~~~
pwhelan
I can't wait for them to do a story on Blackwater/Xe.

~~~
CamperBob
I'd rather have Blackwater pissed at me than Jobs. I can deal with being
gunned down in an alley by mercenaries, but the idea of landing on Jobs's
personal shit list is just plain scary.

There's a great line in _The Usual Suspects_ : "How do you shoot the devil in
the back? What if you miss?" Lam must have thought that was a rhetorical
question when he wrote that email. I'm sure he thinks different now.

~~~
infinite8s
Yeah, because being gunned down in an alleyway is much better than being
indicted on counts of grand larceny and trade secret appropriation. Geez, have
some perspective!!

------
jsz0
It seems Brian Lam has a little inferiority complex here. He wants to use the
tactics of a tabloid and get the respect and access of the WSJ and NYT. The
interesting part to me is Jobs said a few months ago he read Gizmodo. That's a
pretty big nod of respect and legitimacy yet Brian Lam seems to have wanted
even more validation from Apple. It almost sounds like he was trolling for an
unreasonable PR gift from Apple or some other grand gesture. It would probably
be unreasonable to prod or extort for equal access much less special
privileges. Gizmodo just isn't that important compared to the WSJ and NYT. For
the record I'm coming from the perspective of not being offended or upset
Gizmodo perused this story aggressively. They're a tabloid. That's what they
do. If you want real journalism go somewhere else. I'm more offended that they
would try to extort Apple in an attempt to get special access. This e-mail
reads like someone carefully skirting the line of blackmail. That makes it a
much bigger issue than simply trade secrets.

------
jkincaid
Check out the story, starting on page 16 of the embedded Scribd doc in this
article, of the police making contact with the guys who found the phone. They
allegedly tried to hide evidence in a church and a bush.

------
mambodog
I know this is O/T, but I'm finding it incredibly aggravating that I have to
put my mouse in the border of the page to scroll the article, lest the Scribd
Flash box steal my mousewheel movements... I'm guessing this is to do with the
OSX Flash plugin's lack of internal mousewheel support.

------
zaidf
Great example of when you DON'T put shit in writing! Take note, fellas.

~~~
tokenadult
Take note that if each man had been on the telephone, later recalling what was
said, or perhaps taking notes during the conversation, Lam would have been in
just as much trouble if all those things were said. The only difference
putting it in writing makes is improving the indisputability of the evidence.
A finder of fact at trial could still believe Jobs over Lam even if nothing
were put in writing.

~~~
zaidf
_The only difference putting it in writing makes is improving the
indisputability of the evidence_

IMO indisputability is a HUGE deal.

------
indi3fan
Not to mitigate Brian Lam's douchiness. But while Apple's implicit filter on
the media via "access journalism" might not be quite as blatant, it is far
more evil.

------
maukdaddy
What dumbass thinks email is off the record?!

 _Hey Steve, this email chain is off the record on my side._

~~~
Elepsis
When you exchange mail with journalists (yeah, yeah, have the argument about
whether Gizmodo staff are journalists elsewhere) it's fairly common for them
to clarify when they will not plan to directly quote a reply you send to them
in a story.

~~~
maukdaddy
If you want something off the record with journalists you CALL THEM. E-mail is
never, EVER, off the record.

~~~
rbanffy
My phone can record every conversation that goes through it. I suspect any
modern phone can do that.

~~~
qq66
But recordings of those calls are not always legal, and when they are legal to
create, they are not always legal to use in court. There are much stricter
laws around phone recordings than emails (because laws take half a century to
change, and email's only been in wide use for 25)

~~~
tokenadult
My state follows the federal rule that EITHER party to a telephone
conversation may record the entire conversation. What is admissible in court
as evidence may not be as broad (in a particular case) as what evidence can be
gathered by either party, but as I just mentioned in a comment I posted
elsewhere in this thread, a conversation like that between Lam and Jobs can
blow up in Lam's face even if the only evidence offered is courtroom testimony
by Jobs regarding what Lam spoke, from Jobs's recollection of the
conversation.

------
martythemaniak
"Shady email"? How about a post title without the idiotic editorializing?

~~~
ekanes
Shady is right.

I'm surprised he had the audacity to write some of this stuff..

"I get that it would hurt sales to say this is the next iphone. I have no
interest in hurting sales. That does nothing to help Gizmodo or me."

wait for it... wait for it...

Gizmodo: "WE FOUND THE NEXT IPHONE!"

~~~
frossie
_Shady is right._

In fact one could say it is perilously close to blackmail.

~~~
smallblacksun
"Blackmail is such an ugly word. I prefer "extortion". The "X" makes it sound
cool."

------
guelo
I hate the general journalism bashing attitude being taken here. What Gizmodo
did is unquestionably good for society as a whole, regardless of the legal
technicalities.

Apple tries to maximize their profits by duping their customers. In the
affidavit the Apple lawyer complains to the detective about all the sales
they're going to lose when people find out about the new phone and don't buy
the old model. But those lost sales are ill-gotten gains. That money comes out
of the pockets of ill-informed customers that would not make the purchase if
they had all the facts available to them.

It is exactly this kind of market manipulation that a free press helps protect
us from. When a journalist writes a bad review or tells you that there are
better deals elsewhere, he is "hurting overall sales and negatively effecting
earnings" of that company, but it is benefiting consumers and society as a
whole, and creating better more efficient markets.

Legally there might be some dispute, mainly because of the BS "trade secret"
laws written by businesses for businesses, but morally I side 100% with
Gizmodo's right to uncover and report the truth.

On a side note, the idea that cops can go around "seizing" cell phones and
cameras without even having warrant is disgusting. And he doesn't even want
the property returned, at the end of the affidavit he invokes some surely
insane law to have the property "disposed of".

~~~
krelbel
"And he doesn't even want the property returned, at the end of the affidavit
he invokes some surely insane law to have the property "disposed of"."

Wow. Three seconds of research would have told you that this "insane law" does
discuss the disposal of Chen's property... back to Chen. He's asking that as a
courtesy to Chen, to make sure he gets his stuff back as soon as possible.

[http://www.leginfo.ca.gov/cgi-
bin/displaycode?section=pen...](http://www.leginfo.ca.gov/cgi-
bin/displaycode?section=pen&group=01001-02000&file=1407-1413)

~~~
guelo
OK, looks like I was wrong about that last line.

