Why is this even illegal? Perks in the industry is normal. People are always trying to get their own businesses front and center for contracts. Some of these companies just don't have much to give out other than equity and what exactly is wrong about that?
Officially, the crime is fraud and the victim is Netflix, Inc. He defrauded the other employees and the corporate shareholders. He also laundered the money, which is also illegal and why the IRS got involved.
Kickbacks aren't the fundamental issue here. If this was a single-employee startup with no other investors or shareholders, this would be perfectly legal. Or if Netflix, Inc. had a policy that authorized individual executives to personally receive cash and stock from vendors as perks, then this would have been perfectly legal. However, as the article says, Netflix had an internal policy that he blatantly violated:
> Netflix policies prohibited conflicts of interest by its employees by its Code of Ethics and its “Culture Deck,” which required the disclosure of actual or apparent conflicts of interest and the reporting of gifts from entities seeking to sell products or services to the company.
First off, these were tech vendors giving kickbacks to the CIO, not producers bribing studio execs to get someone specific cast.
But you seem to be missing that kickbacks aren't illegal in and of themselves. Netflix corporate didn't have to institute an anti-kickback policy for its employees. But they did, likely because they didn't want an environment where execs are negotiating both for the company and for themselves. The moment an executive violates corporate policy to enrich themselves, it becomes fraud.
For another example, look at how college bribery schemes are illegal.
They're not illegal because they're unfair or immoral, they're illegal because the administrator is selling the spot that the college owns; it's not his/her spot to sell.
If the company wanted to be used by Netflix in exchange for equity, then they could make a deal with Netflix itself. This executive was essentially selling the rights to contracts (akin to spots) that he didn't have the right to sell.
You mean like forcing kids to buy brand new books so that they can get a code to use to take tests on an online platform that the professor gets kickbacks from that has nothing to do with the university the kid is attending?
What's the spot/contract/etc in that case, that the professor is selling but doesn't have the right to sell on behalf of the university for his own enrichment?
I don't see an example of how the university is losing revenue and being defrauded in that scenario.
The University is not being defrauded, but the professor is still taking advantage of their position to make a personal profit.
Leaving aside the legal issues (I'm not a law expert, so I don't know if it is illegal), don't you think it is incredibly immoral for a professor to require a specific book for their class on the basis that the publisher is going to hand a check to the professor?
The student is being defrauded. They signed up for something that was supposed to cost x but instead it costs y. Their degree being in jeopardy makes it blackmail from my perspective.
It's telling that you were more willing to make sure the university wasn't being defrauded but I guess the student can kick rocks right?
No, what I was trying to initially explain is that it is Netflix being defrauded. You pointed out that the company may only have equity to give, and I said that they weren't giving the equity to Netflix. They were giving it to an executive at Netflix in exchange for a contract, and it wasn't the executive's right to give that contract spot away for his own enrichment, because it's not his spot to give.
Similarly, in the case of college admissions scandals, it is the college being defrauded.
Now here, to make a parallel as you were intending, we'd have to see how the university is being defrauded.
I thought the college bribery schemes were mostly illegal because the lowered the price for a guaranteed admission slot too much and, more importantly, cut the university out of the loop by paying the admissions personnel directly.
It was illegal because the kickbacks were kept secret from Netflix.
If there was full disclosure to netflix, (but not other companies) this would have been perfectly legal.
