Los Angeles Times - 27.08.2019

LATIMES.COM/BUSINESS TUESDAY, AUGUST 27, 2019C3

chemical engineering, child
care and the basketball
team.”
But that’s an inadequate
take. As an institution of
higher learning, MIT has a
responsibility to the truth
higher than promoting for
sainthood an individual who
lined the institution’s pock-
ets. That’s especially so
given MIT’s important role
in researching climate
change and disseminating
the truth about it — an
effort that was made im-
measurably more difficult
by Koch spending on the
other side. (I reached out to
MIT’s Environmental Solu-
tions Initiative, which helps
disseminate its research on
climate change, but haven’t
heard back.)
“Few humans have done
so much to dismantle the
public’s trust in science and
to undermine political
action on the climate crisis,”
says Geoffrey Supran, an
MIT PhD who is the former
leader of the advocacy
group Fossil Free MIT and
currently a research associ-
ate at Harvard. “MIT is a
bastion of knowledge,”
Supran says, “yet when it
comes to global warming
politics and the fossil fuel
industry, my alma mater
exhibits a shocking combi-
nation of ignorance, am-
bivalence and naivete — and
its press release about
David Koch is a case in
point.”
Supran says MIT has
become embroiled in what
he and his colleague Ben
Franta label the fossil fuel
industry’s invisible co-
lonization of academia: “a
nationwide conflict of inter-
est with the industry that
has the most to lose from
action on climate change.
The result is that citadels of
science like MIT are going
out of their way to turn a
blind eye to evidence by not
standing up against climate
denial and delay and by
refusing to divest from an
industry incompatible with
the science of stopping
climate collapse.”
Climate change is only
one of several categories in

which the Koch network has had a deplorable impact. As I reported last week, David and his brother were pio- neers in the mustering of “dark money” to influence American elections, chiefly through Americans for Prosperity and other or- ganizations that are not required to disclose their donors and have few restric- tions on how they can de- ploy funds in political cam- paigns. (As recently as Monday, the Kochs’ Ameri- cans for Prosperity Founda- tion asked the U.S. Supreme Court to uphold the confi- dentiality of its donors against a challenge by Cali- fornia.) The share of election- related spending by nondis- closing groups exploded over the last decade, as more donors took advan- tage of the shroud in the law so expertly exploited by the Kochs. Much of this money was spent to fight against gov- ernment initiatives such as the Affordable Care Act, which was designed to bring coverage and consumer protection to middle- and low-income Americans in

the individual health insur- ance market. Americans for Prosperity spent heavily on ads attacking the ACA during the 2014 election cycle and against Medicaid expansion — an ACA provi- sion directed at low-income households — in states including Wisconsin and New Hampshire. (Wiscon- sin and 13 other states still haven’t expanded Medi- caid.) As it happens, MIT has become fully alive to the consequences of accepting what might be considered dirty money, or at least money from dirty charac- ters. In a letter to the faculty on Friday — ironically, the day of Koch’s death and the MIT obituary, university President L. Rafael Reif disclosed that MIT had received $800,000 in donations from foundations controlled by the late sex trafficker Jeffrey Epstein. Reif called acceptance of the donations “a mistake in judgment” and pledged to “identify any lessons for the future, to review our current processes” and to consider “appropriate ways we might improve them.”

Reif implied that faculty members who accepted Epstein’s donations may have merely been blind to his nature: “It can be difficult to maintain a fair understanding about what individuals at MIT could have been expected to know at the time.” Of course, there’s never been any secret about Koch’s approach to the science of climate change or his actions to undermine public understanding. So what’s MIT’s excuse for accepting his money? MIT has come under fire before for its coziness with the Koch network. It’s “time for MIT to kick its Koch habit,” Sam Shames, a 2014 alumnus, wrote on Medium in 2016. “You can acknowledge that the money that David Koch gave to help solve cancer is really good, while also acknowledging that he did other things that are really not good,” Shames told me Monday. “But just to ignore the hard part of what this person chose to do with his money — that’s not the institute I’m proud to graduate from.”

MIT’s one-sided review of Koch’s career points to the Koch network’s effec- tiveness at emasculating American higher education by plying academia with money. I’ve observed previ- ously that Koch donations to universities often come with strings that can even include a say in the appoint- ment of faculty and admin- istrators. MIT showed its grati- tude for Koch’s blandish- ments by offering him pos- itive reinforcement. As the Washington Post reported, at the 2011 dedication of the cancer facility he funded he said: “I read stuff about me and I say, ‘God, I’m a ter- rible guy.’ And then I come here and everybody treats me like I’m a wonderful fellow, and I say, ‘Well, may- be I’m not so bad after all.’ ” One need not speculate about Koch’s motivations in funding cancer research (he was a long-term prostate cancer patient), a campus child-care center or the basketball coach’s salary in order to observe that there’s a long tradition of wealthy families using philanthropic good works to paper over the dark sides of their past. The practice, by the way, is almost always successful. Today, vastly more Ameri- cans undoubtedly associate the Carnegie name with libraries and a concert hall than with the tycoon’s history as a steel magnate. Henry Ford’s record of virulent anti-Semitism is almost forgotten in the glow of the work of the Ford Foundation (founded by his son Edsel). Henry Clay Frick was one of the bloodi- est tycoons of the Gilded Age, with a hand in the lethal Johnstown flood and the violent Homestead strike, but how many New Yorkers think of that history while viewing the paintings by Turner and Constable in the Frick Collection, open to the public in Frick’s former mansion on Fifth Avenue? It’s also true, however, that an institution can’t always suppress the impli- cations of its relationships

with bad actors forever. Not a few universities are trying today to come to terms with honors granted to donors or alumni whose records don’t bear the scrutiny of the present. “My fear is that if MIT does not speak out soon,” Shames wrote in 2016, “we will one day look back at anything named Koch with the same unease and shame as Princeton and Yale now view their buildings named after documented racists like Woodrow Wilson and John Calhoun.” MIT already has suffered the consequences of its ties to Epstein. These include the resignation of at least two associates of the Media Lab, which accepted much of the donations, who don’t want to be associated with the lab any further. But whether the institution really will apply lessons it learns from the Epstein case more broadly is an open question. Certainly there was no evidence in its encomium to Koch. Rather, its statement seemed designed to upend Mark Antony’s observation in Shakespeare’s “Julius Caesar” that “the evil that men do lives after them; the good is oft interred with their bones.” What MIT tried to do was suggest that the good Koch did for the institution’s endowment should live after him, while interring the evil with his bones. Shames says he was especially struck by the final sentence of the MIT obituary, which called Koch “truly a son of MIT who made the Institute a better place.” “Essentially, they were willing to let him fund an agenda that makes the world a worse place,” Shames observed, “in exchange for making MIT better. As an alumnus, that makes me really sad.”

Keep up to date with Michael Hiltzik. Follow @hiltzikm on Twitter, see his Facebook page, or email michael.hiltzik @latimes.com.

MIT failed to address Koch’s true legacy

BILLIONAIREDavid H. Koch, who died Friday, is cast as “one of the most important benefactors in MIT’s modern history” in the university’s unbalanced eulogy.

Mark LennihanAssociated Press

[Hiltzik,from C1]

Amphenol Corp., a
maker of electrical connec-
tors for multiple industries,
rejected any suggestion that
its products caused the solar
equipment fires on store
roofs that prompted retail
giant Walmart Inc. to sue
Tesla Inc.’s energy business.
“We have no reason to be-
lieve that Amphenol’s prod-
ucts are the cause of any is-
sues related to the claims
filed by Walmart against
Tesla,” Wallingford, Conn.-
based Amphenol said in a
statement Sunday. “We
stand behind the quality of
our products, including the
H4 solar connector which
was manufactured to meet
established industry specifi-
cations, and certified to
meet those specifications by
UL, an independent third-

party testing service.” Walmart, the nation’s largest retailer, sued Tesla last week, accusing it of shoddy solar panel installations that led to fires at seven stores. Walmart’s com- plaint didn’t mention Am- phenol by name, but it said that Tesla had “negligently installed and maintained connectors” and that some had been “cross-matched,” meaning incompatible connectors had been used to- gether. Amphenol’s name and the H4 connectors were brought into the mix after Business Insider contacted Tesla, which said there were a few problems found with equipment used by So- larCity, the panel-installing company Tesla acquired three years ago. Tesla said a “small number of these connectors experienced failures

and disconnections at a higher rate than our stand- ards allow,” putting the rate at less than 1% over the last year. “We are confident in the

robust quality and perform- ance of all of our products,” Amphenol said in the statement. Business Insider reported Thursday that Tesla

had launched an effort to re- place a faulty connector in some of its solar panel sys- tems through a program known internally as Project Titan. It was unclear whether issues with the connector affected any of the Walmart installations. Walmart and Tesla issued a joint statement, also Thursday, saying they were in discussions to resolve their issues. The next day, Amazon.com Inc. said a 2018 fire at one of its warehouses was a Tesla/SolarCity instal- lation. More widely known for its electric cars, Tesla bought SolarCity in a $2-billion deal that generated controversy in part because SolarCity’s chief executive at the time was the cousin of Tesla CEO Elon Musk, and Musk was chairman of SolarCity’s board.

Tesla supplier says its parts didn’t cause fires

WALMART BLAMESTesla for solar system fires at seven stores. Above are panels at a Sam’s Club.

David McNewGetty Images

bloomberg

The digital ledger behind
the supposed better version
of Bitcoin is running out of
capacity.
That was the warning
last week from Ethereum co-
founder Vitalik Buterin, who
noted that the cost of proc-
essing transactions done in
the digital token Tether on
the underlying blockchain
may get too expensive for
some users.
Ether’s network utiliza-
tion has risen to the 90% lev-
el, according to tracker
Etherscan.io. As utilization
increases, transaction costs
could follow suit, possibly
making potential corporate
users hesitate to use
Ethereum, Buterin said.
Almost two years ago,
Ethereum was getting clog-

ged up as the digital game CryptoKitties took off. Then thousands of initial coin offerings, which turned out to

be mostly scams, took up space on the network. More recently, though, as a major- ity of the initial coin offerings

went bust, a new tenant is tak- ing over Ethereum: The con- troversial coin known as Tether.

In the last 30 days, Tether paid computers that proc- ess transactions on Ethereum’s digital ledger $260,000 in fees, said data re- searcher Ethgasstation. info. That’s about 17.5 times more than CryptoKitties and six times more than the world’s largest distributed exchange, IDEX. Tether’s use has been growing as more of the coin has been issued. Its market capitalization recently passed $4 billion, up from $2.7 billion a year ago, according to CoinMarket- Cap.com. And at least 40% of all Tether runs on the Ethereum network, John Griffin, a finance professor at the University of Texas at Austin, estimated in July. Tether was used in 40% and 80% of all transactions on two of the world’s top crypto exchanges, Binance and Huobi, respectively, Coin Metrics said recently. As Tether takes up more capacity, that leaves less for other developers. Ethereum was touted by enthusiasts when it was created as a better Bitcoin — one with extra

features that would let peo- ple automate tasks and even set up so-called autono- mous corporations, ones that run themselves via soft- ware. But most of the most popular so-called dapps — apps designed for such net- works — currently run on competing digital ledgers, according to tracker DappRadar.com. Some developers are staying away from Ethereum for now, waiting for it to tweak its technology to increase network capacity, said Jeff Dorman, chief investment officer at Arca, a Los Angeles asset manager that invests in cryptocurren- cies and other digital tokens. “So the biggest implica- tion today is simply that developers may be incen- tivized to wait until this transition happens before fully committing to build on Ethereum,” Dorman said. “Tether isn’t helping.” Ethereum is still working to figure out how to get to its ambitious vision of Ethereum 2.0 — requiring a major overhaul of its technology that some worry may not even work. Though Ethereum em- ploys computers called min- ers to verify transactions — a setup Bitcoin uses as well — it’s moving to so-called stak- ing, a different way of verify- ing transactions. Tech- niques such as sharding — in which certain groups of computers keep track of only certain transactions versus all transactions on the network — should help as well. But this technolog- ical transition “is not a guar- antee and is still on the hori- zon,” Dorman said. “The Ethereum blockchain has been ‘almost full for years,’ ” Buterin said in an email to Bloomberg. “I think it’s still good to devel- op apps, but anything sub- stantial should be developed with scalability techniques in mind, so that it can sur- vive higher transaction fees that would come with further growing demand for Ethereum. In the longer term, Ethereum 2.0’s sharding will of course fix these issues.”

Kharif writes for Bloomberg.

Cryptocurrency ledger is ‘almost full’

Ethereum, which

processes virtual

transactions, running

out of capacity with

rise of Tether tokens.

By Olga Kharif

A TECHNICIANinspects Bitcoin mining at Bitfarms in Saint-Hyacinthe, Que- bec. The use of Tether has been growing as more of the currency has been issued.

Lars HagbergAFP/Getty Images

Los Angeles Times - 27.08.2019

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