From: cult hero (jerichodimensional.com)
Date: Wed Jun 02 1999 - 06:35:01 CDT

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Reply From: Ryan Waldron <rewerebor.com>

> Reply From: Don Tobin <dontkraken.csds.uidaho.edu>
>
> Therefore, it is very likely the companies did not lie in their
> interpretation of what is allowed by law, or mine. Anything expended in
> the detection, tracking, and recovery is allowed to be deducted as an
> expense, and it likely is if you dig through the several thousand pages of
> expense sheets accompanying an annual report.

The amount spent in detection, tracking, and recovery is certainly a
legitimate cost, and while it was not likely itemized, it is certainly
included in the regular expenses that contribute toward the annual report.

However, that's not the point, and it's not what these companies claimed
the "damages" were; they claimed "losses" based on calculation of the
*cost* incurred in *producing* the files or information that Mitnick
copied. These were not costs incurred by the companies as a direct result
of his efforts, as detection, tracking, and recovery might be. They were
extraordinary capital losses (as any uninsured loss to theft would be; in
retail this is commonly reported as "shrinkage", for example), and would
almost certainly NOT be classified as a normal expense, since there's no
category for it, say, in Sun's annual report.

The point is not that his antics didn't cost them money. The point is
that they have claimed extraordinarily large losses based on their cost to
produce the information that Mitnick took. They did NOT report the
"losses" to their shareholders, because there *weren't* any. Those losses
are not "real" losses. The companies neither reported them in their P&L
or annual statements, nor did they suffer any significant financial or
competitive damage (at least, not that anyone, including the FBI or the
"victims", has documented). They were simply allowed to claim that
Mitnick had "stolen" that much from them, and on the other hand to ignore
it as the financial non-event that it was when filing their regular
reports with the SEC and their shareholders. And if the losses weren't
real, then it is wrong for Mitnick to be charged with damage he did not
inflict.

It is much the same as if I had a $100,000 Aston Martin in my garage, and
my neighbor snuck onto my property and took a picture of it that I had not
authorized him to take. I call the FBI, they whisk him away, I file
charges claiming a "loss" of $100,000 (never mind that he can't do
anything much with the picture, and I still have the car and its full
use), and he goes to prison for a much longer time than he would have on
mere charges of trespassing.

Mitnick broke the law. He should pay for that. But the charges against
him have been consciously and malevolently inflated past all possible
reason, and it's now getting to be an embarrassment for both the Feds and
the "victims".

--
Ryan Waldron ||| http://www.erebor.com ||| rewerebor.com

"The web goes ever, ever on, down from the site where it began..."

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