Mike Daisey's fictional attack on Apple and Foxconn reveals fact of Silicon Valley greed

Media figures who shape our understanding of events worked overtime this past week-end writing about how a self-proclaimed monologist named Mike Daisey snookered Ira Glass's "This American Life" on National Public Radio with sensationalized descriptions of working conditions at Foxconn, the Taiwan-owned company with factories in China that produce Apple product components.

While the majority of the critiques have focused on the blurred lines between journalism and entertainment or Mr. Daisey's shamelessness and general lack of ethics, I'd like to put in a good word on behalf of his guerrilla tactics and to praise Mike Daisey's attack on Apple and Foxconn, despite how he apparently took liberties with the truth.

Were it not for the fictional details he loaded his story with -- to the point where he attracted other journalists, one million listeners and the klieg lights of scrutiny -- an unfortunate fact of life in Silicon Valley would never have come to light. Namely, how far from reality a narcissistic CEO can live when neither a docile local business press nor a state legislature can keep up with the new scenarios its industries invent.

If I can assume many of you media junkies already follow the US outlets, you know how the tale unfolded. Shortly after the partially fabricated exposé aired with Mike Daisey's attack on Apple and Foxconn, an American Public Media reporter in China, Rob Schmitz, punched holes in the story. Next came TAL's broadcast and publication of "The Retraction". For those who may not be media junkies or who were in the backwoods (how do Vancouverites refer to the wilderness?) when the story broke, here's further recap.

On Friday, Ira Glass -- radio star, cousin of Philip Glass and producer of TAL -- retracted a recent broadcast segment when it became apparent that the TAL fact-checking process had failed. Not withstanding the fabrication of many details, Daisey's Foxconn segment was one of TAL's most popular podcasts ever (one million downloads), inspiring one wag to complain it was because "activist hacks just can't get enough of that anti-capitalist stuff".

Flickr photo of Foxconn protest by Whole Wheat Toast

Silicon Valley and the cult of the CEO

The cult of the untouchable CEO that reigns here is characterized by a world in which the top guy convinces everyone that to keep the profits flowing, anything he does must be tolerated without question or complaint. Due to the value, in monetary terms, of his vision (his inventions) to the economy, there shouldn't be any restrictions or rules specific to the work conditions in Santa Clara County, much less Shenzhen, to protect people from being run over roughshod by him and his close associates. It's a world where a neutered local business press doesn't dig into things that the corporate giants don't want them to.

Granted, in an economy as entrepreneurial and creative as the Bay Area's, there are many paradoxes. Despite detailed reports in publications like The New York Times about the poor working conditions in Apple's Chinese factories, demand for iPhones and iPads remains jaw-droppingly high. Even though a petition for a more ethically-built iPhone 5 has gathered more than 130,000 signatures so far, public outrage won't have any impact, a report suggests, until demand for Apple products starts to wane. 

Apple's history of assigning a low priority to working conditions in Chinese factories making their components is getting more headlines now, after a snafu in the fact checking of a radio program produced in Chicago.

Which is more significant, Apple's lack of concern and accountability for workers in China, off whose backs they profited 100 times over, or the fact that a known entertainer didn't abide by journalistic ethics?

An overlooked and important aspect of this saga is how the discredited TAL broadcast lifts a lid on the lack of investigative journalism (both nationally and locally)  focused on the big players in high tech. In this case, a muscular Apple PR machine is content to watch Mike Daisey be at the center, and by the way, look over here -- see how seriously Tim Cook (Jobs' successor) is cleaning things up.

What about the decade before, when conditions in China were as poor if not poorer and were definitely not Jobs' concern? The current events offer a rare view behind the scenes in Silicon Valley, where an increasing nasty cauldron of cynicism has been simmering for the last several years, due in part to the recession's dampening effects on newsroom staff and the numerous budget crises the legislature is grappling with.

For all the rah-rah stories written about the hundreds of startups sprouting in the fertile soil of the Bay Area this year, the massive technology engine of Silicon Valley remains unchanged and shows little indication of permitting the democratizing aspects of the social media its very technology supports to take hold in the workforce. Twitter's impact has been profound in places like Egypt, but so far there's no Occupy Silicon Valley. It's business as usual and transparency has no positive effect on the bottom line. Silicon Valley companies – by that I mean not only the CEOs but the Boards of Directors and the other C-suite execs – remain fixated on profits and/or "The Exit"  and work closely with their PR and legal arms to tightly control all the messaging about their staff and brands.

Not since the once mercurial and now deified Steve Job's and the Apple board's stock-options backdating  jiggery pokery between 1997-2002 surfaced in 2007 - covered by The New York Times and Bloomberg, has there been any body of investigative work in Silicon Valley by either the San Francisco Chronicle or the San Jose Mercury News.

Technology's scythe has disrupted journalism and reduced newsroom staffs to 25 per cent of their pre-recession/disruption levels, but come on. One of the world's biggest industries is in their backyard. If the fourthth estate doesn't do their part to keep excesses in check, who will? The Legislature? Not a chance. They gratefully accept any tax revenue to hold together a frayed infrastructure and the social safety net.

How does the local press defend their propensity to fill 90 per cent of their reportage using one of these formulas?

1) "Look, it's a new company." Venture capitalists throw X million dollars at juvenile male who understands nothing of the gritty details of work but who launches his Weirdly Named Company to provide a service that no one outside said upper class circles has a clue whether there is mainstream demand for.

2) "Look, it's an excuse to party." Announcements and first hand reports from another freaking cool startup/social media/geek fest conference happening in Austin, or on one of the two coasts. The gaggle of speakers includes C-suite execs (of the XY chromosome variety) from the hottest new weirdly named companies (Oink, Jiff, Milk ) and a token gal (or two) to appear inclusive.

3) "Look how much money someone is making." Company's X's stock price grazes some big number.

The failure of local news staff to proactively investigate corporations impacts the quality of life in the community. Profit-hungry inventors, investors and executives often leave a trail of burnt out, under-compensated employees in their wake. Trust suffers. Without strong reporting, there's no incentive for the notoriously fractious California State Legislature to look at the everyday abuses a cadre of foxes inflict on the henhouse of workers in this "right to work" state.

Suicides in China? Every Silicon Valley employee (out of an estimated 300,000 hi-tech workers in the Bay Area) who works with parts sourced from China knows something unpleasant probably happens to laborers in Chinese factories. Why was there so little local reporting about the conditions at Apple suppliers while Jobs was still alive? Why is it left to East Coast media outlets to investigate events, decisions and behaviors that occur in Santa Clara County?

To read the local papers, you'd think that the financial services sector in NYC had a monopoly on exploitative machinations. Yet every SV worker knows about abuses of the H1 work force – a large group who live a modern version of indentured servitude, only to be resented by their US native-born colleagues because their presence plays into the hands of management trying to squeeze more work out of everyone.

With a contingent of H-1 visa holders on staff, management can prod the US natives to work at the same level of intensity (i.e. long hours or over the week-end) without saying a word, because everyone knows that the H-1 visa holders must do as they are told.

Most employees could tell you a story or two about witnessing a manager's perversity while dealing with an H1 visa holder. I know of one instance where an H-1 visa holder shared the fact he was happy about the impending receipt of his Green Card residency permit.

A week later, he was thrown out of his job and, as a consequence, out of the US, mere weeks before the paperwork settled. He relocated to Vancouver and started the whole process all over again, with better results and rave reviews from his employer.

And don't think that Apple's getting its hand slapped back in 2007 put a stop to Silicon Valley stock-options jiggery pokery. Esoteric terms like "asymmetrical recap" are thrown around to cover up how start-up founders can leave their long-time employees high and dry when it comes time to sell the company they helped build. I know of one case where the callous founder sent his long term employees an impersonal letter that arrived on Christmas Eve.

Not wanting them to be burdened with a fair share of the proceeds, he wrote that they'd better sign off on an arrangement whereby the majority of the sale bonus money went to his cronies (how else to describe people who shared his Woodside CA zip code?) . And if they didn't sign? They alone would be the sole cause of the deal falling through. In the past year, execs from both Skype and Zynga have taken heat – but not censured – for trying to say, "Oh, didn't you read the fine print?" to take back options from staff after the hard work was done.

There haven't been any suicides that I've heard about attributed to the caustic maneuvers the management practices on employees, but you have to wonder how many techies have contemplated it. Is there anyone outside of the Silicon Valley bubble that thinks this ugly behavior represents the American way?

While the focus of the Daisey/TAL controversy remains on Mr. Daisey's behavior and the majority of Silicon Valley workers seem content to allow Scott Adam's Dilbert comic strip be their spokesperson, I believe that Mr. Daisey's guerrilla methods partially succeeded. Even if the Apple fandom is not clamoring for justice in China or Santa Clara the way they are for new products, Apple sets a standard for other companies and should be held accountable. While Mr. Daisey was dishonest, he will pay. No more work as a journalist.

But whose shamelessness and ethics should we be discussing? An unintended consequence of Mr. Daisey's lies was that he achieved the end he sought. The real story -- of Apple's track record in China and working conditions at home and abroad -- will receive another round of scrutiny.