Sources

Democracy At Risk, A Loud And Clear Warning For 2017

The rise of Donald Trump, as well as the growing power of populist leaders in Europe, will require a vigilant eye when the signs start appearing that puts basic democratic values in harm's way. It is just beginning.

Putin, Erdogan and other leaders last year in Istanbul.
Trump and Putin puppets at a protest in Harrisburg, Pennysylvania
E.J. Dionne

WASHINGTON — The most important political task of 2017 transcends the normal run of issues and controversies. Our greatest obligation will be to defend democracy itself, along with republican norms for governing and the openness that free societies require.

To say this is not alarmist. Nor is it to deny the importance of other issues. Preserving the gains in health insurance coverage achieved by the Affordable Care Act should be a high priority. So should preventing a shredding of the social safety net and stopping budget-busting tax cuts for the best-off Americans.

But even these vital matters are secondary to preventing a rollback of democratic values and a weakening of the institutions of self-rule, at home and around the world.

There should be no mistaking the dangers democracy confronts. The rise of far-right parties in Europe, the authoritarian behavior of governments in Turkey, Hungary and Poland, and the ebbing of center-left and center-right parties that were part of the postwar democratic consensus would be troubling even without the rise of Donald Trump. His emergence should sharpen our concern. "A right-wing demagogue in charge of the world's most influential repository of democratic values," wrote Financial Times columnist Martin Wolf, "is a devastating fact."

Trump's disrespect for the conventions of democracy, his willingness to flout rules long accepted by presidents of both parties and his praise for assorted strongmen, particularly Russia's Vladimir Putin, all point to instincts and attitudes very different from those of his predecessors, Republican and Democratic.

His style of politics, from his mass rallies of the faithful after the election to his statements about himself, carries authoritarian overtones. As Jeff Shesol noted in the New Yorker, Trump's 2016 Republican National Convention declaration that "I alone can fix it" might serve as the title of a management book for autocrats. During the campaign, Trump spoke of using government instruments (including antitrust laws) to punish media companies he regards as hostile. Even if he never follows through, the threats speak to his cast of mind.

Also alarming is the closeness of many of Trump's top aides, including national security adviser Michael T. Flynn and chief White House strategist Stephen K. Bannon, to extreme movements in Europe that have brought back themes buried since the 1930s and early 1940s.

Street scene in Germany — Photo: Kelly Kline

Trump's aides emphatically denied that Flynn had met with Heinz-Christian Strache, the leader of the far-right Austrian Freedom Party, as Strache had claimed. But there is no denying that many on Europe's far right, including the Austrian party founded by ex-Nazis in the 1950s, are open in declaring their sense of empowerment from Trump's victory. Bannon, for his part, has spoken favorably of the "women of the family Le Pen," meaning Marine Le Pen, the presidential candidate of the nationalist and anti-immigrant National Front in France, and her niece, Marion Maréchal-Le Pen.

Trump is not the only leader with appeal to these movements. Putin, about whom Trump has made unrelentingly favorable comments, has given important support to extreme-right parties in Western Europe. Our president-elect aggravates concerns about his Putin bromance by dismissing the findings of intelligence agencies that Russia intervened in the 2016 election on Trump's behalf.

And it was both shocking and appalling that Trump quoted an anti-democratic foreign leader criticizing fellow Americans. In a pre-Christmas tweet, he praised Putin's upbraiding of Hillary Clinton and the Democrats' response to the election.

At a moment when supporters of the postwar democratic consensus — notably German Chancellor Angela Merkel — face tough electoral challenges from the ultra-right, will the new leadership of the United States join Putin in tilting against them?

It's true that supporters of democracy have their own challenges to confront. As John Judis wrote in his insightful book, "The Populist Explosion," the rise of populist parties, including authoritarian ones, signals that "the prevailing political ideology isn't working and needs repair, and the standard worldview is breaking down."

The liberal democracies have, indeed, been guilty of a certain complacency in confronting the economic challenges of globalization. Mass immigration — some of it bred by the Middle East's brutal wars — has created discontents in nearly all the leading democracies. And small-d democrats have gotten out of the habit of offering robust philosophical defenses of a form of government they took for granted.

In 2017, supporters of democracy need to stand up resolutely in its defense. They must also be vigilant against violations of the democratic rules of the game, especially here in the United States. Keeping America great means protecting the institutions that have made our greatness possible.

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Economy

Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.


Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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