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New Orleans I’ve been a fan of Moxie Marlinspike since I first became acquainted with his encryption work years ago. Ok, I admit, I also liked his name and his general thumb to the nose to the tech world, the military-industrial complex (remember them), and of course the police and governmental forces that want to peek and pry with or without reason into private communications on your phone, whether calls or texts. I’m not saying I knew much about Marlinspike, but I knew be was bound to be political and a white hat hacker. He did the encryption work on WhatsApp which recommends him highly, since that application is widely used in all of our international communications in India, Honduras, and ACORN International’s group chats. He was one of the forces behind Signal, which is what I use for all text messages on my cell and some phone calls.
All of which is to say that I pored over every word in a recent New Yorker profile about him! Turns out he’s an anarchist to no surprise, and that being the case may be the highest profile and best paid anarchist in the USA by a long shot. As always in these kinds of profiles, you are fed a host of extraneous details about his personal life and eccentric habits and pursuits, which were fascinating in a peeping-Tom kind of way, but besides the point of what were usually his very insightful comments on where tech is going and the continued fight for some level of privacy protection for all of us little people out there.
Digging into the details behind the origin story of Signal caught me short though and desperate to give Marlinspike a warning now, and here’s why. The reporter, Anna Wiener, interviewed Brian Acton, one of the founders of WhatsApp, who worked to support the creation of Signal with Marlinspike and his partners as a different and more protected kind of service. Wiener then wrote:
Acton and Marlinspike wanted to demonstrate that it is possible to build mainstream technology that is not beholden to the incentives of venture capital, or to markets, despite the overwhelming cost of producing and maintaining software. Signal has always been remote. Its nonprofit status protects it from outside interests demanding rapid returns. Nonprofits cannot be acquired by for-profit companies, so there will be no repeat of what happened between Whisper Systems and Twitter, or between WhatsApp and Facebook. (emphasis added)
Yikes! That’s just not true. Nonprofits can be acquired by for-profit companies.
It’s not easy, but very possible. Noncommercial, nonprofit radio stations are for sale every day. In California, where they are undoubtedly registered, they can look at things like the California Endowment, the result of the sale of a nonprofit, one of the Blue Crosses. There are a ton of hospitals that have been bought by Hospital Corporation of America or Humana or others. In those cases, they were tax-exempt nonprofits, and the New Yorker didn’t clarify that issue, but in most cases to satisfy the IRS regulations the profits from the sale went into other c3 foundations and entities to continue their charitable purposes, and to prevent them from benefiting from their years of tax exemption. Most 501c3’s include language that upon dissolution their assets have to be transferred to other charitable, 501c3 enterprises. These requirements are both domestic and foreign. Our affiliate in the United Kingdom, lists ACORN International as the receiver of its assets if ever dissolved.
So, sure, they can protect Signal with good judgement. No outside investors can muscle up on them, but they can’t “protect” the institution from their successors or greed or whatever from sale, because, like it or leave it, nonprofits can be sold.
Moxie, our brother, thanks for all you do, but amend the bylaws of Signal to specifically direct what would be protected and barred in Signal from any future effort to divert or acquire the nonprofit and force dissolution. If you can do encryption and sail the seas, you can tighten down this ship. Please!