Did We Just Get Cyber Attacked? [Updates]

The last few days have been pretty hectic in the financial world. You may have heard some of this on mainstream media.

Zero Hedge asked “Is This What The First World Cyber War Looks Like?”

Alarmist? I don’t think so. Nothing like this has ever happened before.

Here is my interpretation of what just happened:

July 5:

Greece voted “NO” to their bail-out, meaning they will most likely leave the European Union and issue their own national currency. Other countries may follow suit, “falling like dominoes” due to their banks’ exposure to Greek debt.

A major hacker group “Hacking Team” themselves got hacked. More than 500 GB of emails, financial and other data was leaked to the Internet. They revealed that the company had sold hacking tools to the FBI, DEA, and Department of Defense; as well as to the governments of Mexico, Australia, Russia, Saudi Arabia, Iraq, the UAE, Spain, and many others.

July 7:

The Intercept published documents about the Hacking Team corporation that was selling its secrets to 3rd world despots, as well as G20 countries and alphabet agencies. They revealed Zero-Day Exploits in Windows and Flash, which could be a major vulnerability across the entire Internet.

The zero-day vulnerability affects all major web browsers, including Microsoft’s Internet Explorer, Google’s Chrome, Mozilla’s Firefox as well as Apple’s Safari.

[Source: Hacker News]

Such exploits need to be exploited immediately, before the companies who created them (either accidentally, or deliberately) can scramble to fix them.

The Chinese stock market tanked and trading was suspended. It has dropped more than 30% from its high a month ago. China implemented trading controls, freezing out $2.6 trillion of shares – about 40% of the country’s market capitalization.

Chinese equities have lost more than $3.5 trillion of value in less than a month as traders liquidated leveraged bets at an unprecedented pace. Foreign investors extended a record three-day exodus on Wednesday…On the Shanghai exchange, 365 companies suspended trading, equivalent to 33 percent of all listings. A further 992 were halted in Shenzhen, or 56 percent of the total.

[Source: Bloomberg]

China has been following the “Wall Street 1929 Crash” playbook with this one:

33794china_large

Time magazine publishes a story How Real Is The Threat Of a Cyber Attack, warning that a “black swan” cyber attack could really destabilize the world economy over the next, ummm, year – and the government has been consistently surprised by cyber attacks recently. This blames the Chinese as the most sophisticated group of cyber hackers.

Just before midnight, Anonymous tweets “I wonder if tomorrow will be bad for Wall Street”

July 8:

8:22am Bloomberg, CNet, TIME, and many others pick up the story: Attack on Power Grid Could Cost $1 Trillion

The New York Stock Exchange (NYSE) was shut down for 5 hours due to a “glitch”, only opening in time for the last hour of trading.

Amazing how they can diagnose that so quickly. Especially given that by definition, “hacking” is intruding into internal technical systems.

A trader on the floor described the situation as unprecedented:

In my time in the capital markets or working on the floor of the New York Stock Exchange, I have never seen a complete halt of the markets due to technology problems.  Even 9/11 cannot be considered a halt because the markets never opened that day.  This is extraordinary.
 
There was no clue, or early indication that this would happen. The music just simply stopped playing.  There is no panic on the part of the trading community and right now we are just ensuring that we are prepared when the market re-opens… Most of the volume in this market (and most markets, for that matter) happens in the first half hour and last half hour, so the NYSE is scrambling to get us back on line for a close of the market.

[Source: Yahoo Finance]

The Wall Street Journal web site was taken down by hackers.

Zero Hedge, one of the world’s most popular financial commentary sites, was shut down. Their servers are located in Zug, Switzerland.

United airlines was shut down worldwide, affecting nearly 5000 flights.

https://twitter.com/MisterJayEm/status/618775832656539648

The computer problem in the airline’s reservation system caused the FAA to impose what is known as a ground stop at 8:26 a.m. ET, meaning United flights were not allowed to take off. It lifted the stop for feeder airlines that fly under the name United Express about 15 minutes later, but it took until just before 9:47 a.m. for the ground stop to be lifted for United flights.

The computer problem had forced United to hand write tickets for passengers at multiple airports. But Record said the lack of a reservation system meant that the airline was not able to check to confirm that passengers were not on a no-fly list or that everyone on the flight was supposed to be there.

“Because of the safeguards and the backups built into the reservation system, once that goes down, everything has to stop,” Record said.

[Source: CNN]

https://twitter.com/melrobbins/status/618813313439399936

Power was shut down in Washington DC, affecting 2500 people in the home town of Homeland’s Carrie Mathieson.

Earlier today, Anonymous tweeted this:


Was this just a one off, or has it been brewing for a while? How do we know “Anonymous” is really behind this, and not a state actor?

Going back a little earlier in the year, we can see the build up to this “First Cyber War” being seeded in the media. In particular, software pioneer, cyber-security expert, and hacker of entire countries John McAfee has been sounding the alarm.

A couple of months ago, seemingly out of the blue he started writing a column about hacking – his stories are excellent and he’s quite a character, follow him on Facebook. His most recent columns seem to have been “priming the pump” for today’s events. Prescience? Inside track? Or just a series of lucky guesses?

The first big event of the year was the infamous Sony hack – which led to racist emails between senior Sony Execs circulating.

Then we had the “next level” Sony hack – the one blamed on North Korea, timed to come out at the same time as a comedy film about assassinating the leader of North Korea.

June 4

McAfee wrote about the most damaging hack in history: Adult Friend Finder, 15 million records. There were senators and governors and their staffers in the list, using their own names and official email addresses. There were also church leaders and celebrities.

June 8

McAfee’s next column Four Million Ways To Lose Your Secrets is about how the Office of Personnel Management got hacked, the intruders stole 4 million detailed records. This includes comprehensive and highly sensitive information that is collected as part of the application for Top Secret and other security clearances. This was blamed on the Chinese government.

June 25

McAfee said the OPM hack was smokescreen for a much bigger problem: 24 major hacks in the last 30 days. None of these appear to be linked to Anonymous.

From Silicon Angle:

The Office of Personnel Management (OPM) hack has acted as a smokescreen to mask a far broader problem that has occurred in the past 30 days. Here’s the full story in headlines (those in italics are included for completeness only and are not counted in the 24 hacks.):

April 7th 2015 – Russians Hack White House Computers and Even Access President Obama’s Schedule – New York Post

May 22nd 2015 – Adult Friend Finder hack exposes millions of sex seekers – SiliconANGLE #GetMcAfee’d

May 26th 2015 – 104,000 records taken from IRS Website – CNN

May 29th 2015 – IRS Blames Russia For $50 Million Hack  – Engadget

May 27th 2015 – Kentucky GOP Website Hacked – GovTech

June 1st 2015 – 1.25 Million records from Japan’s Pension System Hacked – Japan Times

June 4th 2015 – U.S. agency handling security clearances hacked – SiliconANGLE

June 5th 2015 – Records of 4 million Federal Employees Exposed in OPM Hack – NPR

June 15th 2015 – US Officials Now Say 14 Million Records Taken In OPM Hack – NPR

June 23rd 2015 – OPM Hack 4 Times Larger Than Reported – 18 Million Records Now Reported Taken – CNN

June 23rd 2015 – John McAfee predicts OPM number will reach 30 Million – SiliconANGLE

June 4th 2015 – Russia Hacks German Parliament – Business Insider

June 8th 2015 – US Army’s Website Hacked By Unknown Intruders – NBC News

June 8th 2015 – 70% Of U, S. Businesses Hacked In Past Year – Property Casualty 360

June 10th 2015 – Arizona Vehicle For Hire Licensing Agency Hacked.  Computers Still Down. – Arizona Central

June 10th 2015- Kaspersky Labs Security Company Hacked – CNET

June 10th 2015 – Apple iCloud Hacked.  Millions of Passwords Targeted – IBTimes

June 11th 2015 – Indiana Health Software IT Firm Hacked – Modern Health Care

June 12th 2015 – New Data Reveals 96% of UK Corporations Have Been Hacked – Information Age

June 13th 2015 – TV Giant Canal+ Has Been Hacked – Torrent Freak

June 15th 2015 – Newly Disclosed Hack of Homeland Security Exposes Records of 390,000 Employees, Contractors And Job Applicants – Newser

June 16th 2015 – North Dakota Workers Comp Insurer Hacked – Business Insurance

June 16th – LastPass Revealed That The Master Passwords For Its 7 Million Users May Have Been Compromised In Hack –Forbes

June 16th 2015 – Computers In House of Congress Hacked: – Breitbart

June 16th – University of Baltimore Website Hacked – WBAL-TV

June 17th 2015- Canadian Government Computers Go Dark After Cyber Attack – BBC

June 20th 2015 – Microsoft Website Dedicated to online Privacy Gets Hacked – ArsTechnica

June 22nd 2015 – Polish Airline Hack Attack Leaves 1,400 Passengers Stranded – CNBC

June 22nd 2015 – U.S. National Archives Says It’s Data Was Hacked – NextGOV

June 22nd 2015 – The NSA Hacked Into Popular Antivirus Software To Track Users And Infiltrate Networks – TechTimes

June 22nd 2015 – Script.CC. Hacked, Large Number of Bitcoin Stolen – NewsBTC

June 23rd 2015 – Britain’s National Health Services Hacked – Mirror

What can we make of the above headlines?

MCAFEED-194x194The first thing that I noticed was the complete absence of the type of hacks that appeared in the news in the previous year.  Nothing similar to the Target Corporation, Nordstrom Inc. and long string of other retail hacks; no mention of credit cards; no mention of individual financial loss.  All the mentioned hacks had to do with Political and Government personnel, or with gaining access to the deeper layers of individual lives – going way beyond mere financial data which is in constant flux.

The data taken focused on the more permanent aspects people’s lives.  For example, medical data was targeted in nearly 20 percent of the hacks (Japan’s Pension System, Indiana Healthcare Software, North Dakota Workers Comp, Britain’s National Health System).  The OPM hack, by far the most devastating, focused on the intensely personal data collected during the process of vetting people for secret security clearances.  This data included everything required to determine a person’s fundamental character.

Given the above, we can predict the following with a high degree of accuracy:

  1. More hacks of medical data within multiple states (and countries) will soon be reported.
  2. Reported hacks within the U.S. Government will spread to a number of other Government agencies.
  3. As currently known hacks unfold, they will significantly worsen.

People may be astonished by the increasing frequency of the number of hacks

[Source: Silicon Angle]

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July 8

In a story this morning in IB Times, which doesn’t mention today’s attacks, McAfee said the leaks portends a grim future of global cyber war. One which we are already in.

Nothing to see here, sheeple, move along. As long as CNN tells you everything’s fine, it’s fine.


Burners have always been preparing for a post-apocalyptic, post-economic civilization – that time might be coming sooner than we think.

I don’t want to give a spoiler alert for the end of the new season of Orange is the New Black, but for anyone who’s seen it, I’m kind of imagining that…if the system shut down, and no bank accounts were working, that would probably seem fine for a moment. Eventually, reality would set in.

Wonder what is going to happen tomorrow: will the markets just shrug and move on? Will The Powers That Be continue to deny vehemently that it was a hacker attack, without even investigating?


anonymous fire satan-Fawkes

anonymous ferguson


[Update 7/9/15 5:41pm]

In today’s news, the OPM hack has now been increased to 22.1 million people’s records stolen, 1 in 15 Americans.

Officials have concluded that the larger breach, which targeted background investigation records kept by OPM, included Social Security numbers, information on family members and other contacts, as well as health and criminal records. The data haul also included an estimated 1.1 million fingerprint records.

In total, hackers are thought to have netted records on 19.7 million people who applied for background check investigations with the federal government, and another 1.8 million people including spouses who did not apply for a background check but whose information was included in the forms. Anyone who applied for a background check from 2000 on is likely to have had their information compromised…

Among the forms used in federal background checks is the Standard Form 86, an 127-page document that delves into intimate questions about prior brushes with the law, drug use, psychiatric health, and info on friends and family members. It requires the applicant to put his or her Social Security number on nearly every page of the document.

China was named as “the leading suspect” in the breach last month by Director of National Intelligence James Clapper…Officials did confirm on the call that both attacks were the work of “the same actor” who gained access to the OPM system probably starting in May or June of 2014 with a contractor’s stolen username and password. 

 [Source: NBC]

It sure seems like a lot of hacker related stuff was launched yesterday. In the Washington Post, DARPA announced a “Cyber Grand Challenge”, noting that we’re losing the cybersecurity war.

Image: DARPA/Facebook

DARPA initially started  with more than 100 teams when it began the program a year ago, but the field was quickly whittled down. On Wednesday, it announced the seven finalists chosen to compete in the competition next year. They are an eclectic band of cyberwarriors, ranging from academics representing major university computer science programs  to well-known hackers and defense industry heavyweights.

[Source: Washington Post]

[Update 7/9/15 7:24pm]

The White House and the FBI might be saying “no cyber attack”, but John McAfee thinks it was. I’m more inclined to go with the billionaire domain expert on this one, rather than the hasty diagnosis by political mouthpieces.

At around the same time that the NYSE went down, the Wall Street Journal’s website went offline, as did that of popular financial blog Zero Hedge. United Airlines also experienced a “network connectivity issue” which impacted almost 5,000 flights worldwide.

Given the criticality of technology to United Airlines, let’s assume for a moment it has a daily reliability rate of 99.9%, meaning it has a system failure once every 1,000 days – which equates to once every three years. Now, let’s assume the NYSE and the Wall Street Journal also have a daily reliability rate of 99.9%.

If these events were truly random and independent, then the frequency of all three of these events happening on the same day is once in a billion days (or if you prefer to count in years, almost 2.8 million years).

Coincidental failure is possible, sure, but it does seem highly unlikely. If you add Zero Hedge to the mix, then the probability of all four events happening on the same day rapidly approaches zero.

If we throw in the near simultaneity of the NYSE and the Wall Street Journal issues (happening within minutes of each other), then it is more likely that your car, using quantum probability effects, would leak out of your garage and show up instantly in my driveway an ocean away.

It is certainly possible, but no one in their right mind would bet on it.

[Source: IB Times]

The Financial Times commented on the attacks, and was rather dismissive of the official denials. They call for a new Agency to manage cyber defense, or just take it out of the hands of the USAF and give it to Homeland Security. That way, the same TSA goons groping you at the airport, can be looking up all your personal records in the Cyber databases too.

On paper, there is no shortage of resources; earlier this year, for example, President Barack Obama earmarked $14bn for the cyber fight. But the key problem now is not so much a lack of cash — but co-ordination: as fear spreads, a bewildering alphabet soup of different agencies and task forces is leaping into cyber battle, often with little collaboration. The institution that is supposed to be in charge of security threats is the Department of Homeland Security. But its skills are viewed with scepticism by military officials. The Pentagon has its own cyber warriors, as do America’s intelligence agencies.

The White House has tried to force these bodies to work together. Separately, civilian agencies such as Nuclear Regulatory Commission started holding discreet meetings with each other last autumn on cyber issues too. But collaboration across sectors is patchy. “The level of readiness in different agencies varies enormously,” admits a senior Washington figure at the centre of these efforts. Add in private sector bodies and the picture is even worse: not only is the Pentagon wary of sharing data with, say, the Chamber of Commerce, but companies are often terrified of revealing attacks to each other.

Is there a solution? One sensible response might be to create a new agency to provide a central focus for the cyber fight. There is precedent for that; most Washington regulators emerged in response to a new threat. The Securities and Exchange Commission, for example, was created after the 1929 stock market crash; the Food and Drug Administration appeared after scandals over dangerous medicines. A second option might be to relaunch the DHS to focus on the cyber fight. It could, for example, be named the Department of Cyber and Homeland Security.

[Source: FT]

7 hackers from L0pht raised the alarm about this to Congress in 1998, saying that any one of them could take down the entire Internet in about 30 minutes. [Source: Washington Post]

[Update 7/9/15 10:45pm]

A detailed post-mortem at Zero Hedge.

So, to summarize, the NYSE has a disaster recovery center which… they choose not to use because it is an inconvenience to clients who would rather be unable to trade!

Maybe there was a different angle altogether: with China crashing and halting 70% of the market, the US had just one response:

The Chinese stock market surged again today, after the government threatened short sellers with arrest. This may merely be a “dead cat bounce”, a reflexive response from the market when technical indicators show it as massively oversold.

It raises the prospect that the motivation of the hackers may not have been to destroy, but in fact to profit from wild swings in the stock market. The use of derivative instruments like Put and Call options can create massive profits from swings of only a few percentage points. Certainly, Anonymous would have been in a position to take out such trading positions before making their threat – and, it looks like, executing their plan.

[Update 7/11/15 2:04pm]

Financial Times: US Agency Head Resigns Over Cyber Attack

 

Video

History is Happening: Let’s Bring This To Burning Man

rap-news-juice-media-courage-is-contageous-dekade-z-interview1

Juice Media channels Die Antwoord in the latest Rap News. It’s brilliant.

Forget “class warfare” and petty hooliganism. Fuck Fight Club: we can’t solve the world’s problems with the same kind of thinking that created them. Let’s hold a mirror up to those at the top of the pyramid with ART. Let’s get these guys out to the Playa.

The Melbourne-based duo Hugo and Giordano believe that “courage is contagious”.

From Media Roots:

juice rap newsAn age-old question among activists and the media is how to grab an audience’s attention and hold it. In a society accustomed to twitter feeds, blog hosting, sound bites and news that serves to either placate viewers with entertainment or alarm them beyond reason, knowing how to engage people on serious issues can be quite the challenge.

In order to reach a culture that is over saturated with sensationalism and new technology, one thing though, is for sure– you have to be creative.

Many people would rather be mindlessly entertained than learn about depressing news. So why not use entertainment to inform the masses?  Inspired to combine music and news-room journalism, two European expatriates living in Australia combined their powers of lyrically creative brilliance, comical acting and historical and political knowledge to form the eccentric character Robert Foster– host of Rap News.

Read the full interview here.

Hugo and Treats performed their live show in Australia at the Eclipse2012 festival, which was attended by many Burners.

Double Rainbow video

Do you like hugs?

Please Like and Share if you want to see these guys perform live at Burning Man 2015.

Support the cause and Donate to keep the Rap News coming.

Watch the other videos on the Juice Media YouTube channel.

rap news pyramid

Selling Out Part II: Who Could It Be Now?

[Selling Out – Part I – Wrapping the Gifting]

There is no direct evidence that Burning Man has been sold, or is planned to be sold. Just a mounting pile of circumstantial evidence, and the crumbling credibility of the official stories we’ve all been told over the last few years. There has been a notable absence of activity from their newest non-profit, which is now well into its third year. We’re still waiting to see the transparency we were promised earlier in the year, and wondering why exactly transparency takes more than 6 months to achieve. That kind of suggests there are things that they don’t want to be seen, right? Things that they have to clean up or shuffle out of the way before they can show us.

The shocking story of a Burning Man director’s involvement in providing financial backing and promotional impetus to a multi-million dollar commodification camp, has been met with the usual stoney silence from BMOrg. The news would have been no surprise to them, since all the money-making camps have to be registered and permitted. They knew about it, and encouraged it. They even changed the rules to facilitate it, and had community discussions promoting the plug-n-play concept. Caravancicle seemed to have no problem finding 120 tickets for its coterie of have-popsicle-will-travel jetset clientele.

Plug-n-play is here to stay. It seems that it has been quite deliberately introduced to the Playa, over a number of years, with the backing of BMOrg’s Board of Directors. BMOrg know this is going on and are actively facilitating it, presumably for the most obvious and sensible reason: it makes their event more commercially valuable.

Here are some potential contenders who might buy Burning Man.

1. AirBnB

AirBnB recently received a major, $400 million+ investment from a consortium led by the Texas Pacific Group. This brought the startup which spun out of YCombinator into the 11 digit club, valuing it at $10 billion. AirBnB are interested in Alternative Forms of Housing. Their offices in San Francisco are decorated like some of the houses available in their network.

Right before Burning Man, BMOrg changed around their Board. Ashram Galactica founder Chris Weitz stepped down, though his wife Mercedes Martinez retained her place. Rae Richman remained on Board, but switched her Default World job. Previously, she worked for Rockefeller Philanthropy Advisors as their West Coast VP. Now she works for AirBnB, as head of Global Citizenship. Her brief includes volunteering, Gifting and Civic Responsibility. Burning Man director Chip Conley also switched jobs. Previously, he founded Joie De Vivre hotels, and built it up to be the world’s largest boutique hotel operator. This was bought out by John Pritzer. The Pritzker family are the main wealth behind Hyatt hotels. Chip Conley now works for AirBnB also, as head of Global Hospitality and Strategy. He also owns Fest300, which aims to be the Fortune 500 of festivals. Burning Man is in the list, so we have at least one Director of BMOrg who sees Burning Man as a festival.

Image from SK8 Camp AirBnB ironic ad

Image from SK8 Camp AirBnB ironic ad

The connection with AirBnB is even deeper than 2 of Burning Man’s 18 Directors being directly employed by them in senior, full-time positions. This year AirBnB was selling space on the Playa also. If you wanted to launch a new ironic revenue stream at Burning Man, how would you do it? You’d find the most “anti” version of what you want to do, and launch it that way. An idea so ludicrous, it must be a farce. In this case, what’s the noisiest place on the Playa? Other than being directly in front of some of the sound systems, it would have to be underneath the ramp at SK8 camp. They were selling rooms there for $15/each, which we covered in AIRBNB4BRC – SK8RGR8. Although this was doubted at the time, we have since seen comments on Facebook from people who claimed to have rented the rooms. Someone else was inspired to list space in their dome on AirBnB.

As with hotels, something that started at Burning Man as irony can rapidly, even Immediately, evolve into real commercialization.

2. LiveNation

matt goldberg kntv

Burning Man Project Director Matt Goldberg

Burning Man appointed 2 new Directors before Burning Man, without any fanfare. One of them, Matt Goldberg, used to be the CEO of Lonely Planet – backpacker travel guides. Now his day job is the Senior Vice President of Global Market Development for QVC. QVC is the Home Shopping Network. Why would Burning Man think that someone from the Home Shopping Network could help them throw their annual party, or spread Burner art around the world? Maybe because the boss of QVC is the boss of Live Nation, too.

Internet mogul Barry Diller, married to Diane von Furstenberg, bought QVC for $25 million in 1992. Diller is a regular guest at Herb Allen’s Burning Mogul in Sun Valley. He sold QVC to Comcast, who then sold it to Liberty Media. This is owned by mega-billionaire John Malone, a telecommunications guru who is a major shareholder in Rupert Murdoch’s News Corp, DirectTV, and Sirius XM. These links might seem unconnected to Burning Man, but Liberty is also the biggest shareholder in Live Nation, owning a whopping 26% stake worth more than a billion dollars. Liberty’s Chairman John Malone is also the Chairman of Live Nation. Live Nation merged with Ticketmaster in 2010, and is the largest event promoter in the world. Live Nation owns a number of venues including the Fillmore, the Punch Line and 12 House of Blues.

Live Nation is getting into EDM in a big way. They bought a 50% stake in Burner Pasquale Rotella’s Insomniac, producers of the Electric Daisy Carnival. Insomniac were at Burning Man this year, their camp Wide Awake was widely described as being excellent.

Insomniac and Live Nation are facing a class action lawsuit from festival volunteers who were paid with free tickets. From magneticmag:

It alleges that “wages were illegally withheld from ‘volunteers’ of the companies’ music festivals, concerts and other events”.  The suit, which can be viewed on classaction.org, states that both Insomniac and Live Nation recruited volunteers to do the work of paid employees at on-site stores, merchandise tents, water stations, and information booths in exchange for admission to festivals, with promised time off to enjoy the show.

The suit claims that the compensation was “highly overstated and essentially worthless” as volunteers were not given any time off to view the show, and were also not given federally mandated breaks for lunch, etc.   Also, it claims that volunteers were also promised the “opportunity to learn the inner workings of a festival environment”, but were often assigned to more menial customer service positions.

3. SFX/Robert Sillerman

Robert Sillerman started the business that was bought by Clear Channel and then spun out as Live Nation, by acquiring events, packaging them up for re-sale to a bigger corporation.

In 2012 the New York Times ran a story on Sillerman, with the headline Mogul To Increase Bets On Electronic Dance Music

Sillerman2Robert F. X. Sillerman, the media executive who transformed the live music business in the 1990s by combining regional concert promoters into the nationwide powerhouse that became Live Nation, has returned to the business with the first of what he expects will be a string of investments in electronic dance music, the industry’s latest trend.

Echoing his strategy in the concert business, Mr. Sillerman is pursuing independent companies that put on dance festivals, D.J. parties and other events where the crowds might range from a few hundred people to tens of thousands. He said in an interview on Monday that his first acquisition was Disco Productions, a Louisiana company that was founded by a rave promoter, Donnie Estopinal, and puts on events throughout the country.

Mr. Sillerman, 64, said that in addition to that deal he was in negotiations with up to 50 other companies, and had tentative agreements with about 15 of them. He declined to disclose terms of the Disco Productions deal, but said that he expected his new company — which is called SFX Entertainment, reviving the name of his earlier concert business — to spend $1 billion on acquisitions within a year, and that he wanted to take it public this summer.

The plan for SFX, Mr. Sillerman said, is still being formulated but will involve using the Internet to connect fans of dance music. If his strategies from the 1990s are a guide, he might also want to deliver this aggregated audience to major advertisers and marketers.

“There’s a wave of interest in attending concerts that have less to do with the specific music and more to do with the experience attached to the music,” he said, referring to the immersive appeal of many large-scale dance events. “Our thought is that the experience of attending an individual event can be perpetuated and made better by connecting the people, not just when they’re consuming the entertainment but when they’re away from it.”

Perpetuating the experience when they’re away from the festival…sound familiar?

Sillerman’s SFX acquired popular DJ site Beatport.com, and shut down their San Francisco office in a “bloodbath“. Last year they were in a bidding war against LiveNation for Insomniac Productions, who put on Electric Daisy Carnival. Despite SFX offering $100 million, Live Nation ended up with 50% of Insomniac for $50 million. Sillerman would be looking for a similar scale event that he could buy for his $100 million, an asset of equivalent quality to Insomniac.

SFX also bought a 75% stake in ID & T. ID & T are internationally known for their massive EDM events, including Tomorrowland, Sensation, and Mysteryland. Post acquisition, SFX announced the first TomorrowWorld in Georgia and the U.S. debut of Mysteryland in Bethel Woods, the site of Woodstock ’69.

[Update 9/15/14 10:28am] See comments – reader CW has further details:

Sillerman offered $100MM for BM three and a half years ago and was shut down with a stout NO THANKS.

Another interesting note… One of the guys behind Robot Heart just sold/merged his mercenary company into XO (Formerly Black Water). He is now the CEO of XO, the largest mercenary company in the world.

[Update 9/17/14  10:58pm]

This is a Playa rumor, confirmed not to be true. Robot Heart is a non-profit. There was no booing of Diplo and Skrillex either.

Another reader has speculated that an acquisition could explain why Harley Dubois is still working there after resigning in 2008.

4. Clear Channel, Bob Pittman

pittman dhome

Pittman, L, in front of a Spider Dhome at Burning Man 2014

Pittman’s Clear Channel was giving media interviews from the Playa this year, launching a technology he is pioneering and selling in a high end Plug-n-Play camp. His inflatable Dhomes will be rented for $5-10k per week. Before being Chairman and CEO of Clear Channel, Pittman ran AOL Time Warner, Century 21 Real Estate, and MTV.

Clear Channel and Live Nation used to be the same company before splitting. Their interest in Burning Man could be similar. Like me, Pittman believes that magic has a place in business:

“Someone told me early on when you are trying to solve a problem it’s the mix of math and magic. Understanding the problem, the analytical and then you need to have the creativity, you got to have the first of a magical ideal to solve the problem and I think that is what creativity is.”

The CEO of Clear Channel, which owns 850 radio stations, told The Hollywood Reporter last year that he enjoys the event because, “One of the problems of aging if you’re a creative person is that you tend to narrow your world. It opens my eyes to possibilities.”

From the Hollywood Reporter (2013):

It’s not every day that the CEO of a leading entertainment company turns off his smartphone, puts away the iPad and flies himself to get lost in the Nevada desert for a weekend. But that’s precisely what Clear Channel’s Bob Pittman did on a recent Friday as he left his office at New York’s 75 Rockefeller Plaza and piloted his own Falcon 900 jet to Burning Man — for the 10th straight year.

“I find Burning Man to be so innovative,” he says. “One of the problems of aging if you’re a creative person is that you tend to narrow your world. It opens my eyes to possibilities.”

…Pittman’s eclectic experiences make him the right fit for Clear Channel’s diverse range of offerings, including its top priority, iHeartRadio. Since 2008, the audio service and app, which allows its more than 30 million users to listen to any Clear Channel station in the country, has seen a successful push into nonterrestrial areas at a time when traditional radio is being threatened by the likes of Pandora, Spotify and iTunes.

Burning Man has had radio stations for more than 20 years, set up by former USAF intelligence officer and BMOrg director of propaganda Stuart Mangrum. This year, BMOrg announced that they had partnered with Clear Channel’s “top priority”, iHeartRadio.

5. Elon Musk

Elon MuskElon has made no secret of his love for Burning Man. Rather, he’s shouting it from the rooftops. In response to Beavis and Butthead founder Mike Judge’s new show Silicon Valley, Elon said Judge should go to Burning Man before he judged: Burning Man IS Silicon Valley.

Recently Elon announced that he will be building Tesla’s Gigafactory at the World’s Largest Industrial Park in Reno/Sparks. This may create jobs in the area for Burners with fabrication and design skills, or lower-level factory workers. Nevada allows Lithium mining, which will be useful for the battery factory.

From the Reno Gazette-Journal:

The tax incentive package assembled by Gov. Brian Sandoval to woo Tesla’s gigafactory is unprecedented in size and scope for the state of Nevada and is one of the largest in the country.

The overall value to Tesla is estimated to be $1.25 billion over 20 years — a figure that is more than double the $500 million package CEO Elon Musk said would be required to draw the company.

If the deal is approved by the Nevada Legislature, Tesla will operate in the state essentially tax free for 10 years.

tesla-reno-gigafactory-site-1-KTNV-Channel-13In exchange, the company must invest a minimum of $3.5 billion in manufacturing equipment and real property in the state—a threshold that is much lower than the $10 billion state officials expect the company to invest in Nevada over the next two decades.

The economic development officials who assembled the tax incentive package argue the massive size of the abatement is justified by the scope of the gigafactory project, which is one of the largest economic development deals in the country.

“What this can do for the region… It will allow every under employed person to reach full employment,” said Sandoval’s economic development director Steve Hill. “It will lift up everyone in the region. Property values will go up. The prosperity of the region will be materially changed.”

rendering-of-tesla-battery-gigafactory-outside-reno-nevada-sep-2014_100479365_mEconomic development officials anticipate the gigafactory—a three-story behemoth with more than 5 million square feet of manufacturing space—will generate a $100 billion economic impact over 20 years.

“To put that into perspective, that is more than 3 percent of the state’s GDP. It is more than 20 percent of the region’s economic output,” Hill said.

The factory would employ 6,500 people with an average wage about $25 an hour. Indirect jobs created could reach 22,000—a number equivalent to 2 percent of the state’s entire work force and 11 percent of the region’s workforce.

But the tax breaks the company would receive with the Legislature’s blessing are also staggering. The total package is 13 times larger than the state’s previous record-breaking $89 million for Apple.

According to USA Today, Elon’s partner in the deal also owns the famous Mustang Ranch brothel.

there are two ways to look at Lance Gilman of Storey County, Nev., the businessman whose industrial center is set to house Tesla’s massive Gigafactory.

To some, he is a major player when it comes to economic development in Nevada, a state that is still clawing its way out of a recession. To others, Gilman is also seen as a flesh peddler — he’s owner of the famous Mustang Ranch brothel, legally operated in Storey County just east of Reno.

Gilman is the principal and director of the Tahoe-Reno Industrial Center, billed as the largest industrial park in the world. As Storey County Manager Pat Whitten put it, Gilman is “the lead economic engine for Northern Nevada.”

Besides Tesla, he’s lured major companies to his park, which has become a cash cow of tiny Storey County. The park is located just outside the county limits of the Reno-Sparks metropolitan area and includes companies such as Kal-Kan, Wal-Mart, Dell Computers and Toys R Us. The industrial park is next to coast-to-coast interstate highway and rail systems, so it sells itself. Yet Gilman closes the deals.

He is also an integral part of the negotiations to bring Tesla Motors’ $5 billion Gigifactory project to the industrial park he represents.

Meanwhile, Gilman got into the brothel business about a decade ago with his Wild Horse Canyon Ranch brothel. He later bought the Mustang Ranch, which was previously owned by the notorious Joe Conforte — who escaped to Brazil to avoid federal prosecution for tax evasion.

When the Mustang re-opened under Gilman’s ownership in 2007, Conforte appeared via live video feed at a grand opening celebration to give a few words and pass the mantle off to Gilman.

When Senate Majority Leader Harry Reid told the Nevada Legislature in 2011 it was time to ban legal prostitution in Nevada, he did not mention Gilman by name, but it was apparent who he was speaking about.

Owning Burning Man seems like a distraction for a guy who creates Hyperloops in his spare time. Elon already has the world’s attention. Maybe he wants to Burn in space.

6. Black Rock’s Childs

A contender from the name alone. BlackRock was founded in 1988 as a division of BlackStone, before Burning Man went out to the BlackRock Desert, but just after the event had started.  In 1992, after Burning Man had relocated to the Black Rock Desert, it changed its name from Blackstone Financial Management to BlackRock. It is now the world’s largest asset manager, and has been called “the most influential financial institution in the world”. From The Economist, the Monolith and the Markets:

BlackRock…is the world’s biggest investor. Founded in 1988, it has $4.1 trillion in assets under management, making it bigger than any bank, insurance company, government fund or rival asset-management firm. It single-handedly manages almost as much money as all the world’s private-equity and hedge funds. Though its holdings are mostly equities—it is the biggest shareholder in half of the world’s 30 largest companies—it also holds bonds, commodities, hedge funds, property and just about anything anyone would ever want to invest in 

I433923-2-1_david-de-rothschild-2

Billionaire Burner David de Rothschild

With $4.59 trillion under management, $100 million or so for Burning Man would be nothing to them. Black Rock and Black Stone are gigantic investment companies that have been connected to the trillionaire Rockefellers and Rothschilds. Both families have members who attend Burning Man and hang out with the Founders at First Camp. Burning Man Project Director Rae Richman was working for them, before moving to AirBnB. The Rockefellers have recently been co-investing alongside TPG, who just put about half a billion into AirBnB. Burning Man Founder Michael Mikel got his Silicon Valley start working for a Rockefeller company, Fairchild Semiconductor.

I met one of the Rockefellers last year at a charity event, where we shared a table with BMOrg workers who were all very chummy with him. I also previously met Justin Rockefeller, also a Burner. David de Rothschild “Plastic Jesus” is proud to tell the press about his Burning Man visits.

https://twitter.com/DRexplore/status/338342049092866049

If you owned half of the world’s biggest companies, many of which employ Burners in key roles, why wouldn’t you want to own the coolest thing in the world too?

The two mighty families recently joined forces:

“Rothschild  “is to buy a 37 per cent stake in the Rockefeller’s wealth advisory and asset management group for an undisclosed sum, giving Lord Rothschild’s London-listed trust a much sought-after foothold in the US.”

The Financial Times states that the transnational, transatlantic union “brings together David Rockefeller, 96, and Lord Rothschild, 76 – two family patriarchs whose personal relationship spans five decades.”

“The Rockefeller group traces its roots back to 1882 when John D. Rockefeller established one of the world’s first family offices dedicated to investing his wealth. It has since developed into a provider of wealth and asset management services to other families, foundations and institutions. It is majority-owned by the 19th century oil magnate’s family and has $34bn of assets under administration.”

The founder of Blackstone, which spawned BlackRock, is also the Chairman of David Rockefeller’s Trilateral Commission, and a former member of the same Skull and Bones secret society that Presidents George Bush Sr and Jr, and Secretary of State and Presidential Candidate John Kerry were part of. From publicintelligence.net

Peter G. Peterson, the cofounder of the Blackstone Group, is the Chairman Emeritus of the Council on Foreign Relations, as well as the former Chairman of the Federal Reserve Bank of New York prior to Timothy Geithner. 6  He is also the founder and chairman of the Peterson Institute for International Economics, a globalist think tank that is financially supported by David Rockefeller and Maurice Greenberg’s Starr Foundation. 7  C. Fred Bergsten, the Director of the Peterson Institute for International Economics, is a North American Steering Committee member of the Trilateral Commission; David Walker, President and CEO of the Peter G. Peterson Foundation in New York is also a Trilateral commission member.8  Both Peter G. Peterson9and Timothy Geithner10 are former Trilateral Commission members.  James Dimon, Timothy Geithner, and Stephen A. Schwarzman are all members of the Council on Foreign Relations.  James Dimon is also a Class A director of the Federal Reserve Bank of New York. Mr. Schwarzman was a also member of the Skull and Bones society at Yale University.111213

From Wikipedia:

Members of the Rockefeller family into the fourth generation (especially the prominent banker and philanthropist David Rockefeller, who is the present family patriarch) have been heavily involved in international politics, and have donated money to, established or been involved in the following major international institutions:

The Rockefeller and Rothschild families represent the top of the pyramid of the Illuminati. If the Illuminati were just a conspiracy theory, then someone should’ve told George Washington. In 1798 he said:

“It was not my intention to doubt that, the Doctrines of the Illuminati, and principles of Jacobinism had not spread in the United States. On the contrary, no one is more truly satisfied of this fact than I am.”

They were founded in 1776, as a response from old European banking families to the American Declaration of Independence. Their goal is a New World Order. The United Nations, which spun out of Bohemian Grove and the Presidio military base, is one of their instruments for achieving that goal.

Illuminati have had a strong interest in the occult Ancient Mysteries that Burning Man is based on, for centuries. The black magick side of the event – the world’s largest Pagan ritual – could be very attractive to these people.

the Rothschild Opus One winery in Napa looks a little like the BRC layout. Mrs Rothschild recently passed away there, on the night of the big earthquake

the Rothschild-owned Opus One winery in Napa is shaped like the Freemasons Square and Compass symbol. It also looks a little like the BRC layout. Mrs Rothschild recently passed away there, just before the big earthquake hit

The financial potential of Burning Man would be of no interest to them, but the network of thought leaders “washing their own brains” in the Cult of Burning Man could be very useful indeed. Burning Man would be a toy for someone in these families, like purchasing a painting or a classic car. The database of increasingly detailed profiles on Burners could be demographic gold, many of the world’s movers and shakers and creators in one place at once time. Ready to be influenced, by whatever messaging the New World Order requires them to receive.

the man pentagram curt

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7. Google

Google have made no secret of their deep ties to Burning Man. They were the first company to commercially exploit the event, when they used the Burning Man logo to advertise their search engine shortly after they launched, in 1998. They commercially exploited it again, prototyping their Google Maps and Glass technologies on the Playa. Their YouTube division sells advertising on videos filmed at Burning Man, so Google are actively monetizing Burning Man every second.

google doodleSome of the technology behind Google came via Interval Research, a thinktank in Palo Alto funded by Paul Allen, the guy who started Microsoft with Bill Gates. In 1994, Burning Man Project Director Leo Villareal was an intern there, when he first went to Burning Man – at the time, being promoted as the physical manifestation of cyberspace.

Google spun out of Stanford, and was initially financed by the CTO of Sun Microsystems – a hardware and software company  which also spun out of Stanford (and is now part of Oracle). Stanford Professor Fred Turner has written about the way Silicon Valley’s culture has been shaped by the military, as well as how Google’s culture has been shaped by Burning Man. He has hailed Burning Man as a new frontier for Cultural Creatives, and a model that corporations should follow for cross-disciplinary collaboration in content farms. So there is an academic justification for Google and Burning Man being linked. Recently, Google founder Larry Page said he wished he had more “free experimentation zones” like Burning Man, where they could trial new technologies without having to release it everywhere at once. Some of the art cars are now apparently self-driving.

Larry Harvey has compared Burning Man’s culture of Gifting and Civic Responsibility, with Google’s policy of giving employees 20% of their time to work on pet projects – something that seems custom made for Burning Man art projects.

The Google founders recently threw their own camping event, an elite conference in Sicily called The Camp. They could have bought Burning Man at any time in the last 10 years. Maybe they did…

8. Facebook.

Facebook's "Illuminati" Hoodie

Facebook’s “Illuminati” Hoodie

We know that Facebook founders Mark Zuckerberg, Dustin Moskovitz, and the Winklevoss twins are all Burners, as are many other Facebook employees. Zuckerberg helicoptered in for 24 hours and handed out grilled cheese sandwiches. Billionaire Burner Moskovitz penned a blog post in defense of the 1%-ers at Burning Man. From Medium:

I’m sure many of you have come across the ongoing debate that is heating up right now around the idea of wealthy individuals paying to have a provided experience at Burning Man. There have been some great write-ups on the topic on both sides, but I wanted to offer my personal experience since I haven’t seen much representation yet by “the 1%” themselves. Last week was my 5th year on the playa, and my feelings on the subject have radically changed as my relationship with the festival and the community has deepened. I’ve gone from feeling like an outsider to becoming a judgmental veteran and back again, more than a few times (sometimes in the same week). Nearly every day, I am reminded of the feeling that I’m on the wrong side of a never-ending class war that sadly divides us, but I’ve gained a lot of perspective and acceptance thanks to specific experiences related to being a burner. And I’m still learning, no matter how many times I think I’ve reached the end

Billionaire Burner Moskovitz at Burning Man 2013. He is to the left, clinging on to the structure with his shirt off

Billionaire Burner Moskovitz at Burning Man 2013. I think that’s him to the left, clinging on to the structure with his shirt off

He thinks the influx of VCs to the event is going to help save the world:

It includes a reference to Mark Zuckerberg “helicoptering in to serve grilled cheeses.” I’ll go ahead and confirm the rumor, since it’s clearly out there now anyway. The implication in the article is that he paid into a turnkey experience, but I know he was a guest in the camp I built and no money changed hands. Along with its other inhabitants, he helped pitch his own tent. I wanted him to experience the city and to experience gifting because I thought it would make him grow as a person and the world better off as a result; I believe that’s exactly what happened, however marginally (he was already a pretty great person). I’ve seen this occur countless times. Burning Man is a direct contributor to Cari’s and my decision to start Good Ventures, and to my Asana co-founder Justin’s realization that all the companies in the world are really part of One Project. I know many of the entrepreneur invaders and, without exception, they come back from their first year with a decreased interest in zero-sum competition and a deep appreciation of the fully connected and mutually supportive community. When I hear about anyone going for the first time, my immediate thought is “that is so great for them” and when they are a person who has pooled power or capital around them, it is usually followed by “that is so great for the world.”

Moskovitz and the Winklevi settled their beefs on the Playa, with hugs.

Tyler Winklevoss at Burning Man

Tyler Winklevoss at Burning Man

In spite of our tangled history I had never actually met them,” he wrote on a blog. “We only communicated through lawyers. These guys are among the only people on earth I might describe as real antagonists in my life or even enemies, but on playa my first instinct was that I quite obviously needed to introduce myself and start with hugs.

“They had just arrived so I wasn’t sure how they’d react, but they were very gracious at the time and I knew they’d understand more deeply by the time they left.

“Almost immediately when I got back, I had a Facebook friend request from Tyler and we started a thread mutually extolling the virtues of the festival. In no uncertain terms, he described a spiritual experience.”

He added: “I had created all kinds of dark fantasies about how meeting them would go (Tyler assures me it would have been cordial regardless,) but on playa it was laughably clear. There, we were all part of the same community. We were always part of the same community.”

Burning Man could be an amusing plaything for these Billionaire Burners, but they already own the coolest thing in the world. They know where all the parties are, and who’s on the guest list.  When you have a billion Likes, what do you need a bunch of trippers in the desert for?

9. Jim Tananbaum/Foresight Capital

jim-tananbaumforesite-capital-304xx283-424-23-0 (1)Burning Man’s latest director and Commodity Camping Caravancicler. Jim’s investment company is flush with cash, having recently raised $400 million for his latest healthcare fund. He’s looking for deals to do. Maybe he’s doing this one. He’s definitely got blood on his hands in terms of looking at the Playa as a thing that can be monetized. Defenders of his behavior online are few, but one comment made was that he is so rich, that any profit he could make from Burning Man is insignificant. Personally, even if that were true, I don’t think that’s much of a justification for what happened at his commodification camp.

A deal-maker like “JT” might see the potential in scrubbing BMOrg up into a real company, and then selling it back to the Burners who created it via an IPO.

He also could have been brought in as part of a broader deal team. He seems like the kind of guy you send into a company to get a big deal done…if you’re a pro. Or someone you want on your side advising you, if you’re not.

Another Burning Man Project Director, Jennifer Raiser, also has a healthcare background:

Previously, Jennifer was CEO of Raiser Senior Services, a full-service provider of luxury retirement in the Bay Area, combining health care, dining, and long-term care. She is the co-author of Designing Retirement Communities for the Future, John Wiley and Sons. Her previous experience includes marketing with Procter and Gamble and BBDO/Omnicom Advertising, and management consulting with Fortune 500 corporations.

I still can see no real connection between health care, senior care, and Burning Man.

10. Intelligence

For a really interesting look at the role Intelligence has played in the Arts, I highly recommend Miles Mathis’ short essay “From Theosophy to the Beat Generation – or How Even the Occult Was Disguised”.

The UK’s Independent newspaper in 1995 said Modern Art Was A CIA Weapon:

Because of the Cultural Cold War and The Mighty Wurlitzer, Intelligence is always a possibility. They have plenty of money. Billionaire Burner Jeff Bezos just did a $600 million deal with the CIA. The Burners at the helm of Facebook and Google have made millions of dollars from deals with the NSA. Oracle founder Larry Ellison’s kids are Burners, that was a CIA project before it was even a company. There are all manner of Alphabet Agencies out there on the Playa already. They already have all the data, all kinds of satellite and thermal imagery and technology that can see through walls. Burning Man right now fuels big budgets for the BLM and local cops, who can have shiny new trucks and all the latest hardware. Why mess with something that’s working? The Man is all over Burning Man.

burning_man_girls_robert_scales

something for everyone, honey…

Intelligence don’t need to buy Burning Man, unless there is some strategic value for them in being able to influence its operations more directly. Like, disseminating propaganda to Burners who have washed their own brains, and taken hallucinogenic drugs to improve their suggestibility. Another possibility would be the “honey trap”, a classic intelligence technique that would be ridiculously easy to pull off at Burning Man. Basically, you meet a hot girl and think she’s interested in you. Really, she’s a spy, who may try to rob you, set you up, blackmail you, or introduce you to others who will then do that. This “oldest trick in the book” is most likely why Julian Assange is holed up in the Ecuadorian Embassy in London right now. Intelligence could use Burning Man to inject people into social groups for the purposes of espionage, influence, addiction, or extortion. Another use could be detecting and then eliminating rival cartels. They know who the Burners are from social networks and phone metadata, it would be an easy next step to work out who is supplying the drugs to them. Yet we never hear about any big busts…


Perhaps Burning Man is not for sale, and this is all just Idol speculation. Perhaps I’m reading too much into the massive investment in lawyers and accountants, the complex corporate structure, the promotion of gentrification, and Burning Man’s board changes not being announced. Maybe it’s just pure coincidence that they put a guy from QVC on, and the same company that owns QVC owns Live Nation. Maybe it’s just coincidence that the Rockefeller employee who was on the Board shifted to AirBnB, and so did one of the other Burning Man Directors, and then AirBnB had Burning Man listings this year. Maybe it’s all One Big Farce. An ironic prank, with Burners as the victims.

It does not change the FACT that the Founders are selling up – if not to someone else, then at the very least to themselves, via the non-profit which will buy Burning Man’s intangible assets back from Decommodification LLC in a couple years. They’re bringing in new people and changing the way the event is run, taking it in a new strategic direction of some sort. The Festival is evolving, and the event in the desert is looking less significant to the organization’s future aspirations. This is the big retirement package they’ve made for themselves, the nest egg they’ve been able to create from 30 years of building Black Rock City. What of the workers, though? DPW and the Sherpas and the tens of thousands of volunteers? Where is the pension plan for them? Are they planned to be part of the “century of legacy?”

We will look at this in Part III.