Category Archive 'Jerome Armstrong'

09 Aug 2007

Leftwing Nutroots Founder Jerome Armstrong Fined by SEC for Stock Manipulation

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New York Times:

Prominent liberal blogger Jerome Armstrong has agreed to pay nearly $30,000 in fines in a settlement with the Securities and Exchange Commission over allegations that Armstrong touted the stock of a software company on Raging Bull, an Internet bulletin board, in 2000, without disclosing that he was being paid to do so.

Armstrong, the co-author of “Crashing the Gate: Netroots, Grassroots, and the Rise of People-Powered Politics,” with Markos Moulitsas of Daily Kos, and the founder of the Democratic activist site MyDD.com, consented to a civil penalty of $20,000, plus disgorgement of $5,832, and $3,235 in interest.

SEC litigation release.

13 Jul 2006

Dissension In the Left’s Ranks Over Kosola Scandal

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Kos made FoxNews.com yesterday, with Noel Shepherd wondering: Is the Daily Kos About to Implode?

It appears that the post-Yearly Kos month from hell is continuing for Markos Moulitsas Zuniga, the proprietor of the Internet’s premier liberal blog Daily Kos. After receiving some extremely negative press from major publications such as The New York Times, The New Republic and Newsweek immediately following his seemingly successful bloggers’ convention in Las Vegas, Kos is now faced with an even greater challenge: dissension within his ranks.

Such internal squabbling comes at the same time that many prominent Democrats seem to be privately expressing concern about the direction the “netroots” — the self-described Internet grassroots movement of liberal bloggers and their loyal followers — are taking the Party. This seemingly inconvenient planetary alignment is not only threatening the long-term viability of this crusade, but also is putting Kos in an uncomfortable position just as his notoriety is skyrocketing.

As reported here on June 30, revelations about Kos’s friend and former business partner Jerome Armstrong — from stock fraud allegations to accepting consulting fees from not so liberal candidates — have cast a cloud over the blog and its leader. This pall has also undermined the stellar relationship Kos has had with the traditional media up to this point.

Yet, maybe more important, these revelations — along with the way Markos and his Kossacks reacted to them — have caused some prominent DKos bloggers to question the behavior of Zuniga and his devotees. Such a civil war within the liberal blogosphere certainly has the potential to further discredit it, while likely making the mainstream media as well as the candidates they revere less apt to associate with this developing train wreck.

Some prominent bloggers on the left have even begun to criticize Kos. Last Saturday, KosKid Maryscott O’Connor, in a posting titled Something is Rotten in Blogmark, condemned the customary Partyline mentality which flourishes on Daily Kos:

Sometimes I am embarrassed to call myself a member of DKos.

This is one of those times.

There is a sort of groupthink, Lord of the Flies kind of behaviour at DKos over certain issues that absolutely makes me nauseated…

Increasingly, I have begun to feel intimidated or wary about writing my thoughts and doubts about these issues, lest I be set upon by a pack of Defenders of the Kos. It is this sense of intimidation that spurs me to write this, among other reasons: when I start censoring myself because I’m afraid I’ll be punished with disapproval, anyone’s disapproval, I know I’m allowing others’ opinions to matter too much to me. I shouldn’t be deciding what to say and not to say online based on any anticipated reaction.

And predicted that not even the left blogosphere’s chorus of howler-monkeys can ultimately succeed in shouting down questions about the exchange of the Kos’ influence for cash. The Kosola scandal “WILL NOT GO AWAY simply because some people don’t think Markos should be held to the standards that he WILL, ultimately, BE held to.”

But many on the left, like Steve Gilliard, think lefties should


“Say nothing bad about Commander Kos.”

They’re scurrying to the barricades over on DailyKos today, posting defensively about the media’s “obsession with trying to bring down the progressive netroots.”

22 Jun 2006

Kosola Scandal: Influence Sold for Money on the Left-Side Blogosphere?

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Jason Zangerle of the New Republic yesterday dropped a bomb on the left-side blogoshere, opening up for general discussion a very damaging story (previously reported way back in January of 2005 in the WSJ, and pooh-pooh’d at that time by Salon, finally re-emerging last week in New Republic –and in the subscriber-only section of the New York Times) of influence traded for money, and back-room coordination of the left-side blogosphere’s message.

Are Jerome Armstrong and Markos Moulitsas (Zúniga) (of the famous Daily Kos) engaged in a pay-for-play scheme in which politicians who hire Armstrong as a consultant get the support of Kos? That’s the question that’s been bouncing around the blogosphere ever since The New York Times’s Chris Suellentrop broke the news last Friday about a 2000 run-in Armstrong had with the Securities and Exchange Commission over alleged stock touting. But Armstrong, Kos, and other big-time liberal bloggers have almost entirely ignored the issue, which is a bit surprising considering their tendency to rapidly respond to even the smallest criticism.

Why the strange silence in the face of such damning allegations? Well, I think we now know the answer. It’s a deliberate strategy orchestrated by Kos. TNR obtained a missive Kos sent earlier this week to “Townhouse,” a private email list comprising elite liberal bloggers, including Jane Hamsher, Matt Stoller, and Christy Hardin Smith. And what was Kos’s message to this group that secretly plots strategy in the digital equivalent of a smoke-filled backroom? Stay mum!

Kos certainly went ballistic this morning on the New Republic:

People talk about the need for the left to work together and have a unified message in the face of a unified conservative noise machine. So a google group was created called “Townhouse”, and it included many bloggers and other representatives of the netroots as well as a large number of partisan journalists and grassroots groups. It allowed us to discuss policy, issues, tactics and coordinate as much as you can ever get a bunch of liberals to coordinate.

There was one big rule for this list, an important cog in the growing Vast Left Wing Conspiracy — everything discussed was off the record.

That was obviously violated today as the New Republic betrayed, once again, that it seeks to destroy the new people-powered movement for the sake of its Lieberman-worshipping neocon owners; that it stands with the National Review and wingnutoshpere in their opposition to grassroots Democrats.

The magazine published, in its website, an email I sent to the list. There is nothing controversial about the email, but Jason Zengerle tried to spin it as evidence that there is a “smoke-filled room” and that I send “dictats” to other bloggers, controlling what they can and cannot write about. In a subsequent post, Zengerle went further, saying that I control the financial fates of much of the progressive blogosphere. My power apparently knows no bounds!

Ludicrous, all of it, but that’s the new rules of the game. TNR and its enablers are feeling the heat of their own irrelevance and this is how they fight it — by undermining the progressive movement. Zengerle has made common cause with the wingnutosphere, using the laughable “kosola” frame they created and emailing his “scoops” to them for links. This is what the once-proud New Republic has evolved into — just another cog of the Vast RIGHT Wing Conspiracy.

If you still hold a subscription to that magazine, it really is time to call it quits. If you see it in a magazine rack, you might as well move it behind the National Review or even NewsMax, since that’s who they want to be associated with these days.

Charles Johnson of LGF thinks that New Republic’s rejoinder written by the same Jason Zengerle, has a great deal to say “about the leftist blogosphere’s coordinating committee, the private email list called ‘Townhouse,’ ” and its central role in coordinating the left-side of the Blogosphere party-line.

I’ve noticed on many occasions that all the lefty blogs will suddenly go into lockstep, echoing the same talking points, whenever a breaking event happens. Now I know why. There’s no doubt that this list is also used to coordinate attacks when they decide to go after blogs like LGF or any of their other favorite targets.

But it’s highly revealing that the very thing the moonbat blogosphere always accuses the “right” of doing—secretly following orders from a central machine—is exactly what they’re doing themselves!

If there’s an equivalent list on the “right,” no one has ever invited me. But that’s OK; I wouldn’t join anyway.

Zengerle speculates that Kos’s power on the left-side may be based on more than good looks.

Now, on to the question of the source of Kos’s influence. As I wrote in this post, some of that influence likely stems from the ideological and partisan loyalty liberal bloggers feel toward him. But I also raised the question of whether Kos exercised some degree of financial influence over liberal bloggers through something called the Advertising Liberally BlogAds network. A number of Kos’s defenders have criticized me for misunderstanding the nature of Advertising Liberally and Kos’s relationship with it. The most thorough and heated critique I’ve seen comes from the aforementioned Steve Gilliard (you can read it here), so let me try to respond to his criticisms in the interest of answering the others.

Gilliard writes, “If Zengerle had done some reporting, he would have found out that Henry Copeland, owner of BlogAds, manages the network.” This is incorrect. Henry Copeland doesn’t manage any of the networks; he operates the overall BlogAds service. Each of the networks (like Advertising Liberally) is operated by a network manager, who is a blogger. In Advertising Liberally’s case, the network manager is MyDD’s Chris Bowers. But, according to e-mails I have that Bowers wrote in 2005, he consulted with Armstrong and Kos when it came to making up the rules for the Advertising Liberally network. (Indeed, this post from today by Bowers over at MyDD acknowledges that Kos sits on the Advertising Liberally “advisory board”; Armstrong left the board in late 2005.)

As for the network manager’s rule-making power, Gilliard writes, “They [i.e. Kos, Armstrong, and Bowers] formed the network, but none of them had the right to remove any other site by fiat.” This is also incorrect. Per the BlogAds rules for its advertising networks, each network manager has absolute control over setting standards for the network and deciding who is in and who is not. This actually became an issue for the Advertising Liberally network last fall, when–according to a source and e-mails in my possession–Bowers, Kos, and Armstrong drew up new membership rules for the network, which led to some blogs being kicked out of the network.

Finally, Gilliard writes:

The idea that one must “stay in Kos’s good graces” to remain in the network is a joke. Kos doesn’t care, he has DK and a sports network to run, Armstong has a job, and Bowers has MyDD to keep up and running, and that’s not easy.

All of this may well be true. I know of no instances where Kos, Armstrong, and Bowers excluded a blog from the network explicitly because the blog did something to fall out of their good graces. But the fact remains that Kos does exercise some control over the network and, according to a source, the fear of angering Kos among some liberal bloggers stems from that control. Is the fear irrational? Maybe. But that doesn’t mean it’s not real.

Lastly, let me address the issue of Kos’s anger. His response to my original posts is basically a long and blustery attack against TNR. His restatement that he is not a consultant still does not answer the serious questions that have been raised about his relationship with Armstrong and whether there is some arrangement by which politicians who hire Armstrong as a consultant then receive Kos’s support. And yet, because I continue to ask these questions, Kos contends that “TNR’s defection to the Right is now complete.” How asking legitimate questions of and about two individuals can be construed as an attack on liberalism as a whole is beyond me. Kos evidently believes that, as The Democratic Daily put it, “the left c’est moi.”

I’d certainly like to be reading Townhouse list today, but there is the danger of one’s mailbox being filled.


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