News Cut: November 27, 2007 Archive

Privacy leaks: The price of incompetence

Posted at 10:44 AM on November 27, 2007 by Bob Collins (0 Comments)

Back in 1999, when we were putting together The Surveillance Society project at MPR, privacy concerns were still in a quaint stage. We figured the threats to our privacy were surreptitious individuals mining the data after hacking into some giant mainframe somewhere and stealing nuggets about ourselves. It's still true. It's a threat.

We didn't imagine that the data that would be stolen was quite often the information we willingly give and that it would fall into the hands of others primarily because of simple incompetence of those who collected it.

In the U.K. last week, the personal data of 25 million citizens -- everyone in the country who receives child benefits -- disappeared when a clerk in the Revenues and Customs Department mailed (as in snail mailed!) the disks. They didn't show up at the audit agency that was supposed to audit them and nobody knows where they are. "This is the biggest privacy disaster by our government," said Jonathan Bamford, assistant information commissioner. Right.

Certainly some federal bureacrats in this country can relate. Last year, 26.5 million veterans had their Social Security numbers leak when a Veterans Affairs employee took the laptop with the data home. The home was burglarized and the data disappeared.

There are, of course, actual bad guys out there trying to steal your private information. But the real problem, according to Ben Worthen at the Wall Street Journal, is employees of the government and private companies don't understand the value of your data in the first place.

The perception problem: When workers lose a computer disk or a portable storage device such as a USB memory stick, they seem to look at the $20 it will cost to replace the device, not the value of the data inside it. (It’s like valuing that theoretical $10 million shipment by the cost of the briefcase and not by the cash inside.)

Maybe the bosses should see this online calculator, which calculates the cost of any privacy breach to a company.

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Foreclosure: It's not just for poor people neighborhoods anymore

Posted at 1:59 PM on November 27, 2007 by Bob Collins (5 Comments)

After visiting with a few residents of the Corcoran neighborhood last week to discuss the effect of the mortgage foreclosure crisis on their neighborhood, one resident sent this e-mail the next day:

If the focus of your story is to use our neighborhood to educate the public about the foreclosure problem/process in general - we would be disappointed - Adding the stigma of the foreclosure issue to our already PR-challenged neighborhood would not be helpful right now. We would ask you to pick a foreclosed property in Woodbury, Edina or Minnetonka for that purpose.

It's a fair point. The mortgage foreclosure crisis isn't just another blot on lower-income neighborhoods. Sometimes it's a blot on the toney ones, as a search of Hennepin County's foreclosure database shows.

Take 813 Kenwood Parkway, one of the higher-priced homes in foreclosure in the city.

Kane Loukas, 30, purchased it for $687,500 in July 2005. With an estimated market value of $650,000 -- and a $10,000 a year property tax bill -- it went into foreclosure and reverted to the bank for $579,000.

What happened? Every picture tells a story, but not the entire one.

This is the front yard. A garage project gone bad.

"My neighbors hate me now," Loukas said Tuesday. "It was during the tech boom when I was still in college. I was able to trade and make money too easily. I thought the party was just going to keep on going. I'd just started a new business (renovating and then selling converted condominiums). I had two projects in process, and I'd just bought a mansion in the nicest neighborhood in Minneapolis. It almost seemed too easy."

And, of course, it was. Loukas intended to use the proceeds from his firm's condo conversions to rehab the mansion, then sell the duplex at a profit.

Back then -- 2005 -- he found a mortgage broker willing to lend him the money with nothing down. "I (think I might've) even got cash back on the deal," he said. The mortgage, taxes, and the cost to renovate took $6,500 a month. When the real estate market softened, he couldn't sell the projects funding the mansion. Foreclosure was, he says, the only solution after attempts to sell the property failed.

His troubles aren't over, even though his construction business is starting to bounce back. He'll get a big tax bill for the difference between the mortgage and the amount the bank accepted at auction. The government will treat that $100,000 as income. the remaining amount of the mortgage. The IRS treats the unforgiven amount as income.

"You really learn, though, it's only money," he said.

Lots of other investors are learning that, too. According to the Minnesota Housing Partnership, 50 percent of mortgage foreclosures in the area are on properties that were owned by investors.

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Diversity in Minnesota courts

Posted at 4:04 PM on November 27, 2007 by Bob Collins (0 Comments)

Mark Cohen, the editor at Minnesota Lawyer, penned a fine column a week or so ago on diversity in Minnesota's court system.

After acknowledging the obvious requirements to be a Supreme Court justice, Cohen wrote...

Diversity is probably the biggest other factor that is on the mind of the legal community. With Hanson's departure, the court will be left with one African American justice (who gained his seat through election rather than appointment), two women justices and three justices with the surname of Anderson. There has never been an African American, Native American, Hispanic or Asian candidate appointed to the Minnesota high court -- an odd situation given that there are so many qualified lawyers in each of these groups.

That record is intact. Today, the governor made his selection. Chris Dietzen, an Appeals Court judge and his onetime campaign attorney, got the nod.

Pawlenty made four district court appointments today, picking prosecutor Janet Barke Cain for a new judicial slot in Carver County, private attorney Tim Wermager for a new position in Dakota County, GOP state Sen. Tom Neuville for an opening in Rice County and private attorney Jerome Abrams for a judgeship in Scott County.

All are said to be highly qualified, and none expands the diversity of Minnesota courts.

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