“Men in Octopus Suits”: Dispatches from the Pao vs Kleiner courtroom, Pt 7

By Dan Raile , written on March 23, 2015

From The News Desk

With days to go before closing arguments in Pao vs Kleiner are heard, a string of similar suits and allegations have popped up in Silicon Valley the way mushrooms once did at this time of year, before the rains disappeared. Taken together, this has the look of a shift in momentum: Gender equality in tech is becoming an imperative with real consequnces, rather than a domain for platitudes and tangential initiatives. It's an issue you can't incubate your way out of.

In Pao vs Kleiner we find a trial that threatens to disrupt -- in the real sense of the word -- one of California’s most powerful, most male dominated industries. Like many things involving the tech industry, the reflex is to say we're seeing something utterly unprecedented, historic even.  A visit to San Francisco Public Library -- in particular its newspaper archives -- gave me some context.

In 1883 a woman, also named Ellen, brought suit against Leland Stanford, Collis Huntington, Mark Hopkins and Charles Crocker – the so-called “Big Four” businessmen who built Central Pacific Railroad.

Ellen Colton’s husband, “General” David Douty Colton, had for years been the railroad consortium’s Fifth Beatle, but upon his death in 1879 his shares in the company were dramatically devalued by the Big Four before passing to his widow. Colton alleged that the executives had deliberately plotted to reduce the price they would have to pay to buy back the shares.

As with the Ellen Pao trial, at issue was the internal machinations of an elite group of men responsible for the propagation of new technology reshaping America’s culture and economy. And also the question: Would they have treated a man the same way?

Ellen Colton ultimately lost her case, but due to enthusiastic coverage in the papers, the Big Four never recovered the damages to their prestige and popularity. The widow produced reams of her husband’s personal correspondence with Collis Huntington. In the “Colton Letters” the two men discussed in plain English their efforts to strong-arm and bribe politicians, plant favorable coverage in newspapers, remove the teeth from regulation and smear any opposition.

In December of 1883, The San Francisco Chronicle published the text of over 200 of the letters in full, despite of a threat by the judge to fine them $500 for doing so. They were republished across the country, and provided fodder for the continuing coverage of railroad issues for decades. The shift in popular opinion against the Big Four emboldened elected officials from Sacramento to Washington, D.C., to oppose the railroad. A Congressional investigation followed in 1888. In 1910 Hiram Johnson was elected Governor of California on a one-issue platform: “Kick the Southern Pacific out of politics.” (by that time the Southern Pacific Company – owned by the Big Four and their heirs – had succeeded the Central Pacific as the four’s primary incorporation.)

In his 1938 book, also titled The Big Four, Oscar Lewis writes of the tangential effects of the Colton trial:

“Shrewdness, the ability to drive a close bargain, to press an advantage for all it was worth, were qualities still highly regarded among California businessmen, where there was no more coveted distinction than to be known as a ‘smart trader.’ But the application of such principles to the widow of a former partner proved distasteful even to those who were not sentimentalists. The victory cost Huntington and Stanford and Crocker [Hopkins was already in the ground] far more in loss of respect than they gained in dollars.”
Regardless of the verdict in the Pao trial, the 132-year old Colton case indicates the potential stakes for KPCB and its tentacular network in the court of public opinion. In the Pao trial there are few ‘smoking gun’ documents demonstrating the exclusion or unequal treatment of women, but ample daylight has been shed on how the region’s venture capitalists and C-suite execs do business, on the trappings of their lifestyles, and on their interactions with governments and the press.

Richard White's 2012 book Railroaded: The Transcontinentals and the Making of Modern America has a chapter called "Men in Octopus Suits". I can't think of a better way to describe the spectacle of watching Silicon Valley elites explain themselves to a jury. Despite the depth and breadth of their networks, they're only men at the end of the day. And often men-only.

Several Kleiner partners have testified that their underlying mission is to change the world for the better, even if their hubris pales somewhat to that of Huntington, who said "We have done more for the state of California than any other group of men have ever done for any other state in the Union."

The bonhomie that presides among journalists of competing publications in the Pao courtroom recalls too the words of Ambrose Bierce in the December 29, 1883 edition of the Wasp. Heralding the publication of the letters by The Chronicle, Bierce wrote:

“The Chronicle compels us more frequently than we like to sadly, but we trust never harshly, chide it for errors of conduct, which now makes us with all the more joy commend it for publishing in full the file of Huntington offered as testimony in the Colton equity suit. The publication lifted the cover which until then had concealed the inner workings of the most powerful of the railroad’s influencing machines.”
If Colton changed the way the 19th century media covered the railroads, the Pao case presents an existential moment for the modern day tech press.  Like the venture capitalists on trial, too many tech reporters are much less at home in the courtroom than in glass-walled meeting rooms, conference-hall floors and invite-only dinners and cocktail functions. The Pao trial presents a challenge: How far ought one to go in excoriating the selfsame luminaries one relies on as sources, to sell event tickets and provide funding? What are the wages of this schadenfreude?

How does journalism in this era of technology bonanza compare to that of the late 19th century, of which Lewis wrote:

“Enterprises controlled by the Big Four closely affected the interests of so large a part of the population that few commentators could, or wished to, write of them without bias. Consequently the mass of material written about “the railroad” falls naturally into one or another of two groups: that which emanated from the papers controlled by the railroad or from individuals enjoying or hoping to enjoy favors at its hands, and, balancing this, the outpourings of the group of journals and individuals that made opposition to the Big Four their chief stock in trade.”
William Randolph Hearst was given The Examiner in 1887 by his millionaire father, who had acquired it as repayment of a gambling debt, and the private wealth that underwrote the paper allowed him to flog the railroad at will without fear of consequence. It’s not a coincidence that by the time the Colton trial had ended, The Examiner was the city’s paper of record and trending yellow. What would the coverage of this case look like today if the city's publications today had such ironclad financial independence.

Other reporters I’ve spoken with at the courthouse have attested that their coverage is doing well, generating a lot of feedback and flushing new SV discrimination beat tips out of the woodwork. An audience for this ongoing story has been proven, and its appetite whetted.

Last Tuesday, Re/code’s Nellie Bowles told me she didn’t like my coverage of the media reporting on the trial. In particular, she objected to my comparison of the tech reporters involved in the trial, including her boss Kara Swisher, to Pigpen’s flies:

The press, especially the tech press, hover just off-screen in the events related in testimony, a constant presence like Pigpen’s flies. Pao’s lunch meetings with Kara Swisher and Sarah McBride of Reuters – which took place in 2012 shortly after Pao announced her termination on Quora and her complaint was mysteriously leaked to the press – are now a matter of the court record.
Bowles told me: “I think that what we are doing here is noble, it has a purpose. It’s something we haven’t done before and I think it is great. You’re pretending to be above it all when you’re here just like everybody else and totally a part of it.”

Re/Code’s coverage has certainly been comprehensive and useful. The liveblog and articles produced by Bowles and co-writer Liz Gannes have become the go-to source for news about the proceedings, even for other reporters. In addition to their prolific coverage for Re/code, they’ve done several local and national TV and radio interviews. During testimony one witness even referred to their liveblog as her source for information about the testimony of earlier witnesses.

Beyond that, Bowles criticism of my presence here is accurate, at least factually. There's no sense in denying I am here like everyone else -- just another fly buzzing around (one that occasionally lands on Kara Swisher's lunch). But SF Public Library's newspaper archives bears witness to the purpose of those bugs-on-the-wall -- whether from Re/Code, Pando or the New York Times -- in particular when they learn to sting.