There are so many aspects of this story that are troubling, where to begin?
Mahalo CEO Jason Calacanis sent an e-mail Thursday to his followers (also posted on his blog, and worth a read) disclosing that his company mistakenly hired a man convicted of computer crimes but who hasn’t yet served his sentence. To retell Calacanis’ story with a critical slant, his employee was caught (unusual for hackers) after launching a botnet attack that didn’t work. And then he lied–or omitted the telling–about his conviction when he was interviewing at Mahalo.
1) Mahalo hired an engineer who had pled guilty to identity theft and bank/wire fraud.
2) The “rigorous hiring process” didn’t include a simple Google search. Keep in mind that Mahalo search results display Google results so in effect Mahalo could have just used their own service to discover this highly publicized crime (it was the first conviction under a new law covering botnet crimes).
3) Calacanis goes to great lengths to apply an emotional filter to the whole story, as in kid from a troubled childhood who pushed the envelope in an episode of youthful foolishness. In reality the man Calacanis hired is 26 years old and acted in concert with 2 co-conspirators while plying his services as a computer security consultant. Not only was the crime itself sophisticated but the behaviors employed to perpetrate the acts as well.
4) Calacanis digs #3 deeper by devoting considerable time to moral equivocation between computer pranks and misdeeds, and what this was, a sophisticated computer crime with the primary motivation of financial fraud.
5) Lastly there is the defense of character argument, the character of John Schiefer and Jason Calacanis. A CEO should be concerned with the human factor but the fact remains that this one employee endangered all of the hard work that the rest of the Mahalo team put forward. It’s admirable that Calacanis now says that everyone deserves a second chance but his claim of being a good judge of character rings hollow when you consider what Schiefer was convicted of and the fact that Calacanis defends this further by stating unequivocally that Schiefer’s act “did .000000001% of the damage it could have” is really quite offensive to anyone who has been a victim of computer crimes, whether a company or an individual. You don’t get convicted based on the damage your crime did, you are convicted for the crime itself.
Calacanis may, and indeed he should, feel good about his graciousness and humanity but that doesn’t make me feel any better about using the Mahalo service now and that’s a real slap for every non-felon employee that has been working diligently to deliver the service and grow the audience.