in which I come up with a specific example: SCO and the Royal Bank of Canada

It’s hard to back up the argument that banks invest your money in businesses you might not like because it’s just not convenient to figure out what businesses any given bank is actually investing in. Here is a nice example of an enterprise that I at least am thrilled isn’t fingering my hard earned cash.

SCO used to be Linux vendor Caldera. They changed their name to SCO and bought the licensing rights to UNIX, the granddaddy proprietary operating system that Linux grew up to replace. They then announced that some code from UNIX had found it’s way into the code for Linux and that therefore anybody using Linux owed them cash. Since the majority of large businesses on the planet now use Linux in some capacity, they stand to take in Billions and Billions in licensing fees or legal damages for work that, even if their license ownership claims are true, they themselves never did. Since then they have been waging a war of Fear Uncertainty and Dismay against pretty much everybody. They have threatened to bring lawsuits against all those who don’t cough up for one of their “licensing packages” and have made IBM their example, filing a 3 Billion dollar damages suit against Big Blue.

If they can prove that Linux was using UNIX code, then all of this would be, if not particularly impressive, then at least within the legal framework. Underhanded and selfish for sure, since thousands of developers have freely given their efforts into making Linux a free and open operating system which now stands to suffer because of what would at most be a irresponsible mistake by some programmer somewhere, and since all the people who benefit from Linux would also stand to suffer. Once SCO “owns” some of Linux then it is no longer free, no longer freely distributives and maybe not even freely changeable. Even if the proprietary code code could be removed, the damage would be done to Linux’s reputation and momentum and the quest to make it the world’s dominant operating system would be set back by years. Despite this, SCO’s maneuver would arguably still be within the legal framework. Microsoft and Sun have already caved in and coughed up some protection money.

Except that they absolutely refuse to actually prove their claims. Claiming that if anyone were to be told which of the endless lines of code that is the Linux OS are actually SCO’s those people would then be “contaminated” by the knowledge, they have insisted that they will only come out with it in court. Well, IBM (and RedHat) have countersued, and as part of that suit the courts have ordered that SCO cough it up. To which they responded by printing out code on 1 000 000 pieces of paper and trucking it to IBM. There is nothing anybody can effectively do to analyze a million sheets of paper. Could anybody be more childish?

It’s becoming clear that SCO doesn’t really have a case. If they did, they would prosecute and progress. Instead they are pulling stunts and tricks and dragging it out to enhance the fear factor as much as they can, hoping more people will preemptively fold and pay up. Along the way, Linux’s reputation is getting permanently damaged. SCO has no concern. Also, they are they are the worst sort of ideological capitalist running dog pigs. Or at least they are claiming to be since it helps their case. Not only are they claiming Linux includes intellectual property of SCO, they are now claiming that the General Public License under which Linux and a large fraction of all open source software is released is unconstitutional and therefore illegal. Why? Because according to the constitution, the progress of science and technology is helped if authors of creative works have ownership of the intellectual component of that work so they can make money from it and therefore any scientific and intellectual progress which is done for non-profit reasons is therefore unconstitutional and hence illegal. I kid you not, they really said that. And since the GPL is based on a non-profit model it is illegal in every instance. It’s too bad, not-for-profit academic research for the benefit of society under the University system was having a pretty good run until SCO proved that sort of thing was illegal.

So what does any of this have to do with the banking system? Turns out threatening the entire computing world with fines and legal action isn’t entirely cheap. Before gearing up for the battle, they needed to find some dough to fill the petty cash drawer. And they found it: the Royal Bank of Canada, one of the banks I once considered opening an account with, invested $30 million dollars to finance their campaign. That could have been my cash (well, not actually, given the timing, but if you have an RBC account, it could well be your money).

It turns out that the banking component of this story may have a happy ending. Thanks to threatened boycotts, and more probably just the fact that the Royal Bank’s investment was outed via an SEC filing (it was originally hidden behind a larger Baxter Capital investment), the RBC has decided to “change their relationship“. Now they suddenly have the power to pull out their cash should the SCO actually try and activate the agreed-upon ambulance-chasing deal they had arranged with the legal firm who is supposed to be carrying through this mess. So that $ may turn out to be something of a poisoned pill for SCO.

But the only reason this is working out is that for once the tie was made between the business in particular and the bank whose money it was. Or more exactly, the bank whose members the money was. In the vast majority of banking investments, no such tie is made. I’d bet money that the next time bank money is used to fund some undertaking that the bank’s members might not savour, the members won’t know about it. But I don’t have to bet my money one way or the other, because it’s safely where it should be: in a credit union.