Posts Tagged ‘bill petrocelli’

The Authors Guild on the Option Clause

September 23, 2015

Excellent statement from The Author’s Guild analyzing the odious “option clause” in the book contract. Most book contracts are “asymmetrical” in favor of the publisher. I.e. an agreement whereby the publisher gets the right to exploit the work of the author for the term of the copyright, life plus 70 years. In exchange they give the author a very small advance (usually)  against rather small royalties. One of the most asymmetrical conditions is the option clause, which requires the author to submit the next book exclusively to the contracted publisher for a given period of time, but doesn’t require any additional responsibility on the publisher to accept it. Sometimes a very limited option clause is ok. But there are some truly horrible ones out there.  Here is the complete text.

A few authors are lucky enough to sign multi-book deals worth six or seven figures. But many more writers, without really thinking about it, tie themselves to unprofitable multi-book deals in the form of one-sided options or “next book” clauses—and they do it for free.

Option clauses in publishing agreements vary, but generally they give the publisher first dibs on the author’s next book. Some options are relatively benign, granting the publisher rights of first look or first negotiation (i.e., the right to see the next book first and negotiate for a limited period of time after reviewing it). Others are never fair, in our view, such as clauses that grant the publisher a right of last refusal (i.e., even if the publisher turns it down at first, it can come back and match any other publisher’s offer) or the ability to wait until after the first book is published, or the second book completed, to make up its mind. Clauses that do so unfairly impede an author’s ability to write and publish.

We get that publishers want their investments in authors to pay off. When a book does well, it may be a credit to the publisher’s marketing efforts, as well as the author’s. In cases where the publisher actively builds the author’s brand, it may be fair to give it the right to further recoup its investment on the next book. But the terms have to reasonable. We have seen too many option clauses that overreach, binding the hands of an unwitting author for longer than she can afford when it comes time to sell the next book.

Option clauses can wreak havoc on authors’ careers. First, and most obviously, they prevent an author from selling her book on the open market and getting the best deal possible. In cases where the first book sold particularly well, unless and until the publisher passes on the next book, an option certainly precludes an auction from developing. And what if the publisher failed to market the first book effectively, or the author was dissatisfied with the edit? The author is left without recourse.

An option can also hold up the author’s ability to get a new advance—a necessity for full-time authors. Particularly egregious clauses require the author to submit a completed manuscript (as opposed to a proposal) of the next book for the publisher’s consideration. To make things worse, they give the publisher way too long to decide whether to publish the manuscript. The author is not permitted to submit a proposal to other publishers until after delivering an entire new book to the original publisher, which is given ample time to review it and, of course, to reject it. This means that the author is writing the entire book without an advance—defeating the very purpose of an advance, which is to provide an author with money to write the book in the first place.

Even worse are options that give the publisher the right to the author’s next book-length work “on the same terms” as the first. That is, if the publisher elects to exercise the option, the author must sign a contract with the publisher with the same provisions and payment structure as the current contract. This completely eliminates the author’s right to negotiate before the next book’s subject matter, length, and market potential are known. No writer should ever agree to such terms.

For absolute intolerability, option clauses including “last refusal” rights take the cake. These, as discussed above, actually allow a publisher to match a second publisher’s offer, even if the publisher who holds the option declines the author’s work initially. We don’t think a publisher should receive even one bite of this apple. But several? That’s crazy. Once a publisher passes on a book, no author should be obligated to disclose any offers received from others to the original publisher.

One Authors Guild member whose option required submission of an entire manuscript spent ten years without any financial compensation while working on a research-intensive non-fiction manuscript (an early advance for the “next book” is almost never part of the deal). His contract prohibited him from approaching any other publisher until the entire manuscript was done—a decade later. It’s preposterous to ask authors to bear that kind of risk.

Fiction writers aren’t immune. A few years ago, a major publisher used a next-book option (together with a non-compete clause, like the ones we’ve called out here) as an excuse to pull the plug on a novel already scheduled for publication. With her agent’s knowledge and blessing, the author decided to self-publish a previously-written but unpublished short story collection in order to make ends meet before the next installment of the advance for the novel was due. When her publisher—which had already rejected the story collection—found out, the author received a termination letter demanding immediate repayment of the advance, claiming that “by ignoring these essential terms of the Agreement and not informing your editor of your intentions, you have not only breached the Agreement, but also demonstrated your unwillingness to work in good faith with us toward the successful publication of the Work.” The novel clearly didn’t compete with the self-published short story e-book. And earlier, when the author presented the publisher with an outline for her next novel, the publisher had insisted on waiting until after the current novel’s release to see how it was received and whether it was worth picking up the next one.

Or consider the romance novelist who took a break from fiction to write a non-fiction book. Her non-fiction contract required her to submit her next book—a romance novel—to that same publisher, despite the fact that the non-fiction publisher had absolutely no experience with romance novels. The upshot was that the author was required to delay submission of the novel to publishers who would actually know how to handle it.

Fair “next book” clauses do exist and may be appropriate where the publisher invests in marketing, but they must be strictly limited. The clause should grant only a right to negotiate with the author for a next book of similar subject matter for a limited period of time. If the author and publisher can’t reach an agreement in that time frame, it is crucial that the author be free to quickly seek another publisher. Additionally, a fair option agreement generally will:

  • require that the publisher base its decision on a proposal or sample chapters of the next book (not on a completed manuscript);
  • require the publisher to make a decision within a certain number of days (e.g., 30) of receiving the author’s proposal or sample chapter(s);
  • allow the author to go elsewhere if no agreement is made within a limited number of days (e.g., 15) of the publisher’s offer;
  • allow the author to submit a proposal or sample from the next book for the publisher’s review when it is ready (the author should never be forced to wait until some period after publication of the first book, which may be way too far out for an author living on book writing alone); and
  • provide for new terms to be negotiated for the next book (the second deal should never be based on the terms in the contract for the first book).

If the publisher wants an option in any other circumstances, the publisher should pay an upfront option fee for it. We recognize this is not an industry practice—not yet, at any rate. But it should become one. A publisher should never have the right to prevent or delay an author from selling her next book unless it pays an additional amount to hold up that work for some period of time, as a film studio would when buying film option rights on a book.

Bottom line: option clauses are almost always in the sole interest of the publisher and not the author. In some cases, the option clause can hold the author’s writing career hostage to the publisher’s schedule for years. This amounts to an unacceptable restriction on an author’s freedom to write. If an author is agreeable to providing the publisher an option, it should be subject to the limits described above.

Bill Petrocelli -Bookseller and Novelist

November 11, 2013

circle of thirteenpetrocelliToday we are going to interview Bill Petrocelli, co-owner of the legendary Book Passage in Marin County. Bill has recently written a novel, The Circle of Thirteen that has just been released by Turner Publishing to rave reviews. Lisa See said of it: “In The Circle of Thirteen, Bill Petrocelli has created a story that flashes forward and backward through time, creating a futuristic world that bears some striking similarities to today. The Circle of Thirteen is a true celebration of the power of women in the face of great odds.”

 Andy: Bill, thanks for letting me interview you on “Ask the Agent.” We’ve been friends for a long time as booksellers. Probably more than 30 years. And we fought all the great fights together defending independent bookstores against the corporations. But you never told me that you wanted to write a book. When and why did you decide to write The Circle of Thirteen?

Bill: I guess I’ve always thought of myself as a writer, more than anything else. Although I’ve been heavily involved in bookselling for many years, during that time I managed to write two non-fiction books as well as a lot of articles.  As to The Circle of Thirteen, I began thinking about that story six years ago. And once the idea formed in my head, I couldn’t let it go.

Andy: The novel is bold and unique in structure. It’s sort of a science fiction novel, but not really (even though it takes place in the future). You structure it with flashbacks, but both the “then” and the “now” take place in the future as well. I don’t see that very often.  It’s a political novel with a strong feminist message that addresses real issues of today. Weren’t you trying to keep a lot of balls in the air? It must have been pretty hard to shape the story.

Bill: It takes place in the future, but I don’t really consider it science fiction. Probably it should be called “future fiction” – or maybe even “speculative fiction.” The idea for the book was to look at the expanding role of women and the potential backlash against them. I decided to set the story a couple of decades into the future, because I thought that would give me the best setting – really, a better perspective on things.

The challenge was to find a time that was far enough removed from the present to get away from day to day politics but still be close enough to seem relevant to the present moment. I decided that I couldn’t write the story in the form of a saga – a story with just one event after another – because I needed to maintain the tension and keep the important elements of the story at the center of things. That’s why I decided on one main narrative line that occurs over a period of two weeks with a series of flashbacks that feed into that story.

Andy: And that  raises the question of how to write flashbacks in a future setting.

Bill: You’re right – that’s a big challenge. And you’re the one who first pointed that out to me several  years ago. After we talked, I went back and reworked the story to try to do two things. First, I wanted to make sure that all of the transition signals were clear – dates, places, and all that. Readers needed to know where they were at any given moment.

The second thing, I believe, was even more important. I had to be relentless in maintaining the point of view of the narrator at key points in the story. I re-wrote most of the book so that it was the first-person voice of my principal character, Julia Moro, who is the Security Director for the United Nations. So when the flashbacks occur, they are  mostly told through her recollection. That allowed the reader to listen to her re-counting of earlier parts of the story with just enough information to get the feel and texture of what happened.

Andy: When I left bookselling, I became an agent, and   started working at the other end of the publishing food chain. It was pretty eye opening for me. What have you learned from this experience? How has it made you view the process of publishing differently?

 Bill: I’ve learned all kinds of things that I hadn’t really focused on before. A lot of it has to do with timing. How much lead time do you need for submission? For editorial feedback? For book promotion? Each of these things operates on its own calendar, and they’re quite different than the calendar that booksellers follow.

Andy: Book Passage is probably the most marketing driven bookstore in America. You have events practically every night. You have classes being taught by famous writers, book fairs, writers conferences. It’s a real three ring circus (in the best sense). Now you have to market your own  book to bookstores. How has your own bookselling experience helped you do this?

Bill: My experience in the book business has helped a lot – there’s no way to deny that. Mainly, my years as a bookseller have given me an entrée into bookstores. It’s also made it easier for me to talk with the people who report on books and bookselling. The people at the blog: “Shelf Awareness”, for example, have been incredibly helpful.

But even with all that, I’ve had to do a lot of the same things that other authors have to do. I have a wonderful agent, Lisa Gallagher, who helped open a few doors at key moments. But I’ve had to create my own website, hire a publicist – and even work with a publicist who specializes in book blogs.

Andy: You’re also a legendary figure in retail bookselling. Is that helping you get the book into the stores? What are other booksellers saying about it?

Bill: Legendary? I don’t know about that. If anyone is legendary, it’s my wife, Elaine, who really understands bookselling as well as anyone in the country. But I do know other booksellers, and I’ve gotten a lot of nice support for the book from many of them.

Andy: When I first became an agent, I avoided representing fiction. Now I have dipped my toes in it. It’s really tough to sell. There are a lot of good writers out there who can’t find publishers. Publishers are making their acquisition decisions based on marketing, not aesthetics. And they will tell you that most of their fiction titles aren’t selling. Any thoughts why?

Bill: Now that I’ve been promoting my own novel, I have a better idea why it’s  so difficult. It’s different than promoting a non-fiction book. With  non-fiction  you can talk about your credentials on the subject, you can stress how important the book is, and you can focus your message to specialized audiences. But none of that is true with fiction. You can talk all you want about your book, but until someone reads it they don’t know how good it is. The real test is the quality of the writing.

Andy: Any thoughts about how to get these books to readers better?

Bill: I have no secret formula for making it easier. I think the only answer is to get as many advance reading copies in the hands of booksellers, other authors, and prominent people – anyone who can read it and give a positive blurb that can then be used in marketing.

Andy: Ok, Bill. Here’s the $64,000 question. I couldn’t help notice that your book is for sale at Big Bad Amazon and almost as Big and Bad Barnes and Noble. Want to share your discomfort with us?

Bill: I have no discomfort with that. I want the book sold through as many places as possible, but I haven’t done anything to encourage sales through Amazon or through the chains. I’m trying as hard as I can to get people to buy it through their local independent stores, In fact, if you go to my website at http://www.williampetrocelli.com, you will see that my buy-link goes directly to the websites of about forty independent bookstores. I’m hoping that more authors will pick up on this idea and link to the independent stores whose support for their books is so important.

Andy: Are you working on your next novel?

Bill: I am, but I put it aside while I’m been trying to promote The Circle of Thirteen. Every now and then I find those characters talking to me, though, asking me where I’ve been. I need to get back to it. It’s a different kind of story, but hopefully it will be just as provocative. One of the characters is a bookseller, so that should give us something to talk about next time.

Bill will be speaking and reading from The Circle of Thirteen at the following venues:

Tues. Nov. 12, 7 PM. Powell’s Books, Portland, Or.

Thurs. Nov. 14,  7 PM. Bookshop Santa Cruz, Santa Cruz, Ca.

Sat. Nov. 19, 7 PM. R. J. Julia Books, Madison, Cn.

Wed. Nov. 20, 7 PM. McNally Jackson, New York, NY.

Sun. Nov. 24, 11 AM. Miami Book Fair, Miami, Fl.

More Letters Against the Department of Justice Anti-trust Action

June 26, 2012

Two very thorough, compelling,  and eloquent letters were sent to the Department of Justice today criticizing their lawsuit against Apple Computers and the book publishers. Hundreds of letters have been sent by people and organizations in the book business criticizing the DOJ for attacking the victims  in their misplaced efforts to oppose monopolistic practices in the industry. Letters have been prepared by trade associations, publishers, authors, agents,  and booksellers, all sending the same message: this lawsuit will do nothing but enhance the market power of the only entity that poses a monopolistic threat to the book business, Amazon.com. I suppose we owe a debt of gratitude to Amazon for bringing together parties who have historically been wary of one another. Chain and independent bookstores are united on this as are almost all publishers and, with few exceptions, authors and agents.

The Authors Guild, the major organization representing book authors, and Bill Petrocelli, owner of Book Passage (and a leader in the historic efforts by independent booksellers to stop anti-competitive practices) have made some new and telling points. Check out the complete texts of these. Bill Petrocelli’s letter  and The Authors Guild letter.

The Authors Guild reminds us of a practice by Amazon of pulling the “buy” buttons from print on demand books being published by iUniverse publishers and printed by  Lightningsource. Lightening Source was the first major company to offer this new technology for self-published books. When Amazon created its own service, Booksurge, to compete, they played hardball and temporarily refused to sell selected Lighteningsource titles. Here is what Authors Guild described:

“The Guild had launched Backinprint.com in the summer of 1999, allowing authors for the first time to republish their out-of-print books without incurring any set-up costs. (The Guild had negotiated an agreement with on-demand publisher iUniverse to prepare the books for on-demand printing.) The service was an immediate hit with members; within two years, more than 1,000 titles were available to readers again, including books by Mary McCarthy, Thornton Wilder, William F. Buckley, Jr., and Victor Navasky….

Sales of all on-demand books grew steadily in the early 2000s. By 2005, sales of on-demand books had reached a new high. Backinprint titles sold 41,000 units that year. Amazon, the storefront for most on-demand sales, took notice. It purchased BookSurge, an on-demand printer, to compete with Lightning Source, the industry-leading on-demand printing service run by Ingram.

Three years later, however, few on-demand publishers had moved their printing to BookSurge. Small wonder, since it charged more for its printing services than Lightning Source and had a reputation of offering lower quality service. So Amazon turned to aggressive tactics to win market share, reportedly removing the buy buttons from all iUniverse titles during the 2008 AWP conference. Author Solutions, which had acquired iUniverse, saw its sales plummet. It quickly agreed to use BookSurge for its Amazon sales, and Amazon restored access to its millions of customers. ”

The Guild also pointed out some troubling practices by Amazon who recently purchased the rights to sell some very important titles and imprints that Amazon would be able to sell exclusively:

” With the launch of the Kindle Fire, Amazon’s drive to acquire exclusive rights to books, by acquiring publishers with substantial backlists and other arrangements, has taken on a new urgency.

In September 2011, Amazon’s acquired the exclusive digital rights to one hundred popular DC Comics graphic novels. If a customer wanted to read any of these on an e-device, it had to be on a Kindle Fire. Barnes & Noble, trying to break into the e-device market with its Nook, retaliated by pulling all print copies of DC Comics titles from its shelves. Books-a-Million, the third largest bookseller, followed suit. “As Amazon seeks over the next few years to expand its tablet line,” predicted the New York Times, “these collisions over content are likely to become routine.”

Amazon is moving quickly. In December, Amazon entered the children’s book market, acquiring more than 450 titles of Marshall Cavendish Children’s Books. In April, Amazon announced it had acquired the exclusive North American rights to publish Ian Fleming’s James Bond novels — in both digital and print formats. Earlier this month, Amazon expanded its holdings of genre fiction, purchasing the publisher Avalon Books and the exclusive rights to its 3,000-title backlist of romance, mystery and Western fiction.

Balkanization of the literary market is something new and deeply troubling. “Bookstores used to pride themselves on never removing any book from their shelves,” reported the Times, “but that tradition—born in battles over censorship—is fading as competitive struggles increase.” Awful as it is for our literary culture, the balkanization of the book market is but a logical extension of Amazon’s no-prisoners approach to competition.”

Bill Petrocelli, owner of Book Passage in Corte Madera, California, put some historical perspective on the actions of the government:

” To put the issue in its starkest form, does a shaky claim of collusion under Section One of the Sherman Act take precedence over a clear violation of Section Two of that same act? I am aware that the DOJ has characterized the actions of the publishers as a per se violation, but the invocation of that label should not be a substitute for clear thinking. The creation of a monopoly in the book business is a far more serious offense than the claim of collusion alleged in this case, because it creates a permanent, anti-competitive situation that is extremely difficult to dislodge.

And this leads to the question of the role of the DOJ. What is the Justice Department doing in this case? Why – of all the potential cases it could be pursuing – did it decide to take this one? Amazon. com – the supposed aggrieved party in this case – is one of the largest, richest companies in America. It is perfectly capable of protecting its own interests and asserting any claims it might have in the courts. So why, then, has the Justice Department decided to align itself with this monopolist?

The actions of the DOJ are especially galling in light of the fact the Justice Department and its sister agency, The Federal Trade Commission, have turned a blind eye to anti-competitive activities in the book business over the last forty years. There has been substantial evidence of anti-competitive uncovered practices uncovered by lawsuits initiated by Northern California Booksellers Association and by the American Booksellers Association. There were two investigations conducted by the staff of the FTC, but in both cases the recommendations of the staff were turned down by the Commission itself. The Justice Department is certainly aware of these investigations, because Christine Varney, the immediate past head of the Anti-Trust division, was a Commissioner on the FTC at the time its investigation was curtailed.

So once again, why now? Why has the Department of Justice decided to ally itself with the interests of a monopolist? By placing the power and majesty of its office on the side of Amazon.com, the Justice Department is undermining that fabric of the book business and signaling to all future monopolists that concentrated, anticompetitive behavior will get a free pass from the government. “

Northern California Independent Booksellers Score Big Victory Over Amazon

June 30, 2011

the Winners

Yesterday California Governor Jerry Brown signed a bill      into law that requires Amazon.com to collect sales tax on all sales made to California customers. The state stands to collect $200,000,000 owed by Amazon for unpaid back taxes. Amazon countered by cutting off all their  California affiliates (people with those nifty click -throughs on their websites that funnel sales to Amazon).

This was a long fight, and it was pretty much carried by the Northern California Booksellers Association. Although paradoxically, they did have some –uh– bigger allies. Like, for instance, Walmart, and later Barnes and Noble.

California followed some other states in this: notably New York and Illinois.

I’ll try not to bore you too much with legal theory, but here’s the somewhat simplified back story. The controlling Supreme Court decision on Internet sales tax collection is a case called Quill v. North Dakota, decided in 1992 before there was such a thing as Internet commerce. The court ruled that under the Commerce Clause of the Constitution states could not require out of state corporations to collect state sales tax. Of course, the devil is always in the details, and the big question is what exactly is an out of state corporation. All tax experts agree that if there is some sort of substantial presence by an out of state corporation in the state, that is enough to trigger the sales tax collection requirement. Sometimes it can be as simple as teachers selling books to students from the Scholastic Book catalogue or even a commissioned sales rep wandering into the state periodically to collect some orders.

The Losers

I think this all started with a meeting of Northern California booksellers in 1999. The meeting was attended by Hut Landon, Bill Petrocelli, myself, and George Kiskadden. Also attending was a particularly supercilious lawyer from the California State Tax Board. Bill had done some pretty intense legal research and laid out his theory about “affiliate nexus”. It was pretty much the theory that New York, Illinois, North Caralina, and now California have used to justify Amazon’s tax collection requirement. The supercilious lawyer responded superciliously that tax policy is extremely complicated and should be left to the tax policy experts.  He looked at us, more in sadness than in anger, and told us it was a pity, because he agreed with our sentiments.

At the same time on the federal level, an unholy alliance of small business people, huge commercial real estate corporations, and big box stores were at work attempting to get federal enabling legislation that would accomplish the same goal. This has never happened.  But there was a national debate raging at the time, and Internet-mania was dominating public discourse.  I remember being on the same talk shows as Internet gurus who were saying that the Internet was the most important invention since the wheel (I’m  not kidding!).

Amazon had 3 or 4 arguments about why they shouldn’t be required to collect sales tax. The 2 most cited arguments were: 1)Internet commerce was a frail bird that needed to be protected from the crushing weight of sales taxes  and 2) Internet commerce was the economic juggernaut that was driving the “New Economy” and creating jobs and wealth. I liked to point out how puzzled I was about how Internet commerce could at the same time be both a frail bird and an economic juggernaut.  I never received a satisfactory answer.

The national alliance of big and small businesses needed a public spokesman who could engender warm and fuzzy feelings. This excluded the vice president of Walmart who was the key figure financing this endeavor. They decided that they needed a colorful small shop keeper and so chose me.  I remember they sent  me off to Washington to debate Grover Norquist, a truly despicable person and anti-tax nut, at the Federal Society. I had no difficulty dispatching Norquist’s shabby arguments by showing that government tax policy should not be picking winners and losers in the marketplace by allowing some favored businesses to sell tax free. It was a perfectly respectable conservative position and it was true and fair. My dirty little secret that I have never admitted until now was that my expenses for that trip were paid for with a check from Walmart.  Strange bedfellows, yes?

Anyway, this has been one of those David and Goliath stories.  In  America the Davids haven’t been having much success these days. I hope California will take Amazon’s $200,000,000 and put it back into the educational system of the state.  An educated population is a book buying population. In the long run,  it will prove a good investment for Amazon and all of us.

It’s nice to know that in this age of economic giantism, sometimes little people are still able to do big things.  Thanks, Northern California booksellers.

Amazon.com and Tax Evasion 10 Years Later

March 9, 2010

This has been getting my goat for 10 years.

According to Publisher’s Weekly today,  Amazon. com dropped all their Colorado “Associates” because the state passed legislation requiring internet retailers to collect local sales tax.

The Amazon “Associates” program is the very clever system in which anyone can post book titles  on their websites which click through to Amazon where a sale is made. The Associate will receive a very generous sales commission (5% and sometimes more) for the transaction. This program drives considerable sales to Amazon and also builds good will, strengthens the brand, and creates loyal customers. And it raises a lot of money for the  Amazon Associates with very little effort. Many of the most effective Associates are non-profits and PTA’s that raise considerable money for schools and other worthy causes through this program.

So to all those PTA’s, to all those local chorale societies, to all those homeless advocacy groups and orphanages, Amazon is saying –”if Colorado is going to make us collect sales taxes, then Colorado, FUC….,” ok I better not say it, but you get the picture.

The issue here is all about Amazon’s vigorous and consistent opposition to collecting local sales tax which allows them  to maintain a competitive advantage over local booksellers. I’ve made a number of blog posts on this subject in the past.

Let’s back up a little bit. I realize that ranting about the Supreme Court position on tax venues pursuant to the Commerce Clause of the Constitution might  deaden the senses of my blog fans who have gotten used  to my   snarky and satirical commentaries on the foibles of commercial publishing. But I’ll keep it simple. In 1992 in the decision of Quill vs. North Dakota, the Supreme Court ruled that under the Commerce Clause, absent federal legislation, a state could  not regulate the   collection of  sales tax by an out of state corporation that had no physical connection to the state in which the buyer resided.  Even though the decision was handed down before internet retailing  existed, it continues to be the law today.

I’m proud of the fact that I have been fighting this abomination for years. Back in 2000, a group of independent booksellers in the Bay Area that included myself, Bill Petrocelli of Book Passage and the local independent booksellers association, began a campaign to end these anti-competitive and illegal practices. We actually got a bill passed through the state legislature in spite of  spirited opposition from Amazon, Barnes and Noble and the entire high tech industry. Even though it received unanimous support from the Democrats in the legislature, it was later vetoed by the venal then  Governor Gray Davis (also known  as “Governor Ka..ching”) , a shameless sop to his fat cat Silicon Valley funders.

On the federal level, an organization was formed to influence similar legislation in Congress. The money for the organization mostly came from big  commercial real estate interests and mega- retailers like Wal-mart. It wouldn’t make  a lot of sense having a Wal-mart executive make the case for tax fairness for community based mom and pop businesses,  so they enlisted me as the public voice of the organization.  As the Arabs have said: “the enemy of my enemy is my friend.”  I was sent to Washington to debate the extremely evil anti-tax nut, Grover Norquist, at the Federalist Society. The check for my expenses came from Wal-mart. There. That is my dirty little secret. Tell my enemies if you must.

 I also was featured on PBS’s Crossfire where I was grilled by Mary Matalin and accused of being a liberal stalking horse who, whenever I saw something new and good (the internet),  I wanted to tax it. I’m proud I whipped the asses of these guys in debate. I even got Grover Norquist to start spitting in fury when I equated his position on tax policy with John Calhoun’s argument for nullification (ok, that was a  pretentious cheap shot and misdirected but a memorable event to tell my grandchildren).

I even got into an argument with former governor (and hopefully future governor), Jerry Brown, then mayor of Oakland. He said all I wanted to do was tax the internet. I responded in my most patronizing tone, that of course the mayor understood that the issue was not taxing but requiring collection of tax. Unlike Norquist, Brown appreciated a worthy opponent. He made me sit next to him for the rest of the event and engaged me in conversation about his passionate interest in the thought of  Jürgen Habermas and other German philosophers. After that, I decided that Brown was wrong on tax policy, but otherwise ok.

This was back in 2001 when the country was gripped with internet frenzy. The high-tech lackies were hyping the New Economy with the most shameless humbuggery imaginable. In the course of debate, I heard  more than once that the internet was the most important invention since the wheel. I responded that it was considerably less important than the invention of the plumber, particularly when your toilet was overflowing.

So why did we argue that this was illegal. After all, according to the Supreme Court in Quill, out of state companies didn’t have to collect sales tax. Well, fair enough. But the Court had also ruled in a number of cases, that even the most tenuous physical connection to a state could trigger the requirement to collect taxes. Even a commission sales rep wandering into the state occasionally was enough to create the necessary connection to the state. Well, what was different about the existence of tens of thousands of  Amazon Associates in  a state actively driving sales to  the internet retailer in exchange for  generous commissions? How was this different from a commission rep? You don’t have to be Antonin Scalia to answer that question. The was no difference.

This whole theory was devised by Bill Petrocelli. Of course, back in 2001 we were the only people arguing it. And, of course, we were just a couple of Luddite mom and pop retailers fighting the  juggernaut of the inexorable Hegelian dialectic of history with our sling shots.

Come the collapse of the economy in 2008. The states start looking for more ways to collect taxes. And Bill’s theory becomes extremely attractive. New York passed a law to begin collection and now Colorado. Of course, if Amazon dumps its affiliates, then their connection to the state disappears and Amazon doesn’t have to collect. Amazon maintains its unfair tax break. Schools and services pay for it by getting less tax dollars; and the PTA’s lose a valuable source of funds.

I end this blog by paraphrasing the unforgettable words of Joseph Welch as he destroyed what was left of Senator Joseph McCarthy’s reputation in the Army-McCarthy Hearings:

Jeff Bezos,  “have you no sense of decency, sir, at long last? Have you left no sense of decency?”