One for the "we knew these things happened but tried not to know about it" department. Re/code just published a story about Netflix suing a former executive for allegedly collecting kickbacks from vendors that connected with the service.
Mike Kail was VP of Operations at
Currently the CIO for Yahoo, Netfix is claiming that Kail committed fraud and a breach of his fiduciary duties. The suit suggests that Kail engineered contracts with Vistara and NetEnrich, two suppliers to Netflix, and subsequently took kickbacks of between 12% and 15% of monthly fees.
According to Netflix, it paid the two companies a total of $3.7 million until Kail's departure which would mean that he may have collected around half a million dollars in kickbacks. According to the suit, Kail funneled the payments to “Unix Mercenary,” a consulting company he controls. According to Netflix, final approval for supplier payments rested with Kail.
Further to the Vistara and NetEnrich allegations, Netflix says that they believe that Kail received other payments from IT vendors.
If these allegations are proven, it will be a sad indictment of a well-respected executive. There is significant reflected glory that anyone involved in the Netflix cloud story has enjoyed and this suit tarnishes that glory. Notwithstanding this situation however, Netflix's journey is a case study for a successful cloud journey and anyone involved can stand proud for what they achieved.
I reached out to Kail himself and current and previous colleagues of his for comment. At the time of publishing no one was prepared to comment on the situation.
