Blogging and blackmail

A Kernel investigation into accounting software blogger Dennis Howlett has revealed a trail of blackmail and conflicts of interest that would make the ropiest tech blogger blush. Milo Yiannopoulos reports.

The Software-as-a-Service accounting sector is by no means huge, so when a leading blogger in the space is accused of impropriety, news travels fast, owing also to the potential for havoc that can be wrought by a single individual.

Thus it is that the rumours, allegations and disquiet surrounding Dennis Howlett, who operates the AccManPro site and writes the Irregular Enterprise blog at ZDNet, are now reaching deafening proportions.

They are not without cause. Howlett is being accused of “monumental” conflicts of interest and behaviour that amounts to protection racketeering, The Kernel can reveal today.

“It’s extortion, plain and simple,” one accountancy software start-up said yesterday. “He writes endless negative posts about your products – unless, of course, you pay him.”

The enterprise accounting sector is maturing, and the companies in it are growing. Howlett’s characteristically barbaric attacks have therefore begun to seriously affect the business of many of them. One of them told The Kernel that Howlett had already cost them “tens of thousands of pounds”.

“It became immediately obvious to us that this blogger worked in a tacit blackmail way,” said another of the start-ups we spoke to. “In other words, you pay me and I’ll write nice things about you. You don’t and I’ll destroy you.”

Observers describe Howlett’s attacks as “relentless”. Since 2009, he has published brutal assessments of Crunch, KashFlow and ClearBooks – but, curiously, not any of the accounting software companies his family owns shares in or has business relationships with.

Howlett continues to claim he holds “no shareholdings in any of the companies that I discuss”. Yet, at the time of his attacks, Howlett owned a 10 per cent shareholding in FreeAgent Central, a direct competitor of the companies he was harshly criticising. He had failed to disclose this connection.

When confronted with what would appear to be an extraordinary conflict of interest, Howlett divested his shares – to his wife, Judith Hodgson. FreeAgent’s annual returns still show her as a shareholder.

Howlett looks after his own. He published scathing attacks on business software providers IRIS that stopped abruptly when the company invested in FreeAgent.

FreeAgent itself has since distanced itself from Howlett, but, as of March 2012, the blogger continues to advocate strongly for the company in which his wife retains a shareholding.

In recent months, Howlett has turned his attention to ClearBooks with a series of remarkably poisonous blog posts. ClearBooks chief executive Tim Fouracre, despite the damage being done to his company’s reputation, has been admirably restrained in responding to Howlett.

He declined to comment on the contents of this report.

Refusal to engage would appear to now be standard practice among Howlett’s victims, although he has irritated a sufficient number of people in the accounting software community to spawn his own parody site, which he has tried, unsuccessfully, using DMCA legislation, to have shut down.

Observers say there is more fact than parody in the Fake Dennis Howlett blog. If even a fraction of the allegations on that site are true, Howlett, who is based in Spain, could face criminal charges under UK law.

A blog post from KashFlow chief executive Duane Jackson, published in 2009, reproduces a damning series of Twitter direct messages in which Howlett appears to be offering favourable coverage in exchange for money.

“He appears to deliberately write uninformed, misleading articles about me or KashFlow in a bid to get me to give him money,” writes Jackson. “I have no intention of giving him any money, so he continues to write.”

“There was no pussyfooting around with me,” another founder told The Kernel yesterday. “He straight out offered me good coverage for cash.”

Duane Jackson’s post also quotes a Skype conversation between Howlett and TechCrunch founder Michael Arrington, in which Howlett says: “I do what I do as a ‘persona’ that people expect of me… gives me ‘ins’ to the money.”

A third start-up founder told The Kernel: “We’d been discussing ways to get a negative story about us removed, and someone familiar with the situation suggested he might take it down if we buy some advertising on his site.”

Recently, Howlett has been sponsored by Xero, a larger player in the accounting software sector. He is understood to have been paid to speak at their conference, appearing on stage as an “analyst” despite his apparent lack of accounting qualifications.

The blogger claims on his website to have been a partner at “a Britsh firm of Chartered Accountants with a tax and IT remit” for ten years, though his name does not appear in either the Institute of Chartered Accountants directory, nor the Association of Chartered Certified Accountants register.

His coverage of Xero has been described as “suddenly, nothing but praise, from the moment he began taking their money”. Meanwhile, his attacks on companies such as KashFlow, ClearBooks and Crunch continue apace.

The Kernel has spoken to several former colleagues of Howlett’s. While preferring not to be named, they were quick to believe the allegations against him, and to surface further specific allegations.

One said: “I’ve known Dennis a long time, and when we worked together everyone knew he was on the fiddle. But you don’t call out other hacks, do you?”

Unfortunately for Howlett’s victims, a lack of engagement does not undo the damage he is doing to their reputations, owing to the high Google PageRank of his blog. For example, Howlett’s post about Crunch filing their accounts nine days late ranks very highly on Google.

But several of them were prepared to speak to The Kernel on the record, despite the risk that Howlett might step up his attacks in revenge.

“As one of the few experts in this exciting and rapidly-growing sector we would have hoped Dennis would conduct himself with a little more transparency,” Darren Fell, founder of Crunch, told The Kernel this morning.

“Unfortunately, it has become clear there is a conflict of interest and what could have been an insightful industry blog now appears to be little more than a mouthpiece for companies he has a financial relationship with.”

KashFlow chief executive Duane Jackson told The Kernel: “Whenever either me personally or KashFlow are attacked on AccManPro, it’s suggested that it’s because I refuse to pay up any sponsorship or consultancy fees.

“When you look at who gets negative and positive coverage there, it certainly seems those that pay up get bigged up. It’s unfortunate, because the SaaS accounting space is really hotting up and Howlett is ideally positioned to be the source of unbiased news on what’s happening.”

Howlett, who describes himself as an “honest broker and communicator” on Constellation Research’s Board of Advisors web page, was given the opportunity to comment on the contents of this report, but declined.

Neither Xero chief executive Rod Drury nor FreeAgent Central chief executive Ed Molyneux responded to a request for comment.

Read The Kernel’s open letter to Dennis Howlett.