My theory has been that scammers have two things: (1) "pink contracts" with phone companies, the scammers pay extra money so that telcos won't throw them overboard and (2) scammers have bribed US lawmakers to keep the situation paralyzed.

I really hope that the money the 10 or 20 people who are in on this got is worth the price of ruining a global utility communication system.

No doubt. Before they went bust (and this is aging myself), I worked for a web design company - we had a guy who brought us a bunch of business, and never met a get-rich-quick scheme too problematic. He had the "bright idea" of what was basically pyramid scheme spam - people got paid to import their address book or manually add all their friends and so on. We did not work on this project. He regaled us with the woes of finding hosting, as no-one wanted to touch it as soon as they translated his bullshit trying to legitimize it - except GlobalCrossing, who was happy to host it for a "surcharge" atop their usual rates.