Tribune Cuts Off Talks, for Now, With Upstart Bidder
Tribune Publishing said on Monday that it had ended talks to sell itself to Newslight, a company set up last month by the Maryland hotel executive Stewart W. Bainum Jr. and the Swiss billionaire Hansjörg Wyss, after Mr. Wyss withdrew from a planned offer on Friday.
Tribune Publishing’s special committee, which evaluates bids, said in a news release on Monday that the Newslight plan could no longer “reasonably be expected to lead to a ‘superior proposal’” than the binding agreement the company had reached in February with Alden Global Capital, a New York hedge fund. (An earlier version of this item misstated that the agreement was nonbinding.)
Mr. Bainum and Mr. Wyss had swooped in last month with a proposal of $18.50 per Tribune share, beating out the bid from Alden, which was for $17.25 a share.
The pathway to a deal involving Mr. Bainum, the chief executive of Choice Hotels, one of the world’s largest hotel chains, is not completely blocked.
In a letter on Saturday, Mr. Bainum informed the Tribune board of Mr. Wyss’s exit from a potential deal, adding that he remained committed to a proposal at $18.50 a share, after examining the company’s finances and discussing a possible agreement with other potential backers.
“I remain confident that there is significant interest in joining this effort and expect the necessary arrangements among one or more additional equity financing sources can be completed expeditiously,” Mr. Bainum wrote in the letter. He declined to comment for this article.
Tribune’s special committee said in its statement on Monday that it would “carefully consider any further developments in order to determine the course of action that is in the best interest of Tribune and its stockholders, subject to the terms of the Alden merger agreement.”
The committee added that, in keeping with a previous recommendation, its board would advise company stockholders to vote in favor of the Alden deal.
Tribune, the publisher of The Chicago Tribune, The Baltimore Sun, The Daily News and other metropolitan newspapers across the country, has been the target of Alden, its largest shareholder, since last year.
Because Alden is known for slashing costs at the roughly 60 daily newspapers it controls through its MediaNews Group subsidiary, journalists at Tribune publications cheered the surprise entry of Mr. Bainum and Mr. Wyss into the bidding. Alden has said it allows newspapers that might otherwise fold in a struggling industry to remain in business.
Tribune shareholders are expected to vote on a buyer this summer, after the board formally approves an offer.
Parler, the social network popular with conservatives, is making its comeback.
The app had been kicked off iPhones, Android devices and even the internet in January after tech companies said Parler had not effectively policed content on the network around the time of the Capitol insurrection on Jan. 6.
But on Monday, Apple said in a letter to two federal lawmakers that it had approved Parler’s return to iPhones because the app had agreed to more aggressively patrol what its users posted, according to a copy of the letter obtained by The New York Times.
An Apple lobbyist said in the letter that the iPhone maker had removed Parler from the App Store in January because it wasn’t taking down “posts that encouraged violence, denigrated various ethnic groups, races and religions, glorified Nazism, and called for violence against specific people.”
Since then, Apple employees have “engaged in substantial conversations with Parler in an effort to bring the Parler app into compliance.” Last week, Apple told Parler that it was welcome back because of changes it had agreed to make to the app, the lobbyist said in the letter. Parler would return to the App Store when it submitted its new app, he said.
Parler did not immediately respond to a request for comment on Monday.
Parler’s return to iPhones follows the revival of its website after it went offline for about a month. Amazon had pulled support for Parler’s social network in January, forcing its website to go dark. Parler came back online in February with the help of a small web-hosting company near Los Angeles called SkySilk.
Since then, some users have returned to Parler, but it appears there is less overall activity on the social network since the time of the election. Most of the conversation around Parler revolved around politics, and the user base was overwhelmingly supportive of former President Donald J. Trump. Executives at Parler, including its co-owner Rebekah Mercer, the conservative donor, hope the iPhone app can help the social network regain steam.
HOUSTON — Under growing pressure from investors to address climate change, Exxon Mobil on Monday proposed a $100 billion project to capture the carbon emissions of big industrial plants in the Houston area and bury them deep beneath the Gulf of Mexico.
Exxon, the largest U.S. oil company, wants to create a profit-making business out of the capture of carbon emitted by petrochemical plants and other industries. But its plan would require significant government support and intervention, including the introduction of a price or tax on carbon dioxide emissions, an idea that has failed to attract enough support in Congress in the past.
The company already captures carbon, which it injects into older fields to produce more oil. Exxon now wants to use its expertise to store the carbon dioxide generated by other industries. But without a price on emitting carbon, many businesses would have little financial incentive to pay Exxon to capture and store their carbon.
The Obama administration failed to enact a cap-and-trade system, which raises costs for polluting companies by forcing them to buy tradable permits to release greenhouse gases into the atmosphere. California, the European Union and 11 states in the Northeast use versions of cap-and-trade. Other governments, including British Columbia and Britain, have imposed a per-ton tax on emissions.
Exxon wants to capture carbon from industrial plants along the Houston Ship Channel and pipe it offshore where it would stored up to 6,000 feet below the Gulf of Mexico. The effort would be paid for by industry and the government, and would eventually store 100 million tons of carbon annually — equivalent to the emissions of 20 million cars, according to Exxon.
The company has discussed its idea with national and Texas policymakers and Republicans and Democrats in Congress, Exxon’s chief executive, Darren Woods, said in an interview. “They see the opportunity and appeal of this idea,” he said. “The question is, how do you translate the concept into practice?”
Exxon said its proposal complements President Biden’s climate efforts, but it would require the administration to embrace a price on carbon, something it has not done.
“The concept of a price on carbon is critical,” Mr. Woods said. “There has to be a way to incentivize the investment.”
Offshore storage has already gained traction in Europe, where governments have put carbon prices in place and lawmakers are more willing to spend taxpayer money to address climate change.
Mr. Woods said that, given the right policies, carbon capture projects could be a major business for Exxon around the world. “The potential for these markets is very, very large to the extent that demand continues to increase to decarbonize society,” he said.
European soccer fans are known for their intense passion for the sport. Now, they are aiming their ire at the American banking giant JPMorgan Chase for backing the so-called Super League.
“If your bank is @jpmorgan you simply have to move your money elsewhere,” one fan posted on Twitter. “Say NO to the #SuperLeague.”
A dozen top clubs from England, Italy and Spain shocked the soccer world with plans to form their own breakaway competition. The notion of a closed continental competition featuring a set group of teams has been explored before, but the seriousness of this proposal was underlined by more than $4 billion in financing from JPMorgan.
The bank’s role has made it a target for a storm of criticism. Soccer’s organizing bodies and domestic leagues, European heads of state, former players and supporter groups of the clubs involved were among those speaking out against the plan.
JPMorgan was a trending topic on Twitter, and the chatter wasn’t complimentary — though much of it wasn’t serious either.
“JP Morgan will regret setting up a #SuperLeague with my entire life savings,” one soccer fan wrote on Twitter. “Account is now closed and this £32.25 is going elsewhere!”
A theme of the ire from fans in Britain, in particular, was that the move represented another step in the foreign takeover of the game, especially by American interests. The Wall Street bank will lend to clubs controlled by American owners, like Arsenal, Liverpool and Manchester United — three of the six English clubs that are founding members of the proposed league.
The competition would largely do away with promotion and relegation based on performance, making it more like American sports leagues: With a U.S.-based bank in the background, it “smacks of the N.F.L. template,” said one British commentator.
That said, the prime mover behind the proposal isn’t an American but Florentino Pérez, the billionaire president of Real Madrid who has proposed a version of the Super League before, according to a person with knowledge of the matter who spoke on condition of anonymity. Mr. Pérez previously relied on JPMorgan to help finance a renovation of his club’s stadium.
The Super League’s backers have already filed motions in multiple courts to challenge any attempts to stop the project.
Other than its size, the actual financing of the league may not be overly complicated, because it is similar to debt raises arranged by American sports leagues, the person briefed on the matter said. The bank is probably betting that lending to a new competition featuring top soccer teams will prove lucrative — assuming it gets off the ground.
United Airlines said Monday that it lost nearly $1.4 billion in the first three months of the year, but added that a turnaround was close as bookings picked up.
The airline said it had stopped spending more money than it collected in March from operations, investing and financing activities — losses known as its “cash burn.” United also said it expected to turn a profit sometime this year despite the weakness in corporate and international travel, which has recovered to only about 35 percent of 2019 levels.
“We’ve shifted our focus to the next milestone on the horizon and now see a clear path to profitability,” Scott Kirby, United’s chief executive, said in a statement. “We’re encouraged by the strong evidence of pent-up demand for air travel and our continued ability to nimbly match it.”
The airline expects to offer about 45 percent fewer seats from April through June than it did over the same period in 2019, but the company expects revenue to be down only about 20 percent on a per-seat and per-mile basis.
After a merciless year, passengers started returning in greater, sustained numbers in early March. On Sunday, nearly 1.6 million people were screened at airport security checkpoints, according to Transportation Security Administration data. Over the past week, about two-thirds as many people were screened as there were in the same period in 2019.
In response, airlines are adding new routes and bringing back old ones ahead of what they hope will be a busy summer. United recently added more than two dozen flights starting Memorial Day weekend, connecting cities in the Midwest to tourist destinations such as Charleston, Hilton Head and Myrtle Beach in South Carolina. On Monday, the airline said it planned to add summer flights between the East Coast and Croatia, Greece and Iceland. United also announced this month that it was hiring pilots again.
Delta Air Lines reported a $1.2 billion quarterly loss last week, but said it was optimistic about the rest of the year. Its chief executive, Ed Bastian, said the airline could be profitable this summer. American Airlines and Southwest Airlines are expected to announce their first-quarter financial results on Thursday.
The American Airlines chief executive, Doug Parker, spoke to workers last week about his decision to publicly oppose restrictive voting legislation pending in Texas, saying that people of color feel “as though these laws are making it much harder for people like them to vote.”
Mr. Parker said in a meeting with employees that he wasn’t trying to take sides in a partisan dispute, but that for him, voting rights was “an equity issue,” according to a recording of the conversation obtained by View From the Wing, a travel industry blog.
American Airlines declined to comment on the recording.
The airline, which is based in Fort Worth, was among the first major companies to publicly oppose the voting legislation that Republicans were advancing in Texas. Just days after Georgia passed a voting law that would make it harder for some people to vote, the company came out against similar legislation pending in Texas, saying it was “strongly opposed to this bill and others like it.”
In the meeting with employees last week, Mr. Parker said he felt the company was going to have to weigh in on the issue. “I think there was virtually no chance we could stay out of it,” he said. “You have to take a stand on these things.”
He added that legislation that targets minority populations is bad for the economy, noting that when such laws pass, companies, sports leagues and entertainers sometimes take their business elsewhere.
“The more we divide ourselves, and the more divisive we become, the less likely it is that people are going to travel to states that take divisive stances, and that’s not good for us either,” Mr. Parker said.
Mr. Parker’s comments come as companies around the country are calibrating their opposition to restrictive voting laws being advanced by Republicans in almost every state. Hundreds of companies last week signed a letter opposing “discriminatory legislation.” Yet there is so far scant evidence that Republican lawmakers are reining in their efforts as a result of the corporate community’s outcry.
The Treasury Department is forming a new climate “hub” and has tapped a former Obama administration official to lead the agency’s effort to fuse climate and economic policy across President Biden’s agenda.
The move comes as the Biden administration is preparing to take new steps to address the financial risks associated with climate change. It is taking a series of executive actions that would affect mortgages, retirement funds, insurance companies and companies that do business with the federal government.
Treasury Secretary Janet L. Yellen said on Monday that she had hired John E. Morton to lead Treasury’s new climate office and to advise her on climate matters. Mr. Morton was senior director for energy and climate change on the National Security Council in the Obama administration and held senior roles at the Overseas Private Investment Corporation. He has been a partner most recently at the climate change advisory and investment firm Pollination.
In an interview with Yahoo Finance in January, Mr. Morton said that the response to climate change should be viewed as an economic opportunity and also made the case for some of the new financial risk disclosure requirements that Ms. Yellen and regulators were considering.
“The issue of climate risk disclosure within financial institutions is going to move from what is now a relatively voluntary haphazard set of coalitions to a more mandatory requirement in the years ahead,” Mr. Morton said. “And that from my perspective as a consumer is really good.”
Mr. Morton’s appointment was met with disappointment from some progressive groups. Public Citizen and Americans for Financial Reform, two left-leaning advocacy organizations, expressed concern that he lacked regulatory experience and suggested he might be too accommodating of big business.
“Mr. Morton should seek input and guidance on robust regulatory action from those groups most affected by the climate crisis and their allies, not Wall Street firms seeking to profit from the transition or to avoid addressing the roots of the problem,” they wrote in a joint statement on Monday.
Ms. Yellen said on Monday that the consequences of climate change were “steep” and that addressing it would be a top priority for Treasury.
“Climate change requires economywide investments by industry and government as well as actions to measure and mitigate climate-related risks to households, businesses and our financial sector,” Ms. Yellen said in a statement. “Finance and financial incentives will play a crucial role in addressing the climate crisis at home and abroad and in providing capital for opportunities to transform the economy.”
The Treasury Department is currently focused on climate-related financial risks and how to use the corporate tax system to combat climate change.
A dozen of Europe’s top soccer clubs announced plans to create a new league that would rival the longstanding Champions League, The New York Times’s Tariq Panja reports. The plan would concentrate the sport’s wealth with just a handful of teams — if it survives potential legal challenges.
The Super League, as it is known, was hatched in secrecy over several months. Among the founding clubs are Arsenal, Liverpool and Manchester United of England; Real Madrid and Barcelona of Spain; and AC Milan and Juventus of Italy. More teams are expected to round out the league’s 15 slots for founding, permanent members.
The idea is for the league to hold exclusive midweek matches in between domestic league matches. The largely closed league would operate more like the N.F.L. or the N.B.A., doing away with a new set of teams appearing in the tournament each year, based on their domestic league performance. Five spots in the 20-team league would be filled by an annual qualifying mechanism.
Big money is at stake: The Super League’s founding clubs would split 3.5 billion euros, or more than $4 billion, as part of its formation. That implies that they would make far more than what the Champions League winner took home last year.
JPMorgan Chase, which has lent money in the past to several of the clubs, is leading financing to support the league’s formation, starting with an initial $4 billion in debt, according to a person briefed on the matter who spoke on condition of anonymity. That debt would be paid back over 23 years and carry an interest rate of 2 percent to 3 percent.
The share prices of publicly traded clubs, like Juventus and Manchester United, jumped more than 10 percent in early trading.
The news spurred an outcry from the establishment. The organizer of the Champions League, UEFA, criticized the proposal as a “cynical project” and has been exploring ways to block it. The governing body of European soccer also noted that FIFA, the global soccer governing body, has threatened to expel players who participate in unsanctioned leagues from tournaments like the World Cup.
Political leaders like Prime Minister Boris Johnson of Britain and President Emmanuel Macron of France are also opposed to the Super League.
But the organization behind the Super League said on Monday that it had taken legal action to counter any efforts to block the project’s formation — though it also said it wanted to work with existing soccer organizations.
The British government and Bank of England will look into creating a central bank digital currency, the two institutions announced on Monday, the latest in a string of initiatives the government is taking to try to ensure Britain holds on to its position as a leading destination for financial services.
A task force will explore the uses and risks of a digital currency, the Bank of England and Treasury said. They haven’t made a decision on whether to introduce one.
But the move will let Britain catch up with other central banks. The Federal Reserve and the European Central Bank have already started researching a digital dollar and a digital euro.
Rishi Sunak, Britain’s top finance official, also said on Monday that the Treasury would make changes to the financial technology industry and public listings process based on the recommendations of two recent reviews. The changes are intended to make it more appealing for tech companies to go public in London instead of New York, and let founders retain more control of their companies when they do. There will be more regulatory help for growing fintech companies and those experimenting with distributed ledger technology like blockchain.
Since Britain left the European Union on Dec. 31, some trading in shares and derivatives has moved from London to other financial centers, and the financial industry is wondering what will go next. The government has sought to reestablish the City of London’s reputation as a financial hub. Sweeping reviews and consultations have been introduced in a range of areas, from capital markets to making finance more green.
A report by New Financial, a London-based research firm, found that more than 440 companies had moved or are planning to move staff, assets or other business out of London because of Brexit. “While this is higher than previous estimates, it underestimates the real picture,” the report published on Friday said.
Bank assets worth more than 900 billion pounds, or $1.3 trillion, about 10 percent of the total assets in Britain’s banking system, have been moved or are being moved, the report said. Its authors, Eivind Friis Hamre and William Wright, wrote that these numbers might be smaller than the reality because their analysis might have missed banks and assets managers already based in the European Union. And fewer European firms than previously expected will open an office in Britain.
“Over time we expect there to be a drip-feed of business and activity from the U.K. to the E.U.,” the report said. It recommended that the city consider the Brexit losses as unrecoverable, and set its sights on opportunities further afield.
By: Ella Koeze·Data delayed at least 15 minutes·Source: FactSet
Stocks on Wall Street dropped from record highs on Monday, the start of a week in which hundreds of public companies including Coca-Cola, Netflix and United Airlines will report earnings.
The S&P 500 fell half a percent, retracing part of last week’s gain that had lifted it to a new high. The Nasdaq composite dropped 1 percent.
Tesla fell more than 3 percent, a day after authorities in Texas said a Tesla car without anyone behind the wheel was involved in an crash that left two men dead. The police investigating the accident said they “believe no one was driving the vehicle at the time of the crash.”
Peloton shares dropped more than 7 percent after the Consumer Product Safety Commission issued an “urgent warning” about the exercise equipment company’s treadmill. The agency said users with small children at home should stop using the machine after reports of injuries and one fatality.
GameStop rose more than 6 percent as the video game retailer announced that its chief executive would be stepping down by the end of July. The company, which was at the center of a retail trading frenzy earlier this year, has been shaken up by the incoming chairman, Ryan Cohen, who is an activist investor in the company pushing for a digital turnaround.
Our roads are dangerous, particularly for pedestrians. Today in the On Tech newsletter, Shira Ovide explores whether having more technology to enforce traffic laws might help — or whether it would make things worse.
The union that was soundly defeated in its efforts to organize an Amazon warehouse in Alabama is seeking to overturn the results of the election, accusing the company of corrupting the voting process by intimidating and surveilling workers.
On Monday, the Retail, Wholesale and Department Store Union filed objections to the election with the National Labor Relations Board, which oversaw the voting-by-mail process last month.
The union lost its bid to organize the warehouse by a more than 2-to-1 ratio. Many workers said that the union had failed to persuade them of the benefits of organizing and that they were largely satisfied with the pay, benefits and working conditions at Amazon.
In a statement on Monday, Amazon said: “Rather than accepting these employees’ choice, the union seems determined to continue misrepresenting the facts in order to drive its own agenda. We look forward to the next steps in the legal process.”
At the heart of the union’s complaint is a mailbox that Amazon installed in the warehouse parking lot where workers could drop off their ballots. The union said Amazon had brought in the collection box without approval from the labor board. The company also used video cameras that could monitor the workers who dropped off their ballots there and encouraged them to drop the ballots in the box rather than mail them from home, the union said.
The union said these actions by Amazon had “created the impression that the collection box was a polling location and that the employer had control over the conduct of the mail ballot election.”
The union also accused Amazon of other tactics that may have intimidated workers, such as hiring local police to patrol the parking lot area while organizers were outside and pulling possibly pro-union workers out of “captive audience” meetings that the company held to address the organizing drive among the staff.
The company “would request the employee to come forward, have them identified and then removed from the meeting in the presence of hundreds of other employees, thereby interfering with and/or chilling the right of employees to freely discuss issues related to the union organizing campaign,’’ the union said in its filing with the labor board.
The union has asked the labor board to hold a hearing on its petition to set aside the results. If the union is successful with its legal challenges, the labor board could order that another election be held.
The country’s largest mine workers union signaled on Monday that it would accept a transition away from fossil fuels in exchange for new jobs in renewable energy, spending on technology to make coal cleaner and financial aid for miners who lose their jobs.
“There needs to be a tremendous investment here,” Cecil E. Roberts, the president of the United Mine Workers of America, said in an interview. “We always end up dealing with climate change, closing down coal mines. We never get to the second piece of it.”
The mine workers’ plan, which Mr. Roberts is presenting at an event with Senator Joe Manchin, Democrat of West Virginia, calls for the creation of new jobs in Appalachia through tax credits that would subsidize the making of solar panel and wind turbine components, and by funding the reclamation of abandoned mines that pose a risk to public health.
The mine workers are also calling for spending on research on carbon capture and storage technology, which would allow coal-fired plants to store carbon dioxide underground rather than release it into the atmosphere, and for policies that allow coal plants to remain open if they commit to installing the technology.
The union wants the federal government to support miners who lose their jobs through retraining and by replacing their wages, health insurance and pensions.
Many of these proposals appear in President Biden’s $2.3 trillion jobs and infrastructure plan, including funding for research into carbon capture, which critics deride as prohibitively expensive, and money for reclaiming mines.
“Change is coming, whether we seek it or not,” stated a document that the mine workers union released on Monday, titled “Preserving Coal Country.” It notes that employment in the coal industry had dropped to about 44,000 as of last December, down from 92,000 at the end of 2011.
Mr. Roberts said the union would resist any climate legislation that did not help ensure a livelihood for its members.
“We’re on the side of job creation, of a future for our people,” he said. “If that isn’t part of the conversation at the end of the day, we’ll be hard pressed to be supportive.”
Journalists at Insider, the news site formerly called Business Insider, said on Monday that they had formed a union, joining a wave that has swept digital media companies.
A majority of more than 300 editorial workers, a group that includes reporters, editors and video journalists, voted in support, union representatives said.
Insider, which changed its name this year, was co-founded by Henry Blodget in 2007 as a business-focused publication with an emphasis on the tech industry. In recent years, it has expanded its areas of coverage.
Axel Springer, a digital publishing company based in Berlin, paid $343 million for a 97 percent stake in the company in 2015 and bought the remaining 3 percent in 2018. Mr. Blodget stayed on as chief executive. Insider, which has grown during the pandemic, bumped up the minimum annual salary for staff members to $60,000 in February.
The Insider Union is asking the company for voluntary recognition. It is represented by the NewsGuild of New York, which also represents editorial employees at The New York Times and other publications.
“I’ve seen how we’ve moved from the start-up energy of a young company into a much larger, much more formal corporation,” said Kim Renfro, an entertainment correspondent who has worked at Insider since 2014. “I see the union as being a natural part of that progress.”
William Antonelli, an editor at Insider, said the union would focus on diversity and inclusion, pay equity, and more transparency on how company executives rate employees.
Nicholas Carlson, Insider’s global editor in chief, said in a statement: “The satisfaction, job security and happiness of our journalists is extremely important to us. We will fully respect whatever decision our newsroom ultimately makes.”
The formation of a union at Insider followed organizing efforts at BuzzFeed News, Vice, The New Yorker and Vox Media. Last week, a group of more than 650 tech workers at The Times formed a union.
Gary Gensler, the new chair of the Securities and Exchange Commission, was sworn in on Saturday. That makes Monday the first day on the job for the former M.I.T. professor, commodities regulator and Goldman Sachs banker.
“Every day I will be animated by our mission: protecting investors, facilitating capital formation, and promoting fair, orderly, and efficient markets,” Mr. Gensler said in a statement. He didn’t offer specifics, but the S.E.C.’s recent activities suggest three major priorities, the DealBook newsletter reports.
The S.E.C. has increased its focus on environmental, social and governance issues. It is responding to the increase in investor demand for company disclosures on things like climate-related risks, board and leadership diversity and political donations. Most recently, it issued a risk alert about the “lack of standardized and precise” definitions of E.S.G. products and services. At his Senate confirmation hearing, Mr. Gensler appeared inclined toward more expansive disclosures, noting that “it’s the investor community that gets to decide” what is material.
Special purpose acquisition companies, or SPACs, have been proliferating, raising many regulatory concerns. These include “risks from fees, conflicts, and sponsor compensation, from celebrity sponsorship and the potential for retail participation drawn by baseless hype, and the sheer amount of capital pouring into the SPACs,” John Coates, the acting director of the S.E.C.’s corporate finance division, said in a statement. Given Mr. Gensler’s strong enforcement credentials, many predict more scrutiny of SPACs in the months ahead.
The mainstreaming of cryptocurrency is something Mr. Gensler will also have to address. He was confirmed on the day that the crypto exchange Coinbase went public, signaling a new era of legitimacy at a time when crypto rules are in flux. Blockchain executives and their growing lobby said that they welcomed working with Mr. Gensler, who is more versed in financial technology than most other policymakers. Clarity on when a digital asset qualifies as a commodity or a security tops Coinbase’s wish list, according to its chief counsel, Paul Grewal: He’s “hopeful” about Mr. Gensler’s tenure, noting that he will be informed and engaged on crypto issues, “even if we won’t always agree.”
After the Jan. 6 riot at the Capitol, scores of companies vowed to pause their political donations. Some stopped giving to all politicians, while others shunned only those 147 Republicans who had voted to overturn the presidential election results. A recent deadline for candidates to release fund-raising details for the first quarter revealed more details about how corporate giving has changed.
Companies largely kept their word, the DealBook newsletter reports. Only a handful of corporate political action committees gave to the Republican objectors in the first three months of the year. The House minority leader, Kevin McCarthy, recorded two PAC donations, from the California Beet Growers Association and the National Federation of Independent Business. Mr. McCarthy had more than 100 donations from business groups in the same period in 2017.
Some companies took the view that not all of the 147 lawmakers are the same, a stance adopted by the U.S. Chamber of Commerce.
Toyota gave to more than a dozen of the Republicans who voted against certifying the election results. A company spokesman said in a statement that Toyota “does not believe it is appropriate to judge members of Congress solely based on their votes on the electoral certification.” The company decided against giving to unspecified others, who, “through their statements and actions, undermine the legitimacy of our elections and institutions.” After the Capitol riot, the company said it would assess its “future PAC criteria,” a more vague pledge than those of many other companies.
Cigna gave to Byron Donalds of Florida, Tom Rice of South Carolina and other House members after it said in January that it would “discontinue support of any elected official who encouraged or supported violence, or otherwise hindered the peaceful transition of power.” A spokeswoman for the insurer said that congressional votes were, “by definition, part of the peaceful transition of power,” and that its cutoff of donations “applies to those who incited violence or actively sought to obstruct the peaceful transition of power through words and other efforts.”
Lawmakers at the forefront of the push to overturn the election raked in cash from other sources. Senators Josh Hawley of Missouri and Ted Cruz of Texas each brought in more than $3 million for the quarter, tapping into the outrage of their individual supporters. Representative Marjorie Taylor Greene of Georgia similarly raised $3.2 million, more than nearly every member of House leadership.
The financial haul for those with the loudest and most extreme voices, against the backdrop of the corporate pullback, highlights a potential shift in the Republican Party’s longtime coziness with corporate America. It also raises questions about the ability of big business to influence policy, as pressure builds on companies to weigh in on hot-button issues like restrictions on voting.
The Dutch bank ABN Amro said Monday that it would pay a $580 million fine to settle money-laundering charges, prompting a former ABN manager to resign from his new job as chief executive of Danske Bank after acknowledging he was a target in a related criminal investigation.
The resignation of Chris Vogelzang is an embarrassment for Danske Bank, Denmark’s largest bank, which hired him in 2019 to rebuild trust after a money-laundering scandal there. Before becoming chief executive of Danske, Mr. Vogelzang was a member of the management board of ABN Amro responsible for retail and private banking services.
Mr. Vogelzang acknowledged that Dutch authorities considered him a suspect in the investigation that led ABN Amro to agree to pay 480 million euros to settle money-laundering charges. In numerous cases, according to a report by Dutch authorities, ABN Amro ignored warning signs that some clients were criminals using it as a conduit for dirty money.
Mr. Vogelzang said in a statement that he was “surprised” to learn that Dutch authorities considered him a suspect. During his time at ABN Amro, he said, “I managed my management responsibilities with integrity and dedication.”
Noting that Danske Bank remains under “intense scrutiny” because of money laundering at its former unit in Estonia, Mr. Vogelzang said he did “not want speculations about my person to get in the way of the continued development of Danske Bank.”
Danske named Carsten Egeriis, previously the bank’s chief risk officer, to succeed Mr. Vogelzang.
Gerrit Zalm, a member of Danske’s board who was chief executive of ABN Amro from 2009 to 2017, will also resign, the bank said. It did not give a reason.
Danske Bank admitted in 2018 that its headquarters and its Estonian branch, which it has since closed, failed for years to prevent suspected money laundering involving thousands of customers.
In the ABN Amro case, Dutch authorities found that the bank had failed to act on obvious signs of illicit activity, including large cash transactions. In several cases, authorities said, the bank continued to serve clients whose criminal activities had been reported by the media, or who had a known history of fraud.
“As a bank we do not merely have a legal but also a moral duty to do our utmost to protect the financial system against abuse by criminals,” Robert Swaak, the ABN Amro chief executive, said in a statement. “Regretfully, I have to acknowledge that in the past we have been insufficiently successful in properly fulfilling our important role as gatekeeper.”
First-quarter earnings season picks up steam this week, with analysts expecting that profits for S&P 500 companies rose roughly 27 percent in the three months through March, compared with a year earlier, when the pandemic sent corporate earnings into a tailspin.
Companies such as Netflix, AT&T and American Express are all slated to issue results this week, offering a relatively well-rounded look at the state of corporate America in the early days of what could be a powerful year for the U.S. economy. It might also help set expectations for the stock market, after a big rally already this year.
The consensus among 76 economists polled by Bloomberg is that gross domestic product will expand 6.2 percent in 2021, which would make it the best year for economic growth since 1984. And sentiment among analysts covering the stock market is almost universally bullish, given that strong economic tailwind.
“You’d almost have to be self-deceiving to expect U.S. companies over all to underperform consensus, given how the macro backdrop is driving revenues so well,” wrote John Vail, chief global strategist at Nikko Asset Management.
The expectations for profit growth are even more elevated for the current quarter: Analysts expect that in the three months that end in June, companies in the S&P 500 will notch a 54-percent rise in profits, compared with a year ago.
That increase, of course, reflects a rebound from the worst of the pandemic-bred downturn. But it also is a result of “economic re-acceleration, and a rebound in commodity prices,” said Jonathan Golub, a stock market analyst at Credit Suisse.
Of course, if everyone is expecting such a surge in profits, the good news could already be fully incorporated into stock prices — and that means anything short of perfect results would make for a difficult stretch for stocks.
That has certainly been the case with some of the banks that reported earnings last week. Shares of Morgan Stanley, for example, dropped on Friday even though the bank reported record revenue and profit. On Monday, investors greeted better-than-expected results from warehouse company Prologis the same way.
The S&P 500 is already up nearly 11 percent in 2021, and climbed to yet another record high on Friday.
That could mean the market is due for a pullback anyway. The index is relatively expensive by metrics such as the price-to-earnings ratio, which compares stock prices as a share of expected corporate profits over the next 12 months.
The S&P 500 is trading at nearly 23 times expected earnings. That’s roughly the valuation the index has held for most of the past year, but it’s very high by historical standards.
Over the last 20 years, the S&P 500 has traded at an average of 16 times expected earnings.
By comparison, a valuation of 23 times expected earnings is closer to where stock market valuations stood at the tail end of the dot-com bubble of the late 1990s. When that ended, the S&P 500 fell roughly 50 percent before it hit bottom.
Members of the National Association of Realtors — the nation’s largest industry group, numbering 1.4 million real estate professionals — are challenging a moratorium on evictions put in place by the Centers for Disease Control and Prevention.
Both the Alabama and the Georgia Associations of Realtors sued the federal government over the matter, and the national association is paying for all of the legal costs. A hearing is scheduled for April 29, Ron Lieber reports for The New York Times.
The N.A.R. spends more money on federal lobbying than any other entity, according to the Center for Responsive for Politics. To puzzle out its actions and advocacy, let’s first be crystal clear about what the N.A.R. is and whose interests it serves. As its own chief executive boasted to members in 2017, it’s really the National Association for Realtors, not of them.
And of those million-plus members, according to the association, about 38 percent own at least one rental property. The N.A.R. isn’t shy about this, stating on the lobbying section of its website that it wants to “protect property interests.”
Why would it do this? The N.A.R. expert on the topic was unable to schedule a phone call, according to a spokesman.
But if you’re selecting a listing agent for your house from among their members, ask that person about this issue if you’re curious or concerned. Many of them have no idea what the N.A.R. is advocating on their behalf.
Here come the lobbyists.
The cryptocurrency exchange Coinbase, the asset manager Fidelity, the payments company Square and the investment firm Paradigm have established a new trade group in Washington: The Crypto Council for Innovation. The group hopes to influence policies that will be critical for expanding the use of cryptocurrencies in conjunction with traditional finance, Ephrat Livni reports in the DealBook newsletter.
Cryptocurrencies are still mostly held as speculative assets, but some experts believe Bitcoin and related blockchain technologies will become fundamental parts of the financial system, and the success of businesses built around the technology may also invite more attention from regulators.
“We’re going to increasingly be having scrutiny about what we’re doing,” Brian Armstrong, Coinbase’s chief executive, said on CNBC. “We’re very excited and happy to play by the rules,” he added, but regulation of crypto should be on a “level playing field with traditional financial services.”
Here are four of the issues that will keep crypto lobbyists busy:
The Crypto Council’s first commissioned publication is an analysis of Bitcoin’s illicit use, and it concludes that concerns are “significantly overstated” and that blockchain technology could be better used by law enforcement to stop crime and collect intelligence.
New anti-money-laundering rules passed this year will significantly expand disclosures for digital currencies. The Treasury Department has also proposed rules that would require detailed reporting for transactions over $3,000 involving “unhosted wallets,” or digital wallets that are not associated with a third-party financial institution, and require institutions handling cryptocurrencies to process more data.
When is a digital asset a security and when is it a commodity? Bitcoin and other cryptocurrencies that are released via a decentralized network generally qualify as commodities and are less heavily regulated than securities, which represent a stake in a venture. Tokens released by people and companies are more likely to be characterized as securities because they more often represent a stake in the issuer’s project.
The Chinese government is already experimenting with a central bank digital currency, a digital yuan. China would be the first country to create a virtual currency, but many are considering it. Some crypto advocates worry that China’s alacrity in the space threatens the dollar, national security and American competitiveness.
More people are flying every day, as Covid restrictions ease and vaccinations accelerate. But dangerous variants have led to new outbreaks, raising fears of a deadly prolonging of the pandemic.
To understand how safe it is to fly now, The Times enlisted researchers to simulate how air particles flow within the cabin of an airplane, and how potential viral elements may pose a risk.
For instance, when a passenger sneezes, air blown from the sides pushes particles toward the aisle, where they combine with air from the opposite row. Not all particles are the same size, and most don’t contain infectious viral matter. But if passengers nearby weren’t wearing masks, even briefly to eat a snack, the sneezed air could increase their chances of inhaling viral particles.
How air flows in planes is not the only part of the safety equation, according to infectious-disease experts. The potential for exposure may be just as high, if not higher, when people are in the terminal, sitting in airport restaurants and bars or going through the security line.
“The challenge isn’t just on a plane,” said Saskia Popescu, an epidemiologist specializing in infection prevention. “Consider the airport and the whole journey.”