CRIMINAL CAPITALISM 

German prosecutors appeal for public help in tracing Wirecard boss


FILE PHOTO: The headquarters of Wirecard AG, an independent provider of outsourcing and white label solutions for electronic payment transactions is seen in Aschheim near Munich, Germany, July 22, 2020. REUTERS/Michael Dalder

BERLIN (Reuters) - German prosecutors appealed on television on Wednesday for help in tracking down Jan Marsalek, a former boss of collapsed payments company Wirecard, and issued a wanted notice for a manager they suspect of embezzling billions of euros.

Charges were first brought against Marsalek in June 22, and his status as a suspect was widely known, but under Germany’s extremely strict privacy laws, formally announcing he is a suspect and soliciting public help is a major step. Prosecutors said they believed he was outside Germany.

Munich-based Wirecard collapsed in June after auditors EY refused to sign off on its 2019 accounts because it could not verify 1.9 billion euros (£1.46 billion) supposedly held abroad in escrow by third-party partners.

The company subsequently filed for insolvency owing debts of 3.2 billion euros. Three former top managers have been arrested on suspicion of fraud and racketeering in Germany’s biggest accounting scandal.

The wanted notice, issued in English and German versions and illustrated with two pictures of the 40-year-old Austrian, one from 2017 in which he sports a beard, and one from last year in which he is cleanshaven, is headlined “Fraud in the billions”.

“Jan MARSALEK, ex board member of Wirecard AG, is strongly suspected of having committed billions in commercial gang fraud, the particularly serious case of embezzlement and other property and economic offences,” the notice issued jointly by Munich prosecutors and federal police reads. “He is currently on the run.”

The collapse of the financial technology company was widely seen as an embarrassment for German regulators, who for years ignored warnings from investigative journalists and market sceptics that Wirecard was inflating revenues and profit.

Former chief executive Markus Braun and former finance head Burkhard Ley have been in detention since July 22. They too are suspected of involvement in the alleged fraud.

Reporting by Thomas Escritt; editing by Grant McCool


Deutsche Boerse expels Wirecard from Germany's blue-chip index DAX

Ludwig Burger


FILE PHOTO: The logo of Wirecard AG, an independent provider of outsourcing and white label solutions for electronic payment transactions, is pictured at its headquarters in Aschheim near Munich, Germany, July 1, 2020. REUTERS/Andreas Gebert/File Photo

FRANKFURT (Reuters) - Exchange operator Deutsche Boerse (DB1Gn.DE) will remove Wirecard (WDIG.DE), the payments company that folded after an accounting scandal, from the DAX index of Germany’s leading blue-chip stocks this month following an index rule change.

The exchange operator on Wednesday said it had opted for new rules - which were proposed last month - to allow for a DAX removal within two days in the case of an insolvency.

It said the new composition of the DAX would be published on Aug. 19 at 2000 GMT and take effect after market close on Aug. 21, effectively making it Wirecard’s last day in the index.

A regular review of the index makeup would have taken until September.

In 2018 Wirecard, at the time a rising technology star, was promoted to the DAX index of 30 leading companies, displacing Commerzbank (CBKG.DE).

But in a dramatic fall from grace, it filed for insolvency in June after disclosing a 1.9 billion euro hole in its accounts that auditor EY said stemmed from a sophisticated global fraud.

German prosecutors on Wednesday issued a wanted notice and appealed on television for help in tracking down Jan Marsalek, the former head of operations at Wirecard, for suspected embezzlement.

Additional reporting by Hans Seidenstuecker; editing by Richard Pullin

German prosecutors probe possible death of suspended VW employee

FRANKFURT (Reuters) - Prosecutors in Braunschweig, Germany, on Wednesday said they were investigating the death of a man found in a burned-out car on Monday to determine whether there were any links to a dispute between Volkswagen (VOWG_p.DE) and Bosnian supplier group Prevent.

A body was found in a field in Lower Saxony on Monday, a spokeswoman for the Braunschweig prosecutor’s office said on Wednesday.

Local newspaper Helmstedter Nachrichten, citing sources, said the dead person was a Volkswagen employee who had done business with the Bosnian supplier group, who was also being probed for potentially illegal recordings of conversations.

A spokesman for police in Wolfsburg, Lower Saxony, Germany, where Volkswagen is based, confirmed a body had been found in Rottorf, Helmstedt, but referred further queries to the Braunschweig prosecutor’s office.

The Braunschweig prosecutor’s office declined to comment on whether the dead person was a Volkswagen employee, adding that it had not yet been possible to formally confirm the identity of the deceased.

The Braunschweig prosecutor’s office however said its staff were now looking at whether the death was linked to the staffer at the centre of the VW eavesdropping probe, and whether there were links to an arson attack on the VW staff member’s house in May.


Preliminary findings by forensic staff, who examined the body on Tuesday, had shown no obvious signs of “outside interference” which may have caused the death, the prosecutor’s office said.

Volkswagen on Wednesday said it would be inappropriate to speculate on the matter given that the carmaker had not received official notification about a possible death of one of its employees, and could not comment on an ongoing investigation.

Volkswagen earlier this month said one of its employees had been suspended pending the outcome of an investigation into eavesdropping.

Volkswagen and the Bosnian supplier group fell out in 2016 in a disagreement over pricing, prompting Car Trim and ES Automobilguss, both part of Bosnia’s Prevent Group, to halt deliveries of seat covers and cast iron parts for gear boxes, causing production losses at six of VW’s factories.

VW and Prevent have since been involved in claims and counterclaims for damages caused by the dispute.

A spokesman for Prevent Group on Wednesday declined to comment on the death. “It is a tragic event. There is nothing more to be said about it,” he said.

Discovery of Black Nitrogen Resolves A Longstanding Chemical Anomaly



TO MAKE BLACK NITROGEN THE GAS MUST BE SQUEEZED BY IMMENSE PRESSURES PROVIDED BY A DIAMOND ANVIL. CHRISTIAN WISSLE

By Stephen Luntz03 JUN 2020, 12:07

Scientists have succeeded in making what they call “black nitrogen” an allotrope (form) expected to exist based on observations of comparable elements, but which had stubbornly eluded them for decades.

The periodic table was essential to chemistry becoming a true science, based on grouping elements that behave in a similar manner into columns so that their behavior could be predicted. It was a long time before we discovered the reason for these similarities – that electrons orbit in “shells” and each element in a column has an outermost shell with the same number of electrons, with each row representing an additional shell.

As technology advanced, chemists observed the similarities are even greater than they first appear. For example, when placed under great pressure elements near the top of the table take on similar structures to those further down their column under more normal conditions. The sole exception to this has been nitrogen, which stubbornly refused to mimic phosphorus no matter how much pressure was applied. A paper in Physical Review Letters changes that, describing a crystalline state of nitrogen that resembles black phosphorus.

Nitrogen's column in the periodic table and those on either side, superimposed on a schematic of black nitrogen's wavy structure. Dominique Laniel

Phosphorus is a versatile element most commonly found in two major forms, red and highly volatile white allotropes. When heated under pressure, however, white phosphorus converts to the most stable structure, known as black phosphorus, whose sheets of zigzagging atoms bears some resemblance to graphite. Further down the table arsenic and antimony can take similar forms.

Dr Dominique Laniel of the University of Bayreuth applied 1.4 million atmospheres of pressure to nitrogen while heating it to 4,000ºC (7,200ºF) – vastly greater temperatures and pressures than are needed to transform phosphorus. Such conditions don't lend themselves to the easy study of a sample, but Laniel and co-authors bombarded the product with X-rays to learn its structure.

"We were surprised and intrigued by the measurement data suddenly providing us with a structure characteristic of black phosphorus,” Laniel said in a statement. “Further experiments and calculations have since confirmed this finding. This means there is no doubt about it: Nitrogen is, in fact, not an exceptional element, but follows the same golden rule of the periodic table as carbon and oxygen do."

Although nitrogen is in plentiful supply, the conditions required to turn it to black are so extreme the new allotrope is unlikely to be of any direct use. However, the study of new elemental forms can often improve our understanding of those they most resemble. In this light, the similarity of black nitrogen’s two-dimensional layers to wonder-material graphene could yield some value.

IT ALSO GIVES GREATER VALIDITY TO THE RUSSIAN THEORY OF ABIOGENIC HYDROCARBONS

Might The Humble House Brick Be The Battery Of The Future?

CHEMISTRY
THE CHEMICAL COMPOSITION AND POROUS STRUCTURE MAKES RED BRICKS WELL SUITED TO BEING TURNED INTO SUPERCAPACITORS THAT CAN STORE ELECTRICITY FROM INTERMITTENT ENERGY SOURCES FOR STILL NIGHTS. D'ARCY LABORATORY, DEPARTMENT OF CHEMISTRY, WASHINGTON UNIVERSITY IN ST. LOUIS


By Stephen Luntz11 AUG 2020, 18:39

Storing energy is among the world's greatest challenges, leading to an array of new technologies proposed as the solution. Perhaps the most surprising is to turn the bricks from which our houses are made into energy storage devices, holding onto electricity for use when we can't tap the wind or sun.

There is an easy way to turn a brick, or any other heavy object for that matter, into a store of energy – simply raise it up in a gravitational field and then use the work it does as it falls to power a generator. Architects also make great use of bricks' thermal capacity to hold onto the day's heat for nighttime warmth. However, Dr Julio D'Arcy of Washington University, St Louis, has something more exotic in mind.

D'Arcy noted bricks are usually red or light brown, a color given to them by hematite, a pigment humans have been using for at least 73,000 years. Having worked on the chemistry of rust, D'Arcy and colleagues were aware hematite can serve as an electrode, and the porous microstructure of bricks makes them well-suited to the task.

D'Arcy permeated two vapors through this porous structure. Encountering the hematite caused the vapors to form a polymer called PEDOT on deposition. In the process, D'Arcy turned an 8-percent hematite brick into a supercapacitor capable of storing charge and releasing it when needed.

In Nature Communications, D'Arcy reports the product is as stable as bricks and mortar, surviving 10,000 cycles of charge and discharge with 90 percent efficiency and unaffected by rain or temperature. We've all had the experience of a piece of fancy electrical equipment turn into a brick – who knew the opposite was also true?

D'Arcy's bricks can't remotely compete on energy density with lithium-ion batteries, so we certainly shouldn't expect them to be powering the cars of the future, let alone airplanes. So far, all D'Arcy has done with the stored energy is light a single LED for five minutes with three bricks.

On the other hand, the materials are certainly cheap, abundant, and able to serve their normal purpose while also storing electricity. D'Arcy foresees 50 bricks providing five hours of emergency lighting after being charged during the day by solar panels.

"Our method works with regular brick or recycled bricks, and we can make our own bricks as well," D'Arcy said in a statement, adding that the off the shelf bricks were bought for 65 cents each.

For PEDOT-layered bricks to become a widespread method of bulk energy storage, they will have to out-perform traditional batteries, newer flow battery systems, pumped hydro, compressed air, concrete-stacking cranes, and many other options. However, with many of these being limited in the locations where they can be applied, D'Arcy's idea may be another brick in the wall to protect the world we love from climate change's rising tide.

Pro-democracy media tycoon Jimmy Lai freed on bail amid Hong Kong crackdown

Hong Kong media tycoon and newspaper founder Jimmy Lai walks out from a police station after being bailed out on Wednesday. | AP

AFP-JIJI
AUG 12, 2020

HONG KONG – Hong Kong pro-democracy media mogul Jimmy Lai walked free on bail Wednesday, over 40 hours after he and other critics of China were rounded up by police as part of a widening crackdown on dissent.

When Lai left a police station he was swarmed by a crowd of journalists and cheering supporters, some of whom waved copies of his Apple Daily in a show of their backing.

A clampdown has gathered pace in Hong Kong since China imposed a sweeping security law in June, with opposition politicians disqualified and activists arrested for social media posts.

The moves have provoked outrage in the West and fear for millions who last year took to the streets to protest communist China’s tightening grip on the semi-autonomous city.

In one of the most dramatic days of the crackdown, Lai was among 10 people detained under the new law on Monday as around 200 police officers searched the newsroom of his tabloid, which is unapologetically critical of Beijing.

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Lai did not address the crowd upon his release, but he flashed a thumbs up as he was bundled into a car that inched away through the crowd.

In a display of solidarity for Lai, people in the city rushed to buy Tuesday’s Apple Daily, with the newspaper saying it had upped its print run to 550,000 from the normal circulation of 70,000.

One restaurant owner bought 50 copies at a newsstand in the commercial district of Mong Kok and said he planned to give them away free of charge.

Jimmy Lai sits in a car as he leaves a police station after being bailed out in Hong Kong on Wednesday. | AP

“Since the government doesn’t allow Apple Daily to survive, then we as Hong Kongers have to save it ourselves,” said the man, who gave his surname as Ng, as dozens of people lined up around the city from the early hours.

The newspaper’s front page showed a picture of Lai being led away in handcuffs, with the headline “Apple will fight on.”

Lai’s arrest sparked a buying spree in shares of his media group, and between Monday morning and closing time on Tuesday its stock value had risen by more than 1,100 percent.

Hong Kong’s new national security law criminalizes secession, subversion, terrorism and colluding with foreign forces.

The most serious crimes under the law — which was introduced on June 30 and is not supposed to be retroactive — carry up to life in jail.

Its broadly worded provisions criminalized certain political speech overnight, such as advocating sanctions, and greater autonomy or independence for Hong Kong.

Similar laws are used on the authoritarian mainland to snuff out opposition.

Lai, 71, was held on charges including colluding with foreign forces and fraud. The operation was hailed by Beijing, quick to declare him an “anti-China rabble-rouser” who conspired with foreigners to “stir up chaos.”

Among the others arrested were two of Lai’s sons, young pro-democracy activist Agnes Chow and Wilson Li, a former activist who works as a freelancer for Britain’s ITV News.

Chow was released on bail late Tuesday.

“It’s very obvious that the regime and the government are using the national security law to suppress political dissidents,” she told reporters after her release.

Supporters of Hong Kong media tycoon Jimmy Lai hold the copies of Apple Daily newspaper as Lai leaves a police station Wednesday. | AP

Critics believe the security law has ended the key liberties and autonomy that Beijing promised Hong Kong could keep after its 1997 handover by Britain.

U.S. Secretary of State Mike Pompeo described Lai’s arrest as “further proof” that Chinese authorities had “eviscerated Hong Kong’s freedoms and eroded the rights of its people.”

“We’re going to respond in real ways,” Pompeo later promised in an interview with Newsmax.

The United States has already imposed sanctions on a group of Chinese and Hong Kong officials — including city leader Carrie Lam — in response to the crackdown.

Hong Kong’s police said those arrested were part of a group that had previously lobbied for foreign sanctions.

In response to objections made by Hong Kong’s Foreign Correspondents’ Club to the arrests, the Chinese foreign ministry warned that “eagerly justifying Jimmy Lai is nothing short of siding with the forces sowing trouble in Hong Kong and China at large.”

“We call on the FCC, Hong Kong to respect the facts, distinguish right from wrong, and stop smearing under the pretext of press freedom the implementation of the National Security Law,” it said.

DEMOCRATIC SOCIALISTS OF AMERICA

THE FIFTY

The far left (BY RIGHT WING AMERICAN STANDARDS)

 looks to seize one of the most prominent political jobs in the country

The latest iteration of the movement will face its first citywide test.



The far-left movement is making gains in New York two years after Alexandria Ocasio-Cortez toppled a congressional power broker and challenged the state’s political conventions. | Paul Sancya/AP Photo


By SALLY GOLDENBERG

08/12/2020 

NEW YORK — New York City’s old political guard is getting elbowed aside.

A 16-term Bronx congressman who routinely snagged prime State of the Union seats was trounced by a middle-school principal in June. A state lawmaker from Brooklyn who’d ascended to the role of assistant Assembly speaker during his 26 years in office lost to a first-time candidate with a background in tenant organizing. And in the voter-rich Southeastern section of Queens, a 24-year-old community organizer defeated the county-backed favorite for state Assembly.

Two years after Alexandria Ocasio-Cortez toppled a congressional power broker and challenged New York’s political conventions, the far-left movement that boosted her to the national stage has demonstrated it is here to stay.

Now, after turning away sitting politicians in Congress and Albany, the latest iteration of the movement will face its first citywide test.

New Yorkers will elect a new mayor in 2021, when term limits force out Bill de Blasio. The race provides a chance for the most liberal wing of the Democratic Party to seize its biggest electoral prize yet — one of the most prominent political jobs in America at a moment of unrivaled turmoil. The next mayor, almost certain to be a Democrat given the party’s 7-1 registration advantage in the city, will at once contend with a national call for police reform and the fallout from Covid-19, which has frozen tourism and decimated an economy that was booming only six months ago.

Negotiations on a new round of Covid relief have stalled. And that means no renewal of the eviction moratorium. We break down what could happen if the government doesn't take action quickly.

The job also provides automatic national relevance. It has a built-in bully pulpit, with the person elected to the office leapfrogging virtually every other politician in the state for regular coverage in one of the country's richest media markets.

The mayor also oversees a workforce of more than 300,000 people and a budget nearing $90 billion, providing resources to drive policies that could serve as a model for the rest of the nation. While de Blasio himself was a left-leaning candidate who won without much support from the Democratic establishment, he and the left wing of the party have grown further apart during his time in office, most recently and notably over police reform.

The Democratic Socialists of America, which backed Ocasio-Cortez’s insurgent win, claimed four new seats in the state Legislature in June’s primaries. The more established Working Families Party, another arm of the left, backed 31 winners, three of whom routed incumbents.

The slate of newcomers see their entrance into politics as their best shot at reforming the criminal justice system, increasing taxes on the wealthy, expanding social programs and restricting rent increases. Their victories mark the sharpest left turn the Democratic party has taken in New York City since the Working Families Party dominated competitive primaries in 2009.

Candidates have already begun courting a new, racially diverse set of political players who appeal to the activist movement. At a time when those looking to become mayor would be calling union leaders and influential congressional representatives, new and newly influential politicians say their phones are also ringing off the hook.

Jessica Ramos, a Queens state senator who in 2018 defeated a Democrat who had caucused with Republicans, and Public Advocate Jumaane Wiliams, who beat a sitting city councilman in an anti-establishment wave 11 years ago, have been approached for their support, they said. The Working Families Party, which veered left after its divorce from more politically conservative unions, has also been fielding candidates’ calls, a spokesperson said.

Candidates are also eying support from Jamaal Bowman, who defeated long-time Rep. Eliot Engel in the recent primary, and Alessandra Biaggi, who sent a longtime Albany powerbroker packing in 2018.

“Just a few years ago, people were leaving me out of pictures when I was running for lieutenant governor,” Williams said. “That’s a hell of a swing.”

Williams — who is running for re-election to a job that serves as a check on executive authority — said he hasn’t decided who to back. An outspoken critic of the NYPD, he said he will weigh leadership bonafides alongside reform credentials.

He was one of two dozen interviews POLITICO conducted with politicians, labor leaders and strategists that, taken together, paint a picture of shifting political winds and a group of candidates running to keep up with the changes.

The mayoral candidates are still making the usual calls to the coveted influence peddlers — union leaders, congressional representatives, pastors. The backing of 1199SEIU — the large healthcare workers union that took a risk in backing de Blasio when he was trailing the pack in 2013 — is still viewed as a prize. But now people hoping to occupy Gracie Mansion must navigate a new terrain with people who don’t play by the old rules.

“This is about regular, everyday voters who want something different, who are exhausted by just any Democrat,” said Camille Rivera, a progressive consultant with the firm New Deal Strategies. “They want Democrats who are going to speak truth to power; they want Democrats who are going to be fighting for them every single day.”

“Anyone who’s thinking that they can go middle-of-the-road in the Democratic primary now needs to change their strategy,” Rivera, who is not working for any of the candidates, said.

Politicians scrambled to recalibrate after Ocasio-Cortez’s victory, and the ensuing deep blue wave that delivered Ramos and Biaggi to Albany. They started swearing off real estate donations — something they had long been content receiving — and began calling for widespread reforms to the NYPD.

But what would otherwise be a linear strategy to win votes is complicated by an anticipated desire for a strong municipal manager during a time of profound crisis and voters who, in prioritizing that, want a message of governance over values. Covid-19 lay bare inequities in the health care system, flattened the city’s cultural and tourism sectors and left nearly a million people unemployed. Crime is on the rise and budget constraints threaten municipal layoffs.

The city’s business community, hardly a force in local elections despite their resources, is hoping to influence the conversation.

“There is great concern about the divisive politics that have characterized the Democratic primary elections that most of [the] business [community] think is counter-productive to economic recovery,” said Kathy Wylde, head of a prominent business consortium and the gatekeeper to the city’s Wall Street executives. “I do believe that there will be a number of efforts to try and mobilize greater voter participation under the theory that that will result in a more centrist approach to the challenges facing the city.”

Jordan Barowitz, spokesperson for developer Douglas Durst, suggested candidates are appealing exclusively to the left at their own peril.

“People running for office in New York City spend more time talking to the Democratic Socialists of America than they do to the business community about getting people back to work,” Barowitz said. “What is our concern? The collapse of New York’s economy, collapse of the city’s budget and ability to provide services, high unemployment, poverty.”

Maya Wiley. | D Dipasupil/Getty Images
“To run the city, especially in a crisis, everybody needs a seat at the table,” he added.

But for all their resources, New York’s business executives long ago lost their influence in mayoral races. They aren’t politically organized and they represent values anathema to many Democrats — particularly after the Occupy Wall Street movement. The city’s strict campaign finance laws further limit their leverage. And the new 8-to-1 match in the city’s public campaign finance system makes it much easier for candidates to swear off big dollar donors.

Meanwhile, the Democratic Socialists of America has no public plans to back a citywide candidate.

In a note to members obtained by POLITICO, a Queens organizer emphasized the need to build DSA’s membership beyond its stronghold in Western Queens and fortify its internal structure. “To this end, I do not think we have the capacity to endorse a candidate where we’d be the primary source of institutional support and infrastructure this year,” it concludes.

But, whether or not the group endorses a mayoral hopeful, the movement aligned with the DSA now encompasses tens of thousands of voters who are newly focused on local races.

Ahead of the Feb. 14 deadline to change party registration, 52,587 people joined the Democratic Party out of 103,093 changes in the city, according to a memo prepared by a consultant who specializes in voting data and trends.

Two-thirds of the new Democrats were previously unaffiliated with any party, meaning they could only vote in general elections, limiting their influence over city races that are largely determined in primaries. Another 18 percent of new Democrats had been Republicans, according to the memo, which was shared with POLITICO.

All told, Democrats doubled their loss of 32,020 departing voters over the prior year, according to the memo, which was prepared several months ago.

“While this is an incomplete picture of the entire state, it does point to a strong grassroots effort in key areas where progressives have gained strength and voters under 40 have increased their vote share; as well as in moderate, college-educated centers where Democratic registration is also growing,” the memo concludes.

“There's a newer portion of Democratic voters that are engaged, paying attention and informing themselves and they tend to be a little more anti-establishment and a little more left than the traditional primary voters in New York,” said Luke Hayes, who ran Bowman’s campaign.

He said newer voters are concerned about climate change, college debt and health care costs and began tuning into local politics after the 2016 election. Even if they aren’t affiliated with the DSA, they are not turned off by the Socialist label, he added.

“Post Trump, I think a lot of people were like, how did it come to this?” Hayes said.

That tension between the organized, energized far left and the more traditional forces in the city’s Democratic establishment is scrambling candidates’ strategies. They will need to marry the values of the left with the pragmatism more centrist Democrats are hungering for, strategists say. That could prove challenging in a crowded field with limited time for contenders to define themselves. Voters are unlikely to tune into the race before the presidential election in November, leaving just seven months until the primary.

Right now the top tier of the field is split among three career politicians and a former de Blasio attorney likely to jump into the race:

— Brooklyn Borough President Eric Adams, a Black former cop, has close ties to the county Democratic machine but has seen his electoral prowess diminished considerably in recent years. He’s a relative moderate who has made unabashedly pro-gun comments and touts his law-and-order credentials.

— City Comptroller Scott Stringer has been assiduously courting support among political newcomers with early endorsements that are paying off. Ramos, for example, said she is all but certain to endorse him. He also hails from Manhattan’s influential political network on the Upper West Side, and has been making inroads in Black communities.

— City Council Speaker Corey Johnson has a charisma and New York pride that have served him well, but become less significant as the state of the city declines. He was the first candidate to publicly refuse donations from real estate executives. He recently emerged from a bloody budget negotiation and is reassessing his strategy heading into campaign season.

— Maya Wiley, who served as de Blasio’s lead attorney and an MSNBC legal analyst, is Black, would break ground as the city’s first female mayor, and also ran the city’s police accountability panel — the Civilian Complaint Review Board — under de Blasio. Her ties to the mayor — who is under fire from the left for his handling of police protests — are an electoral liability. 

— Shaun Donovan, who ran agencies in the administrations of Obama and former Mayor Mike Bloomberg, has been fundraising and hiring staff for his own bid. Bill Hyers, who managed de Blasio’s 2013 campaign, and Amelia Adams, who worked for former Council Speaker Melissa Mark-Viverito, have signed on.

Both Johnson and Stringer are counting on the advent of ranked-choice voting, which will make its debut in the city next year. The two Manhattan Democrats are angling to win a plurality of white liberals and at least come in second-place among Black voters, who are pivotal to any citywide election.

Meanwhile Open Society Foundations president Patrick Gaspard, one of de Blasio’s oldest and closest allies, has been calling people on Wiley’s behalf, according to four people familiar with his entreaties. Among his first calls was 1199, where he previously worked as political director before becoming President Barack Obama’s ambassador to South Africa.

City Sanitation Commissioner Kathryn Garcia, de Blasio’s pinch hitter in times of crisis, is considering jumping in on account of her extensive government experience, according to three people familiar with her thinking. Other lesser-known candidates include Dianne Morales, who runs a nonprofit, and Loree Sutton, de Blasio’s former veterans affairs commissioner.

Lupe Todd-Medina, a Democratic consultant who is so far unaffiliated with any of the candidates, said older Black voters are wary of unabashedly progressive positions. The divide, which has played out in elections throughout the country, was amplified by the recent debate in the City Council over how to rein in the budget of the NYPD. Calls to “defund” the agency — sounded by protestors following the police killing of George Floyd in Minneapolis — were rejected by members of the Council’s Black, Latino & Asian Caucus.

Todd-Medina said the power of Black churches is a mainstay in local races and a place where moderate voices are still well received. “Technically pastors can’t endorse, but you know which ones are with who,” she said. “Everyone comes to church but there’s always one person who comes a little bit more.”

Nevertheless, the emergence of the left has sustained beyond Ocasio-Cortez’s 2018 upset.

“People have been fed up for a while and in 2018 I think that it finally boiled over and enough people said that they weren’t going to take it anymore. And that’s why we saw a wave,” Ramos said. “This is the first city election since that wave started and I think it’s inevitable that we’re going to have an outsized influence on who our next mayor is going to be.”

This article is part of The Fifty, a new POLITICO series that looks at how state and local leaders are responding to current national challenges, from the pandemic to the economic crisis to the reckoning with race. More coverage of these issues here.

State Department watchdog finds Trump’s U.K. ambassador ‘made inappropriate or insensitive comments’

But the envoy, Woody Johnson, rejected the inspector general’s findings and recommendation.


U.S. Ambassador to Britain Woody Johnson, left, with Secretary of State Mike Pompeo last month. | Matt Dunham/AP Photo

By QUINT FORGEY
08/12/2020

The State Department’s Office of Inspector General concluded that President Donald Trump’s ambassador to the United Kingdom made offensive remarks to staff at the U.S. Embassy in London, according to a report released Wednesday.
The inspector general’s office “learned, through employee questionnaires and interviews, that the Ambassador,” billionaire New York Jets co-owner Woody Johnson, “sometimes made inappropriate or insensitive comments on topics generally considered Equal Employment Opportunity (EEO)-sensitive, such as religion, sex, or color.”

Such “offensive or derogatory comments, based on an individual’s race, color, sex, or religion, can create an offensive working environment and could potentially rise to a violation of EEO laws,” the IG report states, deeming that a “more thorough review by the Department is warranted.”

The IG report also found that some embassy staff “were impacted by the Ambassador’s demanding, hard driving work style,” which it stated “had a negative effect on morale in some embassy sections.”

The revelations from the department’s independent watchdog come after CNN reported last month that Johnson, a prominent Republican donor and heir to the Johnson & Johnson pharmaceutical fortune, was investigated by the inspector general for his alleged remarks, as well as for allegedly using his official position to attempt to benefit the president’s personal business interests in the U.K.

The New York Times also reported last month that Johnson had discussed with Scotland’s secretary of state in 2018 the possibility of hosting the British Open golf tournament at the Trump Turnberry resort in Scotland. Johnson told colleagues at the time that the president had asked him to help secure the choice of venue, the Times reported.
Johnson issued an apparent response to the media reports in a tweet last month, writing that he had “followed the ethical rules and requirements of my office at all times. These false claims of insensitive remarks about race and gender are totally inconsistent with my longstanding record and values.”

The ambassador was similarly reluctant to acknowledge any wrongdoing in Wednesday’s IG report, which recommended that the State Department’s Bureau of European and Eurasian Affairs — in coordination with the Office of Civil Rights — assess Johnson’s “compliance with Department Equal Employment Opportunity or leadership policies” and, “based on the results of the review, take appropriate action.”

In Johnson’s response to a draft of the IG report, which he sent to the inspector general’s office in May, the ambassador asserted that throughout his government tenure, “and indeed for the entirety of my professional life,” he had “respected both the law and the spirit of EEO principles and have ensured that all employees under my direction do the same.”

“If I have unintentionally offended anyone in the execution of my duties, I deeply regret that, but I do not accept that I have treated employees with disrespect or discriminated in any way. My objective is to lead the highly talented team at Mission UK to execute the President’s policies and to do so in a way that is respectful of our differences, with zero tolerance for discrimination of any kind,” Johnson wrote.

“In order to address the concerns documented in your report, perceived or real, I have reviewed an S/OCR course on discrimination in the workplace and have instructed the entire Mission UK country team to do the same, with 100% compliance by the end of May,” he continued.

But Johnson wrote that “I respectfully disagree” with the IG report’s recommendation for an assessment of his EEO compliance, and the inspector general’s office stated that the Bureau of European and Eurasian Affairs also “disagreed with this recommendation” in its own response to the draft IG report last month.

“The bureau stated, that given the concern expressed, the Ambassador has viewed the Office of Civil Rights video on workplace harassment and has instructed all section and agency heads to do the same. He has also encouraged all staff to take the Foreign Service Institute training on mitigating unconscious bias,” according to the final IG report.

“The bureau also represented that the Ambassador ‘is well aware of his responsibility to set the right tone for his mission and we believe his actions demonstrate that,’” the IG report states, and the bureau “reported it did not believe a formal assessment was required.”

Instead, the bureau “proposed that, in coordination with the embassy, it would instead work with the Office of Civil Rights to provide advice and additional training to all staff, including the Chief of Mission, to heighten awareness on these important issues.”

Replying to the responses from Johnson and the bureau, the inspector general’s office stated that it “considers the recommendation unresolved,” and argued that the embassy’s actions and the bureau’s proposal “do not address the recommendation” outlined in the IG report.

The investigation by the inspector general’s office was conducted from September-December 2019, according to the IG report, and it did not appear to address the allegations against Johnson regarding Trump’s Scotland resort.

Growing number of voters oppose Trump demand to fully reopen schools

TRUMP SACRIFICES AMERICAN CHILDREN TO MOLOCH

A new POLITICO/Morning Consult poll showed more than half of surveyed voters oppose reopening daycares, K-12 schools and full in-person instruction at colleges and universities.

A first-grader gets off the bus in August for his first day back to school in Saltillo, Miss. | Adam Robison/The Northeast Mississippi Daily Journal via AP

By NICOLE GAUDIANO

08/12/2020 

A growing majority of voters oppose the Trump administration's demand that schools and colleges fully open for in-person instruction, according to a new POLITICO/Morning Consult poll.

In the survey of nearly 2,000 registered voters, 59 percent said they oppose fully reopening K-12 schools for the beginning of the academic year. Those numbers are up from polling last month that showed 53 percent opposed. 

With slightly less resistance to the idea of in-person learning for younger and older students, 56 percent of respondents said this month that they are against fully reopening daycares, in contrast to 53 percent in July's survey. For reopening colleges and universities, 57 percent said they were opposed, up from 50 percent in the previous poll.

While Senate Republicans have proposed setting aside tens of billions of dollars in new funding for schools that reopen, pluralities of registered voters believe federal money for schools should neither be increased nor decreased, regardless of whether they open virtually or for in-person instruction.

If schools resort to virtual instruction, 42 percent of Democrats and 45 percent of Republicans said federal funding should remain unchanged. Another 23 percent of Republicans said, however, that federal dollars should be decreased for those schools.

During now-stalled negotiations over what the next round of coronavirus relief could entail, GOP lawmakers have argued that schools that reopen during the coronavirus pandemic would need more funding than those that remain closed.

The new polling results come as President Donald Trump and Education Secretary Betsy DeVos continue to push for reopening schools, even as the spread of coronavirus worsens in many regions. During a Monday briefing, Trump suggested coronavirus cases among kids make up a "tiny, tiny fraction of death" and said children "get better very quickly."

“I think it's a very important thing for the economy to get the schools going,” he said.

As Trump woos suburban voters, the new poll shows 60 percent of that electorate said they are against fully opening K-12 schools for in-person instruction this fall, with similar opposition to reopening daycares and colleges.

“Over half of suburban voters oppose the idea of reopening K-12 schools in person for the new academic year, at odds with President Trump encouraging the contrary,” said Kyle Dropp, co-founder and chief research officer at Morning Consult. “Three-quarters of suburban voters also think federal funding should be either maintained or increased for schools choosing to open virtually.”

The poll also examined student loan policies as Congress debates action to help those borrowers during the pandemic. While 85 percent of Democrats said they support allowing borrowers to defer payments — interest-free — for six months, a lesser 78 percent of independents support that plan and 75 percent of Republicans back it.

Trump on Saturday signed an executive action continuing the pause on monthly payments and interest for many federal student loan borrowers until the end of the year.

A narrower majority of voters, at 53 percent, support a plan presumptive Democratic presidential nominee Joe Biden has endorsed to cancel up to $10,000 in student loan debt for each borrower. The poll showed most Democrats support that plan, but independents and Republicans are split.

A group of 16 Democratic lawmakers and Sen. Bernie Sanders (I-Vt.) sent a letter Tuesday to Senate leaders, calling for the pause on student loan payments to be extended to another 8 million borrowers who have not been granted relief during the pandemic and for the next coronavirus relief package to extend the payment freeze for the duration of the economic crisis.

Morning Consult is a global data intelligence company, delivering insights on what people think in real time by surveying tens of thousands across the globe every single day.

More details on the poll and its methodology can be found in these two documents: Toplines | Crosstabs

Juan Perez Jr. contributed to this story.

PERMANENT ARMS ECONOMY


Congressman accuses State Department official of lying about weapons sales

The controversy involves Pompeo's decision to use his emergency authorities to approve the sale of military equipment worth $8 billion.


Rep. Andy Levin, shown on Capitol Hill in 2018, is questioning Mike Pompeo's decision to initiate a major arms sale in the Middle East. | Carolyn Kaster/AP Photo


By LARA SELIGMAN
08/12/2020

A Democratic member of the House Foreign Affairs Committee is accusing a State Department official of lying to lawmakers about the nature of a major arms sale to Middle Eastern countries last year.

The controversy involves Secretary of State Mike Pompeo's decision to use his emergency authorities to approve the sale of military equipment worth $8 billion, including precision-guided weapons, to Saudi Arabia, the United Arab Emirates and Jordan. Pompeo cited urgent threats from Iran to justify the transfer, which bypassed lawmakers who had blocked some of the deals over concerns that the weapons could be used to kill civilians in places such as Yemen.

But Rep. Andy Levin (D-Mich.) on Tuesday night raised questions about whether an emergency ever existed, citing an inspector general report on the arms transfer released earlier in the day.

During a June hearing last year, Levin asked R. Clarke Cooper, the assistant secretary of State for political-military affairs, whether an emergency arose that necessitated the arms sale in the days between May 20 and 21, when Pompeo briefed lawmakers in a classified setting, and May 24, when the department declared the emergency. Cooper responded affirmatively.

However, an unredacted version of the IG report on the transfer shows that Pompeo told the department to start prepping the emergency declaration much earlier on May 4.

“In short: Mr. Cooper lied. Secretary Pompeo directed the invention of an emergency more than two weeks before he briefed Congress. One did not arise over the course of three days, as Mr. Cooper told me," Levin said in a statement. “This report confirms what we already know: this Administration has no qualms about lying to the American people. Rarely, however, are those lies so blatant and so dangerous as this one. If they’re willing to lie about national security, what’s next?”

A State Department spokesperson did not directly respond to Levin's accusation that Cooper lied, and instead said the situation in the Persian Gulf at the time "very clearly justified" the use of emergency authorities.

"It is clear the IG also agrees that statutory requirements were complied with, as they found no wrongdoing in the emergency arms sales and stated clearly that the Secretary properly executed the certification and complied with the requirements outlined in the Arms Export Control Act," said the spokesperson, who requested anonymity to discuss a sensitive matter.

The unclassified version of the report published online Tuesday concluded that, technically speaking, Pompeo acted within his authority to declare the emergency, given that the regulations involved give him considerable discretion. Yet the IG also determined the department did not fully consider the risks of civilian casualties surrounding the transfer.

The report released online gives the impression that Pompeo moved quickly on an urgent issue, briefing Congress on Iranian threats on May 21 and approving the paperwork two days later. But an unredacted version shared with lawmakers Tuesday reflects a much longer timeline, showing, for instance, that State Department staffers proposed using the emergency authorities on April 3.

The unredacted report also shows that by the time the IG began reviewing the sale in October, foreign partners had received only four of the 22 arms transfer cases included in the emergency. The low number of deliveries also raises questions about the nature of the emergency.

“The report released today is alarming for a whole host of reasons," Levin said. “But this report also holds particular significance for me personally. It proves that, on June 12, 2019, the State Department lied to me — and, by extension, to Congress and to the American people.

The report drew headlines even before its release, when Pompeo this year engineered the firing of Steve Linick, the inspector general who initiated the investigation. Linick was simultaneously looking into whether Pompeo and his wife, Susan, improperly used State Department funds for personal reasons.

Since then the State Department has tried to tightly control the narrative about the IG's conclusions, demanding major redactions ahead of the report's Tuesday release. And on Monday, the department held a background briefing with reporters designed to highlight the finding that Pompeo acted appropriately in issuing the emergency declaration, but made no mention of the shifting timelines or the determination regarding civilian casualties. The department did not release the full report until the next day.

House Foreign Affairs Chair Eliot Engel (D-N.Y.) blasted the effort to put an early spin on the IG's findings before the report was released, comparing it to the Russia election interference investigation.

"The people briefing the press were the subjects of the IG’s probe, not the report’s authors," Engel said in a statement. "This obvious pre-spin of the findings reeks of an attempt to distract and mislead. Mike Pompeo is pulling directly from the Bill Barr playbook."

They saw record profits under Trump. Bankers are backing Biden anyway.

Bankers' preference for the former vice president comes even as the Trump administration has delivered in a significant way for the banks.


Former Vice President Joe Biden is a known entity to Wall Street and benefits from his longtime closeness to the financial industry. | Scott Olson/Getty Images

By ZACHARY WARMBRODT
08/11/2020

Executives and employees at the nation’s biggest banks are giving a boost to former Vice President Joe Biden's campaign for the White House, despite economic policies under President Donald Trump that produced record profits for the industry.

Contributions from individuals affiliated with the six largest lenders total $907,216 for Biden and $293,434 for Trump, according to a POLITICO review of campaign finance data. Biden has a significant fundraising advantage at every one of the banks — JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley.

Their preference for the former vice president comes even as Trump's administration has delivered in a significant way for the banks — making them among the main beneficiaries of his 40 percent cut in the corporate tax rate and easing Obama-era regulations. Biden has pledged to repeal some of those tax cuts and impose new fees on large financial institutions.

But in an era of growing social and racial unrest, as well as income inequality, many bankers are voting beyond their wallets in the belief that Trump is stoking those divisions, industry experts say. Many in the industry are embracing Biden’s approaches to racial equity, foreign affairs and other areas where his tone is more aligned with the leaders of global financial institutions.

"These contributions speak to the deep unease Democrats and many independents have with national policy on personal priorities such as equality, civility and constitutionality," said Federal Financial Analytics managing partner Karen Petrou, who advises bank executives on policy. The bankers, she said, are "expressing themselves as well as their company’s priorities when they make contributions."
To be sure, Biden is also a known entity to Wall Street and benefits from his longtime closeness to the financial industry. While representing Delaware in the Senate, he supported bankruptcy legislation that made it harder for consumers to escape credit card debt. More recently, he attracted controversy for telling wealthy donors at a 2019 fundraiser that "no one's standard of living will change, nothing would fundamentally change" for them.

And employees at the megabanks also showed a preference for former Secretary of State Hillary Clinton over Trump in 2016 — she outraised him by more than 10 to 1 among these same companies. But they put their money behind Republican Mitt Romney when he ran against President Barack Obama and Biden in 2012.
The figures, aggregated by the Center for Responsive Politics, cover not only high-profile executives but also other employees at the sprawling, international corporations. They underscore a view in the banking industry that Biden would govern as a moderate despite the influence of Wall Street watchdogs like Sen. Elizabeth Warren (D-Mass.).
The contributions analyzed for this story came from individual donors at the banks and were not directed by the companies themselves, which operate separate political action committees that help fund congressional campaigns.

The wave of contributions has emerged as Biden, who will accept the Democratic presidential nomination during the party's convention next week, takes the lead over Trump in national and battleground state polls.

Trump campaign spokesperson Samantha Zager said the president is counting on ordinary voters to win reelection.

“President Trump’s campaign is powered by everyday Americans who have benefited from his bold leadership," she said. "Joe Biden has Big Tech, Big Pharma, and Big Banks in his pocket, and the Trump campaign still outraised him in July — not to mention we have real voter enthusiasm in our corner. President Trump will continue to prioritize hardworking Americans while Joe Biden looks out for himself.”

Jason Pye, vice president of legislative affairs at FreedomWorks, a conservative group, had another explanation for Biden's popularity with bankers: "It's no secret that big businesses, including big financial institutions, tend to benefit from big government policies. They're able to insulate themselves from regulation to some degree because they can afford the cost of compliance that leaves smaller institutions out in the cold."

Several senior leaders at the big banks have contributed money to Biden’s campaign, including Goldman Sachs CFO Stephen Scherr and JPMorgan general counsel Stacey Friedman. Goldman Sachs Japan Vice Chair Kathy Matsui contributed $54,600 to the Biden Victory Fund, Biden's joint fundraising operation with the Democratic National Committee. Morgan Stanley Vice Chair Thomas Nides and Wells Fargo Vice Chairman of Public Affairs Bill Daley — both former Obama administration officials — have also contributed to Biden's campaign.

While Biden has shied away from demonizing Wall Street like Warren and some other Democrats, he has pledged to raise taxes on large financial institutions and other corporations after Trump slashed the rate to 21 percent from 35 percent in 2017, helping deliver a 44 percent surge in banking industry profits in 2018. That’s the top concern of bank lobbyists who are starting to game out how Washington would approach the industry if Democrats take back power.

Yet Paul Thornell, former managing director for federal government affairs at Citigroup, said banking executives aren’t just focused on things like tax policy when it comes to showing their support for a candidate.

“They’re looking at character and how these two conduct themselves as leaders,” said Thornell, now a principal at government relations firm Mehlman Castagnetti Rosen & Thomas. “They’re looking at the issues that Trump has decided to align himself with versus the issues they think Biden would give voice to, which are probably more in line with where they are personally, the brand and reputation of their firms and the issues their employees care about.”

Still, any perceived coziness between Biden and bankers is a potential political problem as the former vice president faces pressure from progressives to crack down on big business. One Biden official said teachers are the top profession that donates to his campaign.

"Wall Street bankers and hedge fund managers didn't build this country — the American middle class did," Biden spokesperson Andrew Bates said. "Donald Trump has turned his back on families struggling to get by throughout his presidency, passing a multitrillion-dollar tax giveaway to the wealthy and plunging manufacturing into a recession while creating new incentives for outsourcing American jobs — whereas Joe Biden is running to ensure that our economy rewards work, not just wealth, which is why his campaign is powered by small, grassroots donations."

Indeed, a Biden administration will likely pursue stricter banking regulation than has Trump, though it's not expected to be the kind of sea change that occurred under Obama. At that time, the global economy was reeling from a financial crisis created by Wall Street, and Democrats responded by overhauling bank regulation with the landmark 2010 Dodd-Frank Act.

Now, bank lobbyists say the Biden campaign’s recent economic proposals, including those released in partnership with Sen. Bernie Sanders (I-Vt.), haven’t been that surprising or threatening.

Bank representatives see lots of issues where they can have constructive conversations with Democrats. They include responding to climate change, improving corporate diversity and supporting small business.

Big banks have also joined the fight against Big Tech by lobbying to stop technology companies from obtaining bank charters. Lobbyists expect Democrats to put more pressure on private equity firms than big banks, which were public enemy No. 1 when Biden became vice president in 2009.

The dynamic was on display last month when Sen. Sherrod Brown (D-Ohio) — who proposed breaking up the banks after the 2008 crisis — spoke on a Goldman Sachs-hosted Zoom call commemorating the graduation of entrepreneurs from the company's “10,000 Small Businesses” program. Brown, who would likely chair the Senate Banking Committee if Democrats won back the Senate, appeared with Goldman CEO David Solomon.

Brown scolded Solomon for stock buybacks the bank pursued thanks to the Trump tax cuts but he also praised the bank’s small business efforts in Ohio.

“I hope you’ll follow up with a commitment to invest more of your, I would say, immense resources in the real economy and communities that often get overlooked by Wall Street,” Brown said. “This is an example of Goldman doing that.”

Capital Alpha Partners director Ian Katz said there are competing forces at play when it comes to how the banking industry views Biden. Biden and his regulators would generally favor tighter regulation. But Trump has been harder for banks to predict because of his populist tendencies.

“There's also the possibility that while bankers prefer Trump on matters affecting their industry, they may prefer Biden on most other things,” Katz said. “If that's the case, they could lean toward Biden because they prefer him on most matters, and while he may be less friendly than Trump is to banks, they don't think he'll be dangerously unfriendly. So when they take everything into account, they may lean toward Biden.”