The Active Volcano in Japan; Sakurajima
Sunday, February 07, 2021
The Down Side to Life in a Supertall Tower:
Leaks, Creaks, Breaks
Stefanos Chen
Sat, February 6, 2021
Stefanos Chen
Sat, February 6, 2021
Several floors of the tower at 432 Park Avenue are surrounded
by clouds in New York on May 13, 2019.
(Karsten Moran/The New York Times)
NEW YORK — The nearly 1,400-foot tower at 432 Park Ave., briefly the tallest residential building in the world, was the pinnacle of New York’s luxury condo boom half a decade ago, fueled largely by foreign buyers seeking discretion and big returns.
Six years later, residents of the exclusive tower are now at odds with the developers, and each other, making clear that even multimillion-dollar price tags do not guarantee problem-free living. The claims include millions of dollars of water damage from plumbing and mechanical issues; frequent elevator malfunctions; and walls that creak like the galley of a ship — all of which may be connected to the building’s main selling point: its immense height, according to homeowners, engineers and documents obtained by The New York Times.
Less than a decade after a spate of record-breaking condo towers reached new heights in New York, the first reports of defects and complaints are beginning to emerge, raising concerns that some of the construction methods and materials used have not lived up to the engineering breakthroughs that only recently enabled 1,000-foot-high trophy apartments. Engineers privy to some of the disputes say many of the same issues are occurring quietly in other new towers.
The disputes at 432 Park also highlight a rarely seen view of New York’s so-called Billionaire’s Row, a stretch of supertall towers near Central Park that redefined the city skyline, and where the identities of virtually all the buyers were concealed by shell companies.
The building, a slender tower that critics have likened to a middle finger because of its contentious height, is mostly sold out, with a projected value of $3.1 billion. The 96th floor penthouse at the top of the building sold in 2016 for nearly $88 million to a company representing Saudi retail magnate Fawaz Alhokair. Jennifer Lopez and Alex Rodriguez bought a 4,000-square-foot apartment there for $15.3 million in 2018, and sold about a year later.
Now, correspondence between residents, some of the richest and most influential people in the world, reveal thorny arguments over how to remedy the problems without tanking property values.
“I was convinced it would be the best building in New York,” said Sarina Abramovich, one of the earliest residents of 432 Park. “They’re still billing it as God’s gift to the world, and it’s not.”
CIM Group, one of the developers, said in a statement that the building “is a successfully designed, constructed and virtually sold-out project,” and that they are “working collaboratively” with the condo board, which was run by the developers until January when residents were elected and took control. (Developers typically control condo boards in the first few years of operation.)
“Like all new construction, there were maintenance and close-out items during that period,” they said. Macklowe Properties, the other developer, declined to comment.
The construction manager, Lendlease, said in a statement that they “have been in contact” with the developers, “regarding some comments from tenants, which we are currently evaluating.”
Abramovich and her husband, Mikhail, retired business owners who worked in the oil and gas business, bought a high-floor, 3,500-square-foot apartment at the tower for nearly $17 million in 2016, to have a secondary home near their adult children.
She was disappointed with her purchase on day one, she said, when she left her home in London in early 2016 to move into what she expected to be a completed apartment, and found that both her unit and the building were still under construction.
“They put me in a freight elevator surrounded by steel plates and plywood, with a hard-hat operator,” she said. “That’s how I went up to my hoity-toity apartment before closing.”
Problems escalated from there, she said.
There have been a number of floods in the building, including two leaks in November 2018 that the general manager of the building, Len Czarnecki, acknowledged in emails to residents. The first leak, on Nov. 22, was caused by a “blown” flange, a ribbed collar that connects piping, around a high-pressure water feed on the 60th floor. Four days later, a “water line failure” on the 74th floor caused water to enter elevator shafts, removing two of the four residential elevators from service for weeks.
Both events occurred on mechanical floors that have been criticized for being excessively tall — a design feature that allowed the developers to build higher than would otherwise have been permitted, because mechanical floors do not count against the building’s allowable size.
Reached by phone, Czarnecki said he was “not at liberty to comment.”
After the first incident, water seeped into Abramovich’s apartment several floors below the leak, causing an estimated $500,000 in damage, she said.
Others have made similar claims. The anonymous buyer of unit 84B cited a “catastrophic water flood” that caused major damage to the 83rd to 86th floors in 2016 as grounds to back out of the deal. The would-be buyer, who was in contract for a $46.25 million apartment, was a member of the Beckmann family, the owners of the Jose Cuervo tequila brand, according to sources familiar with the suit. The case was settled quietly the next year.
Many of the mechanical issues cited at 432 Park are occurring at other supertall residential towers, according to several engineers who have worked on the buildings.
All buildings sway in the wind, but at exceptional heights, those forces are stronger. A management email explained that “a high-wind condition” stopped an elevator and caused a resident to be “entrapped” on the evening of Oct. 31, 2019 for 1 hour and 25 minutes. Wind sway can cause the cables in the elevator shaft to slap around and lead to slowdowns or shutdowns, according to an engineer who asked not to be named, because he has worked on other towers in New York with similar issues.
One of the most common complaints in supertall buildings is noise, said Luke Leung, a director at the architectural firm Skidmore, Owings and Merrill. He has heard metal partitions between walls groan as buildings sway, and the ghostly whistle of rushing air in doorways and elevator shafts.
Residents at 432 Park complained of creaking, banging and clicking noises in their apartments, and a trash chute “that sounds like a bomb” when garbage is tossed, according to notes from a 2019 owners’ meeting.
Problems at the building were coupled with significant new expenses. Annual common charges jumped nearly 40% in 2019, according to management emails that cited rising insurance premiums and repairs, among other costs.
Eduard Slinin, a resident who was elected to the condo board late last year, wrote a letter to neighbors in 2020 reporting that the building’s insurance costs had increased 300% in two years. The insurance hike was partly because of a sprinkler discharge and two “water-related incidents” in 2018 that cost the building about $9.7 million in covered losses, according to a letter from the residential board of managers.
Some residents also railed against surging fees at the building’s private restaurant, overseen by the Michelin-star chef, Shaun Hergatt. When the building opened in late 2015, homeowners were required to spend $1,200 a year on the service; in 2021, that requirement jumps to $15,000, despite limited hours of operation because of the pandemic. And breakfast is no longer free.
The residents, many of whom live elsewhere most of the year, have splintered into groups. In a letter to fellow residents, Slinin, the president of Corporate Transportation Group, said he was working with about 40 “concerned unit owners,” out of about 103 units, not including staff apartments, to rein in costs and address possibly dangerous conditions in the building.
The group commissioned SBI Consultants, an engineering firm, to study mechanical and structural issues. Initial findings showed that 73% of mechanical, electrical and plumbing components observed failed to conform with the developers’ drawings, and that almost a quarter “presented actual life safety issues,” Slinin wrote.
SBI did not respond to email or calls for comment. Slinin, in a phone call, subsequently downplayed the SBI findings, saying that the mechanical issues “were minor things.”
Residents have been divided on how to address the building’s problems. Jacqueline Finkelstein-Lebow, the principal of JSF Capital, a real estate investment firm, and a homeowner who recently won a seat on the board, called other residents’ attempts to “lawyer up” against the developers misguided, in a letter to residents. She also denied claims that she might have a conflict of interest in running for the board. She is married to Bennett Lebow, the chairman of Vector Group, a holding company that controls Douglas Elliman Real Estate — the brokerage that led sales at 432 Park. Howard Lorber, the executive chairman of Douglas Elliman, is also a resident.
Finkelstein-Lebow did not respond to requests for comment.
The tension in the building has been simmering for years, Abramovich said.
“Everybody hates each other here,” she said, but, for the most part, residents want to keep the squabbling out of the public eye.
But Abramovich, who, because of COVID-19 travel restrictions, has been living at 432 Park full time, said she wasn’t worried that resale value might suffer, because she didn’t buy the unit to flip for profit. For refusing to cover the recent increase in common charges, she said she faces $82,000 in late fees and interest — more than twice the median household income in the Bronx.
She’s aware that the plight of billionaires won’t garner much sympathy, but says she is speaking out on principle.
“Everything here was camouflage,” she said. “If I knew then what I know now, I would have never bought.”
This article originally appeared in The New York Times.
© 2021 The New York Times
NEW YORK — The nearly 1,400-foot tower at 432 Park Ave., briefly the tallest residential building in the world, was the pinnacle of New York’s luxury condo boom half a decade ago, fueled largely by foreign buyers seeking discretion and big returns.
Six years later, residents of the exclusive tower are now at odds with the developers, and each other, making clear that even multimillion-dollar price tags do not guarantee problem-free living. The claims include millions of dollars of water damage from plumbing and mechanical issues; frequent elevator malfunctions; and walls that creak like the galley of a ship — all of which may be connected to the building’s main selling point: its immense height, according to homeowners, engineers and documents obtained by The New York Times.
Less than a decade after a spate of record-breaking condo towers reached new heights in New York, the first reports of defects and complaints are beginning to emerge, raising concerns that some of the construction methods and materials used have not lived up to the engineering breakthroughs that only recently enabled 1,000-foot-high trophy apartments. Engineers privy to some of the disputes say many of the same issues are occurring quietly in other new towers.
The disputes at 432 Park also highlight a rarely seen view of New York’s so-called Billionaire’s Row, a stretch of supertall towers near Central Park that redefined the city skyline, and where the identities of virtually all the buyers were concealed by shell companies.
The building, a slender tower that critics have likened to a middle finger because of its contentious height, is mostly sold out, with a projected value of $3.1 billion. The 96th floor penthouse at the top of the building sold in 2016 for nearly $88 million to a company representing Saudi retail magnate Fawaz Alhokair. Jennifer Lopez and Alex Rodriguez bought a 4,000-square-foot apartment there for $15.3 million in 2018, and sold about a year later.
Now, correspondence between residents, some of the richest and most influential people in the world, reveal thorny arguments over how to remedy the problems without tanking property values.
“I was convinced it would be the best building in New York,” said Sarina Abramovich, one of the earliest residents of 432 Park. “They’re still billing it as God’s gift to the world, and it’s not.”
CIM Group, one of the developers, said in a statement that the building “is a successfully designed, constructed and virtually sold-out project,” and that they are “working collaboratively” with the condo board, which was run by the developers until January when residents were elected and took control. (Developers typically control condo boards in the first few years of operation.)
“Like all new construction, there were maintenance and close-out items during that period,” they said. Macklowe Properties, the other developer, declined to comment.
The construction manager, Lendlease, said in a statement that they “have been in contact” with the developers, “regarding some comments from tenants, which we are currently evaluating.”
Abramovich and her husband, Mikhail, retired business owners who worked in the oil and gas business, bought a high-floor, 3,500-square-foot apartment at the tower for nearly $17 million in 2016, to have a secondary home near their adult children.
She was disappointed with her purchase on day one, she said, when she left her home in London in early 2016 to move into what she expected to be a completed apartment, and found that both her unit and the building were still under construction.
“They put me in a freight elevator surrounded by steel plates and plywood, with a hard-hat operator,” she said. “That’s how I went up to my hoity-toity apartment before closing.”
Problems escalated from there, she said.
There have been a number of floods in the building, including two leaks in November 2018 that the general manager of the building, Len Czarnecki, acknowledged in emails to residents. The first leak, on Nov. 22, was caused by a “blown” flange, a ribbed collar that connects piping, around a high-pressure water feed on the 60th floor. Four days later, a “water line failure” on the 74th floor caused water to enter elevator shafts, removing two of the four residential elevators from service for weeks.
Both events occurred on mechanical floors that have been criticized for being excessively tall — a design feature that allowed the developers to build higher than would otherwise have been permitted, because mechanical floors do not count against the building’s allowable size.
Reached by phone, Czarnecki said he was “not at liberty to comment.”
After the first incident, water seeped into Abramovich’s apartment several floors below the leak, causing an estimated $500,000 in damage, she said.
Others have made similar claims. The anonymous buyer of unit 84B cited a “catastrophic water flood” that caused major damage to the 83rd to 86th floors in 2016 as grounds to back out of the deal. The would-be buyer, who was in contract for a $46.25 million apartment, was a member of the Beckmann family, the owners of the Jose Cuervo tequila brand, according to sources familiar with the suit. The case was settled quietly the next year.
Many of the mechanical issues cited at 432 Park are occurring at other supertall residential towers, according to several engineers who have worked on the buildings.
All buildings sway in the wind, but at exceptional heights, those forces are stronger. A management email explained that “a high-wind condition” stopped an elevator and caused a resident to be “entrapped” on the evening of Oct. 31, 2019 for 1 hour and 25 minutes. Wind sway can cause the cables in the elevator shaft to slap around and lead to slowdowns or shutdowns, according to an engineer who asked not to be named, because he has worked on other towers in New York with similar issues.
One of the most common complaints in supertall buildings is noise, said Luke Leung, a director at the architectural firm Skidmore, Owings and Merrill. He has heard metal partitions between walls groan as buildings sway, and the ghostly whistle of rushing air in doorways and elevator shafts.
Residents at 432 Park complained of creaking, banging and clicking noises in their apartments, and a trash chute “that sounds like a bomb” when garbage is tossed, according to notes from a 2019 owners’ meeting.
Problems at the building were coupled with significant new expenses. Annual common charges jumped nearly 40% in 2019, according to management emails that cited rising insurance premiums and repairs, among other costs.
Eduard Slinin, a resident who was elected to the condo board late last year, wrote a letter to neighbors in 2020 reporting that the building’s insurance costs had increased 300% in two years. The insurance hike was partly because of a sprinkler discharge and two “water-related incidents” in 2018 that cost the building about $9.7 million in covered losses, according to a letter from the residential board of managers.
Some residents also railed against surging fees at the building’s private restaurant, overseen by the Michelin-star chef, Shaun Hergatt. When the building opened in late 2015, homeowners were required to spend $1,200 a year on the service; in 2021, that requirement jumps to $15,000, despite limited hours of operation because of the pandemic. And breakfast is no longer free.
The residents, many of whom live elsewhere most of the year, have splintered into groups. In a letter to fellow residents, Slinin, the president of Corporate Transportation Group, said he was working with about 40 “concerned unit owners,” out of about 103 units, not including staff apartments, to rein in costs and address possibly dangerous conditions in the building.
The group commissioned SBI Consultants, an engineering firm, to study mechanical and structural issues. Initial findings showed that 73% of mechanical, electrical and plumbing components observed failed to conform with the developers’ drawings, and that almost a quarter “presented actual life safety issues,” Slinin wrote.
SBI did not respond to email or calls for comment. Slinin, in a phone call, subsequently downplayed the SBI findings, saying that the mechanical issues “were minor things.”
Residents have been divided on how to address the building’s problems. Jacqueline Finkelstein-Lebow, the principal of JSF Capital, a real estate investment firm, and a homeowner who recently won a seat on the board, called other residents’ attempts to “lawyer up” against the developers misguided, in a letter to residents. She also denied claims that she might have a conflict of interest in running for the board. She is married to Bennett Lebow, the chairman of Vector Group, a holding company that controls Douglas Elliman Real Estate — the brokerage that led sales at 432 Park. Howard Lorber, the executive chairman of Douglas Elliman, is also a resident.
Finkelstein-Lebow did not respond to requests for comment.
The tension in the building has been simmering for years, Abramovich said.
“Everybody hates each other here,” she said, but, for the most part, residents want to keep the squabbling out of the public eye.
But Abramovich, who, because of COVID-19 travel restrictions, has been living at 432 Park full time, said she wasn’t worried that resale value might suffer, because she didn’t buy the unit to flip for profit. For refusing to cover the recent increase in common charges, she said she faces $82,000 in late fees and interest — more than twice the median household income in the Bronx.
She’s aware that the plight of billionaires won’t garner much sympathy, but says she is speaking out on principle.
“Everything here was camouflage,” she said. “If I knew then what I know now, I would have never bought.”
This article originally appeared in The New York Times.
© 2021 The New York Times
SAG-AFTRA speaks on Trump's union resignation:
'Members were just fine with his decision'
Former President Donald Trump announced his resignation from The Screen Actors Guild on Thursday, following a disciplinary probe over his role in January’s deadly attack on the Capitol.
“I write to you today regarding the so-called Disciplinary Committee hearing aimed at revoking my union membership. Who cares!” Trump wrote in a fiery resignation letter to SAG-AFTRA president Gabrielle Carteris.
His resignation means he can no longer enjoy SAG-AFTRA benefits, which include voting on employment and government structure of the union — in addition to other unique privileges such as movie screeners during award season and more.
“While I'm not familiar with your work, I'm very proud of my work on movies such as 'Home Alone 2,' 'Zoolander' and 'Wall Street: Money Never Sleeps'; and television shows including 'The Fresh Prince of Bel-Air,' 'Saturday Night Live,' and of course, one of the most successful shows in television history, 'The Apprentice' — to name just a few!” the letter continued.
In response, SAG-AGTRA had just two words for the former commander-in-chief: “Thank you.” National Executive Director David White told Yahoo Finance during a recent interview that the terse response “is all we really had to say.”
“We actually expected him to show up [to the disciplinary hearing] but I think the members were just fine with his decision to no longer be a part of this family,” White said.
Tinseltown’s move to penalize the former president comes as the Senate is poised to deliberate on Trump’s impeachment beginning next week.
White added that SAG faced pressure to revoke Trump’s membership even prior to January 6th’s attacks — with current union members arguing that his actions did not reflect “the integrity and values of the membership. It had nothing to do with his politics,” White explained.
Hollywood is notoriously left-leaning, but White stressed that the union is a non-partisan organization that was once under the leadership of former Republican President Ronald Reagan. The 40th U.S. Commander in Chief served as SAG-president from 1947-1952, and then again from 1959-1960.
“We had a number of members call with lots of concern about Mr. Trump’s actions as a candidate when he was calling the media ‘fake news,’ calling upon people to take action against journalists,” White explained.
“And we know for a fact that, prior to his election as a president, then as president and even after being president, that his words incited actual violence and harm against members of this union, along with many others,” he continued.
Legally, Trump can still appear in movies and TV shows despite the resignation, yet White suggested that union representation in Hollywood is often paramount.
“This industry is one that respects labor relations and respects the collective activities of unions quite a bit, so most producers do look to see whether or not the person is a member of the union in their hiring decisions,” White explained.
HOLLYWOOD BEAT HIM THERE
Elon Musk says SpaceX will get humans to Mars in 2026 but some industry insiders are more optimistic than others. Here's what the experts say.
MUSK PRAYING NUMBER THREE
WILL NOT GO BOOM
SpaceX, founded by Elon Musk, is building and launching
Starship prototypes in Boca Chica, Texas.
Kate Duffy Sat., February 6, 2021
Elon Musk's timeline for SpaceX landing humans on Mars has wavered over the years.
On Sunday, he said 2026 will be the year to send a crewed mission to Mars. In 2017, he said 2024.
Space industry experts believe SpaceX will reach Mars, but not as soon as it hopes.
Elon Musk is still confident that 2026 will be the year that his space company SpaceX lands humans on Mars, where he hopes to build a human settlement.
In a wide-ranging interview with the audio-only Clubhouse app on Sunday, Musk said it will take "five and a half years" before a crewed mission of SpaceX's Starship rocket could land on the Red Planet.
"The important thing is that we establish Mars as a self-sustaining civilization," he said.
But Musk's timeline for reaching Mars has wavered over the past few years. The billionaire said in 2017 his "aspirational" timeline was for SpaceX to send cargo ships to Mars in 2022, followed by a crewed mission two years later.
In October, Musk said the space company has a "fighting chance" of sending an uncrewed Starship rocket to Mars in 2024 - two years later than he previously hoped. He echoed his ambition in December saying he is "highly confident" SpaceX will launch an uncrewed rocket to the planet in 2024, followed by a crewed mission in 2026.
With five and a half years to go, experts say SpaceX may be waiting a few more years to achieve its goal.
Greg Autry, a commercial space industry expert, told Insider he thinks Musk will get to Mars, on his own or with NASA in 2029 or 2031. The window is dependent on when the Earth lines up with Mars, which is every 26 months. But Autry warned that space projects are challenging and rarely on time - Musk's goal is no exception.
"It's a matter of finances and will. Elon has both," he said.
All of his projects, from Tesla to SpaceX to the Boring Company, include extremely ambitious time frames and usually take much longer than expected, according to Autry. "That should not minimize either power of setting an aggressive date, nor the magnificence of what he eventually achieves," he said.
Musk said in January 2020 he plans to send 1 million people to Mars by 2050. This involves building 1,000 Starship rockets over 10 years - that's 100 Starships every year - and launching an average of three Starships per day. "There will be a lot of jobs on Mars!" he added.
SpaceX launched a prototype of its Starship rocket 10km above Boca Chica, Texas, on Tuesday, but it exploded during a landing attempt. This is the second time a Starship rocket has launched and burst into flames. The first time was in December.
Read more: SpaceX is finalizing a massive new funding round. Here's why investors are clamoring for one of the world's most valuable startups.
Despite the Starship rocket being tried and tested, Autry pointed out that the booster, life support system, reentry system, and ability to refuel on Mars haven't been tested yet - and some haven't even been built. This means it's most likely going to take more time to build the tech beyond Starship to support a civilization on Mars.
"There is a lot of work there that is overshadowed by the dramatic tests of the landing system," Autry said.
Musk's ambitious targets stem from a mix of motivational charisma, planning fallacy and being "ubercapable of getting things done," Autry said.
"When he thinks about how long it will take to build a rocket he is perhaps guilty of imagining 5,000 Elon Musks on the job at SpaceX and more of them at his suppliers and in the governmental offices he needs to license or fund his project," said Autry, adding that this isn't realistic.
Kevin J DeBruin, a former NASA rocket scientist, told Insider Musk only has three launch opportunities left because of the planets' alignment to do tests and ensure everything goes perfectly. If the launches, new tech, system tests, and landings all go to plan and Musk has the cashflow to support it, DeBruin said it's possible SpaceX could get to Mars by 2026.
There are concerns, however, regarding the mass needed to land on Mars, DeBruin said.
Six times more mass than we already have is required, he said. "We need new landing technology to land more mass on the surface of Mars for humans to live, operate, and then leave the surface to come home."
Biological issues could also come into play. DeBruin said the longest a human has been continually in space is just under a year but the Mars trip will take much longer. "We will see more degradation of the human body," he said.
Steve Nutt, professor of materials science and aerospace engineering at the University of Southern California, told Insider that Musk intentionally makes bold predictions to "inspire his workforce to think big."
"One can argue that it's an effective strategy, and it is less important that the timeline be accurate than it is for it to be inspirational," said Nutt.
SpaceX's goal to reach Mars is "something NASA should have done long ago," said Nutt. Given that the space agency lost its vision after the big moon walk and is constrained by politics, SpaceX could fill the void, he said.
Read the original article on Business Insider
Elon Musk's timeline for SpaceX landing humans on Mars has wavered over the years.
On Sunday, he said 2026 will be the year to send a crewed mission to Mars. In 2017, he said 2024.
Space industry experts believe SpaceX will reach Mars, but not as soon as it hopes.
Elon Musk is still confident that 2026 will be the year that his space company SpaceX lands humans on Mars, where he hopes to build a human settlement.
In a wide-ranging interview with the audio-only Clubhouse app on Sunday, Musk said it will take "five and a half years" before a crewed mission of SpaceX's Starship rocket could land on the Red Planet.
"The important thing is that we establish Mars as a self-sustaining civilization," he said.
But Musk's timeline for reaching Mars has wavered over the past few years. The billionaire said in 2017 his "aspirational" timeline was for SpaceX to send cargo ships to Mars in 2022, followed by a crewed mission two years later.
In October, Musk said the space company has a "fighting chance" of sending an uncrewed Starship rocket to Mars in 2024 - two years later than he previously hoped. He echoed his ambition in December saying he is "highly confident" SpaceX will launch an uncrewed rocket to the planet in 2024, followed by a crewed mission in 2026.
With five and a half years to go, experts say SpaceX may be waiting a few more years to achieve its goal.
Greg Autry, a commercial space industry expert, told Insider he thinks Musk will get to Mars, on his own or with NASA in 2029 or 2031. The window is dependent on when the Earth lines up with Mars, which is every 26 months. But Autry warned that space projects are challenging and rarely on time - Musk's goal is no exception.
"It's a matter of finances and will. Elon has both," he said.
All of his projects, from Tesla to SpaceX to the Boring Company, include extremely ambitious time frames and usually take much longer than expected, according to Autry. "That should not minimize either power of setting an aggressive date, nor the magnificence of what he eventually achieves," he said.
Musk said in January 2020 he plans to send 1 million people to Mars by 2050. This involves building 1,000 Starship rockets over 10 years - that's 100 Starships every year - and launching an average of three Starships per day. "There will be a lot of jobs on Mars!" he added.
SpaceX launched a prototype of its Starship rocket 10km above Boca Chica, Texas, on Tuesday, but it exploded during a landing attempt. This is the second time a Starship rocket has launched and burst into flames. The first time was in December.
Read more: SpaceX is finalizing a massive new funding round. Here's why investors are clamoring for one of the world's most valuable startups.
Despite the Starship rocket being tried and tested, Autry pointed out that the booster, life support system, reentry system, and ability to refuel on Mars haven't been tested yet - and some haven't even been built. This means it's most likely going to take more time to build the tech beyond Starship to support a civilization on Mars.
"There is a lot of work there that is overshadowed by the dramatic tests of the landing system," Autry said.
Musk's ambitious targets stem from a mix of motivational charisma, planning fallacy and being "ubercapable of getting things done," Autry said.
"When he thinks about how long it will take to build a rocket he is perhaps guilty of imagining 5,000 Elon Musks on the job at SpaceX and more of them at his suppliers and in the governmental offices he needs to license or fund his project," said Autry, adding that this isn't realistic.
Kevin J DeBruin, a former NASA rocket scientist, told Insider Musk only has three launch opportunities left because of the planets' alignment to do tests and ensure everything goes perfectly. If the launches, new tech, system tests, and landings all go to plan and Musk has the cashflow to support it, DeBruin said it's possible SpaceX could get to Mars by 2026.
There are concerns, however, regarding the mass needed to land on Mars, DeBruin said.
Six times more mass than we already have is required, he said. "We need new landing technology to land more mass on the surface of Mars for humans to live, operate, and then leave the surface to come home."
Biological issues could also come into play. DeBruin said the longest a human has been continually in space is just under a year but the Mars trip will take much longer. "We will see more degradation of the human body," he said.
Steve Nutt, professor of materials science and aerospace engineering at the University of Southern California, told Insider that Musk intentionally makes bold predictions to "inspire his workforce to think big."
"One can argue that it's an effective strategy, and it is less important that the timeline be accurate than it is for it to be inspirational," said Nutt.
SpaceX's goal to reach Mars is "something NASA should have done long ago," said Nutt. Given that the space agency lost its vision after the big moon walk and is constrained by politics, SpaceX could fill the void, he said.
Read the original article on Business Insider
AND SHE WOULD BE CORRECT
Hillary Clinton says conspiracies about her spread by QAnon followers are 'rooted in ancient scapegoating of women'ITS A REHASH OFTHE SATANIC PANIC OF THE 1980'S
Connor Perrett
Sat., February 6, 2021,
Connor Perrett
Sat., February 6, 2021,
In an interview published Friday, Hillary Clinton (R) sounded off about QAnon and those who spread such theories, including Georgia Rep. Marjorie Taylor Greene (L). SAUL LOEB/AFP via Getty Images, Jonathan Ernst-Pool/Getty Images
In an interview with The New York Times, Hillary Clinton addressed conspiracy theories about her.
She addressed the role of Marjorie Taylor Greene and social media in the spreading of false theories.
"We are facing a mass addiction with the effective purveying of disinformation on social media," she said.
In an interview with The New York Times, Hillary Clinton addressed conspiracy theories about her.
She addressed the role of Marjorie Taylor Greene and social media in the spreading of false theories.
"We are facing a mass addiction with the effective purveying of disinformation on social media," she said.
Hillary Clinton, the former first lady, senator, secretary of state, and nominee for president, in an interview with The New York Times published Friday addressed the rampant and baseless conspiracy theories about her and her family, including those spread by Georgia GOP Rep. Marjorie Taylor Greene.
"For me, it does go back to my earliest days in national politics, when it became clear to me that there was a bit of a market in trafficking in the most outlandish accusations and wild stories concerning me, my family, people that we knew, people close to us," Clinton said in an interview with New York Times columnist Michelle Goldberg.
Clinton, who served as secretary of state during President Barack Obama's first term in the White House, said that the attacks against her relying on baseless theories, like ones that allege she belongs to a satanic cult, are part of larger cultural sexism and misogyny.
The former first lady also addressed how theories against her had been propagated on social media, appearing to blame social-media platforms for the views and theories that have been espoused by individuals like Greene, who this week was stripped through a House vote of her committee assignments as a result of her past and recent comments.
"We are facing a mass addiction with the effective purveying of disinformation on social media," Clinton said. "I don't have one iota of sympathy for someone like her, but the algorithms, we are now understanding more than ever we could have, truly are addictive. And whatever it is in our brains for people who go down those rabbit holes, and begin to inhabit this alternative reality, they are, in effect, made to believe."
As Insider's Rachel E. Greenspan previously reported, Greene has acknowledged numerous baseless theories about Clinton, including "Pizzagate" and "Frazzledrip," a fictitious video that conspiracy theorists claim shows Hillary Clinton and an aide sexually assault a child, slice off her face, and wear it as a mask.
Democrats, generally, have accused social media companies of being complicit in the spreading of misinformation and disinformation, while Republicans lash out at companies like Facebook and Twitter when their attempts to limit such content involve actions against Republicans, like its permanent suspension of former President Donald Trump in January.
Read the original article on Business Insider
NO BILLIONAIRE FLEES TO TORONTO
Former Saudi spy chief denies he stole billions before fleeing to TorontoTHEY FLEE FROMM TORONTO
Sat., February 6, 2021,
Sat., February 6, 2021,
Former Saudi spy chief denies he stole billions before fleeing to Toronto
A former Saudi spymaster, now living in exile in Toronto, says a lawsuit alleging he embezzled billions of dollars is part of an ongoing campaign of intimidation by Saudi Arabia's powerful crown prince.
The Ontario Superior Court of Justice has issued an order freezing Saad Aljabri's assets, luxury properties, and bank accounts in Europe, Malta, the British Virgin Islands, the United States and Canada — including his $13-million mansion in Toronto.
But in court documents filed Tuesday, Aljabri contends the case is a "politically motivated attack."
"This proceeding is the latest stage of the Crown Prince of Saudi Arabia Mohammed bin Salman's ongoing efforts to achieve absolute power in Saudi Arabia, masquerading as a commercial dispute in Canada."
Companies tied to the current Saudi regime filed the lawsuit in Toronto on Jan. 22. It alleges Aljabri funnelled security and counterterrorism funds from Saudi Arabia's Interior Ministry to himself, his family and associates.
"Although the investigation is ongoing, it is clear that from at least 2008 to 2017, Aljabri masterminded and oversaw a conspiracy incorporating at least 21 conspirators across at least 13 jurisdictions to misappropriate at least [$4.3 billion] from the plaintiffs," the lawsuit states.
Power shift in Saudi Arabia
Saudi Arabia, the world's largest oil exporter, has undergone a major powershift since 2017. That year, King Salman removed his nephew, Crown Prince Mohammed bin Nayef (MBN) and replaced him with his son Mohammed Bin Salman (MBS). MBN was placed under house arrest, accused of plotting a coup.
Western analysts say 35-year-old MBS has pushed the Kingdom towards a more aggressive foreign policy, pursuing his enemies at home and abroad with ruthlessness to cement his claim to the throne.
A former Saudi spymaster, now living in exile in Toronto, says a lawsuit alleging he embezzled billions of dollars is part of an ongoing campaign of intimidation by Saudi Arabia's powerful crown prince.
The Ontario Superior Court of Justice has issued an order freezing Saad Aljabri's assets, luxury properties, and bank accounts in Europe, Malta, the British Virgin Islands, the United States and Canada — including his $13-million mansion in Toronto.
But in court documents filed Tuesday, Aljabri contends the case is a "politically motivated attack."
"This proceeding is the latest stage of the Crown Prince of Saudi Arabia Mohammed bin Salman's ongoing efforts to achieve absolute power in Saudi Arabia, masquerading as a commercial dispute in Canada."
Companies tied to the current Saudi regime filed the lawsuit in Toronto on Jan. 22. It alleges Aljabri funnelled security and counterterrorism funds from Saudi Arabia's Interior Ministry to himself, his family and associates.
"Although the investigation is ongoing, it is clear that from at least 2008 to 2017, Aljabri masterminded and oversaw a conspiracy incorporating at least 21 conspirators across at least 13 jurisdictions to misappropriate at least [$4.3 billion] from the plaintiffs," the lawsuit states.
Power shift in Saudi Arabia
Saudi Arabia, the world's largest oil exporter, has undergone a major powershift since 2017. That year, King Salman removed his nephew, Crown Prince Mohammed bin Nayef (MBN) and replaced him with his son Mohammed Bin Salman (MBS). MBN was placed under house arrest, accused of plotting a coup.
Western analysts say 35-year-old MBS has pushed the Kingdom towards a more aggressive foreign policy, pursuing his enemies at home and abroad with ruthlessness to cement his claim to the throne.
Saudi Royal Court via Reuters
Aljabri, 62, was MBN's chief advisor. As Minister of State and head of security and counterterrorism, he was a key member of the regime.
He was stripped of his duties in 2015. Following the power change in 2017, he fled the country and now lives in a mansion on The Bridle Path, one of Canada's most upscale residential neighbourhoods.
Two of Aljabri's children, Omar and Sarah, 17 and 18 at the time, were detained before they could flee Saudi Arabia in June 2017 on the same day that MBN was removed. They were subsequently charged and convicted of money laundering and are now imprisoned. Aljabri has said there was no evidence to warrant their detention or charges.
Aljabri claims he is being targeted as part of a purge of loyalists from a competing branch of the royal family. As a former top intelligence official, he says he has damaging information about the inner workings of the House of Saud.
In August, Aljabri sued the Crown Prince in the U.S., alleging MBS sent a hit squad to Canada in 2018 to try to assassinate him and his family, and of holding two of his children hostage in Saudi Arabia.
None of the allegations has been proven in court.
Hit squad allegedly dispatched to Canada
Aljabri declined interview requests. His lawyer said he is reluctant to argue the legal case in the media but said in a statement the family is in a "deadly-serious" fight for their lives.
"Within days of the MBS regime engineering the gruesome, cold blooded murder of journalist Jamal Khashoggi in 2018, a team of assassins connected to the MBS regime attempted to enter Canada through Ottawa," lawyer Paul Le Vay wrote in an email.
"They were detected by sharp-eyed airport security officials," Le Vay wrote. "Had this hit squad gained entry, it is entirely likely that a Khashoggi-style assassination would have taken place on our soil. Every Canadian should be appalled that an autocratic regime sought to use our country as a killing ground to meet its own political ends."
Khashoggi was a Saudi Arabian dissident and Washington Post columnist. He was assassinated at the Saudi consulate in Istanbul, Turkey on Oct. 2, 2018.
Aljabri, 62, was MBN's chief advisor. As Minister of State and head of security and counterterrorism, he was a key member of the regime.
He was stripped of his duties in 2015. Following the power change in 2017, he fled the country and now lives in a mansion on The Bridle Path, one of Canada's most upscale residential neighbourhoods.
Two of Aljabri's children, Omar and Sarah, 17 and 18 at the time, were detained before they could flee Saudi Arabia in June 2017 on the same day that MBN was removed. They were subsequently charged and convicted of money laundering and are now imprisoned. Aljabri has said there was no evidence to warrant their detention or charges.
Aljabri claims he is being targeted as part of a purge of loyalists from a competing branch of the royal family. As a former top intelligence official, he says he has damaging information about the inner workings of the House of Saud.
In August, Aljabri sued the Crown Prince in the U.S., alleging MBS sent a hit squad to Canada in 2018 to try to assassinate him and his family, and of holding two of his children hostage in Saudi Arabia.
None of the allegations has been proven in court.
Hit squad allegedly dispatched to Canada
Aljabri declined interview requests. His lawyer said he is reluctant to argue the legal case in the media but said in a statement the family is in a "deadly-serious" fight for their lives.
"Within days of the MBS regime engineering the gruesome, cold blooded murder of journalist Jamal Khashoggi in 2018, a team of assassins connected to the MBS regime attempted to enter Canada through Ottawa," lawyer Paul Le Vay wrote in an email.
"They were detected by sharp-eyed airport security officials," Le Vay wrote. "Had this hit squad gained entry, it is entirely likely that a Khashoggi-style assassination would have taken place on our soil. Every Canadian should be appalled that an autocratic regime sought to use our country as a killing ground to meet its own political ends."
Khashoggi was a Saudi Arabian dissident and Washington Post columnist. He was assassinated at the Saudi consulate in Istanbul, Turkey on Oct. 2, 2018.
Hasan Jamali/The Associated Press
In court records, Aljabri claims the RCMP continues to investigate the alleged assassination attempt on him in Canada.
Aljabri said the RCMP has advised him his life remains under threat, recommending 24-hour physical security. A CBC reporter on Thursday spoke with a private security guard outside Aljabri's mansion from a vehicle idling on the street.
The RCMP declined to comment. Alan Treddenick is a former senior Canadian Security Intelligence Service (CSIS) officer who was stationed at the Canadian embassy in Riyadh, Saudi Arabia. Treddenick worked directly with Aljabri on counterterrorism.
"The threats against the Aljabri family and Saad himself are very real," Treddenick said, adding that Aljabri had to flee for his life.
"In my opinion, he holds the keys to Pandora's box for the current Crown Prince," Treddenick said in an interview with CBC News. "Any secrets they have, business dealings, security issues — it is information I'm sure the current Crown Prince wouldn't want in public."
'Overwhelming evidence of fraud:' Judge
On Jan. 22, Canadian lawyers for a conglomerate of 10 state-owned Saudi companies convinced a Toronto judge in an ex-parte, or private, hearing to freeze Aljabri's world-wide assets.
The freezing order application was underpinned by a 156-page forensic audit by Deloitte, two lengthy sworn affidavits, and nearly 7,000 pages of documents.
The companies argued Aljabri received unauthorized payments he was prohibited from receiving as a government employee. They allege he set up companies, ostensibly to combat terrorism, but instead funnelled money through them to himself, his family and associates.
The plaintiffs allege the auditors uncovered 26 properties in Saudi Arabia, many of which were allegedly gifted to Aljabri's children, nine luxury properties in the U.S. and others in Geneva and Vienna. The auditors also found two homes in Canada purchased with cash: The Bridlepath house for $13 million and another purchased by Aljabri's son, Khalid, for nearly $4.5 million.
In court records, Aljabri claims the RCMP continues to investigate the alleged assassination attempt on him in Canada.
Aljabri said the RCMP has advised him his life remains under threat, recommending 24-hour physical security. A CBC reporter on Thursday spoke with a private security guard outside Aljabri's mansion from a vehicle idling on the street.
The RCMP declined to comment. Alan Treddenick is a former senior Canadian Security Intelligence Service (CSIS) officer who was stationed at the Canadian embassy in Riyadh, Saudi Arabia. Treddenick worked directly with Aljabri on counterterrorism.
"The threats against the Aljabri family and Saad himself are very real," Treddenick said, adding that Aljabri had to flee for his life.
"In my opinion, he holds the keys to Pandora's box for the current Crown Prince," Treddenick said in an interview with CBC News. "Any secrets they have, business dealings, security issues — it is information I'm sure the current Crown Prince wouldn't want in public."
'Overwhelming evidence of fraud:' Judge
On Jan. 22, Canadian lawyers for a conglomerate of 10 state-owned Saudi companies convinced a Toronto judge in an ex-parte, or private, hearing to freeze Aljabri's world-wide assets.
The freezing order application was underpinned by a 156-page forensic audit by Deloitte, two lengthy sworn affidavits, and nearly 7,000 pages of documents.
The companies argued Aljabri received unauthorized payments he was prohibited from receiving as a government employee. They allege he set up companies, ostensibly to combat terrorism, but instead funnelled money through them to himself, his family and associates.
The plaintiffs allege the auditors uncovered 26 properties in Saudi Arabia, many of which were allegedly gifted to Aljabri's children, nine luxury properties in the U.S. and others in Geneva and Vienna. The auditors also found two homes in Canada purchased with cash: The Bridlepath house for $13 million and another purchased by Aljabri's son, Khalid, for nearly $4.5 million.
Submitted by Aljabri family
Aljabri's lawyers filed a motion to immediately lift the freezing order, arguing that the plaintiffs misled the court.
On Monday, Superior Court of Ontario Justice Cory Gilmore denied the request. She ruled there was sufficient plausible, but unproven evidence to meet the basic legal threshold for the asset freezing order. She extended the order to Feb. 19 for another full hearing.
"There is overwhelming evidence of fraud that has been presented to court," Gilmore wrote. "In response, I have an affidavit from [Aljabri's] son, which is more of a political treatise than any concrete response to the serious allegations raised."
The affidavit by Khalid Aljabri contained many of the same allegations, including intimidation and death threats, advanced by Aljabri in his U.S. lawsuit and in his pleadings to the Ontario court.
"The Deloitte report and the affidavits and exhibits filed demonstrate that Aljabri used fraudulent means to divert funds that rightfully belonged to the plaintiffs and the Plaintiffs suffered a loss from that conduct," Gilmore wrote.
Aljabri's lawyers filed a motion to immediately lift the freezing order, arguing that the plaintiffs misled the court.
On Monday, Superior Court of Ontario Justice Cory Gilmore denied the request. She ruled there was sufficient plausible, but unproven evidence to meet the basic legal threshold for the asset freezing order. She extended the order to Feb. 19 for another full hearing.
"There is overwhelming evidence of fraud that has been presented to court," Gilmore wrote. "In response, I have an affidavit from [Aljabri's] son, which is more of a political treatise than any concrete response to the serious allegations raised."
The affidavit by Khalid Aljabri contained many of the same allegations, including intimidation and death threats, advanced by Aljabri in his U.S. lawsuit and in his pleadings to the Ontario court.
"The Deloitte report and the affidavits and exhibits filed demonstrate that Aljabri used fraudulent means to divert funds that rightfully belonged to the plaintiffs and the Plaintiffs suffered a loss from that conduct," Gilmore wrote.
A LEGAL LIABILITY
Lou Dobbs: Fox cancels vocal Trump supporter's programme
DEMENTED LIKE GUILIANI
Sat., February 6, 2021,
Sat., February 6, 2021,
Lou Dobbs was named in a defamation lawsuit filled by a voting machine company
US broadcaster Fox has cancelled the TV programme hosted by Lou Dobbs, a vocal Trump supporter who is accused of using his platform to spread baseless claims of fraud in the 2020 election.
The news emerged a day after Dobbs was named in a defamation lawsuit filed by the voting machine maker Smartmatic.
The $2.7bn (£2bn) lawsuit claims Dobbs was part of a "disinformation campaign" against the company.
Fox, which denies the allegations, said the Dobbs decision was not linked.
The veteran financial journalist, 75, has presented Lou Dobbs Tonight on the Fox Business Network since 2011. He was also an occasional commentator on Fox News, the conservative channel that has been home to several staunch supporters of Mr Trump.
Dobbs - who has recently written the book The Trump Century: How Our President Changed the Course of History Forever - said he had no comment.
Despite the cancellation of his programme,
US broadcaster Fox has cancelled the TV programme hosted by Lou Dobbs, a vocal Trump supporter who is accused of using his platform to spread baseless claims of fraud in the 2020 election.
The news emerged a day after Dobbs was named in a defamation lawsuit filed by the voting machine maker Smartmatic.
The $2.7bn (£2bn) lawsuit claims Dobbs was part of a "disinformation campaign" against the company.
Fox, which denies the allegations, said the Dobbs decision was not linked.
The veteran financial journalist, 75, has presented Lou Dobbs Tonight on the Fox Business Network since 2011. He was also an occasional commentator on Fox News, the conservative channel that has been home to several staunch supporters of Mr Trump.
Dobbs - who has recently written the book The Trump Century: How Our President Changed the Course of History Forever - said he had no comment.
Despite the cancellation of his programme,
Dobbs remained under contract but was unlikely to appear on the network again, the Los Angeles Times reports.
The Smartmatic lawsuit names Fox Corporation, which is Fox Business Network's parent company, as well as Fox News, Dobbs and two other Fox hosts - Maria Bartiromo and Jeanine Pirro. It also cites Rudy Giuliani and Sidney Powell, two lawyers who represented Mr Trump.
The company accused the group of intentionally repeating the false claim that it was "responsible for stealing" the election by "switching and altering votes to rig" the election for Joe Biden.
Smartmatic claims Dobbs was "one of the primary proponents and speakers for the disinformation campaign".
Fox said on Thursday the network was "proud of our 2020 election coverage and will vigorously defend this meritless lawsuit in court".
Legal experts say the lawsuit has put enormous pressure on Fox.
Dominion, another voting technology maker, has also threatened to sue the network and other conservative media for defamation over their repeated unsubstantiated claims of election fraud.
Following the news of Lou Dobbs Tonight's cancellation, Donald Trump issued a statement, saying: "Lou Dobbs is and was great... He had a large and loyal following that will be watching closely for his next move, and that following includes me."
The Smartmatic lawsuit names Fox Corporation, which is Fox Business Network's parent company, as well as Fox News, Dobbs and two other Fox hosts - Maria Bartiromo and Jeanine Pirro. It also cites Rudy Giuliani and Sidney Powell, two lawyers who represented Mr Trump.
The company accused the group of intentionally repeating the false claim that it was "responsible for stealing" the election by "switching and altering votes to rig" the election for Joe Biden.
Smartmatic claims Dobbs was "one of the primary proponents and speakers for the disinformation campaign".
Fox said on Thursday the network was "proud of our 2020 election coverage and will vigorously defend this meritless lawsuit in court".
Legal experts say the lawsuit has put enormous pressure on Fox.
Dominion, another voting technology maker, has also threatened to sue the network and other conservative media for defamation over their repeated unsubstantiated claims of election fraud.
Following the news of Lou Dobbs Tonight's cancellation, Donald Trump issued a statement, saying: "Lou Dobbs is and was great... He had a large and loyal following that will be watching closely for his next move, and that following includes me."
Hedge Funds Risk Biden-Era End to Money-Laundering Loophole
Neil Weinberg
(Bloomberg) -- Private-equity and hedge funds face an increased risk that the U.S. will close a longstanding money-laundering loophole for assets they manage. All it would take is the Biden administration to quickly revive a rule that was developed during Barack Obama’s term but left unused by Donald Trump.
The U.S. has intensified its crackdown on dirty money in recent years, requiring banks, brokerages and mutual funds to monitor clients and report suspicious activity. But investment advisers overseeing trillions of dollars in private equity and hedge funds are exempt from such rules, and the Federal Bureau of Investigation says that’s attracted more cash from Mexican drug lords, countries under U.S. sanctions and companies with suspected Russian mob ties.
Regulators sought to close that loophole in 2015 with a new set of reporting requirements, but the proposal wasn’t enacted before Obama left office and it lay dormant while Trump was president. With Democrats back in control of the White House and bipartisan support for more scrutiny of illicit funds, the Treasury Department’s Financial Crimes Enforcement Network may seek to revive the anti-money-laundering proposal.
“We’re advising clients to expect that during the Biden administration, FinCEN will finalize the AML rule for registered investment advisers,” said Michael Buffardi, a managing director in the financial services practice at FTI Consulting. “We can’t anticipate the timing, but think it’ll be sooner rather than later.”
After the November election, the non-partisan Financial Accountability & Corporate Transparency Coalition called on Joe Biden to enact the 2015 rule in his first 100 days in office to help safeguard the financial system and plug a key U.S. vulnerability to money laundering. “The rule has already undergone the comment process and could be quickly finalized,” the coalition said.
Janet Yellen, who was sworn in as Biden’s Treasury Secretary Jan. 26, said in a staff memo that “fighting illicit finance” would remain part of department’s “usual business” while it confronts the long-term consequences of the global pandemic, climate change, systemic racism and the lingering economic crisis.
It’s still early days for Biden’s team at the department, which hasn’t spelled out any new money-laundering measures or indicated whether it would revive the 86-page Obama-era proposal for SEC-registered investment advisers who oversee private equity and hedge funds. A spokeswoman said Treasury officials were unable to provide a timetable for the anti-money laundering regulation.
And even if the department does move ahead, the change wouldn’t likely occur right away. The White House issued an inauguration-day memo that pauses most new regulations, withdraws rules released but not yet formally published, and asks agencies to consider a 60-day delay for rules that have been published in the Federal Register.
Groups representing private equity and hedge funds don’t want for any such rule to move forward. They say their money is already tracked by regulated financial institutions and doesn’t need additional oversight, despite the FBI report suggesting the problem requires urgent attention.
In a May 2020 Intelligence Bulletin, the FBI said financial criminals are tapping hedge funds and private equity firms “to launder money, circumventing traditional anti-money laundering programs.” Without stricter oversight, the funds provide “ever-increasing opportunities for threat actors to co-opt investment funds without being overly scrutinized,” the agency said. The FBI didn’t respond to a request for comment.
‘Real’ Risks
“The risks highlighted in the FBI assessment are quite real,” said Ali Burney, a partner at Steptoe & Johnson whose practice focuses on cases of financial crime. “Investment vehicles always offer an attractive target, not only to launder funds but also as conduits for bribery and other schemes.”
Concern about the risks has already gotten the attention of regulators and lawmakers.
Just last year, the U.S. Securities and Exchange Commission -- which would have been the chief monitor of compliance under the 2015 proposal -- cited anti-money laundering as one of its top priorities for oversight activities designed to identify risks to investors and the integrity of U.S. markets.
In 2018, FinCEN enacted its Customer Due Diligence Rule requiring banks, brokerages, mutual funds and futures commission merchants to verify the identity of individual account holders and the beneficial owners behind corporate customers.
And in January, Congress passed a law requiring owners of certain types of anonymous shell companies -- a popular tool for laundering money -- to disclose their names, addresses and other identifying information. The resulting government database will be accessible by intelligence agencies, law enforcement, regulators and financial institutions.
Opponents of anti-money laundering requirements for managers of private funds have argued that they don’t take physical custody of client assets. Instead, those assets are held by banks, brokerages or other “qualified custodians,” which are already required to monitor for signs of money laundering and report suspicious activity.
“Hedge funds present relatively limited money-laundering risks,” with the vast majority of investment advisers already using internal measures to track dirty money, the Managed Funds Association, which represents hedge funds, said in its 2015 written response to the FinCEN proposal.
‘Poor Vehicles’
Private-equity managers’ practice of requiring investors to tie up capital for long periods make their funds “poor vehicles for money laundering and terrorist financing,” and should be excluded from FinCEN’s proposed rule, American Investment Council, which represents the industry, said in its 2015 written response.
Jason Mulvihill, the council’s chief operating officer and general counsel, said that SEC-registered private fund advisers already provide detailed information about their activities, so adding anti-money laundering requirements is unnecessary. “The new legislation is not going after investment advisers and funds that are regulated,” he said. “It’s focus is on things that are less transparent.”
The FBI expressed a different view in its report last year. “The proliferation of private investment funds has made the industry less rigid as to the structure of the investment in an effort to attract more capital,” it wrote. “Furthermore, the profit motive does not incentivize the private investment fund manager to scrutinize the source of funds or the underlying beneficial owner.”
Self-policing by private equity and hedge funds is “not as robust as it would be if the 2015 proposal was adopted,” said Mederic Daigneault, a senior director with National Regulatory Services, a compliance consulting firm. That means the industry’s defenses could be strengthened through mandatory requirements for monitoring and reporting money laundering red flags, Daigneault said.
(Updates with comment from Ali Burney.)
©2021 Bloomberg L.P.
BofA Divided as Bankers Cry Foul Over Special Bonus Treatment
The cliff-vest provision is especially problematic for long-serving executives in corporate and commercial banking who expected to qualify for what’s known internally as the “rule of 60.” Previously, Bank of America let staff retire with all deferred pay so long as their age plus a minimum of 10 years served at the company equaled 60. That treasured perquisite now excludes the new bonuses.
Exacerbating those frustrations, the people said, is the decision to exempt investment bankers from the vesting restrictions, seen as a golden handcuff, but enforce them for corporate bankers. Both groups are part of the same division -- global corporate and investment banking -- run by Matthew Koder.
Such resentments have divided big banks for years. Throughout the industry, rainmakers who land multibillion-dollar merger mandates or big-ticket corporate financings are lionized and can pull down eight-figure pay packages. Meantime, traditional bankers responsible for lower-margin activities such as lending or cash management earn less and feel like second-class citizens.
Bank of America’s powerful chief operating officer, Tom Montag, who joined with the Merrill acquisition, is widely seen as loyal to traders and investment bankers. Some veterans in commercial banking feel they’re being punished unfairly for the pandemic, a calamity beyond their control, the people familiar with the situation said.
©2021 Bloomberg L.P.
Erik Schatzker and Sridhar Natarajan
Sat, February 6, 2021,
(Bloomberg) -- Anger is building in the senior ranks at Bank of America Corp. after the company waived an unpopular new bonus policy for top traders and dealmakers while keeping the plan in place for other employees.
At issue is a grant of company stock that high earners -- generally those making $1 million or more -- received for the first time as part of their 2020 compensation. Instead of vesting in equal parts over a set period, as such awards typically do, these bonuses have a “cliff vest” provision making the shares eligible for sale only at the end of four years.
People familiar with the situation described an internal drama unfolding over the past couple of weeks.
Initially, the bank planned to apply the new pay structure broadly. But veterans in investment banking and trading revolted upon hearing they’d have to stay through 2024 to reap bonuses for 2020, and management agreed to exempt them.
Chief Executive Officer Brian Moynihan acknowledged the blowback in a Jan. 27 interview on Bloomberg Television, saying the change in policy “didn’t work the way some people wanted it to, so we fixed it.”
Yet senior colleagues in corporate and commercial banking, a less powerful cohort, soon learned that their awards are still subject to the vesting restrictions. That’s when the grousing began, the people said. In recent days, employees have been gathering on calls to vent frustrations and discuss options.
The decision touched a raw nerve. Bank of America is torn by long-simmering jealousies and divisions among its staff of more than 200,000, many dating back to the shotgun marriage with Merrill Lynch in the 2008 financial crisis. An uneven approach to compensation risks exacerbating those strains at a time when most of the company is working from home and collaboration is at a premium.
Sat, February 6, 2021,
(Bloomberg) -- Anger is building in the senior ranks at Bank of America Corp. after the company waived an unpopular new bonus policy for top traders and dealmakers while keeping the plan in place for other employees.
At issue is a grant of company stock that high earners -- generally those making $1 million or more -- received for the first time as part of their 2020 compensation. Instead of vesting in equal parts over a set period, as such awards typically do, these bonuses have a “cliff vest” provision making the shares eligible for sale only at the end of four years.
People familiar with the situation described an internal drama unfolding over the past couple of weeks.
Initially, the bank planned to apply the new pay structure broadly. But veterans in investment banking and trading revolted upon hearing they’d have to stay through 2024 to reap bonuses for 2020, and management agreed to exempt them.
Chief Executive Officer Brian Moynihan acknowledged the blowback in a Jan. 27 interview on Bloomberg Television, saying the change in policy “didn’t work the way some people wanted it to, so we fixed it.”
Yet senior colleagues in corporate and commercial banking, a less powerful cohort, soon learned that their awards are still subject to the vesting restrictions. That’s when the grousing began, the people said. In recent days, employees have been gathering on calls to vent frustrations and discuss options.
The decision touched a raw nerve. Bank of America is torn by long-simmering jealousies and divisions among its staff of more than 200,000, many dating back to the shotgun marriage with Merrill Lynch in the 2008 financial crisis. An uneven approach to compensation risks exacerbating those strains at a time when most of the company is working from home and collaboration is at a premium.
While compensation on Wall Street is always a balancing act, the circumstances were unusually tricky for Moynihan. Many traders and bankers had a great year, thriving as markets swung, and they expected to be rewarded. But Bank of America tripled its provisions for credit losses to more than $11 billion, anticipating that borrowers battered by the pandemic may default. Net income for the year plunged 35%.
“You’ve got to pay for performance, and the shareholder has to benefit, too,” Moynihan said in the interview.
Wall Street has been mostly conservative with 2020 remuneration. JPMorgan Chase & Co. and Goldman Sachs Group Inc. held compensation per employee in check, and Citigroup Inc. cut bonuses for dozens of top executives after the bank was reprimanded by regulators.
Throughout, Bank of America reduced cash payouts and lengthened the vesting periods for normal stock awards. Without the new bonuses, many executives would have faced pay cuts, according to the people.
In the interview, Moynihan said the company would be divvying up a total of $10 billion to $11 billion of incentive compensation for 2020. Investment bankers and traders typically get a greater share of their pay in equity than employees elsewhere in the company.
“Our bonus pools are down year-over-year, yet some teammates made more money and some made less money,” Moynihan said.
“You’ve got to pay for performance, and the shareholder has to benefit, too,” Moynihan said in the interview.
Wall Street has been mostly conservative with 2020 remuneration. JPMorgan Chase & Co. and Goldman Sachs Group Inc. held compensation per employee in check, and Citigroup Inc. cut bonuses for dozens of top executives after the bank was reprimanded by regulators.
Throughout, Bank of America reduced cash payouts and lengthened the vesting periods for normal stock awards. Without the new bonuses, many executives would have faced pay cuts, according to the people.
In the interview, Moynihan said the company would be divvying up a total of $10 billion to $11 billion of incentive compensation for 2020. Investment bankers and traders typically get a greater share of their pay in equity than employees elsewhere in the company.
“Our bonus pools are down year-over-year, yet some teammates made more money and some made less money,” Moynihan said.
The cliff-vest provision is especially problematic for long-serving executives in corporate and commercial banking who expected to qualify for what’s known internally as the “rule of 60.” Previously, Bank of America let staff retire with all deferred pay so long as their age plus a minimum of 10 years served at the company equaled 60. That treasured perquisite now excludes the new bonuses.
Exacerbating those frustrations, the people said, is the decision to exempt investment bankers from the vesting restrictions, seen as a golden handcuff, but enforce them for corporate bankers. Both groups are part of the same division -- global corporate and investment banking -- run by Matthew Koder.
Such resentments have divided big banks for years. Throughout the industry, rainmakers who land multibillion-dollar merger mandates or big-ticket corporate financings are lionized and can pull down eight-figure pay packages. Meantime, traditional bankers responsible for lower-margin activities such as lending or cash management earn less and feel like second-class citizens.
Bank of America’s powerful chief operating officer, Tom Montag, who joined with the Merrill acquisition, is widely seen as loyal to traders and investment bankers. Some veterans in commercial banking feel they’re being punished unfairly for the pandemic, a calamity beyond their control, the people familiar with the situation said.
©2021 Bloomberg L.P.
Analysis: Out in the cold - how Japan's electricity grid came close to blackouts
Electric power transmission lines leading to Tokyo Electric Power Co.'s Kohoku Substation are seen in Yokohama
By Aaron Sheldrick and Yuka Obayashi
TOKYO (Reuters) - Japan's worst electricity crunch since the aftermath of the Fukushima crisis has exposed vulnerabilities in the country's recently liberalised power market, although some of the problems appear self-inflicted.
Power prices in Japan hit record highs last month as a cold snap across northeast Asia prompted a scramble for supplies of liquefied natural gas (LNG), a major fuel for the country's power plants. Power companies urged customers to ration electricity to prevent blackouts, although no outages occurred.
The crisis highlighted how many providers were unprepared for such high demand. Experts say LNG stocks were not topped up ahead of winter and snow disabled solar power farms.
The hundreds of small power companies that sprang up after the market was opened in 2016 have struggled the most, saying the government does not disclose the market data they need to operate. The companies do not have their own generators, instead buying electricity on the wholesale market.
Prices on the Japan Electric Power Exchange (JEPX) hit a record high of 251 yen ($2.39) per kilowatt hour in January, equating to $2,390 per megawatt hour of electricity, the highest on record anywhere in the world. One megawatt hour is roughly what an average home in the U.S. would consume over 35 days.
But the vast majority of the new, smaller companies are locked into low, fixed rates they set to lure customers from bigger players, crushing them financially during a price spike like the one in January.
More than 50 small power providers wrote on Jan. 18 to Japan's industry minister, Hiroshi Kajiyama, who oversees the power sector, asking for more accessible data on supply and demand, reserve capacity and fuel inventories.
"By organising and disclosing this information, retail electricity providers will be able to bid at more appropriate prices," said the companies, led by Looop Co.
They also called on Kajiyama to require transmission and distribution companies to pass on some of the unexpected profits from price spikes to smaller operators.
The industry ministry said it had started releasing more timely market data, and is reviewing the cause of the crunch and considering changes.
RETHINK
Japan reworked its power markets after the Fukushima nuclear disaster in 2011, liberalizing the sector in 2016 while pushing for more renewables.
But Japan is still heavily reliant on LNG and coal, and only four of 33 nuclear reactors are operating. The power crisis has led to growing calls to restart more reactors.
Kazuno Power, a small retail provider controlled by a municipality of the same name in northern Japan, where abundant renewable energy is locally produced, buys electricity from hydropower stations and JEPX.
During the crunch, the company had to pay nearly 10 times the usual price, Kazuno Power president Takao Takeda said in an interview. Like most other new providers, it could not pass on the costs, lost money, and folded. The local utility has taken over its customers.
"There is a contradiction in the current system," Takeda said. "We are encouraged to locally produce power for local consumption as well as use more renewable energy, but prices for these power supplies are linked to wholesale prices, which depend on the overall power supply."
The big utilities, which receive most of their LNG on long-term contracts, blamed the power shortfall on a tight spot market and glitches at generation units.
"We were not able to buy as much supply as we wanted from the spot market because of higher demand from South Korea and China," Kazuhiro Ikebe, the head of the country's electricity federation, said recently.
Ikebe is also president of Kyushu Electric Power, which supplies the southern island of Kyushu.
Utilities took extreme measures - from burning polluting fuel oil in coal plants to scavenging the dregs from empty LNG tankers - to keep the grid from breaking down.
"There is too much dependence on JEPX for procurement," said Bob Takai, the local head of European Energy Exchange, which started offering Japan power futures last year. He added that new entrants were not hedging against sharp price moves.
Three people, who requested anonymity because of the sensitivity of the matter, were more blunt. One called the utilities arrogant in assuming they could find LNG cargoes in a pinch. Prices were already rising as China snapped up supplies, the sources noted.
FALLOUT
"You had volatility caused by people saying 'Oh, well, demand is going to be weak because of COVID' and then saying 'we can rely more on solar than in the past,' but solar got snowed out," said a senior executive from one generator. "We have a problem of who is charge of energy security in Japan."
Inventories of LNG, generally about two weeks worth of supplies, were also not topped up enough to prepare for winter, a market analyst said.
The fallout from the crunch has become more apparent in recent days, with new power companies like Rakuten Inc suspending new sales and Tokyo Gas, along with traditional electricity utilities, issuing profit downgrades or withdrawing their forecasts.
Although prices have fallen sharply as temperatures warmed up slightly and more generation units have come back online, the power generator executive said, "we are not out of the woods yet."
($1 = 105.1700 yen)
(Reporting by Aaron Sheldrick and Yuka Obayashi. Editing by Gerry Doyle)
TOKYO (Reuters) - Japan's worst electricity crunch since the aftermath of the Fukushima crisis has exposed vulnerabilities in the country's recently liberalised power market, although some of the problems appear self-inflicted.
Power prices in Japan hit record highs last month as a cold snap across northeast Asia prompted a scramble for supplies of liquefied natural gas (LNG), a major fuel for the country's power plants. Power companies urged customers to ration electricity to prevent blackouts, although no outages occurred.
The crisis highlighted how many providers were unprepared for such high demand. Experts say LNG stocks were not topped up ahead of winter and snow disabled solar power farms.
The hundreds of small power companies that sprang up after the market was opened in 2016 have struggled the most, saying the government does not disclose the market data they need to operate. The companies do not have their own generators, instead buying electricity on the wholesale market.
Prices on the Japan Electric Power Exchange (JEPX) hit a record high of 251 yen ($2.39) per kilowatt hour in January, equating to $2,390 per megawatt hour of electricity, the highest on record anywhere in the world. One megawatt hour is roughly what an average home in the U.S. would consume over 35 days.
But the vast majority of the new, smaller companies are locked into low, fixed rates they set to lure customers from bigger players, crushing them financially during a price spike like the one in January.
More than 50 small power providers wrote on Jan. 18 to Japan's industry minister, Hiroshi Kajiyama, who oversees the power sector, asking for more accessible data on supply and demand, reserve capacity and fuel inventories.
"By organising and disclosing this information, retail electricity providers will be able to bid at more appropriate prices," said the companies, led by Looop Co.
They also called on Kajiyama to require transmission and distribution companies to pass on some of the unexpected profits from price spikes to smaller operators.
The industry ministry said it had started releasing more timely market data, and is reviewing the cause of the crunch and considering changes.
RETHINK
Japan reworked its power markets after the Fukushima nuclear disaster in 2011, liberalizing the sector in 2016 while pushing for more renewables.
But Japan is still heavily reliant on LNG and coal, and only four of 33 nuclear reactors are operating. The power crisis has led to growing calls to restart more reactors.
Kazuno Power, a small retail provider controlled by a municipality of the same name in northern Japan, where abundant renewable energy is locally produced, buys electricity from hydropower stations and JEPX.
During the crunch, the company had to pay nearly 10 times the usual price, Kazuno Power president Takao Takeda said in an interview. Like most other new providers, it could not pass on the costs, lost money, and folded. The local utility has taken over its customers.
"There is a contradiction in the current system," Takeda said. "We are encouraged to locally produce power for local consumption as well as use more renewable energy, but prices for these power supplies are linked to wholesale prices, which depend on the overall power supply."
The big utilities, which receive most of their LNG on long-term contracts, blamed the power shortfall on a tight spot market and glitches at generation units.
"We were not able to buy as much supply as we wanted from the spot market because of higher demand from South Korea and China," Kazuhiro Ikebe, the head of the country's electricity federation, said recently.
Ikebe is also president of Kyushu Electric Power, which supplies the southern island of Kyushu.
Utilities took extreme measures - from burning polluting fuel oil in coal plants to scavenging the dregs from empty LNG tankers - to keep the grid from breaking down.
"There is too much dependence on JEPX for procurement," said Bob Takai, the local head of European Energy Exchange, which started offering Japan power futures last year. He added that new entrants were not hedging against sharp price moves.
Three people, who requested anonymity because of the sensitivity of the matter, were more blunt. One called the utilities arrogant in assuming they could find LNG cargoes in a pinch. Prices were already rising as China snapped up supplies, the sources noted.
FALLOUT
"You had volatility caused by people saying 'Oh, well, demand is going to be weak because of COVID' and then saying 'we can rely more on solar than in the past,' but solar got snowed out," said a senior executive from one generator. "We have a problem of who is charge of energy security in Japan."
Inventories of LNG, generally about two weeks worth of supplies, were also not topped up enough to prepare for winter, a market analyst said.
The fallout from the crunch has become more apparent in recent days, with new power companies like Rakuten Inc suspending new sales and Tokyo Gas, along with traditional electricity utilities, issuing profit downgrades or withdrawing their forecasts.
Although prices have fallen sharply as temperatures warmed up slightly and more generation units have come back online, the power generator executive said, "we are not out of the woods yet."
($1 = 105.1700 yen)
(Reporting by Aaron Sheldrick and Yuka Obayashi. Editing by Gerry Doyle)
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