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Global Impact: 'Hong Kong is back': global financiers herald city's return

Mon, November 7, 2022 at 2:30 AM·9 min read

The much-heralded gathering of global bankers and financiers ended on Thursday on an optimistic note about Hong Kong's prospects, as overseas attendees hailed their unhindered participation as proof that the city can put its coronavirus restrictions behind it and get back to business.

The message that was repeated and reinforced throughout the three days of the Global Financial Leaders' Investment Summit was that it is "business as usual" in Hong Kong, even if the city had been slower than other countries in opening its borders to corporate and leisure travel.

The fact that half of the 250 financiers from 120 global firms did manage to fly in from abroad - 40 of them being C-suite executives - underscored the message by Chief Executive John Lee Ka-chiu that "Hong Kong is back".

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The event, led by the Hong Kong Monetary Authority (HKMA), kicked off informally on Tuesday with a closed-door meeting between some invited bankers and the city's financial officials at the office of the de facto central bank.

Bankers and financiers seen arriving for the meeting included HSBC CEO Noel Quinn, Standard Chartered group CEO Bill Winters, Goldman Sachs CEO David Solomon, Morgan Stanley chairman James Gorman, UBS Group chairman Colm Kelleher, Bank of China president Liu Jin, BlackRock president Rob Kapito, Credit Suisse chairman Axel Lehmann, JPMorgan Asia-Pacific CEO Filippo Gori, Pimco CEO Emmanuel Roman, and Carlyle Group co-founder and co-chairman William E. Conway Jr.

Deputy Financial Secretary Michael Wong Wai-lun led the Hong Kong officials at the meeting, joined by the Secretary for Financial Services and the Treasury Christopher Hui Ching-yu, Securities and Futures Commission chief executive Ashley Alder, and Nicolas Aguzin, CEO of Hong Kong Exchanges and Clearing Limited (HKEX).

A gala dinner at the M+ contemporary art museum closed out the first day, where attendees were feted by a musical ensemble and an eight-course Cantonese meal from the Grand Hyatt hotel.

The first day of the public programme featured a number of panel discussions with C-suite speakers from some of the world's largest banks, funds and investors. They discussed dealing with uncertainty, sustainable finance, the future of finance, as well as environmental, social and corporate governance.

Three of China's financial regulators spoke in pre-recorded dialogues - held in English - with HKMA CEO Eddie Yue Wai-man, where they reiterated the central government's commitment to develop and enhance Hong Kong's role as a financial centre.

Every speaker at the conference, from Hong Kong's chief executive to the foreign bankers speaking on panels, spoke without a mask on.

Two panel discussions took place on the final day at the HKEX, at the former trading floor that has since been converted into the Connect Hall to mark Hong Kong's switch to paperless transactions. They discussed the creation of value amid uncertainty and management through volatile markets.

Global inflation, geopolitical tensions, climate change, lingering effects of the Covid-19 pandemic on economies, talent and markets were the major concerns looming on the horizon for Hong Kong, other emerging economies and mainland China, attendees said.

It was not merely lip service. Just before the summit's informal kick-off, Citigroup opened its first global wealth management centre in Tsim Sha Tsui to serve dollar-denominated millionaires, joining rivals HSBC and Standard Chartered in making Hong Kong the beachhead for tapping the estimated 80,000 wealthy individuals in southern China's Greater Bay Area.

Singapore was on the tip of many attendees' tongues, as several global banks grappled with an exodus of staff who were fed up with Hong Kong's previous Covid-19 restrictions. The solution in the post-Covid era was co-location, where senior positions in both Hong Kong and Singapore could serve different purposes, said the Swiss bank Julius Baer.

"Hong Kong has always been the centre of gravity for North Asia, with its proximity to China and the Greater Bay Area," said Philipp Rickenbacher, CEO of the Zurich-based private bank, adding that the two cities are both hubs for expanding in Asia.

The summit was not without drama. Two US lawmakers urged US financiers to reconsider their attendance just days before the summit began, claiming that their participation would "contribute to the Chinese government's human rights abuses". Their call was mostly ignored and roundly condemned by Hong Kong officials.

Financial Secretary Paul Chan Mo-po, the chief proponent of the summit, found himself stuck in Riyadh after catching Covid-19 during a work visit to Bahrain and Saudi Arabia. He did make it back to Hong Kong in time to deliver a keynote address in person because his viral load was low and he was deemed "non-infectious" by local health officials, but he was ordered to refrain from attending banquets.

Several bankers also backed out. Citigroup CEO Jane Fraser and Blackstone president Jon Gray caught Covid-19 and had to stay away, while Barclays CEO C.S. Venkatakrishnan, Capital Group CEO Timothy Armour and Amundi's Valerie Baudson pulled out for scheduling conflicts and other reasons.

With the summit over, some bankers are staying in Hong Kong to meet staff and clients. HSBC's Quinn is staying for the Hong Kong Sevens, as the bank sponsors the rugby tournament.

The HKMA may organise the summit again in 2023 to mark its 30th anniversary, said Yue. Most participants this year said they would not think twice about returning.


Photo: K. Y. Cheng alt=Photo: K. Y. Cheng>

Beijing 'fully focused' on economic growth, with Hong Kong's capital markets a crucial enabler: top regulators

Officials from China's central bank and securities watchdog hit back at the notion that China has reduced its focus on economic growth during a global summit on Wednesday

Beijing will continue to strengthen Hong Kong as an international financial centre to drive the mainland's development, regulators added

Beijing remains "fully focused" on economic growth and is committed to making Hong Kong an even stronger international financial centre to help achieve that goal, China's top financial regulators said during a global finance summit in Hong Kong on Wednesday.

"Hong Kong has great potential in deepening connections with the mainland financial market, financing and investing under the Belt and Road Initiative, fintech and green finance," Yi Gang, governor of the People's Bank of China, told attendees of the Global Financial Leaders' Investment Summit.


Photo: K. Y. Cheng alt=Photo: K. Y. Cheng>

As Federal Reserve's rampant rate increases turn markets cloudy, investors should focus on fundamentals, money managers say

The outlook for equity investors is cloudy as rising interest rates could tip many economies into recession and hit corporate earnings, State Street CEO says

With volatility set to play a bigger role in markets, investors should revisit their portfolio to get the right balance between growth and value, Wellington CEO says

The era of high return on investment is over, and the focus should be on value amid looming market uncertainty, according to top money managers, as the Federal Reserve left open the possibility of further rate increases after delivering another steep rate increase.

"We are of the belief that the Fed will do whatever it takes to tame inflation," Cyrus Taraporevala, president and CEO of State Street Global Advisors, one of world's largest asset managers managing nearly US$$3.26 trillion, said at the Global Financial Leaders' Investment Summit in Hong Kong on Thursday.


Photo: Sam Tsang alt=Photo: Sam Tsang>

Inflation, geopolitical tensions will cast a shadow on an uncertain global economy next year, say top bankers

Speakers on the first panel at a global investor summit discussed the impact of inflation and geopolitical tensions on the world economy

The era of low global inflation is over for now, said James Gorman, chairman and CEO of Morgan Stanley

Inflation and geopolitical tensions are the two main risks hanging over a global economy that is still reeling from the Covid-19 pandemic, Russia's invasion of Ukraine and rising interest rates, according to leading global financiers who spoke at an international financial summit in Hong Kong on Wednesday.

The world will be clouded by "a significant amount of uncertainty" in 2023, but central banks will step in to tame inflation amid the transition from economic expansion to economic contraction, they said.

Read more

Photo: Enoch Yiu. alt=Photo: Enoch Yiu.>

Hong Kong can take the lead to set disclosure example in sustainable financing, bankers say

Each of Hong Kong's 2,500 listed companies must put numbers on potential impact from extreme climate events, according to draft rules due for final approval in 2023

Any fund manager with a portfolio larger than US$1 billion must disclose the emissions data of companies they invest in, starting this month, the SFC says

Hong Kong can take the lead in promoting sustainable finance in the Asia-Pacific, as the city is among the first to incorporate disclosures for environment, social and corporate governance (ESG) in its audit and listing rules, global bankers said.

Each of Hong Kong's 2,500 listed companies must put numbers on potential impact from extreme climate events like severe typhoons and rising sea levels, according to draft rules due for final approval in 2023. Any fund manager with a portfolio larger than US$1 billion must disclose the emissions data of companies they invest in, starting this month, according to the Securities and Futures Commission (SFC).

Read more

Photo: Shutterstock Images alt=Photo: Shutterstock Images>

Cryptocurrencies, blockchain are reshaping future of finance, say global banking chiefs

The biggest challenge for institutions is navigating security issues related to public blockchain networks, says Daniel Pinto, COO of JP Morgan

Senior figures from JPMorgan, BlackRock, HSBC and Standard Chartered shared their thoughts at a global banking summit in Hong Kong

Technologies such as blockchain and central bank digital currencies are reshaping the future of finance, leaders of major banks said during a global financial conference in Hong Kong.

Senior figures from JPMorgan, BlackRock, HSBC and Standard Chartered shared their thoughts on how the fintech industry is shaking up the banking sector during a panel discussion at the Global Financial Leaders' Investment Summit on Wednesday.

This article originally appeared in the South China Morning Post (SCMP)

Copyright (c) 2022. South China Morning Post Publishers Ltd. All rights reserved.

Hong Kong court upholds veteran journalist's conviction


Hong Kong journalist Choy Yuk-ling, also known as Bao Choy, speaks to media outside a court in Hong Kong on April 22, 2021. Choy on Monday, Nov. 7, 2022 lost her appeal against her conviction over making false statements in obtaining information for her investigation of a violent attack during the widespread protests in 2019. 

(AP Photo/Kin Cheung, File) 

KANIS LEUNG
Sun, November 6, 2022 


HONG KONG (AP) — An award-winning Hong Kong journalist lost her appeal Monday against her conviction over making false statements in obtaining information for her investigation of a violent attack during widespread pro-democracy protests in 2019.

Bao Choy was found guilty in April 2021 of deceiving the government by getting vehicle ownership records for journalistic purposes after she had declared in her online application that she would use the information for “other traffic and transport related issues.” She was trying to track down perpetrators of a mob attack on protesters and commuters inside a train station for her documentary for public broadcaster RTHK.

That ruling sparked outrage among local media professionals over the city's shrinking press freedoms. Choy — who was fined 6,000 Hong Kong Dollars ($765) for two counts of making false statements — called it “a very dark day for all journalists in Hong Kong."

High Court Justice Alex Lee upheld the verdict in a written judgment, saying there are only three options available in the application form for conducting such searches: transport or traffic-related matters, legal matters, or vehicle purchases or sales. Journalism is not an option.

“I don't deny that the appellant was trying to obtain the information with good intentions. But as the magistrate had pointed out, in terms of conviction, having good intentions is not a justification," Lee said.

Flanked by veteran journalists who held up placards printed with “Fearless, Selfless," Choy said she was disappointed with the judgement.

“It's a decision that really hinders the access to free information in the city, which means that will create obstacles for the press to act as a brake on the abuse of power, and to monitor and hold the powerful accountable,” she said.

The judgement also called into question whether other activities such as some due diligence searches would be considered illegal, she said, and the ruling's implication should be discussed by the wider society.

Choy added she would make a decision on whether to take the case to the Final Court of Appeal within a month.

The story Choy co-produced, titled “7.21 Who Owns the Truth,” won the Chinese-language documentary award at the Human Rights Press Awards in 2021. The judging panel hailed it as “an investigative reporting classic” that had chased “the smallest clues, interrogating the powerful without fear or favor."

In the months after the journalist was convicted, two media outlets — Apple Daily and Stand News — were forced to shut down during an ongoing crackdown on dissents following the 2019 protests in the semi-autonomous Chinese city. Hong Kong, a former British colony, returned to China’s rule in 1997 with the promise by Beijing that it would keep the city's freedoms, but critics say that's no longer the case.

Some of the top management of the two outlets also have been prosecuted. Apple Daily founder Jimmy Lai faces collusion charges under a sweeping National Security Law enacted in 2020. A trial of two former Stand News editors charged under a colonial-era sedition law that has been used increasingly to snuff out critical voices is underway. One of them, acting editor-in-chief Patrick Lam, has been granted bail on Monday after being detained for more than 10 months.

Hong Kong fell more than 60 places to 148th place in Reporters Without Borders’ latest World Press Freedom Index released in May.

Trump defended hosting the Saudi-backed LIV golf tournament by saying 'We have human rights issues' too. Human rights experts agrees and say Trump himself was responsible for many during his presidency.

Hannah Getahun

Sun, November 6, 2022 

Trump owns 18 golf clubs across the world.Jonathan Ferrey/LIV Golf via Getty Images

• Former President Donald Trump has been hosting the LIV golf tournament this week.

• Trump justified hosting the Saudi-backed circuit by pointing to the US's human rights record.

• Human rights groups have previously called Trump out for exacerbating human rights violations while president.

Former President Donald Trump said he has no regrets about hosting the 2022 LIV Golf Invitational at his Miami golf club in an interview with The New York Times, and deflected questions about the Saudi-backed tour.

"We have human rights issues in this country too," Trump said on October 30 after reporters asked whether he was concerned about human rights abuses in Saudi Arabia.

Trump did not disclose to the Times how much the LIV series has paid him to host the tournament, but said golf was "very important" to the Saudi Arabian government and said, "they're putting a lot of effort into it and a lot of money into it."

"These people have great spirit, they're phenomenal people and they have unlimited money — unlimited," Trump told the Times.

LIV has received criticism for its connections to Saudi Arabia, whose government has invested $2 billion in the tour.

The oil-rich nation has received criticism for its human rights abuses, most notably the murder of Washington Post columnist Jamal Khashoggi, which the CIA believes was the responsibility of the Saudi government. The country has also come under fire for its treatment of women and political dissidents.

'We've got a lot of killers'

Sarah B. Snyder, a historian of US foreign relations at American University, told Insider that Trump's comments dismissing the human rights abuses in Riyadh were in line with his previous stances on human rights. Snyder pointed to earlier interviews where Trump brushed off criticisms of Russian President Vladimir Putin by saying, "We've got a lot of killers."

Trump said at the time: "What do you think? Our country's so innocent?"

"The US record on — whether it's human rights abuses, or military interventions overseas, or kind of robust, aggressive defense of US interests, or any country's foreign policy interests — he didn't see that the United States needed to necessarily uphold a different standard," Snyder told Insider.

Snyder continued: "His willingness to support and express admiration for authoritarian governments, whether they're Vladimir Putin in Russia, or royals in Saudi Arabia, that doesn't surprise me."

Human rights groups have acknowledged that the US, like many countries, has its share of human rights issues and violations.

However, multiple, including Human Rights Watch, Amnesty International and Center for American Progress, contend that some current issues were exacerbated by Trump-era policies and rhetoric on the border, Muslims, and LGBTQ rights.

Alison Leal Parker, Managing Director for the US Program at Human Rights Watch, told Insider that "the wholesale assault" of fundamental human rights under Trump was "unprecedented."

"Every previous administration, including the current one, including the Biden administration, has been responsible for human rights violations," Parker said. "But the administration of Donald Trump is a real nadir in the history of human rights violations in the United States."

As president, Trump took measures to turn away individuals at the southern border by barring asylum seekers from entering the US and implemented a zero-tolerance policy that resulted in children being separated from their families at the border.

A report from Dec. 2020 found that 1,300 asylum seekers had been assaulted in Mexico since 2019 following Trump's orders to leave asylum seekers at the border.

"Continuing to turn away and expel people seeking US refugee protection at the southern border is both a humanitarian disgrace and a legal travesty," Human Rights First researcher Kennji Kizuka told Insider at the time.

Human Rights Watch published a report in 2019 about journalists at the US-Mexico border being harassed by US officials.

Trump issued a controversial "Muslim travel ban" while in office, which barred nationals from a handful of Muslim-majority countries from entering the country without a green card or citizenship. As president, Trump insisted it was for the sake of national security, but critics have also said that Trump emboldened anti-Muslim sentiments.

Trump has also been criticized for his policies on LGBTQ rights, including his administration's role in arguing for the legalization of job discrimination against LGBTQ individuals, his response to the 2020 protests sparked by the death of George Floyd, and his rhetoric on coronavirus, which he repeatedly linked to Chinese people.

Snyder said that the presidency has historically been more intentional about considering human rights when making foreign policy decisions. The Trump administration deviated from that approach, she said.

"My assessment of his record during the campaign and in the White House would be that he does not think that one of the US government's top priorities should be the protection of human rights," Snyder said. "And there I'm talking about the protection of human rights domestically. I think he's even less concerned with the rights of people residing outside of the United States."

In comparison, Snyder said President Joe Biden has sent "strong signals about human rights" although, she says that "the meaningful exception has been its approach to Saudi Arabia."

Parker shared a similar sentiment, and also said it was partially "ridiculous" to engage with Trump's statements on foreign policy now that Biden was leading the country.

A potential future Trump presidency could foretell 'potentially damaging'  human rights developments

Although Trump has not formally announced a 2024 bid, he could run for president and possibly win once again.

Snyder said that anyone who feels strongly about the protection of human rights should be concerned about what could happen in a potential next Trump presidency.

"Elections rarely turn on foreign policy issues, and certainly, I think rarely turn on questions of protection of human rights," Snyder said. "I don't know that that will be particularly influential in how people make their decisions even if a return to a Trump presidency would foretell many potentially damaging developments for human rights."

A representative for Trump did not immediately respond to Insider's request for comment.

Meta expected to announce massive layoffs this week that could impact thousand as tech bloodbath continues: WSJ

Bethany Biron
Sun, November 6, 2022

Meta logo.Arnd Wiegmann/Reuters

Meta is expected to announce layoffs for thousands of employees as soon as Wednesday, WSJ reported.

The company already started downsizing and cutting expenses in recent months.

Meta joins a growing list of tech companies slashing their workforces as a recession nears.

Meta is expected to announce a massive round of layoffs this week, The Wall Street Journal reported Sunday.

The layoffs may impact "many thousands" of staffers and could come as soon as Wednesday, sources told the Journal.

A spokesperson for Meta declined Insider's request to comment, but instead pointed to recent remarks from CEO Mark Zuckerberg from the company's third-quarter earnings call which hinted at upcoming downsizing.

"In 2023, we're going to focus our investments on a small number of high priority growth areas," he said in October. "So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year. In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organization than we are today."

Meta employees told Insider's Kali Hays last month that managers had started asking for "increased intensity" and warned of the possibility of coming layoffs that could be anywhere from 10% to 20% of the company's workforce.

"Zuck's message was loud and clear: You have three months to prove your worth, put in 200% effort, or you can resign now if you don't like it," one of the workers said.

Meta's stock plummeted by 20% last month after the company reported worse-than-expected earnings, garnering scrutiny for missteps like spending $4 billion on the metaverse in its most recent quarter.

The layoffs come as a growing list of tech companies begin cutting jobs and many employers brace for a looming economic recession.

On Friday, Twitter laid off an estimated 50% of its staff shortly after Elon Musk took over at the helm. Also last week, Stripe cut 14% of its staffers and Lyft fired 700 employees, while GoFundMe nixed 12% of its team in October, among others.

"It's going to be a hard time; at the micro level, it will affect a lot of people's jobs and livelihoods," Mark Peter Davis, managing partner at Interplay Ventures, told Insider's Rob Price and Samantha Stokes.

The fintech layoffs just keep on coming

Mary Ann Azevedo and Kyle Wiggers
Sun, November 6, 2022 at 8:16 AM·7 min read


Welcome to The Interchange!There’s a lot of fintech news out there and it’s my job to stay on top of it — and make sense of it — so you can stay in the know. — Mary Ann

Wow, I take off one week and come back to all hell breaking loose in the fintech world.

Sadly, it felt like we got news of layoff after layoff.

I’ll attempt to round up as many of them as I can here:

Chime confirmed that it is letting go of 12% of its employees. This equals about 160 people. According to an internal memo obtained by TechCrunch, Chime co-founder Chris Britt said that the move was one of many that would help the company thrive “regardless of market conditions.” In the memo, Britt said that he and co-founder Ryan King are recalibrating marketing spend, decreasing the number of contractors, adjusting workspace needs and renegotiating vendor contractors.

Opendoor announced it was letting go of 18% of its staff. This is around 500 people. Opendoor co-founder and CEO Eric Wu said his company, a publicly traded real estate fintech, was navigating “one of the most challenging real estate markets in 40 years.”

Chargebee has laid off about 10% of its staff. As reported by Jagmeet on November 2, “Chargebee, backed by marquee investors including Tiger Global and Sequoia Capital India, has laid off about 10% of its staff in a 'reorganization' effort due to ongoing global macroeconomic challenges and growing operational debt. The Chennai and San Francisco–headquartered startup, which offers billing, subscription, revenue and compliance management solutions, confirmed to TechCrunch that the update impacted 142 employees.”

Stripe lays off 14% of its staff. As reported by Paul, “Stripe has announced that it’s laying off 14% of its workers, impacting around 1,120 of the fintech giant’s 8,000 workforce." In a memo published online, Stripe CEO Patrick Collison conveyed a familiar narrative in terms of the reasons behind the latest cutbacks: a major hiring spree spurred by the world’s pandemic-driven surge toward e-commerce, a significant growth period and then an economic downturn ridden with inflation, higher interest rates and other macroeconomic challenges.

Danish startup Pleo may lay off 15% of its workers. Jeppe Rindom, co-founder and CEO of Pleo — which less than one year ago raised $200 million at a $4.7 billion valuation — revealed that the company’s new strategy will impact 15% of its roles. He added that “up to 150 of our colleagues may have to leave.” Pleo is a developer of expense management tools aimed at SMBs to let them issue company cards and better manage how employees spend money.

Credit Karma, now a subsidiary of Intuit, has “decided to pause almost all hiring.” This is according to an internal email sent to employees by chief people officer Colleen McCreary. McCreary referenced “revenue challenges due to the uncertain environment.” This was reiterated in Intuit’s fourth quarter earnings call, during which the company shared on November 1 that “all Credit Karma verticals have been negatively impacted by macro uncertainty. Credit Karma experienced further deterioration in these verticals during the last few weeks of the first quarter.”

Remote online notarization services provider Notarize cuts its team by 60 people. A spokesperson told me via email that “the reorganization impacted nearly all teams and the decision was in service to the larger strategy we have been enacting at Notarize, and will enable us to move faster to best serve our customers.” The spokesperson added that in September, one small real estate–focused team was laid off in response to both its strategy shift and “the drastic drop in demand from the specific customers that they served.” The recent layoffs follow a larger layoff in June that impacted 110 people. Prior to that reduction, Notarize had about 440 employees. It currently employs 250 people across the United States.

I wrote this newsletter on November 3 because I'm leaving on a trip to celebrate my 20th wedding anniversary, so it’s possible that more layoffs took place between then and now. :( What this means for the broader fintech world is not yet clear, but when well-funded companies such as Chime, Stripe and Pleo are cutting staff, it is no doubt sobering for all the players -- small or large -- in the space.

Special thanks to TC senior reporter and very nice guy Kyle Wiggers for helping me draft the Weekly News and Fundings and M&A sections below so I could get offline and pack for my trip!

Weekly News

Jeeves, the fintech startup that recently raised $180 million at a $2.1 billion valuation, told TechCrunch via email that it has launched a service called Jeeves Pay that it's billing as a "credit-backed business payments solution" for enterprise customers. At a high level, Jeeves Pay lets customers use their existing credit line to send wires or pay vendors, ostensibly solving the problem of having to rely on cash or revenues to fund local and cross-border business and vendor payments. Jeeves Pay is available now to all Jeeves customers "where permitted by applicable local laws and regulations," the company says.

Brex sees startups as one of the key avenues to growth in the corporate card and spend management market. To that end, the company on Wednesday announced a partnership with Techstars to extend Brex services to companies within the accelerator, following similar tie-ups with Y Combinator and AngelList. For the duration of the accelerator, Techstars participants will get a Brex platform support team, access to exclusive Brex events and free use of Brex's Pry financial forecasting platform. In an interview with TechCrunch, Brex CEO and co-founder Henrique Dubugras described the move as a customer acquisition play.

At Disrupt, TechCrunch interviewed Brex's Dubugras onstage about the company's recent change in strategy, which involves a stronger emphasis on software and the enterprise. A piece for TC+ breaks out the juicy highlights from the conversation, including why Brex decided to stop serving businesses funded outside the venture capital structure and the implications of the company's layoffs earlier this year.

Also at Disrupt, Ramp CEO Eric Glyman, Airbase CEO Thejo Kote, and Anthemis partner Ruth Foxe Blader participated in a roundtable about competing in the increasingly crowded spend management space -- a space, it's worth noting, that's estimated to be worth tens of billions of dollars. Glyman and Kote shared how they’re working to preserve capital, while Blader offered up some of the advice she’s giving to her portfolio companies. Our TC+ recap has the highlights.

How can finance-focused proptech startups survive the downturn? In an exclusive for TC+, we asked three seasoned investors to give their perspectives. One of the major takeaways: The chances of survival are higher for proptech startups that let consumers fractionally invest in properties and increase access for those seeking a rent-to-own approach. Another: Companies that help others navigate tough times seem to be in special demand.

Are landlords and tenants finally ready to ditch paper checks? JPMorgan Chase is betting that they are. The bank this week launched a pilot platform for property owners and managers that automates the invoicing and receipt of online rent payments. The market is enormous -- JPMorgan estimates that more than 100 million Americans pay a combined $500 billion annually in rent to 12 million property owners -- but convincing landlords to move from checks and money orders won't be an easy feat. Only 22% of rent payments are made digitally today, according to JPMorgan.

GREEK/BYZANTINE CATHOLIC RITE

Ukraine church leader: No deal with Russia if they see us as colony


Major Archbishop of the Greek Catholic Church Shevchuk conducts a service in Kiev

Mon, November 7, 2022
By Philip Pullella

VATICAN CITY (Reuters) - The head of Ukraine's Byzantine-rite Catholic Church met Pope Francis on Monday and said there can be no dialogue with Russia as long as Moscow considered the neighbour it invaded a colony to be subjugated.

Major Archbishop Sviatoslav Shevchuk's trip to the Vatican was his first trip outside Ukraine since the Russian invasion in February. He said he prefers to remain in Kyiv to be close to the people despite the bombings and hardships.

"The war in Ukraine is a colonial war and peace proposals by Russia are proposals of colonial pacification," he said after meeting the pope at the Vatican.

Shevchuk, who has several times urged the pope to visit Kyiv, gave Francis a piece of shrapnel from a Russian mine that destroyed the facade of a church in Irpin in March. An estimated 200-300 civilians were killed in Irpin, near Kyiv, before the town was taken back from Russian forces in late March.

"These proposals imply the negation of the existence of the Ukrainian people, their history, culture and even their Church. It is the negation of the very right of the Ukrainian state to exist with the sovereignty and territorial integrity that is recognised by the international community," Shevchuk said.

"With these premises, Russia's proposals lack a basis for dialogue," he said.

Kyiv says it will never agree to cede land taken by force, and that lawful referendums cannot be held in occupied territory where many people have been killed or driven out.

After the Kremlin announced the annexation of four Ukrainian provinces in September in the wake of referendums condemned by Ukraine and the West as a coercive sham, Kyiv said it was applying to join NATO, and would not negotiate with Russia as long as Vladimir Putin is Russia's president.

Last month, Pope Francis for the first time directly begged Putin to stop the "spiral of violence and death" in Ukraine and asked Ukrainian President Volodymyr Zelenskiy to be open to any "serious peace proposal".

Russian forces swept into Ukraine in what Moscow calls a "special military operation" to eliminate dangerous nationalists and protect Russian-speakers. Kyiv calls Moscow's military action an unprovoked imperialist land grab.

Ukraine is predominantly Christian Orthodox but about 10% of the population belongs to the Eastern, or Byzantine-rite, Catholic Church, whose followers are in communion with Rome.

The support of Patriarch Kirill, head of the Russian Orthodox Church (ROC), for Moscow's invasion of Ukraine has splintered the worldwide Orthodox Church and unleashed an internal rebellion.

The war has also prompted some Orthodox believers in Ukraine to abandon their allegiance to the ROC and join the country's own branch of the Orthodox Church, which Moscow refuses to recognise.

(Reporting by Philip Pullella; Editing by Mark Heinrich)

Massachusetts museum returns sacred items to Sioux tribes


 Leola One Feather, left, of the Oglala Sioux Tribe in South Dakota, observes as John Willis photographs Native American artifacts on July 19, 2022, at the Founders Museum in Barre, Mass. A two hour ceremony was held in Massachusetts on Saturday, Nov. 5, 2022, to mark the symbolic return of about 150 items considered sacred by the Sioux peoples that had been stored at a small Massachusetts museum for more than a century. 

(AP Photo/Philip Marcelo, File)

Sun, November 6, 2022 

BARRE, Mass. (AP) — About 150 artifacts considered sacred by the Lakota Sioux peoples are being returned to them after being stored at a small Massachusetts museum for more than a century.

Members of the Oglala Sioux and Cheyenne River Sioux Tribes traveled from South Dakota to take custody of the weapons, pipes, moccasins and clothing, including several items thought to have a direct link to the 1890 Wounded Knee Massacre in South Dakota.

They had been held by the Founders Museum in Barre, Massachusetts, about 74 miles west of Boston. A public ceremony was held Saturday inside the gym at a nearby elementary school that included prayers by the Lakota representatives. The artifacts will be officially handed over during a private ceremony.

“Ever since that Wounded Knee massacre happened, genocides have been instilled in our blood,” said Surrounded Bear, 20, who traveled to Barre from the Pine Ridge Indian Reservation, according to The Boston Globe. “And for us to bring back these artifacts, that’s a step towards healing. That’s a step in the right direction.”

The ceremony marked the culmination of repatriation efforts that had been decades in the making.

“It was always important to me to give them back,” said Ann Meilus, president of the board at the Founders Museum. “I think the museum will be remembered for being on the right side of history for returning these items.”

The items being returned are just a tiny fraction of an estimated 870,000 Native American artifacts — including nearly 110,000 human remains — in the possession of the nation’s most prestigious colleges, museums and even the federal government. They're supposed to be returned to the tribes under the 1990 Native American Graves Protection and Repatriation Act.

Museum officials have said that as a private institution that does not receive federal funding, the institution is not subject to NAGPRA, but returning items in its collection that belong to Indigenous tribes is the right thing to do.

More than 200 men, women, children and elderly people were killed in the 1890 Wounded Knee Massacre on the Pine Ridge Indian Reservation. Congress issued a formal apology to the Sioux Nation a century later for one of the nation's worst massacres of Native Americans.

The Barre museum acquired its Indigenous collection from Frank Root, a traveling shoe salesman who collected the items on his journeys during the 19th century, and once had a road show that rivaled P.T. Barnum’s extravaganzas, according to museum officials.

Wendell Yellow Bull, a descendant of Wounded Knee victim Joseph Horn Cloud, has said the items will be stored at Oglala Lakota College until tribal leaders decide what to do with them.

The items being returned to the Sioux people have all been authenticated by multiple experts, including tribal experts. The museum also has other Indigenous items not believed to have originated with the Sioux.

WE USE DOMINION MACHINES IN CANADA

Special Report-Voting-system firms battle right-wing rage against the machines



Sun, November 6, 2022
By Helen Coster

(Reuters) - Donald Trump’s stolen-election falsehoods have thrust America’s voting machine suppliers into a national struggle to protect their businesses.

Industry leaders Dominion Voting Systems and Election Systems & Software are waging a political and public relations ground war to beat back threats to their state and local government contracts, rooted in bogus conspiracy theories about vote manipulation. Dominion has also turned to the courts, filing eight defamation lawsuits against Trump allies and media outlets including Fox News.

The efforts to fight misinformation have so far blocked any significant loss of business, in part because many counties and states are locked into long-term contracts for voting systems. But the companies are nonetheless taking the election-denial movement seriously as the belief in voter-fraud fictions continues to gain mainstream acceptance on the right. About two-thirds of U.S. Republicans say they believe the election was stolen from Trump, Reuters polls show.

Whenever companies "face a tsunami of suspicion and distrust of their products, that poses an existential threat to their livelihood and survival,” said Mark Lindeman, policy and strategy director at Verified Voting, a U.S. nonprofit that promotes the use of secure voting technology.

Dominion faces the most intense opposition because the company has featured prominently in right-wing theories alleging its equipment flipped votes from Trump to Biden in 2020. In all, Dominion has faced campaigns in at least a dozen jurisdictions across eight states by officials or activists seeking to replace Dominion voting systems based on unproven fraud allegations, according to a Reuters review of government records and interviews with local officials.

Among the risks: a statewide voting-systems contract Dominion holds in Louisiana, which Trump won handily. Officials there have indefinitely delayed awarding a new contract worth about $100 million amid pressure from pro-Trump, anti-machine activists.

In Tuesday’s U.S. midterm elections, five counties facing voting-machine protests — in the states of Nevada, Arizona, Pennsylvania, South Dakota and Minnesota — plan to institute hand-counting of ballots as a check on their machine counts by Dominion or ES&S tabulating equipment. Among them is Nye County, Nevada, where commissioners voted unanimously to recommend dumping Dominion touch-screen voting machines after a pressure campaign by nationally prominent election deniers.

Voting vendors also face including well-funded national campaigns targeting their machines. Such protests could gain steam nationally depending on the election outcome. Election deniers who support ending the use of electronic voting systems are campaigning in battleground states such as Arizona, Michigan, Nevada and Pennsylvania for governor or secretary of state — the top voting administrator.

Dominion declined to comment on its financial performance since the 2020 election and did not answer detailed questions about its campaign to battle misinformation. The company told Reuters that it has been “active” in “refuting the harmful lies spread about us.” Stolen-election activists, the company said, have “damaged our company, harmed elections officials, and diminished the credibility of U.S. elections.”

ES&S also declined to provide financial specifics but said it has not lost customers because of the voting-machine protests. “Jurisdictions continue to need to seek trustworthy support of their elections,” the company said in a statement.

Both companies managed to grow their revenue in 2021, after the contested 2020 election, according to data provided by PrivCo, which tracks private company financial information in a proprietary database.

The assault on voting machines is at the center of a broader offensive on the U.S. election system by a loose network of right-wing activists. Across the country, election officials have received hundreds of threats or menacing messages that cite debunked conspiracies involving the machines. And pro-Trump officials and activists, on the hunt for fraud evidence, have been accused of gaining or trying to gain unauthorized access to voting equipment in at least 18 security breaches since the 2020 election, Reuters has previously reported.

Debunking the torrent of misinformation is costly, forcing voting-machine companies to expand investments in litigation and public relations, according to more than two dozen interviews with election officials, voting-system vendors and their representatives.

Dominion has vocally rebutted voting-machine conspiracy theories in public statements and in its defamation lawsuits. But it has kept a lower profile in the local political fights over its contracts. The company said it prefers to provide information and expertise to local officials who are dealing directly with voting-machine protesters.

ES&S executives travel multiple times a month to states like Kentucky, Wyoming and Idaho, where they participate in equipment demonstrations for the public, according to the company. They confront questions such as whether the machines are connected to the Internet (they aren’t) and whether the company has foreign owners (it doesn’t). The executives include Chris Wlaschin, the company’s senior vice president and chief of security.

ES&S also says it helps public information officers field questions from voters and the media even in jurisdictions where it has no business — such as Antrim County, Michigan, where a quickly corrected error in the initial reporting of 2020 results from Dominion machines was seized on by conspiracy theorists to baselessly allege widespread fraud in the state.

“When we are able to sit at that table and respond to questions, it shows that we are not hiding,” Wlaschin said.

CHINA, VENEZUELA AND ANTIFA

Right-wing activists’ nonsensical claims about systemic vote-rigging have overshadowed a more useful and long-running debate about legitimate issues with U.S. voting systems, according to four election technology experts interviewed by Reuters. Experts have long scrutinized Dominion, ES&S and other voting technology firms over issues including security, usability and interoperability, accessibility for people with disabilities, and a lack of transparency around pricing and contracts.

The systems are “far from perfect,” said Lindeman, of Verified Voting, but the torrent of pro-Trump vote-manipulation claims “make no sense whatsoever.”

Attacks on voting machines exploded after the 2020 election, led by Trump himself. He tweeted on Nov. 12, days after the election, that Dominion “deleted” votes or “switched” them to his Democratic rival, Joe Biden. As Trump’s misinformation went viral, Denver-based Dominion faced an onslaught of Republican voter rage.

Since then, false claims about Dominion and other voting-technology companies have caught fire, spread by local and national politicians, aspiring pro-Trump congressional candidates, Republican activists and right-wing media. Some have alleged without evidence that Dominion machines were rigged in plots involving Chinese communists, Venezuelan socialists or Antifa, the loosely organized U.S. anti-fascist movement.

Dominion is fighting back in court. Since the 2020 election, it has filed eight defamation lawsuits against Trump allies and conservative media outlets. None has yet been resolved. The company has sued Fox News for $1.6 billion in Delaware Superior Court, alleging that Fox defamed the firm by amplifying false claims about its technology in an effort to boost ratings. In a statement to Reuters, Fox called the damages claims "outrageous" and “nothing more than a flagrant attempt to deter our journalists from doing their jobs.” A trial is set for April 2023.

To fight local political battles, Dominion arms state and county election officials with data and other information to counter conspiracy theorists. Kay Stimson, Dominion’s vice president of government affairs, often calls in to local meetings when voting machine issues arise, to keep abreast of the accusations or to answer questions from officials. In Nevada, Dominion employs a high-profile consultant, former Republican Nevada governor Robert List, who appears at county meetings as the face of the company – someone who can sympathize with Trump supporters but deflect blame for his loss away from Dominion.

At an April board of commissioners meeting in Elko County, for example, List told residents that he shares their “rural values” and, as a Trump supporter himself, was disappointed in the outcome of the election. “But I know it wasn’t the fault of the machines,” he said, before debunking some common claims by election conspiracy theorists.

$100 MILLION ON THE LINE

Some of the highest-profile attacks on voting machines have originated with MyPillow chief executive and Trump ally Mike Lindell. In June, at a Louisiana Voting System Commission meeting, he told state officials that America will be lost “if we keep even one machine in this country going forward.”

The commission was created by law in 2021 amid widespread claims of voter-fraud and machine-rigging in the 2020 election. The law also banned a type of voting machine that does not create an auditable paper trail, according to a September report on the effort from the Public Affairs Research Council of Louisiana (PAR), a nonprofit public policy organization.

Lindell said in an interview that his goal in Louisiana and nationally is to force the removal of all voting and voting-counting machines and return to counting paper ballots by hand. Election officials and experts overwhelmingly reject that idea, saying the laborious process would make elections more vulnerable to fraud and error, not less. Many voting security experts recommend a middle-ground approach that already is used in the majority of U.S. jurisdictions: hand-marked ballots, completed in private by voters and counted by machines, which create a paper trail for audits or recounts.

Among those calling for Louisiana to ditch Dominion machines is the state’s Republican National Committeewoman, Lenar Whitney. At a Republican Party meeting last year, she described Dominion as committing “illegal and treasonous acts” in the 2020 election. Whitney did not respond to a request for comment.

In the spring of 2021, Dominion launched a public relations campaign in Louisiana, including ads on the radio and a conservative political website, to fend off opposition to its bid for a new state contract, worth about $100 million. Its executives – along with those from other vendors – appeared at the June Voting System Commission meeting where Lindell gave his presentation attacking the machines. The executives provided technical answers to address common fears of machine skeptics — reassuring them that Dominion was U.S.-owned, and that its machines could not be remotely accessed or rigged through components imported from China.

Authorities in the heavily Republican state acknowledge that their aging Dominion machines, most of them bought in 2005, are outdated. The machines Louisiana uses are no longer manufactured, requiring the state to scavenge for parts when they break and to lease some new Dominion machines as temporary replacements, according to the PAR report. The machines also do not create a paper trail for auditing, which most states now require.

Nonetheless, Republican Secretary of State Kyle Ardoin last year abandoned a state effort to buy new machines amid protests from anti-machine activists and complaints about the fairness of the bidding process.

The Louisiana secretary of state’s office did not make Ardoin available for an interview or answer questions about the delayed contract and the pressure from stolen-election activists. The Republican state election chief, who chairs the Voting System Commission, invoked a “chairman’s privilege” to allow Lindell more time to speak at its June meeting, where the pillow magnate addressed the board for 17 minutes.

A couple of months later, on August 14, Ardoin appeared on an episode of “The Lindell Report,” a show on Lindell’s website. Ardoin said in the 40-minute conversation that he had sent a letter on Aug. 10 ordering local Louisiana election officials to preserve records from the 2020 election as potential fraud evidence. The secretary of state stopped short of alleging widespread voter fraud in 2020 but said a “travesty of manipulation” had “changed the outcome.” He referred to election law changes before the vote, which included expansions of mail voting and ballot drop boxes meant to protect voters amid the coronavirus pandemic.

Asked about voting machines, Ardoin said he had told the chief executives of at least two machine suppliers that they needed to be more “transparent” about the internal workings of the equipment. Otherwise, he recalled telling them, “You’re going to go out of business and our Republic is going to go to hell in a handbasket.”

HAND-COUNTING IN NEVADA

Dominion’s business is also precarious in Stark County, Ohio. The local Board of Elections voted in December 2020 to replace aging Dominion machines with more than 1,400 new ones at a cost of $6.5 million. After Trump supporters protested, citing false voter-fraud claims, the county’s all-Republican Board of Commissioners voted in March of 2021 to withhold funding for the machines, arguing the county could save money by using other voting-equipment vendors.

The county’s Board of Elections sued the commissioners in April last year to try to force them to buy the machines in time for primary elections. The Ohio Supreme Court ruled in May 2021 that the elections board has authority to select voting technology, and that the county must go ahead with the purchase of Dominion machines. The county complied with the ruling.

Members of the elections board and the county commission did not respond to requests for comment.

In Nevada, a critical election battleground, seven county commissions have considered changing their election systems, by switching voting-equipment vendors or getting rid of the machines altogether. Five of the counties have not moved forward on the proposals, but two have started making changes.

In December 2021, officials in Nevada’s rural Lander County voted to switch from Dominion to ES&S – a vendor used by just one other Nevada county. A Lander County elections technology official told an October board of commissioners meeting that replacing Dominion machines was a “positive change to help regain trust in the system.” County officials approved spending more than $223,000 on new ES&S equipment and an additional $69,000 for equipment installation, training and maintenance.

In Nye County, where Trump won 69% of votes in 2020, commissioners voted 5-0 in March to request that the county clerk ditch Dominion touch-screen voting machines and require voters to submit paper ballots.

The county plans to continue using Dominion vote-counting machines, but also to separately hand-count the ballots to confirm the result. Newly elected County Clerk Mark Kampf in September called the continued use of Dominion tabulators a “stopgap measure” as the county researches whether it can exclusively hand-count in the future.

Commissioners were persuaded after a presentation led by Jim Marchant, a Republican candidate for Nevada Secretary of State who falsely claimed voting machines were rigged against Trump in 2020. Marchant is running in a close race and could become the state’s top election official.

“Why is it even a possibility we would even use any of these electronic voting machines at all?” Marchant asked in a March 3 email to Nye’s commission chair, obtained by Reuters in a public records request.

Marchant did not respond to requests for comment.

The decision by Nye’s commissioners amounted to a recommendation. Only the county clerk could legally implement it. Nye’s longtime Republican clerk, Sandra Merlino, said she took early retirement in August out of frustration with the move to scrap the machines. Her replacement, Kampf, has claimed Trump won the 2020 election. He moved quickly to implement the hand-counting plan.

Kampf did not respond to a request for comment.

Nye’s move to paper ballots and its possible switch to exclusively hand-counting could cost Dominion. The company had been receiving more than $50,000 annually for maintenance and other services, according to Merlino, the former clerk. Dominion machines remain in use in 14 of Nevada’s 17 counties.

Merlino said she was stunned the commissioners voted for junking the machines and returning to old-fashioned hand counts.

“I thought: My commissioners are not going to go for this,” she said. “But they did.”

(Reporting by Helen Coster; editing by Kenneth Li, Jason Szep and Brian Thevenot)

DOMINION IS A CANADIAN COMPANY USED AT MUNICIPAL, PROVINCIAL AND FEDERAL ELECTIONS ACROSS CANADA FOR SEVERAL DECADES 

ECOCIDE

Mexico's Pemex had a plan to fix its flaring problem, but abandoned it



 Mexican state oil company Pemex is pictured at its headquarters in Mexico City

Mon, November 7, 2022
By Stefanie Eschenbacher

MEXICO CITY (Reuters) - In late 2016, to avoid racking up fines for burning too much natural gas, Mexico's state oil company Pemex struck a deal with the regulator to invest over $3 billion to fix its flaring problem at its most productive set of oil fields.

But five years on, the little-publicized project has been abandoned, according to three sources with direct knowledge of the matter, and the environmental toll at the Ku-Maloob-Zaap offshore fields in the Gulf of Mexico continues to rise.

The broken commitment, which has not previously been reported, highlights the struggles of Mexico's oil regulator to rein in Pemex, a powerful state monopoly that is always closely connected to the government.


It also shows how, while countries like Colombia, Kazakhstan and Nigeria have cut flaring by investing in infrastructure and strictly enforcing penalties, Mexico is heading in the opposite direction, as Reuters has reported.

Pemex opted to drop the plan half-way through completion, the three sources said, as low gas prices made it less economically attractive and political priorities shifted to raising oil output.

The decision was made despite the environmental cost and threat of regulator fines.

"The fines are not an adequate incentive for a state company to change its way of doing things," said Rosanety Barrios, a former energy ministry official who designed and coordinated policies for the creation of gas and oil products markets.

For decades, companies routinely burnt off gas - whose main component is methane - that came to the surface as a byproduct of oil production and exploration. It was cheaper than investing in infrastructure to capture and process it.

But growing fears about climate change have made that unpalatable.

Mexico - the world's eighth biggest flarer - is under increasing pressure, including from the United States, to cut gas flaring and methane emissions, which are set to worsen as fields age further.

Pemex development plans and legal records, as well as previously unreported internal assessments made by the regulator, and confidential data, show the enormous waste of resources following Pemex's decision to not complete the works on Ku-Maloob-Zaap – which produces nearly 40% of national oil output.

Pemex, the energy ministry and the regulator did not respond to requests for comment. The oil company has in recent quarterly reports stressed it was making efforts to clean up its operations and bring down flaring and other waste.

Pemex broke no laws by not following through with the investment pledge and there were no penalties foreseen under the terms of the deal. But the plan would have been an important step towards operating in a more environmentally responsible manner.

The plan stalled at the end of the term of President Andres Manuel Lopez Obrador's predecessor, the sources said, and was never resumed even as environmental concerns rose.

In a bid to make Mexico self-sufficient, resource nationalist Lopez Obrador has vowed to help Pemex reverse a decade of declining production - even if it results in higher emissions.

Energy experts said the discarded investment plan also shows how Pemex has struggled to understand the rise of the environmental movement - and how important it would become to its own investors.

"Pemex lags behind its peers in terms of climate ambitions: obviously the listed oil majors but also many national oil companies," said Marie-Sybille Connan, a senior ESG analyst at asset manager Allianz Global Investors.

"Pemex operations are in clear need of investment in order to be more efficient and reduce their greenhouse gas emissions."

Earlier this year, under increasing international criticism, Lopez Obrador said Pemex would invest $2 billion to improve infrastructure to reduce flaring and methane emissions. It has yet to publish details on how the money will be spent, over what time period and where it would come from.

PRESIDENTIAL PRIORITIES

In recent years, as the environmental toll of flaring has become ever clearer, many companies have invested heavily in new technology and infrastructure to curb the practice.

Scientists argue that oil companies should not routinely burn off gas at all. But where it is not possible to capture, process or transport the gas, such as in remote Siberian oil fields, they should at least ensure the flare burns cleanly.

A flare, when burning cleanly, breaks down methane - a highly potent greenhouse gas - into mostly carbon dioxide and vapor. Carbon dioxide absorbs far less heat in the atmosphere than methane.

But methane can leak both from poorly burning flares and from pipelines, wells and gas processing centers.

Thirty-four countries, including Mexico, as well as 51 companies, have signed a World Bank-backed pledge to cut routine flaring to zero by 2030.

Despite being one of the signatories, Mexico's flaring hit record levels in 2021, an analysis of satellite images by the Earth Observation Group of the Colorado School of Mines showed.

The government did not respond to repeated requests for comment on the issue over the past year.

Tamara Sparks, who reviewed the findings for Reuters, said preliminary data for the first seven months of 2022, suggest flaring may have dropped slightly but remains near historic levels recorded last year.

At Ku-Maloob-Zaap the situation is particularly stark.

Located some 105 kilometers (65 miles) offshore from Ciudad del Carmen, Campeche, the biggest field in the cluster is named Ku. Forty years since its discovery, Ku remains one of the country's most important oil assets.

Pemex does not release flaring data for the sites but four different sets of non-public data from the regulator, seen by Reuters, showed flaring and other waste at Ku-Maloob-Zaap went up dramatically since 2018.

The regulator said in 2020 the company wasted 37.7% of the gas from Ku alone through flaring, venting or otherwise. Mexico's legal limit is 2%.

Methane leakage has also been a problem. Scientists, including from the Polytechnic University of Valencia in Spain, detected two massive methane emissions at part of the Ku-Maloob-Zaap infrastructure meant to burn off the methane component of the gas, one in December 2021 and another in August this year.

LICENSE TO FLARE

The more-than $3 billion Pemex said in November 2016 it would invest to cut flaring was meant to go towards five different infrastructure projects.

The company had just been slapped with a fine for exceeding the regulator's limit and presented the plan to fix the problem, a document from the regulator seen by Reuters shows.

Sergio Pimentel, a former top official who was at the regulator at the time, said the first fine - of 2.19 million pesos (then worth $106,000) - was "symbolic" and meant to persuade Pemex to change course. Penalties for second offenses tend to be higher.

As the regulator approved the proposal, it stressed the urgency of the issue in an evaluation document, saying the amount of gas from these fields "will continue to rise," making it increasingly important that Pemex had an effective way to capture and process it.

But the plan was abandoned just two years later, according to a second document from the regulator, which was drawn up to detail the progress.

Pemex had spent half of the pledged money on fixes that did nothing to solve the underlying problem, two of the sources said, pointing to heavy investment in pumping equipment, pipes and a turbocompressor.

But the final pieces of infrastructure were never built, including a new platform meant to compress the gas gathered from all the oil fields and reinject it to maintain pressure and prolong their useful life.

Without that, the other investments were effectively useless, the sources added, because the gas was still sent to the flare, just as before.

One source said the regulator fined Pemex again for recurrence in 2021 but the oil company started legal proceedings to annul the fine, which are still pending.

In 2020, in an effective admission that it would not fulfill the goals of the investment commitment it had made in 2016, Pemex sought regulatory permission to flare or otherwise waste at the Ku field at an even steeper rate for another decade.

It proposed to flare as much as 71.3% of the gas until 2030, public documents reviewed by Reuters show. The regulator approved the plan.

Pimentel, the only official who voted against it, said the regulator should not have approved the request because flaring and venting at such levels are both terrible for the environment and against the law.

"Pemex did not reach the (2% waste) target because it didn't go through with the investment promises it had made," he said. "Mexico has international commitments on climate change, and it should comply with them."

(Reporting by Stefanie Eschenbacher; editing by Stephen Eisenhammer and Claudia Parsons)

Homeland Security Admits It Tried to Manufacture Fake Terrorists for Trump

Dell Cameron
Sat, November 5, 2022 

Photo: Associated Press (AP)

The Department of Homeland Security launched a failed operation that ensnared hundreds, if not thousands, of U.S. protesters in what new documents show was as a sweeping, power-hungry effort before the 2020 election to bolster President Donald Trump’s spurious claims about a “terrorist organization” he accused his Democratic rivals of supporting.

An internal investigative report, made public this month by Sen. Ron Wyden, a Democrat of Oregon, details the findings of DHS lawyers concerning a previously undisclosed effort by Trump’s acting secretary of homeland security, Chad Wolf, to amass secret dossiers on Americans in Portland attending anti-racism protests in summer 2020 sparked by the police murder of Minneapolis father George Floyd.

The report describes attempts by top officials to link protesters to an imaginary terrorist plot in an apparent effort to boost Trump’s reelection odds, raising concerns now about the ability of a sitting president to co-opt billions of dollars’ worth of domestic intelligence assets for their own political gain. DHS analysts recounted orders to generate evidence of financial ties between protesters in custody; an effort that, had they not failed, would have seemingly served to legitimize President Trump’s false claims about “Antifa,” an “organization” that even his most loyal intelligence officers failed to drum up proof ever existed.

“Did not find any evidence that assertion was true”

The DHS report offers a full accounting of the intelligence activities happening behind the scenes of officers’ protest containment; “twisted efforts,” Wyden said, of Trump administration officials promoting “baseless conspiracy theories” to manufacture of a domestic terrorist threat for the president’s “political gain.” The report describes the dossiers generated by DHS as having detailed the past whereabouts and the “friends and followers of the subjects, as well as their interests” — up to and including “First Amendment speech activity.” Intelligence analysts had internally raised concerns about the decision to accuse anyone caught in the streets by default of being an “anarchist extremist” specifically because “sufficient facts” were never found “to support such a characterization.”

One field operations analyst told interviewers that the charts were hastily “thrown together,” adding they “didn’t even know why some of the people were arrested.” In some cases, it was unclear whether the arrests were made by police or by one of the several federal agencies on the ground. The analysts were never provided arrest affidavits or paperwork, a witness told investigators, adding that they “just worked off the assumption that everyone on the list was arrested.” Lawyers who reviewed 43 of the dossiers found it “concerning,” the report says, that 13 of them stemmed from “nonviolent crimes.” These included trespassing, though it was unclear to analysts and investigators whether the cases had “any relationship to federal property,” the report says.

A footnote in the report states that “at least one witness” told investigators that dossiers had been requested on people who were “not arrested” but merely accused of threats. Another, citing emails exchanged between top intelligence officials, states dossiers were created “on persons arrested having nothing to do with homeland security or threats to officers.”

Questioned by investigators, the agency’s chief intelligence officer acknowledged fielding requests by Wolf and his acting deputy, Ken Cuccinelli, to create dossiers “against everyone participating in the Portland protest,” regardless of whether they’d been accused of any crime, the report says. That officer, Brian Murphy, then head of the agency’s Office of Intelligence and Analysis (I&A), told interviewers that he’d rejected the idea, informing his bosses that he could only “look at people who were arrested,” and adding that it was something his office had done “thousands” of times before.

The DHS report, finalized more than a year ago, includes descriptions of orders handed down to “senior leadership” instructing them to broadly apply the label “violent antifa anarchists inspired” to Portland protesters unless they had intel showing “something different.”

Once the dossiers were received by the agency’s emerging threat center, it became clear that DHS had no real way to tie the protesters to any terrorist activities, neither at home nor abroad. Efforts to drum up evidence to support the administration’s claim that a “larger network was directing or financing” the protesters — a task assigned to another unit, known as the Homeland Identities, Targeting and Exploitation Center, diverted away from its usual work of analyzing national security threats — “did not find any evidence that assertion was true,” the report says.

A Trumped-up Threat, a Trumped-up Homeland Security Department

Fears of political toadies occupying key intelligence roles had been aired publicly by former intelligence community members during the Trump administration’s early years, but their concerns were all but ignored by Senate Republicans during confirmation hearings that would ultimately inflict serious reputational damage on a number of agencies that, for their own survival, had long avoided partisan leanings.

The report is based on interviews with approximately 80 employees conducted by attorneys drawn from various agency components, including U.S. Customs and Border Protection and the U.S. Coast Guard. The investigation began in response to leaks of internal DHS emails in July 2020 that prompted questions from lawmakers about potential intelligence abuses, including the monitoring of journalists’ activities online and the liberal application of terrorism-related language to describe Americans engaged in protest.

I&A is one of the nation’s 17 intelligence community members overseen by the nation’s “top spy,” the director of national intelligence, whose office drafts daily top-secret briefings for the president. The directorship was held throughout the protests by John Ratcliffe, a Republican of Texas and renowned Trump loyalist, whose nomination to the post was withdrawn initially in 2019 over qualifications concerns raised by lawmakers and career intelligence officials.

The dossiers, known as Operational Background Reports, or OBRs, are known colloquially within the agency as “baseball cards,” the report says. The task of creating them was handed, “with little to no guidance on execution,” to the agency’s Current and Emerging Threats Center, an analysis unit whose “actionable intelligence” is distributed widely throughout the government. According to the report, the dossiers would’ve been shared with, among others, the agency’s Field Operations Division, which works closely with House and Senate committee staffers, and the Federal Protection Service, whose core mission is securing some 9,000 federal facilities across the country. The extent to which entities outside the federal government were meant to be involved is unclear; however, the report indicates that DHS state and local partners, which would naturally include law enforcement, but also potentially organizations like National Governors Association, could have also been in the loop.

Funded to the tune of $1.5 billion, the Federal Protective Service (FPS) is comprised of thousands of security officers drawn from private contractors such as Triple Canopy, a firm merged in 2014 with another contractor called Academi, previously known as Blackwater. Its staff notoriously included elite warfighters recruited from among the Navy SEALS, the Army Rangers, and the Marines expeditionary force MARSOC.

Activated to engage protesters targeting federal buildings in Portland — including the well-vandalized Hatfield Federal Courthouse — FPS personnel were eventually joined by officers hailing from across the federal government, including some on loan by the U.S. Marshals Service tactical unit normally tasked with making the arrests of the nation’s most violent fugitives. They converged for a mission dubbed “Operation Diligent Valor,” authorized under Executive Order 13933, purportedly to apprehend “anarchists and left-wing extremists” who’d been driven by Floyd’s murder to target U.S. monuments commemorating slave owners and Confederate traitors — dangerous individuals, Trump said, advancing a “fringe ideology” painting the U.S. government as “fundamentally unjust.”

Floyd’s death at the hands of Minneapolis police officer Derek Chauvin, convicted of murder and sentenced to 22 and a half years in prison in 2021, sparked more than 100 days of continuous marches in Portland. Sporadic protests continued well into the next spring, frequently marked by nightly standoffs between protesters toting bottles, fruit, and fireworks and riot-control squads armed with nightsticks, pepperspray, and “kinetic impact munitions” designed to irritate, disorient, and compel compliance through pain.

Police would eventually rack up an unprecedented 6,000 documented use-of-force cases against the demonstrators, who in turn reportedly inflicted more than $2.3 million in damage to federal buildings alone. Police ran off legal observers and physically beat journalist who suffered injuries at the hands of federal agents armed with crowd control weapons as well. In response to the bad press, Justice Department lawyers filed a successful motion in court giving police the power to force reporters off the streets.

Reports began surfacing, meanwhile, of protesters being abducted near demonstrations by men jumping out of unmarked vans in military fatigues. After widely circulated footage confirmed the accounts, DHS acknowledged the abductions, as well as the fact that agents had taken intentional steps to ensure their identities remained secret.


Analysts would feed protesters’ names into an array of databases, including LexisNexis, a tool used by Immigration and Customs Enforcement agents to hunt undocumented immigrants. Another tool, referred to as “Tangles” — a likely reference to the now-defunct Facebook app CrowdTangle — was used to “[compile] information from the subject’s available social media profiles.

The report also states that dossiers were requested on multiple journalists, including Benjamin Wittes, editor-in-chief of Lawfare.

Wittes was targeted for publishing unclassified DHS materials, including the initial leak that set off the investigation. Wittes had coauthored an article at Lawfare with Steve Vladeck, a University of Texas law professor, in July 2020, which included leaked guidance — known as a “job aid” — disclosing DHS plans to act on Trump’s executive order. The document, Lawfare reported, implicated “at least parts of the intelligence community” in the “monitoring and collecting information on some protest activities.” Later leaks obtained by the New York Times included a DHS memo that, among other things, summarized tweets that had been published by Wittes.

One tweet, published on July 26 — a week after Lawfare published the guidance document — included a leaked email by DHS’s acting chief intelligence officer, relaying orders to begin referring to all violence in Portland as the work of “Antifa.”

As the summer nights grew longer and the 2020 elections near, the media spent less time focused on the cause of the demonstrations — the suffocation of a Black father of five by a white Minneapolis police officer who was outwardly unmoved by Floyd’s desperate pleas for air, or the heartrending cries for his mother. Headlines shifted instead, as if on cue, to focus on the narrative crafted by the president’s flailing reelection campaign; a pre-packed delusion designed to strike fear in voters’ imaginations and tether Democrats to a fictitious terrorist threat.

Nothing could dissuade Trump from continuing to propagate the claims, which his supporters — most to this day — continue to blindly believe. “In my book it’s virtually a part of their campaign, Antifa,” Trump said in the final months before the election. “The Democrats act like, gee, I don’t know exactly what that is.”

Trump’s highest ranking intelligence crony, John Ratcliffe, meanwhile, would go on to play the only card left with a little help from Sen. Lindsey Graham, the Republican chairman of the Senate Judiciary Committee.

Shocking and alarming career intelligence officials, Graham posted a letter online ahead of the election’s final debate. It contained a batch of Russian disinformation that a Republican-led committee had disregarded as bogus four years earlier. Apparently, it focused on the only Democratic left on whom they could find any material with which to smear: Hillary Clinton, who had no election to lose.

Gizmodo