Malaysia’s political stability, electrical ecosystem credited for convincing Amazon, Tesla to invest

AWS and Tesla recently announced plans to invest in Malaysia.

 PHOTOS: REUTERS, AFP

MAR 7, 2023

KUALA LUMPUR – Amazon Web Services (AWS) took a wait-and-see approach that spanned a number of years before deciding to invest RM25.5 billion (S$7.7 billion) in Malaysia, said Prime Minister Anwar Ibrahim on Tuesday.

“Negotiations started in December 2019 and were ongoing... In the end, they contacted us to state that it was because of political stability and clear direction in policies that Amazon chose Malaysia to set up their base,” Datuk Seri Anwar said in response to a parliamentary question in the Dewan Rakyat.

He added that transparency in negotiations between AWS and the government was also a factor in the company’s decision to invest here.

“There were to be no negotiations with agents or private companies selected by us. We said that they (AWS) have the freedom and transparency to make their own choice subject to stipulated conditions,” he said.

Mr Anwar also noted that incentives provided to foreign investors are sufficient and AWS was more concerned if Malaysia was business-friendly.

“What they stressed on was the ease of doing business on matters such as whether approvals could be made swiftly. That is why we have set up a main task force committee to oversee the project as we cannot carry on operating like the old ways,” he said.

AWS announced last Thursday that it would be launching a new infrastructure region in Malaysia as part of a public-private sector partnership with the Malaysian government.

The announcement also came with AWS confirming it intends to invest at least RM25.5 billion in the country by 2037 with the intention of developing Malaysia as a “cloud region” for data storage and other cloud-based services.

AWS’ established cloud regions in Asia currently include Singapore, Jakarta, Seoul, Tokyo, Osaka, and Hong Kong. The company is also developing a new region in Thailand.

Another corporate giant, Tesla, also recently announced plans to invest in Malaysia.

International Trade and Industry Minister Tengku Zafrul Aziz had previously said Tesla’s decision was based on Malaysia’s strong electrical and electronics ecosystem to support the manufacture of electric vehicles (EVs).

Tesla plans to set up an operating office, its famed experience centres, as well as aftersales support facilities in the country.

Mr Anwar said businesses from Singapore and the Philippines have indicated their interest in using the AWS cloud facilities in Malaysia once they have been set up.

Without providing specific figures, he said the investments by AWS and Tesla would create several thousand jobs, including positive spillover effects for the surrounding small and medium-sized enterprises. 

THE STAR/ASIA NEWS NETWORK

N.J.’s biggest special interests have spent $285 million to sway politicians this century. Here’s the list.

2023/03/12

The New Jersey Statehouse dome in Trenton


The current median cost of a home in Trenton is $175,000, according to Realtor.com. For that price, the top 25 lobbying spenders and special interest groups could have bought up more than 1,628 houses in New Jersey’s capital city with all the money they’ve shelled out to influence state lawmakers since the turn of the 21st century.

The top spenders invested $284.7 million to lobby lawmakers and the governor’s office from 2000 through last year, according to a new report from the state Election Law Enforcement Commission.

It includes the New Jersey Education Association, the state’s largest teachers’ union — a longtime powerhouse that dwarfs them all. There are companies with household Jersey names such as Verizon and PSE&G. And there’s the AARP, the huge lobby whose members are 50 years old and up.

“These 25 groups were responsible for one-fifth of all lobbying expenditures during that 23-year period,” Jeff Brindle, ELEC’s executive director, said in a statement. “Most of these are large organizations with big financial stakes in New Jersey. Policies they support or oppose can have a significant impact on these organizations and the lives of New Jersey citizens.”

The group that dug deepest into its pockets by far was the NJEA, which represents nearly 200,000 teachers. It spent more than $52.5 million during that period.

According to the report, that includes $11,259,886 spent in 2011 and $6,869,256 in 2010. That was around the time then0Gov. Chris Christie and then-state Senate President Stephen Sweeney teamed up to overhaul the state’s pension and health benefits plan, which Christie ultimately signed into law in 2011.

The NJEA spent $10,348,911 in 2015, the same year it launched a major TV ad campaign that called into question the Assessment of Readiness for College and Careers, or PARCC, testing. It funded another ad campaign that year that urged lawmakers to fully fund the state’s pension system.

It also spent $6,240,028 in 2019, the same year it gave money to New Direction NJ, a pro-Murphy group that amassed millions of dollars and was used to promote Gov. Phil Murphy’s legislative agenda. The NJEA spent $6,255,530 in 2020 — the first year of the coronavirus pandemic.

The next largest spending was from AARP, which invested $16.6 million into its causes over the years.

Among other things, it’s lobbied for the past decade to pass the Caregiver’s Assistance Act, which would provide a $675 tax credit for families who take on caregiving expenses. The group has ratcheted up the campaign in recent years.

Verizon spent $16.4 million since 2000, including a $4,717,250 outlay in 2006. At the time, there was an epic battle in Trenton over cable television legislation. Verizon was ultimately successful in its effort to get new legislation that would make it easier for the company to get into the cable business.

Horizon Blue Cross Blue Shield, New Jersey’s largest health insurer, invested $16.3 million in its causes. It spent $2,524,921 in 2017, the year Christie proposed reforms to the company’s board and wanted to take $300 million of Horizon’s reserves to help pay for a program to prevent the abuse of opioids.

The battle on the issue between Christie and lawmakers got so contentious it led to New Jersey’s first state government shutdown in more than a decade. The shutdown gained international attention after NJ Advance Media published photos of Christie lounging on a beach that was closed to the public because it’s part of a state park. Christie was there with his family because governors has access to a beach house located in Island Beach State Park.

Public Service Enterprise Group, commonly known as PSE&G, spent $15.9 million since 2000. In 2019, New Jersey utility customers committed to paying $300 million each year for the next three years to keep the state’s three remaining nuclear reactors open. It was a controversial measure that was hotly debated in Trenton.

ELEC’s report was released alongside data that showed New Jersey lobbyists shelled out $95 million last year.

It was a little less than what lobbyists spent in 2021 and short of the $106.8 million they shelled tout in 2020. ELEC says it’s a sign lobbying is returning to normal after spending went up after the coronavirus pandemic, which spurred emergency legislation that dealt with hospitals and businesses.

Top 25 Special Interest Groups Spent $285 Million on Lobbying Since 2000.

NJ Advance Media staff writers Brent Johnson and Susan K. Livio contributed to this report.

Matt Arco may be reached at marco@njadvancemedia.com.

Leaping lizards: Peru finds a new one

A new species of lizard of the genus Proctoporus was discovered in a high mountain area of the Andes in the Otishi National Park, Peru, officials said 

 Edgar LEHR / AFP

Agence France-Presse
March 11, 2023

A new species of lizard, of the genus Proctoporus, was found in a high Andean area of a national park in Peru, authorities said Friday.

This small species was located in the Otishi National Park, in the jungle area shared by the departments of Cusco and Junin, the Peruvian authority for protected areas announced.

This is a new specimen of the genus Proctoporus that includes species that inhabit yungas forests and high mountain grasslands on the Amazon slope of the Andes," said the National Service of Natural Areas Protected by the State (Sernanp), without specifying the date of discovery in an area located between 3,241 and 3,269 meters above sea level.

Among its characteristics, "its smooth scales on the head, which lack grooves or roughness, and the eyelids with an undivided translucent disc" stand out, the agency reported.

Males have a dark gray to black neck, breast, and belly, while females have a pale gray neck, breast, and belly with a diffused dark gray.

Peruvian authorities say that there are 20 species of Proctoporus, of which 18 are found in Peru. The discovery was made by a team of five researchers.

How Washington state raised $300 million for climate action from polluters

Smoke rises from a chimney at a coal chemical factory. (AFP)

Kate Yoder
March 11, 2023

This article originally appeared in Grist.

A new effort to tackle climate change in Washington state just got a boost of cash.

On Tuesday, the state announced the results of its first “cap-and-invest” auction. It raised an estimated $300 million from polluting companies to fund projects such as building clean energy, reducing emissions from buildings and transportation, and adapting to the effects of rising global temperatures.

Washington has set a goal to cut its carbon emissions 95 percent below 1990 levels by 2050. In that effort, the state is putting a statewide limit on carbon emissions that gradually lowers over time. Under the cap-and-invest system, businesses buy “allowances” for the greenhouse gases they emit. But these permits will become more expensive over time — both an incentive to cut emissions and a method of raising money to address climate change.

In Washington’s first auction, held last week, the permits sold out, averaging about $49 per ton of carbon dioxide. The price was nearly double that of the most recent cap-and-trade auction held by California and Quebec, where the average was $28 per ton.

“The auction price is potentially higher because Washington’s program requires stronger climate pollution cuts than anywhere else in the country,” said Kelly Hall, the Washington director for the regional nonprofit Climate Solutions. “There is strong competition for these allowances.”

Washington’s auctions, which will take place four times a year, are projected to raise nearly $1 billion annually. At least 35 percent of the revenue is slated to go toward projects that benefit communities historically and disproportionately impacted by pollution. By the end of April, once the budgeting process is ironed out, the state will begin the process of setting up these various climate initiatives, said David Mendoza, the director of public engagement and policy at The Nature Conservancy in Washington.

The state’s cap-and-invest system, which began in January, follows in the footsteps of several state and regional cap-and-trade systems — with a few key changes. It relies less on carbon offsets and is also designed to address some equity concerns around cap-and-trade. In California, for example, studies have shown that pollution in Black and Latino communities actually increased in the years since that state’s cap-and-trade program began.

Washington’s system takes the novel approach of pairing cap-and-trade with a regulatory air quality program intended to crack down on large and small sources of pollution in the hardest-hit areas. While the state is still figuring out the details, last week, its Department of Ecology announced that it had identified 16 communities where it plans to concentrate efforts to improve air quality. South Seattle, Tacoma, and Spokane made the list, as did some rural areas.

Cap-and-trade programs are now up and running in more than a dozen U.S. states, including Oregon and a regional program in the Northeast. Still, the approach remains controversial. Washington’s program has gathered criticism for giving some large emitters, such as petroleum refineries and paper mills, a free pass. While these polluters can buy allowances at little or no cost for the next dozen years, they are still covered under the program’s declining cap on emissions.

The state is currently looking into linking up its cap-and-trade program with California and Quebec, which have already joined markets. In Washington, there’s a requirement that they can only link the markets if the state determines that it won’t result in a “negative impact on overburdened communities in either jurisdiction,” Mendoza said.

After researching the potential benefits — and consequences — of linking the programs, the state is expected to issue a recommendation on whether to join California’s market by the end of summer.


Grist is a nonprofit, independent media organization dedicated to telling stories of climate solutions and a just future. Learn more at Grist.org

SUNDAY FUNNIES

Kenyan Pastor Who Claims To Be Messiah Seeks Police Protection After Threats Of Crucifixion

Yesu Wa Tongaren, a man claiming to be Jesus and his wife in Bungoma county. Photo: UGC

A Kenyan pastor, Yesu Wa Tongaren, who claims to be the Christian Messiah, has reportedly sought police protection after members of his community said he should be crucified over the Easter holiday.

It was claimed that Yesu Wa Tongaren, whose real name is Eliud Wekesa, performed a miracle of turning water into tea.

According to a Kenyan publication, TUKO.co.ke, Wekesa also has a group of 12 disciples. His wife was quoted as saying:

Recently he made the water turn to tea. People drank it and were very happy and more remained and some carried it home.

One Facebook user said that since Yesu Wa Tongaren claims to be the Messiah, he should also be crucified on the cross. Said the writer:

Huyu yesu wa Bungoma lazima tumsulubishe. Haezi jiita Yesu na hajateswa can’t happen Ama mnaonaje (This Bungoma man should be crucified. He cannot call himself Jesus without suffering. What do you guys think?

Members of his community in Bungoma argue that if he is really the Messiah, he should be crucified and he would also resurrect on the third day and ascend to heaven.

Posting on Twitter, a Kenyan social media personality Omwamba said Wekesa has since reported the threats to the police station. He wrote:

Self-proclaimed jesus christ of Bungoma (yesu wa Tongaren) now claims that his life is in danger.

This is after a section of residents of Bungoma were overheard saying he must be crucified during Easter the same way Jesus was crucified.

The residents have assured him that if he is truly the messiah, he will resurrect on the third day and go to heaven after the crucifixion so he should not worry at all.

He has since reported the matter to the police station.

Wekesa recently told TUKO.co.ke that God’s army was protecting him from any harm and those who plan to crucify him will only do so in their dreams.

Philippines oil spill: Residents report nausea and dizziness in affected villages

PublishedShare

IMAGE SOURCE,EPA

Image caption,

Filipino fishermen wearing protective suits collect oily waste along a beach in Pola

By Nicholas Yong

BBC News, Singapore

Dozens of people have fallen sick in coastal villages in the Philippines after a major oil spill from a sunken tanker.

The MT Princess Empress was carrying 800,000 litres of industrial fuel oil when it sank off the coast of the Oriental Mindoro province last week.

That oil has since reached the shores of several nearby fishing villages, coating beaches in black sludge.

Residents have reported experiencing cramps, vomiting and dizziness.

Clean-up workers deployed to the affected village of Pola have also reported feeling ill, local media reported.

Breathing fuel oil vapours can cause symptoms such as nausea and headaches, while skin contact may cause itchiness and blisters.

Philippines authorities have declared a state of calamity for the affected areas in the province and imposed a fishing ban until the spill is cleaned up.

But the ban has a huge impact on the livelihoods of many locals in the area. More than 18,000 fishermen across 60 villages have been barred from the water, local authorities said.

Philippines' tourism ministry has also raised concerns about the spill tainting waters at popular diving destinations including the Verde Island passage and Apo Reef in Mindoro and World War Two shipwrecks in Palawan.

IMAGE SOURCE,REUTERS

Image caption,

An aerial view shows the oil spill from the MT Princess Empress in Pola

Some 36,000 hectares (88,958 acres) of coral reef, mangroves and sea-grass are also at risk from the spill, marine biologists say.

Oil can kill corals or impede their growth. It can also poison or suffocate wildlife, which further disrupts food chains and ecosystems.

The Philippines Coast Guard has been trying to contain the spill for over a week - since the ship sank on 28 February. They have also deployed oil spill booms and sprayed chemicals in efforts to control the spread.

Authorities said on Monday they believed they had located the ship, which had moved from the spot it sank at last week.

It is not yet clear what caused the Philippine-flagged vessel to sink in rough seas. All 20 of its crew were rescued by a passing cargo ship before the vessel went down.

Experts say authorities are verifying how much oil is left inside the tanker, and how to pump the remainder out and prevent further leaks.

The tanker's owner, RDC Reield Marine Services Inc., has contracted two local agencies for the clean up.

SILICON VALLEY BANK CRASH

Tech execs race to save startups from 'extinction' after SVB collapse
Reuters
March 12, 2023


By Jeffrey Dastin, Anna Tong and Krystal Hu

PALO ALTO, California (Reuters) - Technology executives, prominent venture capitalists and founders including OpenAI CEO Sam Altman raced this weekend to keep alive companies caught up in the collapse of Silicon Valley Bank.

Friday's dramatic failure of the bank, which focuses on tech startups, was the biggest since the 2008 financial crisis. It roiled global markets, walloped banking stocks and left California tech entrepreneurs worrying about how to make payroll.

Aiming to avoid what Garry Tan, the CEO of startup accelerator Y Combinator, called a potential "extinction level event" in the tech sector, industry executives moved quickly to do what they could to save small businesses.

Altman, who runs one of Silicon Valley's hottest companies, bailed out some entrepreneurs from his own pocket, according to a Twitter message by his brother and one beneficiary who spoke with Reuters.

"I was running out of options, and so I just emailed him," Doktor Gurson, CEO of Rad AI, said in an interview on Saturday. Within an hour or two, Altman responded, offering him six figures: enough to make payroll and no strings attached, just a request to return the funds once Gurson is able, he said.

Asked for comment, Altman told Reuters, "I remember the investors who helped me out when I was running a startup and I really needed it, and I always try to pay it forward."

Henrique Dubugras, co-CEO of fintech startup Brex, also spent the weekend working the phone after his company announced an emergency credit line on Friday to help startups get through their next payroll.

As of Saturday evening, he said Brex had received $1.5 billion in demand from nearly 1,000 companies. "We’re trying to sign up lenders by end of day tomorrow. Everybody is sprinting," he said.

Even small startups are getting in on the action to help others. Aleem Mawani, founder of Streak, a company with about 30 employees, tweeted Friday he would lend his personal cash free of any terms to other small startups worried about paying staff. He said he then had discussions with a few companies and was aiming to prioritize lending for those living paycheck to paycheck.

“I'm a founder and I know how awful it would be to not make payroll,” Mawani said in an interview.

'MALFEASANCE OR MISMANAGEMENT'

By late Saturday, more than 3,500 CEOs and founders representing some 220,000 workers had signed a petition started by Y Combinator appealing directly to U.S. Treasury Secretary Janet Yellen and others to backstop depositors, many of them small businesses who are at risk of failing to pay staff in the next 30 days.

The petition advocated "stronger regulatory oversight and capital requirements for regional banks" and an investigation into any "malfeasance or mismanagement" by SVB executives. More than 100,000 jobs could be at risk, the petition warned.

SVB did not reply to a request for comment, and Y Combinator did not elaborate on the petition.

Venture investors have advised startups to seek alternatives to gain short-term liquidity. Some, including Lowercarbon Capital, have offered loans to portfolio companies that have funds stuck at SVB.

Its partner Clay Dumas said Lowercarbon would provide payroll support for the next two weeks and was wiring funds out Monday.

Khosla Ventures told Reuters, “Given the rapidly evolving situation, we are talking to 100+ portfolio companies assessing their critical needs and plan to bridge where we are a lead or major investor."

'LIFELINE'

Rad AI's Gurson had not talked to Altman for years when he emailed the OpenAI chief Saturday morning, desperate for help. The startup relied on SVB, the sudden closure of which meant he lacked the money to pay some 65 employees on Monday, he said.

"People's livelihoods depend on us," said Gurson, whose San Francisco-based company helps radiologists work more efficiently and includes staff with wide-ranging roles and wherewithal. "They’ve got mortgages to pay; they’ve got bills."

Gurson's co-founder waited eight hours on a Federal Deposit Insurance Corporation hotline to no avail, he said. Multiple attempts to transfer funds out of SVB had failed.

But Gurson saw a Twitter post from Altman, whom he met as a founder participating in 2014 in Y Combinator, where Altman was president. The two men did not know each other very well, he said.

"It's like a lifeline," Gurson said of Altman's generosity.

Gurson estimated "conservatively" that Altman has given more than $1 million to support other startups in similar need.

"The crazy thing here is he's not an investor in our company," Gurson said. "He didn’t ask for anything."

Altman did not comment on how much he had given companies but said he did not view his contributions as risky.

"Even if SVB can't find a buyer or a loan over the weekend, a lot of the money startups have on deposit will be made available to them. But in the meantime, people are facing a real liquidity crunch through no fault of their own, and employees need to get paid," he said.

(Reporting by Jeffrey Dastin in Palo Alto, Anna Tong and Krystal Hu in San Francisco; Additional reporting by Tatiana Bautzer; Writing by Kenneth Li; Editing by William Mallard)

Silicon Valley Bank's demise began with downgrade threat



2023-03-11 
Peder B. Helland - Hope

In the middle of last week, Moody's Investors Service Inc delivered alarming news to SVB Financial Group (SIVB.O), the parent of Silicon Valley Bank: the ratings firm was preparing to downgrade the bank's credit.

That phone call, described by two people familiar with the situation, began the process toward Friday's spectacular collapse of the startup-focused lender, the biggest bank failure since the 2008 financial crisis.

Friday's collapse sent jitters through global markets and walloped banking stocks. Investors worry that the Federal Reserve's aggressive interest rate increases to fight inflation are exposing vulnerabilities in the financial system.

Details of SVB's failed response to the prospect of the downgrade, reported by Reuters for the first time, show how quickly confidence in financial institutions can erode. The failure also sent shock-waves through California's startup economy, with many companies unsure how much of their deposits they can recover and worrying about how to make payroll.

The Moody's call came after the value of the bonds where SVB had parked its money fell due to the higher interest rates.

Worried the downgrade could undermine the confidence of investors and clients in the bank's financial health, SVB Chief Executive Greg Becker's team called Goldman Sachs Group Inc (GS.N) bankers for advice and flew to New York for meetings with Moody's and other ratings firms, the sources said.

The sources asked not to be identified because they are bound by confidentiality agreements.

SVB then worked on a plan over the weekend to boost the value of its holdings. It would sell more than $20 billion worth of low-yielding bonds and reinvest the proceeds in assets that deliver higher returns.

The transaction would generate a loss, but if SVB could fill that funding hole by selling shares, it would avoid a multi-notch downgrade, the sources said.

REUTERS

Silicon Valley Bank staff offered 45 days of work at 1.5 times pay, FDIC email shows

LANANH NGUYEN AND PETE SCHROEDER
REUTERS

Employees of Silicon Valley Bank were offered 45 days of employment at one and a half times their salary by the Federal Deposit Insurance Corp, the U.S. regulator that took control of the collapsed lender on Friday, according to an email to staff seen by Reuters.

Workers will be enrolled and given information about benefits over the weekend by the FDIC, and healthcare details will be provided by the former parent company SVB Financial Group, the FDIC wrote in an email entitled “Employee Retention” late on Friday. SVB had a workforce of 8,528 at the end of last year.

Staff were told to continue working remotely, except for essential workers and branch employees.

The FDIC did not immediately respond to a request for comment.

Silicon Valley Bank imploded after depositors, concerned about the lender’s financial health, rushed to withdraw their deposits. The frenetic two-day run on the bank blindsided observers and stunned markets, wiping out more than $100 billion in market value for U.S. banks. SVB ranked as the 16th biggest bank in the United States at the end of last year, with about $209 billion in assets and $175.4 billion in deposits.

Members of California’s congressional delegation are set to be briefed by FDIC officials on Saturday, according to a report by Politico, which cited two people familiar with the situation.

The lender’s main office in Santa Clara, California, and all of its 17 branches in California and Massachusetts will reopen on Monday, the FDIC said in a statement on Friday.

ABC host slams regulation cuts 'under President Trump' after Silicon Valley Bank collapse

David Edwards
March 12, 2023

ABC/screen grab

ABC host Martha Raddatz noted that Trump-era regulation cuts may have contributed to the rapid collapse of Silicon Valley Bank last week.

While speaking to Sen. Mark Warner (D-VA), Raddatz wondered about the downfall of the go-to bank for tech startups.

"Senator, after the financial crisis in 2008, regulations were put into place to make sure banks could weather large losses," Raddatz told Warner on Sunday. "Under President Trump, some of those were rolled back, and in 2018, you were one of only 17 Democrats who voted for the bill that rolled back some banking rules, including for institutions the size of Silicon Valley Bank."

"Do you regret that vote?" the host asked.

Warner defended the vote: "I do think these mid-sized banks needed some regulatory relief."

"So, Senator, you don't regret that vote?" Raddatz pressed.

"I don't regret that vote," he insisted.

Watch the video below from ABC or at the link.

SILICON VALLEY BANK USED FORMER MCCARTHY STAFFERS TO WEAKEN REGULATIONS, LOBBY FDIC

Two senior aides to House Speaker Kevin McCarthy were among the top lobbyists for the bank at the center of a new financial crisis

Ken Klippenstein
March 11 2023

AFTER SUCCESSFULLY LOBBYING, for the rollback of new rules applied to Wall Street in the wake of the financial crisis, lobbyists for Silicon Valley Bank immediately began pressing their case further to the federal authority that insures bank deposits in the event of another crisis, according to lobbying disclosures reviewed by The Intercept. The lobbying effort managed to exempt banks the size of SVB from more stringent regulations, including stress tests aimed at uncovering the type of weaknesses that led to the bank’s implosion last week. Two of the bank’s top lobbyists previously served as senior staffers for House Speaker Kevin McCarthy, who himself pushed for the repeal of significant pieces of the landmark Wall Street reform legislation known as Dodd-Frank.

The meltdown of Silicon Valley Bank on Friday represents the second largest bank collapse in American history and the first since the 2008 financial crisis. Over 90 percent of SVB’s deposits exceed the amount federally guaranteed by the FDIC, meaning those people may never see their money again, or may lose substantial amounts.

SVB’s president, Greg Becker, himself pushed for weaker banking regulations, telling congress to lift “enhanced prudential standards…given the low risk profile of our activities,” as The Lever reported.

A chief culprit, economists say, is legislation signed into law by President Trump in 2018, which rolled back key parts of the Dodd-Frank banking regulations passed in the wake of the 2008 financial crisis. That 2018 legislation, called the Economic Growth, Regulatory Relief, and Consumer Protection Act, passed with strong support from the Republican Party and critical support from some Democrats. Among those leading the charge was then-House Majority Leader Kevin McCarthy, who is now House Speaker.

“We’re going to move this Senate bill directly to the president’s desk to ensure these reforms help the economy to grow further by making community banks stronger,” McCarthy said of the legislation in 2018. “This is going to free up a great deal of capital and this will help a lot.”

Two former staffers for House Speaker Kevin McCarthy are registered lobbyists for Silicon Valley Bank, with one specifically lobbying on the 2018 Dodd-Frank repeal law that experts say made this crisis more likely, according to federal lobbying disclosures reviewed by The Intercept.

Other SVB lobbyists worked for political figures cutting across both parties including President Bill Clinton, former Sen. Mike Enzi, R-Wy., former Sen. Tom Coburn, R-Okla., Rep. Joe Courtney, D-Conn., former Sen. Arlen Specter D/R-Pa., and former Rep. Jay Inslee, now governor of Washington.

Brian Worth served as coalitions director for McCarthy from January 2011 to May 2014, when he was House Republican Whip. Since March of 2017 he’s been a partner at Franklin Square Group, where he’s worked as a lobbyist for SVB. Wes McClelland served as a policy advisor and senior policy advisor for McCarthy from April 2011 to September of 2015 and joined Franklin Square in January of last year, where he has also lobbied on SVB’s behalf.

Franklin Square is the only lobby group that SVB has used in over a decade, having lobbied on its behalf every year from 2009 to 2023. The only other lobby shops SVB has employed were DLA Piper from 2009-2010 and McGuireWoods consulting from 2010-2011.

A spokesperson for McCarthy did not immediately respond to a request for comment.

Worth lobbied on the repeal law beginning on October 1, 2017, right up to its passage on May 24, 2018. Then, starting on July 1, 2018, SVB began lobbying the FDIC — the very same federal agency responsible for insuring bank deposits, which was tasked with implementing critical portions of Dodd-Frank.

Though Franklin Square has lobbied on behalf of SBV since 2009, the 2018 filing represents the first time it had ever lobbied the FDIC.

Beginning on April 20, 2022, McClelland also began lobbying the FDIC on SBV’s behalf, which both he and Worth continued doing right up until SBV’s last lobbying filing this year.

The lobbying disclosures do not provide any more detail about the work. Neither Worth nor McClelland immediately responded to requests for comment.

“This was a 100 percent avoidable problem,” economist Dean Baker told The Intercept in an email, pointing to the Dodd-Frank repeal bill. “That bill raised the asset threshold above which banks have to undergo stress tests from $50 billion to $250 billion. SVB would have been required to undergo regular stress tests before the revision; among the stresses you look at are sharp rises in interest rates, which is apparently what did in SVB. Presumably, if its books had been subject to this test, the risk would have been detected and they would have been required to raise more capital and/or shed deposits.”

Twitter slams 'moron' Charlie Kirk for suggesting Silicon Valley Bank crashed because of 'DEI' efforts

Maya Boddie, Alternet
March 12, 2023

Charlie Kirk speaking with attendees at the 2021 Southwest Regional Conference hosted by Turning Point USA at the Arizona Biltmore in Phoenix, Arizona. (Photo credit: Gage Skidmore)

Turning Point USA founder and conservative, Charlie Kirk, suggested Silicon Valley Bank collapsed due to the lender's diversity, equity and inclusion commitment statement on its website.

Kirk tweeted, "It is a mystery why Silicon Valley Bank collapsed," along with a screenshot of the banks Diversity, Equity and Inclusion statement.

NBC reporter Ben Collins responded to Kirk's tweet, writing, "On the right-wing internet, SVB collapsed because of DEI and ESG, which is just SBF's version of CRT. This is the kind of sentence you're gonna start hearing from presidential candidates, and they're going to wonder why nobody cares. It's meaningless acronyms all the way down."

Other Twitter users chimed in to criticize the right-wing activist's theory, calling it "embarrassing, even for you."

@williamlegate: "to suggest that this is the reason is absurd, but it was also very predictable. I called it yesterday that you all would blame this on DEI"

@holman: "it's okay to admit you don't understand banking!"

@Cassizzi: "Frankly it would be a bigger mystery if a community college dropout like yourself knew anything about liquidity risk management in a financial institution. But nice try, Charlie."

@buccocapital: "you are a true moron"

READ MORE: 'War on white people': Charlie Kirk's train derailment conspiracy theory

David Burrows: "Hilarious. Now tell us why CPAC collapsed"

@MikieAndTheVibe: "im not sure if this post just makes 0 sense or if you’re saying that the company failed because they attempt to include gay and black people"

Andy Brining: "Yeah, everything with you is a mystery for some reason. I wish we could discover the common factor."

READ MORE: Silicon Valley Bank becomes 'largest bank' to collapse 'since 2008' financial catastrophe: report

@e_michael1: "In case people were wondering, this is *not* why SVB failed."

@RagingGinge: "c'mon Charlie this is embarrassing even for you."

READ MORE: Silicon Valley Bank's collapse triggers concern over potential 'bloodbath' and risk to broader markets

Inside the Silicon Valley Bank failure: A tech industry in shock as it awaits a government response

People stand outside of an entrance to Silicon Valley Bank in Santa Clara, California, 10 March 2023 - Copyright AP Photo/Jeff Chiu

By Aleksandar Brezar • Updated: 11/03/2023 -

The news out of California that authorities shut down Silicon Valley Bank (SVB) on Friday shocked the tech start-up and venture capitalist world, with its sudden collapse over the course of two days roiling the market by Saturday.

SVB - the 16th largest bank in the US but a crucial one for the startup community - was closed down by regulators on Friday after a bank run dealt it a lethal blow following attempts to recover deposit losses and the sale of treasury bonds and securities.

"SVB was obviously the beacon of the start-up venture community for four decades. Almost, you know, one of those institutions that everyone viewed as too big and too strong to fail," Samir Kaji, a former banker who spent more than 20 years in the industry, told Euronews Next.

Silicon Valley Bank collapse: Fears of financial crisis after bank used by US tech sector fails

Yet SVB was hit hard by funding drying up over the past year in the tech and startup sector as well as the Federal Reserve's plan to aggressively increase interest rates to combat inflation.

The bank was backed by billions of dollars worth of bonds, but in having to sell them at a time when interest rates were high, they sold them at a significant loss.

But SVB’s customers were largely startups and other tech-centric companies that started becoming needier for cash over the past year.

A Brinks truck is parked outside of Silicon Valley Bank in Santa Clara, 10 March 2023

AP Photo/Jeff Chiu

"When they had the announcement of the capital reshuffling [on Wednesday]," he recalled, "what ended up happening there was a 'town hall' call with their clients which are mainly these VC firms".

And it actually incited more panic than it did to reassure, Kaji explained.

"There were torrents of emails, voicemails, calls, Slacks, text messages, where all of the VCs were imploring their companies to move capital out of SVB, which created that $42 billion leaving the bank".

SVB's 'specific' problems to result in only pockets of instability?

SVB is expected to re-open Monday with the FDIC in charge. It said all insured depositors would have full access to insured deposits no later than Monday morning.

"While there are no guarantees, it is very likely that the FDIC - which is the institution created in the New Deal to deal with bank runs and prevent bankruptcy - will likely resolve the situation," Armand Domalewski, a data analyst with a background in economic policy told Euronews Next.

There were torrents of emails, voicemails, calls, Slacks, text messages, where all of the VCs were imploring their companies to move capital out of SVB, which created that $42 billion leaving the bank.

Samir Kaji

Former banker

"People in the US think that their deposits are only insured up to $250,000 [€234,000], which is legally true. But in general what the FDIC tries to do since 2008 is arrange sales to other banks so that the customers are transitioned overnight. They don't lose their deposits".

The people who invested directly in SVB are going to get wiped out, but depositors have reasons to be hopeful, Domalewski explained.

The Silicon Valley Bank failure is the largest since Washington Mutual’s demise in 2008 - a watershed moment that triggered a major financial crisis and crippled the world’s markets since.

Yet SVB’s failure is expected to result only in pockets of instability, mostly due to its nature as a "boutique" bank and specific portfolio favoured by US tech startups and venture capital, servicing nearly half of the market.

Additionally, US and international regulators have introduced more stringent rules since the last financial crisis, aimed at ensuring that one bank’s failure would not trigger a cascade event, harming the broader economic system.

An FDIC sign is posted on a window at a Silicon Valley Bank branch in Wellesley, Massachusetts, 11 March 2023

AP Photo/Peter Morgan

The problems encountered by the bank "are very specific" and are not likely "to affect the entire banking sector, let alone the major banks," Ken Leon, an analyst with the firm CFRA, told AFP.

Morgan Stanley's analysts echoed this view, insisting in a statement: "We want to be very clear... We do not believe that the banking sector is facing a liquidity crunch".

Authorities in the US have also expressed their confidence in the country’s banking sector, which is far more diversified across multiple industries, customer bases, and geographies.

US Treasury Secretary Janet Yellen said on Friday that the banking sector remained "resilient,” while White House economic adviser Cecilia Rouse said the sector was "fundamentally different from what it was 10 years ago".

Silicon Valley Bank collapse: Here's how and why it happened

'Businesses should not fail because their choice of bank failed'

Some high-tech companies were hit hard by the news of SVB’s failure, however. On Friday, streaming device maker Roku said they had "around $487 million" (€456.9 million), or 26 per cent of its cash reserves, deposited at SVB.

Roku’s shares have gone down 10 per cent in extended trading, but the company said that "it continues to believe that its existing cash and cash equivalents balance and cash flow from operations will be sufficient […] for the next twelve months and beyond".

Requiring every individual business to do constant due diligence wherever they put their money creates a huge amount of stability.

Armand Domalewski

Data analyst

But smaller companies spent Saturday in heightened panic, as some of the startups depending on SVB became concerned over their ability to pay their employees post-shutdown.

Others scrambled to look for a bank to replace SVB even before markets reopen on Monday.

This is understandable, according to Domalewski, as fairly small businesses feeding a hundred employees feel "they’ll run out of money very very fast".

"Businesses should not fail because their choice of bank failed," Domalewski said.

"Requiring every individual business to do constant due diligence wherever they put their money creates a huge amount of stability".

"But I do think also, they should just wait to see what happens till Monday".
'Irrational' premise still led to 'rational' movement of cash

Yet the freakout persisted throughout Saturday, with emails from various firms said to have been circulating imploring companies to move their cash from other specialised banks to a top four bank as soon as possible.

"What this really cascaded into then is all of the regional banks being reviewed and many of the VCs have now looked at all this and said, 'Okay, well my distrust is not only with SVP, but it's actually with the broader read of the banking sector outside of the top four,'" Kaji explained.

Santa Clara Police officers exit Silicon Valley Bank in Santa Clara, 10 March 2023

AP Photo/Jeff Chiu

"And so everyone right now is looking at their company's funds and saying we simply just can't take a chance".

"When you have mass hysteria, the cat's already out the bag... the premise based on which people moved money was probably irrational, but once it started the movement of the cash it became rational".

"Because you never want to be the last one out. No one wants to be stuck in that same position with another bank" that is failing in the same way, Kaji concluded.
Protections in place to make all the difference?

In Europe, German and UK regulators are said to be monitoring the fallout of the SVB Group, although expectations of its overseas future were mostly optimistic on Saturday.

The group has offices in both European countries, as well as Ireland, Denmark, and Sweden, but its international arm is thought to represent a minor part of its overall business, with just 3 per cent of its total client funds coming from abroad.

On Friday afternoon CET, SVB’s UK branch said in a statement that it "has been an independent subsidiary since August 2022 with a separate balance sheet to the SVB Financial Group and an independent UK Board of directors".

And Domalewski believes that the protections in place since 2008 will make all the difference come Monday.

"There's a reason that we did all this since 2008 — passed a lot of new financial regulations formally and informally to make our banking systems a little more boring, a little more arduous, but to like prevent things like this from causing a full-scale crisis," he explained.

"It's been a long time since we've had a bank failure,” Domalewski said, “and people have forgotten what that's like".


Additional sources • AFP