The Doctors Suing to Make Health Care Great Again

MEDICARE FOR NONE YA ALL PAY CASH

DR.S RON AND RAND PAUL 
Olga Khazan 

A small, litigious group has spent decades trying to stop the government from telling doctors what to do. What happens if it succeeds?

© Bettmann / Getty / Katie Martin / The Atlantic

When the vaccine crackdown came, it was the doctors, of all people, who felt censored. It all started last year, when Adam Schiff, a Democratic representative from California, sent letters to Amazon and other tech giants expressing concern that the companies feature anti-vaccine videos and information on their platforms. Schiff cited a report by CNN that found that many searches on Amazon related to vaccines led to anti-vax content. The first listing, for instance, was a sponsored post for the book Vaccines on Trial, which is dedicated to “children who had to suffer due to adverse vaccine reactions.”


Amazon removed anti-vaccine movies like Vaxxed: From Cover-Up to Catastrophe from its Prime streaming service, incensing advocates opposed to mandatory vaccines and leading to a lawsuit that was filed against Schiff a few weeks ago. The lawsuit came from a New York woman who wants more information about vaccines, alongside an organization that, on the surface, seems counterintuitive: a group of doctors called the Association of American Physicians and Surgeons.

The lawsuit alleges that Schiff’s actions are tantamount to censorship. As a result of his letters, the suit says, Amazon kicked AAPS out of an affiliate network through which the organization had earned commissions. According to the group, searches on Facebook for AAPS vaccine articles instead yielded links to the World Health Organization, the National Institutes of Health, and the Centers for Disease Control and Prevention. One of the AAPS articles that was allegedly suppressed states, “Measles is a vexing problem, and more complete, forced vaccination will likely not solve it.” (Schiff’s office did not respond to a request for comment.)

Related: The new measles

The Association of American Physicians and Surgeons might sound like another boring doctors’ group politely debating telehealth legislation. But AAPS is a small yet vociferous interest group. Like Zelig with a stethoscope, it has popped up in nearly every major health-care debate for decades, including the Affordable Care Act and opioids, and it wields a surprising amount of influence. Senator Rand Paul of Kentucky was outed as a member in 2010. (A Paul spokesperson told me that while the senator is no longer a member, he is supportive of AAPS’s fight against Obamacare.) When Rep. Tom Price of Georgia was nominated to lead President Donald Trump’s Department of Health and Human Services, several newspapers pointed out that he, too, was a member. (At the time, an HHS spokesperson said that not all doctors in a group believe the same thing.)

Though AAPS often takes positions that are associated with conservative groups, it sometimes goes even further, pushing fringe views that most mainstream conservatives do not endorse, such as the belief that mandatory vaccination is “equivalent to human experimentation” and that Medicare is “evil.” Over the years, the group seems to have coalesced around an ethos of radical self-determination and a belief that mainstream science isn’t always trustworthy. It’s the most curious of medical organizations: a doctors’ interest group that seems more invested in the interests of doctors, rather than public health.

At a time when doctors are facing scorching levels of burnout, health-care costs are soaring, and seemingly everyone is frustrated with the status quo, AAPS seems to have come up with an unusual answer: to turn back the clock. AAPS sees its vision as forward-looking and modern, but the group’s rhetoric recalls an era when a doctor would treat you for just a few bucks. No insurance deductible would need to be met first, and no intimidating vaccine schedule had been mandated from above.

AAPS has been called the Tea Party’s favorite doctors, but it’s actually a more fitting health-care group for the Trump era. As Trump has contributed to sowed doubt in the scientific consensus, AAPS is seizing the moment. The group just wants to make health care great again—even if that means tearing it apart.

AAPS was founded in 1943 in opposition to an early effort to provide universal health care to Americans. It first shot to fame half a century later, when it sued then–First Lady Hillary Clinton to gain access to the records of her Task Force on National Health Care Reform. (Though the Clinton administration was initially ordered to pay AAPS’s lawyer fees and other costs, eventually a federal appeals court ruled in its favor.)

Today, the group has moved beyond simply opposing health-care reform, with the apparent intent to throw sand in any and all government gears. It seems most invested in protecting doctors from regulations. “We believe in private medicine,” Jane Orient, AAPS’s longtime executive director and primary spokesperson, told me in a phone interview. “We have opposed attempts to intrude government and other third parties between the patients and the physicians.”

Related: When the religious doctor refuses to treat you

Orient said that AAPS’s membership consists of “under 5,000” of the country’s million or so doctors. She is a physician herself, based in Tuscon and licensed by the Arizona Medical Board. According to AAPS’s tax forms, Orient makes $181,000 a year from the group, though she said in an email that much of this goes toward running the office, such as IT support and office supplies, and that her salary is $48,000. On Facebook, someone named Jane Orient from Tucson posts AAPS press releases on her feed, along with ads for radiation detectors, conspiracy theories about vaccines, and inspirational posts from Littlethings.com. Orient would not confirm whether this was her Facebook page.

During our call, Orient was down on insurance companies, as well as electronic health records and anyone or anything that might tell a doctor what to do, ever. In 2005, Orient backed doctors who prescribe lots of opioids, telling a newspaper that doctors were being “imprisoned for prescribing in good faith with the intention of relieving pain.” (The opioid epidemic has claimed 700,000 American lives.) In 2007, AAPS sued the Texas Medical Board to stop it from relying on anonymous complaints to retaliate against doctors suspected of wrongdoing. (AAPS lost.) Later, AAPS became the first medical society to sue to overturn the Affordable Care Act, saying that it “spells the end of freedom in medicine as we know it.”

During the 2018 election cycle, AAPS donated $16,000 to federal political candidates, all of them Republicans, according to the Center for Responsive Politics. Orient herself has consistently donated small amounts of money to candidates, almost exclusively Republicans, since 1998. But the group drifts from the Republican establishment in many ways. Orient said she opposes some traditionally conservative health-care policies, such as the Massachusetts predecessor to the Affordable Care Act devised by the conservative Heritage Foundation. Regarding Trump, Orient said he has been “a disappointment in some ways,” but that AAPS is “very glad for some of the things that he has done,” such as continuing to oppose Obamacare.

Several mainstream conservatives I reached out to declined to speak with me about AAPS. When I finally got one right-leaning health wonk, Joe Antos, on the phone, he said he had been thinking of the wrong AAPS and did not know much about the group.

Meanwhile, a media-relations representative at the American Medical Association, the main doctors’ group in America, mentioned that he'd expect the AAPS to accuse the AMA of having a ‘fascist’ relationship with the government. Orient told me that AAPS does not consider the AMA fascist, “although we certainly criticize many of their policies. We think it is important to define terms precisely and not to indulge in name-calling.”

Perhaps the only thing Americans agree on when it comes to health care today is that something’s gotta give. Electronic records are a nightmare for many doctors, and patients hate fighting with insurers as much as doctors do. It’s natural to want to just nuke it all. AAPS presents an extreme vision of that: What would happen if the government didn’t make doctors do, well, anything? I’ve met with some doctors who see anti-vaccine patients and who also don’t accept insurance, and I was taken by how free, self-actualized, and otherwise perky they were. Many doctors might readily swap an overcrowded primary-care practice for a concierge gig like that.

AAPS seems to have pushed this vision of the unfettered doctor too far, though. Over time, it has taken a puzzling turn toward unconventional medical views, as exemplified by its legal tangle with Schiff. To Orient, the government should not even dictate essential medications that protect public health. Asked whether vaccines increase the risk of autism, she said, “I think that the definitive research has not been done.” (The overwhelming scientific consensus is that vaccines do not cause autism.)

In 2015, after measles broke out at Disneyland, AAPS put out a press release questioning the safety of vaccines. The group has suggested that women who have abortions are at a higher risk of breast cancer, though mainstream scientists say this is false. In 2008, an article on AAPS’s website suggested that President Barack Obama was covertly hypnotizing people with his speeches, and that this might explain why Jews voted for him. AAPS’s journal, the Journal of American Physicians and Surgeons, has published articles raising doubts that HIV causes AIDS and questioning the wisdom of urging people to quit smoking, according to the Louisville Courier Journal.

Orient told me that the articles in the group’s journal don’t necessarily represent the official policy of AAPS. She called the story from the Louisville Courier Journal a “hit piece,” saying that the smoking article was arguing simply that “constantly telling [people] that nicotine is addictive might give them an excuse not to try” to quit. Regarding the abortion–breast cancer link, she said in an email that “there is a large and growing number of articles supporting this, although ‘mainstream’ American researchers deny it and focus on a small number of articles with negative findings.” She denied the suggestion about Jews and said that the entire AAPS article was referencing an article from another source.

Orient disagrees with the premise of this article, too. She said that AAPS cares most about patients, not doctors. Rather than being backwards-looking, she said, the group is “looking forward to a future in which there’s more innovation and more freedom, instead of one in which there’s tighter government control.” With such freedom, Orient told me, “we could have a thriving, innovative, friendly medical practice where when you call the doctor’s office on the phone, instead of saying, ‘What insurance do you have?’ the doctor’s office will say, ‘How can we help you?’”


AAPS’s apparent yearning for patients to pay with cash and for doctors to do as they please has historical precedent. Medicare only arrived in 1966. Before that, the options for seniors were to, as PolitiFact notes, “spend their savings, rely on funding from their children … hope for charity from the hospitals or avoid care altogether.” In the early 1970s, only certain states had school vaccination laws—and their measles rates were 40 to 51 percent lower than in schools without such laws.

There were indeed fewer rules and less paperwork back then. But the AAPS doesn’t seem to offer a solution for the fact that these days, a single “How can we help you?” from a doctor can result in a five-figure bill. In recent years, the group has focused on opposing calls for single-payer health care, and it even came out against surprise-billing legislation, which would protect patients from out-of-network hospital bills and has garnered bipartisan support in several states. (Orient dismissed these measures as “price controls imposed on physicians.”)

In our conversation, Orient did say that physicians should strive to help people who can’t pay, that hospitals should charge more reasonable and transparent prices, and that patients are often able to reduce their hospital bills through negotiation. But in 2016, Orient wrote in an op-ed that some people might simply sell their belongings to pay their medical bills. “Consider this,” she wrote. “Would you rather buy a nice car and risk having to sell it to pay a bill, or pay the insurance company the same amount and never get to drive the car?” (Orient stands by this, writing in an email, “If you lived beyond your means and bought a car that you couldn’t afford, and did not provide for future medical costs, how much sympathy should you receive?”)

Most health groups today have a specific idea for how to reform medical care, whether through single-payer health care or Netflix for doctors. The trouble with AAPS’s vision for America is that it exhibits a nostalgia for a past that never existed. Measles killed hundreds of Americans a year before the vaccine became available. Americans are drowning in medical debt that kindly doctors haven’t successfully eliminated, and selling our cars to pay for medical care would strike few people as the right answer. The idea that doctors always do right by patients, and that patients always have the money to pay, and that no one ever gets measles at Disneyland, is a tempting dream. The problem is, it’s just that.


Related video: Anti-vaccine movement takes online harassment into the real world (provided by NBC News

  

© Digital Vision / Getty

Kudlow: Coronavirus will not be economic tragedy
DR. KUDLOW I PRESUME

White House economic adviser says US economy can ride out coronavirus
KUDLOW PLAYS A TV ECONOMIST

 SO WHY NOT A TV DOCTOR

The U.S. economy will be able to ride out any disruption from the global spread of coronavirus, a top White House adviser said on Tuesday, adding that he is not anticipating the Federal Reserve to cut interest rates to blunt the virus' economic impact.

National Economic Council Director Larry Kudlow said in an interview on CNBC that the virus has so far been tightly contained in the United States despite calls by federal public health officials for businesses and others to prepare for possible major disruption.

"This is very tightly contained in the U.S.," Kudlow told CNBC, adding any such emergency planning does not mean a wider outbreak of the virus will come to pass in the United States.

"I'm not hearing the Fed's going to make any panic move," he said, referring to growing market expectations that the virus will push the U.S. central bank to cut rates.

U.S. health officials at the Centers for Disease Control and Prevention on Tuesday raised the alarm about the likely spread of coronavirus and urged Americans to get prepared now, following swift-moving outbreaks in China, South Korea, Japan, Iran and Italy.

President Donald Trump, meanwhile, has sought to downplay any potential U.S. outbreak or the impact to the nation's economy.

Kudlow on Tuesday praised U.S. health officials for "preparing for any eventualities" but also urged Americans and financial investors not to overreact.

SEE 
https://plawiuk.blogspot.com/2020/02/will-chinas-coronavirus-outbreak-send.html

Trump’s Plea for U.S. to Shrug Off Virus Fear Ignored by Markets

DR TRUMP I PRESUME PLAYING PRESIDENT NOW PLAYING DOCTOR 

Trump to discuss coronavirus at news conference

OOPS THAT PREDICTION DIDN'T LAST LONG


(Bloomberg) -- President Donald Trump and his top advisers want global markets and the American public to believe that the coronavirus poses little risk to the U.S.

But the U.S. Centers for Disease Control and Prevention is saying just the opposite -- warning Tuesday that the virus’s spread in America is inevitable and could bring significant disruption to the world’s largest economy.


So far, the markets are siding with the CDC’s experts. U.S. stocks hit a 12-week low following the CDC warning, with losses on the S&P 500 totaling 7.6% over four days.

“The American people deserve some straight answers on the coronavirus and I’m not getting them from you,” Republican Senator John Kennedy of Louisiana told acting Homeland Security Secretary Chad Wolf at a hearing on Tuesday.

At the Democratic presidential debate in Charleston, South Carolina, on Tuesday night, candidates accused Trump of making the country more vulnerable by failing to take action.

The mixed messages from top U.S. officials illustrated the balance that Trump and his advisers are trying to strike: Demonstrating that they have control over the situation while avoiding any move that spurs a panic and subsequent stock market sell-off as the re-election campaign heats up.

Trump will arrive in Washington early Wednesday morning with growing questions about the administration’s handling of coronavirus. His Health and Human Services secretary, Alex Azar, will face a second day of scrutiny over the government’s response during House hearings Wednesday on his agency’s budget.

Earlier: Trump Administration Asks for $2.5 Billion to Battle Coronavirus

Earlier Tuesday, as he concluded a two-day trip to India, Trump told reporters that the disease was “well under control” in the U.S. His top economic adviser, Larry Kudlow, declared at the White House later in the day that “we have contained this virus.”

But they were contradicted by public health professionals at the CDC. “We expect we will see community spread in this country,” said Nancy Messonnier, director of the CDC’s National Center for Immunization and Respiratory Diseases.

“It is not a matter of if, but a question of when, this will exactly happen,” she said.

The benchmark S&P 500 index extended its losses for a fourth straight day, the longest such streak since Aug. 5, falling more than 3% on Tuesday. Compounding investors’ worries about the U.S. government’s preparedness, the World Health Organization reported on Tuesday that the number of global infections exceeded 80,000, up 900 in a day, and that cases were reported in four additional countries -- Afghanistan, Bahrain, Iraq and Oman.

There have only been 60 Americans infected so far, according to the CDC, and none have died. Nevertheless, there is deep concern on Capitol Hill that the government is unprepared for a domestic outbreak. Some lawmakers have pushed Trump for a more aggressive response, including broader restrictions on travel from countries with outbreaks, but there are worries within the White House about the impact on the economy -- and by extension, the president’s re-election campaign.

Read More: Fed’s Clarida Says Too Soon to Speculate on Virus Spillover

A test for the virus developed in part by the CDC and shared with states has produced inconclusive results, limiting the ability of local health departments to detect the disease and raise alarm if it’s silently spreading through U.S. communities. That’s crucially important, given that mild cases can resemble the flu.

“I am frustrated that we have had issues with the test,” Messonnier said. The agency is working on a modified test kit it hopes to send out to state and local health departments as soon as possible. Twelve states and localities are now able to perform testing on their own, she said.

Through Feb. 23, the CDC conducted 2,620 coronavirus tests on 1,007 patients. While it has no backlog, completing the test involves sending a sample back to the agency, potentially delaying results.

The U.S. also has far fewer protective masks than it would need in the case of a major coronavirus outbreak, Alex Azar told lawmakers.

There are about 30 million stockpiled N95 masks that can block infective particles, Azar said, but the country would need as many as 300 million for health workers in an outbreak.

More Money
The Trump administration asked Congress on Monday to provide $2.5 billion to help fight the looming outbreak, money that would be used to help expand disease surveillance, bolster state and local health agencies, fund work on vaccines and drug treatments and help fortify the strategic national stockpile with protective gear including masks and respirators. About half of the $2.5 billion would come from reallocated funds, including $535 million for efforts to combat Ebola, according to a person familiar with the matter.

Democrats and some Republicans said the White House’s request was not enough.

Even some close Trump allies expressed frustration with the government’s preparations and public statements. Asked to comment on Kudlow’s assertion that the virus is contained in the U.S., Senator Roy Blunt, a Missouri Republican, demurred.

“I can’t comment on what the White House has been saying on this, because the people who work for the White House are not saying that,” he said.

Kennedy complained that U.S. officials couldn’t consistently answer even basic questions about the virus. In a hearing Tuesday morning, he asked Wolf about the disease’s mortality rate.

Earlier: Virus Outbreak Drives Italians to Panic-Buying of Masks and Food

“Worldwide I believe it’s under 2%,” Wolf said, saying he’d provide an exact figure from the CDC. “It changes daily. It’s under 2%, it was as high as 3.”

Asked the mortality rate of influenza, Wolf said, “it’s also right around that percentage as well.”

“You sure of that?” Kennedy said. While seasonal flu kills as many as tens of thousands of Americans each year, its mortality rate is less than 0.5% this year, in part thanks to broad vaccination.

During the Tuesday night debate, Senator Amy Klobuchar, former Vice President Joe Biden and former New York Mayor Michael Bloomberg all said Trump has sought to cut funding to the CDC, and Klobuchar said that the president “hasn’t really addressed the nation on this topic.”

(Bloomberg is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.)

Trump, on his way back from India, responded on Twitter that “CDC and my Administration are doing a GREAT job of handling Coronavirus, including the very early closing of our borders to certain areas of the world.” He added that “so far, by the way, we have not had one death. Let’s keep it that way!”

‘Radical Transparency’
After the Senate hearing, Kennedy said that officials “need to speak straight up to the American people, and when they don’t know an answer, they need to say we don’t know the answer to that but we’re working on it.” A Homeland Security Department spokeswoman said that Kennedy should have directed his questions about the virus’s mortality to health care officials, not Wolf.

Azar said that the administration is “trying to engage in radical transparency with the American public as we go through this.”

“Each of those messages is accurate, but addresses a particular aspect of what we’re talking about,” he said. “Abroad, this is spreading quite rapidly. In the United States, thanks to the president and this team’s aggressive containment efforts, this disease is contained.”

Trump, tweeting grievances about the prosecution of his friend Roger Stone as he flew back to Washington, will return to a city consumed by concerns about the coronavirus and his government’s preparations. His message to Americans, so far, has been that even if they get sick, the virus is unlikely to kill them.

Of the 60 Americans who have become infected so far, 36 were on a cruise ship in Japan that was the site of one of the largest outbreaks outside China. None have died.

“We think they’ll be in very good shape very, very soon,” Trump said.

Blunt, the Missouri Republican, took a darker and more global view. After a classified briefing from U.S. officials at the Capitol, Blunt said: “It would be true that most of them are getting better.”

But he added: “They’re not all getting better. The ones that died aren’t getting better.”

CRIMINAL CAPITALISM BANK ROBBERY
A Private Bank That Survived the Nazis May Be Broken by German Tax Scandal

Karin Matussek

M.M. Warburg & Co.’s headquarters exudes the aura of a fortress that has withstood the tumultuous twists of German history for centuries.

The ornate sandstone structure survived the bombs that rained down on Hamburg starting in 1941. One shell hit the roof but bounced off a metal beam, limiting the damage. Even the firestorm that wiped out much of the neighborhood in a 1943 raid couldn’t harm the building. The Jewish family that owned and ran the bank was expelled by the Nazis and went into exile, only to return after the war and rebuild the institution into one of the country’s largest and best-regarded private lenders.

Now another crisis is enveloping the storied institution and has forced its longtime chairman, Christian Olearius, as well as co-owner Max Warburg -- a direct descendant of the founding family -- from the supervisory board. Authorities have raided Warburg three times as well as the private homes of Olearius. Among the seized documents were the chairman’s personal diaries containing meticulous records of his business life.

Warburg allegedly participated in controversial dividend trades known as Cum-Ex that took advantage of double tax reimbursements. The scandal, which lawmakers say has cost the state at least 10 billion euros ($10.8 billion) in lost revenue, has roiled the financial industry, ensnaring lenders from Deutsche Bank AG to Barclays Plc. The case has led to a months-long trial unfolding in Bonn with two defendants, former bankers who have laid out the industry’s complicity in the practice.
Countless Challenges

Olearius, his son Joachim -- now the lender’s CEO -- Max Warburg and several top managers are being probed over their roles in Cum-Ex. The next charges filed by Cologne prosecutors will target Warburg employees, people familiar with the case said.

Warburg said it never intended to participate in illegal share transactions, misinform tax authorities or claim unjustified refunds.

Cum-Ex trades, named for the Latin term for “With-Without,” took advantage of German tax laws and allowed multiple investors to claim refunds on a dividend levy that was paid only once, prosecutors say.

How a discreet institution like Warburg, which has carefully crafted the image of respectability, got caught up in what’s been labeled the biggest tax heist in Germany has perplexed investigators and the public alike. Warburg is a fixture among Hamburg’s moneyed elite, and the fall of Olearius has sent shock waves through the upper echelons of society and political circles.

“Warburg survived countless challenges in the last 200 years; numerous wars, a hyperinflation and the Nazis -- you have to wonder why a bank with such tradition was prepared to participate in these kinds of acts,” said Christopher Kopper, a professor at Bielefeld University specializing in corporate history.In the world of Cum-Ex, Warburg stands out. Its deep involvement in the scandal belies its modest size compared to global giants like Bank of America Corp.’s Merrill Lynch unit or Barclays. Warburg long focused on private banking for the rich, as well as asset management and investment banking, and the company prides itself in its long-term approach. A corporate brochure suggests Warburg is guided by a higher ethical standard, claiming it doesn’t do business for its own sake.

Hamburg, New York

“Cum-Ex has laid bare the fundamental problem of the finance industry, which likes to embrace all possibilities that are not strictly illegal,” said Bernhard Emunds, an ethics professor at the Sankt Georgen college in Frankfurt.

Warburg is one of the last family-owned private banks in the country. Sal. Oppenheim, previously Europe’s largest private bank with a rich history to match Warburg’s, was forced to embrace Deutsche Bank as a savior in 2009 after investments went sour.

The Hamburg bank traces its roots to brothers Moses Marcus Warburg and Gerson Warburg, who set up shop in 1798. Over the next century, it expanded to become a well-connected lender with close government ties around the globe. Paul Warburg, a family offspring who became an investment banker in New York, was an early advocate for the U.S. Federal Reserve System, while Eric M. Warburg founded E.M. Warburg in New York in 1939, which evolved into private equity firm Warburg Pincus LLC.

The Nazis finally forced the family in Hamburg to give up its shares and the bank later had to change its name to Brinckmann, Wirtz & Co. After the war, the Warburgs regained ownership and reinstated the family name.

Warburg’s first brush with Cum-Ex occurred more than a decade ago, when one of Germany’s top tax lawyers stopped by for a meeting. On Jan. 30, 2006, Hanno Berger pitched Olearius a new trade that promised safe yet highly lucrative transactions built around taxation of dividends, according to the indictment filed by prosecutors in the Bonn case.

Rich Heritage

One of Berger’s associates, a tax lawyer who has since turned on his former boss using the pseudonym Benjamin Frey, recounted the meetings, and how he was awed by the splendor, with oil paintings depicting the dynasty adorning the walls, coffee served by butlers and china with the Warburg emblem. (The bank denies employing butlers).

Frey said Berger explained the deals, though Olearius “didn’t understand the details,” instead relying on another manager who had analyzed the structure. In the end, Olearius signaled his interest, and that he might also invest his personal money, according to Frey’s account in court last year.

Warburg set out as a Cum-Ex shortseller later in 2006. The following year, the bank switched roles and acted as the buyer in the deals, continuing until 2011, prosecutors say. The Cum-Ex practice ended in 2012 after Germany changed how dividend tax is collected. Berger, who moved to Switzerland that same year after his Frankfurt law office was raided, has denied any wrongdoing.

The bank has long maintained that it simply participated in legitimate dividend arbitrage transactions and couldn’t know that these involved Cum-Ex-type deals. It’s an argument refuted by witnesses in the Bonn trial, who said everyone knew and could detect Cum-Ex even if the term wasn’t used because the profits priced into the underlying transaction were unusually high.

The bank’s investment unit also set up funds that collected money from German millionaires and other investors. One of these arrangements was dubbed “Maltese structure” because it used offshore companies based in Malta. That entity alone caused damages of 108 million euros, according to the indictment.

Credibility Boost

In the majority of the 34 cases under review in the Bonn case, Warburg or people associated with the bank were involved. A verdict in that case is expected toward the end of March or early in April.

Martin Shields, one of the accused in the Bonn trial, told the court that he came in contact with Warburg when he was still a trader at UniCredit SpA’s HVB unit. The Hamburg lender was “one of our desk’s most active relationships,” said Shields, who worked primarily on Cum-Ex deals.

When Shields left the bank to set up his own boutique advising on Cum-Ex deals, Warburg was his first client.

“The agreement with M.M. Warburg provided us with a certain amount of credibility and basic business,” Shields, who is cooperating with authorities in a bid to avoid jail time, told the court.

The judges in the Bonn case have said they consider the deals to be criminal and that Warburg will most likely have to pay about 280 million euros in lost tax revenue.

“Warburg needs to understand that the state is clamping down,” said Konrad Duffy, an expert on financial crime at Finanzwende, a political pressure group. “This is why the bank is struggling, because it previously wasn’t accustomed to such behavior.”

Confronted with the allegations, the bank initially went on the offensive. After the third raid of its headquarters in 2018, Warburg issued a terse release denying any wrongdoing. The probe, Warburg said, was a “useless” exercise that failed to produce even a single case backing the allegations.

Damaged Reputation

The staunch resistance enraged prosecutors, according to people familiar with the probe. Public perception of Warburg and Olearius had already begun to shift, depicting the bank and its chairman as greedy and willing to sacrifice their principles on the altar of profit.

By the end of November, pressure had become unsustainable. Olearius and Max Warburg both quit their posts to “devote more time to their social commitment,” according to a statement. The release maintained the veneer of an orderly generational handover that had been long in the making. But Bafin, the regulator, had essentially forced out that duo that had guided the bank for decades.

After Olearius and Max Warburg stepped down, the bank began revealing a more cooperative side. Less than three weeks after their departure was announced, lawyers told the Bonn court that the lender was ready to pay back any profits generated from the incriminated transactions. Warburg says it made 68 million euros in the deals. Earlier this month, the bank said Olearius and Max Warburg were prepared to contribute the necessary funds to cope with any Cum-Ex impact.

“Olearius spent years cultivating the image of the honorable merchant,” Duffy said. “Taking a closer look, that now rings hollow.”

--With assistance from Stephan Kahl.

Will China's coronavirus outbreak send the world economy into recession? 

As cases spread across Asia and in Europe, only some of the multiple indicators investors use to monitor recession signals are flashing red, implying the frail global economy may not necessarily be heading towards a contraction.

It is too early to be sure, however. The outbreak is still continuing to spread and key data points for February are still unavailable.

What's more, forecasting global recessions is tricky because most countries can't match U.S. data for its breadth. It's also rare for the world economy to actually shrink - prior to 2008-09, that happened only in 1990-1991.

But taking into account population growth and poor countries' need for faster expansion rates, the broad rule of thumb is that world growth below 2% can be classed as recession.
The International Monetary Fund still expects 3.3% global growth in 2020. But it cut China forecasts to 5.6% and voiced fears the coronavirus impact could be longer-lasting than previously expected.

Chinese President Xi Jinping has vowed the country's 6% growth target will be met.
But Justin Onuekwusi, a portfolio manager at Legal & General Investment Management (LGIM), said there was a 90% probability Chinese growth would fall below 5% if the virus continued to disrupt economic activity.

"That would be the tipping point. The question then will be if world growth will fall under 2%," he added.

Here are 10 frequently used recession indicators.

1. U.S. LEADS THE WORLD
If the world's biggest economy tips into recession, it's likely others will follow. But a closely watched Leading Economic Index in the United States, compiled by the Conference Board think-tank, hit a record high in January.

The index suggests "the current economic expansion – at about 2% – will continue through early 2020," the Conference Board said.

But the index also leans heavily on indicators tied to manufacturing, which now accounts for less than a fifth of U.S. economic activity. The surge also reflected the run-up in stock prices last month.

2. CURVE BALL
An inverted yield curve, when short-dated borrowing costs rise above longer yields, has been a reliable gauge of U.S. downturns, having predicted almost every recession in the past half-century.

Now the coronavirus has sent three-month borrowing costs above 10-year rates while the two-year/10-year curve is less than 20 basis points from inversion.
"The Treasury market is pricing that the world economy is going to be flirting with sub-2% growth," LGIM's Onuekwusi said.

3. CHINA MOMENTUM INDICATOR
Chinese Premier Li Keqiang reportedly favors three indicators to monitor growth - freight volumes, power consumption and bank loans - unified in Fathom Consulting's China Momentum Index.

The index tumbled in 2008 before the global crisis and fell below 2 in 2015-16 amid Chinese "hard landing" fears.

The index stood at 5.1 in December, off three-years lows touched in mid-2019 during the Sino-U.S. trade spat. But recovery has probably fizzled this year as the virus dampened activity.

4. TRADE ALARM
If growth hinges on booming trade, the Baltic Dry Index (BDI) shipping benchmark is sounding alarm bells. It hit three-year lows this month and has dipped during every previous recession. Since September the BDI has plunged 80% to around 506 points. It troughed during the 2016 growth scare at around 300 points.

5. WHAT DO PURCHASING MANAGERS THINK?
Purchasing Managers' Indexes have been reliable in predicting manufacturing and services trends so February's drop in the U.S. services PMI to the lowest since October 2013 was a shock.

Signaling that a sector accounting for two-thirds of the world's biggest economy was in contraction, the "flash" PMI "brought home how close we might be to recession because of the coronavirus," London and Capital Group told clients.
Global composite global PMIs from JPMorgan showed output and new orders still expanding last month. But February's composite is likely to be very different. 

6. INFLATION AND BONDS
Bond yields and inflation usually rise when growth is strong and vice versa. So the recent tumble in market-based inflation gauges -- five-year forward swaps -- in the euro zone and the United States is cause for concern.

And 7-10-year yields on the Bloomberg/Barclays Multiverse, a global debt benchmark, are at six-month lows and approaching the lows hit during the 2016 growth scare.

7. ASK DR. COPPER
Copper's record as a boom-bust indicator has earned it the "Dr. Copper" moniker. And because gold is considered a store of value during recession, the gold/copper ratio can point where growth is heading. So if the economy's tanking, dump copper and buy gold.
The current ratio - approaching 2009 peaks - is worrying. But in the modern economy copper's predictive power has weakened. Also during market panic, "sentiment tends to boost gold and weigh on copper. That can open the spread and lead to a false signal," said Julius Baer analyst Carsten Menke.

8. DEMAND FOR DEFENSIVES
There are shares that do well when the economy is robust and others which perform in tough times. The former category comprises 'cyclicals' -- carmakers and retailers for instance -- while 'defensives' include utilities and consumer staples. 

But these days the cyclicals vs defensives ratio is skewed by tech - nominally classed as cyclicals, companies such as Apple and Amazon have behaved increasingly like safe defensives.

9. TIGHTENING BELTS
Financial conditions indices (FCI), comprising elements such as long-term borrowing costs, exchange rates and equity moves, show how supportive the backdrop is for growth. Tighter conditions are generally a negative.

A Goldman Sachs index https://tmsnrt.rs/32lFIqw shows conditions have eased since early January, possibly as China loosens policy. But the index does not yet reflect this week's massive equity selloff. 

10. KOREAN EXPORTS
South Korean trade figures are the first to emerge each month from any major economy and therefore receive close scrutiny. The picture isn't pretty - exports contracted in January for the 14th straight month.

February data is now awaited, especially on semiconductors - used in electronics and comprising a fifth of South Korean exports, overseas sales have fallen for five months straight.


Iranians wear protective masks to prevent contracting coronavirus as they sit in taxi in Tehran.© Reuters / WANA NEWS AGENCY Iranians wear protective masks to prevent contracting coronavirus as they sit in taxi in Tehran.

'Nail in the coffin': Era of big oil sands mines may be over

Canada’s oil sands industry may have already built its last big mine.

© Photo By Jerry Cleveland/The Denver Post via Getty Images Gloved hands hold a sample of freshly mined oil sands at Suncor Energy's oil sands mine and upgrade facility north of Fort McMurray in northeastern Alberta, Canada.

The cancellation of Teck Resources Ltd.’s Frontier project in northern Alberta -- which envisaged producing more crude than OPEC member Gabon -- epitomizes the struggles of an industry that has already seen most foreign investors flee. It’s not clear that any other proposed mine would be able to clear the hurdles that felled Frontier in the years to come, possibly spelling the end of an era of megaprojects that transformed North America’s energy landscape by turning Canada into the top foreign crude supplier to the U.S.

“This may be the nail in the coffin,” said Laura Lau, who helps manage C$2 billion ($1.5 billion) in assets at Brompton Corp. in Toronto. “I would expect some smaller projects would have a better chance going through.”

On top of middling oil prices, a pipeline capacity shortage in Canada and heightened competition from U.S. shale, the oil sands have become a particularly shunned industry in a world of rising concerns about climate change, leading some major funds to divest their holdings. And with speculation oil demand could peak in 10 years or so, companies are growing increasingly wary of committing to multibillion-dollar projects that require decades of operation to pay out.

The oil sands of Alberta have drawn the ire of environmental activists because of the region’s vast open-pit mines that require the clearance of forest, produce massive lakes of wastewater and consume more energy than other ways of extracting oil. Refining the sticky, black bitumen scooped from some mines in so-called upgraders is also very carbon-intensive. Newer, smaller projects, while more efficient, still use a lot of energy to extract the oil with the help of steam.
While attempts to make Canada’s oil sands into an economically viable source of crude have been ongoing for about a century, the industry experienced its heyday in the 2000s and 2010s, when fears abounded that the world may be running out of crude.

Those fears prompted a flood of global investment as nations and international producers rushed to secure supplies. From 2004 to 2014, about C$210.1 billion was invested in the oil sands, according to data from the Canadian Association of Petroleum Producers. Over those 10 years, oil-sands output more than doubled, to 2.2 million barrels a day, and Canada shot up from the world’s eighth-largest oil-producing nation to the fifth-largest.

The industry has struggled since global oil prices crashed from more than $100 a barrel in mid-2014. New pipeline projects were stalled by environmentalist opposition and legal challenges, weighing on Canadian heavy crude prices. International giants including Royal Dutch Shell Plc and ConocoPhillips sold off oil-sands assets. And capital spending in the oil sands fell for five straight years.

The situation came to a head in late 2018, when a wave of new production, the shortage of pipeline space and a heavier-than-normal refinery maintenance season in the U.S. combined to cause a crash in Canadian heavy crude prices. That prompted Alberta’s government to implement mandatory production limits that started in 2019 and may remain in effect for the rest of this year.


© Bloomberg Crude prices have never fully recovered from the 2014 crash

Teck Chief Executive Officer Don Lindsay, in a letter explaining the company’s decision on Frontier, acknowledged that the project raised broader questions over climate change and how countries’ regulatory regimes should balance resource development and emissions reductions.

“The growing debate around this issue has placed Frontier and our company squarely at the nexus of much broader issues that need to be resolved,” Lindsay said. “In that context, it is now evident that there is no constructive path forward for the project.”

But the hard economic reality remains the potentially biggest hurdle. Frontier’s 2011 application relied on long-term oil prices over its four-decade life of about $95 a barrel, a level global benchmarks haven’t seen since 2014. With both West Texas Intermediate and Brent crude prices in the $50-a-barrel range and the U.S.’s Permian Basin continuing to pump more oil, those prices may not return anytime soon.

“This was the last big oil sands mining project advancing in the oil sands,” said Kevin Birn, IHS Markit’s director of North American crude oil markets. “Fully new greenfield ones outside this one, I don’t think there is any.”

Analysts had generally positive reactions to Teck canceling Frontier. Morgan Stanley analyst Carlos De Alba said that despite the C$1.13 billion writedown Teck would take on the project, “it removes overhanging concerns about the company potentially making a significant investment in fossil fuel amid raising ESG focus.”

To be sure, the oil-sands industry is far from shutting down. Major producers are generally profitable and producing free cash flow. Capital spending is even projected to tick up this year. Producers are continually developing new technologies and finding ways to cut costs.

They can still expand existing mines and are able to add output from what are known as in situ projects, which resemble more familiar methods of oil extraction by tapping underground resources through the use of wells. Those tend to be smaller, cheaper and faster to build.

But even those projects are having trouble in the current environment. Imperial Oil Ltd. last year delayed its C$2.6 billion Aspen oil-sands project, which had been approved and was scheduled to start production in 2022, because of Alberta’s production limits.

And with the cancellation of Frontier, there are no major mine projects of the kind that formed the industry’s bedrock. The last big mine to come online was Suncor Energy Inc.’s C$17 billion Fort Hills mine, which started producing in 2018.

Teck is a partner at Fort Hills and is considering getting out of that investment, too.

Kevin Orland and Robert Tuttle --With assistance from Aoyon Ashraf.

The letter Teck sent: A scathing rebuke of government

KENNEY'S GOVERNMENT IN FACT 

HE IS NOW RESPONSIBLE FOR THOUSANDS OF LOST JOBS AND HOURS OF WORK

HIS DOGMATIC CLIMATE DENIAL GET IN THE WAY OF THE FOSSIL FUEL INDUSTRY

RACHEL NOTLEY'S NDP GOVERNMENT HAD THE GREEN ENERGY PLAN INDUSTRY SUPPORTED AND KENNEY SPENT THREE YEARS ATTACKING IT PRIOR TO THE ELECTION FIRST THING HE DID WHEN ELECTED WAS TO BLOW IT UP AND REPLACE IT WITH A PUBLIC RELATIONS WAR ROOM ON BEHALF OF THE DIRIEST LAZIEST POLLUTERS, UCP 

By Duane Rolheiser



The original application from Teck Resources was made 9 years ago. That almost says enough right there. As environmental regulations changed, the company ‘optimized’ the project to ensure it would remain ‘commercially and environmentally viable’. The work with area First Nations communities was considered ‘ground breaking’ by those communities. Teck had already invested well over 1 billion dollars. But in the end, it appears Teck was not prepared to invest billions more in the environment of hostility toward major resource projects which Canada’s federal government has not been able to control.

Here’s the letter sent by the CEO of Teck Resources to Canada’s Minister of Environment and Climate Change. This letter will do more to stir Western Canadian anxiety than any number of “Buffalo Declarations”.

—————————————

Letter to Minister Wilkinson


Dear Minister:

I am writing to advise that after careful consideration Teck has made the difficult decision to formally withdraw our regulatory application for the Frontier oil sands project from the federal environmental assessment process.

We are disappointed to have arrived at this point. Teck put forward a socially and environmentally responsible project that was industry leading and had the potential to create significant economic benefits for Canadians. Frontier has unprecedented support from Indigenous communities and was deemed to be in the public interest by a joint federal-provincial review panel following weeks of public hearings and a lengthy regulatory process. Since the original application in 2011 we have, as others in the industry have done, continued to optimize the project to further confirm it is commercially viable.

Teck is extremely proud of the work done on this project and the strong relationships that we have formed with local governments, labour organizations, scientists, researchers and many other stakeholders, as well as with affected Indigenous communities. We believe that our agreements with Indigenous communities on Frontier, and very recently the work undertaken by the Alberta government with Indigenous communities in the region, form an important foundation for the future, and we applaud them for this milestone achievement.

However, global capital markets are changing rapidly and investors and customers are increasingly looking for jurisdictions to have a framework in place that reconciles resource development and climate change, in order to produce the cleanest possible products. This does not yet exist here today and, unfortunately, the growing debate around this issue has placed Frontier and our company squarely at the nexus of much broader issues that need to be resolved. In that context, it is now evident that there is no constructive path forward for the project. Questions about the societal implications of energy development, climate change and Indigenous rights are critically important ones for Canada, its provinces and Indigenous governments to work through.

I want to make clear that we are not merely shying away from controversy. The nature of our business dictates that a vocal minority will almost inevitably oppose specific developments. We are prepared to face that sort of opposition. Frontier, however, has surfaced a broader debate over climate change and Canada’s role in addressing it. It is our hope that withdrawing from the process will allow Canadians to shift to a larger and more positive discussion about the path forward. Ultimately, that should take place without a looming regulatory deadline.

Resource development has been at the heart of the Canadian economy for generations. Resource sectors including the Alberta oil sands create jobs; build roads, schools and hospitals; and contribute to a better standard of living for all Canadians. At the same time, there is an urgent need to reduce global carbon emissions and support action on climate change.As a proudly Canadian company for over 100 years, we know these two priorities do not have to be in conflict. Our nation is uniquely positioned with abundant natural resources coupled with strong environmental regulations and a deeply engrained culture of social responsibility. We can build on that foundation and be a global provider of sustainable, climate-smart resources to support the world’s transition to a low carbon future. And yes, that can include low-carbon energy produced from the Alberta oil sands from projects like Frontier, using best-in-class technology, which would displace less environmentally and ethically sound oil sources.

At Teck, we believe deeply in the need to address climate change and believe that Canada has an important role to play globally as a responsible supplier of natural resources. We support strong actions to enable the transition to a low carbon future. We are also strong supporters of Canada’s action on carbon pricing and other climate policies such as legislated caps for oil sands emissions.

The promise of Canada’s potential will not be realized until governments can reach agreement around how climate policy considerations will be addressed in the context of future responsible energy sector development. Without clarity on this critical question, the situation that has faced Frontier will be faced by future projects and it will be very difficult to attract future investment, either domestic or foreign.

Teck has not taken this decision lightly. It is our hope that the decision to withdraw will help to create both the space and impetus needed for this critical discussion to take place for the benefit of all Canadians.

Sincerely,
Don Lindsay
President and Chief Executive Officer
Teck Resources Limited

Alberta disputes First Nation's claims about Teck Frontier in letter to federal minister

NDP Leader Rachel Notley says Kenney government hasn't done its job

Michelle Bellefontaine · CBC News · Posted: Feb 12, 2020

Environment and Parks Minister Jason Nixon wrote his federal counterpart to refute claims about a lack of consultation on the Teck Frontier project made by Chief Allan Adam of the Athabasca Chipewyan First Nation. (Manuel Carrillos/CBC)

Alberta's environment minister is disputing a First Nation's claims that the provincial government's refusal to consult on issues related to the proposed Teck Frontier oilsands mine could derail the project's approval.

Allan Adam, chief of the Athabasca Chipewyan First Nation (ACFN), has gone public this week with concerns that Alberta has failed to address environmental and social issues related to the $20.6-billion project.

The federal cabinet is expected to decide by the end of the month if Teck Frontier will go ahead. A joint federal-provincial environmental panel recommended approval last July.

In a letter Wednesday to federal Environment Minister Jonathan Wilkinson, Alberta Environment Minister Jason Nixon said Adam's claims are not accurate.

OPINION Clearing the air on Teck Frontier: Here are the expected benefits — and harms — of the oilsands project

"We must not get caught up in incrementalism, continually addressing new requests that are peripheral to the project and politicize it unnecessarily," Nixon wrote.

In the letter, Nixon urged Wilkinson to look at how Alberta has made "adjustments" in its approach to the Teck project over the last 10 years. Nixon suggested Adam has an agenda by raising concerns at the 11th hour.

"I note that Chief Adam has now also injected direct financial compensation into his apparent demands, above and beyond funds for environmental mitigation," the letter said.

"This is also in addition to ACFN's commercial agreements with Teck and the potential for an equity stake in projects via Alberta's new Alberta Indigenous Opportunities Corporation."

In the same letter, Nixon took issue with Wilkinson's statements in the media that Alberta's 100-megatonne cap on emissions needs to be set in regulation. He accused the federal minister of "changing the goal posts" because the issue never came up in discussions.
'Sloppy failure'

Premier Jason Kenney met privately Thursday with Alberta chiefs in Edmonton about children in care, and the federal Bill C-92, An Act respecting First Nations, Inuit and Métis children, youth and families, which came into force on Jan. 1.

On Feb. 7, Adam wrote a letter to all chiefs set to meet with Kenney, urging them to confront the premier about a lack of consultation and sharing royalties from resource projects.

He alleged that Alberta prefers to deal with First Nations indirectly through the new Indigenous Opportunities Corporation (IOC) and that government funds earmarked for consultation, court challenges and land claims has been diverted from Indigenous Relations to the IOC.

"AFCN is a supporter of the Teck Frontier project, however, Alberta's refusal to work with us respectfully jeopardizes this project's federal approval, putting jobs and benefits for our Nation (and all Albertans) at risk," Adam wrote.

"Premier Kenney has been vocal in the media blaming Canada for delaying the project, however the truth is that it is Alberta's refusal to co-operate in good faith that puts the project at risk." 




Adam said the IOC won't help First Nations unless they have a $20-million up-front payment.

Alberta Indigenous Relations Minister Rick Wilson refuted that claim. He said the IOC will only back projects worth $20 million or more, but the ownership can be shared, as long as 25 per cent comes from Alberta.

Wilson said applicants don't need to turn over their financial information, contrary to what Adam said in his letter.

Alberta NDP Leader Rachel Notley said Kenney and his government have put approval of the Teck project at risk by failing to work with the ACFN and undoing the work she did while premier.

While ACFN signed on to the project in September 2018, Notley said there was still work that needed to be done on environmental mitigation.

"How this relationship could change so quickly is beyond disappointing," Notley said at a news conference in Edmonton on Wednesday. "It is, quite frankly, irresponsible."
Alberta environment minister says First Nations concerns with Teck Frontier are about money

Environment minister doesn't rule out deferring a decision on the Teck oilsands mine

She said ACFN told the federal government in December that they couldn't get Alberta back to the table after reaching out after the provincial election which brought Kenney and the United Conservative Party to power.

Subsequent discussions the following month between ACFN and the Alberta government in January went nowhere, she said.

Notley said Kenney needs to listen to the chiefs he is meeting with, and take action.

"If this project ultimately does end up in jeopardy, the majority of blame can be laid squarely at the feet of Jason Kenney and the UCP for engaging in an arrogant and disrespectful and frankly, sloppy failure to do their job," she said.

Treaty 8 chiefs, including Adam, walked out of the meeting over concerns about the children in care and demanded a separate meeting on Feb. 27.

At a news conference afterward, Wilson downplayed the walkout. He said the chiefs wanted a separate meeting to deal with their own issues and denied there was an issue.

"There's no friction. One hundred per cent, " he said, adding that Adam told him there are discussions underway about air and water quality mitigation issues around the Teck project.

Watch
Treaty 8 chiefs walk out of meeting with premier
14 days ago
Treaty 8 Grand Chief Arthur Noskey calls on government to honour constitutional obligations.

Sanders uses Obama to defend his Cuba comments

Bernie Sanders brought up Barack Obama to defend his recent comments praising some aspects of Fidel Castro's Cuba

“What I said is what Barack Obama said in terms of Cuba – that Cuba made progress on education,” Sanders said, prompting some booing from the audience.

“Really? Really?” Sanders responded.

When the Cubans do something good, that should be recognized, he said.

“You don’t have to trade love letters with them,” he added.

Sanders has been much criticized for the comments since he was asked by interviewer Anderson Cooper on Sunday why the Cuban people didn't rise up and help the U.S. overthrow communist dictator Castro. Sanders said Castor “educated their kids, gave them health care, totally transformed the society, you know?"

Joe Biden said Obama’s past comments were different. Obama acknowledged that Cuba increased life expectancy but he condemned Cuba’s dictatorship -- which Biden said Sanders has not.

Sanders called that “categorically untrue.”

Buttigieg got into the game by saying that Democrats will not be able to win critical Congressional races this fall if the party’s nominee is “telling people to look on the bright side of the Castro regime.”

--Maureen Groppe

                    THIS IS HOW

BLOOMBERG THE REPUBLICAN DEMOCRAT MEMES

NEW ZEALAND PM VAMPYRE MEMES