UPDATED
Microsoft talks to buy TikTok's U.S. operations spark ire in China
 

Yingzhi Yang, Kane Wu


BEIJING/HONG KONG (Reuters) - A potential shotgun wedding to Microsoft Corp (MSFT.O) for TikTok’s U.S. operations provoked an outcry on Monday on Chinese social media as well as criticism from a prominent Chinese investor in TikTok owner ByteDance.

The U.S. tech giant formally declared its interest on Sunday after President Donald Trump, who has cited national security risks posed by the Chinese-owned short video app, reversed course on a planned ban and gave the two firms 45 days to come to a deal.

The proposed acquisition of parts of TikTok, which boasts 100 million U.S. users, would offer Microsoft a rare opportunity to become a major competitor to social media giants such as Facebook Inc (FB.O) and Snap Inc (SNAP.N).

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Shares in Microsoft, which owns the business social media network LinkedIn and is also seeking to buy TikTok’s Canadian, Australian and New Zealand interests, rose nearly 3% in early trades on Monday.ByteDance has not publicly confirmed the sale talks. But in an internal letter to staff on Monday seen by Reuters, the company’s founder and CEO Zhang Yiming said the firm had started talks with a tech company it did not identify to clear the way “for us to continue offering the TikTok app in the U.S.”

Clinching a deal that will satisfy all parties and potentially act as a lightning rod for U.S.-China relations will be a tall order.

People close to the situation have told Reuters that all of TikTok could be worth $50 billion, but the forced sale of the U.S. division and some other units alone will likely yield much less than that.

“A forced deal under Washington’s shotgun could open up for endless litigations if it should result (in) an unfavorable outcome to existing private shareholders,” said Fred Hu, chairman of Primavera Capital Group, an investor in ByteDance and one of China’s best known private equity groups.

Hu said Microsoft was a credible buyer but questioned how selling large parts of TikTok’s operations at such an early stage of its growth could ever be a good deal for ByteDance.

“It absolutely makes no sense. Bytedance is an innocent victim of the mad politics and mad geopolitics. It is a sad outcome for Bytedance, for entrepreneurial capitalism, and for the future of global commerce,” he said.


Tech bankers in Asia said investment banks working on the deal would have to be careful not to antagonize Trump.

“This is not a standard M&A situation...this is hard to predict,” said one senior banker with a U.S bank in Hong Kong, saying that it would be a question of how to structure a deal in a way that would keep Washington happy.

Zhang’s letter to staff also said ByteDance did not agree with the stance taken by the Committee on Foreign Investment in the United States (CFIUS), which scrutinizes deals for national security risks, that it must fully divest TikTok’s U.S. operations.

“We disagree with this CFIUS conclusion,” the letter said but added: “...we understand the decision in the current macro environment.”

ByteDance did not respond to Reuters requests for comment.

The Chinese government declined to comment specifically on the Washington’s move to force a sale of TikTok’s U.S. operations.

The United States has been “stretching the concept of national security”, presuming that companies are guilty without evidence, China’s foreign ministry spokesman Wang Wenbin told a briefing after being asked about U.S. actions against Chinese software companies.

The topic “ByteDance has agreed to divest TikTok’s U.S. operations” was one of the most discussed subjects on China’s Twitter-like Weibo platform on Monday, with over 920 million views.

Some commentators criticized ByteDance, saying it has not shown as much backbone as Huawei Technologies, also in the crosshairs of U.S.-China tensions and now on a U.S. trade blacklist.

“(ByteDance) kneeled down so fast that it didn’t even wait for the Chinese government to retaliate,” said one comment that was ‘liked’ over 5,000 times.

While TikTok is ByteDance’s most well known app globally, the company makes the bulk of its revenue from advertising on Chinese apps including Douyin - a Chinese version of TikTok - and news aggregator app Jinri Toutiao.


Reporting by Yingzhi Yang and Yilei Sun in Beijing and Kane Wu in Hong Kong; Additonal reporting by Lun Tian Yew in Beiing; Writing by Brenda Goh; Editing by Edwina Gibbs and Saumyadeb Chakrabarty

Exclusive: TikTok's Chinese owner offers to forego stake to clinch U.S. deal - sources




Echo Wang, Alexandra Alper, David Shepardson

NEW YORK/WASHINGTON (Reuters) - China’s ByteDance has agreed to divest the U.S. operations of TikTok completely in a bid to save a deal with the White House, after President Donald Trump said on Friday he had decided to ban the popular short-video app, two people familiar with the matter said on Saturday.

U.S. officials have said TikTok under its Chinese parent poses a national risk because of the personal data it handles. ByteDance’s concession will test whether Trump’s threat to ban TikTok is a negotiating tactic, or whether he is intent on cracking down on a social media app that boasts it has 100 million users in the United States.

Trump told reporters onboard Air Force One late on Friday that he would issue an order for TikTok to be banned in the United States as early as Saturday. “Not the deal that you have been hearing about, that they are going to buy and sell... We are not an M&A (mergers and acquisitions) country,” Trump said.

Late on Saturday, Peter Navarro, director of the White House’s office of trade and manufacturing policy, told Fox News that Trump would be taking action on TikTok on Sunday or Monday.

ByteDance was previously seeking to keep a minority stake in the U.S. business of TikTok, which the White House had rejected. Under the new proposed deal, ByteDance would exit completely and Microsoft Corp would take over TikTok in the United States, the sources said.

Some ByteDance investors that are based in the United States may be given the opportunity to take minority stakes in the business, the sources added. About 70% of ByteDance’s outside investors come from the United States.

“The administration has very serious national security concerns over TikTok. We continue to evaluate future policy,” the White House said in a statement, declining to comment on whether Trump would accept ByteDance’s concession. ByteDance in Beijing did not respond to a request for comment.

“We are here for the long run. Continue to share your voice here and let’s stand for TikTok,” TikTok U.S. general manager Vanessa Pappas said in a video published on the app on Saturday.

Under ByteDance’s new proposal, Microsoft, which also owns professional social media network LinkedIn, will be in charge of protecting all of TikTok’s U.S. user data, the sources said. The plan allows for a U.S. company other than Microsoft to take over TikTok in the United States, the sources added.

“What’s the right answer? Have an American company like Microsoft take over TikTok. Win-win. Keeps competition alive and data out of the hands of the Chinese Communist Party,” Republican Senator Lindsey Graham wrote on Twitter on Saturday.

Microsoft did not respond to a request for comment.

As relations between the United States and China deteriorate over trade, Hong Kong’s autonomy, cyber security and the spread of the novel coronavirus, TikTok has emerged as a flashpoint in the dispute between the world’s two largest economies.


ByteDance has been considering a range of options for TikTok amid U.S. pressure to relinquish control of the app, which allows users to create short videos with special effects and has become wildly popular with U.S. teenagers.

ByteDance had received a proposal from some of its investors, including Sequoia and General Atlantic, to transfer majority ownership of TikTok to them, Reuters reported on Wednesday. The proposal valued TikTok at about $50 billion, but some ByteDance executives believe the app is worth more than that.

ByteDance acquired Shanghai-based video app Musical.ly in a $1 billion deal in 2017 and relaunched it as TikTok the following year. ByteDance did not seek approval for the acquisition from the Committee on Foreign Investment in the United States (CFIUS), which reviews deals for potential national security risks. Reuters reported last year that CFIUS had opened an investigation into TikTok.

APP SCRUTINY

The United States has been increasingly scrutinizing app developers over the personal data they handle, especially if some of it involves U.S. military or intelligence personnel. Ordering the divestment of TikTok would not be the first time the White House has taken action over such concerns.

Earlier this year, Chinese gaming company Beijing Kunlun Tech Co Ltd sold Grindr LLC, a popular gay dating app it bought in 2016, for $620 million after being ordered by CFIUS to divest.

In 2018, CFIUS forced China’s Ant Financial to scrap plans to buy MoneyGram International Inc over concerns about the safety of data that could identify U.S. citizens.

ByteDance was valued at as much as $140 billion earlier this year when one of its shareholders, Cheetah Mobile, sold a small stake in a private deal, Reuters has reported. The startup’s investors include Japan’s SoftBank Group Corp.

The bulk of ByteDance’s revenue comes from advertising on apps under its Chinese operations including Douyin - a Chinese version of TikTok - and news aggregator app Jinri Toutiao, as well as video-streaming app Xigua and Pipixia, an app for jokes and humorous videos.

China will not accept U.S. 'theft' of TikTok: China Daily

SHANGHAI (Reuters) - China will not accept the “theft” of a Chinese technology company and is able to respond to Washington’s move to push ByteDance to sell short-video app TikTok’s U.S. operations to Microsoft, the China Daily newspaper said on Tuesday.

The United States’ “bullying” of Chinese tech companies was a consequence of Washington’s zero-sum vision of “American first” and left China no choice but “submission or mortal combat in the tech realm”, the state-backed paper said in an editorial.

China had “plenty of ways to respond if the administration carries out its planned smash and grab”, it added.

Microsoft Corp (MSFT.O) said on Monday it was in talks with ByteDance to buy parts of TikTok after U.S. President Donald Trump reversed course on a plan to ban the app on national security grounds and gave the firms 45 days to strike a deal.

U.S. Secretary of State Mike Pompeo said over the weekend that Trump would take action shortly against Chinese software companies that shared user data with the Chinese government.

The Global Times newspaper, which is also government-backed, said U.S. treatment of ByteDance and Huawei Technologies [HWT.UL], now on a U.S. trade blacklist, was indicative of U.S. efforts to separate its economy from China’s.

China had “limited ability” to provide protection to these Chinese companies by retaliating against U.S. companies because the United States had technological superiority and influence with its allies, it added.

“China’s opening-up to the outside world and disintegrating the U.S. decoupling strategy should be priorities,” it said in an editorial.

The Global Times is published by the People’s Daily, the official newspaper of China’s ruling Communist Party.

Reporting by Brenda Goh; Editing by Stephen Coates


White House adviser Navarro suggests Microsoft divest China holdings
WASHINGTON (Reuters) - White House trade adviser Peter Navarro suggested on Monday that Microsoft Corp (MSFT.O) could divest its holdings in China if it were to buy the Chinese owned short-video app TikTok.


“So the question is, is Microsoft going to be compromised?” Navarro said in an interview with CNN. “Maybe Microsoft could divest its Chinese holdings?”

President Donald Trump has agreed to give China’s ByteDance 45 days to negotiate a sale of popular short-video app TikTok to Microsoft, three people familiar with the matter said on Sunday.


U.S. officials have said TikTok, under its Chinese parent, poses a national risk because of the personal data it handles. Trump said on Friday he was planning to ban TikTok in the United States after dismissing the idea of a sale to Microsoft.

In an earlier interview with Fox News Channel, Navarro said any potential buyer of TikTok that has operations in China could be a problem.

Navarro cited Microsoft’s Bing search engine and Skype platform, saying they “effectively are enablers of Chinese censorship, surveillance and monitoring.”


Microsoft has over 6,000 employees in China and offices in Beijing, Shanghai and Suzhou.

While the company has been there for decades, business from China accounts for just over 1% of the company’s revenue, Bloomberg reported Microsoft President and Chief Legal Officer Brad Smith stating at a conference in January.

Widespread piracy of Windows and Office once prevented the company’s cash cow from bringing in money.

The company is now pushing its Azure cloud service to customers in China, via a partnership with local data service provider 21Vianet.

Its crown jewel is arguably a research center in Beijing, which has produced a number of alumni who have gone on to executive positions at Alibaba, ByteDance, Xiaomi, and facial recognition unicorns Sensetime and Megvii.

It also was the site of origin for the so-called “ResNet” paper, currently the most-cited AI paper according to Google scholar metrics.


Reporting by Doina Chiacu, Susan Heavey and Pete Schroeder; Additional reporting by Josh Horwitz; Editing by Nick Zieminski and Christopher Cushing

ANOTHER BRIX IN THE WALL  UPDATED 
A COLLEAGUE AND A GENTLEMAN
Dr. Fauci swooped in to defend coronavirus czar Dr. Birx after Trump called her 'pathetic' for acknowledging that the coronavirus pandemic is getting worse in the US
Lauren Frias 

Dr. Deborah Birx, White House coronavirus response coordinator, speaks during a coronavirus task force briefing at the White House, Saturday, April 4, 2020, in Washington. Associated Press/Patrick Semansky

Top US infectious disease expert Dr. Anthony Fauci defended White House coronavirus czar Dr. Deborah Birx after President Donald Trump criticized her for her stark assessment of the ongoing coronavirus pandemic.

On Sunday, Birx said that the US is entering a "new phase" of the pandemic, as surges in cases can be attributed to asymptomatic carriers who don't know they are infected and make it much more difficult to identify, isolate, and contact trace the virus within communities.

Trump took Birx's analysis as a criticism of the US pandemic response, accusing her of offering such a grim assessment to curry favor with House Speaker Nancy Pelosi, who has condemned the coronavirus czar for not doing enough to confront the president's faulty claims on the pandemic.

During a virtual press conference, Dr. Fauci explained the reasoning behind's Birx's use of a "new phase," saying that the US is seeing a much more "insidious" spread of the virus, making it difficult to suppress and contain its spread throughout communities.

Dr. Anthony Fauci came to the defense of White House COVID-19 czar Dr. Deborah Birx after President Donald Trump slammed her for acknowledging that the coronavirus is getting worse in the US.

On Sunday, Birx said the US is entering a "new phase" of the coronavirus pandemic as some states see uncontrolled surges in cases by asymptomatic individuals.

Her comments on the pandemic came after House Speaker Nancy Pelosi said the coronavirus czar "enabled" the president and has not done enough to confront his misguided claims about the coronavirus.

Trump, however, took Birx's stark assessment of a "new phase" as a blow to the US response to the coronavirus, accusing Birx of acknowledging the worsening pandemic in order to appeal to Pelosi's criticisms.

"So Crazy Nancy Pelosi said horrible things about Dr. Deborah Birx, going after her because she was too positive on the very good job we are doing on combatting the China Virus, including Vaccines & Therapeutics," Trump tweeted Monday. "In order to counter Nancy, Deborah took the bait & hit us. Pathetic!"

In a virtual press conference with Gov. Ned Lamont of Connecticut, Fauci elaborated on Birx's analysis of a "new phase" of the pandemic by explaining that she was referring to the prevalence of "inherent community spread" in the US.

"The reason why she's saying it's a new phase is because, throughout the country, when you have community spread, it's much more difficult to get your arms around that and contain it," Fauci said during the press conference.

"There are spreads where you know where it is and you can contain it," he added, citing examples like outbreaks in a nursing home, meat-packing facility, or prison, but inherent community spread is "insidious."

"There are people who are spreading it who have no symptoms at all, and we know that definitely occurs," the infectious disease expert continued. "It's difficult to identify it, and it's difficult to do identification, isolation, and contact tracing."

Birx and Fauci's viewpoints of the ongoing coronavirus pandemic stand at odds with the president's, as he continues to refer to confirmed infections in the US as "embers" that can be quickly stamped out.

The US has reported more than 4.7 million cases and over 155,000 deaths, according to Johns Hopkins University.

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6 months after declaring the coronavirus a global health emergency, WHO director says there may never be a 'silver bullet' for the novel coronavirus.

A survey suggests 2.5% of Italians have COVID-19 antibodies, which would be 6 times more than the official count of cases. 

'Parents in a school district in Georgia, are demanding in-person classes. But hundreds of employees have tested positive or been exposed to COVID-19, revealing the biggest blind spot in the fight to reopen schools. 

Trump claims lockdowns 'do not prevent infection in the future' and undermines Dr. Fauci's push to reconsider shutdowns in certain states.

Donald Trump calls his Covid coordinator 'pathetic' after she said virus was widespread across US

Pelosi and other Democrats have gone after Deborah Birx, accusing her of tailoring her messages for Trump.

Donald Trump speaks during an appearance at Double Eagle Energy in Midland, Texas.
Image: SIPA USA/PA Images

PRESIDENT DONALD TRUMP has lashed out at his coronavirus response coordinator Deborah Birx after she sounded a grim warning about the pandemic’s new surge.

Trump, angered by what he sees as overly pessimistic media coverage of his handling of the pandemic, said Birx had given into pressure from the Democrats’ Nancy Pelosi to sound negative.

“Deborah took the bait & hit us. Pathetic!” he tweeted.

Yesterday, Birx told CNN that the United States, which has already seen nearly 155,000 deaths from Covid-19, is entering “a new phase” of viral spread.

“It is extraordinarily widespread,” she said. “To everybody who lives in a rural area, you are not immune or protected from this virus.”

Trump said that Birx’s warning was issued only after she was attacked by the Democratic speaker of the House of Representatives, Nancy Pelosi.

Pelosi and other Democrats have gone after Birx, a veteran public health expert, over what they say is her willingness to tailor her messages to win approval from Trump.

“I think the president is spreading disinformation about the virus and she is his appointee, so I don’t have confidence there, no,” Pelosi said on ABC television.

Yesterday, the White House sprang to Birx’s defence.

“It is deeply irresponsible of Speaker Pelosi to repeatedly try to undermine & create public distrust in Dr Birx, the top public health professional on the coronavirus task force,” Alyssa Farah, director of strategic communications, tweeted.
It’s also just wrong. Period. Hard stop.

Trump, however, changed tack with today’s tweet.

So Crazy Nancy Pelosi said horrible things about Dr. Deborah Birx, going after her because she was too positive on the very good job we are doing on combatting the China Virus, including Vaccines & Therapeutics. In order to counter Nancy, Deborah took the bait & hit us. Pathetic!— Donald J. Trump (@realDonaldTrump) August 3, 2020Source: Donald J. Trump/Twitter


The other main public face of the US medical response to the coronavirus, Dr Anthony Fauci, has come in for frequent rough treatment at the hands of the White House and sometimes Trump himself.

Fauci’s typically hard-nosed assessments of the disease’s progress regularly counter more rosy versions promoted by the president.

Trump has called Fauci “alarmist,” suggested he is misleading the public, and last week said it was unfair that the doctor’s public approval ratings are so much higher than his own.

© – AFP 2020

Trump Turns His Back On Dr. Birx After She Incinerated Her Reputation For Him

THE INTELLECTUALIST



Dr. Deborah Birx said the coronavirus is now widespread across the US. President Trump called her comments "pathetic."

President Donald Trump lashed out publicly at Dr. Deborah Birx on Monday, suggesting that she hurt him by acknowledging that the coronavirus is now widespread across the United States, according to The Hill.

• “Trump targeted Birx over a weekend response to criticism from Speaker Nancy Pelosi (D-Calif.), who questioned Birx’s credibility in responding to the pandemic,” the news outlet reported, calling Birx’s response to Pelosi’s criticism “pathetic.”
• The president tweeted: “So Crazy Nancy Pelosi said horrible things about Dr. Deborah Birx, going after her because she was too positive on the very good job we are doing on combatting the China Virus, including Vaccines & Therapeutics. In order to counter Nancy, Deborah took the bait & hit us. Pathetic!”

• Trump’s tweet marked the first time he has criticized Birx in public, The Hill noted, though it is not the first time he has undercut one of his own public health officials during the pandemic.
• Pelosi had said of Birx, “I think the president is spending — spreading disinformation about the virus and she is his — she is his appointee. So I don't have confidence there, no.”
• And Birx responded on Sunday: “I have tremendous respect for the Speaker. And I have tremendous respect for her long dedication to the American people.”
• She added a warning: “What we are seeing today is different from March and April. It is extraordinarily widespread ... it’s more widespread and it’s both rural and urban. To everybody who lives in a rural area, you are not immune or protected from this virus. And that is why we keep saying, no matter where you live in America, you need to wear a mask and socially distance, do the personal hygiene pieces.”

UK
Spurs' Rose says tired of police stopping him to ask if car is stolen

FILE PHOTO: Soccer Football - Tottenham Hotspur Training Centre, London, Britain - November 20, 2019. Tottenham Hotspur's Danny Rose arrives at the training centre Action Images via Reuters/John Sibley

(Reuters) - Tottenham Hotspur defender Danny Rose has said he is tired of racial discrimination after being regularly stopped by police and asked if his car is stolen.

The 30-year-old England international said he has had similar experiences for the last 15 years.

“The last time, last week, when I’d just been at my mum’s house, I had pulled up in a car park so the engine was off,” he told the Second Captains podcast.


“The police pulled in and they brought a riot van, three police cars and questioned me. They said they’d had a report that a car had not been driving correctly.

“I’m like: ‘So why does that make it my car?’ I got my ID out and they breathalysed me. It’s just one of those things to me now. Each time it’s: ‘Is this car stolen? Where did you get it from? Can you prove that you bought this car.’”

Rose said such incidents had made him sceptical about the prospects of lasting change.


“I just give up with hoping that things will change because that’s some people’s mentality towards racism.”

Rose said last year that he could not wait to leave football because he had had enough of the racism in the game.


Reporting by Arvind Sriram in Bengaluru; Editing by Peter Rutherford

'The man who built the peace': Irish and British front pages react to the death of John Hume

Newspapers have extensively covered the life of John Hume in today’s front pages.

NEWSPAPERS IN IRELAND and Britain have this morning reacted to the death of the Northern Ireland peace leader John Hume.

Hume died yesterday aged 83. He was one of the primary architects of the Good Friday Agreement and was awarded the Nobel Peace Prize for his efforts in 1998.

The Irish Times described Hume as “the man who built the peace” in its wraparound front page. The paper includes several tribute articles to Hume.

Tuesday's @irishtimes front page. John Hume, the man who built the peace. Tribute supplement to the outstanding Irish politician of modern times pic.twitter.com/AXddG8BL8s— Liam Ryan (@LiamPRyan91) August 3, 2020Source: Liam Ryan/Twitter

The Irish Independent led its front page with the famous image of Hume being detained by a soldier in Derry in 1971.



Irish Independent front page.

The Irish Examiner led with an iconic quote from Hume: “I want to see Ireland as an example to men and women everywhere of what can be achieved by living for ideals, rather than fighting for them, and by viewing each and every person as worthy of respect and honour.”

The front page of today's Irish Examiner. #JohnHume

Print subscriptions (free delivery): https://t.co/NKXOECzq2B
ePaper: https://t.co/UPXgsBJfmS pic.twitter.com/BNyEInkgpY— Irish Examiner (@irishexaminer) August 4, 2020Source: Irish Examiner/Twitter


The Irish Daily Mirror led with the headline: “Peace be with you John.”

Irish Daily Mirror front page.

The Irish Daily Star described Hume as “a giant of peace”.

Tuesday’s front page pic.twitter.com/fzfzDmyM3s— Irish Daily Star (@IsFearrAnStar) August 3, 2020Source: Irish Daily Star/Twitter

The Belfast Telegraph also went with a striking full-page front cover of Hume.

An iconic front page of tomorrow's Belfast Telegraph as the City of Derry and Northern Ireland mournes the death of peacemaker John Hume - “When people are divided, the only solution is agreement.” @BelTel https://t.co/PRHWt0dChV pic.twitter.com/gtoD4ppvq0— Kevin Scott (@Kscott_94) August 3, 2020Source: Kevin Scott/Twitter


The Irish News featured extensive coverage of Hume’s life.

'PEACEMAKER'

Front page of @irish_news paying tribute to the life and legacy John Hume.

'More than any other individual, John Hume was responsible for the delivery of peace. He ultimately succeeded in his steadfast aim of changing Ireland for the better.' pic.twitter.com/35VX0nFJme— Brendan Hughes (@brendanhughes64) August 3, 2020Source: Brendan Hughes/Twitter

In Britain, John Hume made the front page of two national papers.

The Guardian features an image of Hume and includes tributes where he is called “a titan and a visionary”.

Guardian front page, Tuesday 4 August 2020: Russians stole secret documents from ex-minister’s personal email pic.twitter.com/md03tP0XMt— The Guardian (@guardian) August 3, 2020Source: The Guardian/Twitter

The Financial Times featured the famous image of Hume and described him as a “voice of peace”.

Just published: front page of the Financial Times, UK edition, Tuesday 4 August https://t.co/MVNZSNkX7y pic.twitter.com/8l1LBZ92EE— Financial Times (@FinancialTimes) August 3, 2020Source: Financial Times/Twitter

RELIGIOUS NUT
Trump USAID appointee unloads as rocky tenure ends

The deputy White House liaison at the aid agency blasted Democrats and her colleagues for what she called “rampant anti-Christian sentiment.”

A Trump administration official said USAID‘s acting administrator, John Barsa, fired Merritt Corrigan on Monday after she began posting her tweets. | John Moore/Getty Images

By DANIEL LIPPMAN

08/03/2020 

Merritt Corrigan, the deputy White House liaison at the U.S. Agency for International Development, is leaving the agency after a short and tumultuous tenure marred by calls for her removal over controversial comments she had made on LGBT rights, according to two USAID officials and another person familiar with the matter.

Late Monday morning, Corrigan unlocked her previously private Twitter account and unleashed six tweets blasting USAID, congressional Democrats and the media.

In tweets unusual even for an administration that has been marked by constant personnel shakeups and palace intrigue, she said she would be holding a news conference on Thursday that would include two far-right purveyors of conspiracy theories, Jacob Wohl and Jack Burkman, to “discuss the rampant anti-Christian sentiment at USAID.” She also said she had “watched with horror this week as USAID distributed taxpayer funded documents claiming ‘we cannot tell someone’s sex or gender by looking at them’ and that not calling oneself ‘cis-gendered’ is a microagression[.] I’m not cis-anything. I’m a woman.”

Corrigan also criticized the chairman of the House Foreign Affairs Committee, Rep. Eliot Engel (D-N.Y.), and Sen. Robert Menendez (D-N.J.), the top Democrat on the Senate Foreign Relations Committee, and said they had “engaged in a corrupt campaign to remove me from USAID. I will expose it on Thursday.”

She also tweeted on Monday: “The United States is losing ground in the battle to garner influence through humanitarian aid because we now refuse to help countries who don’t celebrate sexual deviancy[.] Meanwhile, Russia and China are happy to step in and eat our lunch.”

A Trump administration official said USAID‘s acting administrator, John Barsa, fired Corrigan on Monday after she began posting her tweets. Barsa told the White House of his decision and received no pushback. Barsa has repeatedly said he will hold people at the agency accountable for inappropriate behavior regardless of their hiring category.

Twenty Democratic representatives, led by Engel, sent a letter to Barsa in late July telling him that Corrigan held positions “in direct opposition to the work USAID supports.”

In a statement, a USAID spokesperson, Pooja Jhunjhunwala, said: “Effective 3:00 P.M., on August 3, 2020, Ms. Merritt Corrigan is no longer an employee at the U.S. Agency for International Development (USAID). USAID takes any claim of discrimination seriously, and we will investigate any complaints of anti-Christian bias Ms. Corrigan has raised during her tenure at the Agency.“

Corrigan didn’t respond to a request for comment. It’s unclear what her next step will be.

The news conference announcement raised eyebrows among current and former Trump officials, with one former senior Trump official saying in a text message: “Who does she think she is holding a press conference, suddenly forcing the White House to answer questions about a low level staffer with outside the mainstream opinions?”

Corrigan is not the only Trump appointee at USAID to have stirred concern recently. Others are Bethany Kozma, who has spoken derisively of trans people and is deputy chief of staff; and Mark Kevin Lloyd, a USAID religious freedom adviser who has reportedly slurred Islam, calling it a “barbaric cult” in at least one instance. Kozma recently also became acting White House liaison, according to a person familiar with the matter.

Last year POLITICO reported on Corrigan’s Twitter account and cataloged a number of posts that lawmakers cited in their letter. She wrote that “our homo-empire couldn’t tolerate even one commercial enterprise not in full submission to the tyrannical LGBT agenda.”

“Liberal democracy is little more than a front for the war being waged against us by those who fundamentally despise not only our way of life, but life itself,” Corrigan wrote in another post.

House Democrats wrote in their letter: “We are left wondering how Ms. Corrigan is able to effectively serve an agency whose principles are so clearly antithetical to her own.”

After Corrigan's departure became public, Rep. Joaquin Castro (D-Texas) tweeted: “Our government should not promote hate. Good news that Merritt Corrigan has left @USAID after her homophobic comments and pressure from @HouseForeign Democrats. @Ilhan and I have also called for Mark Kevin Lloyd, who has Islamophobic views, to resign.“

Corrigan also once wrote an op-ed that called for women to assume traditional gender roles of mother, wife and homemaker.

On Monday, she defended herself and tweeted: “For too long, I’ve remained silent as the media has attacked me for my Christian beliefs, which are shared by the majority of Americans[.] Let me clear: Gay marriage isn’t marriage[.] Men aren’t women[.] US-funded Tunisian LGBT soap operas aren’t America First.”

David Stacy, government affairs director for the LGBTQ advocacy group Human Rights Campaign, said in a statement: “Sadly, Merritt Corrigan is not unique in the Trump Administration. She is the exact type of anti-LGBTQ zealot that Trump recruits and places in positions of power. Corrigan’s biased and harmful beliefs are not shared by the vast majority of Americans.”

Nahal Toosi contributed to this report.

Little-known U.S. firm secures deal for Syrian oil

Former diplomat and special forces soldier got green light to work with Kurds to develop crude in northeastern Syria.

A pond of oil at an oil field controlled by a U.S-backed Kurdish group, in Rmeilan, Hassakeh province, Syria. | AP Photo/Hussein Malla


By LARA SELIGMAN and BEN LEFEBVRE

08/03/2020

An American company has inked a contract with Kurdish authorities in northeastern Syria to develop and export the region’s crude oil under a secretive deal approved by the U.S. government months after President Donald Trump announced he was leaving U.S. troops to “secure the oil,” multiple people familiar with the project told POLITICO.

The agreement reached by a little-known firm helmed by politically connected former military and diplomatic officials has already angered the government of Syrian President Bashar Assad, which does not recognize the Kurdish authorities as autonomous. The Syrian Foreign Minister called the deal illegal and said it is aimed at “stealing” Syria’s crude.

The deal advances a longtime U.S. goal to help the Syrian Kurds, which have been staunch U.S. allies in the fight against the Islamic terrorist group, to strengthen their position in the region, where they face not just Assad's brutal regime but also the Turkish government -- and provide new means to help address the desperate needs of civilians that have been caught in the Syrian civil war.

The company, Delta Crescent Energy LLC, was incorporated in Delaware in February 2019, according to its business license. Its partners include former U.S. ambassador to Denmark James Cain; James Reese, a former officer in the Army’s elite Delta Force; and John P. Dorrier Jr., a former executive at GulfSands Petroleum, a U.K.-based oil company with offices and drilling experience in Syria.

It has been in talks with the Kurds for more than a year but only received a license from the Treasury Department's Office of Foreign Assets Control for the work in April, according to a State Department official and a Syrian source familiar with the discussions. The arrangement is to refine and use some of the oil locally but also export some through northern Iraq and Turkey, they said.

The Treasury Department has multiple sanctions against Syria’s oil market. In a March 2019 the Trump administration issued the orders targeting companies that deliver or finance petroleum shipments of Syrian oil on behalf of the country’s government. The effort is designed to punish the Assad regime for atrocities committed amid the country’s civil war.

However, the Pentagon and State Department have long been working to enable the Syrian Kurds to harness the crude oil in the region, a former Trump administration official told POLITICO. The idea is that revenue from the oil could help the Kurds deal with the dire humanitarian situation in the war-torn country, including overflowing refugee camps from years of civil war, the person said.

“The goal is to get the production back up to where it was before the civil war and sanctions,” said Ambassador Cain. “It was very much our effort to keep the State Department advised — not seeking approval — but wanting to know if this was contrary to American policy interest. Nobody told us no.”

A spokesperson for the Syrian Democratic Forces, which controls the region and is allied with the United States, declined to comment. A Treasury Department spokesperson also declined to discuss the deal on Monday.

"Treasury does not generally comment on or provide details on license applications or specific licenses that have been issued as the information contained within these licensing applications and determinations may be protected by the Privacy Act, the Trade Secrets Act, or other regulations governing OFAC’s licensing authorities," the spokesperson said in an email.



Secretary of State Mike Pompeo appears during a Senate Foreign Relations committee hearing in Washington. | Greg Nash/Pool via AP

The deal first came to light during a Senate Foreign Relations Committee hearing on Thursday, when Secretary of State Mike Pompeo was questioned about it by Republican Sen. Lindsey Graham of South Carolina.

Pompeo said the administration supports the deal and said it is intended to “modernize” the oil fields. “The deal took a little longer ... than we had hoped, and now we’re in implementation,” he said.

Graham told POLITICO on Monday that the company will brief him this week on its plans.

"I think this company’s going to improve the viability of the northern oil fields to make them more productive,” Graham said. “Conceptually it makes sense that we should, instead of just writing checks, help people help themselves.”

The State Department is leading the effort under James Jeffrey, United States Special Representative for Syria Engagement and the Special Envoy for the Global Coalition to Defeat ISIL, and his deputy, Joel Rayburn, the former Trump administration official said.

However, they have sought to keep the deal quiet for fear that Russia, which backs Assad’s regime and deploys military and paramilitary forces across the region, might retaliate, both the State Department official and Syrian source said.

A State Department spokesperson declined to comment on the contract but noted that the U.S. government considers requests “on a case-by-case basis to authorize U.S. persons’ involvement in activities that would normally be prohibited.”

“We are not involved in the commercial decisions of our local partners. However, as a general matter, we work to ensure that our sanctions are in line with our foreign policy interests and target the Assad’s regime continued violence against the Syrian people,” the spokesperson said.

“Syrian oil is for the Syrian people and we remain committed to the unity and territorial integrity of Syria," the spokesperson added. "The United States government does not own, control, or manage the oil resources in Syria. The populations in areas liberated from ISIS make their own decisions on local governance.”

Delta Crescent has so far been the only company to receive a license to work in Syria since U.S. military forces all but abandoned the country in October.

Trump at the time ordered only enough troops to stay in the war-ravaged country to allow for “keeping the oil." The U.S. used residual forces to secure the oil fields in the eastern part of the country and to continue fighting Islamic State militants. The country’s oil field were seized by ISIS during the civil war. Years of fighting that forced ISIS to retreat left the production infrastructure devastated, however.

Delta Crescent operates under the protection of the SDF and the U.S. military in northeast Syria, the sources said. The company’s plan is to sell the Syrian oil to various customers in the region, potentially including Assad, Turkish-backed rebels and Iraqi Kurdistan, all of whom could then sell it on the international market, the Syrian source said.

Cain said the company would sell its products “directly into the international market at market prices so that they can use the proceeds to rebuild their economy and help their people,“ he said.

Reese, the former Delta Force soldier was also a founder at North Carolina-based consulting and private security firm TigerSwan.

The company gained notoriety several years ago when North Dakota regulators sued it for providing private security in the state without a license after it sent agents to crack down on protests against the Dakota Access pipeline, operated by a company owned by Trump donor Kelcy Warren.

TigerSwan denied all wrongdoing and the state dropped the case after the company left North Dakota.

Attempts to reach Dorrier were unsuccessful. He left GulfSands in the late 2000s, according to news reports at the time. A GulfSands spokesperson did not reply to emails seeking comment.

Betsy Swan Woodruff contributed to this report.

Migrant workers on farms across Canada are being told they can’t leave, raising human rights concerns

TAVIA GRANT AND KATHRYN BLAZE BAUM
PUBLISHED AUGUST 3, 2020
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Workers do maintenance at the Scotlynn Group near Vittoria, Ont., in Norfolk County on Wednesday, June 3, 2020. Agriculture employers in several provinces are restricting the movement of migrant farm workers during the pandemic.

NATHAN DENETTE/THE CANADIAN PRESS

Agriculture employers in several provinces are restricting the movement of migrant farm workers during the pandemic, raising questions about the human rights of temporary foreign workers who in some cases aren’t allowed to leave the premises, even to get groceries.

In an attempt to contain the spread of COVID-19 at agri-food operations, some employers are asking workers to sign agreements or conform to rules confining them to the property. Under the federal temporary foreign worker (TFW) program, employers often provide seasonal farm staff with on-site accommodations, which can include bunkhouses, trailers and sheds.

Some employees said they have not ventured off the grounds for several months, forgoing grocery runs, church services, medical appointments and visits with spouses and children who live in Canada year-round.

Workers told The Globe that they feel pressure to abide by the employer-imposed restrictions because their status in the country is tied to their status on the farm. The Globe is not identifying them because they fear workplace reprisal and deportation. Where possible, The Globe reviewed the contracts and letters pertaining to restrictions and terminations during the pandemic period.

Ottawa offers cash, more promises of reform for migrant workers in the agriculture industry

A Jamaican man who works on an Ontario vegetable farm said he felt he had no choice but to sign a form saying that he voluntarily wouldn’t leave the premises to buy groceries. The form, which the Migrant Workers Alliance for Change advocacy group said is being widely used by employers, states that the worker agrees that the employer or a service will arrange food delivery to the farm.


It says that although the worker has the choice to buy their own groceries, they have made the decision not to do so “in the best interest of my own health and those that I may interact with in a public setting.” Grocery costs, the form says, will be deducted from paycheques.

For the past two months, the man hasn’t gone grocery shopping, attended church or visited family in Toronto. He said he is confined to the crops by day and a bunkhouse without air conditioning by night. “We don’t deserve this,” he said, adding that he believes he is being overcharged for food.

“We can’t speak out. It’s like shackles around our feet. We cannot say nothing, because we want to come back.” He said access to permanent-resident status would help level the playing field by empowering workers to defend their rights.

The structure of the TFW program has long drawn criticism for enabling power imbalances between farm operators and their workers. The pandemic has exacerbated the problem and exposed the poor working and living conditions that some migrant workers face as they support the Canadian food system. In Ontario alone, more than 1,300 migrant farm workers have been infected with COVID-19, according to a Globe and Mail survey of local public-health units.

Medical officials stress that the workers contracted the virus locally. The situation is especially grave in Windsor-Essex, which is not moving to the next phase of reopening as the virus continues to spread in the Kingsville and Leamington growing regions

Fay Faraday, a Toronto-based labour and human-rights lawyer, said the restrictions of movement on workers this year are unprecedented and “feed into systemic racism that positions them as a threat,” she said. “What we’re seeing now is a really broad imposition of control. This goes so far beyond what is required in terms of social distancing.”

There’s nothing in the law, she said, that gives farm employers the ability to impose stricter conditions of public-safety measures on their employees during their off-work hours.

The pandemic-related restrictions, which were described to The Globe by workers, advocates and farmers in Ontario, B.C. and Nova Scotia, are a symptom of the pressure on employers to both ensure the success of their harvest and the well-being of their workers. Mid-season disruptions caused by labour shortages due to COVID-19 could lead to rotten crops and significant economic losses.

In addition, employers are getting advice from local public-health units, which in some regions say that workers should avoid going into town as much as possible.

Approximately 37,000 temporary foreign workers have already arrived in Canada to work on farms; an additional 14,000 are expected to come before the end of the year, with around half heading for Ontario. Harvests are looming for many key crops destined for Canadian tables, from field tomatoes to apples and squash.

None of the provincial health ministries in B.C., Ontario or Nova Scotia have issued restrictions on the ability of temporary foreign workers to leave the farm premises if there is no outbreak or specific isolation order in place.

In Nova Scotia, a single mother supporting two daughters back home in Jamaica – said she has been restricted, through a verbal order, from leaving the strawberry farm where she works. “If we have a day off, then we want to go to town to get something to bring back for our children back home,” the woman said.

She said her employer is “more aggressive” this year, using racial slurs and threatening to send workers back home if they speak up about conditions on the farm or pandemic-related rules.

A worker in B.C. told The Globe that he’s not allowed to leave the farm, and has been paying his employer for groceries at what he believes to be double the cost. “This year, they’re not letting us out from the farm to go shop for ourselves and they also don’t let any visitors come see us, including officials who used to come and check on us,” said the worker, who is from Mexico.

“Those restrictions are supposedly due to COVID-19, and yet we live very cramped in these very small trailers.”

Javier Robles, a migrant-support outreach worker at Kelowna Community Resources in B.C., said he takes Walmart orders for employees, and then drops off boxes in the middle of the road just outside the premises; when supervisors aren’t looking, he said, the migrant workers run to get the deliveries and leave cash on the road.

Mr. Robles said he has spoken with many workers this year, particularly those at larger operations, who say they’re required to stay on the premises and cannot have visitors. “They feel frustrated because they see the news that everybody is going to the beach, everybody is trying to have a normal life, but they’re not allowed,” Mr. Robles said.

In West Kelowna, two seasonal agriculture workers from Mexico were fired for breaching restrictions on their movement and having visitors after a community volunteer dropped off some work clothes and culturally appropriate food for them.

The Globe reached out to three large farms in the Kelowna area to ask about their policies; one declined to comment, and one did not respond. Bylands Nurseries, which employed the two workers who were fired for breaking COVID-19-related rules, said that due to the pandemic it is taking “additional precautions” for its staff living in company accommodations.

The company, which experienced an outbreak in late March, said it provides grocery services to workers and transportation to any medical appointments. Regarding the workers who were terminated, Bylands says it dismissed them after “multiple infractions, following orientation on the workplace policies and warnings about leaving the premises.”

In accordance with the terms of the seasonal agriculture worker program, the company alerted the Mexican consulate of the terminations. Amy Cohen, the volunteer and advocate who dropped off the clothes and food to the workers, said the pair have since been deported.

Jenn Pfenning, co-owner of Pfenning Organic Vegetables Inc. in New Hamburg, Ont., said that while the farm’s 35 Jamaican workers are not prohibited from leaving the premises, she can understand, to some degree, the logic for imposing restrictions aimed at mitigating pandemic-related risk.

“This is what happens when you have a program that sets employers up to be responsible for every aspect of the workers’ lives in a parental fashion,” said Ms. Pfenning, the chair of the National Farmers Union migrant worker subcommittee.


“Farmers are worried about protecting their workers’ health and well-being from a personal and business perspective. Sick workers can’t work. Unfortunately, that creates a human-rights issue.”

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UPDATED
HSBC warns loan losses could hit $13 billion as profit plunges 65%

Lawrence White, Alun John

LONDON/HONG KONG (Reuters) - HSBC Holdings PLC warned its bad debt charges could blow past a previous estimate to $13 billion this year and said its profits more than halved, as the coronavirus pandemic hammered the bank’s retail and corporate customers worldwide.


The lender warned its capital reserves could deteriorate, its revenues would come under pressure and it faced heightened geopolitical risk as Europe’s biggest bank set out a gloomier than expected outlook for the second half of the year.

HSBC increased its estimate of the total bad debt charges it could take this year to between $8 billion and $13 billion from $7 billion-$11 billion, reflecting worse-than-expected actual losses in the second quarter and expectations of a steeper decline in the economy.


“What we have seen this quarter is quite a sharp shift in economic outlook for the global economy, the famous ‘V’ has got a lot sharper and as a result we have materially increased our provisions,” Chief Financial Officer Ewen Stevenson told Reuters.

HSBC’s shares fell 4.6% to a nerly twelve-year low as investors digested the scale of the challenge facing HSBC, as it grapples with a global pandemic, political unrest in its core Hong Kong market, and low interest rates on its lending worldwide.

The bank reported a pre-tax profit of $4.32 billion for the first six months this year, lower than the $5.67 billion average of analysts’ forecasts.
FILE PHOTO: HSBC logo is seen in the financial district in New York, U.S., August 7, 2019. REUTERS/Brendan McDermid/File Photo

HSBC’s business in Britain has been hit particularly hard, Stevenson said, as it took a $1.5 billion charge against expected credit losses.

HSBC’s results reinforced the trend of lenders across the world increasing their buffers to absorb souring loans at a time when companies - from aviation to retail and hospitality sectors - are reeling from the impact of COVID-19.

TROUBLE AHEAD

The bank’s credit impairment provisions in the first-half soared to $6.9 billion, compared to $1 billion in the same period a year earlier.

Impairment charges included a $1.2 billion writedown on the value of software it owns, mainly in Europe, it said.

While HSBC’s core capital ratio, a key measure of financial strength, rose to 15% at the end of June, the bank warned the metric would likely decline later this year as falling credit ratings hit its risk-weighted asset ratio.

Its revenues fell 9% in the six-month period, as global interest rate cuts and declining market values on assets in investment banking and insurance outweighed higher trading income.

HSBC is continuing to review its long-term dividend policy, CEO Noel Quinn said in a statement.

FILE PHOTO: A Chinese national flag flies in front of HSBC headquarters in Hong Kong, China, July 28, 2020. REUTERS/Tyrone Siu/File Photo GLOBAL BUSINESS WEEK AHEAD

The bank earlier this year halted payouts in response to a regulatory request in Britain, infuriating many of its retail investors who rely on it for income, particularly in Hong Kong.

Quinn told Reuters the bank’s staff headcount has fallen by some 4,000 this year after it restarted a redundancy programme that was put on ice after the coronavirus outbreak.

The bank is aiming to cut costs by 3% this year from that restructuring as well as lower employee spending on travel and other items during the pandemic, he said.

Only a fifth of the around 9,000 staff in its headquarters in London’s Canary Wharf district would be able to return to work in the near term for safety reasons, Quinn told Reuters.


Reporting by Alun John in Hong Kong and Lawrence White in London; Additional reporting by Noah Sin in Hong Kong; Editing by Muralikumar Anantharaman and Louise Heavens


HSBC profits sink by 82% as loans sour: Shares plunge to lowest levels since 2009 crisis

By LUCY WHITE FOR THE DAILY MAIL

PUBLISHED: 3 August 2020 

HSBC profits plunged more than 82 per cent as the bank warned £10billion worth of loans could turn sour this year due to the coronavirus pandemic. 

The London-headquartered lender, which makes most of its money in Asia, said pre-tax profits slid to just £824m in the three months to June 30, down from £4.7billion over the same period last year. 

This was much worse than the £1.9billion expected by analysts, and caused shares to slump 2.9 per cent, or 9.95p, to 332.25p – their lowest level since March 2009 during the depths of the last financial crisis. 

+1

Slump: The lender said pre-tax profits slid to just £824m in the three months to June 30

HSBC boss Noel Quinn said he was planning to 'accelerate' his shake-up of the bank in a cost-cutting drive which was already set to see 35,000 jobs axed globally by 2022. 


The brutal restructuring was initially put on hold during the pandemic, but chief financial officer Ewen Stevenson confirmed yesterday that 3,800 jobs had been cut since the beginning of the year. 

And in a worrying sign for office landlords and business districts around the world, Quinn added that the bank may need less office space in future as the pandemic pushed more staff to work from home. 

He said: 'I do think there's potential over the medium term to reflect on different ways of working, allowing people greater flexibility to work from home or in the office.' 

Prime Minister Boris Johnson has urged workers to return to their offices where possible as lockdown eases, to bring life to deserted business hotspots. 

But the majority of staff at HSBC and other major financial institutions have been working at home throughout the pandemic, and many firms are now wondering whether they need all of their towering skyscrapers in costly locations such as Canary Wharf and London's Square Mile. 

The pandemic has also been weighing on HSBC's loan book, as it thinks more borrowers will become unable to repay their loans due to job losses and the resulting economic downturn. 

It had already set aside £2.3billion to cover bad loans in the first three months of 2020, and ramped this up to £5.3billion in June as the extent of the damage began to emerge. 

HSBC warned the cost over the full year could be as high as £10billion. Its outlook for the UK was gloomy, as around £1billion of the expected losses were linked to the country. On top of the coronavirus troubles, HSBC has been dealing with a flare-up in tensions between the US and China. 


The bank angered MPs, customers and investors when it supported the controversial law imposed by China on Hong Kong in June. 

The national security law drastically reduces Hong Kong citizens' rights, and makes it a crime for anyone to criticise Beijing's Communist regime. 

Quinn yesterday denied the bank would be forced to choose between its operations in the West and its more profitable business in Asia. He said: 'Current tensions between China and the US inevitably create challenging situations for an organisation with HSBC's footprint.' 

And despite prominent pro-democracy protester Joshua Wong claiming he had faced increased questions from HSBC over his finances since the law was introduced, HSBC denied it was screening customers specifically to check whether they had pro-democracy links. 

Quinn insisted that the bank was simply complying with all laws in the jurisdictions it operates in, and refused to speculate on the possible impact which US sanctions on Chinese officials could have. 
Metro Bank has bought Ratesetter as it ramps up its efforts to expand into more profitable lending. Metro, which is trying to recover from a bleak 2019 when it swung to a £11.7m loss, will buy the online lender for up to £12m. Ratesetter matches investors who want to lend with borrowers who are in need of cash, and offers personal loans, financing for car dealers, and loans for property developers, and has handed out more than £4billion since it launched.

UNDERDOGS
Start considering the Raptors real NBA title contenders

Kirk Goldsberry ESPN Staff Writer

The Toronto Raptors are the defending NBA champions, yet they remain horribly under the radar in this year's title race. That needs to change. Dating back to before the league's stoppage in March, this team has won 23 of its past 27 games. They've been awesome in their first two restart matchups, beating the Los Angeles Lakers by 15 points on Saturday night and outlasting Jimmy Butler and the Miami Heat on Monday.

Still, a recent poll of my esteemed ESPN colleagues revealed that only three of 16 NBA experts expect Toronto to come out of the Eastern Conference. That's harsh, but Nate Silver's robots are even harsher. The FiveThirtyEight prediction model, which is even called RAPTOR, is currently insulting its namesake -- giving the dysfunctional Philadelphia 76ers a 29% chance of making the Finals while the Boston Celtics have a 19% chance. The Raptors are down at 10%, but some folks have noticed how good they are.

"It's a great team," LeBron James said after Saturday's game. "No ifs, ands or buts. Exceptionally well coached. Championship DNA, you can never take that away from a ball club. ... The media may not talk about them much or give them as much credit because Kawhi [Leonard] is gone, but players know what type of team they are."


LeBron James discusses the "championship DNA" that the Raptors possess and explains why they are more of a threat than they get credit for.

James is absolutely right. Toronto has a 71.6% win percentage over the past three seasons, the best in the NBA. In that same time period, the Raptors have also recorded a plus-6.8 point differential -- again, No. 1 overall. This team is legitimate with or without last year's NBA Finals MVP.

While they're grabbing hold of the East's No. 2 seed with the league's No. 4 net rating, the Raptors' first two games in the bubble have revealed one key driver for their success: This is an emerging defensive juggernaut.

In a league increasingly dominated by perimeter production, head coach Nick Nurse and the Raps have found a way to frustrate the dominant tactics. The basketball world took notice when Nurse dusted off a highly unusual box-and-one defense that frustrated Stephen Curry and the Warriors in the Finals last year, but that was just the beginning. Nurse's staff has earned a reputation for innovative, unpredictable and unconventional approaches.


"The whole fourth quarter they were playing some janky defense ... Over the course of the game, it's kinda disrespectful to leave Andre Iguodala open like that. ... He's made big shots like that before."

-Steph Curry on the finish to Game 2 pic.twitter.com/eQ9Bymczv2— NBA on ESPN (@ESPNNBA) June 3, 2019

Nurse's weird bag of defensive tricks includes full-court presses, 2-3 zones, surprise traps and double-teams. The real trick, though, is having a roster full of guys ready and willing to implement these strategies. Masai Ujiri and the front office have loaded the roster with a bunch of guys who love to fight on the unglamourous end of the floor.

It all starts with Marc Gasol and Serge Ibaka shoring up the frontcourt with elite rim protection and communication. Toronto allows 41.9 points per game in the paint, trailing only the Milwaukee Bucks in that department.

The wings are led by Pascal Siakam and his stunning versatility. At 6-foot-9, Siakam can do it all. He has become one of the NBA's best 3-point deterrents, leading the NBA in contested 3s this season, per Second Spectrum tracking data. And shooters have only made 31.2% of the 337 3s that Siakam has challenged, the third-best mark among the 33 players with at least 250 contests.

The backcourt includes both Fred VanVleet's remarkable perimeter activity -- he leads the league in deflected passes, and was great on Curry last year -- and Kyle Lowry's never-ending love of drawing charges.

Bottom line: These dudes love the dark arts of defense. They each thrive in their own unique ways, but the collective strength is undeniable. It allows the Raptors to implement diverse, unorthodox defensive strategies tailored to each opponent. Game to game, you never know what you're going to get, and the results are solid.

https://www.instagram.com/p/CDcPmKIl1J_/?utm_source=ig_embed

Raptors opponents are making just 33.6% of their triples this season, the lowest such figure in the NBA. But the numbers behind that stat are interesting. Toronto actually allows the easiest 3s in the league, according to Second Spectrum's shot quality data. The negative difference between opponent's expected field goal percentage on 3s -- when accounting for things such as defender distance and shooter location -- and their actual shooting performance is greater than that for any other team by a considerable margin.

There's certainly some luck involved here, but there's a case that the Raptors' No. 2 overall defense should be credited more to strategy and execution. The Heat came into Monday's matchup as the league's most efficient 3-point shooting team, but Toronto held Miami to just 31% from deep in large part by limiting Duncan Robinson -- who trails only James Harden in total 3s this season -- to just one made 3 on four attempts. The way Robinson was swarmed and hounded was not luck.

The Raptors also like to shut down unassisted 3s, which are surging in popularity. Back in 2013-14, NBA shooters attempted just 4.5 such shots per 100 possessions. This season that number has surged to 7.8 -- but not against the Raptors, who give up 5.7 such tries per 100 possessions, the fewest in the NBA, per Second Spectrum. And opponents are converting just 29% of those looks, which ranks second in the league.

All told, Raptors opponents are managing to convert just 1.6 unassisted 3s per game, meaning they have to try to find offense elsewhere. Good luck.

Following the departure of Leonard, many NBA observers expected Toronto to crater. But the leftover Raptors have very different expectations. This team is playing like it can win it all again, and its case is strong. As Curry and Giannis Antetokounmpo both found out last year: Defense wins championships.