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  • Fired SpaceX employees accuse company of violating labor law

    Fired SpaceX employees accuse company of violating labor law

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    NEW YORK — Several SpaceX employees who were fired after circulating an open letter calling out CEO Elon Musk’s behavior have filed a complaint accusing the company of violating labor laws.

    The complaint, made Wednesday to the National Labor Relations Board, details the aftermath of what allegedly happened inside SpaceX after employees circulated the letter in June, which, among other things, called on executives to condemn Musk’s public behavior on Twitter — including making light of allegations he sexually harassed a flight attendant — and hold everyone accountable for unacceptable conduct.

    The letter was sent weeks after a media report surfaced that Musk paid $250,000 to the flight attendant to quash a potential sexual harassment lawsuit against him. The billionaire has denied the allegations.

    Employees in their letter urged SpaceX to uniformly enforce its policy against unacceptable behavior and commit to a transparent process for responses to claims of misconduct. A day later, Paige Holland-Thielen and four other employees who participated in organizing the letter were fired, according to the filing, which was made by Holland-Thielen to a regional NLRB office in California. Four additional employees were fired weeks later for their involvement in the letter.

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

    Musk, who is the CEO of Tesla and SpaceX and is currently running Twitter, prefers to do things his own way even if that means running afoul of rules and regulations. He’s currently in a defiant fight with Civil Rights department, a California regulator that is suing Tesla for rampant racial discrimination.

    Some view Musk’s management style as autocratic and demanding, as evidenced by a recent email he sent to Twitter staff giving them until Thursday evening to decide whether they want to remain a part of the business. Musk wrote that employees “will need to be extremely hardcore” to build “a breakthrough Twitter 2.0″ and that long hours at high intensity will be needed for success.

    A number of engineers also said on Twitter they were fired last week after saying something critical of Musk, either publicly on Twitter or on an internal messaging board for Twitter employees.

    In a statement, Holland-Thielen said as a woman engineer at SpaceX, she experienced “deep cultural problems” and comforted colleagues who had experienced similar issues.

    “It was clear that this culture was created from the top level,” she said.

    Still, she said part of what she liked about the company was that any person could escalate issues to leadership and be taken seriously.

    “We drafted the letter to communicate to the executive staff on their terms and show how their lack of action created tangible barriers to the long term success of the mission,” Holland-Thielen said. “We never imagined that SpaceX would fire us for trying to help the company succeed.”

    The firings coincide with Musk’s $44 billion buyout of Twitter. Around the same time, the billionaire used a sexual term to make fun of Microsoft co-founder Bill Gates’ belly and also posted a poop emoji during an online discussion with then-Twitter CEO Parag Agrawal.

    After terminating the first set of employees, SpaceX allegedly interrogated dozens of others over the next two months in private meetings, telling them they couldn’t disclose those conversations to anyone else due to attorney-client privilege, according to the complaint. Four additional employees who helped draft or share the letter were fired in July and August, the filing said, adding up to nine terminations in total.

    “Management used this ‘ends justifies the means’ philosophy to turn a blind eye to the ongoing mistreatment, harassment, and abuse reported by my colleagues, much of which was directly encouraged and inspired by the words and actions of the CEO,” said Tom Moline, who was also fired from SpaceX after organizing the letter.

    Jeffery Pfeffer, a professor who specializes in organizational behavior at Stanford University’s business school, said that the allegations were hardly a surprise given Musk’s leadership style at Twitter. Musk’s success at companies like Tesla and SpaceX have created what he labeled as hubris under the false notion that it was “all about individual genius.”

    “Powerful people get to break the rules. They don’t think they are bound by the same conventions as other people,” Pfeffer said, criticizing Musk’s behavior. He said it showed the arrogance of Musk, one of the world’s richest men: “Why would he think he is a mere mortal?”

    ———

    Groves reported from Sioux Falls, South Dakota.

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  • Culture clash? Conservative Qatar preps for World Cup party

    Culture clash? Conservative Qatar preps for World Cup party

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    On the Instagram accounts of fashion models and superstars last month, the sheikhdom of Qatar looked like one glittering party.

    High-heeled designers descended on exhibition openings and fashion shows in downtown Doha. Celebrities, including a prominent gay rights campaigner, snapped selfies on a pulsing dance floor.

    “As-salaam ’alykum Doha!” Dutch model Marpessa Hennink proclaimed on Instagram, using the traditional Muslim salutation.

    The backlash was swift. Qataris went online to vent their anger about what they called a dangerous and depraved revelry, saying it threatened Qatar’s traditional values ahead of the 2022 FIFA World Cup. The Arabic hashtag, Stop the Destruction of Our Values, trended for days.

    The episode underscores the tensions tearing at Qatar, a conservative Muslim emirate that restricts alcohol, bans drugs and suppresses free speech, as it prepares to welcome possibly rowdy crowds for the first World Cup in the Middle East.

    “Our religion and customs prohibit indecent clothing and behavior,” Moheba Al Kheer, a Qatari citizen, said of the avant-garde artists and flamboyant models who mingled with Qatari socialites in late October. “It’s normal for us to worry when we see these kinds of people.”

    World Cup organizers say everyone is welcome during the tournament. Already, foreigners outnumber citizens 10 to one in Qatar. Some Qataris are liberal and open to mixing with foreigners. Many are thrilled about the tournament. But human rights groups have raised concerns over how police will deal with foreign fans’ violations of the Islamic laws criminalizing public drunkenness, sex outside of marriage and homosexuality.

    Qatar, a tiny Persian Gulf country that once was a dust-blown pearling port, transformed at almost warp-speed into an ultra-modern hub following its 1990s natural gas boom. Expats, including Western consultants and engineers and low-paid South Asian construction workers and cleaners, poured into the country.

    Glass-and-steel skyscrapers, luxury hotels and massive malls soon sprung up in the desert. In an effort to diversify away from a carbon-based economy, Qatar’s ruling family bought up stakes in things ranging from global finance and technology to the French soccer club Paris Saint-Germain and London real estate.

    The ruling emir’s sister, Sheikha Al Mayassa Hamad bin Khalifa Al Thani, became one of the world’s most important art buyers. His mother, Sheikha Mozah bint Nasser Al-Missned, became a global style icon and bought several luxury brands, including Valentino.

    But even as Qatar, among the world’s wealthiest countries per capita, looked to the West for inspiration, it faced pressure from within to stay true to its Islamic heritage and Bedouin roots. Qatar’s most powerful clan originates from the Arabian Peninsula’s landlocked interior, where the ultraconservative form of Sunni Islam known as Wahhabism was born.

    Qatari rulers treaded the tightrope between placating its conservative citizens and tribes and shoring up soft power as a major global player.

    “Doha’s religious discourse to its citizens is very different from its liberal discourse to the West,” said 38-year-old Qatari Mohammed al-Kuwari. “It cannot always succeed at both.”

    The glaring spotlight of the World Cup — which requires Qatar to relax access to alcohol, create fun outlets for fans and comply with FIFA rules promoting tolerance and inclusion — raises the stakes.

    In years past, the World Cup has turned host countries into the world’s biggest party, with joyous crowds drinking heavily and celebrating together. When emotions run high, fans can be euphoric — or rude and violent.

    This will shake up quiet Qatar, where such behavior is deeply taboo and virtually unheard of. Doha is not known for its nightlife. Despite its rapid development over the years, its entertainment offerings remain slim and its public spaces limited.

    Some foreign fans fret about how Qatar will handle hordes of drunken hooligans in the streets, given the nation’s public decency laws and strict limits on the purchase and consumption of alcohol.

    Swearing and making offensive gestures, dressing immodestly and kissing in public may normally lead to prosecution in Qatar. Anti-gay sentiment runs deep in society, like elsewhere in the Arab world. A senior security official has warned rainbow flags may be confiscated to protect fans from being attacked for promoting gay rights.

    Fan anxiety is apparent in recent Reddit message boards: “How would the government know if someone is gay?” “How bad is it to wear short pants (Can I get arrested)?” “Is it true that people who say negative things about Qatar on social media get arrested?”

    At the same time, conservative Qataris fret about how much their society can bend to accommodate World Cup guests. Doha plans to throw giant electronic music festivals. Authorities say they’ll turn a blind eye to offenses like public intoxication, intervening only in response to destruction of property and threats to public safety.

    “I hope that the World Cup will not strip society of its religion, morals and customs,” said a 28-year-old Qatari man who spoke on condition of anonymity for fear of reprisals.

    He said he found comfort in a promise from the country’s advisory Shura Council last month that authorities will “ensure the building of a strong society that adheres to its religion” and reject “any excessive behavior” that breaks local taboos.

    But because the tournament fulfills the vision of the country’s emir, Sheikh Tamim bin Hamad Al Thani, to develop the country, experts say the tiny population of Qataris have little choice but to accept whatever comes.

    The emirate brooks no dissent. Qatar’s oil and gas wealth has generated a social contract where citizens benefit from a cradle-to-grave welfare state and political rights come after state paternalism.

    “If Qatar wants to be on the world map they have to adhere by global standards and values,” said Andreas Krieg, an assistant professor of security studies at King’s College London. “The government will stand its ground on certain issues, and the population will fall in line.”

    Al-Kuwari, the citizen, was blunter.

    “There is fear,” he said. “If a citizen thinks to criticize, a (prison) sentence awaits him.”

    ———

    Follow Isabel DeBre on Twitter at www.twitter.com/isabeldebre.

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  • ‘Zombie Debt’: Homeowners face foreclosure on old mortgages

    ‘Zombie Debt’: Homeowners face foreclosure on old mortgages

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    Rose Prophete thought the second mortgage loan on her Brooklyn home was resolved about a decade ago — until she received paperwork claiming she owed more than $130,000.

    “I was shocked,” said Prophete, who refinanced her two-family home in 2006, six years after arriving from Haiti. “I don’t even know these people because they never contacted me. They never called me.”

    Prophete is part of a wave of homeowners who say they were blindsided by the start of foreclosure actions on their homes over second loans that were taken out more than a decade ago. The trusts and mortgage loan servicers behind the actions say the loans were defaulted on years ago.

    Some of these homeowners say they weren’t even aware they had a second mortgage because of confusing loan structures. Others believed their second loans were rolled in with their first mortgage payments or forgiven. Typically, they say they had not received statements on their second loans for years as they paid down their first mortgages.

    Now they’re being told the loans weren’t dead after all. Instead, they’re what critics call “zombie debt” — old loans with new collection actions.

    While no federal government agency tracks the number of foreclosure actions on second mortgages, attorneys aiding homeowners say they have surged in recent years. The attorneys say many of the loans are owned by purchasers of troubled mortgages and are being pursued now because home values have increased and there’s more equity in them.

    “They’ve been holding them, having no communication with the borrowers,” said Andrea Bopp Stark, an attorney with the Boston-based National Consumer Law Center. “And then all of a sudden they’re coming out of the woodwork and are threatening to foreclose because now there is value in the property. They can foreclose on the property and actually get something after the first mortgages are paid off.”

    Attorneys for owners of the loans and the companies that service them argue that they are pursuing legitimately owed debt, no matter what the borrower believed. And they say they are acting legally to claim it.

    How did this happen?

    Court actions now can be traced to the tail end of the housing boom earlier this century. Some involve home equity lines of credit. Others stem from “80/20” loans, in which homebuyers could take out a first loan covering about 80% of the purchase price, and a second loan covering the remaining 20%.

    Splitting loans allowed borrowers to avoid large down payments. But the second loans could carry interest rates of 9% or more and balloon payments. Consumer advocates say the loans — many originating with since-discredited lenders — included predatory terms and were marketed in communities of color and lower-income neighborhoods.

    The surge in people falling behind on mortgage payments after the Great Recession began included homeowners with second loans. They were among the people who took advantage of federal loan modification programs, refinanced or declared bankruptcy to help keep their homes.

    In some cases, the first loans were modified but the second ones weren’t.

    Some second mortgages at that time were “charged off,” meaning the creditor had stopped seeking payment. That doesn’t mean the loan was forgiven. But that was the impression of many homeowners, some of whom apparently misunderstood the 80/20 loan structure.

    Other borrowers say they had difficulty getting answers about their second loans.

    In the Miami area, Pastor Carlos Mendez and his wife, Lisset Garcia, signed a modification on their first mortgage in 2012, after financial hardships resulted in missed payments and a bankruptcy filing. The couple had bought the home in Hialeah in 2006, two years after arriving from Cuba, and raised their two daughters there.

    Mendez said they were unable to get answers about the status of their second mortgage from the bank and were eventually told that the debt was canceled, or would be canceled.

    Then in 2020, they received foreclosure paperwork from a different debt owner.

    Their attorney, Ricardo M. Corona, said they are being told they owe $70,000 in past due payments plus $47,000 in principal. But he said records show the loan was charged off in 2013 and that the loan holders are not entitled to interest payments stemming from the years when the couple did not receive periodic statements. The case is pending.

    “Despite everything, we are fighting and trusting justice, keeping our faith in God, so we can solve this and keep the house,” Mendez said in Spanish.

    Second loans were packaged and sold, some multiple times. The parties behind the court actions that have been launched to collect the money now are often investors who buy so-called distressed mortgage loans at deep discounts, advocates say. Many of the debt buyers are limited liability companies that are not regulated in the way that big banks are.

    The plaintiff in the action on the Mendez and Garcia home is listed as Wilmington Savings Fund Society, FSB, “not in its individual capacity but solely as a Trustee for BCMB1 Trust.”

    A spokeswoman for Wilmington said it acts as a trustee on behalf of many trusts and has “no authority with respect to the management of the real estate in the portfolio.” Efforts to find someone associated with BCMB1 Trust to respond to questions were not successful.

    Some people facing foreclosure have filed their own lawsuits citing federal requirements related to periodic statements or other consumer protection laws. In Georgia, a woman facing foreclosure claimed in federal court that she never received periodic notices about her second mortgage or notices when it was transferred to new owners, as required by federal law. The case was settled in June under confidential terms, according to court filings.

    In New York, Prophete is one of 13 plaintiffs in a federal lawsuit claiming that mortgage debt is being sought beyond New York’s six-year statute of limitations, resulting in violations of federal and state law.

    “I think what makes it so pernicious is these are homeowners who worked very hard to become current on their loans,” said Rachel Geballe, a deputy director at Brooklyn Legal Services, which is litigating the case with The Legal Aid Society. “They thought they were taking care of their debt.”

    The defendants in that case are the loan servicer SN Servicing and the law firm Richland and Falkowski, which represented mortgage trusts involved in the court actions, including BCMB1 Trust, according to the complaint. In court filings, the defendants dispute the plaintiff’s interpretation of the statute of limitations, say they acted properly and are seeking to dismiss the lawsuit.

    “The allegations in the various mortgage foreclosure actions are truthful and not misleading or deceptive,” Attorney Daniel Richland wrote in a letter to the judge. “Plaintiff’s allegations, by contrast, are implausible and thus warrant dismissal.”

    ———

    Associated Press writer Claudia Torrens and researcher Jennifer Farrar in New York contributed to this report.

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  • ‘Zombie Debt’: Homeowners face foreclosure on old mortgages

    ‘Zombie Debt’: Homeowners face foreclosure on old mortgages

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    Rose Prophete thought the second mortgage loan on her Brooklyn home was resolved about a decade ago — until she received paperwork claiming she owed more than $130,000.

    “I was shocked,” said Prophete, who refinanced her two-family home in 2006, six years after arriving from Haiti. “I don’t even know these people because they never contacted me. They never called me.”

    Prophete is part of a wave of homeowners who say they were blindsided by the start of foreclosure actions on their homes over second loans that were taken out more than a decade ago. The trusts and mortgage loan servicers behind the actions say the loans were defaulted on years ago.

    Some of these homeowners say they weren’t even aware they had a second mortgage because of confusing loan structures. Others believed their second loans were rolled in with their first mortgage payments or forgiven. Typically, they say they had not received statements on their second loans for years as they paid down their first mortgages.

    Now they’re being told the loans weren’t dead after all. Instead, they’re what critics call “zombie debt” — old loans with new collection actions.

    While no federal government agency tracks the number of foreclosure actions on second mortgages, attorneys aiding homeowners say they have surged in recent years. The attorneys say many of the loans are owned by purchasers of troubled mortgages and are being pursued now because home values have increased and there’s more equity in them.

    “They’ve been holding them, having no communication with the borrowers,” said Andrea Bopp Stark, an attorney with the Boston-based National Consumer Law Center. “And then all of a sudden they’re coming out of the woodwork and are threatening to foreclose because now there is value in the property. They can foreclose on the property and actually get something after the first mortgages are paid off.”

    Attorneys for owners of the loans and the companies that service them argue that they are pursuing legitimately owed debt, no matter what the borrower believed. And they say they are acting legally to claim it.

    How did this happen?

    Court actions now can be traced to the tail end of the housing boom earlier this century. Some involve home equity lines of credit. Others stem from “80/20” loans, in which homebuyers could take out a first loan covering about 80% of the purchase price, and a second loan covering the remaining 20%.

    Splitting loans allowed borrowers to avoid large down payments. But the second loans could carry interest rates of 9% or more and balloon payments. Consumer advocates say the loans — many originating with since-discredited lenders — included predatory terms and were marketed in communities of color and lower-income neighborhoods.

    The surge in people falling behind on mortgage payments after the Great Recession began included homeowners with second loans. They were among the people who took advantage of federal loan modification programs, refinanced or declared bankruptcy to help keep their homes.

    In some cases, the first loans were modified but the second ones weren’t.

    Some second mortgages at that time were “charged off,” meaning the creditor had stopped seeking payment. That doesn’t mean the loan was forgiven. But that was the impression of many homeowners, some of whom apparently misunderstood the 80/20 loan structure.

    Other borrowers say they had difficulty getting answers about their second loans.

    In the Miami area, Pastor Carlos Mendez and his wife, Lisset Garcia, signed a modification on their first mortgage in 2012, after financial hardships resulted in missed payments and a bankruptcy filing. The couple had bought the home in Hialeah in 2006, two years after arriving from Cuba, and raised their two daughters there.

    Mendez said they were unable to get answers about the status of their second mortgage from the bank and were eventually told that the debt was canceled, or would be canceled.

    Then in 2020, they received foreclosure paperwork from a different debt owner.

    Their attorney, Ricardo M. Corona, said they are being told they owe $70,000 in past due payments plus $47,000 in principal. But he said records show the loan was charged off in 2013 and that the loan holders are not entitled to interest payments stemming from the years when the couple did not receive periodic statements. The case is pending.

    “Despite everything, we are fighting and trusting justice, keeping our faith in God, so we can solve this and keep the house,” Mendez said in Spanish.

    Second loans were packaged and sold, some multiple times. The parties behind the court actions that have been launched to collect the money now are often investors who buy so-called distressed mortgage loans at deep discounts, advocates say. Many of the debt buyers are limited liability companies that are not regulated in the way that big banks are.

    The plaintiff in the action on the Mendez and Garcia home is listed as Wilmington Savings Fund Society, FSB, “not in its individual capacity but solely as a Trustee for BCMB1 Trust.”

    A spokeswoman for Wilmington said it acts as a trustee on behalf of many trusts and has “no authority with respect to the management of the real estate in the portfolio.” Efforts to find someone associated with BCMB1 Trust to respond to questions were not successful.

    Some people facing foreclosure have filed their own lawsuits citing federal requirements related to periodic statements or other consumer protection laws. In Georgia, a woman facing foreclosure claimed in federal court that she never received periodic notices about her second mortgage or notices when it was transferred to new owners, as required by federal law. The case was settled in June under confidential terms, according to court filings.

    In New York, Prophete is one of 13 plaintiffs in a federal lawsuit claiming that mortgage debt is being sought beyond New York’s six-year statute of limitations, resulting in violations of federal and state law.

    “I think what makes it so pernicious is these are homeowners who worked very hard to become current on their loans,” said Rachel Geballe, a deputy director at Brooklyn Legal Services, which is litigating the case with The Legal Aid Society. “They thought they were taking care of their debt.”

    The defendants in that case are the loan servicer SN Servicing and the law firm Richland and Falkowski, which represented mortgage trusts involved in the court actions, including BCMB1 Trust, according to the complaint. In court filings, the defendants dispute the plaintiff’s interpretation of the statute of limitations, say they acted properly and are seeking to dismiss the lawsuit.

    “The allegations in the various mortgage foreclosure actions are truthful and not misleading or deceptive,” Attorney Daniel Richland wrote in a letter to the judge. “Plaintiff’s allegations, by contrast, are implausible and thus warrant dismissal.”

    ———

    Associated Press writer Claudia Torrens and researcher Jennifer Farrar in New York contributed to this report.

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  • Sam Bankman-Fried’s downfall sends shockwaves through crypto

    Sam Bankman-Fried’s downfall sends shockwaves through crypto

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    NEW YORK — Sam Bankman-Fried received numerous plaudits as he rapidly achieved superstar status as the head of cryptocurrency exchange FTX: the savior of crypto, the newest force in Democratic politics and potentially the world’s first trillionaire.

    Now the comments about the 30-year-old Bankman-Fried range from bemused to hostile after FTX filed for bankruptcy protection Friday, leaving his investors and customers feeling duped and many others in the crypto world fearing the repercussions. Bankman-Fried himself could face civil or criminal charges.

    “I’ve known him for a number of years and what just happened is just shocking,” said Jeremy Allaire, the co-founder and CEO of cryptocurrency company Circle.

    Under Bankman-Fried, FTX quickly grew to be the third-largest exchange by volume. The stunning collapse of this nascent empire has sent tsunami-like waves through the cryptocurrency industry, which has seen a fair share of volatility and turmoil this year, including a sharp decline in price for bitcoin and other digital assets. For some, the events are reminiscent of the domino-like failures of Wall Street firms during the 2008 financial crisis, particularly now that supposedly healthy firms like FTX are failing.

    One venture capital fund wrote down investments in FTX worth over $200 million. The cryptocurrency lender BlockFi paused client withdrawals Friday after FTX sought bankruptcy protection. The Singapore-based exchange Crypto.com saw withdrawals increase this weekend for internal reasons but some of the action could be attributed to raw nerves from FTX.

    “Sam what have you done?,” tweeted Sean Ryan Evans, host of the cryptocurrency podcast Bankless, after the bankruptcy filing.

    Bankman-Fried and his company are under investigation by the Department of Justice and the Securities and Exchange Commission. The investigations likely center on the possibility that the firm may have used customers’ deposits to fund bets at Bankman-Fried’s hedge fund, Alameda Research, a violation of U.S. securities law.

    “This is the direct result of a rogue actor breaking every single basic rule of fiscal responsibility,” said Patrick Hillman, chief strategy officer at Binance, FTX’s biggest competitor. Early last week Binance appeared ready to step in to bail out FTX, but backed away after a review of FTX’s books.

    The ultimate impact of FTX’s bankruptcy is uncertain, but its failure will likely result in the destruction of billions of dollars of wealth and even more skepticism for cryptocurrencies at a time when the industry could use a vote of confidence.

    “I care because it’s retail investors who suffer the most, and because too many people still wrongly associate bitcoin with the scammy ‘crypto’ space,” said Cory Klippsten, CEO of Swan Bitcoin, who for months raised concerns about FTX’s business model. Klippsten is publicly enthusiastic about bitcoin but has long had deep skepticism about other parts of the crypto universe.

    Bankman-Fried founded FTX in 2019, and it grew rapidly — it was recently valued at $32 billion. The son of Stanford University professors, who was known to play the video game “League of Legends” during meetings, Bankman-Fried attracted investments from the highest echelons of Silicon Valley.

    Sequoia Capital, which over the decades invested in Apple, Cisco, Google, Airbnb and YouTube, described their meeting with Bankman-Fried as likely “talking to the world’s first trillionaire.” Several of Sequoia’s partners became enthusiastic about Bankman-Fried following a Zoom meeting in 2021. After several more meetings, Sequoia decided to invest in the company.

    “I don’t know how I know, I just do. SBF is a winner,” wrote Adam Fisher, a business journalist who wrote a profile of Bankman-Fried for the firm, referring to Bankman-Fried by his popular online moniker. The article, published in late September, was removed from Sequoia’s website.

    Sequoia has written down its $213 million in investments to zero. A pension fund in Ontario, Canada wrote down its investment to zero as well.

    In a terse statement, the Ontario Teachers’ Pension Fund said, “Naturally, not all of the investments in this early-stage asset class perform to expectations.”

    But up until last week, Bankman-Fried was seen as a white knight for the industry. Whenever the crypto industry had one of its crises, Bankman-Fried was the person likely to fly in with a rescue plan. When online trading platform Robinhood was in financial straits earlier this year — collateral damage from the decline in stock and crypto prices — Bankman-Fried jumped in to buy a stake in the company as a sign of support.

    When Bankman-Fried bought up the assets of bankrupt crypto firm Voyager Digital for $1.4 billion this summer, it brought a sense of relief to Voyager account holders, whose assets has been frozen since its own failure. That rescue is now in question.

    FTX’s failure started after the cryptocurrency news outlet CoinDesk published a story, based on a leaked balance sheet from Alameda Research. The story found that the relationship between FTX and Alameda Research was deeper and more intertwined than previously known, including that FTX was lending high quantities of its own token FTT to Alameda to help build up cash. It sparked mass withdrawals from FTX, causing the crypto firm to experience a very old financial problem: a bank run.

    “FTX created a worthless token out of thin air and used it to make its balance sheet appear more robust than it really was,” Klippsten said.

    As king of crypto, Bankman-Fried influence was starting to pour into political and popular culture. FTX bought prominent sports sponsorships with Formula One Racing and bought the naming rights to an arena in Miami, and ran Super Bowl ads featuring “Seinfeld” creator Larry David. He pledged to donate $1 billion toward Democrats this election cycle — his actual donations were in the tens of millions — and prominent politicians like Bill Clinton were invited to speak at FTX conferences. Football star Tom Brady invested in FTX, as did his supermodel soon-to-be-ex-wife Gisele Bündchen.

    Bankman-Fried had been the subject of some criticism before FTX collapsed. While he largely operated FTX out of U.S. jurisdiction from his headquarters in The Bahamas, Bankman-Fried was increasingly vocal about the need for more regulation of the cryptocurrency industry. Many supporters of crypto oppose government oversight. Now, FTX’s collapse may have helped make the case for stricter regulation.

    One of those critics was Binance founder and CEO Changpeng Zhao. The feud between the two billionaires spilled out onto Twitter, where Zhao and Bankman-Fried collectively commanded millions of followers. Zhao helped kickstart the withdrawals that doomed FTX when he said Binance would sell its holdings in FTX’s crypto token FTT.

    “What a s(asterisk)(asterisk)t show … and it’s going to be crypto’s fault (instead of one guys’s fault),” Zhao wrote on Twitter on Saturday.

    ————

    Reporters Michael Balsamo in Washington and Cathy Bussewitz in New York contributed.

    ———

    For more AP coverage of cryptocurrency, visit: https://apnews.com/hub/cryptocurrency

    ———

    This story has been corrected to say that Adam Fisher is a business journalist who freelanced for Sequoia Capital. A previous version of the story identified Fisher as an employee of Sequoia.

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  • Norwegian battery firm plans $2.6 billion plant in Georgia

    Norwegian battery firm plans $2.6 billion plant in Georgia

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    ATLANTA — A Norwegian company will build a giant electric battery factory just southwest of Atlanta, company and state officials announced Friday, investing up to $2.6 billion over multiple phases.

    Freyr Battery said it would build an initial plant that would produce batteries that could hold 34 gigawatt hours of electricity each year. Among battery plants currently operating, that would be the second-largest worldwide, behind a factory owned by Panasonic and Tesla in Nevada.

    Freyr CEO Tom Jensen told attendees at the announcement in the Atlanta suburb of Newnan that the company’s vision of using renewable energy to make batteries could play an important role in reducing carbon emissions from electricity generation and transportation. The company’s initial plan is targeted toward storing electricity produced by renewable sources and releasing it later, but Jensen said sales to vehicle makers could also be included.

    Jensen said battery production is a “massive growth opportunity,” predicting 70% of decarbonization efforts will somehow include batteries.

    “We want to build something that matters, something that we can be proud of something that will matter for our children,” Jensen said. “Because at the end of the day, the world needs to rapidly decarbonize the society.”

    The company said it plans an initial investment of $1.7 billion, and would hire 720 people at a site it has purchased in an industrial park near Newnan, about 35 miles (55 kilometers) southwest of Atlanta. Phases through 2029 involving $700 million of additional investment could include more production lines, material processing and other activities.

    Employees are projected to make an average of $60,284 a year, said Molly Giddens of the Coweta County Development Authority.

    Freyr, named for the Norse god of peace and fertility, rain, and sunshine, is also building a large factory in northern Norway and is planning a battery cell production facility in Vaasa, Finland.

    The company aims to make batteries, an electricity-intensive process, using renewable energy. In Georgia, that could mean buying electricity from a dedicated solar facility with battery storage run by a third party, the company said.

    Freyr said it looked at 130 sites in 25 states before selecting Georgia, citing the availability of engineers trained by Georgia Tech and other schools, job training, and proximity to Atlanta’s big airport, Savannah’s port, railroads and highways.

    The company said it sees opportunities in the United States in part because of incentives for renewable energy passed by Congress earlier this year. Freyr said it intends to seek federal grants or loans.

    In addition, the company said it is getting “strong” financial incentives from state and local officials in Georgia. The state plans to pay for worker training, and Freyr will eligible for up to $4.5 million in state income tax credits over five years, as long as workers make at least $31,300 a year. Coweta County will give property tax breaks for 20 years, Giddens said, not disclosing a projected value. She said the company would also get a “quality jobs creation grant.”

    It’s the second huge battery factory announced in Georgia. Korean firm SK Innovation has built a $2.6 billion plant in Commerce, northeast of Atlanta, with plans to hire 2,600 workers eventually.

    The state has targeted the electric vehicle industry. Hyundai Motor Group has announced plans to invest $5.5 billion in a plant near Savannah and hire 8,100 workers, also planning to make batteries there. Electric truck maker Rivian has plans to build a plant east of Atlanta, investing $5 billion and employing 7,500 workers.

    ———

    Follow Jeff Amy on Twitter at http://twitter.com/jeffamy.

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  • Judge halts pot dispensary licenses in parts of New York

    Judge halts pot dispensary licenses in parts of New York

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    ALBANY, N.Y. — A federal judge has temporarily blocked New York from issuing recreational marijuana dispensary licenses in Brooklyn and parts of upstate New York while a legal challenge to the state’s selection process is being considered.

    The preliminary injunction from U.S. District Court Judge Gary Sharpe in Albany on Thursday comes as the state prepares to begin adult marijuana sales by the end of the year, starting with shop owners with past pot convictions or their relatives. New York lawmakers designed the state’s legal market to make sure the first retailers were people directly affected drug law enforcement.

    Sharpe is hearing a legal challenge from Variscite NY One, which claims the state’s selection process favors New York residents over out-of-state residents in violation of constitutional interstate commerce protections.

    The judge’s order temporarily bars the state from issuing retail licenses for the five regions of the state Variscite selected in its business application: Brooklyn, central New York, the Finger Lakes, the mid-Hudson region and western New York. It does not cover nine other regions of the state, including the rest of New York City. The ruling affects up to 63 of the 150 possible business licenses.

    Officials at the Office of Cannabis Management said Friday its board will still consider license applications later this month for up to 150 businesses and individuals, along with applications for up to 25 nonprofit licenses.

    The office remains committed to “including those impacted by the state’s enforcement of cannabis prohibition in the market that we are building and we are additionally committed to getting New York’s cannabis supply chain fully operational,” spokesman Freeman Klopott said in an email.

    Applicants in the initial round had to demonstrate “a significant presence in New York state.” While Variscite’s majority stakeholder has a cannabis conviction, it was under Michigan law. And though the corporation is organized under New York law, its business principal does not meet the significant presence requirement, according to court papers.

    In ruling for the company, Sharpe wrote that the state’s license application requirements “will have a discriminatory effect on out-of-state residents.”

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  • Alex Jones ordered to pay $473M more to Sandy Hook families

    Alex Jones ordered to pay $473M more to Sandy Hook families

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    HARTFORD, Conn. — Infowars host Alex Jones and his company were ordered by a judge Thursday to pay an extra $473 million for promoting false conspiracy theories about the Sandy Hook school massacre, bringing the total judgment against him in a lawsuit filed by the victims’ families to a staggering $1.44 billion.

    Connecticut Judge Barbara Bellis imposed the punitive damages on the Infowars host and Free Speech Systems. Jones repeatedly told his millions of followers the massacre that killed 20 first graders and six educators was staged by “crisis actors” to enact more gun control.

    “The record clearly supports the plaintiffs’ argument that the defendants’ conduct was intentional and malicious, and certain to cause harm by virtue of their infrastructure, ability to spread content, and massive audience including the infowarriors,” the judge wrote in a 45-page ruling.

    Christopher Mattei, a lawyer for the Sandy Hook families, said he hopes the award sends a message to conspiracy theorists who profit from lies.

    “The Court recognized the ‘intentional, malicious … and heinous’ conduct of Mr. Jones and his business entities,” Mattei said in a statement.

    On his show Thursday, Jones called the award “ridiculous” and a “joke” and said he has little money to pay the damages.

    “Well, of course I’m laughing at it,” he said. “It’d be like if you sent me a bill for a billion dollars in the mail. Oh man, we got you. It’s all for psychological effect. It’s all the Wizard of Oz … when they know full well the bankruptcy going on and all the rest of it, that it’ll show what I’ve got and that’s it, and I have almost nothing.”

    Eight victims’ relatives and the FBI agent testified during a monthlong trial about being threatened and harassed for years by people who deny the shooting happened. Strangers showed up at some of their homes and confronted some of them in public. People hurled abusive comments at them on social media and in emails. Some received death and rape threats.

    Six jurors ordered Jones to pay $965 million to compensate the 15 plaintiffs for defamation, infliction of emotional distress and violations of Connecticut’s Unfair Trade Practices Act.

    Jones, who lives and works in Austin, Texas, has bashed the trial as unfair and an assault on free speech rights. He says he will appeal the verdicts. He also has said he doesn’t have the money to pay such huge verdicts, because he has less than $2 million to his name — which contradicted testimony at a similar trial in Texas. Free Speech Systems, meanwhile, is seeking bankruptcy protection.

    Jones said Thursday that he has only a “couple hundred thousand dollars” in his savings account.

    Jones’ lawyer, Norm Pattis, wrote in a text message to the The Associated Press, “To paraphrase Karl Marx, the verdict was tragedy, this latest ruling is farce. It makes our work on appeal that much easier.”

    Bellis found Jones and Infowars’ parent company liable for damages without a trial last year, as a consequence for what she called his repeated failures to turn over many financial documents and other records to the plaintiffs. After the unusual “default” ruling, the jury was tasked only with deciding on the amount of compensatory damages and whether punitive damages were warranted.

    Jones says that he turned over thousands of documents and that the default ruling deprived him of his right to present a defense against the lawsuit.

    The punitive damages include about $323 million for the plaintiffs’ attorney fees and costs and $150 million for violations of the Unfair Trade Practices Act.

    In Connecticut, punitive damages for defamation and infliction of emotional distress are generally limited to plaintiffs’ legal fees. The Sandy Hook plaintiffs’ lawyers are to get one-third of the $965 million in compensatory damages under a retainer agreement.

    But there is no cap on punitive damages for violations of the Unfair Trade Practices Act. The plaintiffs had not asked for a specific amount of punitive damages, but under one hypothetical calculation they said such damages could be around $2.75 trillion under the law.

    In a similar trial in Texas in August, Jones was ordered to pay nearly $50 million to the parents of another child killed in the Sandy Hook shooting for calling the massacre a hoax. A forensic economist testified during that trial that Jones and Free Speech Systems have a combined net worth as high as $270 million.

    Jones hawks nutritional supplements, survival gear and other products on his show, which airs on the Infowars website and dozens of radio stations. Evidence at the Connecticut trial showed his sales spiked around a time he talked about the Sandy Hook shooting, leading the plaintiffs’ lawyers to say he was profiting off the tragedy.

    In documents recently filed in Free Speech Systems’ bankruptcy case in Texas, a budget for the company for Oct. 29 to Nov. 25 estimated product sales would total $2.5 million, while operating expenses would be about $740,000. Jones’ salary was listed at $20,000 every two weeks.

    On Wednesday, Bellis, the Connecticut judge, ordered Jones to not move any of his assets out of the country, as the families seek to attach his holdings to secure money for the damages. Jones, meanwhile, has asked the judge to order a new trial or at least reduce the compensatory damages to a “nominal” amount.

    A third and final trial over Jones’ hoax claims is expected to begin around the end of the year in Texas. As in Connecticut, Jones was found liable for damages without trials in both Texas cases because he failed to turned over many records to the plaintiffs.

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  • Elon Musk sells $3.95 billion worth of Tesla stock

    Elon Musk sells $3.95 billion worth of Tesla stock

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    Twitter’s new owner and Tesla CEO Elon Musk sold nearly $4 billion worth of Tesla shares, according to regulatory filings.

    Musk, who bought Twitter for $44 billion, sold 19.5 million shares of the electric car company from Nov. 4 to Nov. 8, according to Tuesday’s filings with the Securities and Exchange Commission.

    He sold $7 billion of his Tesla stock in August as he worked to finance the Twitter purchase he was trying to get out of at the time. In all, Musk has sold more than $19 billion worth of Tesla stock since April, including those in Tuesday’s filings, likely to fund his share of the Twitter purchase.

    The takeover of Twitter has not been smooth and the social media platform has seen the exodus of some big advertisers in recent weeks in including United Airlines, General Motors, REI, General Mills and Audi.

    Musk acknowledged “a massive drop in revenue” at Twitter, which heavily relies on advertising to make money.

    Musk had signaled that he was done selling Tesla shares and the revelation that those sales continue left some industry analysts exasperated.

    “Our fear heading into the final days of the deal was that Musk was going to be forced to sell more Tesla stock to fund the disaster Twitter deal and ultimately those fears came true which speaks to some of the massive selling pressures on the stock of late,” wrote Daniel Ives at Wedbush. “For Musk who multiple times over the past year has said he is ‘done selling Tesla stock’ yet again loses more credibility with investors and his loyalists in a boy who cried wolf moment.”

    Most of Musk’s wealth is tied up in shares of Tesla Inc. On Tuesday, his personal net worth dropped below $200 billion, according to Forbes, but he is still the world’s richest person.

    Musk had lined up banks including Morgan Stanley to help finance the Twitter deal. His original share of the deal was about $15.5 billion, Ives estimated . But if equity investors dropped out, Musk would be on the hook to replace them or throw in more of his own money.

    “The Twitter circus show has been an absolute debacle from all angles since Musk bought the platform for all the world to see: from the 50% layoffs and then bringing back some workers, to the head scratching verification roll-out to users which many are pushing back on, to the constant tweeting in this political firestorm backdrop, and now…..selling more TSLA stock,” Ives wrote. “When does it end?”

    Shares of Tesla Inc., which were flat before the opening bell Wednesday, have fallen 8% this week and are down 46% this year, far outpacing broader market declines in what has been a dreadful year for investors.

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  • Elon Musk sells $3.95 billion worth of Tesla stock

    Elon Musk sells $3.95 billion worth of Tesla stock

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    Twitter’s new owner and Tesla CEO Elon Musk sold nearly $4 billion worth of Tesla shares, according to regulatory filings.

    Musk, who bought Twitter for $44 billion, sold 19.5 million shares of the electric car company from Nov. 4 to Nov. 8, according to Tuesday’s filings with the Securities and Exchange Commission.

    He sold $7 billion of his Tesla stock in August as he worked to finance the Twitter purchase he was trying to get out of at the time. In all, Musk has sold more than $19 billion worth of Tesla stock since April, including those in Tuesday’s filings, likely to fund his share of the Twitter purchase.

    The takeover of Twitter has not been smooth and the social media platform has seen the exodus of some big advertisers in recent weeks in including United Airlines, General Motors, REI, General Mills and Audi.

    Musk acknowledged “a massive drop in revenue” at Twitter, which heavily relies on advertising to make money.

    Musk had signaled that he was done selling Tesla shares and the revelation that those sales continue left some industry analysts exasperated.

    “Our fear heading into the final days of the deal was that Musk was going to be forced to sell more Tesla stock to fund the disaster Twitter deal and ultimately those fears came true which speaks to some of the massive selling pressures on the stock of late,” wrote Daniel Ives at Wedbush. “For Musk who multiple times over the past year has said he is ‘done selling Tesla stock’ yet again loses more credibility with investors and his loyalists in a boy who cried wolf moment.”

    Most of Musk’s wealth is tied up in shares of Tesla Inc. On Tuesday, his personal net worth dropped below $200 billion, according to Forbes, but he is still the world’s richest person.

    Musk had lined up banks including Morgan Stanley to help finance the Twitter deal. His original share of the deal was about $15.5 billion, Ives estimated . But if equity investors dropped out, Musk would be on the hook to replace them or throw in more of his own money.

    “The Twitter circus show has been an absolute debacle from all angles since Musk bought the platform for all the world to see: from the 50% layoffs and then bringing back some workers, to the head scratching verification roll-out to users which many are pushing back on, to the constant tweeting in this political firestorm backdrop, and now…..selling more TSLA stock,” Ives wrote. “When does it end?”

    Shares of Tesla Inc., which were flat before the opening bell Wednesday, have fallen 8% this week and are down 46% this year, far outpacing broader market declines in what has been a dreadful year for investors.

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  • Elon Musk sells $3.95 billion worth of Tesla stock

    Elon Musk sells $3.95 billion worth of Tesla stock

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    Twitter’s new owner and Tesla CEO Elon Musk has sold nearly $4 billion worth of Tesla shares, according to regulatory filings.

    Musk, who bought Twitter for $44 billion, sold 19.5 million shares of the electric car company from Nov. 4 to Nov. 8, according to Tuesday’s filings with the Securities and Exchange Commission.

    He sold $7 billion of his Tesla stock in August as he worked to finance the Twitter purchase he was trying to get out of at the time. In all, Musk has sold more than $19 billion worth of Tesla stock since April, including those in Tuesday’s filings, likely to fund his share of the Twitter purchase.

    Most of Musk’s wealth is tied up in shares of Tesla Inc. On Tuesday, his personal net worth dropped below $200 billion, according to Forbes, but he is still the world’s richest person.

    Musk had lined up banks including Morgan Stanley to help finance the Twitter deal. His original share of the deal was about $15.5 billion, Wedbush Analyst Dan Ives estimated . But if equity investors dropped out, Musk would be on the hook to replace them or throw in more of his own money.

    Tesla’s shares closed down $5.78, or 2.9%, at $191.30. The stock has lost 52% of its value since the start of this year. In comparison, the S&P 500 index has lost about 20% of its value so far this year.

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  • EU’s Call of Duty: Probe Microsoft-Activision Blizzard deal

    EU’s Call of Duty: Probe Microsoft-Activision Blizzard deal

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    BRUSSELS — The European Union has launched an investigation into Microsoft’s planned takeover of video game giant Activision Blizzard, fearing the $69 billion deal would distort fair competition to popular titles like Call of Duty.

    Microsoft, maker of the Xbox gaming system, first announced the agreement to buy the California-based game publisher in January, but it still awaits scrutiny by antitrust regulators in the U.S., Europe and elsewhere. If it goes through, the all-cash deal would be the largest in the history of the tech industry.

    Members of the European Commission, the 27-nation bloc’s executive arm, said in a statement Tuesday that “the point is to ensure that the gaming ecosystem remains vibrant to the benefit of users in a sector that is evolving at a fast pace.”

    “We must ensure that opportunities remain for future and existing distributors of PC and console video games, as well as for rival suppliers of PC operating systems,” the commissioners said. They have until March 23, 2023, to decide whether to approve the deal.

    At the heart of the dispute is who gets to control future releases of Activision Blizzard’s most popular games, especially the first-person military shooter franchise Call of Duty. Activision this week said its latest installment, Call of Duty: Modern Warfare 2, has already made more than $1 billion in sales since its Oct. 28 launch.

    Microsoft’s console rival Sony, maker of the PlayStation, has brought its concerns about losing access to what it describes as a “must-have” game title to regulators around the world. In response, Microsoft has promised to keep Call of Duty on the PlayStation “for at least several more years” beyond its current contract with Sony. It also has said it might bring it to Nintendo’s Switch console, where the game isn’t currently available.

    In a preliminary probe, the EU found potential antitrust issues with the distribution of video games and halting access to Microsoft’s rivals. The bloc said it has concerns that the proposed acquisition could hurt competitors to Microsoft’s Windows operating system, because computers without Windows might not be able to get Xbox’s game-streaming subscription service and growing collection of titles.

    Microsoft said it will keep working with the European Commission on next steps “and to address any valid marketplace concerns.”

    “Sony, as the industry leader, says it is worried about Call of Duty, but we’ve said we are committed to making the same game available on the same day on both Xbox and PlayStation,” Microsoft said in a statement Tuesday. “We want people to have more access to games, not less.”

    Activision Blizzard CEO Bobby Kotick said in an email to employees Tuesday that global competition in the video game industry makes it “understandable that regulators are trying to better understand the games business.” But he said the “process is moving along as we expected” and foresees the deal closing by June.

    “We will continue to cooperate with the European Commission where, in the countries they represent, we have many employees,” Kotick wrote.

    He highlighted Brazil’s recent approval, saying the country’s competition authority understood “we operate in a highly dynamic and competitive industry, and that the merger will not harm competition in any way.”

    Saudi Arabia also has signed off on the deal, but it still awaits important decisions from the U.S. Federal Trade Commission and authorities in the U.K. and EU.

    Tuesday’s decision was another example of how the EU has led the way on regulating Big Tech companies, opening antitrust investigations, enacting strict regulations on data privacy and pushing through landmark rules that threaten online platforms with billions in fines unless they respect fair market conditions and crack down on harmful content like hate speech and disinformation.

    It’s possible regulators could impose conditions on the gaming deal that force Microsoft to keep access open to Call of Duty for longer and ensure that its rivals aren’t getting a lesser version.

    Among those listening to Sony’s concerns are antitrust regulators in the United Kingdom. Last month, they escalated their investigation into whether Microsoft could make Call of Duty and other titles exclusive to its Xbox platform or “otherwise degrade its rivals’ access” by delaying releases or imposing licensing price increases.

    “These titles require thousands of game developers and several years to complete, and there are very few other games of similar caliber or popularity,” according to a September report from the U.K.’s Competition and Markets Authority.

    ———

    O’Brien reported from Providence, Rhode Island.

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  • Game time: California to decide dual sports betting measures

    Game time: California to decide dual sports betting measures

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    LOS ANGELES — The gaming industry and Native American tribes bet big on dueling propositions to legalize sports gambling in California, pumping hundreds of millions of dollars into the most expensive ballot question campaigns in U.S. history.

    But voters casting ballots in the midterm elections that conclude Tuesday may not want a piece of that action.

    Californians have been inundated with a blast of advertisements as backers seek to legalize sports gambling by allowing it at tribal casinos and racetracks or through mobile and online wagering.

    With a multibillion-dollar market at stake, proponents raised nearly $600 million — more than 250% higher than the record amount spent in 2020 by Uber, Lyft and other app-based ride-hailing and delivery services to prevent drivers from becoming employees eligible for benefits and job protection.

    Still, preelection polls showed both ballot measures faced an uphill fight to win a majority. Should both be approved, a provision in the California Constitution calls for the one with the most votes to prevail.

    More than 30 other states allow sports betting, but gambling in California is currently limited to Native American casinos, horse tracks, card rooms and the state lottery.

    Proponents of the two initiatives propose different ways to offer sports gambling and each touts other benefits they say that will come to the state if their measure is approved.

    Proposition 26 would allow casinos and the state’s four horse tracks to offer sports betting in person. The initiative bankrolled by a coalition of tribes would also allow roulette and dice games at casinos.

    A 10% tax would help pay for enforcement of gambling laws and programs to help gambling addicts.

    Proposition 27 would would allow online and mobile sports betting for adults. Large gaming companies would have to partner with a tribe involved in gambling or tribes could enter the market on their own.

    That measure is backed by DraftKings, BetMGM, FanDuel — the latter is the official odds provider for The Associated Press — as well as other national sports betting operators and a few tribes.

    The initiative is being promoted for the funding it promises to funnel through tax revenues to help the homeless, the mentally ill and and poorer tribes that haven’t been enriched by casinos.

    The nonpartisan Legislative Analyst’s Office found that both initiatives would increase state revenues but it’s unclear by how much. Proposition 26 could bring in tens of millions of dollars while Proposition 27 could bring in hundreds of millions, the office said.

    However, that revenue could be offset if people spend their money on sports gambling instead of shopping or buying lottery tickets.

    Democratic Gov. Gavin Newsom hasn’t taken a position on either proposal but has said Proposition 27 “is not a homeless initiative.”

    The California Republican Party opposes both proposals. State Democrats oppose Proposition 27, but are neutral on Proposition 26. Major League Baseball is backing Proposition 27.

    The No on Prop 26 campaign, funded largely by card rooms that stand to lose out, says the measure would give a handful of wealthy and powerful tribes “a virtual monopoly on all gaming in California.”

    The No on 27 committee says the proposal is based on deceptive promises and says the gaming companies behind it “didn’t write it for the homeless, they wrote it for themselves.”

    ———

    Follow AP’s coverage of the elections at: https://apnews.com/hub/2022-midterm-elections

    Check out https://apnews.com/hub/explaining-the-elections to learn more about the issues and factors at play in the 2022 midterm elections.

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  • EU court sides with Fiat Chrysler in tax advantage case

    EU court sides with Fiat Chrysler in tax advantage case

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    LUXEMBOURG — The European Union’s top court on Tuesday overturned a decision requiring automaker Fiat Chrysler to pay up to 30 million euros ($30 million) in back taxes to Luxembourg.

    The European Commission, the EU’s executive arm and anti-trust regulator, had determined in 2015 that a 2012 Luxembourg tax ruling favored Fiat companies in Europe and was incompatible with state aid rules in the 27-nation bloc.

    A European court ruled in the commission’s favor in 2019, ordering the automaker to return the tax break. Fiat Chrysler, which last year merged with France’s PSA Peugeot to form Stellantis, asked the higher court to set aside the order.

    The Court of Justice of the EU said Tuesday that the commission failed to take into account the typical tax laws in Luxembourg when it was determining whether the automaker got a tax advantage and that the EU’s General Court “committed an error of law” in upholding that approach three years ago.

    EU competition commissioner Margrethe Vestager tweeted that Tuesday’s ruling was a “big loss for tax fairness.”

    “The Commission is committed to continue using all the tools at its disposal to ensure that fair competition is not distorted in the Single Market through the grant by Member States of illegal tax breaks to multinational companies,” she said in a statement.

    It comes as countries in Europe and around the world are working to enshrine into law a global minimum tax deal that more than 130 nations signed on to last year, designed to create a more equal footing in attracting and keeping multinational companies.

    It aims to deter multinationals from stashing profits in countries where they pay little or no taxes — commonly known as tax havens.

    Stellantis is “pleased that the Court of Justice has confirmed our view that the Commission was wrong to consider our tax ruling to be unlawful state aid,” spokeswoman Valerie Gillot said.

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  • O’Rourke hopes to upset Texas Gov. Abbott’s bid for 3rd term

    O’Rourke hopes to upset Texas Gov. Abbott’s bid for 3rd term

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    AUSTIN — Republican Texas Gov. Greg Abbott sought a record-tying third term Tuesday while Democrat Beto O’Rourke reached for an upset in America’s biggest red state in one of the most expensive midterm races in the U.S.

    More than 5 million early votes had already been cast ahead of Election Day in Texas, where anger over the Uvalde school shooting that left 19 children and two teachers dead in May intensified an already heated contest in which both candidates’ campaigns combined spent more than $200 million.

    Five months later, Texas state police still face pressure for failing to confront the gunman sooner at Robb Elementary School. O’Rourke said the shooting, one of the deadliest classroom attacks in U.S. history, crystalized the stakes of the election as Abbott waved off calls for tougher gun laws.

    But Abbott, 64, has remained formidable in a state where Republicans have won every governor’s race since 1994.

    He has rallied his base around a record number of illegal border crossings from Mexico to the U.S., aggressively courted Hispanic voters in South Texas, and seized on economic anxieties and recession fears that have created headwinds for Democrats nationally.

    A victory by Abbott would strengthen his position as a potential presidential contender in 2024, secure his place as the second-longest serving governor in the state’s history and extend decades of GOP dominance.

    O’Rourke on Tuesday was set to embark on one last campaign blitz through Dallas, San Antonio and Houston before heading home to wait for election returns in his hometown of El Paso. Abbott was spending election night Tuesday in the southern border city of McAllen, underscoring the GOP’s rising confidence in a region that has long been a stronghold for Democrats.

    O’Rourke’s hard-charging challenge has rekindled Democrats’ hopes while appealing to voters soured by the Uvalde shooting, a strict new abortion ban and the deadly collapse of the state’s power grid in winter 2021. The former El Paso congressman has cast himself as a fresh start for Texas and a check on a GOP-controlled Legislature, while vowing to legalize marijuana and expand Medicaid.

    But four years after O’Rourke, 50, nearly won a U.S. Senate seat in Texas, raising his profile in the Democratic Party, he has confronted more skeptical voters. Abbott has painted him as a liberal crusader, and O’Rourke has been forced to answer for positions he took while running for the White House, particularly his support of mandatory gun buybacks.

    A day after the shooting in Uvalde, O’Rourke interrupted an Abbott news conference, telling him, “This is on you,” in reference to the governor’s opposition of tougher gun measures. To Republicans, the moment was a tasteless political stunt, but O’Rourke’s supporters saw it as an authentic reflection of their anger.

    During early voting in suburban Dallas, Deborah Thompson said she voted for all Democrats, including O’Rourke, out of concern that Republicans threaten voting and abortion rights.

    “I think that an 18-year-old girl that’s been raped should be able to get an abortion,” the 56-year-old Richardson resident said. “I’m not going back. I’m not going back to the ’50s … and I’m so angry at all of this.”

    Janie Helms, a retiree, said worries about inflation led her to vote for Abbott.

    “I see him as a conservative who will watch our money,” she said.

    ————

    Associated Press writer Jake Bleiberg contributed from Plano, Texas.

    ————

    Follow AP’s coverage of the elections at: https://apnews.com/hub/2022-midterm-elections

    Check out https://apnews.com/hub/explaining-the-elections to learn more about the issues and factors at play in the 2022 midterm elections.

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  • Equipment that’s designed to cut methane emission is failing

    Equipment that’s designed to cut methane emission is failing

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    As Sharon Wilson pulled up to the BP site in Texas last June, production tanks towered above the windblown grass roughly 60 miles southeast of San Antonio. Cows and pumpjacks lined the roadsides.

    All looked placid. But when Wilson flipped on a high-tech video camera, a disquieting image became visible: A long black plume poured from a flare pipe. Her camera, designed to detect hydrocarbons, had revealed what appeared to be a stream of methane — a potent climate-warming gas, gushing from the very equipment that is supposed to prevent such emissions.

    “It’s very discouraging and depressing, but mostly it’s infuriating,” said Wilson, a field advocate for Earthworks, which promotes alternatives to fossil fuels. “Our government is not taking the action that needs to be taken.”

    Methane is the main ingredient in natural gas. Measured over a 20-year period, scientists say, it packs about 80 times the climate-warming power of carbon dioxide. And according to the International Energy Agency, methane is to blame for roughly 30% of the global warming that has occurred since the Industrial Revolution. Aerial surveys have documented huge amounts of methane wafting from oil and gas fields in the United States and beyond.

    It’s a problem the Biden administration has sought to attack in its recently enacted Inflation Reduction Act. One of the law’s provisions threatens fines of up to $1,500 per ton of methane released, to be imposed against the worst polluters. Perhaps most crucially, the law provides $1.55 billion in funding for companies to upgrade equipment to more effectively contain emissions — equipment that could, in theory, help the operators avoid fines.

    Yet some of the best equipment for reducing emissions is already installed on oil and gas infrastructure, including at the BP site that Wilson filmed. And critics say such equipment is failing to capture much of the methane and casting doubt on whether the Biden plan would go far to correct the problem.

    What Wilson saw at the BP site was an unlit flare. It’s among the types of equipment the EPA recommends companies consider installing to reduce methane emissions. Resembling a tall pipe, a flare is supposed to burn off methane before it can escape. Flames typically burn from the top of the flares.

    But in this case, the flame had gone out, so methane was pouring from the pipe. The flare’s mechanisms are supposed to alert the operator if it stopped working. That didn’t happen in this case, according to a report by the Texas Commission on Environmental Quality.

    “Energy companies have made pledges, but I’ve got to tell you, I haven’t seen anything from a practical standpoint that makes me believe there’s any reality to reductions on the ground,” said Tim Doty, an environmental scientist and former air quality inspector for the Texas Commission on Environmental Quality. “Maybe they’re making progress, but are they making enough progress to slow down climate change? I don’t think so.”

    The spewing methane that Wilson detected was among more than a dozen such scenes she documented over three days in the Eagle Ford Shale, an oil and gas field in south Texas. The methane poured from unlit or broken flares, storage tanks, vapor recovery units and compressors. She found it escaping at sites owned by companies including BP and Marathon Oil, both of which have pledged to reduce methane emissions.

    “They have the technology, but for some reason, whether they don’t maintain it, whether the technology doesn’t work, I don’t know, but if find it not working,” Wilson said.

    BP did not respond to questions about the methane leaks Wilson documented. The company says it plans to eliminate routine flaring in U.S. onshore operations by 2025 and is advocating for policies to reduce methane emissions.

    Marathon Oil disputed that it violated any regulations. A spokeswoman said the company recognizes the impact of greenhouse gas emissions on the global climate and prioritizes concern for the environment.

    Sometimes, methane escapes because the equipment designed to contain it hasn’t been properly calibrated or maintained. Emissions aren’t immediately stopped once new equipment is installed. Companies must still invest in properly designing the system and continuously monitoring and maintaining the equipment. This requires money and staff, which experts say many companies neglect.

    The Biden administration hasn’t yet specified which types of equipment it recommends. But the EPA, which is working with the administration on the law’s methane reduction program, has recommended technologies for reducing methane emissions. Whether that equipment actually succeeds in capping emissions is an open question.

    “There’s lots of technologies, but the reality in the field is it just doesn’t work,” Doty said.

    That’s frequently also the case with another type of equipment the EPA recommends: vapor recovery units. These are systems of pipes and seals that are supposed to capture methane before it can escape from tanks. In Doty’s field work, which spans decades, he estimates that he’s seen vapor recovery units leaking some amount of methane or other hydrocarbons 75% to 85% of the time.

    And hydrocarbons like methane, because they are corrosive, inevitably degrade the tanks, pipes and equipment that are supposed to contain them.

    “All this stuff is going to be prone to leak — that’s just the way it is,” said Coyne Gibson, who spent about two decades as an engineer inspecting oil and gas equipment. “That’s mechanics. And there’s there’s not really any way to avoid it.”

    One reason it’s hard for the industry to control methane emissions is that many leaks come from the nation’s vast gas distribution network. Millions of miles of pipelines are next to impossible to completely monitor. What’s more, Gibson said, pipelines are often buried, making leaks harder to detect.

    That gas distribution network, which includes pipelines and compressor stations, is responsible for most methane emissions in the energy industry, said Antoine Halff, chief analyst at Kayrros, an energy analytics company. Using satellite data, Kayrros identified one compressor station — which adjusts the pressure of gas to move it through pipelines — that emitted methane continuously for eight days.

    “It’s way too common,” Halff said.

    Some large companies have invested in infrared cameras, like Wilson’s, that can detect methane leaks at facilities. They use them on the ground, or on drones or aircraft.

    The process can help operators find and fix leaks. But it’s typically done only periodically, with cameras that don’t run continuously. Every few months, some companies will send a team with an infrared camera to check for leaks from the ground or a helicopter.

    Much of the time, though, there is no such surveillance. Leaks or even planned methane releases can occur during these periods, as when companies open a stretch of pipeline to release methane before doing repairs. The staffing it would take to continuously survey the nation’s 3 million miles of natural gas pipelines would likely be prohibitively expensive.

    Malfunctioning flares like the one Wilson found are also a major contributor to methane pollution. Flaring is supposed to burn off 98% of the methane that would otherwise shoot directly into the atmosphere. But whether because of malfunctions or poor design, flares are releasing five times that amount of methane into the atmosphere, according to a study by the University of Michigan.

    “Flares often go out,” said David Lyon, senior scientist with Environmental Defense Fund. “They’ll be unlit and venting all the gas. Or they’ll just not be burning the gas properly. So that’s that’s a really big source of methane. And often I think the operators are not aware that the flare’s out.”

    The Environmental Protection Agency is writing rules on methane reduction that will further detail what would be required of companies starting in 2024 under the Inflation Reduction Act.

    The American Petroleum Institute, the main lobbying group for the oil and gas industry, says methane emissions intensity declined by nearly 60 percent across the nation’s major producing regions from 2011 to 2020. But companies base their reported methane emissions on estimates, not actual measurements, another custom that the Inflation Reduction Act seeks to change.

    Climate scientists have shown, using satellite data, that methane emissions are often two or three times above what companies reported. Under the new law, companies would have to actually measure and report their methane emissions. But it’s still unclear how such a measurement program would work.

    “Us and many others in this field, over and over again, have shown the huge gap between reporting by countries and companies and what can actually be detected,” Halff said.

    Even so, he thinks there’s reason to hope that the methane provisions in the Inflation Reduction Act will make some difference.

    “Emissions keep going up,” he said. “We’re moving in the wrong direction…but the potential, the conditions, to change course seem to be here.”

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  • Climate Questions: Does what I do matter?

    Climate Questions: Does what I do matter?

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    Can people’s individual actions make a difference in how much carbon dioxide is emitted on an international scale? International organizations like the United Nations have called on individuals to limit their carbon footprint and live more sustainably, along with governments and corporations.

    Some argue it would be more effective to focus on changing government and corporate policy to limit emissions from the energy and agriculture sectors than asking individuals to limit their carbon footprint, but experts say that while that’s true, every bit of emissions reduction helps.

    ———

    EDITOR’S NOTE: This story is part of an ongoing series answering some of the most fundamental questions around climate change, the science behind it, the effects of a warming planet and how the world is addressing it.

    ———

    “We should all be the most responsible citizens we can be in every sense of the word and contribute to a sustainable existence on this planet,” said University of Pennsylvania climate scientist Michael Mann. He said that means, in part, minimizing our carbon footprints as individuals.

    And that can take a lot of different forms.

    The United Nations Act Now campaign for individual climate action suggests people can minimize their personal carbon footprint directly by changing their energy and transportation use and food consumption. Other, less direct methods for reducing carbon emissions include divesting from fossil fuel companies in retirement plans, protesting to support climate action and lobbying government officials to pass environmentally sustainable policies.

    Kim Cobb, a Brown University climate scientist, said there are consequences to individuals having “outsized” carbon footprints. And still there are people who engage in the environmental movement who don’t consider their personal carbon footprint.

    “I think we’re living in an anti-gravity moment where people are able to say, ‘I’m not concerned about my first, personal carbon footprint. Collective action matters the most,’” she said. In the future, though, “there will be a moral and social cost to bear by those individuals.”

    Still, there are some climate impacts that people aren’t individually responsible for and can’t change on their own. Over 70% of all greenhouse gas emissions produced between 1988 and 2015 came from 100 fossil fuel companies, according a 2017 report by CDP, formerly known as the Carbon Disclosure Project.

    And despite the United Nations’ warnings to drastically cut greenhouse gas emissions, countries are planning on extracting double the amount of fossil fuels than what would be consistent with keeping the global temperature rise below 1.5 degrees Celsius (2.7 degrees Fahrenheit), even as they pledge to make ambitious cuts.

    So, although there are things individuals can do to minimize their personal carbon footprints, Mann said, “we must not allow … polluters to reframe the discussion so that it falls entirely upon individuals, which takes the pressure off of them.”

    “We can’t pass legislation ourselves that incentivizes renewable energy or that blocks new fossil fuel infrastructure. We can’t impose regulations on industry. We can’t negotiate directly with international partners. We need our policymakers to do that,” Mann said. “Those things can only be enacted at the systematic level, and that’s why we have to keep the pressure on policymakers and on corporations and those who are in a position to make the changes that we can’t make ourselves.”

    ———

    Follow Drew Costley on Twitter: @drewcostley.

    ———

    The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Department of Science Education. The AP is solely responsible for all content.

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  • Alex Jones trial moves to punitive damages phase

    Alex Jones trial moves to punitive damages phase

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    HARTFORD, Conn. — Infowars host Alex Jones is facing the possibility of having more penalties heaped onto the amount he already owes for spreading conspiracy theories about the Sandy Hook Elementary School shooting, as the punitive damages phase of his Connecticut trial is set to begin Friday in a lawsuit filed by the victims’ families.

    A jury last month ordered Jones and his company, Free Speech Systems, to pay nearly $1 billion in compensation to the Sandy Hook families for the harm they suffered when he persuaded his audience that the 2012 shooting that killed 26 people was a hoax perpetrated by “crisis actors.”

    The jury also said punitive damages should be awarded. That amount will be determined by Judge Barbara Bellis following evidentiary hearings set for Friday and Monday.

    The plaintiffs’ lawyers, in court filings, suggested punitive damages could total $2.75 trillion based on one hypothetical calculation, but have not asked for a specific amount.

    “Justice requires that the Court’s punitive damages award, punish and deter this evil conduct,” attorneys Alinor Sterling, Christopher Mattei and Joshua Koskoff wrote in a motion. “Only a punitive damages assessment of historic size will serve those purposes.”

    Jones’ lawyer, Norm Pattis, is arguing that any punitive damages should be minimal, in part because the $1 billion compensatory damages award is the functional equivalent of punitive damages due to its extremely large amount.

    “Few defendants alive could pay damages of this sum,” Pattis wrote. “Indeed, most defendants would be driven into bankruptcy, their livelihood destroyed, and their future transformed into the bleak prospect of a judgment debtor saddled for decades with a debt that cannot be satisfied. To regard this as anything other than punishment would be unjust.”

    Pattis did not return a message seeking comment. Mattei declined to comment.

    All the plaintiffs, including relatives of eight of the shooting victims and an FBI agent who responded to the school, gave emotional testimony during the trial, describing how they have been threatened and harassed for years by people who believe the shooting didn’t happen.

    Strangers showed up at some of their homes and confronted some of them in public. People hurled abusive comments at them on social media and in emails. And some said they received death and rape threats.

    Jones was found liable last year for damages to the families for defamation, infliction of emotional distress and violating Connecticut’s Unfair Trade Practices Act. Although punitive damages are generally limited to attorneys’ fees for defamation and infliction of emotional distress, there are no such limits for punitive damages under the Unfair Trade Practices Act.

    In a calculation in a plaintiffs’ court filing, they said Jones’ comments about Sandy Hook were viewed an estimated 550 million times on his and Infowars’ social media accounts from 2012 to 2018. They said that translated into 550 million violations of the Unfair Trade Practices Act.

    “If each of the 550 million violations were assessed at the $5,000 statutory maximum, the total civil penalty would be $2,750,000,000,000 ($2.75 trillion),” their attorneys wrote.

    They also said punitive damages for violations of the unfair trade practices law typically are multiple times more than compensatory damages.

    As for legal fees, the plaintiffs and their lawyers have a retainer agreement stipulating the law firm, Koskoff, Koskoff & Bieder, will get one-third of any compensatory damages recovered from Jones and Free Speech Systems. The firm says its legal costs in the case have been nearly $1.7 million so far.

    Jones has said on his Infowars show that it doesn’t matter how large the damages awards are, because he doesn’t have $2 million to his name and he wouldn’t be able to pay the full amounts.

    That contradicted testimony at a similar trial in Texas in August, when a jury ordered Jones to pay nearly $50 million to the parents of one of the children killed in the Sandy Hook shooting due to his lies about the massacre.

    A forensic economist testified that Jones and Free Speech Systems, Infowars’ parent company, have a combined net worth as high as $270 million, which Jones disputes. Free Speech Systems filed for bankruptcy protection in the middle of the trial in Texas, while a third trial over the hoax conspiracy is planned around the end of the year.

    Jones hawks nutritional supplements, survival gear and other products on his show. Evidence at the Connecticut trial showed his sales spiked around the time he talked about the Sandy Hook shooting — leading the plaintiffs’ lawyers to say he was profiting off the tragedy.

    In documents recently filed in Free Speech Systems’ bankruptcy case, a budget for the company for Oct. 29 to Nov. 25 estimated product sales would total $2.5 million, while operating expenses would be about $740,000. Jones’ salary was listed at $20,000 every two weeks.

    Jones has vowed to appeal all the verdicts against him related to Sandy Hook.

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  • Albertsons $4B payout to shareholders amid merger paused

    Albertsons $4B payout to shareholders amid merger paused

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    SEATTLE — A judge in Washington state has temporarily blocked Albertsons from paying a $4 billion dividend to investors as part of the grocery retailer’s proposed merger with rival Kroger.

    On Thursday, King County Superior Court Commissioner Henry Judson approved a motion by state Attorney General Bob Ferguson to temporarily block the dividend until the court can more fully consider whether the payment violates antitrust laws, The Seattle Times reported.

    The dividend was scheduled to be paid Monday.

    The proposed merger would combine two of the nation’s largest grocery chains. Some critics worry that could mean reduced competition, higher food prices and the closure of under-performing locations, including some in Washington state. Albertsons, which owns Safeway, and Kroger, which owns QFC and Fred Meyer, are among the biggest players in Washington.

    “Putting the brakes on this $4 billion payment is a huge win for consumers nationwide,” Ferguson said Thursday afternoon on Twitter.

    Next Thursday, King County Superior Court Judge Ken Schubert is scheduled to more closely review arguments in the case.

    “There is obviously further information and evidence that needs to be presented,” Judson noted.

    In a lawsuit filed Tuesday, Ferguson argues the dividend is illegal because it potentially undercuts the ability of Albertsons to keep all its locations open in the several years needed to complete the merger.

    Those arguments were echoed by attorneys general in Illinois, California and the District of Columbia, which on Wednesday jointly sued to block the dividend in federal court in Washington, D.C.

    Boise, Idaho-based Albertsons said this week that both lawsuits are without merit.

    One major concern of the dividend is the potential impact of such a large payment on Albertsons. To win regulatory approval for the merger, Albertsons and Kroger must sell hundreds of locations in areas where they have too much market overlap. So-called divestiture could have a major impact in Seattle and throughout Washington, where Kroger and Albertsons collectively have about 350 locations.

    Kroger and Albertsons have agreed to put the divested locations in a standalone company, managed by Albertsons, and then sell them to a competing retailer or retailers as part of the approval process.

    However, some antitrust and business experts question whether locations chosen for divesture might already be struggling financially. They worry that a cash-strapped Albertsons might fail to keep all those locations open while it finds a willing buyer and that some divested stores could close, as happened after the 2015 merger between Albertsons and Safeway.

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  • As Israel’s far right parties celebrate, Palestinians shrug

    As Israel’s far right parties celebrate, Palestinians shrug

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    RAMALLAH, West Bank — The apparent comeback of former Prime Minister Benjamin Netanyahu and the dramatic rise of his far-right and ultra-Orthodox allies in Israel’s general election this week have prompted little more than shrugs from many Palestinians.

    “It’s all the same to me,” Said Issawiy, a vendor hawking nectarines in the main al-Manara Square of Ramallah, said of Netanyahu replacing centrist Yair Lapid and poised to head the most right-wing government in Israel’s history.

    Over the past month, Issawiy had struggled to get to work in Ramallah from his home in the city of Nablus after the Israeli army blocked several roads in response to a wave of violence in the northern West Bank. “I’m just trying to eat and work and bring something back to my kids,” he said.

    Some view the likely victory for Netanyahu and his openly anti-Palestinian allies, including ultranationalist lawmaker Itamar Ben-Gvir who wants to end Palestinian autonomy in parts of the occupied West Bank, as a new blow to the Palestinian national project.

    The sharp rightward shift of Israel’s political establishment pushes long-dormant peace negotiations even further out of reach and deepens the challenges facing 87-year-old President Mahmoud Abbas, whose autocratic Palestinian Authority already seemed to many Palestinians as little more than an arm of the Israeli security forces.

    “If you want to use the metaphor of a ‘nail in the coffin of the Palestinian Authority,’ that was done earlier,” said Ghassan Khatib, a former Palestinian peace negotiator and Cabinet minister. “This election is another step in that same direction.”

    During his 12 years in power, before being voted out in 2021, Netanyahu showed scant interest in engaging with the Palestinians. Under his leadership, Israel vastly expanded its population of West Bank settlers — now some 500,000 — and retroactively legalized settler outposts built on private Palestinian land. The measures have entrenched Israel’s occupation, now in its 56th year since Israel captured the territory during the 1967 Mideast war.

    Palestinians see successive Israeli governments as seeking to solidify a bleak status quo in the West Bank: Palestinian enclaves divided by growing Israeli settlements and surrounded by Israeli forces.

    “We had no illusion that this next government would be a partner for peace,” said Ahmad Majdalani, a minister in the Palestinian Authority. “It’s the opposite, we see a campaign of incitement that began more than 15 years ago as Israel drifted toward extremism.”

    The Gaza Strip’s militant Hamas rulers said the election outcome would “not change the nature of the conflict.”

    But for the first time, surging support for Israel’s far right has made the Jewish supremacist party of Ben-Gvir the third-largest in the Israeli parliament.

    Ben-Gvir and his allies hope to grant immunity to Israeli soldiers who shoot at Palestinians, deport rival lawmakers and impose the death penalty on Palestinians convicted of attacks on Jews. Ben-Gvir is the disciple of a racist rabbi, Meir Kahane, who was banned from parliament and whose Kach party was branded a terrorist group by the United States before he was assassinated in New York in 1990.

    On the campaign trail, Ben-Gvir grabbed headlines for his anti-Palestinian speeches and stunts — recently brandishing a shotgun and encouraging police to open fire on Palestinian stone-throwers in a tense Jerusalem neighborhood.

    Some Palestinians have found reason for optimism. After Tuesday’s elections, they say, Israel will no longer present to the world the telegenic face of Lapid. A win for extremism in Israel, some say, could bolster the moral case for efforts to isolate Israel, vindicating activism outside the moribund peace process.

    “It will lead to some international pressure,” said Mahmoud Nawajaa, an activist with the Boycott, Divestment and Sanctions movement, or BDS, which calls for an economic boycott of Israel as happened to apartheid-era South Africa in the 1980s.

    “Netanyahu is more honest and clear about his intentions to expand settlements. The others didn’t say it, even if it was happening,” Nawajaa added.

    Lapid and his predecessor, Naftali Bennett, a former settler leader who rebranded himself as a national unifier, had presided over a wobbly coalition of right-wing, centrist and dovish left-wing parties, including the first Arab party to ever join a government.

    Foreign leaders who shunned the divisive Netanyahu embraced what appeared to be a less ideological government. Bennett became the first Israeli leader to visit the United Arab Emirates after the countries normalized ties — an honor repeatedly denied to Netanyahu. President Joe Biden, who had a rocky relationship with Netanyahu, basked in Lapid’s warm welcome during his visit to Israel last summer.

    But even as Lapid voiced support for the two-state solution during his address to the U.N. General Assembly in September, Palestinians saw no sign he could turn words into action. They watched Israel approve thousands of new settler homes on lands they want for a future state.

    Israeli military raids in the West Bank have also surged after a series of Palestinian attacks in the spring killed 19 people in Israel. More than 130 Palestinians have been killed, making 2022 the deadliest since the U.N. started tracking fatalities in 2005. The Israeli army says most of the Palestinians killed have been militants. But stone-throwing youths protesting the incursions and others not involved in confrontations have also been killed.

    “In terms of violence, the Lapid government has outdone itself,” said Nour Odeh, a Palestinian political analyst and former PA spokeswoman. “As far as new settlements and de facto annexation, Lapid is Netanyahu.”

    Many young Palestinians have given up on the two-state solution and grown disillusioned with the aging Palestinian leadership, which they see as a vehicle for corruption and collaboration with Israel. Hamas and Fatah, the Palestinian party that controls the West Bank, have remained bitterly divided for 15 years.

    A mere 37% of Palestinians support the two-state solution, according to the most recent report from Palestinian pollster Khalil Shikaki. In Israel the figures are roughly the same — 32% of Jewish Israelis support the idea, according to the Israel Democracy Institute.

    “There is no horizon for a political track with the Israelis,” Odeh said. “We need to look inward … to re-legitimize our institutions through elections, and stand together on a united political platform.”

    But on the crowded, chaotic streets of Ramallah on Wednesday, there was only misery and anger over the daily humiliations of the occupation.

    “I hate this place,” said Lynn Anwar Hafi, a 19-year-old majoring in literature at a local university. “It’s like the occupation lives inside me. I can’t think what I want to. I can’t go where I want to. I won’t be free until I leave.”

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