Around 50 groups have filed amicus briefs in a coming Supreme Court case pitting charities against the state of California in a fight over donation disclosures. The Capitol riot on Jan. 6 put a spotlight on corporations’ direct and indirect political donations; justices agreed on Jan. 8 to hear the case and arguments will take place later this month.
Business interests want to create a “broad expansion of dark money rights,” according to a new brief from 15 Democratic senators, referring to untraceable donations that are often routed via nonprofit groups. The court case is an influence campaign disguised as a technical legal fight, the senators said. The case pits California against a charity, the Koch-affiliated Americans for Prosperity Foundation, over private access to tax documents. The Chamber of Commerce and National Association of Manufacturers are among the trade groups supporting the foundation’s demand for anonymity.
Anonymous donors work like covert intelligence operations, the senators wrote. The donors give millions annually to “social welfare” groups that spend it in an effort to influence politics and policy. The senators pointed to congressional appropriations rules blocking disclosure efforts by the I.R.S. and S.E.C. over the past decade as evidence that the groups have swayed lawmakers behind the scenes. The case is the latest attempt “by powerful interests to both cement and obscure their influence over the public sphere,” the senators argued.
The federal government is with California, more or less, telling the justices in a brief that the nonprofits’ constitutional claim is wrong but that the case should be sent back to the lower courts for more analysis.
Get to know social tokens
As the “suits” finally get into Bitcoin, the crypto crowd has moved on to the next big thing: BitClout, a “polarizing” open-source crypto social network that monetizes influencers via personalized tokens that can be traded by users, essentially quantifying a person’s reputation.
BitClout’s recent launch has generated outrage because the company didn’t ask permission from people featured on the platform, instead launching with “reserved” currencies linked to celebrities like the Tesla founder Elon Musk, the pop star Katy Perry and about 15,000 others. Influencers can claim their coins, which requires buying in, but in the meantime fans can still buy and trade their tokens, BitClout’s white paper explains.
Silicon Valley bigwigs have backed BitClout, including Sequoia Capital, Andreessen Horowitz, Social Capital, Coinbase Ventures, Winklevoss Capital and the Reddit co-founder Alexis Ohanian. A crypto wallet on the platform reportedly holds more than $150 million worth of Bitcoin, thought mostly to have been raised from these A-listers.
The company’s founder goes by “DiamondHands,” a reference to investors who steadfastly hold speculative assets, popularized during the meme-stock frenzy.His true identity is an open secret among crypto insiders; signs point to Nader al-Naji, a former Google software engineer who has not denied the claim. Brandon Curtis of the exchange Radar Relay recently sent a cease and desist letter to Mr. al-Naji, protesting the commercialization of his persona without permission, and his counsel confirmed to DealBook that his profile was removed after that letter was sent.
“BitClout is trying to create ownership through code instead of law” but may find itself “throttled,” said Michael Heller, a Columbia law professor. “People don’t much like strangers messing with their reputations,” he added, and the “right of publicity” lets them police who can profit off their clout.
On March 11, Delta Air Lines dedicated a building at its Atlanta headquarters to Andrew Young, the civil rights leader and former mayor. At the ceremony, Mr. Young spoke of the restrictive voting rights bill that Republicans were rushing through the Georgia state legislature. Then, after the speeches, Mr. Young’s daughter, Andrea, a prominent activist herself, cornered Delta’s chief executive, Ed Bastian.
“I told him how important it was to oppose this law,” she said.
For Mr. Bastian, it was an early warning that the issue of voting rights might soon ensnare Delta in another national dispute. Over the past five years, corporations have taken political stands like never before, often in response to the extreme policies of former President Donald J. Trump.
After Mr. Trump’s equivocating response to the white nationalist violence in Charlottesville, Va., in 2017, Ken Frazier, the Black chief executive of Merck, resigned from a presidential advisory group, prompting dozens of other top executives to distance themselves from the president. Last year, after the killing of George Floyd, hundreds of companies expressed solidarity with the Black Lives Matter movement.
But for corporations, the dispute over voting rights is different. An issue that both political parties see as a priority is not easily addressed with statements of solidarity and donations. Taking a stand on voting rights legislation thrusts companies into partisan politics and pits them against Republicans who have proven willing to raise taxes and enact onerous regulations on companies that cross them politically.
Major League Baseball pulled the All-Star game from Atlanta in protest, and more than 100 other companies spoke out in defense of voting rights.
The groundswell of support suggests that the Black executives’ clarion call will have an impact in the months ahead, as Republican lawmakers in more than 40 states advance restrictive voting laws. But already, the backlash has been swift, with Mr. Trump calling for boycotts of companies opposing such laws, and Georgia lawmakers voting for new taxes on Delta.
eliminate a tax break for Delta, costing the company $50 million.
Yet as 2021 began and Mr. Bastian focused on his company’s recovery from the pandemic, an even more partisan issue loomed.
In February, civil rights activists began reaching out to Delta, flagging what they saw as problematic provisions in early drafts of the bill, including a ban on Sunday voting, and asking the company to use its clout and lobbying muscle to sway the debate.
Delta’s government affairs team shared some of those concerns, but decided to work behind the scenes, rather than go public. It was a calculated choice intended to avoid upsetting Republican lawmakers.
In early March, Delta lobbyists pushed David Ralston, the Republican head of the Georgia house, and aides to Gov. Brian Kemp to remove some far-reaching provisions in the bill.
followed the same script, refraining from criticizing the bill.
That passive approach infuriated activists. In mid-March, protesters staged a “die in” at Coca-Cola’s museum. Bishop Reginald Jackson, an influential Atlanta pastor, took to the streets with a bullhorn and called for a boycott of Coca-Cola. Days later, activists massed at the Delta terminal at the Atlanta airport and called on Mr. Bastian to use his clout to “kill the bill.” Still, Mr. Bastian declined to say anything publicly.
Two weeks to the day after Delta dedicated its building to Mr. Young, the law was passed. Some of the most restrictive provisions had been removed, but the law limits ballot access and makes it a crime to give water to people waiting in line to vote.
The fight in Georgia appeared to be over. Days after the law was passed though, a group of powerful Black executives frustrated by the results sprang into action. Soon, Atlanta companies were drawn back into the fight, and the controversy had spread to other corporations around the country.
spoke with the media. “There is no middle ground here,” Mr. Chenault told The Times. “You either are for more people voting, or you want to suppress the vote.”
“This was unprecedented,” Mr. Lewis said. “The African-American business community has never coalesced around a nonbusiness issue and issued a call to action to the broader corporate community.”
Mr. Bastian had been unable to sleep on Tuesday night after his call with Mr. Chenault, according to two people familiar with the matter. He had also been receiving a stream of emails about the law from Black Delta employees, who make up 21 percent of the company’s work force. Eventually, Mr. Bastian came to the conclusion that it was deeply problematic, the two people said.
accused Mr. Bastian of spreading “the same false attacks being repeated by partisan activists.” And Republicans in the Georgia house voted to strip Delta of a tax break, just as they did three years ago. “You don’t feed a dog that bites your hand,” said Mr. Ralston, the house speaker.
Senator Marco Rubio of Florida posted a video in which he called Delta and Coca-Cola “woke corporate hypocrites” and Mr. Trump joined the calls for a boycott of companies speaking out against the voting laws.
Companies that had taken a more cautious approach weren’t targeted the same way. UPS and Home Depot, big Atlanta employers, also faced early calls to oppose the Georgia law, but instead made unspecific commitments to voting rights.
declared their opposition to proposed voting legislation in that state. And on Friday, more than 170 companies signed a statement calling on elected officials around the country to refrain from enacting legislation that makes it harder for people to vote.
It was messy, but to many activists, it was progress. “Companies don’t exist in a vacuum,” said Stacey Abrams, who has worked for years to get out the Black vote in Georgia. “It’s going to take a national response by corporations to stop what happened in Georgia from happening in other states.”
We’re a Georgia-based company. That’s going to be certainly our starting point. I don’t see us having the wherewithal to understand every nuance in every other state. I think there will be energy directed at the federal level. If you go back historically, federal oversight of changing the voting processes in the states has been an important process to make sure that things move forward, not backward.
Do you see a double standard between the way in which companies are engaging with the issue of voting rights and how they’ve engaged with other issues, be it L.G.B.T. bills or climate change, or immigration, in the past?
It’s not that the corporate community was not involved. We were perhaps not as public as some people wish we had been, or perhaps would have made more difference.
You’ve got this tension of getting companies involved — the tension of dragging, or having companies pulled, into politics. When do I get involved? You can’t possibly be involved in every issue. So getting clear on what are the most important things to your company is what we go back to.
We’re very clear on the importance of diversity and inclusion to the Coca-Cola Company, which aspires to be a brand for everyone, and particularly in the South, given its history. We stand for diversity and inclusion in Georgia above all else, and that’s why we came to the table on this issue. We tried to affect change. It didn’t work. But we have not given up by any stretch of the imagination.
You had lots of senior roles before becoming C.E.O. What is the biggest difference as C.E.O.?
When you become C.E.O. you think you’ve got this organizational pyramid and you’ve come at the apex, and now everyone works for you. But then you find out there’s another pyramid, but it’s upside down, and you’re the one person at the bottom.
There’s a huge number of stakeholders who want to tell you what to do, and many of them don’t work in the business. So you deal with the board, the media, the investors, the analysts, the NGOs, the government. You have this whole galaxy of people you need to deal with in a way that was never true for any of the other jobs. If you haven’t gotten really clear on what are the few things that I want to tell people about and prioritize things this, it can be quite destabilizing.
For two weeks, Delta Air Lines and Coca-Cola had been under pressure from activists and Black executives who wanted the companies to publicly oppose a new law in Georgia that makes it harder for people to vote. On Wednesday, six days after the law was passed, both companies stated their “crystal clear” opposition to it.
Now Republicans are mad at the companies for speaking out. Hours after the companies made their statements, Gov. Brian Kemp, a Republican, took aim at Ed Bastian, the chief executive of Delta, accusing him of spreading “the same false attacks being repeated by partisan activists.” And Republicans in the Georgia state legislature floated the idea of increasing taxes on Delta as retribution.
On Thursday, Senator Marco Rubio of Florida posted a video in which he called Delta and Coca-Cola “woke corporate hypocrites.” Senator Roger Wicker of Mississippi said Coca-Cola was “caving to the ‘woke’ left.” And Stephen Miller, an adviser to former President Donald J. Trump, said on Twitter, “Unelected, multinational corporations are now openly attacking sovereign U.S. states & the right of their citizens to secure their own elections. This is a corporate ambush on Democracy.”
It was another illustration of just how fraught it is for big companies to wade in to partisan politics, where any support for the left draws the ire of the right, and vice versa.
Other big Georgia companies have managed to stay on the sidelines. UPS, which is based in Atlanta, also refrained from criticizing the new law before it was passed. On Thursday, the company said it “believes that voting laws and legislation should make it easier, not harder, for Americans to exercise their right to vote.” It made no mention of the law.
Announcing phony news on April Fools’ Day is one of corporate America’s favorite occasions for shameless publicity stunts. But when stonks, Dogecoin and $69 million JPG files are real things that warrant serious business coverage, the risk of jokes being taken seriously could hardly be higher. Some say that’s a good reason to skip them, not to mention the gravity that a pandemic has cast over things.
With that in mind, can you spot the prank among these recent announcements? (Scroll to the bottom for the answer.)
A: To celebrate National Burrito Day today, Chipotle is giving away $100,000 worth of Bitcoin.
B: Volkwagen’s U.S. operation is changing its name to “Voltswagen” to emphasize the company’s push into electric vehicles.
C: Robinhood is nixing a confetti animation when app users make a stock trade to reduce “distraction.”
complaints about burnout.
HERE’S WHAT’S HAPPENING
Business groups challenge President Biden’s proposed corporate tax increases. The Business Roundtable and U.S. Chamber of Commerce were among those that praised Mr. Biden’s plan to spend trillions on infrastructure. But they rejected his idea to pay for it by raising taxes, saying that doing so would endanger the economic recovery.
delay future shipments of its vaccine after a mix-up at a manufacturing plant. A top E.U. official said the bloc would allow “zero” shipments of AstraZeneca’s vaccine to Britain until the drugmaker fulfilled its commitments to Brussels. And France announced a third nationwide lockdown as its cases mount and inoculation efforts lag.
A tough day for initial public offerings. As Deliveroo had “the worst I.P.O. in London’s history,” other offerings also struggled. In the U.S., the SoftBank-backed real estate brokerage Compass priced at the bottom of a reduced range, while the low-cost airline Frontier sold at the low end of expectations. And in Canada, the space tech company MDA priced below its range.
Microsoft wins a huge contract to make augmented-reality headsets for the U.S. Army. The tech giant will receive up to $22 billion for equipping soldiers with sensors based on its HoloLens technology. It’s another big defense contract for Microsoft, which beat out Amazon to provide a $10 billion cloud computing system for the Pentagon.
Executives get a ‘sense of urgency’ in Georgia
A day after 72 Black executives signed a letter calling on companies to fight restrictive voting bills more forcefully, executives have begun speaking out more directly about laws that limit ballot access. But their statements came too late to affect a sweeping law passed last week in Georgia that added new requirements for absentee voting, limits on drop boxes and other restrictions that have an outsize impact on Black voters.
Today in Business
Delta and Coca-Cola reversed course. Ed Bastian, Delta’s C.E.O., told employees, “I need to make it crystal clear that the final bill is unacceptable and does not match Delta’s values.” James Quincey, Coca-Cola’s C.E.O., said he wanted to be “crystal clear” that “the Coca-Cola Company does not support this legislation, as it makes it harder for people to vote, not easier.”
The statements by the Atlanta-based companies angered local politicians, including Gov. Brian Kemp. In the past, corporate stands on controversial issues have led to political retribution: In 2018, Lt. Gov. Casey Cagle stripped a tax break proposal from a bill that would benefit Delta after the airline ended a promotional discount for N.R.A. members. The State House passed a similar measure yesterday, but the Senate didn’t take it up before the chambers adjourned for the year.
Retaliation also goes the other way: In an interview with ESPN, President Biden said he would “strongly support” moving Major League Baseball’s All-Star Game from Atlanta, scheduled for July.
“It is regrettable that the sense of urgency came after the legislation was passed and signed into law,” said Darren Walker, the Ford Foundation president, who is a board member at Pepsi, Ralph Lauren and Square.
said the company stood “ready to continue to help in ensuring every Georgia voter has the ability to vote.” A spokesperson for Home Depot reiterated the company’s stance that it believes “all elections should be accessible, fair and secure.” A spokesperson for Inspire Brands, the owner of Dunkin’ Donuts and Arby’s, said that it “values inclusivity” and believes that “every American should have equal access to their right to vote.”
“The argument is they are recruited, they’re used up and then they’re cast aside without even a college degree. So they say, how can this be defended in the name of amateurism?”
— Justice Samuel Alito, assessing the “stark picture” painted by college athletes in an antitrust case against the N.C.A.A. that the Supreme Court heard yesterday.
The Red Sox sold a stake to private equity. Now what?
RedBird Capital Partners confirmed its deal to buy a stake in Red Sox parent Fenway Sports Group, a transaction that values the company at $7.35 billion. DealBook spoke with RedBird’s founder, Gerry Cardinale, and Fenway’s chair, Tom Werner, about what happens next.
Buy and build. RedBird plans to acquire more teams: Mr. Cardinale noted that his company doesn’t own teams in the N.B.A., N.H.L. or M.L.S. For its part, Fenway plans to tap new opportunities in ticketing, sponsorship and media. (As part of the RedBird deal, the N.B.A. star LeBron James bought a stake in Fenway.) In media, Fenway controls NESN, and RedBird owns a stake in the YES network. “You should expect that we’re going to continue to look for ways to innovate in that area,” said Mr. Cardinale, who helped create the YES network.
Deepening ties with online gambling is also on the table. “We do have an excellent relationship with DraftKings,” Mr. Werner said, “and we’ve already had some conversations with them about partnerships.”
The deal was a better fit for the private market instead of a SPAC, the executives said, after talks to take Fenway public via a blank-check firm fell through. “In the middle of Covid, with the mandate to re-underwrite the next wave of growth for Fenway Sports Group, we probably would be better off doing that privately and then give ourselves the option down the road,” Mr. Cardinale said of going public. He also called the current SPAC market “very frothy.”
announced a deal last week to go public by merging with a blank-check firm that valued it at roughly $8 billion.) A new documentary, “WeWork: Or the Making and Breaking of a $47 Billion Unicorn,” tries to find lessons among the ups and downs. It streams on Hulu, starting tomorrow.
Jed Rothstein, the director, told DealBook that he believes what’s most compelling about WeWork isn’t what went wrong, but how it initially succeeded by turning strangers into a kind of tribe. “We still need that,” he said.
“The core idea of WeWork met a real need for community,” Mr. Rothstein said. “The voids people were trying to fill have only become more real.” After a year of social distancing, he likes the notion of curated communal spaces, which is what WeWork offered. Talking to early WeWorkers who bought the vision and later felt betrayed, he was surprised to find how much the company gave its devotees, notably a feeling that they were part of something bigger. That is worth acknowledging in a world where people will increasingly work remotely and for many different companies in their careers, Mr. Rothstein said.
WeWork’s co-founders, Adam Neumann and Miguel McKelvey, both had communal childhood experiences. Mr. Rothstein said he thought they sincerely wanted to replicate the good in group life and inspired people who hadn’t seen that before. But Mr. Neumann also focused on what he didn’t like — sharing equally — and emphasized an “eat what you kill” mentality. Ultimately, his hunger turned the community dream into a nightmare for many.
After the director talked to people who followed the initial vision, his perspective changed. “People in the film experienced real growth and fulfillment mixed with their anger,” he said. “I realized the story is much more nuanced.”
THE SPEED READ
The media conglomerate Endeavor filed to go public for a second time, while raising $1.8 billion to buy full control of the Ultimate Fighting Championship. It also added Elon Musk to its board. (WSJ, CNBC)
Vice Media is reportedly in talks to go public by merging with a SPAC. And the S.E.C. issued two notices for companies looking to go public via SPAC. (The Information, S.E.C.)
Junior bankers aren’t the only ones feeling burned out. Young lawyers are, too. (Business Insider)
Politics and policy
New York became the 15th state to legalize recreational marijuana. (NYT)
Efforts by aides to Gov. Andrew Cuomo to hide New York State’s Covid-19 death toll coincided with his efforts to win a multimillion-dollar book deal. (NYT)
An accidental disclosure by the I.R.S. revealed a $1 billion tax dispute with Bristol Myers Squibb. (NYT)
Best of the rest
The ad agency Deutsch is doubling referral bonuses for Black job candidates. (Insider)
Amazon wants its employees mostly back in its offices, while the Carlyle Group and IBM favor hybrid working models. (Insider, Bloomberg)
Paul Simon is the latest musician to sell his entire back catalog: Sony Music Publishing will buy the collection, including classics like “Bridge Over Troubled Water,” for an undisclosed amount. (NYT)
Feeling burned-out? As more workers consider a return to the office, our colleague Sarah Lyall is writing about late-pandemic anxiety and exhaustion. Tell her about how you’re coping.
April Fools’ Day quiz answer: B. If you were fooled by Volkswagen’s prank, you’re in good company. Volkswagen reportedly told journalists that a draft of the announcement was not a stunt. It later called the stunt just “a bit of fun.”
In the memo, Mr. Bastian said it was only after the law was passed that he truly understood the degree to which it would impose restrictions on Black voters.
Today in Business
“After having time to now fully understand all that is in the bill, coupled with discussions with leaders and employees in the Black community, it’s evident that the bill includes provisions that will make it harder for many underrepresented voters, particularly Black voters, to exercise their constitutional right to elect their representatives,” he said. “That is wrong.”
Mr. Bastian went further, saying the new law was based on false pretenses.
“The entire rationale for this bill was based on a lie: that there was widespread voter fraud in Georgia in the 2020 elections,” he said. “This is simply not true. Unfortunately, that excuse is being used in states across the nation that are attempting to pass similar legislation to restrict voting rights.”
Several other companies also weighed in on the issue on Wednesday.
Larry Fink, the chief executive of BlackRock, issued a statement on LinkedIn saying the company was concerned about the wave of new restrictive voting laws. “BlackRock is concerned about efforts that could limit access to the ballot for anyone,” Mr. Fink said. “Voting should be easy and accessible for ALL eligible voters.”
Mark Mason, the chief financial officer of Citi, in a post on LinkedIn, called out the Georgia law as discriminatory.
“I am appalled by the recent voter suppression laws passed in the state of Georgia,” said Mr. Mason, who is Black. “I see it as a disgrace that our country’s efforts to keep Black Americans from engaging fully in our Constitutional right to vote continue to this day.”
Chuck Robbins, who is the chief executive of Cisco and grew up in Georgia, said on Twitter that “voting is a fundamental right in our democracy” and that “governments should be working to make it easier to vote, not harder.”
Companies were quick to speak out during the racial justice protests last year, putting out statements of solidarity and posting black squares on Instagram. But after Georgia Republicans passed broad voting restrictions, Atlanta’s corporate giants have been much more muted — and activists are now talking boycotts, The Times’s David Gelles writes.
Among the targets:
Delta, which has publicly defended gay rights and said it stood with Black people after the police killings of George Floyd and others. But on the voting legislation, the airline has only issued a statement about a need for broader voter participation. It told employees that it had “engaged extensively” with lawmakers in creating the legislation, and that the measure had “improved considerably” during the process, though it noted that “concerns remain.”
Coca-Cola, which pledged last summer to “invest our resources to advance social justice causes.” When it came to the recent bill, Coke said that it was aligned with local chambers of commerce, which also spoke mainly of increasing voter participation and avoided sharp criticism. (Late yesterday, Coke said it was “disappointed” in the new law, but added, “We don’t see this as the final chapter.”)
“It’s not as though corporations are unwilling to speak powerfully about social justice issues,” Sherrilyn Ifill, the president of the NAACP Legal Defense, told David. Companies spoke out forcefully against bills on gender and bathroom access, even threatening to pull out of states like Indiana and, yes, Georgia.
What changed? Companies may be shying away from political fights, after spending four years speaking out against the Trump administration. And the Georgia laws were spearheaded by mainstream Republicans, making executives less eager to cross lawmakers they may need on other issues.
Ms. Ifill raised a provocative third potential reason. “Why is it that corporations that could speak so powerfully and unequivocally in opposition to discrimination against the L.G.B.T.Q. community and immigrants are not speaking as clearly about the disenfranchisement of Black people?” she said. “This is a race issue.”
For activists, the next step is calling for boycotts on companies with big Georgia presences, including Coke, Delta, Home Depot and UPS. If “Coca-Cola wants Black and brown people to drink their product, then they must speak up when our rights, our lives and our very democracy as we know it is under attack,” Bishop Reginald Jackson of the African Methodist Episcopal Church told The Atlanta Journal-Constitution.
HERE’S WHAT’S HAPPENING
The Suez Canal is clear. Now what? The 224,000-ton Ever Given was freed from the vital shipping passage days after being stuck, hindering global trade. After the celebrations will come two big questions: What happened, and how can the disruptions be sorted out?
prevented 90 percent of Covid-19 infections by two weeks after the second shot. But President Biden and the head of the C.D.C., Dr. Rochelle Walensky, urged Americans to maintain virus safety measures in the face of “impending doom” from a potential fourth wave of cases.
The White House pushes for tax increases to pay for its infrastructure and jobs plan. As it rolls out its multitrillion-dollar spending initiative, the Biden administration is likely to call for about $3 trillion in new taxes, The Washington Post reports.
President Tayyip Reccip Erdogan of Turkey fired another top central bank official. The removal of Murat Cetinkaya, a deputy governor, was announced with no explanation. It came 10 days after Mr. Erdogan fired the bank’s chief, setting off a sell-off in Turkey’s currency.
The Supreme Court wonders what to do in an investor fraud lawsuit against Goldman Sachs. Justices noted that both sides agree that general statements about professional integrity could be the basis for a lawsuit, and that their positions had moved closer over the course of litigation.
huge stock sales tied to Archegos Capital Management, one thing has become clear: Cooperation is not the finance industry’s strong suit.
Archegos’ main lenders met on Thursday to discuss an orderly wind-down of the firm’s trades, according to The Wall Street Journal. The idea was to limit the damage from several banks dumping huge blocks of stock in ViacomCBS and other companies, potentially tanking prices and hurting their own balance sheets.
You can guess what happened next. Credit Suisse and Morgan Stanley sold small amounts of stock after that meeting. But Goldman Sachs opened the floodgates the next day, quickly followed by Morgan Stanley. By market close, the two had sold nearly $20 billion worth of Archegos assets.
That left Goldman and Morgan Stanley with relatively little damage to their businesses, while banks that didn’t move as quickly — notably Credit Suisse and Nomura — warned investors that they could suffer huge hits. As one banker involved told the FT, “The reality is in a fire sale, if you’re not first out the door you’re going to get burned.”
What a SPAC believer thinks of SPAC mania
Kevin Hartz, the founder of Eventbrite, believes in the value of SPACs: In February, his first SPAC (named “One”) acquired the industrial 3-D printing company Markforged in a $2.1 billion deal. His second blank-check fund — named “Two,” of course — raised $200 million yesterday. Still, he told DealBook that he believes some SPACs pose risks to retail investors.
Below are edited excerpts from their conversation.
On why S.E.C. scrutiny is needed:
Because people are getting hurt. “For some millennial family to invest in a SPAC, or invest in a SPAC merger, and then see that crater is why we need the S.E.C. to be more involved here,” he said.
What could happen next:
Mr. Hartz pointed to the dot-com bubble as a warning: “We still kind of point to 1999, 2000 as an indicator of what SPACs will need to go through, unfortunately, and that is kind of extreme euphoria, followed by the reality of most losing money for investors.”
corporations and governments has grown in recent years. Yet when it comes to the Supreme Court, some are resisting efforts to allow more sunlight into the institution, as demonstrated in the debate over a bipartisan bill that aims to televise the court’s proceedings.
No Supreme Court hearing has ever been filmed, though Congress has been trying to get cameras in federal courts since 1937. Most state courts allow cameras, and some federal circuit courts permit video with limits. But Chief Justice John Roberts and the five other veterans on the bench have said they fear that the presence of cameras would transform oral arguments into showy performances. (The court’s three most recent appointees have said they would consider it.)
Seeing arguments in “monumental cases” shouldn’t be a privilege of the few, said Senator Dick Durbin, the Democratic chairman of the Judiciary Committee, who is sponsoring the Sunshine in the Courtroom Act. Adding cameras “opens our democracy and gives millions of Americans a window into the room where decisions are made that have lasting effects for generations,” he told DealBook.
Then again, the court has adapted during the pandemic, allowing live audio feeds of arguments. Justices may clamp down on the public’s access to the court when the pandemic lifts, but the tech precedent may make that more difficult.
replace President Andrew Jackson on the bill. “The primary reason currency is redesigned is for security against counterfeiting,” Lydia Washington, a representative for the Bureau of Engraving and Printing, told DealBook. “The redesign timeline is driven by security feature development.”
The Obama administration said it would unveil a design “concept” by 2020, to coincide with the centennial of the 19th Amendment, which gave women the right to vote. Extensive redesign work was reportedly done, but in 2019 President Trump’s Treasury secretary, Steven Mnuchin, said the project would be delayed until at least 2026. (Insiders said they had always doubted that the 2020 deadline could be met).
It turns out that the complex design and testing process for currency can’t be hurried. “No final images have been selected,” Ms. Washington said. (The Treasury Department did not respond to a request for comment).
THE SPEED READ
Recent trades in the private markets reportedly valued ByteDance, TikTok’s parent company, at more than $250 billion. (Bloomberg)
The food service Deliveroo lowered the high end of valuation expectations for its forthcoming I.P.O., to £7.85 billion ($10.8 billion). (Reuters)
Politics and policy
Best of the rest
Goldman Sachs said its interns would work out of its offices this summer. (Bloomberg)
If the minimum wage had grown at the same rate as Wall Street bonuses since 1985, workers would be paid $44 an hour today. (Insider)
Take a peek at the potential offices of the future: hot desks, Zoom rooms and more. (NYT)
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As Black Lives Matter protesters filled the streets last summer, many of the country’s largest corporations expressed solidarity and pledged support for racial justice. But now, with lawmakers around the country advancing restrictive voting rights bills that would have a disproportionate impact on Black voters, corporate America has gone quiet.
Last week, as Georgia Republicans rushed to pass a sweeping law restricting voter access, Atlanta’s biggest corporations, including Delta, Coca-Cola and Home Depot, declined to weigh in, offering only broad support for voting rights. The muted response — coming from companies that last year promised to support social justice — infuriated activists, who are now calling for boycotts.
“We are all frustrated with these companies that claim that they are standing with the Black community around racial justice and racial equality,” said LaTosha Brown, a co-founder of Black Voters Matter. “This shows that they lack a real commitment to racial equity. They are complicit in their silence.”
On Thursday, hours after the Georgia voting restrictions were signed into law, Ms. Brown joined protesters at the Atlanta airport calling for a boycott of Delta, Georgia’s largest employer. In front of the Delta terminal, they lobbied for employees to pressure their employer and urged the airline’s chief executive, Ed Bastian, to use his clout to sway the debate.
said the company would “invest our resources to advance social justice causes” and “use the voices of our brands to weigh in on important social conversations.”
But last week, rather than take a position on the then-pending legislation, Coca-Cola said it was aligned with local chambers of commerce, which were diplomatically calling on legislators to maximize voter participation while avoiding any pointed criticisms.
said. “Now, when they try to pass this racist legislation, we can’t get him to say anything. And our position is, if you can’t stand with us now, you don’t need our money, you don’t need our support.”
Senator Raphael Warnock of Georgia, a Black pastor who was elected in January, called out companies for their muted responses in an interview with CNN on Sunday.
“I’ve seen these corporations falling over themselves every year around the time of the King holiday, celebrating Dr. King,” Senator Warnock said. “The way to celebrate Dr. King is to stand up for what he represented: voting rights.”
Corporate America’s guarded approach to the partisan issue of voting rights stands in stark contrast to its engagement with other social and political issues in recent years. When legislatures advanced “bathroom bills” that would have discriminated against people who are transgender, many big companies threatened to pull out of states like Indiana, Georgia and Texas.
And over the past four years, many big companies spoke out against President Donald J. Trump on issues including climate change, immigration and white supremacy.
“It’s not as though corporations are unwilling to speak powerfully about social justice issues,” said Sherrilyn Ifill, the president and director-counsel of the NAACP Legal Defense and Educational Fund Inc. “It seems to me perfectly legitimate for Black voters in Georgia to expect them to speak just as powerfully and directly about what is an unwarranted attack on the ability of Black voters to participate in the political process.”
on Twitter. Criticizing an early version of the Georgia bill, it added: “Georgia H.B. 531 would limit trustworthy, safe & equal access to voting by restricting early voting & eliminating provisional ballots. That’s why Salesforce opposes H.B. 531 as it stands.”
Patagonia, which has worked to increase voter participation, condemned the new bills and called on other companies to get more involved.
“Our democracy is under attack by a new wave of Jim Crow bills that seek to restrict the right to vote,” Ryan Gellert, the chief executive of Patagonia, said in a statement. “It is urgent that businesses across the country take a stand — and use their brands as a force for good in support of our democracy.”
Those were the exceptions. For the most part, big companies declined to comment on the Georgia legislation as it came together. Even chief executives who have made names for themselves by championing diversity chose not to get involved. Tim Ryan, the senior partner at PwC and a founder of CEO Action for Diversity & Inclusion, declined to comment for this article.
“The voice of individual leaders is oddly muted,” said Jeffrey Sonnenfeld, a professor at the Yale School of Management who regularly gathers chief executives to talk about controversial issues. “For the most part, they are not yet taking the same courageous stands they have taken on election ballot counting and the election results this fall, let alone on immigration, gun safety and the infamous bathroom bills.”
After four years of responding to the often extreme policies of the Trump administration, many companies are seeking to stay out of political fights.
And the voting bills are being driven by mainstream Republican lawmakers, rather than lesser-known right-wing figures. Companies that take a stand might have a harder time currying favor with those lawmakers on other issues down the line.
“This is not the fringe members trying to push bathroom bills,” said Lauren Groh-Wargo, the chief executive of Fair Fight, a voter-rights group founded by Stacey Abrams. “This is a priority for the party at the national level. For companies to speak out and work against these bills is very different.”
Ms. Ifill of the NAACP Legal Defense and Educational Fund said there was another factor at play as well: race. “Why is it that corporations that could speak so powerfully and unequivocally in opposition to discrimination against the L.G.B.T.Q. community and immigrants are not speaking as clearly about the disenfranchisement of Black people?” she said. “It’s the same thing. This is a race issue.”
Companies have effectively squashed bills at the state level before. In 2016, when lawmakers were advancing the bathroom bills, major corporations said they would move jobs out of states that adopted such measures. Responding to one such bill in Georgia in 2016, the Walt Disney Company said, “We will plan to take our business elsewhere should any legislation allowing discriminatory practices be signed into state law.”
The tactic was effective. Many of those bills were tabled as lawmakers responded to the threats of lost business.
This time around, however, the entertainment industry has taken a more guarded approach.
When asked for comment, Disney, Netflix, NBCUniversal, Sony Pictures Entertainment and ViacomCBS either said they had no public comment or did not respond to queries. The Motion Picture Association, Hollywood’s lobbying organization, declined to comment, as did Amazon Studios, which six months ago released “All In: The Fight for Democracy,” a documentary about efforts by Ms. Abrams and other activists to tear down voting barriers in Georgia and elsewhere.
The fight in Georgia is likely a preview of things to come. Lawmakers in dozens of states have proposed similar voting bills, and activists are planning to ramp up the pressure on corporate America as the battle over voting rights goes national.
Companies, meanwhile, are trying to maintain a delicate balancing act. Though the Georgia law passed Thursday was less stringent than initially proposed, it introduced more rigid voter identification requirements for absentee balloting, limited drop boxes and expanded the state legislature’s power over elections.
After its passage, Delta and Coca-Cola appeared to take some credit for helping soften the bill’s restrictions. Delta said it had “engaged extensively with state elected officials” in recent weeks and that “the legislation signed this week improved considerably during the legislative process.”
Coca-Cola issued a similar statement, saying it had “sought improvements” to the law and that it would “continue to identify opportunities for engagement and strive for improvements aimed at promoting and protecting the right to vote in our home state and elsewhere.”
Those words were cold comfort to activists who had worked against the efforts to curb voter rights.
“They have made soft statements rather than stepping out,” Ms. Groh-Wargo of Fair Fight said. “It’s ridiculous.”
Brooks Barnes and Nicole Craine contributed reporting.