In other instances, prosecutors may not say exactly what they’re investigating when they ask for transaction records. In that case, it’s up to the financial institution to request more information or try to figure it out on its own.

Paying for abortion services with cash is one possible way to avoid detection, even if it isn’t possible for people ordering pills online. Many abortion funds pay on behalf of people who need financial help.

But cash and electronic transfers of money are not entirely foolproof.

“Even if you are paying with cash, the amount of residual information that can be used to reveal health status and pregnancy status is fairly significant,” said Ms. Stepanovich, referring to potential bread crumbs such as the use of a retailer’s loyalty program or location tracking on a mobile phone when making a cash purchase.

In some cases, users may inadvertently give up sensitive information themselves through apps that track and share their financial behavior.

“The purchase of a pregnancy test on an app where financial history is public is probably the biggest red flag,” Ms. Stepanovich said.

Other advocates mentioned the possibility of using prepaid cards in fixed amounts, like the kinds that people can buy off a rack in a drugstore. Cryptocurrency, they added, usually does leave enough of a trail that achieving anonymity is challenging.

One thing that every expert emphasized is the lack of certainty. But there is an emerging gut feeling that corporations will be in the spotlight at least as much as judges.

“Now, these payment companies are going to be front and center in the fight,” Ms. Caraballo said.

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Large U.S. law firms mostly quiet on abortion ruling, are ‘walking a tightrope’

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June 26 (Reuters) – The largest U.S. law firms did not take a public stance following the U.S. Supreme Court’s reversal of Roe v. Wade on Friday, diverging from the approach of some major companies that have made statements on the closely watched abortion case.

The high court’s 6-3 Dobbs decision upheld a Republican-backed Mississippi law that bans abortion after 15 weeks of pregnancy. Many states are expected to further restrict or ban abortions following the ruling.

Reuters on Friday asked more than 30 U.S. law firms, including the 20 largest by total number of lawyers, for comments on the Dobbs ruling and whether they would cover travel costs for employees seeking an abortion.

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The vast majority did not respond by Saturday afternoon, and only two, Ropes & Gray and Morrison & Foerster, said they would implement such a travel policy.

Morrison & Foerster, with nearly 1,000 attorneys, was the only large firm to issue a public statement by Saturday afternoon.

The firm’s chair, Larren Nashelsky, said Morrison & Foerster would “redouble our efforts to protect abortion and other reproductive rights.”

The Dobbs decision has been expected since a draft opinion was leaked in May.

Several major U.S. corporations, including The Walt Disney Co (DIS.N) and Meta Platforms (META.O) said on Friday they will cover travel costs for employees seeking abortions. read more

Industry experts say law firms could speak out on Dobbs in the future if employees and clients push them to take a public stance. For now, firm leaders appear to be carefully weighing the advantages and disadvantages of commenting, including the possibility of alienating clients, experts said.

“This is a tightrope to walk for firms,” said Kent Zimmermann, a law firm consultant with the Zeughauser Group. “They have a diversity of views among their talent and clients.”

Some firms have issued internal communications to employees about the decision. Ropes & Gray Chair Julie Jones said in an internal memo viewed by Reuters that the firm will hold several community gatherings to discuss the ruling and offer “comfort.”

“As a leader of Ropes & Gray, I am concerned about the effect of this decision on our community,” Jones wrote, while acknowledging that her memo may cause “offense to portions of our community.”

A Ropes & Gray spokesperson told Reuters Friday that employees enrolled in its medical plan are eligible for financial assistance to travel out of state for an abortion.

Another large U.S. law firm, Steptoe & Johnson, offered its U.S. workforce the day off on Friday, a spokesperson confirmed. The spokesperson did not immediately respond to further requests for comment.

Despite a dearth of public statements, a number of law firms publicly signaled ahead of the ruling that they planned to provide free legal support to women seeking abortions if Roe was overturned.

Both the New York Attorney General Leticia James and the San Francisco City Attorney David Chiu, with the Bar Association of San Francisco, have convened pro bono initiatives that rely on law firm volunteers. Paul Weiss, Gibson Dunn & Crutcher and O’Melveny & Myers are among the participants.

Paul Weiss Chair Brad Karp called the Dobbs decision a “crushing loss” in an internal message to the firm on Friday provided to Reuters. Paul Weiss and O’Melveny, which both represented Jackson Women’s Health Organization, respondents in the Dobbs case, deferred comment on the ruling to their co-counsel, the Center for Reproductive Rights.

The center said in a statement that the court had “hit a new low by taking away – for the first time ever – a constitutionally guaranteed personal liberty.”

Gibson Dunn did not respond to request for comment.

Robert Kamins, a consultant with Vertex Advisors who works with law firms, said firms will be “very cautious” about taking early positions on the ruling.

“They have to make sure that they are being thoughtful about it,” he said. “What is the business impact? What is the client impact? What is the recruiting impact? There are lots of things to think about.”

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Reporting by Karen Sloan in Sacramento, California, and Jacqueline Thomsen in Swampscott, Massachusetts; Additional reporting by Mike Scarcella in Silver Spring, Maryland; Editing by Rebekah Mintzer, Noeleen Walder and Leslie Adler

Our Standards: The Thomson Reuters Trust Principles.

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Construction Has Started at Vaughan’s Sold Out Vincent Condominiums

VAUGHAN, Ontario–(BUSINESS WIRE)–Ground has been broken for Vincent Condominums, a 766-unit, two-tower condominium, following an impressive 8-month selling program.

Vincent is among the largest condominium projects currently underway in the GTA. This makes the extremely fast market absorption a notable accomplishment, and a vote of confidence in the building, the developers and its location in the new VMC.

The celebration was officiated by Vaughan’s Mayor Maurizio Bevilacqua, Councillor Sandra Yeung-Racco and representatives of the builder/developer.

Hon. Maurizio Bevilacqua, P.C., Mayor, City of Vaughan said, “I am pleased to welcome Vincent Condominiums to the Vaughan Metropolitan Centre (VMC), the city’s dynamic downtown core. The VMC continues to rise to new and unprecedented heights, growing well beyond projected growth rates at 267 per cent. The heart of Vaughan’s downtown is home to several transformational projects, including the VMC Subway, high-rise towers, and commercial office buildings, which have created thousands of jobs, public art projects and community event spaces. As a result, Vaughan is outpacing national, provincial and regional growth rates with real GDP growth at 7 per cent. Since 2010, the city has issued more than $15 billion in building permits and 70,000 additional jobs have been created. I want to congratulate the development team of Rosehaven Homes, Townwood Homes and Guglietti Brothers Investments and express my sincerest gratitude for their meaningful city-building contributions. By making investments, creating jobs and giving back to the community, you are making a positive difference and demonstrating the spirit of generosity that radiates in Vaughan.”

Created by an impressive development team of Rosehaven Homes, Townwood Homes and Guglietti Brothers investments, each of these companies is owned by members of the extended Guglietti family, a group with a long history of building and development in Vaughan, and across the GTA. With Vincent, the project’s name, and the vision behind it, was more than business. Vincent is an expression of their family history.

Spokesman Silvio Guglietti said, “For the Guglietti family, the Official Groundbreaking of Vincent has a very personal importance to us. The Guglietti family came to Canada from a little town in Italy called Sora, just outside Rome in Lazio. It’s actually the twin-city of Vaughan. In our town, the small church that our family belonged to was San Vincenzo Ferreri, or Saint Vincent Ferrer. And our grandfather, the man we are all descended from was named Vincent, or Vincenzo, after this saint.”

To create this new landmark condominium community, the Guglietti family were committed to choosing a world-class team of consultants to complement their own extensive internal resources.

“Kirkor Architects brought us a striking, extraordinary architectural design,” says Guglietti. “Figur3 has taken the designs to a whole new level with their stylish and elegant interiors. And In2ition Realty, our sales brokerage and McOuat Partnership, our marketing firm, have delivered us a sold-out condominium project.”

Located near Jane St. and Hwy 7, the Vaughan Metropolitan Centre is a new financial, innovation and cultural centre. Major corporations, retailers, small businesses and other industries are located in the VMC, as it is a major transit hub with direct subway connections to York University and downtown Toronto as well as VIVANEXT and local bus routes across Vaughan and Richmond Hill.

For more information on The Vincent, visit TheVincent.ca

About Rosehaven Homes

Since 1992, Rosehaven Homes has created many exciting communities, built over 9,000 exceptional homes and condos and received numerous prestigious accolades and awards. From detached homes, semis and townhomes to mid-rise and high-rise condos, we have designed and built homes of all types for all kinds of people, in all walks of life. Our architecture ranges in style from the traditional to the contemporary, yet every Rosehaven home stands out distinctively in every community.

Our most recent successes in condos such as the Randall Residences, Mount Pleasant Urban Towndominiums, Affinity, Odyssey and KiWi clearly signify our strengths in contemporary urban design, our keen eye for cosmopolitan culture and our ability to deliver exceptional residences tailored to today’s vibrant, modern, sophisticated tastes and aspirations.

About Townwood Homes

Established in 1974 with over 45 years of experience in the home-building industry, building more than 15,000 homes throughout southern Ontario, Townwood communities have stood the test of time. Our homes are built with integrity and longevity, featuring distinct architectural styles, spacious open concepts and formal designs while consistently maintaining the combination of luxury and ease throughout. Every Townwood community be it low rise or condo sets the standard for quality and innovation throughout neighbourhoods in the GTA.

About Guglietti Brothers Investments

Guglietti Brothers Investments Limited is a real estate investment company which was established in 1972. Principals Giovanni, Carmine, Tony and their families have maintained primary investments in industrial/commercial, land development, low-rise new home and now high-rise condominium development. The company has the highest community and professional reputation, always practising important values of professionalism, good work ethics and integrity. The company has and continues to support numerous hospitals, charities, public retirement centres and churches since its inception.

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Drivers’ Lawsuit Claims Uber and Lyft Violate Antitrust Laws

A group of drivers claimed on Tuesday that Uber and Lyft are engaging in anticompetitive practices by setting the prices customers pay and limiting drivers’ ability to choose which rides they accept without penalty.

The drivers, supported by the advocacy group Rideshare Drivers United, made the novel legal argument in a state lawsuit that targets the long-running debate about the job status of gig economy workers.

For years, Uber and Lyft have argued that their drivers should be considered independent contractors rather than employees under labor laws, meaning they would be responsible for their own expenses and not typically eligible for unemployment insurance or health benefits. In exchange, the companies argued, drivers could set their own hours and maintain more independence than they could if they were employees.

ballot measure in California that would lock in the independent contractor status of drivers. The companies said such a measure would help drivers by giving them flexibility, and Uber also began allowing drivers in California to set their own rates after the state passed a law requiring companies to treat contract workers as employees. Drivers thought the new flexibility was a sign of what life would be like if voters approved the ballot measure, Proposition 22.

Drivers were also given increased visibility into where passengers wanted to travel before they had to accept the ride. The ballot measure passed, before a judge overturned it.

The next year, the new options for drivers were rolled back. Drivers said they had lost the ability to set their own fares and now must meet requirements — like accepting five of every 10 rides — to see details about trips before accepting them.

bears little relationship to what drivers earn.

Whatever the case, courts in California could be more sympathetic to at least some of the claims in the complaint, the experts said.

gas prices have soared and as competition among drivers has started to return to prepandemic levels.

“It’s been increasingly more difficult to earn money,” said another plaintiff, Ben Valdez, a driver in Los Angeles. “Enough is enough. There’s only so much a person can take.”

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Exclusive: How a Russian billionaire shielded assets from sanctions

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  • Melnichenko ceded ownership of coal, fertilizer firms to wife
  • Cession occurred the day before EU imposed sanctions on him
  • Transfers of assets fuel doubts over sanctions’ effectiveness

ISTANBUL/BRUSSELS, May 27 (Reuters) – Russian businessman Andrey Melnichenko ceded ownership of two of the world’s largest coal and fertilizers companies to his wife the day before he was sanctioned by the European Union, according to three people familiar with the matter.

Melnichenko, who built his fortune in the years following the 1991 fall of the Soviet Union, gave up his stakes in the coal producer SUEK AO and fertilizer group EuroChem Group AG on March 8, the day of his 50th birthday, leaving his wife, Aleksandra Melnichenko, the beneficial ownership of the companies, the people said.

Until March 8, Melnichenko owned the two companies through a chain of trusts and corporations stretching from Moscow and the Swiss town of Zug to Cyprus and Bermuda, according to legal filings reviewed by Reuters.

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Since 2006, Melnichenko’s wife was second in line behind her husband on the list of beneficial owners of the two companies in trust documents, according to the three people, who spoke on condition of anonymity because they aren’t allowed to speak publicly about the couple’s assets. That meant that she stood to inherit ownership of the companies in the event her husband died, the people said.

When the war in Ukraine began in February, however, Melnichenko grew concerned that he would be designated under the European Union’s Russia sanctions regime, the people familiar with the matter said. On March 8, Melnichenko notified trustees of his retirement as the beneficiary, the people said. That triggered the same chain of changes in trust records that would have happened if the businessman had passed away, and made his wife the beneficiary.

Reuters was unable to reach Melnichenko and his wife for comment.

A spokesman for Russia-based SUEK didn’t respond to messages seeking comment. Switzerland-based EuroChem confirmed that Aleksandra Melnichenko had replaced her husband as beneficial owner.

“Following the departure of its founder, the primary beneficial ownership of a trust holding a 90% stake in the global fertilizer company has automatically passed to his wife,” the company said in a statement to Reuters on Wednesday.

The role of Melnichenko’s wife at EuroChem was first reported by Swiss newspaper Tages-Anzeiger. Her role at SUEK as well as the timing of ownership changes and other details are reported here for the first time.

Melnichenko, who founded SUEK and EuroChem two decades ago, was ranked as Russia’s eighth richest man last year by Forbes, with an estimated fortune of $18 billion.

The European Union sanctioned Melnichenko, citing his alleged proximity to the Kremlin, on March 9 as part of a Western attempt to punish Russian President Vladimir Putin for the Feb. 24 invasion of Ukraine. The sanctions – which include freezing his assets, banning him from entering the European Union and prohibiting EU entities from providing funds to him – do not apply to his wife nor the couple’s daughter and son.

Britain also put Melnichenko, who is Russian but was born in Belarus and has a Ukrainian mother, on its sanction list on March 15. Switzerland imposed sanctions against him the following day.

The businessman said in a statement to Reuters in March, after the EU sanctions were imposed, that the war in Ukraine was “truly tragic” and he appealed for peace. A spokesman for Melnichenko said at that time he had “no political affiliations”.

Western governments have imposed sweeping sanctions against Russian companies and individuals in an effort to force Moscow to withdraw.

But some sanctioned Russian businessmen, including Roman Abramovich and Vladimir Yevtushenkov, have transferred assets to friends and family members, fuelling doubts over the effectiveness of these attempts to pressure Moscow.

Melnichenko, whose residence was registered in the Swiss alpine resort town of St. Moritz until he was hit by sanctions, gave his instructions to change the ownership of his companies from a retreat near Mount Kilimanjaro where he was celebrating his birthday, according to a person familiar with the matter. A Boeing 737 emblazoned with the billionaire’s signature “A” on the fuselage had landed in Tanzania on March 5, arriving from Dubai, according to flight-tracking service Flightradar24.

A lawyer for Melnichenko didn’t respond to questions about the Kilimanjaro trip.

Melnichenko’s transfer of ownership at SUEK and EuroChem had far-reaching implications.

After reviews lasting several weeks, Swiss financial authorities concluded that the two companies could continue operating normally on the grounds that Melnichenko was no longer involved with them. SUEK and EuroChem said that British and German financial regulators have reached similar conclusions.

The British and German regulators didn’t respond to requests seeking comment.

Upon completion of the reviews in late April, SUEK and EuroChem – which had revenues last year of $9.7 billion and $10.2 billion respectively – were able to resume distribution of millions of dollars in interest payments to bondholders.

In recent weeks, SUEK and EuroChem have also approached Western clients, showing them documents with the new ownership structure in a bid to reassure them that they can continue doing business with Mr. Melnichenko’s former companies, two people familiar with the matter said.

NO MORE PAYMENTS

In Switzerland, the Secretariat for Economic Affairs (SECO) said neither SUEK nor EuroChem were under sanctions in the country.

SECO said that, as far as it was aware, Melnichenko was no longer a beneficiary of the trust to which EuroChem belonged at the time of his sanction by the EU and Switzerland.

SECO also said it sought confirmation from Eurochem that it would no longer provide funds to Melnichenko.

“The company and its management have guaranteed in writing to SECO that the Swiss sanction measures will be fully complied with and in particular that no funds or economic resources will be made available to sanctioned persons,” SECO said in response to a query.

Swiss authorities have defended their decision not to extend sanctions to Melnichenko’s wife or to his former companies, pointing to the fact that EU authorities had not sanctioned them either.

“In this case, we have done exactly what the EU has done,” Switzerland’s Economy Minister Guy Parmelin told Swiss television on Wednesday.

Parmelin added that Switzerland was also wary that sanctioning EuroChem at a time when fertilizer prices have soared in most parts of the world could have dire consequences on agriculture markets. EuroChem said it produced more than 19 million metric tons of fertilizer last year – roughly equivalent to 10% of the world’s output, according to U.N. data.

The European Commission, the EU’s executive arm, said it had no information about the transfer of Melnichenko’s assets to his wife. The commission has said it is willing to close loopholes allowing individuals and companies to elude its sanctions. Earlier this week, it unveiled proposals aimed at criminalising moves to bypass sanctions, including by transferring assets to family members, across the 27-nation bloc.

Under the trust structure, control over SUEK and EuroChem is exercised by independent trustees while beneficial ownership, which was in the hands of Melnichenko until March 8, has moved to his wife.

A mathematician who once dreamt of becoming a physicist, Melnichenko dropped out of university to dive into the chaotic – and sometimes deadly – world of post-Soviet business.

He founded MDM Bank but in the 1990s was still too minor to take part in the privatizations under President Boris Yeltsin that handed the choicest assets of a former superpower to a group of businessmen who would become known as the oligarchs due to their political and economic clout.

Melnichenko then began buying up often distressed coal and fertilizer assets, making him one of Europe’s richest men.

The EU said, when it announced its sanctions, that Melnichenko “belongs to the most influential circle of Russian business people with close connections to the Russian government”.

Melnichenko was among dozens of business leaders who met with Putin on the day Russia invaded Ukraine to discuss the impact of sanctions, showing his close ties to the Kremlin, the EU said in its March 9 sanction order.

At the time, a spokesman for Melnichenko denied that the businessman belonged to Putin’s inner circle and said he would dispute the sanctions in court. On May 17, Melnichenko challenged the sanctions by lodging an appeal with the EU’s General Court, which handles complaints against European institutions, court records show.

Russia calls its actions in Ukraine a “special operation” to disarm Ukraine and protect it from fascists. Ukraine and the West say the fascist allegation is baseless and that the war is an unprovoked act of aggression.

Italy seized Melnichenko’s superyacht – the 470-foot Sailing Yacht A, which has a price tag of 530 million euros – on March 12, three days after he was placed on an EU sanctions list.

SUEK and EuroChem said on March 10, a day after the EU announced sanctions against Melnichenko and 159 other individuals tied to Russia, that their founder had resigned from his board positions at the companies.

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Reporting by David Gauthier-Villars and Gabriela Baczynska; Additional reporting by Chris Kirkham in Los Angeles, Andrew MacAskill in London, Michael Shields and Brenna Hughes Neghaiwi in Zurich
Editing by Daniel Flynn

Our Standards: The Thomson Reuters Trust Principles.

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How Jack Welch’s Reign at G.E. Gave Us Elon Musk’s Twitter Feed

When Jack Welch died on March 1, 2020, tributes poured in for the longtime chief executive of General Electric, whom many revered as the greatest chief executive of all time.

David Zaslav, the C.E.O. of Warner Bros. Discovery and a Welch disciple, remembered him as an almost godlike figure. “Jack set the path. He saw the whole world. He was above the whole world,” Mr. Zaslav said. “What he created at G.E. became the way companies now operate.”

Mr. Zaslav’s words were meant as unequivocal praise. During Mr. Welch’s two decades in power — from 1981 to 2001 — he turned G.E. into the most valuable company in the world, groomed a flock of protégés who went on to run major companies of their own, and set the standard by which other C.E.O.s were measured.

Yet a closer examination of the Welch legacy reveals that he was not simply the “Manager of the Century,” as Fortune magazine crowned him upon his retirement.

broken up for good.

the fateful decision to redesign the 737 — a plane introduced in the 1960s — once more, rather than lose out on a crucial order with American Airlines. That decision set in motion the flawed development of the 737 Max, which crashed twice in five months, killing 346 people. And while a number of factors contributed to those tragedies, they were ultimately the product of a corporate culture that cut corners in pursuit of short-term financial gains.

Even today Boeing is run by a Welch disciple. Dave Calhoun, the current C.E.O., was a dark horse candidate to succeed Mr. Welch in 2001, and he was on the Boeing board during the rollout of the Max and the botched response to the crashes.

When Mr. Calhoun took over the company in 2020, he set up his office not in Seattle (Boeing’s spiritual home) or Chicago (its official headquarters), but outside St. Louis at the Boeing Leadership Center, an internal training center explicitly built in the image of Crotonville. He said he hoped to channel Mr. Welch, whom he called his “forever mentor.”

The “Manager of the Century” was unbowed in retirement, barreling through the twilight of his life with the same bombast that defined his tenure as C.E.O.

He refashioned himself as a management guru and created a $50,000 online M.B.A. in an effort to instill his tough-nosed tactics in a new generation of business leaders. (The school boasts that “more than two out of three students receive a raise or promotion while enrolled.”) He cheered on the political rise of Mr. Trump, then advised him when he won the White House.

In his waning days, Mr. Welch emerged as a trafficker of conspiracy theories. He called climate change “mass neurosis” and “the attack on capitalism that socialism couldn’t bring.” He called for President Trump to appoint Rudy Giuliani attorney general and investigate his political enemies.

The most telling example of Mr. Welch’s foray into political commentary, and the beliefs it revealed, came in 2012. That’s when he took to Twitter and accused the Obama administration of fabricating the monthly jobs report numbers for political gain. The accusation was rich with irony. After decades during which G.E. massaged its own earnings reports, Mr. Welch was effectively accusing the White House of doing the same thing.

While Mr. Welch’s claim was baseless, conservative pundits picked up on the conspiracy theory and amplified it on cable news and Twitter. Even Mr. Trump, then merely a reality television star, joined the chorus, calling Mr. Welch’s bogus accusation “100 percent correct” and accusing the Obama administration of “monkeying around” with the numbers. It was one of the first lies to go viral on social media, and it had come from one of the most revered figures in the history of business.

When Mr. Welch died, few of his eulogists paused to consider the entirety of his legacy. They didn’t dwell on the downsizing, the manipulated earnings, the Twitter antics.

And there was no consideration of the ways in which the economy had been shaped by Mr. Welch over the previous 40 years, creating a world where manufacturing jobs have evaporated as C.E.O. pay soars, where buybacks and dividends are plentiful as corporate tax rates plunge.

By glossing over this reality, his allies helped perpetuate the myth of his sainthood, adding their own spin on one of the most enduring bits of disinformation of all: the notion that Jack Welch was the greatest C.E.O. of all time.

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Ukraine Live Updates: Russia Hustles to Recruit Soldiers and Halts Gas Supplies to Finland

The Samara Metallurgical Plant, a sprawling complex in southwestern Russia that spans an area the size of a dozen city blocks, is a cornerstone of Russian industry. It is the country’s largest supplier of aluminum commercial and industrial products.

It is also a source of critical parts for the Russian warplanes and missiles that are now tearing through Ukraine. And atop its edifice, spelled out in giant blue letters, is the name of its American owner: Arconic, a Pittsburgh-based, Fortune 500 company that is one of America’s largest metalworking firms even after splitting out from the industrial giant Alcoa in 2016.

Arconic does not make weapons. But its sophisticated forges are among a handful of machines in Russia that can form lightweight metals into large aerospace parts like bulkheads and wing mounts.

Under an agreement with the Russian government, the company has from the start of its operations at Samara, in 2004, been legally required to supply the country’s defense industry as a condition of operating a plant whose mostly nonmilitary output has proved tremendously lucrative.

Even as Russia turned its military toward ever more aggressive ends around the world and the relationship between the United States and the Kremlin soured, Arconic maintained the Samara operation, despite the growing legal and political complications of operating there.

Now, however, with Russia’s invasion of Ukraine polarizing the world, Arconic’s leadership has found that its business at Samara is, finally, unsustainable.

Though there is no indication that Arconic is in breach of American or other Western sanctions, those penalties have made it difficult to keep the plant supplied and operating. But shutting down production could expose its employees there to jail time under Russian laws on maintaining strategic production. And Russia has already cut off Arconic’s access to profits from the Samara plant.

“The conflict in Ukraine has made our continued presence in Russia untenable, which led to our decision to pursue a sale,” Timothy Myers, Arconic’s chief executive, said in a written statement on Friday.

Company documents acquired by The New York Times, along with financial filings and other public materials, reveal Arconic’s struggles to keep the plant running. The documents were provided by a whistleblower employee who objected to Arconic’s continued involvement in Russia even after the invasion of Ukraine.

On Wednesday, the day after The Times approached Arconic with details of its work in Russia, its board approved a plan that, according to internal documents, had been under internal consideration for weeks: to sell the plant outright. The company announced this decision on Thursday.

But any sale remains hypothetical, as the company does not yet have a buyer. And finding one would require regulatory approval at the highest levels from both the United States and Russia.

That is perhaps fitting, as those governments had cooperated to pave the way for Arconic’s ownership of Samara in the first place.

Now, the long-coming divorce, accelerated by the war in Ukraine, is proving costly, with European energy consumers and companies like Arconic caught between now-hostile powers.

Credit…Daniel Berehulak for The New York Times

The Arrangement

“The era in which the United States and Russia saw each other as an enemy or strategic threat has ended,” Presidents George W. Bush and Vladimir V. Putin announced at a 2002 summit meeting in Moscow. Now, they said, “We are partners,” praising each other as like-minded allies in the war on terrorism.

Mr. Bush encouraged American companies to buy up Russian industries that had fallen into disrepair. Economic integration, it was widely thought, would bind Russia and the West for good.

Credit… Konstantin Zavrazhin/Getty Images

American corporations snapped up whole factory compounds, once the engines of Soviet power. Moscow welcomed this, believing American financing and know-how might reconstitute Russian industrial might.

The American industrial giant Alcoa joined the gold rush in 2004, buying two complexes in Russia, including the one at Samara. It purchased both factories for $257 million but spent twice that rebuilding Samara, which it found running at one-third capacity.

Within the facility was a nine-story metal behemoth: a huge forge press that had been built right into the foundation, able to form the parts that make up the largest airplanes and missiles. It is one of only a handful like it in the world, including just two in Russia.

“These machines are essential to the defense industry,” Martino Barbon, a representative of the manufacturing firm Gasparini Industries, said, calling them “the backbone” of production.

In an interview, Mr. Myers said that Samara’s giant press had seen little use in recent years. Still, its presence, along with a number of smaller forges, underscores that Samara, like many Soviet-era facilities, had been designed to combine commercial and military work.

When it bought the Samara plant, Alcoa — which split part of its operations, including those in Russia, into the name Arconic in 2016 — did not explicitly seek to become a Russian military supplier. Rather, this was Moscow’s condition for the sale.

That condition remains in force, according to company documents that describe a legal obligation to “manufacture aerospace and defense products” for sale to Russia’s weapons industry.

Mr. Myers — who is now the chief executive and had been among the first employees to visit Samara in the early 2000s — said that the U.S. government knew about Moscow’s terms when it approved Alcoa’s purchase. The company’s Russian subsidiary sells most products through other distributors and therefore Arconic cannot control how those products are used, he said.

But company documents show that Arconic has known throughout that the Samara operation was supplying Russia’s military, even if it was only a small part of the company’s overall business.

Moscow required the company to sign an agreement, as a condition of purchase, that it would pledge to indefinitely supply programs that it deemed essential. Mr. Myers acknowledged these terms in an interview with a Russian news outlet just last year.

“The main condition of the deal,” Mr. Myers said, “was the obligation to ensure uninterrupted supplies” for “state defense and aerospace programs.”

The agreement included a supplemental document, a copy of which The Times acquired, detailing mandatory production contracts.

The file lists more than a half-dozen of Russia’s largest weapons-makers, such as N.P.O. Novator and Komsomolsk-on-Amur Aviation Plant. Altogether, the companies provide the bulk of Russia’s cruise missiles, ICBMs, attack helicopters, strategic bombers and other hardware.

Credit…Dmitry Astakhov/Sputnik/Via Agence France-Presse — Getty Images

The file applied to both plants, the second of which Alcoa later sold. But it underscores Russia’s insistence on steady military supplies — and the American company’s willingness to comply.

For Moscow, the greatest benefit may have been modernization: Western financing and know-how brought the plant from derelict to state-of-the-art.

For Alcoa/Arconic, this was the cost of admission to Russia. In financial terms, it paid off handsomely.

Last year alone, Samara brought in nearly $1 billion, accounting for 16 percent of Arconic’s third-party sales worldwide, according to financial filings.

The Breakdown

Before long, a string of Russian military interventions, chiefly its annexation of Crimea in 2014 and its entry to the Syrian war the next year, transformed Western views of Russia.

Arconic found itself supplying, however indirectly, a Russian military that was now seen as a global threat.

Still, the company remained in Russia.

Moscow was no longer so welcoming. It codified sweeping “antimonopoly” laws allowing it to restrict or expel foreign companies involved in sensitive industries.

American companies became especially likely to face official investigation. This often came with supposedly temporary injunctions that make doing business difficult.

Richard Aboulafia, an aerospace industry consultant, said that Russia has since effectively seized control of many foreign-owned plants through what he termed “oligarchization.”

Rather than outright nationalize those businesses, Moscow coerces them into selling themselves off to Kremlin-linked firms, sometimes for pennies on the dollar. Just this week, the French automaker Renault sold a factory in the country to a Russian government-linked firm for one ruble.

Credit…Sergey Ponomarev for The New York Times

In 2020, Arconic was hit with one such investigation. Russian officials barred Arconic from disbursing its profits from Samara or even restaffing leadership at the Russian subsidiary that runs the plant.

Richard Connolly, a University of Birmingham economist who advises companies on doing business in Russia, called it “very surprising” that Arconic, unlike many other American companies, had not yet been forced out of Russia.

From the Kremlin’s point of view, coercing Samara’s owners to sell the plant, as it has with several other American-owned business over the years, does carry some risk. It could disrupt production at a time when Russia already faces battlefield setbacks. But tolerating Arconic would mean leaving critical infrastructure in the hands of an American corporation.

Dr. Connolly suggested that Russian leaders may still see American knowledge and technology as too critical to lose at Samara, especially as battlefield losses wipe out advanced weapons that, because of sanctions, Russia may struggle to replace.

“They realize they might not be able to produce everything themselves,” he said.

The Unwinding

Russia’s invasion of Ukraine, in February, forced difficult conversations within Arconic, according to internal documents and the account of a whistleblower employee who asked not to be named because the employee did not have the company’s permission to speak.

At the end of 2021, amid Mr. Putin’s buildup to war with Ukraine, Samara’s forging division had its best quarter on record, reporting an 82 percent increase in production from the prior year. An internal presentation touting the rise listed it under the heading “Aerospace.”

That constituted roughly one percent of the plant’s overall output, making it something of a financial afterthought compared with the rest of the company’s business.

Still, with Russian warplanes and missiles employed in shocking attacks in Ukraine considered to constitute possible war crimes, ethical considerations weighed heavily, according to the employee.

By March, even as sales poured in, Arconic’s leadership was exploring ways to leave Russia entirely, according to internal memos.

But any purchase would require the approval of the Russian government, as well as VSMPO-Avisma, the Kremlin-linked firm with which Arconic had formed a joint partnership.

Selling would also require a license from the Treasury Department to avoid violating sanctions.

Even as Arconic sought an exit, internal documents show that the company went to some lengths to keep Samara running.

Credit…Tyler Hicks/The New York Times

As early as March, with shipping companies ceasing operations in Russia, the company began seeking new ways to supply the plant with production materials.

A few weeks later, the company concluded that, because of new sanctions, U.S.- and Europe-based employees could no longer work on efforts to supply the plant with materials, even from abroad.

The company shifted this work to its division in China, where employees were thought to be unconstrained by Western sanctions.

By early May, an internal presentation reported, Samara was hitting “numerous production volume records.” And sales were up: $233 million in the first quarter of 2022, from $195 million the year before. This likely reflected the commercial work that makes up most of Samara’s output, rather than military projects, but it underscored Arconic’s success in keeping the plant spinning at full speed.

Still, the company concluded around the same time, according to Mr. Myers, its chief executive, that the war would continue for a long stretch, and with it both the sanctions and Russian government restrictions constraining Arconic’s ability to operate. Mr. Myers said that moral considerations also factored into Arconic’s decision to seek to leave Russia.

That the partnership between Arconic and Russia ever seemed workable underscores how far the world has moved on from the notion that first brought them together: that economic integration would end a century of Russian-Western enmity and finally secure lasting peace.

Mr. Connolly, the economist, compared Arconic’s stake in Russia to Europe’s decision to build its energy grids atop Russian gas pipelines and oil shipments, which was thought to make conflict unthinkable.

Instead, European energy consumers are effectively funding Russia’s government even as they punish it with sanctions, much as Arconic appears caught up in Russian militarism that Washington had once hoped American investment might temper.

“It’s a really graphic illustration,” Dr. Connolly said, “of the dashed hopes of that era.”

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Wells Fargo Expands Efforts to Advance Racial Equity in Homeownership

SAN FRANCISCO–(BUSINESS WIRE)–Systemic inequities in the United States have prevented too many minority families from achieving their homeownership and wealth building goals for too long. As the largest bank home mortgage originator, and largest bank originator of home loans to minorities over the last decade, Wells Fargo believes it has a responsibility to develop solutions that help close the gap. As a next step in meeting that responsibility, Wells Fargo today announced a new initiative to help advance racial equity in homeownership across the country. The company will develop a Special Purpose Credit Program (SPCP) to help minority homeowners, whose mortgages are currently serviced by Wells Fargo, refinance those mortgages. Initially, through the program, Wells Fargo will identify eligible Black homeowners who could benefit from a refinance product. Wells Fargo will commit $150 million to lower mortgage rates and reduce the refinancing costs to help these homeowners further benefit from refinancing. This program goes beyond the usual lending programs and puts the company’s own money to work refinancing minority families’ homes. The company will assess its progress and will publicly disclose it annually.

Wells Fargo will also:

“Wells Fargo has long been a leader in lending to minority families. These efforts are an important next step and will help close the homeownership gap between white and minority families created by decades of systemic inequities,” said Kristy Fercho, CEO of Wells Fargo Home Lending. “We are taking meaningful action by reimagining the homeownership journey to support minority families in realizing the dream of homeownership.”

In 2020, Wells Fargo was the largest bank lender for home mortgages to Black families. This is consistent with the company’s performance over the last decade (2011 – 2020) in which it helped as many Black families purchase homes as the next three largest bank lenders combined.

Additionally:

The company is a long-time leader in the housing finance industry:

About Wells Fargo

Wells Fargo & Company (NYSE: WFC) is a leading financial services company that has approximately $1.9 trillion in assets, proudly serves one in three U.S. households and more than 10% of small businesses in the U.S., and is the leading middle market banking provider in the U.S. We provide a diversified set of banking, investment, and mortgage products and services, as well as consumer and commercial finance, through our four reportable operating segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth & Investment Management. Wells Fargo ranked No. 37 on Fortune’s 2021 rankings of America’s largest corporations. In the communities we serve, the company focuses its social impact on building a sustainable, inclusive future for all by supporting housing affordability, small business growth, financial health, and a low-carbon economy. News, insights, and perspectives from Wells Fargo are also available at Wells Fargo Stories.

Additional information may be found at www.wellsfargo.com | Twitter: @WellsFargo.

Cautionary Statement About Forward-Looking Statements

This news release contains forward-looking statements about our future financial performance and business. Because forward-looking statements are based on our current expectations and assumptions regarding the future, they are subject to inherent risks and uncertainties. Do not unduly rely on forward-looking statements as actual results could differ materially from expectations. Forward-looking statements speak only as of the date made, and we do not undertake to update them to reflect changes or events that occur after that date. For information about factors that could cause actual results to differ materially from our expectations, refer to our reports filed with the Securities and Exchange Commission, including the discussion under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the Securities and Exchange Commission and available on its website at www.sec.gov.

News Release Category: WF-PS

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EXCLUSIVE HSBC steps up scrutiny of Russian clients worldwide as sanctions ratchet up, article with image

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The HSBC bank logo is seen in the Canary Wharf financial district in London, Britain, March 3, 2016. REUTERS/Reinhard Krause

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  • HSBC applying harsher scrutiny to Russia-related business
  • Managers told to refuse new loans, accounts -sources
  • Crackdown comes as U.S., European sanctions bite

HONG KONG/LONDON, March 25 (Reuters) – HSBC (HSBA.L) is shunning prospective Russian clients and declining credit to some existing ones, two sources with knowledge of the matter told Reuters, as the bank seeks to shield itself from Western sanctions against Moscow.

The measures affect HSBC’s individual and business customers globally and go further than the bank’s previously stated intentions to wind down its relations with lenders such as VTB (VTBR.MM), which were placed under Western restrictions after Russia invaded Ukraine on Feb. 24. read more

The moves by Europe’s second biggest bank show how sanctions aimed at Russia’s financial system and its political and business elite are also ensnaring Russian nationals outside the country as lenders seek to avoid falling foul of the restrictions and potentially hefty fines.

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HSBC had said on March 14 it is “not accepting any new business in Russia,” without spelling out what that means for existing or prospective Russian customers in other markets.

The sources said the bank’s risk and compliance staff have told business managers to apply extra scrutiny to all prospective clients bearing Russian passports or furnishing Russian addresses, with the result that many more are turned away than would have been in the past.

The checks also extend to dual passport-holders as well as those with links to Belarus, seen as an ally of Moscow, as the bank’s staff scramble to ensure they do not inadvertently offer services to sanctioned individuals or businesses.

HSBC declined to comment.

Customers with business ties to Russia and receiving income in roubles, such as those deriving income from Russian employment, pensions, or investments, are also being impacted as those rouble cashflows are discounted to zero for credit purposes, one of the sources, who works at HSBC, told Reuters.

Business customers with Russian links, even those with no ties to sanctioned entities or individuals, face increased scrutiny on large deposits or withdrawals and are seeing new loan applications declined, the two sources said.

The invasion has triggered an exodus of foreign companies from Russia as Western authorities deploy sanctions at an unprecedented scale and pace to squeeze Moscow and prevent the global financial system from being a conduit for Russian money.

Reuters reported earlier this month that European Union regulators had told some banks to tighten control of all Russian and Belarusian clients, including EU residents, to ensure they are not used to circumvent sanctions. read more

Russia characterises its actions in Ukraine as a “special operation” to demilitarise and “denazify” the country.

BUSINESS FREEZE

Leading European banks such as Italy’s UniCredit (CRDI.MI) and France’s Societe Generale (SOGN.PA) said they could face a multi-billion dollar write-off of their businesses in Russia, but banks also face a wider chill on business as they grapple with sanctions. read more

HSBC does not operate a retail bank inside Russia but as of Feb. 22 it had around 200 staff there serving multinational corporations, its Chief Financial Officer Ewen Stevenson told Reuters at the time. The bank said on March 14 its business there “will continue to reduce.”

The latest HSBC measures go beyond the usual background checks, and show how banks’ policies are still evolving since the invasion as they try to implement multiple waves of sanctions without discriminating against legitimate customers.

They also show the tension between banks’ sanctions and compliance teams, who urge the strictest possible interpretation of new rules to satisfy regulators, and frontline staff tasked with growing the business and serving clients.

HSBC is under particular pressure to show regulators that it can identify illegal transactions. It had to tighten up its money laundering controls globally after a string of past scandals and, in 2012, agreed to pay $1.9 billion to U.S. authorities for allowing itself to be used to launder drug money flowing out of Mexico.

HSBC is reviewing all existing private and retail banking customers with Russian connections globally to see if they have ties to sanctioned entities or individuals, the sources said.

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Additional reporting by Vidya Ranganathan in Singapore. Editing by Jane Merriman and Carmel Crimmins

Our Standards: The Thomson Reuters Trust Principles.

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Inflation and Deficits Don’t Dim the Appeal of U.S. Bonds

Mr. Bernstein stipulated that while debt financing has its place, the White House also believes it has firm limits within its agenda. “The outcome of all this is going to be some mix of progressively raised revenues and investments in essential public goods with a high return financed by some borrowing.”

What would have to happen for these rock-bottom borrowing costs to rise significantly? There could be a crisis of confidence in Fed policy, a geopolitical crisis or steep increases in the Fed’s key interest rates in an attempt to kill off inflation. In a more easily imagined situation, some believe that if inflation remains near its current levels into the second half of the year, bond buyers may lose patience and reduce purchases until yields are more in tune with rising prices.

The resulting higher interest payments on debt would force budget cuts, said Marc Goldwein, the senior policy director at the Committee for a Responsible Federal Budget. Mr. Goldwein’s organization, which pushes for balanced budgets, estimated that even under this past year’s low rates, the federal government would spend over $300 billion on interest payments — more than its individual outlays on food stamps, housing, disability insurance, science, education or technology.

Last month, Brian Riedl, a senior fellow at the right-leaning Manhattan Institute, published a paper titled “How Higher Interest Rates Could Push Washington Toward a Federal Debt Crisis.” It concludes that “debt is already projected to grow to unsustainable levels even before any new proposals are enacted.”

The offsetting global and demographic trends that have been pushing rates down, Mr. Reidl writes, are an “accidental, and possibly temporary, subsidy to heavy-borrowing federal lawmakers.” Assuming that those trends will endure, he said, would be like becoming a self-satisfied football team that “managed to improve its overall win-loss record over several seasons — despite a rapidly worsening defense — because its offense kept improving enough to barely outscore its opponents.”

But at least one historical trend suggests that rates will remain tame: an overall decline in real interest rates worldwide dating back six centuries.

A paper published in 2020 by the Bank of England and written by Paul Schmelzing, a postdoctoral research associate at the Yale School of Management, found that as political and financial systems have globalized, innovated and matured, defaults among the safest borrowers — strong governments — have continuously declined. According to his paper, one ramification may be that “irrespective of particular monetary and fiscal responses, real rates could soon enter permanently negative territory,” yielding less than the rate of inflation.

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