SAN JOSE, Calif. — For the past 11 weeks, prosecutors revealed emails from desperate investors. They held up falsified documents side by side with the originals. They called dozens of witnesses who lobbed accusations of deceit and evasiveness.
And on Friday, the person whom prosecutors have been making their case against — Elizabeth Holmes, the founder of the failed blood testing start-up Theranos — took the stand to defend herself. She faces 11 counts of defrauding investors over Theranos’s technology and business in a case that has been billed as a referendum on Silicon Valley’s start-up culture. She has pleaded not guilty.
tech industry’s hubris and the last decade’s culture of grift — began her testimony by answering a series of questions about Theranos. She delved into her background and how she began the Silicon Valley start-up, which had promised to revolutionize health care by using just a drop of blood from patients to deduce their illnesses.
trial finally began in September, prosecutors called former investors, partners and Theranos employees to testify. Jim Mattis, the retired four-star Marine Corps general and former defense secretary, who was a Theranos director, took the stand, as did a former Theranos lab director who endured six grueling days of questioning. In one surreal moment, a forensics expert recited text messages between Ms. Holmes and Ramesh Balwani, her boyfriend at the time and business partner at Theranos, who is known as Sunny.
This week, Alan Eisenman, an early investor in Theranos, testified that Ms. Holmes cut him off and threatened him when he asked her for more information about the company. Yet even after that treatment, Mr. Eisenman poured more money into the start-up, believing its seemingly fast-growing business would deliver riches to backers like him.
When asked about his understanding of the value of his Theranos stock today, Mr. Eisenman said: “It’s not an understanding, it’s a conclusion. It’s worth zero.”
a series of validation reports that Ms. Holmes sent to potential investors and partners that made it look as though pharmaceutical companies including Pfizer and Schering-Plough had endorsed Theranos’s technology. Representatives from each company testified that they had not endorsed Theranos’s blood test and were surprised to see their companies’ logos added to the report.
testified that the start-up faked demonstrations of its machines for potential investors, hid technology failures and threw out abnormal blood test results.
Mr. Mattis testified that he was not aware of any contracts between Theranos and the military to put its machines on medevac helicopters or on the battlefield, as Ms. Holmes had frequently told investors.
testimony from Roger Parloff, the journalist who wrote a magazine cover story about Ms. Holmes, helping propel her to acclaim. Mr. Parloff’s article was sent to numerous investors as part of Ms. Holmes’s pitch.
Yet notably absent from the courtroom were some of the most prominent witnesses on the prosecution’s list. Ms. Holmes’s rise was aided by her association with business titans such as the media mogul Rupert Murdoch, elder statesmen such as Henry Kissinger and Adm. Gary Roughead, and the lawyer David Boies. Theranos was felled, in part, by whistle-blowers such as Tyler Shultz, a grandson of George Shultz, the former secretary of state, who sat on Theranos’s board. None of them testified.
Also absent was Mr. Balwani, who was charged with fraud alongside Ms. Holmes and faces trial next year. His role as a fiery defender of Theranos who went after anyone who questioned the company has been in the background of much of the testimony.
At nearly every turn, Ms. Holmes’s lawyers sought to limit testimony and evidence. They attacked the credibility of investors, using legal disclaimers to show that investors knew they were gambling on a young start-up. The lawyers also poked holes in investors’ limited due diligence on Theranos’s claims. At one point, they directed Erika Cheung, a key whistle-blower who worked in Theranos’s lab, to read the entire organizational chart of the people employed in lab to show she played a small role in the overall operation.
she said in one of the videos. “Anything that happens in this company is my responsibility.”
We meet Adams Maihota outside his house in the dead of night. A crab hunter, he wears white plastic sandals, board shorts, a tank top and a cummerbund to hold lengths of twine. He picks a sprig of wild mint and tucks it behind his ear for good luck.
The photographer Eric Guth and I follow Mr. Maihota’s blazing headlamp into the forest in search of coconut crabs, known locally as kaveu. They are the largest land invertebrate in the world, and, boiled or stir-fried with coconut milk, they are delicious. Since the cessation of phosphate mining here in 1966, they have become one of Makatea’s largest exports.
It’s ankle-breaking terrain. We negotiate the roots of pandanus trees and never-ending feo, a Polynesian term for the old reef rocks that stick up everywhere. Vegetation slaps our faces and legs, and our skin becomes slick with sweat.
The traps, which Mr. Maihota laid earlier that week, consist of notched coconuts tied to trees with fibers from their own husks. When we reach one, we turn off our lights to approach quietly. Then, Mr. Maihota pounces.
A moment later, he stands up with a sky-blue crab pedaling its ten legs in broad circles. Even with its fleshy abdomen curled under the rest of its body, the animal is much longer than the hunter’s hand.
Makatea, part of the Tuamotu Archipelago in French Polynesia, sits in the South Pacific about 150 miles northeast of Tahiti. It’s a small uplifted coral atoll, barely four and a half miles across at its widest point, with steep limestone cliffs that rise as high as 250 feet straight out of the sea.
From 1908 until 1966, Makatea was home to the largest industrial project in French Polynesia: Eleven million tons of phosphate-rich sand were dug out and exported for agriculture, pharmaceuticals and munitions. When the mining ceased, the population fell from around 3,000 to less than 100. Today, there are about 80 full-time residents. Most of them live in the central part of the island, close to the ruins of the old mining town, which is now rotting into the jungle.
One-third of Makatea consists of a maze of more than a million deep, circular holes, known as the extraction zone — a legacy of the mining operations. Crossing into that area, especially at night, when coconut crabs are active, can be deadly. Many of the holes are over 100 feet deep, and the rock ledges between them are narrow. Still, some hunters do it anyway, intent on reaching the rich crab habitat on the other side.
One evening before sunset, a hunter named Teiki Ah-scha meets us in a notoriously dangerous area called Le Bureau, so named for the mining buildings that used to be there. Wearing flip-flops, Mr. Ah-scha trots around the holes and balances on their edges. When he goes hunting across the extraction zone, he comes home in the dark with a sack full of crabs on his back.
Mr. Maihota, too, used to hunt this way — and he tells me that he misses it. But ever since his wife fell into a shallow hole a few months before our visit in 2019, she has forbidden him to cross the extraction zone. Instead, he sets traps around the village.
Coconut crabs inhabit a broad range, from the Seychelles in the Indian Ocean to the Pitcairn Islands in the southern Pacific Ocean. They were part of local diets long before the mining era. The largest specimens, “les monstres,” can be the length of your arm and live for a century.
There hasn’t been a population study on Makatea, so the crab’s conservation status is unclear — though at night, rattling across the rocks, they seem to be everywhere.
When we catch crabs that aren’t legal — either females or those less than six centimeters across the carapace — Mr. Maihota lets them go.
If the islanders are not careful, he says, the crabs might not be around for future generations. In many places across the Indo-Pacific, the animals have been hunted to the point of extirpation, or local extinction.
Makatea is at a crossroads. Half a century after the first mining era, there is a pending proposal for more phosphate extraction. Though the island’s mayor and other supporters cite the economic benefits of work and revenue, opponents say that new industrial activity would destroy the island, including its fledgling tourism industry.
“We cannot make her suffer again,” one woman tells me, invoking the island as a living being.
Still, it’s hard to make a living here. “There is no work,” Mr. Maihota says, as we stand under the stars and drip sweat onto the forest floor. He doesn’t want to talk about the mine. The previous month, he shipped out 70 coconut crabs for $10 each to his buyers in Tahiti.
In popular hunting spots, hunters say the crabs are smaller or fewer, but hunters rely on the income and nobody has the full picture of how the population is doing overall.
We visit Mr. Maihota’s garden the next morning where the crabs are sequestered in individual boxes to keep them from attacking each other. He’ll feed them coconut and water to purge their systems, since, in the wild, they eat all manner of food, including carrion.
By daylight, their shells are rainbows of purple, white, orange, along with many shades of blue. For now at least — without mining, and while harvests are still sustainable — they seem perfectly adapted to Makatea, holes and all.
A decade ago, after a rained-out Thanksgiving desert camping trip with our five kids, my wife, Kristin, and I headed to the nearest available lodging, the now-shuttered Hard Rock Casino in Las Vegas. Watching our brood eat their Thanksgiving meal as cigarette smoke and slot-machine clamor wafted over their cheeseburgers, Kristin and I locked eyes with an unspoken message: We are the world’s worst parents.
We have avoided Las Vegas with the kids since then, but an aborted drive to slushy Aspen this April with three of our heirs caused us to pause in Vegas. At the time, the city was just awakening from its Covid slumber, with mandatory masks and limited capacity in most indoor spaces, traffic so light that cars were drag-racing down the normally packed Strip, and a lingering, troubling question over the whole place: Will this reopening really be safe?
But extraordinary things have been happening during this slumber, and while we were only going to spend one night there, we had so much fun that we ended up staying four. At first we spent most of our time in the relative safety of the outdoors, but then we started to relax along with the rest of the city, drowning our hands beneath the ubiquitous liquid sanitizer dispensers, masking up and heading indoors.
I knew things had shifted in Sin City when, while maneuvering the minivan through some seemingly dicey neighborhood between Downtown and the Strip, I noted on the back alley wall of a hair salon a striking mural depicting the cult outsider artist Henry Darger’s seven Vivian Girl warriors in their trademark yellow dresses. What were the Vivian Girls doing here?
Makers & Finders — and wandered along Spring Mountain Road, the hub of the city’s Chinatown, rapidly expanding westward. In the midcentury mecca of East Fremont Street, a $350 million investment by the tech titan Tony Hsieh, who died last year, has produced a boulevard of fantastical art installations, restored buildings and a sculptural playground surrounded by stacked shipping containers converted to boutiques and cafes, all guarded by a giant, fire-spewing, steel praying mantis.
“Vegas is going through a cultural renaissance,” a former member of the city’s Arts Commission, Brian “Paco” Alvarez, told me in a recent telephone interview. “A lot of the local culture that comes out of a city with two million unusually creative people didn’t stop during the pandemic.”
Area15, which opened in February in a mysterious, airport-hanger-size, windowless building two miles west of the Strip. Imagine an urban Burning Man mall (indeed, many of the sculptures and installations came from the annual arts festival held in northern Nevada), with some dozen tenants providing everything from virtual reality trips to nonvirtual ax throwing, accompanied by Day-Glo color schemes, electronic music, giant interactive art installations and guests flying overhead on seats attached to ceiling rails. Face masks are currently only mandatory in Area15 for self-identified unvaccinated people, though some of the attractions within still require face masks for everyone. Everywhere, we encountered the constant presence of cleaning attendants spraying and wiping surfaces.
Blue Man Group, who was bringing his creative magic to Area15 in the form of a “Psychedelic Art House Meets Carnival Funhouse” called Wink World (adult tickets start at $18). Wink World is centered around six rooms with infinity mirror boxes reflecting Slinkys, plasma balls, fan spinners, Hoberman Spheres and ribbons dancing to an ethereal soundtrack of electronic music, rhythmic chanting and heavy breathing.
“I worked on these installations for six years in my living room in New York,” Mr. Wink told me. “I was trying to evoke psychedelic experiences without medicine.”
My unmedicated children were transfixed, as if these familiar toys frolicking into eternity were totems to their own personal nirvanas. I’ve never seen them stand so still in front of an art exhibit.
Omega Mart (adult admissions start at $45, face mask and temperature check mandatory), the biggest attraction in the complex, lines one side of the complex’s atrium and seemed — at first — to provide a banal respite from Area15’s sensory overload. Along the sale aisles I found Nut Free Salted Peanuts, Gut Monkey Ginger Ale and cans of Camels Implied Chicken Sop.
Meow Wolf (the name derived from pulling two random words from a hat during their first meeting), Omega Mart is an amalgamation of some 325 artists’ creations tied together by disparate overlapping story lines which one can follow — or not.
For a short time, I tracked the story of the takeover of Omega Mart’s corporate headquarters by a hilariously manipulative New Agey daughter, and then got sidelined into the tale of a teen herbalist leading a rebellion to something else. I have no idea what I experienced other than that Brian Eno composed the music to one of the installations. None of my kids could explain what they experienced either, other than something mind-expanding. If it wasn’t for dinner, we might still be in there.
Raku. Step behind an understated white backlit sign and you enter an aged wood interior of an intimate restaurant that you might find off a Kyoto alley. We slid into the family-style tables behind the main dining room and commenced to feast. There’s a $100 tasting menu if you are feeling adult, but my tribe ordered cream-like tofu with dried fish, foie gras skewers and a dozen other items.
Chinatown became our go-to-spot for snacks and boba tea between adventures. A favorite spot became Pho 90, a low-key Vietnamese cafe with outstanding noodle dishes and exquisitely layered banh mi sandwiches for picnics in the wild.
Red Rock Canyon, 17 miles west of the Strip, is like walking into a Road Runner cartoon with a Technicolor ballet of clashing tectonic formations. We grabbed our admittedly reluctant brood on a 2.4-mile, round-trip hike on the Keystone Thrust Trail through a series of gullies until we emerged above epic white limestone cliffs jutting through the ocher-colored mountains. Here we had our Vietnamese picnic overlooking the monolithic casinos in the distance.
Rail Explorers has set up rail bike tours on the abandoned tracks leading to the Hoover Dam construction site. We booked a sunset tour (from $85 to $150 for a tandem quad bike). After some quick instruction, we, along with three dozen other visitors, climbed into an 800-pound, four-person Korean-made bike rig and, giving the group ahead of us a three-minute head start for some space, started peddling.
Our route was along four miles of desert track gently sloping into a narrowing canyon pass. As we effortlessly peddled at 10 miles per hour, we noticed that the spikes holding down the railroad ties were often crooked or missing. “I bet these were all driven in by hand,” my teenage son, Cody, a history buff, noted.
In the enveloping dusk, we glimpsed shadows moving along the sagebrush: bighorn sheep, goats and other critters emerging for their nocturnal wanderings. But the most surreal sight was at the end of the ride, where a giant backlit sign for a truck stop casino appeared over a desert butte — Vegas was beckoning us back, but now we welcomed the summons. Here we were, peddling into the sunset, feeling more athletic, cool and (gasp!) enlightened than when we first rolled into Vegas four days ago. Oh what good parents we were!
“The moniker of ‘Sin City’ is totally wrong,” Mr. Alvarez told me, “if you know where to look.”
On Chinese iPhones, Apple forbids apps about the Dalai Lama while hosting those from the Chinese paramilitary group accused of detaining and abusing Uyghurs, an ethnic minority group in China.
The company has also helped China spread its view of the world. Chinese iPhones censor the emoji of the Taiwanese flag, and their maps suggest Taiwan is part of China. For a time, simply typing the word “Taiwan” could make an iPhone crash, according to Patrick Wardle, a former hacker at the National Security Agency.
Sometimes, Mr. Shoemaker said, he was awakened in the middle of the night with demands from the Chinese government to remove an app. If the app appeared to mention the banned topics, he would remove it, but he would send more complicated cases to senior executives, including Mr. Cue and Mr. Schiller.
Apple resisted an order from the Chinese government in 2012 to remove The Times’s apps. But five years later, it ultimately did. Mr. Cook approved the decision, according to two people with knowledge of the matter who spoke on the condition of anonymity.
Apple recently began disclosing how often governments demand that it remove apps. In the two years ending June 2020, the most recent data available, Apple said it approved 91 percent of the Chinese government’s app-takedown requests, removing 1,217 apps.
In every other country combined over that period, Apple approved 40 percent of requests, removing 253 apps. Apple said that most of the apps it removed for the Chinese government were related to gambling or pornography or were operating without a government license, such as loan services and livestreaming apps.
Yet a Times analysis of Chinese app data suggests those disclosures represent a fraction of the apps that Apple has blocked in China. Since 2017, roughly 55,000 active apps have disappeared from Apple’s App Store in China, according to a Times analysis of data compiled by Sensor Tower, an app data firm. Most of those apps have remained available in other countries.
The coronavirus pandemic has threatened to rapidly expand yawning gaps between the rich and the poor, throwing lower-earning service workers out of jobs, costing them income, and limiting their ability to build wealth. But by betting on big government spending to pull the economy back from the brink, United States policymakers could limit that fallout.
The $1.9 trillion economic aid package President Biden signed into law last month includes a wide range of programs with the potential to help poor and middle-class Americans to supplement lost income and save money going forward. That includes monthly payments to parents, relief for renters and help with student loans.
Now, the administration is rolling out additional plans that would go even further, including a $2.3 trillion infrastructure package and about $1.5 trillion in spending and tax credits to support the labor force by investing in child care, paid leave, universal prekindergarten and free community college. The measures are explicitly meant to help left-behind workers and communities of color who have faced systemic racism and entrenched disadvantages — and they would be funded, in part, by taxes on the rich.
Forecasters predict that the government spending — even just what has been passed so far — will fuel what could be the fastest annual economic growth in a generation this year and next, as the country recovers and the economy reopens from the Covid-19 pandemic. By jump-starting the economy from the bottom and middle, the response could make sure the pandemic rebound is more equitable than it would be without a proactive government response, analysts said.
disproportionately hurt women of all races and men of color, she said, “If we tailor the relief to those who are most affected, we are going to be addressing racial and ethnic gaps.”
From its first days, the pandemic set the stage for a K-shaped economy, one in which the rich worked from home without much income disruption as poorer people struggled. Workers in low-paying service jobs were far more likely to lose jobs, and among racial groups, Black people have experienced a much slower labor market rebound than their white counterparts. Globally, the downturn probably put 50 million people who otherwise would have qualified as middle class into lower income levels, based on one recent Pew Research analysis.
But data suggest the U.S. policy response — including relief legislation that passed under the Trump administration last year — has helped to mitigate the pain.
“The CARES Act to the American Rescue plan have helped to support more households than I would have imagined,” Charles Evans, the president of the Federal Reserve Bank of Chicago, told reporters during a call earlier this month, referring to the early 2020 and early 2021 pandemic relief packages.
across the board after slumping early last year, foreclosures have remained low, and household consumption has been shored up by repeated stimulus checks.
While the era has been fraught with uncertainty and people have slipped through the cracks, this downturn looks very different for poorer Americans than the post-financial crisis period. That recession ended in 2009, and America’s wealthiest households recovered precrisis wealth levels by 2012, while it took until 2017 for the poorest to do the same.
income inequality — the gap between how much the poor and the rich earn each year — might soon decline. Lower income inequality could, in theory, lead to lower wealth inequality over time, as households have the wherewithal save more evenly.
start of 2007, the bottom half of the wealth distribution held 2.1 percent of the nation’s riches, compared to 29.7 percent for the top 1 percent. By the start of 2020, the bottom half had 1.8 percent, while the top 1 percent held 31 percent.
Researchers debate whether monetary policy actually worsens wealth divides in the long run — especially since there’s the hairy question of what would have happened had the Fed not acted — but monetary policymakers generally agree that their policies can’t stop a pre-existing trend toward ever-worse wealth inequality.
By offering a more targeted boost from the very start of the recovery, fiscal policy can. Or, at a minimum, it can prevent wealth gaps from deepening so much.
Monetary policy “is naturally trickle-down,” said Joseph Stiglitz, an economist at Columbia and Nobel laureate. “Fiscal policy can work from the bottom and middle up.”
That’s what the Biden administration is gambling on. Paired with packages from December and last April, Congress’s recent package will bring the amount of economic relied that Congress has approved during the pandemic to more than $5 trillion. That dwarfs the amount spent in the last recovery.
The legislation is a mosaic of tax credits, stimulus checks and small business support that could leave families at the lower end of the income and savings distribution with more money in the bank and, if its provisions work as advertised, with a better chance of getting back to work early in the recovery.
There is no guarantee Mr. Biden’s broader economic proposals, totaling about $4 trillion, will clear a narrowly divided Congress. Republicans have balked at his plans and this week offered a counterproposal on infrastructure that is only a fraction the size of what Mr. Biden wants to spend. A bipartisan group of House moderates is pushing the president to finance infrastructure spending through an increased gas tax or something similar, which hits the poor harder than the rich.
Still, the president’s new proposals could have long-term impacts, working to retool workers’ skills and lift communities of color in hopes of putting the economy on more equal footing. The president is set to outline his so-called American Family Plan, which is focused on the work force, before his first address to a joint session of Congress next week.
While details have yet to be finalized, programs like universal prekindergarten, expanded subsidies for child care and a national paid leave program would be paid for partly by raising taxes on investors and rich Americans. That could also affect the wealth distribution, shuffling savings from the rich to the poor.
The plan, which must win support in a Congress where Democrats have just a narrow margin, would raise the top marginal income tax rate to 39.6 percent from 37 percent, and raise taxes on capital gains — the proceeds of selling an asset, like a stock — for people making more than $1 million to 39.6 percent from 20 percent. Counting in an Obamacare-related tax, the taxes they pay on profits would rise above 43 percent.
The new policies won’t necessarily cut wealth inequality, which has been on an inexorable upward march for decades, but they could keep poorer households from falling behind by as much as they would have otherwise.
Betting big on fiscal policy to return the economy to strength is a gamble. If the economy overheats, as some prominent economists have warned it could, the Fed might have to rapidly lift interest rates to cool things down. Rapid adjustments have historically caused recessions, which consistently throw vulnerable groups out of jobs first.
But administration officials have repeatedly said the bigger risk is underdoing it, leaving millions on the labor market’s sidelines to struggle through another tepid recovery. And they say the spending provisions in both the rescue package and the infrastructure could help to fix longstanding divides along racial and gender lines.
“We think of investment in racial equity, and equity in general, as good policy, period, and integral to all the work we do,” Catherine Lhamon, a deputy director of the Domestic Policy Council, said in an interview.
In addition to the job-hopping you’d expect during boom times, the pandemic has created many more remote jobs, and expanded the number of companies willing to hire outside of big, coastal cities. That has given workers in remote-friendly industries, such as tech and finance, more leverage to ask for what they want.
“Employees have a totally unprecedented ability to negotiate in the next 18 to 48 months,” said Johnathan Nightingale, an author and a co-founder of Raw Signal Group, a management training firm. “If I, as an individual, am dissatisfied with the current state of my employment, I have so many more options than I used to have.”
Individual YOLO decisions can be chalked up to many factors: cabin fever, low interest rates, the emergence of new get-rich-quick schemes like NFTs and meme stocks. But many seem related to a deeper, generational disillusionment, and a feeling that the economy is changing in ways that reward the crazy and punish the cautious.
Several people in their late 20s and early 30s — mostly those who went to good schools, work in high-prestige industries and would never be classified as “essential workers” — told me that the pandemic had destroyed their faith in the traditional white-collar career path. They had watched their independent-minded peers getting rich by joining start-ups or gambling on cryptocurrencies. Meanwhile, their bosses were drowning them in mundane work, or trying to automate their jobs, and were generally failing to support them during one of the hardest years of their lives.
“The past year has been telling for how companies really value their work forces,” said Latesha Byrd, a career coach in Charlotte, N.C. “It has become challenging to continue to work for companies who operate business as usual, without taking into account how our lives have changed overnight.”
Ms. Byrd, who primarily coaches women of color in fields like tech, finance and media, said that in addition to suffering from pandemic-related burnout, many minority employees felt disillusioned with their employers’ shallow commitments to racial justice.
“Diversity, equity and inclusion are extremely important now,” she said. “Employees want to know, ‘Is this company going to support me?’”
Additional attention in this area is a notion with bipartisan support, in an era that lacks much of that. In June, Representatives Chip Roy, Republican of Texas, and Abigail Spanberger, Democrat of Virginia, introduced what they called the Trust Act.
The bill would require their colleagues, spouses and dependent children to use a qualified blind trust, as Mr. Ossoff and Mr. Kelly are doing. With such vehicles, a third party would control individual stocks, if any, and some other investment assets and keep the beneficiary from knowing much about the contents or from trading on specialized knowledge of coming legislation. (Owning and trading common investments like mutual funds would be fine.)
“This is about making it easier for members of Congress to do their job,” Mr. Roy said at the time.
And let us not forget what I outlined in detail in a November column: They’ll all end up with more money in the end, on average, if they (or their stockbrokers) stop believing that they’re smart enough to beat the market. The studies on this are legion, and a particularly fun one showed how badly people in Congress did, on average, when they tried to outsmart the market between 2004 and 2008.
It is perhaps not surprising that those who would be elected officials would not be passive investors. The same enhanced sense of self that propels many of them to run for office may well make them think they have some kind of stock-picking superpower. They almost certainly don’t — and neither do the financial advisers who are charging them handsomely. Perhaps they’ll come to their senses eventually.
Others may own stock or trade it to blow off steam, as a form of gambling. If they can afford to lose the money, and are truly not using any inside information or in a position to influence the policies that affect the companies they bet on, then there is no real harm.
But do they wish to lose elections over it?
Certainly, stock trading wasn’t the only issue at play in Georgia. But in purple parts of the country or districts where upstarts in their own party would try to make a case of it, these newly elected officials could be vulnerable. If they avoid individual stocks for political reasons rather than more principled reasons, so be it. It’s all to the good.
LOS ANGELES — In early 2019, as the Murdoch family completed the $71 billion sale of 21st Century Fox to Disney, executives at the movie studio learned that someone was reading all their emails.
And not just anyone: Viet Dinh, the Fox Corporation’s chief legal officer and close friend of Fox’s chief executive, Lachlan Murdoch, had brought on a team of lawyers to investigate “the potential improper use of Fox data” by top 21st Century Fox executives he suspected of leaking to Disney while the terms were still being hammered out, a Fox spokeswoman said. The studio’s president, Peter Rice, and the company’s general counsel, Gerson Zweifach, protested that they were merely conducting normal transition planning — and that Mr. Dinh was being so paranoid he might blow up the transaction.
The episode didn’t scuttle the deal. But the previously unreported conflict between the studio executives and Mr. Dinh, a sociable and relentless Republican lawyer who was the chief architect in 2001 of the antiterrorism legislation known as the Patriot Act, offers a rare glimpse into the opaque power structure of Rupert Murdoch’s world. The nonagenarian mogul exercises immense power, through News Corp and the Fox Corporation, in driving a global wave of right-wing populism. But basic elements of how his media companies run remain shrouded in mystery.
In the case of the Fox Corporation, the questions of who is in charge and what the future holds are particularly hazy. The company, minus its studio, is now a midsize TV company adrift in a landscape of giants like Disney and AT&T that control everything from cellular phone networks to streaming platforms, film and television. Fox’s profits are dominated by Fox News. Lachlan Murdoch’s more liberal brother, James, who no longer holds an operational role in the family businesses, has made clear he’d like to see a change.
complained to The Financial Times about “outlets that propagate lies to their audience.”
Last month, Lachlan Murdoch moved his family to Sydney, Australia, an unlikely base for a company whose main assets are American. The move has intensified the perception — heightened when he stood by as Fox News hosts misinformed their audience about Covid-19 last year — that Mr. Murdoch does not have a tight grip on the reins. The company takes pains to rebut that perception: The Fox spokeswoman told me that Mr. Murdoch is so committed that he has adopted a nocturnal lifestyle, working midnight to 10 a.m. Sydney time. (She also said it would be “false and malicious” to suggest that Mr. Dinh is exercising operational control over Fox’s business units.) It’s such a disorienting situation that one senior Fox employee went so far as to call me last week to ask if I knew anything about succession plans. I promised I’d tell him if I figured it out.
But Mr. Dinh, 53, was ready to step in, and indeed has been seen internally as the company’s power center since before Mr. Murdoch headed across the globe. Mr. Dinh’s ascent caps an unlikely turn in his career that began when he met Lachlan Murdoch at an Aspen Institute event in 2003. The Murdoch heir later asked him to both fill a seat on the company’s board and to be godfather to his son. (“He couldn’t find any other Catholics,” Mr. Dinh joked to The New York Observer in 2006.)
Two former Fox employees and one current and one former Fox News employee familiar with his role painted him as the omnipresent and decisive right hand of a chief executive who is not particularly hands-on. (They spoke only on the condition they not be named because Fox keeps a tight grip on its public relations.) While Mr. Dinh is not running day-to-day programming, he manages the political operation of a company that is the central pillar of Republican politics, and he’s a key voice on corporate strategy who has played a role in Fox’s drive to acquire and partner its way into the global online gambling industry.
In a recent interview with the legal writer David Lat — headlined “Is Viet Dinh the Most Powerful Lawyer in America?” — Mr. Dinh called suggestions in this column and in The Financial Times that he’s more than a humble in-house counsel “flat-out false.”
once told VietLife magazine that he worked jobs including “cleaning toilets, busing tables, pumping gas, picking berries, fixing cars”to help his family make ends meet. He attended Harvard and Harvard Law School. As a student, he wrote a powerful Times Op-Ed about Vietnamese refugees — including his sister and nephew — stranded in Hong Kong. The piece helped win them refugee status, and eventually allowed them to immigrate to the United States.
Mr. Dinh arrived with the conservative politics of many refugees from Communism, and followed a pipeline from a Supreme Court clerkship with Sandra Day O’Connor to a role in the congressional investigations of Bill Clinton in the 1990s.
He was assistant attorney general for legal policy on 9/11, and he was “the fifth likeliest person” to wind up quarterbacking what would become the Patriot Act, said his old friend and colleague Paul Clement, who currently represents Fox in defamation lawsuits brought by two election technology companies. Mr. Dinh “led the effort to pull it all together, package it, present it to the Hill and get it passed,” said a former Bush White House homeland security adviser, Ken Wainstein. The package of legislation transformed the American security state, vastly expanding domestic surveillance and law enforcement powers. It allowed the F.B.I. to conduct secret and intrusive investigations of people and groups swept in by an expanded definition of terrorism.
Mr. Dinh was often mentioned at the time as a brilliant young lawyer who could easily wind up the first Asian-American on the Supreme Court. He was also notably image-conscious, and “worked the media like crazy,” recalled Jill Abramson, a former Times Washington bureau chief and later executive editor. He’s also a master Washington networker whose relationships cross party lines. His best college friend is a Democratic former U.S. attorney, Preet Bharara. Through the pandemic, Mr. Dinh left chipper comments on other lawyers’ job announcements on LinkedIn.
hiring a top Republican opposition researcher, Raj Shah, to monitor online criticism of the company and develop strategies for countering it.
Now, Mr. Dinh finds himself in the strange position of many of Rupert Murdoch’s top lieutenants: He is paid like a chief executive, and fills much of the larger strategic role that comes with that job. He also has the sort of leverage you need in a family business, a personal relationship with Lachlan Murdoch that allowed him to take on Mr. Rice, who is himself the son of a close Rupert Murdoch ally. But Mr. Dinh is still working for a business dominated by the need to follow Mr. Trump and Fox’s audience wherever they lead, lest they be overtaken by networks further to the right, like Newsmax. And the family ultimately retains control.
And Mr. Dinh’s own agenda can be hard to divine. In the interview with Mr. Lat, he largely repeated Fox News talking points about the quality and fairness of the network’s coverage. He did also express pride at Fox’s fleeting willingness to cross the president last fall, even though the network subsequently fired the political analysts who most angered Mr. Trump.
“There is no better historical record of Fox News’s excellent journalism than to see how the former president tweeted against Fox,” Mr. Dinh said.
Most adults who bet on sports do so without major negative consequences. But about 1 percent of American adults have a gambling disorder, in which the core symptom is continuing to gamble despite harmful consequences, said Dr. Fong, who is a director of the Gambling Studies Program at U.C.L.A.
A vast majority of those with a serious gambling problem never seek or gain access to treatment, he said.
Studies have shown that sports bettors are typically male, under 35, single, educated and employed or preparing for a career. According to a new survey commissioned by the National Council on Problem Gambling, sports bettors showed significantly higher levels of problematic gambling than other gamblers. The risk of addiction is higher for young adults — specifically sports bettors — than for those of any other age, the survey found.
According to CollegeGambling.org, a subgroup of the International Center for Responsible Gaming, 6 percent of college students in the United States have a serious gambling problem that can lead to psychological difficulties, unmanageable debt and failing grades.
Young adults are at particular risk for developing a gambling problem, especially if there is a family history of gambling or if they are introduced to it at a young age, Dr. Fong said. The increased accessibility of online gambling may accelerate the development of problems, he said — a phenomenon known as telescoping.
As sports betting has grown — household names like FanDuel and DraftKings now offer legal avenues — the need for recovery programs and dedicated treatment facilities has quickly outpaced their availability, recovery experts said. Rick Benson, the founder of the Algamus Gambling Recovery Center in Arizona, said the number of young adults who have sought treatment for gambling problems has more than doubled in the past two years.
Sex, drugs and alcohol are commonly covered in school and in the coming-of-age conversations that parents have with their children, but discussions about the consequences of gambling are rare, former gamblers and experts said. This can lead young people to underestimate the addictive nature of sports betting and other forms of gambling. Warnings, often in small fonts, that caution visitors to online sports books and gambling websites about the risks of addiction are easily overlooked.
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
Deals
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)
Tech
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.”
