KABUL, Afghanistan — In June, when the Taliban took the district of Imam Sahib in Afghanistan’s north, the insurgent commander who now ruled the area had a message for his new constituents, including some government employees: Keep working, open your shops and keep the city clean.
The water was turned back on, the power grid was repaired, garbage trucks collected trash and a government vehicle’s flat tire was mended — all under the Taliban’s direction.
Imam Sahib is one of dozens of districts caught up in a Taliban military offensive that has swiftly captured more than a quarter of Afghanistan’s districts, many in the north, since the U.S. withdrawal began in May.
It is all part of the Taliban’s broader strategy of trying to rebrand themselves as capable governors while they press a ruthless, land-grabbing offensive across the country. The combination is a stark signal that the insurgents fully intend to try for all-out dominance of Afghanistan once the American pullout is finished.
have begun to muster militias to defend their home turf, skeptical that the Afghan security forces can hold out in the absence of their American backers, in a painful echo of the country’s devastating civil war breakdown in the 1990s.
report. Some homes there were burned down by the Taliban, residents said.
“The Taliban burned my house while my family was in the house,” said Sirajuddin Jamali, a tribal elder. “In 2015, a military base was under siege and we provided food and water for them, but now the Taliban are taking revenge,” Mr. Jamali sobbed. “Do they do the same in any area the Taliban take?”
Zabihullah Mujahid, a spokesman for the Taliban, said the accusations of burning down homes was under investigation.
The group’s public responses, though rarely sincere, play directly into a strategy meant to portray the insurgents as a comparable option to the Afghan government. And they ignore the fact that local feuds drive large amounts of the war’s violence, outweighing any official orders from the Taliban leadership.
On the battlefield, things are shifting quickly. Thousands of Afghan soldiers and militia members have surrendered in past weeks, forfeiting weapons, ammunition and armored vehicles as the Taliban take district after district. Government forces have counterattacked, recapturing several districts, though not on the scale of the insurgents’ recent victories.
But little reported are Taliban losses, aside from the inflated body counts announced by the Afghan government’s Ministry of Defense. The Taliban, with their base strength long estimated to be between 50,000 and 100,000 fighters, depending on the time of year, have taken serious casualties in recent months, especially in the country’s south.
The casualties are primarily from the Afghan and U.S. air forces, and sometimes from Afghan commando units.
Mullah Basir Akhund, a former commander and member of the Taliban since 1994, said that cemeteries along the Pakistani border, where Taliban fighters have long been buried, are filling up faster than in years past. Pakistani hospitals, part of the country’s unwavering line of support for the insurgents, are running out of bed space. During a recent visit to a hospital in Quetta, a hub for the Taliban in Pakistan, Mr. Akhund said he saw more than 100 people, most of them Taliban fighters, waiting to be treated.
But despite tough battles, the weight of a nearly withdrawn superpower, and the Taliban’s own leadership issues, the insurgents continue to adapt.
Even as they seek to conquer the country, the Taliban are aware of their legacy of harsh rule, and do not want to “become the same pariah and isolated state” that Afghanistan was in the 1990s, said Ibraheem Bahiss, an International Crisis Group consultant and an independent research analyst.
“They’re playing the long game,” Mr. Bahiss said.
Reporting was contributed by Asadullah Timory in Herat, Taimoor Shah in Kandahar, Ruhullah Khapalwak, Farooq Jan Mangal in Khost and Zabihullah Ghazi in Jalalabad.
TORONTO–(BUSINESS WIRE)–Konfidis Inc. (Konfidis), Canada’s leading and comprehensive service provider to enable better investor access to the Canadian residential real estate sector, is pleased to announce that it has closed an oversubscribed non-brokered $2 million private placement seed financing round. Konfidis is excited to welcome its new strategic and value-add investors including its accomplished Advisory Board members.
With Canada’s leading technology platform for residential real estate investing and a rapidly growing technology-enabled and investor-focused residential real estate brokerage subsidiary, Konfidis Realty Inc., this injection of funds will bolster Konfidis’ growth strategy and boost various enhancements to the platform serving both single-property investors and those accumulating residential property portfolios, as well as Konfidis’ tenant marketplace to support a new age of rental housing solutions and service.
“We are excited to provide new and innovative technology solutions for our clients and partners to enable simple access to better Canadian residential real estate investment opportunities,” said Mr. Asher. “We’ve witnessed the success of technology-enabled residential real estate investing, including the Single-Family Rental (SFR) Home asset class, and we’re here to provide investors with such opportunities in Canada where there are compelling long-term supply and demand fundamentals supporting outsized risk-adjusted return potential.”
Konfidis is dedicated to delivering an exciting new offering for tenants seeking high-quality and dependable long-term rental housing solutions. “Recent news headlines continuously highlight how buyers have been priced out of the market, and this is especially problematic for families who wish to rent in a specific school district, for example, given the acute shortage of quality single-family homes available for rent in those districts. In addition, landlords are by-and-large mom-and-pop owner-managers and unfortunately great tenants do sometimes have poor experiences and fear sudden eviction if the landlord decides to move into the property. We believe our professional and tenant-first offering will deliver comfort and security of tenure to longer-term renters with a high level of service,” said John Asher, President and Co-Founder of Konfidis Inc.
“The current residential real estate landscape is dominated by resources that serve owner-occupier families. Konfidis provides an investor-focused suite of tools that are not restricted to local knowledge only, rather we scour a wider geographic region for the best investment opportunities driven by technology and big data and without emotion,” said Jared Kalish, Executive Chairman and Co-Founder of Konfidis Inc. “We believe that KonfidisRANKTM, our proprietary acquisition software, which utilizes 100+ million data points to search and evaluate tens of thousands of opportunities in real-time across different cities, will enable our clients to outperform the market. We’re fortunate to have an extremely talented technology team which is applying top tier big data and machine learning techniques to leverage a wide and innovative array or datasets to continuously improve upon the KonfidisRANKTM scoring methodologies to better forecast which properties will outperform the market over the long-run and generate alpha for our clients.”
Konfidis strives to democratize residential real estate investing which has historically been challenged by limited analysis tools and a lack of turn-key management solutions. Konfidis provides full-service support for its clients to evaluate and acquire investment properties with the most compelling risk-adjusted return characteristics through top-down geographic region analysis and bottom-up rental income and total return analysis; and supports the comprehensive management of those investment properties on behalf of its clients. Konfidis believes in rigorous investment opportunity due diligence practices and best-in-class governance and risk-mitigation practices; such principles are instilled in Konfidis’ product and service offering.
“On a total return basis, the Canadian residential real estate sector has been among the best performing and highly liquid asset classes globally. Canada benefits from strong population, employment, and demographic trends that bolster accelerating demand for housing,” said Shael Soberano, Chief Investment Officer of Konfidis. “Notwithstanding these strong demand drivers, there continues to be a significant undersupply of housing. Such mismatch supports continued outperformance of this asset class, especially in an inflationary environment, and will force private sector investment to innovate new housing solutions. Konfidis is dedicated to supporting investors that are seeking to benefit from these dynamics while providing Canadian families enhanced quality housing, and flexible alternatives.”
Konfidis Inc. is Canada’s leading full-service realtor brokerage and technology service provider for Canadian residential real estate investors. Konfidis strives to democratize residential real estate investing, which has historically been challenged by limited analysis tools and a lack of turn-key management solutions. Konfidis provides full-service support for its clients to evaluate and acquire investment properties with the most compelling risk-adjusted return characteristics through top-down geographic regional analysis, bottom-up rental income, and total return analysis; and supports the comprehensive management of those investment properties on behalf of its clients. As a core principle, Konfidis is dedicated to delivering enhanced solutions for Canadian families seeking high-quality and dependable long-term rental housing alternatives.
OTTAWA — At times it was the Royal Canadian Mounted Police who came for them. Other times, it was a school van. However it happened, for generations, Indigenous families in Canada had no choice but to send their children to church-run residential schools established by the government to erode their culture and languages, and to assimilate them.
A national Truth and Reconciliation Commission declared in 2015 that the schools, which operated from 1883 to 1996, were a form of “cultural genocide.”
But the profound damage inflicted by the schools didn’t stop there. The commission cataloged extensive physical, sexual and emotional abuse at the schools, which were often overcrowded, understaffed and underfunded. Disease, fire and malnourishment all brought death and suffering.
Now, the national shame of the schools is again dominating the conversation in Canada.
Since May, new technology has enabled the discovery of human remains, mostly of children, in many hundreds of unmarked graves on the grounds of three former schools in Canada — two in British Columbia and one in Saskatchewan. Who they were, how they died or even when they died may never be fully known.
were forced to attend residential schools in a forced assimilation program. Most of these schools were operated by churches, and all of them banned the use of Indigenous languages and Indigenous cultural practices, often through violence. Disease, as well as sexual, physical and emotional abuse were widespread. An estimated 150,000 children passed through the schools between their opening and their closing in 1996.
The Missing Children: A National Truth and Reconciliation Commission, set up as part of a government apology and settlement over the schools, concluded that at least 4,100 students died while attending them, many from mistreatment or neglect, others from disease or accident. In many cases, families never learned the fate of their offspring, who are now known as “the missing children.”
The Discoveries: In May, members of the Tk’emlups te Secwepemc First Nation found 215 bodies at the Kamloops school — which was operated by the Roman Catholic Church until 1969 — after bringing in ground-penetrating radar. In June, an Indigenous group said the remains of as many as 751 people, mainly children, had been found in unmarked graves on the site of a former boarding school in Saskatchewan.
Cultural Genocide’: In a 2015 report, the commission concluded that the system was a form of “cultural genocide.” Murray Sinclair, a former judge and senator who headed the commission, recently said he now believed the number of disappeared children was “well beyond 10,000.”
Apologies and Next Steps: The commission called for an apology from the pope for the Roman Catholic church’s role. Pope Francis stopped short of one, but the archbishop of Vancouver apologized on behalf of his archdiocese. Canada has formally apologized and offered financial and other search support, but Indigenous leaders believe the government still has a long way to go.
“Something good has to come out of this,” Joey Desjarlais, 73, said outside the ruins of the Muskowekwan Indian Residential School in Saskatchewan, which he was forced to attend, as were his parents, grandparents and great-grandparents. “Our children need to learn about the residential school, what we went through and what went on in there but also to learn their culture, so at least they’ll get it back.”
The image below shows girls working in the kitchen at the Bishop Horden Memorial School in Moose Factory, Ontario, around 1940.
Boys at the Shingwauk Indian Residential School playing with handmade bows, and a game of table hockey, in the 1960s.
Boys say their prayers in the dormitory at the Bishop Horden Memorial School in Moose Factory, Ontario, in 1950.
Girls at a residential school in Fort Resolution, Northwest Territories, around 1936. It is estimated that roughly one-third of all Indigenous children were enrolled in the schools by the 1930s.
Boys and girls, in their first communion outfits, posing at Spanish Indian Residential School in Spanish, Ontario, in the 1960s.
SAN ANTONIO HUISTA, Guatemala — An American contractor went to a small town in the Guatemalan mountains with an ambitious goal: to ignite the local economy, and hopefully even persuade people not to migrate north to the United States.
Half an hour into his meeting with coffee growers, the contractor excitedly revealed the tool he had brought to change their lives: a pamphlet inviting the farmers to download an app to check coffee prices and “be a part of modern agriculture.”
Pedro Aguilar, a coffee farmer who hadn’t asked for the training and didn’t see how it would keep anyone from heading for the border, looked confused. Eyeing the U.S. government logo on the pamphlet, he began waving it around, asking if anyone had a phone number to call the Americans “and tell them what our needs really are.”
soared in 2019 and is on the upswing once more.
have risen, malnutrition has become a national crisis, corruption is unbridled and the country is sending more unaccompanied children to the United States than anywhere else in the world.
That is the stark reality facing Ms. Harris as she assumes responsibility for expanding the same kind of aid programs that have struggled to stem migration in the past. It is a challenge that initially frustrated her top political aides, some of whom viewed the assignment from Mr. Biden as one that would inevitably set her up for failure in the first months of her tenure.
Her allies worried that she would be expected to solve the entire immigration crisis, irked that the early reports of her new duties appeared to hold her responsible for juggling the recent surge of children crossing the border without adults.
linked to drug traffickers and accused of embezzling American aid money, the leader of El Salvador has been denounced for trampling democratic norms and the government of Guatemala has been criticized for persecuting officials fighting corruption.
Even so, Ms. Harris and her advisers have warmed to the task, according to several people familiar with her thinking in the White House. They say it will give her a chance to dive squarely into foreign policy and prove that she can pass the commander-in-chief test, negotiating with world leaders on a global stage to confront one of America’s most intractable issues.
critics denounced as unlawful and inhumane. Moreover, members of the current administration contend that Mr. Trump’s decision to freeze a portion of the aid to the region in 2019 ended up blunting the impact of the work being done to improve conditions there.
But experts say the reasons that years of aid have not curbed migration run far deeper than that. In particular, they note that much of the money is handed over to American companies, which swallow a lot of it for salaries, expenses and profits, often before any services are delivered.
Record numbers of Central American children and families were crossing, fleeing gang violence and widespread hunger.
independent studies have found.
“All activities funded with U.S.A.I.D.’s foreign assistance benefit countries and people overseas, even if managed through agreements with U.S.-based organizations,” said Mileydi Guilarte, a deputy assistant administrator at U.S.A.I.D. working on Latin America funding.
But the government’s own assessments don’t always agree. After evaluating five years of aid spending in Central America, the Government Accountability Office rendered a blunt assessment in 2019: “Limited information is available about how U.S. assistance improved prosperity, governance, and security.”
One U.S.A.I.D. evaluation of programs intended to help Guatemalan farmers found that from 2006 to 2011, incomes rose less in the places that benefited from U.S. aid than in similar areas where there was no intervention.
Mexico has pushed for a more radical approach, urging the United States to give cash directly to Central Americans affected by two brutal hurricanes last year. But there’s also a clear possibility — that some may simply use the money to pay a smuggler for the trip across the border.
The farmers of San Antonio Huista say they know quite well what will keep their children from migrating. Right now, the vast majority of people here make their money by selling green, unprocessed coffee beans to a few giant Guatemalan companies. This is a fine way to put food on the table — assuming the weather cooperates — but it doesn’t offer much more than subsistence living.
Farmers here have long dreamed of escaping that cycle by roasting their own coffee and selling brown beans in bags to American businesses and consumers, which brings in more money.
“Instead of sending my brother, my father, my son to the United States, why not send my coffee there, and get paid in dollars?” said Esteban Lara, the leader of a local coffee cooperative.
But when they begged a U.S. government program for funding to help develop such a business, Ms. Monzón said, they were told “the money is not designed to be invested in projects like that.”
These days, groups of her neighbors are leaving for the United States every month or two. So many workers have abandoned this town that farmers are scrambling to find laborers to harvest their coffee.
One of Ms. Monzón’s oldest employees, Javier López Pérez, left with his 14-year-old son in 2019, during the last big wave of Central American migration to the United States. Mr. López said he was scaling the border wall with his son when he fell and broke his ankle.
“My son screamed, ‘Papi, no!’ and I said to him, ‘Keep going, my son,’” Mr. López said. He said his son made it to the United States, while he returned to San Antonio Huista alone.
His family was then kicked out of their home, which Mr. López had given as collateral to the person who smuggled him to the border. The house they moved into was destroyed by the two hurricanes that hit Guatemala late last year.
Ms. Monzón put Mr. López in one of her relatives’ houses, then got the community to cobble together money to pay for enough cinder blocks to build the family a place to live.
While mixing cement to bind the blocks together, one of Mr. López’s sons, Vidal, 19, confessed that he had been talking to a smuggler about making the same journey that felled his father, who was realistic at the prospect.
“I told him, ‘Son, we suffered hunger and thirst along the way, and then look at what happened to me, look at what I lost,’” Mr. López said, touching his still-mangled ankle. “But I can’t tell him what to do with his life — he’s a man now.”
LONDON — Russia is increasingly pressuring Google, Twitter and Facebook to fall in line with Kremlin internet crackdown orders or risk restrictions inside the country, as more governments around the world challenge the companies’ principles on online freedom.
Russia’s internet regulator, Roskomnadzor, recently ramped up its demands for the Silicon Valley companies to remove online content that it deems illegal or restore pro-Kremlin material that had been blocked. The warnings have come at least weekly since services from Facebook, Twitter and Google were used as tools for anti-Kremlin protests in January. If the companies do not comply, the regulator has said, they face fines or access to their products may be throttled.
The latest clashes flared up this week, when Roskomnadzor told Google on Monday to block thousands of unspecified pieces of illegal content or it would slow access to the company’s services. On Tuesday, a Russian court fined Google 6 million rubles, or about $81,000, for not taking down another piece of content.
store all data on Russian users within the country by July 1 or face fines. In March, the authorities had made it harder for people to see and send posts on Twitter after the company did not take down content that the government considered illegal. Twitter has since removed roughly 6,000 posts to comply with the orders, according to Roskomnadzor. The regulator has threatened similar penalties against Facebook.
the police visited Twitter’s offices in New Delhi in a show of force. No employees were present, but India’s governing party has become increasingly upset with the perception that Twitter has sided with its critics during the coronavirus pandemic.
In Myanmar, Poland, Turkey and elsewhere, leaders are also tightening internet controls. In Belarus, President Aleksandr G. Lukashenko this week signed a law banning livestreams from unauthorized protests.
“All of these policies will have the effect of creating a fractured internet, where people have different access to different content,” said Jillian York, an internet censorship expert with the Electronic Frontier Foundation in Berlin.
The struggle over online speech in Russia has important ramifications because the internet companies have been seen as shields from government censors. The latest actions are a major shift in the country, where the internet, unlike television, had largely remained open despite President Vladimir V. Putin’s tight grip on society.
“sovereign internet,” a legal and technical system to block access to certain websites and fence off parts of the Russian internet from the rest of the world.
an interview this week with Kommersant, a leading Russian newspaper, Andrey Lipov, the head of Roskomnadzor, said slowing down access to internet services was a way to force the companies to comply with Russian laws and takedown orders. Mr. Lipov said blocking their services altogether was not the goal.
Google declined to discuss the situation in Russia and said it received government requests from the around the world, which it discloses in its transparency reports.
Facebook also would not discuss Russia, but said it restricted content that violated local laws or its terms of service. “We always strive to preserve voice for the greatest number of people,” a spokeswoman said.
Twitter said in a statement that it took down content flagged by the Russian authorities that violated its policies or local laws.
protests in support of the opposition leader Alexei A. Navalny after his arrest in January. The demonstrations were the biggest shows of dissent against Mr. Putin in years.
“This mobilization was happening online,” Ms. Zlobina said.
The Russian government has portrayed the tech industry as part of a foreign campaign to meddle in domestic affairs. The authorities have accused the companies of blocking pro-Kremlin online accounts while boosting the opposition, and said the platforms were also havens for child pornography and drug sales.
Twitter became the first major test of Russia’s censorship technology in March when access to its service was slowed down, according to researchers at the University of Michigan.
To resolve the conflict, a Twitter executive met at least twice with Russian officials, according to the company and Roskomnadzor. The government, which had threatened to ban Twitter entirely, said the company had eventually complied with 91 percent of its takedown requests.
Other internet companies have also been affected. Last month, TikTok, the popular social media platform owned by the Chinese company ByteDance, was fined 2.6 million rubles, or about $35,000, for not removing posts seen as encouraging minors to participate in illegal demonstrations. TikTok did not respond to a request for comment.
The fines are small, but larger penalties loom. The Russian government can increase fines to as much as 10 percent of a company’s revenue for repeat offenses, and, perhaps more important, authorities can disrupt their services.
Perhaps the biggest target has been Google. YouTube has been a key outlet for government critics such as Mr. Navalny to share information and organize. Unlike Facebook and Twitter, Google has employees in Russia. (The company would not say how many.)
In addition to this week’s warning, Russia has demanded that Google lift restrictions that limit the availability of some content from state media outlets like Sputnik and Russia Today outside Russia.
Russia’s antitrust regulator is also investigating Google over YouTube’s policies for blocking videos.
Google is trying to use the courts to fight some actions by the Russian government. Last month, it sued Roskomnadzor to fight an order to remove 12 YouTube videos related to opposition protests. In another case, the company appealed a ruling ordering YouTube to reinstate videos from Tsargrad, a nationalist online TV channel, which Google had taken down over what it said were violations of American sanctions.
Joanna Szymanska, a senior program officer for Article 19, an internet freedom group, said Google’s recent lawsuit to fight the YouTube takedown orders would influence what other countries did in the future, even if the company was likely to lose in court. Ms. Szymanska, who is based in Poland, called on the tech companies to be more transparent about what content they were being asked to delete, and what orders they were complying with.
“The Russian example will be used elsewhere if it works well,” she said.
Adam Satariano reported from London and Oleg Matsnev from Moscow. Anton Troianovski contributed reporting from Moscow.
Carmakers have been promising to scrap the internal combustion engine, and now it’s the truckmakers’ turn. But the makers of giant 18-wheelers are taking a different route.
Daimler, the world’s largest maker of heavy trucks, whose Freightliners are a familiar sight on American interstates, said last week that it would convert to zero-emission vehicles within 15 years at the latest, providing another example of how the shift to electric power is reshaping vehicle manufacturing with significant implications for the climate, economic growth and jobs.
The journey away from fossil fuels will play out differently and take longer in the trucking industry than it will for passenger cars. For one thing, zero emission long-haul trucks are not yet available in large numbers.
And different technology may be needed to power the electric motors. Batteries work well for delivery vehicles and other short-haul trucks, which are already on the roads in significant numbers. But Daimler argues that battery power is not ideal for long-haul 18-wheelers, at least with current technology. The weight of the batteries alone subtracts too much from payload, an important consideration for cost-conscious trucking companies.
online presentation Thursday, Daimler executives announced a partnership with Shell to build a “hydrogen corridor” of fueling stations spanning northern Europe. For shorter-haul trucks, Daimler announced a partnership with the Chinese company CATL to develop batteries, and partnerships with Siemens and other companies to install high-voltage charging stations in Europe and the United States.
Trevor Milton, resigned last year facing accusations he had made numerous false assertions about the company’s hydrogen fuel-cell technology.
Nikola at least demonstrated how eager investors are to put their money into hydrogen trucks. Another example is Hyzon, a maker of fuel cells based in Rochester, N.Y., that has begun offering complete trucks and buses. In February, Hyzon was acquired by Decarbonization Plus Acquisition Corporation, a so-called SPAC that raises money before it has any assets.
Tesla unveiled a design for a battery-powered semi truck in 2017, which the company has said it will begin delivering this year. Tesla, Scania and some other truckmakers are skeptical of hydrogen technology, which they regard as too expensive and less energy-efficient.
The traditional truckmakers like Daimler and Volvo have some advantages over the start-ups. Truck buyers tend to be practical hauling firms or drivers who carefully calculate the costs of maintenance and fuel consumption before they make a decision. Managers of big fleets may also be reluctant to take a chance on a manufacturer without a long track record.
President Biden has been promoting electric vehicles, but has not yet defined what that means for the trucking industry.
Trucking companies, which have depended on diesel for most of the last century, will have to revamp their maintenance departments, install their own charging or hydrogen fueling stations in some cases, retrain drivers and learn to plan their routes around hydrogen or electric charging points.
But Mr. Kedzie said that emission-free trucks also had some advantages. Fuel costs for battery-powered vehicles are much lower than for diesel trucks. Maintenance costs may be lower because electric vehicles have fewer moving parts. Drivers like the way electric trucks perform — an important factor at the moment when there is a driver shortage in America.
Many companies that ship a lot of goods, like Walmart or Target, are trying to reduce their carbon footprints and taking an interest in zero-emission trucks. “There are a lot of potential benefits” Mr. Kedzie said.
Daimler says its aim is to make battery-powered short-haul trucks that can compete on cost with diesel by 2025, and long-haul fuel-cell trucks that achieve diesel parity by 2027.
“In that very moment when the customer starts benefiting more from a zero-emission truck than a diesel truck, well, there’s no reason to buy a diesel truck anymore,” Andreas Gorbach, chief technology officer for Daimler’s trucks and buses division, said during the presentation Thursday. “This is the tipping point.”
In the near future, giant index funds, those low-cost investments that have helped millions of people to build nest eggs, will gain “practical power over the majority of U.S. public companies.”
That nightmarish vision originated in a prescient 2018 paper by John Coates.
Mr. Coates was a professor of Harvard Law School when he laid out his argument — one that I share. Now, he is a policymaker. In February, he became acting director of the Securities and Exchange Commission’s division of corporation finance. Under the new reform-minded S.E.C. chairman, Gary Gensler, Mr. Coates is in a position to address the problems he has analyzed so painstakingly.
Neither Mr. Coates nor Mr. Gensler was available for an interview, but in that paper, Mr. Coates laid out his views. Index funds, which simply track the market and make no attempt to outperform it, are so effective and cheap, he said, that they have become the investment vehicle of choice for trillions of dollars of assets. Yet under current rules, it is the index fund executives, not the millions of people who invest in them, who have the power to cast proxy votes.
Those votes are the heart of a system intended to give investors a voice on crucial matters like how much the chief executive is paid or whether a company is damaging the environment.
wrote in December 2019, that lack of proxy voting capability leaves vast numbers of investors out of the equation, and gives corporations inordinate power. Consider that roughly half of all American households, comprising tens of millions of people, have a stake in the stock market. But most own equities indirectly through funds — mainly index funds.
That leaves fund managers with the decisive power over corporate governance, and the biggest fund companies have sided with management roughly 90 percent of the time.
As Mr. Coates wrote in 2018, “Control of most public companies — that is, the wealthiest organizations in the world, with more revenue than most states — will soon be concentrated in the hands of a dozen or fewer people.” The title of his paper was “The Problem of Twelve,” referring to the unelected leaders of index fund operations.
What’s worse, mutual fund companies are frequently conflicted. Many receive revenue from public traded corporations for providing financial services connected to retirement plans, yet have the responsibility of casting critical votes on how those companies are run. Scholars like Mr. Coates have worried about these conflicts for years.
study, “Uncovering Conflict of Interests: Proxy Voting Data Reveals Bias for Asset Managers to Favor Clients,” was done by the group As You Sow, which files for shareholder proposals on issues such as the environment, gender and racial diversity, and executive pay.
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The group based its finding on an analysis of 9.6 million proxy votes by fund companies, along with Labor Department records that show how much fund companies were paid for retirement plan services.
“The big fund companies have a massive aggregation of power that comes from the investments of their shareholders,” said Andrew Behar, chief executive of As You Sow. “At the very least, the fund companies shouldn’t be allowed to vote if they have conflicts of interest.”
Such apparent conflicts are permitted under current rules, as Mr. Coates noted in his 2018 paper. There are many possible regulatory solutions, but the fundamental cure would be to take proxy voting power away from the fund companies and put it in the hands of millions of fund shareholders. That change would be especially important for investors in broad-based index funds, which mirror the stock market and cannot divest shares of individual companies.
Say you don’t want to put money into Exxon Mobil because you disagree with its approach to climate change. If you own shares in an S&P 500 index fund, you will have an indirect stake in Exxon nonetheless. And if you hold the fund in a workplace retirement account, you may be stuck. Only 3 percent of 401(k) plans include investment options based on what are known in the industry as environmental, social and governance (E.S.G.) principles, according to the research firm Morningstar, a research firm that rates funds.
Reflecting widespread concern about climate change, fund companies appear to be shifting some of their proxy votes, Morningstar said. BlackRock, headed by Larry Fink, has called for a speedy transition to a “net zero economy” and Vanguard in April adopted guidelines that may lead to more “E.S.G.-friendly” votes, said Jackie Cook, director of investment stewardship research at Morningstar.
INDEX, has taken a small step that could have revolutionary implications: This year, it has begun asking shareholders how they want to vote.
Index Proxy Polling,” an easy way for shareholders to convey their preferences on proxy votes for S&P 500 companies. The aim is to demonstrate how shareholders in an index fund could express their opinions.
So far, only about 100 investors have participated, said Mike Willis, the fund manager, and current S.E.C. regulations require him to make the final voting decisions on behalf of the fund. But he said he hoped the S.E.C. would eventually allow him “to move to real shareholder democracy and go to pass-through voting, in which the shareholders say what they want and we just cast the vote for them.”
I commend Mr. Willis for his innovative approach, but note that this is not a typical index fund. It is an equal-weighted version of the S&P 500: It gives equal emphasis to big and small companies, so it may underperform the market when giants like Apple boom, and do better than the standard index when smaller companies excel. Its expense ratio of 0.25 percent is reasonable but not as low as some of the giant funds.
If experiments like this catch on, they could help to move the markets closer to something resembling shareholder democracy. But legislators and regulators — people like Mr. Coates and Mr. Gensler — will need to weigh in, too, if we are to avert a future in which the voices of investors are muffled and giant corporations are dominated by even more powerful index funds.
When Jeffrey Epstein gave The Times columnist James Stewart a tour of his apartment a few years ago, he boasted of his expansive Rolodex of billionaires — and the dirt he had on them. A year and a half after the financier’s death by suicide in a New York jail, the fallout for those in the registered sex offender’s orbit, and increasingly those a step or two removed from it, continues to spread.
For example, the latest management reshuffle at Apollo, as we reported yesterday, can be linked back to Epstein. Tracing all the resignations and reshuffles directly and indirectly tied to the scandal will take a while (we’re working on it), but here’s a tally of some so far:
The Apollo co-founder Leon Black said in January that he would resign as C.E.O. but stay on as chairman, after an internal inquiry found he had paid $158 million to Epstein for tax advice. He unexpectedly quit both posts in March, and later stepped down as chairman of the Museum of Modern Art. Josh Harris, a fellow co-founder who had unsuccessfully pushed Black to quit immediately, said yesterday that he was stepping back from Apollo after failing to become the next C.E.O.; Marc Rowan, Apollo’s third co-founder and Black’s pick as successor, now leads the firm.
When the details of meetings between Epstein and Bill Gates burst into public view in late 2019, the billionaire’s wife, Melinda French Gates, hired divorce lawyers. The couple’s split, announced this month, could upend their numerous investments and philanthropic ventures
Les Wexner announced last February that he would step down as C.E.O. of the Victoria’s Secret parent company L Brands, under pressure from multiple internal investigations about his close ties to Epstein. Earlier this year, he and his wife, Abigail Wexner, said they would not stand for re-election to the L Brands board this month. (The company is now in the process of spinning off Victoria’s Secret.) Mr. Wexner was Epstein’s biggest early client and, a Times investigation found, the original source of the financier’s wealth.
Prince Andrew of Britain gave up his public duties last November, days after a disastrous interview with the BBC centered on his relationship with Epstein. At least 47 charities and nonprofits of which he was a patron have since cut ties to the prince.
Joi Ito resigned as the director of the M.I.T. Media Lab, a prominent research group, in 2019 and as member of several corporate boards (including The New York Times Co.), after acknowledging that he had received $1.7 million in investments from Epstein.
Alexander Acosta resigned as Donald Trump’s labor secretary in 2019, amid criticism of his handling of a 2008 sex crimes case against Epstein when he was a federal prosecutor in Miami.
HERE’S WHAT’S HAPPENING
Morgan Stanley sets up its C.E.O. succession competition. The Wall Street firm gave new roles to four top executives, marking them as candidates to take over from James Gorman: Ted Pick and Andy Saperstein were named co-presidents; Jonathan Pruzan was named C.O.O.; and Dan Simkowitz was named co-head of strategy with Pick.
The U.S. endorses a global minimum tax of at least 15 percent. The proposal, which was lower than some had expected, is closely tied to the Biden administration’s plans to raise the corporate tax rate. Global coordination would discourage multinationals from shifting to tax havens overseas.
Treasury officials said they could capture at least $700 billion in additional revenue. That would involve hiring 5,000 new I.R.S. agents, imposing new rules on reporting crypto transactions and other measures.
U.S. customs officials block a Uniqlo shipment over Chinese forced labor concerns. Agents at the Port of Los Angeles acted under an order prohibiting imports of cotton items produced in the Xinjiang region.
U.S. steel prices are soaring. After years of job losses and mill closures, American steel producers have enjoyed a reversal of fortune: Nucor, for instance, is the year’s top-performing stock in the S&P 500. Credit goes to industry consolidation, a recovering economy and Trump-era tariffs. Unsurprisingly, steel consumers aren’t thrilled about it.
Oprah Winfrey to Blackstone, made its stock market debut yesterday, ending its first trading session with a valuation of about $13 billion. DealBook spoke with Oatly’s C.E.O., Toni Petersson, about the I.P.O. and what’s next for the company.
resignation letter offering both praise of SoftBank’s chief, Masa Son — and unusually pointed criticism of the company’s corporate governance.
Going out vs. staying in, charted
It’s been a while since we checked in on an alternative indicator of pandemic economic activity: the share price ratio of Clorox to Dave & Buster’s.
Wait, what? Nick Mazing, the director of research at the data provider Sentieo, came up with that metric to gauge the openness of the economy. The higher Clorox’s share price rises relative to Dave & Buster’s, the more people appear to be staying home and disinfecting everything than going out to crowded bars. By this measure, conditions have nearly returned to prepandemic levels — indeed, Dave & Buster’s recently lifted its sales forecast, as nearly all of its beer-and-arcade bars have reopened.
packed concert schedule, selling tickets to people who may have already binge-watched all of “Below Deck.” The second, however, suggests that people aren’t as eager to get back to huffing and puffing at the gym as they are content to exercise at home. As restrictions lift and people feel safer in crowds, drinking and dancing appear to be higher priorities.
new book, “Noise: A Flaw in Human Judgment,” the Princeton psychology professor and Nobel laureate Daniel Kahneman, along with co-authors Olivier Sibony and Cass Sunstein, argue that these inconsistencies have enormous and avoidable consequences. Kahneman spoke to DealBook about how to hone judgment and reduce noise.
DealBook: What is “noise” in this context?
Kahneman: It’s unwanted and unpredictable variability in judgments about the same situations. Some decisions and solutions are better than others and there are situations where everyone should be aiming at the same target.
Can you give some examples?
A basic example is the criminal justice system, which is essentially a machine for producing sentences for people convicted of crimes. The punishments should not be too different for the same crime yet sentencing turns out to depend on the judge and their mood and characteristics. Similarly, doctors looking at the same X-ray should not be reaching completely different conclusions.
How do individuals or institutions detect this noise?
You detect noise in a set of measurements and can run an experiment. Present underwriters with the same policy to evaluate and see what they say. You don’t want a price so high that you don’t get the business or one so low that it represents a risk. Noise costs institutions. One underwriter’s decision about one policy will not tell you about variability. But many underwriters’ decisions about the same cases will reveal noise.
An arm of Goldman Sachs has raised $3 billion from clients to invest in later-stage start-ups. (WSJ)
SPACs have raised $100 billion this year through May 19, a record, but new fund listings dropped sharply last month. (Insider)
Politics and policy
President Biden issued an executive order directing government agencies to expand efforts to analyze and mitigate the economic risks tied to climate change. (Axios)
“As Paycheck Protection Program Runs Dry, Desperation Grows” (NYT)
CNN said the prime-time host Chris Cuomo inappropriately advised his brother, Gov. Andrew Cuomo of New York, on how to respond to sexual harassment allegations. (NYT)
Paul Romer was one of the tech industry’s favorite economists; now he is criticizing Silicon Valley giants for being too big. (NYT)
Amazon was recently pushed to ban prominent electronics accessory makers by the F.T.C. over fake-review schemes. (Recode)
Best of the rest
Bill Gates and Warren Buffett got more than 200 billionaires to pledge half their wealth to charity. Some are falling short, but still getting massive tax breaks. (Insider)
FIFA, the global soccer governing body, secretly considered supporting the European Super League, before reconsidering amid public outcry about the now-failed competition. (NYT)
Five questions to ask before you panic about inflation. (NYT)
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GAZA CITY — Diplomats and international leaders were unable Sunday to mediate a cease-fire in the latest conflict between Israel and Hamas, as Prime Minister Benjamin Netanyahu of Israel vowed to continue the fight and the United Nations Security Council failed to agree on a joint response to the worsening bloodshed.
The diplomatic wrangling occurred after the fighting, the most intense seen in Gaza and Israel for seven years, entered its deadliest phase yet. At least 42 Palestinians were killed early Sunday morning in an airstrike on several apartments in Gaza City, Palestinian officials said, the conflict’s most lethal episode so far.
The number of people in killed in Gaza rose to 197 over the six days of the conflict, according to Palestinian officials, while the number of Israeli residents killed by Palestinian militants climbed to 11, including one soldier, the Israeli government said.
began last Monday after Hamas fired rockets at Jerusalem following a month of rising tensions between Palestinians and Israelis in the holy city.
The Israeli Army says its goal is to destroy the military infrastructure of Hamas, the Islamist militant group that controls the Gaza Strip, a Palestinian enclave of about two million people that is under an Israeli and Egyptian blockade. Israel blames Hamas for the civilian casualties in Gaza, saying the group hides militants in residential areas.
housed two major international news outlets, The Associated Press and Al Jazeera, after calling the building’s owner and telling him to evacuate tenants. An Israeli strike also killed at least 10 members of the same family in a house in a refugee camp and caused collateral damage to a clinic run by Doctors Without Borders, a medical aid group.
Then on Sunday morning, the airstrike hit Ms. Abul Ouf’s home. Two relatives said that the strike killed two members of her immediate family, at least 12 of her extended family and more than 30 neighbors, and that it left her mother in critical condition.
In a statement, the Israeli Army said it had “struck an underground military structure belonging to the Hamas terrorist organization which was located under the road.” It added: “Hamas intentionally locates its terrorist infrastructure under civilian houses, exposing them to danger. The underground foundations collapsed, causing the civilian housing above them to collapse, causing unintended casualties.”
The American ambassador to the United Nations, Linda Thomas-Greenfield, urged restraint on the part of both Hamas and Israel during Sunday’s Security Council meeting, which was called to try to find a way to end the violence.
a day of talks Sunday with key Israeli officials and the Office of the Quartet, which mediates Middle East peace negotiations. He is scheduled to hold similar discussions on Monday with President Mahmoud Abbas of the Palestinian Authority, which governs parts of the West Bank but lost control of Gaza in 2007.
The conflict between Israel and Hamas has ignited a wave of related violence between Arabs and Jews within Israel itself this past week. That and demonstrations across the occupied West Bank have made analysts wonder whether Palestinians are on the verge of a major uprising, the third since the late 1980s. Protests and clashes were less intense on Sunday after a major crackdown by the police in Israel and by the Israeli Army in the West Bank.
The Israeli-Palestinian Conflict
But Arabs and Jews clashed in the Negev desert in Israel’s south, in East Jerusalem and in Lod, a mixed Arab-Jewish city in central Israel. The police response to the civil unrest over the past week has mostly focused on Arabs, following attacks on synagogues that some likened to a pogrom.
On Sunday, an umbrella organization for Arab leaders in Israel appealed to the international community to help protect Palestinian citizens of Israel “from violent attacks and human rights violations by both state and private actors.” The group added, “Palestinian citizens, collectively, are afraid for their lives.”
a case that has galvanized Palestinian national sentiment, setting the stage for the renewed conflict in Gaza.
The weekend’s rocket fire by Hamas and other Islamist militant groups in Gaza included a major barrage over central Israel early Sunday morning.
Most of those rockets were intercepted by the Iron Dome, an antimissile detection system partly financed by the United States. But where they hit, they brought terror on Israeli residents, particularly in towns like Sderot, close to Gaza’s perimeter.
One blast this weekend destroyed a fifth-floor apartment in Sderot, killing a 5-year-old boy, and ripped a hole in another, where Eli Botera, his wife, Gitit, and their infant daughter, Adele, were huddling in the baby’s bedroom.
“My wife was panicking and started to scream,” Mr. Botera said. “Eventually, it’s all up to God. Every individual must do what they can to protect themselves, but if it’s your destiny to die, you die.”
The deadliest attacks have been in Gaza — and chief among them was the airstrike on Ms. Abul Ouf’s home in Al-Wehda, a busy, wealthy district in Gaza City, full of shops and apartment blocks.
Ms. Abul Ouf was training to be a dentist and lived at home with her parents and siblings, relatives said. By Sunday morning, two were dead and three had been plucked injured from the rubble, relatives said. Ms. Abul Ouf’s father, a supermarket owner, was unscathed, having gone for a nighttime visit to fix a neighbor’s internet.
Ms. Abul Ouf was due to marry Mr. al-Yazji in two months. They last spoke early Sunday as the bombardment began, Mr. al-Yazji said.
“Hide,” he remembered telling her in a text message.
But the message never arrived.
Mr. al-Yazji spent hours on Sunday scouring the rubble for her. Government rescuers heaved away debris, stone by stone, and when they spotted a body, Mr. al-Yazji hurried over, the rubble’s grit and sand caking his feet.
The person was still breathing. But it wasn’t Ms. Abul Ouf.
The Israeli bombardment has forced 38,000 people to seek sanctuary in dozens of U.N. schools, the United Nations said. Gaza now faces power failures at least 16 hours a day, while damage to a desalination plant has threatened the access of about 250,000 people to drinking water, the United Nations said.
Israel’s airstrikes have also stopped all Covid-19 vaccinations and virus testing in the Palestinian enclave and raised the risk of viral contagion as civilians cram into shelters for safety, U.N. officials said.
Standing in the rubble Sunday, Mr. al-Yazji gave up hope of finding his fiancée by the midafternoon. He took a box of her dental equipment from the ruins, a small token to remember her by. Then he left with his brother for the nearby hospital where casualties from the airstrike were being taken.
After every new ambulance arrived, he rushed to its back doors to peer inside and see if Ms. Abul Ouf was lying within. Each time, he walked back disappointed.
After several hours, he went instead to the morgue. And there, lying motionless on a stand, was the body of Shaimaa Abul Ouf.
Mr. al-Yazji emerged hysterical with grief. “Be happy,” he said after identifying her body.
“I swear to God,” he added, “she was laughing.”
Reporting was contributed by Isabel Kershner from Sderot, Israel; Lara Jakes from Washington; Rick Gladstone from New York; Gabby Sobelman from Rehovot, Israel; and Adam Rasgon from Tel Aviv.
Environmental, social and governance issues are increasingly important for companies, and a decision in one of the three aspects of so-called E.S.G. often has implications for the others. The more that board members can see these connections, the more likely they’ll act in society’s interest, argues the economist and author Dambisa Moyo, who also sits on the boards of 3M and Chevron. The same goes for stakeholders who want companies to be better citizens.
Moyo spoke with DealBook about her new book, “How Boards Work: And How They Can Work Better in a Chaotic World.” The interview had been edited and condensed for clarity.
DealBook: What do people misunderstand about how boards work?
Moyo: People’s perception is quite facile but it’s important to understand the array of issues and what levers they actually have, the complexity and range of decisions board members face and their limits. In my time on boards in different industries and countries, I’ve seen almost every crisis except bankruptcy, along with the rise of the E.S.G. agenda.
What’s the most important attribute in a board member?
Good judgment. You can’t be dogmatic. You have to be flexible and pragmatic.
How is running a company different today than before?
Corporations have always been part of the communities and societies they operated in. But in areas where the government was leading before, for a whole host of reasons, companies have been stepping up, for example with E.S.G. issues.
What’s the story with E.S.G.?
People often don’t realize how the different goals interact or create second-order problems. For example, when students at Oxford University constantly encourage the endowment to defund energy companies, they don’t think about the 1.5 billion people in the world who still don’t have access to power, and how that influences diversity and inclusion. They see no connection. But the kids from energy-poor countries are not going to make it to Oxford that way.
Is it all too complex?
I’m very optimistic we can get there. We need to be less hasty and more innovative. I do think we need to create some kind of framework that supports society and has teeth. And, most importantly, that’s sustainable.