Bill and Melinda Gates’ Divorce Has a Lot at Stake

Bill and Melinda Gates are divorcing after 27 years of marriage, raising questions about the fate of their vast fortune. Their split could yield the biggest divorce settlement on record, according to Forbes’s calculations, surpassing the $35 billion breakup of Amazon’s Jeff Bezos and MacKenzie Scott. Given the likely sums involved, what happens with the Gateses’ extensive investments and charity work will be monitored at the highest levels of government, business and the nonprofit sector.

What’s at stake: Mr. Gates is the fourth-richest person in the world, according to Forbes, with wealth estimated at $124 billion. The family is the largest owner of farmland in the U.S. His personal investment firm, Cascade Investment, owns big stakes in assets like the Four Seasons, the Canadian National Railway and the AutoNation chain of car dealerships.

  • The Gateses are believed to have a prenuptial agreement, but its details aren’t publicly known. The divorce petition notes that there is a separation contract in place.

The two have faced relationship struggles in recent years, Andrew, David Gelles and Nick Kulish report in The Times. Mr. Gates stepped down from the boards of Microsoft and Berkshire Hathaway in part to spend more time with his family.

What will happen to the Gates Foundation? The $50 billion nonprofit is one of the biggest philanthropies in the world, giving away about $5 billion each year to causes like global public health and childhood education. Most recently, it was instrumental in forming Covax, the global coronavirus vaccination program. For now, the foundation says little will change in how it is run day to day, but people in its orbit worry that an acrimonious split by its founders could cloud the nonprofit’s plans. “Together they have assured me of their continued commitment to the foundation that they have worked so hard to build together,” the foundation’s chief executive, Mark Suzman, told employees in an email.

  • When the Gateses created the Giving Pledge, an effort to get wealthy people to donate a majority of their money to charitable causes, they said they would commit to donate “the vast majority of our assets” to the foundation. Much of that money has not yet been donated.

Ms. Gates could separately become a big philanthropic force. She has already used her own investment office, Pivotal Ventures, to donate money to causes like women’s economic empowerment, and could use any settlement to amplify her giving to preferred groups. “You could imagine Melinda Gates being a much more progressive giver on her own,” said David Callahan, the founder of Inside Philanthropy. “She’s going to be a major force in philanthropy for decades to come.”

The Tristate area will reopen sooner than expected. The governors of New York, New Jersey and Connecticut said they would ease most Covid-19 capacity limits on businesses starting on May 19, thanks to declining coronavirus case numbers.

View Source

Can the Biden Agenda Fix Middle America’s Deepest Problem?

The debate is often framed as between “people” (policies to help individuals affected by economic change) and “places” (policies aimed at communities that are languishing).

“I don’t think we can ignore the role of place in public policy any longer and just allocate investments to people,” said Ross DeVol, president of Heartland Forward, a think tank based in Bentonville, Ark. “Because that creates a hollowing out in places that affects the entire country negatively.

“We can’t as a nation continue to advance our competitive position by concentrating more knowledge-based industries and research just on the coasts,” Mr. DeVol added, saying this results in soaring real estate prices in those coastal markets, as well as underused physical infrastructure and a lack of opportunity in the places left behind.

Federal policy in recent decades has arguably reinforced the disparity.

The federal government itself is based in one of the high-growth coastal metropolises. Nearly half of federal research and development spending in 2018 went to five states — California, Maryland, Massachusetts, New York and Virginia — and Washington, D.C., according to analysis of federal data by Brookings.

The Biden administration’s American Jobs Plan incorporates ideas from the bipartisan “Endless Frontier Act,” which, among other things, seeks to spend billions to create regional innovation hubs. The idea is to invest in cutting-edge research with potential for commercial spinoffs, worker training and other steps to create the kinds of virtuous cycles of innovation and jobs that already occur in places like Boston.

That could be a boon to places like Lincoln, Neb.

Its population has grown slowly but steadily in recent years; investments in things like high-speed internet have helped it avoid the cycle of decline affecting many other smaller cities in the Midwest. It is home to the University of Nebraska, which has strong programs in computer science and engineering, and it has a vibrant agribusiness sector.

View Source

Years of Unheeded Warnings. Then the Subway Crash Mexico City Had Feared.

MEXICO CITY — The capital had been bracing for the disaster for years.

Ever since it opened nearly a decade ago, the newest Mexico City subway line — a heralded expansion of the second largest subway system in the Americas — had been plagued with structural weaknesses that led engineers to warn of potential accidents. Yet other than a brief, partial shutdown of the line in 2014, the warnings went unheeded by successive governments.

On Monday night, the mounting problems turned fatal: A subway train on the Golden Line plunged about 50 feet after an overpass collapsed underneath it, killing at least 24 people and injuring dozens more.

The accident — and the government’s failure to act sooner to fix known problems with the line — immediately set off a political firestorm for three of the most powerful people in Mexico: the president and the two people widely believed to be front-runners to succeed him as leaders of the governing party and possibly, the country.

told reporters through sobs. “I can’t find him anywhere.”

Hours later, her 13-year-old son, Brandon Giovani Hernández Tapia, was still missing.

told reporters gathered at the crash site on Tuesday. “The metro wasn’t built on its own — this flaw has been there for a long time and no one did anything.”

A total of 79 injured people had been taken to hospitals, three of whom later died, according to Claudia Sheinbaum, the mayor of Mexico City. Among those hospitalized were three minors.

Mexico City’s water problems and its subway system, a key mode of transportation for the sprawling capital’s population of nearly 22 million.

In the aftermath of Monday’s disaster, two of Mr. López Obrador’s closest allies came under immediate scrutiny: Ms. Sheinbaum, the capital’s mayor, and Marcelo Ebrard, the foreign minister who was mayor when the new subway line opened. Both are presumed to be top contenders to run for the presidency when Mr. López Obrador, limited to one term, steps down in 2024.

The new line, which serves the working-class neighborhoods in the capital’s southeast, was built by Mr. Ebrard, who was mayor of Mexico from 2006 to 2012. He was accused by critics of rushing to finish construction before his term concluded in an effort to bolster his political legacy. Troubles emerged immediately.

In just the first month after the line was inaugurated, there were 60 mechanical failures on trains or on tracks, according to local media. Trains had to slow down over elevated stretches of track, because engineers feared derailments. About a year later, the city was forced to temporarily shut down part of the $2 billion line for repairs.

transport authorities reported “a structural fault” in one of the metro line’s supporting columns, which had affected its ability to support heavy weight.

In 2018, senators from the opposition Institutional Revolutionary Party called for Mexico City authorities to inform Congress about irregularities in the funding of the subway line’s expansion. In an official party document, the opposition lawmakers called the Golden Line a “symbol of corruption and the misuse of public resources that prevailed during that administration.”

The lawmakers cited a congressional inquiry into the faulty line which found that “the modifications to the basic engineering, to the original layout with the change of underground stations to elevated stations, severely affected the technical operating conditions” of the subway line.

Residents living near the scene of the accident said government workers had fixed the column shortly after the earthquake. But they expressed doubt about the quality of the reconstruction, after seeing how many shutdowns and maintenance issues the line had over the years.

Hernando Manon, 42, was walking home from work Monday night when he felt a tremor and heard a loud crash a few hundred yards up the street.

“There was a rumbling and then sparks. The lights went out, and we didn’t know what happened. Then we heard the sirens,” Mr. Manon said, standing just a few hundred yards from the site of the accident. “As we approached, we realized that the subway had collapsed.”

Families rushed to the scene, he said, hoping to find their loved ones and yelling at the police demanding to be let through the cordon they had erected around the wreckage.

2018-2030 Master Plan for the subway system detailed major backlogs to the maintenance of tracks and trains and warned that trains could be derailed on the Golden Line unless major repairs were undertaken. It is unclear whether those needed repairs were ever carried out.

Since becoming mayor of the capital in 2018, Ms. Sheinbaum, who is closely aligned with the president’s pursuit of austerity, has presided over cuts to spending on the subway system.

For a year, the city did not appoint a director of infrastructure maintenance for the subway system. Ms. Sheinbaum only filled the role last week.

two subway trains collided in Mexico City. Then in January, a fire ripped through the subway’s headquarters in downtown Mexico City, killing a police officer and sending 30 others to hospital.

At a news conference on Tuesday, both Ms. Sheinbaum and Mr. Ebrard faced harsh questioning from reporters. Publicly, at least, the two political heavyweights presented a united front.

“We are in agreement to get to the bottom of this and work together to find the truth and know what caused this incident,” Ms. Sheinbaum said.

“If you have nothing to hide, you have nothing to fear,” Mr. Ebrard said. “Like anyone else, I am subject to whatever the authorities determine, but even more so as a high-level official, as someone who promoted the construction of the line.”

View Source

Amazon Paid No Corporate Tax to Luxembourg

Amazon had a record-breaking year in Europe in 2020, as the online giant took in revenue of 44 billion euros while people were shopping from home during the pandemic. But the company ended up paying no corporate tax to Luxembourg, where the company has its European headquarters.

The company’s European retail division reported a loss of €1.2 billion ($1.4 billion) to Luxembourg authorities, according to a recent financial filing, making it exempt from corporate taxes. The loss, which was due in part to discounts, advertising and the cost of hiring new employees, also meant the company received €56 million in tax credits that it could use to offset future tax bills when it makes a profit, according to the filing, released in March.

Amazon was in compliance with Luxembourg’s regulations, and it pays taxes to other European countries on profits it makes on its retail operations and other parts of the business, like its fulfillment centers and its cloud computing services.

But the filing is likely to provide fresh ammunition for European policymakers who have long tried to force American tech giants to pay more taxes. And the Biden administration is pushing for changes in global tax policy as part of an effort to raise taxes on large corporations, which have long used complicated maneuvers to avoid or reduce their tax obligations, including by shifting profits to lower-tax countries, like Luxembourg, Ireland, Bermuda and the Cayman Islands.

first three months of this year, the entire company’s profit soared to $8.1 billion, an increase of 220 percent from the same period last year. Amazon’s first-quarter filings, released last week, also showed that it made $108.5 billion in sales, up 44 percent, as more customers made purchases online because of the pandemic.

The company’s filing with Luxembourg was reported earlier by The Guardian.

A spokesman for Amazon, Conor Sweeney, said the company paid all taxes required in every country in which it operated.

“Corporate tax is based on profits, not revenues, and our profits have remained low given our heavy investments and the fact that retail is a highly competitive, low-margin business,” he said.

250 million in unpaid taxes from 2006 through 2014 from Amazon. Amazon and Luxembourg appealed that order, and a judgment in Europe’s second-highest court is expected next week.

Margaret Hodge, a British lawmaker, said Amazon had deliberately created financial structures to avoid tax. “It’s obscene that they feel that they can make money around the world and that they don’t have an obligation to contribute to what I call the common pot for the common good,” she said.

Matthew Gardner, a senior fellow at the Institute on Taxation and Economic Policy, a left-leaning research group in Washington, said Amazon’s Luxembourg filing showed why there was such urgency, not only in the European Union but also in the United States, to require a global minimum tax.

“This is a stark reminder of the high financial stakes of inaction,” he said.

View Source

Janet Yellen says interest rates might need to rise to keep economy from overheating.

Treasury Secretary Janet L. Yellen said higher interest rates might be needed to keep the economy from overheating given the large investments that the Biden administration is proposing to rebuild the nation’s infrastructure and remake its labor force.

The comments, shown on Tuesday at an event sponsored by The Atlantic, come amid heightened concern from some economists and businesses that the United States is in for a period of higher inflation as stimulus money flows through the economy and consumers begin spending again. The Treasury secretary has no role in setting interest rate policies.

Jerome H. Powell, the Federal Reserve chair, said last month that the central bank is unlikely to raise interest rates this year and wants to see further healing in the American economy before officials will consider pulling back their support by slowing government-backed bond purchases and lifting interest rates.

While the Fed is watching for signs of inflation, Mr. Powell and other Fed officials have said they believe any price spikes will be temporary and will not be sustained. On Monday, John C. Williams, president of the Federal Reserve Bank of New York, said that while the economy is recovering, “The data and conditions we are seeing now are not nearly enough” for the Fed’s policy-setting committee “to shift its monetary policy stance.”

spending approximately $4 trillion over a decade and would pay for the investments with tax increases on companies and the rich.

View Source

Profits surge at Shell and Total, reflecting higher oil and gas prices.

Strong profit increases from two of Europe’s largest energy companies, Royal Dutch Shell and Total, demonstrated that what really matters for the financial performance of these companies remains the price of oil and natural gas.

Their recent investments in clean energy, described by company officials as essential for the future, remain marginal.

Total said that adjusted net income rose by 69 percent compared with the period a year earlier, when the effects of the pandemic were beginning to kick in, to $3 billion, while Shell said that what it calls adjusted earnings rose by 13 percent to $3.2 billion.

The main factor in the improved performance by both companies was a roughly 20 percent rise in oil prices along with an increase in natural gas prices, leading to higher revenues. During a news conference to discuss the results, Jessica Uhl, Shell’s chief financial officer, said that a $10 jump in oil prices would translate into a $6.4 billion increase in cash for the company’s coffers on an annual basis.

Shell in February said its oil production had peaked in 2019, and it has been investing in various clean energy ventures, including a network of 60,000 charging stations for electric vehicles. And Total has, among other things, invested in options to build offshore wind farms off Britain.

In its earnings statement, Total took the lead among the oil majors in providing details on its investments in renewable energy like wind and solar. The company said these businesses brought in $148 million for the quarter, measured as earnings before interest, taxes, depreciation and amortization. This figure was about 2 percent of the overall total for the company of $7.3 billion, according to analysts at Bernstein, a research firm.

View Source