Lina Khan Named F.T.C. Chair by Biden

President Biden named Lina Khan, a prominent critic of Big Tech, as the chair of the Federal Trade Commission, according to two people with knowledge of the decision, a move that signals that the agency is likely to crack down further on the industry’s giants.

A public announcement of the decision is expected Tuesday, one of the people said.

Earlier in the day, the Senate voted 69 to 28 to confirm Ms. Khan, 32, to a seat at the agency. The commission investigates antitrust violations, deceptive trade practices and data privacy lapses in Silicon Valley.

Ms. Khan did not immediately respond to a request for comment.

In her new role, Ms. Khan will help regulate the kind of behavior highlighted for years by critics of Amazon, Facebook, Google and Apple. She told a Senate committee in April that she was worried about the way tech companies could use their power to dominate new markets. She first attracted notice as a critic of Amazon. The agency is investigating the retail giant and filed an antitrust lawsuit against Facebook last year.

Her appointment was a victory for progressive activists who want Mr. Biden to take a hard line against big companies. He also gave a White House job to Tim Wu, a law professor who has criticized the power of the tech giants.

But Mr. Biden has yet to fill another key positions tasked with regulating the industry: someone to lead the Department of Justice’s antitrust division.

This is a developing story. Check back for updates.

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How Private Equity Firms Avoid Taxes

There were two weeks left in the Trump administration when the Treasury Department handed down a set of rules governing an obscure corner of the tax code.

Overseen by a senior Treasury official whose previous job involved helping the wealthy avoid taxes, the new regulations represented a major victory for private equity firms. They ensured that executives in the $4.5 trillion industry, whose leaders often measure their yearly pay in eight or nine figures, could avoid paying hundreds of millions in taxes.

The rules were approved on Jan. 5, the day before the riot at the U.S. Capitol. Hardly anyone noticed.

The Trump administration’s farewell gift to the buyout industry was part of a pattern that has spanned Republican and Democratic presidencies and Congresses: Private equity has conquered the American tax system.

one recent estimate, the United States loses $75 billion a year from investors in partnerships failing to report their income accurately — at least some of which would probably be recovered if the I.R.S. conducted more audits. That’s enough to roughly double annual federal spending on education.

It is also a dramatic understatement of the true cost. It doesn’t include the ever-changing array of maneuvers — often skating the edge of the law — that private equity firms have devised to help their managers avoid income taxes on the roughly $120 billion the industry pays its executives each year.

Private equity’s ability to vanquish the I.R.S., Treasury and Congress goes a long way toward explaining the deep inequities in the U.S. tax system. When it comes to bankrolling the federal government, the richest of America’s rich — many of them hailing from the private equity industry — play by an entirely different set of rules than everyone else.

The result is that men like Blackstone Group’s chief executive, Stephen A. Schwarzman, who earned more than $610 million last year, can pay federal taxes at rates similar to the average American.

Lawmakers have periodically tried to force private equity to pay more, and the Biden administration has proposed a series of reforms, including enlarging the I.R.S.’s enforcement budget and closing loopholes. The push for reform gained new momentum after ProPublica’s recent revelation that some of America’s richest men paid little or no federal taxes.

nearly $600 million in campaign contributions over the last decade, has repeatedly derailed past efforts to increase its tax burden.

Taylor Swift’s back music catalog.

The industry makes money in two main ways. Firms typically charge their investors a management fee of 2 percent of their assets. And they keep 20 percent of future profits that their investments generate.

That slice of future profits is known as “carried interest.” The term dates at least to the Renaissance. Italian ship captains were compensated in part with an interest in whatever profits were realized on the cargo they carried.

The I.R.S. has long allowed the industry to treat the money it makes from carried interests as capital gains, rather than as ordinary income.

article highlighting the inequity of the tax treatment. It prompted lawmakers from both parties to try to close the so-called carried interest loophole. The on-again, off-again campaign has continued ever since.

Whenever legislation gathers momentum, the private equity industry — joined by real estate, venture capital and other sectors that rely on partnerships — has pumped up campaign contributions and dispatched top executives to Capitol Hill. One bill after another has died, generally without a vote.

One day in 2011, Gregg Polsky, then a professor of tax law at the University of North Carolina, received an out-of-the-blue email. It was from a lawyer for a former private equity executive. The executive had filed a whistle-blower claim with the I.R.S. alleging that their old firm was using illegal tactics to avoid taxes.

The whistle-blower wanted Mr. Polsky’s advice.

Mr. Polsky had previously served as the I.R.S.’s “professor in residence,” and in that role he had developed an expertise in how private equity firms’ vast profits were taxed. Back in academia, he had published a research paper detailing a little-known but pervasive industry tax-dodging technique.

$89 billion in private equity assets — as being “abusive” and a “thinly disguised way of paying the management company its quarterly paycheck.”

Apollo said in a statement that the company stopped using fee waivers in 2012 and is “not aware of any I.R.S. inquiries involving the firm’s use of fee waivers.”

floated the idea of cracking down on carried interest.

Private equity firms mobilized. Blackstone’s lobbying spending increased by nearly a third that year, to $8.5 million. (Matt Anderson, a Blackstone spokesman, said the company’s senior executives “are among the largest individual taxpayers in the country.” He wouldn’t disclose Mr. Schwarzman’s tax rate but said the firm never used fee waivers.)

Lawmakers got cold feet. The initiative fizzled.

In 2015, the Obama administration took a more modest approach. The Treasury Department issued regulations that barred certain types of especially aggressive fee waivers.

But by spelling that out, the new rules codified the legitimacy of fee waivers in general, which until that point many experts had viewed as abusive on their face.

So did his predecessor in the Obama administration, Timothy F. Geithner.

Inside the I.R.S. — which lost about one-third of its agents and officers from 2008 to 2018 — many viewed private equity’s webs of interlocking partnerships as designed to befuddle auditors and dodge taxes.

One I.R.S. agent complained that “income is pushed down so many tiers, you are never able to find out where the real problems or duplication of deductions exist,” according to a U.S. Government Accountability Office investigation of partnerships in 2014. Another agent said the purpose of large partnerships seemed to be making “it difficult to identify income sources and tax shelters.”

The Times reviewed 10 years of annual reports filed by the five largest publicly traded private equity firms. They contained no trace of the firms ever having to pay the I.R.S. extra money, and they referred to only minor audits that they said were unlikely to affect their finances.

Current and former I.R.S. officials said in interviews that such audits generally involved issues like firms’ accounting for travel costs, rather than major reckonings over their taxable profits. The officials said they were unaware of any recent significant audits of private equity firms.

For a while, it looked as if there would be an exception to this general rule: the I.R.S.’s reviews of the fee waivers spurred by the whistle-blower claims. But it soon became clear that the effort lacked teeth.

Kat Gregor, a tax lawyer at the law firm Ropes & Gray, said the I.R.S. had challenged fee waivers used by four of her clients, whom she wouldn’t identify. The auditors struck her as untrained in the thicket of tax laws governing partnerships.

“It’s the equivalent of picking someone who was used to conducting an interview in English and tell them to go do it in Spanish,” Ms. Gregor said.

The audits of her clients wrapped up in late 2019. None owed any money.

As a presidential candidate, Mr. Trump vowed to “eliminate the carried interest deduction, well-known deduction, and other special-interest loopholes that have been so good for Wall Street investors, and for people like me, but unfair to American workers.”

wanted to close the loophole, congressional Republicans resisted. Instead, they embraced a much milder measure: requiring private equity officials to hold their investments for at least three years before reaping preferential tax treatment on their carried interests. Steven Mnuchin, the Treasury secretary, who had previously run an investment partnership, signed off.

McKinsey, typically holds investments for more than five years. The measure, part of a $1.5 trillion package of tax cuts, was projected to generate $1 billion in revenue over a decade.

credited Mr. Mnuchin, hailing him as “an all-star.”

Mr. Fleischer, who a decade earlier had raised alarms about carried interest, said the measure “was structured by industry to appear to do something while affecting as few as possible.”

Months later, Mr. Callas joined the law and lobbying firm Steptoe & Johnson. The private equity giant Carlyle is one of his biggest clients.

It took the Treasury Department more than two years to propose rules spelling out the fine print of the 2017 law. The Treasury’s suggested language was strict. One proposal would have empowered I.R.S. auditors to more closely examine internal transactions that private equity firms might use to get around the law’s three-year holding period.

The industry, so happy with the tepid 2017 law, was up in arms over the tough rules the Treasury’s staff was now proposing. In a letter in October 2020, the American Investment Council, led by Drew Maloney, a former aide to Mr. Mnuchin, noted how private equity had invested in hundreds of companies during the coronavirus pandemic and said the Treasury’s overzealous approach would harm the industry.

The rules were the responsibility of Treasury’s top tax official, David Kautter. He previously was the national tax director at EY, formerly Ernst & Young, when the firm was marketing illegal tax shelters that led to a federal criminal investigation and a $123 million settlement. (Mr. Kautter has denied being involved with selling the shelters but has expressed regret about not speaking up about them.)

On his watch at Treasury, the rules under development began getting softer, including when it came to the three-year holding period.

Monte Jackel, a former I.R.S. attorney who worked on the original version of the proposed regulations.

Mr. Mnuchin, back in the private sector, is starting an investment fund that could benefit from his department’s weaker rules.

Even during the pandemic, the charmed march of private equity continued.

The top five publicly traded firms reported net profits last year of $8.6 billion. They paid their executives $8.3 billion. In addition to Mr. Schwarzman’s $610 million, the co-founders of KKR each made about $90 million, and Apollo’s Leon Black received $211 million, according to Equilar, an executive compensation consulting firm.

now advising clients on techniques to circumvent the three-year holding period.

The most popular is known as a “carry waiver.” It enables private equity managers to hold their carried interests for less than three years without paying higher tax rates. The technique is complicated, but it involves temporarily moving money into other investment vehicles. That provides the industry with greater flexibility to buy and sell things whenever it wants, without triggering a higher tax rate.

Private equity firms don’t broadcast this. But there are clues. In a recent presentation to a Pennsylvania retirement system by Hellman & Friedman, the California private equity giant included a string of disclaimers in small font. The last one flagged the firm’s use of carry waivers.

The Biden administration is negotiating its tax overhaul agenda with Republicans, who have aired advertisements attacking the proposal to increase the I.R.S.’s budget. The White House is already backing down from some of its most ambitious proposals.

Even if the agency’s budget were significantly expanded, veterans of the I.R.S. doubt it would make much difference when it comes to scrutinizing complex partnerships.

“If the I.R.S. started staffing up now, it would take them at least a decade to catch up,” Mr. Jackel said. “They don’t have enough I.R.S. agents with enough knowledge to know what they are looking at. They are so grossly overmatched it’s not funny.”

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How Long Should It Take to Give Away Millions?

Ms. Madoff and others pushing for change see a growing gap between reputation-burnishing promises of money and distributions to people who need it. The Giving Pledge, which was started by Bill Gates, Melinda French Gates and their friend and collaborator Warren E. Buffett, gave billionaires a space where they could announce their intention to give away half their fortunes or more, often to great acclaim. But it provides no mechanism to monitor or ensure the giving actually happens.

Earlier this year, the Chronicle of Philanthropy ranked Jeffrey P. Bezos, the founder of Amazon, as the top philanthropist of 2020 because he committed $10 billion to his Bezos Earth Fund to fight climate change. But he had handed out less than one-tenth of that, $791 million, to working nonprofits like the Environmental Defense Fund and Natural Resources Defense Council.

Charitable giving has remained relatively steady for decades, clocking in at roughly 2 percent of disposable income per year, give or take a few tenths of a percent. In 1991, the year that Fidelity began to offer donor-advised funds, just 5 percent of giving went to foundations and DAFs. By 2019, the most recent year available, that figure had risen to 28 percent.

It was January 2020 when that small group gathered at the offices of the nonprofit consulting firm the Bridgespan Group in Manhattan for a wonky brainstorming session about the state of philanthropy. The group included foundation leaders, former congressional staff members, former senior Internal Revenue Service officials and a key constituency in any effort to change how billionaires give away their money: billionaires.

One of the organizers was John D. Arnold. Once a trader at Enron, the Houston energy company that infamously collapsed in 2001, Mr. Arnold later ran his own hedge fund, which made him one of the youngest billionaires in the United States.

Ms. Madoff, another leader of the initiative, has written a book, “Immortality and the Law,” about the growing legal power of dead people in America and has applied her knowledge of estate taxes and inheritance law to the rising field of philanthropy.

The group focused on the fact that most of the laws governing philanthropy were half a century old, dating back to 1969.

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Offshore Wind Farms Show What Biden’s Climate Plan Is Up Against

A constellation of 5,400 offshore wind turbines meet a growing portion of Europe’s energy needs. The United States has exactly seven.

With more than 90,000 miles of coastline, the country has plenty of places to plunk down turbines. But legal, environmental and economic obstacles and even vanity have stood in the way.

President Biden wants to catch up fast — in fact, his targets for reducing greenhouse gas emissions depend on that happening. Yet problems abound, including a shortage of boats big enough to haul the huge equipment to sea, fishermen worried about their livelihoods and wealthy people who fear that the turbines will mar the pristine views from their waterfront mansions. There’s even a century-old, politically fraught federal law, known as the Jones Act, that blocks wind farm developers from using American ports to launch foreign construction vessels.

Offshore turbines are useful because the wind tends to blow stronger and more steadily at sea than onshore. The turbines can be placed far enough out that they aren’t visible from land but still close enough to cities and suburbs that they do not require hundreds of miles of expensive transmission lines.

approved a project near Martha’s Vineyard that languished during the Trump administration and in May announced support for large wind farms off California’s coast. The $2 trillion infrastructure plan that Mr. Biden proposed in March would also increase incentives for renewable energy.

The cost of offshore wind turbines has fallen about 80 percent over the last two decades, to as low as $50 a megawatt-hour. While more expensive per unit of energy than solar and wind farms on land, offshore turbines often make economic sense because of lower transmission costs.

“Solar in the East is a little bit more challenging than in the desert West,” said Robert M. Blue, the chairman and chief executive of Dominion Energy, a big utility company that is working on a wind farm with nearly 200 turbines off the coast of Virginia. “We’ve set a net-zero goal for our company by 2050. This project is essential to hitting those goals.”

rely on European components, suppliers and ships for years.

Installing giant offshore wind turbines — the largest one, made by General Electric, is 853 feet high — is difficult work. Ships with cranes that can lift more than a thousand tons haul large components out to sea. At their destinations, legs are lowered into the water to raise the ships and make them stationary while they work. Only a few ships can handle the biggest components, and that’s a big problem for the United States.

Government Accountability Office report published in December. That is far too small for the giant components that Mr. Eley’s team was working with.

So Dominion hired three European ships and operated them out of the Port of Halifax in Nova Scotia. One of them, the Vole au Vent from Luxembourg, is 459 feet (140 meters) long and can lift 1,654 tons.

Mr. Eley’s crew waited weeks at a time for the European ships to travel more than 800 miles each way to port. The installations took a year. In Europe, it would have been completed in a few weeks. “It was definitely a challenge,” he said.

The U.S. shipping industry has not invested in the vessels needed to carry large wind equipment because there have been so few projects here. The first five offshore turbines were installed in 2016 near Block Island, R.I. Dominion’s two turbines were installed last year.

Had the Jones Act not existed — it was enacted after World War I to ensure that the country had ships and crews to mobilize during war and emergencies — Dominion could have run European vessels out of Virginia’s ports. The law is sacrosanct in Congress, and labor unions and other supporters argue that repealing it would eliminate thousands of jobs at shipyards and on boats, leaving the United States reliant on foreign companies.

Demand for large ships could grow significantly over the next decade because the United States, Europe and China have ambitious offshore wind goals. Just eight ships in the world can transport the largest turbine parts, according to Dominion.

200 more turbines by 2026. Dominion spent $300 million on its first two but hopes the others will cost $40 million each.

For the last 24 years, Tommy Eskridge, a resident of Tangier Island, has made a living catching conchs and crabs off the Virginia coast.

One area he works is where Dominion plans to place its turbines. Federal regulators have adjusted spacing between turbines to one nautical mile to create wider lanes for fishing and other boats, but Mr. Eskridge, 54, worries that the turbines could hurt his catch.

The area has yielded up to 7,000 pounds of conchs a day, though Mr. Eskridge said a typical day produced about half that amount. A pound can fetch $2 to $3, he said.

Mr. Eskridge said the company and regulators had not done enough to show that installing turbines would not hurt his catch. “We just don’t know what it’s going to do.”

who died in 2009, and William I. Koch, an industrialist.

Neither wanted the turbines marring the views of the coast from their vacation compounds. They also argued that the project would obstruct 16 historical sites, disrupt fishermen and clog up waterways used by humpback, pilot and other whales.

the developer of Cape Wind gave up in 2017. But well before that happened, Cape Wind’s troubles terrified energy executives who were considering offshore wind.

Projects up and down the East Coast are mired in similar fights. Residents of the Hamptons, the wealthy enclave, opposed two wind development areas, and the federal government shelved the project. On the New Jersey shore, some homeowners and businesses are opposing offshore wind because they fear it will raise their electricity rates, disrupt whales and hurt the area’s fluke fishery.

Energy executives want the Biden administration to mediate such conflicts and speed up permit approval.

“It’s been artificially, incrementally slow because of some inefficiencies on the federal permitting side,” said David Hardy, chief executive of Orsted North America.

Renewable-energy supporters said they were hopeful because the country had added lots of wind turbines on land — 66,000 in 41 states. They supplied more than 8 percent of the country’s electricity last year.

Ms. Lefton, the regulator who oversees leasing of federal waters, said future offshore projects would move more quickly because more people appreciated the dangers of climate change.

“We have a climate crisis in front of us,” she said. “We need to transition to clean energy. I think that will be a big motivator.”

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Facebook’s Trump Ban Will Last at Least 2 Years

In an emailed statement, Mr. Trump said Facebook’s ruling was “an insult to the record-setting 75M people, plus many others, who voted for us in the 2020 Rigged Presidential Election.” He added that Facebook should not be allowed to get away with “censoring and silencing” him and others on the platform.

Facebook’s broader shift to no longer automatically exempt speech by politicians from its rules is a stark reversal from a free-speech position that Mark Zuckerberg, the company’s chief executive, had championed. In a 2019 address at Georgetown University, Mr. Zuckerberg said, “People having the power to express themselves at scale is a new kind of force in the world — a Fifth Estate alongside the other power structures of society.”

But that stance drew criticism from lawmakers, activists and Facebook’s own employees, who said the company allowed misinformation and other harmful speech from politicians to flow unhindered.

While many academics and activists welcomed Facebook’s changes on Friday as a step in the right direction, they said the implementation of the new rules would be tricky. The company would likely enter into a complicated dance with global leaders who had grown accustomed to receiving special treatment by the platform, they said.

“This change will result in speech by world leaders being subject to more scrutiny,” said David Kaye, a law professor and former United Nations monitor for freedom of expression. “It will be painful for leaders who aren’t used to the scrutiny, and it will also lead to tensions.”

Countries including India, Turkey and Egypt have threatened to take action against Facebook if it acts against the interests of the ruling parties, Mr. Kaye said. The countries have said they might punish Facebook’s local staff or ban access to the service, he said.

“This decision by Facebook imposes new political calculations for both these global leaders, and for Facebook,” Mr. Kaye said.

This is a developing story. Check back for updates.

Maggie Haberman contributed reporting.

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Bouncy Castles and Grenades: Gangs Erode Maduro’s Grip on Caracas

CARACAS, Venezuela — From within his presidential palace, President Nicolás Maduro regularly commandeers the airwaves, delivering speeches intended to project stability to his crumbling nation.

But as the Venezuelan state disintegrates under the weight of Mr. Maduro’s corrupt leadership and American sanctions, his government is losing control of segments of the country, even within his stronghold: the capital, Caracas.

Nowhere is his weakening grip on territory more evident than in Cota 905, a shantytown that clings to a steep mountainside overlooking the gilded halls from which Mr. Maduro addresses the nation.

policing, road maintenance, health care and public utilities, to pour dwindling resources into Caracas, home of the political, business and military elites who form his support base.

Hunkered down in his fortified Caracas residences, Mr. Maduro crushed the opposition, purged the security forces of dissent and enriched his cronies in an effort to eliminate challenges to his authoritarian rule.

In remote areas, swathes of national territory fell to criminals and insurgents. But gang control of Cota 905 and the surrounding shantytowns, which lie just two miles from the presidential palace, is evidence that his government is losing its grip even on the center of the capital.

Across the city, other armed groups have also asserted territorial control over working-class neighborhoods.

“Maduro is often seen as a traditional strongman controlling every aspect of Venezuelans’ lives,” said Rebecca Hanson, a sociologist at the University of Florida who studies violence in Venezuela. “In reality, the state has become very fragmented, very chaotic and in many areas very weak.”

As the government’s reach in Caracas’s shantytowns withered, organized crime grew, forcing Mr. Maduro’s officials to negotiate with the largest gangs to limit violence and maintain political control, according to interviews with a dozen residents, as well as police officers, officials and academics studying violence.

In the process, the most organized gangs began supplanting the state in their communities, taking over policing, social services and even the enforcement of pandemic measures.

Police officers say the gang that controls Cota 905 now has around 400 men armed with the proceeds from drug trafficking, kidnapping and extortion, and that it exerts complete control over at least eight square miles in the heart of the capital.

Gang members with automatic weapons openly patrol the shantytown’s streets and those of the surrounding communities, and guard entry points from rooftop watchtowers. The first checkpoint appears just a few minutes’ drive from the headquarters of Mr. Maduro’s secret police.

As the Venezuelan economy went into a tailspin, the Cota gang began offering financial support to the community, supplanting Mr. Maduro’s bankrupt social programs, which once offered free food, housing and school supplies for the poor.

After monopolizing the local drug trade, the Cota 905 gang imposed strict rules on the residents in return for stopping the once endemic violence and petty crime. And many residents welcome its hard line on crime.

“Before, the thugs robbed,” said Mr. Ojeda, a Cota 905 resident who, like others in the community, asked that his full name not be published for fear of crossing the gangsters. “Now, they are the ones who come to you, without fail, with anything that goes missing.”

During his tenure, Mr. Maduro has veered from brutal suppression of organized crime groups to accommodation in an attempt to check rising crime.

In 2013, he withdrew security forces from about a dozen troubled spots, including Cota 905, naming them “Peace Zones,” as he tried to placate the gangs. Two years later, when the policy failed to check crime, he unleashed a wave of brutal police assaults on the shantytowns.

The police operations resulted in thousands of extrajudicial killings, according to the United Nations, earning Mr. Maduro charges of committing crimes against humanity and the hatred of many shantytown residents. Faced with the onslaught, the gangs closed ranks, creating ever larger and more complex organizations, according to Ms. Hanson and her colleague, the researcher Verónica Zubillaga.

Unable to defeat the Cota gang, Mr. Maduro’s government returned to negotiations with its leaders, according to a police commander and two government officials who held talks with the gang and worked to put the agreements in place.

Security forces are once again banned from entering the community, according to the police commander, who is not authorized to discuss state policy and did so on condition of anonymity.

Under the deal with the government, the Cota gang has reduced kidnappings and murders, and began carrying out some state policies. During the pandemic, gang members strictly enforced lockdown rules and mask wearing, local residents said. And the gang is working with the government to distribute the scant remaining food and school supplies to the residents, residents and the two officials said.

“The gang is focused on the community,” said Antonio Garcia, a shantytown resident. “They make sure we get our bag of food.”

Mr. Ojeda said he received $300 from the gang the last Carnival season to buy toys and sweets for his family, a fortune in a country where the minimum monthly wage has collapsed to about $2. Residents said young people in the community are offered jobs as lookouts or safe house guards for between $50 and $100 a week, more than most doctors and engineers make in Venezuela.

Taking these jobs is easier than leaving them. Soon after the oldest son of Ms. Ramírez — who did not want to give her full name out of fear of the gang — began serving as a lookout in Cota 905, he discovered that his life now belonged to the gang.

“He had new clothes, new shoes, but he couldn’t stop crying,” Ms. Ramírez said. “He wanted to go back and couldn’t.”

Anti-government protests are banned in the shantytown, and gang members summon residents to the polling stations on elections, said the residents.

The members “tell us that if the government is toppled, we would be affected too, because the police would return,” said Ana Castro, a Cota resident. “The ‘Peace Zone’ would end, and we would all suffer.”

In private, some government officials defend the nonaggression pacts with the biggest gangs, saying the policy has drastically reduced violence.

Violent deaths in Caracas shantytowns have halved since the mid-2010s, when the Venezuelan capital was one of the world’s deadliest cities, according to figures from a local nonprofit, Mi Convive.

But academics and analysts studying crime in the city say the drop in homicides points to the growing power of Caracas’s gangs against an increasingly weak government. The imbalance, experts said, puts the government and the population in an increasingly dangerous and vulnerable position.

The power shift was evident in April, when the Cota gang shot up a police patrol car and took over a section of highway running through Caracas. The area was a five-minute drive from the presidential palace, and the blockade paralyzed the capital for several hours.

But the government stayed silent through it all. The security forces never came to retake the highway. Once the gang left, officers quietly cleared out the blasted patrol car.

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Secret Chats Show How Cybergang Became a Ransomware Powerhouse

MOSCOW — Just weeks before the ransomware gang known as DarkSide attacked the owner of a major American pipeline, disrupting gasoline and jet fuel deliveries up and down the East Coast of the United States, the group was turning the screws on a small, family-owned publisher based in the American Midwest.

Working with a hacker who went by the name of Woris, DarkSide launched a series of attacks meant to shut down the websites of the publisher, which works mainly with clients in primary school education, if it refused to meet a $1.75 million ransom demand. It even threatened to contact the company’s clients to falsely warn them that it had obtained information the gang said could be used by pedophiles to make fake identification cards that would allow them to enter schools.

Woris thought this last ploy was a particularly nice touch.

“I laughed to the depth of my soul about the leaked IDs possibly being used by pedophiles to enter the school,” he said in Russian in a secret chat with DarkSide obtained by The New York Times. “I didn’t think it would scare them that much.”

released a statement a week earlier saying it was shutting down. A customer support employee responded almost immediately to a chat request sent from Woris’s account by the Times reporter. But when the reporter identified himself as a journalist the account was immediately blocked.

Megyn Kelly pressed him in a 2018 interview on why Russia was not arresting hackers believed to have interfered in the American election, he shot back that there was nothing to arrest them for.

“If they did not break Russian law, there is nothing to prosecute them for in Russia,” Mr. Putin said. “You must finally realize that people in Russia live by Russian laws, not by American ones.”

After the Colonial attack, President Biden said that intelligence officials had evidence the hackers were from Russia, but that they had yet to find any links to the government.

“So far there is no evidence based on, from our intelligence people, that Russia is involved, though there is evidence that the actors, ransomware, is in Russia,” he said, adding that the Russian authorities “have some responsibility to deal with this.”

This month, DarkSide’s support staff scrambled to respond to parts of the system being shut down, which the group attributed, without evidence, to pressure from the United States. In a posting on May 8, the day after the Colonial attack became public, the DarkSide staff appeared to be hoping for some sympathy from their affiliates.

“There is now the option to leave a tip for Support under ‘payments,’” the posting said. “It’s optional, but Support would be happy :).”

Days after the F.B.I. publicly identified DarkSide as the culprit, Woris, who had yet to extract payment from the publishing company, reached out to customer service, apparently concerned.

“Hi, how’s it going,” he wrote. “They hit you hard.”

It was the last communication Woris had with DarkSide.

Days later, a message popped up on the dashboard saying the group was not exactly shutting down, as it had said it would, but selling its infrastructure so other hackers could carry on the lucrative ransomware business.

“The price is negotiable,” DarkSide wrote. “By fully launching an analogous partnership program it’s possible to make profits of $5 million a month.”

Oleg Matsnev contributed reporting.

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Hong Kong Has a New Type of Prisoner: Pro-Democracy Activists

HONG KONG — A half year after he got out of prison, Daniel Tang has made a habit of going back. He waits in spare, crowded corridors. He greets familiar faces among the fellow visitors and guards. He brings books, postage stamps, writing paper and packets of M&Ms.

Mr. Tang is visiting people like him who were imprisoned for their role in the pro-democracy street protests that rocked Hong Kong in 2019. He travels three hours, round-trip, for a 15-minute chat through a thick plate of glass, sometimes with a total stranger. He summons a cheery, chatty demeanor, when he feels anything but.

“You owe them your best face,” he said. “If you’re not feeling right, don’t even bother going.”

Mr. Tang and many of those he meets with represent a new breed of convict in Hong Kong: activists who opposed the Chinese Communist Party’s growing power in the city. This group — often including college students or white-collar professionals — rose up two years ago in a historic campaign of public disobedience that led to clashes with police on the streets and focused the world’s attention on the future of the Asian financial capital.

tough new laws imposed by Beijing, mass arrests and the hazards of the coronavirus. Now, with dim job prospects, a fraught political future and the unending threat of another arrest, those protesters are emblematic of the uncertainties facing the city’s stricken democracy movement.

about 7,000 people. Beijing’s imposition last year of a national security law gives prosecutors greater powers to target even more.

Many of the activists are contemplating a future in exile. Others struggle to stay committed to the cause for which they sit behind bars.

“Being sentenced to jail fractures people,” said Alex Chow, a 30-year-old activist who spent a brief time in jail for his role as a leader of protests in 2014, a precursor to the 2019 demonstrations. He now lives in exile in the United States.

as well as veterans. Those sentenced to prison so far include Joshua Wong, Agnes Chow and Ivan Lam, young leaders of the 2014 protests. Wong Ji-yuet, 23, and Owen Chow, 24, activists who participated in a primary election that was organized by the pro-democracy camp, are awaiting trial in solitary confinement after they were charged with endangering national security.

For many young people in jail, the sentences have redrawn their lives.

Jackie Yeung, a 23-year-old university student serving a three-year prison sentence, said she had abandoned the “typical ambitions” she used to harbor — getting a good job and an apartment in a family-friendly district.

statement ahead of her sentencing. “And I have no way of comforting them through the glass in the visitation room in prison.”

She dreams of opening up a small business importing Taiwanese pineapples after she and a Taiwanese cellmate are released. With the profits, she would support other young people by helping to pay their legal fees and living expenses. “To do anything, you need money,” she said.

To make things easier on prisoners, Mr. Tang and some other activists have banded together to provide support. They write letters and gazettes to catch people up with protest news and raise funds to pay for better meals in jail while protesters await trials.

Mr. Tang frequently sees Ms. Yeung. During one visit to her prison near the border with the mainland city of Shenzhen, he brought pens and stamps. He left the stamps, but was unable to give her the pens, as it would have exceeded her monthly allowance of two.

For all of his dedication, Mr. Tang, who spent more than a half-year imprisoned after pleading guilty to arson charges, says it doesn’t feel like it’s enough.

“Many Hong Kongers have moved on and moved away and don’t think about how there is a group of people sitting behind bars for the movement we all fought for,” said Mr. Tang, who is in his late 30s. “It seems many have forgotten.”

Far from radicalizing during his time on the inside, Mr. Tang now struggles with cynicism and meaning in a city that suddenly seems unfamiliar. He has been disheartened by the protest movement’s stagnation and by the waves of migration out of the city. The camaraderie of protest has been replaced by dread of ever more targeted arrests. He sees it all as an abandonment of values and believes that escape is a privilege unavailable to many.

Mr. Tang’s protester friends from prison also seem to be moving on. A group chat they kept, called the “Lai Chi Kok Prisoners,” after the facility where they were detained, still lights up occasionally with holiday greetings and vague laments. But few want to talk politics. Sometimes those in prison that do speak out seem to be exaggerating their place in the movement. He rolls his eyes at one prisoner, who has taken to calling himself Mandela 2.0.

“All that we have left is our relationships with one another,” he said. “Some seem ready to let that go.”

Yet, for Mr. Tang, there is no road back — not that he’d take it. His former employer was understanding, but let him go when his absence stretched on. He has been unable to access his life savings, he said, after his bank account was frozen over automated donations he made in 2019 to a protester bail fund that police placed under investigation.

He has applied to managerial jobs like those he had worked in the past, only to be turned away because of his criminal record. Now, he’s mulling applying for a taxi license or working in construction.

He still faces four charges related to the protests that were filed just days before his release from prison. The thought of officers at his door has kept him away from the apartment he shares with his mother. He tells her he now works a night shift, and she doesn’t press him.

“I’m really tired,” Mr. Tang said. “The government has left us no room to resist and nowhere to go.”

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Brazil’s Bid to Outsource Amazon Conservation Finds Few Takers

This article was produced in partnership with the Pulitzer Center’s Rainforest Investigations Network.

RIO DE JANEIRO — Facing strong international condemnation over the destruction of the Amazon, President Jair Bolsonaro’s government came up with a strategy: It offered companies the chance to “adopt” a patch of rainforest.

But the plan — which invites companies to contribute money to help preserve the forest — has been marred by disorganization and met with skepticism by critics, who see it as an effort to “green wash” the Bolsonaro administration’s poor record on the environment.

It also hasn’t found many takers.

The program was announced in February, as the Biden administration made clear that it expected Brazil to reverse some of the forest loss and dismantling of environmental protections that marked Mr. Bolsonaro’s first two years in office.

the Adopt-a-Park program would accomplish two of the Bolsonaro administration’s goals: redeem Brazil’s tarnished environmental image, which industry leaders have feared could shut them out of international markets, and outsource the costs of conservation at a time of tightening budgets.

“Many of these companies, investment funds that signed letters demonstrating their concern about the Amazon,” said Ricardo Salles, the minister of the environment, “now have in Adopt a Park a concrete, very simple and efficient possibility of transforming their statements into action.”

The government offered 132 federal reserves in the Amazon for sponsorship. So far, only three foreign companies — the grocery chain Carrefour, Coca-Cola and Heineken — and five Brazilian corporations have enrolled. Their donations total just over $1 million — a tiny fraction of the $600 million that Mr. Salles aspires to raise.

Protected Areas of the Amazon program has raised tens of millions of dollars from governments and companies for protected areas in the Amazon.

Through the Adopt-a-Park program, sponsoring companies pay at least $9.5 per hectare of the reserve’s area per year. To sponsor the biggest park costs almost $35 million annually, while the smallest go for $23,000 a year.

Once sponsorship deals are finalized, companies donate goods and services — which could include vehicles or a fire brigade — to the Chico Mendes Institute office in each reserve.

July to share responsibility for protecting the Amazon with nongovernment actors. As protests over fires in the Amazon rainforest intensified, he challenged the actor Leonardo DiCaprio, one of the government’s most prominent critics, to sponsor a reserve.

“Are you going to put your money where your mouth is?” Mr. Salles wrote on Twitter in September.

Beyond proposing the park-adoption program before the climate change summit convened by the Biden administration last month, Brazil’s government seems to have done little to improve its environmental policies.

At the summit, Mr. Bolsonaro vowed to allocate more money to environmental protection agencies. But the very next day the government did the opposite, signing into law a budget that further slashed funding for the agencies.

And federal lawmakers are considering a bill that would make it easier for companies to get environmental permits for new farming, mining and infrastructure ventures.

“Is receiving donations as they are proposing going to compensate for all that?” asked Natalie Unterstell, a climate policy expert who has been tracking the program. “No. It’s a palliative measure.”

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