vaccinated by Oct. 25 or within five weeks of a vaccine’s formal approval by the Food and Drug Administration, whichever came first. The timing was intended to ensure that the airline had adequate staffing for holiday travel, said Kate Gebo, who heads human resources.

This time, the unions were more resigned.

“For those 92 percent of pilots who wanted to be vaccinated, we captured $45 million in cash incentives,” said Captain Insler, whose union is challenging the decision to fire employees who don’t comply. “For those who did not want to be vaccinated, we were able to hold off a mandate for several months.”

The success of the incentives — about 80 percent of United’s flight attendants were also vaccinated by the time the airline announced its mandate in August — inspired the company to expand them to all employees, offering a full day’s pay to anyone who provided proof of vaccination by Sept. 20.

The company hadn’t surveyed its workers, but estimated that 60 to 70 percent were already vaccinated. Getting the rest there wouldn’t be easy.

Margaret Applegate, 57, a 29-year United employee who works as a services representative in the United Club at San Francisco International Airport, helps illustrate why.

Ms. Applegate normally does not hesitate to get vaccines, noting that her late father was a doctor and that her daughter does research in nutritional science.

Her daughter urged her to get vaccinated, but she remained deeply ambivalent. Friends and co-workers “were feeding me stories about horrible things happening to people with the vaccine,” she said. She worried about the relatively new technology behind the Pfizer and Moderna vaccines, and whether her heart condition could pose complications, though her cardiologist assured her it wouldn’t.

six employees sued United, arguing that its plans to put exempt employees on temporary leave — unpaid in many circumstances — are discriminatory. United has delayed that plan for at least a few weeks as it fights the suit.

Still, United’s vaccination rate has continued to improve. There was another rush before the deadline to receive the pay incentive and one more before the final Sept. 27 deadline. Toward the end of September, the company said 593 people had failed to comply. By Friday, the number had dropped below 240.

“I did not appreciate the intensity of support for a vaccine mandate that existed, because you hear that loud anti-vax voice a lot more than you hear the people that want it,” Mr. Kirby said. “But there are more of them. And they’re just as intense.”

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Thomas H. Lee Partners Acquires House of Design

NAMPA, Idaho & BOSTON–(BUSINESS WIRE)–Thomas H. Lee Partners, L.P. (“THL”), a premier private equity firm investing in growth companies, announced today that it has acquired a majority interest in House of Design LLC (the “Company”), a leading provider of robotic automation systems and software for the residential construction market. THL’s investment will strengthen House of Design’s existing capabilities and provide capital and resources for future growth investments. House of Design’s co-founders will hold minority positions in the Company. Terms of the transaction were not disclosed.

Founded in 2012 and based in Nampa, Idaho, House of Design is a leading provider of automated solutions for the building components and residential offsite construction industries. The Company designs and engineers robotic systems that increase component manufacturers’ production output and capacity while reducing the challenges of labor shortages. Proprietary software makes House of Design’s system the only fully automated system that can produce complex variable trusses and wall panels without robot retraining or resetting.

THL’s investment in House of Design will accelerate the Company’s ability to build upon its leading robotic technology and software platform and accelerate new product innovation for its customers.

“Our partnership with THL is a monumental milestone for the Company,” said Shane Dittrich and Ryan Okelberry, Co-Founders of House of Design. “THL brings the expertise and sophistication needed to reach the next stage in our Company’s growth, and we have a shared vision for how to get there. We are excited to partner with THL and leverage their deep automation expertise and financial and operational resources to fuel House of Design’s growth strategy.”

“We are thrilled to partner with the House of Design team,” said Mike Kaczmarek, Managing Director at THL. “Persistent labor scarcity in the construction industry is driving greater need for automated solutions, and House of Design’s offerings help address labor shortage and worker safety challenges while providing an attractive ROI to the customer. THL is excited to support House of Design in continuously growing and innovating its product offerings to help customers increase production throughput and revenue.”

Stifel acted as financial advisor, Kirkland & Ellis LLP acted as legal advisor and PwC acted as accounting and tax advisor to THL. PEAK Technology Partners, a San Francisco based investment bank, acted as the exclusive financial advisor and Stoel Rives acted as legal advisor to House of Design.

About House of Design

House of Design has established itself as a thought leader and premier provider of robotic solutions, dynamic software applications, and system integration services. Through a multitude of successful automation projects across varied industries, House of Design is recognized as an innovative, collaborative partner committed to the success of the clients it serves.

Founded in 2012 by two engineers, House of Design has grown to 100+ employees and one of the largest robotic integrators in the West. Over the last ten years House of Design has been recognized nationally for its innovation in the robotics industry and as a small business leader in Idaho. The company’s vision is to ensure that execution matches strategy, emerging opportunities are captured, and team members grow, prosper and their work changes the world.

For more information, please visit www.thehouseofdesign.com.

About Thomas H. Lee Partners

Thomas H. Lee Partners, L.P. (“THL”) is a premier private equity firm investing in middle market growth companies exclusively in three sectors: Financial Services, Healthcare and Technology & Business Solutions. THL couples deep sector expertise with dedicated internal operating resources to transform and build great companies of lasting value in partnership with management. The Firm’s domain expertise and resources help to build great companies with an aim to accelerate growth, improve operations and drive long-term sustainable value. Since 1974, THL has raised more than $30 billion of equity capital, invested in over 160 companies and completed more than 500 add-on acquisitions representing an aggregate enterprise value at acquisition of over $210 billion. THL invests in automation companies through its flagship private equity fund and a dedicated automation fund. For more information, please visit www.thl.com.

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How Facebook Relies on Accenture to Scrub Toxic Content

In 2010, Accenture scored an accounting contract with Facebook. By 2012, that had expanded to include a deal for moderating content, particularly outside the United States.

That year, Facebook sent employees to Manila and Warsaw to train Accenture workers to sort through posts, two former Facebook employees involved with the trip said. Accenture’s workers were taught to use a Facebook software system and the platform’s guidelines for leaving content up, taking it down or escalating it for review.

What started as a few dozen Accenture moderators grew rapidly.

By 2015, Accenture’s office in the San Francisco Bay Area had set up a team, code-named Honey Badger, just for Facebook’s needs, former employees said. Accenture went from providing about 300 workers in 2015 to about 3,000 in 2016. They are a mix of full-time employees and contractors, depending on the location and task.

The firm soon parlayed its work with Facebook into moderation contracts with YouTube, Twitter, Pinterest and others, executives said. (The digital content moderation industry is projected to reach $8.8 billion next year, according to Everest Group, roughly double the 2020 total.) Facebook also gave Accenture contracts in areas like checking for fake or duplicate user accounts and monitoring celebrity and brand accounts to ensure they were not flooded with abuse.

After federal authorities discovered in 2016 that Russian operatives had used Facebook to spread divisive posts to American voters for the presidential election, the company ramped up the number of moderators. It said it would hire more than 3,000 people — on top of the 4,500 it already had — to police the platform.

“If we’re going to build a safe community, we need to respond quickly,” Mr. Zuckerberg said in a 2017 post.

The next year, Facebook hired Arun Chandra, a former Hewlett Packard Enterprise executive, as vice president of scaled operations to help oversee the relationship with Accenture and others. His division is overseen by Ms. Sandberg.

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New York City’s Vaccine Passport Plan Renews Online Privacy Debate

When New York City announced on Tuesday that it would soon require people to show proof of at least one coronavirus vaccine shot to enter businesses, Mayor Bill de Blasio said the system was “simple — just show it and you’re in.”

Less simple was the privacy debate that the city reignited.

Vaccine passports, which show proof of vaccination, often in electronic form such as an app, are the bedrock of Mr. de Blasio’s plan. For months, these records — also known as health passes or digital health certificates — have been under discussion around the world as a tool to allow vaccinated people, who are less at risk from the virus, to gather safely. New York will be the first U.S. city to include these passes in a vaccine mandate, potentially setting off similar actions elsewhere.

But the mainstreaming of these credentials could also usher in an era of increased digital surveillance, privacy researchers said. That’s because vaccine passes may enable location tracking, even as there are few rules about how people’s digital vaccine data should be stored and how it can be shared. While existing privacy laws limit the sharing of information among medical providers, there is no such rule for when people upload their own data onto an app.

sends a person’s location, city name and an identifying code number to a server as soon as the user grants the software access to personal data.

passed a law limiting such use only to “serious” criminal investigations.

“One of the things that we don’t want is that we normalize surveillance in an emergency and we can’t get rid of it,” said Jon Callas, the director of technology projects at the Electronic Frontier Foundation, a digital rights group.

While such incidents are not occurring in the United States, researchers said, they already see potential for overreach. Several pointed to New York City, where proof of vaccination requirements will start on Aug. 16 and be enforced starting on Sept. 13.

For proof, people can use their paper vaccination cards, the NYC Covid Safe app or another app, the Excelsior Pass. The Excelsior Pass was developed by IBM under an estimated $17 million contract with New York State.

To obtain the pass, people upload their personal information. Under the standard version of the pass, businesses and third parties see only whether the pass is valid, along with the person’s name and date of birth.

On Wednesday, the state announced the “Excelsior Pass Plus,” which displays not only whether an individual is vaccinated, but includes more information about when and where they got their shot. Businesses scanning the Pass Plus “may be able to save or store the information contained,” according to New York State.

Phase 2,” which could involve expanding the app’s use and adding more information like personal details and other health records that could be checked by businesses upon entry.

IBM has said that it uses blockchain technology and encryption to protect user data, but did not say how. The company and New York State did not respond to requests for comment.

Mr. de Blasio told WNYC in April that he understands the privacy concerns around the Excelsior Pass, but thinks it will still “play an important role.”

For now, some states and cities are proceeding cautiously. More than a dozen states, including Arizona, Florida and Texas, have in recent months announced some type of ban on vaccine passports. The mayors of San Francisco, Los Angeles and Seattle have also said they were holding off on passport programs.

Some business groups and companies that have adopted vaccine passes said the privacy concerns were valid but addressable.

Airlines for America, an industry trade group, said it supported vaccine passes and was pushing the federal government to establish privacy standards. The San Francisco Chamber of Commerce, which is helping its members work with Clear, said using the tools to ensure only vaccinated people entered stores was preferable to having businesses shut down again as virus cases climb.

“People’s privacy is valuable,” said Rodney Fong, the chamber’s president, but “when we’re talking about saving lives, the privacy piece becomes a little less important.”

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Companies Begin to Mandate Covid Vaccines for Employees

Some of the nation’s largest employers, for months reluctant to wade into the fraught issue of whether Covid-19 vaccinations should be mandatory for workers, have in recent days been compelled to act as infections have surged again.

On Tuesday, Tyson Foods told its 120,000 workers in offices, slaughterhouses and poultry plants across the country that they would need to be vaccinated by Nov. 1 as a “condition of employment.” And Microsoft, which employs roughly 100,000 people in the United States, said it would require proof of vaccination for all employees, vendors and guests to gain access to its offices.

Last week, Google said it would require employees who returned to the company’s offices to be vaccinated, while Disney announced a mandate for all salaried and nonunion hourly workers who work on site.

Other companies, including Walmart, the largest private employer in the United States, and Lyft and Uber, have taken a less forceful approach, mandating vaccines for white-collar workers but not for millions of frontline workers. Those moves essentially set up a divide between the employees who work in offices and employees who deal directly with the public and, collectively, have been more reluctant to get the shots.

different set of reasons that are not primarily political. They say many of their members are worried about potential health side effects or bristle at the idea of an employer’s interfering in what they regard as a personal health decision.

Marc Perrone, the president of the United Food and Commercial Workers union, representing 1.3 million employees in grocery chains such as Kroger and at large meatpacking plants, said he would not support employer mandates until the Food and Drug Administration gave full approval to the vaccine, which is being administered on an emergency basis.

“You can’t just say, ‘Accept the mandate or hit the door,’” Mr. Perrone said in an interview on Monday.

After Tyson announced its vaccine mandate on Tuesday, Mr. Perrone issued a statement that the union “will be meeting with Tyson in the coming weeks to discuss this vaccine mandate and to ensure that the rights of these workers are protected and this policy is fairly implemented.”

several meat plants became virus hot spots. Now, it is requiring its leadership team to be vaccinated by Sept. 24 and the rest of its office workers by Oct. 1. Frontline employees have until Nov. 1 to be fully inoculated, extra time the company is providing because there are “significantly more frontline team members than office workers who still need to be vaccinated,” a Tyson spokesman said.

Throughout the pandemic, companies have treaded carefully in carrying out public health measures while trying to avoid harm to their businesses.

Last year, when major retailers began requiring customers to wear masks, they quietly told their employees not to enforce the rule if a customer was adamant about not wearing one.

Companies like Walmart have tried a similarly tentative approach with vaccine requirements.

Walmart announced last week that it was requiring the roughly 17,000 workers in its Arkansas headquarters to be vaccinated but not those in stores and distribution centers, who make up the bulk of its 1.6 million U.S. employees.

In a statement, the retailer said the limited mandate would send a message to all workers that they should get vaccinated.

“We’re asking our leaders, which already have a higher vaccination rate, to make their example clear,” the company said. “We’re hoping that will influence even more of our frontline associates to become vaccinated.”

Lyft told their corporate employees last week that they would need to show proof they had been inoculated before returning to company offices.

Requiring vaccinations “is the most effective way to create a safe environment and give our team members peace of mind as we return to the office,” said Ashley Adams, a spokeswoman for Lyft.

But those mandates did not extend to the workers the companies contract with to drive millions of customers to and from their destinations. The drivers are being encouraged to be vaccinated, but neither Lyft or Uber has plans to require them.

Public health experts warn that limited mandates may reinforce the gaping divide between the nation’s high- and low-wage workers without furthering the public health goal of substantially increasing vaccination rates.

They also say it’s naïve to think that workers who resisted vaccines for ideological reasons would suddenly change their mind after seeing a company’s higher-paid executives receive the shots.

“Ultimately we want to ensure that they really have the broadest reach,” Dr. Kirsten Bibbins-Domingo, the vice dean for population health and health equity at the University of California, San Francisco, said of company directives. “Failing to do that, I think, will only cause others to be more suspicious of these types of mandates.”

Legally, companies are likely to be on solid ground if they mandate vaccines. Last year, the Equal Employment Opportunity Commission said employers could require immunization, though companies that do could still face lawsuits.

George W. Ingham, a partner at the law firm Hogan Lovells, said companies with mandates would potentially have to make difficult decisions.

“They are going to have to fire high performers and low performers who refuse vaccines,” he said. “They have to be consistent.” Reasons an employee could be exempted include religious beliefs or a disability, though the process of sorting those out on an individual basis promises to be an arduous one.

Companies may also have to contend with pushback from state governments. Ten states have passed legislation limiting the ability to require vaccines for students, employees or the public, according to the National Conference of State Legislatures.

Disney is among the few big companies pursuing a broad vaccine mandate for their work forces, even in the face of pushback from some employees.

In addition to mandating vaccines for nonunion workers who are on-site, Disney said all new hires — union and nonunion — would be required to be fully vaccinated before starting their jobs. Nonunion hourly workers include theme park guest-relations staff, in-park photographers, executive assistants and some seasonal theme park employees.

It was the furthest that Disney could go without a sign-off from the dozen unions that represent the bulk of its employees. Walt Disney World in Florida, for instance, has more than 65,000 workers; roughly 38,000 are union members.

Disney is now seeking union approval for the mandate both in Florida and in California, where tens of thousands of workers at the Disneyland Resort in Anaheim are unionized. Most of the leaders of Disney’s unions appear to be in favor of a mandate — as long as accommodations can be worked out for those refusing the vaccine for medical, religious or other acceptable reasons.

“Vaccinations are safe and effective and the best line of defense to protect workers, frontline or otherwise,” Eric Clinton, the president of UNITE HERE Local 362, which represents roughly 8,000 attraction workers and custodians at Disney World, said in a phone interview.

Mr. Clinton declined to comment on any pushback from his membership, but another union leader at Disney World, speaking on the condition of anonymity so he could speak candidly, said “a fair number” of his members were up in arms over Disney-mandated vaccinations, citing personal choice and fear of the vaccine.

“The company has probably done a calculation and decided that some people will unfortunately quit rather than protect themselves, and so be it,” the person said.

Lananh Nguyen contributed reporting.

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American Campus Communities Leads Student Housing Industry with Four Innovator Awards at Annual InterFace Conference

AUSTIN, Texas–(BUSINESS WIRE)–American Campus Communities (NYSE: ACC), the nation’s largest student housing company, has once again been recognized in multiple award categories of Student Housing Business Magazine’s InterFace Conference Innovator Awards.

The Innovator Awards are given to student housing owners, developers, operators, architecture firms and universities for excellence in student housing development, marketing and operations. More than 100 industry experts judged on more than 140 entries in this year’s contest. This was the largest number of submissions to date.

ACC has been honored with the following on-campus awards for 2021:

“It’s an honor to be recognized alongside our innovative university partners for two communities, Manzanita Square and the UIC Academic and Residential Complex, that go above and beyond to create environments conducive to academic success and personal well-being for our students,” said Bill Bayless, CEO at ACC. “Our ACC team members across the country have remained focused on fulfilling our mission of putting students first and creating a place where they love living.”

Bayless gave the keynote address at the conference on Wednesday, July 14th at the JW Marriott in Austin, Texas. In total, ACC has been awarded 43 SHB Innovator Awards since 2013.

About American Campus Communities

American Campus Communities, Inc. is the largest owner, manager and developer of high-quality student housing communities in the United States. The company is a fully integrated, self-managed and self-administered equity real estate investment trust (REIT) with expertise in the design, finance, development, construction management and operational management of student housing properties. As of March 31, 2021, American Campus Communities owned 166 student housing properties containing approximately 111,900 beds. Including its owned and third-party managed properties, ACC’s total managed portfolio consisted of 207 properties with approximately 142,400 beds. Visit www.americancampus.com.

Forward-Looking Statements

In addition to historical information, this press release contains forward-looking statements under the applicable federal securities law. These statements are based on management’s current expectations and assumptions regarding markets in which American Campus Communities, Inc. (the “company”) operates, operational strategies, anticipated events and trends, the economy, and other future conditions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. These risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward looking-statements include those related to the COVID-19 pandemic, about which there are still many unknowns, including the duration of the pandemic and the extent of its impact, and those discussed in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2020 under the heading “Risk Factors” and under the heading “Business – Forward-looking Statements” and subsequent quarterly reports on Form 10-Q. We undertake no obligation to publicly update any forward-looking statements, including our preleasing activity or expected full year 2021 operating results, whether as a result of new information, future events, or otherwise.

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How Two Start-ups Made a Fortune in Fees on P.P.P. Loans

Also in late February, Blueacorn and Womply got an unexpected tailwind from a major rule change by the Small Business Administration, which oversaw the loan program. Concerned that women and minority-led businesses were being disproportionately left out, the Biden administration overhauled the loan formula to award sole proprietors — a group that includes contractors and gig workers — loans based on their reported revenue rather than profit. Overnight, millions more qualified for help. Drawn in by the marketing campaigns, they stampeded toward the two companies.

By early March, “we were overrun with demand,” said Blueacorn’s Mr. Calhoun, a private equity veteran who joined the company that month to help manage its growth. “We had a 24-hour period where we went from 15,000 new customer service tickets to 27,000,” he recalled. “Those are Amazon-like levels.”

Blueacorn rented call centers and trained hundreds of temporary workers to troubleshoot. Womply redeployed nearly all of its 200 employees to work on loan issues. Both companies still struggled to keep up. On Reddit groups and social media sites, thousands of borrowers complained about delays, poor communication and problems resolving errors.

Louis Glatthorn, an Uber driver in Boone, N.C., who goes by Bob, applied on Womply’s website on April 7 and signed the paperwork two weeks later for a $7,818 loan. But the money — which is listed in government records as approved — has not been paid by Benworth Capital, one of Womply’s partners. Mr. Glatthorn’s attempts to reach Womply for help have been unsuccessful.

“You can never talk to a person or actually make contact,” he said. A Womply representative declined to comment on Mr. Glatthorn’s experience.

Others had a smoother run. Dan Bourque, an Uber driver in San Francisco, saw Womply’s ads and applied for a loan in mid-April. Seventeen days later, he had a $10,477 deposit — funded by Fountainhead SBF, another of Womply’s partner lenders — in his bank account. For that loan, the process “was flawless,” he said.

The millions of tiny loans the two tech companies enabled, coupled with Congress’s decision to make small loans more lucrative, led to gigantic payouts for small lenders. Last year, Prestamos made $1.3 million for its lending. This year, it will collect nearly $1.2 billion, according to a New York Times calculation of lenders’ fees based on government data.

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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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Farewell, Millennial Lifestyle Subsidy

A few years ago, while on a work trip in Los Angeles, I hailed an Uber for a crosstown ride during rush hour. I knew it would be a long trip, and I steeled myself to fork over $60 or $70.

Instead, the app spit out a price that made my jaw drop: $16.

Experiences like these were common during the golden era of the Millennial Lifestyle Subsidy, which is what I like to call the period from roughly 2012 through early 2020, when many of the daily activities of big-city 20- and 30-somethings were being quietly underwritten by Silicon Valley venture capitalists.

For years, these subsidies allowed us to live Balenciaga lifestyles on Banana Republic budgets. Collectively, we took millions of cheap Uber and Lyft rides, shuttling ourselves around like bourgeois royalty while splitting the bill with those companies’ investors. We plunged MoviePass into bankruptcy by taking advantage of its $9.95-a-month, all-you-can-watch movie ticket deal, and took so many subsidized spin classes that ClassPass was forced to cancel its $99-a-month unlimited plan. We filled graveyards with the carcasses of food delivery start-ups — Maple, Sprig, SpoonRocket, Munchery — just by accepting their offers of underpriced gourmet meals.

tweeted, along with a screenshot of a receipt that showed he had spent nearly $250 on a ride to the airport.

“Airbnb got too much dip on they chip,” another Twitter user complained. “No one is gonna continue to pay $500 to stay in an apartment for two days when they can pay $300 for a hotel stay that has a pool, room service, free breakfast & cleaning everyday. Like get real lol.”

Some of these companies have been tightening their belts for years. But the pandemic seems to have emptied what was left of the bargain bin. The average Uber and Lyft ride costs 40 percent more than it did a year ago, according to Rakuten Intelligence, and food delivery apps like DoorDash and Grubhub have been steadily increasing their fees over the past year. The average daily rate of an Airbnb rental increased 35 percent in the first quarter of 2021, compared with the same quarter the year before, according to the company’s financial filings.

set up a $250 million “driver stimulus” fund — or doing away with them altogether.

I’ll confess that I gleefully took part in this subsidized economy for years. (My colleague Kara Swisher memorably called it “assisted living for millennials.”) I got my laundry delivered by Washio, my house cleaned by Homejoy and my car valet-parked by Luxe — all start-ups that promised cheap, revolutionary on-demand services but shut down after failing to turn a profit. I even bought a used car through a venture-backed start-up called Beepi, which offered white-glove service and mysteriously low prices, and which delivered the car to me wrapped in a giant bow, like you see in TV commercials. (Unsurprisingly, Beepi shut down in 2017, after burning through $150 million in venture capital.)

These subsidies don’t always end badly for investors. Some venture-backed companies, like Uber and DoorDash, have been able to grit it out until their I.P.O.s, making good on their promise that investors would eventually see a return on their money. Other companies have been acquired or been able to successfully raise their prices without scaring customers away.

Uber, which raised nearly $20 billion in venture capital before going public, may be the best-known example of an investor-subsidized service. During a stretch of 2015, the company was burning $1 million a week in driver and rider incentives in San Francisco alone, according to reporting by BuzzFeed News.

But the clearest example of a jarring pivot to profitability might be the electric scooter business.

Remember scooters? Before the pandemic, you couldn’t walk down the sidewalk of a major American city without seeing one. Part of the reason they took off so quickly is that they were ludicrously cheap. Bird, the largest scooter start-up, charged $1 to start a ride, and then 15 cents a minute. For short trips, renting a scooter was often cheaper than taking the bus.

But those fees didn’t represent anything close to the true cost of a Bird ride. The scooters broke frequently and needed constant replacing, and the company was shoveling money out the door just to keep its service going. As of 2019, Bird was losing $9.66 for every $10 it made on rides, according to a recent investor presentation. That is a shocking number, and the kind of sustained losses that are possible only for a Silicon Valley start-up with extremely patient investors. (Imagine a deli that charged $10 for a sandwich whose ingredients cost $19.66, and then imagine how long that deli would stay in business.)

Pandemic-related losses, coupled with the pressure to turn a profit, forced Bird to trim its sails. It raised its prices — a Bird now costs as much as $1 plus 42 cents a minute in some cities — built more durable scooters and revamped its fleet management system. During the second half of 2020, the company made $1.43 in profit for every $10 ride.

“DoorDash and Pizza Arbitrage,” about the time he realized that DoorDash was selling pizzas from his friend’s restaurant for $16 while paying the restaurant $24 per pizza, and proceeded to order dozens of pizzas from the restaurant while pocketing the $8 difference, stands as a classic of the genre.)

But it’s hard to fault these investors for wanting their companies to turn a profit. And, at a broader level, it’s probably good to find more efficient uses for capital than giving discounts to affluent urbanites.

Back in 2018, I wrote that the entire economy was starting to resemble MoviePass, the subscription service whose irresistible, deeply unprofitable offer of daily movie tickets for a flat $9.95 subscription fee paved the way for its decline. Companies like MoviePass, I thought, were trying to defy the laws of gravity with business models that assumed that if they achieved enormous scale, they’d be able to flip a switch and start making money at some point down the line. (This philosophy, which was more or less invented by Amazon, is now known in tech circles as “blitzscaling.”)

There is still plenty of irrationality in the market, and some start-ups still burn huge piles of money in search of growth. But as these companies mature, they seem to be discovering the benefits of financial discipline. Uber lost only $108 million in the first quarter of 2021 — a change partly attributable to the sale of its autonomous driving unit, and a vast improvement, believe it or not, over the same quarter last year, when it lost $3 billion. Both Uber and Lyft have pledged to become profitable on an adjusted basis this year. Lime, Bird’s main electric scooter competitor, turned its first quarterly profit last year, and Bird — which recently filed to go public through a SPAC at a $2.3 billion valuation — has projected better economics in the years ahead.

Profits are good for investors, of course. And while it’s painful to pay subsidy-free prices for our extravagances, there’s also a certain justice to it. Hiring a private driver to shuttle you across Los Angeles during rush hour should cost more than $16, if everyone in that transaction is being fairly compensated. Getting someone to clean your house, do your laundry or deliver your dinner should be a luxury, if there’s no exploitation involved. The fact that some high-end services are no longer easily affordable by the merely semi-affluent may seem like a worrying development, but maybe it’s a sign of progress.

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