Mark Zuckerberg, Facebook’s chief executive, made securing the 2020 U.S. election a top priority. He met regularly with an election team, which included more than 300 people from across his company, to prevent misinformation from spreading on the social network. He asked civil rights leaders for advice on upholding voter rights.
The core election team at Facebook, which was renamed Meta last year, has since been dispersed. Roughly 60 people are now focused primarily on elections, while others split their time on other projects. They meet with another executive, not Mr. Zuckerberg. And the chief executive has not talked recently with civil rights groups, even as some have asked him to pay more attention to the midterm elections in November.
Safeguarding elections is no longer Mr. Zuckerberg’s top concern, said four Meta employees with knowledge of the situation. Instead, he is focused on transforming his company into a provider of the immersive world of the metaverse, which he sees as the next frontier of growth, said the people, who were not authorized to speak publicly.
hearings on the Jan. 6 Capitol riot have underlined how precarious elections can be. And dozens of political candidates are running this November on the false premise that former President Donald J. Trump was robbed of the 2020 election, with social media platforms continuing to be a key way to reach American voters.
2000 Mules,” a film that falsely claims the 2020 election was stolen from Mr. Trump, was widely shared on Facebook and Instagram, garnering more than 430,000 interactions, according to an analysis by The New York Times. In posts about the film, commenters said they expected election fraud this year and warned against using mail-in voting and electronic voting machines.
$44 billion sale to Elon Musk, three employees with knowledge of the situation said. Mr. Musk has suggested that he wants fewer rules about what can and cannot be posted on the service.
barred Mr. Trump from its platforms after the riot at the U.S. Capitol on Jan. 6, 2021, has worked over the years to limit political falsehoods on its sites. Tom Reynolds, a Meta spokesman, said the company had “taken a comprehensive approach to how elections play out on our platforms since before the U.S. 2020 elections and through the dozens of global elections since then.”
recently raised doubts about the country’s electoral process. Latvia, Bosnia and Slovenia are also holding elections in October.
“People in the U.S. are almost certainly getting the Rolls-Royce treatment when it comes to any integrity on any platform, especially for U.S. elections,” said Sahar Massachi, the executive director of the think tank Integrity Institute and a former Facebook employee. “And so however bad it is here, think about how much worse it is everywhere else.”
Facebook’s role in potentially distorting elections became evident after 2016, when Russian operatives used the site to spread inflammatory content and divide American voters in the U.S. presidential election. In 2018, Mr. Zuckerberg testified before Congress that election security was his top priority.
banning QAnon conspiracy theory posts and groups in October 2020.
Around the same time, Mr. Zuckerberg and his wife, Priscilla Chan, donated $400 million to local governments to fund poll workers, pay for rental fees for polling places, provide personal protective equipment and cover other administrative costs.
The week before the November 2020 election, Meta also froze all political advertising to limit the spread of falsehoods.
But while there were successes — the company kept foreign election interference off the platform — it struggled with how to handle Mr. Trump, who used his Facebook account to amplify false claims of voter fraud. After the Jan. 6 riot, Facebook barred Mr. Trump from posting. He is eligible for reinstatement in January.
Frances Haugen, a Facebook employee turned whistle-blower, filed complaints with the Securities and Exchange Commission accusing the company of removing election safety features too soon after the 2020 election. Facebook made growth and engagement its priorities over security, she said.
fully realized digital world that exists beyond the one in which we live. It was coined by Neal Stephenson in his 1992 novel “Snow Crash,” and the concept was further explored by Ernest Cline in his novel “Ready Player One.”
The future. Many people in tech believe the metaverse will herald an era in which our virtual lives will play as important a role as our physical realities. Some experts warn that it could still turn out to be a fad or even dangerous.
Mr. Zuckerberg no longer meets weekly with those focused on election security, said the four employees, though he receives their reports. Instead, they meet with Nick Clegg, Meta’s president of global affairs.
Several civil right groups said they had noticed Meta’s shift in priorities. Mr. Zuckerberg isn’t involved in discussions with them as he once was, nor are other top Meta executives, they said.
“I’m concerned,” said Derrick Johnson, president of the National Association for the Advancement of Colored People, who talked with Mr. Zuckerberg and Sheryl Sandberg, Meta’s chief operating officer, ahead of the 2020 election. “It appears to be out of sight, out of mind.” (Ms. Sandberg has announced that she will leave Meta this fall.)
wrote a letter to Mr. Zuckerberg and the chief executives of YouTube, Twitter, Snap and other platforms. They called for them to take down posts about the lie that Mr. Trump won the 2020 election and to slow the spread of election misinformation before the midterms.
Yosef Getachew, a director at the nonprofit public advocacy organization Common Cause, whose group studied 2020 election misinformation on social media, said the companies had not responded.
“The Big Lie is front and center in the midterms with so many candidates using it to pre-emptively declare that the 2022 election will be stolen,” he said, pointing to recent tweets from politicians in Michigan and Arizona who falsely said dead people cast votes for Democrats. “Now is not the time to stop enforcing against the Big Lie.”
SAN JOSE, Calif. — For the past 11 weeks, prosecutors revealed emails from desperate investors. They held up falsified documents side by side with the originals. They called dozens of witnesses who lobbed accusations of deceit and evasiveness.
And on Friday, the person whom prosecutors have been making their case against — Elizabeth Holmes, the founder of the failed blood testing start-up Theranos — took the stand to defend herself. She faces 11 counts of defrauding investors over Theranos’s technology and business in a case that has been billed as a referendum on Silicon Valley’s start-up culture. She has pleaded not guilty.
tech industry’s hubris and the last decade’s culture of grift — began her testimony by answering a series of questions about Theranos. She delved into her background and how she began the Silicon Valley start-up, which had promised to revolutionize health care by using just a drop of blood from patients to deduce their illnesses.
trial finally began in September, prosecutors called former investors, partners and Theranos employees to testify. Jim Mattis, the retired four-star Marine Corps general and former defense secretary, who was a Theranos director, took the stand, as did a former Theranos lab director who endured six grueling days of questioning. In one surreal moment, a forensics expert recited text messages between Ms. Holmes and Ramesh Balwani, her boyfriend at the time and business partner at Theranos, who is known as Sunny.
This week, Alan Eisenman, an early investor in Theranos, testified that Ms. Holmes cut him off and threatened him when he asked her for more information about the company. Yet even after that treatment, Mr. Eisenman poured more money into the start-up, believing its seemingly fast-growing business would deliver riches to backers like him.
When asked about his understanding of the value of his Theranos stock today, Mr. Eisenman said: “It’s not an understanding, it’s a conclusion. It’s worth zero.”
a series of validation reports that Ms. Holmes sent to potential investors and partners that made it look as though pharmaceutical companies including Pfizer and Schering-Plough had endorsed Theranos’s technology. Representatives from each company testified that they had not endorsed Theranos’s blood test and were surprised to see their companies’ logos added to the report.
testified that the start-up faked demonstrations of its machines for potential investors, hid technology failures and threw out abnormal blood test results.
Mr. Mattis testified that he was not aware of any contracts between Theranos and the military to put its machines on medevac helicopters or on the battlefield, as Ms. Holmes had frequently told investors.
testimony from Roger Parloff, the journalist who wrote a magazine cover story about Ms. Holmes, helping propel her to acclaim. Mr. Parloff’s article was sent to numerous investors as part of Ms. Holmes’s pitch.
Yet notably absent from the courtroom were some of the most prominent witnesses on the prosecution’s list. Ms. Holmes’s rise was aided by her association with business titans such as the media mogul Rupert Murdoch, elder statesmen such as Henry Kissinger and Adm. Gary Roughead, and the lawyer David Boies. Theranos was felled, in part, by whistle-blowers such as Tyler Shultz, a grandson of George Shultz, the former secretary of state, who sat on Theranos’s board. None of them testified.
Also absent was Mr. Balwani, who was charged with fraud alongside Ms. Holmes and faces trial next year. His role as a fiery defender of Theranos who went after anyone who questioned the company has been in the background of much of the testimony.
At nearly every turn, Ms. Holmes’s lawyers sought to limit testimony and evidence. They attacked the credibility of investors, using legal disclaimers to show that investors knew they were gambling on a young start-up. The lawyers also poked holes in investors’ limited due diligence on Theranos’s claims. At one point, they directed Erika Cheung, a key whistle-blower who worked in Theranos’s lab, to read the entire organizational chart of the people employed in lab to show she played a small role in the overall operation.
she said in one of the videos. “Anything that happens in this company is my responsibility.”
SAN FRANCISCO — In 2019, Facebook researchers began a new study of one of the social network’s foundational features: the Like button.
They examined what people would do if Facebook removed the distinct thumbs-up icon and other emoji reactions from posts on its photo-sharing app Instagram, according to company documents. The buttons had sometimes caused Instagram’s youngest users “stress and anxiety,” the researchers found, especially if posts didn’t get enough Likes from friends.
But the researchers discovered that when the Like button was hidden, users interacted less with posts and ads. At the same time, it did not alleviate teenagers’ social anxiety and young users did not share more photos, as the company thought they might, leading to a mixed bag of results.
Mark Zuckerberg, Facebook’s chief executive, and other managers discussed hiding the Like button for more Instagram users, according to the documents. In the end, a larger test was rolled out in just a limited capacity to “build a positive press narrative” around Instagram.
misinformation, privacy and hate speech, a central issue has been whether the basic way that the platform works has been at fault — essentially, the features that have made Facebook be Facebook.
Apart from the Like button, Facebook has scrutinized its share button, which lets users instantly spread content posted by other people; its groups feature, which is used to form digital communities; and other tools that define how more than 3.5 billion people behave and interact online. The research, laid out in thousands of pages of internal documents, underlines how the company has repeatedly grappled with what it has created.
What researchers found was often far from positive. Time and again, they determined that people misused key features or that those features amplified toxic content, among other effects. In an August 2019 internal memo, several researchers said it was Facebook’s “core product mechanics” — meaning the basics of how the product functioned — that had let misinformation and hate speech flourish on the site.
“The mechanics of our platform are not neutral,” they concluded.
hide posts they do not want to see and turning off political group recommendations to reduce the spread of misinformation.
But the core way that Facebook operates — a network where information can spread rapidly and where people can accumulate friends and followers and Likes — ultimately remains largely unchanged.
Many significant modifications to the social network were blocked in the service of growth and keeping users engaged, some current and former executives said. Facebook is valued at more than $900 billion.
“There’s a gap between the fact that you can have pretty open conversations inside of Facebook as an employee,” said Brian Boland, a Facebook vice president who left last year. “Actually getting change done can be much harder.”
The company documents are part of the Facebook Papers, a cache provided to the Securities and Exchange Commission and to Congress by a lawyer representing Frances Haugen, a former Facebook employee who has become a whistle-blower. Ms. Haugen earlier gave the documents to The Wall Street Journal. This month, a congressional staff member supplied the redacted disclosures to more than a dozen other news organizations, including The New York Times.
In a statement, Andy Stone, a Facebook spokesman, criticized articles based on the documents, saying that they were built on a “false premise.”
“Yes, we’re a business and we make profit, but the idea that we do so at the expense of people’s safety or well-being misunderstands where our own commercial interests lie,” he said. He said Facebook had invested $13 billion and hired more than 40,000 people to keep people safe, adding that the company has called “for updated regulations where democratic governments set industry standards to which we can all adhere.”
post this month, Mr. Zuckerberg said it was “deeply illogical” that the company would give priority to harmful content because Facebook’s advertisers don’t want to buy ads on a platform that spreads hate and misinformation.
“At the most basic level, I think most of us just don’t recognize the false picture of the company that is being painted,” he wrote.
The Foundations of Success
When Mr. Zuckerberg founded Facebook 17 years ago in his Harvard University dorm room, the site’s mission was to connect people on college campuses and bring them into digital groups with common interests and locations.
Growth exploded in 2006 when Facebook introduced the News Feed, a central stream of photos, videos and status updates posted by people’s friends. Over time, the company added more features to keep people interested in spending time on the platform.
In 2009, Facebook introduced the Like button. The tiny thumbs-up symbol, a simple indicator of people’s preferences, became one of the social network’s most important features. The company allowed other websites to adopt the Like button so users could share their interests back to their Facebook profiles.
That gave Facebook insight into people’s activities and sentiments outside of its own site, so it could better target them with advertising. Likes also signified what users wanted to see more of in their News Feeds so people would spend more time on Facebook.
Facebook also added the groups feature, where people join private communication channels to talk about specific interests, and pages, which allowed businesses and celebrities to amass large fan bases and broadcast messages to those followers.
Adam Mosseri, the head of Instagram, has said that research on users’ well-being led to investments in anti-bullying measures on Instagram.
Understand the Facebook Papers
Card 1 of 6
A tech giant in trouble. The leak of internal documents by a former Facebook employee has provided an intimate look at the operations of the secretive social media company and renewed calls for better regulations of the company’s wide reach into the lives of its users.
The whistle-blower. During an interview with “60 Minutes” that aired Oct. 3, Frances Haugen, a Facebook product manager who left the company in May, revealed that she was responsible for the leak of those internal documents.
Ms. Haugen’s testimony in Congress. On Oct. 5, Ms. Haugen testified before a Senate subcommittee, saying that Facebook was willing to use hateful and harmful content on its site to keep users coming back. Facebook executives, including Mark Zuckerberg, called her accusations untrue.
The Facebook Papers. Ms. Haugen also filed a complaint with the Securities and Exchange Commission and provided the documents to Congress in redacted form. A congressional staff member then supplied the documents, known as the Facebook Papers, to several news organizations, including The New York Times.
Yet Facebook cannot simply tweak itself so that it becomes a healthier social network when so many problems trace back to core features, said Jane Lytvynenko, a senior fellow at the Harvard Kennedy Shorenstein Center, who studies social networks and misinformation.
“When we talk about the Like button, the share button, the News Feed and their power, we’re essentially talking about the infrastructure that the network is built on top of,” she said. “The crux of the problem here is the infrastructure itself.”
Self-Examination
As Facebook’s researchers dug into how its products worked, the worrisome results piled up.
In a July 2019 study of groups, researchers traced how members in those communities could be targeted with misinformation. The starting point, the researchers said, were people known as “invite whales,” who sent invitations out to others to join a private group.
These people were effective at getting thousands to join new groups so that the communities ballooned almost overnight, the study said. Then the invite whales could spam the groups with posts promoting ethnic violence or other harmful content, according to the study.
Another 2019 report looked at how some people accrued large followings on their Facebook pages, often using posts about cute animals and other innocuous topics. But once a page had grown to tens of thousands of followers, the founders sold it. The buyers then used the pages to show followers misinformation or politically divisive content, according to the study.
As researchers studied the Like button, executives considered hiding the feature on Facebook as well, according to the documents. In September 2019, it removed Likes from users’ Facebook posts in a small experiment in Australia.
The company wanted to see if the change would reduce pressure and social comparison among users. That, in turn, might encourage people to post more frequently to the network.
But people did not share more posts after the Like button was removed. Facebook chose not to roll the test out more broadly, noting, “Like counts are extremely low on the long list of problems we need to solve.”
Last year, company researchers also evaluated the share button. In a September 2020 study, a researcher wrote that the button and so-called reshare aggregation units in the News Feed, which are automatically generated clusters of posts that have already been shared by people’s friends, were “designed to attract attention and encourage engagement.”
But gone unchecked, the features could “serve to amplify bad content and sources,” such as bullying and borderline nudity posts, the researcher said.
That’s because the features made people less hesitant to share posts, videos and messages with one another. In fact, users were three times more likely to share any kind of content from the reshare aggregation units, the researcher said.
One post that spread widely this way was an undated message from an account called “The Angry Patriot.” The post notified users that people protesting police brutality were “targeting a police station” in Portland, Ore. After it was shared through reshare aggregation units, hundreds of hate-filled comments flooded in. It was an example of “hate bait,” the researcher said.
A common thread in the documents was how Facebook employees argued for changes in how the social network worked and often blamed executives for standing in the way.
In an August 2020 internal post, a Facebook researcher criticized the recommendation system that suggests pages and groups for people to follow and said it can “very quickly lead users down the path to conspiracy theories and groups.”
“Out of fears over potential public and policy stakeholder responses, we are knowingly exposing users to risks of integrity harms,” the researcher wrote. “During the time that we’ve hesitated, I’ve seen folks from my hometown go further and further down the rabbit hole” of conspiracy theory movements like QAnon and anti-vaccination and Covid-19 conspiracies.
The researcher added, “It has been painful to observe.”
Reporting was contributed by Davey Alba, Sheera Frenkel, Cecilia Kang and Ryan Mac.
On Feb. 4, 2019, a Facebook researcher created a new user account to see what it was like to experience the social media site as a person living in Kerala, India.
For the next three weeks, the account operated by a simple rule: Follow all the recommendations generated by Facebook’s algorithms to join groups, watch videos and explore new pages on the site.
The result was an inundation of hate speech, misinformation and celebrations of violence, which were documented in an internal Facebook report published later that month.
bots and fake accounts tied to the country’s ruling party and opposition figures were wreaking havoc on national elections. They also detail how a plan championed by Mark Zuckerberg, Facebook’s chief executive, to focus on “meaningful social interactions,” or exchanges between friends and family, was leading to more misinformation in India, particularly during the pandemic.
a violent coup in the country. Facebook said that after the coup, it implemented a special policy to remove praise and support of violence in the country, and later banned the Myanmar military from Facebook and Instagram.
In Sri Lanka, people were able to automatically add hundreds of thousands of users to Facebook groups, exposing them to violence-inducing and hateful content. In Ethiopia, a nationalist youth militia group successfully coordinated calls for violence on Facebook and posted other inflammatory content.
Facebook has invested significantly in technology to find hate speech in various languages, including Hindi and Bengali, two of the most widely used languages, Mr. Stone said. He added that Facebook reduced the amount of hate speech that people see globally by half this year.
suicide bombing in the disputed border region of Kashmir set off a round of violence and a spike in accusations, misinformation and conspiracies between Indian and Pakistani nationals.
After the attack, anti-Pakistan content began to circulate in the Facebook-recommended groups that the researcher had joined. Many of the groups, she noted, had tens of thousands of users. A different report by Facebook, published in December 2019, found Indian Facebook users tended to join large groups, with the country’s median group size at 140,000 members.
Graphic posts, including a meme showing the beheading of a Pakistani national and dead bodies wrapped in white sheets on the ground, circulated in the groups she joined.
After the researcher shared her case study with co-workers, her colleagues commented on the posted report that they were concerned about misinformation about the upcoming elections in India.
Two months later, after India’s national elections had begun, Facebook put in place a series of steps to stem the flow of misinformation and hate speech in the country, according to an internal document called Indian Election Case Study.
The case study painted an optimistic picture of Facebook’s efforts, including adding more fact-checking partners — the third-party network of outlets with which Facebook works to outsource fact-checking — and increasing the amount of misinformation it removed. It also noted how Facebook had created a “political white list to limit P.R. risk,” essentially a list of politicians who received a special exemption from fact-checking.
The study did not note the immense problem the company faced with bots in India, nor issues like voter suppression. During the election, Facebook saw a spike in bots — or fake accounts — linked to various political groups, as well as efforts to spread misinformation that could have affected people’s understanding of the voting process.
In a separate report produced after the elections, Facebook found that over 40 percent of top views, or impressions, in the Indian state of West Bengal were “fake/inauthentic.” One inauthentic account had amassed more than 30 million impressions.
A report published in March 2021 showed that many of the problems cited during the 2019 elections persisted.
In the internal document, called Adversarial Harmful Networks: India Case Study, Facebook researchers wrote that there were groups and pages “replete with inflammatory and misleading anti-Muslim content” on Facebook.
The report said there were a number of dehumanizing posts comparing Muslims to “pigs” and “dogs,” and misinformation claiming that the Quran, the holy book of Islam, calls for men to rape their female family members.
Much of the material circulated around Facebook groups promoting Rashtriya Swayamsevak Sangh, an Indian right-wing and nationalist group with close ties to India’s ruling Bharatiya Janata Party, or B.J.P. The groups took issue with an expanding Muslim minority population in West Bengal and near the Pakistani border, and published posts on Facebook calling for the ouster of Muslim populations from India and promoting a Muslim population control law.
Facebook knew that such harmful posts proliferated on its platform, the report indicated, and it needed to improve its “classifiers,” which are automated systems that can detect and remove posts containing violent and inciting language. Facebook also hesitated to designate R.S.S. as a dangerous organization because of “political sensitivities” that could affect the social network’s operation in the country.
Of India’s 22 officially recognized languages, Facebook said it has trained its A.I. systems on five. (It said it had human reviewers for some others.) But in Hindi and Bengali, it still did not have enough data to adequately police the content, and much of the content targeting Muslims “is never flagged or actioned,” the Facebook report said.
Five months ago, Facebook was still struggling to efficiently remove hate speech against Muslims. Another company report detailed efforts by Bajrang Dal, an extremist group linked with the B.J.P., to publish posts containing anti-Muslim narratives on the platform.
Facebook is considering designating the group as a dangerous organization because it is “inciting religious violence” on the platform, the document showed. But it has not yet done so.
“Join the group and help to run the group; increase the number of members of the group, friends,” said one post seeking recruits on Facebook to spread Bajrang Dal’s messages. “Fight for truth and justice until the unjust are destroyed.”
Ryan Mac, Cecilia Kang and Mike Isaac contributed reporting.
Germany’s most powerful newspaper removed its top editor Monday after months of defending his sexual relationships with women in the workplace as the scandal began to envelop the paper’s globally ambitious parent company, Axel Springer.
Bild, a center-right tabloid that has fed popular anger at Chancellor Angela Merkel and her Covid-19 restrictions, dismissed the editor in chief, Julian Reichelt, after The New York Times reported on details of Mr. Reichelt’s relationship with a trainee, who testified during an independent legal investigation that in 2018 he had summoned her to a hotel near the office for sex and asked her to keep a payment secret. Hours after Mr. Reichelt was ousted, the newsmagazine Der Spiegel published allegations that Mr. Reichelt had abused his position to pursue relationships with several women on his staff.
The dismissal marked the belated arrival of the global #MeToo movement at Axel Springer — and it came as the German company is making significant investments in the American market, including its acquisition this summer of Politico for $1 billion. Axel Springer faced pressure in the United States and Germany to explain two recent revelations: What the investigation into Mr. Reichelt’s conduct found, and how the chief executive, Mathias Döpfner, responded to the investigation. In a text message to a friend obtained by The Times, Mr. Döpfner seemed to link the scrutiny of Mr. Reichelt’s behavior to the editor’s divisive politics, casting him as a bulwark against a return of Communist-style oppression in the guise of Covid rules.
The company said in a statement that Mr. Reichelt had “not clearly separated private and professional matters,” and had misled the board. Mr. Döpfner, in a statement, also praised Mr. Reichelt for his journalistic leadership and for launching Bild-Tv, a new television station in the combative style of American cable news. He said Mr. Reichelt’s replacement, Johannes Boie, would combine “journalistic excellence with modern leadership.” Mr. Reichelt has denied abusing his authority, and didn’t respond to an email seeking comment.
surge in right-wing European media while capturing a new global online generation. Its acquisition of publications like Politico and Business Insider, which it bought for $442 million in 2015, is a major part of that strategy.
The move to dismiss Mr. Reichelt was a significant reversal for a company that prides itself on standing up to Germany’s more liberal media establishment. Axel Springer had been bracing for reaction from its new American employees to the reports of Mr. Reichelt’s conduct, but two people familiar with the company’s decision Monday said that a furious storm in German media added pressure on Mr. Döpfner to act. German critics blasted the company, in particular, for its role in killing a story by a rival publisher, Ippen, whose journalists said in a letter that they were set to reveal details of Mr. Reichelt’s alleged abuse of power.
“That made the whole story bigger than it was before,” said Moritz Tschermak, the co-author of a recent book about Bild. “Somehow it became not a story about Reichelt and Springer but a story about freedom of the press.”
In an inquiry this spring, the company said it had cleared Mr. Reichelt, who apologized at the time for unspecified “mistakes” and remained in his role. Axel Springer appeared to blame the opaque German legal process in part for its reversal, releasing a statement noting that it learned some details of its own lawyers’ inquiry from the media. The company also said it had learned unspecified new information about Mr. Reichelt’s conduct, and that the editor had misled the company’s board.
Axel Springer also said in its statement that it would take legal action against third parties who it claimed tried to illegally influence the company’s compliance investigation, “apparently with the aim of removing Julian Reichelt from office and damaging Bild and Axel Springer.”
Mr. Döpfner, the chief executive, said in a statement in March. “However, having assessed everything that was revealed as part of the investigation process, we consider a parting of the ways to be inappropriate.”
Mr. Reichelt was reinstated with a co-editor in chief, Alexandra Würzbach, the editor of Bild’s Sunday edition, who had taken over his duties in his absence.
In explaining its decision on Monday to remove Mr. Reichelt as editor, the publisher cited “revelations” about his behavior that had “come to light in recent days, following media reports.”
Pressure built in Germany after Ippen Media, which publishes a group of websites as well as a print competitor to Bild in Munich, decided on Friday to pull its own in-depth investigation into Mr. Reichelt. That revelation, in The Times and then in a letter from Ippen’s own investigative team, outraged reporters in Berlin, leading one to ask Chancellor Merkel’s spokesman at a news conference on Monday whether that decision had raised concerns in the German government that freedom of the press could be in danger. Ms. Merkel’s spokesman, Steffen Seibert, declined to comment.
article published Monday in the magazine Der Spiegel, which first broke the news this spring of the investigation into Mr. Reichelt. The article described Mr. Reichelt as a man “obsessed with power” who had a “pattern” of both promoting and seducing young women at Bild.
His sexual relationships with women on his staff were known in Bild’s office, Der Spiegel reported.
The magazine also raised further questions about Axel Springer’s internal investigation, which had promised anonymity to women who testified. Nonetheless, one of the women received a message from a “confidant” of Mr. Reichelt, urging her not to speak to investigators, Der Spiegel reported.
Germany’s publishing world is dominated by large companies, largely run by men, where reluctance to be seen as criticizing one another runs deep. Ippen cited such a motivation behind its last-minute decision to withhold the report.
The Frankfurter Rundschau, based in Frankfurt am Main, one of the regional newspapers owned by the Ippen Media company that had planned to publish the investigation, ran an editorial on Monday calling the decision damaging to their relationship of trust with their readers.
The German Journalists’ Association criticized Ippen’s decision not to publish the investigation. But journalists discussing the reporting also raised questions about why the world of German publishing had struggled to have its own MeToo reckoning, and why it took attention from American media to prompt this action.
As the German media world focused on the turmoil at Axel Springer, the staff of Politico, whose acquisition by Springer is expected to close as soon as this week, was largely focused elsewhere. Journalists there are considering forming a union, and organizers have set a deadline of this month to gather support.
John Tye, the founder of Whistleblower Aid, a legal nonprofit that represents people seeking to expose potential lawbreaking, was contacted this spring through a mutual connection by a woman who claimed to have worked at Facebook.
The woman told Mr. Tye and his team something intriguing: She had access to tens of thousands of pages of internal documents from the world’s largest social network. In a series of calls, she asked for legal protection and a path to releasing the confidential information. Mr. Tye, who said he understood the gravity of what the woman brought “within a few minutes,” agreed to represent her and call her by the alias “Sean.”
She “is a very courageous person and is taking a personal risk to hold a trillion-dollar company accountable,” he said.
On Sunday, Frances Haugen revealed herself to be “Sean,” the whistle-blower against Facebook. A product manager who worked for nearly two years on the civic misinformation team at the social network before leaving in May, Ms. Haugen has used the documents she amassed to expose how much Facebook knew about the harms that it was causing and provided the evidence to lawmakers, regulators and the news media.
knew Instagram was worsening body image issues among teenagers and that it had a two-tier justice system — have spurred criticism from lawmakers, regulators and the public.
Ms. Haugen has also filed a whistle-blower complaint with the Securities and Exchange Commission, accusing Facebook of misleading investors with public statements that did not match its internal actions. And she has talked with lawmakers such as Senator Richard Blumenthal, a Democrat of Connecticut, and Senator Marsha Blackburn, a Republican of Tennessee, and shared subsets of the documents with them.
The spotlight on Ms. Haugen is set to grow brighter. On Tuesday, she is scheduled to testify in Congress about Facebook’s impact on young users.
misinformation and hate speech.
In 2018, Christopher Wylie, a disgruntled former employee of the consulting firm Cambridge Analytica, set the stage for those leaks. Mr. Wylie spoke with The New York Times, The Observer of London and The Guardian to reveal that Cambridge Analytica had improperly harvested Facebook data to build voter profiles without users’ consent.
In the aftermath, more of Facebook’s own employees started speaking up. Later that same year, Facebook workers provided executive memos and planning documents to news outlets including The Times and BuzzFeed News. In mid-2020, employees who disagreed with Facebook’s decision to leave up a controversial post from President Donald J. Trump staged a virtual walkout and sent more internal information to news outlets.
“I think over the last year, there’ve been more leaks than I think all of us would have wanted,” Mark Zuckerberg, Facebook’s chief executive, said in a meeting with employees in June 2020.
Facebook tried to preemptively push back against Ms. Haugen. On Friday, Nick Clegg, Facebook’s vice president for policy and global affairs, sent employees a 1,500-word memo laying out what the whistle-blower was likely to say on “60 Minutes” and calling the accusations “misleading.” On Sunday, Mr. Clegg appeared on CNN to defend the company, saying the platform reflected “the good, the bad and ugly of humanity” and that it was trying to “mitigate the bad, reduce it and amplify the good.”
personal website. On the website, Ms. Haugen was described as “an advocate for public oversight of social media.”
A native of Iowa City, Iowa, Ms. Haugen studied electrical and computer engineering at Olin College and got an M.B.A. from Harvard, the website said. She then worked on algorithms at Google, Pinterest and Yelp. In June 2019, she joined Facebook. There, she handled democracy and misinformation issues, as well as working on counterespionage, according to the website.
filed an antitrust suit against Facebook. In a video posted by Whistleblower Aid on Sunday, Ms. Haugen said she did not believe breaking up Facebook would solve the problems inherent at the company.
“The path forward is about transparency and governance,” she said in the video. “It’s not about breaking up Facebook.”
Ms. Haugen has also spoken to lawmakers in France and Britain, as well as a member of European Parliament. This month, she is scheduled to appear before a British parliamentary committee. That will be followed by stops at Web Summit, a technology conference in Lisbon, and in Brussels to meet with European policymakers in November, Mr. Tye said.
On Sunday, a GoFundMe page that Whistleblower Aid created for Ms. Haugen also went live. Noting that Facebook had “limitless resources and an army of lawyers,” the group set a goal of raising $10,000. Within 30 minutes, 18 donors had given $1,195. Shortly afterward, the fund-raising goal was increased to $50,000.
The presence of PFAS in oil and gas extraction threatens to expose oil-field employees and emergency workers handling fires and spills as well as people who live near, or downstream from, drilling sites to a class of chemicals that has faced increasing scrutiny for its links to cancer, birth defects, and other serious health problems.
A class of man-made chemicals that are toxic even in minuscule concentrations, for decades PFAS were used to make products like nonstick pans, stain-resistant carpeting and firefighting foam. The substances have come under scrutiny in recent years for their tendency to persist in the environment, and to accumulate inside the human body, as well as for their links to health problems like cancer and birth defects. Both Congress and the Biden administration have moved tobetter regulate PFAS, which contaminate the drinking water of as many as 80 million Americans.
Industry researchers have long been aware of their toxicity. But it wasn’t until the early 2000s, when the environmental attorney Rob Bilott sued Dupont for pollution from its Teflon plant in Parkersburg, W.Va., that the dangers of PFAS started to be widely known.In settlements with the E.P.A. in the mid-2000s, Dupont acknowledged knowing of PFAS’s dangers, and it and several other chemical manufacturers subsequently committed to phase out the use of certain kinds of the chemical by 2015.
Kevin A. Schug, a professor of analytical Chemistry at the University of Texas at Arlington, said the chemicals identified in the FracFocus database fell into the PFAS group of compounds, although he added that there was not enough information to make a direct link between the chemicals in the database to the ones approved by the E.P.A. Still, he said it was clear “that the approved polymer, if and when it breaks down in the environment, will break down into PFAS.”
The findings underscore how, for decades, the nation’s laws governing various chemicals have allowed thousands of substances to go into commercial use with relatively little testing. The E.P.A.’s assessment was carried out under the 1976 Toxic Substances Control Act, which authorizes the agency to review and regulate new chemicals before they are manufactured or distributed.
But for years, that law had gaps that left Americans exposed to harmful chemicals, experts say. Furthermore, the Toxic Substances Control Act grandfathered inthousands of chemicals already in commercial use, including many PFAS chemicals. In 2016, Congress strengthened the law, bolstering the E.P.A.’s authority to order health testing, among other measures. The Government Accountability Office, the watchdog arm of Congress, still identifies the Toxic Substances Control Act as a program with one of the highest risks of abuse and mismanagement.
In recent days, whistle-blowers have alleged in the Intercept that the E.P.A. office in charge of reviewing toxic chemicals tampered with the assessments of dozens of chemicals to make them appear safer. E.P.A. scientists evaluating new chemicals “are the last line of defense between harmful — even deadly — chemicals and their introduction into U.S. commerce, and this line of defense is struggling to maintain its integrity,” the whistle-blowers said in their disclosure, which was released by Public Employees for Environmental Responsibility, a Maryland-based nonprofit group.
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.
An Unexpected Email
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.
No Money Owed
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.
The Mnuchin Compromise
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.
‘The Government Caved’
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.
A Charmed March
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 areso grossly overmatched it’s not funny.”
The Swiss bank also hired Mr. Wray, then a partner at King & Spalding in Washington who had served as the head of the Justice Department’s criminal division and oversaw the Enron task force. (Mr. Wray became the director of the F.B.I. three years after he negotiated the final plea deal for Credit Suisse.)
“It is a mystery to me why the U.S. government didn’t require as part of the agreement that the bank cough up some of the names of the U.S. clients with secret Swiss bank accounts,” Carl Levin, then a Michigan senator leading an investigation into offshore tax avoidance, said after the 2014 plea agreement.
In the interview, Mr. Neiman, the whistle-blower’s lawyer, said that in July 2014, after the plea deal was signed and as Credit Suisse awaited its final sentencing, he told officials at the tax division of the Justice Department and federal prosecutors who had worked on the case that his client had information that the bank had continued to cloak money held by some U.S. account holders. He gave them one name in particular — Dan Horsky, the retired business professor, who lived in Rochester, N.Y.
The tip checked out. The following year, federal agents arrested Mr. Horsky, who had amassed a $200 million fortune and hidden it with the help of Credit Suisse bankers using offshore shell companies, court documents show. The arrangement lasted for several months after the bank signed its plea deal.
It is unclear why the Justice Department did not notify the court and change the terms of its settlement with Credit Suisse based on the information from the whistle-blower — either before Credit Suisse’s final sentencing or after Mr. Horsky’s case became public. At the sentencing, lawyers for both sides told the court that they had no information to add that would affect the agreement.
Officials who would have had authority to make the decision to review the Credit Suisse case for possible breaches in 2014 and 2015 — including James Cole, who was then the deputy attorney general, and Dana Boente, the U.S. attorney in the Eastern District of Virginia — did not respond to requests for comment.
In 2015, Mr. Horsky pleaded guilty to defrauding the U.S. government and said that he would cooperate with prosecutors. In 2017, he was sentenced to seven months in prison. Some details of his sentencing are sealed, and a federal judge denied a request by Bloomberg News to unseal it. The judge said he denied the request after consulting with the Justice Department and Mr. Horsky’s lawyers.
Mr. Neiman’s client could be richly rewarded if prosecutors move to impose more fines on Credit Suisse. Under an I.R.S. rule, whistle blowers can get as much as 30 percent of the amount of any additional money the government gets. And, Mr. Neiman said, the whistle blower has more names of American account-holders beyond Mr. Horsky’s, although he wouldn’t say how many.
The Detroit Institute of Arts is taking steps to improve its workplace culture following a critical review by outside investigators who said they had fielded employee complaints of retaliation by the director whose autocratic leadership style, they said, had fostered an environment that led a disproportionate number of women on staff to leave.
The findings of the review by the law firm Crowell and Moring, which was hired by the museum, were presented to members of its board in November but were not made public.
The investigators, from the Washington, D.C., office of the law firm, also said that current and former staff members they had spoken to complained that the director, Salvador Salort-Pons, demonstrated a “lack of facility with race-related issues,” according to an audio recording of the board meeting at which the investigators presented their findings.
The museum said Monday that it had taken a number of steps in response to the findings, including establishing a new board position to be a liaison between staff members and the board of directors. It has also set up a confidential hotline for reporting discrimination, retaliation or other workplace issues.
Whistleblower Aid, a nonprofit law firm in Washington that represents some museum staff members, and was reviewed by The New York Times.
infusion of nearly a billion dollars from foundations, private donors and the State of Michigan. The investigators said employees they spoke to said they respected his efforts in this regard.
He has retained the support of the board, and last year the institute persuaded three surrounding counties to agree to continue a property tax surcharge that helps support the museum.
But morale was so low in 2017 that nearly half of museum staff said in a survey that they did not believe the institute provided a work culture where they could thrive, citing disrespect and a sense that their opinions were ignored. The review by Crowell and Moring found those problems had not been addressed in a meaningful way.
Last year, just as issues of culture and diversity roiled museums across the country, current and former employees came forward publicly with complaints, particularly about the institute’s treatment of its Black employees.
In September, the institute hired a Chicago-based diversity and inclusion consultancy. The consultancy, Kaleidoscope, has carried out a survey of employees and is organizing staff focus groups on issues such as equity and diversity. “The Board is fully committed to addressing these concerns and shared that commitment with our staff in December,” Christine Kloostra, a spokeswoman, said of the review’s findings. “At all levels of our organization, we’re working hard together to make the D.I.A. a better place for all of our team members.”
Reviewing employment data, the investigators found that a greater number of women in managerial and professional positions than men had left the museum in recent years. In 2018, for example, it found that 27 percent of women employed by the museum in managerial and professional positions had departed that year, compared to 2 percent of men. In some cases, Ellen Moran Dwyer, one of the investigating lawyers told the board, women said they had left even though they had no other job “because they were unhappy with the environment.”
Whistleblower Aid said the outside review’s findings showed there is a need for more substantial change to address serious problems their own clients brought forward several months ago.
“It’s got to the point where people are so desperate for accountability and change that they are taking this kind of step” to leak the recording of the board meeting, said John N. Tye, the founder and chief executive of Whistleblower Aid.
Some staff said they would wait to see whether the steps the institute is taking would make a difference in addressing the challenges.
“There is a glimmer of hope that something is being done,” said Margaret Thomas, house manager of the Detroit Film Theater, which is part of the institute. “This whole situation should not be swept under the rug.”
She added, “I want to believe that something is going to be done about this.”
