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How Jeffrey Epstein’s charity burnished his image
On paper, Jeffrey Epstein’s foundation looked like a charitable powerhouse. But it wasn’t officially a charity for much of its existence, allowing Mr. Epstein to exaggerate his giving, report Steve Eder and Matthew Goldstein in the NYT.
The organization lost its tax-exempt status in 2008, the same year Mr. Epstein pleaded guilty to soliciting prostitution from a minor, according to a review of tax documents, government records and information provided by federal officials.
This worked to his advantage. “Mr. Epstein was unshackled from the rigorous financial disclosures that charities are supposed to file every year with the government — allowing him to exaggerate his philanthropy as he sought to rebuild his reputation,” write Mr. Eder and Mr. Goldstein.
Exaggeration ranged from simple embellishment to staggering overstatement, including charitable work for the Tribeca Film Festival, the Massachusetts Institute of Technology and Mount Sinai Hospital.
The most glaring example appeared on Wikipedia, where the foundation’s entry had its annual outlay at $200 million a year, more than 10 times its real giving over its entire existence.
Some organizations are taking an active approach to dealing with Mr. Epstein’s charitable giving. The Council on Foreign Relations, of which Mr. Epstein was a member from 1995 to 2009, said it would put $350,000 — the amount he contributed to the council’s annual fund — toward supporting victims of abuse and human trafficking.
• “We want to use this situation as an opportunity to raise awareness of human trafficking and to improve U.S. and global efforts to combat it,” the council’s president, Richard Haass, told Andrew.
Trump and China say a ‘Phase 1’ trade deal is close
American and Chinese trade negotiators are inching closer to agreeing on a preliminary trade deal, according to officials from both countries.
“We’re in the final throes of a very important deal,” President Trump told reporters at the White House yesterday, Bloomberg reports. “It’s going very well.” And the White House counselor Kellyanne Conway said negotiators were “getting really close” to completing a “Phase 1” deal.
• China’s Commerce Ministry also said that the two countries had “reached a consensus on properly resolving related issues,” the WSJ reports.
The optimism followed high-level phone calls between China’s chief trade negotiator, Liu He, and his U.S. counterparts, the trade representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.
But Mr. Trump tempered his optimism in an interview with the former Fox News host Bill O’Reilly about the trade deal. “I’m holding it up because it’s got to be a good deal,” Mr. Trump said. “We can’t make a deal that’s like, even. We have to make a deal where we do much better, because we have to catch up.”
• It’s also worth noting that hopes that a “Phase 2” trade deal will be negotiated within the next year are beginning to evaporate.
Feds are reportedly going after opioid makers
Federal prosecutors will reportedly investigate whether pharmaceutical companies intentionally allowed opioid painkillers to flood communities, according to the WSJ, which cites unnamed sources.
“Prosecutors are examining whether the companies violated the federal Controlled Substances Act,” the WSJ writes, a statute that is normally used to go after drug dealers.
• The report says that “at least six companies have said in regulatory filings that they received grand-jury subpoenas from the U.S. attorney’s office in the Eastern District of New York.”
• Sources told the newspaper that “the subpoenas were in connection with the Brooklyn federal probe.”
• “The probe is in its early stages and prosecutors are expected to subpoena additional companies in the coming months, one of the people said.”
Executives and companies could face civil charges under the Controlled Substances Act if they didn’t report signs that could have indicated that drugs were being used for nonmedical purposes, the WSJ reports. “Criminal charges require prosecutors to prove an effort to willfully and intentionally avoid such requirements,” it adds.
The investigation “could become the largest prosecution yet of drug companies alleged to have contributed to the opioid epidemic” if it results in criminal charges.
Trouble in India for SoftBank?
SoftBank’s investments in WeWork and Uber now look misinformed, with those companies having collectively lost about $100 billion in value this year, prompting soul-searching among investors. And the pattern could repeat in India, writes Henny Sender of Nikkei Asian Review, who reports that overfunding and bloated valuations there have “destabilized the country’s start-ups.”
SoftBank’s first big Indian investment, in the payment company Paytm, is under scrutiny. After initial success on the back of India’s “demonetization,” it is now struggling.
• “It has faced rising competition while burning through cash — as much as $650 million, according to the head of one e-commerce company who has had dealings with Paytm,” Mr. Sender reports. “The company’s losses multiplied by 2.5 times for the fiscal year ended in March.”
The Indian hotel chain Oyo has received more than $1.5 billion from SoftBank, a move that is also raising eyebrows. Its business model promises local hoteliers big fees for signing up with the company and upgrading their properties, but is currently unprofitable.
• “In recent months, the China arms of Sequoia and Warburg Pincus declined to invest in Oyo’s Chinese operation, Oyo Jiudian, believing that its numbers made no sense, according to people with direct knowledge of both decisions,” the reporter writes.
“When SoftBank stops putting money in, nobody else will write a check,” says the Mumbai-based head of India for a big international private equity firm.
New concerns over TikTok’s ties to China
The creator of a video that criticized the Chinese government said this week that TikTok had suspended her account after she posted the clip on the platform. The incident added to fears that the company’s owner, the Chinese social media giant ByteDance, censors videos and punishes creators that China’s government might dislike, writes Raymond Zhong in the NYT.
In a bait-and-switch, the video begins with instructions for lengthening eyelashes. But the creator, Feroza Aziz, quickly moves to the mass detentions of minority Muslims in northwestern China.
• The 40-second clip has amassed more than 498,000 likes on TikTok.
Ms. Aziz was blocked from her TikTok account because she used a previous account to post a video that violated TikTok’s policies against terrorist content, a ByteDance spokesman said.
But U.S. lawmakers have expressed concern in recent months that TikTok censors content on orders from Beijing and shares user data with the Chinese authorities.
A TikTok executive dismissed accusations of Chinese influence. “We don’t remove content based on sensitivities around China or other governments,” said TikTok’s director of creator community, Kudzi Chikumbu, MSNBC reports.
ByteDance is seeking to assure U.S. lawmakers by stepping up efforts to separate TikTok from much of its Chinese operations, Reuters reports. That could include setting up a team in California to oversee data management and hiring more U.S. engineers to reduce its reliance on employees in China, according to the report.
Ray Dalio wrote a book for children
The Bridgewater Associates founder has written a condensed, illustrated version of his 600-page “Principles: Life and Work.” Here’s what he hopes it will teach young readers, according to an interview he gave to Yahoo Finance:
• “The reality of life is so much different than the way you’re taught,” Mr. Dalio said. “They don’t teach you to think for yourself. They don’t teach you as much to fail by mistakes. They don’t teach you everybody has strengths and weaknesses.”
• The biggest lesson in the book, according to Mr. Dalio, is: “Think for yourself while being radically open-minded.”
• “The fear of failure and the self-esteem loss that people have associated with failure stand in the way of their success,” he told Yahoo Finance. “I’ve watched so many people have a fear of failure and a self-esteem problem with failure that stands in the way of them flourishing.”
Melanie Whelan resigned from her position as C.E.O. of SoulCycle. She is also leaving her position as a director on the company’s board.
The speed read
• The private equity firm Silver Lake is buying a $500 million stake in Manchester City Football Group at a valuation of $4.8 billion. (FT)
• Xerox plans to take its $33.5 billion buyout bid directly to HP shareholders. (Reuters)
• Facebook is acquiring Beat Games, the developer of the virtual-reality rhythm game Beat Saber. Terms were not disclosed. (TechCrunch)
• Saudi Aramco is reportedly looking to raise as much as $3 billion from Gulf state funds as part of its I.P.O. (FT)
Trump impeachment inquiry
• President Trump had reportedly already been briefed on a whistle-blower’s complaint about his dealings with Ukraine when he unfroze military aid for the country in September. (NYT)
• Two White House budget officials resigned this year partly because of their concerns over Mr. Trump’s decision to hold up security assistance to Ukraine, a third aide told investigators. (NYT)
• The House Judiciary Committee invited Mr. Trump to its first impeachment hearing, scheduled for Dec. 4. (Reuters)
Politics and policy
• President Trump said he planned to designate Mexican drug cartels as terrorist organizations. (NYT)
• “I have spent literally six years undoing what Michael Bloomberg did,” said Mayor Bill de Blasio of New York. (The Hill)
• President Trump’s truce with France over taxing digital services has expired, but it is unclear whether he will impose new tariffs on French goods. (NYT)
• The E.U’s Brexit negotiator, Michel Barnier, said he would make a new trade deal between Britain and the bloc a priority after Brexit. (FT)
• Potential new rules could allow the U.S. commerce secretary to block imports of any technology deemed to pose a possible national security threat. (FT)
• “Intel, Hewlett Packard Enterprise and others aided and profited from China’s multibillion-dollar surveillance industry.” (WSJ)
• Elon Musk suggested that Tesla has received 250,000 orders for its new electric pickup truck. He also accepted an official tug-of-war contest with Ford, to pit the new pickup against an F-150. (Reuters, Bloomberg)
• New data shows that few employees, customers and contractors pursue arbitration against the likes of Facebook, Google, Amazon and Apple. (American Prospect)
Best of the rest
• The F.A.A. stripped Boeing of its authority to perform and sign off on pre-delivery safety checks of its 737 Max planes, which could mean that the jets will remain grounded longer. (WSJ)
• The Bank of England issued Citigroup with a record fine of £44 million, or about $57 million, for “serious” reporting failures. (FT)
• The Commodity Futures Trading Commission fined a Goldman Sachs subsidiary $1 million over failure to obtain and keep recordings on its sales and trading desk. (WSJ)
• A new research paper argues that short-selling is barely worth the effort. (Bloomberg Opinion)
• Venture capitalists have a new way to describe ideas that go against conventional wisdom: “narrative violation.” (NYT)
• Why Fifth Avenue is amping up its holiday window displays. (NYT)
• How retailers track shoppers’ online purchases using cartoons. (NYT)
• Thanksgiving hams are safe despite a global pork shortage. (WaPo)
• Turkey trouble? Don’t worry: Butterball still runs its Turkey Talk-Line for those needing urgent cooking advice. (NYT)
Thanks for reading! We’ll see you on Monday after the Thanksgiving break.
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