US Politics

Silicon Valley Bank was supposedly the type of institution that would never need a government bailout – right until its backers spent three days on social media demanding one, and then promptly receiving it, after the bank’s spectacular collapse last week.Eight years ago, when the bank’s CEO, Greg Becker, personally pressed Congress to exempt SVB from post-2008 financial reform rules, he cited its “low risk profile” and role supporting “job-creating companies in the innovation economy”. Those companies include crypto outfits and venture capital firms typically opposed to the kind of government intervention they benefited from on Sunday, when regulators moved to guarantee SVB customers immediate access to their largely uninsured deposits.Fifteen years after the global financial crisis, the logic of “too big to fail” still prevails. The financial hardship of student debtors and underwater homeowners is a private problem – but losses sustained by titans of tech and finance are a matter of urgent public interest. Moral hazard for thee, but not for me.What’s more, SVB’s meteoric rise and fall serves as a reminder that many of the guardrails erected after the last crisis have since been dismantled – at the behest of banks like SVB, and with the help of lawmakers from both parties beholden to entrenched finance and tech lobbies.Before becoming the second-largest bank to fail in US history, SVB had transformed itself into a formidable influence machine – both in northern California, where it became the go-to lender for startups, and on Capitol Hill, where it spent close to a million dollars in a five-year period lobbying for the deregulatory policies that ultimately created the conditions for its downfall.“There are many ways to describe us,” SVB boasts on its website. “‘Bank’ is just one.”Indeed, SVB’s management appears to have neglected the basics of actual banking – the bank had no chief risk officer for most of last year, and failed to hedge its bets on interest rates, which ultimately played a key role in the bank’s downfall. In the meantime, the bank’s deposits ballooned from less than $50bn in 2019 to nearly $200bn in 2021.From the moment that Congress passed banking reforms through the 2010 Dodd-Frank law, SVB lobbied to defang the same rules that would probably have allowed regulators to spot trouble sooner. On many occasions, lawmakers and regulators from both parties bowed to the bank’s demands.One of SVB’s first targets was a key Dodd-Frank reform aimed at preventing federally insured banks from using deposits for risky investments. In 2012, SVB petitioned the Obama administration to exempt venture capital from the so-called Volcker Rule, which prevented banks from investing in or sponsoring private equity or hedge funds.​​“Venture investments are not the type of high-risk, ‘casino-like’ activities Congress designed the Volcker Rule to eliminate,” the bank argued to regulators. “Venture capital investments fund the high-growth startup companies that will drive innovation, create jobs, promote our economic growth, and help the United States compete in the global marketplace.”After the Obama administration finalized the Volcker Rule in 2014 without a venture capital carveout, SVB sought its own exemption that would allow it to maintain direct investments in venture capital funds, in addition to providing traditional banking services for roughly half of all venture-backed companies.One such firm was Ribbit Capital, a key investor in the collapsed cryptocurrency exchange FTX, which lauded SVB’s tech-friendly ethos in a 2015 New York Times profile. “You can go to a big bank, but you have to teach them how you are doing your investment,” Ribbit’s founder told the Times. At SBV, “these guys breathe, eat and drink this Kool-Aid every day.”In the transition between the Obama and Trump administrations, SVB got what it wanted: a string of deregulation, based on the idea that the bank posed no threat to the financial system.In 2015, Becker, the CEO, submitted testimony to Congress arguing that SVB, “like our mid-size peers, does not present systemic risks” – and therefore should not be subject to the more stringent regulations, stress tests and capital requirements required at the time for banks with $50bn or more in assets.Two years later, SVB was one of just a handful of banks to receive a five-year exemption from the Volcker Rule, allowing it to maintain its investments in high-risk venture capital funds.The deregulatory drumbeat grew louder in Congress, and in 2018 lawmakers passed legislation increasing to $250bn the threshold at which banks receive enhanced supervision – again, based on the argument that smaller banks would never prove “too big to fail”.The Federal Reserve chairman, Jerome Powell, supported the deregulatory push. Under Powell, a former private equity executive, the Fed in 2019 implemented a so-called “tailoring rule”, further exempting mid-size banks from liquidity requirements and stress tests.Even then, the banks’ lobbying groups continued to push a blanket exemption to the Volcker Rule for venture capital funds, which Powell advocated for and banking regulators granted in 2020.Then, in 2021, SVB won the Federal Reserve’s signoff on its $900m acquisition of Boston Private Bank and Trust, on the grounds that the post-merger bank would not “pose significant risk to the financial system in the event of financial distress”.“SVB Group’s management has the experience and resources to ensure that the combined organization would operate in a safe and sound manner,” Federal Reserve officials wrote.Since the financial crisis, SVB has reported spending more than $2m on federal lobbying efforts, while the bank’s political action committee and executives have made nearly $650,000 in campaign contributions, the bulk to Democrats.Among the highlights of this influence campaign was a 2016 fundraiser for the Democratic senator Mark Warner of Virginia, hosted by Greg Becker in his Menlo Park home. A few months later, Warner and three other Democratic senators wrote to regulators arguing for weaker capital rules on regional banks.Warner went on to become one of 50 congressional Democrats who joined with Republicans to pass the 2018 Dodd-Frank rollback. When asked this week about his vote, Warner said: “I think it put in place an appropriate level of regulation on mid-sized banks … these mid-sized banks needed some regulatory relief.”In the wake of SVB’s collapse, Republicans have not renounced their votes for deregulation – nor have most of the Democrats who joined them, even as Biden is promising a crackdown.Warner took to ABC’s This Week on Sunday to defend his vote; Senator Jeanne Shaheen, the Democrat from New Hampshire, told NBC on Tuesday that “all the regulation in the world isn’t going to fix bad management practices”. Senator Jon Tester, the Democrat from Montana and a co-sponsor of the 2018 deregulatory law, even held a fundraiser in Silicon Valley the day after the SVB bailout was announced.Unless they reverse course, the Silicon Valley Bank bailout could prove politically disastrous for Democrats, who just oversaw the rescue of coastal elites in a moment of ongoing economic pain for everyone else.The good news is that there are straightforward steps that Democrats can take to start fixing things.For example: Senator Elizabeth Warren’s legislation to repeal Trump-era financial deregulation.Democrats can also revisit the areas where Dodd-Frank fell short, including stronger minimum capital requirements, and consider longstanding proposals to disincentivize risky behavior by banks by reforming bankers’ pay. And they should demand that Powell recuse himself from the Federal Reserve investigation of recent bank failures and take a hard look at whether his disastrous record merits outright dismissal under the Federal Reserve Act, which allows the president to fire a central bank chair “for cause”.And yet even now – amid the wreckage of deregulation – these and other measures to better regulate the banks may still be nonstarters among both the Republicans and corporate Democrats who voted for the regulatory rollbacks and have so far shown little sign of repentance.The words of the Illinois Democratic senator Dick Durbin still ring true, 14 years after the financial crisis.“The banks – hard to believe in a time when we’re facing a banking crisis that many of the banks created – are still the most powerful lobby on Capitol Hill,” he said back in 2009. “And they frankly own the place.”If that remains true today, the possibility of change looks grim.
Rebecca Burns and Julia Rock are reporters for the Lever, an independent investigative news outlet, where a version of this article also appeared More

Two decades ago, the United States invaded Iraq, sending 130,000 US troops into a sovereign country to overthrow its government. Joe Biden, then chairman of the Senate foreign relations committee, voted to authorize the war, a decision he came to regret.Today another large, world-shaking invasion is under way. Biden, now the US president, recently traveled to Warsaw to rally international support for Ukraine’s fight to repel Russian aggression. After delivering his remarks, Biden declared: “The idea that over 100,000 forces would invade another country – since world war II, nothing like that has happened.”The president spoke these words on 22 February, within a month of the 20th anniversary of the US military’s opening strike on Baghdad. The White House did not attempt to correct Biden’s statement. Reporters do not appear to have asked about it. The country’s leading newspapers, the New York Times and Washington Post, ran stories that quoted Biden’s line. Neither of them questioned its veracity or noted its hypocrisy.Did the Iraq war even happen?While Washington forgets, much more of the world remembers. The flagrant illegality of bypassing the United Nations: this happened. The attempt to legitimize “pre-emption” (really prevention, a warrant to invade countries that have no plans to attack anyone): this mattered, including by handing the Russian president, Vladimir Putin, a pretext he has used. Worst of all was the destruction of the Iraqi state, causing the deaths of hundreds of thousands of Iraqis and nearly 4,600 US service members, and radiating instability and terrorism across the region.The Iraq war wasn’t the only law- or country-breaking military intervention launched by the US and its allies in recent decades. Kosovo, Afghanistan and Libya form a tragic pattern. But the Iraq war was the largest, loudest and proudest of America’s violent debacles, the most unwarranted, and the least possible to ignore. Or so it would seem. Biden’s statement is only the latest in a string of attempts by US leaders to forget the war and move on.Barack Obama, who came into the White House vowing to end the “mindset” that brought America into Iraq, decided that ending the war was good enough. “Now, it’s time to turn the page,” he said upon ordering the withdrawal of US forces from the country in 2011. Three years later, he sent troops back to Iraq to fight the Islamic State, which had risen out of the chaos of the invasion and civil war. It fell to Donald Trump to harness public outrage over not only the war but also the refusal of elites to hold themselves accountable and make policy changes commensurate with the scale of the disaster.Tempting though it is to look forward, not backward, the two are not mutually exclusive. And it might not be possible to reach a better future without understanding and appreciating why past attempts failed.Ukrainians are now paying part of the price for western misdeeds. Russia’s invasion was an act of blatant aggression. Moscow violated the UN charter and seeks to annex territory as part of an explicitly imperial project (in this respect unlike America’s war in Iraq). Few people outside Russia have genuine enthusiasm for Putin’s effort. Yet, much of the world sees the conflict as a proxy war between Russia and the west rather than a fight for sovereignty and freedom.According to the Economist Intelligence Unit, approximately 58% of the world’s population (excluding the two direct belligerents) lives in countries that are either neutral toward the war or lean toward Russia’s side. Over the past year, support for the west’s position has shrunk rather than grown: a handful of countries initially critical of Russia have shifted toward neutrality. Just last month, 39 countries did not support a UN resolution demanding that Russia withdraw its forces from Ukraine. Those that took a neutral stance, including China and India, represented an estimated 62% of the population of the global south.Russia has not become the international pariah that western leaders claim it to be. Its economy has mostly weathered international sanctions, in part because the only countries willing to impose them are wealthy strategic partners of the US.In this context, the White House should think about the message that Biden sent the world when he acted as though the war in Iraq never happened. When the US commits aggression, he implied, America’s misdeeds do not count. Or perhaps, in saying that “since world war II, nothing like that has happened”, Biden was thinking only of Europe but neglected to say so – in which case he treated the west’s history as synonymous with the world’s, effacing the experience of most of humanity. Either way, Biden conveyed that support for Ukraine is mere power politics, not a principled cause in which all countries have a stake.Hypocrisy alone is not the problem. Hypocrisy is all around us. What matters is whether we are working to build a better world.When Biden memory-holes the obvious, he is not doing so. He is perpetuating the hegemonic project that brought the US into Iraq in the first place. He sends a similar message when he routinely frames the Ukraine war as a struggle of democracy against autocracy – as though countries deserve support against an unprovoked invasion only if the nature of their government meets with Washington’s approval.Countries outside the west have an interest in defending the principle that sovereignty should be respected. They have no interest in defending the principle that sovereignty is conditional. If Washington still claims the right to judge who is sovereign, then has it really renounced the right invade Iraq after all?The US should admit past errors frankly and demonstrate, through words and deeds, that it has learned difficult lessons. No time is too late to build a better world. But even as the US takes the right side of the latest war, it is far from clear what lessons it has learned.
Stephen Wertheim is a senior fellow in the American Statecraft Program at the Carnegie Endowment for International Peace and a visiting lecturer at Yale Law School and Catholic University. He is the author of Tomorrow, the World: The Birth of US Global Supremacy More

Twenty years ago, as George Bush and Tony Blair advocated the need to invade Iraq, Jonathan Freedland and Peter Beinart were on opposite sides of the argument. This week, Peter tells Jonathan why he now regrets supporting the war

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Gina Melton is facing a dilemma. Like millions of other Americans, Melton and her family relied on food assistance benefits boosted by Congress to help them through the pandemic. Now that extra cash is gone.The reduction has hit them hard. Three of her family members are disabled and one of her daughters works to take care of them through an agency. They had already relied on credit cards to pay for medical equipment that wasn’t covered by the federal health insurance schemes Medicare or Medicaid but have had to stop paying a couple of them in order to afford food.“When you have to choose between feeding your family and paying a credit card bill, you have to choose food,” said Melton, 62.Around 42 million Americans are currently enrolled in Supplemental Nutrition Assistance Program (Snap) benefits. Congress increased Snap benefits in response to the Covid-19 pandemic in March 2020. The last extra payments went out at the end of February in the remaining 32 states that were still issuing them, in addition to the District of Columbia, Guam and the US Virgin Islands.The emergency allotments were authorized in tandem with the Covid-19 emergency declaration in March 2022, but in December 2022, Congress passed a law to end the allotments.The lapse in the additional benefits will reduce Snap allotments for the average recipient by $90 a month, with some households losing $250 a month or more. Older adults at the minimum benefit level will see their monthly Snap benefits drop from $281 a month to $23.Though Melton’s husband, a diabetic, is still recovering from a recent surgery, he has been considering going back to work part time at the age of 65 as the family struggles to afford basic necessities, including healthy food. They’ve cut back on food purchases and buy what’s on sale or in reduced-price bins.“The extra food allotment was helping us a lot,” said Melton. “We’ve started shopping at lower-priced stores that don’t bag your groceries, but for a disabled person like myself, that requires me to go with a helper. We’ve also cut back on some more expensive necessities and are relying on the local food pantry more.”The end of the expanded benefits comes at a time when US consumer debt has been on the rise, with 20.5 million Americans currently behind on their utility payments and nearly 25 million behind on credit card, auto loan or personal loan payments, the highest number since 2009. Low-wage workers in the US, who make less than $20 an hour, have experienced drops in wage growth compared with other workers in recent months.Food prices have and are expected to continue to significantly rise in 2023 as well. The US Department of Agriculture estimated that all food prices will increase by 7.9% in 2023 – and they were already 9.5% higher in February 2023 compared with February 2022.With so many Americans receiving Snap benefits because of low wages, unemployment and underemployment, the sudden end of the emergency allotment has been characterized as a “hunger cliff”.Ellen Vollinger, Snap director for the nonprofit Food Research and Action Center, said: “The cliff is aptly named because this a very abrupt change in what people are going to have in their food budget and it’s affecting tens of millions of people.“When the federal government doesn’t provide as much support for food, it doesn’t mean that hungry people all of a sudden are better off, or no longer need assistance, or they go away. The hunger is still there, people are still there, the need is there, but the federal government is too abrupt in shifting the burden and costs of dealing with that downstream, to states [and] localities, and puts a greater burden on charities.”Vollinger noted that the end of emergency allotments leaves low-income families facing difficult choices around food, from forgoing meals and purchasing less to buying cheaper food.“There’s a lot of stress, that’s why we call it a hunger cliff. It’s very precipitous,” she added.Food banks have been bracing for a surge in demand as the expanded Snap benefits expire, with state agencies directing recipients to food pantries to help cope with the reduction in benefits.Studies have shown that the extra payments worked. The Urban Institute found that the increased Snap benefits during the Covid-19 pandemic kept 4.2 million Americans out of poverty in the fourth quarter of 2021, reducing poverty by 9.6% and child poverty by 14% in states with emergency allotments. They also have a wider economic benefit. Every $1 invested in Snap benefits yields between $1.50 and $1.80 in economic activity during economic downturns.A 2022 survey conducted by Propel found that among Snap recipients, there was a significant level of higher food insecurity in states where emergency allotments were cut off. In a January 2023 survey, there was an increase in the number of Snap recipients who reported skipping meals, eating less, visiting food pantries or relying on family or friends for meals compared with December 2022.The end of the emergency Snap allotments also coincides with a push from Republicans in Congress to cut regular Snap benefits this year, despite the majority of Americans having favorable views of the benefits. A January 2023 survey conducted by Purdue University found that seven out of 10 respondents supported permanent expansions of the Snap program.But an expansion looks very unlikely in the current Congress. In the meantime, recipients are facing tough choices.“I just received the last one last week,” said Patricia Ameral, 67, of Massachusetts, referring to the Covid emergency benefits. “I am certain it will mean the difference between consuming less fresh produce and less meat, fresh or frozen.” More

Top executives at Donald Trump’s social media company started to become concerned last spring about $8m that they had accepted from opaque entities in two emergency loans when its auditors sought further details about the payments, according to documents, emails and sources familiar with the matter.The payments had come at a critical time for Trump Media – which runs the Truth Social platform – because it was running out of cash after its planned merger with a blank check company known as DWAC that would have unlocked $1.3bn in capital stalled pending an SEC investigation.But the financing, which came in the form of a $2m loan from an entity called Paxum Bank registered in Dominica in December 2021 and a $6m loan from a entity called ES Family Trust in February 2022, had been arranged in a hurry and Trump Media knew next to nothing about the emergency lenders.The executives had good reason to be concerned: a subsequent examination revealed that the trustee of ES Family Trust was simultaneously a director of Paxum Bank, and one of the part-owners of the bank would turn out to be the relation of an ally of the Russian president, Vladimir Putin.And, months after Trump Media came under criminal investigation for the merger by the US attorney’s office for the southern district of New York, federal prosecutors started to examine whether the company violated money-laundering statutes over the payments, the Guardian revealed on Wednesday.Around that time, Trump Media’s chief financial officer, Phillip Juhan, weighed returning the money because of the opaque nature of its origins, former Trump Media co-founder turned whistleblower Will Wilkerson recounted in an interview.But the money was ultimately not returned, Wilkerson said, in part because the $8m represented such a large proportion of the roughly $12m in cash that Trump Media had in its accounts that losing those funds could put the company in a precarious financial position.The question about who knew about the origins of the $8m that ran the risk of having illegitimate origins because of the Russian connection, and what Trump Media did to ensure that kind of money was not entering the United States has become a key issue arising from the episode.The implications and, more generally, the optics of Trump’s company borrowing money from potentially unsavory sources through opaque conduits are significant considering they could cast a pall over the former president as he seeks to recapture the White House in 2024.According to documents and emails reviewed by the Guardian and interviews with multiple people familiar with the payments, the knowledge about the $8m being potentially problematic stretched across a number of top executives at Trump Media.A lawyer for Trump Media declined to comment on the criminal investigation or the $8m financing. A spokesman for the former president’s son, Don Jr, and the justice department declined to comment.The first $2m loan was sourced by DWAC’s chief executive, Patrick Orlando just days before Christmas 2021 when Trump Media’s financial situation was becoming increasingly acute. Orlando later charged a $240,000 finder’s fee for the loan to Trump Media, according to an invoice billed through his brokerage firm Entoro Securities LLC.Even at that stage, there was some concern about the origin of the payment given the fact that it was being routed through an offshore bank and Orlando declined to provide any further information about the lender, telling Trump Media associates that the lender was extremely private.The financing itself also got approval at the Trump family level, when Don Jr, who had become increasingly involved in the Trump Media deal since the summer when he pushed to renegotiate the licensing deal that Trump had with the company for Truth Social, signed off on the loan.“Just want to keep you in the loop – no guaranty that these will get signed and funded, but we remain hopeful,” John Haley, outside counsel for Trump Media said in a 24 December 2021 email seen by the Guardian, to which Don Jr replied: “Thanks john much appreciated. d.”The issue then lay dormant for months until it resurfaced on 8 March 2022, when Trump Media’s CFO Juhan flagged the fact that the company had virtually no information about ES Family Trust and that the entity had never signed the promissory note confirming the loan conditions.“Our auditors require confirmation statements signed by all noteholders. We don’t have a contact for ES Family Trust other than the name of Angel Pacheco (Trustee). Can you provide contact info (email) so that our auditor (BF Borgers) can email this confirmation? Thanks!” Juhan wrote in the email also reviewed by the Guardian.It remains unclear what further information, or whether a signed version of the loan agreement, was actually passed on to Juhan or to the auditor.But in the following weeks, Juhan considered whether to return the money because of its potentially questionable origins, Wilkerson recounted. Whether Juhan consulted with the board – which includes Don Jr, Trump ally Kash Patel and former Republican congressman-turned chief executive Devin Nunes – is unclear.It was also unclear whether Orlando, a licensed SEC broker-dealer, or the auditor BF Borgers completed any due diligence under anti-money laundering and “Know Your Customer” requirements that mandate vetting of investors to combat the proliferation of illicit money.A person who picked up the phone at BF Borgers this week put a reporter seeking comment on hold until the line disconnected. On a subsequent call, the person said they would pass the request on to managing partner Ben Borgers. Juhan and Orlando did not respond to multiple requests for comment.But, Wilkerson recounted, the money was not returned. And by the time that his attorneys Patrick Mincey, Stephen Bell and Phil Brewster alerted the US attorney’s office for the southern district of New York to the payments on 23 October 2022, the links to a Putin ally were evident. More

TikTok is once again fending off claims that its Chinese parent company, ByteDance, would share user data from its popular video-sharing app with the Chinese government, or push propaganda and misinformation on its behalf.China’s foreign ministry on Wednesday accused the US itself of spreading disinformation about TikTok’s potential security risks following a report in the Wall Street Journal that the committee on foreign investment in the US – part of the treasury department – was threatening a US ban on the app unless its Chinese owners divest their stake.So are the data security risks real? And should users be worried that the TikTok app will be wiped off their phones?Here’s what to know:What are the concerns about TikTok?Both the FBI and the Federal Communications Commission have warned that ByteDance could share TikTok user data – such as browsing history, location and biometric identifiers – with China’s authoritarian government.A law implemented by China in 2017 requires companies to give the government any personal data relevant to the country’s national security. There’s no evidence that TikTok has turned over such data, but fears abound due to the vast amount of user data it, like other social media companies, collects.Concerns around TikTok were heightened in December when ByteDance said it fired four employees who accessed data on two journalists from BuzzFeed News and the Financial Times while attempting to track down the source of a leaked report about the company. Just last week, the director of the FBI, Christopher Wray, told the Senate intelligence committee that TikTok “screams” of national security concerns and that China could also manipulate the algorithm to perpetuate misinformation.“This is a tool that is ultimately within the control of the Chinese government, and to me, it screams out with national security concerns,” Wray said.How is the US responding?White House national security council spokesperson John Kirby declined to comment when asked on Thursday to address the Chinese foreign ministry’s comments about TikTok, citing the review being conducted by the committee on foreign investment.Kirby also could not confirm that the administration sent TikTok a letter warning that the US government may ban the application if its Chinese owners don’t sell its stake but added, “we have legitimate national security concerns with respect to data integrity that we need to observe.”In 2020, then president Donald Trump and his administration sought to force ByteDance to sell off its US assets and ban TikTok from app stores. Courts blocked the effort, and President Joe Biden rescinded Trump’s orders but directed an in-depth study of the issue. A planned sale of TikTok’s US assets was also shelved as the Biden administration negotiated a deal with the app that would address some of the national security concerns.In Congress, US senators Richard Blumenthal and Jerry Moran, a Democrat and a Republican, respectively, wrote a letter in February to the treasury secretary, Janet Yellen, urging the committee on foreign investment panel, which she chairs, to “swiftly conclude its investigation and impose strict structural restrictions” between TikTok’s US operations and ByteDance, including potentially separating the companies.At the same time, lawmakers have introduced measures that would expand the Biden administration’s authority to enact a national ban on TikTok. The White House has already backed a Senate proposal that has bipartisan support.How has TikTok already been restricted?On Thursday, British authorities said they are banning TikTok on government-issued phones on security grounds, after similar moves by the EU’s executive branch, which temporarily banned TikTok from employee phones. Denmark and Canada have also announced efforts to block the app on government-issued phones.Last month, the White House said it would give US federal agencies 30 days to delete TikTok from all government-issued mobile devices. Congress, the US armed forces and more than half of US states had already banned the app on official devices.What does TikTok say?TikTok spokesperson Maureen Shanahan said the company was already answering security concerns through “transparent, US-based protection of US user data and systems, with robust third-party monitoring, vetting, and verification”.In June, TikTok said it would route all data from US users to servers controlled by Oracle, the Silicon Valley company it chose as its US tech partner in 2020 in an effort to avoid a nationwide ban. But it is storing backups of the data in its own servers in the US and Singapore. The company said it expects to delete US user data from its own servers, but it has not provided a timeline as to when that would occur.TikTok CEO Shou Zi Chew is will testify next week before the House energy and commerce committee about the company’s privacy and data-security practices, as well as its relationship with the Chinese government. In the lead-up to the hearing, Chew has quietly met with several lawmakers – some of whom remain unmoved by their conversation with the 40-year-old executive.After convening with Chew in February, Senator Michael Bennet, a Democrat from Colorado who previously called on Apple and Google to remove TikTok from their app stores, said he remained “fundamentally concerned that TikTok, as a Chinese-owned company, is subject to dictates from the Chinese Communist party”.Meanwhile, TikTok’s parent company, ByteDance, has been trying to position itself as more of an international company – and less of a Chinese company that was founded in Beijing in 2012 by its current chief executive, Liang Rubo, and others.Theo Bertram, TikTok’s vice-president of policy in Europe, said in a tweet on Thursday that ByteDance “is not a Chinese company”. Bertram said its ownership consists of 60% global investors, 20% employees and 20% founders. Its leaders are based in cities such as Singapore, New York, Beijing and other metropolitan areas.Are the security risks legitimate?It depends on whom you ask.Some tech privacy advocates say that while the potential abuse of privacy by the Chinese government is concerning, other tech companies have data-harvesting business practices that also exploit user information.“If policymakers want to protect Americans from surveillance, they should advocate for a basic privacy law that bans all companies from collecting so much sensitive data about us in the first place, rather than engaging in what amounts to xenophobic showboating that does exactly nothing to protect anyone,” said Evan Greer, director of the nonprofit advocacy group Fight for the Future.Karim Farhat, a researcher with the Internet Governance Project at Georgia Tech, said a TikTok sale would be “completely irrelevant to any of the alleged ‘national security’ threats” and go against “every free market principle and norm” of the state department’s internet freedom principles.Others say there is legitimate reason for concern.People who use TikTok might think they’re not doing anything that would be of interest to a foreign government, but that’s not always the case, said Anton Dahbura, executive director of the Johns Hopkins University Information Security Institute. Important information about the US is not strictly limited to nuclear power plants or military facilities; it extends to other sectors, such as food processing, the finance industry and universities, Dahbura said.Is there precedence for banning tech companies?Last year, the US banned the sale of communications equipment made by Chinese companies Huawei and ZTE, citing risks to national security. But banning the sale of items could be more easily done than banning an app, which is accessed through the web.Such a move might also go to the courts on grounds that it could violate the first amendment as some civil liberties groups have argued. More

The US Department of Justice filed a legal brief Thursday in support of local governments in Colorado that are part of a growing wave of local and state governments pursuing climate litigation against fossil fuel companies.In the brief, the DoJ argued that the Colorado case against the Canadian energy giant Suncor should be heard in state court, which is considered more favourable than federal court for plaintiffs who are suing oil companies over climate change. ExxonMobile is also a defendant in the case.Experts say the DoJ brief is an action by the administration in support of climate litigation, fulfilling a campaign promise by President Joe Biden. “They’ve definitely come out on the side that the climate advocates wanted,” said Dan Farber, law professor at the University of California, Berkeley.State and local governments across the country have filed lawsuits in recent years alleging that energy giants, including Exxon, Chevron, Shell and BP, failed to warn the public about the harms of fossil fuels and engaged in deception or misrepresentation about their products, resulting in devastating climate emergencies in those jurisdictions. In court filings, fossil fuel companies have argued that media coverage of climate change extends back to the 1950s but local governments continued to promote and encourage production and use of oil and gas.Supporters of the wave of climate lawsuits have compared them to cases against Big Tobacco in the 1990s that resulted in settlements of more than $200bn against cigarette companies. If the lawsuits are successful, they could change how firms do business, compel companies to pay for climate adaptation, and reinforce banking industry concerns that fossil fuels are a risky investment.Since the first lawsuits were filed in California in 2017, oil companies have removed them to federal court, which they see as friendlier to their arguments. But the plaintiffs have maintained that the cases belong in state court.In 2018, local governments in Colorado sued fossil fuel companies seeking damages for the companies’ role in causing climate change. The local governments said they incurred heavy costs from worsening heat waves, wildfires, droughts and floods, and that ExxonMobil Corporation and Suncor Energy Inc. According to the US Energy Information Administration, Colorado has abundant fossil fuel reserves, and two operating petroleum refineries located in Denver – one of them operated by Suncor.The lawsuit claims the companies “knowingly and substantially contributed to the climate crisis by producing, promoting and selling a substantial portion of the fossil fuels that are causing and exacerbating climate change, while concealing and misrepresenting the dangers associated with their intended use.”The case made it up to the tenth circuit appeals court, which agreed with the plaintiffs that the case should be heard in state court. The supreme court, now dominated by conservative judges, will weigh in on that issue.To aid in that decision, the supreme court invited Solicitor General Elizabeth Prelogar to file a brief expressing the views of the United States government on whether the case belongs in federal court. Prelogar had the option to support the state court argument by the Colorado counties, which she did in a filing on Thursday.Asked whether a Colorado case should be removed to federal court, Prelogar argued that the petition should be denied. “Respondents brought this suit in state court, alleging only state-law claims,” she wrote. “Under the well-pleaded complaint rule, respondents’ claims do not present a federal question, and petitioners have identified no sound basis for recharacterizing those claims.”The attorney for Suncor Energy did not immediately respond to request for comment.Farber said the brief is “laser-focused” on the question of whether the cases should be in federal court, and does not make any broader arguments about the climate litigation.The sSupreme Court now has two options – it can either decline to hear the case, or it can take up the case. If it declines to hear the case, then the lower court decision stands, and the lawsuit goes back to state court – a win for the plaintiffs that would have a ripple effect on other climate litigation, and all the cases would be heard in state court, Farber said.If the supreme court decides to hear the case, oral arguments could happen in the fall and the court could issue a decision in 2024. In that scenario, all the climate cases before the courts would be on pause until the decision comes down, he said.“There could be some complicated issues about how to handle some of the individual cases, but I think basically the result would be that things would more or less stand still until the court either decides to hear this case or decides not to hear it,” Farber said.Richard Wiles, president for the Center for Climate Integrity, was delighted by the federal government’s brief. “We’re obviously very pleased with this decision,” he said over the phone. “The DoJ came down on the side of every other federal judge that has looked at this.” He said there is consensus in the courts and the legal community is that the cases belong in state court.As for the Biden administration, he said, “You can definitely say they made good on their promise to strategically support these cases.” More

Janet Yellen, the Treasury secretary, informed Congress that the recent collapses of two US banks, Silicon Valley Bank and Signature Bank, does not reflect on the overall strength of the US banking system. Yellen told Congress the US banking system ‘remains sound,’ claiming that the government’s swift response to the failures helped to restore public confidence in the banking system. ‘I can reassure the members of the committee that our banking system remains sound, and that Americans can feel confident that their deposits will be there when they need them,’ she said More