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      in US Politics

      US sanctions Myanmar’s junta-controlled state oil and gas enterprise

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      The United States imposed sanctions on Myanma Oil and Gas Enterprise (Moge) on Tuesday, the first time it has directly targeted the entity that is Myanmar’s ruling junta’s main source of foreign revenue.The action, first reported by Reuters, prohibits certain financial services by Americans to the state oil and gas enterprise starting on 15 December, the treasury department said in a statement. Financial services include loans, accounts, insurance, investments and other services, according to treasury guidance.The move represents the US’s first direct action against the state-owned enterprise. Washington has previously targeted its leadership.The oil and gas industry is the biggest source of foreign-currency revenue to Myanmar’s murderous junta, bringing in $1.72bn in the six months to 31 March 2022 alone, according to the junta’s figures. Junta-controlled Moge acts as the primary gatekeeper to the country’s oil and gas assets.Since the coup in February 2021 more than 4,162 people have been killed by the junta and pro-military groups and 25,363 have been arrested, according to Assistance Association for Political Prisoners. The United Nations special rapporteur on Myanmar has said the regime is “committing war crimes and crimes against humanity daily”.Some of the world’s biggest oil and gas service companies have continued to make millions of dollars from operations that have helped prop up the military regime, according to a joint investigation of documents obtained by Distributed Denial of Secrets and analysed by the Guardian, the Myanmar activist group Justice for Myanmar and the investigative journalism organisation Finance Uncovered.While the new sanctions will complicate business dealings with Moge, Washington held back from adding the enterprise to the specially designated nationals list, which would effectively kick it out of the US banking system, ban its trade with Americans and freeze its US assets.“The US financial services directive against Moge is a welcome step to disrupt the significant flow of funds to the junta from the oil and gas sector,” said Yadanar Maung, a Justice for Myanmar spokesperson.“The US should continue to target the junta’s sources of revenue and arms, including through full sanctions on Moge that would also target the US corporations that have been supporting the maintenance and expansion of the very gas fields that finance atrocities.”Washington also slapped sanctions on three entities and five people who the US treasury department said were connected to Myanmar’s military, according to the statement, in action coordinated with the United Kingdom and Canada.“Today’s designations close avenues for sanctions evasion and strengthen our efforts to impose costs and promote accountability for the regime’s atrocities. We continue to encourage all countries to take tangible measures to halt the flow of arms, aviation fuel and revenue to the military regime,” the US secretary of state, Antony Blinken, said in a separate statement.Myanmar’s embassy in Washington did not immediately respond to a request for comment. Reuters was unable to reach Moge for comment.Myanmar has been in crisis since a 2021 military coup and a deadly crackdown that gave rise to a nationwide resistance movement that won the backing of several ethnic minority armies.Rights groups and United Nations experts have accused the military of committing atrocities against civilians in its efforts to crush the resistance. The junta says it is fighting “terrorists” and has ignored international calls to cease hostilities.“Today’s action … maintains our collective pressure on Burma’s military and denies the regime access to arms and supplies necessary to commit its violent acts,” the treasury’s undersecretary for terrorism and financial intelligence, Brian Nelson, said in the statement, using the south-east Asian nation’s former name.“We remain committed to degrading the regime’s evasion tactics and continuing to hold the regime accountable for its violence.”The UN human rights expert for Myanmar in September called on the United States to further tighten sanctions on the country’s military rulers to include the state oil and gas enterprise.Human rights advocates have repeatedly called for sanctions on Moge, but Washington had so far held back.Washington in June issued sanctions against the state-owned Myanmar Foreign Trade Bank (MFTB) and Myanma Investment and Commercial Bank (MICB), which allowed the junta to use foreign currency to buy jet fuel, parts for small arms production and other supplies.Myanmar military officials have played down the impact of sanctions.Reuters contributed reporting More

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      in US Politics

      ‘Hamas has created additional demand’: Wall Street eyes big profits from war

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      The United Nations has warned that there was “clear evidence” that war crimes may have been committed in “the explosion of violence in Israel and Gaza”. Meanwhile, Wall Street is hoping for an explosion in profits.During third-quarter earnings calls this month, analysts from Morgan Stanley and TD Bank took note of this potential profit-making escalation in conflict and asked unusually blunt questions about the financial benefit of the war between Israel and Hamas.The death toll – which so far includes more than 8,000 Palestinians and over 1,400 Israelis – wasn’t top of mind for TD Cowen’s Cai von Rumohr, managing director and senior research analyst specializing in the aerospace industry. His question was about the upside for General Dynamics, an aerospace and weapons company in which TD Asset Management holds over $16m in stock.Joe Biden has asked Congress for $106bn in military and humanitarian aid for Israel and Ukraine and humanitarian assistance for Gaza. The money could be a boon to the aerospace and weapons sector which enjoyed a 7-percentage point jump in value in the immediate aftermath of Hamas’s 7 October attack on Israel and the beginning of Israel’s bombardment of Gaza in response.“Hamas has created additional demand, we have this $106bn request from the president,” said Von Rumohr, during General Dynamics’ earnings call on 25 October. “Can you give us some general color in terms of areas where you think you could see incremental acceleration in demand?”“You know, the Israel situation obviously is a terrible one, frankly, and one that’s just evolving as we speak,” responded Jason Aiken, the company’s executive vice-president of technologies and chief financial officer. “But I think if you look at the incremental demand potential coming out of that, the biggest one to highlight and that really sticks out is probably on the artillery side.”That next day, Von Rumohr assigned a “buy” rating to General Dynamics’ stock.Morgan Stanley’s head of aerospace and defense equity research, Kristine Liwag, took a similar approach to the conflict during Raytheon’s 24 October earnings call.“Looking at [the White House’s $106bn supplemental funding request], you’ve got equipment for Ukraine, air and missile defense for Israel, and replenishment of stockpiles for both. And this seems to fit quite nicely with the Raytheon Defense portfolio,” said Liwag, whose employer holds over $3bn in Raytheon stock, a 2.1% ownership share of the weapons company.“So how much of this opportunity is addressable to the company and if the dollars are appropriated, when would be the earliest you could see this convert to revenue?”Greg Hayes, Raytheon’s chairman and executive director, responded: “I think really across the entire Raytheon portfolio, you’re going to see a benefit of this restocking … on top of what we think is going to be an increase in the [Department of Defense] top line [budget].”The comments are seemingly in contradiction of each company’s “statement on human rights” and explicit endorsements of the Universal Declaration of Human Rights and UN Guiding Principles on Business and Human Rights.Aside from the callousness of casually discussing the financial benefits of far-off armed conflict, the comments raise questions about whether these major institutional shareholders of weapons stocks are abiding by their own human rights policies.“We exercise our influence by conducting our business operations in ways that seek to respect, protect and promote the full range of human rights such as those described in the United Nations’ Universal Declaration of Human Rights,” says Morgan Stanley’s “Statement on Human Rights”. “Although we believe that governments around the world bear primary responsibility for safeguarding human rights, we acknowledge the corporate responsibility to respect human rights articulated in the United Nations’ Guiding Principles on Business and Human Rights.”“TD’s commitment to respect human rights is made in accordance with the corporate responsibility to respect human rights as set out in the United Nations Guiding Principles on Business and Human Rights (UNGP),” says TD’s “Statement on Human Rights”. “Since 2018, we have been undertaking a review of current practices and procedures and continue working towards integrating the UNGP across the Bank.”But just three days into the Israel-Hamas war, the United Nations’ human rights council issued a warning that “there is already clear evidence that war crimes may have been committed in the latest explosion of violence in Israel and Gaza, and all those who have violated international law and targeted civilians must be held accountable for their crimes, the UN Independent International Commission of Inquiry on the Occupied Palestinian Territory, including East Jerusalem and Israel, said today.”skip past newsletter promotionafter newsletter promotion“The Commission has been collecting and preserving evidence of war crimes committed by all sides since 7 October 2023, when Hamas launched a complex attack on Israel and Israeli forces responded with airstrikes in Gaza,” said the Human Rights Council, assessments shared by Amnesty International and Human Rights Watch.“[The UN Guiding Principles on Business and Human rights] are clear in their expectation of companies to respect human rights throughout their value chain,” said Cor Oudes, programme leader of humanitarian disarmament, business conflict and human rights at Pax for Peace, a Netherland based non-governmental organization advocating for the protection of civilians against acts of war.“For banks, this includes ensuring that their clients or companies they otherwise invest in do not cause or contribute to violations of human rights or international humanitarian law,” said Oudes. “If a bank invests in an arms producer that supplies weapons to states which use these in serious violations of human rights or IHL, according to the UNGPs, the bank has a responsibility to act to prevent more violations as well as to mitigate the existing impact on human rights.”But the UN won’t be the legal arbiter of whether US companies have participated in human rights violations, a key loophole for institutional investors and the weapons firms.“The Universal Declaration of Human Rights is only as good as how it’s interpreted by the host government, which in this case would be the US,” Shana Marshall, an expert on finance and arms trade and associate director of the Institute for Middle East Studies at George Washington University explained.“These analysts can feel safe in the knowledge that the US government is never going to interpret that law in such a way that they will be prevented from exporting weapons to a country that the US doesn’t have an outright embargo on, which probably won’t have anything to do with human rights law anyways.”Morgan Stanley and TD Bank did not respond to requests for comment.
      Co-published with Responsible Statecraft

      Eli Clifton is a senior advisor at the Quincy Institute and Investigative Journalist at Large at Responsible Statecraft More

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      in UK Politics

      Brexit blamed for £850m fall in UK beauty exports

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      Sign up to our free Brexit and beyond email for the latest headlines on what Brexit is meaning for the UK Sign up to our Brexit email for the latest insight Britain’s beauty industry has suffered a £850m slump in exports to the EU since Brexit, according to top economists. Experts said the sector had […] More

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      in US Politics

      US orders immediate stop to some AI chip exports to China; Lloyds profits up but lending margins fall – business live

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      Good morning, and welcome to our live, rolling coverage of business, economics and financial markets.The US has ordered the immediate halt of exports to China of hi-tech computer chips used for artificial intelligence, chipmaker Nvidia has said.Nvidia said the US had brought forward a ban which had given the company 30 days from 17 October to stop shipments. Instead of a grace period, the ban is “effective immediately”, the company said in a statement to US regulators.The company did not say why the ban had been brought forward so abruptly, but it comes amid a deep rivalry between the US and China over who will dominate the AI boom.Nvidia said that shipments of its A100, A800, H100, H800, and L40S chips would be affected. Those chips, which retail at several thousand dollars apiece, are specifically designed for use in datacentres to train AI and large language models.Demand for AI chips has soared as excitement has grown about the capabilities of generative AI, which can produce new text, images and video based on the inputs of huge volumes of data.Nvidia said it “does not anticipate that the accelerated timing of the licensing requirements will have a near-term meaningful impact on its financial results”.Lloyds profits up but competition squeezes marginsIn the UK, Lloyds Banking Group has reported a rise in profits even as it said competition was hitting its margins as mortgage rates fall back.Britain’s biggest bank said it made £1.9bn in profits from July to September, an increase compared to the £576m for the same period last year. The comparison has an important caveat, however: the bank has restated its financials to conform to new accounting rules.Net interest margin – the measure of the difference between the cost of borrowing and what it charges customers when it lends – was 3.08% in the third quarter, down 0.06 percentage points in the quarter “given the expected mortgage and deposit pricing headwinds”, it said.The bank did set aside £800m to deal with rising defaults from borrowers, but said that it was still seeing “broadly stable credit trends and resilient asset quality”.The agendaFilters BETAAn EY-linked auditor to the Adani Group is under scrutiny from India’s accounting regulator, Bloomberg News has reported.The National Financial Reporting Authority, or NFRA, has started an inquiry into, S.R. Batliboi, a member firm of EY in India, Bloomberg said, citing unnamed sources.S.R. Batliboi is the auditor for five Adani companies which account for about half Adani’s revenues.Bloomberg reported that representatives for NFRA and the Adani Group didn’t respond to an emailed request for comments. A representative for EY and S.R. Batliboi declined to comment to Bloomberg.China’s economic slowdown is causing worries at home, as well as in Germany and other big trade partners.A series of Chinese government actions have signalled their concern about slowing growth, which could cause problems for an authoritarian regime.Xi Jinping, China’s president, visited the People’s Bank of China for the first time, according to reports yesterday. “The purpose of the visit was not immediately known,” said Reuters, ominously.State media also reported that China had sharply lifted its 2023 budget deficit to about 3.8% of GDP because of an extra $137bn in government borrowing. That was up from 3%. The Global Times, a state-controlled newspaper, said the move would “benefit home consumption and the country’s economic growth”, citing an unnamed official.Germany’s economic fortunes were better than expected in October, according to a closely watched indicator – but whether it’s overall good news or bad depends on who you ask.The ifo business climate index rose from 85.8 to 86.9 points, higher than the 85.9 expected by economists polled beforehand by Reuters.Germany has been struggling as growth slows in China, a key export market, as well as the costs of switching from Russian gas to fuel its economy. You can read more context here:Franziska Palmas, senior Europe economist at Capital Economics, a consultancy, is firmly in team glass half empty. She said:
      The small rise in the Ifo business climate index (BCI) in October still left the index in contractionary territory, echoing the downbeat message from the composite PMI released yesterday. This chimes with our view that the German economy is again recession.
      Despite the improvement in October, the bigger picture remains that the German economy is struggling. The Ifo current conditions index, which has a better relationship with GDP than the BCI, is still consistent with GDP contracting by around 1% quarter-on-quarter. This is an even worse picture than that painted by the composite PMI, which fell in October but points to output dropping by “only” 0.5% quarter-on-quarter.
      But journalist Holger Zschaepitz said it looks like things are improving:UK house prices will continue to slide this year and in 2024 and will not start to recover until 2025, Lloyds Banking Group has forecast.The lender, which owns Halifax and is Britain’s largest mortgage provider, said that by the end of 2023 UK house prices will have fallen 5% over the course of the year and are likely to fall another 2.4% in 2024.Those forecasts, which were released alongside its third-quarter financial results on Wednesday, suggest UK house prices will have dropped 11% from their peak last year, when the market was still being fuelled by a rush for larger homes in the wake of the coronavirus pandemic.Lloyds said the first signs of growth would only start to emerge in 2025, with its economists predicting a 2.3% increase in house prices that year.You can read the full report here:The Israel-Hamas conflict adds another cloud on the horizon for the global economy, according to the head of the International Monetary Fund (IMF).Kristalina Georgieva was at “Davos in the desert”, a big conference hosted by Saudi Arabia.The Future Investment Initiative conference was the subject of boycotts five years ago when Saudi crown prince Mohammed bin Salman allegedly ordered the murder of exiled critic Jamal Khasoggi. The distaste of global leaders has apparently faded since, however.Speaking on the Israel-Hamas conflict, Georgieva said (via Reuters):
      What we see is more jitters in what has already been an anxious world. And on a horizon that had plenty of clouds, one more – and it can get deeper.
      The war has been devastating for Israel and Gaza. Hamas killed more than 1,400 people and took more than 220 people as hostages in an assault on Israel. The health ministry in Gaza, which is run by Hamas, said last night that Gaza’s total death toll after 18 days of retaliatory bombing was 5,791 people, including 2,360 children.The broader economic impacts have been relatively limited, but Georgieva said that some neighbouring countries were feeling them:
      Egypt, Lebanon, Jordan. There, the channels of impact are already visible. Uncertainty is a killer for tourists inflows. Investors are going to be shy to go to that place.
      Reckitt, the maker of Dettol bleach and Finish dishwasher products, has missed sales expectations as revenues dropped 3.6% year-on-year in the third quarter.Its shares were down 2.3% on Wednesday morning, despite it also committing to buy back £1bn in shares.It missed expectations because of the comparison with strong sales in the same period last year in its nutrition division, which makes baby milk powder.Kris Licht, Reckitt’s chief executive, said:
      Reckitt delivered a strong quarter with 6.7% like-for-like growth across our hygiene and health businesses and has maintained market leadership in our US nutrition business.
      We are firmly on track to deliver our full year targets, despite some tough prior year comparatives that we continue to face in our US Nutrition business and across our OTC [over-the-counter medicines] portfolio in the fourth quarter.
      Speaking of Deutsche Bank, it posted its own earnings this morning: third-quarter profits dropped by 8%, but that was better than expected by analysts.Shares in Deutsche, which has struggled in the long shadow of the financial crisis, are up 4.2% in early trading.Reuters reported:
      The bank was slightly more optimistic on its revenue outlook for the full year, forecasting it would reach €29bn ($30.73bn), the top end of its previous guidance range, as it upgraded the outlook for revenue at the retail division.
      Net profit attributable to shareholders at Germany’s largest bank was €1.031bn, better than analyst expectations for profit of around €937m.
      Though earnings dropped, it marked the 13th consecutive profitable quarter, a considerable streak in the black after years of hefty losses.
      Here are the opening snaps from across Europe’s stock market indices, via Reuters:
      EUROPE’S STOXX 600 DOWN 0.1%
      FRANCE’S CAC 40 DOWN 0.4%
      SPAIN’S IBEX DOWN 0.3%
      EURO STOXX INDEX DOWN 0.2%
      EURO ZONE BLUE CHIPS DOWN 0.3%
      European indices appeared to be taking their lead from the US, where Google owner Alphabet’s share price dropped in after-hours trading last night. That dragged down futures for US tech companies, even though another tech titan, Microsoft, pleased investors.Analysts led by Jim Reid at Deutsche Bank said:
      Microsoft saw its shares rise +3.95% in after-market trading as revenues of $56.52bn (+13% y/y) beat estimates of $54.54bn and EPS came in at $2.99 (v $2.65 expected). The beat comes on the back of recovering cloud-computing growth with corporate customers spending more than expected. The other megacap, Alphabet, missed on their cloud revenue estimates at $8.4bn (v $8.6bn) with the share price falling -5.93% after hours as operating income and margins both surprised slightly to the downside.
      You can read more about Google’s performance here:We’re off to the races on the London Stock Exchange this morning: and the FTSE 100 has dipped at the open.Shares on London’s blue-chip index are down by 0.15% in the early trades. Lloyds Banking Group shares initially moved higher, but now they are down 2.1% after they flagged increasing competition hitting net interest margins.Good morning, and welcome to our live, rolling coverage of business, economics and financial markets.The US has ordered the immediate halt of exports to China of hi-tech computer chips used for artificial intelligence, chipmaker Nvidia has said.Nvidia said the US had brought forward a ban which had given the company 30 days from 17 October to stop shipments. Instead of a grace period, the ban is “effective immediately”, the company said in a statement to US regulators.The company did not say why the ban had been brought forward so abruptly, but it comes amid a deep rivalry between the US and China over who will dominate the AI boom.Nvidia said that shipments of its A100, A800, H100, H800, and L40S chips would be affected. Those chips, which retail at several thousand dollars apiece, are specifically designed for use in datacentres to train AI and large language models.Demand for AI chips has soared as excitement has grown about the capabilities of generative AI, which can produce new text, images and video based on the inputs of huge volumes of data.Nvidia said it “does not anticipate that the accelerated timing of the licensing requirements will have a near-term meaningful impact on its financial results”.Lloyds profits up but competition squeezes marginsIn the UK, Lloyds Banking Group has reported a rise in profits even as it said competition was hitting its margins as mortgage rates fall back.Britain’s biggest bank said it made £1.9bn in profits from July to September, an increase compared to the £576m for the same period last year. The comparison has an important caveat, however: the bank has restated its financials to conform to new accounting rules.Net interest margin – the measure of the difference between the cost of borrowing and what it charges customers when it lends – was 3.08% in the third quarter, down 0.06 percentage points in the quarter “given the expected mortgage and deposit pricing headwinds”, it said.The bank did set aside £800m to deal with rising defaults from borrowers, but said that it was still seeing “broadly stable credit trends and resilient asset quality”.The agenda More

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      in US Politics

      Cannabis firms are cut off from the US financial system, but relief is in sight

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      Imagine that you run a perfectly legal business but are unable to open a simple checking account at a national bank. Believe it or not, that’s the case right now for anyone licensed to sell cannabis in the US. Given the size of the cannabis industry, it’s pretty shocking. But it may be about to change.In the US, 38 states have legalized marijuana for medical use and 23 of them have legalized it for recreational purposes, including three territories and the District of Columbia. An additional eight states have decriminalized its use. Both red and blue states with legalized marijuana laws have collected $15bn in tax revenue between 2014 and 2022, with $3.77bn in tax revenue attributed to 2022 alone.Meanwhile, if you run a cannabis business – one that sells, distributes, manufactures or in some cases serves the industry, you’re not allowed to be a normal business.Meta, Facebook’s parent, only allows “limited” CBD and hemp advertising. Cannabis companies can’t run TV or radio commercials for their products. They are not allowed to conduct any campaigns outside their state as interstate commerce is forbidden. In Ohio – like other states – they can’t run a billboard campaign without prior approval of the state’s board of pharmacy. Many localities have zoning laws that prohibit them from operating. Many insurance carriers are reluctant to serve the industry as do a number of the country’s largest payroll service providers.Cannabis businesses are not allowed to deduct rent, payroll or other expenses that other businesses can write off. They regularly face expanded business licensing requirements. They can’t take advantage of the federal bankruptcy rules. They can’t trademark their products.And then there’s banking. Cannabis businesses can only choose from about 200 independent and community banks. I don’t mean to throw shade on these organizations, because many of them are excellent. But they oftentimes don’t offer online banking, international access, wire transfer, investment options, financial stability and other capabilities of a larger institution. When it comes to the cannabis industry, federally chartered banks like Wells Fargo, PNC Bank, JP Morgan Chase, TD Bank and Key Bank are not playing ball. Because of this, many cannabis businesses receive fewer financial services and have been forced to retain an uncomfortable level of cash, making themselves exposed to theft and crime. The banking industry realizes this but resists.Why is this? Because cannabis is still considered to be an illegal controlled substance, subject to very strict federal laws and, because it’s illegal at the federal level, many large corporations, such as banks, insurance companies and payroll services, remain spooked.It’s no surprise that, despite all the growth, many in the cannabis industry are struggling to make profits. But there’s potentially good news on the horizon. Finally, the federal government may allow banks with federal charters to do business with those in the cannabis industry.At the end of last month the Senate committee on banking, housing and urban affairs moved forward with the Secure and Fair Enforcement Regulation (Safer) Banking Act, which allows banks to conduct business with cannabis companies. The House already passed a similar act, so the Senate committee’s approval is a big deal.“This legislation will help make our communities and small businesses safer by giving legal cannabis businesses access to traditional financial institutions, including bank accounts and small business loans,” the bill’s sponsors said in a joint statement. “It also prevents federal bank regulators from ordering a bank or credit union to close an account based on reputational risk.”skip past newsletter promotionafter newsletter promotionStill, significant hurdles exist. There remain a number of representatives in both the House and Senate who oppose the bill.“This legislation also compromises the integrity of the United States banking system by giving banks government approval to participate in illegal activity, setting a dangerous new precedent,” some Republican senators said recently in a joint statement. “Allowing banking access to a Schedule I drug sets a dangerous legal precedent and will help facilitate money laundering for drug cartels.” This opposition, combined with a leadership void in the House, could derail progress of the bill for the foreseeable future.But I’m more optimistic. The bill is not going so far as to legalize marijuana, so that should appease some of its opponents. And given the strong bipartisan support received in both the Senate and House for the Safer Banking Act, I don’t believe it’s an overreach to expect passage … eventually. When? Who knows.In the meantime, those in the industry must wait. And fight. And deal with restrictions that few other legitimate companies have to face. It’s tough enough running any business. But for those in this game, it’s a whole new level altogether. More

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      in US Politics

      The trials of SBF and DJT: Trump isn’t clean on crypto but he did warn us about it

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      The New York fraud trial of Sam Bankman-Fried kicked off this week. The 31-year-old former crypto billionaire faces two substantive counts of wire fraud, for acts allegedly perpetrated against the customers of FTX, the crypto-futures exchange he founded, and five related counts of conspiracy. If convicted on all charges, he faces up to 110 years in prison.As fate would have it, his case is being heard a few buildings away from where one Donald J Trump sits on trial for fraud. Like the 45th president – DJT, if you will – SBF has a tough row to hoe.Even if Bankman-Fried is acquitted, he stares at another trial, slated for March 2024, on five more counts of fraud. The men’s paths remain entwined. At that same moment, Trump will be both deep into the Republican primary and likely standing trial in connection with January 6.Furthermore, filings show that as of early August, Trump held $2.8m in a cryptocurrency wallet, with as much as $500,000 in ethereum, a cryptocurrency. On top of that, his collection of non-fungible tokens generated $4.87m in licensing fees. The NFTs are a collection of virtual trading cards, featuring illustrations of Trump as superhero, cowboy or astronaut. Really.Not that Trump has always been in favour of crypto.“I am not a fan of bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air,” he tweeted in 2019.Sound familiar? Prosecutors say Bankman-Fried relied on smoke and mirrors to gain access to political power. According to his indictment, he used customers’ assets “to lobby Congress and regulatory agencies to support legislation and regulation he believed would make it easier for FTX to continue to accept customer deposits and grow”.He is also alleged to have “misappropriated customer money to help fund over $100m in political contributions in advance of the 2022 election”, while seeking to “conceal the source of the funds used for the contributions”.Trump and his party, however, were not the chief recipients of such largesse. Bankman-Fried tended to donate to Democrats. Conservatives were therefore annoyed. They sought to portray Bankman-Fried as a leftist, on top of being a crook. Once upon a time, though, he met Ron DeSantis for no apparent reason other than the fact Florida’s hard-right governor wanted to meet. Now, as a presidential candidate, DeSantis has emerged as a crypto advocate. His campaign continues to sink, however.We know more about such meetings now, thanks in large part to Going Infinite: The Rise and Fall of a New Tycoon, a new book by Michael Lewis, the author of Moneyball, The Big Short and other bestsellers about how capitalism works – and doesn’t.For instance, Jerry Jones, a Republican and owner of the Dallas Cowboys NFL team, showed up at a Beverly Hills party also attended by Hillary Clinton, a passel of Kardashians, Doug Emhoff, the husband of the vice-president, Kamala Harris – and Bankman-Fried.Bankman-Fried had allure. Exactly why continues to puzzle political players. His money doesn’t explain everything. But it does shed light on plenty.In summer 2022, Lewis writes, Bankman-Fried met Mitch McConnell, the Senate minority leader, with the goal of stopping Trump-aligned extremists snagging Republican nominations. It was a high-level meeting – high enough that for one evening, Bankman-Fried even swapped his beloved cargo shorts for a suit.“At that moment, Sam was planning to give $15m to $30m to McConnell to defeat the Trumpier candidates in the Senate races,” Lewis writes.Bankman-Fried also explored paying Trump $5bn not to run in 2024, Lewis writes. Nothing came of that.Now, as Bankman-Fried sits in court, McConnell, 81, remains in the minority, his health in public decline. But McConnell remains a reliable soldier, his hold on his caucus unchanged.skip past newsletter promotionafter newsletter promotionThe crypto industry, meanwhile, scrambles to salvage its image from the damage done by Bankman-Fried.“The idea that one man and one company dictated an entire industry was frustrating for a lot of people,” Kara Calvert, head of US policy at Coinbase, recently told Politico. “At the end of the day, the industry is so broad-based. Nobody wants to let the whole future of technological development in the United States be dictated by a criminal.”Bankman-Fried has not been convicted of anything. But it does seem extraordinary that he rose so high so fast, and that so many political leaders were so eager to help.“From the beginning, I had thought that crypto was pretty dumb,” wrote Zeke Faux, an investigative reporter for Bloomberg and a fellow at New America, in Number Go Up, his unflattering take on crypto and Bankman-Fried. “And it turned out to be even dumber than I imagined.“There was no mass movement to actually use crypto in the real world … from El Salvador to Switzerland to the Philippines, all I saw were scams, fraud, and half-baked schemes.”In September 2021, El Salvador made bitcoin legal tender, the first country to do so. The rightwing Heritage Foundation ranks the country’s economy the 114th most free. Freedom House, more mainstream, rates El Salvador partly free. It’s not a flattering ad for crypto.In the US, major advocates include Eric Adams, the mayor of New York; Robert Kennedy Jr, a conspiracy theorist and likely third-party presidential candidate; and Cynthia Lummis, the Wyoming Republican senator who opposed certifying Joe Biden’s 2020 win just hours after the attack on Congress.Such names should tell us something – as should Trump’s crypto holdings mentioned above. But anyone who still believes might also care to recall Trump’s earlier words.“Unregulated crypto assets can facilitate unlawful behavior, including drug trade and other illegal activity,” he tweeted, more than four years ago. “We have only one real currency in the USA … it is by far the most dominant currency anywhere in the world, and it will always stay that way. It is called the United States Dollar!”Strange as it seems to say it, the man had a point. More

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      in US Politics

      ‘Trump show is over,’ says New York attorney general as third day of fraud trial ends

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      The New York attorney general, Letitia James, told reporters on Wednesday that “the Trump show is over” as the third day of the former US president’s civil fraud trial wrapped up in Manhattan.James and Trump both returned to the trial a day after Trump ran afoul of the judge by denigrating a key court staffer in a social media post.Outside court, James called Trump’s appearance at the civil trial – which he is not required to attend – a “political stunt” and a “fundraising stop”.Trump has spent the first three days of the trial attacking James and Judge Arthur Engoron in press gatherings outside court. He is expected to return to Mar-a-Lago on Wednesday.“I will not be bullied,” James said. “Justice will be served.”The former US president and Republican frontrunner in the 2024 presidential race is voluntarily taking time out from the campaign trail to attend the trial. James’s lawsuit accuses Trump and his business of deceiving banks, insurers and others by providing financial statements that greatly exaggerated his wealth.Trump formally appealed a judge’s refusal to dismiss James’s civil fraud lawsuit against him and his family business on Wednesday. The appeal was filed as Trump sat in a the courtroom, watching an accountant who used to work for him testify as the state’s first witness.Engoron already has ruled that Trump committed fraud by inflating the values of prized assets including his Trump Tower penthouse. The ruling could, if upheld on appeal, cost Trump control of his signature skyscraper and some other properties.Trump denies any wrongdoing. With familiar rhetoric, on his way into court on Wednesday, he called James “incompetent”, portrayed her as part of a broader Democratic effort to weaken his 2024 prospects and termed the trial “a disgrace”.Trump has frequently vented in the courthouse hallway and on social media about the trial, James and Judge Engoron, also a Democrat.But after he assailed Engoron’s principal law clerk on social media on Tuesday, the judge imposed a limited gag order, commanding all participants in the trial not to hurl personal attacks at court staffers. The judge told Trump to delete the “disparaging, untrue and personally identifying post”, and the former president took it down.The non-jury trial concerns six claims that remained in the lawsuit after Engoron’s pretrial ruling, and the trial is to determine how much Trump might owe in penalties. James is seeking $250m and a ban on Trump doing business in New York.On Wednesday, an accountant who prepared Trump’s financial statements for years was to continue testifying as a witness for the state. James’s lawyers are trying to show that Trump and others at his company had full control over the preparation of the statements.skip past newsletter promotionafter newsletter promotionThe accountant, Donald Bender, told the court on Tuesday that the Trump Organization didn’t always supply all the documents needed to produce the statements, despite attesting in letters to the accounting firm that the company had provided all financial records and hadn’t “knowingly withheld” relevant data.During cross-examination, Bender acknowledged he missed a change in information about the size of the Trump Tower apartment.The defense lawyer Jesus Suarez seized on that, telling Bender that Trump’s company and employees were “going through hell” because “you missed it”.Bender responded: “We didn’t screw it up. The Trump Organization made a mistake, and we didn’t catch it.”Trump plans to testify later in the trial.Agencies contributed to this article More