fortune--2020-06-18--‘Taxpayers deserve to know how their money is being spent’: Demands for PPP transparency heat up

Nearly from the outset, transparency has been a major concern for the $670 billion Paycheck Protection Program. And now government agencies, members of Congress, and watchdogs are pushing the Small Business Administration and Treasury to name the nearly 4.6 million PPP loan borrowers.
After just 13 days, funds for the first round of the program (then, some $350 billion) ran out, and the public later came to find out that many of the loans went to large, publicly traded companies and chains. Although Congress has since taken many steps to amend the program—from new rules of who was eligible to receive loans to directing funds to smaller businesses in rural areas—a big question still hasn’t been answered: Who exactly got the loans?
A “violation of the law”
Last week, Treasury Secretary Steve Mnuchin declared in testimony to Congress that names and amounts of borrowers would not be provided, saying they are “proprietary” and in some cases “confidential,” sparking backlash on Capitol Hill.
Now members of Congress and accountability agencies are amping up the pressure on the SBA and Treasury to release names, alleging the administration has blocked government oversight agencies from fulfilling their duties overseeing the SBA and Treasury’s $670 billion taxpayer program.
The Government Accountability Office (GAO), an independent oversight arm tasked with writing a report on how the program has doled out funds by the end of June, has thus far been unable to obtain information from the SBA about loan names and amounts. In a letter Wednesday, five Democratic committee and subcommittee chairs called the SBA’s failure to comply with the GAO’s requests for interviews, documents, and data a “violation of the law” and asked the SBA administrator Jovita Carranza to “immediately comply” with the GAO’s requests. Chuck Young, a spokesperson for the GAO, told Fortune Wednesday the office has not been given a timeline for when it would receive the information from the SBA. A spokesperson for the SBA did not immediately respond to Fortune‘s request for comment.
So far, there have been several attempts to procure the names and loan amounts from the administration, including a bill that failed to pass the House and requests from senators including Sen. Marco Rubio (R-Fla.) and Sen. Ben Cardin (D-Md.) for the SBA to publish further information on the loans. The SBA has provided breakdowns of the average size of loans, industries that received loans, and other broad data, but hasn’t provided individual names and loan amounts, even though the administration has said the data would eventually be released.
Meanwhile, on Monday, seven House Democrats, spearheaded by House Majority Whip James Clyburn, sent letters to the SBA and Treasury (as well as big banks involved in lending for the program) to demand transparency and names of recipients. House Democrats wrote, “Contrary to Secretary Mnuchin’s recent testimony, there is nothing ‘proprietary’ or ‘confidential’ about a business receiving millions of dollars appropriated by Congress, and taxpayers deserve to know how their money is being spent.” A spokesperson for the SBA did not immediately respond to Fortune‘s request for comment.
Additionally, government watchdogs like the Pandemic Response Accountability Committee (PRAC), an independent panel created to oversee the CARES Act, similarly warn of limited access. The inspectors general leading the PRAC warned congressional committees in a letter first obtained by the Washington Post that legal rulings and “ambiguity” in the CARES Act law could block their ability to oversee the implementation of some of its programs, like the PPP.
“We will have PPP loan disclosure”
In a shift in tone from the secretary’s previous testimony to Congress, Mnuchin said on Twitter Monday he “will be having discussions with the Senate [Small Business Committee] and others on a bipartisan basis to strike the appropriate balance for proper oversight” of the PPP loans, and “appropriate protection of small business information.”
But the PPP loan application itself says, “Information about approved loans…will be automatically released” under the Freedom of Information Act, including the name of the borrower and the loan amount. And traditional 7(a) loans through the SBA (the blueprint for the PPP) are not confidential, meaning the names of recipients are made public.
How that naming process goes, however, is still up in the air. Sen. Rubio wrote on Twitter Tuesday, “We will have PPP loan disclosure,” stating that there is “no dispute over larger loan recipients being disclosed,” and that the “only issue still being discussed with administration is how to treat smaller loans to mostly micro-business, sole proprietors & independent contractors.”
Indeed, Sen. Rubio said there are ongoing concerns from some small businesses, and “people who have the data are echoing concerns”—which have included revealing information about loan sizes (payroll is used to calculate the loan size) and how that might impact competition among firms—but “we are working to find ways to disclose that address their concerns,” Rubio said in a tweet Wednesday.
Still, some warn the ambiguity may impede efforts to direct future aid where it’s most needed. “We do not know which companies need the most help because the Trump administration has not released detailed data on the companies that have received PPP loans,” Sen. Cardin said in a statement last week.
Demanding details from the banks
In a similar vein, big banks have also come under fire since the program rolled out, as reports of banks prioritizing some customers over others surfaced early in the first round of funds.
But now, the House Democrats led by Rep. Clyburn are asking for information about loans and lending processes from eight national banks including JPMorgan Chase, Bank of America, Wells Fargo, Citibank, U.S. Bank, and others. In letters sent to each bank, the lawmakers, citing media reports, expressed “significant concerns that the two-tiered system that some banks reportedly developed for wealthy clients may have diverted PPP funds intended for vulnerable small business owners in underserved and rural markets.”
The loans were designed to be “first-come, first-served,” but many noted that because of the lack of initial guidance and the way the program was written, banks would process current lending customers first (which many did), leaving those without lending relationships out in the beginning stages of the program.
As part of the CARES Act, the House members wrote in the letter, the SBA was encouraged to issue guidance to banks on how to “ensure that the processing and disbursement of covered loans prioritizes small business concerns and entities in underserved and rural markets,” but that the SBA and Treasury have thus far failed to issue clear guidance to prioritize loans for underserved communities.
So far, lenders have allocated roughly $512 billion in funds for the program.
Congress members benefited from loans
Additionally, at least four members of Congress including Rep. Roger Williams of Texas, Rep. Vicky Hartzler of Missouri (both Republicans), Rep. Susie Lee of Nevada, and Rep. Debbie Mucarsel-Powell of Florida (both Democrats) have acknowledged close ties to or have benefited from companies that received PPP loans, Politico first reported, and there are likely others.
Some senators are writing legislation to demand further transparency within Congress’s own ranks.
Sen. Joni Ernst (R-Iowa) said Tuesday she is proposing legislation to “require full disclosure of every member of Congress who may be benefiting from the [Paycheck Protection Program],” stating, “Members of Congress should disclose if they are taking taxpayer money,” she wrote on Twitter.


fortune--2020-06-18--Taco Bell’s Black Lives Matter controversy shows how easily corporations can stumble on race issues

There is no shortage of black talent in corporate America

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Taco Bell was getting quite the beating on social media on Thursday after a Facebook video made last week by a man who said he was fired from an Ohio franchise for wearing a Black Lives Matter mask went viral.
Denzel Skinner posted a video on Facebook on June 8 in which he described being asked to remove the mask while working and then told not to come back after he walked off the job at a restaurant he had worked at for eight years.
“This is crazy. All because I got a Black Lives Matter mask on that I’m losing my job,” Skinner said in the video. “We can wear any type of masks.” One tweet of the video garnered tens of thousands of retweets and likes and led to hashtags such as #tacobellisoverparty and #RIPTacoBell.
A spokesperson for Taco Bell, a unit of Yum Brands, confirmed to Fortune in an email that workers were free to wear Black Lives Matter masks and would clarify the mask policy to avoid a repeat of the incident. The company also said that Yum’s head of human resources and the head of diversity and inclusion had spoken to Skinner last week and offered to apologize. Franchisees in the quick-service restaurants industry typically oversee human resource management at their restaurants.
“We believe in Black Lives Matter. We were disappointment to learn about the incident that took place in Youngstown, Ohio,” Taco Bell’s statement said.
The contretemps is embarrassing for the company coming soon after Taco Bell CEO Mark King published an open letter addressing the killing of George Floyd in which he said he and Taco Bell would work to fight racism.
“I’m a white male,” King wrote on June 2. “I grew up in the Midwest and now live in Southern California, where the Black population is a small percentage of the community. I will not pretend to understand the weight of the years of injustice and inequality that our Black friends and colleagues have experienced.”
He continued: “Let me be clear: We don’t tolerate racism or violence against Black people. And we demand inclusivity. We have more work to do and Taco Bell will continue to lead and drive positive change amongst our communities and beyond.”
The statement was similar to those of countless other big corporations this month with lofty goals but short on details on how they’d be reached, and the Skinner case shows the challenges of living up to such ideals while running a business during a time of polarization on matters of race.
Starbucks ran into a similar issue this month. The coffee chain, which has been a vocal proponent of racial equality, backtracked on an earlier decision and eventually let store workers wear their own Black Lives Matter gear despite previously barring them.
Earlier this week, PepsiCo CEO Ramon Laguarta announced a big campaign to fight racism, and the next day a division of the company announced it would retire the name of the Aunt Jemima brand.


fortune--2020-06-18--Facebook removes Trump campaign ads displaying Nazi symbol

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Facebook has removed advertisements created and widely shared by President Donald Trump’s reelection campaign that displayed Nazi markings meant to designate political dissidents in concentration camps.
The ads included a red inverted triangle paired with text warning of “dangerous mobs of far-left groups” running around “causing mayhem.” In the 1930s, the same badge was used to identify communists, liberals, social democrats, and others who did not agree with the politics of the Nazi party. Jewish political dissenters were forced to wear the inverted triangle over a yellow star.
Nearly 90 ads with the image were viewed on Facebook between 1 million and 1.8 million times.
The ads displayed by Trump’s reelection campaign asked supporters to sign a petition against antifa, a term to describe groups of relatively unorganized anti-fascist activists, which the President has recently called a terrorist organization and has worked to tie to protests against police brutality and systemic racism around the country. There is little evidence of the connection.
A Facebook spokesperson told Fortune that the company “removed these posts and ads for violating our policy against organized hate. Our policy prohibits using a banned hate group’s symbol to identify political prisoners without the context that condemns or discusses the symbol.”
In a House intelligence committee hearing Thursday, Nathaniel Gleicher, head of Facebook’s cybersecurity policy, explained that his company’s artificial intelligence would bank the images shared by the Trump campaign and prevent them from resurging on the platform. “We don’t allow symbols that represent hateful organizations or hateful ideologies,” he said. “You obviously want to be careful to allow someone to put up a symbol to condemn it or to discuss it. But in a situation where we don’t see either of those we don’t allow it on the platform and we remove it. That’s what we saw in this case with this ad.”
The Trump campaign, meanwhile, claimed that the symbol had been taken from images posted by antifa. The campaign linked to items being sold by a user on spreadshirt.com with the inverted triangle and the word “antifa” over it. The items were posted just five days ago by a user who says they are from Spain.
“I have never seen it used by antifa, and it simply does not seem plausible to me that Trump’s team has either, based on the weird image that they shared,” Michael Edison Hayden, senior investigative reporter for the Southern Poverty Law Center, told Fortune.
The Trump campaign added that the Anti-Defamation League (ADL) did not have the image in its hate symbols database.
In a statement to Fortune, ADL CEO Jonathan Greenblatt condemned the use of the image by the Trump campaign. “Whether aware of the history or meaning, for the Trump campaign to use a symbol—one which is practically identical to that used by the Nazi regime to classify political prisoners in concentration camps—to attack his opponents is offensive and deeply troubling,” he said. “It is not difficult for one to criticize their political opponent without using Nazi-era imagery. We implore the Trump campaign to take greater caution and familiarize themselves with the historical context before doing so. Ignorance is not an excuse for appropriating hateful symbols.”
Danielle Abril contributed additional reporting to this story.


fortune--2020-06-18--U.S. demand for TV saw a significant drop as George Floyd protests began

As protests spread across the United States in the wake of the police killing of George Floyd, despite the coronavirus pandemic’s continued presence, national demand for television declined.
Total demand in the U.S. for all television series dropped nearly 18% during the period of May 15 to June 4, with a sharp drop occurring between May 31 and June 4—days after Floyd’s death on May 25—data research firm Parrot Analytics found. Total demand during May 15 to May 24, which the firm measured across all streaming and linear TV platforms using piracy consumption data, social media popularity, and other measures, remained relatively stable.
Parrot Analytics
“In the days following George Floyd’s killing, as protests against systemic racism and police brutality spread across the U.S., audiences’ attention was drawn away from their usual content consumption,” said Karina Dixon, director of global insights for Parrot Analytics. “Normally market level and global demand is relatively stable. A 17.8% drop in total U.S. demand over a three-week period shows just how much this tragedy has captured the American public’s attention.”
In the same period from May 15 to June 4, the demand for TV worldwide saw a nearly 8% drop. Parrot attributes this trend to protests expanding across the globe—including in London, Seoul, Sydney, and dozens of other major international cities—as well as the opening up of more countries and states following strict coronavirus lockdown measures.
Parrot Analytics
Despite the decrease in demand for overall television content, certain shows addressing socially relevant topics saw a huge surge in interest as the protests were beginning. U.S. demand for Netflix series Dear White People and When They See Us grew 329% and 147%, respectively, during the week of May 27 to June 2, the firm found.
That interest is also reflected across other mediums as Americans grapple with issues of race and police brutality. The books How to Be an Antiracist, White Fragility, and So You Want to Talk About Race all remain in Amazon’s top 10 bestsellers list after previously selling out of stock. In the podcast space, race-oriented podcasts 1619 by the New York Times and Code Switch by NPR rank in the top 10 most popular shows on Apple’s podcast app.


fortune--2020-06-18--Land O’Lakes CEO Beth Ford and other LGBTQ business leaders talk about the hard work that led to Sup

Land O’Lakes CEO Beth Ford and other LGBTQ business leaders talk about the hard work that led to Supreme Court success

This week, when the Supreme Court ruled that LGBTQ workers were protected from job discrimination under federal job discrimination laws, it was a moment of celebration for, in some cases, a lifetime of hard work. The LGBTQ ruling was achieved on the broad shoulders of the willing and the courageous. For me, it was a moment of reflection and connection.
I am fortunate to now be in a position of CEO-level leadership. Like the rights achieved by the LGBTQ community, my career trajectory has been supported by a community—friends and colleagues who have given me the courage to push forward.
As we celebrate this landmark ruling, I asked them for their reactions, comments, and stories in an email chain. Their careers represent lifetimes of experience in business and nonprofit settings, in big companies and small, in locations across the nation. Their collective work is representative of the work so many in our community had to do to get us here. Rather than summarize their comments, I share their words to inform our future and recognize our past.
“I remember, as if it were yesterday, a meeting held 30 years ago, when as a young gay junior employee, I along with a few gay colleagues met with American Express’s CEO Harvey Golub to plead for the right to purchase benefits for our same-sex partners. I was fearful and unsure whether we would prevail. We did, and I believe employee requests like mine happened across corporate America and were the early steps that began this incredible march to the recent Supreme Court decision.” —Sally Susman, executive vice president and chief corporate affairs officer, Pfizer
“In 1998, I asked my former CEO at Bell Atlantic to testify before the Senate Commerce Committee (chaired by Sen. Kennedy) in support of the Employment Non-Discrimination Act, and he did! I remember sitting in the Senate hearing room thinking just how historic the moment was. I never thought that it would take another 22 years for it to become a reality. It reminds me of MLK’s famous quote: ‘The arc of the moral universe is long, but it bends towards justice.’” —Lisa Sherman, president and CEO, Ad Council
“This decision is the culmination of years of organizing inside of companies by LGBTQ people and allies willing to put their careers on the line for change. Elizabeth Birch pioneered this corporate advocacy at the Human Rights Campaign Fund when she arrived there from Apple, and it’s come so far. Victory is a wonderful testament to this year’s long strategy as so many companies joined with activists and asked the Supreme Court to affirm these rights. It wasn’t easy for us to be out then and doing this work, so thank God we were young and fearless. I am so proud that activists today have taken up the next frontier of intersectional rights and alliances. It’s all connected.” —Hilary Rosen, vice chair, SKDKnickerbocker
“When I attended business school in the ’90s, I was one of only seven openly gay or lesbian students in the entire class. Some of my peers had never met or even heard from a gay person—and these were going to be the country’s future business leaders. I saw firsthand how different life experiences shaped conversations in new ways and sparked ideas that never would have happened otherwise. I firmly believe diverse teams are stronger teams, and I strongly hope that this ruling means more people across the country can show up as their full selves at work.” —Jana Rich, founder, Rich Talent Group
“Representative” is a powerful word. The LGBTQ community is represented by powerful, thoughtful people who contribute to the success of organizations every day, and a robust community of individuals and allies who have done the hard work to give them shoulders to stand on as they reach for their dreams. Today, those shoulders are a little broader, the stretch is a little easier, and the success is a little sweeter.
Beth Ford is president and CEO of Land O’Lakes.


fortune--2020-06-18--The Coronavirus Economy: How a new coworking space designed to celebrate people of color is coping t

The Coronavirus Economy: How a new coworking space designed to celebrate people of color is coping through the pandemic

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Ethel’s Club launched last year as a new kind of coworking space—one that actively celebrates people of color and a diverse membership. In the wake of the reckoning at other private business clubs, such as The Wing, the current moment should have been ideal for a place like Ethel’s Club to shine in the public spotlight as a prime counteroffering and better way of doing business.
But COVID-19 has gotten in the way of just about everything. Even as some regions are beginning to reopen, the future of coworking spaces remains uncertain.
Fortune spoke with founder and CEO Naj Austin for a new series, The Coronavirus Economy, about how the outbreak has affected her business, her thoughts on the future, and how she is working through the pandemic.
The following interview has been lightly edited and condensed for clarity.
Fortune: Ethel’s Club was founded with the purpose of both celebrating but also better serving people of color. What inspired you to launch the business, and what can prospective members expect at this private club versus other coworking spaces?
Austin: I have always craved and sought out spaces and communities that made me feel safe. Whenever I enter a space, I always hope that I’m able to leave my burdens at the door and feel fully comfortable in all facets of my identity. However, as a black woman, this isn’t usually my reality. When I started to look particularly within the landscape of social clubs and other third spaces, I found this to be even less of the case. That’s when the wheels really began to turn and the idea of Ethel’s Club became less of an idea and more of a necessity that had to be created.
Our clubhouse—both online and IRL—truly considers and understands what it’s like to be a person of color navigating the world. Our community is meant to inspire, heal, and empower.
“Our clubhouse—both online and IRL—truly considers and understands what it’s like to be a person of color navigating the world. Our community is meant to inspire, heal, and empower.” Amandla Baraka
When nonessential businesses were shut down in March, there wasn’t much wiggle room for private clubs and coworking spaces given that everyone was forced to self-isolate. With so many people working from home, what has it been like to sustain the business over the past several weeks and months?
We have a digital clubhouse where members can pay $17 per month to access three events every weekday, connect with and DM other members around the world, join our monthly book club, writing group, or design club, and stay up to date with our feed of articles and content centering marginalized voices.
We’ve had to change our focal point from Brooklyn to the world, and we’ve embraced the growth; we now have members as far as Norway.
“Whenever I enter a space, I always hope that I’m able to leave my burdens at the door and feel fully comfortable in all facets of my identity. However, as a black woman, this isn’t usually my reality,” says Austin. Amandla Baraka
Ethel’s Club was founded just last year. How does a shutdown of this nature affect the future of the business, from growing your membership base to raising capital?
We’ve always been nimble, fast-moving, and understood what our audience needed and expected from us as a company. We were able to provide a resource in the time of COVID that was difficult and or frustrating for them to find elsewhere. We curate everything from events, music, films, articles—you name it. As a member, you get access to that experience.
Now that select cities and states are starting to reopen, how is Ethel’s Club adjusting to whatever the new normal might be? Are there any kinds of social distancing measures being put into place? And how could this affect the social nature of the private club for the foreseeable future?
We are definitely following every safety measurement. We will open in phases and will always have an open line of communication with our members to ensure they’re comfortable and feel safe within the clubhouse.
“[Ethel’s Club offers] a digital clubhouse where members can pay $17 per month to access three events every weekday, connect with and DM other members around the world, join our monthly book club, writing group, or design club, and stay up to date with our feed of articles and content centering marginalized voices,” says Austin. Amandla Baraka
Over the past few weeks, there has been a much stronger and more concerted effort on social media to encourage consumers to support black-owned businesses. At the same time, there is the worry that while this might offer a much-needed sales bump during an economic downturn, nonblack consumers will not commit to this effort in the long term. What can other members of the business community do to amplify and sustain support for black-owned businesses?
I think that people have to put in the work. These black businesses were here before the boost, and we will be here after. The ask right now is to see us for who we are: smart, savvy business owners with compelling products that you should buy on that account alone.


fortune--2020-06-18--Spotify partners with Warner Bros., DC Comics to produce narrative podcasts

Spotify will team up with WarnerMedia’s DC Comics and Warner Bros. to produce and distribute an original slate of narrative podcasts centered on DC’s cast of superheroes, the companies announced Thursday.
The multiyear deal—exact length not specified—gives Spotify a first-look option at scripted drama and comedy podcasts based on characters such as Superman, Batman, Wonder Woman, Harley Quinn, the Joker, and more. The deal will also see Spotify produce podcasts based on Warner Bros.’ wider film and television libraries, as well as entirely new series based on original intellectual property.
“As we continue to see explosive growth in podcasting around the world, we are thrilled to partner with Warner Bros. to build this slate of programming drawn from the worlds of DC and WB,” Dawn Ostroff, Spotify’s chief content and advertising business officer, said in a statement.
“We’re excited to bring beloved characters and franchises from DC and Warner Bros. into this new world and to use our storytelling prowess to redefine what’s possible in the scripted audio space,” Warner Bros. executives Robert Steele and Peter Girardi added in a statement.
Over the past year and a half, Spotify has pushed heavily into the podcast business, starting with the $340 million purchase of podcast companies Gimlet and Anchor in February 2019. Since then, the Swedish music streamer acquired podcasting studio Parcast and Bill Simmons’ The Ringer and its popular network of podcasts. Last month, it signed an exclusive deal reportedly worth $100 million with Joe Rogan for his wildly popular podcast The Joe Rogan Experience, bringing Spotify’s podcast spending well over half-a-billion dollars.
DC and Warner Bros., meanwhile, are subsidiaries of their parent company, WarnerMedia, which just launched an expansive video-streaming service in HBO Max on May 27.


fortune--2020-06-18--Passengers are afraid to fly. The right tools could help airlines woo them back

For an industry flush with success at the start of 2020, it’s remarkable how quickly commercial aviation went into a nose dive because of the COVID-19 health crisis, which has left most of the world’s airlines and countless equipment manufacturers in severe financial distress.
In the short term, “the threat to the airline industry is grave,” Boeing CEO David Calhoun recently told NBC News. According to Calhoun, passenger traffic isn’t expected to rebound to its record 2019 levels for two to three years, with some airline executives anticipating a more pessimistic three-to-five-year recovery. For comparison, it took nearly three full years following the terrorist attacks on Sept. 11, 2001, for the airline industry to rebound, according to the U.S. Bureau of Transportation Statistics.
Carriers and their equipment and services suppliers are exploring how to fundamentally rethink their industry to make travelers feel safe again, even as industrialized countries are still trying to wrest control of the pandemic that continues to ravage other parts of the world. Ultimately, resuscitating commercial aviation must start by restoring public confidence in the industry’s ability to make the end-to-end travel experience as safe as possible.
Whatever combination of steps the aviation industry takes will be only as effective as its effort to inform would-be air travelers of those actions and how they’re perceived in aggregate. Even small missteps by carriers could slow the recovery, with passenger confidence the linchpin to success. This means that the stewardship of aviation’s delicate course correction will be extremely important; everything the industry does will need to be seen through the lens of passengers’ well-being, not the airlines’.
As it is shaping up, layers of safety are what the flying public can expect to experience as they resume air travel. This includes mandatory face coverings, social distancing, passenger health checks in a growing number of airports, and in all probability the reconfiguration of aircraft cabin interiors. Moreover, how to convince air travelers that flying commercially is safe amid the virus’s spread is a challenge shared among all industry players.
On this last point, key vendors to the airline industry are quickly stepping up by offering ready-to-go solutions to leverage simulation and modeling of “contamination dispersal” in aircraft cabins and airport terminals. These tools should help airlines figure out and demonstrate to passengers how they are minimizing community spread.
The good news is that today, all modern passenger jets already have very sophisticated cabin air systems with hospital-standard high-efficiency particulate air (HEPA) filters, so air is cleaned and kept moving on a continuing basis. A greater sense of security, however, requires taking an additional step. Today, seeing the unseen—how air flows—can create more than a sense of safety but visible proof of safety.
Tools that can do this have already proven their abilities in the ground fight against COVID-19. When China needed to erect several medical facilities earlier this year in response to the coronavirus outbreak, the Central South Architectural Design Institute Company of China undertook the task of erecting multiple makeshift hospitals on an accelerated timeline. In addition to the logistical challenge, an HVAC (heating, ventilation, and air conditioning) system that minimized the risk of exposing hospital staff and noninfected patients to COVID-19 was imperative.
By using real-world simulation of air circulation patterns, designers were able to determine which of their proposed ventilation layouts would be the most effective.
Airlines and airports can employ the same simulation technology to help airlines and original equipment manufacturers (OEMs) establish how to minimize the dispersal of contaminants, based on different cabin passenger layouts and traffic patterns in airports. (For an example, see this video.) Airlines can efficiently simulate airflow and virus diffusion patterns in an aircraft cabin and work with a virtual model to redesign and test safety procedures. By creating high-rendering videos to show how their procedures work, they can communicate effectively with all stakeholders and increase passenger confidence. (My company, Dassault Systèmes, offers solutions that address several of these issues, including our Keep Them Operating and Passenger Experience solutions.)
Longer term, aviation’s OEMs may also choose to structurally modify the cabin itself to enhance onboard safety. But this action would take longer to implement, since the Federal Aviation Administration would have to certify any such changes, as was the case following 9/11, when OEMs upgraded cockpit doors to make them virtually impenetrable.
Another area of great uncertainty is the extent to which social distancing will be required in airports, including security queues—what tests will be required, and how will they be administered. This is a commercial issue for both airports and airlines, since retail outlets provide a lucrative source of revenue for airport operators, which helps reduce the charges made to airlines, according to Karen Dee, CEO of the Airport Operators Association.
Airports can use the same technology to create simulated models that help them optimize passenger flow and test the effectiveness of safety measures and procedures. By trying out their plans in a “virtual twin” of the airport first, they can optimize resources and minimize disruption when implementing those plans. Crucially, they can also create videos to demonstrate to workers and passengers that the environment is safe. (For an example of such a simulation, see this video.)
In the “new normal” that follows the pandemic, passenger safety needs to be built in at every stage, from design to departure and flight. And the steps that are taken to ensure passenger safety must be clearly articulated to give people assurances that they will be safe when they fly. Thanks to the combined efforts of companies across the aerospace ecosystem, that end-to-end approach is already in place. Now it’s time to act.
David Ziegler is the vice president of aerospace and defense at Dassault Systèmes.


fortune--2020-06-18--Carnival loses $4.4 billion, as cruise lines see little reopening relief in sight

As the pandemic and its near-total shutdown of leisure travel continues to ravage the cruise industry, the world’s largest cruise company is leaking floods of cash.
Carnival Corp. lost $4.4 billion in the quarter ended May 31, including a $2 billion loss from selling off some of its cruise ships, the Panama-based company said Thursday. With almost all of its operations on hold since March, the company eked out $700 million in revenue—an 85% plummet from $4.8 billion a year earlier.
But the pain is far from over: Even as the company plans to accelerate the sales of more of its enormous floating hotels, Carnival says it expects to burn an average of $650 million per month for the rest of 2020. It previously was burning about $500 million every month, according to analyst estimates.
Cruise companies were some of the earliest businesses to feel the effects of the global COVID-19 pandemic—and to draw widespread criticism for their lumbering response to it. Carnival, which operates Princess Cruises as well as Holland America and its eponymous brand, was at the center of early COVID-19 outbreaks on its Grand Princess and Diamond Princess ships. Now the company is facing passenger lawsuits and a U.S. House of Representatives probe into its handling of the early crisis.
Compounding their financial pain, Carnival and its top competitors were also left out of the U.S. federal stimulus package designed to throw American businesses a lifeline. While the major cruise operators all have headquarters in Miami, they are technically incorporated overseas, in a long-standing arrangement that allows them to avoid paying U.S. federal income tax on most of their profits.
Carnival CEO Arnold Donald in April reaffirmed his company’s intention to remain incorporated abroad. But now he is scrambling for other financing: His company has raised $6.6 billion in debt and stock, completely tapped its $3 billion revolving credit facility, deferred other debt payments, and is selling off assets. Carnival said Thursday that it has preliminary agreements to sell another six ships in the next 90 days, and is working to sell more ships and non-ship assets. The company says it had $7.6 billion of available liquidity by the end of May.
Carnival had 104 ships in its fleet at the end of its 2019 fiscal year, with 17 additional ships, including planned replacements for existing vessels, on order through 2025. (The company said Thursday that it expects delays in the delivery of four of those ships, which previously had been scheduled to be constructed before October.)
Those measures may help Carnival stay afloat until passengers are able to reboard its ships—although it has become increasingly unclear when that will be. While the company had previously said it might resume some cruises on Aug. 1, Donald has backed away from that hope in recent days.
“I wish I could give you a date, but we can’t, because it’s a regulatory matter,” Donald told travel website The Points Guy in an interview this week.
The U.S. Centers for Disease Control and Prevention in April extended a “no-sail” order for cruise ships through at least July 24. But industry members seem to anticipate further regulatory delays; this week, Norwegian Cruise Line Holdings said it would not resume cruise operations before October.
On Thursday, Carnival did not specifically address its previous Aug. 1 prediction, but said it “is unable to definitively predict when it will return to normal operations.”
In the meantime, Carnival ships aren’t entirely without passengers, however unwilling they may be. The pandemic-related shutdown of cruising stranded more than 80,000 Carnival employees at sea, on board ships, until they could be repatriated to their home countries.
Employees across all cruise companies have reported grim and sometimes COVID-infected conditions while they have been trapped at sea. By mid-May, more than 578 crew members had contracted COVID-19 at sea, and seven had died, the Miami Herald reported; others have reportedly died by suicide.
On Thursday, Carnival said it had repatriated approximately 60,000 cruise-ship employees to more than 130 countries, either by sailing them home or by chartering flights. Another 21,000 employees will be repatriated by the end of June, according to Carnival, which added that it is “focusing on the physical and mental health” of employees “experiencing extended stays on board.”
That includes giving employees access to “fresh air and other areas of the ship,” as well as movies, Internet, and counseling services. The company also said it is “providing most shipboard team members with single occupancy cabin accommodations, many with a window or balcony.”


fortune--2020-06-18--Delta CEO says return to breakeven is in sight

There is some light at the end of the tunnel for Delta Air Lines.
The airline sounded an optimistic note about traffic volumes rising this summer—and losses decreasing in the coming months—even as its CEO said 500 employees had contracted COVID-19, news that reignited worries about the safety of air travel.
Delta chief executive Ed Bastian said at the company’s annual shareholder meeting, held virtually this year, that the airline would add some 2,000 flights in July and August. That would still leave the airline’s domestic capacity down 55% and 60% from normal levels for those months. Last week, Delta abruptly canceled summer flights to smaller markets such as Juneau, before reinstating them a few days later as a condition of getting federal government assistance.
Bastian was cautious about predicting what would happen beyond the next couple of months. Delta will still be burning through $30 million a day in cash reserves at the end of June, but that’s better than the $100 million churn of a few weeks ago. The summer promises to be an improvement from the second quarter, when capacity was down 85%.
The Delta CEO said the business might need two or three years to get back to normal levels, but that with cost controls the company could return to a break-even point by next spring as Americans slowly return to air travel.
“We are in the process of recovery, there’s no doubt about it,” Bastian later told Bloomberg Television. “There are clear signs the momentum we have is meaningful and continuing to build.”
An average of 415,135 passengers were screened at U.S. airports in the first 16 days of June, according to the Transportation Security Administration. While significantly higher than traffic volumes at the height of lockdowns in April, that number is still down more than 83% from the same period last year. The big test for Delta, Bastian said, will come after Labor Day when it becomes clearer how much business travel is returning.
In a sign of how fragile any new momentum can be, Delta’s stock and that of other airlines fell in premarket trading when Bastian said 500 employees had contracted COVID-19. (Delta had 90,000 employees as of its most recent annual report.) Those share declines were pared back after the market open. The stock market has been volatile in the past few days on concerns about infection rates creeping up again in several major states.
Delta, like other airlines, has implemented several measures to limit the virus from spreading on its flights. It has stopped booking middle seats until at least September. In May, Delta and its major peers started requiring passengers to wear face masks on its flights, though they have not always enforced those rules rigidly. But this week, an airline industry trade group said that could change, warning the public that passengers not complying with the rules could be barred from flights.


fortune--2020-06-18--E-book reading is booming during the coronavirus pandemic

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The COVID-19 crisis forced bookstores and libraries to close across the country, which has ignited a revival in reading electronic books.
The e-book market had been in decline for the past six years, but now that it’s one of the easiest ways to get new books during the pandemic, libraries and publishers report a surge of new interest.
For example, at OverDrive, which helps 90% of libraries in North America offer e-books to their patrons, e-book loans have jumped 53% on average since before mid-March. Kids, or grownups checking out kids’ books, have increased their e-book reading the most, the company says. Young adult nonfiction e-book checkouts are up 122%, and juvenile fiction is up 93%.
The system has also seen 343,000 people create new digital library cards since the beginning of March, more than double the number created in all of last year. OverDrive’s catalog includes more than 4 million digital offerings, counting both e-books and downloadable audio books.
More kids are reading e-books for a pretty obvious reason, explains David Burleigh, director of marketing at OverDrive. “As schools around the country have remained closed, students, parents, and teachers have continued to turn to digital titles from public libraries for educational and entertaining content,” he says. “Children’s and young adult [books] have seen the largest surges in usage since the stay-at-home order, especially in the e-book format.”
In the New York Public Library system, which uses its own homegrown e-book lending platform, the increase has been even larger. The system has seen a 200% increase in new users of its e-reading platform, called SimplyE, since all 92 of its physical buildings had to close in mid-March. And 50,000 people have signed up for digital library cards in the app, an 864% increase from the same period last year, says Andrew Medlar, who manages the library’s circulating collection.
The library system has also tried to transfer some of its programming online. Thousands of people have joined one of the system’s virtual book clubs, and an online recommended reading list related to black liberation has pushed many titles onto the library’s most-borrowed e-book list, Medlar says.
The stay-at-home boom has also increased outright sales of e-books from major publishers. In April, according to the most recent data available, publishers’ e-book revenue grew 11% compared with the same month last year, rising to $93 million, the Association of American Publishers reports. That’s the first monthly year-over-year increase since last July and reverses a long-running decline in e-book sales, which peaked in 2014. At the same time, revenue from general interest print books in April declined 7% to $549 million.
Still, publishers have kept e-book prices relatively high, and consumers will probably go back to reading print books once the crisis ends, says longtime publishing consultant Jane Friedman, who also writes the industry newsletter Hot Sheet. “Readers who prefer print will likely continue to choose it when they can,” she says. “For them, e-books are a stopgap measure, especially when supply chain issues prevent print copies from being readily available.”
Only about one-quarter of people in the U.S. read an e-book last year, compared with 65% who read at least one print book, according to surveys by Pew Research. E-book reading increased steadily from 2011 through 2014 before plateauing and even declining slightly since then.


fortune--2020-06-18--Join us at Brainstorm Health 2020

Join us at Brainstorm Health 2020

Good morning, readers. If you were to assemble 50 people in a room who could help you truly understand health care today, who would you pick?
To help you choose, I’ll start with my list. First, I’d want some insight into today’s most pressing challenges (and biggest opportunities) for medical science—hoping to understand everything from vaccine development to the latest advances in gene editing. So, I’d invite Alex Gorsky, the CEO of Johnson & Johnson and Stéphane Bancel, the CEO of Moderna, who are both in the forefront in the race for a COVID-19 vaccine—and pursuing radically different strategies to get there. I’d be thrilled to talk with Dr. Jennifer Doudna, the pioneering biochemist who co-discovered CRISPR-Cas9, the gene-editing technique that may one day provide cures for everything from certain cancers to inherited blood disorders to, perhaps, the next pandemic virus.
I’d add three more innovative drug-company CEOs—Dr. Vas Narasimhan of Novartis, Robert Bradway of Amgen, and Dr. Giovanni Caforio of Bristol Myers Squibb—along with the leader of the Biotechnology Innovation Organization, Dr. Michelle McMurry Heath—to talk not only about the current efforts to fight the coronavirus, but also the new horizons in drug discovery for a slew of other pathologies. And I’d round out the discussion with the CEOs of GE Healthcare and Baxter, respectively—Kieran Murphy and José Almeida—to discuss the myriad chronic conditions, from cancers to kidney disease, that didn’t suddenly vanish during the pandemic and that still require care.
How can health care systems balance these conflicting demands—as COVID-19 patients flood emergency rooms and ICUs and those in need of surgeries or chemotherapy avoid the hospital for fear of infection? For some perspective, I’d seek the expertise of two thoughtful hospital CEOs: the Mayo Clinic’s Dr. Gianrico Farrugia and Intermountain Healthcare’s Dr. Marc Harrison. And I’d be more grateful still if the Dean of Stanford Medicine, Dr. Lloyd Minor, and healthcare venture capitalist Sue Siegel—both quite wise, in my view—could join us as well.
For sure, I’d want some fresh intel on digital health and analytics—to see how data and A.I. and a phone-ful of other technologies can transform health as we know it. With that in mind, Verily’s chief medical and scientific officer Dr. Jessica Mega, Google Health boss David Feinberg, and the leader of IBM Watson Health, Paul Roma, would be way high on my invite list. So would epidemiologists like Dr. John Brownstein at Boston Children’s, whose HealthMap is a real-time virtual window into every disease hotspot in the world. As would Eric Lefkofsky, the CEO of Tempus, who is discovering a hidden map of disease—and, hopefully, a guidebook for precision cures—in human DNA, RNA, and protein.
Any real discussion of today’s health care system would have to have candid perspective from three of the most insightful physician-scientists on the planet—Dr. Amy Abernethy, Dr. Julie Gerberding, and Dr. Margaret Hamburg. Abernethy (now at the FDA), Gerberding (now at Merck), and Hamburg (now at the National Academy of Medicine) have résumés that alight upon every inch of the U.S. health system, from top hospitals to health commissioners to HHS. And speaking of which, anyone would be nuts to leave out Seema Verma, the Administrator of CMS, who directs programs providing health care for 130 million Americans.
Naturally, I’d want to hear from leading health insurers such as Aetna President and CVS EVP Karen Lynch and Centene CEO Michael Neidorff. And I’d be remiss “to separate the head from the body,” as my late friend Bernard Tyson put it—so I’d call up Dr. Joshua Gordon, director of the National Institute of Mental Health, too. The COVID-19 pandemic has brought with it a parallel outbreak of anxiety, stress, loneliness, and exhaustion that’s being felt by employees everywhere—which is something that corporate leaders like Cisco CEO Chuck Robbins and Bank of America Vice-Chairman Anne Finucane have thought about deeply. I’d ask both to come join us—and for good measure, I’d welcome chief medical officers and wellbeing experts from IBM, Walmart, and Salesforce, too.
I’d want to hear from leaders in public health, like Harvard Dean Michelle Williams—and prominent leaders in global health such as Dr. Agnes Binagwaho, Dr. Sheila Davis, and GAVI CEO Dr. Seth Berkley.
The conversation would surely benefit from including experts in behavioral finance and decision-making, such as Dan Ariely and Niall Ferguson. And I’d throw in NBA Commissioner Adam Silver to share how he made one such pressure-filled decision—shutting down a hugely popular professional sport mid-season, all in the name of public health.
Finally, I’d want to face the stark realities of health inequities in this country head on—and so it would be essential to have a frank conversation about U.S. healthcare’s lasting racial divide, a gap in outcomes that has become ever more stark in the midst of COVID-19. Here, I’d be grateful for the counsel of Van Jones, the CEO of REFORM Alliance, and Dr. Erin Thomas, Upwork’s Head of Diversity, Inclusion and Belonging.
Of course, no conversation on health and wellbeing today would be anywhere near complete without including Thrive Global CEO Arianna Huffington and Dr. David Agus, the founding director and CEO of the Lawrence J. Ellison Institute for Transformative Medicine. And in a perfect world, they would lead this sprawling two-day conversation alongside me.
Which is precisely what Arianna and Dave will do as my longstanding co-chairs of FORTUNE Brainstorm Health. They, and all of the experts above, are slated to speak at this year’s event on July 7-8. The one thing that would make it better is if you, the faithful readers of The Capsule, can join us as well—and share your perspective at our interactive tele-gathering. Those who are interested can use this code— BSH20GUEST—and get 50% off.
Hope to see you there.
Clifton Leaf, Editor-in-Chief, FORTUNE
clifton.leaf@fortune.com
@CliftonLeaf
DIGITAL HEALTH
How the first video game for ADHD got the FDA's blessing. Sy here—I sat down (well, on Zoom) with the CEO of Akili, the company with the first-ever FDA cleared video game to treat ADHD in children. Chief executive Eddie Martucci, who has a Ph.D. in biochemistry and biophysics from Yale, is a data evangelist. And he believes that evidence-driven approach, including major clinical trials, is why his company has succeeded in the digital health space. “We’ve worked with investors in both the technology field and the health care field. Our board is a hybrid of those two [forms of] expertise,” he says. “We partner with top-tier universities, such as UC–San Francisco, Duke University, and countless others to run rigorous clinical trials.” (Fortune)
INDICATIONS
WHO hopes to have 2 billion vaccine doses by next year. The World Health Organization (WHO) on Thursday said that it hopes that hundreds of millions of coronavirus vaccine doses will be available by the end of this year and that prouction will ramp up to 2 billion in 2021. "I’m hopeful, I’m optimistic. But vaccine development is a complex undertaking, it comes with a lot of uncertainty," said WHO chief scientist Soumya Swaminathan. "The good thing is, we have many vaccines and platforms so even if the first one fails, or the second ones fails, we shouldn’t lose hope, we shouldn’t give up." Companies spanning the gamut from major pharma firms such as Johnson & Johnson to biotechs such as Moderna are working on potential coronavirus vaccines. (Reuters)
THE BIG PICTURE
The ripple effects of the Supreme Court's landmark LGBT job discrimination ruling. The Supreme Court issued a milestone decision this week, ruling that employers can't fire their workers on the basis of sexual orientation or gender identity as it amounts to discrimination based on sex, which is illegal under Title VII of the Civil Rights Act of 1964. And that could carry implications for the Trump administration's efforts to roll back an Obama-era rule that extends the Affordable Care Act's anti-discrimination provisions to health care for transgender people. It's a complicated legal issue—I break it down here. (Fortune)
REQUIRED READING
Fortune survey: 62% of CEOs plan policy changes in response to calls for racial justice, by Lance Lambert
How Google and Facebook's 8,000 mile undersea data cable got caught in the U.S.-China feud, by Naomi Xu Elegant
Working while black: Stories from black corporate America, by Karen Yuan
The CEO who keeps animal pharm going, by Anne Sraders
Sign up for other Fortune newsletters.


fortune--2020-06-18--Jonathan Majors on making Spike Lee’s ‘Da 5 Bloods’ and how it’s ‘popping off’ at the right time

Jonathan Majors compares working with Spike Lee on Da 5 Bloods to being in the military—and to being on a professional sports team. The filmmaker “inspires you to be your best artist,” the actor says. “He’s such a coach, too, that he challenges you to be the most athletic you can be in your craft.”
The film, which started streaming on Netflix Friday, focuses on four black veterans as they return to Vietnam in search of a fallen comrade’s remains as well as buried treasure. They’re joined by David (Majors), the son of a PTSD-afflicted, Donald Trump–supporting veteran (Delroy Lindo). Preparing for the role involved everything from reading up on the Vietnam War to “tactical gun drills.”
“David, my character—he doesn’t do any of that, right? He’s not there for that,” Majors says. “Spike, the scholar that he is, had me do all the training.”
Majors spoke to Fortune about his role in the film, as well as how it highlights the experience of black soldiers in a way that Vietnam War movies like Apocalypse Now and Platoon did not. What follows are his words, lightly edited and condensed for clarity.
How Spike Lee prepared the cast for their roles
The bible for us was a book called Bloods, and Bloods is a collection of memoirs from Vietnam War vets—particularly and singularly black Vietnam War vets—and it talks about their time. So that was essential reading. I don’t know how [Lee] did it, but he got a lot of war veterans to come to [shooting locations in] Thailand, where we were, or Vietnam—and speak to us directly. So we didn’t only get a one-on-one account from the books—we got an in-person personal recounting of what that experience was like for those fellas. In addition to that, there was the dapping.
You’re running down a street, you see a friend, you see a homie—you high-five or whatever you do—a great deal of that culture originated in the Vietnam War among the black vets. And the dap was a way of saying, “Hello, how are you,” and also a way of establishing where you’re from. And so there would be a dap. Among the guys in the cast, we had multiple daps—we learned six daps. And some of these daps they did in Vietnam at that time. We re-created those and pushed those into the lifeblood of the film. That was really cool. In addition to that, we did a little more than basic training—tactical gun drills to work on the action sequences. We learned it practically, then we applied the actual blocking and camera movements.
From left to right: Isiah Whitlock Jr. as Melvin, Norm Lewis as Eddie, Clarke Peters as Otis, Delroy Lindo as Paul, and Jonathan Majors in “Da 5 Bloods.” David Lee—Netflix
Learning untold aspects of Vietnam War history
The story of war and the story of African-Americans does not go hand in hand. We have been divorced from that narrative a great deal. I’ve been blessed to be a son and grandson of war vets, so I have a certain understanding about what that is, but it’s not uncommon knowledge that war vets don’t like to talk about the shit that happened overseas, even to their grandsons, even to their sons. So what I learned a great deal is twofold: One was that the Vietnam War is just what we call it, right? That’s just our naming of it. There, they call it the American War—and in the American War, all this happened.
Now the other part that became very clear to me is that the brothers that were in this war were fighting two wars, right? The patriarchy is the patriarchy, and racial systematic betrayal and injustice are rampant. A lot of them left—my grandfather left Texas because at that time, there was nothing else for him to do. So not only him, but his, I believe, three brothers, all went into the armed forces—all joined the Army around the time of the Vietnam War. That struggle is not taught in history books. The other thing that’s not taught in history books is the culture of what it was to be a black soldier. There’s a place called Soul Alley where all the brothers hung out, and those in the black movement—it was moving through the ranks, even there—were growing their Afros out. Some of the brothers were feeling discomfort because some African-American men, because of the way our skin is, can’t shave with a certain type of razor—the razor they give us in the armed forces is not good for our skin. So you’ve got soldiers who are growing beards because they don’t want their face to be all tore up. The culture of that, that’s not something you learn from the history books or from the movies. Apocalypse Now is not dealing with that; Platoon is not dealing with that. They’re too busy with John Wayne in combat boots.
On playing David
There were certain things I knew he had to have. He was a Morehouse [College] man—the motto of Morehouse is “Let there be light.” So that’s a metaphor, something to drop in poetically to suggest, “Okay, this is where this man is coming from, and he’s very proud of having graduated from Morehouse.” We also know he’s on the track team, so that informed my body and how I moved, and we also know he’s a teacher, so pedagogy of any sort is very important to him. But I think the most crucial part of it was the father-son dynamic.
Establishing a complicated father-son dynamic
This is a story about a father and a son, and the son is having a very hard time getting to know his father. And he loves his father. The tautness of the relationship, the turbulence of the relationship, is because these men actually love each other. In real life, you don’t know how to love somebody. Everyone loves differently. And in this case, there’s a historical block between them: “I want my father’s love, and I want to be the model son for him.” So if my father was a soldier, I want to behave like a soldier in the best way. I want to be as intelligent as a soldier. I want to be as strong as a soldier. I want to have the loyalty and the moral compass of a soldier, which [his character’s father] challenges so much because his flag he’s flying under—the Trump flag…is not what David agrees with. So there’s turmoil and hardship there, but you just go after the love. My [character’s] mission was: Get my father’s love, make my father proud, and in doing that, you can get a whole lot of stories.
Spike Lee, Clarke Peters, Delroy Lindo, Jonathan Majors, and Norm Lewis on the set of “Da 5 Bloods.” David Lee—Netflix
The timing of the film’s release
Well, I’d say that it’s not necessarily radical—the [protests against racism and police brutality] that are happening right now.
It’s the most natural thing in the world. If you cage any living thing, right? Let alone a man, right? Something that has a heart, that has a spirit, that has a family, that has needs, wants, desires, dreams? The second you cage that thing, you cage that man, you cage that culture, you cage that race—over time, that man, that race, that group of people will undoubtedly fight back and revolt.
Spike Lee is doing the most natural thing he could do as a filmmaker. He is giving the other side of the narrative. Here in the streets right now, we are giving the patriarchy, the majority, the other side of America. And so the film popping off right now at this time and this moment, is to me—whatever you believe in, whomever you believe in—a very definite and undeniable sign that things have come to an end. Things are stopping now. The film is a part of the movement, a part of the protests. And I mean the things that this film is bringing to light—the unfairness. It’s just unfair: Since 1619, a certain group of folks have not been playing fair, and the chicken has come home to roost. That’s all it is. It’s as simple as that.
I’m very pleased that the film is out right now. I think it adds to the conversation, and it adds education.
Audience reactions and the film’s straight-to-Netflix release
People are loving the film. I’ll leave you with this anecdote: I grew up in Texas and I saw my first Broadway show when I was 22 years old. I could never afford a Broadway ticket between birth to that. I think I used college money to buy the ticket. The same thing can be said about streaming. Movie tickets can be tough [for some people to afford]. And I think that certain people who are sick, who are broke, who literally have to spend their money on other things—they would not have had the opportunity to see this film had it not come out on Netflix. So to me, it is again a divine action taken by whoever, by whatever, for the better good.


fortune--2020-06-18--George Floyd protests force Britain to reckon with its role in slavery, leading some companies to pa

George Floyd protests force Britain to reckon with its role in slavery, leading some companies to pay reparations

The Bank of England apologized on Friday for its historic links to slavery and promised to ensure no images of former bank officials who owned slaves or profited from slavery are on display.
The U.K. central bank had 27 former members, including 11 former bank governors and 16 directors, who owned slaves or profited directly from the slave trade, according to a database maintained by University College London.
The bank’s announcement comes one day after two venerable brand-name British companies, insurance exchange Lloyd’s of London and the brewer Greene King, announced that they would make reparation payments for the historic role the firms played in slavery. The Royal Bank of Scotland, one of the country’s biggest retail banks, which had several slaveholding directors, told the Daily Telegraph that is considering doing the same.
The announcements are a significant victory for the U.K.’s Black Lives Matter protests which, while sparked by the killing of George Floyd in the U.S., have sought to highlight racial inequalities and injustices closer to home. The current movement has succeeded where earlier attempts to wrest compensation from companies with slave-tainted pasts, including several lawsuits against Lloyd’s of London filed by the descendants of slaves in the U.S. in the early and mid-2000s, had failed.
Lloyd’s was founded in a London coffeehouse in 1688 and later underwrote insurance policies on voyages transporting slaves, as well as the commodities, such as sugar, coffee, and cotton, that their labor produced. The company said in a statement that it “cannot always be proud of our past.” It apologized “for the role played by the Lloyd’s market in the 18th-and 19th-century slave trade—an appalling and shameful period of English history, as well as our own.”
The exchange said it would invest in ways to recruit, retain, and develop more black and minority ethnic market participants and provide financial support to charities and other organizations promoting diversity and inclusion, among other steps.
Greene King, which was launched in 1799, said one of its founders profited from slavery and argued against abolition in the 19th century. The company’s chief executive officer Nick Mackenzie said this past was “inexcusable” and that the company would make “a substantial investment” to benefit the black, Asian, and Middle Eastern community in Britain.
Just as statues of Confederate generals have become a focal point for Black Lives Matter protesters in the U.S., in Britain, protests have targeted statues of those who profited from the transatlantic slave trade. In Bristol earlier this month, a statue of Edward Colston, a major benefactor to the city in the early 18th century, was tossed into the harbor. Colston had been a director of the Royal African Company, which in the 17th century held a monopoly on the British slave trade from the West African coast.
The next week demonstrators cheered as a statue of Robert Milligan, an 18th-century merchant who had built one of London’s most important docks, was removed from its plinth. Milligan’s ships plied the Triangle Trade between England, Africa, and Britain’s American possessions, and he led efforts to build London’s West India Docks, where goods produced with slave labor, such as sugar, rum, and coffee, were landed.
The statue-toppling campaign has brought renewed attention to the country’s role in slavery and the extent to which the nation’s wealth is built on the back of that historic crime. It has added momentum to calls for the modern-day beneficiaries of that wealth, especially corporations, to pay reparations.
A neglected subject
Slavery is a neglected subject in the U.K., where popular history has tended to focus more on the nation’s leadership in helping to abolish slavery with the passage of the 1807 Slave Trade Act than on its culpability in the 150 years that came before. (In addition, British textile mills remained heavily dependent on slave-produced American cotton right up until the end of the Civil War. Despite official British neutrality in that conflict, many British citizens and businesses provided financial and material support to the Confederacy.)
This myopia applies to Britain’s public spaces too. “The physical environment in Britain has worked to elide slavery and privilege abolition,” the historian Nick Draper wrote in an essay published earlier this month in the journal History & Policy. “Memorials to those who participated in slave-trading or slave-ownership celebrate their activities in other spheres but remain silent on their connections with slavery, while numerous statues commemorate the abolitionists and their gift of freedom to captured Africans.”
Draper is former director of the UCL (University College London) Legacies of British Slave Ownership project, which has sought to document all the ways in which wealth from the slave trade and slave labor is infused throughout the British economy and society. Activists have used the database the project maintains to identify companies such as Lloyd’s of London, the Greene King, and Royal Bank of Scotland, that have been pressured to pay reparations. It is also the UCL database that was used to identify the Bank of England members associated with slavery.
But Draper and other historians who have studied Britain’s connections to slavery are wary that the current drive to remove statues and demand reparations, in its zeal to correct the injustices of history, may wind up doing damage to it.
Draper points to calls to remove a bust of Henry Tate, the 19th-century sugar magnate and collector of British art who endowed the great London art museums that now bear his name, as an example of where the removal movement may be going astray: Sure, Tate made his money in an agricultural commodity, sugar, whose cultivation was originally made possible by slavery. But, Draper says, Tate himself was not a slave owner and did not profit directly from the trade. Slavery in Britain was abolished before he was born and ended in the Caribbean when he was just a child.
Keeping records
A key document for the UCL Legacies of British Slave Ownership project is the record of individuals who received compensation from the British government under the 1837 Slave Compensation Act. This law reimbursed former slave owners for the “property” they had lost when Parliament finally got around to freeing all slaves in British territory. (Although Britain outlawed participation in the transport of slaves from Africa for sale in the Americas in 1807, it did not actually free most slaves held within the British Empire until 1833—or, in the case of slaves held in India and modern-day Sri Lanka, until 1843). More than 40,000 compensation awards were made from a 20-million-pound fund set up to reimburse former slave owners—the single largest U.K. government bailout of an industry prior to the 2008 financial crisis. (Meanwhile, the freed slaves themselves received nothing.) Researchers connected with the project estimate that between 10% and 20% of Britain’s wealthiest individuals owe some portion of their fortune to the slave trade.
The tentacles of slavery, and the money derived from it, extended into distant corners of society and the economy. “It was a system that so permeates the Western maritime economy, where do you start and stop responsibility?” James Walvin, an emeritus professor of history at the University of York who studies the slave trade, says. “Everyone is involved, from the royal family on downwards. What about the ordinary sailors who crewed the ships or the gunsmiths who equipped them?”
That said, a few industries in particular have come under scrutiny. One is insurance. Most British slaving voyages in the 18th century carried insurance, not just for the ship, but for its human cargo too. Over time, these policies became ever more sophisticated—if not any less immoral: They compensated shipowners in cases where slaves were killed in the course of putting down shipboard revolts, but charged large excesses to encourage captains to guard against insurrections. They compensated shipowners for slaves lost to “perils of the sea,” such as storms, or because of lack of water owing to long periods of becalment, or lack of navigable winds, but not for those who died en route from more routine causes, like disease, a refusal to eat, or suicide.
Historians Robin Pearson and David Richardson of the University of Hull estimate that the slave trade generated at least 40% of marine insurance premiums in the late 18th century, and some other historians have put the figure even higher. “It was probably the single largest contributor to the growth of marine insurance,” Richardson notes.
But the two historians say, with the exception of Lloyd’s of London, it is difficult to find any modern insurance companies that are the direct inheritors of slave trade underwriters. After the Royal African Company went bankrupt in 1708, slaving voyages were undertaken by individual shipowners or groups of wealthy merchants in cities like London, Liverpool, and Bristol. The insurance policies for those ventures tended to be underwritten by syndicates of other slave-ship owners in those cities. The syndicate was formed for just one voyage and disbanded after the ship returned home, Pearson says. “There was no corporate continuity to any of these enterprises, and none of them got absorbed into any modern marine insurance company,” he says.
The banks’ role
A similar issue has stymied efforts to scrutinize the finance industry for its role in the slave trade. The directors of some banks that were later absorbed into some of Britain’s largest retail banks—most notably RBS, Barclays, HSBC, and Lloyds Bank (not affiliated with Lloyd’s of London)—do show up in the UCL database. But, in other cases, the money trail is harder to trace.
For instance, those 20 million pounds paid out to former British slave owners. It represented about 40% of the British Treasury’s annual income. To find the money, the British government borrowed three-quarters of it from the banker Nathan Mayer Rothschild and his brother-in-law Moses Montefiore, according to Draper’s research. It is believed Rothschild and Montefiore syndicated the loan to other banks and investors, since, then as today, this was common practice for such large loans. But Draper and others have been unable to find any record of exactly who held the loan notes.
Naomi Fowler, who works for the Tax Justice Network, wrote a blog post detailing her efforts to find out more: She filed public record requests with the U.K. Treasury and Debt Management Office in 2018. She found out the original slave compensation loan was consolidated with other government bonds with a 4% interest coupon, redeemable after 1957, and that it was fully redeemed only in 2015. But, since the bonds could have been freely traded many times in the intervening years, tracking exactly who profited from the coupon payments is almost impossible to determine.
“The names and details of those creditors and investors remain frustratingly out of sight,” Fowler writes. Fowler says she is hoping to replicate what happened in the U.S. in 2005, when JPMorgan Chase acknowledged that two of its predecessor banks had, between 1831 and 1865, allowed slaves to be used as collateral for loans and had wound up owning 1,250 of them in Louisiana as a result of defaults. To make amends, the bank agreed to provide $5 million over five years to pay full tuition for black undergraduates from Louisiana to attend college there.
Given the difficulties of untangling the modern-day inheritors of slave wealth, many reparation campaigners have turned their attention to the British government itself. Kris Manjapra, a Tufts University historian, has called on Britain to pay reparations. So too has Hilary Beckles, vice-chancellor of the University of the West Indies, whose 2012 book, Britain’s Black Debt, led to increased calls from Caribbean nations, the majority of whose citizens are descended from British slaves, for the U.K. to pay reparations. Those calls have been taken up in the past week by Michelle Bachelet, the UN High Commissioner for Human Rights.
This story has been updated to reflect Friday’s announcement from the Bank of England.


fortune--2020-06-18--DACA ruling: Supreme Court rejects Trump’s bid to end protections for Dreamers

The Supreme Court on Thursday rejected President Donald Trump’s effort to end legal protections for 650,000 young immigrants, a stunning rebuke to the president in the midst of his reelection campaign.
The outcome seems certain to elevate the issue in Trump’s campaign, given the anti-immigrant rhetoric of his first presidential run in 2016 and immigration restrictions his administration has imposed since then.
The justices rejected administration arguments that the 8-year-old Deferred Action for Childhood Arrivals Program is illegal and that courts have no role to play in reviewing the decision to end DACA.
Chief Justice John Roberts wrote for the court that the administration did not pursue the end of the program properly.
“We do not decide whether DACA or its rescission are sound policies,“ Roberts wrote. “We address only whether the agency complied with the procedural requirement that it provide a reasoned explanation for its action. Here the agency failed to consider the conspicuous issues of whether to retain forbearance and what if anything to do about the hardship to DACA recipients.”
The Department of Homeland Security can try again, he wrote.


fortune--2020-06-18--Peloton is having a moment. So are its competitors

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Despite its hefty sticker price, Peloton’s near-religious following has only multiplied during a pandemic that has shuttered workout classes and bankrupt gyms.
Now hopeful competitors are cycling in—and could veer into Peloton’s dollars.
Tempo, an at-home weights training startup backed by Founders Fund, DCM, and Khosla Ventures, is raising some $60 million in funding valuing the company at roughly $200 million to $300 million, sources tell Term Sheet. The deal, said to be led by two investors, however, has yet to close.
Weights alone are not an expensive buy: Pop on Amazon and a pair of 20-pound rubber dumbbells currently costs about $60. But Tempo is pitching consumers on a more gym-like experience—just at home: Think on-demand classes playing on a large screen and motion sensors that determine whether an exercise is correctly executed. For that, Tempo’s system retails in the quadruple digits. While Peloton’s stationary bike sells for about $2,245 Tempo’s system costs $1,995.
Consumers are showing willingness to splurge on larger fitness-related buys as the coronavirus rages on. Hydrow, an at-home rowing startup that retails its machines at $2,199, says sales at the company have risen 400% in April compared to January. The company recently raised $25 million in funding with L Catterton leading the round. Hydrow is most certainly not a biking machine, but its CEO told Term Sheet that it is going straight up against Peloton.
“I think there will be four or five winners,” said Hydrow CEO Bruce Smith of the at-home fitness space. “We think about it like Microsoft and Apple—or Adidas and Nike.”
Indeed with a price of about $2,199 on Hydrow, and Peloton’s apparently fastest growing demographic earning below $75,000 per household, one machine per house may perhaps become the de facto.
So what is Peloton’s move? While best known for its stationary bikes, the company has also moved into selling treadmills and standalone classes that don’t require equipment. Peloton is also not resting on its laurels when it comes to competitors. It’s issued lawsuits against what it considers biking copycats from Echelon and Flywheel. One source tells Term Sheet that Peloton approached Tempo in recent months, voicing interest in acquiring the company. Tempo, though, the source said, was not interested in selling. But the workout world has seen fads come and go (where were HIIT classes 10 years ago?)—so is an acquisition next somewhere?
“We don’t comment on rumors or speculation and we have no acquisitions to announce,” a Peloton spokesperson told Term Sheet. Tempo did not respond to requests for comment.
When asked, Smith said that Hydrow too has fielded inbound inquiries about an acquisition, though he declined to name specific parties.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURE DEALS
- QuantumScape, a San Jose, Calif.-based solid-state battery developer, raised $200 million. Volkswagen led the round. Read more.
- Geek+, a Beijing-based maker of robotics for logistics, raised $200 million in Series C funding. Done in two tranches, GGV Capital D1 Capital Partners, and V Fund led the rounds and were joined by investors including Warburg Pincus, Redview Capital, and Vertex Ventures. Read more.
- UiPath Inc., a New York-based software maker, is in talks to raise funding that could value it at more than $10 billion, per Bloomberg citing sources. Funds including Sequoia, Coatue, Kleiner Perkins, and Accel back the firm.Read more.
- Contentful, a San Francisco and Berlin-based API content management platform, raised $80 million in Series E funding. Sapphire Ventures led the round and was joined by investors including General Catalyst and Salesforce Ventures.
- Zerto, a Boston-based IT recovery platform, raised $33 million in funding. Investors included Claltech, 83North, Battery Ventures, Harmony Partners, IVP, RTP Ventures, U.S. Venture Partners, and new investors Poalim Capital Markets and Bank Hapoalim.
- Zero Mass Water, a Scottsdale, Ariz.-based company seeking to make drinking water renewable, raised $50 million in Series C1 funding. BlackRock led the round and was joined by investors including Duke Energy, Breakthrough Energy Ventures, and Material Impact Fund.
- Upgrade, a San Francisco-based neobank, raised $40 million in Series D funding. Santander InnoVentures led the round.
- Degreed, a Pleasanton, Ca.-based employee learning platform, raised $32 million in funding. Owl Ventures led the round.
- Zerto, a Boston-based IT recovery platform, raised $33 million in funding. Investors included Claltech, 83North, Battery Ventures, Harmony Partners, IVP, RTP Ventures, U.S. Venture Partners, and new investors Poalim Capital Markets and Bank Hapoalim.
- Copado, a Chicago-based DevOps platform for Salesforce, raised $26 million in Series B funding. Insight Partners led the round and was joined by investors including Salesforce Ventures, Lead Edge Capital, ISAI Cap Venture, and Perpetual Investors.
- Botkeeper, a Boston-based bookkeeping company, raised $25 million in Series B funding. Point72 Ventures led the round and was joined by investors including High Alpha Capital, Republic Labs, Oakridge, Peak State as well as existing investors Ignition Partners, Greycroft Partners, Gradient Ventures, and Sorenson Capital.
- MayStreet, a New York -based market data infrastructure platform, raised $21 million in Series A funding. Credit Suisse Asset Management's NEXT Investors led the round.
- Remessa Online, a Brazilian money transfer service, raised $20 million in funding. Kaszek Ventures and Accel Partners invested. Read more.
- Urbint, a New York-based maker of artificial intelligence for utility safety and field risk management, raised $20 million in Series B funding. Energy Impact Partners and Piva co-led the round and were joined by investors including Salesforce Ventures and National Grid Partners.
- Splyt, a London-based mobility app integration company, raised $19.5 million in funding. SoftBank led the round. Read more.
- Biz Capital, a Rio de Janeiro-based online lender, raised $12 million in Series B funding. DEG led the round and was joined by investors including MELI Fund, Quona Capital, Monashees, Chromo Invest, and 42K Investments.
- Jupiter, a San Francisco-based grocery delivery startup, raised $2.8 million in seed funding. NFX and Khosla Ventures co-led the round.
- Perimeter 81, a Tel Aviv, Israel-based secure access startup, raised $5.5 million in extended Series A funding. Toba Capital led the extension.
- Back Technologies a Berlin-based employee service platform, raised $3.3 million in seed funding. La Famiglia led the round, and was joined by investors including Gradient Ventures.
- DocASAP, a Herndon, Va.-based engagement platform for health systems, raised an undisclosed amount of funding. Optum Ventures led the round.
PRIVATE EQUITY
- Credit Suisse Asset Management’s NEXT Investors merged LUX Fund Technology and Solutions, an enterprise data management and reporting platform, and NorthPoint, an investment management solution, to form Portfolio BI. Financial terms weren't disclosed.
- iCapital Network, backed by the likes of Blackstone and Carlyle, agreed to acquire the alternative investments feeder fund platform from Wells Fargo’s (NYSE: WFC) Global Alternative Investments (GAI) division. Financial terms weren't disclosed.
- Trinity Hunt Partners acquired a majority stake in Keste, a Dallas, Texas-based B2B digital transformation service. Financial terms weren't disclosed.
- Clairvest Group invested in Arrowhead Environmental Partners, a Uniontown, Ala.-based waste management company. Financial terms weren't disclosed.
OTHERS
- Reliance Industries is nearing a deal to acquire stakes in some units of Future Group, an Indian e-commerce operator partnered with Amazon, per Bloomberg. Read more.
- Bridgepoint agreed to buy EQT Partners’ credit business, Reuters reports citing sources. Read more.
- Saudi Aramco completed a deal to buy a 70% stake in Saudi Basic Industries Corp., a Saudi Chemicals firm, for around $70 billion from Saudi Arabia’s sovereign wealth fund. Read more.
IPOs
- Yes Bank, an Indian bank, plans to raise 80 billion rupees ($1 billion) in a IPO, per Bloomberg citing sources. State Bank of India and HDFC back the firm. Read more.
EXITS
- Idinvest Partners sold a portfolio of investments in 12 growth companies to Idinvest Growth Secondary SLP, a consortium of acquirers led by Pantheon and including Commonfund. It included: Deezer, a audio streaming service based in France; Forsee Power, a smart battery system in France; and Sightcall, a video cloud platform in San Francisco. Financial terms weren't disclosed.
- KKR agreed to acquire Roompot, a Dutch vacation park operator, from PAI Partners. Financial terms weren't disclosed. Read more.
F+FS
- FTV Capital, a growth equity investment firm, raised $1.2 billion for FTV VI.
- Menlo Ventures Management plans to raise between $450 million to $500 million for its 15th flagship fund. Read more.
- Square Peg Capital, an Australia-based venture firm, raised A$350 million ($242 million) for its latest early stage fund. Read more.
- Fly Ventures, an early stage European seed investor, raised €53 million for its second seed stage fund.
PEOPLE
- Hearst Ventures named Jacqueline Cegla as senior associate and promoted Kunal Mehta to principal.
- NewView Capital added Christina Fa and Nick Bunick joined as associates from Atomico and Qatalyst Partners, respectively. Ankit Sud was promoted to principal.
- Cultivian Sandbox promoted Amanda Donohue-Hansen to managing director.


fortune--2020-06-18--45.7 million have filed for unemployment during the pandemic—greater than the combined population of

45.7 million have filed for unemployment during the pandemic—greater than the combined population of 23 states

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More than 1.5 million Americans filed initial unemployment claims in the week ending June 13. That’s an improvement of 58,000 on the prior week, but the latest figure comes in above economists’ estimates. More worryingly, it marks 13 straight weeks with jobless claims topping a million.
That brings the total unemployment claims since the start of the coronavirus shutdowns to a whopping 45.7 million, according to the U.S. Department of Labor. That’s greater than the combined population of 23 American states.
Americans currently on the unemployment rolls are receiving an additional $600 weekly in benefits on top of their state benefits. The 1.5 million who filed claims last week will still get this benefit, but only through July 31—that is, unless the federal government extends it.
With waning political support and an improving economy, it’s unlikely the $600 weekly benefits get extended.
But even as weekly jobless claims again topped 1 million, the total number of Americans receiving unemployment benefits—continued claims—actually fell another 62,000, to 20.5 million. As more states ease their shutdowns and employers start to rehire, the number of out-of-work Americans on the unemployment rolls has fallen 4.4 million from its peak of 24.9 million on May 9.
A continued fall in the number of Americans on state unemployment rolls is another sign the economy has moved from a historic contraction to the beginning of a recovery. As such, American employers are steadily bringing workers back. In May, the unemployment rate fell to 13.3% from its peak in 14.7% in April.
While 45.7 million have claimed unemployment benefits at some point during the pandemic, only 20.5 million are currently receiving the benefits. The reason for the huge gap? Workers put on furlough, even for just a week, can apply for jobless benefits, and employers in reopened states are bringing workers back. Some states are also still wading through their backlog of applicants.
Nevada had the highest UI, or insured unemployment rate, with 24.2% of its labor force receiving jobless benefits. It was followed by Hawaii (20.2%), New York (18.0), and Michigan (17.6).


fortune--2020-06-18--Ripple launches PayID allowing users to send digital payments across different platforms

Email is a popular technology in part because it doesn’t matter which service you use. A Gmail user can send a message to someone with a Yahoo account and vice versa. Yet when it comes to sending cash on the Internet, services are fractured. A Venmo user can’t send money to someone using Cash App or Zelle, and nor can you can use a bank’s website to send money to those apps.
That’s why a new service called PayID is intriguing. Launched by a coalition led by the cryptocurrency company Ripple, PayID offers consumers the equivalent of an email address—a distinct easy-to-read ID that works with any service provider.
Ripple announced the service on Thursday, touting that it has 40 partners and over 100 million potential users, and encouraging people to sign up at PayID.org.
In theory, this could be a game changer. It means I could create an ID such as Jeff$Roberts, and one day use it to receive transactions from banks, PayPal, Western Union, or even a Bitcoin wallet.
The reality, unsurprisingly, is a little more complicated.
Ripple has dozens of partners, including Bitcoin wallet provider BitPay and a privacy-focused browser called Brave, but none of them are everyday names like Venmo—meaning PayID is, for now, just one more payment silo, and an obscure one at that.
But the service has a chance to grow, given that its underlying code is open source, meaning anyone can build on it. In practice, this means the likes of PayPal or Square could integrate PayID onto their platforms, or even offer them to their customers.
According to Ripple executive Ethan Beard, PayID has a similar design to the Internet’s domain name system, which takes the string of numbers that define a website’s address and renders them as an everyday phrase like Fortune.com.
Even though the PayID system appears relatively simple for consumers and businesses to use, there are competitive reasons why payment companies may be loath to embrace it. Namely, a payment protocol that works across platforms could undercut their ability to make money from a captive user base.
Beard, though, believes payments providers like Square or Venmo may actually come to embrace PayID on the basis of a different competitive calculation—namely that doing so could be a hedge against Libra, Facebook’s ambitious plan to create a new global currency platform.
“Facebook and [Chinese payment giant] AliPay want to create closed, proprietary networks. Even someone as big as PayPal should be wary,” Beard said.
Beard also says that common sense argues in favor of a universal payment ID system. He points out that technology like email and text messaging don’t restrict users to a particular company, and argues that payments should be no different.
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