fortune--2020-01-23--From goodwill to bad blood: How Mohammed Bin Salman used a U.S. publicity tour to hack Jeff Bezos

In the spring of 2018, Saudi Arabia’s crown prince, Mohammed Bin Salman, arrived in the U.S. for a three-week cross-country tour to pitch a progressive vision for his kingdom, including an economic plan less reliant on oil, and to charm America’s elite.
He visited MIT and Harvard, talked space travel with Richard Branson and hobnobbed with celebrities, including Oprah Winfrey, according to media reports. The crown prince also met with business executives, including Amazon.com Chief Executive Officer Jeff Bezos.
It was an encounter likely weighted with tension. Both Amazon’s e-commerce site as well as its most profitable business, Amazon Web Services, had been pushing to expand in the Middle East, including in Saudi Arabia. At the same time, Jamal Khashoggi, a columnist at the Bezos-owned Washington Post, had written columns sharply critical of the crown prince including one, while Bin Salman was visiting the U.S., saying that “replacing old tactics of intolerance with new ways of repression is not the answer.” They met at a small dinner in Los Angeles on April 4. It’s not clear what the two men talked about, but it apparently went well enough that they exchanged phone numbers.
Nearly four weeks later, on May 1, Bezos received a WhatsApp message from the crown prince’s account, which arrived “unexpectedly and without explanation, meaning it was not discussed by the parties in advance of being sent,” according to a November 2019 report by FTI Consulting Inc., a business advisory firm, which was published by Vice.
The message included a 4.22 MB video. Within hours of receiving it, “a massive and unauthorized exfiltration of data from Bezos’s phone began,” according to the report.
News of the alleged hack was reported by The Guardian on Tuesday and confirmed Wednesday by two United Nations experts, who said in a statement, “The information we have received suggests the possible involvement of the crown prince in surveillance of Mr. Bezos, in an effort to influence, if not silence, The Washington Post’s reporting on Saudi Arabia.”
The Saudi Embassy has denied involvement in the hack, calling the allegations “absurd.”
The details from the U.N. statement add a remarkable twist to last year’s already remarkable accusation by Bezos that the National Enquirer tried to blackmail him by threatening to publish embarrassing personal photos and texts from him a month after it published an article saying he was having an extramarital affair.
Bezos’s security team launched an investigation into how the texts leaked, led by security consultant Gavin de Becker. It didn’t take long for De Becker to home in on Saudi Arabia. De Becker said the Saudi government was targeting Bezos as the owner of the Washington Post.
A few months earlier, in October 2018, Khashoggi was murdered by agents of the Saudi government and the Washington Post published “ever-expanding revelations” about the role of the Saudi government and of the crown prince personally, according to the U.N. experts. That was soon followed by an online campaign against Bezos: In November 2018, the top-trending hashtag on Saudi Twitter was “Boycott Amazon.”
On Nov. 8, 2018, Bezos received another message from the crown prince’s WhatsApp account, when Bezos and his wife were exploring a divorce and before his marital problems became public, according to the FTI Consulting report. It showed a picture of a woman who resembled Lauren Sanchez, with whom Bezos was having a then-secret relationship, and read: “Arguing with a woman is like reading the Software License Agreement. In the end you have to ignore everything and click I agree,” according to the report.
De Becker’s inquiry included interviews with current and former executives at the National Enquirer’s parent company, American Media Inc., discussions with Middle East experts and cybersecurity officials who have tracked Saudi spyware. He concluded, in a March 30, 2019 column in the Daily Beast “with high confidence that the Saudis had access to Bezos’ phone and gained private information.”
But the investigation wasn’t over. De Becker hired FTI Consulting on Feb. 24, 2019 to do an analysis of Bezos’ iPhone X, according to the company’s report. The analysis was conducted in a “well-equipped and secure lab environment, including forensic imaging of Bezos’ phone and analysis of phone behavior in a sandboxed network,” the report says.
What the FTI investigators found was that the amount of data being transmitted out of Bezos’s phone changed dramatically after receiving the video file from the crown prince’s account. His phone averaged about 430 KB of egress per day in the six months prior to receiving the WhatsApp video. Hours later, the egress jumped to 126 MB, according to the report.
The FTI Consulting report was completed in November, and was passed along to experts at the U.N. who were already looking into the Khashoggi murder. One of those experts, David Kaye, the U.N. special rapporteur on the promotion and protection of the right to freedom of opinion and expression, said evidence shared with his team was reviewed by four independent experts, who asked some questions of the authors, leaving the U.N. team ultimately satisfied with the results.
Kaye said they sent a letter to the Saudi government warning that their statement was coming.
“The allegations here are very grave, they’re about a foreign government compromising the communications account of a phone of an American citizen,” Kaye said in an interview. “There’s clearly enough for federal authorities to examine this.”
The crown prince hasn’t yet addressed the allegations. But on Feb. 16, 2019, two days after Bezos had received a briefing on the Saudi online campaign against him, his WhatsApp account sent another message to Bezos telling him to be skeptical of what he was hearing.
“Jeff all what you hear or told to it’s not true and it’s matter of time tell you know the truth,” the message says, according to the FTI Consulting report. “There is nothing against you or Amazon from me or Saudi Arabia.”
More must-read stories from Fortune:
—A.I. in China: TikTok is just the beginning
—Inside big tech’s quest for human-level A.I.
—Medicine by machine: Is A.I. the cure for the world’s ailing drug industry?
—A.I. breakthroughs in natural-language processing are big for business
—A.I. is transforming the job interview—and everything after
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-01-22--Does the FDA need to slow its drug approval roll?

Sundance 2020 : Hunting for the next indie hit and what it may be worth

This is the web version of Brainstorm Health Daily, Fortune’s daily newsletter on the top health care news. To get it delivered daily to your in-box, sign up here.
Happy Wednesday, readers.
Sarepta Therapeutics has a way of bringing out the passions in the biotech world.
Its pioneering treatments for Duchenne muscular dystrophy—Exondys 51, approved in 2016, and Vyondys 53, cleared by the Food and Drug Administration (FDA) in late 2019—were either marquee victories for patients suffering from a devastating muscle-wasting rare disease or an abrogation of the FDA’s duty to judge medicines solely on their safety and efficacy, depending on your perspective. (Read these two pieces for some more background on the controversy.)
Sarepta was back in the news Wednesday following newly published FDA documents highlighting considerable disagreement amongst the agency’s own expert staff on whether or not Vyondys 53 should be approved despite safety and efficacy concerns.
It’s a rare look into the FDA’s drug approval process and communications with companies (these sorts of communications, called Complete Response Letters, are almost never made public unless the therapy in question actually is approved)—and it raises the larger question of whether or not the agency has been pushing new treatments across the finish line with a bit too much zeal.
In 2019, the FDA approved 48 new drugs. The number was 59 in 2018. Those are massive figures in the drug approval world, especially compared with the previous 10 years. And the pace of drug green lights aligns with a deliberate undertaking by current (and recent) FDA leaders to shepherd new therapies to the market.
But here’s the rub. These accelerated approvals, often pushed by patient groups which argue that something is better than nothing when it comes to life-threatening rare disorders, require post-market surveillance for more data. In other words: The clinical trial may play out in actual patients in the real world before a drug’s safety and efficacy has been definitively proven. And, in some cases, the “confirmatory” trial for these drugs are never actually completed, according to a study by Yale, NYU, and Dartmouth researchers.
That’s an approach that has its fair share of proponents given how devastating some of these diseases can be. But the internal politicking at the FDA demonstrated in the newly released documents shows how tricky the balance can be.
Read on for the day’s news.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
INDICATIONS
A mixed earnings report for J&J—but good times could be around the corner, according to one analyst. Johnson & Johnson shares fell slightly on Wednesday following a mixed earnings report that fell short of Wall Street expectations on profits and revenues. The company has been facing competition from generic rivals from its massive pharmaceuticals unit. But SVB Leerink's Danielle Antalffy writes in an investor note that shares are likely to move higher over the course of 2020, especially as the firm's various litigation costs (including in its class action talc powder cases) continue to subside.
THE BIG PICTURE
China escalates its response to the coronavirus outbreak. The coronavirus outbreak—which has reached U.S. shores, according to the CDC, after a Washington man returned from a trip to China—has prompted Chinese authorities to shut down major modes of transportation from Wuhan, a city inhabited by more than 11 million people and the seeming epicenter of the respiratory disease-causing virus. A man in Mexico is also reportedly being examined for possible infection by this coronavirus strain (which is different from others related to conditions like SARS). (New York Times)
REQUIRED READING
The Conversation: Google and Alphabet CEO Sundar Pichai on Managing a Tech Giant's Growing Pains, by Adam Lashinsky
Jeff Bezos Phone Hack Highlights How Hackers Can Use WhatsApp to Spy, by Alyssa Newcomb
Mysterious GPS Outages Are Wracking the Shipping Industry, by Katherine Dunn
China Tech's Venture Capital Boom Is Going Cold, by Naomi Xu Elegant
Sign up for other Fortune newsletters.


fortune--2020-01-22--What you need to know about the Wuhan coronavirus

There’s alarm in central China where a mysterious outbreak of pneumonia has been linked to a new coronavirus—a family of bugs responsible for diseases that range in severity from the common cold to Severe Acute Respiratory Syndrome, or SARS. Because some of the patients worked or shopped at a seafood market where live animals and wildlife parts were also reportedly sold, there was concern that the pathogen might have come from animals, as SARS probably did—reviving memories of the epidemic that killed almost 800 people about 17 years ago. Early findings that the new pathogen isn’t transmitted easily from person to person proved premature, although some differences remain.
What’s the worry?
There is always a concern when a new pathogen emerges in a population because people typically lack immunity to it, and there usually aren’t specific treatments or vaccines available. Novel coronaviruses (not seen in humans before) represent a particular concern because they have been known to spark complicated outbreaks that have sickened thousands of people, like SARS did as it swept across the globe from southern China.
Who’s getting sick?
The outbreak in Wuhan, a city of 11 million, that began in mid-December appears severe. A few cases have been confirmed elsewhere in China and nearby countries involving travelers arriving from Wuhan. Initially it seemed the virus wasn’t transmitted readily between people, reducing the potential of it spawning a SARS-like outbreak. But on Jan. 20 the World Health Organization confirmed “some limited human-to-human transmission,” not just from animals to humans. Chinese state media also reported health-care workers had been infected. That put the Wuhan virus in a category similar to SARS.
An animal source seems the most likely primary source of this novel #coronavirus (2019-nCoV) outbreak, with some limited human-to-human transmission occurring between close contacts. pic.twitter.com/L57VUr5d3z — World Health Organization (WHO) (@WHO) January 19, 2020
How serious is the virus?
At this stage, it appears to be less virulent, and less deadly, than SARS. Of the first handful of deaths linked to the virus, at least some were people who already were seriously ill. Regular pneumonia kills about 50,000 people annually in the U.S.
What are the symptoms?
Mainly fever, with some patients experiencing fatigue, a dry cough, and difficulty breathing. Chest X-rays have shown invasive lesions of both lungs, the WHO said. However, only cases requiring hospitalization have been reported so far. It’s possible other people have been infected and experienced no, or only mild, symptoms. Many people have recovered and been discharged from the hospital.
What’s the cause?
Chinese authorities identified a novel coronavirus in one of the pneumonia patients in Wuhan after conducting gene sequencing. The WHO has labeled the new virus 2019-nCoV. A report done for the International Journal of Infectious Diseases found it is at least 70% similar in its genetic makeup to the SARS virus, but “appears clinically milder” in terms of severity, fatality rate, and transmissibility.
Where did it come from?
Genomic data was made publicly available in mid-January, enabling scientists anywhere to study its genetic fingerprint for clues about where and how it might have emerged. Investigators in Wuhan have focused on the seafood market, where most people infected early in the outbreak either worked or shopped frequently. It has been closed since Jan. 1, though cases continued to appear, including in people who hadn’t gone there. That raised the possibility that the pathogen is lurking more widely in the city.
What are authorities doing?
Chinese President Xi Jinping ordered resolute efforts to curb its spread ahead of the Lunar New Year holiday, which falls on Jan. 24 this year. Many people travel for the celebrations. Authorities in Wuhan suspended outbound flights and rail service. Airports have begun screening some passengers for symptoms, including in the U.S. China’s health commission decided to include the coronavirus in the Class B infectious diseases category, which includes SARS, while taking preventive steps typically used for the most-serious ailments, such as cholera and plague. Patients have been isolated to prevent any spread. Health officials are also looking for, screening, and monitoring people the patients had contact with, and searching for current and past cases that may have been treated in medical institutions throughout the city. Environmental samples from the closed market have been taken for analysis.
[Read: How the air travel industry is dealing with the deadly Wuhan coronavirus]
How does the virus compare to SARS?
There are parallels. Both viruses emerged in China. SARS is thought to have spread indirectly from a “wildlife reservoir,” believed to be bats, to humans via masked palm civets and other species in live-animal markets. The SARS outbreak began in late 2002 in Guangdong province and spread across the border to Hong Kong and beyond. The WHO issued a global health alert in March 2003 and didn’t declare the outbreak contained until July 5 that year. China’s tourism, transportation, and retail sectors were heavily hit as people stayed home; domestic consumption fell sharply, as did real estate prices and financial markets. The epidemic subtracted an estimated 0.8 percentage point from gross domestic product growth in China in 2003, according to a China Daily report that cited a National Bureau of Statistics official. A 2003 academic study estimated the global economic cost at close to $40 billion or more.
What’s a coronavirus?
There’s a large family of them, with some causing less-severe diseases, some more. Some transmit easily from person to person, while others do not. There’s growing recognition of the role of coronaviruses in cases of severe pneumonia. The WHO says that new ones emerge periodically in different areas globally, and several known coronaviruses are circulating in animals that haven’t infected humans. They tend to morph and mutate a lot, which means the level of risk they pose can change the longer they circulate. Diseases transmissible from animals to humans, sometimes referred to as “zoonoses,” comprise a large percentage of all newly identified infectious diseases.
More must-read stories from Fortune:
—The World’s Most Admired Companies in 2020
—Fertility Inc.: Inside the big business of babymaking
—A.I. breakthroughs in natural-language processing are big for business
—Industry standouts: The companies most admired by the business world
—The forces behind Boeing’s long descent
Subscribe to Fortune’s forthcoming Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-01-22--Hallmark media CEO leaves, a month after backlash over channel’s decision to pull ad featuring same-

Hallmark media CEO leaves, a month after backlash over channel’s decision to pull ad featuring same-sex kiss

The head of Hallmark’s media business is leaving the company after 11 years, just a month after its flagship Hallmark Channel faced an outcry over a decision to pull an ad with a lesbian couple kissing.
No reason was given for Bill Abbott’s departure, and no replacement was immediately named.
In a statement, Mike Perry, president and CEO of Hallmark Cards Inc., said that with immense competition from TV networks and streaming services, it is important for the company to find “relevant new ways to grow our business.”
Abbott was CEO of Crown Media Family Networks, a company controlled by Hallmark Cards. Crown Media’s flagship cable channel is The Hallmark Channel, known for family-friendly programming, particularly made-for-TV Christmas-themed movies.
In December, the Hallmark Channel’s decision to pull an ad featuring the same-sex couple led to an outcry online. The company later reversed the decision.
Crown Media also operates the Hallmark Movies & Mysteries, Hallmark Drama networks, subscription streaming service Hallmark Movies Now and e-book publishing division Hallmark Publishing.
More must-read stories from Fortune:
—Awkwafina Is Nora From Queens team: Asian-American representation is not a ‘fad’
—Parasite director Bong Joon Ho dissects his tale of two families
—The History channel’s aliens and UFOs content continues to blossom as Project Blue Book returns
—What does Parasite’s best ensemble win at SAG mean for Oscar?
—These Oscar Best Picture nominees are “problematic,” but will that matter?
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.


fortune--2020-01-22--Harvey Weinstein rape trial opens, marking milestone for #MeToo movement

Harvey Weinstein went on trial Wednesday in a landmark moment for the # MeToo movement, with prosecutors painting him as a sexual predator who used his Hollywood clout to abuse women for decades, while his lawyers sought to portray his accusers as willing participants.
Prosecutor Meghan Hast told the jury of seven men and five women that the former studio boss was “not just a titan in Hollywood — he was a rapist” who screamed at one victim that she “owed” him sex, used injections to induce an erection before an assault and pushed his way into the apartment of another woman and attacked her.
“It is for his complete lack of empathy that he must be held accountable,” Hast said.
Weinstein lawyer Damon Cheronis countered by laying out plans to use friendly-sounding emails, calendar entries and other evidence to call into question the accusers’ accounts of being attacked.
The opening of the rape trial more than two years after a barrage of allegations against Weinstein gave rise to the #MeToo movement was seen by activists as a milestone in the global reckoning over sexual misconduct by powerful men. Weinstein’s lawyers have portrayed the case as the result of a climate of accusation run amok.
Weinstein, 67, said little as he arrived at court. Asked whether he believed he would have a fair trial, he said yes: “I have good lawyers.” Guided by aides and lawyers, he wasn’t using the walker he has leaned on lately after a summer car crash and subsequent back surgery. He said he was feeling better.
Weinstein has insisted any sexual encounters were consensual. He could get life in prison if convicted.
The once-powerful and feared executive brought to the screen such Oscar-winning movies as “Pulp Fiction,” “The King’s Speech,” “Shakespeare in Love” and “Chicago” and hobnobbed with the elite in Hollywood and beyond, a point prosecutors made by showing jurors a photo of Weinstein with former President Bill Clinton. A prosecutor also told the judge that Weinstein had taken calls from Clinton while Weinstein was with one of his accusers.
Weinstein’s lawyers later cited the photo in asking for a mistrial, accusing prosecutors of improperly trying to influence the jury. Judge James Burke denied the request.
Scores of women have accused Weinstein of exploiting his position as a career-maker to sexually harass or assault them over the years. But the New York charges center on two allegations: that Weinstein forcibly performed oral sex on former “Project Runway” production assistant Mimi Haleyi in his apartment in 2006 and raped an aspiring actress in a New York City hotel room in 2013.
The Associated Press does not typically identify people who say they have been victims of sexual assault, unless they come forward publicly.
The rape accuser found a needle in the hotel room bathroom after the alleged assault and realized Weinstein had injected himself to get an erection, Hast said.
Another time, after the woman told him she had a new boyfriend, Weinstein dragged her into a bedroom, “all the while screaming at her that he owed her one more time,” Hast said. “He ripped her jeans off so forcefully that it left scratch marks.”
The prosecutor said Weinstein later told the woman, “I just want to apologize for what happened earlier. I just find you so attractive, I couldn’t resist you.”
In addition to the two women he is charged with attacking, prosecutors plan to call to the stand four other accusers — including actress Annabella Sciorra — in a bid to depict Weinstein as a monster who lured women with offers of career help, then forced himself on them.
“They will each describe their fear, their shame and their humiliation — the struggle each went through to push their trauma down and show a brave face to the world,” Hast said.
Hast detailed allegations that Weinstein sexually assaulted Sciorra around 1993 after giving the “Sopranos” actress a ride home to her Manhattan apartment and forcing his way inside.
“She told him to get out. She told him no. But Harvey Weinstein was undeterred,” Hast said. She said the actress eventually stopped fighting Weinstein, “hoping it would end,” and was left “emotionally and physically destroyed, passed out on the floor.”
Weinstein’s lawyers made clear they intend to go on the offensive.
Cheronis said the 2013 rape accuser sent Weinstein a request that year asking for “time privately” with him and another message letting him know, “I got a new number. I just wanted you to have it. … Always good to hear your voice.”
Cherinos said: “These aren’t our words. They’re hers. It is not a relationship based on fear. You are going to see that.”
Later Wednesday, testimony got underway with prosecutors calling to the stand former Weinstein Co. board member Lance Maerov, who described the ex-producer as “an extremely influential, powerful person” who could be charming in public and aggressive in private.
“I would say his public personality was diametrically opposed to who he was in private,” Maerov said. The movie company went bankrupt after Weinstein’s fall.
At the end of the day’s session, Weinstein left the courthouse with the use of his walker. Asked how the day went, he said, “Good.”
___
Associated Press writers Jennifer Peltz in New York and Maryclaire Dale in Philadelphia contributed to this report.
More must-read stories from Fortune:
—Awkwafina Is Nora From Queens team: Asian-American representation is not a ‘fad’
—Parasite director Bong Joon Ho dissects his tale of two families
—The History channel’s aliens and UFOs content continues to blossom as Project Blue Book returns
—What does Parasite’s best ensemble win at SAG mean for Oscar?
—These Oscar Best Picture nominees are “problematic,” but will that matter?
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.


fortune--2020-01-22--Crime required for impeachment? Not so, say legal experts

President Donald Trump’s defense hinges largely on arguments made in the impeachment trial of President Andrew Johnson more than 150 years ago: that impeachment requires a crime.
But most legal scholars disagree, including Jonathan Turley, the law professor called by Republicans in the House investigation to argue against impeaching Trump.
A lawyer for Johnson argued in his opening statement to the Senate that Johnson could not be removed from office because he was not guilty of a crime. Johnson was acquitted by a single vote. One of Trump’s lawyers, Alan Dershowitz says that same argument — that impeachment requires “criminal-like conduct” — will be central to the constitutional defense he will make on the president’s behalf.
The idea may be attractive to Republicans seeking a legal basis to acquit Trump of having abused his power and obstructing Congress. But legal scholars dispute the idea that the Founding Fathers ever intended for impeachable offenses to require proof of a crime. And historians are equally dubious that the argument from Johnson’s lawyer, Benjamin Robbins Curtis, can be credited with securing Johnson’s narrow acquittal.
“This is a way in which history is weaponized and distorted in order to give these kinds of arguments heft,” said Rachel Shelden, a Penn State University history professor and Civil War-era expert. “It’s a way of trying to promote an understanding of the Johnson impeachment that is false, based on what historians now believe.”
At issue is the Constitution’s standard for impeachment: “treason, bribery, or other high crimes and misdemeanors.” Over the centuries, the threshold has been understood to encompass actual crimes — judges have been impeached for sex abuse and soliciting bribes, among other offenses — but also noncriminal misconduct such as being drunk on the bench or favoritism in the appointment of bankruptcy receivers.
Johnson was impeached in part over accusations that he violated the Tenure of Office Act, which barred presidents from firing certain officials without Senate approval, over his removal of War Secretary Edwin Stanton.
Johnson’s defense team questioned the constitutionality of that now-extinct law, and at his 1868 trial, one of his lawyers asserted in his opening argument that an impeachable offense “refers to, and includes only, high criminal offenses against the United States.”
“There can be no crime, there can be no misdemeanor without a law, written or unwritten express or implied,” said Curtis, a former Supreme Court Justice. “There must be some law; otherwise there is no crime. My interpretation of it is that the language ‘high crimes and misdemeanors’ means ‘offenses against the laws of the United States.'”
Dershowitz, who is expected to make a constitutional presentation to the Senate within days, said Sunday on CNN’s “State of the Union” that he would paraphrase Curtis’s argument that “the framers intended for impeachable conduct only to be criminal-like conduct or conduct that is prohibited by the criminal law.”
“That argument prevailed. I will be making that argument as a lawyer on behalf of the president’s defense team against impeachment. That’s my role. It’s very clear. I have done it before,” Dershowitz said.
Republican senators may well embrace the argument. One, Sen. John Cornyn of Texas, told reporters Wednesday that anyone charged with wrongdoing has the right to know what law or standard they’re accused of violating.
“This idea that you can use abuse of power as a grab bag in which to stuff all your political, policy or personal grievances — I think is very dangerous,” Cornyn said.
But legal scholars and Democrats are decrying the claim that an impeachable offense must be an indictable crime.
Frank Bowman, a University of Missouri law professor and former student of Dershowitz’s at Harvard Law School, described it as “rubbish.” Turley, a George Washington University law professor, wrote in The Washington Post on Wednesday that such an argument was politically unwise and constitutionally shortsighted.
“They had to go outside the realm of constitutional lawyers and scholars to a criminal defense lawyer to make that argument because no reputable constitutional law expert would do that,” said California Rep. Adam Schiff, chairman of the House Intelligence Committee. He is one of the seven Democratic managers prosecuting the impeachment case.
Even Trump’s attorney general, William Barr, wrote in a June 2018 memo before he was nominated for the Cabinet post that Congress could impeach presidents who abused their power.
Democrats contend that Trump’s abuse of power — pressing Ukraine for an investigation into a Trump Democratic rival, Joe Biden, at the same time Trump’s administration withheld hundreds of millions of dollars in military aid — is a “quintessential impeachable offense.”
They say the Founding Fathers intentionally created a flexible standard of bad acts that could result in impeachment, and that Trump’s acts in this instance are the framers’ “worst nightmare.”
Historians also point to multiple reasons for Johnson’s acquittal and are skeptical that senators at the time found Curtis’ arguments persuasive.
Had Johnson been removed from office, he would have been temporarily succeeded by Benjamin Wade, the Senate president and a radical Republican disliked by more conservative Republicans. Behind the scenes, Johnson and his allies worked to assure senators that if they voted to acquit him, he would stop interfering in Reconstruction. That was the very concern that led to Johnson’s impeachment in the first place. And there’s some agreement among historians that the senator who cast the deciding vote against impeachment was bribed.
“I don’t think you can place any weight on that argument for explaining Andrew Johnson’s acquittal,” said Jeffrey Engel, director of Southern Methodist University’s Center for Presidential History and co-author of “Impeachment: An American History.”
The Constitution’s framers seemed more preoccupied by the notion of a president’s “faithfulness to the office” than on the precise acts that would merit impeachment, said Kent Greenfield, a Boston College constitutional law professor.
“What that means is faithful as opposed to corrupt, faithful as opposed to self-interested,” Greenfield said. “There’s something like a fiduciary duty to the nation. That duty is really more than just, ‘Don’t break the law.'”
It means, Greenfield said, putting the interests of the country above personal interests.
Even if the argument isn’t the best, it may nonetheless be worth making to senators, “who are not judges” and “may be persuaded by arguments that aren’t terribly good law,” said David Stewart, a historian who has written a book about Johnson’s impeachment.
“I’ll be blunt: If I was the president’s lawyer, I’d probably make the argument too,” Stewart said. “But I don’t think it’s very strong.”
More must-read stories from Fortune:
—The Chief Justice and impeachment: John Roberts’ role in the Trump trial
—How impeachment hearings in the Senate will work
—Understanding the 2020 election as brand marketing
—A Q&A with Sen. Kelly Loeffler on her unlikely path to Washington
—The World’s Most Admired Companies in 2020
Get up to speed on your morning commute with Fortune’s CEO Daily newsletter.


fortune--2020-01-22--Jeff Bezos phone hack highlights how hackers can use WhatsApp to spy

Saudi Arabia’s use of WhatsApp to allegedly hack Jeff Bezos’ phone has sparked a huge amount of backlash, including from the United Nations. But the fact is that the technique used—sending infected files via the popular messaging service—is an increasingly common way to spy on high-profile targets, according to security experts.
The hack involves sending a video or file that exploits a vulnerability in WhatsApp. When opened, it triggers a smartphone to run malicious code that gives hackers access to nearly everything on a smartphone, without the target having a clue.
“Once you have root access to the phone, you have access to whatever is on the phone,” says David Schwed, professor and founding director of the cybersecurity program at Yeshiva University in New York.. “Text messages, the camera roll—whatever a person is saying on WhatsApp.”
Bezos’ phone was likely hacked after he opened a seemingly benign WhatsApp video sent in 2018 from the account of Saudi Crown Prince Mohammed bin Salman, The Guardian reported on Tuesday. It gave hackers access to private messages and photos exchanged between Bezos and his girlfriend, Lauren Sanchez.
Those messages were allegedly later used by the Saudis as leverage to quash reporting at the Bezos-owned Washington Post about murdered journalist Jamal Khashoggi.
It’s unclear which vulnerability the hackers used against Bezos, the billionaire founder of Amazon. But last year, WhatsApp, owned by Facebook, patched a bug that had been used to track 1,400 journalists, human rights activists, and civil servants worldwide, according to WhatsApp.
That exploit involved sending a video call that would allow hackers to take control of a WhatsApp account, even if the target didn’t answer. WhatsApp said it stopped the “highly sophisticated cyber attack” in May 2019 and notified the affected individuals.
In October, WhatsApp filed a lawsuit in the U.S. federal court in Northern California against the NSO Group, an Israeli firm known for its Pegasus smartphone spyware. WhatsApp alleged that the NSO Group was unable to break its encryption as part of its surveillance efforts, so it instead downloaded malware on phones of 1,400 targets.
The NSO Group denies the allegations.
In July, at the annual Black Hat hacking conference in Las Vegas, researchers from security company Symantec showed off another vulnerability in WhatsApp. Hackers, the researchers said, could manipulate WhatsApp videos, photos, and messages, potentially undermining confidence users have in content sent through the app.
Separately, WhatsApp announced in November that it had patched a bug that would have let hackers send mp4 files, which include GIFs, that could place malware on a target’s phone. The bug was labeled “critical,” however it’s unclear whether it was ever used by hackers.
The exploits are an example of a kill chain, a technical term for a series of actions that bad actors can take to gain increasing access to a target, account, or device, said Tim Mackey, principal security strategist at Synopsys.
“Identifying when an attack is underway is challenging, and whether you’re a high-profile individual or John Q Public, often the warning signs become apparent after the attack, and not before,” Mackey said.
The National Enquirer published private texts in January 2019 about Bezos’ affair with Sanchez. Bezos also said he was contacted with details about additional intimate texts and racy photos in an “extortion and blackmail” attempt by the outlet.
The Saudi Embassy in the United States has denied that it played any role in the hacking of Bezos’ phone.
“Recent media reports that suggest the Kingdom is behind a hacking of Mr. Jeff Bezos’ phone are absurd. We call for an investigation on these claims so that we can have all the facts out,” said a tweet from the Saudi Embassy in the United States.
Recent media reports that suggest the Kingdom is behind a hacking of Mr. Jeff Bezos' phone are absurd. We call for an investigation on these claims so that we can have all the facts out. — Saudi Embassy (@SaudiEmbassyUSA) January 22, 2020
More must-read stories from Fortune:
—A.I. in China: TikTok is just the beginning
—Inside big tech’s quest for human-level A.I.
—Medicine by machine: Is A.I. the cure for the world’s ailing drug industry?
—A.I. breakthroughs in natural-language processing are big for business
—A.I. is transforming the job interview—and everything after
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-01-22--The baby-making business gets a growth spurt

This is the web version of raceAhead, Fortune’s daily newsletter on race, culture, and inclusive leadership. To get it delivered daily to your inbox, sign up here.
The fertility industry is experiencing a Gold Rush-level expansion at the moment, a phenomenon which has been expertly chronicled by my colleague Beth Kowitt in her most recent feature, “Fertility Inc.: Inside the big business of babymaking.”
Her story also begins with the best opening sentence I’ve read in a business publication in a very long time: “Sperm and eggs have invaded the Pennsylvania Convention Center.”
The fertility business is having a very big moment.
The first IVF-enabled baby was born in 1978, a harbinger of medical miracles that took some time to gain mainstream traction. That’s about to change.
“In the decades since, the sector has gone from living outside the traditional health care system, viewed almost as a luxury good, to a serious industry garnering serious money,” writes Kowitt. “Piper Sandler research puts the U.S. fertility market at $15.4 billion by 2023, up from almost $7 billion in 2017.”
For people who are wealthy enough to afford the now growing array of services—the tests, the fertility monitors, the egg-freezing and medical procedures—this big moment has an even bigger meaning.
“Some people really care about having genetic children, which makes it a huge source of suffering—and a huge market,” Stanford Law School professor Hank Greely told her.
Writing in Fortune’s Broadsheet newsletter, Kowitt explains the “why now”:
“Fertility treatment historically sat outside traditional health care, essentially considered elective and a luxury. But today, even as access remains a huge issue, several big demographic trends are starting to move the industry into the mainstream. Millennials are aging into fertility treatment, women are having children later in life, the LGBTQ+ population is increasingly turning to assisted-reproductive technology to build their families, and infertility is losing its status as a taboo topic.”
But it’s complicated. For one thing, most humans don’t know much about how reproductive age bodies actually work and even less about fertility. It means that part of the job of specialists, investors, and entrepreneurs is to take prospective customers—people who want to be pregnant and their partners —through the basics of it all.
To that end, expect lots more sperm and egg invasions in convention centers, in medical offices, investment portfolios and mutual funds, corporate benefit packages, and most immediately, in startup decks.
While reading this essential piece, I couldn’t help but wonder about the opportunity costs it implied, the intersection with an emotional marketplace driven fraught with suffering, and a medical and investment world still largely dominated by white people, mostly men.
“One thing I didn’t get into that I thought about a lot is how a lot of these startups fall into ‘femtech,’” Kowitt tells me, “again, suggesting that infertility and reproduction is a female problem.”
Or, more specifically, a white female problem. As Kowitt writes, some founders are concerned that the newfound focus on fertility and pregnancy will divert what little attention the rest of the women’s health field has struggled to garner— issues including the maternal mortality rates of Black women, which are truly dire and mostly ignored.
It’s also worth considering how this new Gold Rush may perpetuate some of the very same gender inequities that currently exist. “Some people I talked to really think that it does a disservice to the entire field—relegating it to a ‘woman’s problem,’” says Kowitt. “Reproductive health is really everybody’s business.”
Ellen McGirt
@ellmcgirt
Ellen.McGirt@fortune.com
Note: We recently made changes to improve our publishing tools that may cause temporary formatting bugs. Thank you for your patience during this transition.
On Point
A record number of Fortune 500 companies support transgender employees This is one of several important highlights from the Human Rights Campaign's (HRC) annual Corporate Equality Index, which measures how well big companies protect and value LGBTQ+ employees. Here’s a nice number and a new record: 686 businesses and law firms earned a perfect 100 on the HRC scale. Here’s another one: As of 2019, 91% of Fortune 500 companies have explicit gender identity nondiscrimination protections, which is an increase of 88% (!!) from the first equality survey in 2002. Way to move the needle, folks. NewNowNext
The NFL takes on police shootingsThe new ad, which will run during the Super Bowl is part of the League’s effort to ramp up its social justice presence via a campaign called "Inspire Change." The ad features retired player Anquan Boldin sharing the story of his cousin, Corey Jones, who in 2015 was shot and killed by a Florida police officer while stranded roadside and waiting for a tow truck. The shooting was immediately controversial: The officer was dressed in street clothes and didn’t identify himself. He was later found guilty of manslaughter and first-degree attempted murder. The ad includes a dramatic reenactment of the shooting and is very powerful. I submit this story without further comment. Ad Age
How much data would you give up for a coupon? California’s new privacy law has spurred a spate of boiler plate statements disclosing what consumer data companies collect, and how they use it. But the data practices employed by Ralphs, a grocery chain owned by Kroger, is anything but business as usual. Users of their loyalty program, typically women on a budget and trying to save a buck, have unknowingly made their credit and financial histories, education levels, credit card and bank account numbers, purchase histories, and geolocation data available for the company to... do what with, exactly? “This is one of the most intrusive data-gathering programs I’ve ever seen from a supermarket,” says Joel Reidenberg, who teaches information-technology law at Fordham University. “It’s an extraordinary amount of surveillance.” Los Angeles Times
“Asian-American representation is not just a fad” This is the clear-throated declaration of writer and executive producer Teresa Hsiao, who along with executive producer Lucia Aniello, is about to prove her point with a new scripted series on Comedy Central, "Awkwafina Is Nora From Queens." Yes, it stars Golden Globe winner Awkwafina, but it’s also an all Asian-American cast, from Asian-American creators telling an Asian-American story—which happens to have plenty of universal elements. And no, it’s not a fad. “Asian-Americans, it’s not like we’re high-waisted jeans or something,” says Hsiao. “We’re not going to all of a sudden disappear from store shelves. But I do think there is an appetite for more Asian-American stories, and should be. There’s really been a dearth of stories from all people of color, of diversity in film.” Fortune
On Background
Sometimes strangers will make a door to your heart If you are prone to thinking about social media as a troll-driven snake pit filled who haters who will spontaneously gather into a murmuration-mob to attack at will, then you’ll enjoy this wonderful story from David Perry. “No, I didn't join a cult,” he begins. “But I did find out what it would be like if the internet was the nicest place on earth, if Twitter was a platform in which people flooded each other with love, encouraged each of us to feel accepted and to accept ourselves…” Awwww, right? The catalyst was an innocent question about the origin of an emoji he received in a text message. Next thing he knew, he’d been adopted by the fans of the Korean pop band, BTS, who engaged him with curiosity, candor, and compassion, and welcomed him into ARMY. A balm for politically-troubled times. The Current
Building safe spaces at work In the ongoing conversation about the role of Employee Resource Groups (ERGs) should play in the workplace, Mekaelia Davis, a program officer with the Prudential Foundation advocates for a redesign that better reflects the intersections that inform people’s identities. “Employees who identify as black and gay and veteran, for instance, may not be able to speak about their concerns or share ideas in a group that excludes any one of these identities, let alone feel safe in offering their unique perspective towards business challenges,” she says. How to accomplish this is the challenge. Click through for her advice for building safe sub-spaces within existing ERGs. Quartz
Is a lack of a college education a public health crisis? There are many issues at play in this piece set in hard scrabble Kennett, Missouri, once the home of singer Sheryl Crow, now a road to nowhere. Kennett is in a part of Missouri called the Bootheel, named for its distinctive shape on the map. But it is emblematic of many towns across the country, “[a] place, one of many in America, where disadvantages pile up,” says writers Sarah Brown and Karin Fischer. “Educational disparities and economic malaise and lack of opportunity are making people like those in the Bootheel sick. And maybe even killing them.” The Chronicle of Higher Education
Quote
“You can’t educate your way out of this problem. You can’t health-care-access your way out of this problem. There’s something inherently wrong with the system that’s not valuing the lives of black women equally to white women.”
—Dr. Raegan McDonald-Mosley, a board-certified obstetrician-gynecologist and chief medical director for Planned Parenthood Federation of America
The future of Fortune is here
In 1930, Fortune published its first-ever issue, featuring the goddess Fortuna and her wheel on the cover. This year, on our 90th anniversary, we’re celebrating with a new Fortune. Here’s what’s in store for you:


fortune--2020-01-22--Monty Python founding member Terry Jones remembered as ‘complete Renaissance comedian’

Terry Jones, a founding member of the anarchic Monty Python troupe who was hailed by colleagues as “the complete Renaissance comedian” and “a man of endless enthusiasms,” has died at age 77 after suffering from dementia.
Jones’s family said he died Tuesday evening at his home in London “after a long, extremely brave but always good humored battle with a rare form of dementia.”
“We have all lost a kind, funny, warm, creative and truly loving man whose uncompromising individuality, relentless intellect and extraordinary humor has given pleasure to countless millions across six decades,” Jones’s wife, Anna Soderstrom, and children Bill, Sally and Siri, said in a statement.
Born in Wales in 1942, Jones attended Oxford University, where he began writing and performing with fellow student Michael Palin.
After leaving university, he wrote for seminal 1960s comedy series, including “The Frost Report” and “Do Not Adjust Your Set.” At the end of the decade he and Palin, along with Eric Idle, John Cleese, Graham Chapman and Terry Gilliam, formed Monty Python’s Flying Circus. The troupe’s irreverent humor — a blend of satire, surrealism and silliness — helped revolutionize British comedy.
“Terry was one of my closest, most valued friends. He was kind, generous, supportive and passionate about living life to the full,” Palin said in a statement.
“He was far more than one of the funniest writer-performers of his generation. He was the complete Renaissance comedian — writer, director, presenter, historian, brilliant children’s author, and the warmest, most wonderful company you could wish to have,” Palin said.
Jones wrote and performed for the troupe’s TV series, which aired for five years on the BBC, and films including “Monty Python and the Holy Grail” in 1975 and “Monty Python’s Life of Brian” in 1979.
Playing the mother of Brian, a hapless young man who is mistaken for Jesus, he delivered one of the Pythons’ most famous lines: “He’s not the Messiah. He’s a very naughty boy!”
A more understated presence than the 6-foot-five-inch (1.95 meters) Cleese or the energetic Idle, Jones was a deft comic performer, who played many of the Pythons’ female characters. He was also, among many other incarnations, a grinning nude organist, Spanish Inquisitor Cardinal Biggles and the explosively gluttonous restaurant patron Mr. Creosote.
Cleese tweeted: “It feels strange that a man of so many talents and such endless enthusiasm, should have faded so gently away…”
He added: “Two down, four to go,” a reference to the six members of the troupe. Chapman died of cancer in 1989.
As well as performing, Jones co-directed “Holy Grail” with Gilliam, and directed “Life of Brian” and the 1983 Python film “The Meaning of Life.”
“Life of Brian” was considered daring — and was even banned in some areas — for its biblical satire. The film’s crucifixion scene, which featured Idle performing the cheeky song “Always Look on the Bright Side of Life,” cemented Jones’ reputation as a daring director with an absurdist sense of humor.
During the 1970s, Jones also created the show “Ripping Yarns” with Palin and wrote sketches for comedy duo The Two Ronnies.
After the Pythons largely disbanded in the 1980s, Jones wrote books on medieval and ancient history, presented documentaries, wrote poetry and directed films, including “Personal Services,” about a suburban brothel madam, an adaptation of children’s classic “The Wind in the Willows” and the comedy adventure “Erik the Viking.” He also scripted the Jim Henson-directed fantasy film “Labyrinth,” which starred David Bowie.
In 2014, more than three decades after their last live performance, the five surviving Pythons reunited for a string of stage shows that revived their old skits for adoring audiences.
Palin would recall that during the stage run, Jones struggled for the first time with remembering lines. Two years later, Jones’s family announced he had been diagnosed with frontotemporal dementia, which gradually robbed him of the ability to write and speak.
Palin said in 2016 that losing the ability to speak was “the cruelest thing that could befall someone to whom words, ideas, arguments, jokes and stories were once the stuff of life.”
The news of his diagnosis came just after the Welsh film and TV industry group Bafta Cymru announced that Jones had been given a special award for his outstanding contribution to film and television.
Palin presented the award to a tearful Jones, who was helped onto the stage by his son to a standing ovation. All he could say was “Quieten down.”
“It is a cruel and sad thing,” surviving troupe member Idle tweeted Wednesday. “But let’s remember just what joy he brought to all of us.
“So many laughs, moments of total hilarity onstage and off, we have all shared with him. It’s too sad if you knew him, but if you didn’t you will always smile at the many wonderfully funny moments he gave us.”
Jones is survived by his wife, his ex-wife Alison Telfer, and three children.
More must-read stories from Fortune:
—This year will be the first real litmus test for the streaming vs. theater debate
—The free streaming option offered by NBC’s Peacock is a real threat to Hulu
—The oral history of Laura Dern—in her own words
—Phoebe Waller-Bridge and Fleabag cast reflect on saying goodbye
—Parasite director Bong Joon Ho dissects his tale of two families
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.


fortune--2020-01-22--Aerosmith drummer Joey Kramer sues to rejoin the band for Grammy events

Aerosmith’s drummer, Joey Kramer, is suing his bandmates because they won’t let him play as the band is set to perform and be honored at Grammy events this week.
Kramer, a founding member of the band launched in Boston, said in a lawsuit filed this month in Massachusetts Superior Court that he has been kept out of the band after he hurt his ankle last year and missed shows, including part of the band’s lucrative residency at a Las Vegas casino.
The 69-year-old Magnolia, Texas, resident says his bandmates required him to earn his job back by performing a series of solo rehearsals to prove he could play “at an appropriate level,” according to his lawsuit.
Kramer says the band is in breach of contract, arguing the requirement is an “an artificial, made-up and undefined standard” that no other member of the band has been asked to do.
He notes in his lawsuit that singer Steven Tyler, guitarists Joe Perry and Bradley Whitford, and bassist Tom Hamilton have all been recently sidelined with injuries and illnesses and weren’t asked to re-audition for their jobs.
Kramer wants a Massachusetts judge to order he be allowed to participate in two upcoming music industry events.
Aerosmith is slated to receive the 2020 MusiCares Person of the Year award on Friday at the Los Angeles Convention Center.
Alice Cooper, Foo Fighters, Jonas Brothers, John Legend and John Mayer are among the artists slated to perform as the band is recognized for its philanthropic work by the Recording Academy, which awards the Grammys.
Aerosmith is also set to perform a “career-spanning medley” at the Grammy Awards show Sunday night at the Staples Center, where the band is expected to be joined onstage by hip hop’s Run-DMC, with which it has had collaborated.
“This is not about money,” Kramer said in a statement ahead of a court hearing on the suit in Plymouth, Massachusetts, on Wednesday. “I am being deprived of the opportunity to be recognized along with my peers, for our collective, lifetime contributions to the music industry.”
Aerosmith’s lawyer and manager didn’t respond to emails seeking comment Wednesday,
But the band, in a public statement Tuesday, said it has invited Kramer to join it as it is honored at the Grammy events, saying there just not enough time to rehearse together.
“Joey Kramer is our brother; his well-being is of paramount importance to us. However he has not been emotionally and physically able to perform with the band, by his own admission, for the last 6 months,” the statement reads.
“We have missed him and have encouraged him to rejoin us to play many times but apparently he has not felt ready to do so,” the statement continues. “Joey has now waited until the last moment to accept our invitation, when we unfortunately have no time for necessary rehearsals during Grammys week.”
In his lawsuit, Kramer says his fellow band members deemed his “try out” wasn’t “technically correct” and lacked “energy,” an assessment he strongly disputes.
“Nothing could be further from the truth,” he said in his statement. “I did everything they asked.”
Kramer also says it’s “devastating” that he is being prevented from being honored on the music industry’s biggest stage.
“The greatest magic and success of Aerosmith happens when all the band’s founding members are together in the house,” he said in the statement. “To be removed from my rightful place on stage to celebrate our success — a success that acknowledges my own life’s work, is just plain wrong.”
More must-read stories from Fortune:
—Awkwafina Is Nora From Queens team: Asian-American representation is not a ‘fad’
—Parasite director Bong Joon Ho dissects his tale of two families
—The History channel’s aliens and UFOs content continues to blossom as Project Blue Book returns
—What does Parasite’s best ensemble win at SAG mean for Oscar?
—These Oscar Best Picture nominees are “problematic,” but will that matter?
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.


fortune--2020-01-22--Boeing’s latest setback may cause a hit to GDP—and a ripple effect through the broader economy

News that Boeing’s beleaguered 737 Max might not return to the air until mid-2020—which many are taking as meaning June to even July, assuming no further delays—did an immediate number on share prices.
Shares were down 3.33% Tuesday to close at $313.37. That puts the cumulative loss since March of 2019 at 28.9%. But it’s not just Boeing shareholders that are hurting.
A Fortune review of the company’s financials and government data, along with confirmation from multiple expert sources, show that GDP in the first quarter could take a 0.5% hit because the expected loss of Max sales have that big an impact on the economy. That doesn’t necessarily take into account potential layoffs and impact on hundreds of vendors.
Boeing said in a statement that it acknowledges and regrets “the continued difficulties that the grounding of the 737 Max has presented to our customers, our regulators, our suppliers, and the flying public.” The company will provide more information next week when it releases its quarterly and full-year financial results.
An economic hit
The experts Fortune spoke to were not sweating Tuesday’s stock swing. A frequent pattern in sudden drops is that amateur investors panic on bad news and immediately sell. Professionals wait, see the drop, and then—knowing that Boeing has purchase contracts worth tens of billions and only one competitor, Airbus, that doesn’t have the capacity to take over that business—see the low price as a buying opportunity.
As for the broader economy? The contribution Boeing makes is a much bigger deal than many people realize.
The company’s 2019 third quarter 10-Q statement shows sales data for the first three quarters (nine months) of both 2018, when the Max was still flying, and 2019, when the plane was grounded starting in March. During that period in 2018, the company’s commercial airplane sales were $41 billion. In 2019, they dropped 39.5% to $24.8 billion.
Boeing can’t technically count the revenue of a sale until it delivers a plane, which it has not been able to do since the Max was grounded.
During the full year of 2018, Boeing’s commercial airplane division had revenue of $60.7 billion. The final numbers aren’t yet available for 2019, but if the Max drop continues at that same 39.5% rate, we might expect the division’s sales to be off by at least $24 billion.
Results in the first half of 2020 will be even more painful: the missing sales would be somewhere in the neighborhood of 0.2% of U.S. GDP. Or likely larger because Boeing’s commercial airplane sales had been growing at almost a 5% rate, making the expected reduction in GDP more like 0.21%.
Some market watchers are far more pessimistic going forward.
A commentary published before Boeing’s Tuesday announcement, which Federated Investors sent to Fortune, said the continued grounding “will create an air pocket for first quarter 2020 GDP growth of about 0.5% (within a range of 0.25% to 1%).” Federated was assuming that the Max would get FAA recertification and return to the air months before the summer. The additional delay means the 0.5% reduction in GDP would continue at roughly the same pace for the first half of the year.
Max Gokhman, head of asset allocation at Pacific Life Fund Advisors, agreed separately that a half percent drop in GDP was also likely. “Things could get even worse if it extends and leads to layoffs or furloughs, as Boeing alone employs 12,000 staff on the 737 Max production line and has over 600 smaller companies in its supply chain,” he wrote to Fortune. “This is increasingly likely with FAA signaling further delays to recertification, although Boeing is pushing hard to get the all-clear quicker.”
“The 737 Max is probably about 2% of manufacturing GDP,” said Timothy Fiore, chair of the Institute of Supply Management’s manufacturing business survey committee. “And we know every dollar of manufacturing output tends to affect anywhere of 25% to 35% of the service sector. It also impacts our computer electronics sector, primary metals, fabricated metal products. It impacts a lot of other subsectors.”
One major Boeing vendor, Spirit Aerosystems (not associated with the airline) laid off 2,800 employees earlier this month in response to Boeing’s halt of Max production.
There is also the question of what Boeing does with its own staff. Although the company had said there were no immediate plans to lay anyone off, it reassigned about 3,000 Max workers in the Seattle area to other duties for the time being, according to a CNBC report.
Boeing has a similar problem as major auto manufacturers like GM, according to Giacomo Santangelo, a senior lecturer in economics at Fordham University. “Everyone who gets paid to touch the plane” is a potential cost, he said. That’s a concern, especially as analysts have estimated that Boeing is losing $1 billion a month and multiple reports say the company is looking for $10 billion in additional financing.
“Those loans are only going to happen if they can show on paper it makes sense to give them money,” Santangelo said. “They’re going to have to cut costs somewhere. And they’re not going to cut it in production costs—they’re not going to use cheaper materials.”
Boeing’s final destination is still unknown, but the flight still looks awfully bumpy.
More must-read stories from Fortune:
—Why investors should pick the underdogs in sports gambling
—In the optimism divide between CEOs and investors, somebody’s wrong
—6 experts on what the U.S. won (and lost) in the China trade agreement
—Fertility Inc.: Inside the big business of babymaking
—The World’s Most Admired Companies in 2020
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-01-22--Trump inaugural committee ‘grossly’ overpaid Trump hotel, according to a new lawsuit

President Donald Trump’s inaugural committee violated nonprofit laws by “grossly” overpaying for events held at a hotel owned by his family business, according to a lawsuit by the District of Columbia’s attorney general.
Trump’s inaugural committee made an “unfair and unjustified” payment of more than $1 million to the Trump hotel in downtown Washington for events from Jan. 17 to 20, 2017, failing to consider less expensive alternatives, according to the complaint by Attorney General Karl Racine made public on Wednesday.
The president and his eldest daughter, Ivanka, now a senior adviser to the president, were both aware that the Trump International Hotel was overcharging the committee for its use of event space and went ahead with the deal anyway, Racine said. The committee didn’t use the facilities for the full four days that included Inauguration Day, and one of the events “amounted to a private party for the Trump children,” he said.
Neither Trump is a named defendant in the case. Both were top executives at the family-owned Trump Organization before Trump became president.
“The Trump Hotel ended up charging rental rates that were well in excess of its own pricing guidelines,” Racine said. Those payments flowed directly to the Trump family.
A spokeswoman for the Trump Organization rejected Racine’s lawsuit “a clear PR stunt” that was “false, intentionally misleading and riddled with inaccuracies.”
“The rates charged by the hotel were completely in line with what anyone else would have been charged for an unprecedented event of this enormous magnitude and were reflective of the fact that the hotel had just recently opened, possessed superior facilities and was centrally located on Pennsylvania Avenue,” she said in a written statement.
The lawsuit, filed in the District of Columbia Superior Court, is the latest legal attack on Trump by Racine, a Democrat. He previously sued Trump for violating the emoluments clause of the U.S. Constitution that bars presidents from profiting from their position, a case that is pending before a federal appeals court.
Racine asked a Superior Court judge to place the funds paid to the Trump Organization in a trust and restore them to a “proper public purpose” by directing them to another nonprofit “dedicated to promoting civic engagement” of U.S. citizens.
Racine’s lawsuit detailed concerns about the high prices demanded by the Trump hotel, as expressed by Stephanie Winston Wolkoff, an event planner working for the inaugural committee. She shared them directly with Trump and his daughter at a meeting on Dec. 16, 2016, Racine said. In an email the next day, she expressed her concerns to Ivanka Trump and Rick Gates, a senior inaugural official who later pleaded guilty to federal crimes unrelated to the inauguration.
“These are events in PE’s [the President-elect] honor at his hotel and one of them is with and for family and close friends,” Winston Wolkoff wrote. “Please take into consideration that when this is audited it will become public knowledge that locations were also gifted and costs underwritten to lower rental fees.”
More must-read stories from Fortune:
—The Chief Justice and impeachment: John Roberts’ role in the Trump trial
—How impeachment hearings in the Senate will work
—Understanding the 2020 election as brand marketing
—A Q&A with Sen. Kelly Loeffler on her unlikely path to Washington
—The World’s Most Admired Companies in 2020
Get up to speed on your morning commute with Fortune’s CEO Daily newsletter.


fortune--2020-01-22--The fall of WeWork was a jolt to venture capital—how that could change VC investing

When news broke in September that SoftBank-backed WeWork was pulling its doomed IPO, a chill ran across the capital markets.
Mere days before, entertainment and talent agency Endeavor had also pulled its IPO. In December, following disappointing growth, SoftBank sold back its nearly 50% stake in late-stage dog-walking startup Wag Labs to the company. And according to reports, pizza startup Zume was in talks with SoftBank to raise another funding round in late 2019, but the deal fell apart in December (the company subsequently laid off hundreds of workers in January).
As the investor world grappled with the failure of some of SoftBank’s most lavishly-funded startups, a renewed sense of scrutiny started taking hold for some investors. Barrett Cohn, the co-founder and CEO of private market investment bank Scenic Advisement, sees that trend continuing. As he puts it, investors will be “scrutinizing the companies much more heavily.”
“Flashing yellow caution sign”
On the whole, 2019 was a banner year for venture funding. But while the deal count in late-stage venture capital hit records in 2019 at nearly 2,600 (with over $85 billion invested), the 4th quarter of 2019 saw a slight slump, failing to crack 600 deals for the quarter (back down to pre-2019 levels), according to PitchBook data. (Although historically the 4th quarter is one of the slowest for late-stage deal activity, according to PitchBook).
Those like Cohn believe that SoftBank’s missteps gave investors pause. But SoftBank’s strategy “was so vastly unique” and “anomalous,” Cohn says, that, on the whole, private investors have been (and will continue being) judicious. Still, with the heightened awareness of ever-rising private valuations and ever-maturing private companies, he says the overriding message for private investors this year is “a flashing yellow caution sign.”
That doesn’t mean deal flow will grind to a halt. There are still plenty of analysts and VC firms alike betting that the flow of capital into the private markets will continue largely unchanged—even at the late stages.
The amount of capital raised in venture last year missed 2018’s record. But the $46.3 billion raised as of the end of the 4th quarter for U.S. venture funds, according to PitchBook data, was nothing to dismiss. Those closest to the money aren’t seeing venture capital soar or sink in 2020—even despite the highly publicized struggles of SoftBank’s disastrous late-stage ventures.
What’s driving the momentum for investments into venture is the amount of capital available to companies, fueled by record amounts of cash being distributed back to LPs (limited partners) that will likely be recycled back.
Judicious venture investing
If the WeWork debacle and the poor public debuts of companies like Uber, Lyft, and SmileDirectClub taught us anything it’s that the public markets are going to be tougher on high-flying unicorns. That’s not a bad thing, market observers note.
“The private markets have found religion, so to speak. Now they know that growth at any cost is not acceptable anymore,” says Santosh Rao, head of research at Manhattan Venture Partners. “There is money out there that needs to be [put to work], but the VCs are going to be much more prudent and rational in terms of funding these companies.”
For Scenic’s Cohn, that means, “we’re back to basics.” Companies with “great fundamentals, real unit economics, and a proper mote around them” are going to win late-stage rounds this year.
In 2020, analysts are predicting that VC funding will continue to see strong investment, both in early and late stage rounds—as plenty of money is earmarked to be recycled into late-stage mega U.S. deals and at the pre-money seed level, likely pushing median seed-stage valuations up higher, according to PitchBook’s 2020 Venture Capital Outlook. Even traditional early-stage investors are angling later in funding rounds—which is true of Peter Thiel’s Founders Fund, breaking with its usual formula with its latest $1.5 billion fund, focused primarily on growth-stage startups rather than seed-stage startups.
In fact, Jill Shaw, the managing director at global investment firm Cambridge Associates, has been seeing a trend emerge of early-stage seed and Series A venture capital funds creating so-called “follow-on funds,” designed to give early venture investors an opportunity to continue investing in their best companies at later funding rounds (like Series B and C). Shaw suggests this trend is likely to continue in 2020 and beyond as investors aren’t shying away from later stage investments to keep from diluting their stake.
But that’s not to say some sectors won’t find it hard to raise capital. Micro mobility and cannabis startups are two that come to mind for Cohn. The poor share performance of public companies like Aurora Cannabis in 2019 are a “harbinger for the other companies in the space.”
Exit opportunities: the 2020 IPO pipeline is filling up
Last year, private investors got a record-breaking bang for their buck as VC exit value topped $250 billion. Almost 80% of those came from VC-backed IPOs, according to PitchBook. That momentum looks likely to continue this year.
An IPO pipeline, chock full of big names like Airbnb, Casper, and Robinhood, is likely to bring public markets another big year. “I think the appetite [for IPOs] will be there, but investors aren’t going in blindfolded looking at these companies—I think those days are over,” says Kathleen Smith, principal at Renaissance Capital, a provider of institutional research and IPO ETFs.
Still, in a post-WeWork world, some companies may be postponing the IPO in favor of taking on more private capital or pursuing M&As. Several companies yanked or postponed IPOs late last year, including Endeavor (who had already filed) and others like Postmates and Robinhood, who had been rumored (but not filed) to go public.
In fact, according to data from Renaissance Capital, only one U.S. VC-backed tech IPO went public in the 4th quarter—Bill.com. Plaid, for one, followed the M&A path as Visa announced a $5.3 billion acquisition of the fintech this month.
“We have to point back to SoftBank,” Scenic’s Cohn says. “SoftBank had a strategy of putting huge checks into one company to create the hegemon, and that largely didn’t work, and they did it very publicly and it freaked out the investor universe.”
Instead, Cohn suggests we might see companies staying private indefinitely, opting to pick up larger rounds of private capital or use M&A to build bigger private companies away from the public’s watchful eye.
But even with the record amounts of capital in private markets, Cohn is seeing even more “dry powder,” or unspent capital, “just coming online.”
That too should boost deal flow.
More must-read stories from Fortune:
—Forget policymakers. Greta Thunberg and her allies are targeting CEOs
—Investors see a 2020 recession coming—but think they’ll make money
—The Carlos Ghosn affair: A look inside the motivations of a fugitive CEO
—What $1,000 in 10 top stocks a decade ago would be worth today
—Laws meant to close down tax havens and shut loopholes could have opposite effect
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-01-22--How to succeed in your January job hunt

How to succeed in your January job hunt

Kicking off the new year by looking for a new job? Good for you, but beware: You’re facing more competition this month than at any other time of year.
New research from career site Glassdoor says more people apply for posted openings in January than in any other month. In 2020, the “January spike” is a hefty 22% in the U.S., and even higher in some other countries—29% in France, for instance. At the same time, though, the report says employers, having just closed the books on the old year, post fewer jobs than in other months. So far in January, U.S. help-wanted ads are running at about 4% below average.
So how can you improve your odds of winning the new gig you want? It might help to focus your search on companies whose workforces number from 50 to 500 employees. ADP’s latest payroll report notes that, while U.S. businesses added 202,000 jobs in December, about 88,000 of those new openings were created at “medium-sized” enterprises. That’s almost twice the number (45,000) of new jobs at “large” businesses with 500 to 1,000 or more employees.
No matter what size company you’d like to work for, here are two ways you can stand out from your fellow job hunters—both now and for the rest of 2020.
1. Take a fresh look at whether you’re doing the right things.
Michael Steinitz, executive director at staffing firm Accountemps, says it might be time to take a fresh look at whether you’re doing the right stuff, especially if you haven’t put yourself on the market for a while. “A strategic job search now requires much more than putting together a polished resume,” he says. “Employers are looking for people with a strong online presence and a passion for their work.”
A new Accountemps survey of 2,400 hiring managers in 28 U.S. states found that they’re most impressed with candidates who “network on social media with employees at the company of interest” (49%) and “provide access to an online portfolio or personal website” (47%).
What should your site look like? An infographic, or clear charts and graphs that quantify your achievements and show them in visual form, can tip the scales in your favor and get you chosen for an interview, while cartoon images and Bitmojis tend to turn employers off, the survey says. Suggests Steinitz, “Steer clear of anything that could be considered distracting or unprofessional, like flashy fonts and images.” None of that means an old-school resume doesn’t count anymore, but what employers want to see on it has undergone a shift.
2. Highlight your soft skills instead of your technical ones.
“Companies now are looking to hire candidates with strong ‘people’ skills, with the idea of training them in any necessary technical skills on the job,” says Michelle Armer, who works as Chief People Officer at CareerBuilder. “About 80% of employers have told us they value ‘soft’ skills more than the ‘hard’ kind, especially in three main areas: critical thinking, teamwork, and customer service.”
It’s not hard to see why “soft” skills (also known by other names, like human skills, power skills, and E.Q.) are in demand. For one thing, more and more jobs in every industry have been transformed by technology. With A.I. and machine learning taking over the routine, repetitive parts of work, what’s left for human employees to do usually calls for traits like empathy, creative problem-solving, and even humor—beyond the ken (so far) of algorithms. And unlike tech skills, which now obsolesce at an average rate of every 18 months, soft skills will grow even more essential as technology keeps racing onward.
Also, remember that collaboration is crucial. So many jobs these days require effective teamwork, Armer points out, that your resume will fall short unless it highlights specific examples of situations where you achieved notable goals by playing well with others. Even, or especially, if your technical savvy is stellar, she says, “don’t downplay your soft skills. Emphasize them.” Noted.
More must-read stories from Fortune:
—Why this 20-year-old Bosch apprentice chose to work first and get a degree later
—How freelancing can help your career
—No, humanities degrees don’t mean low salaries
—The 4 main reasons people change careers
—Ready to jump at that great job offer? Read this first
Get Fortune’s RaceAhead newsletter for sharp insights on corporate culture and diversity.


fortune--2020-01-23--Xerox escalates HP takeover fight with push to replace board

Exclusive : American Well ’ s next act is turning your bedroom into a hospital

Xerox Holdings Corp. said it intends to nominate 11 directors to replace the board of HP Inc. after the personal-computer maker refused to engage in takeover talks, according to a statement Thursday.
The iconic printer maker hasn’t increased its $22-a-share takeover offer after HP rejected its proposal, which it argues undervalues the company. Instead, Xerox will seek to replace HP’s entire board through a proxy fight to push the merger through.
The nominees include former senior executives from dozens of companies including Aetna Inc., United Airlines Holdings Inc. and Novartis AG.
“HP shareholders have told us they believe our acquisition proposal will bring tremendous value, which is why we lined up $24 billion in binding financing commitments and a slate of highly qualified director candidates,” said John Visentin, vice chairman and chief executive officer of Xerox.
Xerox filed its slate ahead of a Friday deadline for board nominations. The move could potentially be a precursor to Xerox taking its offer directly to shareholders through a tender offer at the current offer price or a premium if HP continues to rebuff its efforts, according to people familiar with the matter. No decision has been made on whether to pursue a tender offer, the price it would be put forth at, or when it would do so, the people said, asking not to be identified because the matter is private.
The push to replace the board marks an escalation of the simmering tensions between the two hardware giants that have withered in a world increasingly driven by software. Xerox has argued the tie-up would revive both companies and unlock about $2 billion in synergies.
“These nominations are a self-serving tactic by Xerox to advance its proposal, which significantly undervalues HP and creates meaningful risk to the detriment of HP shareholders,” HP said in a statement.
HP said that it would review Xerox’s nominees and respond in due course. It also said that it was committed to serving the best interests of all shareholders, and that it had many avenues that it could pursue to create value. Those efforts are not dependent on a combination with Xerox, it said.
Activist shareholder Carl Icahn, who owns about 11% of Xerox and has a 4.3% stake in HP, has pushed for the tie-up.
HP said Thursday it believed Xerox’s proposal to acquire HP was being driven by Icahn. The billionaire has considerable influence over Xerox because he is its largest shareholder, the role he played in appointing Xerox’s CEO, who was a former consultant to Icahn, and the ties he has to members of the board, including its chairman, who is also the chief executive officer of Icahn Enterprises, HP said.
“Due to Mr. Icahn’s ownership position, he would disproportionately benefit from an acquisition of HP by Xerox at a price that undervalues HP,” the company said, adding that his interests were not aligned with those of other HP shareholders.
A representative for Icahn wasn’t immediately available for comment.
HP’s board currently has 12 members. Dion Weisler, the former chief executive officer of the company, has said he would step down at the next annual general meeting, which the company said would reduce the board size to 11. Its last annual meeting was on April 23.
HP in November rebuffed an unsolicited, cash-and-stock offer from Xerox, citing concerns about the financial health of its smaller rival, which has experienced declining annual revenue since 2012.
HP’s board said it was open to exploring a merger, but believed the offer undervalued the company.
Xerox announced Jan. 6 that it had arranged a $24 billion loan with a group of banks to finance the takeover. HP and its advisers had questioned Xerox’s ability to raise the money for the deal.
Following the financing announcement, HP said it believed the offer still undervalued the company.
Xerox’s director nominees are:
Betsy Atkins, CEO of Baja Corp.
George Bickerstaff, co-founder and managing director of M.M. Dillon & Co.
Carolyn Byrd, CEO of GlobalTech Financial.
Jeannie Diefenderfer, who spent 28 years at Verizon.
Kim Fennebresque, who was CEO of Cowen Group for nine years.
Carol Flaton, who has served as a managing director at AlixPartners.
Matthew Hart, who most recently served as president and chief operating officer of Hilton Hotels until the buyout of Hilton by Blackstone in 2007.
Fred Hochberg, who was most recently the chairman and president of the Export-Import Bank of the United States during the Obama administration.
Jacob Katz, who was chairman of Grant Thornton.
Nichelle Maynard-Elliott, who most recently served as executive director of mergers & acquisitions for Praxair Inc.
Thomas Sabatino, Jr. who most recently served as executive vice president and general counsel of Aetna Inc.
Citigroup Inc. is acting as Xerox’s financial advisor, and King & Spalding LLP is providing legal counsel to Xerox. Willkie Farr & Gallagher LLP is providing legal counsel to Xerox’s independent directors.
More must-read stories from Fortune:
—Why investors should pick the underdogs in sports gambling
—In the optimism divide between CEOs and investors, somebody’s wrong
—6 experts on what the U.S. won (and lost) in the China trade agreement
—Fertility Inc.: Inside the big business of babymaking
—The World’s Most Admired Companies in 2020
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-01-23--Exclusive: American Well’s next act is turning your bedroom into a hospital

Sonos apologizes after backlash over updates for aging speakers

This is the web version of Brainstorm Health Daily, Fortune’s daily newsletter on the top health care news. To get it delivered daily to your in-box, sign up here.
Good afternoon, readers.
Imagine you’ve just had serious surgery. You’re ready to leave the hospital, but not quite ready to go back to your everyday life. And so you need to get periodic checkups from your doctor or nurse practitioner.
Trekking back and forth from the hospital would be a (literal) pain. And, depending on your age, using an iPad or computer may be beyond your technological grasp. But what if the doctors and clinicians came straight into your bedroom—and you didn’t have to do anything at all?
That’s the technology that telehealth giant American Well is developing and expects to deploy sometime in 2020, CEO Roy Schoenberg tells Fortune in an exclusive interview.
“This is a new service that is tied into the American Well ecosystem. It’s a device that gets mounted on top of the TV in front of the patient in their home, has the ability to take over the TV when the clinician wants to come in… Making the bedroom of the patient a hospital room,” he says.
The details are a bit sparse, since both the underlying product itself and the logistics behind its use (such as setting it up in an elderly patient’s home) still need to be worked out. But, as Schoenberg tells it, the (as-of-yet unnamed) device would be able to connect to a TV or webcam. A medical professional could switch the patient’s TV from, say, CNN over to a direct video feed to a doctor.
What’s more, this service would allow clinicians to home in on vital signs and biometrics by zooming in on a patient via webcam, allowing for a much better view. Wirelessly connected microphones and the device’s capability to link up with wireless tech (such as blood pressure monitors) could deliver critical information to health care providers in real time with minimum effort required from the patient.
American Well envisions partnerships with insurers and hospitals who will see the value incentive of treating chronically ill or recovering patients remotely.
“As a patient, the likely way in 2020 is, when you’re in the hospital, the discharge planning will give you this device, and then there’s going to be different ways of helping you set this up in your home,” says Schoenberg.
He also cautions that the rollout, as with much in health care, will be a process. But the current plan is to get it out into the real world this year.
Read on for the day’s news.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
23andMe cuts jobs amid falling DNA test sales. CNBC's Chrissy Farr reports that home DNA testing firm 23andMe is axing 100 jobs (about 14% of its workforce) as demand for at-home DNA testing kits fall. CEO Anne Wojcicki floated a number of theories about the decline to Farr. I have some of my own—including increased scrutiny over the privacy concerns linked with such services, or the potential that consumers just haven't been finding the products' insights worth the price. Going forward, 23andMe says it will expand the focus of its DTC and therapeutics businesses. (CNBC)
INDICATIONS
I-Mab launches first Chinese biotech IPO in the U.S. in two years. Chinese biotech I-Mab has set off a public offering process on the Nasdaq, making it the first Chinese biopharma company in two years to IPO in the U.S. This may not be all that surprising given rule changes that have allowed more and more of these companies to list on the Hong Kong exchange, including a rule change that allows pre-clinical biotechs (i.e., ones that don't have any products on the market) to go public. (Yahoo Finance)
THE BIG PICTURE
WHO not ready to declare coronavirus outbreak an international emergency. The World Health Organization (WHO) on Thursday declined to declare the ongoing coronavirus outbreak in China a global emergency, calling it "a bit too early to consider that this is a public health emergency of international concern." Chinese authorities have essentially locked down Wuhan, where the outbreak began, and a number of other cities, shutting down transport ahead of the travel-heavy Chinese New Year celebrations. WHO officials said while it does mark an emergency in China, there have only been isolated cases in many other regions. (Reuters)
Supreme Court to punt Obamacare case till after 2020 election. The House GOP and Trump administration's lawsuit to repeal the entirety of the Affordable Care Act likely won't come before the Supreme Court until after election day 2020. The court's justices rejected House Democrats' request to fast-track the case, which carries serious political ramifications—striking down the law in the midst of the election would upend the health care industry, scuttling major Obamacare provisions such as protections for people with pre-existing conditions and the law's Medicaid expansion. (Politico)
REQUIRED READING
A.I. Is 'The Most Important Project Humanity Will Ever Work On,' by Aric Jenkins
How the Air Travel Industry Is Dealing with the Wuhan Coronavirus, by Bloomberg
Will Retiring Baby Boomers Crash the Stock Market, by Ben Carlson
Captain Davos: CEOs Urged to Lead in Sustainability, by Eamon Barrett
Sign up for other Fortune newsletters.


fortune--2020-01-23--Intel’s fourth quarter boom blows its troubles away

In his first year or so running Intel, new CEO Bob Swan has spent a stunning amount of time trying to reassure Wall Street that the world’s most dominant chipmaker for PCs and servers could thrive again.
On Thursday, it was Wall Street that was stunned, as Intel reported sales and profits for the fourth quarter that were much better than analysts expected and gave an upbeat forecast for 2020. Fourth quarter sales of $20.2 billion grew 8% from the year before and exceeded the average analyst forecast by $1 billion. Earnings per share of $1.58 were up 40% and 35 cents better than analysts predicted. And the 2020 forecast of $73.5 billion was $1.3 billion better than analysts forecast.
Intel’s stock, already recovering under Swan’s confidence boosting efforts, jumped 6% in after-hours trading to reach more than $67 per share. That’s up 26% from the day Swan’s predecessor, Brian Krzanich suddenly resigned in June 2018, and 53% from when Intel’s shares hit bottom in May 2019 over fears that the company’s engineering and manufacturing mistakes in recent years might lead to a disaster. This is also the highest price Intel’s stock has seen since 2000, before the Internet bubble popped.
New chips for servers featuring much better performance on artificial intelligence and machine learning tasks are key to Intel’s strong performance, Swan told analysts on a conference call after the results were released on Thursday evening. He cited the latest generation of Intel’s popular Xeon family of chips, specifically. “Customers continue to make Xeon the foundation for their A.I. infused data center workloads,” Swan said.
Two key factors in Intel’s results have bolstered Swan’s case. For one, PC sales have held up better than anyone predicted, largely because companies appear to have decided to replace millions of computers running Windows 7, as Microsoft finally decided to cut off support for the aged operating system.
The second factor, even more significant for Intel’s future success, is a revival in sales of chips for servers in corporate and cloud computing data centers. Last year, over and over, analysts and investors asked Swan why Intel’s growth rate in server chip sales—once the company’s strongest segment—had slumped. They were down almost 10% in the first half of 2019. But after leveling off in the third quarter, server chip sales in the fourth quarter suddenly jumped 19%.
The fourth quarter results had to be a sweet vindication for Swan, the first outsider to run the Silicon Valley icon in its more-than-50-year history. Swan joined Intel in 2016 as chief financial officer after a long and distinguished career in finance at companies including General Electric, TRW, and eBay.
More must-read stories from Fortune:
—A.I. in China: TikTok is just the beginning
—Inside big tech’s quest for human-level A.I.
—Medicine by machine: Is A.I. the cure for the world’s ailing drug industry?
—A.I. breakthroughs in natural-language processing are big for business
—A.I. is transforming the job interview—and everything after
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-01-23--Dear ally: “It’s not about you”

Dear ally: “It’s not about you”

This is the web version of raceAhead, Fortune’s daily newsletter on race, culture, and inclusive leadership. To get it delivered daily to your inbox, sign up here.
“I’ve been doing this a long time, and it’s deeply human stuff,” says Katrina Jones, whose diversity work has included senior roles at Accenture, Vimeo, Twitch, and now, Amazon Devices. “That’s why it’s so challenging.”
For the better part of her career, Jones has dedicated herself to creating and implementing systems designed to address the barriers that exist for people from non-majority cultures in the workplace—the kinds of things that make people feel excluded, overlooked, or simply exhausted from the effort of fending off microaggressions.
She also knows from her own personal experience that feeling like “the other” at work takes a toll.
“One thing that has existed as a divide, and for me that has made me feel disconnected, is that I’ve felt that I could not bring my race, and the experiences [that derive from it] forward,” Jones said, as she helped co-lead a town hall on power at Fortune’s Most Powerful Women Next Gen summit in 2018. These insights are part of the diversity “good stuff,” the parts where teams outperform, new markets are discovered, and where the innovation happens. But it’s also how people thrive at work and find peace in t heir lives.
When it feels risky to be yourself at work, allies are in a unique position to help. But she says, it’s a hard thing to master.
How to be a better ally is a question that comes up constantly in her work, she says. “I hear it all the time. And it’s typically when something happens, and a person in a majority group bears witness to something and then suddenly and viscerally understand how messed up things are for marginalized people. It hits them hard and it hits them deep.”
The first problem arises when they want a simple answer. “They want logical steps. They want a prescription. They want to be walked from Point A all the way through, but that’s not what this is,” she says. “Allyship is a constant journey of learning, humility and curiosity, and finding the courage to take action to make things better.”
Jones recently wrote a popular Twitter thread that talks about what it means to be a good ally—and why it can be so hard. Today, raceAhead has adapted that thread into a Gif essay, with her permission.
Read on for Jones’s thoughts, in Gif essay form.
***
It’s Not About You, Ally
Allyship, especially in service of increasing diversity and making [organizations] more equitable and inclusive, must anchor to humility.


fortune--2020-01-23--George Soros to start $1 billion university to fight authoritarianism and climate change

Billionaire George Soros said he will commit $1 billion to start a global university to fight authoritarian governments and climate change, calling them twin challenges that threaten the survival of our civilization.
The Open Society University Network will offer an international platform for teaching and research, the 89-year-old said Thursday at the World Economic Forum in Davos, Switzerland. The university will be launched through a partnership of the Soros-backed Central European University and Bard College.
“As a long-term strategy our best hope lies in access to quality education, specifically an education that reinforces the autonomy of the individual by cultivating critical thinking and emphasizing academic freedom,” Soros said.
In his speech and a follow-up question and answer session, Soros covered a wide-range of issues, including the “overheated” U.S. economy, the dominance of Facebook Inc. and the autocratic rule of Xi Jinping, Narendra Modi, Jair Bolsonaro and Donald Trump, who he called a “con man and the ultimate narcissist.”
“Taking into account the climate emergency and worldwide unrest, it’s not an exaggeration to say that 2020 and the next few years will determine not only the fate of Xi and Trump, but also the fate of the world,” he said.
Soros also once again criticized Facebook for its failure to police the social media network.
“There’s nothing to stop them, and I think there is a kind of informal mutual assistance operation or agreement developing between Trump and Facebook,” Soros said. “Facebook will work together to re-elect Trump and Trump will work to protect Facebook.
Trump, he said, is responsible for overheating the economy. “An overheated economy can’t be kept boiling for too long,” he said.
Soros has hit on these themes in previous Davos speeches. Last year, the philanthropist warned of the “mortal danger” of China’s use of artificial intelligence to repress its citizens under the leadership of Xi, whom he called the most dangerous opponent of democracies.
He has also lashed out at social-media giants including Facebook and Google, saying they need to be regulated. Last year he compared them to gambling companies that foster addiction among users and said that they exploit the data they control.
Soros has become a lightning rod for his political views and philanthropic efforts. A longtime supporter and financial backer of progressive causes and Democratic politicians, he’s become a target of right-wing activists.
Soros closed his hedge fund and converted his firm into a family office. The $25 billion Soros Fund Management now mostly manages money for the Open Society Foundations, a worldwide network of philanthropies.
More must-read stories from Fortune:
—The World’s Most Admired Companies in 2020
—Fertility Inc.: Inside the big business of babymaking
—A.I. breakthroughs in natural-language processing are big for business
—Industry standouts: The companies most admired by the business world
—The forces behind Boeing’s long descent
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.